AGRI-VIEW
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North African buying team in Wisconsin last week
Grain buyers from three North African countries visited the Woodruff Farm in Chippewa Falls Saturday, along with several other farming businesses to learn about the U.S. corn and feed industry. The group arrived here in advance of an Export Exchange Conference hosted by the U.S. Grains Council in Minneapolis this week. The visitors were top management officials from the largest corn and soybean importers in Morocco, Algeria and Tunisia and came to learn more about how corn and dried distillers grains (DDGS) are produced, handled and distributed. The Algerian delegation includes the largest corn and soybean importers of Algeria, representing over 85 percent of All Algerian Corn imports and the Algerian government recently (Sept. 1) exempted custom duties on DDGS. All three countries have growing livestock markets that require imported feed grains to meet their needs. Other stops for these importers included Big River Ethanol plant, Boyceville, Fetzer Dairy, Elmwood; Beskar Farms, Wheeler; River Country Cooperative, Bloomer.
Buying teams from Algeria, Morocco and Tunisia were in Wisconsin last week visiting grain and dairy farms in western Wisconsin and Big River Ethanol in Boyceville. They are among teams from 32 countries attending Export Exchange 2012, a buyers’ conference in Minneapolis hosted by the U.S. Grains Council Oct. 22-24. The U.S. is the world’s largest exporter of feed grains, and buyers are attending Export Exchange to connect with U.S. suppliers and assess firsthand the impact of this summer’s drought on the 2012 U.S. harvest. The conference is funded by a combination of USDA export promotion program dollars and U.S. agribusiness contributions.
As buying teams from 32 countries fanned out last week across the U.S. grain belt, USDA market development programs that boost agricultural exports could be shut down early next year if the Farm Bill is not reauthorized.
The U.S. corn industry is getting a double whammy this year. Adverse weather conditions led to a shorter corn crop, higher global grains prices, and sharply increased pressure from foreign competitors. At the same time, the lack of a Farm Bill threatens to do long-term damage to the United States’ ability to remain competitive in the international marketplace, adding to the already high stakes in the Farm Bill debate. On the verge of a program shut-down, export promotion programs including the Foreign Market Develop (FMD) and the Market Access Program (MAP), authorized by the now-expired Farm Bill, are more vital than ever to service existing international customers.
“There are a hundred good reasons why Congress needs to reauthorize the Farm Bill as soon as it returns to Washington after the election,” says Tom Gillis a farmer from River Falls, hosting a North African grain buying delegation. “The last Farm Bill expired on Sept. 30. If the new Farm Bill is not enacted soon, U.S. export promotion programs will start shutting down soon.”
Increasing global competition in the grain market threatens U.S. market share. Collectively, U.S. competitors are taking advantage of open markets through recently enacted trade agreements. While the passage last year of the Panama, Colombia, and South Korea Free Trade Agreements help open the door to U.S. exports in these selected markets, it will become increasingly difficult in the long run for the United States to compete globally without a continuation of the long-standing public-private partnership that has been the foundation of U.S. export promotion activities.
“These export programs are important,” says Gillis. “They provide vital customer service functions, which are a priority this year due to the short U.S. corn crop. They allow for representation of U.S. farmer interests in developing trade agreements, like the Trans-Pacific Partnership. They help reduce barriers to trade and aid in capacity building, a fundamental goal of the United States. Real damage will be done if Congress doesn’t act soon.”
Agricultural exports are one of the bright spots in the battered U.S. trade balance. The U.S. is the world’s largest exporter of agricultural products, which are projected to reach a record $143.5 billion in 2013. That translates directly into income and jobs, not only in farm country but across the processing and distribution value chain. Agricultural exports are also one of America’s big winners in trade with China, which is now the world’s second biggest importer of U.S. foodstuffs, behind Canada.
“Ag exports are a big winner for the United States, but we have to recognize that competitors like Brazil, Argentina and the Ukraine are ramping up production for export and are ready, willing and able to grab increased market share if the United States drops out of the race,” Gillis continues.
“Critical programs like export promotion can’t just be turned on and off like a light switch. There are offices around the world that will be shut down, and highly experienced staffs who promote billions of dollars of U.S. grain every year that will be furloughed. They should not be sacrificed just to kick the can down the road a few months so that Congress can stall on tough decisions. It will take years to rebuild the capability we are in danger of throwing away. The clock is ticking,” he concludes.
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