By EMMA HOPKINS-O’BRIEN

Indiana Correspondent

INDIANAPOLIS, Ind. — Last week, USDA Under Secretary for Trade Ted McKinney stopped by the Indiana State Fair to talk about agricultural trade and the Trump administration’s $12 billion mitigation package for farmers.

“Clearly there’s a lot going on in trade these days,” McKinney began, in a small press conference. “I don’t need to tell you that. But I am more encouraged than I was even 10 days ago about some developments.”

While he and other officials have been working through negations in other countries relating to free global trade, the U.S. farming community has been suffering the consequences of a back-and-forth tariff war on ag goods and other products.

McKinney is now some quarter-million miles into a journey of trade missions to countries with which the U.S. is currently trading, and several others he is hoping could become new markets for American ag products. Due to tensions that have been created between the U.S. and other countries in trade, these missions are also doubling down on existing markets.

“There is certainly an element of frustration, unknown and tension out there in our farming and ranching world,” he acknowledged. “But I do think we are going to find a way to close out some of these and get back to some means of normalcy.”

Following McKinney’s confirmation as under secretary, he undertook a trade mission to India. “It’s not seen as a major market, but I think we’ll look back in about two or three years, certainly nine or 10, and be happy we worked on that market.”

Other countries targeted on these trade missions include Indonesia, Vietnam, Myanmar, Colombia and Panama. In the future, he said he will be in South Africa, the Philippines, Thailand and Korea. Other countries such as Brazil, McKinney said, may be competitors with the U.S. in terms of soybeans, but are also consumers – in ethanol, as an example.

“These countries have propensity and have stated that they want to buy more U.S. product, and their needs range from corn to soybeans to pork, all of it, and I think we have an opportunity to diversify our portfolio, which is always a good thing over time,” he said.

McKinney said commodities such as dairy, corn, soybeans, pork, poultry, dried fruits and nuts are often featured on trade missions, in addition to biotechnology.

“In all of these visits, I am driven and adamant to believe, and the administration believes, that trade is a two-way street,” he affirmed.

He also wants to make sure negotiations are solving problems for all countries involved. In this way, he hopes Mexico and Canada can be landed quickly to finish out negotiations on the North American Free Trade Agreement (NAFTA).

“If we settle on our agreement with Canada, which I hope we will, we’ll straighten out that Class 7 managed milk supply problem that is simply not being managed,” he said. “You can’t have a managed milk supply and be dumping butter and dry milk powder on the world market at half to two-thirds global prices. That’s not free, fair and reciprocal trade.”

Discussions have also begun in Japan, which McKinney said is right on the heels of closing out NAFTA.  He believes China is more of a wildcard.

“Longer term, the big concern is probably with China, and it’s very difficult to replace what they’ve been buying from the U.S.,” he explained. “It will take a lot of these other smaller countries to make up for China, and you can’t do that in short order. So we will be facing a bridge, but I remain more optimistic than not.”

In this “bridge” period, McKinney said times are bound to be tough, which is why the administration has put together the $12 billion mitigation package for farmers.

“Does anyone in government, or USDA or farming, even, want this type of thing?” he asked. “Normally the answer is no, but we did it because it is the right thing to bridge for farmers who are now going into year five of a very distressed farm/ranch economy, while we bring other things to fruition – land some of these deals.”

The package consists of three legs: First, a cash payment to farmers for goods that cannot go into food banks or food aid. Second, government purchases of food to go into food banks, as well as some other destinations such as Native American reservations and for military consumption, so as not to hurt other businesses.

The third leg consists of market development programs, which have been around for a while.

“These market development programs are perhaps one of the finest creations of our U.S. government,” McKinney said. “For every taxpayer dollar that we invest in opening up some market for soybeans or fruits or nuts or whatever the crop may be, it’s usually matched five or 10 times every dollar.”

Commodity groups will be invited to make applications to this program beginning Sept. 4, when the package is planned to launch.

“This is a surge capacity; it’s a one-time deal, but the money can be spread over however long a time period they may want,” he said. “Usually it’s three years or so, but it can go as long as five – this is all export development, and we’ve had very good feedback. Team USDA is fully cinched up to do this right.”