Trump resonates with America's ag areas

26 Aug, 2017 04:00 AM
David Farley (right) on his recent US fact-finding mission with Terry Houchin, a cotton farmer and soft agricultural commodity investor from Bakersfield, California.
David Farley (right) on his recent US fact-finding mission with Terry Houchin, a cotton farmer and soft agricultural commodity investor from Bakersfield, California.

DONALD Trump is often portrayed as the devil in the global media with a notable negative focus in Australia that borders on obsession.

But experienced Australian and US agribusiness consultant David Farley said a major contrast was occurring at the grass-roots level in regional America, where reality is contradicting the media’s constant, frenzied attack on the US president.

The former Australian Agricultural Company boss has had an extensive relationship with the US over 35 years.

He returned home from a fact-finding mission and consulting contract – from May to the end of last month – with some strong impressions on the current political landscape in America and its impact on farming with flow-on effects for Australian agriculture.

Mr Farley said on the ground in the US “things are getting done” at a rapid rate and the shift in political dynamics, following Mr Trump’s election late last year, was being reflected in the powerful agricultural nation’s improved economic standing with job creation.

“The Trump effects and views within regional and rural America are totally inversed to those within the major west and east coast cities like San Francisco, Los Angeles and New York,” Mr Farley said.

“Donald Trump is being heralded as a man of trade, a man of regional infrastructure spending and a man of his word, making ‘America First’.

“And his slogan ‘Making America Great Again’ is still resonating across regional America.

“There is a great confidence in Trump as being a leader for the working-class man, as a leader for USA international trade and more equitable trade agreements for America.”

Mr Farley said Mr Trump didn’t break the recent US droughts, didn’t create the international demand for American agricultural products and didn’t set monetary policies to deflate the US dollar.

But he said the new president was enjoying the political and domestic “applause” for his performance across regional America, including the farm sector.

“Within regional US, Donald Trump is revered as a President for America and not a President for the world,” he said.

“Regional American is of the notion that a healthy prospering America is good for the world.

“One dry laconic West Texas cotton producer summarised the Trump presidency as ‘like having Charlie Sheen in charge of Hollywood’,” he said.

“He told me the new president was ‘shaking things up in an immediate and ill-mannered way – yet we like it’.”

Mr Farley said an “interesting” observation of social change had also evolved within regional communities across the US.

He said with 20-plus years of war and conflict engagement in the Middle East engaging millions of Americans – on either the front line or support within the war logistics supply chain – and the brutal personal reality of the 2009-2016 financial recession, a regional society had developed across a wide age group of 25 to 60 year olds, with a greater emotional intelligence of their personal and regional purpose of being.

“Regional Americans believe they are a greater necessity to the prosperity of America than ever before,” he said.

“It was regional America that voted Trump into the presidency and its Trump’s commitment to making America great again that is fuelling their bellies to improve productive output and their personal well-being.

“Regional America is about securing American safety, productivity, export and profit, and other issues, like fringe social issues, if necessary, can be discussed after church on Sunday.”

In his 35-year relationship with the US, Mr Farley has owned businesses in California and Texas while managing farmer marketing co-operatives from California through to Tennessee.

His current business, Matrix Commodities, trades US agriculture physical and derivatives products, meaning his interest in the new political regime must remain proactive.

He said after 35 years working and visiting the US, “I never seen the economy is such great health”.

But there is one very soft under belly to the US economy and its citizens and that is within its inability to structure and offer fair and equitable health services to all its citizens, he said.

Mr Farley said another purpose of his extended recent US trip was to examine other critical events like the long-running Californian drought breaking and how the nation’s agriculture sector was performing after the government’s abandonment of traditional farm support programs.

He said Californian agriculture and agribusiness was now “back in full business” after eight years of drought.

Mr Farley said irrigation water was strong and would remain so for the next few years with storages full and aquifers recharged, “bringing California back to its formidable position as the US and the world’s largest agricultural economy”.

He said extensive and large new plantings of almond and pistachio orchards within the San Joaquin Valley irrigation reliant region of California was also notable.

Mr Farley said the powerful agricultural valley was also expanding seasonal crops of corn and alfa crops to support a growing dairy industry and long fibre Pima cotton plantings were “pushing out” traditional Acala cottons.

He said the Californian drought had seen Australia fill international supply chains over the past half decade for crops like almonds.

But Mr Farley said Australia’s position would be “quickly retrieved” by Californian agribusiness and producers, with the drought having now broken, taking immediate effect during 2017 and 2018.

More broadly throughout the US, Mr Farley said a combination of profitable farmgate prices for corn, soybean, cotton and wheat, underwritten by excellent seasonal conditions – from a platform of adopting advanced technologies in both seed genetics and mechanical engineering transacting with high speed data – had put US farmers in a stronger position to absorb financial cut-backs to historical Farm Bill programs.

He said US protein producers like beef, hogs and chicken had enjoyed good profits from a unique sequence of confident domestic consumer demand, inflated further by excellent export performance into global markets, off a descending USD value.

“Production energy charges off low-cost oil and gas prices have further supported both farming groups into producing superior profits,” he said.

“Labour costs and productive performance are also impressive and very internationally competitive compared to Australia.”

Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media


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