Trump administration means challenges, opportunities for feed industry

by Susan Reidy
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Joel Newman president and CEO of AFIA
Newman discussed what the feed industry might expect from the new administration during a TECHTalk at IPPE.
Photo by Susan Reidy.
 
ATLANTA, GEORGIA, U.S. – With the administration of U.S. President Donald J. Trump promising to be unlike any other, the feed industry will have opportunities in regulatory reform, but also face challenges in trade, said Joel Newman, president and chief executive officer of the American Feed Industry Association (AFIA).

Newman discussed what the feed industry might expect from the new administration during a TECHTalk at the International Production & Processing Expo (IPPE) in Atlanta, Georgia, U.S. The event concludes Thursday, Feb. 2.

“There are a lot of ways people are describing this administration,” Newman said. “But mostly the one I think that fits this is unconventional. It’s not going to be like any previous administration that we are familiar with. That will cause us to deal with a lot of change in the process.”

A big concern for the feed industry was Trump’s withdrawal from the Trans Pacific Partnership (TPP) on Jan. 23. The TPP is a trade agreement negotiated over more than seven years with governments of 11 nations, accounting for about 40% of the global economy. TPP wrapped up in February 2016, but was never sent to the U.S. Congress for approval.

The TPP was considered a good agreement for agriculture and would have created more jobs, and accelerated the amount of product moving out of the United States, Newman said.

“We’re not at all pleased that that very quick decision was made to pull out of that agreement,” he said.

The agreement had to be signed within three years, so there is a year-and-a-half to two-year window to see if portions of it can move forward, Newman said. The problem is China is actively moving to take the spot vacated by the United States.

“That’s a huge region,” he said. “If someone else takes our spot, it’s going to take a long time for us to get back in there. It takes just as long to negotiate bilateral agreements as it did to negotiate this multilateral agreement. The withdrawal is also going to really affect the trust that we’re going to have in negotiating trade agreements in the future. We spent years working with these 11 countries, came to an agreement, and at the last minute, we’re backing out.

“To go back and replace it with an agreement with even half of those countries is going to take quite a while. This is a huge area of disappointment for us and our industry.”

AFIA Newman TechTalk
Trade has a significant impact on the U.S. agriculture industry. 
Photo by Susan Reidy.
 
The industry is extremely dependent on exports from the producer and on up the chain. Most major species depend on 20% exports to keep production in line and give producers reasonable revenue.

“When exports drop down, we have excess production and prices fall,” Newman said.

The total agricultural exports over the past 10 years have met or exceeded a trillion dollars, he said, and 50% of U.S. grown rice, soybeans and wheat are exported.

Two of three top destinations – Canada and Mexico – are affected by the North American Free Trade Agreement (NAFTA), which Trump has promised to reform.

“We need to make sure that goes well so we don’t end up with a worse situation but an improved situation,” Newman said. “There’s no question there’s an opportunity to add some accountability within the agreement but how they go about it is going to be critical.”

US Ag Sec_Sonny Perdue_Photo courtesy of Georgia.Gov
Sonny Perdue, Trump’s nominee for agriculture secretary.

Sonny Perdue, Trump’s nominee for agriculture secretary, has said he wants fair deals for farmers in trade treaties. Overall, Perdue’s vision for the U.S. Department of Agriculture (USDA) is positive for the feed industry, Newman said.

“He wants to ensure that USDA services are more producer friendly,” he said. “He wants USDA to work closely with the FDA and also EPA. That’s a very positive statement because there are a lot of things hanging between the agencies right now that affect our industry but aren’t moving because there hasn’t been cooperation in the past.”

Perdue is a veterinarian, a two-term Georgia governor as well as an owner of a family feed, fertilizer and grain business, so he is familiar with the agriculture industry.

“I think we anticipate that Sonny is going to be a real champion for the agriculture and food industry,” Newman said.

Newman highlighted other Trump cabinet nominees that will have a major impact on the feed industry. The Health and Human Services (HHS) nominee is Tom Price, an orthopedic surgeon and a member of Congress from Georgia. HHS oversees the Food and Drug Administration and the Center for Veterinary Medicine, which have significant impacts on the feed industry.

There is a possibility for some improvements to the Food Safety Modernization Act (FSMA), which is the most sweeping reform to food safety laws since the 1950s, Newman said. Food safety is a top priority for AFIA, but there are parts of the rulemaking that are onerous for the industry to comply with and don’t reduce hazards in feed, he said.

“What we really want is the agency to go back and take a second look at the more onerous pieces and find a way that meets their objectives and reduces the burden on the feed industry,” Newman said.

Other issues under the FDA’s oversight include simplification of the animal drug approval process and the ingredient approval process.

Trump and congressional Republicans campaigned on reducing regulatory burden. Legislation has passed the House and is under consideration in the Senate, including the Regulatory Accountability Act, which gives Congress an opportunity to look back at economically significant rules.

Another regulation reform would allow congress to review a final rulemaking for a law before it gets enacted to make sure it meets the parameters they have set up as well as the cost justification vs. the benefits of the law.

There are checks and balances to any policies that might come from the Trump administration, and many players, Newman said. Several cabinet nominees have voiced opposing views during their hearings.

“It’s going to be interesting to see how much President Trump will open up and listen to his cabinet members in terms of strategically what they want to do,” Newman said. “That’s all yet to be determined.”

Even with Republican majorities in the House and Senate, Newman said on certain cases, he doesn’t think Congress will give a rubber stamp to everything that comes from the administration.

“That’s an important part of balance in our government,” he said.

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