Farm and commodity groups say uncertainty surrounding USMCA negotiations is creating concern across agriculture. Industry leaders warn that losing reliable access to Mexican and Canadian markets could significantly impact grain prices and farm income, while USDA officials say the administration is working to secure a stronger agreement that better serves American producers.
The ag industry is sounding the alarm over the potential of lost market access due to stalled USMCA negotiations.
Kansas Corn CEO Josh Roe says while the agreement is in effect on yearly basis, the uncertainty could compound the financial challenges already facing producers. “If we look in general coming off record export numbers and still see the dire conditions seen across most of farm country; and if we took that demand hit now, it would be absolutely devastating.”
He says studies show that the value of a bushel of corn that comes from trade contributes about $1 to prices. “If you look at a minimum there, you’d take another $1 off this grain market, more on sorghum, and it would be higher on the soybean side.”
Andy Hineman, President of the Kansas Sorghum Association, says Mexico purchased nearly half-a-million metric tons last year when demand from China slipped. “Putting our number two trading partner at risk is really scary. It leads to uncertainty and instability for our farmers.”
U.S. House Ag Committee member Sharice Davids, a Democrat from Kansas, says the lack of consistent trade hurts farmers and ranchers. “It’s less ability to plan. It’s less ability to strategize. There are concerns about making sure that we maintain strong relationships with Mexico and Canada for exports and making sure we have that for our imports as well.”
However, Acting USDA Under Secretary for Trade and Foreign Agricultural Affairs Michelle Bekkering says the administration is trying to secure a more robust agreement. “With Mexico, those conversations of course are also one-on-one. With Canada as well. We’re treating both of them with their own line of negotiations.” And, she says, the review period also allows to improve areas of the deal to help American producers.
Kansas Farm Bureau President Glen Brunkow says while he shares similar concerns, he would like to see improvements in dairy and grain grading policies.
EDITOR’S TAKE:
The USMCA review process has certainly created more than its share of anxiety over future trade relations with our neighbors to the north and the south. They also happen to be some of our most important trading partners, purchasing large quantities of U.S. farm products. It is understandable that farmers/ranchers are nervous about losing such important market access. All that said, it should be noted that such negotiations and attempts to improve the agreement do not come without tension. Optimistically, we will end up with an improved agreement that actually increases access and raises farm income in the future. Please don’t give up on selling more trucks to farmers and ranchers in your area. In fact, be sure you keep your inventory up to date on AgTruckTrader.com®, the place where they look for CAD dealers and their next truck or SUV.
