A look into how NSP navigated the international trade investigations into U.S. Sorghum. What had to happen, who was involved and where does the sorghum industry go from here.
As National Sorghum Producers began plans for the 2018 year, many big-ticket items were on the agenda for sorghum. Preparations for the 2018 Farm Bill were underway, the sorghum oil pathway was on its way to the Federal Register, and China was on track to reach a billion bushels imported from U.S. sorghum farmers by the end of January. On Feb. 4, NSP added another sizable task to its already extensive lineup when China launched their self-initiated anti-dumping (AD) and countervailing duty (CVD) investigations.
NSP staff, along with other industry associates, quickly went into action, working around the clock. Board members and staff held multiple meetings with Congress, the U.S. Department of Agriculture, U.S. Trade Representative, White House representatives and other officials to raise awareness and ensure sorghum growers were defended.
As NSP worked through the case, China continued their aggressive retaliation against the U.S., placing sorghum at the tip of the spear in an ongoing trade dispute. On April 17, China announced a 178.6 percent anti-dumping deposit—effectively blocking U.S. sorghum exports to China. NSP and partners in the industry, along with NSP general counsel Gary Baise and NSP’s trade law firm Hogan Lovells lead by Deen Kaplan, fully cooperated with the investigation and diligently worked to meet all legal requirements to defend sorghum growers.
In fact, roughly two weeks prior to the announcement, NSP had submitted more than 2,000 pages of legal responses demonstrating conclusively that U.S. sorghum was not dumped nor causing any injury to China. It was clear China’s tariff decision was influenced by a broader trade dialogue between our two countries.
The vigorous pace of the case was unprecedented. A process that typically takes 12-18 months had taken place in just 73 days. China’s retaliatory action against sorghum was the first real blow against U.S. agriculture in ongoing tit-for-tat trade negotiations.
Longstanding relationships with Senate Agriculture Committee Chairman Pat Roberts (R-KS) and House Agriculture Committee Chairman Mike Conaway (R-TX) and routine meetings between NSP leadership and their staff members helped establish NSP’s credibility throughout the investigation.
Through NSP’s relationship with the House Agriculture Committee, former NSP Chairman Terry Swanson, a sorghum farmer from Walsh, Colorado, was one of few farmers to meet with President Trump and Secretary Perdue early on in the Administration. This enabled NSP to put a farmer’s face with the sorghum commodity prior to China’s investigations.
Other U.S. officials including Senators Jerry Moran (R-KS) and Deb Fischer (R-NE) and Congressmen Kevin Brady (R-TX), Roger Marshall (R-KS), Jody Arrington (R-TX) and Kevin Yoder (R-KS) were also advocates for sorghum during the trade discussions. Kansas Senators Roberts and Moran, were (and continue to be) champions of sorghum throughout the entire process and repeatedly visited directly with President Trump on the issue, even taking pictures of sorghum piles into the White House for show-and-tell.
NSP leadership also met with USDA, USTR and now former Special Assistant to the President for Agriculture, Trade and Food Assistance, Ray Starling several times before any tariff announcement was made. In the meetings, NSP voiced the concerns over potential harmful action from China, making the severity of the situation known and reinforced how their support would be critical to the process should China make any decisions against U.S. sorghum.
The 178.6 percent tariff was startling, but NSP continued to press forward. When China made the announcement, there were multiple U.S. sorghum vessels en route to China, which quickly needed to be rerouted. Rallying as an industry, the U.S. Grains Council and the United Sorghum Checkoff Program began looking for new locations for those vessels alongside the U.S. grain trade.
While looking for new destinations for U.S. sorghum, the world demand for feed grains and protein remained strong. The USGC took active steps to push grain into countries such as Saudi Arabia, Morocco, Spain, Japan, Vietnam and the Philippines, which you can read more about on page 16.
NSP leadership also brought attention to other international and domestic market availabilities. NSP continued to schedule meetings in Washington, D.C., to address expanded possibilities within international food aid. In the domestic market, we encouraged the Environmental Protection Agency to approve the sorghum oil pathway to add domestic ethanol value and help ease the sting in the near term.
NSP continued to advocate on behalf of sorghum farmers to ensure fair trade policies. Our longstanding industry relationships with congressional leaders from Kansas, Texas and Nebraska were vital and enabled NSP leadership to promote sorghum’s concerns throughout the highest levels of government. Through our collaborative efforts, NSP’s petitions for trade negotiations were heard.
USDA Secretary of Agriculture Sonny Perdue was a significant champion for U.S. sorghum producers during this time. He released a statement saying there was no basis in fact of these actions and he stood united with the American sorghum industry within the same week of the preliminary anti-dumping ruling. NSP board members Don Bloss, Kendall Hodgson and James Born, along with NSP CEO Tim Lust, later met with the USDA Secretary to further discuss ongoing needs for sorghum farmers as a result of the Chinese trade situation.
A week after China’s preliminary decision, President Trump announced several staff members, including U.S. Trade Representative Robert Lighthizer, would soon travel to China for a high-level trade delegation meeting.
China announced it had terminated the anti-dumping and countervailing duty investigations into U.S. sorghum on May 18, following the trade delegation meeting. China also promised to return in full the temporary anti-dumping deposits that had been collected. NSP welcomed the announcement and the quick result, which we viewed as a win for Chinese customers and a win for America’s sorghum farmers.
“We owe a great deal of thanks to our congressional champions in both the Senate and the House, and industry partners who have donated time, resources and ensured sorghum’s trade needs were met,” NSP Legislative Committee Chairman and board director Dan Atkisson said. “We also cannot forget the farmers who committed time and transparency required by this case and stood up on behalf of the entire industry.”
NSP hoped the dismissal of these cases would reflect decreasing trade tensions between the U.S. and China. However, as trade discussions have escalated, China retaliated against U.S. imposed tariffs by placing a 25 percent tariff on multiple U.S. goods, including sorghum, on July 6. While a smaller percentage, the newly enforced 25 percent tariff continues to impact sorghum prices here at home. See page 22 for an in-depth analysis of trade’s impact on sorghum prices since February. Demand for U.S. sorghum continues, but uncertainty remains in the current trade environment.
On July 24, Secretary Perdue announced the USDA authorization of up to $12 billion to assist farmers effected by trade damages from unjustified retaliations. The short-term relief strategy aims to aid farmers as the Trump Administration works on trade deals. NSP responded with a statement saying, “We respect the Administration for following through with their promise to stand by U.S. farmers, and we look forward to working with Secretary Perdue in providing much needed funds to sorghum farmers and other producers impacted by tariffs. NSP fully supports fairer and open trade and will continue to work with officials to achieve long-term trade solutions.”