Trade deals key to lifting demand for agricultural products, farmers say

U.S. farmers said new trade deals are critical to help boost agricultural producers after the disruptions of the coronavirus pandemic and the Trump administration's trade battles.

Firming up existing trade agreements and joining with multicountry trade pacts would give U.S. producers better prices for some products than they can get domestically, farmers said at the WSJ Global Food Forum. Farmers said giving priority to trade would help reduce the need for government aid, which climbed to a record level in 2020 as the Trump administration sought to stem losses from the U.S.-China trade war and the food-supply chain was upended by the pandemic.

"If we don't have trade we're not going to get the full value of what we're selling," said Kimberly Ratcliff, a Texas cattle rancher.

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Mr. Trump's tenure was a turbulent time for U.S. farmers, who have grown more reliant on selling their crops and meat overseas as domestic production outstrips the appetites of U.S. consumers. Duties the Trump administration levied on goods from China, Mexico, Canada and the European Union sparked retaliatory tariffs targeting U.S. agricultural products from pork to soybeans to apples, cutting into U.S. agricultural exports and sending farm commodity prices plunging.

President Biden said during his campaign that he would scale back trade disputes and align like-minded countries to push nations, including China, to engage in fairer trade practices. That approach could limit China's ability to target U.S. farm goods with retaliatory tariffs, Mr. Biden's campaign said, protecting U.S. farmers from market swings.

Tom Vilsack, Mr. Biden's nominee to lead the Agriculture Department, said in his Senate confirmation hearing earlier this month that expanding farmers' access to new markets is key to stabilizing the U.S. farm economy. Southeast Asia and Africa, he said, represented promising markets for U.S. farm goods, where competitors are already making inroads.

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The European Union is eager to work with the Biden administration to alleviate the trade tussle that developed between the U.S. and E.U. during Mr. Trump's term, said European Commissioner for Agriculture Janusz Wojciechowsk at the forum.

"I can see a good possibility for development of our trade relations," Mr. Wojciechowsk said, adding that the E.U. is willing to resume negotiations as soon as possible, as tariffs have hurt agriculture on both sides of the Atlantic. "Our farmers are waiting for us to solve this problem," he said.

Paul Fribourg, CEO of agricultural investment firm Continental Grain Co., said the U.S.-China relationship is the food industry's single biggest challenge. Trade disputes in recent years have cast doubt on the reliability of the U.S. as a food supplier, a huge hurdle for U.S. farmers given the size of the Chinese market.

"The last four years, China perceived us as the enemy. That's a mistake, " Mr. Fribourg said. "If we aren't seen as reliable, that will destroy one of our biggest competitive advantages."

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U.S. agricultural exports to China have surged in recent months, after the countries called a truce on their trade dispute in early 2020 and China's pork industry works to rebuild herds after a swine disease killed more than 40% of China's hogs, according to USDA estimates. That export surge is fueling an unexpected recovery in the U.S. Farm Belt following a yearslong agricultural downturn.

Still, U.S. net farm income is expected to drop 8% this year as coronavirus-related government payments recede, according to a USDA forecast. Farm income soared in 2020 as the Trump administration pumped a record $46 billion in direct payments into the Farm Belt to mitigate farmers' losses from the coronavirus pandemic and other disruptions.

"Those definitely were a help," Larry Hasheider, an Illinois farmer who grows corn, soybeans and other crops said on Tuesday. "But most farmers...we don't want to get our money from the government, we want to get it from the marketplace."

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Mr. Hasheider said the U.S. should rejoin the Trans-Pacific Partnership, a regional trade deal that the Obama administration had pushed, but that Mr. Trump rejected. Pork producers and other farmers had seen that deal as a way to put the U.S. on better footing in Asian markets.

Megan Dwyer, a farmer in northwestern Illinois, said rebuilding U.S. infrastructure, including locks and dams along the Mississippi and other rivers, would bolster a new push to sell more farm goods abroad.

"To get those places, we need infrastructure," Ms. Dwyer said.