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Mississippi export boom

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US exports took big hit during the recession. During the first three months of the year, exports were down in 49 states. Only Mississippi did well – now that’s probably not what you would expect. At right, a ship filled with Mississippi products readies to leave the port of Pascagoula for an overseas destination. The World’s Jason Margolis explores this southern success story. (Photo: Jason Margolis)

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MARCO WERMAN: I’m Marco Werman. This is The World. U.S. exports took a big hit during the Recession. Things got really bad during the first three months of this year. Exports were down in 49 states. Only one state bucked that trend as the world’s Jason Margolis found out.

JASON MARGOLIS: I was in North Dakota recently working on some stories about international trade. While there, I sat down with Heather Rank.

HEATHER RANK: And you can keep these.  This thing is really interesting.

MARGOLIS: Rank is a self-professed statistics geek and a Trade Specialist with the U.S. Department of Commerce. She was looking at export data from the U.S. Census for the three months of 2009 when she accidentally uncovered this gem.

RANK: And exports are down in every U.S. state except for one state, Mississippi.

MARGOLIS: That’s right. Mississippi, the state often depicted as economically troubled. The state with the highest poverty rate in the country managed to out-do every other state when it came to exports. In the first quarter of this year, Mississippi exports were up 9%. That was more than 30% better than the national average. So just what was Mississippi’s secret? To find out, I called Heather Rank’s colleague in Jackson, Mississippi.

CAROL MOORE: Hi my name is Carol Moore. I am the Director the Mississippi Export Assistant Center, which is a part of the U.S. Department of Commerce.

MARGOLIS: Carol, do you think there were any products that were pushing exports higher in Mississippi during the first three months, any specific exports?

MOORE: Yes, that would be energy products, vehicles, machinery, as well as poultry.

MARGOLIS: But Moore’s data couldn’t definitely tell her which one of those products may have accounted for the export spike or why, for that matter, Mississippi exports were surging while world trade was collapsing.

MOORE: I think that if you come down and I could take you to talk to some of our partners, it would give you a better, you know …  Let me see, understanding into why we had that increase.

MARGOLIS: So I went first to Mississippi’s State Capitol, Jackson where I met Gray Swope.  He’s Executive Director of the Mississippi Development Authority.  I asked Swope the same question, “Why did Mississippi succeed with exports when all others failed.”

GRAY SWOPE: I think that it reflects that Mississippi has kind of an international mindset. And our focus since 2004 has been how do we integrate trade, international companies including foreign direct investment?  How do we integrate those into our economy?

MARGOLIS: I pressed Swope for specifics. He didn’t offer any. At my next stop Brian Watkins said it’s tough to pinpoint what called that spike in Mississippi exports.

BRIAN WATKINS: You know, I’m virtually certain there’s going to be a lot. I don’t know but I’ll be happy to help.

MARGOLIS: Watkins teaches International Business 150 miles northwest of the capitol at Mississippi State University, but Watkins couldn’t say for sure what’s driving the State’s exports. He did say it should be fairly easy to figure out because Mississippi’s exports are relatively small.

WATKINS: The statistics can be skewed by one or two, you know, big contracts, particularly in a consolidate industry, which it would appear that we were beginning to have in a couple of agricultural areas here in Mississippi.

MARGOLIS: One sure fire way to find out which exports were up was to go to the place where exports leave the state, 280 miles due south on the Gulf of Mexico.  At the Port of Pascagoula men driving forklifts loaded utility poles bound for the Dominican Republic.  Rows and rows of container boards were stacked waiting to be shipped to places like Ecuador and Chile. A massive freezer was packed with frozen chicken headed for Russia.

MARK MC ANDREWS: My name is Mark Mc Andrews. I’m the Port Director in Pascagoula, Mississippi.

MARGOLIS: Mc Andrews surveyed all the exports and pointed at the chicken freezer. He said, “You want to know what’s driving Mississippi’s exports? There’s your answer.”

MC ANDREWS: Poultry exports are up about 21% over last year.

MARGOLIS: Do you have any sense why or do you just do the shipment?

MC ANDREWS: I really don’t. As a port, you’re not really in a position to create demand for your own services and facilities only to react to them.

MARGOLIS: To try and find out why chicken exports are surging, I got back in the car and headed 130 miles back up north to the small Town of Laurel, Mississippi.

JOE SANDERSON: My name is Joe Sanderson, Jr. and I’m Chairman and Chief Executive Officer of Sanderson Farms.

MARGOLIS: Sanderson Farms is the fourth largest poultry company in the United States.

SANDERSON: We process about a little over eight million birds per week.

MARGOLIS: About 1.2 million of those birds are shipped overseas. That can move export statistics in a small state like Mississippi. Sanderson said the end of last year was one of the low points in his company’s 62-year history. Americans weren’t going out to eat and his foreign buyers had no cash.

SANDERSON: The world credit crisis, actually exports collapsed and there were no exports, or a very minute amount of exports particularly to Eastern Europe and Russia.

MARGOLIS: But then, things started to turn around early this year when the wheels of international finance started working again. Credit markets unfroze and pent-up demand for frozen Mississippi chickens surged in Eastern Europe. So, riddle solved. Russians eating Mississippi chicken drove the state to export success.

WATKINS: The question arises as to how do you fit all of this together.

MARGOLIS: Again, Brian Watkins at Mississippi State. He says there are two possible interpretations. First, the surge in exports was a one-time thing, a statistical aberration. The second possibility is that those statistics show the beginning of a long-term trend, which Watkins says would be invaluable to state policymakers.

WATKINS: You may well conclude that it’s appropriate to play to your strengths. So if Mississippi is experiencing growth in a particular segment let’s say poultry, and there are policy decisions that can be made, there are things that can be taken by state development agencies to encourage industry, you may well want to pursue that.

MARGOLIS: Of course, Watkins says there are environmental concerns and questions over how many good jobs the poultry industry creates. That’s for Mississippi policymakers in Jackson to debate. But beyond chicken, Gray Swope with the States’ Development Authority said Mississippi’s recent export success does underscore the need to help local companies get their products overseas.

SWOPE: In Mississippi we’ve seen these … I call them assets. You know, they’re God-given assets in that, you know, deep water that’s on the southern end of our state or the Mississippi River or the Tintom [PH] Waterway, but it’s in how you take those assets and you use those to create economic wealth and jobs. And I think that we’ve done a good job in our state at looking at how do we take these resources of logistics and transportation and launch our products abroad?

MARGOLIS: That’s something that requires constant work, resources and money.  According to the latest export data broken down by state, Mississippi has fallen to the middle of the pack. But that unexpected spike in exports during the first three months of the year has some Mississippians thinking big about their state’s economic potential. For The World, I’m Jason Margolis, Jackson, Mississippi.

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