U.S. and China Agriculture Look for Common Ground

May 7, 2021  | 7 min  | Ep4638

There have been difficulties in travelling the trade road with China.

The Trump Administration enacted tariffs - that escalated into a trade war - in an effort to reign in some practices the former president said did not help America.

The road smoothed a bit with the Phase One trade deal that requires China to purchase a specific amount of U.S. agricultural goods.

Colleen Bradford Krantz reports on one business trying to navigate that bumpy road in our Cover Story. 

 

On this April morning, Linda Davis and her sister Gloria Jensen are taking their turn making the five-hour drive from Hawkeye Breeders Service’s home office in Adel, Iowa to the company’s Brooklyn, Wisconsin branch. The livestock genetics company’s owners and employees have been making the trip there and back every week for three and a half years, covering about 120,000 miles.

The weekly trip is tied to the 52-year-old company’s attempt to gain permission to export the bull semen they collect to China.

David Jensen, Hawkeye Breeders Service: “Our international market is huge. It probably represents about 70 percent of our business currently. And we ship to every country from Australia to Zimbabwe, with the exception of China …. Our annual production is over a million … units annually currently. The Chinese market would have the potential to almost double that.”

But getting that stamp of approval through an inspection by a Chinese delegation has, so far, proven impossible. Hawkeye Breeders’ year-long effort to get an inspection in 2014 ended up being wasted when Chinese officials unexpectedly canceled at the last minute due to concerns about Bluetongue, an insect-carried virus that’s not a threat to humans but can be problematic in sheep. The reason: the Iowa facility keeps bulls brought in from regions farther south where Bluetongue virus is more common.

David Jensen, Hawkeye Breeders Service: “It definitely sucked the wind out of our sails when they said we were no longer eligible just because of our geographical location... So, not wanting to give up, we switched our gears. We found out where we would need to actually be physically located to get China’s approval. And, again, that market is of such demand that it warranted actually building a … satellite location.”

After investing over half a million dollars in the new Wisconsin facility, which opened in late 2016, the family-owned business waited for the next visit by an inspection team, which typically happened every three years.

David Jensen, Hawkeye Breeders Service: “So, you know, three years came and went. Four years came and went and still no inspection. No word of inspection. In 2019, they said again that they were going to gear up for inspections and ….from our understanding, there was some political issues that kind of prevented this from happening. Then 2020 came and we all kinda know what happened in 2020.”

Before the COVID-19 pandemic, the political issue Jensen refers to was the trade war that began between the two nations in early 2018. Then-President Trump’s administration was trying to resolve what they called “unfair trade practices,” including concerns about intellectual property theft by China.

The Wisconsin facility, from which Hawkeye Breeders has since gained approval to export to other international markets, has become a profitable satellite regardless, with the company putting an emphasis on dairy genetics.Some experts say Chinese government officials have, in recent years, taken steps suggesting a greater willingness to work within parameters already in place in the global community.

Wendong Zhang, Iowa State University: “There are still a lot of issues for China to work through, but, if you look compared to five years ago, there is a lot more progress in this arena and the Chinese government has issued law prohibiting forced technology transfer. There’s also a lot of progress in terms of market access that, for several sectors that China no longer requires joint ventures… China is not moving backwards. China is becoming more open to the global markets and more following the global standards.”

Zhang, who has spent more than five years working at Iowa State and works on the university’s annual farmland value survey, grew up in a rural northern Chinese province. As the grandson and nephew of wheat and corn farmers, he knew about getting his hands dirty through hard work. When he travels the state of Iowa, he finds farmers have more interest in his experiences growing up in rural China.

Wendong Zhang, Iowa State University: “I have seen the transformation of my grandpa’s village, how their production has changed from wheat and corn double crops about 20 years ago to then growing table grapes. But, now, if you go to my hometown area, everyone has vegetable production in greenhouses. It’s a tremendous change.”

Zhang, who co-founded Iowa State’s China Ag Center in 2017, believes China may be adapting to global business expectations, but he still suspects tensions between the U.S. and China may worsen in the next decade. He says that as both nations search for common ground they remain leery of being too reliant on each other.

Although many political battles often have nothing to do with agriculture, he says producers are often used as pawns.

Wendong Zhang, Iowa State University: “Agricultural trade is actually one of the mutually beneficial trades that both countries will welcome because China doesn’t have enough land resources to produce soybeans and other land-intensive proteins... and the U.S. is often one of the major bulk commodity suppliers…At least at this point, both sides are trying to preserve the relationship. However, the danger of the danger of the political tensions is things could escalate.”

Although Jensen finds it frustrating turn away customers in China, he isn’t giving up just yet.

Dave Jensen, Hawkeye Breeders Service: “We’re very hopeful that something, you know, in the not-too-distant future will materialize with that market. And we’ll be able to take advantage of that as well."

By Colleen Bradford Krantz, colleen.krantz@iowapbs.org

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