Export mania hit the agriculture sector in the 1970's.  The Soviet Union bought a bunch of U.S. grain shipments, and we had an export bump for a few years.  That set the course for agriculture policy for years... i.e. exports are our future.  But the 1970's was just a bump.  Not a trend.

U.S. farm programs were designed to be export oriented.  Ag economists came up with data proving that future years would show large export growth.  But the export trend never materialized.

Daryll Ray of the University of Tennessee explains in detail in his column this week.

In 1980, the US sold 1.5 billion bushels of wheat into the world export market (solid red line) for a 45.7 percent share of the worldwide market (Fig.2). Twenty-nine years later, US exports are down to 0.8 billion bushels, while Non-US wheat exports—exports of US wheat-export competitors—jumped to 3.7 billion bushels, up from 1.8 billion bushels in 1980 (dashed blue line).

The whole column is worth a read.  Agriculture often does not behave like other markets, for various reasons including supply inelasticity, perishability and the fact that safe and plentiful food is a basic good that a nation needs right now for a government to continue being the government.  General economists assume market behaviors from the textbook apply to agriculture, but are often incorrect.

The point is that increased focus upon growing our domestic market share in any national agriculture and food strategy is a must.  This point is not so different from other manufacturing sectors.  We have the best market here.  Let's develop it.  Jobs and wealth were built with it.

The main ag commodity organizations have always been pushing trade agreements hard.  Readers of this blog are aware of my contempt for those who talk about the export side of the net trade equation only.  They are dishonest.

In the hogs/pork and cattle/beef trade, there is another way to hide the ball.  We are a net exporter of pork and a net importer of beef, which are what the big meatpackers sell.  But we are net importer of hogs and cattle - the precursors of pork and beef - which are what farmers and ranchers sell. 

In the marketplace, the imports of hogs and cattle depress farm/ranch prices, lowering the cost of meat packer procurement.  But wholesale meat prices - a different product from hogs and cattle - are somewhat buoyed by the exports.  Good for multinational meatpackers, bad for ag producers.

Now there is a push to enter into some sort of additional trade agreements with China and Russia.  China is the "holy grail" for the pork industry, according to the National Pork Producers Council. 

That's what we've heard from other sectors, and we see how that worked out.  But more specifically, ag economist Daryll Ray from the University of Tennessee debunks that "export opportunity" fantasy:

[A] clear-eyed look at their history and stated intentions indicates that their goal is to become virtually self-sufficient in meat.

With regard to Russia, Agrinews’ Thorstensen reports that “NPPC not only wants to reach an agreement with Russia, it wants to increase the US quota share as a condition of [Russia’s] World Trade Organization accession.”

Where is the biggest, richest market in the world?  Right here.  We live in it.  And we give it away, thus losing market share in our own market.  With trade agreements that promise us fantasies of "export opportunity" that never seems to materialize. 

Not smart.

UPDATE:  I initially wrote that the U.S. is a net exporter of beef.  This is not true.  We are a net importer of beef.  

Peter Harriman
Argus Leader - South Dakota
February 19, 2010

A federal court ruling from eastern Washington earlier this month could shore up the legal foundation under country of origin meat labeling, or COOL, which faces a challenge from Mexico and Canada at the World Trade Organization.
 
That's the opinion of the cattle industry group R-Calf and Sen. Tim Johnson, a longtime COOL proponent.
 
However, a meat industry spokesman insisted the ruling from the Washington Easterday Ranches case has no effect on the WTO complaint against COOL.
 
"It's a completely separate legal process," National Meat Association spokesman Jeremy Russell said.

The following column was written by Daryll E. Ray, holder of the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and the Director of UT’s Agricultural Policy Analysis Center (APAC).  Daryll Ray’s column is written with the research and assistance of Harwood D. Schaffer, Research Associate with APAC.

The farm media is all atwitter over the announcement by the Obama administration that they have set a goal of doubling US exports in five years. This will include help for farmers in boosting their exports.

You will have to pardon us if we don’t get overly excited about the implications of this export initiative for US farmers.