Wisconsin ag producers continue to find more opportunities overseas, experts say
Wisconsin producers of all shades in the ag industry will continue to find growing business opportunities through exports to new overseas markets, an expert panel says.
A group of experts from the DATCP International Agribusiness Center spoke on the department's Sept. 28 episode of the "Rural Realities" podcast, including director Mark Rhoda-Reis and economic development consultants Ashwini Rao, Lisa Stout, Jennifer Lu and Luis Santana. They had an overall positive outlook on the future of Wisconsin exports, especially for dairy products, but also held firm that the industry needs to recover its losses from the COVID-19 pandemic before more growth can be achieved.
Rhoda-Reis said the IAC is really important for Wisconsin producers to take advantage of, because not only do they help farmers find export opportunities, but they also strengthen their domestic supply. When regular export markets are down, it helps to have a diversified approach so you can rely on other markets to make up for it, he said. It reduces the stress on the farmer.
"Exports help companies smooth out their supply and demand challenges. If things are down in one market they might be up in another," Rhoda-Reis said. "It helps companies be able to continue a revenue stream that they would not necessarily have if those markets were to go down and they didn't have alternatives. It helps to reduce stress in the case of farmers (and) in many businesses by providing a bit of that certainty."
Right now, exports are up more than 20% compared to last year, which is an improvement but not quite where we want to be, Rhoda-Reis said. Pandemic restrictions, like countrywide lockdowns in some areas, are disrupting economic activity, while container and labor shortages are also affecting markets across the world and driving up the prices of goods. He said he's confident that this year will end on a good note, but we still need these upcoming years to be just as good or better if we want to progress, he added.
Emerging cheese export markets are found in the Middle East, especially United Arab Emirates, and in southeast Asia, including China, Japan and South Korea where diets have become more westernized to include nontraditional dairy products, Rao said. She also mentioned that Mexico continues to be a solid destination for whey exports as the past six months have seen huge growths in those markets.
"(Opportunity) depends on the product and the country that you're going to sell. For a processed product, something like cheese, some of the emerging countries in the Middle East are opportunities," Rao said. "We are in fact currently running a social media program slated to run at the end of this month in Dubai and Abu Dhabi in the Middle East that basically is online promotion in one of their largest stores."
Stout agreed that Asian markets are huge opportunities for Wisconsin dairy producers, adding that popular American fast food chains like Pizza Hut and KFC have become incredibly popular in that region. Since those chains use American cheeses in their products, they are also becoming more common at home in southeast Asian countries.
Whey byproducts, like cheese powders, are also a way to add the savory "umami" flavor to traditional Asian snacks. Stout said IAC has been planning lots of trade missions to China, UAE and Latin America and even paying to bring incoming buyers to the US for business deals.
"It's hard for our companies to travel sometimes, so we have used incoming buyer missions and hosted and paid for buyers to come to the state to visit our cheese plants (and) ingredient plants so that they can see firsthand the quality of our product," Stout said. "Then they have an opportunity to meet more of our Wisconsin cheese companies in one place, as opposed to having our cheese company travel."
On the livestock front, China is a hot market for livestock products, Lu said. In recent years, China has become Wisconsin's number-one exporter for bull semen and one of the top exporters for whey feed ingredients. Lu also said hardwood is becoming a hot commodity for Wisconsin exports as southeast Asia continues to experience population and infrastructure booms, and since hardwood is becoming more and more in demand, prices are going up.
Ginseng is also one of Wisconsin's specialty crops that has remained popular for Chinese exporters, although Lu said ginseng exports have fallen in the past few years due to the Chinese-American trade wars. Instead of traditional markets, she said IAC has been helping ginseng farmers to access markets through e-commerce and online sales. She said mink, a specialty product in Wisconsin, is also becoming more desired in colder Eastern countries like China, Russia and South Korea.
"We want this to be known throughout the world: Wisconsin is America's dairyland," Lu said. "We don't sell a jug of milk, we don't sell a piece of equipment. We promote the consistent quality and value of our agricultural products. We open the doors, build up relationships. We help a company to be connected with the overseas importers for future products."
Lu also emphasized the need to break into more international markets because domestic demand only represents 4% of the global population and domestic dairy and livestock consumption is not increasing. However, it is increasing for the rest of the population overseas, meaning there are lots of opportunities yet to be found.
Santana noted that despite the bright optimism, there are still many hurdles and challenges to overcome when it comes to increasing international exports. That's why the IAC is there to help producers break into these markets with less risk and more assistance with understanding logistics and regulations, he said. Santana also said he is looking for more opportunities within the European Union with regard to livestock, especially Spain.
"We're trying to develop a relationship with Spain, in particular with the province of Galicia, which is to some extent the Wisconsin of Spain. It's the dairyland of Spain and we believe there is a tremendous opportunity," Santana said. "The way we try to do this is promote agreements of understanding and cooperation between the two."