feature
FEEDING THE WORLD
Global agriculture exports bolster our local economy.
WRITTEN BY SUE EDMONDSON
PHOTOS BY CANDICE NYANDO AND JAMIE KINGHAM
Morning and night, the 500 cows at Liberty Jersey Farm in Fallon line up for milking. The twice-a-day routine is business as usual for fifth-generation dairy farmer Ted Christoph, whose family owns the farm. It’s also business as usual to truck about one million pounds of the milk collected each month a few miles down the road to the Dairy Farmers of America plant. There, it’s processed into milk powder and exported, primarily to Latin America and China.
The Christophs are not alone. Sixteen other Fallon dairy farmers send their milk to the DFA plant, which produces up to 80 million pounds of milk powder a year for international exportation.
An hour or so from Fallon at Snyder Family Farms in Mason Valley, onions and alfalfa cover fields farther than the eye can see, about 2,430 acres combined. Each year, a good share of the 600 to 700 semi-truckloads of Snyder farm onions head to international markets — among them Asia, Canada, Vietnam, Mexico, Saudi Arabia, and Dubai. Much of the Snyders’ alfalfa is exported to the United Arab Emirates.
Other Northern Nevada farms join the Snyders in selling their onions and alfalfa worldwide. In fact, for a state that ranks in the bottom third of the U.S. for its number of farms, Nevada does a whopping agricultural global export business. According to the Nevada Department of Agriculture, in 2016, those sales neared $337 million.
Why we export
“Think of this story,” says Thomas Harris, University of Nevada, Reno professor and director of the Center for Economic Development. “When Eisenhower was president, there was a milk glut, and he encouraged everyone to drink an extra glass of milk. The problem was, there’s only so much milk a person is going to drink. It’s the same thing with agriculture. Farmers and ranchers are extremely productive, and there’s only so much they can sell to U.S. consumers. That’s one reason why global export markets play such an important role in our economy.”
It’s not only a matter of selling products; it’s the money products command.
“Our climate, with its hot days and cool nights, produces very high-quality crops,” Harris says. “Buyers are willing to pay a premium because of that quality.”
Higher margins and less competition add to the profitability of exporting, explains Joe Dutra, founder of Reno’s Kimmie Candy and president of Westec NV Inc., which exports non-GMO seeds internationally.
“When you sell in the U.S., you’re competing with companies like Monsanto,” Dutra says. “In the export business, the trend is to buy from smaller outfits with excellent products.”
Low shipping costs is another factor that makes global markets so appealing. Dan Strebin, who buys Snyder farm onions to sell overseas, knows this firsthand after 30 years in the agricultural global export business.
“I can actually ship product to Southeast Asia for less than I can to Kansas,” Strebin says. “A shipping container holds 27.5 tons, whereas trucks are only allowed to carry 21 tons on most U.S. highways. Between truck weight limits and other expenses, it can be more cost effective to export.”
Grants designed to promote worldwide exporting offer even more incentive. Funded by the USDA and distributed through the Western United States Agricultural Trade Association, grants reimburse food and agriculture enterprises for 50 percent of costs associated with global marketing — attending trade shows for example — up to $300,000 a year.
“The return on those grant funds is $182 for every dollar invested in marketing efforts,” says Jeff Sutich, NDA international marketing coordinator.
Not only that, but in 2016 Nevada’s agricultural global export business created 1,866 jobs that pay 17 percent more than the average Nevada wage.
How it works
Northern Nevada farmers have marketing options. One is selling to a company that processes crops for international markets — a popular choice for alfalfa and hay growers. Farmers who choose that option have kept the Menezes family in business for three generations. Just east of Sparks at its Lockwood plant, Menezes Brothers Inc. turns Nevada-grown hay and alfalfa into compressed bales and cubes. Its 32 trucks transport products to port, where compressed bales are shipped to China and cubes to Japan — 50,000 tons a year in all.
An alternative is using someone such as Strebin, who does everything from determining which crops a farmer should grow to marketing and delivery. Buyers also may search out sellers of specific crops, either by contacting farmers directly or asking those familiar with local growers, whether individuals such as Dutra and Strebin, or organizations such as the USDA or NDA. Trade shows also provide a venue for connecting buyers and sellers.
While cooperatives often are a popular way to sell crops, DFA is the only cooperative in Northern Nevada that globally exports its products.
“We have a unique model,” says Michael Lichte, DFA vice-president and general manager, dairy powder ingredients. “The Fallon plant was the first of its kind for DFA, specifically built to proactively serve global dairy consumers.”
Having the means to market is not enough; in the global marketplace, businesses succeed or fail based upon reputation, often of a single person, such as Dutra. His excellent reputation has made him a commodity — he’s accompanied Gov. Brian Sandoval on trade missions to China, North Korea, and Mexico, where his connections open doors.
“It’s fascinating how the world is such a small place,” Strebin says. “Buyers deal with you because they trust you, know you’ve got a great product, and know you’ll make the process easy for them.”
Derek Menezes agrees.
“My grandfather started our export business by selling hay to Japan,” he says. “Forty years later, we’re still selling to Japan. Customers know they can count on us.”
A caveat
Like everything else in agriculture though, global exporting faces challenges.
“Drought and the strong U.S. dollar negatively impacted the export market in the last couple of years,” says Mike Helmar, UNR research analyst and agricultural economist. “The fourth quarter of 2016 showed improvement, but it takes time to recover.”
Still there’s an upside to down years.
“Even in those years, farmers maintain their linkage to the community,” Harris says. “Unlike companies that just shut down, farmers still maintain their businesses, still buy local goods, and still use local services.”
Freelance writer Sue Edmondson has written for various publications in Northern Nevada and Northern California. One of her favorite topics is agriculture, which covers more ground than she ever imagined.
