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Wheat Industry Welcomes U.S.-Japan Trade Deal (adapted from U.S. Wheat Associates press release)

Posted: Sep 24 2019

In late August, President Trump announced a trade agreement in principle between the United States and Japan that will keep exports of U.S. wheat flowing to a very large and crucial market for U.S. farmers.

“We are very happy that this agreement will end the growing competitive cost advantage that Canadian and Australian wheat imports got under the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement,” said U.S. Wheat Associates (USW) Chairman and Paulding, Ohio, farmer Doug Goyings. “We want to say thank you to the negotiators at the U.S. Trade Representative office and at the USDA trade and foreign affairs office for working so hard to prevent more export losses for farmers like me.”

“Chief Agricultural Negotiator Gregg Doud and USDA Under Secretary Ted McKinney deserve special recognition for their efforts,” said USW President Vince Peterson. “They immediately understood what was at stake for wheat farmers without a trade deal and made this outcome a priority. We also thank government officials and our flour miller customers in Japan for their forward-thinking approach to the situation.”

U.S. wheat farmers in partnership with USDA’s Foreign Agricultural Service have helped build a strong demand among Japan’s flour millers for several classes of U.S. wheat grown in the Pacific Northwest to the Northern and Central Plains.  Japan is a top buyer of U.S. wheat, a result of over 60 years of market development activity work.  Japan is an important market for North Dakota wheat producers.  “The Japanese market is a consistent, high quality market for U.S. spring wheat producers,” says Greg Svenningsen, North Dakota Wheat Commission Chairman. “In recent years, they have imported 30-40 million bushels of HRS, making them our second largest customer.  This is a quality market we cannot afford to lose,” he adds.
When the CPTPP was implemented Dec. 30, 2018, without the United States, the effective tariffs on imported Canadian and Australian wheat started to decline. Locked out of the agreement, U.S. wheat imports would have become less and less cost competitive to the point that Japan’s flour millers would have no other choice than to buy the lower cost wheat from the CPTPP member countries. 

The new agreement helps protect U.S. exports that represents about 50 percent of the sophisticated and demanding Japanese wheat market, with average annual sales of about 3 million metric tons that are currently worth about $700 million per year.

USW and NAWG believe that resolving such trade issues can again lift the rural economy by opening new markets for our wheat and other agricultural exports and increasing access in existing markets. The organizations would now welcome new trade negotiations such as with countries in the rapidly growing Southeast Asian and South American regions.

About U.S. Wheat Associates USW’s mission is to “develop, maintain, and expand international markets to enhance wheat’s profitability for U.S. wheat producers and its value for their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 17 state wheat commissions and cost-share funding provided by USDA’s Foreign Agricultural Service. For more information, visit our website at www.uswheat.org. 

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