WASHINGTON — “Are we at another flat spot in ag exports, and if we are, how do we get that next leg up?”

The question was posed by former ambassador and chief agricultural trade negotiator Gregg Doud, now with the National Milk Producers Federation, in remarks that opened the US Department of Agriculture’s 101st Agricultural Outlook Forum on Feb. 27.

The question has no easy answer, Doud said, after touching on economic trade history that saw US agricultural exports rise from $10 billion in the era of the 1972 Great Grain Robbery to $40 billion amid the Soviet grain embargo, and then to $62 billion in the Uruguay Round era, $118 billion in 2011 and a 2022 peak at $196 billion.

En route to potential paths for boosting exports, Doud pivoted to US agriculture imports, which rose to $250 billion last year from $174 billion in 2020, and segued into the US trade deficit with the European Union at $23.6 billion.

“In 1980, the US exported $12 billion in ag to the European Union,” Doud said. “Do you realize that we haven’t beaten that number — $12 billion was the high-water mark until 2023? We went almost 45 years exporting between $10 billion and $12 billion to the European Union. Flat as a pancake. There’s this discussion in Washington about a reciprocal way of looking at trading so let’s put that into context. We import $3 billion in dairy from the European Union. We export $167 billion in dairy to the EU. That’s pathetic.  We export 15 times more cheese to Guatemala than we do the European Union. We export more cheese to New Zealand; they’re a major exporter with 5 million people.”

“How do we close that gap?” asked Doud, who served as chief agricultural negotiator in the Office of the US Trade Representative (USTR) during the first Trump administration.

“The EU farm-to-fork initiative, all the certification requirements and protocols and processes they require in the EU, they’re protectionist,” he said. “They’re designed to keep us out. What if we required a similar regime with the European Union or what if we required that the EU meet the same criteria in terms of meeting the standard rather than the process in our exports to the EU?

“In my 30 some years, the European Union (is) impossible to deal with agriculture. I think right quite honestly given what we see in Europe today, I think if you had a group of European farmers, they would raise their hand in agreement with that as well. Dealing with Brussels is a real problem and they’re protectionist. Let’s just be honest about this.”

Doud said in the first-ever World Trade Organization case, the Europeans paid compensation but had no interest in correcting the problem.

“In my previous job at USTR, the farm-to-fork initiative in the European Union, I have always referred to it as the farm-to-empty-fork initiative,” he said. “In (USDA’s) 10-year forecast, do you have the European Union as a major grain importer? Because that’s probably where they’re headed. Whether it’s carbon sequestration, herbicides, pesticides, antibiotics, there’s this silly notion that the Europeans do it better than we do. As a Kansas farm boy, I can assure you they do not. Not on their best day.”

The former ambassador, who was headed to Capitol Hill to testify before the US House Committee on Ways and Means after speaking, said the United States’ advantage lies in technology and that gaining government approval toward commercialization of technology is key because venture capital will otherwise flow to other industries or countries.

Doud decried Chinese government data, saying it was not to be trusted, the opposite of the USDA.  

“USDA is the most correct source of agricultural data in the world, whether it’s trade data, price data, price discovery, whatever it is,” Doud said. “You can grouse about the data all day long like we often do. USDA’s numbers are the best in existence. There isn’t anybody else in the world that does it better and we need to remind out political folks of this.”

Doud detailed myriad sessions over hundreds of hours held in negotiating with the agricultural piece of the Phase One Trade Agreement with China.

“We fixed 57 things in our trading relationship and took US ag exports to China in a couple of years from $26 billion to $38 billion,” he said. “Now the bogey was $80 billion over two years. We didn’t get there, but I would argue we came closer than any other industry and did pretty well there until the COVID thing kind of crossed up the Chinese economy.”

Doud said China’s poor economy had gross domestic product increasing at around 2.5%. The resulting decline in Chinese demand cannot be recouped with free trade agreements from the rest of the world, he said. China’s January 2021 ban on swill-feeding of hogs led the country from zero imports to the largest corn imported overnight, but that demand was not indefinite.  

“We had an enormous debate over genetically modified issues with China a year and a half ago and they finally said we’re going to allow the planting of GMO in China,” he said. “From USDA data, you can figure out that if China increases its corn yield, which is only about 100 bus an acre, by 10%, I’m not sure China needs to import corn anymore. Where do we go forward, where are the opportunities. That’s on the meat side of the equation. They don’t really want to import meat, but you look at what they’re doing on the poultry side, their profitability is flat, they’re right at cost of production.  But boy, the Chinese love beef.  I thought when we opened that market, it would be a billion dollars. It’s $2 billion. It’s been tremendous for us, but we have to understand today if you look at wheat, corn, soybeans, beef, pork, poultry, I don’t see any silver bullets from China.”

Doud detailed trade progress with Brazil, India and Mexico as well. Ultimately, he said, the supply of protein in the world comes nowhere near meeting global demand.

“If you look around the world and ask yourself, ‘Is it the European Union, is it Asia, is it Brazil, is it China, where can we grow more protein?” he said. “Where can we grow more beef cattle, more pigs, more chickens, more dairy?”

An audience member shouted “USA.”

“Right here,” Doud said. “Right here. If you don’t believe that, take a look at the dairy industry. We have $8 billion in new dairy processing going into the United States in 2023 to 2026. Where else in agriculture in the US, for that matter where else in agriculture in the world, do you have $8 billion in new processing going in in one specific sector? And that new money is coming from US dairy farmers and their own cooperatives that I work. It’s coming from US private sector investment.

"But it’s also coming from foreign investment: Other countries and other dairy processing coming in from around the world, recognizing exactly this point. The place to grow is going to be in the United States so my charge to all of us today in US agriculture is ‘let’s go!’ Let’s get after this. This where it’s at on the protein side of the equation, but the challenging thing for us in terms of trade is that all the easy stuff has been done and agricultural trade liberalization a long time ago.

“This is tough sledding. From the US perspective, my charge to all of us is we’ve got to come up with deals. Little deals. In the dairy industry we’re actually approaching country by country and how we can change one tariff one at a time. We’ve got to stay in the WTO. For agriculture, there is no alternative, so we have to stay and figure out a way to fix it and make it better.

"This reciprocity conversation as we get into the really tough slogging, I think it’s a fascinating point when it comes to the European Union. Because it’s out of balance: $23.6 billion ag trade deficit with the EU is not balanced folks. My charge to you today is let’s get after it let’s work on the protein side of the equation.”