By Tom Sleight, President and CEO, U.S. Grains Council
Some days don’t go how you expect them to go.
I have had many of those in my career, but few like [last] Wednesday, when we thought for 12 hours that we could soon see action from our own government to withdraw the United States from the North American Free Trade Agreement (NAFTA).
Immediately and obviously we – and the larger agriculture community – knew how critical this situation could be.
Mexico is our largest corn export market, taking 524.4 million bushels (13.3 million metric tons) of corn worth $2.5 billion last marketing year, in addition to 23.86 million bushels (606,127 metric tons) of sorghum.
Mexico is also a top market for U.S. barley and U.S. distiller’s dried grains with solubles (DDGS). Canada is the top export market for U.S. ethanol. Mexico and Canada are the #2 and #4 markets for U.S. pork. Mexico is the top export market for U.S. dairy. In short, NAFTA is critical for U.S. grain producers, traders and exporters regardless of what form the grain takes when it crosses our borders.
We have worked actively with customers in both of these large and loyal grain markets for decades, taking advantage of geography, shared goals for our region and, especially, the favorable market access we have under NAFTA.
Our buyers in both countries want to know we are the stable, reliable supplier we have always been. They also want to know that when they shake our hands and agree to buy, they are doing so as both customers and friends.
I have worked in market development longer than most of my staff have been alive, and I have seen firsthand how easily market share can slip away and how much of trade only happens face-to-face, based on mutual relationships and trust.
By the end of the day Wednesday, President Donald Trump had personally engaged with his counterparts in Mexico and Canada and agreed to come to the negotiating table. We were relieved to hear this news and strongly support his course of action. We look forward to participating in the discussions about what can be even better in a modernized NAFTA, in cooperation with our sister organizations working in domestic policy and our members.
But make no mistake: NAFTA is critical to grain farmers’ profitability right now. There are no alternate markets for the 17.3 million metric tons – 681 million bushels – of corn sold to Mexico and Canada last marketing year at current prices, and farmers cannot afford for prices to go any lower.
Whether in China, Frontier Asia, the Middle East or Central America, our organization is focused on demand growth and market access. We are aggressively pursuing new and larger markets for the grains our farmers so abundantly produce and our export industry so efficiently delivers to global customers. That means advocating on a daily basis for our customers, our constituents and the good trade can do in the world.
In this business, you learn to expect the unexpected and prepare for all eventualities. Losing access to our top market cannot be one of those.