There’s been ample news stories about the trade outlook – and regulations – around the world. What’s the status on the European Union and ag trading with the U.S.?

There continues to be abundant opportunities for farm trade between the United States and the European Union despite the omission of agriculture in the European list of negotiating areas on a potential free trade agreement, European agricultural leaders said during a workshop at the 2019 AFBF Convention, held Jan. 11-16 in New Orleans.

U.S. farmers and farm state lawmakers have pushed hard to include agriculture in trade talks. But European officials excluded farm goods to streamline the negotiations and to concentrate on vehicles and industrial products, said Jesus Zorrilla, counselor on Agriculture for the European Union.

Zorrilla was joined by Lorenzo Terzi, counselor on food safety for the European Union, and Sylvain Maestracci, counselor on agriculture for the French Embassy, to provide a European perspective on trade and agriculture.

Key issues, such as geographic indicators for dairy products and the approval of genetically modified crops, still separate the United States and the EU. But the European leaders said there continues to be opportunities for U.S. products in Europe, including soybeans, biofuels and other products even without agriculture in the free trade negotiations.

“The perception that the European market is closed is misleading,” Terzi said. “We are a huge market of 500 million people that is a big importer of food.”

Terzi noted that the United States and Europe have recently worked through several key food safety issues on products such as almonds and Florida oranges.

European farmers share many of the same concerns as their American counterparts, such as low commodity prices, changing demand from consumers and an aging farm population, Maestracci said. In addition, he said. European farmers face a continued barrage of environmental demands from European consumers.

Like their American counterparts, European farmers have seen a reduction in farm subsidy payments and a more market-oriented farm program. But European farmers do not have a robust crop insurance system like the one which provides the backbone of the farm safety net in the United States, Maestracci said.

 

Economist’s View

Looking ahead to 2019, American Farm Bureau Federation chief economist John Newton also shared viewpoints at the American Farm Bureau Annual Convention, saying many factors are pressuring the farm economy.

Newton shared, “We’re in a situation where on the grain side we’ve had excellent weather for six or seven straight years now. We’ve had some challenges on the livestock front, I think 2019 will prove to be better for the dairy industry, but if you think about cattle and hogs and poultry, we’re going to have record production in 2019 there, so that’s going to put pressure on prices. The other thing to think about is that while cash receipts continue to increase, they were up one and a half percent last year; costs of production were up four and a half percent.

He added, “I think there’s still a lot of uncertainty on what farm income will be. Obviously, still got to get a crop in the ground, we need to know what acres, how we are going to allocate corn and soybeans, and so on, and ultimately what those crop yields are going to be. But I think most people expect 2019 to be a challenging year given that we still have the retaliatory tariffs on a lot of our commodities.”

However, Newton says the trade issues provide opportunity for a bright spot in the future. “If we get these trade situations resolved, there’s an opportunity to get out and move product. 2018 was a record year in terms of corn exports, so there are some opportunities going forward if we can get these trade situations resolved,” he concluded.

– American Farm Bureau Federation