Is Export Really An Option?
By Mark Hitt and Denise Farris
In today's tight economy, many horse breeders and trainers aare seeking additional market opportunities. Yet if you ask most equine business owners about "export marketing", the response is: "What is it; why would I want to do it, how do I do it, and what are the costs/benefits?" This article briefly addresses those questions.
What is Equine Exporting?
"Export" essentially means you are taking a horse from the United States, and selling it to an owner in a foreign country. This country may be in North America (i.e. Canada or Mexico), or overseas. While it may seem far-fetched, horse exports are a growing component of U.S. livestock exports. Many Missouri purebred producers and trainers may have the opportunity to take advantage of this growing market. For example, the U.S. equine industry exported over $300 million in horses in 2001 to 47 countries. Although last years' horse exports slipped, they still exceeded a staggering $223 million. Some of the top export markets for U.S. horses include: Canada, Ireland, Germany, Japan, the Netherlands, and the United Kingdom.
Why Export?
Exporting has direct and indirect benefits. The obvious direct benefit is the additional market potential from the international sale. The indirect benefits are more then bragging rights. After an international sale or two, your domestic customers may realize or perceive your quality as being "higher". "Higher" quality justifies increased prices. In some instances, international buyers' quality requirements may actually increase your quality and therefore your domestic business.
How Would I export?
There are several established U.S. initiatives which are currently handled through local associations. The United Livestock Export council, Inc. (USLGE), a St. Louis based USDA cooperative, provides international marketing funding to its members to further increase U>S> horse exports. USLGE's members include the American Paint Horse Association, the American Quarter Horse Association, the American Morgan Horse Association, and the Tennessee Walking Horse Breeders and Exhibitors' Association. These groups were awarded over $239.000 dollars to increase awareness of their respective horse breeds throughout Europe, Asia, South America, Africa, Mid-East and Mexico. The first step is establishing an international marketing effort. Through groups such as USLGE, this step is being accomplished for you.
Capitalizing on this initiative, the American Quarter Horse Association was one of the more active promoters of their breed via USLGE Funding. This bodes well for the largest U.S. and Missouri breed population in those foreign markets where western style and/or trail riding interest is increasing. For example, AQHA received approval to conduct, in cooperation with the Australian Quarter Horse Association, promotional seminars to Australian breeders. Reining and cutting horse clinics have been held in Germany and England. In addition, the American Paint Horse Association, Missouri's second most popular breed, was approved to promote their breed in France, Germany, Italy and Australia. The proposed Italian activity will offer a clinic at the National Italian Show in Cavalese that will include the American Paint Horse history, availability and shipping logistics.
The Missouri Department of Agriculture is a USLGE member and, for the first time ever, submitted an equine proposal. The proposed activity is to bring buyers from Mexico to learn first-hand about Missouri's equine industry and livestock quality. The event will permit a personal introduction between foreign buyers and local breeders and trainers. USLGE's budget allows it to fund approximately one-half of all proposals submitted, The announcements are made mid-summer each year.
The Missouri Department of Agriculture's International Marketing Program offers many export programs and activities for Missouri's livestock industry, and the recent Missouri Equine Survey emphasizes the importance and opportunities for Missouri equine exports. The Missouri Department of Agriculture has experience locating international buyers for many species and it is looking forward to expanding its past successes to include equine.
Om addition to international buyer contacts, staff provides export counseling, general market research, access to international advertising, international offices and/or representative offices in Mexico and Taiwan. The Department also provides access to the Missouri Department of Economic Development's international trade offices in Japan, Korea, Israel, Europe, Brazil and South Africa.
How Much Does It Cost?
The thought of getting your horse to an international customer and getting paid is, well, more than a little overwhelming. Breeders can learn the export process and export direct, or they can fully depend on a livestock export broker who will manage all the details of your export shipment. With over $300 million in exports in 2001, a seemingly daunting export process is manageable and qualified brokers exist within the state to assist in your efforts. While the initial marketing costs are largely being handled through government efforts, the actual out-of-pocket costs will depend on your own initiatives and the services you require unique to each export country, number of livestock transported, and how the sales transaction itself is tailored. In most instances, the sales price of the horse includes the fees associated with its international shipment.
What Are My Risks?
The export process is a time-proven process designed to protect both the buyer and the seller. In fact, exporters, because of the export process, have less receivables than in their domestic business. Although the export process has many protection steps, it is always wise to do business with reputable buyers. All the agreements, all the international lawyers and all the international bankers in the world are less important than genuine buyers who are interested in developing long-term relationships with businesses like yours.
Patience is key in the export arena. Many cultures lack the urgency we Americans sometimes expect, but persistence and patience will reward you. In most cases, buyers want to be comfortable with their suppliers and a one-time meeting may not be enough. Mexican buyers, for example, expect you to travel to Mexico. Much as the Japanese, Mexican business people want to get to know you on a personal level before they will consider doing business with you. An interest in other cultures will greatly increase your opportunities for success.
