Ag Policy Blog

What's Next for Agriculture Trade?

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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To say agriculture interests are concerned about the future of trade relations under President Donald Trump's administration, may be an understatement.

With Trump officially backing out of the Trans-Pacific Partnership, or TPP, and calling for a renegotiated North American Free Trade Agreement, or NAFTA, what remains for agriculture commodities may depend on the new administration's ability to negotiate more bilateral agreements.

In a letter to the president on Monday, 87 agriculture groups and companies urged the administration to work hard to improve trade in the Asia-Pacific region despite backing out of the TPP, http://bit.ly/….

Those groups signing the letter include the American Farm Bureau Federation, National Corn Growers Association, American Soybean Association, Archer Daniels Midland Company, Cargill Inc., Tyson Foods, Inc., and others.

"The Asia-Pacific region is the world's largest market for food and agriculture and is expected to grow rapidly in the years ahead," the letter said.

"Reducing and eliminating tariffs and other restrictive agricultural policies in this region will help American workers in our sector compete, creating an opportunity to supply Asian markets with high-quality food and agricultural goods.

"We hope your administration will create such opportunities for our sector by deepening U.S. economic engagement in this critical region while responding to the Asia-only regional trade agreements being negotiated by our foreign competitors. While many in our sector strongly supported the Trans-Pacific Partnership, we hope future agreements build upon the valuable aspects of that agreement to increase our market access in the Asia-Pacific...

"...Economic growth in America's heartland is inextricably linked to the long-established productivity of U.S. food and agriculture- an industry that is a true American success story."

The groups said because more than 95% of agriculture's potential customers live outside the United States, "expanding access to international markets is essential for our future success. The Asia-Pacific region is one such market that is critical if we are to attain our future export potential."

GRASSLEY CONCERNS

What's more, though agriculture interests have been strongly behind Trump's nominee Sonny Perdue to head USDA, one Sen. Charles Grassley, R-Iowa, told agriculture journalists Tuesday it will be important for the next agriculture secretary to show strong leadership on trade and all things ag.

Grassley said he has a planned meeting with Perdue Thursday. Perdue still has not had Senate committee hearings for the post. Despite a number of Trump nominees being held up in the Senate by Democrats, Grassley said if Perdue was to get near-unanimous approval at the committee level it would be possible for the full Senate to vote quickly.

"I don't know Sonny Perdue," Grassley said.

"USDA is the people's department and I need to know it will continue to be the people's department. I want him to be able to take on what's needed for the next farm bill.

"Since Trump needs to renegotiate trade deals we need someone at the ag department who understands family farmers. It's important we have strong leadership at the department."

After backing out of the 11-nation TPP, Grassley said the president should pursue additional bilateral agreements with many of those nations. That includes Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.

"In my view it is difficult to get 11 nations at the table," Grassley said.

"I would want the president to get a bilateral agreement with Japan. That would be most important to agriculture."

When it comes to NAFTA, he said because it is federal law it could require an act of Congress to change certain aspects. Although NAFTA covers a multitude of products, Grassley said the president must keep agriculture in mind if it is renegotiated.

"We don't have to withdraw from the existing treaty," Grassley said. "I'm not sure what can be done by Congress or the president. He better not forget about agriculture. He needs a locomotive to get this through with agriculture.

"In other words, don't screw around with agriculture."

The U.S. Census Bureau said Tuesday U.S. exports of goods and services in December totaled $190.7 billion, up $5 billion from the previous month. Imports totaled $235 billion, up $3.6 billion from the previous month.

USDA said U.S. ethanol exports totaled 98 million gallons in December, a 17% increase from one year ago. Brazil was the top U.S. customer again in December, accounting for 43% of all exports and followed by Canada with 28%.

U.S. ethanol exports were up 27% in 2016 from a year ago. U.S. exports of biodiesel totaled 11,330 metric tons in December, down 40% from a year ago.

Mexico was the top destination for biodiesel exports in December, taking 44% of the total while 36% went to Canada. U.S. biodiesel exports were up slightly in 2016 from a year ago.

U.S. exports of distillers grains totaled 862,319 metric tons in December, down 13% from a year ago.

Mexico was the top export destination in December, accounting for 19% of total exports with South Korea, Turkey and Thailand all close runners-up.

DDG exports to China were down 63% in 2016 and total U.S. exports of distillers grains were down 10% in all of 2016 from a year ago.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

Comments

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Clark Reimer
2/9/2017 | 8:05 AM CST
Farmers who voted for Trump are going to get exactly what they voted for more UNCERTAINTY and lower commodity prices. The sad part about this is the few of us farmers who didn't support him will also have to pay the price.