It has been a week since President Donald Trump and Chinese President Xi Jinping met at the White House, and U.S. agriculture continues to watch for signs that those discussions could lead to stronger trade relationships.
Representatives from the ethanol and cattle industries are weighing what is at stake, including trade opportunities, fuel supplies and the potential impact of policy changes on agricultural markets.
China was once a major market for U.S. ethanol and distillers grains. Renewable Fuels Association President and CEO Geoff Cooper said restoring access to that market remains a priority for the ethanol industry.
Cooper said China was once the second or third leading market for U.S. ethanol exports and the largest market for distillers grains. Today, he said U.S. ethanol is effectively shut out of the Chinese market, while distillers grains exports to China have also fallen significantly.
Ahead of the Trump-Xi meeting, Cooper said the industry’s message to the administration was to keep ethanol part of the conversation.
Fuel policy is another area being watched closely. Cooper also weighed in on the possibility of a ban on U.S. diesel exports and what such a move could mean for domestic fuel supplies.
Cooper said analysis of a potential export ban suggests it could provide some short-term help for fuel prices, but could have the opposite effect over a longer period.
Refineries produce more than diesel from crude oil, including gasoline and jet fuel. Cooper said refiners have warned that restrictions on diesel exports could lead them to reduce crude runs, potentially resulting in lower production of several fuels.
Uncertainty surrounding potential policy changes is also being felt in the cattle industry.
Ethan Lane, senior vice president of government affairs with the National Cattlemen’s Beef Association, said even speculation about significant changes can have an immediate impact on agricultural markets.
Lane said market reactions to rumors of government intervention demonstrate how sensitive agricultural markets can be to uncertainty. He said attempts to intervene in the supply chain or free market can quickly affect producers and commodity prices.
For both industries, the concerns highlight how decisions involving trade, fuel, and supply chains can reach the farm level. Industry leaders continue to emphasize maintaining market access while avoiding disruptions that could create unintended consequences for U.S. producers.
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