November 11, 2016

How President Trump's 100-Day Plan Affects Agriculture

 |  By: Anna-Lisa Laca

Now that Donald J. Trump is the President-elect, many people are diving into his campaign promises of what he wishes to accomplish during his first 100 days in office. Most of the items included in his plan will have an impact on agriculture – some in a positive way, and some not. Here’s a top-line look at some of the issues that may come into play.

Trade: NAFTA and the Trans-Pacific Partnership are at the top of Trump’s plan to “protect American workers.” The President-elect plans to “renegotiate NAFTA or withdraw from the deal.” NAFTA has long been an asset to agriculture exports. According to Roger Bernard of Informa Economics, renegotiation will be Trump’s first stop. He says Mexico and Canada have already signaled they are willing to “modernize” the deal.

Also on Trump’s trade-chopping block is the Trans-Pacific Partnership. While controversial on the campaign trail, most mainstream ag groups say the TPP is a net gain for agriculture.

"TPP is the one thing Congress can do right now to increase farm income, generate economic activity and promote job growth," says Wesley Spurlock, National Corn Growers Association president. "Campaign rhetoric has set America's trade agenda back years. Let's take a big step back in the right direction and pass TPP."

Immigration: Not only does Trump plan to stick to his campaign promise of “removing more than 2 million criminal illegal immigrants from the country,” but his 100-day plan also includes building a wall between the U.S. and Mexico. According to the Department of Labor, of the 2.5 million farm workers in the U.S., more than 53% are illegal immigrants.

Hispanic labor plays an important role in many sectors of the agriculture industry including dairy, fruits, vegetables and specialty crops. More than half of all dairy farm workers are immigrants, the American Dairy Coalition reports. According to ADC’s research, losing that labor force will cost the economy roughly $32 billion annually. 

Currency Manipulation: Trump’s plan includes directing his Secretary of the Treasury to “label China a currency manipulator.” But according to Andy Shissler of S & W trading, most countries are currency manipulators.

“The Chinese currency is a whole other level of manipulation,” he says.

Shissler thinks Trump is “100% right when he says China manipulates their currency,” but he doesn’t know how any president could get them to stop.

“You could get into a trade war situation,” he says.

The strong dollar has been causing export market heartburn for months. Shissler says a change in U.S. currency structure could impact commodity markets; however, he doesn’t see a scenario in which ag commodities would suffer from the Trump administration labeling China a currency manipulator.

“There are three protected commodities in china Corn, wheat and rice,” he says. “China will do what they have to in order to ensure adequate supply of those commodities.”

Infrastructure: Improving infrastructure is a recurring theme throughout the President-elect’s 100-day plan. Trump plans to “cancel billions in payments to U.N. climate change programs and use the money to fix America’s water and environmental infrastructure.” He also plans to implement a bill called the American Energy & Infrastructure Act. This act “leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over 10 years.”

Failing infrastructure has long been a pinch point for American agriculture. Roads, railways, bridges, waterways and ports all need improvements to support the growing volumes of food grown in the U.S. Record-breaking harvests this fall is one prime example of putting an outdated system to the test.

“We’re going to ask the system to move more grain in October, November and December than we’ve ever seen in our history,” says Ken Ericksen, senior vice president, transportation, Informa Economics. “Then throw DDGs and soybean meal into the system and we’ll be testing its capacity.”

Regulations: Trump’s pledge to American’s includes new rules on regulation. “For every new federal regulation, two existing regulations must be eliminated,” is his official position on regulation. Farmers across the agriculture industry have felt overburdened by regulation for years. Will Trump’s plan ease some of this pain?