Despite major declines in Nebraska soybean exports and reductions in both pork and wheat exports, the dollar value of Nebraska’s total agriculture exports increased from 2017 to 2018 thanks to significant boosts in sales of Nebraska beef and corn to countries that avoided trade disputes with the United States. That’s one of several findings from Nebraska Farm Bureau’s “Nebraska Agriculture and International Trade” report which uses the most current United States Department of Agriculture (USDA) trade data to identify the value of Nebraska agriculture exports in 2018 on a per-commodity, per-county, and per-farm and ranch basis.
“Remarkedly, the overall value of Nebraska exports grew in 2018 despite trade disputes with many U.S. trading partners. Fortunately for Nebraska producers, the U.S. maintained positive relations with two leading beef markets in Japan and South Korea allowing growth to occur. Expanded purchases by Japan and South Korea boosted the value of Nebraska’s beef exports to more than $1.3 billion in 2018, a record high,” said Jay Rempe, Nebraska Farm Bureau senior economist and author of the report.
According to the report, friendly trade relations with Japan also led to increased purchases of Nebraska corn, as Japanese imports of U.S. corn grew by 34 percent in 2018. Nebraska also benefited from Mexico opting not to impose tariffs on U.S. corn in retaliation for U.S. tariffs on steel and aluminum. U.S. corn exports to Mexico increased by 16 percent over the previous year. Production problems elsewhere in the world aided Nebraska’s total corn exports which increased by 42 percent in 2018, the second-highest level on record.
“While beef and corn exports were strong, the U.S. trade dispute with China did negatively impact exports. Soybeans have long been the leader of Nebraska agriculture exports due in large part to Chinese demand. Soybeans were the top Nebraska export commodity from 2012 to 2017 but fell to third in 2018 as exports slumped by 21 percent to $1.2 billion, the lowest level since 2008.
“The decline is directly tied to China’s imposition of retaliatory tariffs on U.S. soybeans,” said Rempe. “Nebraska exports of hides and skins also suffered due to the Chinese trade dispute, falling 20 percent in 2018. China is the world’s largest importer, and tariffs put Nebraska at a competitive disadvantage.”
Nebraska was the sixth-largest agricultural exporting state in the country in 2018, topping the nation in exports of beef; holding a position as the second-largest exporter of hides and skins; third-largest exporter of corn, feed and processed grains; and serving as the fifth-largest exporter of soybeans, soybean meal and vegetable oil. Ethanol, popcorn, wheat, pork, dry edible beans, and a host of other commodities and products round out Nebraska’s portfolio.
To bring the value of agricultural trade closer to home, the report identifies different ways in which dollars from trade contribute to Nebraska farms and ranches, including establishing a value of agricultural trade on an individual commodity basis.
“For example, the 2018 analysis pegs the per-unit value of exports for soybeans at $5.58 per bushel, down from $5.66 per bushel in 2017, and off 69 cents from an estimated $6.27 per bushel in 2016,” said Rempe. “The 2018 analysis shows the per-unit value of trade at $221.63 per head for beef, $69.33 per head for pork, $1.22 per bushel for corn and $2.78 per bushel for wheat.”
The report also analyzes and puts a dollar value of agricultural trade on every Nebraska county. Custer County led the way in terms of the county receiving the most value from agricultural trade in 2018. More than $175 million of export value flowed to Custer County due to international sales. In measuring the importance of trade on a per-farm basis, Phelps County was the most reliant on trade with a per-farm export value of more than $338,000 in 2018.
“This report illustrates the importance of international trade and free trade agreements to Nebraska farmers and ranchers. If not for the positive relations with Japan and South Korea in moving more Nebraska beef and corn into those markets, 2018 would have looked much different when coupled with the declining sales of soybeans to China,” said Steve Nelson, Nebraska Farm Bureau president.
In releasing the report, Nebraska Farm Bureau identified a four-point “to-do” list on trade. The list includes securing Congressional passage and finalization of the United States – Mexico – Canada Agreement (USMCA); finalizing a trade deal with China that removes the tariffs China has placed on U.S. agricultural products; expanding efforts to find new partners with emphasis on free trade agreements with countries involved in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the European Union, the United Kingdom, India and others. The list is rounded out by the need to ensure there is a future for Rules-Based Trade, involving reforms to the World Trade Organization (WTO) that address dispute settlement process, challenges from China’s state-run enterprises and rules governing developing countries.
“Securing the U.S.-Japan trade deal was a major ’win’ for Nebraska agriculture, but there are more ’wins’ to be had. Checking off the items on this “to-do” list will ensure those wins keep coming, and Nebraska Farm Bureau will continue to push for these important measures,” said Nelson.
The “Nebraska Agriculture and International Trade” report is available on the Nebraska Farm Bureau website at www.nefb.org.