- State Exports, Cash Receipts Estimates
- Methodology Based on Farm Cash Receipts
- Advantages and Limitations of Cash-Receipts-Based Method
- Historic Methodology Based on Agricultural Production
- Comparing Production-based and Cash Receipts-based State Export Estimates
- State Trade by Country of Origin and Destination
- Limitations of Trade Data Collected at the State Level
- Comparing State Trade by Country of Origin and Destination and State Exports, Cash Receipts Estimates
- Data Sources
Data on the value of U.S. agricultural exports by State of origin are not included in the U.S. export information collected by the Department of Homeland Security, U.S. Customs and Border Protection. U.S. agricultural commodity exports are often produced within inland States and then pass through several marketing and processing points before arriving at a port. As the commodity passes through other States prior to export, the State of origin is often lost, or the product is commingled with a similar product from other States. Frequently, the State from which the commodity began its export journey (not necessarily the State in which the commodity was produced) is the State of origin reported by the exporter.
USDA’s Economic Research Service (ERS) has historically provided estimates of State agricultural exports by attributing of major agricultural products’ export values to States based on each State’s estimated share of U.S. production for those products. Currently, ERS produces State export values based on the share of U.S. farm cash receipts for those products in each State. This approach preserves the origin of production function of the production-based allocations. Additionally, it accounts for differences in product prices and on-farm use across States and uses consistent calendar-year (January to December) data for both U.S. agricultural exports and U.S. farm cash receipts.
Tracking agricultural export products back to their original source of production is complicated since data on agricultural exports by State are not collected by the Department of Homeland Security, U.S. Customs and Border Protection. Recording the State of production for exported farm products is also difficult due to the lack of documentation or specific source information for processed products or mixed shipments. A large portion of U.S. agricultural commodities—such as grains and soybeans—are produced in inland States such as Iowa, Nebraska, and Kansas. Bulk commodities are typically sold first to a local elevator, which may then sell them to a larger elevator where they are mixed with similar commodities from other States and transported to a seaport or border crossing. Tracking the source State is even more complicated for processed agricultural products. Processors and manufacturers may use raw materials from several States, and final processed products may undergo multiple processing steps in different States before reaching the port to be shipped internationally. Instead of tracing commodities or products back to their original State of production, it is more feasible to allocate exports by production shares—whether based on volume or value.
Using farm production value or cash receipts to compute State export shares provides data consistency because both the estimated export values and the farm receipts data are expressed in dollar terms. ERS uses on-farm, cash receipts data to estimate the sales revenue U.S. farmers receive for their commodities. These receipts are calculated from production quantities and prices received by farmers, or from production values, for each U.S. State during the calendar year. The production volume, prices, and value of agricultural commodities in each State are estimated from farm survey data collected by USDA’s National Agricultural Statistics Service (NASS). Farm cash receipts provide the base value for agricultural production sold, whether in domestic or international markets. The national sales amount for each farm commodity equals the sum of each State’s farmgate sales receipts from that commodity.
The share of a commodity’s farm receipts by each State must be determined to estimate the value of a State’s agricultural commodity sales to the international market. State’s estimated export value for a commodity is determined by its share of the total U.S. farm receipts from sales of that commodity. To match U.S. agricultural exports with farm receipts, exports are grouped according to the ERS farm sales commodity groupings (e.g., livestock products, vegetables, fruits, grains, etc.). Closely matching these groups is important because a State’s export estimate for a commodity, and the products processed from it, depends on the State’s share of total U.S. farm sales for that commodity.
A State’s farm receipts for agricultural commodities produced and harvested within its geographic boundaries are organized by ERS as either “livestock and products” or “crops and products.” The livestock sector is further subdivided into meat animals, dairy products, poultry and eggs, and miscellaneous livestock products. The crop sector consists of food grains, feed crops, cotton, tobacco, oil crops, vegetables, fruits and nuts, and other crops. ERS provides annual farm receipt estimates for 21 commodity groups and individual commodities, including total animal products, total crops, and for all agricultural commodities. The total U.S. farm receipts for each commodity group are the sum of the farm receipts from all 50 States. U.S. agricultural exports, including processed products, are aggregated into the same commodity groups as farm receipts. State export-value estimates for a commodity or commodity group are calculated by multiplying each State’s share of total U.S. farm receipts for that commodity or group by the U.S. export dollar value corresponding to the same commodity or group. For example, using California’s 32.3 percent share of U.S. farm receipts for rice in 2014 and U.S rice exports of $2 billion for the same year, the estimate of rice exports from California in 2014 is $644 million.
For commodity groups, which include processed products, value added from processing can inflate the estimated export value for that commodity group since corresponding farm receipts do not account for processing costs. As such, the sum of estimated exports for a group of commodities may exceed a commodity group’s estimated export value. To ensure consistency with actual U.S. agricultural export values, the sum of all States’ export estimates is calibrated to equal the actual U.S. export values for each commodity and commodity group.
The current agricultural cash receipts-based method for estimating State export shares offers several advantages over the production-based system that it replaced:
- Farm cash receipts account for differences in the quality and price of commodities produced in each State. Information on price per unit in each State is used to compute cash receipts.
- Farm cash receipts account for commodities’ changing farm and export prices over time.
- Farm cash receipts provide information on the amount of commodities actually sold by farms, excluding those retained for farm use. Farm use, farm-owned stocks, and USDA Commodity Credit Corporation purchases are not accounted for in the calculation.
- The production-based method requires a mix of marketing-year production volumes with fiscal-year (October 1 through September 30) export values. Marketing years are commodity and location specific and usually begin with the first month of harvesting. For farm receipts, calendar-year estimates are combined with consistent calendar-year export values.
The cash receipts-based method, however, shares several limitations with the production-based method for attributing exports to States. Neither of these methods can:
- Track actual movement of farm products from States to ports or to border crossings. Export estimates based on either cash receipts or production share may differ substantially from actual commodity movement from States to export locations.
- Account for States’ roles in processing—or other value-adding procedures to—exported products between farm and export locations. The export value of processed foods and agricultural products is apportioned to States based on where the raw commodity is produced, not where the product was processed. Data on value added by commodity are not available by State—only value added by manufacturing industry is available. Export values (f.a.s., or free alongside ship) also include costs for inland freight, insurance, and other charges incurred while delivering the commodity to the U.S. port of exportation, which are not attributable to the commodity’s farm production value.
- Account for U.S. export values that include re-exports—or international trans-shipments—passing through U.S. ports. The value of re-exports is shared between States even though the product was not produced in the United States.
- Provide information on the countries of destination for each State’s exports.
Historically, ERS State export estimates were computed by fiscal year and were allocated to individual States using the State-level agricultural production data supplied by NASS, which were usually recorded by crop or marketing year. The underlying crop and livestock production and slaughter data by State are publicly available from NASS on its “Quick Stats” page. The State's share of production quantity or volume (i.e., physical weight) for a commodity would be applied to the U.S. export value for that commodity to derive the State’s export estimate. NASS does not provide production statistics for processed agricultural products such as pasta. For processed agricultural products, supplemental data came from the NASS Census of Agriculture and the U.S. Department of Commerce's Economic Census, Subject Series, Manufacturing Product Summary to refine State export estimates.
Production-based estimates were provided for 20 commodity groups, including "Other," which consisted of many disparate products not included elsewhere—e.g., wine, essential oils, sugar and tropical products, nursery and greenhouse products, beverages (except juice), coffee, tea, cocoa, oilseed meals and their oils (mostly rapeseed and safflower seed), vegetable waxes, protein substances, chocolate, spices, rubber, fibers other than cotton, and miscellaneous horticultural products (starches, soy sauce, condiments, soups, gelatins, yeast, baking powder, hops, vinegar, and food preparations). In many cases, the sum of State production volumes is less than the reported U.S. total. This difference was then added to an "Other States" category for each commodity group.
ERS will no longer updates the production-based State agricultural export estimates. Updates now include only new calendar year U.S. farm receipts-based export estimates.
The top ranked States for export estimates based on value are similar to the top ranked States for export estimates based on volume. ERS has ranked—by export earnings in 2014—the top eight States: California, Iowa, Illinois, Minnesota, Nebraska, Texas, Indiana, and Kansas (figure 1). These States exported from $23.6 to $4.7 billion in agricultural commodities and processed products in calendar-year 2014. The largest exporters of animal products were Iowa, California, Texas, Nebraska, and Minnesota, with earnings ranging from $1.7 billion to $3.6 billion (figure 2). The top exporters of plant products include California, Illinois, Iowa, Minnesota, and Nebraska, who earned between $5.4 and $21.3 billion (figure 3). Overall, the United States exports about 3.5 times more plant products than animal products, giving an economic advantage to large grain- and oilseed-producing States.
Many of these top producing States’ exports exceed what their share of farm receipts indicates. Accordingly, about 20 States produce highly exportable commodities, resulting in production-based total export estimates larger than the value obtained from multiplying the corresponding ratio of farm receipts by U.S. agricultural exports. This discrepancy may result when value added through processing is attributed not to the States that processed those exported products but to the States that originally produced the primary raw materials of those exports. Thus, States producing most of the exported commodities—measured as shares of farm receipts—are credited with proportionally higher export values. On this point, the production-based and receipts-based methods are compatible.
Farm cash receipts are computed by multiplying farm production by unit price. As such, farm receipts-based export estimates use information from commodity prices that production-based exports do not. For example, although Arkansas produced and exported more than twice as much rice as California did in 2010 (table 1), California’s higher unit prices for rice raised its export value relative to Arkansas’s export value. The farm receipts-based export estimate for Arkansas rice was $982 million in 2010, or only 1.5 times California’s rice export estimate. Thus, different prices between States for the same commodity will result in different export estimates, when based on farm receipts. When two States produce equal quantities of a commodity, their production-based export estimates will be the same but will differ if their farm receipts reflect any price difference.
|Farm production share||Farm receipts share|
|Sources: Estimates are from or are compiled from data from USDA, World Agricultural Supply and Demand Estimates, USDA, National Agricultural Statistics Service; and USDA, Economic Research Service.|
Additionally, when 2 States have equal farm receipt ratios—as between Indiana and North Carolina in 2010—their export estimates will depend on the highly exportable commodities they produce. Even though Indiana and North Carolina have the same 3.1 percent share of total U.S. farm cash receipts, Indiana’s larger production of grain and oilseed products relative to North Carolina results in a larger difference in export estimates than what the production-based export estimates indicate. Ultimately, the difference between receipts-based export estimates (or $928 million) is $250 million more than the difference between production-based estimates (or $678 million) (table 2). In other words, exports based on production volume tend to underestimate export values. By contrast, exports based on farm receipts are more favorable for States from which high value exports originate or for States whose farm production is disproportionately represented in U.S. exports, such as grains and oilseeds.
|State||Farm production ratio (percent)||Exports (million dollars)||Farm receipts ratio (percent)||Exports (million dollars)|
|Sources: Estimates are from or are compiled from data from USDA, World Agricultural Supply and Demand Estimates; USDA, National Agricultural Statistics Service; and USDA, Economic Research Service.|
State Trade by Country of Origin and Destination
Currently, there is no cash receipts-based method—as used for the State Exports, Cash Receipts Estimates—providing a similar estimate of foreign imports at the State level. To provide comparable information regarding both imports and exports for States, ERS relies on the U.S. Department of Commerce, Bureau of the Census’ State Data Series, which includes the State of Origin of Movement (OM) Series and the State of Destination (SD) Series.
As defined by the U.S. Department of Commerce, Bureau of the Census, the OM Series lists the “State from which the merchandise starts its journey to the port of export.” While the SD Series—which is based on the U.S. State of Destination Code—lists “the U.S. state, U.S. territory or U.S. possession where the merchandise is destined, as known at the time of entry summary filing.”
These data provide the top five agricultural import and export commodity groups and their value for each State, as well as the top five countries of origin (imports) or destination (exports) for each product, by fiscal quarter. The commodities are grouped according to the Bulk, high-value Intermediate and Consumer-Oriented (BICO) product grouping as defined in USDA Foreign Agricultural Service’s Global Agricultural Trade System (GATS).
The State Data Series has known limitations. However, even considering these limitations, the series still provides the most reliable, comprehensive, and well documented information for both exports and imports at the State level. One limitation of the State Data Series is the attribution of commodities to the State where they are consolidated for shipment, rather than to the State in which they are produced. As a result, larger export values and quantities are attributed to States such as Louisiana and New York where major export ports are located. Similarly, imports may be attributed to a State where merchandise is stored prior to distribution to other States for further processing and/or consumption. These distortions would be magnified if a trade balance was calculated using these data. Therefore, calculation of a trade balance using the State Trade by Country of Origin and Destination Data set is discouraged.
Comparing State Trade by Country of Origin and Destination and State Exports, Cash Receipts Estimates
The U.S. Department of Commerce, Bureau of the Census data used for State Trade by Country of Origin and Destination estimates State-level exports for farm products using a method based on the last recorded point or location before transport to the port of exportation. Recorded movement origins can include farms, silos, packers, factories, or warehouses. State export estimates using the Bureau of the Census’s Origin of Movement (OM) method differ from those generated by the ERS production-share (PS) or cash-receipts (CR) methods. OM estimates differ primarily because they reflect shipments from industries or manufacturers, whereas the PS and CR estimates are calculated from agricultural production. PS or CR methods will lead to larger export values for States producing agricultural commodities traditionally exported in less processed forms. OM estimates will lead to larger export values for States manufacturing or shipping commodities traditionally exported in more processed forms.
The estimation differences are especially large for soybeans and feed grains. In the OM series, Louisiana and Washington accounted for 77 percent of total soybean export value in 2010, even though neither State is in the top 10 States in the PS/CR series. In the PS series, the top 6 States—Iowa, Illinois, Minnesota, Nebraska, Indiana, and Ohio—accounted for 79 percent of soybean export value, but Iowa and Indiana were not in the top 10 States for the OM series. For feed grains, Louisiana accounted for 56 percent of the OM export value but does not appear in the list of top 10 PS States. In the top 10 CR rankings for feed grains—which excluded Louisiana and Washington—the top 7 states accounted for 68 percent of total feed grain exports in 2010.
However, both the OM and PS/CR series list California, Washington, and Florida as the top fruit and nut export States. Together, these 3 States accounted for 81 percent of the estimated value of fruit and nut exports based on the OM method and for 87 percent of the estimated value of fruit and nut exports based on the PS method in 2010. Using cash receipts-based shares, these States shipped 82 percent of U.S. fruit exports, which is more in line with the OM method. Since more than half of fruit exports are shipped fresh, they are not generally routed through other States before reaching the exportation port, which is the reason for the similar OM and PS/CR shares.
The bias generated by the OM method in overestimating exports of port or border States is eliminated when origin of production or cash receipts are used. The OM method has many limitations when used as a substitute for the origin of production methods for many farm commodities and processed products. Thus, the OM method is a less accurate basis for estimating State exports. Additionally, in accounting for commodity price differences between States, the cash receipts export estimates are more accurate than the production-share estimates.
While several methods for estimating export values by State are available, none provide a direct measure of actual export value. Each method has its own weaknesses when allocating export earnings by State because tracing products back to their original farm of production is difficult, whether in raw or processed form. Since farm cash receipts are calculated using sales value by farms in each State, they provide the best method for measuring export shares that more closely estimate the production value and source of exported products. However, there is no similar estimation method for imports at the State level. Therefore, reporting the data estimated by the U.S. Department of Commerce, Bureau of the Census allows for comparisons of similar data for imports and exports by State.
ERS farm cash receipts by commodity and State are computed from USDA’s National Agricultural Statistics Service (NASS) production data and unit prices of farm products in each State.
Bulk, high-value Intermediate and Consumer-Oriented (BICO) product grouping definitions used in the State Trade by Country of Origin and Destination are obtained from the USDA Foreign Agricultural Service’s Global Agricultural Trade System (GATS).
Farm production data by State are published by NASS, Quick Stats 2.0.
State Trade by Country of Origin and Destination values are compiled using the U.S. Department of Commerce, Bureau of the Census State Data Series.