Tag Archives: Trade

The U.S. Department of Agriculture announced the Agricultural Trade Promotion Program in August and the American Sheep Industry Association applied for funds in advance of today’s deadline in an effort to promote American wool and sheepskins to alternative international markets.

The program is designed to help American agricultural products affected by recent adverse trade conditions. China has long been the major buyer of American wool and sheepskins, so recent tariffs announced by the country were a blow to the industry.

Administered by the Foreign Agriculture Service, ATP Program funds would be used to promote sheepskins at trade shows in an effort to boost the market in that area of the industry. The funds would also provide support for exploring new markets for American wool in Eastern Asia, the Middle East and South America. This would allow for an effort similar to the existing Quality Samples Program, which ASI already uses to support the trial use of American wool exports around the world.

Additionally, funds would support promotion efforts and education of international buyers as to the benefits of American wool.

“China has been a key market for American wool and sheepskins,” said ASI Deputy Director Rita Samuelson. “The agriculture industry is fortunate to have a USDA/FAS program that supports the exploration of new or expansion of current export markets during this unexpected change in trade policy.

“With the tariff changes, ASI has been active visiting with wool and sheepskin exporters and identifying target markets. ASI is also looking at ways to further support the export of American wool while working collaboratively on projects.”

During the month of October, the Nebraska Corn Board hosted two trade missions which consisted of major U.S. corn buyers from Mexico and Saudi Arabia. The trade teams met with Nebraska farmers, suppliers and exporters of corn and corn co-products to better understand U.S. corn production, marketing and exporting logistics. The visits were coordinated in collaboration with the U.S. Grains Council, which works to develop export markets for U.S. agricultural products, such as corn, distiller’s dried grains with soluables (DDGS) and ethanol.

“American farmers have sustainably been growing quality agricultural products for generations,” said David Bruntz, chairman of the Nebraska Corn Board and farmer from Friend. “With 95 percent of the world’s population living outside of the United States, we must develop and maintain positive trade agreements with our global customers. By inviting these customers to the U.S., we’re able to help them understand our supply chain, so they’ll feel more confident doing business with American farmers. This undeniably has an economic value to our state and our country, but we’re also helping provide feed, fuel and fiber to the world.”

While in Nebraska, the Mexican grain buyers met with local corn farmers, Aurora Cooperative and Gavilon to better understand the U.S. value chain of white corn to Mexico from harvest to shipping. Nebraska is the largest white corn producing state in the country, and Mexico has historically been the largest importer of U.S. white corn. From Nebraska, the group further explored the American white corn industry through stops in Missouri and Kentucky.

Both trade missions, from Mexico and Saudi Arabia, represented only two of 21 international teams that were in the U.S. in October. The 21 teams consisted of more than 200 grain buyers who participated In Export Exchange, a bi-yearly event sponsored by the U.S. Grains Council, Renewable Fuels Association and Growth Energy. This year’s Export Exchange took place Oct. 22 through Oct. 24 in Minneapolis. The purpose of the event was to connect global grain buyers to over 300 domestic suppliers.

While the Mexican team visited Nebraska to learn about the white corn supply chain prior to Export Exchange, the grain buyers from Saudi Arabia came to Nebraska after the event concluded.

Saudi Arabia is the eighth largest overseas importer of U.S. corn, importing 3.7 million metric tons in market year 2017/2018, and is the second largest buyer of U.S. sorghum, importing 280 thousand metric tons during the 2017/2018 market year. The imported commodities are frequently used in dairies, feed and poultry companies.

While in Nebraska, the Saudi Arabian team visited the farms of Steve Wellman, director of the Nebraska Department of Agriculture, and Don Bloss, past chairman of the National Sorghum Producers. As major feed grain buyers, this team wanted to better familiarize themselves with U.S. corn and sorghum production. In addition to visiting Nebraska corn and sorghum farms, they visited Farmers’ Cooperative in Beatrice, the Aurora Cooperative corporate office and Pacific Ethanol, both in Aurora, and the University of Nebraska-Lincoln.

“We really had several great conversations with both teams over the last several weeks,” said Roger Berry, director of market development with the Nebraska Corn Board. “Our governments may not always see eye-to-eye, but these customers are so eager to learn more about U.S. agriculture. They want to be partners with American farmers in helping to meet the growing demands of their people, which is a major reason we host these trade teams. We have products to sell and we want to be able to show the world that U.S. agriculture is open for business.”

The Nebraska Corn Board partnered with the U.S. Grains Council to coordinate the missions. The U.S. Grains Council works in more than 50 countries and the European Union to market U.S. grains and their related products to build long-term demand from loyal customers. This work is also supported by funding from the USDA through the Market Access Program (MAP) and Foreign Market Development (FMD) program in the U.S. farm bill.

The National Milk Producers Federation this week asked the Department of Agriculture to better support dairy farmers who are experiencing losses stemming from the Trump trade agenda.

The Federation says in a letter to USDA that the agency needs to better reflect the dairy-farm incomes lost to tariff retaliation when it calculates its next round of trade mitigation payments. NMPF Chairman and dairy farmer Randy Mooney cited four studies illustrating that milk producers have experienced more than $1 billion in lost income since May, when the retaliatory tariffs were first placed on dairy goods in response to U.S. levies on foreign products.

In contrast, the first round of USDA trade mitigation payments, announced in August, allocated only $127 million to dairy farmers. The expected impact of the retaliation may result in roughly $1.5 billion in lost revenue for producers during the second half of 2018.

President Donald Trump is tentatively scheduled to meet with Chinese President Xi Jinping during the Group of 20 nations, or G20 summit next month. The two are expected to discuss the ongoing trade dispute between the U.S. and China.

White House economic adviser Larry Kudlow told Bloomberg News that U.S. goals are on the table and that the two leaders “will meet for a bit” during the event. He said he anticipated staff-level meetings between Chinese and American officials ahead of the November 30th summit.

However, Kudlow warned not to expect any major breakthrough between the two leaders. He did say that a broad agreement “on some basic principles and trading rules” including intellectual-property theft, forced transfer of technology, and tariffs on agricultural products “would be most welcome.” Formal talks have stalled since August as the U.S. accused China of unwilling to engage on trade issues.

Trade negotiations are officially on the horizon with the European Union, Japan and the United Kingdom, continuing the momentum generated by a bilateral deal with South Korea (KORUS) and a renegotiated NAFTA agreement with Mexico and Canada, now the USMCA.

The American Soybean Association (ASA) has consistently requested a negotiated solution to the trade war with China and urged that exports lost to this key market be offset through new free trade agreements. ASA is hopeful that the Administration’s formal notice to Congress that it will enter trade negotiations with the European Union, Japan and the United Kingdom as soon as mid-January will make a settlement with China a plausible next step, bringing an end to the devastating tariff imposed on American soybeans.

Concluding the USMCA and success with subsequent FTA negotiations with Japan, the EU and other countries would mean opportunities to potentially increase U.S. soy and livestock product exports to other promising markets, including the Philippines. ASA is encouraging the Administration to consider adding Vietnam and Indonesia to its list of potential negotiating targets. Knowing, however, that increased sales to these markets won’t offset lost U.S. export to China, ASA continues to emphasize the need to reach an agreement that rescinds the current tariffs and allows soy growers to begin to restore this vital, number one export market.

News on the trade front is getting better for U.S. pork producers as the Trump administration today announced it wants to negotiate trade agreements with the European Union, Japan and the United Kingdom. The National Pork Producers Council commended the administration for its ambitious trade agenda.

The administration recently updated agreements with Canada and Mexico and with South Korea that maintained the U.S. pork industry’s zero-tariff access to those important markets, three of the top five destinations for U.S. pork exports.

“We’ve got the momentum on trade headed in the right direction now,” said NPPC President Jim Heimerl, a pork producer from Johnstown, Ohio. “Producers are hurting because of retaliatory tariffs on pork, which were prompted by the administration’s efforts to realign U.S. trade policy. But producers have been patient, and now that patience is starting to pay off, particularly if we get a trade deal with Japan.”

Since Trump took office in January 2017, NPPC has been urging the White House to begin trade talks with countries in the fast-growing Asia-Pacific region, beginning with Japan, the U.S. pork industry’s No. 1 export market. It also has called for deals with the Philippines and Vietnam.

NPPC also has been supportive of trade negotiations with the United Kingdom, provided that the U.K. is willing to eliminate all non-tariff barriers and embrace U.N. food-safety standards and other international standards.

“NPPC will not support a deal with the U.K. unless it agrees to equivalence, meaning that all USDA-approved pork and pork products must be eligible for export to the U.K. without additional requirements,” Heimerl said.

And while the organization is open to trade negotiations with the U.K., it is skeptical about EU intentions.

“The EU has played the United States like a drum in the past,” said Heimerl. “This must stop. We expect the Trump administration to require the EU to eliminate all tariff and non-tariff barriers to U.S. pork so we can export with no additional requirements.”

While the trade news is good for U.S. pork producers, NPPC is continuing to press the Trump administration to resolve trade disputes with China and Mexico, including dropping tariffs on steel and aluminum imports from the latter. Both countries imposed retaliatory tariffs on U.S. pork in response to the U.S. metals duties.