No. 1 Corn Buyer Holds Bearish Wild Card

February 13, 2017 12:00 PM

No tariffs have been imposed yet in the war of words between the administration of President Donald Trump and Mexico. But the dispute between the two countries deserves producers’ attention because of its implications for agriculture if financial or policy changes unfold, argues Jim McCormick of Allendale.

“Trade agreements that have occurred over the last 30 to 40 years have really helped out American agriculture,” McCormick tells “AgDay” host Clinton Griffiths on the Agribusiness Update segment for Monday, Feb. 13, 2017. “We sell over $1 billion worth of beef, $1 billion worth of pork, $1 billion worth of chicken to Mexico alone. They’re also our biggest corn importer. If Trump would push hard to Mexico, will they push back? And how might they push back?”

One option: Mexico could begin sourcing corn from places such as South America.

“I had a customer who said, ‘There’s no way they’ll buy South American corn. They’ll have to buy it from the U.S.’ Well, the point I like to make is we import corn from Brazil twice a year out into the East Coast,” McCormick says. “It seems crazy, but we do. Economically, think about it: You can bring corn in from the East Coast of the U.S. from a foreign country compared to bringing it in from Ohio, Indiana.”

More broadly, the Trump administration’s comments about trade also have targeted the other two nations—China and Canada—that round out the top three trade partners for the U.S. Trump has called China a currency manipulator, and he has pointed to NAFTA, which includes Canada, as one of many deals that needs to be revisited.

“It’s something that producers just need to keep an eye on,” McCormick says. “If you start hearing [about] tariffs and repercussions, the fact of the matter is that’s going to be bearish American agriculture.”   

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Spell Check

dixon, NE
3/7/2017 12:05 AM

  Floyd you can call me a moron, call me stupid or what ever you please. I have been in farming for all most fifty years. Farmed under a number of presidents. Wheather you know it or not we have a cheep food policy in the US which came out of the great deprecation developed by your liberal leaders , which is fine but US American farmers are paying the bill for it. The trade policy's we currently have are not to help American farmers but to keep cheap food in the Us we have the cheapest food of any country in the world. I think you need to wake up. Until we get a leader in this county that will Change that policy, we meaning you and me and all the rest of the US farmers will keep paying the bill through low commodity prices at the wholesale level. May be Donald Trump could change that for us US farmers and may be not we will never know unless we give him a chance, and express our concerns to him I see him as a man who will listen, and try to do what is right, I may be wrong but I'm willing to give him a chance. I am praying for him, that God be his guide and that he will seek Gods guidance, as he leads our nation, if that happens we all in this nation will come out on top an will have an opertunity to all be better off, in many ways.

hudson, WI
3/4/2017 01:24 PM

  I believe Ray doesn't understand economics 101. He's not alone in his flawed thinking. To not have trade deficits we would have to buy consumer product made in America only. Thus the price would be much higher to the consumer., So when he say 60 billion trade deficit what he is really saying is lets not import products that are able to made cheaper in other counties but rather make everything here, have the consumer pay 60 billion more. 2+2=2 Ray no zero. Have you bought any parts lately, I don't want have to pay more than they are already. Farm products are a great benefit to ALL the world not just us. This a world market and we need to get use to it. Isolationist is poor policy for our farm products. People need to stop thinking right and left and being narrow minded. Politicians lie to use daily. It time for us to start doing our own fact checking. We want to hold our children accountable but we don't hold ourselves accountable and repeat their lies. Lets all grow up and start being responsible about the facts for the campaign is over. Thank God!!!!!

anywhere, TX
3/31/2017 09:35 PM

  tell ya what Floyd, come to Texas and we can go behind the shed and discuss how un-educated farmers are.


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