In this file:
· The trade war comes to the prairie
· Should Farmers Fear Trump?
· Grassley warns Trump to tread carefully negotiating trade deals
· Trade data show U.S. animal product sector a major exporter
The trade war comes to the prairie
What's good for manufacturers could be a big problem for farmers.
By Catherine Boudreau, POLITICO
Doyle Lentz has grown barley, wheat, soybeans and canola for decades on his land in North Dakota, a farm that has been in the family for generations.
Just outside of Rolla, North Dakota, a town of about 1,300 people west of the Red River Valley, his rolling, fertile land might seem a world away from coastal ports, international business deals and the very idea of "globalism." But when he sells his barley, it’s not a local proposition: About two-thirds of his crop is shipped some 2,000 miles to brewers in Mexico. The deal with his Mexican customers – he contracts with them directly, and has it malted in Minnesota along the way – is a chance to make a little more money from a commodity crop. That’s been especially important to his bottom line over the past few years, as world commodity prices have hit seven-year lows.
Heartland American farmers like Lentz are among globalism's prime beneficiaries. Agriculture is North Dakota’s top industry, and it gets a significant boost from the $4 billion in farm goods, including wheat, soybeans, barley and sorghum, sent across borders every year. And they often travel much farther than Mexico: More than 90 percent of the state’s soybeans are exported, mainly to China.
The vast quantity of agricultural products that North Dakota exports is a story shared by farm states across the country. American agriculture sent $129 billion worth of goods abroad in fiscal 2016 – more than 20 percent of all the food grown in the United States. That number has more than doubled over the past decade, making agriculture a rare bright spot in the U.S. trade accounts. When President Donald Trump and free-trade critics fret about the United States’ $500 billion trade deficit, it’s often lost that American farmers run a large and growing surplus, and have been since the 1960s. Last year the surplus was $16.6 billion. The USDA projects it will rise to $21.5 billion this year.
The Trump administration has come out of the gate seemingly gearing up for a trade war -- withdrawing from the Trans-Pacific Partnership, threatening to pull out of NAFTA and rattling relations with Mexican President Peña Nieto with talk of paying for a wall along the southern border by imposing taxes on imports. The goal is to restore U.S. manufacturing jobs in languishing industries like steel, and help the Rust Belt factory workers who turned out to vote Trump. But farmers and ranchers have a lot to lose, and they’re are starting to worry their entire industry will be collateral damage in Trump’s trade experiment. Lentz already lost $200,000 in new malted barley business he was expecting this year after one of his customers in Mexico cancelled plans to expand their brewery due to escalating tension between the countries.
A coalition of more than 130 U.S. agricultural groups has anxiously sent letters to President Trump expressing eagerness to work on modernizing NAFTA, but in a way that protects the United States’ $38.6 billion in farm exports to Canada and Mexico – its largest trading partners. The coalition also is encouraging the administration to reduce tariffs and trade barriers in the Asia-Pacific region, similar to what the TPP would have accomplished in countries like Japan, Vietnam, Malaysia, Australia, and Singapore. The letters invoke Trump’s promise to rebuild the manufacturing sector, noting that the U.S. food and agricultural industry represents 12 percent of all manufacturing jobs in the country, and would benefit greatly from increased exports to Asia.
The tradeoff between old-line manufacturing and their own livelihoods isn’t lost on farmers, especially when developing new trade deals. “If NAFTA is renegotiated, we certainly are concerned that agricultural market access will be sacrificed for other manufacturing jobs,” Ben Mosely, vice president of government affairs at USA Rice Federation, told farmers and ranchers during the Southwest Ag Issues Summit in Fort Worth, Texas this month.
Politically, the president’s “America first” stance on trade has the potential to cause a rift between two sets of his most fervent backers in rural America. In trying to protect people relying on manufacturing and service work, Trump could burn bridges with farm voters who rely on the agricultural economy—and who overlooked his stance on trade in the hope they’d benefit from less regulation and lower taxes.
“I think he is in danger of losing a lot of that support,” said Roger Johnson, president of the National Farmers Union. The NFU is critical of free trade agreements and opposed TPP because of lost jobs and low wages in rural communities—most U.S. farmers rely on income from other jobs—but worries that an overly aggressive Trump administration will hurt one of the few upsides the agriculture business can count on. “It’s one thing to renegotiate trade agreements to get better terms,” he says, “but it’s a whole other thing to blow up deals and get fewer exports in the process.”
U.S. FARMERS AND RANCHERS are among the most productive and efficient in the world, growing more food and raising more animals than Americans can consume, even as their numbers have dropped to less than 2 percent of the population. The industry’s success story can be attributed to a multitude of factors:
THE FARMING EXPORT ...
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Should Farmers Fear Trump?
Protectionism can mean famine, even war.
by Alan Bjerga, Bloomberg
February 15, 2017
Kirk Liefer is readying his soybeans for shipment down southern Illinois’s Kaskaskia River. The Kaskaskia feeds into the Mississippi, which, to a great extent, feeds China: About one-quarter of the U.S. crop goes straight to the world’s biggest food market, where it gets eaten by half the planet’s pigs and provides cooking oil for a rapidly growing middle class.
“Our soybeans go to China, a lot of the corn goes to Japan or Mexico,” says Liefer, 39. “Almost everything that’s a bulk crop goes overseas. You take that away, you ripple through the entire region.”
U.S. farmers and agribusinesses are wary of the protectionism driving the trade policy of President Donald Trump, while rivals are calculating how doors closed by the U.S. could open markets for them. David MacLennan, chief executive officer of Cargill, the world’s largest grain trader, says the U.S. “cannot wall ourselves off” from world markets. He warns that protectionism can “provide famine, cause conflict and even war.”
The view is different from Brazil, where Agriculture Minister Blairo Maggi, whose family owns one of the nation’s biggest soybean shippers, says his country “is back in the game,” competing for sales it had conceded to the U.S. Now the Trump administration may slow the adoption of Asian trade pacts, giving Brazil an opening.
The outcome could be a shift away from America, the world’s traditional breadbasket. Brazil, Australia, Russia, and Ukraine are well-positioned to profit from any American disruption. “You’re shooting yourself in the foot,” says Joe Glauber, a former chief economist for the U.S. Department of Agriculture and chief U.S. negotiator on farm issues during the Doha Round of global trade talks. “If a supplier starts to be seen as unreliable, the global supply chain adjusts, and that player will lose market share going forward.”
Unlike sectors such as manufacturing, where trade deals are blamed for job losses, U.S. agriculture has benefited from globalization. Sales of U.S. corn, soybeans, cattle, and other commodities will reach $134 billion in the 2017 fiscal year, up from $129.7 billion the year before, according to the USDA. This year, Canada and Mexico will account for $39.6 billion of U.S. farm trade, or 31 percent.
About half of all global corn exports are grown in the U.S. Almost half of all U.S. wheat, half of its soybeans and rice, and three-quarters of its cotton are shipped abroad.
The U.S. is the world’s top exporter and highly competitive. Still, America’s export share is declining as rivals catch up in technology and infrastructure. Russia, once a grain importer, surpassed the U.S. in wheat exports for the first time last year, and the two countries are neck and neck this year. Brazil is rising in soybeans, thanks to weather that allows two crops per year and land that’s yet to be fully developed.
U.S. farmers need exports to keep already low commodity prices at home from collapsing...
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Grassley warns Trump to tread carefully negotiating trade deals
By Joseph Morton, BH News Service
via The Nonpareil Online (IA) - Feb 15, 2017
WASHINGTON – Sen. Chuck Grassley, R-Iowa, warned the Trump administration on Tuesday to tread carefully as it seeks to negotiate better trade deals.
In a meeting between administration officials and members of the Senate Finance Committee, Grassley highlighted the risk of retaliation to farmers and ranchers who depend on overseas markets to sell their products.
“If the president can negotiate better deals for the United States, I’m all for it, but I don’t want to see anything that hurts major sectors of the economy, like agriculture,” Grassley said in a statement following the meeting.
On the campaign trail, candidate Donald Trump frequently denounced the country’s track record on trade deals.
He vowed to renegotiate the longstanding North American Free Trade Agreement with Canada and Mexico, and to abandon the pending Trans Pacific Partnership that was negotiated under President Barack Obama.
Trump said his preference is for bilateral deals between the United States and one other country, because those are easier to exit if the U.S. feels unfairly treated.
Since taking office, President Trump has made good on his pledge to ditch the TPP – much to the dismay of those in farm country.
Nebraska Farm Bureau President Steve Nelson, for example, said he was disappointed at Trump’s move on the Pacific trade agreement.
Nelson said at the time that the pact would have increased agricultural cash receipts for Nebraska by more than $378 million annually – benefitting pork producers as well as corn and soybean farmers.
More recently, the Trump administration briefly floated the idea of a 20 percent import tax on Mexican products to help pay for a wall along the border between the two countries.
While the White House quickly backed off that proposal, it caused alarm among ag groups who feared possible retaliation.
Grassley sought to convey those concerns when he and other Finance Committee members met Tuesday with two top Trump advisers...
Trade data show U.S. animal product sector a major exporter
Foreign demand takes a significant share of U.S. animal product production.
Feb 15, 2017
The latest available U.S. Department of Agriculture trade data for red meat, poultry and dairy trade show that foreign demand accounts for a significant share of U.S. animal product production.
In 2016, beef exports accounted for 10.1% of commercial production. Asia was the largest export market last year, accounting for 63% of beef exports. In 2016, 21% of U.S. pork production was exported, with Asia (45%) and Mexico (31%) taking the largest shares of exports.
The U.S. poultry sector (broilers, other chicken and turkey) exported 15.6% of production, with a large number of relatively small shipments (“other”) accounting for 56% of exports.
The dairy sector exported 18.3% of production on a skim-solids milk equivalent basis, with Asia (55%) and Mexico (24%) the largest export destinations last year.
Almost 4% of U.S. lamb and mutton production was exported in 2016...
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