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The New Market Developer, May - June 2015

Michigan Dept of Agriculture & Rural Development sent this bulletin at 05/05/2015 02:48 PM EDT

Issue 3: May-June 2014

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Market Spotlight- Central America & Caribbean

Despite experiencing a slight decline in economic growth rates in 2014, Central America and the Caribbean will experience growth throughout 2015. An economic stronghold in nearly all Central American and Caribbean countries annually proves to be tourism, which is good news for producers in the United States. Reliance on tourism within the region creates a tremendous opportunity for food manufacturers in the United States to export their own goods to fill demands. Markets remain strong for exporters to provide bulk products for the HRI sector, as well as provide familiar products to tourists shopping in retail settings. As a whole, the US is regarded as one of the key trade partners to the region providing 33.7 percent of imports to Central America. Wheat, corn, soybean, and dairy products annually prove to be primary bulk imports, but brand name value-added foods continue to be in particularly high demand.

United States producers who are interested in expanding their business and reaching new markets are highly encouraged to explore the opportunities presented in the Central American and Caribbean markets throughout the coming year. One way to gain access to these markets is through the assistance of Food Export Midwest. Interested producers will have the opportunity to meet pre-qualified buyers whom represent established and successful segments of the Central American and Caribbean markets.

Upcoming Export activities:

Caribbean & Central American Buyers Mission for Retail & Food Service Products

June 23-25 in Miami, FL

Registration Deadline: May 11

Businesses who participated in the 2014 Buyer Mission were directly involved in 181 one-on-one buyer/seller interactions and which resulted in $1.4 million in actual export sales. Of those companies involved, 26 achieved exports to the Caribbean for the first time. At this year’s buyer mission, representatives from 16 different countries including the Bahamas, Barbados, Costa Rica, and Panama will attend. Products of interest will include canned and preserved food, chilled processed food, confectionery items, as well as many other value-added goods.

Caribbean for Retail and Food Service Products

October 6-7 in Santo Domingo

Registration Deadline: July 14

Producers who travel to Santo Domingo will be provided with pre-event custom product research, market briefing by local USDA officials, and on-site assistance by Food Export In-Market Representatives. While in the Dominican Republic company representatives will have the opportunity to meet one-on-one with qualified buyers, with participating company profiles included in the Food Export Trade Mission brochure.

Michigan Pavilion at Americas Food & Beverage Show

October 27-28 in Miami Beach, FL

Michigan Pavilions are events sponsored by the Michigan Department of Agriculture & Rural Development designed to showcase Michigan made products at select trade shows nationwide. Participation in this pavilion is a great opportunity to network with both domestic and internation buyers who appreciate the value of Michigan-made goods. Americas Food & Beverage Show’s proximity to Central America and the Caribbean will increase opportunities to meet with qualified buyers from the region.

For additional questions contact Hannah Bollinger at BollingerH@michigan.gov or 517-284-5737.

Detroit-Based Company Finds Success in Exporting

Detroit Based food company, McClure’s Pickles, has built a growing international brand and is helping influence the revitalization of Detroit. McClure’s Pickles is a family-owned company that first began exporting to Canada in 2011. Since then, the signature pickles have sold almost half a million dollars in the Canadian market and experience cumulative growth of 20 percent. They have now expanded beyond Canada and reached into four new markets: Australia, France, South Korea, and the U.K. McClure’s Pickles also provides jobs to 26 employees and is an important component of Detroit’s economic recovery.

Read the success story from USDA Foreign Ag Service >

6 Payment Considerations When Using Foreign Currencies

Guest article from Michael Wahl of PNC Capital Markets.

Michael Wahl is on the Foreign Exchange desk assisting corporate clients in the Michigan region manage foreign exchange exposures. He formulates and executes foreign exchange policy tailored to a company’s specific needs and risk tolerance.

If your vision for growing your company includes non-US markets, the benefits of using foreign currencies could lead to improved profits and competitive advantages. While it may appear daunting at first, it is actually fairly simple, once you embrace the challenge.

Here are six considerations to maximize your cross-border business goals:

1. International Funds Transfer -- If you purchase goods from foreign suppliers or export overseas, you need to be able to send and receive payments in currencies other than U.S. dollars. Transactions with a bank with established foreign accounts will significantly reduce the costs of these transactions.

2. Foreign Exchange Payments – When making foreign currency payments, you want an efficient process. Online solutions provide account access with real-time rates, which greatly reduces your time, effort and cost for these transactions.

3. Using a Multi-Currency Account – Demand deposit multi-currency accounts offer an efficient way to manage incoming and outgoing cash flows in non-US currencies. This type of account provides a “natural” hedge where you can invoice your clients in the local currency and use those funds to pay vendors and expenses in the same currency.

4. Netting Global Intra-Company Payables -- Enhance the efficiency of your cash flow by “netting” worldwide intra-company foreign cash flows among your overseas locations. An online solution simplifies input and receipt of funds.

5. Foreign Currency Loan – If your foreign subsidiary requires funding and will be repaid with the local currency, then a foreign currency loan may provide an effective solution.

6. Building a Custom Hedging Strategy – Your company should address managing currency exposure if you have on-going, or even one-off, transactions in a foreign currency. A hedging program can protect against negative currency fluctuations and protect your financial condition.

It’s vital to choose the right U.S. banking partner to facilitate your foreign exchange transactions. The good news is that businesses of any size can now access the expertise and technologies needed to succeed in foreign markets.

Take Advantage of Foreign Trade Zones to Reduce Exporting Costs

Current and potential exporters need to be aware of foreign trade zones (FTZ) in order to improve their export success. Created in 1934 by the federal government, FTZs are special economic zones where goods can be stored, distributed, processed or stored free of customs duty. FTZs are a cost-saving mechanism for US companies that enable greater competition in the global marketplace.

Among other industries, food processing companies can take advantage of FTZs to gain a competitive edge by lowering duty draw back processes and expenses, brokerage fees and associated merchandise processing fees. Further, FTZs improve supply chain performance by allowing users to ship unrestricted, on a weekly basis after approval from customs at the start of each business week.

In Michigan, there are several foreign trade zones: Sault Ste. Marie, Battle Creek, Detroit, Flint, Grand Rapids, Port Huron and Lansing. Michigan companies can benefit by utilizing these FTZs when exporting to stay competitive with international companies.

For more information about FTZs, the US Foreign Trade Zone Board and the Michigan Economic Development Corporation have a variety of resources to businesses. Click here to download a fact sheet about FTZs from MEDC.

Exporter's Toolbox

Every profession comes with a unique set of tools. As a food exporter your toolbox might be lacking if you aren't using all of the available resources. The following are links and articles to assist in making sales overseas:

West Michigan MDEC

East Michigan MDEC

Trade Mission to Toronto, Canada for Specialty and Natural Products

Join the International Marketing Program and the Food Export Association for a focused trade mission to Canada for Specialty and Natural Products. The trade mission is scheduled to take place on September 9th and 10th. Canada is the top recipient of Michigan food and ag exports, totaling $1.2 billion. Natural, gluten free, ethnic, specialty, healthy, GMO-free, and organic foods are all in high demand in Canada.

Attend the focused trade mission to Canada and participate in one-on-one meetings with prequalified buyers, a table top showcase and trade reception, industry and market tour, and much more. The focused trade mission will take place September 9th and 10th. The cost to attend is $400 before May 6th, $600 before June 17th. For more information please click here.

Upcoming Events

Trade Mission to Hong Kong for Retail and Food Service Product

July 13-14 | Hong Kong

Trade Mission to China for Food Service and Retail Products

July 15-17| Shen Yang & Beijing, China

Trade Mission to Canada for Specialty and Natural Products

September 9-10| Toronto, Canada

Anuga Food Fair

October 10-14 | Cologne, Germany

Michigan Pavilion at Americas Food and Beverage Show

October 26-27 | Miami Beach, FL

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Get in touch and stay informed with program updates at LinkedIn.

Welcome Athena and Elizabeth

The International Marketing Program is welcoming two new interns, Jiaqi Li (Athena) and Elizabeth Frey, to the International Marketing Program at MDARD for the summer. Athena and Elizabeth will work closely with the Food Export Association of the Midwest as well as the International Marketing Program. They will work on Food Export events including buyer’s missions, trade missions, and seminars. Athena and Elizabeth will also work with Michigan food and agricultural companies who are interested in exporting and utilizing Food Export programs to increase international sales.

Athena is a junior at Michigan State University pursuing a dual degree in Accounting and International Relations focused on U.S.-China relations. Elizabeth is a junior at Michigan State University studying Animal Science with an Animal Industry concentration, and plans to graduate with a minor in Agribusiness Management. We are glad to have them as an addition to the team.

Previous interns Allison Stuby and Kiley Kastl will both graduate in May from Michigan State University, we wish them the best of luck in their future careers!