June 06, 2016

06/06/2016: Study: Corn exports add US$74.7 billion to US economy

http://www.grains.org/
Image: Rae Allen
Exports of US corn and corn products generated US$74.7 billion in annual economic output in 2014, with sales of all US feed grain products contributing US$82 billion, according to a new analysis conducted by Informa Economics.

According to the analysis, the export of corn and corn products increased the US gross domestic product (GDP) by US$29.8 billion over what would have occurred without such exports. The number of full-time equivalent jobs linked directly or indirectly to corn exports totalled 332,787.

All feed grains examined – corn, corn products, sorghum and barley – increased the US GDP by US$33 billion over what would have otherwise occurred, affecting 371,536 jobs.

“Corn – whether in the form of feed, ethanol, or meat and dairy – is a major driver of the US farm economy. Exports impact not just farmers and ranchers, but the entire US economy,” said National Corn Growers Association President Chip Bowling, a farmer from Newburg, Maryland.

“That’s why it’s so important that farmers and ranchers have access to international markets, and why we need global trade agreements such as the Trans-Pacific Partnership that give us a chance to compete.”

The study, which was commission by the National Corn Growers Association (NCGA) and the US Grains Council (USGC), quantifies the economic benefits nationally and to each US state and selected Congressional districts of grain exports, showing results for corn, ethanol and its by-product distiller’s dried grains with solubles (DDGS), corn gluten feed and the corn equivalent of meats, in addition to sorghum and barley.

Every US$1 in exports of grains and grain products generates an additional US$3.23 in business sales across the US, the study found. The positive economic effects of corn exports benefit not only agriculture, but also wholesale trade, real estate, oil and natural gas production, and the banking and financial industries.

“Farming is a global business, and this study shows how immense the impact of grain exports is on not just the agriculture economy, but our national economy,” said Alan Tiemann, USGC chairman and a farmer in Nebraska.

“The work our industry does to build new markets and grow our relationships with those overseas who rely on US grains is critical for US farmers’ profitability.”

The study also touched on the negative consequences to reducing exports of grain products, showing that if these exports were suddenly halted, more than 47,000 jobs and US$2.8 billion in GDP would be lost in the farming, ethanol production and meat production industries alone.

Mr Bowling said this study underscores the need for the Trans-Pacific Partnership, the pending trade agreement with 11 other countries that will expand farmers’ market access to the Asia-Pacific region.

“America’s farmers and ranchers have a lot to gain from new trade agreements such as TPP, but there is also a consequence for not moving forward,” Mr Bowling said.

“Every day we delay TPP means lost markets, which this study demonstrates has a ripple effect throughout the farm economy. That’s why Congress needs to act. The sooner TPP is passed, the better for America’s farmers and ranchers.”

The full analysis is available online HERE.
 

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