Even though Kentucky’s first-ever agricultural trade mission was eight months in the making, no one would have blamed the state’s trade commission for delaying last week’s five-day trek to Ontario until the air cleared of anti-Canadian rhetoric from U.S. President Donald Trump.
After all, not only are trade tensions high, but Kentucky is as pro-Trump a state as they come. Only two of its 120 counties did not vote for Trump in the 2016 U.S. federal election. It’s understandable that Kentucky politicians and business leaders might be edgy about toasting their counterparts in a country their president has repeatedly vowed to punish with huge tariffs.
But politics are one thing. Business and trade are another, and they’re critical to Kentucky – just like its relationship with Canada.
According to the state’s chamber of commerce, trade supports 540,000 jobs in Kentucky. Many of those jobs are the result of connections with Canada. Last year, Canada accounted for one-quarter of the state’s record $30.9 billion in exports.
Among the provinces, Ontario is Kentucky’s leading agricultural product export market. In 2017, the state sent $264-million worth of processed food and beverages, bourbon, horses, and forest products our way.
“Whether it is automobiles and auto parts, agricultural commodities, aerospace products, or our bourbon moving north, Kentucky is supplying important products to the Ontario economy,” Dave Adkisson, president and CEO of the Kentucky chamber, said earlier this year, as NAFTA negotiations were developing. Indeed, in 2016, Kentucky was among the top 10 states exporting into Ontario.
And going the other way, Ontario realized a huge spike in exports to Kentucky in 2016, hitting $3.5 billion, which was about 65 per cent of the total exports from Canada to that state. Auto parts were a big part of that amount.
Kentucky, known world over for Kentucky Fried Chicken, is a superpower for poultry production. Last year, poultry accounted for a full 20 per cent of its $5.6 billion in farm gate receipts. That’s more than any other commodity (horses were second, at 18 per cent), and production has been on the rise.
Helping finding markets for all those birds is a priority for the state’s ag commissioner Ryan Quarles, who led last week’s delegation to Ontario. And there’s no question his state is looking for deeper and long-lasting trade relations.
Says Quarles: “I believe access to Canadian markets is a major trade objective.”
That’s why, from his delegation’s perspective, it was the ideal time to be in Ontario — to develop new trade relationships and reaffirm existing ones, in the face of potential change.
“The timing couldn’t be better to have a presence in Ontario, given the potential changes coming,” Quarles said, following an afternoon-long information exchange Wednesday in Guelph between faculty members from the University of Guelph and from the University of Kentucky and Kentucky State University. “It’s coincidental, but it’s a powerful message that we showed up at this time. Ontario and Kentucky have more in common than we are different. We’re good neighbours, and our governments both want the best deals for our agricultural communities.”
To him, that means supporting U.S. trade negotiators intent on updating NAFTA and expanding trade – in both directions.
“Our governments both have competent people at the negotiating table,” he said, adding that U.S. ambassador to Canada Kelly Craft is native to rural Kentucky and understands agriculture. “We’ll be good trading partners regardless of the outcome.”
One of the long-standing relationships here involves Kentucky-based Alltech. The company celebrated its 30-year anniversary in Canada with the delegation early Thursday evening, at its Canadian headquarters at Guelph.
Prior to the event, Alltech president Mark Lyons acknowledged the gravity of the trade discussions. But like the commissioner, he’s optimistic about the future.
“Pragmatically, it will work out,” he predicts. “On the matter of access, the question is whether there is a way to do it without undermining Canadian agriculture. Where’s the compromise?”
At the academic presentations, researchers noted most agricultural goods now move tariff free between Ontario and Kentucky. The border, they say, is not closed for trade.
“We’re getting caught up on some things,” says Quarles, “but we have a lot of advantages being neighbours.”