When a commodity is exported, those dollars flow through the economy an estimated 2.5 times and the impact ripples through local communities, the state and nation.
That was point driven home by panelists last Thursday night at an International Trade Town Hall in Lexington. “Each and every one of you are impacted by exports, more so than you will ever realize,” stressed Don Hutchens of Johnson Lake, former executive director of the Nebraska Corn Growers.
One day before U.S. tariffs on Chinese goods were set to begin, five panelists representing the corn, ethanol, beef, manufacturing and commodity marketing industries put the spotlight on trade issues that should be every citizen’s concern. Organized by the Lexington Council for Economic Development (CED), the speakers, all with local ties, addressed the impacts of trade on the area economy.
“No one wins in a trade war,” said Hutchens. “Jobs are lost and consumer costs increase. Tariffs lead to retaliatory measures and they hit ag first, they know our strength.”
Even though steel and aluminum tariffs weren’t in place, just the threat of those tariffs caused a material price increase of 50 percent since January 1st at Orthman Manufacturing, said panelist and Orthman President John McCoy. “That 50 percent contributes to a 30 percent loss in profit,” he said.
“If we are going to remain sustainable and profitable, we have to maintain export markets,” noted Craig Uden of Elwood, immediate past president of the National Cattlemen’s Beef Association. “With 95 percent of the world population living outside the U.S. that is where our market is.”
Uden noted that Dawson County engages in $118 million in international trade and that translates to a per farm value of $146,000. “That divides into $41 million for beef, $42 million for corn, $6 million for pork, $27.4 million in soybeans and $2 million for wheat,” said Uden.
Put another way five percent or 437 jobs in Dawson County could be directly attributed to exports in 2016, he said.
Panelist Scott McPheeters of Gothenburg, who serves on the Nebraska Ethanol and KAPPA Cooperative Boards, noted trade disagreements could disrupt a huge flow of Nebraska corn and corn by-products.
“Mexico is a top importer of Nebraska corn. Nebraska is a net exporter of fuel, 2.1 billion gallons of ethanol annually,” he said. “Nearly 700 million bushels of corn are ground annually for ethanol and as a result over 13 billion pounds of distiller’s grains are produced. China imports 40 percent of the distiller’s grains produced in the United States.”
With the U.S. exporting ethanol to 57 countries around the world, the impact of trade on the corn market is huge, said McPheeters. “Over 60 nations have a renewable fuels policy. We don’t have a starch shortage in this country so we take starch and make fuel out of it, which leaves us distiller’s grains as a protein.”
Paul Mussman of Holdrege, president of Ag West Commodities, an ag marketing firm noted that 20 percent of the ag sector produces in the U.S. is exported. “Eighty percent of growth in agriculture in the last decades has gone to export trade,” he added.
While the threat of trade wars with more than one country make people nervous, Mussman cautioned it should not be viewed as all doom and gloom. “We need to remember we have a high quality, consistent product,” he said. “Do we dismiss it or do we improve it? It is not in our mindset to do less, so we should focus on moving it up.”
At the conclusion of the town hall, Lexington CED member and town hall organizer Earl Lindeman noted, “ We’re (the CED) usually pretty quiet, except when we need to be and this was one of those times. International trade is a very important part of our economy. This is about people, we’re all connected.”
In an effort to communicate with policy makers at the state and national level, Lindeman noted they formulated a non-partisan petition to encourage policy makers to pursue legislation, policies, executive actions and regulations to foster greater access to foreign markets.
The CED’s goal is to collect at least 1,000 signatures to send to Nebraska’s Congressional delegation in Washington, D.C. The overall goal is to get influencers on both the state and national levels to support trade.
In addition, the CED hopes their initiative will prompt other Nebraska counties to undertake similar projects.
The CED will have the petition available for signing at upcoming area events, including the Dawson County Fair. Anyone interested in signing the petition may contact Lindeman at 308-325-6127.