The U.S. agriculture lobby seems to be breathing a sigh of relief after the White House walked back comments about the future of the North American Free Trade Agreement (NAFTA).
Farm groups went into panic mode when Wednesday it appeared an executive order to withdraw NAFTA was imminent.
As Thursday arrived, the administration seemed to back off from withdrawing. Instead, the U.S. could renegotiate with Canada and Mexico.
President Trump backed away those statements following “pleasant and productive” conversations with Canadian and Mexican leaders. Before his late-night announcement, agriculture groups acted quickly, calling for NAFTA to be maintained.
John Keifner, a farmer from Manhattan, Ill., has a planter in the field but trade on his mind.
“We’re definitely looking at lower commodity prices, and we’re still looking at high inputs,” said Keifner. “We need every export, consumption of bushels we produce [to be exported].”
Kiefner was upset when he heard news the White House was potentially considering pulling out of NAFTA. He wondered what would happen to grain prices since Mexico is the number one importer of U.S. corn. He wasn’t the only one with concerns.
“We said to wait a second and that there’s a lot to lose,” said Tom Sleight, president and CEO of the U.S. Grains Council. “We have a huge market for U.S. agriculture. Mexico is the number two [market] for U.S. sorghum and our number one market for U.S. barley. For DDGs, it’s our number two market.”
The U.S. Grains Council is one of many agriculture groups calling for a pause, saying there’s a big difference between withdrawing and modernizing the deal. Other agriculture groups responded too.
The National Pork Producers Council (NPPC) called it financially devastating.
In a release, the NPPC stated, “Mexico and Canada are now our No. 2 and No. 4 markets, so we absolutely must not have any disruptions to U.S. pork exports there…Abandoning NAFTA and going back to pre-NAFTA tariffs would be financially devastating to U.S. pork producers.”
The National Corn Growers Association (NCGA) said Mexico and Canada are markets they’ll never recover.
In a release, the NCGA stated, “Withdrawing from NAFTA would be disastrous for American agriculture. We cannot disrupt trade with two of our top trade partners and allies. This decision will cost America’s farmers and ranchers markets that we will never recover.”
Sleight says talk about Mexico importing majority of its grain from South America has quieted down, but it was his biggest worry when he heard the potential NAFTA news.
“I don’t think you’ll see Mexico stop buying from the United States,” said Sleight. “If you see a 10 percent drop in purchases or a 15 percent drop, you’ll see a first impact on internal basis prices softening. You’ll see problems in terms of where else we’re going to take grain and all of that comes into play.”
“We need our demand because obviously, we like to plant and we like to grow a lot of corn and soybeans,” Keifner.
As farmers like Kiefner plant crops in 2017, they’re counting on continuing demand come harvest.
Sleight says if NAFTA is renegotiated, there’s not a whole lot he’d like to change. If he had a “wish list,” it would be updates on biotech and phytosanitary agreements.