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VIRGINIA HAM IN CHINA, SOYBEANS IN MOROCCO, APPLES IN CUBA

By Matthew J. Lohr, Commissioner, Virginia Department of Agriculture and Consumer Services (VDACS)

 

I have spent my life working in Agriculture in Virginia, but in those 40 years, I’ve never seen anything quite like what is happening now with our exports to other countries. In the early days of Virginia and this country, our goal was to become self-sufficient, a goal we realized through agricultural independence. Then enterprising people in the 18th century realized that we had a lot of items other countries desired, items such as tobacco, cotton, and native plants, fruits and vegetables. We began shipping them first to England, then to other countries, and thus began Virginia’s export markets. Our history is proud, indeed, but it’s our present and our future that excite me so today.

 

In 2011, Virginia set an all-time record for exports: $2.35 billion dollars, a more than six percent increase from 2010. This surpassed the previous record set in 2009. The growth in agricultural exports comes despite a continued slow economic recovery worldwide. At the Governor’s Conference on International Trade, Governor McDonnell remarked, “Agriculture and forestry are vitally important to economic growth in Virginia. With more than one quarter of farm cash receipts attributable to export sales, continuing to grow Virginia’s agribusiness exports is a priority.”

 

You may be surprised to learn what our number one export market is: Morocco, where last year we took advantage of the Free Trade Agreement with that country and shipped them soybeans, soy oil, soy meal, corn and other products worth $360 million. Our second biggest nation for Virginia exports was China with $304 million in products such as soybeans, pork, animal feed, seafood, cotton and more. In 2009 we sent $58 million of soybeans to China; in 2010, that number grew to $73 million. In 2011, we sent $108 million, a 48 percent increase over the previous year. In January 2012 alone we exported $52 million worth of soybeans to China, an amount almost equal to the entire year’s exports in 2009. In 2012 we sent our first shipment of soybeans to a new Chinese port, Dangdong, so I am very optimistic that we will continue this growth.

 

Canada, our third ranked country, imported $220 million worth of products from Virginia, including processed food, wood products, peanuts, fresh fruits and vegetables and poultry. Switzerland ranked fourth with $149 million, mainly in leaf tobacco. Fifth-ranking Egypt imported $139 million worth of wheat, hardwood veneer and more.

 

Cuba is a nation that has been importing our agricultural products for only ten years, but it now ranks seventh on our list with $65 million in products such as apples, pork and soybeans. Our list contains other countries that might not have sprung immediately to mind if someone asked where Virginia ag products go. How about Tunisia, Saudi Arabia or Ireland? Would you have thought of them? Well, we sent them soybeans, animal feed, poultry, barley and corn to the tune of $157 million for all three countries. Let me assure you that this is just a sampling, but if you would like more information, you’ll find it on our website at vdacs.virginia.gov/agfacts/index.shtml or I will be happy to send you a copy of the 2011 - 2012 edition of our VAgriculture Facts and Figures brochure.

 

So what explains this dramatic increase in Virginia’s ag exports? There are many reasons, but let me highlight just a few:

 

Trade Missions: This past year the Governor led trade missions to China, India and Israel, and our Marketing Director, Charles Green, participated in these as well as an international trade exposition in Cuba. We have participated in this expo every year since 2002 when the U.S. relaxed the embargo on goods to Cuba to allow agricultural and medical products.

 

Trade Deals: Virginia exporters are leaders in developing live cattle exports to Turkey and Russia. Both countries have been increasing demand for both beef and dairy breeds. In fact in Russia, they never had a dedicated beef industry as we know it. All beef in Russia was from cull dairy cows. Now, thanks to the work of VDACS and Virginia exporters, Russian farmers are raising Angus and Hereford cattle for the first time, and Russians are experiencing high quality beef as a result. Likewise, the Russian dairy industry was historically plagued by low production and poor quality milk. Now U.S. Holsteins and bulls from Virginia are improving the production capacity and quality of the milk in Russia.

 

Opening of New Overseas Markets: I have already mentioned what the Free Trade Agreement (FTA) has done for Virginia soybean producers who are sending their products to Morocco. We have had similar success in South Korea where a recent FTA has opened up the market for everything from Virginia sausages and soybeans to cotton. The Central American Free Trade Agreement (CAFTA) and NAFTA for North American countries also have opened trade between Virginia and these nations, as well.

 

Establishment of International Trade Offices: To me, one of the most exciting parts of our growing export business is the opening of trade offices in three key areas overseas. We have had an established office in Hong Kong for some time and David Wong is a fulltime VDACS employee there. Recently we added two new offices in mainland China (Shanghai) and India. These three areas are important to us because they already import many of our products and the potential for growth is tremendous. They have burgeoning populations, a growing middle class with an appetite for our products and friendly relationships with Virginia.

 

With a population of more than 1.2 billion and an economy growing at nearly nine percent per annum, demand for imported agricultural products is expected to grow along with India’s economy. In Shanghai, China, our consultant has responsibilities that include marketing and business development of four marine ports, one inland port, as well as logistics, warehousing and free trade zones with the Commonwealth of Virginia. The focus there is on maintaining, promoting and strengthening the relationships with ocean carriers, logistic companies, shippers and other Port of Virginia business partners.

 

On-the-ground representation is critical in developing and maintaining export markets. These trade representatives are skilled in lead development, follow-up with Virginia companies, and assistance with shipping and regulation information specific to international markets. They can assist our Virginia companies with understanding the import requirements and advice on how to ship their products without costly delays.

 

During my two years as Commissioner, I have come to see exports as a very important tool for Virginia farmers. I also have learned that it takes a myriad of details, a lot of diplomatic skill and a great deal of patience to bring an export deal to fruition. I want to thank all of the people who are making this happen in Virginia, Governor McDonnell, Secretary Haymore and Director of Marketing Charles Green; our international marketing staff and our overseas representatives; but most of all, our farmers who have taken the challenge, learned the skills and made exports of agricultural products a reality in Virginia.

 

 

Elaine Lidholm

Director of Communications

Virginia Department of Agriculture and Consumer Services

102 Governor Street

Richmond VA 23227

804.786.7686