Idaho Potato Commission – Sam Eaton
Idaho Dairymen Association – Rick Naerebout
Idaho Wheat Commission – Britany Hurst Marchant
Idaho Cattle Association – Cameron Mulrony
Looking back, how did President Donald Trump’s previous tariffs impact your industry?
EATON: If you look back to the United States-Mexico-Canada Agreement (USMCA) that was negotiated during President Trump’s first term, the threat of tariffs was a tool the president used to get Canada and Mexico to the table. We also achieved a zero duty in Japan on frozen fries as a result of a U.S.-Japan trade agreement and concluded a long-standing market access request for chipping potatoes to China.
We recognize that the threat of tariffs can leverage better trade agreements for U.S. producers. However, there is the reality that the enactment of new tariffs can result in retaliatory tariffs that are very harmful to the potato industry.
NAEREBOUT: Tariffs during President Trump’s first term had significant impacts on milk prices, so much so that direct payments were provided dairymen to offset those impacts.
MARCHANT: This is familiar territory for the wheat industry. When tariffs were imposed during the first Trump presidency, key trading partners responded with retaliatory tariffs on wheat and other agricultural products. These retaliatory tariffs made U.S. wheat – already sold at a premium – less competitive in global markets. Market shares held by U.S. wheat declined as countries shifted to purchasing wheat from U.S. competitors. Tariffs also increased the costs of fertilizers and other essential inputs. The USDA authorized the Agricultural Trade Promotion (ATP) program to offset the impacts of retaliatory tariffs so the wheat industry could continue overseas marketing efforts during this time, which helped, but we did see reduced exports in some classes of wheat from the U.S. and higher production costs on the farm.
MULRONY: The administration’s past actions (in the previous term) opened the U.S. to China's market, making that available to our industry for the first time, and we did not see any adverse impacts as a result.
What countries are the biggest buyers of your commodity, and how reliant are you on exports?
EATON: Canada and Mexico are the biggest buyers of Idaho potatoes internationally. On average, about 1 in 5 rows, or 20%, of our potatoes are destined for international markets. We ship processed potatoes (think frozen french fries) all over the world. For fresh potatoes, in addition to Canada and Mexico, we also ship to several Asian countries including Taiwan, Hong Kong, Singapore, Malaysia and others. About three years ago, the entire Mexican market was opened to fresh potatoes from the U.S. and Idaho has been very active in that market. Since 2022, Idaho has seen about a 400% increase in shipments of fresh potatoes to Mexico.
NAEREBOUT: Historically, our largest international buyers have been Mexico, Canada, China, Japan and South Korea. Idaho dairies produce enough milk in one year to feed the state’s population more than 15 times over. As a result, more than 90% of Idaho’s milk is sold outside the state or exported worldwide in the form of cheese, whey proteins or other dairy ingredients.
MARCHANT: Mexico, the Philippines, Japan, South Korea and China are the top five export destinations for U.S. wheat. Wheat farmers throughout the United States produce 2 billion bushels of wheat annually and half of that is exported.
Idaho’s wheat farmers produce, on average, 100 million bushels of wheat annually, and 50% of that crop is exported. While Idaho wheat farmers are unique in their ability to grow five of the six classes of wheat, 68% of Idaho’s wheat crop is soft white wheat, a class of wheat grown almost exclusively in the Pacific Northwest. Japan, the Philippines, South Korea, Indonesia and Taiwan are the top five export destinations for soft white wheat.
MULRONY: The top three countries where the U.S. exports beef are Japan, South Korea and China, with the USMEF estimating an additional $412 of value per head being added by these exports.
If tariffs are reinstated, what do you foresee as the biggest risks or challenges?
EATON: If tariffs are reinstated, we will find ourselves having to rely heavily on new and existing domestic customers for some of those potatoes that were previously destined for international markets. It doesn’t take an economist to realize that situation creates a supply and demand challenge within the U.S. We are also actively pursuing new markets for our fresh potatoes, including countries like Japan. While we are disappointed in the pace of negotiations with Japan, we have made strides over the last several years and we do worry that tariffs could have a chilling effect on those discussions. There is also another layer of complication to this which is the impact tariffs would have on inputs, like fertilizers, that our farmers purchase from other countries and rely on to grow their crops.
NAEREBOUT: If tariffs reduce market demand for U.S. dairy in key countries like Mexico, it could have serious consequences for the industry. Nationally, we export 15% to 20% of dairy production, making it a key demand factor for our financial success. Lower demand would lead to depressed prices and an oversupply of dairy products in the U.S. Additionally, retaliatory tariffs could drive up costs for dairy producers, further disrupting supply chains.
MARCHANT: There are two primary risks that come to mind immediately. First, losing market share in countries that will be forced to look elsewhere for wheat that can be purchased more affordably. U.S. wheat, and particularly wheat from Idaho, is not the least expensive wheat in the market. Customers are willing to pay the premiums on U.S. wheat for the consistent quality upon which they depend. At some point, however, that margin is stretched to maximum, and customers are forced to purchase elsewhere from competitors.
Secondly, fluctuations in the market with wheat prices and the increase in inputs that tariffs bring drive up the risk for farmers. For example, potash is a vital component in wheat production, and Canada is the dominant supplier of potash for U.S. farmers and one of the world’s largest sources of potash. The other source is Russia. That is just one example of how tariffs on Canadian goods are going to have significant financial impacts on farmers’ ability to produce crops. Farming is already tremendously risky. Increased input costs drive those risks exponentially higher.
MULRONY: There may be limited risk to demand; however, the rest of the world has a documented preference for U.S. beef.
Are you seeing any early indicators of buyers pulling back or adjusting their orders due to tariff concerns?
EATON: As I write this, tariffs on USMCA commodities which includes potatoes are on hold until April 2. We are in constant communication with our Idaho shippers and fortunately, thus far, we haven’t heard of any major disruptions on potato shipments to Canada or Mexico.
NAEREBOUT: Yes, milk prices have slipped about $3 per hundredweight (cwt) over the past few weeks due to uncertainty in demand created by the threat of tariffs.
MARCHANT: Not yet with soft white wheat exports. Customers of soft white wheat are loyal for three reasons: 1) Quality, 2) Consistency and 3) Reliability. Soft white wheat produces a low-protein, bright white flour that is ideal for noodles, flatbreads and pastries. Idaho’s wheat farmers grow very high-quality wheat that consistently meets the specification requirements of customers. Additionally, because of the Columbia Snake River system, wheat from the Pacific Northwest reliably arrives on time. This is critical for countries like Taiwan that have neither the geography nor the climate to grow or store more than a month’s supply of wheat in country but consumes 51.4 million bushels of wheat each year.
MULRONY: While the ICA does not deal directly with buyers to our supply in the U.S., we do have a pulse on their concerns. Supply in the U.S. cow herd is at a low point in the cycle and demand remains high, both domestically as well as in the international market. We are pleased to see a continued strong pricing model for our industry.
