U.S. Rep. Kristi Noem (R-SD) and U.S. Sens. John Thune (R-SD) and Mike Rounds (R-SD) want the president to prioritize the nation’s agricultural exports during negotiations with global trade partners in order to stabilize the struggling industry.
Recent market uncertainty already has cost South Dakota producers millions of dollars, according to the lawmakers, who pointed out that agriculture is the state’s No. 1 industry and the cornerstone of its economy.
In fact, South Dakota ranks among the nation’s top 10 states for producing cattle, hogs, corn, wheat, and soybeans with more than 11 million acres of the three crops planted in 2018, according to the lawmakers.
“Because of our state’s dependency on agriculture exports, our producers can no longer continue to ‘wait and see’ what happens with U.S. trade in the global arena. Trade uncertainty over just the past few months has cost South Dakota farmers and ranchers hundreds of millions of dollars they could not afford to lose,” the members wrote in a July 11 letter sent to President Donald Trump.
“Over the past several months, we have expressed serious concern that the steep drop in commodity and livestock prices linked to current U.S. trade policies and recently effectuated sanctions could push an alarming number of our state’s farms, ranches, and rural areas to the brink of economic collapse,” they warned.
While Rep. Noem and Sens. Thune and Rounds said they appreciated and supported the Trump administration’s efforts to address a broad spectrum of trade inequities, most notably in China, they said they did not support making agriculture exports – long considered the exception to such trade inequities, they wrote – “bear the brunt of retaliatory actions in response to current U.S. trade policies.”
“As you continue to pursue trade negotiations to address unfair trade practices and other trade barriers, we strongly urge you to make U.S. agricultural exports a priority of those negotiations and to negotiate with our trading partners to protect agriculture products from all existing and future tariffs,” the lawmakers wrote.
To bolster their case, the members cited recent information from CoBank, a national cooperative bank serving industries across rural America that provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers. CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture and the nation’s rural economy.
“Uncertainty around trade presents escalating concern to U.S. agriculture,” according to CoBank, which reported in its most recent Rural Economic Review that 70 percent of U.S. agriculture exports are to destinations that are in current negotiation or trade disputes.
Additionally, the members wrote, the U.S. Department of Agriculture (USDA) Economic Research Service’s July 2 report noted that “lower commodity prices in the near future could likely further reduce farm receipts, making it more difficult for some farmers to meet their loan obligations and pay for production expenses.”
“Against this backdrop, the 2018 winter wheat harvest has begun in South Dakota, with other crop harvests to continue over the next four to five months,” the members wrote. “Harvest typically marks the beginning of a very critical period of economic uncertainty for farmers and ranchers in a normal year, as operating loans and production and harvest expenses are coming due before year’s end. Unfortunately, this uncertainty is now unnecessarily exacerbated by U.S. trade policies,” they wrote.
And even though President Trump has said publicly that the U.S. agriculture sector will survive through some form of USDA assistance, the members reminded him “that U.S. export market share is diminishing daily at an alarming rate, and history has proven that once lost, export markets can take years, even decades to recapture.”
“Given the already difficult market conditions for farmers and ranchers over the past several years, long-term damage to agricultural export opportunities is the last thing the industry needs,” they said.