ST. PAUL, Minn. – Commissioner of Agriculture Thom Petersen and a 14-member delegation have returned from a trade mission to Columbia and Peru. During a time when Minnesota farmers need every trade partner they have, the trip was meant to build trust and increase trade with both countries.
“This is a tremendous opportunity for our grains, especially corn, and keep in mind both countries now have had free trade agreements for about 10 years,” said Petersen after he returned from South America. “They're continuing to increase their imports in corn, soybeans and wheat.”
The delegation was comprised of Minnesota farm leaders and University of Minnesota representatives, including Dean Bev Durgan. Representatives from both Minnesota’s grain and meat production also attended.
“We were able to meet with both ambassadors in both Columbia and Peru, which was quite an honor and I think it also shows the importance of agriculture for both countries” said Petersen.
Exports to Columbia reached a record last year of $2.9 billion, accounting for 100 percent of their soybean imports, 97 percent of their corn and 91 percent of their total pork and pork products.
Peru is an equally important trading partner with exports totaling $1.4 billion last year, an 8 percent increase from the previous year.
Petersen notes there is still room to grow in these markets.
“I was kind of interested to see their Canadian imports of wheat have gone up and United States imports of wheat have gone down,” he said. “They would like to import more United States wheat.”
Reasons for the decreased shipments of wheat to the South American countries have to do with shipping and logistical issues that are continuing to be worked on and improved.
“They would like to see higher protein content in our wheat,” he said. “But they have a growing population and a growing middle class.”
The Commissioner asked the ambassadors what a growing middle class meant to them. They responded by saying more of their population has increased their income and they have more money to spend. One area they are increasing their spending is on food – buying higher quality products.
Grain production in Peru and Columbia is limited. They grow a little corn, but no soybeans or wheat.
“Columbia grows corn, but the average farmer raises only about 7 acres, so they need to rely on imports of our products,” he said. “They like United States as a trading partner.”
While the trade agreements between these countries and the United States are very good agreements, seem secure, and have not come under criticism by the White House administration, the instability of the global trading world right now does raise concern.
“The United States is looking at its trade a little differently,” said Petersen. “We got a lot of questions or just comments that trade right now is unpredictable, and whether it's a tariff on Chinese goods or Mexico, that can have residual effects into Colombia and Peru.”
In any commodity-based market, uncertainty and instability can be a problem. Talks of increased tariffs not only impact the trading markets within the United States, but it has effects on the global markets as well.
In addition to talking about Minnesota’s products, the delegation had the opportunity to address some misconceptions the people of Columbia have about farmers in the U.S.
“I got a lot of questions from reporters who sometimes thought that we have a lot of rich farmers in the United States,” he said. “And I said, we wish that was the case, but it really isn't the case right now and that's why we're there looking for markets and opportunities.”
The people were surprised to learn that the U.S. farm economy is down.
They were also very interested in our farm subsidy programs, which Commissioner Petersen described to them as a safety net program, not subsidies.
In the end, the trip was a successful one for Minnesota farmers. They have loyal customers in South America that will continue to buy product.
“We made a lot of good relationships. I look forward to following up on those relationships and hope that it helps us continue to move a lot of product to South America,” Petersen concluded.