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Tariffs Leave the Kidney Bean Crop in Limbo

By Dan Gunderson, MPR News

Kidney beans are just one of several varieties of beans classified as dry edible beans. “When you take the North Dakota, Minnesota and southern Manitoba growing region, half of the North American dry bean crop is produced in that area,” says John Bartsch, a trader with Kelley Bean Company, who also grows beans on an eastern North Dakota farm. “And so if they have a good crop or a poor crop, it has an outsized impact on price.”

About 60 percent of kidney beans harvested are used in the United States and the rest are exported. “Domestically, they’re going down to Faribault, Minnesota for canning there and for foreign export. Most of them go to the E.U. or Central America,” says Perham, Minnesota farmer Mark Dombeck.

Lately, trade disputes have played a larger role in the direction of the industry. “Right now, our competition for exports is Canada and Argentina,” says Dombeck. “They don’t have a tariff, so we’re at a disadvantage,” The European Union has been a steady kidney bean customer for years, he adds. But last year, trade disputes disrupted the relationship when the E.U. put a retaliatory tariff on the beans after the U.S. had placed tariffs on steel and aluminum.

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NDSU Study Looks at the Impact of EU Tariffs

A study from North Dakota State University, commissioned by the U.S. Dry Bean Council, concluded that retaliatory tariffs by the European Union have put U.S. farmers at a price disadvantage in international markets. This has resulted in reduced exports and potentially lost export markets in the future.
 
The study looked at the impact of tariffs on the three principal types of dry beans exported to the EU; dark red kidney, navy, and Great Northern beans. NDSU researchers concluded that tariff levels must reach an inflection point, or key level, before export amounts are negatively impacted.
 

Dry Beans Included in New MFP Program

The new round of trade-related assistance totals $16 billion with $14.5 billion going to Market Facilitation Program payments. Rather than different rates for the various commodities, USDA Undersecretary Bill Northey said farmers will now be paid based on a single county rate. “The team has gone through and looked at the trade damage each county is feeling and we then divide that by the acreage planted within the county and will have a single payment, no matter which of the crops you plant.” This relief strategy is still being reviewed by OMB, but payments will be expedited. “The payments will come out in three different times of the year; we’re looking at a first payment coming out in July or August.” The second payment can be expected in November and the third will come in January. Agriculture Secretary Sonny Perdue said payments will likely be front-loaded, coming out shortly after the Farm Service Agency acreage reporting is wrapped up in mid-July. The first tranche of payments are the only ones guaranteed. The second and third tranches will be made if market and trade conditions are warranted.

Agriculture Not Included in EU Trade Talks

The European Union does not want to include agriculture in its trade talks with the United States. The EU has approved the terms for negotiating a trade agreement, and it limits the focus to industrial products.
 
Agriculture is a contentious issue for Europe and the U.S. The United States wants more access for its farm products and European Union protects its heavily subsidized farm sector. A 25 percent tariff remains on U.S. navy, kidney and Great Northern beans.