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Amid Turmoil, the Second-Highest Year for Ag Exports?
Despite trade disputes with China, Canada, Mexico, and the EU, the four largest customers for U.S. farm exports, 2018 will be a banner year for overseas sales, according to USDA – $142.5 billion in exports and the second-highest tally ever.
How can that be? Partly, it’s the calendar. USDA bases its export figures on fiscal years, which open on October 1. “We’re pretty far into fiscal 2018,” said USDA Chief Economist Robert Johansson in mid-June, with less than four months to go and sales remaining strong.
Pat Westhoff of the think tank FAPRI said global economic growth is creating new demand for U.S. food and ag products even if some trade partners are creating barriers. Bad weather in Argentina means a smaller volume of wheat and soy exports from a major competitor, so there’s a market for U.S. export. In the early going, there were more threats than action. “A lot of factors determine agricultural product demand,” said Westhoff. “If more of the threatened trade actions go into effect, the impact could be much more noticeable.”
Entering early summer, 14% (or $20 billion worth) of U.S. ag exports were targeted, most prominently pork, hit by tariffs by China and Mexico.
“While producers are trying to be good soldiers, we’re taking on water fast,” says Pork Producers President Jim Heimerl. “The president has said he will not abandon farmers. We take him at his word.”
Iowa State University (ISU) economists say there’s truth to the adage that agriculture is the first casualty in trade disputes. In two earlier clashes, China used retaliatory tariffs “to inflict economic loss on politically influential groups. China has chosen agricultural products, as it sees the affected U.S. producers to be politically powerful,” say Minghao Li, Wendong Zhang, and Chad Hart in an ISU article. In addition, China has plenty of pork, so its consumers will not suffer if U.S. pork costs more.
USDA will make its first estimate of fiscal 2019 sales, involving this year’s crops, on August 29.
This article was produced in collaboration with the Food & Environment Reporting Network, an independent, nonprofit news organization producing investigative reporting on food, agriculture, and environmental health.