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Looking Past China, What Are the Next Big Ag Trade Moves for Biden Administration?

Tyne Morgan

February 12, 2021

Trade seems to be taking a back seat in Washington right now. From COVID-19 recovery to a focus on climate, other issues are taking priority in the new White House.

And as agriculture awaits record purchases from China to ship, reports show for the first time since the election, President Biden talked with China President Xi Jinping on the phone this week. Reuters reported Xi told Biden that confrontation would be a "disaster," and the two sides should re-establish the means to avoid misjudgments.

While the country waits to see what type of approach Biden will take with China, the Asian country has a record number of corn sales on the books, with the path now potentially paved for a record-setting export year.

“The potential is there,” says Ryan LeGrand, president and CEO of the U.S. Grains Council. “I don't want to jinx it by saying this, but I think we can do it. And shipments need to really pick up. We need to see those shipments, but I think we can get it done.”

From a roaring start in 2021 on corn to the strong finish in 2020 for pork, exports have a powerful story to tell.

“2020 was by far a record year on pork exports,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF). “We were up to 14% or 15% for the year. Of course, the main story, one of the main storylines there is China.”

USMEF expects China’s record appetite for pork to taper off this year, but with other countries climbing out of the COIVD-19 pandemic, the Federation thinks exports could still see a 2% to 3% bump this year.

“We see growth really in all key markets,” says Halstrom. “Mexico is probably set up for a big rebound post-COVID.”

Halstrom says beef buys are also picking up with beef exports setting a new record in December. While the entire year wasn’t as strong, Halstrom thinks 2021 could be different.

“The last quarter of 2020 was very robust,” says Halstrom. “We're starting to see Asia in particular rebound. We think that rebound will continue into 2021.”

From Asia to Latin America, USMEF thinks beef exports could set a record this year.

The strong mix of other countries continuing to buy U.S. ag products is also a story seeing strength in corn.

“We've seen activity from Mexico, and when you look across the top five traditional buyers that we have for corn, what's remaining after China, you've got Mexico, Japan, Colombia and South Korea all well ahead of pace of last year's corn purchases,” says LeGrand. “And that's not even to speak of that unknown category out there. We have nearly 8 million tons on the books for unknown destinations, and that's a record as well.”

While LeGrand says the U.S. won’t know who the unknown buyers are until the purchases actually ship, he’s confident purchases will produce shipments, as the Biden Administration turns its focus to trade in the next few years.

“We want to see a continuation of what the Trump Administration started,” adds LeGrand. “There's a few out there, India is really high on our radar right now, there's potential access for distillers grains and ethanol. We'd like to get sorghum access as well into India. The UK is a very interesting, one that could provide some access for ethanol.

Kenya is another one that got started, that can create a roadmap for great free trade agreements on the continent of Africa, which is a real untapped source of demand for the U.S.”

Tapping into trade with the United Kingdom is also an area of opportunity for meats.

“I think we have two good trade agreements that were in process under the Trump Administration: the U.S. and UK trade negotiations were probably a little further along.

The other one is the U.S. and Kenya Free Trade Agreement in Africa. I think both of these could be very beneficial for the U.S. meat industry.”

Halstrom says while Africa isn’t always discussed a lot, he thinks the biggest gains could be made with beef and the variety of beef cuts.

“Africa is very much on the low end of the developmental phase of that, but where it took Mexico 30-plus years to develop, it's not going to take Africa that long. The rate of growth and development are expedited,” says Halstrom. “I mean with technology the way it is today with logistics the way it is today, these markets will develop at a much quicker clip in my opinion.”



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