Gregg Doud, who was chief agricultural trade negotiator during the first Trump administration, says the U.S. faces a daunting task in kickstarting growth in U.S. agricultural exports after a period of plateauing sales.
The massive Chinese market in particular, offers no easy paths to unlocking export growth, he said Thursday during the Agriculture Department’s Agricultural Outlook Forum.
“If you look at wheat, corn and soybeans, meat, pork, poultry, I don't see any silver bullets in China. I just don't see it,” said Doud, who is now president and CEO of the National Milk Producers Federation.
China is forecast to reduce its purchases of U.S. agricultural products in fiscal 2025 by $1.3 billion, leaving total U.S. ag exports to the country at $22 billion, according to a USDA forecast published Thursday. The drop is largely due to reduced soybean, grain and cotton purchases.
“You can do free trade agreements with the rest of the world, it does not replace Chinese demand,” Doud said.
The USDA forecast estimates the U.S. agricultural trade deficit for FY25 will widen to $49 billion. The department raised its estimate for exports by $500 million to $170.5 billion but boosted its forecast for imports by $4 billion to $219.5 billion.
Doud suggested that after a peak in U.S. agriculture exports in 2022, the U.S. could be in a period of plateau. Since 1972, Doud argued, U.S. ag exports have been defined by multiple lengthy windows of little growth, punctuated by sudden surges, before exports reach another plateau.
“This is how commodity markets work,” he said, but asked, “Are we at another flat spot? And if we are, how do we get out? How do we get that next leg up? This is a really difficult question to answer for me right now.”
During Doud’s tenure in the Office of the U.S. Trade Representative during President Donald Trump's first term, he was part of negotiations on the agricultural chapter of the phase one agreement with China. Agriculture emerged as a rare bright spot in that deal, with China purchasing between 64-77% of the two-year target, according to the Peterson Institute for International Economics.
But Doud said Thursday that China’s economic woes will likely hamper the country’s ability to further scale U.S. ag purchases.
About 300 million of China’s 1.4 billion population have the disposable income needed to drive Chinese demand, Doud said. An economic slowdown, however, could soon erode that purchasing power.
“When those 300 million don't have disposable income, that's where it creates the issue,” Doud said. Further, he argued that if Beijing’s efforts to boost its corn yields pay off, it could crater purchases of U.S. corn. Soybean imports, he added, are set to remain fairly flat.
Chinese imports to drive ethanol production – often tipped as a beacon for future U.S. export opportunities – depend on infrastructure investments that may still take some time to materialize, Doud said. Brazil is also in a strong position to serve that industry, he added.
“They can double crop and average their fixed costs over two crops a year, versus us in the United States – one,” Doud said.
Doud was equally downbeat on the prospect of the Indian market opening to U.S. agriculture exports to allow for a significant uptick.
“We've been mining for ag export gold in the hills of India for 40 years,” Doud said. “I’m not sure it’s there.” Even when India has made market access concessions, duties remain high, Doud said. He pointed to a recent announcement from the Indian government that it would reduce duties on U.S. bourbon from 150% to 100%.
During Indian Prime Minister Narendra Modi’s visit to Washington earlier this month, the U.S. and India unveiled plans to begin work on a “multi-sector bilateral trade agreement.” In comments to Agri-Pulse, at the time analysts said trade barriers in the agricultural sector would likely feature prominently in those discussions, they but shared his assessment that securing concessions for ag, in particular, would be a slog.
In a presentation that struck a bleak tone at times, Doud indicated that U.S. protein exports could hold some opportunities for U.S. ranchers. Global demand for protein is growing faster than supply, he said, and many countries have constraints that prevent them from rapidly scaling up production capabilities.
“Where can we grow more protein? Where can we grow more beef, more pigs, more chickens, more dairy?” he asked. “Right here.”
The U.S., he charged, can take steps to ensure it can capitalize on the opportunities presented for protein exporters by staying in the World Trade Organization and negotiating free trade agreements with partners. Introducing greater reciprocity in U.S. trade relationships, as Trump has pledged, could also lead to export gains in Europe – where U.S. dairy exports lag markets with populations far smaller, like New Zealand and Guatemala, Doud said.
“The challenging thing for us in terms of trade is that all the easy stuff has been done in agricultural trade liberalization a long time ago. This is tough sledding,” he said. “Little deals” that lead to tariff reductions in singular export markets for singular industries could dominate trade policymaking and engagement with partners.
“So my charge is agriculture. Let's go. Let's get after this,” he concluded.
