Minnesota's FarmFest kicks off with politicians and talks of trade woes

REDWOOD FALLS, MINN. — The top U.S. ambassador for agriculture goods kicked off the annual Farmfest Tuesday morning by touting a banner year for the nation's agricultural goods — from row crops to eggs — which reached record value for foreign buyers.

"We've got a lot to celebrate," said Doug McKalip, the chief agricultural negotiator in the Office of the United States Trade Representative for the Biden Administration. "But we need to continue to put our foot on the gas pedal."

McKalip conceded some market challenges, including labor shortages in the shipping industry and the high cost of imported fertilizer, as he spoke to the gathering of farm industry producers, players and politicians.

A strong dollar, McKalip added, "makes it a lot more difficult to purchase those U.S. goods for that consumer across the globe."

That tripped the crowd's trigger during the question-and-answer portion.

"I'm concerned our exports are not where I want them to be," said Harold Wolle, who farms near Madelia in south-central Minnesota and serves as vice president the Corn Board of the National Corn Growers Association. "Brazil is now exporting more corn than the U.S.," he said.

Both stories on U.S. trade seem true. U.S. farmers exported $196 billion in goods last year — a 30% increase over 2019, when the nation reached nearly $140 billion in export value. In Minnesota, the nation's fourth-largest producer when measured by dollars, that counted soybeans shipped on barges down the Mississippi River to sugar beet byproducts loaded aboard seafaring vessels in the Duluth harbor.

But it's equally accurate to see the downside of global trade economics across Minnesota.

In June, a large hog plant in Windom closed, eliminating more than 1,000 jobs and a place of sale for area pig farmers. The company, which was losing over $6 million a month, blamed a range of forces for its financial distress, including the high value of the U.S. dollar, as the plant's hog products were largely sent to foreign countries, including Japan and China.

And just weeks ago, advocates for U.S. corn growers held a press conference announcing dissatisfaction that Brazil was on pace to surpass the U.S. as the world's top exporter for corn.

At a time for slumping milk prices and a pork industry that — in the words of an industry panelist — is "bleeding red" in profits, the ability of U.S. lawmakers to finesse any trade remedy is limited.

McKalip pointed to the recent end on tariffs in Japan that will allow for the exportation of more U.S. beef to the Asian country, as well as sweeping changes in India that'll open up U.S. exports for industrial ethanol to animal feed.

Sen. Amy Klobuchar, DFL, reminded the crowd on Tuesday — to a smattering of applause — that Minnesota remains a leader amongst states exporting ag products.

"A strong dollar can be a good thing in many ways, but it can affect trade," Klobuchar told the Star Tribune after her remarks.

The Democrat — who added that she's on tap to be the next chair of the Senate Agriculture committee, should she win reelection in 2024 and her party keep control of the U.S. senate — said, "I've always been a huge, huge supporter of allowing the foreign commercial service to do more here at home and in our embassies and make that a priority of theirs to get business for American business."

Bob Worth, president of the Minnesota Soybean Growers Association, said six of 10 rows of soybean in the state are dependent on trade.

"Exports for soybeans are really strong right now," he said. "But they have to be."

As world markets, including the European Union, call for more environmentally friendly farm practices, Worth said U.S.-grown crops could become more desirable — to the potential detriment of rival Brazil.

"[Markets] are beginning to discover we've been water-certified for years," said Worth.

The U.S. Dollar Index — which measures the currency against the British pound, euro, Swiss franc, Japanese yen, Canadian dollar and Swedish krona — hit a 20-year-high last fall. However, the dollar's value diminished this summer, as inflation has eased.

Farmfest continues on Wednesday, with a farm bill listening session hosted by the U.S. House agriculture committee and a forum led by Gov. Tim Walz.