Trump says U.S./UK trade deal will give our farmers a boost, but ag markets aren’t particularly impressed.
I was a little surprised by all the hoopla directed at American ag producers after Donald Trump’s just-concluded trade deal with Britain. My two-decade long tenure as an options and futures trader (10 years of which were spent exclusively in ag futures) kept me looking at our export markets every day for clues as to where prices for farm goods were heading. In all those years of tracking export data, I don’t recall ever paying attention to what our sales to the UK were. The country just wasn’t much of a destination for American farm goods.
Turns out the current generation of traders is about as underwhelmed as I am. Ag market participants didn’t immediately see much in the deal that excited them. Reporting on the lackadaisical market response, commodity market analysts at Market Talk headlined their post-deal analysis “Ag Markets Show Minimal Reaction to US/UK Trade Deal.”
Why the indifference?
Probably because the UK hasn’t been known as major buyer of U.S. ag products. I don’t believe it has ever appeared on the top ten lists of countries that buy American farm products. Just to get specific, consider that we exported more corn to Saudi Arabia (population 33 million) than we did to UK (population 68 million) in 2022. That same year, Bangladesh bought more soybeans from the U.S. than did the UK.
I don’t particularly pooh-pooh the projected increases in American farm sales touted by dealmaker Trump. Any boost in overseas ag sales is a good thing, but in the overall picture of American farm exports, the UK doesn’t stand out.
The headlines touting the impact on American farmers make for some good copy, but the reality is that the numbers discussed aren’t much in comparison to where the major export business gets done, principally China, Japan, Canada and Mexico. Headlines say the deal will expand farm sales to the UK by $250 million a year, which sounds great on a stand-alone basis, but when you consider combined sales of nearly $10 billion worth of soybeans alone to the four countries I just mentioned, you see that the British deal is a small one indeed
That’s why the ag markets (cattle excepted, which are high for reasons that have little to do with export markets and much to do with a serious supply shortage in the U.S.) are shrugging off the news about Trump’s UK deal. Soybeans are down slightly since the trade deal was announced, corn is down sharply, and wheat is also down sharply. As to hogs, they’re also down.
Trump’s public relations apparatus might work well with the general population, but traders, who know where the major export action is, are indifferent.
Trump needs to talk to traders and producers about what he intends (if he even knows his own intentions) to do about selling ag products to the major markets, the ones where he has alienated everybody in sight.
John Tsitrian is a businessman and writer from the Black Hills. He was a weekly columnist for the Rapid City Journal for 20 years. His articles and commentary have also appeared in The Los Angeles Times, The Denver Post and The Omaha World-Herald. Tsitrian served in the Marines for three years (1966-69), including a 13-month tour of duty as a radioman in Vietnam. Republish with permission.
Photo: Cover crop in Perkins County, SD, public domain, wikimedia commons
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