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Midlands agricultural producers need key requirements in order to prosper. Favorable weather conditions are one example. Adequate commodity prices are another.

Another requirement is long-term access to overseas markets. Recent data from the U.S. Department of Agriculture unfortunately indicate a major problem in maintaining that all-important access. Trade frictions with China are obviously a significant part of the problem, and the mini-deal reached on U.S.-China trade last week should help. At this point, though, the exact extent of the improvement remains unclear.

Recent USDA figures show a steady shrinking of the U.S. agricultural sector’s overall trade surplus in recent years, which indicates loss of overseas market share. The surplus (exports exceeding imports) has declined from $20.2 billion in 2016 to $17.1 billion in 2017 to $10.8 billion in 2018.

Overseas ag sales have been hard hit this year. At this point in the calendar year in 2018, the U.S. ag sector had a trade surplus of $6.4 billion. Now the surplus stands at a mere $816 million.

The global corn market provides an example of lost market share for U.S. producers. During the second half of the 2018-19 marketing year (March-August of this year), “abundant South American crops and competitive pricing saw the U.S. export share of the world market fall precipitously,” a University of Illinois analysis reported last week.

President Donald Trump says China will buy $50 billion worth of U.S. ag exports annually under the deal reached last week. Purchases on that scale would indeed give a major boost to the U.S. ag sector, since $50 billion would be more than five times the total U.S. ag sales to China last year: $9.1 billion.

Whether the Chinese will actually commit to purchases on that scale remains a question mark. Neither the Chinese government nor the state-controlled Chinese press so far has confirmed the $50 billion figure. “People with knowledge of China’s strategy say Beijing officials still insist that agriculture purchases must align with the real needs of Chinese companies, including state-owned enterprises, and comply with World Trade Organization standards which limit market-distorting practices,” the Financial Times newspaper reported. “Chinese negotiators have said China shouldn’t be forced to divert purchases from other countries such as Brazil to meet the U.S. request.”

Brazil stands out for the major inroads it has made in the China ag market in the wake of U.S.-China tensions. Brazilian farmers and ranchers accounted for 26% of China’s agricultural imports last year, up from 18% in 2016. The U.S. share, meanwhile, has fallen from 21% in 2016 to only 12% last year.

Overseas competitors aren’t without their own challenges, of course. Dry weather expected for South America is likely to erode the soybean export potential from Brazil and Argentina this marketing year, the University of Illinois analysis says.

The U.S. has far to go in rebuilding its soybean sales to China. For the marketing year that ended Aug. 31, U.S. soybean sales to China are expected to be about 10 million tons — a decline of two-thirds from the 30 million tons sold during the 2017-18 marketing year.

Recent Chinese soybean purchases, as an incentive in trade negotiations with the Trump administration, provide some encouragement. China’s purchases of U.S. soybeans in the marketing year that began Sept. 1 so far total 4.7 metric tons. That’s up from 1 metric ton at this time a year ago.

Current trade conflicts have cost Nebraska producers a hefty sum — almost $400 million, with additional costs likely in the months ahead, an Iowa State University economist told a conference last week at the University of Nebraska-Lincoln. In the wake of the trade tumult, the federal government has approved $28 billion in trade relief payments to U.S. producers. But such short-term payments are no substitute for significant long-term access to foreign markets.

Gaining open access to those markets, and then capitalizing through strong marketing and competition, are vital to the future success of U.S. agriculture. Now is the time to regain that lost ground.

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