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Could French farmer struggles impact U.S. ag?

A RaboBank analyst based in France tells Brownfield it’s difficult to say how the recent financial struggles of French farmers impacts U.S. agriculture.

While grain and oilseed markets are depressed globally, Stefan Vogel says a poor 2016 crop in France has resulted in farm incomes there falling 15 percent in the last year.

In addition, uncertainty surrounding an upcoming presidential election and instability within the European Union following Brexit have French farmers concerned.

“Depending on how the currency moves in the EU, that could have an impact on U.S. exports and basically help or make things more difficult for U.S. exporters depending on which direction the political elections will go.”

Vogel says France is a strong competitor for U.S. pork and wheat exports, but the EU—which France remains a member of—is also an importer of certain American ag products.

“Be it soybeans, for example.  Again, currency will be the key driver.”

The proposed Transatlantic Trade and Investment Partnership (T-TIP) is another variable that could impact both U.S. and French farmers.

“This (deal) would most likely help U.S. farmers to more (easily) move some of their goods into the European Union, and if this trade agreement does not come into play the situation will remain as-is and most likely make trade for U.S. farmers and exporters more difficult into the European Union.”

T-TIP negotiations began in 2014 but President Trump has indicated his administration will move away from these types of multilateral agreements.

Vogel says the 2017 growing season in France has been promising, and the expectation is for grain supplies to be much better than last year.