Agriculture Trade: A Reason for Optimism in 2020

December 11, 2020

Agriculture Trade: A Reason for Optimism in 2020

Dec 11, 2020

Key Issues:Trade

This month we are looking back at some of the accomplishments and success stories from 2020. This story is an example of many we will be highlighting throughout the month.

 

In late January 2020, the U.S.-Mexico-Canada Agreement, or USMCA, was signed into law by President Trump at a White House ceremony attended by NCGA leaders. This monumental event set the stage for positive trade developments for corn growers in 2020.

 

The signing ceremony was the culmination of nearly two years of negotiations and ratification between the three countries. Following the initial signing November 30, 2018, the United States ratified USMCA on January 29, 2020, followed by Canada on March 13 and Mexico on April 3.

 

NCGA endorsed USMCA at Commodity Classic 2019 and declared the trade deal the organization’s top legislative priority for the year. Corn farmers submitted more than 1300 comments in support of USMCA.

 

Mexico and Canada are the U.S. corn industry’s largest, most reliable market. Since NAFTA, U.S. ag exports have tripled to Canada and quintupled to Mexico. These exports have a significant economic impact, producing $5.79 billion in economic activity, supporting 36,480 jobs and 300,000 farms. USMCA is a big win for America’s farmers, rural communities, and the American economy as a whole.

 

The USMCA ratification came on the heels of a partial agreement between the United States and Japan being signed in late 2019. Japan has been a top trading partner, buying more than 13 million MT of corn during the September 1, 2018 - August 31, 2019 marketing year. Japan is also a high-value market for the U.S. livestock industry, the top purchaser of U.S. beef and beef products and number three purchaser of U.S. pork and pork products, therefore also a major purchaser of U.S. corn through exported meats. The newly minted agreement will provide stability in the corn market and builds upon our strong trading relationship with Japan. Moving forward, NCGA will seek additional negotiations with Japan to address sanitary and phytosanitary (SPS) measures and other non-tariff issues.

 

2020 also brought significant purchases of U.S. corn by China. China has made more than 11 million metric tons of corn purchases from the United States in the 2020/2021 marketing year. At this point, China is our industry’s top customer for the year. NCGA is pleased with the pace of purchases, though we are still holding out hope that we’ll start to see ethanol and DDGS purchases as well.

 

For generations, America's farmers and ranchers have built strong trading relationships to help maintain a competitive edge in the global economy and bolster job creation across the United States. While corn farmers celebrated agreements to secure the future of U.S. trading relationships in 2020, there are still new growth opportunities for U.S. corn and corn products around the globe that we will work to capture.

 

NCGA will continue to advocate for new trade agreements that offer new growth opportunities for America’s corn farmers.