Senate Ag Committee Hearing
Overview
For questions on the note below, please contact Edmund Perry at (202) 547-3035.
Today, the Senate Agriculture Committee Subcommittee on Commodity Exchanges, Energy, and Credit held a hearing entitled “Agricultural Trade: Priorities and Issues Facing America’s Farmers.” The witnesses in the hearing were:
- Gopinath Munisamy, Professor, University of Georgia
- Karla Thompson, Vice President, Jet Farms Georgia and Integrity Farms
- Sheryl Meshke, CEO, Associated Milk Producers
- Neal Fisher, Administrator, North Dakota Wheat Commission
Below is a summary of the hearing prepared by Delta Strategy Group. It includes several high-level takeaways from both panels, followed by summaries of opening statements and witness testimonies and a summary of the Q&A portion of the hearing.
Key Takeaways
The following is a summary of some of the topics explored in today’s hearing. Each is discussed in further detail in the Discussion section below.
- Subcommittee Chairman Raphael Warnock (D-GA) said that farmers are already dealing with uncertainty stemming from supply chain bottlenecks, the pandemic, and Russia’s invasion of Ukraine. He said that they should not also have to be concerned about new trade barriers, and the U.S. should ensure that there are sufficient export markets for American producers to feel confident in their businesses.
- Subcommittee Ranking Member John Hoeven (R-ND) voiced relief that the Biden administration has made long-awaited nominations for USDA Undersecretary for Trade and USTR Chief Ag Negotiator, but he called for the administration to devote more focus to American trade policies and work to open up new export markets for American producers.
- Senator John Thune (R-SD) also voiced concerns that, as American producers struggle to get their goods to Indo-Pacific and Latin American markets, China is moving in to fill the gap. He said that the U.S. must do more to sure up trade relationships in these regions to mitigate Chinese influence.
Summary
Opening Statement and Testimony
Chair Raphael Warnock (D-GA)
Farmers are dealing with significant uncertainty stemming from trade wars, supply chain bottlenecks, extreme weather, the pandemic, and Russia’s invasion of Ukraine. Expanding trade opportunities and opening new markets are vital tools for producers. Trade barriers are a risk to profitability right now and introduce more uncertainty in our markets. Our trade policies are not benefiting certain sectors, namely produce farmers. Export rates are also exceptionally high for farmers.
Ranking Member John Hoeven (R-ND)
Ag export markets provide tremendous value to our producers. Recent world events have highlighted the need for resiliency and consistent farming policy. We must ensure our producers have access to the global markets. We should continue to challenge bad actors like China when they engage in unfair market practices. I am pleased that President Biden has made nominations for USDA Undersecretary for Trade and USTR Chief Ag Negotiator; the administration must dedicate more focus to ag trade.
Gopinath Munisamy, Professor, University of Georgia
Export success is uneven across commodities. High export values in 2022 stem from price increases, not export volume increases. However, the US will import far more produce than we will export in 2022. Trade agreements such as the USMCA, CAFTA, the Korea-U.S. Agreement, and China Phase I agreement have been important in securing foreign markets for American ag.
Ag producers depend on predictable and equitable agreements. Worldwide events have created economic and policy uncertainties, which limit future investment for growth. Agreeing not to raise trade barriers is also often as significant as lowering trade barriers.
Karla Thompson, Vice President, Jet Farms Georgia and Integrity Farms
Non-tariff trade barriers and seasonal imports on produce are decimating our prices in foreign markets. We see the most success in our premium product markets. However, many of these markets are not healthy. The U.S. share in the EU market has been on a downward trend since 2003. We need the United States Trade Representative (USTR) to prioritize discussion of these issues with the EU and UK.
Sheryl Meshke, CEO, Associated Milk Producers
The U.S. government should focus on advancing eco-friendly trade and global policies, such as those seen in the dairy industry. Right now, supply chain challenges are costing U.S. producers and are putting U.S. trade relations at risk. Congress must pass the Ocean Shipping Reform Act. The U.S. needs to work on improving and creating new free trade agreements. We also need commitments on lowering non-tariff barriers. The U.S. must defend the use of common food names that the EU is fighting.
Neal Fisher, Administrator, North Dakota Wheat Commission
Farmers rely heavily on exports to sustain its agricultural diversity. We are also struggling with high transportation costs due to fuel prices. Balancing our energy portfolio with all other alternatives is important moving forward. The rise to non-tariff trade barriers is also concerning to ag producers.
Discussion
Warnock (D-GA): How would farmers benefit from the administration dedicating more focus to ag trade and having the proper staff in place to handle these issues? How would increased market access into the EU benefit peanut farmers? Munisamy: It is important that these positions are filled, and political leadership should reach out to farmers and listen to their concerns; Thompson: Improving market access and eliminating trade barriers would help provide producers with certainty.
Warnock (D-GA): How have produce businesses been affected by the recent flood of seasonal imports? Thompson: The market for fresh produce is extremely volatile. Right now, U.S. fresh produce prices are staying low because of cheap Mexican imports. Many farms are debating whether to harvest at all; Munisamy: Producers are losing revenue because of increased imports of cheap produce.
Hoeven (R-ND): What is the status of the Service Transportation Board (STB) requiring railroads to provide bi-weekly reports on their progress for increasing rail service? What are your thoughts on the current shipping bottlenecks? Fisher: The STB is asking railroads to submit reports on their work, but the STB should push the railroads harder for results. Costs continue to increase in these area, and producers are bearing those burdens; Fisher: We must draw attention to ocean shipping because of our high level of exports. We have taken the efficiencies of our shipping supply chains for granted and must improve their resiliency; Meshke: Beyond passing the Ocean Shipping Reform Act, the administration can take steps to do weekly container availability snapshots and provide fast lane incentives for exports at port terminals.
Grassley (R-IA): What more could we do to protect and expand overseas market access? What is the benefit of the Indo-Pacific Economic Framework if it does not include increased market access? Meshke: Free trade agreements are critical, particularly the bilateral trade relationships with the UK, Japan, and several other Southeast Asian countries. There is a global demand for American products, and we are ready to fulfill that demand if we put the right trade agreements in place. We must look at tariff and non-tariff trade barriers. For the Indo-Pacific region, we need to streamline regulatory requirements.
Thune (R-SD): Does the U.S. risk losing market access and influence in the Indo-Pacific and Latin America without active trade engagement? If China fills the gap in these markets, what long term impacts will this have on American producers? Fisher: This has been my concern since we pulled out of the Trans-Pacific Partnership (TPP). As we lose traction in the Indo-Pacific, Latin America, and Africa, we are letting China colonize these spaces; Meshke: Free trade agreements are key here. China is more firmly entrenched in trade relationships in this area than we are today.