Nebraska’s export portfolio has grown but as experts point out, the persistent labor crunch continues to impede firms from maximizing their potential overseas.
“Manufacturing is Nebraska’s largest industry sector and there’s nowhere to go but up. The only ingredient we’re missing is workers,” said Mike Johnson, chief operating officer and executive vice president of the Nebraska Chamber of Commerce and Industry. “If we could just get a hundred thousand people to move to Nebraska, it would save our towns and our cities across our state. It would breathe new life into our communities. From a manufacturing perspective, it would just explode.”
According to the National Association of Manufacturers, total output from manufacturing was $16.9 billion in 2021, accounting for 11.8% of the total output in the state and employing 9.9% of the workforce. Of this, food processing represents the largest manufactured export; over $3 billion worth, Johnson said.
“The common Nebraskan would not be too shocked to learn food processing is the lion’s share of our exports to our trade partners,” Johnson said. “Everything from intermediate products like packaged meats and soybean oil or corn oil, to finished products like bacon, sausage or steak.”
The Nebraska Department of Economic Development listed the state’s five leading exports in 2021 as soybeans ($4.27 billion); corn ($2.4 billion); beef and beef products ($1.8 billion); nuclear reactors, boilers and machinery ($1 billion) and optic medic and surgical instruments ($454 million). The top five trading partners that year were China ($3.3 billion); Canada ($1.9 billion); Mexico ($1.6 billion); Japan ($1.4 billion) and South Korea ($862 million).
In 2018, the state set a record for exports, per the Office of the United States Trade Representative, at $8 billion of made-in-America goods to the world. In 2022, Johnson said, the total was $8.9 billion of international exports to the world in manufactured goods. The number of Nebraskans employed in manufacturing also grew, from about 63,000 in 2016 to 100,000 in 2021.
More to Come
Johnson sees the potential for additional export growth based on ever-improving efficiencies in Nebraska’s manufacturing processes and the state of things geopolitically around the world.
“I think ag technology has done wonderful things to increase the bushels per acre and it couldn’t come at a better time,” he said. “The world at large is finding itself in a need to feed the growing global population. I think the need for Nebraska food products is exacerbated because of the awful war in Ukraine.
“I’m 100% speculating here, but I think increased demand from global partners is going to continue for years due to the growing population and because of constrained supply due to the war. If I were in food production here in Nebraska I would feel pretty good. The U.S., and particularly Nebraska, are going to see more opportunities for exports to feed the world.”
Johnson cited the continued work of the state chamber and various government entities to connect companies of all sizes with opportunities abroad as one factor in the growth of exports.
“The connectivity of the world these days is allowing the smaller players to play on a more global scale,” he said. “We work in partnership with the Department of Economic Development, especially when it comes to the governor’s trade missions, which are really helpful when it comes to awareness by global players of what Nebraska can do. DED does a great job of connecting with businesses to either join those trade missions or be part of the connection-building unlocking new markets for a player locally.
“I recently met with reps from the Czech Republic who are looking for the same type of relationship-building. The chamber is really proud to work with the DED to connect our members to foreign trade partners when we think a match can be made.”
But as the old saying goes, what got you here won’t get you there and Johnson noted the 2% unemployment Nebraska has been at or near since March 2022 is hamstringing the manufacturing sector.
“It’s noteworthy that we have more people working in the industry now than we did before COVID,” he said. “But Nebraska manufacturers also have long backlogs of orders and the number one constraint to getting those orders filled is lack of available workforce. I can comfortably estimate we’ve got more than 10% growth in [manufacturing] jobs; call that over 10,000 jobs available to fill.
“Nebraska manufacturing is like a powder keg waiting to explode. We’re a state that’s really fortunate to be on a lot of rail and interstate; you can get to a coastal port pretty efficiently. We’re fortunate in the transportation logistics side of things. We’re fortunate because we have a great education system across the state, be it K-12, colleges or universities. We’ve got the right recipe, we just don’t have enough people.”