Friday, March 8, 2019
CapitalPress.com
Trade policy still up in air, expert says
By CAROL RYAN DUMAS
Capital Press
U.S. trade policies remain
in a state of flux with the
Trump administration, and
billions of dollars hang in
the balance for agriculture.
“U.S. ag is at a cross-
roads,” Dominique van der
Mensbrugghe, director of
the Center for Global Trade
Analysis at Purdue Univer-
sity, said Monday during the
audiocast of the Farm Foun-
dation’s forum on trade.
Since the end of World
War II, U.S. administra-
tions have been pursuing
lower-tariff trade. But the
Trump administration has
reversed those long-stand-
ing policies, he said.
“The steel and aluminum
tariffs were the first salvo,”
he said.
The U.S. also withdrew
from the Trans-Pacific Part-
nership, which was signed
by 11 other countries.
“This will certainly have
an impact on market access
for U.S. farmers,” he said.
U.S. steel and alumi-
num tariffs are still in place,
and the U.S. has threatened
China with more tariffs. And
while there’s no immediate
concern about ratification of
the new U.S.-Mexico-Can-
ada Agreement, it is not yet
a done deal, he said.
How those trade issues
turn out will have an impact
on U.S. agriculture. Things
could go in a direction of
more protectionism, remain
at the status quo or swing to
a total reversal of the trade
WTO panel finds China
pumps up farm subsidies
By MATTHEW WEAVER
Capital Press
Port of Seattle
The CMA CGM Benjamin Franklin departs from the Port of Seattle. A Purdue
University professor says U.S. agriculture stands to lose or gain billions of trade
dollars, depending on which direction the administration’s policy swings.
wars, he said.
A study of the potential
impacts of those outcomes
by Purdue University shows
U.S. agriculture could lose
$21.8 billion annually in
exports under the worst-case
scenario.
That scenario would
include the U.S. remaining
outside TPP, continued tar-
iffs and retaliatory tariffs
and a complete withdrawal
from the North American
Free Trade Agreement with
Mexico and Canada.
Taking the issues sepa-
rately, the U.S. withdrawal
from TPP would reduce U.S.
agricultural exports by $1.8
billion annually. If the U.S.
were to rejoin TPP, however,
those losses would turn into
a gain of $2.9 billion annu-
ally in additional agricul-
tural exports.
The total cost to agricul-
ture and other industries of
leaving TPP is roughly $5
billion, he said.
As for NAFTA, it’s had a
dramatic impact on trade, he
said. The share of U.S. agri-
culture exports going to Can-
ada and Mexico increased
from 14 percent in 1995 to
30 percent in 2017, he said.
While its replacement —
the USMCA — was mostly
a modernization of NAFTA
with a relatively small
increase in U.S. agricultural
exports, it consolidated the
gains made under the previ-
ous agreement, he said.
A complete withdrawal
from NAFTA would lead
to a $12 billion decline in
U.S. agricultural exports
annually.
But current retaliatory
tariffs are a more glaring
issue. Continuation of those
tariffs by Canada and Mex-
ico would result in a decline
of $1.8 billion in agricultural
exports annually.
The impacts of all U.S.
tariffs and counter tariffs,
including retaliatory tar-
iffs by China and the EU,
would result in an $8.4 bil-
lion annual loss in U.S. agri-
cultural exports.
The trade wars and with-
drawal from TPP are lead-
ing to a $9.8 billion decline
in U.S. agricultural exports
annually.
As for the outlook, there’s
been no reversal yet in the
trade wars — even with the
signing of the new USMCA,
he said.
“At this point, there’s
no reason to believe there
will be a reversal. Can we
be optimistic? I’m not sure
at this stage. (But) I think
we can be optimistic things
won’t get worse,” he said.
7
A World Trade Organi-
zation panel has found that
China distorts the global
wheat trade by increasing
subsidies for its farmers
through price supports.
“China now holds about
half the world’s stocks
because they have such
high support prices,” said
Ben Conner, vice president
of policy for U.S. Wheat
Associates, the overseas
marketing arm of the indus-
try. “Their government just
keeps buying and buying.”
When a single nation has
huge stocks, it puts down-
ward pressure on world
prices, he said.
“We want to see those
start to come down and
China start having stocks
that are more responsive to
market needs,” Conner said.
The WTO panel was
formed after the U.S. Trade
Representative challenged
China’s domestic agricul-
tural support programs for
wheat, corn and rice. The
U.S. entered the dispute set-
tlement process in 2016.
A U.S. Wheat-sponsored
study by Iowa State Uni-
versity in 2016 found that
China’s domestic market
support price at the time —
roughly $10 per bushel for
wheat — cost U.S. farmers
between $650 million and
$700 million annually in
lost income.
As a member of the
W T O ,
China
is
limited in
how much
it can sub-
s i d i z e
farmers.
Ben Conner
“What
we hope will happen now
is that China will now take
steps to come into compli-
ance,” Conner said. “China
talks about how important
the WTO rules are to them,
and how important it’s been
for their economic develop-
ment, so we certainly hope
they’ll respect those rules.”
China could appeal the
ruling, he said.
“We don’t think that’s
necessary, we think the
decision here is clear, it’s
an almost black-and-white
case,” he said.
The higher domestic
prices have forced China to
keep lower-priced imported
wheat out of the country,
Conner said.
U.S.
Wheat
hopes
reform of China’s sub-
sidy programs will create
more opportunities for U.S.
exports to China. Conner
points to “enormous, bla-
tant” demand for U.S. wheat
classes, including soft white
wheat primarily grown in
the Pacific Northwest.
“That’s ultimately our
hope, to be able to have a
strong relationship with the
Chinese wheat industry,
where they become one of
the largest buyers of U.S.
wheat,” Conner said.
SW Idaho county mulls
ag-to-residential rezone
By BRAD CARLSON
Capital Press
A slice of farmland near
Caldwell, Idaho, could
become rural home sites if
Canyon County commis-
sioners approve a rezoning
request.
William Jenkins and
Robert O. Jenkins requested
the county rezone, from
agricultural to rural-residen-
tial, four parcels totaling a
combined 78.2 acres at the
southwest corner of Indiana
and Orchard avenues, south
of Idaho 55. The average
minimum lot size in a Can-
yon County rural-residential
zone is 2 acres.
The Jenkins family has
farmed in the area for many
years. Farming the sub-
ject property “is becom-
ing increasingly difficult
because of encroachment of
higher-density residential,
including bordering prop-
erty being annexed into the
city of Caldwell,” the fam-
ily said in a letter to county
planners. The county’s for-
ward-looking
Compre-
hensive Plan Map shows
the property as residential,
“which fits the trend of the
area.
Brad Carlson/Capital Press
Residential uses are increasing near this farm property
just outside Caldwell, Idaho.
“The property is well sit-
uated for low-density devel-
opment as it has three-quar-
ters of a mile of public road
frontage, power on site, and
water rights that are flex-
ible for delivery,” the let-
ter said. The family “has a
long-term plan of making
more parcels available for a
growing family and friends
as the need arises.”
The Canyon County
Planning & Zoning Com-
mission Feb. 21 recom-
mended approval by the
County Board of Commis-
sioners, slated to consider
the proposal at 1:30 p.m.
Mountain April 11, said
Kathy Frost, recording
secretary for the coun-
ty’s development services
department.
Planning
documents
show the property is within
Caldwell’s city impact
area. Residential and agri-
cultural uses surround the
property, bordered to the
north and east by city lim-
its. Twenty-one platted sub-
divisions, totaling 817 lots
and averaging 0.41 acre
each, are platted within a
mile.
Federal changes mean more
consistency in falling number tests
By MATTHEW WEAVER
Capital Press
Two federally mandated
changes in falling number
tests will mean more con-
sistency when technicians
check wheat samples for
starch damage, Washington
state’s grain inspection man-
ager says.
Beginning May 1, the
Federal Grain Inspection
Service will correct for the
barometric pressure at all
laboratory sites when run-
ning the industry standard
falling numbers test. Labs
at an elevation higher than
2,000 feet above sea level
have already been adjust-
ing for the elevation and
corresponding barometric
pressure.
The barometric pressure
impacts the boiling point of
water and the falling number
test score. In the falling num-
ber test, a slurry of wheat
and water is heated in a bath
of boiling water. In general,
the higher the elevation, the
higher the falling number,
according to the FGIS.
Now all falling num-
ber scores will be cor-
rected to the barometric
pressure at sea level using
a formula developed by
the Agricultural Research
Service, according to the
FGIS.
“We’re going to see
some numbers change —
some will go up a little bit
and some will go down, but
there’s no real deviation out-
side of about 6 to 15 points,
is what we’ve noticed,” said
Phil Garcia, Washington
State Department of Agri-
culture grain inspection pro-
gram manager in Olympia.
“You’re going to see more
accuracy,” he said.
Also, according to federal
rules, labs will no longer be
able to hand-shake the slurry
of wheat and water to mix it
before running it through the
falling number test machine.
An automatic shaker called
a Perten Shakematic must be
used exclusively, Garcia said.
Hand-shaking was previ-
ously done as a last resort in
the event of a machine fail-
ure, Garcia said.
“You have that human
element, but when you put in
the Shakematic, that element
is gone,” he said.
That means the state must
buy more equipment so it is
always available as a backup,
Garcia said.
The wheat industry was
caught off guard in 2016,
when starch problems caused
much lower falling num-
ber test scores and cost farm-
ers more than $30 million in
reduced prices.
“This isn’t the fix-all,”
Garcia said. “We’re looking
at a problem that is a lot big-
ger than just the methodology
in the falling number test.”
“They’re just steps,” said
Glen Squires, CEO of the
Washington Grain Commis-
sion. “The goal of the indus-
try is to improve the current
test, to make the test more
accurate. These are steps
that certainly help do that.”
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