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United States may be heading toward trade “hangover”

Photo Courtesy of Iowa State University Extension

The Soil Management and Land Valuation Conference was held Wednesday at Iowa State University in Ames. One of the panels talked about the growing hog industry in Iowa and how it ties in with land value. However, the success of the pork market is hanging on international trade.

You may wonder how the strength of hog production fits in with land value. If you look at the graphic above, you will see the highest counties for land value are also the strongest in pork production. Producers are bidding up land prices to secure areas to build facilities.

Pork production is good in Iowa. Dr. Dermott Hayes, an Iowa State University economist says that even though production is strong, we really depend on exports to consume the production increase.

Hayes says that we need to be opening new markets. However, we are in the process of closing them. He says the future is very frightening.

Hayes thinks we may have done irreparable harm to our trading capabilities.

Hayes had the best analogy to describe the current trade situation. It is like being at a party. It is 1:30 in the morning. You might still be having fun, but the party is coming to an end and the hangover is on its way. However, the rumored deal between the US and China concerning ZTE, is like finding an after-hours place that is still open.