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Iowa is an important producer of agricultural and wood products exported
worldwide. In 2007, the State’s cash farm receipts totaled $19 billion. Iowa
ranked second among all 50 states in 2007 with agricultural exports estimated at
$5.2 billion. Iowa continues to lead all states in the exports of soybeans and
feed grains. Agricultural exports help boost farm prices and income, while
supporting 55,415 jobs both on the farm and off the farm in food processing,
storage, and transportation. Exports remain important to Iowa’s agricultural and
statewide economy. Measured as exports divided by farm cash receipts, the
State's reliance on agricultural exports was 27 percent in 2007.
Iowa’s top five agricultural exports in 2007 were:
feed grains and products -- $1.9 billion
soybeans and products -- $1.8 billion
live animals and red meats -- $1 billion
feeds and fodders -- $144 million
poultry -- $66 million
World demand for these products is increasing, but so is competition among
suppliers. If Iowa's farmers, ranchers, and food processors are to compete
successfully for the export opportunities of the 21st century, they need fair
trade and more open access to growing global markets.
How Trade Agreements Benefit Iowa Agriculture
As the nation’s largest soybean producer, Iowa benefits under the Uruguay
Round agreement as South Korea reduced its tariffs on soybean oil by 14.5
percent from 1995 to 2004. Thus far, the tariff reduction has supported a
threefold increase in export volume. The Philippines reduced its tariffs on
soybean meal from 10 to 3 percent during the same period. China’s accession to
the WTO has helped to raise our exports of soybeans to that country by over six
fold from 1999 to 2004, surpassing $2.4 billion this year.
Iowa benefited under the NAFTA when Mexico converted its import licensing
system for corn to a transitional tariff-rate quota. It will remain in effect
until 2008. Under this system, the volume of U.S. corn exports to Mexico has
risen over 42 percent since 1994, reaching 120 million bushels valued at $585
million in 2002.
Under the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR),
U.S. prime and choice cuts of beef gain preferential access as applied tariffs
of 15 to 30 percent are immediately eliminated (except the Dominican Republic)
while those applied to other cuts are phased-out over 15 years. Tariffs on beef
offal and other beef products are phased out over 5 to 10 years. As part of the
agreement, all six countries are working toward the recognition of the U.S. meat
inspection and certification systems, which would replace the existing policy of
plant-by-plant inspections and approval. From 2001 through 2003, U.S. suppliers
annually shipped on average 4,094 metric tons valued at $9.8 million to all six
countries combined.
Export Success Stories
As a major soybean producer, Iowa has benefited from the efforts of the
American Soybean Association (ASA), in partnership with USDA, and various
producer organizations to increased demand for U.S. soybeans and meal in a
number of key markets in Asia. For example, ASA's promotion of Full Fat Soybean
Meal in Thailand has enhanced the competitiveness of buyers of U.S. soybeans by
improving the quality of their product line. It is estimated that the target
audience will consume an additional 60,000 metric tons of soybeans valued at $16
million annually.
Iowa pork companies benefited from USDA's market development funding in Japan
where marketing efforts conducted by the U.S. Meat Export Federation contributed
to a 32 percent increase in U.S. pork exports by volume and 34 percent increase
by value for the first seven months of 2004 compared to the same period in 2003.