U.S. farm income will be slightly higher than expected this year due chiefly to $4.7 billion in Trump tariff payments that will buffer the impact of trade war on commodity prices, says the USDA. With the bailout, farmers are forecast to collect $13.6 billion in direct farm payments, the largest amount in 12 years.
Six in 10 respondents to a Purdue poll on farmer confidence said the United States-Mexico-Canada Agreement had either completely or somewhat relieved their concerns about their income over the next year.
Although President Trump declared the United States-Mexico-Canada Agreement a big win for U.S. farmers, a study released on Wednesday says U.S. farm exports will fall by $1.8 billion due to retaliatory tariffs by Mexico and Canada. That would be four times larger than the gains the trade pact would produce.
Wheat and dairy groups were guarded in their assessments of the North American trade pact, while Agriculture Secretary Sonny Perdue asserted on Thursday the agreement "is locking up two of our top three markets for the future." The administration says the agreement, which needs approval by Congress, will enable fairer trade in food and agriculture but has not suggested what additional trade flow to expect.
President Trump veered between predicting easy approval of the new Canada-Mexico-U.S. trade agreement and expressing concerns about opposition to the pact on Monday while declaring that the agreement “is a very, very big deal for our farmers.”
The U.S.-Mexico-Canada agreement that will succeed NAFTA includes the elimination of Canada’s Class 7 dairy price system and greater U.S. access to the Canadian dairy market than offered in the TPP free trade agreement, said senior administration officials late Sunday.
The United States and Japan will open negotiations on a free trade agreement “that can produce early results” on manufactured goods, announced President Trump and Prime Minister Shinzo Abe on Wednesday. Japan, however, said that in the upcoming negotiations it would not lower tariffs on food, agriculture, and fishery imports.
Amid rumors that Canada will offer concessions on dairy trade, former prime minister Brian Mulroney said he would be surprised if the new NAFTA did not include "flexibility" on the country's supply management system. Agriculture is a small part of NAFTA trade but it is a stubborn impediment in U.S.-Canada negotiations.
Agriculture Secretary Sonny Perdue described a potential tri-national agreement on a new NAFTA as the start of a domino effect in rewriting U.S. relations with trading partners around world. "I would love to have a deal today with Canada to put NAFTA back together," said Perdue during a C-SPAN interview in which he called for reform of Canada's supply-management system."
On Wednesday, three state Farm Bureau presidents told administration leaders, including President Trump, that farmers, hit hard by retaliatory tariffs, need open markets soon. “There’s a fairly short runway,” said South Dakota’s Scott VanderWal.