GRBJ | 24 May 2019
Agribusiness leaders anxious for trade ratification
By Danielle Nelson
Frustration mounts after the U.S. government has failed to ratify the United States-Mexico-Canada Agreement.
The Agricultural Leaders of Michigan voiced concern after the three countries announced the agreement eight months ago, but they’ve yet to ratify it. The group is made up of a coalition of agricultural, commodity and agribusiness leaders.
Representatives from the Michigan Agri-business Association, Michigan Pork Producers Association, Michigan Agricultural Commodities, Greenstone Farm Credit Services, Michigan Milk Producers Association and the Michigan Soybean Association gathered in Lansing to talk about the economic urgency for the three countries to ratify the USMCA Agreement, which replaced the North American Free Trade Agreement.
Earlier this month, the United States reached a deal to remove steel and aluminum tariffs on Canada and Mexico with many lawmakers saying that was the biggest roadblock in ratifying USMCA.
The agriculture industry is one of the state’s largest revenue streams. It brings in $104.7 billion annually into the Michigan economy, per the Michigan Department of Agriculture and Rural Development. Mexico and Canada are Michigan’s top two export markets.
According to ALM, under NAFTA, exports of agricultural products to Canada and Mexico have more than quadrupled since the early 1990s. In 2017, the U.S. exported $24.7 billion in agricultural and related products to Canada and $19.5 billion to Mexico.
“With Michigan agricultural exports totaling more than $2.7 billion each year, trade is critical to our ag industry,” said Jim Byrum, president of the Michigan Agri-business Association. “The USMCA will help maintain the strong trade relationships we have with Mexico and Canada, and we urge Congress to take action to ratify the agreement.”
Mary Kelpinski, CEO of the Michigan Pork Producers Association, said there are more than 2,500 Michigan pork producers who export 27% of their pigs. She said the value of pigs produced by farmers is greater than $500 million annually.
“The USMCA will maintain valuable markets and provide industries like mine an immediate opportunity to improve trade,” she said.
Dave Armstrong, president and CEO of Greenstone Farm Credit Services, said his organization manages over $9 billion in assets and serves over 24,000 members in Michigan and northeast Wisconsin with loans, building equipment leases, and life and crop insurance. He said about 70% of U.S. farms are at a high risk of financial problems.
“The rural economy is in a recession with farm income down 50% since 2013,” he said. “Trade is key to reviving commodity prices and turning the ag economy around, which is why passing the USMCA is so important.”
Ken Nobis, senior policy adviser for the Michigan Milk Producers Association, said the USMCA agreement would help Michigan Dairy farmers get less restrictive access to Canada’s export market.
“The USMCA will have a positive effect on the dairy industry in Michigan by improving trade opportunities and increasing U.S. market access,” Nobis said. “Under the USMCA, Canada will eliminate a dairy pricing system that has disadvantaged U.S. producers.”
The Business Journal reported last fall that the agreement has two advantages for dairy farmers in Michigan: an expanded Canadian market and the elimination of Canada’s Milk classes 6 and 7. The agreement would allow for more dairy products to Canada, including fluid milk, cream, butter, skim milk powder, cheese and other dairy products.
“Export is a big part of the U.S. economy and the Michigan economy,” Byrum said. “If we don’t export agriculturally, we are not in business, quite frankly, because we have to export because we produce way more commodities here than we can ever consume.”