American farmers told to look for new markets

US Agricultural Secretary Sonny Perdue says some American farmers have become too dependent on China.

US Secretary of Agriculture Sonny Perdue. Picture: AFP

US Secretary of Agriculture Sonny Perdue says some American farmers have become too dependent on China and has urged them to look for new markets in other parts of the world as both countries levy punitive tariffs upon the other.

Speaking at The Wall Street Journal’s Global Food Forum in New York last week, Mr Perdue said the goal of the US Department of Agriculture (USDA) was to help expand the country’s key food exporters to new markets following the trade war with China.

“We have a big hungry world out there and we want to find other markets.

“It is not good to have all your eggs in one basket,’’ Mr Perdue told the forum.

Last week, the Trump administration formally levied $US200 billion ($277bn) of tariffs on Chinese imported goods. In response the Chinese slapped duties on about $US60bn worth of US imports.

As a result, the USDA has approved a package of around $US12bn in assistance for American farmers.

Mr Perdue said the aid package was designed to “allow farmers to go again”, noting US soybean production had long been built around Chinese demand.

He said the package aimed to mitigate the damage they could not have foreseen when they planted their crops.

But Mr Perdue said he was optimistic the US would achieve fair and reciprocal trade with China.

“I am still optimistic that both China and the US will see it is in their best interests for fair and respectable trade practices,’’ he said.

At the WSJ forum, America’s biggest pork producer Smithfield Foods also welcomed the Trump administration’s tough stance on China despite the detrimental effect on pork prices.

“The reality is we don’t have a good trade deal with China.

“We do face punitive tariffs. As a pork guy, we certainly want access to that market,’’ said chief executive Ken Sullivan.

He said one pound of frozen US pork already faced a 25 per cent tariff in China.

“It’s a fight that was necessary,” Mr Sullivan said.

While he was hopeful the US and China would resolve the trade standoff, the progress so far had been unexpectedly slow.

“China looks a little bit intractable at this point,” he said.

The CEO of global grain trader Bunge told the WSJ forum that farmers would feel a “prolonged hangover” if trade disruptions continued.

Chief executive Soren Schroder said previous trade disputes involving the US had not helped the US economy and contributed to Brazil’s emergence as a key soybean exporter.

Beth Ford, who was named the first female president and chief executive of butter producer Land O’Lakes earlier this year, said American dairy farmers largely supported President Trump’s push to open up the Canadian market to US dairy products.