Report ranks Farmington second in US for exports in 2014

James Fenton
The Daily Times

FARMINGTON — Last week, the U.S. Department of Commerce released a report that ranked Farmington second in the nation for goods exports from metropolitan areas in 2014.

The report showed that goods exports from the Farmington area totaled $83 million last year, an increase of $49 million, or 140 percent, from 2013, according to the Thursday press release from the Department of Commerce's International Trade Administration.

Three New Mexico cities — Las Cruces, Farmington and Santa Fe — were among the top five metropolitan statistical areas nationwide cited in the report. Las Cruces was first in the U.S. with a 210 percent increase in exports last year. Statewide, New Mexico exported products to 93 foreign countries in 2014.

On Friday, Gov. Susana Martinez issued a press release saying her administration's policies have paved the way for the increase in exports by making tax policy changes and forging relationships with leaders from foreign countries.

"I've always said that if we provide an environment that is friendly to job creators, we can level the playing field with neighboring states and become a leader in exports. Today's news is yet another testament to our efforts to diversify the economy and grow the private-sector," Martinez said.

Four Corners Economic Development CEO Ray Hagerman said the exports report was heartening and an affirmation of the diversification efforts many local officials have touted for years. Farmington exports included machinery, transportation and electrical equipment, and fabricated products, among others, according to the report.

"I'm encouraged by the fact that it is durable goods kinds of things, hard goods," Hagerman said. "The simple fact is that we're talking about manufactured goods besides simply the extraction of oil and gas. This is true manufacturing."

Stan Lueck, president of RODI Systems in Aztec, said his business makes water-treatment systems and sells about half of them to foreign countries, including Mexico, Columbia, India and China.

The business sells its products usually as part of large projects, which Lueck likened to the construction industry.

"Dollar-wise, I don't think we would have been a huge contributor ... in their study, but we do export a fair amount," Lueck said. "Over the last couple year, half of our revenue has been outside the U.S. We sell worldwide, to India quite a bit, to the Middle Eastern region. ... It's the nature of our business that some of the projects we do are large. Not unlike a construction business, sometimes you have larger projects. Of course, we always wish we had more."

Levi Conklin, manufacturing engineer at San Juan Compression, agreed that 2014 was a good year for international sales. The Farmington business, which manufactures and sells compressors for oil and gas production, sold a record 300 units last year. Conklin said the increase was, in part, based on the launch of a smaller compressor for oil and gas companies that operate on a smaller scale.

This year, however, the company's sales are another story, Conklin said.

"This year, not a lot. We've sold 77 so far this year, but some are carry-over from last year," Conklin said. "Our sales in 2013, we only did roughly 75, so (2014) was a pretty big jump."

Conklin said the company has been a slow down since oil prices on the commodities market dropped last fall.

Robert Queen, director of the Texas and New Mexico U.S. Export Assistance Center, said the jump in international sales from San Juan County can be attributed to electronic commerce and the visibility of area companies via the Internet.

"One thing I've noticed is that e-commerce is having a larger, stronger impact, which is helping companies reach global markets," Queen said in a phone interview on Monday. "It's then from that, we start getting calls from the Philippines and a company there asks, 'Put me in contact with the guy in Aztec,' for example."

Mayor Tommy Roberts said in an emailed statement on Friday that the report is needed good news about the local economy.

"These job growth statistics for the Farmington (metropolitan statistical area) and the press release from the governor's office regarding export growth provide reason for some optimism in the face of a generally held pessimism about our economic health," Roberts said. "These statistics are also consistent with the (5.7) percent growth in (gross revenue taxes) revenue to the city of Farmington during the fiscal year that just ended. While we remain cautious about the economy, given oil and natural gas prices and the continuing challenges faced by the coal and power plant industries, we need to recognize that there is some good news out there."

Roberts' cautious optimism is based on tax revenue numbers each fiscal year that show the economy has not made a full recovery since the economic downturn.

Farmington is still taking in 7 percent less in gross revenue taxes than what it did in 2009, according to Rob Mayes, Farmington city manager.

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621 and Follow him @fentondt on Twitter.