Ag secretary puts spin on trade report

PEORIA JOURNAL STAR, INC. ^ | September 12, 2006 | Alan Guebert

[hedgetrimmer]

Farmers and ranchers live in an ocean of numbers. And like the tide, the numbers - pigs-per-litter, gain-per-pound, bushels-per-acre, dollars-per-bushel - can't be held back; they keep coming and keep adding to our nation's food story. The U.S. Department of Agriculture swells the tide with annual, quarterly, monthly, biweekly, weekly and daily reports. The data are the dots by which all in agriculture and food steer.

The steering is about to get harder. Two late August USDA reports confirm that 2006's big numbers won't be big enough for American food producers.

At first blush, the first report, the Outlook for U.S. Agricultural Trade, released Aug. 23, looked lovely; estimated 2006 ag exports will be a record-breaking $68 billion, besting 2005's record-breaker by a fat $5.5 billion, or nearly 9 percent.

Secretary of Agriculture Mike Johanns waved the report high to again push the White House's trade-is-everything view of agriculture. "These export numbers clearly illustrate the importance of opening and maintaining export markets for U.S. agriculture products," said a smiling Johanns after the report's release.

But, as he often does, Johanns only highlighted the best and forgot the rest.

Yes, grain and feed exports will climb from $16.2 billion in 2005 to $18.1 billion in 2006. But soy and soy product exports will slide from $11 billion to $10.2 billion over the same period.

Yes, our neighbors Mexico and Canada will up their collective U.S. ag imports from $19.5 billion in 2005 to $21.9 billion, or from 31 percent of all U.S. ag exports in 2005 to 32 percent in 2006.

But so, too, will these two nations export more food back into the United States - from $19.9 billion in 2005 to $22.8 billion this year.

Consider these facts for a moment: Mexico, with one-third our population, one-tenth our economy and one-fourth our per capita income, will combine with Canada, with one-one-tenth our economy and one-ninth our population, to sell us 35 percent of all our imported food. Thanks, NAFTA.

This theme - yes, total 2006 ag export will grow 8.8 percent over 2005, but total ag imports will grow by an even bigger 11.8 percent - can be seen on nearly every page of the USDA report, yet nary a word of this downward trend ever passes the USDA chief's lips.

The reason is simple. These USDA facts neither fit the Administration's unending trade sermon nor its election year slogans.

Nor do the facts contained in USDA's Aug. 31 forecast on 2006 farm income. It shows 2006 estimated net farm income at $54.4 billion, or nearly $20 billion below 2005's $74 billion and $31 billion below 2004's $85.4 billion.

Indeed, everywhere you look in the income report you see black flags and bleak numbers when comparing 2005 to 2006 in farm country: gross cash income down from $281 billion to $272 billion; livestock receipts down from $125 billion to $119 billion; direct government payments down from $24 billion to $18 billion; total expenses up from $226 billion to $237 billion.

The one thing you won't find in the income report and its accompanying analysis is a press release or even a public comment by Secretary Johanns on how farm income has crashed under his leadership.

Again, these USDA facts neither fit the Administration's unending trade sermon nor its election year slogans. Record ag exports and a simultaneous $20 billion plunge in net farm income and no public official offers one word of explanation?

Indeed, the reports' facts plainly show the Administration's - as well as many farm groups' - central "market access" plank to both the 2007 Farm Bill debate and world trade talks is, again, all gas.

What's more, if you restate annual ag trade numbers from 1990 through 2006 in constant 2006 dollars you see the U.S. ag trade surplus peaked in mid-1996 at $35 billion and steadily eroded to today's $3 billion.

And what seminal American ag event occurred in 1996? We embarked on an odyssey in ag policy, Freedom to Farm, that has yet to work. Just look at the numbers.

[hedgetrimmer]

Mexico, with one-third our population, one-tenth our economy and one-fourth our per capita income, will combine with Canada, with one-one-tenth our economy and one-ninth our population, to sell us 35 percent of all our imported food. Thanks, NAFTA

Nailed it.

[hedgetrimmer]

PING

[kittymyrib]

Democrats running in farm states could really kill Republicans with the falling farm income stats, especially with this year's crushing fuel costs and low commodity prices. It could cost the GOP the House.

[sheana]

I live in the Central Valley of California. Did you know that most of what we grow is exported from California and I can't find produce at the grocery stores that is NOT from Mexico?
We eat very little produce anymore unless it is bought from a farmer's market. etc. There are a few local owned stores that only sell local produce also.

[hedgetrimmer]

There are a few local owned stores that only sell local produce also.

We do need to support our local growers. The terrible thing is, that California is an agricultural eden, and our elected officials are doing their best to destroy it.

[Toddsterpatriot]

Mexico, with one-third our population, one-tenth our economy and one-fourth our per capita income, will combine with Canada, with one-one-tenth our economy and one-ninth our population, to sell us 35 percent of all our imported food.

Let's do the math. one-third (33%) + one ninth (11%) = 44%. They have 44% of our population and sell us 35% of our imported food.

Gee, I guess that's a disaster. I'm not sure exactly why. Maybe a protectionist can explain it?

[hedgetrimmer]

Democrats running in farm states could really kill Republicans with the falling farm income stats,

Are they smart enough to do this, or are they too corrupted by the "free traders" to admit their policies are destroying all wealth producing sectors in our economy.

[calcowgirl]

But of course, you will be asked to endorse the big-bang-bond to invest in ports so that even more of your food and necessities can be provided by foreign sources. Will California produce anything after the globalists are done with us?

[sheana]

I don't think there will be much left of California after ALL the politicians get done with us.

[hedgetrimmer]

Sen. Chuck Grassley talks like he's a senator for Mexico, not Iowa.

***

According to the Mexico’s Ministry of the Economy, Mexico’s GDP has increased by 43 percent over the past ten years. Mexico added over 590,000 jobs in 2005, and it looks like the number of jobs created in 2006 could reach 900,000. Economic growth and job growth in Mexico can be attributed, in part, to NAFTA-induced increases in foreign direct investment (FDI) in Mexico. FDI in Mexico averaged $2.1 billion from 1986 to 1993, reached almost $18 billion in 2005, and could hit $20 billion in 2006.

By locking in economic reforms, NAFTA has helped to bring economic stability to Mexico. Mexican families have benefited by the near disappearance of inflation, which was at just 3.3 percent in 2005, a marked drop from pre-NAFTA inflation of, for example, 159 percent in 1987. Likewise, Mexican consumers – who faced annual interest rates of 96 percent in 1987 – saw interest rates of just 9.2 percent last year.

With regard to Mexican agriculture, Mexico’s agricultural exports to the United States have increased by $5.6 billion over the past twelve years, compared with U.S. agricultural exports to Mexico increasing by $5.7 billion during that same time period, which demonstrates that the growth in agricultural trade between the United States and Mexico has been quite balanced under NAFTA. I’d also like to note that while some critics of NAFTA claim that U.S. exports have devastated Mexican corn production, this isn’t the case. Production of corn in Mexico has remained remarkably stable since NAFTA was implemented – Mexico produced 19 million metric tons of corn in 1993/94 compared to 22 million metric tons in 2004/2005. U.S. corn exports have supplemented Mexican corn production and go largely to Mexico’s growing livestock industries.

Finally, the benefits of NAFTA to Mexico are more than economic. I’m convinced that there’s a link between NAFTA and Mexico’s significant movement to democracy following 1993. After all, free markets tend to lead to free elections.

Grassley Highlights Benefits to U.S. Producers Mexican Economy, Economy of NAFTA at Year 12

http://www.ifbf.org/fullarticle.aspx?artid=23821

[hedgetrimmer]

Will California produce anything after the globalists are done with us?

Indebtedness for ourselves and our 'future generations', and wealth for everyone else.

[1rudeboy]

Maybe a protectionist can explain it?

I think it has something to do with the horror of discovering that our closest neighbors (in terms of geography) grow stuff and dare sell it to us.

[Toddsterpatriot]

Damn them. I just hope they don't sell us beer.

[Toddsterpatriot]

Indebtedness for ourselves and our 'future generations', and wealth for everyone else.

If whining paid, you could cover the trade deficit all by yourself!

[1rudeboy]

Do you remember He Who Should Not Be Named complaining about sugar beet farmers in Minnesota? Those were the days.

[Toddsterpatriot]

We need those over priced sources of sugar, to keep sugar cheap and readily available.

If ignorance paid, HWSNBN would have covered the trade deficit years ago.

[1rudeboy]

Come to think of it, I wonder if beer is considered to be a consumer-product or an ag-product? Probably consumer. I wish I could afford to drink more Bohemia . . . it's one of the finest (Mexican) lagers in the world, in my opinion, if one can find it fresh.

[NapkinUser]

The agriculture secretary is a puppet. Who cares what he says?

[1rudeboy]

Don't forget, none of us voted for him.

[Toddsterpatriot]

LOL!

I demand a recount!

Who is this guy? Secretary of Agriculture Mike Johanns. Sounds Dutch!!