The global demand for the Bluegrass State’s diverse mix of agricultural products makes Kentucky a very ag trade-dependent state. Kentucky agricultural exports totaled $1.46 billion in 2015, according to the U.S. Department of Agriculture’s Foreign Agricultural Service.
The Value in Diversity
Kentucky’s more well-known commodities – bourbon whiskey and purebred horses – were the state’s top two agricultural exports in 2015, but Jonathan Van Balen, Import/Export Advisor for the Kentucky Department of Agriculture (KDA), says the Bluegrass State has even more to offer the global market.
“People don’t realize the importance of agriculture exports from our state. If you look at 2014 numbers, oak barrels were our No. 4 export,” Van Balen says. “Those barrels are going to Argentina and even France for wine production. We also export used barrels from the bourbon distilleries to be reused or repurposed in other countries – to Canada for scotch, Ireland for Irish whiskey, and Mexico for tequila. That’s an important agricultural export for Kentucky.”
With whiskey accounting for more than $300 million in export revenue, companies such as Heaven Hill Distilleries in Louisville are cashing in on the global demand for Kentucky spirits. The independent, family-owned company is the sixth-largest spirits supplier in the U.S. and second-largest holder of aging bourbon whiskey in the world.
“Right now, the European Union is one of the most vibrant markets for American whiskey. That’s because of the huge demand for cocktails and authenticity,” says Justin Ames, director of international sales and marketing for Heaven Hill Distilleries. “Ninety-five percent of all bourbon comes from Kentucky, so when anybody overseas thinks about American whiskey and bourbon, they automatically think about Kentucky. If you look at the numbers, there is significant potential for exponential growth in export of Kentucky whiskey.”
Van Balen says Kentucky lumber and forest products have also experienced increasing global demand.
“Oak lumber has been in the top 10 [for exports] for the last two years,” he says. “A lot of foreign manufacturers are looking for quality Appalachian hardwood. You see a lot of buyers looking for woods like white oak and poplar.”
Troy Jamieson, lumber sales manager for Somerset Wood Products in Burnside, says exports account for 35 percent of the company’s sales. Somerset Wood manufactures flooring from Appalachian hardwood and markets its products to China, Vietnam, Spain, and Germany. Though profitable, Jamieson says marketing to foreign countries presents some challenges, such as navigating cultural differences and language barriers.
Fortunately, state organizations, including the KDA, offer agribusinesses assistance and resources to help overcome those challenges.
“We have used the department several times,” Jamieson says. “They have brought in buyers from other markets on tours to visit our facilities. They have also helped us with travel and contacts when we have visited those countries.”
KDA offers assistance in a number of areas, including registration and documentation, logistics, and market research.
“I’ve received several emails from them offering specialized assistance with exporting our unique products, for example,” says Heaven Hill’s Ames. “Whether it’s helping navigate bureaucratic trade barriers, offering data, or making us aware of opportunities or business contacts to increase our exports – or whether it’s just being there to help answer questions – the department has always been ready to assist.”