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Tariffs, trade agreements lead to uncertainty ahead of planting season
calendar26-02-2019 | linkABC12 | Share This Post:

ABC12 (25/0/2019) - While it may not feel like it today, planting season is just around the corner for Mid-Michigan farmers.

And while Mother Nature is always the wild card when it comes to a successful growing season, this year there's a bit more uncertainty.

"They can live with whatever the rules are if they know what they are, and right now there's a little uncertainty about that," said Executive Director Joe Cramer with the Michigan Bean Commission.

The Frankenmuth-based organization closely watches factors that impact local growers.

Cramer said while planting doesn't begin for about three more months, decisions need to be made soon about what to plant and what to order. "Whether it's seed or fertilizer, or herbicides or risk management, anything, and it takes time to get those things positioned."

Cramer said the uncertainty started last summer when new tariffs went into effect.

Then the United States-Mexico-Canada Agreement was agreed upon to replace the North American Free Trade Agreement. But it still has to be finalized by Congress.

The tariff changes and trade uncertainty leaves local growers in the balance.

Cramer hopes for more direction soon. "Some of the loose ends tidied up. It gives the market some confidence and I think would lead to some contracts."

Typically farmers rotate their crops each year on their fields, but factors like markets do play a major role in deciding what to plant.

But with this year's uncertainty it will likely be a little more difficult. "Left to sort of trust their gut, and decide what they are going to plant," Cramer said.

Cramer said as a whole the agriculture industry tends to be a conservative group which supports the Trump administration. "Believing that the environment is going to be better for their sons and daughters, or grandsons and granddaughters in the future, but there's a timetable that comes with that and we're testing peoples' patience a little bit," he said.

Cramer hopes to see progress made with China and Mexico, which would then allow a greater focus on Europe.

The Michigan Bean Shippers shared the following news release about the current situation:

"Despite the challenging global trade climate, the Michigan Bean Shippers today said demand for U.S. dry beans has begun surfacing in nontraditional markets, resulting in some optimism.

"There is recent interest in navy beans from some nontraditional areas such as Turkey and Northern Africa, and sales opportunities continue to expand in South America." said Rob Chandonnet with Bayside Best Beans. "Even with the EU's 25 percent import tariff, we're still shipping navies to the EU, but not at levels in the past, and the world supply and demand is changing as Canada steps in to fill some of that EU void."

Retaliatory tariffs on U.S. dry beans have caused significant uncertainty for Michigan growers and shippers headed toward 2019 planting. The European Union's 25 percent import tariff effectively shut down that market for U.S. exports, forcing the industry to keep their products in storage. Despite these disruptions, there is new demand for dry beans in other parts of the world.

"There is steady demand for black beans and small reds," said Matt Stawowy with Steele & Company. "The world is hungry and we are learning of unique demand in many different regions, particularly in South and Central America."

Recent developments in the ongoing conflict in Venezuela have increased optimism for shippers looking to export to that region. Venezuela has traditionally been a major consumer of black beans.

"International food aid agencies are already buying and 'prepositioning' supplies to help the Venezuelan people," said Chandonnet. "This is potentially a major humanitarian crises, and black beans will be part of the aid packages. If the government stabilizes there, demand for black beans will be significant and urgent."

There were also rumors early this winter that farmers in North Dakota would plant a significant amount of acres of black beans, but recent strength in pinto bean prices suggests growers in that region may plant fewer acres of black beans than previously anticipated.

"These opportunities for trade in nontraditional markets may bode well for Michigan growers and dry bean shippers," said Jim Byrum, president of the Michigan Bean Shippers. "The important message for Michigan farmers is that all is not lost when it comes to dry bean opportunities."

"It is important for growers to discuss their planting intentions with their dry bean buyer, and learn more about the current situation. Dry beans are important to the Thumb and Saginaw Valley's agriculture sector, and 2019 opportunities are looking brighter than they did just a few months ago," Byrum said."

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