Work will begin soon to regain market share in Colombia that was lost to other countries that beat the U.S. to free trade agreements with that South American customer. That’s according to Wendell Shauman, Chairman of the US Grains Council.
“It’s a market that should come back to us quickly,” Shauman told Brownfield Thursday. “The problem you have, it’s like any other business and business relationship, they’ve developed relationships over the last year to year-and-a-half with other suppliers and we’re going to have to go back and try and win that business back, and that will be the immediate challenge for us; we’ll be down there probably within two weeks to start that process.”
Colombia switched grain suppliers because of a competitor’s lower price. Shauman says Colombia liked doing business with U.S. grain growers, but they could buy more inexpensively from suppliers with whom they had free trade agreements. That lower price was because of the difference in tariffs.
“We will be lower priced now,” said Shauman, who farms at Kirkwood, Illinois. “Once that free trade agreement passed, our tariff rate goes to zero and there’s also a [price] band system they used over there; that also goes away, plus we have the advantage of lower freight going in, so we will be the low-cost provider now.”
Provisions of the Colombia Free Trade Agreement take effect only after ratification by Colombia’s government, which is anticipated.
To put it in perspective, Shauman says other markets are bigger for U.S. grain growers, but these agreements will mean improvements in exports that have been years in coming.