I’ve heard it said often: imports hurt us and exports don’t really help us. In fact, I’ve heard it so often that, at some level, one could almost begin to believe it, except that I’ve seen the data and understand the principle that sheer volume and dollars can be misleading. Rather, one must look at the relative value differences and calculate the net impact of trade to understand the benefits. CattleFax currently estimates that exports add about $128 to every fed animal in the U.S. We can’t lose sight of the fact that 96% of the world’s population and virtually all the increase in wealth is coming from outside our borders.
I recently read a newspaper article about McDonald’s expansion plans in China. McDonald’s happens to be way behind Yum Brands, the owners of companies like Pizza Hut and KFC, in China. But, McDonald’s plans to open one new restaurant daily over the next 3-4 years in China. That’s up from the “paltry” one store every other day that the nation’s largest restaurant chain is currently opening in China!
The future of our industry is twofold: we must continue to increase market access and imports and we must stop the decline in market share. Per-capita consumption, of course, is not a good indicator of demand, as consumption is a function of supply, which is affected by many things. Yet at a time when the industry is looking at supply at levels that endanger both market share and infrastructure, it’s amazing to me that some folks continue to argue against trade.