Dairy Exports to Mexico Good For U.S.

July 12, 2010 05:45 AM
 

The North American Free Trade Agreement (NAFTA) has been contentious since it was first proposed. Before its passage opponents argued it would lead to jobs lost to Mexico, while its proponents argued it would open markets for exports.

Without evaluating NAFTA overall, for dairy it is an unambiguous gain. The two columns below show the last 20 years of exports of dairy products to Mexico and cheese exports to Mexico.

In both, it is obvious that Mexico is a much bigger customer today than before NAFTA. No doubt other factors, such as higher incomes and population growth, have contributed to this export growth, but a better trade climate is a key factor.

The downturn in 2009 was due to lower prices, not fewer exports. The charts for Canada
would look similar, but at a lower level. Of course, Canada has a much smaller population and a more protected dairy industry.

Year                Thousand metric                     $ Value (millions,  
                       Tons of cheese                         deflated to 2009)
1990                1.8269                                &​nbsp;               $83
1991                3.2442                                         &n​bsp;      169
1992                5.9090                         &nb​sp;                      217
1993                7.2175                                  &nbs​p;             333
1994                9.9634                                            ​;    239
1995                4.6344                            ​                    163
1996                4.7657                                     &​nbsp;          131
1997                5.5472                                              &n​bsp; 210
1998                6.1852                              &nb​sp;                 207
1999                5.0896                                       &nbs​p;        199
2000                9.9790                                                196
2001                16.2988                                 ​;              269
2002                14.8557                                           ​;    232
2003                16.1473                            ​;                   291
2004                21.3526                                      ​;         389
2005                17.5115                                               517
2006                24.4081                                 ​;              465
2007                33.5880                                           ​;    763
2008                36.9553                            ​;                   804
2009                40.1104                                      ​;         640
2009                40.1104                                               640
Source: USDA 

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