The past year of a trade war with China and a renegotiation of what was once called NAFTA have created a lot of uncertainty for ag markets.
Markets don’t like uncertainty. And that has caused a negative impact on Kansas agriculture for close to a year.
That was the perspective of K-State ag economist Vincent Amanor-Boadu during an interview on KVOE’s Newsmaker 2 segment Monday. He says “trade wars are never good for anybody,” and ag producers are going into the 2019 season with no idea of what they can expect from worldwide markets — or from prices, for that matter. He says it didn’t take long for the state’s ag economic sector to see the negative impacts of tariffs last year.
President Trump has announced the United States is now backing off an original deadline of this upcoming Friday for a trade deal with China. Amanor-Boadu says announcements like that are of less help to the ag economy than you might think.
Receiving far fewer headlines than the China situation — but also significant to Kansas agriculture — has been a rework of the longstanding North America Free Trade Agreement, or NAFTA, into USMCA, standing for the trade partners United States, Mexico and Canada. Tariffs are largely not at issue here, but the agreement has not been ratified in any of the three countries — leading to another layer of uncertainty for ag producers and the ag economy.
Amanor-Boadu says the beef industry is apparently taking the hardest hit because of its impact to the entire state ag economy and because the competition for Kansas grains, including corn and soybeans, is already at a high level from other countries. Once export partners find other trading outlets, Amanor-Boadu says it’s hard to re-establish relationships — at least at prior levels.
Having said all this, Amanor-Boadu says the door is open for ag producers hoping to reach new markets or to try new methods. He says one good focal point could well be value-added products, which he says ag producers have largely gone away from recently.
Amanor-Boadu says the key thing to track now is how the United States can re-establish markets, especially in light of competition from Argentina, Brazil, Australia and other countries.
