By Julia Debes Kansas Wheat
Kansas farmers grow more than crops through their dues. Spending those dollars to cultivate export markets directly benefits wheat farmers and the broader U.S. economy, according to a new econometric study by IHS Markit and Texas A&M University.
The researchers concluded that two export programs – the Market Access Program (MAP) and the Foreign Market Development (FMD) Program – added an average of $9.6 billion per year to the value of exports between 1977 and 2019. This is great news for Kansas wheat farmers, as approximately half of the Kansas wheat crop is exported each year.
“Our work indicated that MAP and foot-and-mouth disease accounted for 13.7% of all U.S. agricultural export revenue from 1977 to 2019,” said Dr. Gary Williams, one of the project’s lead agricultural economists. . “Additional export revenue strengthens the entire U.S. agricultural sector and creates a multiplier effect throughout the U.S. economy.”
Investing in export market development starts at the combine. The Kansas Wheat Commission is funded by a voluntary assessment of two cents per bushel on every bushel of wheat grown in Kansas and sold to a Kansas grain elevator. The Kansas Wheat Commission uses these funds to invest in agricultural research projects, consumer education, and support for the development of agricultural export markets as a contributing member of US Wheat Associates (USW).
Wheat is the most trade-dependent of the major food and feed crops grown in the United States. But individual farms cannot effectively market wheat overseas. The USW combines funding from 17 Wheat Board member states with federal funding through the MAP and FMD programs to market US wheat, including Kansas Hard Red Winter (HRW) wheat, at customers all over the world. USW staff and consultants add their expertise on how best to use the different classes and grades of American wheat for finished products, from loaves of bread to instant noodles to pasta and more. The USW also works to remove trade or technical barriers that impede the flow of wheat to world markets.
“These export market development programs enable US Wheat Associates to build a critical reservoir of trust and goodwill with our buyers, end users and influential government officials overseas, as well as with key agencies and U.S. government officials,” said USW President Vince Peterson. “And there is a clear return on investment – for every dollar spent on export promotion, there is a return of $24.50 in additional net export revenue – and the return is even higher for the system. ‘American Wheat Supply.’
In addition to calculating the value of the MAP and FMD programs, the researchers also analyzed the potential impact of the Agricultural Trade Promotion Program (ATP) introduced by the USDA in 2019.
The ATP program provided $300 million to cooperating organizations like the USW, and, in turn, these groups contributed $90 million in cash, goods and services. The study’s analysis of expected future returns from these investments between 2019 and 2026 predicts that additional financing for the development of agricultural export markets will provide an excellent return.
Read the study and learn more about the value of US agricultural exports on the farm at www.AgExportsCount.org.