Instead of working his fields in northeastern Montana, wheat farmer Gordon Stoner was in Washington, D.C., last week to testify before Congress – twice – on the significance of pending free trade agreements with Colombia, Panama and South Korea to his business and the U.S. wheat industry.
Wednesday morning, Stoner testified to the Senate Finance Committee on the importance of the pending agreement with Colombia. On Thursday he spoke to the House Agriculture Committee on the need for immediate ratification of all three agreements to bolster American agriculture.
“I am here today instead of at home working my fields because I know the viability of our industry depends on our ability to export U.S. wheat and barley to every market in the world,” said Stoner , who is also president of the Montana Grain Growers Association, a member of the National Association of Wheat Growers (NAWG) board of directors and vice chairman of the NAWG and U.S. Wheat Associates (USW) Joint International Trade Policy Committee.
All three countries with current pending free trade agreements are important customers of U.S. growers. Last year, the U.S. exported 645,000 metric tons (mt) of wheat to Colombia, 123,000 mt to Panama and 1.1 million mt to South Korea. At today’s export prices, that wheat represents about $650 million in export sales.
“We cannot afford to miss out on these markets, as these countries are not waiting for the U.S.,” Stoner said. “We encourage the Obama Administration to prepare and submit all three free trade agreements to Congress for a ratification vote as soon as possible, and we urge the House and Senate to vote for their swift passage.”
Without the pending free trade agreements, U.S. wheat producers will lose market share. Competitors including Australia, Canada, the European Union and Argentina have already concluded agreements or are negotiating their own bilateral agreements, which will effectively shut the U.S. out of wheat markets in some cases.
For example, when the Colombia-Canada FTA becomes effective this summer, millers that would prefer to use U.S. wheat will have to turn to cheaper duty-free wheat from Canada to remain competitive. The tariff disadvantage would result in a more than $100 million per year loss to U.S. wheat farmers.
Nearly 80% of the wheat produced in Montana is exported. Overall, the U.S. exports about half of total wheat production each year. For the 2010-2011 marketing year, USDA indicates that exports will be 34.7 million mt, representing 58% of U.S. production and 28% of world wheat trade.