Naig: ‘Agricultural trade is a bright spot’
By KRISS NELSON
JEFFERSON – Since Sept. 1, Landus Cooperative has shipped nearly 15 million bushels of grain to Mexico.
Of that, nearly 2 million has been shipped from the cooperative’s Jefferson location.
Landus Cooperative also exports its SoyChlor and SoyPlus products from its Ralston and Jefferson locations to Mexico, as well as several other locations throughout the world.
“I don’t think people in Jefferson think of us as an export hub, but that’s what this square mile is,” said Alicia Heun, director of communications for Landus Cooperative. “It’s an export hub in the middle of Greene County.”
It’s those strong experts that made Landus Cooperative the perfect place for an afternoon of trade talk.
Iowa Secretary of Agriculture Mike Naig and Iowa Deputy Secretary of Agriculture Julie Kenney paid a visit last week to Landus Cooperative’s Jefferson location.
Naig spoke on the importance of the North American Free Trade Agreement (NAFTA) as well as the effect potential tariffs with China could have on our state’s producers.
“The importance of NAFTA to Iowa agriculture is critically important as Canada and Mexico being No. 1 and 2 trading partners,” said Naig. “We have very compatible relations with Canada and Mexico. We have the logistics of getting products north and south of the border and it makes perfect sense for us.”
“We need NAFTA to be concluded in a way that certainly does no harm to agriculture, but in fact, also has opportunities for us to grow,” he added. “This is definitely an uncertainty that our producers don’t need.”
Roger Fray, chief commodity marketing officer for Landus Cooperative, agreed on the fact that the U.S. does have a natural logistics advantage with trading partners in Mexico and Canada. Along with partnerships the cooperative has with railroads, it is an “unbeatable efficiency.”
Naig said Mexico and Canada do have the opportunity to source products from other parts of the world, but the infrastructure here in the United States is a great advantage.
“We don’t want them to have to invest in infrastructure to take product in through other venues,” he said, adding that NAFTA doesn’t only effect agriculture, but it is a large part of the trade agreement.
“I certainly understand with our NAFTA relationships there are other sectors outside of agriculture that are impacted and need to be modernized and addressed and there is no doubt about that, but agricultural trade is a bright spot and let’s make sure we do no harm on that standpoint,” said Naig. “In fact, not just protect what we got, but expand our opportunities.”
Mark Cullen, chief animal nutrition officer, said the export of the company’s SoyChlor product, which is manufactured in Jefferson, is a vital part of their business with 20 to 25 percent of the product exported.
SoyPlus, which is manufactured at the company’s Ralston facility, exports 15 to 20 percent of that product.
“We have a long-standing relationship with our Mexican customers,” said Cullen. “Over 20 years. And they are taking 40 railcars a month from us. So exports are a very significant part of our business and relationships as we move forward. We have a lot invested in Mexico. Some long-term relationships. Even in Canada, it’s the same thing.”
Although trade policies are left up to the federal administration, Naig said he and others hold some responsibility to educate and inform those at the federal level.
“Those of us that have a responsibility to represent Iowa are doing our job to make sure our administration knows where we stand and what our position is and understand the potential of negative impact on our businesses and our farmers,” said Naig. “That’s what we have been doing and it’s important we work through our federal delegation together. With the governor, with commodity groups and leaders across the state, have all played that advocacy role.”
He added Iowa has a great track record of aggressively promoting trade.
“We promote our product, promote our farmers and travel to meet with customers,” he said. “We sit across the table from them. We have along history of doing that.”
As part of the Chinese tariff situation, the U.S. Trade Representative office opened up a formal public comment period.
Naig said, on behalf of the state, he, Gov. Kim Reynolds and leaders of 10 ag commodity groups, submitted comments together, to officially be on the record with the position of the potential negative impact the tariffs could have on Iowa agriculture.
“We’re in a situation where one out of three rows of Iowa soybeans goes to China,” he said. “That didn’t happen overnight and it didn’t happen by accident. There’s a lot of work that goes in to developing those markets and there are a lot of hands that have been involved in the work and that’s another role the state can play.”
Naig is hopeful something will get resolved with NAFTA sooner rather than later.
“When you take in all of the political consideration, both in Mexico and here in the U.S., we would encourage the administration to move quickly,” he said. “I know they have a lot on their plate right now with trade, but NAFTA is critically important to get concluded.”
Naig also spoke about the potential upcoming farm bill.
Recently, the farm bill failed to pass the United States House of Representatives.
“Again, we’re talking about uncertainty that is really unneeded,” he said. “We need this process to move ahead. We would like to see a farm bill completed before the current farm bill expires. I think it is unfortunate it did not pass and it appears it did not pass because of some unrelated legislation that folks were trying to leverage.”
Naig would like to see both the house and the senate move ahead with their bills.
“Farm bills are notoriously difficult to develop and bring to conclusion,” he said. “We know there will be a house version and we know there will be a different senate version and those will have to come together. It’s a process we will have to see play out.”
He said the 2018 farm bill will be more of an evolutionary bill rather than being looked at as a revolutionary bill. He stressed it is important to make sure crop insurance is well-funded.
“That is one of the things I hear from folks,” Naig said. “We have to have a solid, well-funded risk management program and so I think that’s the first and foremost on people’s minds.”
Other important factors of the farm bill Naig said he would like to see included is funding for a foot and mouth disease vaccine bank and continued funding for water quality and soil conservation.
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