House Agriculture Committee Chairman Collin Peterson, D-Minn., told DTN Political Correspondent Jerry Hagstrom that he came back from a trip to Brazil and Argentina over the recent congressional break pleased that he was able to show more junior members of the House what South American agriculture is like, and that it is likely to be a bigger competitor of U.S. agriculture in the future.
In an interview, Peterson said he took a delegation that included Reps. Steve Cohen, D-Tenn.; Dwight Evans, D-Pa.; Al Lawson, D-Fla.; Dave Loebsack, D-Iowa; Tom O’Halleran, R-Ariz.; Jimmy Panetta, D-Calif.; and Filemon Vela, D-Texas.
Peterson said he organized the trip with the idea of understanding the impact President Donald Trump’s tariffs have had on South American exports and whether the Chinese were investing heavily in Argentina and Brazil. The Chinese “are buying soybeans, but they are not real aggressive,” Peterson said.
In Argentina, where he met with President Mauricio Macri, farmers are still complaining about the government, as they have in years past.
“We also heard a lot about biodiesel in Argentina,” Peterson said in a news release. “The folks in Argentina face a strange situation: Because of the government’s tax structure, at times it has been cheaper for them to produce and export biodiesel to the U.S. than it is to sell it there in Argentina. In 2018, our Commerce Department put anti-dumping duties on Argentine biodiesel which lowered how much they sold to the U.S. Then, their government raised their export tax from 8 to 15 percent to match the 15 percent export tax on whole soybeans. What’s helping to relieve the pressure is that the export taxes on whole soybeans and soybean meal are now even, so they are exporting more beans to the Chinese. What’s unfortunate for our farmers is that some of those sales are beans the Chinese used to buy from us.”
In Brazil, the delegation met with President Jair Bolsonaro; toured corn, cotton, and soybean producing regions; and reviewed the infrastructure capacity of industry to meet export demand.
According to Peterson, Bolsonaro told him, “We want to sell to the Chinese, but we are not going to sell the country to them.”
The double cropping and increased yields compared with a previous visit to Brazil were impressive, Peterson said. “These guys are double-cropping corn and cotton and getting fantastic yield on both, with a good-looking crop. They’ve got in many cases better access to new traits and new technologies than our guys, and they’re right on our heels.”
The Achilles heel of Brazilian agriculture is still that the cost of shipping soybeans from Brazil to China is twice what it costs to ship from the United States. Fifteen years ago, Peterson said, the Brazilians expected the Chinese to invest in their infrastructure, but “the Chinese have never come through with any money.”
Bolsonaro said he wants to improve infrastructure, but he wants the private sector to make the investments.
Peterson said he still doesn’t see that infrastructure being built, but with Brazilian agriculture so productive, the United States has to continue to invest in locks, dams and ports to stay ahead of Brazil.
“President Bolsonaro is actively looking to close that gap, and there are plenty of investors in places that demand the products that our countries produce who are willing to step in and provide the funding to do it,” Peterson said.
“Overall, my takeaway from the trip is that as competitive as the South Americans are, they will only become stronger with time, and our missteps on trade policy are only helping them along in that effort,” added Peterson. “It’s only a matter of time before investments to improve infrastructure cut into our competitive advantage, and the Chinese are happy to buy everything the South Americans can grow until we figure our trade mess out. That doesn’t fill me with a lot of confidence.”
The delegation also met with U.S. armed forces personnel stationed at Joint Task Force Bravo and Soto Cano Air Force Base in Honduras.
Jerry Hagstrom can be reached at email@example.com
Follow him on Twitter @hagstromreport
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