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Trade agreement is crucial to Idaho agriculture

Bob Naerebout

Bob Naerebout

The Idaho Dairymen’s Association, Idaho’s largest dairy producer trade association, and Glanbia Foods Inc., Idaho’s largest dairy processor, are encouraged by the support given The Bipartisan Congressional Trade Priorities and Accountability Act of 2015. The bill, more commonly referred to as the Trade Promotion Authority (TPA) bill, recently passed 20-6 with strong bipartisan support through the U.S. Senate Finance Committee.

The TPA bill is critically necessary to allow the United States to negotiate the best trade agreements possible. Progressive trade agreements will promote American growth and jobs by enabling Idaho businesses – including agriculture – to market more U.S. goods and services to foreign customers.

Exports are a crucial part of Idaho agriculture. The 2014 Agricultural Facts, published earlier this year by the Idaho State Department of Agriculture, showed that 2013 Idaho agriculture exports totaled $2.59 billion, equal to 31 percent of total Idaho cash receipts from agriculture. Dairy exports totaled $428 million, second to only wheat, where exports reached over a half-billion dollars. Four additional Idaho agriculture sectors – processed vegetables, beef, fresh vegetables and animal feed – exported products worth over $100 million during the year.

Daragh Maccabee

Daragh Maccabee

Seven countries out of the top ten export markets for Idaho agricultural products are part of current trade negotiations, including six that are currently part of Trans Pacific Partnership negotiations. Of these seven countries, the U.S. dairy industry currently enjoys mostly free trade with only one – Mexico. The TPA bill will provide our trade negotiators with increased leverage to further open markets with our trading partners, such as Japan and Canada, which make it very difficult, if not impossible, to export many of our dairy products to these two countries.

The Idaho dairy industry’s experience with previous free trade agreements with Mexico and South Korea has been extremely positive. Since 1990, U.S. cheese exports to Mexico have increased at an average rate of 7.4 million pounds per year, reaching 182 million pounds in 2014 for an average growth rate of over 17 percent, with the big uplift in sales occurring after our agreement with Mexico was enacted in January 1994.

Holstein, white backgroundOur agreement with South Korea, which went into effect in March 2012, has provided the US dairy industry with tariff-free access to their cheese markets. 2014 cheese exports to South Korea were double the 2011 level. In fact, South Korea was the top world destination for US cheese for several months during 2014, surpassing Mexico for the first time ever.

At the same time, we know there are both existing and new challenges for U.S. companies, workers and farmers doing business in the global marketplace. For example, recent successful FTA negotiations by the EU are threatening opportunities for growing US dairy exports to many Pacific Rim and Latin American countries.

Modernized TPA legislation will help address these and many other challenges through both current and future U.S. trade negotiations, including the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership, and the Trade in Services Agreement.

The United States must continue to open new markets for U.S. goods and services, while simultaneously helping our companies and workers compete and succeed. More than 95 percent of the world’s consumers live outside of our borders and more than one in five U.S. jobs depend on trade. TPA will help achieve both of these goals.

The Idaho dairy industry has benefited greatly from the pro-business focus of our political leaders. Our industry has grown far beyond the consumption needs of our state’s citizens, and in the process brought thousands of good-paying jobs and billions of dollars into the state through dairy product sales across the U.S. and the world. For that growth to continue, the United States must look to open new foreign markets for U.S. goods and services.

We view expanding our dairy export markets as a primary path for the continued growth and success for the Idaho dairy industry, providing new markets for Idaho farm milk and well-paying jobs for our communities.

Daragh Maccabee is executive vice president & CFO of Glanbia Foods, Inc. in Idaho and a board member of Southwest Cheese, LLC, Glanbia’s joint venture with DFA and Select Milk Producers in Clovis, N.M. Maccabee, who is based in Twin Falls, is responsible for finance, risk management, and milk procurement for Glanbia’s U.S. Cheese & Whey Operations business unit.

Bob Naerebout has served as the executive director of the Idaho Dairymen’s Association since 2002. The Twin Falls-based IDA was established to continue to develop and sustain an economically viable Idaho dairy industry and represents all Idaho dairy producers.

 

About Bob Naerebout and Daragh Maccabee