Vol. 11, No. 3
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July-Sept. 2002 Vol. 11, No. 3 |
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Farm locally, sell globally Minnesota companies can sell globally with the help of international trade organizations
St. Paul, Minn. — In a typical week, Paul Hansen may field questions from Minnesota producers on organic potatoes, soybeans, livestock feed, dairy products, poultry processing and ethanol. The callers are not concerned with raising or manufacturing those products; they want to learn about exporting them. As an international trade representative for the Minnesota Trade Office, Hansen works with agribusiness to develop trade with other countries. He doesn’t mind the calls. “We like to be used,” he says. With about 95 percent of the world’s population outside the United States, the trade efforts of businesses large and small have begun to be directed internationally. Some cooperatives and grower groups have also set foot in foreign markets, such as Earthwise Foods of northwest Minnesota. Crookston farmer and Earthwise member Curt Petrich says the co-op has had some success shipping organic and identity-preserved soybeans, wheat and flax to Japan, Europe and South Korea. “If you are doing things right for customers here, maybe you can do it right somewhere else, too,” Petrich says. Ought to be committed Heading beyond the borders requires commitment and planning, Hansen says. Businesses just starting out are not typically in a position to think globally. They should focus on building solid business in this country first. “For people who are serious about doing business internationally, it’s a process of becoming knowledgeable. It’s usually done in degrees.” Jeffrey Phillips, a trade office representative working with processed food companies, says a company’s commitment to pursuing foreign markets is essential, but there are many small companies that have taken the plunge successfully. Phillips says, “97 percent of exporters are small companies. Businesses of 20 employees and under are the fastest growing exporters.” “It’s more the attitude than the size,” adds Ryan Kanne, international trade specialist with the U.S. Commercial Service. “Being international takes resources of people, time and money. It can be large companies or it can be small. It depends on their strategy and the view of their market.” While most AURI-supported businesses target domestic markets, several have ventured into international waters. “Identity-preserved grains and exporting are excellent means of adding value to crops,” says Michael Sparby, AURI project director. “But I would caution those interested to use all the resources available to them before starting. It can make the difference on whether something is viable or not.” AURI has provided technical support to prepare some crops for export. Where in the world Canada, Japan, Britain and Germany are among this country’s top trading partners. While trade relations have been established, each country has unique considerations, and doing business overseas is not like doing business down the street. “Japan is a consistently large importer of Minnesota ag products,” Hansen says. “But before you make your first sale, there can be a long courtship — emphasizing the need for commitment.” “Canada has very similar tastes to the U.S.,” Phillips adds. “If you are looking at Mexico, Europe or Asia, you have to consider things like flavor, their tastes, packaging preferences, package sizes. It’s a resource commitment. You have to research the market.” While Minnesota producers do export finished products, they are currently large suppliers of processed ingredients. Phillips says Minnesota exporters are finding buyers for ingredients such as dry dairy products and eggs, flour, oils and dried vegetables. Wearing white hats A large portion of the Minnesota Trade Office’s 10th floor office is taken up by its international resource center. To most, books with titles like “International Marketing Data and Statistics” and “World Guide to Trade Associations” are nothing more than cures for insomnia. But the center’s online and print resources offer businesses access to valuable information on foreign markets, trends and key contacts. “We get a lot of calls,” says Liz Wade, research specialist. “People are looking for things like ‘who’s buying, who’s importing.’ We give … access to those things and we help them find answers. We have market research databases and subscriptions that some businesses couldn’t afford on their own or wouldn’t want to take the time to learn to use.” While foreign trade is imposing, Minnesota businesses have considerable resources on their side. (See “Ag Web Sites” on page 14.) In addition to its extensive resource center, the Minnesota Trade Office employs specialists and offers education to help businesses become familiar with countries they are trying to enter. MTO also organizes trade tours to bring Minnesota businesses and trade reps in contact with potential buyers. Phillips is Minnesota’s representative to the Mid-America International Agri-Trade Council, a nonprofit organization promoting Midwest food and ag exports. Other resources include the Foreign Agriculture Service, the U.S. Commercial Service and the Minnesota Department of Agriculture. These services assist in dealing with lingual and cultural barriers, connecting with brokers and distributors, and getting paid. While international trade does present opportunities for Minnesota enterprises, Hansen says it is vital not to forget customers close to home. “We’re sitting on top of a large market domestically,” he advises. “And you don’t have to worry about translation." Exporting Resources A wealth of information is available to businesses interested in exporting agricultural products. The four most prominent: Minnesota Trade Office MIATCO U.S. Commercial Service Foreign Agricultural Service
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July-Sept. 2002 * AURI AG INNOVATION NEWS
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By Dan Lemke