Trade’s Importance to Southern Agriculture

Agricultural trade has certainly been a major topic among farmers and farm organizations recently amidst declining U.S. ag exports, a new era of ag trade deficits, and disappointment over trade policy. Dating back to colonial days, trade has been a major part of the Southern agricultural economy. Historically, the Southern region has produced, marketed, and shipped various unique southern commodities such as tobacco, rice, cotton and sugar, along with grains, livestock products, fruits, and vegetables to markets around the globe.  

How important is agricultural trade to various southern states today?  In reality, individual state or regional trade data are difficult to measure since agricultural production, processing, and trade can occur in multiple states and/or regions. For example, a calf born and backgrounded in a southern state, might be finished at a feed lot in the midwest, and proccessed/packaged for export in another state or region.  Which state/region gets credit for this export?

USDA’s Foreign Agricultural Service (FAS) relies on data from Census where U.S. ag exports by state or region are based on the final origin of movement of the product to the export market. Given a large volume of U.S. grain shipped out of New Orleans, the FAS methodology results in Louisana being the nation’s largest ag exporting state, despite the vast majority of these grains being produced in other states. Thus, FAS export data will generally understate the relative importance of international markets for inland states. Over the past five years (2019-2023), the FAS database ranks the Southern region as the leading ag exporting region with 38% of the value of U.S. agricultural exports, followed by the Western region (31%), Midwestern region (25%) and the Northeastern region (5%).  According to the FAS database, five of the eight largest U.S. agricultual ports by volume are located in the Southern region which accounted for 60% of U.S. ag export volume over the past five years, with New Orleans being the largest ag port accounting for 36% of U.S. ag export volume and 18% of U.S. ag export value.

Alternatively, USDA’s Economic Research Service (ERS) measures trade data by state based on the state’s share of production value (cash receipts). Using the ERS methodology, within the southern region Texas recorded the largest value of agricultural exports over the past five years, averaging $6.9 billion of ag exports annually (ranks 6^th nationally), followed by North Carolina ($3.9 billion), Arkansas (3.5 billion), Florida ($3.4 billion), Georgia ($3.1 billion) and Kentucky ($2.7 billion). Regionally, the ERS database ranks the Midwestern region as the largest exporting region with 48.1% of U.S. ag exports over the past five years, compared to only 23.2% for the Southern region, reflecting a large percentage of the U.S. agriculture initially produced in the Midwest, but exported out of other regions. 

What about the relative importance of agricultural trade? Adopting the ERS methodolgy, ag exports represents about 1/3 of ag cash receipts in the Southern region. Using this metric, Table 1 illustrates that over the past five years of ERS export data,, Louisiana is the most ag trade-dependent Southern U.S. state with ag exports accounting for nearly one half of the state’s ag cash receipts, followed by Tennessee, Florida, Kentucky, and Mississippi rounding out the top five.

Table 1: Ag Export Trade Dependency

Snell, Will. “Trade’s Importance to Southern Agriculture.” Southern Ag Today 4(18.4). May 2, 2024. Permalink