The U.S. Grains Council received initial reports that Friday’s earthquake and the subsequent tsunami may have caused significant damage to many of Japan’s agricultural facilities and production areas. While the extent of the damage is not yet known, it will likely impact grain trade.
“Some ports in northern Japan, Kushiro, Hachinohe, Ishinomaki and Kashima, were hit by the tsunami. We’ve heard some feed mills and livestock operations have also been damaged by the tsunami. Those facilities were not severely damaged by the earthquake itself but were affected by the tsunami,” said Tommy Hamamoto, USGC director in Japan. “It is too early to tell what effect this will have on Japan’s agricultural sector, but it could be of significance.”
Alistair Polson (center right) and Terry Meikle (far right) met with CFB leadership this week to discuss trade.
Yesterday, Don Shawcroft and Troy Bredenkamp met with Alistair Polson, New Zealand’s Special Agricultural Trade Envoy and Terry Meikle, the New Zealand Embassy’s Secretary for Trade and Agriculture. The meeting was an informal way to share about agriculture issues from two countries across the Pacific Ocean from each other. Mr. Shawcroft and Mr. Bredenkamp provided a survey of Colorado agriculture and the issues we face. Mr. Polson was particularly interested in Colorado’s water administration system and how water is balanced between ag and urban needs.
Mr. Polson, himself a sheep and cattle rancher in New Zealand, spoke about his countries support for the Trans Pacific Partnership (TPP) and asked that Colorado farmers and ranchers support the effort. The TPP is a trade agreement between 9 Pacific Rim nations. Is is currently in the negotiation stage and the 6th round will take place at the end of this month.
The TPP could open up many Pacific nations to U.S. goods, services and agricultural products.
Mr. Polson met with the Commissioner John Stulp, Leprino Cheese, JBS Swift, and other ag groups during his two day tour of Colorado.
President Obama meets with Mexican President Felipe Calderon last week.
President Barack Obama and Mexican President Felipe Calderon on Thursday reached an agreement to resolve the long-running dispute over cross-border trucking between the two countries. The agreement may be finalized as soon as June.
“This agreement has been a long time coming and, with half of the $2.4 billion in Mexican retaliatory tariffs to be lifted as soon as the agreement is finalized, this will have an immediate positive impact on U.S. agricultural exports,” said AFBF President Bob Stallman. The remainder of the tariffs will be lifted when the necessary safety tests are completed and the first Mexican truck rolls across the U.S. border.
Mexico is the third-largest agricultural export market for U.S. farm goods. Farm Bureau is urging the administration to finalize the agreement quickly.
The world is consuming grains faster than farmers are growing them, draining reserves and pushing prices to the levels that fueled food riots in poor countries three years ago. A big U.S. crop will be needed to meet the demand, according to the Wall Street Journal.
“The stage is set for very serious disruptions, should weather disasters happen,” said Keith Collins, the former chief economist of the Agriculture Department. “It seems clear to me that the chance of a more widespread global food crisis has increased.”
The rise in prices also has economists urging caution among policy makers.
Economists with the World Bank and the International Food Policy Research Institute are urging President Barack Obama not to overreact to recent spikes in food prices by imposing export bans on U.S. agricultural products.
“We should expect fluctuations, but we shouldn’t exacerbate these fluctuations by imposing obstructions to the market that could make things worse,” said Manuel Hernandez, a postdoctoral fellow at IFPRI. “The situation is not the same as in 2007 and 2008. So there is no major concern that we should worry about another food crisis.”
Colorado is one of 10 new states that can now ship seed potatoes to Thailand, Agriculture Secretary Tom Vilsack announced Tuesday.
The newly eligible states are Colorado, Maine, Michigan, Minnesota, Montana, Nebraska, New York, North Dakota, Wisconsin and Wyoming. In 2009, Thailand announced it would accept seed potatoes from California, Idaho, Oregon and Washington.
“This is a promising development for U.S. seed potato producers who will now be able to compete in Thailand, the largest potato growing country in Southeast Asia,” Vilsack said. “Southeast Asia is one of the fastest growing markets for U.S. agricultural products, and exports there are expected to grow by more than 25 percent this year. This action by the government of Thailand will provide buyers with additional supplies of high-quality seed potatoes.”
U.S Trade Representative, Ron Kirk
In testimony today before the House Ways and Means Committee, U.S. Trade Representative Ron Kirk said the Obama administration will pursue trade agreements with South Korea, Colombia and Panama this year, but will not sacrifice concerns over labor and human rights.
In the meantime, eight former agriculture secretaries wrote to Congress on Tuesday urging fast passage of the Korea-U.S. Free Trade Agreement. In the letter, former secretaries Bob Bergland, John Block, Mike Espy, Dan Glickman, Mike Johanns, John Knebel, Ed Schafer and Clayton Yeutter said the agreement “will offer enormous new opportunities for our products in a market that is large and growing.
The Transportation Department has released a concept paper to Mexico in an attempt to begin negotiations to resolve the U.S.-Mexico trucking dispute. Contents of the concept paper can be found here.
This concept paper is the first attempt by the Obama administration to resolve a two-year trade dispute between Mexico and the United States. The dispute halted arose when Congress the cross-border trucking pilot program. The pilot program was developed and implemented to address Mexico’s concerns that the United States was not fulfilling its obligations under the North American Free Trade Agreement.