Tomorrow might be the day you celebrate candy corn, but Illinois farmers are celebrating field corn. The free trade agreement between the U.S. and Panama goes into effect tomorrow, October 31, representing increased U.S. agricultural exports to Panama of more than $195 million per year by full implementation.
That’s raw commodities like corn, soybeans, and wheat as well as value added commodities like pork and beef with newly gained access to an important market. According to Iowa State University economist Dermot Hayes, the Panama FTA, when fully implemented, will raise hog prices 20 cents above what would otherwise be the case. Therefore, exports to Panama would be worth approximately $20.6 million to the U.S. pork industry in additional revenue.
Panama will immediately eliminate duties on high quality beef, frozen turkeys, sorghum, soybeans, soybean meal, crude soybean and corn oil, almost all fruit products, wheat, peanuts, why, cotton, distilled spirits and many other processed products. This agreement clearly has significant value to the U.S. agricultural economy.
Nationally, Panama is the United States’ 52nd largest trading partner with $8.6 billion in total trade in products during 2011. U.S. exports totaled $8.3 billion and imports, $389 million. The Miami district exported $1.88 billion worth of products to Panama in 2011 and imported $212.7 million.
Next in line: upgrade the U.S. locks and dams to accommodate all the additional growth.
Farmers will definitely find it difficult to continue growing demand for our booming agricultural industry without upgraded infrastructure. While we celebrate the increased opportunity this Halloween, we also look forward to transportation opportunities that will allow us to compete with other countries and continue to be a bright spot in a dim – even spooky – U.S. economy.