LUBBOCK, TEXAS (RFD NEWS) — More attention is shifting toward ways to build domestic agricultural demand as export competition intensifies and low crop prices continue to pressure farm income. An analysis from the Ag and Food Policy Center at Texas A&M says the U.S. may need stronger domestic demand tools alongside trade policy if producers are going to improve returns.
The report notes the U.S. agricultural trade deficit has climbed above $100 billion over the last four years. It also says some in agriculture are increasingly questioning whether exports alone can pull row-crop markets out of the current low-price environment.
Texas A&M points to several ways in which Washington already supports domestic demand, including food-aid purchases, Buy American rules, and the Renewable Fuel Standard. The report says those policies show the federal government can influence both direct purchases and private-sector buying incentives.
It also highlights newer proposals now gaining traction in Congress. One would create a tax credit for food and beverage manufacturers that source raw commodities from U.S. farmers. Another would create a tax credit tied to the use of U.S.-grown cotton in clothing.
The report says both proposals fit a broader push to strengthen domestic supply chains and create more outlets for U.S. production. For crop producers facing heavier competition abroad, that could become a more important part of the policy conversation.
Farm-Level Takeaway: Domestic demand policy may play a larger role if export competition continues to limit price recovery.
Tony St. James, RFD News Markets Specialist
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