Posts Tagged ‘agriculture’

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FDI in Agribusiness: Feeding the U.S. Economy

November 21, 2019

Kimberly Aagaard is a Research Analyst at SelectUSA

In honor of Thanksgiving and the recent addition of the agribusiness industry page to the SelectUSA website, it is a great time to look at how foreign direct investment (FDI) in agribusiness helps support feasts and festivities around the country.

What is agribusiness?
By SelectUSA’s definition, the agribusiness industry is made up of establishments engaging in livestock, crop production, forestry, aquaculture and fishing, hunting, and agricultural chemical manufacturing.*

What has FDI contributed to the U.S. agribusiness industry?
Recently, SelectUSA worked with Charoen Pokphand Group (CP Group), a 98-year-old Thai company, to help the company establish a U.S. subsidiary called Homegrown Shrimp USA, LLC. The company announced earlier this year that it will produce shrimp with a focus on nutrition and sustainability and invest approximately $6.6 million in a recirculating farm outside of West Palm Beach, Florida. In addition to investing in the community and producing a more reliable supply of seafood, Homegrown Shrimp USA will use innovative aquaculture technology in its land-based farm. CP Group has also undertaken efforts to collaborate on research with the University of Florida’s Institute of Food and Agricultural Sciences.

Looking at the national level, the agribusiness industry’s FDI position in the United States was valued at $14.1 billion in 2018, according to the Bureau of Economic Analysis. In 2016, agribusiness FDI also supported an estimated 14,700 U.S. jobs, $114 million worth of research and development spending, and over $1.1 billion in U.S. exports!

According to fDi Markets, announced FDI greenfield projects in the U.S. agribusiness industry have totaled approximately $3.3 billion in the past five years. Pesticides, fertilizers, and other agricultural chemicals made up the largest agribusiness sub-sector by announced capital investment from September 2014 to August 2019 (over $1.9 billion).

In the past five years, the top sources of U.S. agribusiness greenfield projects by announced capital investment are Norway ($809.7 million), Germany ($674.3 million), Hong Kong ($373.4 million), Canada ($372.5 million), and Brazil ($259.6 million). In addition, Germany was the largest source market by number of projects (22) and by estimated jobs created (1,913) from September 2014 to August 2019.

Norway was the top source market of U.S. agribusiness FDI in the past five years.
Investors from the top 10 source markets announced a total of $3.1 billion in greenfield capital investment in U.S. agribusiness between September 2014 and August 2019.

Chart for FDI in Agribusiness 112119

 

Agribusiness FDI in the United States not only brings investment and new jobs to our communities; it also brings us the delicious products of those investments. As Thanksgiving approaches, SelectUSA is grateful for all FDI, especially that of the agribusiness industry.

To learn more about how SelectUSA supports FDI in all industries, sign up for our email updates and visit SelectUSA.gov for resources such as FDI fact sheets, interactive data tools, and informative reports. You can also follow and contribute to our #FDIintheUSA campaign on Twitter!

About SelectUSA
Housed within the U.S. Department of Commerce’s International Trade Administration, SelectUSA promotes and facilitates business investment in the United States.

*SelectUSA categorizes agricultural machinery in the machinery and equipment industry and categorizes food processing in the consumer goods industry

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Opportunities for U.S. Agricultural Equipment Exporters

May 4, 2017

Padraic Sweeney is a Team Leader for the International Trade Administration’s Office of Industry & Analysis 

 Despite a negative overall outlook for 2017-2018, opportunities exist for U.S. agricultural equipment exporters willing to pursue them. The Black Sea Region has emerged as a major exporter of wheat, fueling Russian and Ukrainian imports of U.S. machinery. Low interest rates and funding from Brussels enable farmers in several European Union countries to invest in equipment. Western Hemisphere markets including Mexico, Chile and Peru present opportunities for exporters of certain types of equipment.

Nevertheless, U.S. exports of agricultural equipment will continue to decline in 2017-18. Market conditions responsible for the decline—which is a worldwide phenomenon—are unlikely to change in the near to medium term. Low prices for widely-traded agricultural commodities are expected to continue through 2018 and beyond. Large inventories of late-model used equipment will continue to be a drag on the market, especially in North America. Weak local currencies, a problem that intensified in late 2016 and early 2017, will impede recovery in many markets.

The 2017 ITA Agricultural Equipment Top Markets Report  ranks countries to identify opportunity markets in a difficult global business climate, by relating export volumes, market growth in recent years, political and economic risk and future potential. The eight markets ranked in 2017 represent 60 percent of U.S. exports in 2015—the last year for which complete, globally comparable data were available as the report was written.

U.S. agricultural equipment exports will continue to decline in 2017-18 in the absence of major increases in global agricultural commodity prices. Such increases are unlikely. High interest rates in markets such as Brazil and South Africa will further constrain the recovery of U.S. exports. Low interest rates in others, especially the Eurozone, may mitigate somewhat the effects of low agricultural commodity prices. Weak local currencies relative to the U.S. dollar will also remain a barrier to exports of U.S. agricultural equipment. Low petroleum prices, if they continue, will hold down farmers’ production costs, while restraining economic growth and demand for imported foodstuffs in petroleum-producing countries.

Opportunities

In a generally bleak international marketplace, some bright spots could be found in 2016. The Russian and Ukrainian markets have shown significant growth, especially for equipment to produce grain, oilseeds and other commodity crops. U.S. exports to Russia were up an impressive 35 percent overall in the first six months of the year. Exports to Ukraine grew even more dramatically, by more than 204 percent. Improved economic conditions have led to the emergence of the Black Sea Region (Russia, Ukraine and Kazakhstan) as one of the world’s major wheat exporting areas. While impressive, this recovery is from very low levels and quite fragile, given the region’s high level of political risk.

In the European Union (EU), Germany in particular has shown surprising growth as a market for equipment for grains, oilseeds and other commodity crops. Extremely low interest rates in the Eurozone and the allocation of EU rural development funds for the Baltic, Central and Southeastern European countries provide immediate stimulus for agricultural equipment purchases in some markets. Especially for the EU’s former Soviet-bloc members, modernization of agricultural economies after decades of under-investment will continue to drive sales of agricultural equipment.

A number of Western Hemisphere FTA markets continue to present opportunities for U.S. exporters. Mexico is the United States’ largest market for tractor parts, engines and engine parts, and exports of these products to Mexico have expanded in both absolute and relative terms in recent years. Mexico is also a leading market for equipment for the cultivation of fresh produce and high-value crops, raising livestock, and for mowers and other power equipment. Chile and Peru have shown strong growth in recent years, although export performance in 2016 has been disappointing.

For companies with the right products that are willing to market and price competitively, Australia also presents opportunities. Australia exports meat to its Asian trading partners, in particular FTA partners China, Japan and Korea, and U.S. exports of equipment for raising livestock—as well as mowers and other power equipment—have done well in 2016.

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USDA Seeking New Agriculutural Trade Advisory Committee Members

October 18, 2011

The U.S. Department of Agriculture is seeking greater diversity on their Agricultural Trade Advisory Committees (ATACs) they jointly administer with the U.S. Trade Representative. The ATACs are a formal way to ensure ongoing discussions between the federal government and the private sector about agricultural trade issues. The committees provide advice and make recommendations to the Secretary of Agriculture and the U.S. Trade Representative about a wide range of agricultural trade issues. They are very similar to the Industry Trade Advisory Committees that the International Trade Administration jointly administers with the USTR.

To learn more and apply to become a member, visit the ATAC website.

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Big Business at Big Iron

November 2, 2009

(This post contains external links.  Please review our external linking policy.)

Heather Ranck is Director of the Fargo, North Dakota US Export Assistance Center. She is also active on the Agribusiness Team, and in that capacity she promotes the export of US-made agricultural machinery throughout the world.

So Much to Do, So Little Time

I keep telling myself: sleep is overrated! Somewhere between the 1 a.m. airport pickup for my colleague arriving from China; and the 7:30 a.m. Ex-Im Bank finance meeting sleep tends to take a back seat to all the organizing, facilitating, entertaining and crisis management that is inherent in putting on any large event. The Big Iron Farm Machinery Show is the biggest agricultural machinery show in the Upper Midwest, and in 2007 we decided to make it a global event when the former Soviet countries began showing very high interest in our large scale farm machinery built in North Dakota. This, our third year, is once again packed with activity and opportunities for the 150+ foreign buyers who are descending on Fargo to learn about American large scale crop farming.

This year I focused my recruiting efforts on Africa, a new frontier for large scale farm equipment. Having lived in Mozambique and Congo, I wanted to scope out the prospects, so in May 2009 I took a 3-week trip to South Africa, Angola and Mozambique. After 144 meetings I learned a lot about the needs and opportunities for farm equipment in Africa. We had a delegation of 25 Africans at Big Iron this year, and I would like to see American technology helping increase food production in Africa.

The Big Iron International Visitors Program is a collaborative effort between the U.S. Commercial Service (the primary federal government export assistance agency) and the North Dakota Trade Office (a state of North Dakota trade promotion organization); and our combined team of 10 people coordinates very closely on all recruiting, events planning, logistics, interpreting, transportation and programming.

During the show, the hub of all the activity is the International Visitors Pavilion, for which the International Trade Administration’s Market Development Cooperator Program (MDCP) provided substantial funding for the meeting rooms this year. This is Grand Central Station for buyers and sellers, with meeting rooms, food and COFFEE!

We are always coming up with new elements to the program, and one of my new ideas this year was to hold an international soccer match. We had a beautiful, sunny day in Fargo and Fargo Parks let us use the best fields in Fargo. The game ended in a 4-4 tie, further ensuring international harmony.

I also have taken on the activity of ensuring adequate language assistance for buyers and sellers. I speak Portuguese, and therefore did quite a bit of interpreting for the Angolan delegation this year. We are fortunate to have 3 universities in the Fargo-Moorhead area, so we recruit student volunteers to facilitate business meetings throughout the week.

Big Iron 2009 was as exciting as ever this year with representation from 12 different countries, many of them new to Big Iron. It is thrilling to watch the years of effort leading to deals being negotiated before our eyes; and millions of dollars of US agricultural machinery being shipped all over the world.

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