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Impacting The Three P’s By Competing Domestically With Food Imports

Presidio Economics | Friday May 6th, 2011 | 0 Comments

By Fergus McGrath

Total US food imports have doubled in the past decade, from $43 billion in 2001 to $86 billion in 2010. As our national budget and economy continue to sputter, introducing the idea of enrolling entrepreneurs to become domestic food producers and compete with foreign competition for our citizens’ dollars would have a positive impact on our economy, our communities, and our planet.

In 2007 the US imported $1 billion in swine, a significant amount of which were salted, cured products from Spain & Italy. There are opportunities for local and regional businesses to begin producing products that compete with the foreign products in quality and price. This is currently taking place in Northern California, where food entrepreneur John Scharffenberger has teamed up with rancher Mac Magruder to raise hogs on an acorn diet to emulate and compete with the Iberico ham that comes from Spain. Other success stories from California are Boccalone and Fra’mani, two cured meat companies which successfully compete with their foreign counterparts. Opportunities to compete with foreign food exist in every state, and it is important for artisans and entrepreneurs to follow their passion and allow the customer to fulfill their needs domestically. These new businesses would create new jobs, reduce our national deficit by lowering imports, and would stimulate other industries because spending on domestic products has a higher multiplier than import spending.

As a byproduct of competing with food imports, local and regional food producers would strengthen communities. It feels good to have a chat with the local baker when you pick up a loaf of bread. Keeping dollars local makes communities more prosperous, and thus happier. Also, Americans generally want to support and see their neighbors do well. There is a big opportunity for this in cereal and bakery products. The United States imported $7.1 billion worth of cereal and bakery products in 2010, up from $2.6 billion in 1999. Included in these numbers are bread and cookies, seventy percent of which come from Mexico and Canada, which account for nearly $1 billion in imports in 2007. Dried pasta is also a significant import, with 40% coming from Italy. These demands could easily be fulfilled by local and regional domestic producers. Companies such as Community Grains are beginning to operate in the grain industry. They are partnering with local farmers to restore the grain industry in California, and are producing value add products like flour, pasta, and polenta which will compete with foreign products. Companies like this strengthen our communities by offering good food, creating jobs, and putting us in more direct contact with our food.

Increasing domestic food production to compete with imports could reduce GHG emissions as well. There are high carbon emissions associated with importing products. Substituting locally or regionally produced products would greatly decrease transportation distances. Instead of bringing noodles from Asia, why not have many regional producers handle that demand? It would be even more impactful if producers used domestic inputs in their processes, such as domestic flour for baking.

All these points are under the assumption that domestic suppliers can compete with imports on price and quality. It is also very important that this happen on a local and regional level, so as to strengthen communities and reduce emissions. It will be an uphill battle, but with some American innovation, and a “Made in USA” moniker we could make positive impacts on our national triple bottom line by competing with food imports.

Fergus McGrath is an MBA candidate at Presidio Graduate School. He is focused on local food production as a means to help solve economic, environmental, and social issues.


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