Hay, What's Their Beef? Two Northwest Ag Industries Plan For Exports Under Trump

Jan 17, 2017
Originally published on January 16, 2017 7:29 am

The inauguration of Donald Trump and the next session of Congress mark the end of the Trans-Pacific Partnership for the United States. The trade deal proved to be a divisive issue during the presidential election -- and not just among politicians.

Two closely-tied agriculture exporters in the Northwest, beef producers and hay farmers, will be affected by the end of  TPP in very different ways.

Hundreds of people work at Agri Beef’s large beef packing plant In Toppeninsh, Washington, near Yakima. They wield large metal hooks and knives as conveyor belts move cuts of beef along. The workers process about 400,000 head every year.

Right now, each carcass is worth more than $1,400. But $325 from each cow comes from things you’ve likely never forked.

“Items like tongues, intestine large and small, hanging tenders, outside skirts, tunic tissue -- all those types of items have a much greater demand overseas than they do in the U.S.,” Agri Beef spokesman Jay Theiler said. His company, based in Boise, produces Snake River Farms American Wagyu beef and Double R Ranch Northwest beef.

Theiler said on average their American cattle will land in 15 different countries -- mostly in Asia. He was hoping that the TPP would be pushed through under the Obama Administration.

Right now, U.S. beef exports to Japan face a nearly 39 percent tariff. The TPP would have lowered that and made U.S. beef more competitive with countries like Australia.

But then both Hillary Clinton and Donald Trump started speaking against the TPP.

“It was a real blow to realize the amount of time that had been invested in this,” Theiler said. “And for not just our industry, but many industries, particularly ag industries that are so dependent on exports, that this was going to be not part of the future for our trade.”

Theiler is hoping for at least a smaller agreement between the U.S. and Japan.

‘A huge negative impact'

It’s a different story about 50 miles down the highway in Ellensburg, Washington. Workers at Anderson Hay, one of the largest hay exporting companies in the world, pack fluffy hay into super-pressed bales. The finished stacks are tightly wrapped in plastic for shipment overseas.

Company CEO Mark Anderson said as he understood the latest version, the TPP wouldn’t have helped him at all.

“[It] would actually have had a huge negative impact on the Japan dairy industry,” Anderson said. “One of our biggest customers in the hay business is the Japan dairy industry.”

Turns out Japanese tariffs on fresh milk and dairy products from the U.S. and other countries protect small-scale Japanese dairies. If those tariffs had been eased by the TPP, Japanese dairy farmers may have gone out of business -- killing Anderson’s customer base.

This Ellensburg-based company grew under Obama. But Anderson is really optimistic about the next four years under Trump. And he knows what he wants out of his next presidential administration.

“The two places we will see a bottom line financial impact to our company will be the immigration reform being dealt with once and for all and the tax code system being dealt with once and for all,” Anderson said.

Lower taxes, and the ability to hire foreign labor. Both the hay and beef plants have hundreds of workers and they say they need more.

They’re worried about “the wall” Trump campaigned on--the one that he said Mexico would pay for. So they’re waiting to see what the Trump administration will bring.

Olivia Weitz contributed to this report.

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