Joel Severinghaus
Iowa Farm Bureau Federation
International Trade Analyst

It has been rewarding, and sometimes challenging, helping two farmer-owned companies with export marketing for the past year or so. After interviewing a range of candidates, the Iowa Farm Bureau Federation offered consulting and financial assistance to help the Greene Bean Project and Wholesome Harvest Organic Meats expand into export markets. Working closely and traveling overseas with the Iowa farmers who run those companies has reminded me of the steep learning curve that comes with international business. I’ve done this stuff before in previous careers doing import/export, but it’s all new for the farmers we’re helping.

When we decided to start this export assistance project, I visited or talked with farmer-owned value-added enterprises across the state, trying to gauge their “export readiness” and chances of success in a foreign market. Economic developers and trade consultants use this term “export-ready” to describe a company that has the attitudes, experience, and resources necessary to pursue international sales and make money exporting. A basic “export readiness” list includes these attributes:

Business competence

If you’re not already doing well with domestic business, you probably shouldn’t jump into exporting. Do you already have a track record of making sales, delivering product, and getting paid? Do you have processing, marketing, sales, distribution, and accounting systems in place? If you’re not making money in Iowa, you don’t have much chance of making it in Mexico. Or China.

Commitment

It takes time and money to make foreign sales. There’s a cliché that “you can’t fax a handshake.” You have to go call on potential customers in person. Repeatedly. It may take several visits to close the first deal. At a recent dairy export conference, I heard someone ask a panelist how he found new customers in Asia. The experienced exporter answered, “That’s what airplanes are for.” Plane tickets and hotel rooms for a business trip to Japan aren’t cheap, but you may be able to get grant funding to cover some of the costs. The greater cost is time – are you willing to take several weeks per year away from your family and farm to travel overseas?

Curiosity and willingness to learn

Your foreign customer lives in a different culture, and may speak a different language. Are you willing to bone up on some world history and geography, do some market research, and learn different ways of doing things and seeing the world? To think in terms of metric tons per hectare instead of bushels per acre? To learn enough foreign business etiquette and polite phrases to get by? To learn about international terms of sale, international shipping, and how to get paid from abroad? You can outsource much of the logistical and financial details to trade professionals, but you’ll need to learn some of the basics.

Making exports a priority

To be successful, you’ll have to treat export customers as well as, or better than, your domestic customers. That means the fax or email from overseas needs to be answered today, not when you get around to it. Selling to someone in the next county will always be quicker and easier, so it’s tempting to put the more difficult, longer-term pay-off export prospects on the back burner. Exporting means there will be hassles and new ways of doing things, so you need buy-in from all levels of your organization, from the president to the shipping clerk.

Flexibility and patience

International business and travel can be frustrating. If you’re going to do business with foreign cultures, you need lots of patience and a high tolerance for uncertainty. When you start out, you won’t know the rules, the cultural nuances, or the lingo. Interpreters can help with a foreign language, but you’re still going to be sitting in some business meetings where you have no clue what’s going on or being discussed. Things beyond your control can go awry, such as BSE and avian influenza outbreaks bringing U.S. beef and chicken exports to a sudden halt. And you will make mistakes and faux pas to learn from. May they not be expensive mistakes.

Despite all these challenges, Iowa farmers export because it can be fun and profitable. Foreign markets might pay higher prices for the same product you’re selling locally. Foreign consumers might prefer, and pay a premium for, a product that’s not in high demand here, such as pork organ meats, or turkey dark meat, or specialty soybeans for tofu.