Trade Disputes High Stakes for Agriculture
With lower prices for virtually every commodity we produce on Nebraska’s farms and ranches, the last thing we need is more uncertainty. Unfortunately, nothing creates uncertainty more than trade disputes.
What I know is that trade matters to agriculture and Farm Bureau has and will continue to be a strong advocate for building relationships and growing markets for our agriculture commodities. The stakes are too high not too. We know there are other competitors in the market looking to displace American agriculture and that lost markets aren’t easy to recover. It can take a long-time to get a market back; if it can be done at all. We can all think of a time we stopped doing business with someone for one reason or another. Did you go back? What did they have to do get your business back? How long did it take?
These concerns keep coming to mind as trade tensions progress with our allies to the north (Canada) and south (Mexico), as well as our other trading partners in the EU, Japan, Korea, and China. The long-term risk of losing markets for our agriculture commodities is real.
American Farm Bureau economist Veronica Nigh pointed that out in a recent report where she took a closer look at the impacts of trade tensions between China and the U.S. on U.S. soybean exports for this marketing year. Nigh focused on dates related to when the U.S. threatened tariffs on steel imports from China, examining the loss of U.S. soybean sales to China associated with those dates. In short, her findings show that the accumulated lost sales of soybeans to China have already exceed the total accumulation of lost sales during the entire 2016-17 marketing year. Keep in mind that China is the largest customer for U.S. soybeans and the third largest trading partner for Nebraska agriculture commodities and goods. China alone accounted for roughly $396 million in Nebraska agriculture sales in 2017. And this is only one example.
Trade tensions are also showing up in the market. June has been brutal to Nebraska crop producers, with cash corn prices down roughly 11 percent and cash soybean prices down 16 percent. While good growing conditions and an increase in the value of the dollar is playing a role, trade tensions are leading the way in the downward price push. Cattle and pork prices are also lower than they were a year ago. The ripple of trade tensions is clearly present.There is no question the President has done many good things for American agriculture. But trade matters to Nebraska’s farm and ranch families. Roughly 30 percent of our agriculture income comes from these trade partnerships. It’s critical the President and Administration understand there is no government assistance program that could ever replace lost markets from a major misfire in U.S. trade policy. Rolling into the fall with dismal prices and continued uncertainty on the trade front paints an ugly picture. We need positive outcomes on trade. It’s vital we as farmers and rancher relay that message to the President and his Administration. The stakes are too high not too.