Trans-Pacific Partnership holds benefits for agricultural producers

Joyce Kelly knows the volatility of agricultural markets. The Greeley woman, who runs a corn farm with her husband, felt the latest market downturn firsthand.

The Kellys grow corn for grain, and when corn prices plummeted after hitting a high of more than $7 per bushel, her family’s income took a nosedive, too. When meat prices slipped, Kelly felt that too — though they don’t raise pigs, Kelly is the executive director of the Colorado Pork Producers Council. She’s pork’s biggest cheerleader, even sporting canvas shoes adorned with little pink piglets.

Every day, she sees producers fighting low prices on the livestock side of agriculture. Though the cheap tag at the grocery store may be a boon for consumers, it’s a bust for farmers.

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That’s why trade agreements, like the proposed Trans-Pacific Partnership, are so popular among farmers and ranchers. While politicians can’t seem to agree on the partnership — it’s been a hot topic during the presidential primary — almost all ag organizations such as the Colorado Pork Producers Council support it.

The Trans-Pacific Partnership is a trade agreement between the U.S. and 11 other countries that would lower or eliminate tariffs and taxes on U.S. goods and agricultural products and crack down on unfair or unethical labor practices worldwide. The partnership would also expand U.S. access to Southeast Asian markets, which are growing rapidly due to economic development and population growth.

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According to the Office of the U.S. Trade Representative, about 20 percent of U.S. farm income comes from ag exports, but foreign tax rates on these products are much higher than on other goods. The trade agreement would address that disparity.

“It is considered probably the greatest thing to happen to pork production in decades,” Kelly said. “Everything benefits when you get rid of tariffs.”

In Colorado, 12,900 jobs are supported by ag exports, according to the trade representative’s office. Colorado’s ag exports are valued at $1.7 billion, and the top five export categories are beef and veal, wheat, feeds and fodder, hides and skins and dairy.

Steve Gabel, owner of Magnum Feedyard in Wiggins, said the partnership would allow beef to be competitive in foreign markets, where it hasn’t stood a chance because of high tariffs.

Japan’s beef tariff can go as high as 50 percent, according to the Office of the U.S. Trade Representative. The partnership would reduce that to 9 percent and eliminate tariffs in Vietnam and Malaysia.

If the price U.S. producers are setting for their products is still too high to be competitive, it’s too high, but at least it will be because of the cost of production, not taxes.

Magnum Feedyard doesn’t have contact with the international market directly but sells finished cattle to large companies, such as JBS, that do. Many of the large meatpacking companies in the U.S., JBS included, support the agreement.

Don Brown, Colorado Commissioner of Agriculture, met with a group of producers and industry leaders last month at Colorado State University for a visit from Alexis Taylor, the deputy under secretary for Farm and Foreign Agricultural Services with the U.S. Department of Agriculture. There, they talked about the Trans-Pacific Partnership and the impact it may have on the state’s ag production. Overall, Brown said, people are excited.

“I think it’s something that definitely benefits Colorado,” he said. “The devil, as always, is in the details, so I think everyone has a lot of detail questions, but at the end of the day, I believe they’re very content with the concept that we can sell more products.”

Taylor, who grew up on a farm in Iowa, said the trade agreement will impact Colorado’s agriculture on a number of fronts. Once the demand for animals increases, so does demand for grain, which benefits corn and other feed growers such as Kelly.

Potatoes, a principal Colorado crop, would see a huge reduction in tariffs from other countries. The U.S. exports $1.2 billion in potatoes every year.

Some of the main countries importing U.S. potatoes and potato products are Vietnam and Japan, which both have high tariffs on them. In Vietnam, the tariffs are as high as 34 percent, but they would be eliminated within six years of the agreement’s passage.

“I think when you look at the fruit and vegetable products of the United States, those are I think the silent winners,” Taylor said. “As middle class economies grow, people want to buy better quality food — meat, protein, dairy products — but also more nutritious fresh fruits and vegetables and also potatoes.”

So what happens if it doesn’t pass?

Ag officials such as Kelly doubt anything will happen on the agreement before the November election. She hopes, though, that something will come about once a new president takes office.

“People are really going to be hesitant to negotiate any kind of trade agreements with the United States if they really can’t trust them to stand behind what they do,” Kelly said. “And right now, it’s such a bad political climate because nobody trusts anybody.”

Taylor said if no progress happens with the partnership, it could mean trouble for farmers and ranchers. When Australia signed a free trade agreement with Japan, it caused a 5 percent decline in U.S. beef exports to Japan, which could cost U.S. producers $100 million, she said.

The Trans-Pacific Partnership is key to getting helping farmers and ranchers prosper, she said.

“We produce a world class product,” Taylor said, “and no one can out-produce us.” ❖