Post Election Thoughts for Agriculture #4 of 5 | TRADE
Trade, more so than immigration or calling Hillary “crooked,” impacted the vote. In fact, the Trans Pacific Partnership, thought to be a slam dunk in April, was dead in the trans Pacific water by October, regardless of who got elected.
Trump talks tough on trade - pointing out the inequities to America done via the North American Free Trade Agreement. Last I looked, Mexico did enjoy a $2.6 billion trade surplus with the U.S. So maybe he’s right.
Here’s why Agriculture needn't scream fire and run for the exits over trade worries:
a. Our product will still go somewhere. We live in a global economy. We can’t grow bananas or kumquats, Indonesia can’t grow corn. We want fresh fruit in February, someone somewhere wants to grill American meat in June. International trade will happen out of mutual necessity.
b. Trade wars hurt Agriculture. We learned that the hard way during Jimmy Carter’s Soviet grain embargo of 1980. Which, actually gave an Agricultural shot in the arm to our competitor countries. The pack of Ag advisors Mr. Trump is assembling will give stern warning about the perils of a trade war. But a little saber rattling from our commander in chief might be just what’s needed to negotiate better terms with our trading partners. Remember, this is the guy who authored a book called, “The Art of the Deal!”
c. The world has plenty of corn and soy and arguably too much milk, wheat and cotton — just look at market prices. We in Ag retain the idea that it’s incumbent on us to feed a growing world population. Only problem is, other nations have learned to produce commodities too, hence the slumping prices.
The long term answer, is Ag innovation, in which America leads the world. As western culture becomes more affluent and more fashionably foodie, we need to increase our value added products. Niche food has become almost main stream — there was no Hemp milk or Tofu turkey on the shelves at Kroger during the Soviet grain embargo! Now more than ever, Ag can profit from non -commodity food items. So I say, ramp up your production of Gluten free, organic, all natural, blessed by a Shaman, sustainably packaged, certified humane, quinoa because there’s now a market for it.
Video can be viewed here: https://youtu.be/rZ_cF3fvjrM