Commentary: Tell Everyone Trade Is Vital To US Ag Economy


By Ray Allan Mackey,
KyCorn Promotion Council Financial Agent

If anyone wants to see how trade affects economic growth, look at Panama City, Panama. I had the privilege of representing KyCorn at the US Grains Council International Marketing Conference in Panama earlier this month, and saw the tremendous growth that has occurred since canal expansion. In fact, January was a record month for the Panama Canal, where 1,260 ships carrying more than 36 million tons of cargo passed through.

During the conference, US Grains Council leaders provided updates on their grain trade promotion activities and an overview of what should be done on the policy side to strengthen trade relations. Their discussions were laced with a “wait and see” attitude, however, due to ideas of the new administration.

As a grain farmer experiencing below breakeven prices, I believe we have been offered a challenge to express how important grain trade is to our rural, agriculture economy. There is a lot of dangerous uncertainty surrounding global trade, when stable relationships are needed more than ever. The USGC has been working for many years to build those relationships, so we can’t just throw all current trade policy out the window.

Several policies and relationships need to be considered. I agree that NAFTA could be improved, but bilateral and trilateral agreements don’t work when it comes to grains. Mexico is currently our number customer of corn, so that relationship needs to remain strong. We also need to keep provisions of the Trans-Pacific Partnership  on the table. The Asian market is growing and they want our grains, ethanol, and meat products. As demand for these products grow it can create more US jobs. The new administration’s attempt to even out the tax code could be a win down the road so we compete fairly with other countries.

An Informa Economics analysis said exports of U.S. corn and corn products generated $74.7 billion in annual economic output, with overseas sales of all U.S. freed grain products contributing $82 billion. Feed grains also contributed an increase to U.S. gross domestic product of $33 billion over what would have otherwise occurred, affecting 371,536 jobs.

The same study found that every $1 in exports of grains and grain products generates an additional $3.23 in business sales across the United States The positive economic effects of grain exports benefit not only agriculture, but also wholesale trade, real estate, oil and natural gas production, and the banking and financial industries, so these results can be seen in every state across the nation.

On the other hand, if these exports were suddenly halted, more than 47,000 jobs and $2.8 billion in GDP would be lost in the farming, ethanol production and meat production industries alone, according to Informa.

Trade is so important to agriculture, and if it’s good for farming, then rural communities will grow. But please don’t keep this to yourselves. Tell your neighbors, tell our congressmen, and then tell your neighbors to tell our congressmen. Agriculture and America can’t afford to lose our strong trade economy.  

Ray Allan Mackey and Russell Schwenke are KyCorn's delegates at the US Grains Council meetings. 

Ray Allan Mackey and Russell Schwenke are KyCorn's delegates at the US Grains Council meetings. 

Philip McCoun (right) is also a US Grains Council delegate and Trade Team member. 

Philip McCoun (right) is also a US Grains Council delegate and Trade Team member.