EXIM Committed to Supporting Rural America
The agriculture industry puts food on our plates every day and EXIM is committed to supporting rural businesses in selling their commodities and equipment abroad. In fact, the agency has staff dedicated to these communities.
During the 2008/2009 recession, some rural companies began exporting for the first time in order to expand. As a result, these companies were able to retain or create jobs through their export sales.
Unfortunately, this international growth opportunity is often hindered because commercial lenders can be reluctant to extend working capital loans to exporters and loans to foreign buyers purchasing U.S. capital goods and services, but that’s where EXIM can help. EXIM offers a variety of solutions to boost U.S. exports.
Financing Solutions for U.S. Agriculture Exports
According to the U.S. Department of Agriculture, agricultural exports supported more than one million American jobs both on and off the farm, a substantial part of the estimated 11.5 million jobs supported by exports all across our country. About one of every three acres on America’s farms is planted for export, which underscores how important it is for farmers to export in order to remain financially strong.
With international demand growing faster than domestic demand for many products, U.S. farmers and agricultural firms have been relying on export markets to sustain prices and revenues. As a result, U.S. agricultural exports grew steadily over the last two decades, reaching $135.5 billion in 2019, from $56.2 billion in 1995 (+141 percent). [1]
EXIM Provides Solutions
Since 2014, EXIM has authorized more than $1.8 billion to support agricultural exports valued at more than $5 billion. Those products reflect the diversity and complexity of the agriculture industry, including commodities, livestock, foodstuffs, farm equipment, chemicals, supplies, and services. More than 80 percent of the agricultural exports supported by EXIM were associated with small businesses.
Consistent with its charter, EXIM does not compete with, but rather supplements, both private capital and the Commodity Credit Corporation, which is overseen by the U.S. Department of Agriculture
EXIM is able to support the sale of agricultural commodities and consumables, such as grain and soil additives or new and used agricultural equipment. The variety of equipment benefitting from EXIM’s support has ranged from smaller items such as disc harrows to more complex machinery such as seeders and combines.
Beyond the sale of equipment and commodities, EXIM also assists U.S. exporters and suppliers with financing for agricultural projects. Examples of projects supported range from the export of greenhouses for individual growers to the development of large-scale integrated meat processing facilities.
EXIM’s financing products include:
- EXIM Working Capital Loan Guarantees, which help companies obtain the funds needed to build export-related products and services. This credit line may also cover standby letters of credit used as performance or bid bonds.
- EXIM Export Credit Insurance, which allows exporters to safely extend open account credit terms to foreign buyers by insuring against nonpayment risks for commercial or political reasons. Plus, the receivables covered by export credit insurance can be added to a company’s borrowing base.
- EXIM Term Financing, which assists foreign buyers in obtaining loans from lenders to purchase U.S. capital goods (e.g., tractors, silos, bale throwers, irrigation systems) and services (e.g., consulting). Repayment terms typically range from one to five years.
In addition to the financial products featured above, EXIM also has outreach efforts targeting rural companies and communities. EXIM’s Regional Export Promotion Program (REPP) partners with state, county, and local nonprofit economic development entities to expand export opportunities in rural communities.
To learn about EXIM and how it can help your company increase its international sales, get a free export consultation.
Success Stories
Nonpayment Protection and Extending Credit
Keith Smith Company — Hot Springs, Arkansas
Headquartered in Arkansas, the Keith Smith Company is a producer and provider of quality hatching eggs. The company was working to enter new international markets but was concerned about buyer nonpayment. EXIM’s export credit insurance gives the company the confidence it needs to sell into new markets. EXIM’s insurance reduces Keith Smith Company’s cash flow risk and allows the business to be more comfortable competing for international sales. Since 2009, the company has added jobs and has seen sales increase by nearly 50 percent. Keith Smith’s exports as a percentage of total sales has grown from less than one percent to 61 percent in 10 years.
Heartland Agri Partners, LLC (aka Insta-Pro International)— Grimes, Iowa
Heartland Agri Partners, LLC, has been producing solutions for animal feeds for more than 50 years. It is known for its “dry extrusion process” technology, a chemical and mechanical free method of utilizing friction as a source of heat for cooking, dehydrating and sterilizing agricultural crops, such as soybeans used in the food, feed and renewable fuel industries. With just over 100 employees, this company exports to about 100 countries and uses EXIM’s small business export credit insurance to protect against buyer nonpayment. EXIM has supported more than $4 million of Heartland’s international sales since 2014.
Monty’s Plant Food Company — Louisville, Kentucky
Monty’s Plant Food Company provides a natural soil enhancement and plant fertility program to maximize a farmer’s yield. In 2018, this Kentucky company obtained EXIM’s export credit insurance to reduce the risk of nonpayment from foreign buyers in four countries and offer its customers open account credit terms.
Buyer Financing Support
Mathews Company — Crystal Lake, Illinois
Mathews Company is a family-owned manufacturer in Illinois that has been building agriculture equipment for 60 years. Almacenamiento de Granos Y Semillas, a Mexican company, had a limited cash flow and needed financing to purchase one of Mathews’ continuous flow grain dryers. EXIM was able to support the transaction and save the deal. EXIM’s medium-term export credit insurance policy allowing the buyer to secure a lender loan with longer repayment terms. According to the president of Matthews, this sale would not have gone through without EXIM support.
Chief Industries, Inc. — Grand Island, Nebraska
Chief Industries, Inc. has grown from a garage in 1954 into a multifaceted corporation. Today, this family-owned business has approximately 1,400 employees. One division manufactures a full line of grain and commodity storage, aeration and material handling products. When Chief noticed some of its foreign buyers were having difficulty in obtaining loans, it turned to EXIM. The agency’s medium-term insurance enables foreign buyers to obtain capital equipment and services with lender loans that typically have longer terms and lower interest rates. EXIM’s support has been a key factor in Chief Industries growing its international sales from 25 percent of total sales to 50 percent and this success has supported 45 jobs.
[1] Source: USDA, March 5, 2020.