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IBNewsmag
™
International Business News
April, 2015
American-made drones
flock to export markets
AgEagle founder, Bret Chilcott,
acknowledges young farmer
Also in this issue:
What is up with the world economy?
2014 Exports by State
World Trade Month Events
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April 2015
page 3
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In this edition, we take a look at the burgeoning
growth of drones or UAVs used for agriculture in
global markets. Ag Eagle is one of the top 7 ag
drones in the world and finds itself in demand by
a growing number of countries.
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AgEagle, Commercial Drones
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What’s Up with the Global Economy?
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World Trade Month Events
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Exports by State
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InterMark3
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Global Economy, continued
12
Greater Kansas City Foreign Trade Zone
Fax: 816.472.0959
[email protected]
6655 Troost Ave.,
Kansas City, MO 64131, USA
In God we trust!
PUBLISHER/EDITOR:
Frederick Baehner
ADVISORY BOARD:
Jo Anna Edgerton,
Doris Ganser, Paul Mastilak
DESIGN & PRODUCTION:
Tom Gilland,
www.GillandGraphx.com
page 4
Birds be warned. Your flocks are fast
becoming drones. From Japan to Chile,
American-made drones are swarming
to eavesdrop on farm fields, confirm
boundaries, and in New Zealand - even
herd sheep.
One notable Heartland company zooming into the mix
is AgEagle of Neodesha, KS. Its flight platform was designed and developed by experts with ag backgrounds.
Its “tractor-tough” flight platform uses fiberglass and carbon fiber to reinforce and encase the wing form.
Just how good is the AgEagle in this blossoming era of
drone proliferation? DRONELIFE.com ranks AgEagle
as one of “The 7 Best Agricultural Drones on the Market
Today,” in its latest report on the most comprehensive
aerial agricultural solutions on the market.
AgEagle has already brought out 130 or more UAVs, 20
IBNewsmag TM
April 2015
of which are filing a flight plan to Canada. Tom Nichol,
AgEagle head of business development, claims, “We’re
not a large UAV company like Boeing and Raytheon, but
we are flexible and more responsive to customer needs.”
The AgEagle electric-powered drone, at a light 6 pounds,
can stay aloft for up to 35 to 40 minutes and cover over
about 450 acres in a single flight depending on wind conditions. Its RAPID long image processing system allows
the user to retrieve georeferenced image data in minutes.
Factory-trained dealers provide service and support.
“What sets Ag Eagle apart from many of the cheaper
UAVs,” said Mr. Nichol, “ is our carbon fiber wing core
and infrared camera, which gives users a wider footprint
and more accurate reading of crop issues in specific plots
of their field.” The typical Ag Eagle runs $15,000 with all
the accessories. Belgium-based Trimble, on the other end
of the price spectrum, runs $50,000 and is equivalent in
capabilities.
The company has already chalked up inquiries from
April 2015
Tom Nichol,
Business Development
page 5
Brazil, Panama, Mexico, Israel and UK, among others.
“In Mexico, John Deere is interested in taking AgEagle,”
said Mr. Nichol, “but we are
reluctant to go with them.
They are too large a company
and would eat up all of our
production, but we’re adding
more capacity so we can help
larger firms.”
But, what does the FAA say about rules for drones here
in the Heartland and USA? “At this point, it is still up
in the air, so to speak,” suggested Mr. Nichol. First, they
said up to 400 feet and line of site. Then they wanted to
use only fully-certified pilots. Now, they are leaning back
to a distance such as 500 feet and line of site. No doubt
they will change the guidelines and rules before this article hits the streets.”
In many countries, except Japan, drone rules are fairly
loose. In countries like Japan and Canada where governments have been more proactive in embracing drone
technologies, drones have been flying over farms for
years. But those technologies aren’t quite geared for the
kind of large-format farming conducted in the American
Midwest. The average Japanese rice paddy is typically
smaller than the average Heartland cornfield.
In some states, and cities, local rules constrict usage for
public safety reasons. But in many countries of the world,
farming rules the roost.
IBN
Denver-based RoboFlight has positioned itself to sell
drones in much the same way as General Motors works
with its dealers to peddle cars. The company has pacts
planned throughout nearly a third of the US with John
Deere dealers who would showcase the devices and sell
services like training and hardware right next to the big
green tractors and combines displayed in their showrooms.
Drones enable farmers to get an up-close and personal
view of their crops and determine the sick and healthy
plants. It saves them time and money by identifying
where to treat or not.
Agriculture is just one of many uses for these flying machines. They are used to track borders, canvass industrial
sites, check the maturity of grapes in French vineyards,
and possibly deliver pizza.
Composite image created from 220 drone images of a
field NW of Neodesha, KS, showing downed wheat.
Strong storm winds and over-application of nitrogen
contributed to the damaged crop.
International Business News
page 6
April 2015
What is up with the
Global Economy?
Currency swings can have a big impact
on our international business and need
to be considered when planning and
implementing strategy. It’s been a while
since we have seen the volatility we are
currently experiencing in the global currency markets, and as such it’s worth a
review of what we just lived through and
what may yet be to come.
In the first quarter of 2015 the global economy
performed a bit like a Rube Goldberg contraption, although it’s doubtful many countries
found humor, as economic, financial, and
political events triggered other economic,
financial, and political events across the world.
Here is a quick look back:
is most striking. Its inflationary past – price rises averaged 11 percent a year in Italy and 20 percent in
Greece in the 1980s – is a distant memory. Today, 15
of the area’s 19 members are in deflation; the highest
inflation rate, in Austria, is just 1 percent.”
In mid-January, anticipating the European Central Bank
(ECB) was about to try to head off deflation with a round
of quantitative easing (QE) that would reduce the value
of the euro, the Swiss National Bank (SNB) announced
it would no longer cap the value of the Swiss franc at 1.2
per euro. The response was exceptional and unexpected.
Experts speculated the SNB planned for the franc to lose
value against the euro. Instead, it gained more
than 30 percent. The Swiss market lost about 10
percent of its value on the news, and US markets slumped too.
The SNB may have miscalculated the effect of
de-capping its currency, but it was correct about
the timing of the ECB and QE. After months
Low energy prices contributed to persistently
of dithering and debate, the ECB announced
Jon McGraw,
low levels of inflation in many countries, alit was committed to a new round of QE and
though oil prices were slightly higher toward the end of
would spend about $70 billion a month through Septhe first quarter. “The whiff of deflation is everywhere,”
tember 2016 – and possibly beyond. For perspective, QE
reported The Economist early in 2015:
in the US ran at about $1T per year and Japan has also
implemented a form of QE targeting the $ equivalent of
“Even in America, Britain, and Canada – all grow$1.2T per year. With the ECB announcement, global
ing at more than 2 percent – inflation is well below
markets cheered, the stock markets in Europe ascended
target. Prices are cooling in the east, with Chinese
to a seven-year high, and the euro descended to an 11inflation a meager 0.8 percent. Japan’s 2.4 percent
year low.
rate is set to evaporate as it slips back into deflation;
Global Economy, continued on page 11
Thailand is already there. But it is the euro zone that
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page 8
April 2015
Heartland World Trade
events raise awareness
of trade
The events vary considerably by city, but the intent is the same – feature international business
to keep the economy running. Here is a summary*
of world trade events taking place in the Heartland
this Spring.
*We apologize if we missed any particular event.
These were compiled over 30 days prior to publishing.
Sioux Falls, SD – Export Documentation
Date: April 28, 2015
Time: 8:30am – 4:30pm
South Dakota International Trade Center
Location: University Center, Avera Hall, Sioux Falls, SD
Presentation: Morning – Export Documentation
Afternoon – NAFTA – 2014 Certificate of Origin.
Information: Rock Nelson, [email protected]
Madison, WI – Smart Supply Chain Management for Savvy Companies
Date: May 12, 2015
Time: 7:30 10:30am
Madison International Trade Association (MITA) &
University of Wisconsin - Madison
Location: Madison Marriott West, Middleton, WI
Presentation: Creating a flexible, responsive and
controlled supply chain to meet the challenges of
preparing and managing the supply chain
Information: www.mitatrade.org
Omaha/Lincoln, NE – International
Business Successes
Date: May 13, 2015
Time: 7:30am – 2:30pm
Midwest International Trade Association (MITA)
Location: Embassy Suites – La Vista, NE
Presentation: Homegrown Success Stories, Governor’s Exporter & Importer of Year awards, Prof
Ernie Goss, Creighton University, and others
Information: www.mitaonline.org
Kansas City, MO – Fueling the World –
Geopolitical Economy of Oil
Date: May 6, 2015
Time: 8 – 10:30am
International Trade Council (ITC) and International
Relations Council (IRC) of Greater Kansas City
Location: Grand Street Café, Kansas City, MO
Presentation: Honorable James Clad, Sr. Advisor
– Center for Naval Analysis & Former US Deputy
Assistant Secretary of Defense
Information: www.irckc.org/event/oil
Denver, CO – World Trade Day
Date: May 19, 2015
Time: 8am – 6pm
World Trade Center Denver
Location: Ritz-Carlton, Denver
Presentation: Advancing Colorado Around the
Globe. Keynotes: Damien Levie, EU Delegation to
the US, Jeff Seeley, CEO, Carew International.
Events, continued on page 9
IBNewsmag TM
April 2015
page 9
Heartland 2014 exports show marginal growth over 2013
It wasn’t necessarily a banner year for our ten state Heartland area, but exports did improve overall. Only 3
states registered a drop, but even these were rather flat. Here below is a state-by-state look at 2014 exports
compared to those of 2013.
Exports by State In US$ billions (rounded off to nearest million)
$ change
2014
2013
Arkansas
6.8
7.1
$ -0.3
Iowa
Kansas
Minnesota
15.1
13.9
$ +1.2
12.0
12.5
$ -0.5
21.4
20.8
$ +0.6
Missouri
Nebraska
Oklahoma
14.1
12.9
$ +1.2
7.9
7.4
$ +0.5
6.3
6.9
$ -0.6
N. Dakota
S. Dakota
Wisconsin
5.3
3.7
$ +1.6
1.59
1.58
$ +.01
23.4
23.1
$ +0.3
Source: International Trade Administration – www.export.gov
Events, continued from page 8
St. Louis, MO – International Trade Night
Date: May 20, 2015
Time: 5:30 – 9pm
Transportation Club of St. Louis
Location: Knight Center at
Washington University
Presentation: Keynote – Dan
Key, VP and Chief Supply Chain
Officer, Sigma-Aldrich, Global Pioneer Award –
Duke Mfg., St. Louis International Ambassador
Award – Paul Toskin, VP and Manager of Commerce
Bank, Trade Service Group
International Business News
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April 2015
Global Economy, continued from page 6
Divergent monetary policy – the Federal Reserve ended
a round of QE just before the Bank of Japan and the ECB
introduced new rounds of QE – proved to be a pressure
cooker for currencies. With the dollar rising and the euro
falling, countries with currency pegs were forced to follow suit. US dollar-linked countries generally tightened
monetary policy, even if it might hurt their economies,
and euro-linked countries pursued looser monetary policy.
The Economist reported, “Denmark has had to cut interest rates three times, further and further into negative
territory, in order to discourage capital inflows that were
threatening its peg against the euro.”
All this has led to global interest rates falling lower - and
lower - and lower. Thanks to quantitative easing, banks
in the United States and Europe have a lot of cash tucked
away in their central banks’ coffers. The Economist reported:
“…negative interest rates have arrived in several countries, in response to the growing threat of deflation…
Banks, in effect, must pay for the privilege of depositing their cash with the central bank. Some, in turn,
are making customers pay to deposit cash with them.
Central banks’ intention is to spur banks to use “idle”
cash balances, boosting lending, as well as to weaken
the local currency by making it unattractive to hold.
Both effects, they hope, will raise growth and inflation.”
page 11
is a contributing factor to the weakness in some emerging
market currencies because of their close trade ties. Countries that export raw materials to China, such as Brazil
and Australia, have seen their currencies fall steeply in
the wake of China’s slowing growth.”
Where do we go from here? Many believe the strength in
the dollar may continue…for another year or longer. Add
it all up: a stronger US economy, better bond yields…
and an improving trade deficit, suggests the US dollar is
in fact in the midst of a new bull phase.
Jon McGraw is the President of Buttonwood Financial
Group, LLC, an independent wealth management firm
based in Kansas City, Missouri, that works with many
small business owners, to simplify the complexity that comes
with wealth. For more information [email protected]
In the Euro area, Germany, Denmark, Sweden, Switzerland, the Netherlands, France, Belgium, Finland, and
Austria have issued bonds with negative yields. Why
would anyone be willing to pay to invest in bonds? The
Wall Street Journal suggested one possibility: Investors
think yields have farther to fall. Others believe negative
yields are based on the concern of deflation: The return
of 0.97 cents vs par is better than 0.93 cents.
And, it isn’t just the developed economies being impacted. Emerging Market (EM) economies have also added
to the dollar’s strength according to research published
by Charles Schwab. “As EM countries have expanded
their share of GDP and global trade, they’ve become a
bigger force in the currency markets—and slower growth
has weighed on these countries’ currencies relative to the
dollar. To a large extent, the slowdown in China’s growth
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