November 23, 2017

Congress Ramps Up Pressure Over NAFTA Process

Congress is ramping up pressure on the Trump administration over the so far uneventful NAFTA negotiations.  As the fifth round of trade talks wrap up in Mexico City this week, there have been no reported breakthroughs and stalemates seem to abound.  Agricultural policy has been a major point of contention, even to the point that U.S Commerce Secretary Ross called out the industry and its push to “do no harm” as a major cause of the delays.  The lack of any progress has forced participants to push back their Dec 31st deadline, saying no agreement is now expected before at least March of 2018.

The delays haven’t helped the political climate.  In fact, revamping NAFTA was never a popular move on Capitol Hill and now it seems as though Congress is losing patience.  A bipartisan group of senators, including several heavy hitters on the Ag Committee and all four senators from North and South Dakota, have sent a letter to Secretary Ross.  In the letter, the senators underscore the vital role agriculture plays in the U.S. and say they find it essential that Congress’s voice be heard in the process.  Further, they say they “find it imperative that before any changes are made to NAFTA, or any other free trade agreement, that economic analysis the illustrates the impact on the full supply chain of the  industries involved be shared.  As such, we request an economic analysis that examines and evaluates the impacts to crop and livestock sectors as a result of any change to NAFTA”

That letter, importantly, was also signed by Senator John Cornyn of Texas.  Cornyn is the chair of the Senate Finance subcommittee on trade and also serves as majority whip.  His home state of Texas is also expected to be one of the hardest hit economically if a talks do fall apart.  After recent NAFTA testimony in front of his subcommittee, the Senator seemed resolved in his support, saying “the administration needs to keep Congress in mind and know that lawmakers will need to approve any renegotiated NAFTA”.

Its that approval that may be strengthening Canada in the negotiations, according to experts.  Sources from that country have said that negotiators there may hold out, forcing the Trump administration to attempt to leave NAFTA and ultimately into a stalemate with Congress where nothing happens.  That resolve may be echoed in Cornyn’s other statement: “Failure is not an option”.

China Bumps Canada, Mexico Out Of Top Spot As Buyer Of Ag Goods

New numbers out this week show that China is the new number one buyer of American agricultural goods.  Fiscal year 2017 numbers show that China bought $22 billion worth of agricultural products, which is a large jump from the $19.2 billion purchased the year before. The increase meant China moved into the number one customer spot, pushing America’s NAFTA partners down a space each. Now second-place Canada purchased $20.4 billion worth of goods, a slight jump over the previous year. Number three Mexico bought six percent more goods in the fiscal year 2017, coming in at $18.6 billion.

USDA says the total number of exports jumped $10 billion dollars, coming in at $140.5 billion, the third-highest on record. Farmers produced another record corn crop and the protein sector continues to expand, so it’s going to take expanded exports to chew through the extra product that’s available.  Ag Secretary Sonny Perdue says the ag sector posted an annual trade surplus of $21.3 billion, an amazing 30 percent rise over the previous year.

Its important to remember that fiscal year measurements run September to September, so grain sales included in this number are largely the result of 2016 sales.  Exports of both corn and soybeans were stellar over that time frame, but sales so far of 2017 are running well behind schedule.  With massive amounts of carryout for both products, experts say export growth will be pivotal to improving prices.

USDA Now Accepting Applications For Trade Mission To Central America

U.S. companies have a unique opportunity to grow their food and agricultural exports to Central America’s Northern Triangle of Guatemala, El Salvador and Honduras during a USDA  trade mission February 26-March 1, 2018.

The mission will be based in Guatemala, but participants will be able to connect with potential customers from Honduras and El Salvador as well through targeted business meetings arranged by local staff from USDA’s Foreign Agricultural Service. The itinerary also includes briefings with government and industry leaders and visits to local retail outlets and food processing and handling facilities.

Why the Northern Triangle of Central America?

Central America’s Northern Triangle – Guatemala, Honduras and El Salvador – is a convenient and growing market for U.S. agricultural exports. The U.S.-Central America Free Trade Agreement (CAFTA-DR) entered into force in all three countries in 2006 and, since then, U.S. farm and food exports have more than doubled. More than 95 percent of U.S. agricultural products enjoy duty-free access under CAFTA-DR.

In 2016, Guatemala, Honduras and El Salvador imported nearly $5.9 billion of agricultural products –more than 40 percent of which came from the United States, which is the top supplier to all three countries. Throughout the region, rising GDPs and rapidly expanding urban and middle-class populations are expected to lead to continued growth in demand for food and farm products over the coming decade.

FileApplication Form

 Deadline for application submission is December 7, 2017.