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Ag Exports Get $2.5 Billion Boost
OMAHA (DTN) -- Farm groups are enthusiastic about progress on the three pending free trade agreements (FTAs) with Korea, Colombia and Panama. The overall agreements could boost U.S. exports by $13 billion. Ag exports would rise by $2.5 billion, and lead to 22,500 additional jobs, the American Farm Bureau Federation estimates. It is expected Congress will vote on, and pass, the agreements toward the middle of this week. "I'm happy about this for a multitude of reasons," said Tim Burrack, an Arlington, Iowa, farmer interviewed while he was combining beans. "Just look at the value they bring to U.S. agriculture. We can't lose. These days, with farmers relying consistently more on the markets and government payments playing an ever-smaller role in farm income, it also is incumbent on us to grow as many markets as we can. We don't want to put all our eggs in the ethanol basket, which is politically shaky at times. The only tragedy is that it has taken so long to reach this point. We could have been benefiting from freer trade years ago." "Trade is absolutely vital if the United States is to secure economic growth and create new jobs, including in rural America," said National Grain and Feed Association (NGFA) President Kendell Keith. "Exports represent up to one-third of total usage of U.S. feed grains and 50% of wheat and soybeans if you include their use in producing value-added products such as meat." The accord with South Korea, our sixth-largest ag import destination in 2010, calls for two-thirds of U.S. ag exports becoming duty-free immediately, including wheat, corn, soybeans for crushing and other processed and high-value products, NGFA noted. "In fiscal 2010, the U.S. exported $2 billion in grains and feeds and $644 million in oilseeds and products to South Korea, accounting for 54% of all U.S. ag exports to South Korea." Under the Colombia agreement, more than 80% of U.S. ag exports will become duty-free immediately, including wheat, soybeans, soybean meal and other processed and high-value products. In fiscal year 2010, the U.S. exported $354 million in grains and feed ingredients as well as $165 million in oilseeds and products, accounting for 54% of all U.S. ag exports to Colombia, according to NGFA. Trade negotiators hope this agreement will help reverse the declining market share the U.S. has experienced as Mercosur partners Argentina and Brazil grew their share. In 2007, the U.S. supplied 76% of Colombia's imports of corn, wheat and soybeans, but by 2010, that had fallen to 27%. More than half of U.S. ag exports to Panama will become duty-free immediately, including soybeans, soybean meal, wheat, barley and other processed and high-value products. In fiscal 2010, the U.S. exported $152 million in grains and feeds and $71 million in oilseeds and products to Panama, accounting for 55% of all U.S. ag exports to the country, NGFA reported. WINNERS Analysis by the American Farm Bureau Federation (AFBF) found beef would be the big winner with these three agreements, with an expected increase in exports of $582 million. Processed food and fish follow at $463 million. As the table shows, many ag products will enjoy greater exports, though dairy will be restricted somewhat by fierce competition from Australia and New Zealand, USDA noted, and corn exports won't grow a great deal due to its tight supply. (See table.) Looking at expected estimated gains from the FTAs, AFBF determined that the Corn Belt and Plains states are likely to be the biggest benefactors (see map). The map represents both total direct and indirect (such as corn being fed to livestock that is exported) income. "We took USDA's Economic Research Service aggregate numbers and estimated state impacts by using production and export data for each state," Veronica Nigh, AFBF economist, told DTN. "It's important to consider both sets of numbers. A state like Texas both produces and exports a lot of beef. But a state with a port, such as South Carolina, may export corn that wasn't grown in that state," she explained. Likewise, she said, some states may not be large growers of commodities but may have a lot of food processing -- which would show up in the "processed food and fish" category. As an example, North Dakota's total may be boosted by the flour processing and baking mixes. To see the details related to your state, see http://www.fbactinsider.org/… and click on the state.
Linda Smith can be reached at linda.h.smith@telventDTN.com (CZ/AG) © Copyright 2011 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
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