The U.S. Senate and House have signed the United States-Mexico-Canada Agreement, effectively replacing the North America Free Trade Agreement.
Some improvements were made, but for agriculture, it’s a failed farm policy again. Dairy producers got only access to 3.6% of the Canadian Class 7 dairy market, which allows farmers to compete in sales of the protein-rich part of milk, called the skim, to Canadian dairies for use in making cheese and yogurt.
The day the agreement was passed by the House of Representatives milk prices crashed. That sounds like the best deal for whom? Prices have come back some, but the promise to improve dairy producers’ bottom line is far too little and way too late.
Milk giants Dean Foods and Borden Dairy have declared bankruptcy. Wisconsin has lost 818 dairy farms, or 10% of its dairy farms. In the last decade, the state has lost 44% of the farms.
Cattlemen are not faring much better. We have lost a quarter of our American cattle producers since NAFTA was adopted. America’s herd has lost almost 7 million cattle, and the country eliminated 25% of livestock auction barns, 48 meatpacking plants and 75% of all cattle feedlots. The U.S. also has a $1.4 billion annual deficit in the trade of cattle and beef with Canada and Mexico.
Beef exports to Canada, the fourth-largest U.S. export market, are down 11.3% this year, while imports of beef from Canada are up 8%. Canada, the No. 1 foreign supplier of beef to the U.S., stands at 27.7% of America’s total beef imports.
Mexico is the third-largest foreign supplier of beef to the United States. U.S. beef exports to Mexico are down 3.5% while imports of beef from Mexico are up 14%. Mexico exported 1.3 million feeder cattle to the U.S. — the largest number in 14 years. Mexican feeders sold for $200 less than U.S.-sourced feeders. This is especially important to Missouri cattle producers as Missouri is the No. 2 state for cow/calf production. The profit per pair was $438 in 2015, and this year, profit is projected to drop below $138.
Because the new North American free trade agreement involves the two countries that caused Congress to repeal country-of-origin labeling, American negotiators should have taken the opportunity to raise that subject anew. Mandatory country-of-origin labeling was implemented in 2009 and led to a steady increase in feedlot cattle until its repeal in 2015. The repeal saw a 34% drop in feedlot cattle prices in one year.
Fifty family farm groups sent a letter asking for reinstatement of country-of-origin labeling, the best promotional tool for independent cattle producers and the best educational tool for consumers. Some of these groups include National Family Farm Coalition, Farm Aid, R-CALF and Missouri Rural Crisis Center.
Absent are the National Cattleman’s Beef Association and the state affiliate Missouri Cattlemen’s Association and Farm Bureau. Those groups benefit from beef checkoff taxes charged on U.S. beef producers and from imported beef competing with U.S. producers. The two groups collect the same dollars from foreign cattle and beef as from U.S. beef producers. The more imports the better for them, regardless of the loss for U.S. producers.