Current Edition

current edition

International

On Feb. 23, the American Farm Bureau Federation (AFBF) joined Agriculture Secretary Tom Vilsack to announce the release of a new report quantifying the benefits of the Trans-Pacific Partnership (TPP).

“Over the course of the past few months, we have studied TPP, and we are encouraged by our findings,” said AFBF President Zippy Duvall. “We know it is important to our ag communities and to farmers and ranchers to open markets and have access to markets.”

AFBF’s research concluded that TPP will result in a $5.2 billion increase in ag exports annually for an increased $4.4 billion in the pockets of farmers and ranchers across the U.S.

“We think TPP will be positive for all commodities across the board,” Duvall commented.

Vilsack added that for every $1 billion increase supports 6,500 jobs, and the predicted $4.4 billion in increased incomes means support for an additional 30,000 good quality, high-paying jobs in the U.S.

Role of exports

“To put a fine point on the important role of exports in American agriculture, 30 percent of sales and 20 percent of farm income are directly related to exports,” Vilsack said during a media conference call. “It is important that we realize additional opportunities to expand the reach, quality, quantity, safety and affordability of ag products.”

Vilsack referenced a report by the Peterson Institute which showed that, by 2039, Americans would see an additional $357 billion in exports, a portion of which would be directed to agriculture.

“This would raise income for Americans by $131 billion,” Vilsack added. “The bulk of this would go to high-wage workers and farmers. Export-related jobs are indeed higher paying jobs.”

Further, the Peterson Institute Report noted that delayed implementation could cost the American economy $94 billion in lost opportunity.

“It is important to emphasize the passage of TPP and allow it to be implemented,” Vilsack said. “No country will receive more benefit than the U.S.”

“Until today, we didn’t have a documented review or study, but thanks to AFBF, we are prepared to share information about the importance of opening markets for ag products,” he added.

TPP will reduce 18,000 tariffs and taxes on goods and services provided by American companies, including farms and ranchers.

“We see benefits in TPP to livestock and dairy across the board,” Vilsack said. “We see the impact and effects on grain and feed, and fruits and vegetables have benefited from expanded trade and access.”

Groundbreaking benefits

TPP breaks new ground in the realm of trade agreements by including provisions for sanitary and phytosanitary (SPS) rules, as well as biotechnology.

“This is the first trade agreement that addresses the importance of making sure that SPS rules are based on science and documented information,” Vilsack explained. “This is also an agreement that, for the first time, makes reference to biotechnology and the importance of having a uniform approach to biotechnology.”

The added language will be helpful in Asian markets, he noted, adding that a standardized regulatory process that doesn’t unfairly create barriers will be particularly essential in China.

Vilsack further said that access to biotechnology is important to provide for the growing world population.

“We are challenged in agriculture in the U.S. to continue to lead the world in innovation and continue to lead the effort to increase productivity in fields, on farms, on the range and in pastures to meet growing food demands,” he commented. “America must have the ability to get innovations to the market after appropriate study and review without unnecessary and unreasonable barriers as a result of politics.”

Science-based decisions will be essential to fair trade around the world, he noted.

Expanded world markets

TPP has the potential to harness growing world markets, said Vilsack.

“The Asian market is a growing market,” Vilsack mentioned. “It is home to 535 million middle-class consumers, and in 15 years, we expect that number to grow by 2.7 billion – 10 times the population of the U.S.”

Expanded market access means diversity of markets for U.S. agriculture, and Vilsack noted that diversity reduces the chance of overreliance on any one market.

He continued, “Ninety-five percent of trade activity in terms of growth and development occurs outside the U.S. It is essential for us to be engaged in active trade discussions and to play a part in this expanded trade.”

Action from Congress

While TPP is ready to be signed, the U.S. is awaiting action from Congress on the deal, which is costly to the American economy.

“We know that if we delay implementation by a single year, we look at a $94 billion hit, which will impact agriculture but also the other sectors,” Vilsack explained. “There will be continued requests to Congress to get this done. Any delay is costly.”

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

When Rabobank polled over 350 executives from leading North American good, beverage and agribusiness companies, 61% said that China will have the greatest impact on global agriculture over the next 10 years. Respondents also marked China as the most important economic growth driver for the same period.

 

Sheridan – Attendees at the Wyoming Farm Bureau Convention Nov. 13-15 had the opportunity to find out more about the ag economy during a presentation by American Farm Bureau Federation’s Deputy Chief Economist John Anderson, who plainly stated that trade is critical for a healthy U.S. economy.

“The forecast in 2015 of U.S. agricultural trade is $144.5 billion in exports and  $117 billion in imports, showing a $27.5 billion dollar surplus,” the economist said.  

Export markets

The year 2014 saw $152 billion in agricultural exports.

Anderson explained that although grain and oil seed prices will probably be lower, the volumes will be higher – and the dollar is getting stronger.  

“There is a very strong trend for agricultural trade,” said Anderson. “There was a downturn in the early 1990s, but ag trade has been steadily increasing.”

He noted that the livestock sector, particularly pork and poultry, have developed their markets dramatically in the last few years and gives China credit for boosting trade figures.

“Any question about trade, just answer with the word ‘China,’” Anderson joked. “Their growth is phenomenal. People there now have a little money in their pockets and are buying ag input products and food products.”

He continued, “China wasn’t even on the ag trade map before 2007. Now they have a huge impact on our ag economy, especially with pork and soybeans. Pork exports to China have been positive in the livestock sector. It’s worth taking note. However, keep in mind that Canada and Mexico are still and will remain our top agricultural trading partners. They still take a lot of product. Russia is not the ag trade market it used to be. One reason is they are getting more efficient in producing their own food. The other is political.”

Market outlook

Trade is extremely important in the meat sector. 

Anderson said poultry now exports about 20 percent of their production overseas. Pork exports more than 20 percent thanks to China, and beef has about 10 percent of their product exported.

“The international trade we do with pork and chicken is actually important to our domestic beef industry in that the 20 percent of poultry and 20 percent of pork is meat that is not in our domestic market. Beef can pick up that share at home,” he indicated.  

He explained that a majority of the U.S. beef export market goes to Japan, Mexico and even Hong Kong. 

“We sell beef to Hong Kong, but not China,” Anderson said. “The beef industry is working hard on China, and it’s expected that they will come along, eventually.”

Success factors

One of the reason for success in international markets is tastes vary from country to country. 

“Mexico takes a lot of variety meats. Egypt purchases a lot of liver and tongue. Korea wants short ribs. China loves chicken feet and other parts not consumed by Americans. Trade allows us to get more out of the carcass as we send it where people value it and increase the value of that livestock,” Anderson said.

He cautioned that although ag trade is strong, there are many challenges. 

“We have intense global competition, trade protectionism, trade as a weapon and market factors, such as a high dollar and high prices for some commodities,” Anderson explained. “We are competing with everyone and against a number of factors beyond our control on the farm.”

The economist praised the innovation of this country’s farmers and ranchers to stay highly competitive in a global market. 

Beef outlook

Even if prices for beef are high at the retail level, the demand for product has still been good. 

“Consumers are willing to pay more for the limited product. We have seen a slow, steady increase of consumers in the U.S. buying beef, which I believe is not due to tight supplies but because consumers are feeling better about their situation,” Anderson remarked. “I am amazed how resilient demand for beef has been.  That says a lot about how good our product is.” 

He noted that even with cattle numbers down, the supply of meat is still good because producers are becoming more efficient. 

“Our entire beef supply chain is getting more efficient,” said Anderson.  

He added that, along with corn prices dropping, there is a huge corn crop, with 14.4 billion bushels projected – which is good news for the beef industry.

Competition

“Pork is also looking to expand,” he said. “They are building a lot of new facilities and are moving aggressively. Broiler production is expected to increase by three percent, especially once those farmers rebuild their pedigree flocks that they depleted in 2011 and 2012.”

He indicated that this increase in pork and poultry means beef will face challenges to keep their market share.

As for the prices producers receive for cattle, Anderson believes that it will be down five to seven percent in 2015. 

“However, with energy prices and feed prices decreasing, I believe cattle producers will still see good margins,” he concluded. 

Rebecca Colnar Mott is a correspondent for the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..

As international trade becomes more prevalent in agriculture, trade issues and agreements play a crucial role in encouraging the growth of the industry.

“The biggest thing as far as exports are concerned is getting all of the various trade agreements that are out there sorted out,” comments Western United States Agriculture Trade Association (WUSATA) Executive Director Andy Anderson. “We have just signed agreements with South Korea and Colombia, and those are going well.”

Success stories

Anderson remarks that the agreements with South Korea and Colombia that have been signed recently have resulted in trade increases.

“We are seeing an increase in trade,” he says. “In fact, we just had a trade mission to South Korea with all of the Directors of Agriculture from the western states, and we are seeing a lot of dividends paid from that.”

Aside from signing the agreements, Anderson notes that WUSATA has devoted a large amount of time to education.

“We do a lot of training and spend a lot of time educating people,” he says. “It is about educating people on how to use our food products – teaching them to understand how to use the products, how to prepare them and that kind of thing.”

Trade barriers

“One of the big issues as far as trade goes is what kind of barriers are put up,” Anderson explains. “Agriculture is one of the basic industries that all countries are concerned about.”

With concerns about food security and protecting local industries, he says that foreign competition is an important factor for countries to consider when importing foods, and from time to time, false trade barriers are set up. 

Anderson uses rice as an example, noting that countries cite food safety as the reason for not allowing imports.

“A lot of Asian countries bring up food safety issues, saying U.S. rice is not as safe as South Korean or Japanese rice, which is not true,” he explains. “But until we jump through all the science to prove it, they can keep the U.S. out.”

Trans-Pacific Partnership

“The TPP (trans-pacific partnership) is an effort to get everybody on the same page – to get all countries to treat exports and imports the same way so there aren’t any false trade barriers,” he says.

He continues, “The TPP is just an effort to try to get everybody standardized, and if there are some of these non-tariff trade barriers, countries will have recourse. There will be a process to go through to get things taken care of.”

Though Anderson says the World Trade Organization was designed to address trade issues, the organization has not been moving forward on a number of concerns.

“We are seeing all of these regional and country-to-country trade agreements are made because the WTO is bogged down and not moving forward on issues,” Anderson comments. “We are seeing a proliferation of trade agreements to solve some of these problems.”

Saige Albert is editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.

During the first week of March, New Zealand Special Agricultural Trade Envoy Mike Petersen came to Wyoming with the intention of looking at opportunities for sharing ideas and working together for agriculture. 

“I’ve been to the United States a number of times, but I’ve never been to the Midwest,” Petersen commented. “It is great to see what is happening here and where we can learn from each other.”

He continued that, while there are aspects of agriculture where New Zealand is quite proficient, “It is always great to see other people, what they are doing and to try and add more pieces into the puzzle.” 

Working together

“Everywhere I travel around the world, the issues are the same,” Petersen said. “It doesn’t matter if you are a farmer in New Zealand, Wyoming, Japan, Europe or the United Kingdom, the issues are the same.”

He noted that environmental pressures, nutrient management issues, water quality, farm succession, prices and improved and efficient farming practices are all important. 

“Everywhere we go, everyone is looking for the same sort of things,” Petersen commented. “One thing that Wyoming has that we don’t see is predators. That is quite unique because we don’t have those threats, but that is a major issue here.”

Export driven

New Zealand, however, also faces some unique challenges that Wyomingites don’t necessarily see. 

“We are quite unique because we are a country of 4.4 million people, but we produce enough food for about 40 million,” Petersen explained. “We export about 90 percent of what we produce, and that is unique in the world.”

He added, “If we don’t have access to markets off-shore, we don’t have businesses, and we don’t have an economy.”

As a result, New Zealand strongly focuses on market creation and making sure that their product meets the expectations of consumers. 

“If we don’t meet consumer expectations, they won’t buy our product,” Petersen noted. 

On the global scale, Petersen also mentioned that New Zealand is a very small country providing very little product. 

“If we fell off the earth – even in agriculture – no one would notice,” he said. “In our production terms, we are very small, but exports are very important to us.”

Agriculture, including the processing and trade industries, make up about 18 percent of the country’s economy.

Developing trade

One important piece in developing export markets for New Zealand is the developing Trans-Pacific Partnership (TPP). 

“The TPP is critical because we are an exporting nation,” Petersen said. “As we look at the 12 member countries, the TPP is a mess of opportunity for us. This has the potential to change the face of trade in the Asia-Pacific Region.”

As the U.S. and other countries look at becoming more engaged in the Asia-Pacific, Petersen believes the TPP is the litmus test to determine how that will happen. 

“This agreement is desperately needed for the countries involved,” he continued. “If we get a good outcome, there are other countries who will want to join. I think this will become a much bigger deal than any of us could have imagined.”

“It has the potential to shift the dial on trade, not just for the Asia-Pacific Region, but for the world,” Petersen emphasized. “This is a seriously big opportunity.”

Petersen also added that the U.S. will be the biggest beneficiary of the deal, and countries must continue to work together to develop an agreement. 

“We need much stronger advocates for the TPP,” he continued. “I understand the issues about the secrecy of the deal, but the reality is, this can’t be discussed in Congress.”

“We need people to get behind the TPP and make it the best deal it can possibly be,” Petersen said.

Working together

To bolster the agriculture industries of both New Zealand and Wyoming, Petersen mentioned that we should work together and recognize that there are many ties that bond the industries. 

“There are a number of things that we all face,” Petersen said. “It doesn’t matter if we are talking about farmers in New Zealand or Wyoming, our issues are the same.”

“We should look at how we can develop mentoring programs to encourage more young people to get back into agriculture,” he added. “Maybe we should look at how we can work jointly to promote our products. We can jointly advocate for the unbelievable quality of the pure, natural products that we have.”

Petersen emphasized, “We have wonderful opportunities, but too often, we sit in our own little countries and don’t think about doing it together.”

Exporting agriculture products

The U.S. is New Zealand’s third largest export market, and 48 percent of all beef produced in the country, or 190,000 tons, comes to the U.S.

“Most of that beef is manufacturing beef,” New Zealand Special Agricultural Trade Envoy Mike Petersen commented. “It goes into the hamburger trade.”

As a country, New Zealand produces very high quality lean, manufacturing beef that is mixed with trimmings of prime and choice beef from the U.S. to make the recipe for hamburgers. 

Petersen noted that New Zealand’s dairy industry has struggled to send products to the U.S. for several reasons. 

“The barriers to entry are still too high,” he said as a primary factor. “Whether it is tariffs or quotas, we have a number of products that we struggle to be competitive with when it comes to sending dairy to the U.S. market.”

He also mentioned that the efficiency of the U.S. dairy industry means that dairy products are produced cheaply and effectively in the U.S.

“We export most of our dairy to Asia, and that is where the market has grown for us,” Petersen said. 

In addition to beef, New Zealand exports hides and skins that come out of the beef industry to the U.S., and the country’s third largest export is wine and apples. 

“Wine and apples are third, but they are a distant third when we consider what happens with beef,” Petersen explained.

In the sheep industry, Petersen noted that China is the country’s largest export market. 

“If we look at the tonnages of sheep meat, China is our biggest market at 160,000 tons. The U.K. is next at 64,000 tons and the USA is third at 19,000 tons,” he said. “Even though many people up here think they see New Zealand lamb everywhere, we don’t send large amounts of lamb to the USA”

For lamb, New Zealand is also a part of the Tri-Lamb Group, which also includes Australia and the U.S.

“We are trying to build lamb for all three partner countries,” Petersen said. “We are looking at nutrition programs and promotions. We are working with bloggers and others with some neat initiatives that seem to make a difference.”

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..