While the trade agreements President Donald Trump signed earlier this with China, Mexico and Canada may not be everything Washington farmers hoped for, most analysts believe the deals will at least provide a level of certainty moving forward.
China has agreed to purchase at least $40 billion in U.S. agricultural products for 2020 and 2021. But many question how those promises will be fulfilled, said Jon DeVaney, president of the Washington Tree Fruit Association.
“The agreement with China is encouraging, but it isn’t clear yet exactly how our tree fruit products will fare,” DeVaney said. “The agreement provides some targets for increased Chinese purchases … but isn’t specific about which ones or how those targets will be achieved. There remains more work to do, but this is an encouraging step.”
Mark Powers, president of the Northwest Horticultural Council, told the Yakima Herald that the deal with China could open more markets for Washington apples, pears and cherries.
“There are all kind of mechanisms they could employ in order to honor the agreement, to purchase the level of agricultural products they agreed to purchase,” he said. “We’re working with our government to put forward what we think the level of purchase for our industry (should be).”
However, China has not removed 50% retaliatory tariffs on U.S. cherries, pears and apples, Powers said. China could remove the tariffs to honor its purchasing obligations.
“It’s likely going to involve a partnership and work with the U.S. government and Chinese importers,” he said.
The agreement with Mexico and Canada, which replaces the North American Free Trade Agreement, will be good news to apple producers, DeVaney said.
Washington apples represent up to 95% of all U.S. apple exports, and Mexico makes up about 30% of the entire export market. If you throw in Canada, about 40% of all Washington apples go to those two countries.
“Although (the new deal with Canada and Mexico) doesn’t make changes specific to our products, it provides some certainty on two of our most important export markets,” DeVaney said.
Farmers for Free Trade spokeswoman Michelle Erickson-Jones, a Montana wheat farmer, said she was skeptical of the agreement with China.
“It remains to be seen whether it will deliver any meaningful relief for farmers like me,” Erickson-Jones wrote in a news release. “The promises of lofty purchases are encouraging. But farmers like me will believe it when we see it.”
Absent the trade deals, the thing that’s really moved the needle for farmers, mostly in the South and the Midwest, is Trump’s $28 billion farm bailout. The trade aid meant farm incomes rose in a year when they were widely expected to fall.
Even better news: U.S. Agriculture Secretary Sonny Perdue just confirmed he’s expecting the administration will make the third and final payment for the aid package, even with the China agreement.
Perdue said those checks should be coming “imminently.” That extra income boost underscores why farmers are feeling good in places like Iowa’s Sioux County, the top agricultural producer in a state that’s No. 1 for corn and hogs.
“I’m really optimistic,” said Chris Ten Napel, who farms 2,500 acres and raises 15,000 hogs a year in a family operation with his father and brother in Sioux County. “Things are looking up, you might say.”
The Associated Press contributed to this report.
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