Midwestern Conservative Thought for the 21st Century

A Manufacturing Powerhouse: Wisconsin and Trade

A special report by the Pax Americana Institute Staff

Milk, cheese and beer — when people think Wisconsin and its trade, these are often what come to mind. Although Americans might come in contact with these products from Wisconsin quite often, none are listed in Wisconsin’s top ten exports. Despite being one of the biggest producers of dairy and beer, Wisconsin products span far beyond the state’s stereotypes.

Trade in the Midwest, and particularly Wisconsin, is big business. In spite of that, conservatives in Wisconsin can fail to recognize how vital trade is to Wisconsin and its economy. Without Wisconsin’s role in trade, the world would be a much different place. Much of that trade revolves around building machinery for military purposes. Thus, since Wisconsin trade relies heavily on military technology, Midwestern conservatives should be paying attention to foreign policy and the military as a whole. Conservatives should realize that the military is going to spend money on contracts and Wisconsin is a good place for them to engage in such business. Like many states, Wisconsin relies on the national security system of contracts for part of its economy.

Furthermore, Wisconsin also relies on free trade, though as conservatives we advocate fair trade where other nations do not engage in predatory acts to create false economies. Without the free market, Wisconsin’s exports would be hurt drastically. The free market allows for Wisconsin to not only import goods from across the world, but also export them without the limits of trade barriers, tariffs, and sanctions. It should be a reminder the Father of Conservatism, Edmund Burke, supported free trade, stating “There are no such things as a high and a low price that is encouraging and discouraging; there is nothing but a natural price.” Conservatism was born from the ideas of free trade, and Wisconsin Conservatives need to continue the tradition to assure the growth of Wisconsin’s economy.

Manufacturing

A large percentage of Wisconsin exports is centered in the manufacturing of engineering technology, such as products with self-propelled engines.

Aerospace

The products with the largest monetary value in Wisconsin’s exports are civilian aircraft engines and other components related to airplanes. Considering most of Wisconsin’s aerospace companies are relatively small, including Orbital Technologies based in Madison and Jet Air based in Green Bay, it’s surprising it plays such a large role in Wisconsin’s exports. Some of the aerospace accomplishments in Wisconsin can be attributed to the Experimental Aircraft Association (EAA) Museum in Oshkosh, as the EAA’s AirVenture event draws over half a million visitors to the Oshkosh area every year.

Military

Another major contributor to Wisconsin’s exports is the production of armored vehicles. The production of military vehicles in Wisconsin has risen dramatically over the last five years by 800%.[1] Military contracted companies based in Wisconsin, including Oshkosh Corporation, Astronautics Corporation of America, and AMTEC Corporation have expanded exponentially in the past decade. Most of these companies are overlooked as many of their contracts are not publicly expressed due to confidentiality and national security.

Wisconsin’s economy is heavily reliant on military products. This only further signifies the importance and need for increased knowledge of foreign policy in Wisconsin.

Medical

The medical field has been a major contributor to Wisconsin exports. The state produces a significant amount of medical technology, as covering approximately 10% of Wisconsin’s exports.

The state leads the country in exporting tomography apparatuses, also known as x-ray and CT technology. This could be attributed to UW Madison’s School of Medicine and Public Health, along with Froedtert Medical Center who creates technology that creates technology for the medical field. Wisconsin is also a lead exporter of electrodiagnostic tools. These tools can determine the patient’s illness by measuring the electrical activity in body parts.

Motors and Engines

The production of engines in Wisconsin is a large part of the state’s exports. Wisconsin in particular has a large production volume of outboard engines, farm tractors, and lawn tractor equipment.

The market for marine outboards is dominated by Wisconsin companies, as Mercury Marine and Evinrude hold a supermajority of the civilian outboard market. Kondex Corporation in Lomira, Wisconsin is one of the largest producers of tractor sickles in the United States. Case New Holland’s American headquarters in Kenosha is a massive producer of farm equipment, including combines, hay balers, and other machines. Wisconsin’s lawn tractor exports are from assembly plants owned by Briggs and Stratton. The lawn tractor company Toro also has a manufacturing plant in Tomah where equipment for commercial use is created.

Wisconsin’s Fox Valley region is the largest manufacturing district in the United States. This plays a substantial role in Wisconsin’s economy considering that approximately 25% of Wisconsin’s exports are manufacturing related.

Farmed Products in Wisconsin

It wouldn’t be an overview of Wisconsin’s exports if there was no discussion on farming production. Many believe dairy is the top export from Wisconsin when it comes to agriculture. Wisconsin ranks second in the nation for production of dairy products and is first in the nation in the production of cranberry products. However, Wisconsin’s largest exported agricultural product in dollar value was soybeans.

In 2018, Wisconsin farmers planted over 2.3 million acres of soybeans. Many farmers in recent years have been switching to producing more soybeans, rather than corn. Soybeans are used for a variety of products, including animal feed, soy milk, lubricants, and bio-diesel, and are exported to locations throughout the country. It also helps that soybeans, when properly stored, can last up to 10 years, which isn’t the case for many other Wisconsin based farmed products.

Farming Related Economic Issues

Something that has hurt Wisconsin farmers in recent history is the issue of inflation. Product costs continue to rise, but the prices for most farmed products hasn’t changed significantly in the past 50 years. This can be attributed to many different economic issues. The ability to harvest products for less, GMOs, pesticides, herbicides, cheap labor and basic advancements in technology have been underlying reasons for the fall of agricultural production in Wisconsin.

The creation of better pre-harvest technology has led to more crops being harvested, leading to the supplies increasing. It should be noted that just because the supply of a product increases, doesn’t mean there is an equivalent increase in demand. For instance, if a normal family buys a gallon of milk a week, they aren’t likely going to buy another gallon of milk if the price drops a few cents a gallon. This occurrence is called the oversupply of an inelastic product. This scenario essentially only hurts the producer, in this case, the farmer, and benefits the consumer slightly.

Cheaper labor has also hurt Wisconsin farmers in the past. Illegal immigrants are often hired in the Wisconsin agriculture sector because jobs are not only plentiful but also easy to be paid in cash. This allows for not only the underpaying of illegal immigrants but also no taxes will be paid on those employees. Since labor on farms has become cheaper due to the rising illegal immigrant populations, it allows for the existence of mega-farms. The increased amount of mega-farms drives down the price of harvested products and further hurts farmers, specifically family farms in Wisconsin.

Just a generation ago in 1977, the average farm in Wisconsin was milking around 37 cows. In the modern day, the average size of a Wisconsin farm has risen to milking over 100 cows. This increased number of cattle on farms in Wisconsin has hurt smaller family farms drastically, as the value of products produced on American farms has stagnated over the past generation.

The changing economics of Wisconsin farms is a situation where trade has been and will continue to be affected. Farms will continue to exist in Wisconsin, but what they produce will likely continue to change in order for farmers to gain maximum profit.

Wisconsin International Trade

When it comes to international trade, Wisconsin is affected by the various trade agreements made by the United States. For example, two of the countries that import the most product from Wisconsin are Canada and Mexico. Canada imports approximately $6.9 billion in Wisconsin products, and Mexico imports approximately $3.2 billion in Wisconsin products. This can be attributed to the North American Free Trade Agreement (NAFTA), as well as the proximity of both countries to Wisconsin.

The People’s Republic of China also imports a large amount of Wisconsin goods equating to over $1.7 billion. A country that imports a significant amount of goods from Wisconsin is Saudi Arabia, with the fourth largest export value of approximately $800 million. This is due to the increased sales of military vehicles to Saudi Arabia over the past decade. Wisconsin trades with essentially every country in the world, except a few countries due to war, or economics trade sanctions.

Wisconsin’s Economic Overview

The aspects of Wisconsin’s trade will continue to change year by year. Companies moving to Wisconsin, like Foxconn, are expected to drastically change Wisconsin’s exports and overall GDP for the better.

Although Wisconsin is known for its dairy products and beer, there are much larger markets that are key factors in Wisconsin’s economy. For instance, Wisconsin’s economy relies heavily on defense contracting and manufacturing of engines. To keep improving Wisconsin’s economy, the United States should continue to increase its defense budgets and to continue using defense contractors from Wisconsin.

Without the federal government, Wisconsin companies like Oshkosh Corporation would essentially cease to exist. Another important aspect to continue the growth of Wisconsin’s economy is to ensure combustion engines stay a popular source of power. This includes keeping combustible engines efficient, as well as keeping them technologically advanced compared to Asian and European markets. Smart legislative decisions need to continue for Wisconsin to continue to be successful in creating business and facilitating trade. Bills like the Green New Deal would ultimately cripple the Wisconsin economy as a large percentage of the state’s economy relies on the production of products the bills seek to stop. Legislation needs to benefit not only the consumers but also the producers in order to keep jobs and wealth in the region. Wisconsin’s economy is strong, but hopefully, future improvements will lead to a more successful and prosperous Wisconsin.


[1] Referring to how much the HS Code changed in Wisconsin’s Export Percentage to Foreign Trade


Sources and Additional References:

https://www.lancasterfarming.com/farming/field_crops/switch-to-soybeans-continues-to-trend/article_564e9da4-a457-5402-8d5e-8e02a76a8669.html

https://www.farmprogress.com/dairy/dairy-farms-drop-below-9000-wisconsin

https://www.agmrc.org/commodities-products/fruits/cranberries

https://www.biztimes.com/2017/industries/banking-finance/wisconsin-has-9-firms-on-2017-fortune-500-list/

https://www.census.gov/foreign-trade/statistics/state/data/wi.html

https://www.flexport.com/

https://www.brunswick.com/_media/pdfs/factsheet_14.pdf

https://globaledge.msu.edu/states/wisconsin/tradestats

https://www.biztimes.com/2018/industries/international-trade-exports/wisconsins-exports-on-the-rise/ https://www.biztimes.com/2018/industries/energy-environment/wisconsin-has-9-companies-on-2018-fortune-500-list/
%d bloggers like this: