2020 ship coming in

Hey, it is here! Happy New Year. Every single person I know in the farming community has been looking for 2019 to be in the rear view mirror with the hope that 2020 will be a step in the right direction.

I felt like this would be a great time to generate what I believe is the biggest ag news story of 2019. Clearly the topic is trade. My version is the nonstory and not the story itself. Even ag media, in my mind, has missed the mark on what is really going regarding trade. China is not really the issue we thought.

Honestly, has anyone taken the time to look at export statistics from 2019 compared to 2018? If you have, you already know that what you have been told to believe is really not right. In reality, only three commodities have seen significant year-to-date reductions from 2018 and they are not soybeans or pork. Corn, tobacco and hides and skins are the big losers; two of those we can blame on China but corn is not one of them.

Corn exports in 2019 are nearly 40% lower than the same period one year ago. China, by the way, is not even in the top 10 consumers of United States corn. The top of the list is Mexico and our neighbor to the south purchased 12.5% less corn this year. No. 2 is Japan and we saw a reduction of 27.2% year to date. Coming in third is Colombia, down by 29.7%. The only positive story on the list of the top 10 corn customers was Canada who increased imports by 20.8%. The moral of my story is that we have held our own in exports in 2019 in basically everything but corn.

For a quick glance at other farm product exports, wheat leads the way in big growth increasing by 19%, rice was up 16%, red meat was up by 8% and even dairy was up 5%. Soybeans, with all the noise about China, increased by 1%.

The real story regarding the export of U.S. farm products that seemingly gets zero media attention is the value of the U.S. dollar. To give you a glimpse of this, I would like to share with you this recent excerpt from Ag Resource.

“The Brazilian economic minister visiting the US stated that his country will not support the real. This caused the real to drop from 4.15 to 4.26:1 USD in quick order. The currency move raised Brazilian new crop bids to farmers to 76-83 reals/bag of soybeans—the best in the past 5 years. The financial incentives for Brazilian farmers to seed more soybeans/corn is strong.”

The disconnect we have in the nation is that very few understand growth in a producing nation. The strong value of the dollar is important as a purchaser of products not in one that produces to sell. Folks tend to flock to the local supercenter and purchase cheap imported goods and reap the benefit of the strong dollar. For those that are actually in production or manufacturing, it is a struggle in the global marketplace with high value dollars. To continue building economic strength, it is clear we must remain in the export business. Just a quick reminder that only 4% of the world’s population calls the U.S. home so the potential for new customers remains great.

I am just like every other farmer/rancher in this country in that this week we will roll into our lending institutions and tell them we have finally gotten it together and 2020 is going to be the year our ship comes in. Let’s take a hard look at the real stories of 2019: despite the severe weather, we celebrate all who survived. Despite the low prices for all farm products, we managed to produce food. Despite the major struggle all farms and food processors had in filling needed employees, we sorta held our own. If we follow through on the trade deals that have come together with Japan, Mexico, Canada and China in the last few months and we can get enough people to show up to harvest the fruits of our labor, our ship should actually come in.

Editor’s note: Trent Loos is a sixth generation United States farmer, host of the daily radio show, Loos Tales, and founder of Faces of Agriculture, a non-profit organization putting the human element back into the production of food. Get more information at www.LoosTales.com, or email Trent at [email protected].