A red Santa hat and Christmas decorations on a fence in rural area.
It’s a blue Christmas for America’s farmers, who face another year without any new trade deals. U.S. agricultural exports are on track to close out the year with an $18 billion drop compared to last year. There's no need to panic about food security, as American farmers are still among the world’s most productive and competitive. But one thing is clear: Our farmers need Washington to deliver more trade deals to open and expand markets for the food they grow.
U.S. agricultural exports rarely decline. When they do, it’s usually due to weather or a strong dollar. Over the last two decades, we’ve only seen exports decline in three other years: 2009 amid the global recession, 2015 from a dollar-driven decline in demand, and 2019, when U.S. farmers got tangled up in the trade war with China (on top of a dramatic drop in corn exports related to weather-induced planting delays).
These rare instances speak to how America’s farmers are exposed to so many risks outside their control. Plus, Brazil, Argentina and Ukraine have emerged as strong competitors for globally traded commodities. So when U.S. crops like corn, wheat or soybeans suffer weather-related problems, or when the U.S. dollar is strong, rival exporters can step in.
The 2016 election reversed U.S. progress on trade, leaving farmers at a disadvantage while Brazil, Japan, the European Union, Mexico, Japan, South Korea, Canada and many other countries forged ahead with trade deals to sell their own goods. Such agreements can cut tariffs but, more subtly, also strengthen lines of communication across key agricultural and government agencies that administer trade-related issues. Those relationships can facilitate trade and help resolve little problems for buyers and sellers before they turn into big issues.
U.S. farmers have gotten tangled up in Washington’s trade mess with China, their biggest customer — but they are also suffering a continued standstill on trade policy. Neither party in Congress is pushing to open up new markets. The Trump administration cancelled the Trans-Pacific Partnership in 2017, while the Biden trade team has ignored opportunities to join the successor agreement. There is still no U.S.-U.K. deal despite a series of prime ministers in London practically begging two presidential administrations. And Washington’s recent handwringing over strict labor regulations derailed the trade pillar of the Indo-Pacific Economic Framework—probably the last chance before the 2024 election for anything like a trade deal.
As for that $18 billion in lost U.S. agricultural exports this year, trade data shows corn exports will be down about $7.2 billion, wheat exports down $2.4 billion, soybean exports down $3.28 billion, and animal and vegetable oils and fat exports down $1.6 billion. The Department of Agriculture reports that the overall export share of agricultural production is 20 percent. That’s almost double the share for the overall U.S. economy.
Trade deals can’t counter a strong dollar or healthy competition. They can’t solve droughts or shorten excessive rainfall. But having good market access around the world helps soften those blows when they do come. This is what U.S. farmers are wishing for, but there’s no sign they’ll find any trade deals under the tree this year.
