The Oregon Natural Resources Report - Agricultural News from Oregon

TPP could be big loss for Oregon wheat

March 12, 2018

Oregon Wheat

The Oregon Wheat Growers League and Oregon Wheat Commission joined with 33 other national and state wheat organizations, in a letter to U.S. Trade Representative (USTR) Robert Lighthizer asking that the Administration immediately prioritize efforts to rejoin the Trans-Pacific Partnership agreement to save the valuable Japanese market for U.S. wheat farmers. The agreement will be signed today by the other 11 TPP countries (TPP-11) in Santiago, Chile.

Over 60 years ago, Oregon wheat growers did the pioneering work to develop the market in Japan for wheat grown in Oregon and other parts of the U.S. The sustained and collective effort by Oregon, other wheat states, and US Wheat Associates, have helped build Japan into, on average, our largest, most valuable, and consistent wheat market.

With 85-90 percent of our wheat going into export markets, wheat is one of Oregon’s most export dependent crops. Japan accounts for 21% of our total export sales of soft white wheat, our premier product, with an estimated value of $60 million a year at current prices at Portland’s export terminals.
Once ratified, the TPP-11 agreement will put the Japan market at serious risk. Competitors in Australia and Canada, both parties to TPP-11, will gradually gain an advantage as tariffs for their wheat are reduced by $65/metric ton (MT) or $1.75/bushel, compared to wheat grown in the U.S. When fully implemented, this would be about a 30% discount from today’s prices.

This massive cost difference will set up a catastrophic loss of sales over the next few years, likely further depressing already low farm gate prices for wheat. Sources within Japan’s flour milling industry estimate the U.S.’s share of their wheat market would fall by more than half, from about 3 million MT to less than 1.4 million MT, equal to revenue losses of almost $500 million per year.
Oregon’s wheat growers and our communities will face this same future; lost wheat markets, lost wheat sales, lower wheat prices, failed wheat farms, and lost jobs throughout our wheat supply and transportation systems.

Wheat farmers understand that President Trump wants fair and reciprocal trade deals for the United States. We hope that the Administration will be equally focused on preserving our markets in Japan and helping to grow sales to other TPP countries, ultimately helping wheat farmers in Oregon and across the country.

  
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