There are several moments that have shaped Gregg Doud’s journey from a Jewell County, Kansas, farm kid to chief U.S. agriculture trade negotiator.
But one in particular sticks with Doud, who spoke to a packed room at Kansas State University’s Cattlemen’s Day March 2—just a day after the U.S. Senate confirmed his appointment.
It was 2003 and Doud was working as the National Cattlemen’s Beef Association chief economist. In one of many meetings that week, he touted something about expanding beef exports. He vividly recalls the conversation he had next.
“This rancher came up to me, put his hand on my shoulder and said, ‘Gregg, just wanted to let you know beef trade is never going to be anything but a niche business for us. It’s never really going to matter. But it is OK you are working on it.’”
It was then that Doud realized his calling. And, just months later, the first U.S. case of bovine spongiform encephalopathy, or mad cow disease, disrupted Christmas. Doud would spend the next seven years helping the industry rebuild its beef exports from scratch.
“That experience is what led me to where I am today,” Doud said.
Global economy
Upon swearing in, Doud will serve as Chief Agricultural Negotiator in the Office of the United States Trade Representative. The White House nominated him in June.
Sen. Pat Roberts, R-KS, announced Doud’s confirmation March 1.
“It’s one of those jobs I’ve been training for my whole life,” Doud told the group, which included his parents. “And I finally get a chance to do it. I can’t think of any better place to have been today given the events of about 4 o’clock yesterday afternoon.”
His résumé includes working for U.S. Wheat Associates after completing graduate school in the early 1990s. After leaving NCBA, Doud worked as a senior aide to the U.S. Senate Agriculture Committee and helped shape the 2012 farm bill. Previously, he was the president of the Commodity Markets Council, the trade association for commodity futures exchange.
Doud talked excitedly about returning to Washington and taking the reins. He talked about growing the U.S. beef export market.
“The new money in our industry is going to come from the trade side,” he said. “Seventeen percent of the money you get paid for your cattle comes from some other currency.”
In 2003, that accounted for about $150 of every fed steer. Today, that amount has grown to $284 a head.
The beef industry is growing since the BSE report, he said. Last year, beef totaled $7.2 billion of the $140 billion in agriculture products exported, which compares to just $3.86 billion in 2003.
Asia is among the growing markets with enormous potential, he said, adding that 64 percent of U.S. beef exports go to Asian countries. South Korea ranks No. 2 in exports with $1.2 billion in sales thanks to a trade agreement.
The agreement, implemented in 2014, diminishes duties on beef from 40 percent to zero by 2026, according to the U.S. Meat Export Federation.
“That Korean trade deal for beef is easily the best deal we have ever done,” he said.
China now imports 3 billion pounds of beef, he said. China buys a lot of variety meats. A few years ago, the country was spending $1 a pound for the rectum.
“Who else is going to do that,” Doud said, bringing laughs. “What do they do with that, they chop it up and make soup out of it. Seriously.”
“We are just beginning to scratch the surface,” Doud said. “Fifteen years ago, they weren’t even on the radar. Today they are buying 3 billion pounds of beef.”
Meanwhile, Japan is the nation’s No. 1 beef purchaser, buying $1.9 billion last year—about a half billion more than when the country banned U.S. beef after BSE.
Doud said it has only been in the past five years that officials recaptured the Japanese market. And, from 2003 to 2013, “we lost about $10 billion in exports just because of that one cow,” he said.
Working to get tariffs down is one of the biggest challenges. Japan’s tariffs on frozen beef went up from 38.5 percent to 50 percent last year after the United States began pumping exports into the country due to a drought in Australia.
Now, 15 years after “the mad cow that stole Christmas,” Australia and the U.S. are at an even market share into Japan.
“The Trans-Pacific Partnership would bring that tariff down to 9 percent,” Doud said, adding, “Fifteen years later, I can’t emphasize enough how important it is to prevent things from happening like the cow that stole Christmas. It’s taken years to get those wheels back.”
Importance of trade
However, unlike a few years ago, beef is not in tight supply in the U.S., making the export market significant, said Glynn Tonsor, a K-State professor of agricultural economics. Herds have increased and animals are heavier. The calf crop increased by 4 percent over increases in 2016.
The good news, Tonsor said, was feeder cattle producers in late 2017 had a “Christmas surprise,” with beef demand spiking prices during the fourth quarter.
Yet, Tonsor emphasized the importance of exports for continued upswings. He noted that some products exported by the U.S. are ones most American don’t typically consume, such as the tongue.
“Exports allow us to send those products to the markets that use them the most,” he said.
Domestic meat consumption is growing. The USDA is forecasting that in 2019 61 pounds of beef will be consumed per person. If realized, it would be the largest increase in a decade.
“If the growing beef supply stays domestic, Tonsor said, “then we will have lower prices than we thought.
“We have a lot of meat here,” he said. “If we can accomplish growth of exports—not just long term but short term—it will alleviate some of that per capita pressure.”
It’s enough to make Randolph, Kansas, rancher Lori Fink appreciate Doud’s work. Fink and her husband, Galen, market 700 bulls a year through Fink Beef Genetics, which they started in 1977.
“If we can’t sell a bull or if it gets injured, we have to eat it. I only have so much room in my freezer for hamburger, so I wonder what this country will do if we produce so much and we can’t sell it.”
But, she added, she notices through the restaurant they operate in Manhattan where they serve Certified Angus Beef that the customers will pay for high quality.
Another generation is coming to the operation, her daughter and son-in-law, she said.
“I want them to have a future,” Fink said. “And so, I think listening today makes you realize there is future for our young people.”
Amy Bickel can be reached at 620-860-9433 or [email protected].
