It seems more likely the structure of farm subsidies will continue to encourage American farmers to produce more. That will provide domestic livestock producers and grain exporters reliable and ample supplies of affordable grain. The fact those supplies will be government subsidized is already one source of complaint by trading partners.
Another and more current trade grievance arises from the quotas the Bush administration has placed on foreign steel imports. The first response to the quotas has been levied on a sizable U.S. agricultural export sector, and the impact of the response could be far-reaching.
The Russian ban on U.S. poultry products is now nearing two weeks. Russian officials have demanded renegotiation of a 1996 trade agreement on grounds the U-S is not holding up its end of the deal. Publically, the ban is due to antibiotics in chicken feed, "dirty" meat, and faulty or non-existent documentation. U-S officials are hard at work in Moscow attempting to convince the Russian veterinary ministry of the scientific safety of American production practices. Hindering the U-S argument is salmonella. Russian testing has uncovered the pathogen in at least 16 loads of meat.
Russian officials have declared they will not lift the ban until their demands are met. Secretary of agriculture Ann Veneman has said the discussion is at an impasse.
Neither the U-S or Russia is citing U-S tariffs on steel as a reason for the poultry ban, but evidence is mounting that the two events may not be completely independent. Economic losses due to the poultry ban will cost roughly 600 million dollars a year, about the same amount as the steel tariffs. And, this week, the former Soviet republics of Kyrgyzstan and Moldova announced plans to ban U-S poultry citing the same health concerns as Russia. And, like Russia, both are exporters of steel to the U-S.
Regardless of the reasons for the ban, the loss of the largest U-S chicken export market is likely to have widespread impact. Retail chicken prices in Washington D-C plummeted due to a sudden ban-induced product glut. Dropping prices at the store could mean lower prices for producers in the 38 states who raise the birds. Continued price pressures could cause production to fall off, causing the feed market to shrink. The ripple effect of a long drawn out ban would likely cause grain markets to sag.