Simplot CEO: “We believe in free trade.”
The ongoing trade battle between the United States and China threatens the stability of American farms and threatens Idaho’s leading agricultural business, the CEO of the J.R. Simplot Co. says.
Garrett Lofto, 50, who became the Boise agribusiness’s top executive a year ago, told a Boise audience that rising tariffs jeopardize longstanding relationships and could drive customers away.
“The American farmer is getting hurt,” Lofto told about 230 people Tuesday at a Boise Metro Chamber of Commerce luncheon. “The big concern long-term is: Have we just taken our largest customer and shipped them over to our competitors in other countries?”
Simplot operates several potato processing plants in China, grows forage crops and sells turf seed there. The company does business in more than 60 countries, Lofto said. Simplot employs 11,000 people worldwide and 2,400 in Idaho, including 900 at its Downtown Boise headquarters.
Last month, the Trump administration more than doubled tariffs on billions of dollars of Chinese imports. President Donald Trump imposed 25 percent tariffs on $250 billion in Chinese imports. The tariffs were increased from 10 percent after trade talks stalled, the Associated Press reported.
By the end of last year, American businesses and consumers were paying $3 billion a month in added import taxes, according to a study released in March by the Federal Reserve Bank of New York and Columbia and Princeton universities.
Last year, Fitch Ratings, a credit rating service, called Idaho the state most affected by the trade war between the U.S. and China. Potatoes have not been affected so far by China’s retaliatory tariff increases, dairy products and hay are.
Idaho was one of four states where bilateral trade with China is 2 percent or more of state gross domestic product. The others are California, Tennessee and Georgia.
“There’s a lot of product going in and a lot of product going out,” Lofto said.
But he did not call for Trump to stop imposing tariffs. At Simplot, “we’re trying to make sure there’s no unfair trade practices.”
Simplot is also concerned about the possible impact of Trump’s plan next week to impose a 5 percent tariff on all Mexican goods entering the United State. The duty would increase by 5 percent every month until it reaches 25 percent in October if Mexico does not act to prevent migrants coming over the border into the United States.
A Simplot subsidiary headquartered in Mexico City sells potatoes, vegetables and other frozen products throughout Latin America. And Marbran, a joint venture between Simplot and Mexican partners, operates two vegetable processing plants in the state of Guanajuato, whose products are sold in the U.S., Canada, Europe and Japan.
How Lofto joined Simplot
Lofto grew up on a farm in southern Manitoba, Canada. He went to work for Simplot in 1992 as a crop adviser in Manitoba. He said he was working an internship with another company when he was recruited by Simplot.
He told the recruiter he wasn’t available because he needed to go home for several weeks to plant crops at his family’s farm, after his father became ill and required heart bypass surgery.
“He looked me straight in the eyes and said, ‘Garrett, do whatever you need to do to take care of your family and then come to work,’” Lofto told the audience. “I can tell you right at that moment, I said ‘This is the company I want to work for.’”
He spent nine years as president of Simplot’s AgriBusiness Group before being named CEO last year. He succeeded Bill Whitacre, who retired after 18 years at the helm.