The growing importance of agricultural trade in Wisconsin

Bill Dobson, Professor Emeritus
Department of Agricultural and Applied Economics
UW-Madison College of Agricultural and Life Sciences
dobson@aae.wisc.edu

(608) 265-4169

Bill Dobson, Emeritus professor, discusses the 2012 ag export outlook

3:23 – Total Time

0:23 – Importance of international trade
1:00 – Economic value of trade
1:18 – Two dollars a hundredweight in dairy trade
1:35 – Trade outlook good, cautious
2:01 – Trade outlook for 2012
2:32 – Opportunities in international dairy trade
2:53 – Portrait of dairy export competition
3:10 – Lead out
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bill_dobson_2012_export_outlook.mp3

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Transcript
Sevie Kenyon
: Bill, welcome to our microphone. Can you start out by telling us how important international trade is to Wisconsin?

Bill Dobson: International trade has become very important since about 1990. That’s because the trade in dairy products has increased from the U.S. being a bit player in international trade into a major player in international trade in dairy products, in particular.

Sevie Kenyon: What kind of dairy products are we talking about?

Bill Dobson: We’re talking about cheese, non-fat dry milk, whey products: these are exceedingly important. For example, we sell a large number of, or amount of whey products to, to China.

Sevie Kenyon: And, what does this kind of trade mean to us, economically?

Bill Dobson: About 13 percent of the milk solids produced in the U.S. enter international trade. It’s become very important. The U.S. has evolved from being a bit player to one of the big four dairy exporters in the world.

Sevie Kenyon: Can dairy producers look at their milk check and see a difference?

Bill Dobson: Yes. They would see a difference if, for some reason, dairy exports declined to zero. They would see a large difference in their milk check, like a couple of dollars per hundredweight.

Sevie Kenyon: What kinds of things do we have to look forward to in international trade?

Bill Dobson: The international trade situation looks quite good. It’s going to be one of the drivers of economic growth in the agricultural sector in 2012, if the European Union does not implode, and compromise or destroy some of the growth markets for agricultural products.

Sevie Kenyon: And Bill, if you could look into your crystal ball for the year ahead. What do you see for international trade?

Bill Dobson: I see good prospects for a couple of reasons. One is that the Federal Reserve has given us a “weak dollar policy” which fosters strong exports of agricultural and non-agricultural products. And the other point that I would emphasize is that the European Union situation is one that will bear strong watching.

Sevie Kenyon: Bill, if someone is of an entrepreneurial nature, what kind of opportunities should they consider?

Bill Dobson: What I suggest is that the U.S. dairy industry-including Wisconsin’s dairy industry-develop additional industry champions, which can be strong competitors, to be able to compete with firms such as Fonterra of New Zealand, Nestle of Switzerland, and Careygroup in Ireland.

Sevie Kenyon: Any idea what that might look like?

Bill Dobson: They will be large. They will have good research and development capability. Exporting champions will have good market intelligence capabilities, particularly regarding China. China is the growth market for lots of agricultural products, including dairy products.

Sevie Kenyon: We’ve been visiting with Bill Dobson, Emeritus professor, Department of Agricultural and Applied Economics, University of Wisconsin, in the College of Agricultural and Life Sciences, Madison, Wisconsin… and I’m Sevie Kenyon.

For more information about the Status of Agriculture in Wisconsin, visit the Wisconsin Agriculture Outlook Forum website.

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