We continue our coverage from the NAFB convention with Andrew Brandt, US Grains Council Trade Policy Director.
Q: What has the US Grains Council been doing when it comes to trade as of late?
A: It’s always a busy year for USGC …but not everybody really sees our work. So that is the genesis of what we’re here for. So my responsibility and the mission of our organization is to promote corn, barley, sorghum and ethanol around the world. We have been very busy with that.
We’ve got a lot of emerging markets that we have focused on. Two years ago, we opened an office in India, seeing that as one of the future great markets. We remain very optimistic about India, but I think it will be slow.
Q: I know there’s been some recent trade missions in India with growth potential. I think some folks have said that maybe India could be the next China for US Ag exports, and some stopped short of going that far, so to speak. But I think broadly the potential of India being a major U.S. ag trade partner is there, right?
A: I’m going to have to correct you. It’s not some folks, it’s a lot of folks say that. You look around the world, obviously we have trade tensions with China that have been gone ongoing now for 8, 10, 20 years. However far you want to look at that timeline, I think a lot of people look around, well, where else is there a large population center? Oh, India is the only other country in the world with over a billion people.
I think some estimates now put India as a larger country than China within the last year. It’s basically a flip of a coin at the moment. But a lot of indications (say) India is going to become the most populous country in the world outright going forward, depending on whose estimate you’re looking at. One of the things I was surprised with … over 50% of their population considers themselves farmers. So anytime they touch a farm policy, either in the domestic front or related to any kind of farm import coming in, it is not a small issue.
I think that India has been a hard market to access so far. I think those political realities there will continue to create hurdles, potential hurdles. On the other side of that, though, at some point they just have a reality of they’re going to need resources, whether that’s ethanol for cleaner burning fuels to help with emissions and air quality in some of their mega cities, or corn to feed their livestock industry to bring down prices of feed, ultimately bring down the prices of corn, of proteins. Those are some of the things we want to help them with.
I think long term, absolutely, it is a great potential country. But I don’t want people to get excited and think, oh, we’re going to use India to solve this problem next year. I would like to think that reality would take a little longer than that to develop these markets.
know there’s been a lot of talk of tariffs, things of that nature. We still have plenty of unknowns, I would say, in that arena, what’s going to happen. Any thoughts from your perspective at U.S. grains Council? Just looking ahead here to next year.
Q: I know there’s been a lot of talk of tariffs, things of that nature. We still have plenty of unknowns, I would say, in that arena for what’s going to happen. Any thoughts from your perspective at U.S. Grains Council? Just looking ahead here to next year.
A: I think it will be an interesting next year.
He has made it no secret that he believes tariffs on imports to the US are a policy mechanism he wants to use to rebalance some things, specifically on the trade and goods metrics.
So not trading services, which is kind of your consulting law firm type, white collar stuff. He’s focused on trading goods, factory jobs, US manufacturing base is what he’s focused on. And he has made no secret I’m going to use tariffs to rebalance that. I have no reason to doubt him. His first term he did this.
I do think we don’t quite know how that will be. We know it will be tariffs, how exactly they will work, what rate which countries get hit. Those are some of the details I don’t think we know yet. But I think it’s very clear he’s going to do what he says on that.
It’s not a secret. We saw this the first time. Countries will likely react to his tariffs. I think from our perspective at the Grains Council and probably a fair number of people in ag, we want to see the leverage from these tariffs be used as a means to an end to a negotiated deal that is more fair, or balanced on the trading good sides in the future. Ideally, we do not want to see a new set of permanent tariffs that kind of create a permanent new market structure that could disadvantage us for umpteen decades.
