Farmers are resilient, but that resiliency is being tested by challenges on the trade front, according to several Iowa and national agricultural leaders.
The situation right now, with a trade war still raging and COVID-19 ravaging the economy, is “not a good situation for farmers,” said Jim Sutter, CEO of the U.S. Soybean Export Council. Sutter and several other agricultural leaders took part in a July 30 virtual town hall on trade, supply chains and the future of American agriculture.
“It’s pretty hot in the kitchen on the trade side,” said Craig Willis, senior vice president of global markets for Growth Energy.
On the ethanol front, Willis said, Phase One of the China deal did lead to a drop in tariffs on ethanol going into China, but only from 70% to 45%. That helps, but the tariff really needs to go down to about 5 percent. If that could be accomplished “the potential is huge,” he said.
China, he explained, announced in 2017 that it was setting a goal of moving to 10% ethanol by 2020. That hasn’t happened, but if China gets to that goal it would open up a potential market that would be twice the size of all U.S. ethanol exports in 2018.
He also said the industry is working to try to even the tariff levels between the United States and Brazil. Presently, Brazil charges a 20% tariff on imported ethanol while the United States only charges a 1.9% tariff on imported Brazilian ethanol.
Another area of optimism is non-fuel, plant-based products, according to Brent Shanks, director of the Center for Biorenewable Chemicals at Iowa State University. Items such as plant-based plastics for bottles have great potential, Shanks said.
The panelists at the town hall mentioned several other issues. Rural internet service is still an issue that hampers farmers and rural business, according to Mary Andringa, chair of the board at the Vermeer Corporation. Increased infrastructure spending is also a priority, she said.
But trade was the key issue of discussion, and several panelists said that until the issues around the Section 232 tariffs (imposed on steel and aluminum exports by President Trump) were resolved, the trade situation for farmers would be difficult.
When asked about any potential differences on agricultural policy between President Trump and his Democratic challenger, former Vice President Joe Biden, several panelists said Biden would likely put more emphasis on climate and the environment than Trump.
Andringa said Biden would likely try to mend the trade relationship with the EU and find a way to end the trade war with China. She said he might even revive the Trans-Pacific Partnership, a trade agreement negotiated during the Obama administration but never approved by Congress that was aimed in part at providing an economic offset to China’s power in the region.
The virtual town hall was put on by AgTalks, an organization formed in conjunction with a number of farm organizations.