U.S. Tariffs Reshaping Global Ag Trade Flows

By Ryan Hanrahan

The imposition of U.S. tariffs and new U.S. trade deals with countries across the globe are expected to reshape agricultural trade flows — on products ranging from beef to grains to oilseeds — in the coming months. For beef, Reuters’ Roberto Samora and Kylie Madry reported that “higher U.S. tariffs on Brazil are expected to reshape global beef trade flows, sparking increased shipments to the U.S. from countries like Mexico and Australia while Brazil seeks alternative markets, analysts said on Wednesday.”

For grains and oilseeds, Reuters’ Naveen Thukral reported that “Southeast Asian nations are set to reshape global grains and oilseed trade flows through U.S. trade deals that include raising agriculture purchases, with increased American shipments displacing Australian, Canadian and Russian supply.”

Tariffs on Brazil Likely Reshaping Beef Trade Flows

Reuters’ Samora and Madry reported that “Brazil is the world’s largest beef exporter, with China as its main trading partner. In August, Mexico overtook the U.S. to become its second-largest export destination for the commodity,” Samora and Madry reported. “‘It is very likely that countries that can triangulate Brazilian beef will increase their purchases following Mexico’s example,’ Mauricio Nogueira, director of livestock consultancy Athenagro, said in an interview. ‘If Mexico starts sending beef to the U.S., it will have to buy from someone, it will have to buy from here.’ Argentina would be another candidate to import and eventually re-export Brazil’s beef to the U.S., he added.”

“Nogueira’s Athenagro did not change its year-end projection for Brazil’s beef exports after Trump’s 50% tariffs on the country’s products took effect on August 6. His consultancy is projecting a 7.5% increase this year in Brazilian beef exports, to 3.08 million metric tons. Through July, such exports rose more than 13%,” Samora and Madry reported.

“Economist Thiago de Carvalho confirmed expectations of a shift in global beef flows, with Brazil potentially selling to markets previously served by Australian exporters, for example,” Samora and Madry reported. “Factors such as tight global beef supplies, which the U.S. is facing after its cattle herd hit historical lows, may also direct demand to Brazil, Carvalho added.”

Trade Deals with Southeast Asian Nations Likely Reshaping Grains Trade Flows

Reuters’ Naveen Thukral reported that “while Indonesia and Bangladesh have already agreed to increased buying as part of agreements that set lowered tariffs on their exports to the U.S., regional grains traders say Vietnam, the Philippines and Thailand may boost feed grain purchases under their deals,” Thukral reported. “Asia, a net food importer, is a vital market for global suppliers, as the region’s consumption is rising with growing population and incomes. Asia accounts for about 30% of world wheat, corn and soymeal imports, according to U.S. Department of Agriculture data.”

“An influx of U.S. crops could push down prices for rivals and drive up costs for them to ship grains at greater distances, traders and analysts said,” Thukral reported. “Over the past decade, suppliers from the Black Sea and South America have gained ground in Asia, eating into U.S. market share.”

“The U.S. share of Indonesian wheat shipments has fallen by almost 50% in the past five years, replaced by imports from Ukraine, Russia and Argentina, according to data from the Indonesian Wheat Flour Producers Association,” Thukral reported. “But Indonesian flour millers have bought about 250,000 metric tons of U.S. wheat since July, according to two Singapore-based grain traders. The association signed a memorandum of understanding then to buy 1 million tons of U.S. wheat annually as part of trade negotiations to gain lower tariffs. In 2024, the U.S. sold 693,000 tons to Indonesia.”

“‘Prices are key as these will be private deals by millers but getting one million tons of U.S. wheat will not be a problem for us,’ said an association official, declining to be named as they were not authorised to speak to media,” Thukral reported.

“Thailand and the Philippines could also emerge as key importers of U.S. corn, the two Singapore-based traders said. One of the traders said purchases tied to trade deals could lead to Thailand buying more than 1 million tons of U.S. feed corn, based on what would be needed to replace their current purchases of feed wheat from the Black Sea and feed corn from Asia,” Thukral reported. “Philippine corn purchases could be higher as its needs to replace 3.3 million tons of feed wheat, though its buying will depend on lowering its corn tariffs, the trader said.”

U.S. Tariffs Reshaping Global Ag Trade Flows was originally published by Farmdoc.