President Trump Notes Farmers Will Benefit Within U.S. Market from Strategic Price Advantage

Sundance reporting for CTH 

As President Trump outlined the goals and objectives of the tariffs during his address to congress, President Trump noted how the American farmer will no longer have to compete unfairly within the U.S market against cheap imported food products.

President Trump notes U.S. food prices are positioned for major supply-demand changes that will benefit all American consumers.  What President Trump states in his speech to congress, is the reality we experienced in 2018/2019 as the result of national agriculture supply. WATCH:

This is what happens when the American food supply equation is modified to focus on domestic production to the benefit of domestic consumers.   The food supply chain will shift, slowly at first and then ultimately by around Thanksgiving of this year (fall harvest) we will see major price drops in the American food basket.

There are going to be major opposition forces, notably related to decades of Big Ag exfiltration, screaming that U.S. consumers will see higher prices.  However, as previously experienced/outlined these claims are entirely false. We will see major drops in food prices as a result of a more balanced U.S production-import/export dynamic.

In the short term, there will be some supply chain disruption as the import equation (total cost of goods) changes to reflect the tariff impact.  However, long term, we will see (example citrus) farm products returning to FL/CA farm production from Mexico.

Generally speaking, about 50% of the USA bulk food system is ‘one full harvest’ ahead of demand.  Grain silos, frozen product and processed food stuffs are generally a full harvest ahead.  Ex. the Frozen turkey you purchase in November is a product outcome of a production process that takes place all year. Canned foods, dried foods, spices and other derivatives follow the same supply chain background.  The length of this process is approximately 6 months.

On the fresh food side (think in terms of the perimeter of the grocery store), the supply chain is thin and holds less inventory in the supply system; the flow from field to fork is much faster.  Fresh seasonal foods come/go as this supply chain reflects the seasonal harvests – with a portion of those fresh products also entering the processed space as ingredients.

Our sunbelt farmers can produce everything that is imported from Mexico and central America, an import tariff resets the price structure permitting them to enter the production system with organic profits.  It may take a little time for the reset of pricing to travel to new fields and then ultimately to our forks, but it will happen if the USA holds strong in support of the rebalancing.