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Promoting Exports of Agricultural Commodities—Pushing a Piece of String?


Following a USDA release indicating a negative agricultural trade balance of $14.5 billion for the current quarter, Senator John Boozman (R-AR), Ranking Member of the U. S. Senate Committee on Agriculture, Nutrition and Forestry, urged aggressive measures to increase exports.


The issue of declining agricultural exports is not due to the inactivity or lack of diligence of any specific administration irrespective of political persuasion.  Customers for U. S. agricultural products place orders according to their requirements and their willingness and ability to pay.  In a recessionary economy, many nations have reduced food imports including China, our largest customer.  Senator Boozman should recognize that the U.S. is in direct competition with other exporting nations with their prices based on land, labor and energy. There is minimal differentiation in quality attributes for commodities including corn, soybeans, rice and cotton.


His blaming the current Administration for an imbalance in agricultural trade defies reality.  U.S. imports have soared, especially for seasonal fruit from South America and vegetables and other food items from Mexico and Central America. This trend is advanced by domestic labor costs, environmental restrictions and availability of water for irrigation that result in a price differential between domestic and imported food products.


It is hoped that additional funding will be allocated to the Market Access Program and the Foreign Market Development Program to allow for new markets and expansion of existing trade as much as is possible.  The Administration has been aggressive in pursuing legal remedies to correct deviations from trade rules with dairy exports to Canada as an example.


Senator Boozman should recognize that pumping money and resources into export promotion has limitations in terms of return.  If domestic demand increases concurrently with our customers demonstrating a declining need for our products or if competitors offer lower prices, there is little that industry associations and the Administration can do to restore trade balance in agricultural commodities.

Copyright © 2023 Simon M. Shane