Mary A. Marchant indicated recently at Choices Online that, "International trade deficits have recently been reputed as 'bad' for the economy; however, agriculture has posted a trade surplus since 1959. For U.S. agriculture, trade represents 20% of farmers’ income on average, and more for specific commodities—70% for cotton and tree nuts; 50% for wheat, rice, and soybeans: and almost 20% for meat and dairy products. Thus, tossing trade would be comparable to U.S. farmers destroying 20% of their yields. China, which has advanced to become the United States’ largest agricultural export market in an unprecedented time frame, plays a key role in the economic wellbeing of U.S. agriculture."
Shawn Donnan and Jude Webber reported on Thursday at The Financial Times Online that, "Donald Trump has fired the starting gun on renegotiations of the North American Free Trade Agreement with Canada and Mexico, with his administration notifying Congress on Thursday that it planned to begin formal talks as soon as August."
Donnelle Eller reported on the front page of Friday's Des Moines Register that, "Opening markets for U.S. corn, soybeans and other farm goods would get more attention under a major reorganization proposal Thursday from U.S. Ag Secretary Sonny Perdue, who wants to create a new undersecretary for trade. With the farm downturn entering a fourth year, ag groups lauded the move."
Secretary of Agriculture Sonny Perdue visited an Iowa farm on Friday and took questions from producers. In his remarks, Secretary Perdue addressed a number of issues; today's update focuses more narrowly on his comments relating to trade and biofuels. Also, Secretary Perdue was in Arkansas on Sunday to survey flood damage with Arkansas Governor Asa Hutchinson.
During last week's tumultuous developments on trade, news reports indicated that Secretary of Agriculture Sonny Perdue was providing President Trump with data driven advice with respect to NAFTA and agriculture, and urged him not to trigger a U.S. withdrawal from the trade accord. Nonetheless, recent remarks from a Senator from Mexico regarding corn imports, and potential NAFTA renegotiation issues means trade policy will likely remain an ongoing concern for Illinois producers and farmers throughout the U.S.
Recall that a FarmPolicyNews update last week noted that a trade dispute with Canada over dairy policies related to ultra-filtered milk is adversely impacting some dairy farms in Wisconsin, Minnesota, and New York, and some of these dairy farms could be forced out of business as a result. Today's update highlights additional news developments on the Canadian dairy dispute, including remarks on the issue from President Trump, as well as concerns the U.S. dairy sector has with exports to Mexico.
Many agricultural producers have expressed concern over the direction of executive branch trade policy since January. These apprehensions may not be universally shared in all quarters of Rural America; however, tariffs and other trade restrictions are important considerations for U.S. agriculture. Today's update looks at recent news items on trade, with a focus on corn exports, ethanol byproducts and beef.
In a front page article last week at the Milwaukee Journal-Sentinel, Rick Barrett reported that, "Dairy farms in Wisconsin and other states could be forced out of business as early as May because of a trade dispute that has halted the export of their milk to Canada."
As global commodity markets cope with abundant stocks of corn, soybeans and wheat, export competitiveness has become increasingly important for U.S. farmers. Today's update takes a closer look at these issues with particular focus on trade developments with China and Mexico.
Today's update examines recent news articles that address issues associated with NAFTA and U.S. corn exports to Mexico. As the future direction of executive branch trade policy continues to evolve, this uncertainty is potentially weighing on agricultural markets.