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Fort Collins, Colo. – As the beginning of a new presidential administration approaches, those in the agricultural industry around the U.S. wait to see how the Trump administration will impact agricultural exports with their trade policies.

During the International Livestock Forum on Jan. 6-7, U.S. Meat Export Federation Trade Access Senior Vice President Thad Lively gave a summary of what producers can most likely expect under President-elect Donald Trump’s trade policy.

Aggressive approach

“Trump’s priorities for his economic policy are not going to seem that radical – grow the economy, create jobs, reduce the trade deficit and strengthen the U.S. manufacturing base. It’s hard to argue with that,” commented Lively.

However, Trump's plans to achieve priorities are more controversial, said Lively, noting that he does not hesitate to use the term, “America, first.”

“He’s going to pursue 'buy American' and 'hire American' programs. That’s what his industrial policy will be all about,” he explained.

The Trump administration will be aggressive in their use of trade remedy cases.

“There are certain things they can do through the World Trade Organization that allow them to really go after other countries. There are limits to how far they can go within the law, but there are not immediate repercussions for going beyond those limits,” said Lively. “He has brought people with his team who all have a record of being as aggressive in that area as possible.”

Negotiations

Rather than multilateral negotiations, like the Transpacific Partnership (TPP), the Trump administration has talked about using bilateral negotiations between the U.S. and another country.

“He believes that most countries in the world want to export to the U.S. more than we want to export to them,” said Lively. “We’re not an export-driven economy.”

“His view is that when we sit down one-on-one with those countries, we’re in a much stronger position than if we’re just one of 12 or even more, every single one of whom has a vote equal to the United States, the biggest economy in the world. I think there’s some legitimacy to this,” he commented.

Trump has also talked about a trade deficit, meaning that we import more than we export. But, he has said that it will not be resolved by exporting more but rather by changing tax policy, implementing aggressive trade remedies and importing less.

“This is completely new. Again, if we compared this to a policy statement of any recent administration, we would have found the cornerstone of our trade policy was trade globalization,” explained Lively.

Uncertain

“If I had to summarize how I think a Trump administration is going to affect our exports of beef and pork in particular, I’d say the picture is still a little blurry,” said Lively, noting that one possible scenario would be improved access in China and the European Union, while another would be detrimental.

“I can also see a scenario where Trump succeeds with his so-called defensive objectives, but we get caught in the crossfire in Mexico and China and maybe see retaliated against the U.S. because we export so much product to those countries,” warned Lively.

Lively explained that both North American Free Trade Agreement (NAFTA) and the U.S.-Korea Free Trade Agreement have zero tariffs, meaning that no tariffs are paid on beef and pork going into Mexico.

“There’s a potential for us to get lost in the shuffle there because the truth is, that renegotiation is not about agriculture market access,” said Lively. “There’s also the possibility to make some improvements specifically in sanitary issues.”

As China is a major importer of U.S. pork, engaging in a trade war could result in the country retaliating against the pork industry. However, similar to NAFTA, there is the possibility for positive changes.

“If Trump’s strategy works, we might find that our access to pork into China gets better because we’ve got a lot of little issues that we work with the Chinese on every day,” said Lively.

Ag interests

To ensure that the interests and priorities of the agricultural industry remain in the forefront during trade negotiations, Lively stressed that the industry needs to bridge the gap in communication.

“The first thing we’ve got a do is say ‘Look, we support your objectives. We like what we see here,’ but we also need to be sure that President-elect Trump and his people understand how critical exports are to the long-term health of our industry,” said Lively.

“Beyond that, we should look for opportunities to build on this very aggressive approach that he plans to take, specifically in countries like Japan and China,” Lively continued.

It is especially important for the agricultural industry to guard their interests, particularly in China and Mexico, which both have significant agricultural interests, he added.

“We need to guard our interests, so we don’t become collateral damage as Trump pursues his policy,” concluded Lively.

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

Gulfood 2016 drew over 90,000 people from around the world from Feb. 21-25 in Dubai to celebrate the unique foods offered by exporters from around the world. As one of the world’s largest food exhibitions, the event brings exporters together with key buyers from growing regions around the world.

John Brook, U.S. Meat Export Federation (USMEF) regional director for Europe, Russia and the Middle East, says, “Gulfood has really become a very, very important show. It is the regional show for all of the Middle East, drawing in people from all over Africa and Asia, as well, and there’s no doubt that Gulfood is a hub. It’s a meeting point for a very wide region.”

Brook adds that the event drew more U.S. companies than ever before in 2016, and he sees that the regions represented at the show are important for U.S. producers.

U.S. beef piqued the interest of many from around the world, but Brook also notes the buyers showed strong interest in U.S. lamb.

“USMEF has been working with chefs and other foodservice professionals in the region to bolster demand for U.S. lamb,” adds Ralph Loos of USMEF.

Other markets

Another important market for U.S. beef, USMEF notes that Indonesia has begun to relax their import restrictions on U.S. beef.

USMEF explains that the country was once a top 10 volume market for beef exports, but inconsistent access in recent years has occurred in response to government efforts to bolster self-sufficiency in beef production.

Joel Haggard, USMEF senior vice president for the Asia Pacific, says, “Following publicity last year about a government-wide effort to streamline red tape and regulations, the Indonesian minister of agriculture published these new import regulations that made more cuts eligible for importation and allowed importers to apply to import as much beef as they want. More cuts are eligible from the U.S., including export staples such as short plates and short ribs.”

He also predicted higher U.S. volumes for 2016.

“The U.S. probably has the best opportunity in years to supply Indonesia because Australia’s live cattle export supply will be constrained by where that country is at in terms of its own cattle cycle and the consequent high beef import prices from Australia,” Haggard adds.

However, he emphasizes caution for the market as a result of challenges in the marketplace.

Haggard explains that the country requires purchasers to buy a certain quantity of domestic beef and prove it by showing receipts before they are able to  apply for an import license.

“It’s quite restrictive, and it lengthens planning time for imports, obviously,” he adds. “These and other restrictions are really the reason why the U.S., joined by New Zealand, filed a trade complaint to the World Trade Organization (WTO) over Indonesia’s beef import regime.”

While the outcome of the case is important, Haggard also notes that USMEF is focusing on capturing the market share that they can in the meantime.

Export volumes

USMEF reported on Jan. 7 that exports of U.S. beef and pork were above last year, though only modestly. At the same time, export value slipped.

“Beef exports increased three percent from a year ago to 82,301 metric tons, but value was down 13 percent to $438.1 million,” they said. “Exports to most Asian markets, which were impacted early last year by the West Coast port labor impasse, increased in January, but these gains were largely offset by lower volumes shipped to Western Hemisphere markets and the Middle East.”

Exports in January only accounted for 12 percent of total beef production and nine percent for muscle cuts, which was steady from 2015. Export value per head of fed slaughter was $239.88, down 11 percent from a year ago.

Important markets

Beef exports to Japan were the largest in six months at 16,762 metric tons, up 21 percent from a year ago, while export value edged two percent higher to $93.2 million. Exports to South Korea and Taiwan increased by 59 and 25 percent in volume and 17 and three percent in value, respectively.

Led by a strong month in the Philippines, Vietnam and Indonesia, exports to the region increased 71 percent in volume and nine percent in value, said USMEF.

Exports to Hong Kong were up 19 percent, although value declined by 16 percent.

“Although it is encouraging to see beef exports to the Asian markets performing above year-ago levels, these results are a reminder of how disruptive the West Coast situation was for our industry,” said USMEF President and CEO Philip Seng. “While we still face a tariff gap in Japan compared to Australian beef, Australia’s recent slowdown in production presents an opportunity to reclaim market share – an opportunity the U.S. industry is pursuing very aggressively. U.S. beef is also capitalizing on the tight domestic supplies in Korea, making strides in both the retail and foodservice sectors.”

Saige Albert, managing editor of the Wyoming Livestock Roundup, compiled this article from a number of USMEF press releases and reports. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it.

San Diego, Calif. – “In the course of the last few years, our business has become more global,” said CattleFax Analyst Mike Murphy during the National Cattlemen’s Beef Association Cattle Industry Convention and Trade Show at the end of January.

  In 2008, when recession hit the global economy, markets contracted.

“We started to see the globe come together to try to stimulate business in our own countries around the world,” he said. “When that occurred, we had a big influx of commodities and values were supported.”

However, cattle aren’t as flexible as other commodities in terms of ability to recover quickly. The reproductive cycle of cattle can be prohibitive as compared to hogs or even crop markets, he noted.

“When we look at these changes in terms of crude oil or hogs, we have seen a significant correction to their values,” Murphy said. “That is driven by supply. We were having increased production, which was affected by demand. Then we saw a slowdown in global demand.”

Global demand

Global demand declines led producers to assess their situations in terms of long-term price trends.

“We lowered interest rates to try to stimulate the economy,” Murphy said. “We were able to achieve some success, but we are now in a situation where interest rates can’t get lower.”

Some European countries are even encouraging their citizens to not deposit their money in banks now.

“There isn’t much more we can do to stimulate the economy,” he said. “At some point interest rates are going to go back up, but in the short-term, we expect them to stay fairly low.”

The impact seen from lowering interest rates was positive, but it has begun to wear off.

“We are seeing countries trying to devalue their currency in hopes of stimulating export growth. Some are in more difficult shape than others,” Murphy commented.

Key countries

Key countries around the world are seeing a slowing of growth, including Brazil, Russia and China.

“Brazil and Russia, in particular, have seen contraction from an economic standpoint,” Murphy explained. “Countries like China stand out as solid but with slowing growth.”

For example, in Russia, a 56 percent decline was seen in their currency over the last 18 months.

“Some of that is related to what is going on in the energy sector and the deflationary concept,” Murphy said.   

Murphy also noted that, despite slowdowns and cheaper beef coming from Brazil, many countries are still seeking U.S. beef because it is a high-quality, grain-fed product.

“Brazil has a grass-fed product,” he said.

Economic stimulation

While economic stimulation is still a concern, Murphy also added that slowdown around the world is starting to impact the U.S. economy more significantly.

“This is a reflection of where we are from an economic standpoint,” he continued. “In the U.S., we know we are in really good shape compared to the rest of the world, and that is the expectation as we look forward. We see no concerns looking at 2016 to be any sort of recessionary year.”

However, beyond the borders of the U.S., the picture is less clear, and Murphy noted that it continues to be important to pay attention to the global marketplace.

“We know how important global demand is for proteins – and in particular beef,” he said. “We have to make sure we are always analyzing and assessing what is going on around the globe.”

“The challenge in the U.S. is we are a stable economy,” Murphy added. “There is no fear of seeing our decline, at least in the short-term, over the course of the next one to two years.”

With a stable economy and other countries devaluing their currency to stimulate growth, Murphy explained that the U.S. is at a competitive disadvantage. 

Positive signs

“There are some positive things from a global standpoint,” Murphy commented. 

First and foremost, he noted that it is also important to consider supplies.

“We have had a small increase as we look at beef production, but when we look at the last several years, we have a tight, tight supply,” Murphy said. “Australia will contract their beef industry from a production standpoint because they are going to begin expansion as they receive more moisture. To expand, they have to contract first.”

Canada will experience a similar situation, comparable to what was seen from 2013-15 in the U.S.

“We don’t have a huge increase in terms of overall global beef supply,” he said.

Beef forecasts

Looking forward, beef imports are expected to decline about eight percent as Australia contracts their supply.

At the same time, the value of the 90% lean beef market has gone from three dollars a pound to $2.20.

“From an export standpoint, over the last four to five years, we have exported about 2.5 million pounds, which is what we expect to export on a consistent basis,” Murphy said. “That is roughly nine to 10 percent of our production.”

The ability to continue exporting beef is a “big positive for the industry,” he added.

Any increase in global beef production will also come from the U.S., considering expansion of the beef cattle herd, which puts the beef industry in a position to prosper.

“That puts us in a position where we should be able to command better demand from a global standpoint so we can export more product,” Murphy said.

He added, “There are some trade winds we will have to face, but we feel like, overall, the global market will be more positive.”

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..

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..

San Diego, Calif. – As energy prices plummeted this year and the profitability of crop prices has been squeezed, CattleFax’s Chad Spearman noted that the same trend is expected over the next few years.

“The question we have to ask ourselves about is weather,” he said. “The key as we look at corn, soybeans and wheat is we have ample supplies coming into this year, and without a major crop production issue, that is going to remain the case and keep pressure on prices through 2016 and into the next year.”

Stocks-to-use

A key marker when looking at prices going forward is the stocks-to-use ratio.

“Stocks-to-use measures total usage relative to the ending stocks at the end of the year is presented on a percentage basis,” Spearman said.

He continued, “Corn stocks-to-use levels are just on top of 25 percent, and they are expected to be flat compared to last year but still elevated compared to tight levels of 2008-12.”

Going back to 2012, stocks-to-use for U.S. corn dropped below six percent resulting in record high corn prices. As stocks-to-use levels are low, prices are high, he explained.

“Since we have moved past that period, at least over the last two years, we have had stocks-to-use levels maintaining above the 12 percent level,” Spearman said.

Spearman added that, through the upcoming year, stocks-to-use ratios will range from 11 to 13 percent.

“That will keep major resistance for stocks of corn around four dollars a bushel and maintain a risk factor of $3.35 to $3.45 going into the spring,” he continued. “When we consider prices in the longer term, trends remain lower. Supplies are ample, so we are going to see that weigh on prices.”

Around the world, the U.S., Argentina, Brazil and Ukraine are the only major corn producers, meaning competition around the world is somewhat limited. However, Spearman also noted that dried corn isn’t as significant a concern as other commodities. Dried corn exports make up a very small portion of the overall crop sales in the U.S.

“We export a lot of things that are derived from corn, but only about 15 percent of the corn crop is dried corn,” he explained. “Cheaper corn prices outside of the U.S. are going to be a limiting factor, though.”

For farmers, increased supply will be a challenge, but livestock producers and feeders will see some relief.

“Feed costs will come down substantially, but we have to separate these three markets when we look at a global economy,” Spearman added.

Protein and energy

“We are looking at cheaper protein and energy feed costs in 2016,” Spearman summarized. “That pressure will continue to weigh on hay prices.”

After 2012, U.S. hay production rebounded sharply, and hay stocks also rebounded over the last year.

“We are seeing those prices come down substantially, and we expect that will be supportive in the cow/calf sector in terms of costs,” he said. “Other hay prices and alfalfa hay prices are expected to decline six and 16 percent, respectively, for the current marketing year ending in April.”

Influence of ethanol

An additional complicating factor in corn markets is the use of corn to make ethanol.

“When we look at the corn market and the changes it has undergone since 2005, the ethanol industry has become established and is not going anywhere,” Spearman said. “We have 35 to 40 percent of the corn market that is tied to energy markets.”

As energy prices have declined, support of the industry through ethanol production should not be expected.

Market forecast

“Corn prices will stay at $3.35 to $3.45, up to $4.10 on the high end in the spring.”

With 89.5 million acres of corn expected to be planted in the 2016-17 marketing year, and forecasted yields of 167 bushels per acre, Spearman commented that the resulting supply of corn is steady or only slightly higher than last year's.

“We do expect usage to grow, especially as supported by livestock production,” he said. “Without a major production issue, we will be limited to a little above four dollars for corn prices.”

Spearman addressed attendees of the 2016 National Cattlemen’s Beef Association Cattle Industry Convention and Trade Show, held in San Diego, Calif. at the end of January.

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..