Exports Drive Third Quarter GDP Growth, Vilsack Urges TPP Passage
Third quarter GDP numbers were released Friday. The U.S. economy grew at the fastest rate in two years at 2.9% from July through September. Some industry analysts credit export markets, specifically soybeans for the surge, U.S. Secretary of Agriculture Tom Vilsack agrees.
"Today's report on gross domestic product growth in the third quarter of 2016 brings welcome news for our overall economy, and brings further affirmation that America's agriculture sector remains a shining star in our nation's ability to seize export opportunities,” he said in a statement Friday.
During the third quarter not only did economic growth increase, but export sales did too. Vilsack said exports grew 10% in the third quarter, the highest growth rate since 2013, with agricultural exports “contributing disproportionately to the gains.” According to MarketWatch, a boom in soybean exports due to a poor crop in South America contributed significantly to the increase. In his statement, Vilsack applauded farmers for seizing export markets despite the strong U.S. dollar.
“Although a strong U.S. dollar and lower commodity prices have created headwinds for America's farmers and ranchers, this report demonstrates their ability to remain resilient and to seize opportunities to sell U.S. food, fiber and fuel to markets around the world,” he said.
Vilsack is using today’s GDP numbers as an argument in favor of trade agreements, specifically the Trans Pacific Partnership (TPP). The TPP has been under much scrutiny this election cycle and many policy analysts are skeptical an agreement will be reached.
“Since 2009, USDA has worked to remove hundreds of unfair barriers to trade; open or expand key markets for products such as beef, dairy, fruits and vegetables, and more; and led 17 trade and investment missions and attended 23 trade shows, generating billions-of-dollars in sales for U.S. businesses,” Vilsack said. "In order to continue this momentum, we can and should do more to expand global markets. U.S. farmers are facing unprecedented competition amid a slowing global economy and appreciating dollar. That's why it is important for Congress to approve the TPP.”
According to Secretary Vilsack, exports are responsible for 20% of U.S. farm income and support more than 1 million American jobs on and off the farm. Earlier this month, the American Farm Bureau Federation released data from its study on TPP finding that the agreement will boost annual net farm income in the United States by $4.4 billion.
“As the agriculture sector expands, U.S. real income will increase by $57.3 billion and 66% of GDP growth from TPP would go to American workers through increased wages and job opportunities,” Vilsack said. "American agriculture needs the good deal laid out in the TPP agreement to bolster its position in the world economy."
Not everyone agrees TPP is the silver bullet for agriculture. While groups like the National Milk Producers Federation have said the agreement would be a benefit to U.S. dairy, some farmers and industry analysts are skeptical of the deal. The chance of the TPP coming before Congress in the lame duck session is slim, and most political analysts think it will be January before any movement is seen.