Free-trade agreements with South Korea, Colombia and Panama will open up significant opportunities for farmers, leaders of the South Dakota Corn Growers Association (SDCGA) say.
“The quality of grain and meat produced by South Dakotans is unsurpassed, and these agreements will give us greater ability to compete fairly in global markets,” President Gary Duffy of Oldham said after the U.S. House and Senate approved all three plans. “We’re pleased that Congress realized the value of the pacts and promptly approved them. Each of these nations is an important market for grains and co-products.”
The importance of global trade is more important than ever for the state’s farmers. South Dakota exported $2.3 billion worth of agricultural products to all countries in 2009, including $606 million worth of feed grains, according to the U.S. Department of Agriculture’s Foreign Agricultural Service. The export markets add value to American products.
“This is certainly good news for South Dakota agriculture and also for the state’s economy,” SDCGA Executive Director Lisa Richardson said. “The agreements will open the door to significant markets for various agricultural products, including corn, distillers grains and other corn co-products. It will be a boost for the agricultural economy, which is so vital to our state’s well being.”
Duffy and Richardson thanked South Dakota’s congressional delegation, Sens. Tim Johnson and John Thune and Rep. Kristi Noem, for their strong support of the agreements.
Without the agreements, U.S. producers could have lost a market share to other countries, Duffy said. In recent months, corn growers watched other nations gain a competitive edge through trade agreements with South Korea, Colombia and Panama.
South Korea is the United States' third-largest corn market and a key target for distillers' grains. Colombia traditionally has been one of the top 10 export markets, but is currently importing corn from U.S. competitors because of an import-duty preference. Panama is one of the fastest-growing economies in Latin America. U.S. corn exports there have dropped 20 percent from their 2008 peak.
These new agreements will provide important opportunities for U.S. agriculture by immediately eliminating import duties on the vast majority of commodities, such as corn, other coarse grains and co-products such as distillers grains.
The quality of U.S. corn makes it a highly sought commodity in nations with growing middle classes and a rising demand for protein. Government and industry estimates say the three FTAs will result in an additional $2.5 billion in sales and lead to the creation of more than 20,000 jobs.