KEARNEY — After sharing good news that Nebraska’s exported agriculture commodities were valued at $6.8 billion in 2018, Nebraska Farm Bureau President Steve Nelson of Axtell made a holiday season suggestion Monday during his annual state convention address.
“If you still have room on your Christmas list, you might want to send cards to Japan and South Korea,” Nelson said.
Nebraska’s 2018 ag exports were valued at $450 million more than in 2017, even with big losses in soybean and pork exports to China because of trade war tariffs.
“We’ve never been more dependent on trade for the well-being of Nebraska agriculture than we are today,” Nelson said.
Growing beef purchases by Japan and South Korea combined with a boost in international corn sales helped make up the value losses in China in 2018, Farm Bureau senior economist Jay Rempe said in his updated “Nebraska Agriculture and International Trade” report released Monday.
Overall, U.S. beef exports were a record high in 2018 and included a $200 million boost for Nebraska exports, for a total value of $1.31 billion.
U.S. corn sales to Japan also were up by 34 percent, Rempe said, and grew by 16 percent to Mexico, where officials chose not to retaliate for U.S. tariffs on steel and aluminum by placing tariffs on U.S. corn.
Overall in 2018, Nebraska corn exports grew by 42 percent and more than $400 million, for a total of $1.47 billion, second highest on record.
On the loss side of the trade equation was soybean sales. The value for Nebraska exports, at $1.2 billion, was the lowest since 2008.
Rempe said soybeans had been Nebraska’s top export commodity from 2012 to 2017 due to increasing Chinese imports. In 2018, soybeans ranked third behind corn and beef.
Markets, not payments
Rempe said payments from the government were a major reason Nebraska’s net farm income rose from 2017 to 2018.
President Trump initiated the market facilitation program to offset some ag producer losses directly related to the trade war with China. The biggest payments were for soybeans and pork.
“So our net income really relies on one person, the president,” Rempe said. “We’re overly reliant right now on that ... to see the net income go up.”
“Certainly our choice would be to get these trade deals done and grow trade,” Nelson said during a press conference. “I think most farmers and ranchers would also say that.”
Rempe said a debt-to-asset ratio assessment by Nebraska Farm Business Inc. is another way to measure how farmers and ranchers are doing economically.
The current report shows, in general, “that if you were in good financial condition in 2011, you probably are today,” he said. However, there are signs of more producers reaching the “stress” part of the scale.
“A lot of what happens in 2020 will come down to a couple of things ... one is trade issues,” Rempe said, and the other is the value of the dollar.
He and Nebraska Farm Bureau Director of National Affairs Jordan Dux see great potential to grow ag exports, especially to China and other Asian countries with high meat production losses to African swine fever.
Realizing those gains depends on resolving trade issues with China and making new agreements with other countries, they said.
The 2020 U.S. elections and ongoing impeachment issues also are factors. “Things can change overnight,” Rempe said. “They can change with one tweet.”
Dux said farmers and ranchers understand there are bigger issues within the trade dispute with China, particularly how China treats trade partners.
“So it’s not just about soybeans and pork,” he said. “... But at the same time, it is about soybeans and pork, so we need to find a solution.”
In his president’s address, Nelson’s message to Trump was, “We’re about markets, not government checks.”
On Nebraska Farm Bureau’s top trade issue — getting Congress to approve the USMCA free-trade agreement between the United States, Mexico and Canada — Nelson said, “We need (House) Speaker Pelosi to put impeachment politics aside and get this deal done.”
Dux said he’s confident something will get done on USMCA by the end of 2019, even with few legislative days left.
“If it happens, it will happen quickly,” he said, adding that he’ll be less confident if the issue remains unresolved going into 2020.
Dux said trade agreements are vital to keep U.S. ag products competitive, especially with Trans Pacific Partnership member countries with low tariff advantages. Trump withdrew the United States from TPP early in his term.
Also, Dux said, World Trade Organization reforms are needed to get disputes settled more quickly and deal with China’s state-run system.
“The U.S. wins 80 to 90 percent of the cases we bring to the WTO,” he said, so it is in ag producers’ best interest to have a rules-based trading process.