Relations between the U.S. and some of its trading partners have left farmers and others keeping a closer eye on the global marketplace over the past year.
On Jan. 13 American Farm Bureau Federation policy experts gave an overview of the trade issues expected to affect U.S. farmers and ranchers in 2019 at the organization’s annual convention.
David Salmonsen, AFBF senior director of Congressional relations, said the diverse impacts of tariffs, the outcomes of free trade agreement negotiations and the future of relations with China are all critical for the future of ag exports and the growth of American agriculture.
Salmonsen discussed the United States-Mexico-Canada Agreement and outlined the process for ratification. “It could be quick, or it could be slow but there is a timeline that has to be followed,” he noted.
He also shared that the U.S. has begun trade negotiations with Japan, the European Union and the United Kingdom, although the start of U.K. negotiations depends on when the U.K. completes the process of leaving the EU. He added that, in any agreement, there is political bargaining that will go on over several months.
Regarding China, Salmonsen noted that a U.S. delegation went to China to negotiate the week of Jan. 7, though there have been no formal announcements yet and talks are continuing.
“All of these negotiations are with major trading partners,” he said. “These are substantive and important negotiations that we will be following very closely throughout the coming year.”
Veronica Nigh, AFBF director of Congressional relations, told farmers that exports will continue to be important to U.S. agriculture.
“Ninety-five percent of the world population is outside the U.S., so export markets will always be our opportunity for growth,” she explained. Overall, 20 percent of U.S. agricultural production is exported.
Discussing the potential impact of USMCA, Nigh said that while it is positive that the U.S. will be exporting more dairy to Canada, it isn’t going to be a major mover of the market, as Canada’s population is just 36 million and the country has a strong domestic dairy industry. But it is a positive sign for U.S. agriculture.
Citing the impact of Chinese tariffs, she noted that ag exports to China were down by $2 billion in 2018, and the U.S. Department of Agriculture forecasts they could decline by an additional $7 billion in 2019. China was ranked as the nation’s second-largest trading partner for several years but is projected to be fifth in 2019. Currently 99 percent of all U.S. ag products exported to China are subject to tariffs.
Summing up the impact of the China trade disputes, Nigh said that the biggest concern is that many countries grow soy and corn, and now there’s room in China’s markets for those commodities. “We could lose the market even if the tariffs eventually go away, and it would take time to restore these markets.”
In Virginia, trade is critically important for agriculture and rural communities statewide. Tony Banks, a commodity marketing specialist for Virginia Farm Bureau Federation, noted that significant Virginia products like soybeans, grains, tobacco, apples, poultry, pork and dairy goods “are all trade-dependent commodities. Trade negotiations need to be prompt while addressing our farmers’ need for fair and open access to overseas markets.”
