Trade agreement with Mexico and Canada big news for Nebraska farmers and ranchers

LINCOLN - Nebraska agricultural organizations, along with Gov. Pete Ricketts and University of Nebraska-Lincoln Chancellor Ronnie Green, on Wednesday urged the U.S. House of Representatives to pass the United States-Mexico-Canada Agreement (USMCA) as soon as possible to bring producers some surety in what has been a tumultuous year when it comes to weather, income and trade.

Canada and Mexico are Nebraska’s top two trade partners. Agricultural trade between the two neighboring nations represented a more than $3.5 billion trade opportunity last year.

After President Trump was elected president, his administration voided the 20-year-old North American Free Trade Agreement in favor of a new agreement. A new agreement was reached between the three countries, but has yet to be ratified by the House of Representatives.

On Wednesday, Sept. 11, a news conference was held at Husker Harvest Days. Speaking were Ricketts, Green and representatives of Nebraska’s crop and livestock organizations. Nebraska Farm Bureau organized the event.

The ag leaders emphasized the critical importance of the USMCA deal. Mexico and Canada account for more than 21 percent of Nebraska’s total agriculture exports. Agriculture trade with the two nations also supports nearly 54,000 Nebraska jobs.

According to the gathered state ag leaders, the new deal would maintain market access for Nebraska commodities such as corn, soybeans, beef and pork, while improving access for Nebraska wheat and dairy products. The deal also would update the former agreement to address agriculture biotechnology to support innovation and reduce trade-distorting policies.

In addition, they said that USMCA creates a more rigorous process for addressing trade-distorting geological indicators for agriculture products, and strengthens science-based measures to protect human, animal and plant health while improving the flow of trade.

“A combination of flooding, low commodity prices and trade negotiations have made for a very tough time for agriculture recently,” Ricketts said. “The U.S.-Mexico-Canada Agreement is critical for our country and growing key trade relationships. Now it’s time for Congress to step up and do their part by approving the USMCA.”

According to the U.S. Census Department, despite a lack of a trade agreement between the three countries. Nebraska’s share of trade from Mexico and Canada has increased and represents nearly 44 percent of all foreign trade. In 2018, trade with Canada and Mexico, combined, increased by more than 25 percent from the previous year.

Ricketts said trade is an important component to farm and ranch income. He recently returned from a trade mission to Vietnam and Japan, which are among Nebraska’s top 10 trade partners.

He said Nebraska’s ag trade with Vietnam tripled last year. The U.S. and Japan are working on a trade agreement, which Ricketts said would be beneficial to state producers.

Ricketts said Mexico and Canada each buy more than $1 billion in products from the state annually.

“Mexico is our top destination for things like corn, wheat and dairy and No. 2 for soybeans, pork and dairy,” he said.

Ricketts said Mexico is also Nebraska’s second top destination for prepared foods and pet foods.

“These are top markets for us,” he said. “That is why it is important that we get USMCA ratified.”

With Congress returning from the August recess, the Nebraska leaders urged swift action to secure the USMCA deal.

Dan Nerud, Nebraska Corn Growers Association president, said Mexico is Nebraska’s top customer for corn and Canada is its second-best trading partner for ethanol.

“Once distillers grains (a byproduct of ethanol production), livestock and other agricultural commodities start getting added into the mix, it’s easy to see why USMCA is so important to Nebraska’s farmers and ranchers,” Nerud said.

Von Johnson of the Nebraska Wheat Board board of directors said Mexico is one of the largest purchasers of both U.S. and Nebraska wheat.

“A fully implemented USMCA would greatly benefit our state’s wheat farmers,” Johnson said.

Robert Johnston, Nebraska Soybean Association president, said over the last 25 years, U.S. food and ag exports to Canada and Mexico have more than quadrupled under NAFTA.

“Mexico is the No. 2 buyer of Nebraska soybeans and soybean products,” Johnston said.

Both state pork and cattle producers also echoed the others about the importance of trade with Canada and Mexico.

“In today’s trade environment, the passage of the USMCA is of great importance. With trade equalization moving forward with Japan and other booming markets around the world, the passage of USMCA would increase the momentum to trade with other countries and boost all sectors of our agricultural economy,” said Tim Chancellor of the Nebraska Pork Producers Association.

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