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Kentucky is an important producer and exporter of agricultural products. In
2008, the State's cash farm receipts totaled $4.8 billion. Kentucky ranked 22nd
among all 50 States in 2008 with agricultural exports estimated at $1.6 billion.
Agricultural exports help boost farm prices and income, while supporting about
18,532 jobs both on the farm and off the farm in food processing, storage, and
transportation. Exports are important to Kentucky's agricultural and statewide
economy. Measured as exports divided by farm cash receipts, the State's reliance
on agricultural exports was 33 percent in 2008.
Kentucky’s top five agricultural exports in 2008 were:
live animals and red meats -- $383 million
tobacco leaf -- $331 million
soybeans and products -- $307 million
feed grains and products -- $148 million
wheat and products -- $212 million
World demand for these products is increasing, but so is competition among
suppliers. If Kentucky's farmers, ranchers, and food processors are to compete
successfully for the export opportunities of the 21st century, they need fair
trade and more open access to growing global markets.
How Trade Agreements Benefit Kentucky Agriculture
Under the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR),
U.S. prime and choice cuts of beef gain preferential access as applied tariffs
of 15 to 30 percent are immediately eliminated (except the Dominican Republic)
while those applied to other cuts are phased-out over 15 years. Tariffs on beef
offal and other beef products are phased out over 5 to 10 years. As part of the
agreement, all six countries are working toward the recognition of the U.S. meat
inspection and certification systems, which would replace the existing policy of
plant-by-plant inspections and approval. From 2001 through 2003, U.S. suppliers
annually shipped on average 4,094 metric tons valued at $9.8 million to all six
As a soybean producer, Kentucky benefits under the Uruguay Round agreement as
South Korea reduced its tariffs on soybean oil by 14.5 percent from 1995 to
2004. Thus far, the tariff reduction has supported a threefold increase in
export volume. The Philippines reduced its tariffs on soybean meal from 10 to 3
percent during the same period. China’s accession to the WTO has helped to raise
our exports of soybeans to that country by over six fold from 1999 to 2004,
surpassing $2.4 billion this year.
Export Success Stories
The American Soybean Association used Market Access and Foreign Market
Development program funds to distinguish U.S. dehulled soybean meal from that of
alternative suppliers in Korea. Since the first 13, 000 MT shipment of U.S.
dehulled soybean meal was introduced to the feed and livestock industry in 2001,
the perceived value that end users have of U.S. meal, as demonstrated by price
premiums, keeps rising. Buyers of U.S. meal are paying a premium of $16 per
metric ton over competing meals from South America and India. This should be
compared to $11 per ton three years ago. The number of feed mills, integrated
poultry, and swine growers that bought U.S. product also increased to 24 in 2003
from three in 2001. As a result, exports of dehulled meal more than tripled to
79,000 MT over the same period. Exports of U.S. soybean meal to Korea were
valued at $17 million in 2003.