Global Demand Forecasts for U.S. Crops to Factor in Tariffs in Effect, USDA Says

By Tom Polansek

CHICAGO, March 6 (Reuters) – A monthly U.S. Department of Agriculture supply and demand report due next week will consider trade policies in place when the forecasts for grains and soybeans are issued, an agency official said on Thursday, as President Donald Trump suspended tariffs he imposed this week on Canada and Mexico.

Grain traders and farmers will look closely at how USDA adjusts its World Agricultural Supply and Demand Estimates, due on March 11, as tariffs have fueled worries the U.S. will lose export markets for farm products. The nation relies on exports and competes with rival suppliers, such as Brazil, for global sales of crops like corn and soybeans.

Trump on Thursday exempted goods from Canada and Mexico under a North American trade pact for a month from the 25% tariffs that he had implemented, the latest twist in fast-shifting trade policy. The president has also imposed tariffs of 20% on all imports from China, prompting Beijing to retaliate against American agricultural and food products.

“Consistent with established practices, the WASDE report only considers trade policies which are in place at the time of publication,” said Joanna Hitchner, an agricultural economist for USDA’s World Agricultural Outlook Board.

“Unless a formal end date is specified, the report also assumes that these policies remain in place throughout the time period covered by the forecasts,” she added.

U.S. farm groups have warned that Trump’s tariffs threaten the $191 billion American agricultural export sector and will raise costs for growers. Canada, Mexico and China are the top importers of U.S. farm products.

After Trump announced the levies, USDA Chief Economist Seth Meyer confirmed at an industry event on Tuesday that the agency would consider them.

“My crew will then now need to think about how to implement those tariffs into World Agricultural Supply and Demand Estimates,” he said in a recording from the Commodity Classic conference.

Analysts, on average, are not expecting USDA to make major changes to global grain and soy inventories from February, according to a Reuters poll.

“They probably don’t change stuff much,” said Don Roose, president of brokerage U.S. Commodities.

(Reporting by Tom Polansek; Additional reporting by Julie Ingwersen in Chicago; Editing by Cynthia Osterman)