Between the beginning of tariffs and the withdrawal from the Trans-Pacific Partnership, Washington wheat farmers may be facing a difficult year ahead.
While growers are somewhat optimistic about the upcoming year, tumultuous trade relations threaten to sideline what farmers hope will be one of the largest harvests on record, said Scott Yates, communications director for the Washington Grain Commission.
Washington’s primary wheat crop is soft white wheat. Low protein and gluten content make it fluffy, tender and ideal for baked desserts like pies and cakes. The grain is highly regarded in Japan, which is Washington’s largest customer of wheat.
Soft white wheat is a relatively unique product compared to the more common hard red spring variety, which helps insulate Washington’s main grain from some of the shocks and fluctuations of the global wheat market, Yates said. Still, Yates said, unfavorable prices compared to competitors could eventually drive customers to cheaper, lower quality varieties.
Though last week’s tariffs from China, one of the top customers of Washington wheat, have added to trade concerns, Yates said that those concerns have been growing since the withdrawal of the U.S. from the Trans-Pacific Partnership. With other signatories of the previous free-trade agreement working toward partnership without the U.S., Yates said the concern is that global wheat prices drop relative to U.S. wheat.
That could lead to a $500 million loss in Japanese market share, Yates said.
“If that happens, we’re going to be in a world of hurt,” he added.
WGC Commissioner Dana Harron said he doesn’t share the extent of Yates’ concerns. Though growers might hurt in the short term due to price volatility, Harron said, some of the trade agreements President Trump has withdrawn from were also not good long-term, including the TPP.
“I don’t see negativism from growers,” said Harron. “Wheat farmers are in it for the long haul; they don’t overreact to the short term.”
This year is going to be one of the largest crops on record and Washington has the highest quality wheat in the world, Harron said.
“Sooner or later, customers have to come to us if they want that level of quality,” Harron said.