Strong dollar dragging on exports
An economic dilemma has tapped the brakes on Northeast Wisconsin’s red-hot exports.
As the U.S. dollar has strengthened against foreign currencies the past few years, many have taken it as a positive sign the overall economy continues to grow and strengthen — slower than desired, perhaps — from the lows of the Great Recession. Unless, or course, you’re an exporter.
A strong dollar makes U.S. goods more expensive on the world stage, and exporters from Northeast Wisconsin have been feeling the pinch. After several years of growth in the value of exports from the region, Northeast Wisconsin has
seen a slowdown and slight declines since the dollar began its latest upward trend.
“The first part of 2015 has not been a great time for exporters,” says Jen Pino-Gallagher, bureau director for business and market development with the Wisconsin Department of Agriculture, Trade and Consumer Protection. “As
with any business, it can be very cyclical. We continue to find new markets for Wisconsin products and with a good strategy, a business can overcome these challenges.”
While the strength of the dollar may pose some challenges going forward, there are still plenty of successes to celebrate, according to export data maintained by the U.S. International Trade Administration.
In 2014, Wisconsin exported products valued at more than $23.4 billion, an increase of about 1.4 percent from 2013’s export total of $23.1 billion. The New North region’s five metropolitan statistical areas exported a total of $4.3 billion in 2014, down slightly from $4.4 billion in 2013.
Exports from Northeast Wisconsin comprise about 18 percent of the state’s overall total.
Part of the decline for Northeast Wisconsin reflects statewide trends of a slowdown in exports for industrial machinery, parts and other manufactured components, though they still represent the largest export category for the state at $6.4 billion, about 27 percent of all exports.
Of the five major MSAs that comprise the New North region, Oshkosh, Appleton and Fond du Lac have seen declines in export values in 2014. Green Bay and Sheboygan, however, have seen an increase since 2013, according to the data.
A fondness for Wisconsin’s agriculture products, from cheese to vegetables to cranberries, has helped to offset those segments that are declining, with exports in those categories surging as producers around the state sent more than
$3.6 billion worth of agriculture products overseas in 2014, an increase of nearly 14 percent from the previous year.
A developing worldwide taste for American barbecue has meant growing overseas sales for Red Arrow International, which sells natural smoke condensates for use in food products.
“Smoked foods, particularly in the barbecue segment, are becoming more popular all around the world,” says Christopher Gutman, managing director of Red Arrow International, a sister company to Manitowoc-based Red Arrow Products. “It’s been a great trend for us.”
Red Arrow started exporting its products in the late 1980s after being approached by an international export firm. The company began managing its own international sales in the 1990s and now sends products to distributors in more than 100 countries around the world.
Gutman is also quick to note the cyclical challenges the company has dealt with as the dollar has strengthened and other major economies in the world have slowed.
“This last year has been a really interesting year,” he says. “Some markets have been extremely high, while others are really down from where they were just a few months ago. We’ve been hurt in Russia by the strong dollar and in Europe as the economy as a whole has slowed. But we also continue to see new markets in Asia and Africa and Mideast.”
Though 2015 may have begun slowly for many exporters, Pino-Gallagher says new markets are evolving — particularly in Asia — and companies with a sound strategy will find new opportunities. The challenge is helping those companies who got into exporting “accidentally” or may not realize there are adjacent markets for a product currently exported.
There are multiple state and regional programs that can help, Pino-Gallagher says. “Companies don’t have to do this alone — we have a lot of export resources.”
Learn more about exporting:
Wisconsin Department of Agriculture, Trade and Consumer Protection
Wisconsin Economic Development Corp.
Global New North
