Illinois Corn supports the message of a letter sent to President Donald Trump earlier this week regarding the importance of the North American Free Trade Agreement (NAFTA). The organizations signing the letter, including the National Corn Growers Association, represent over 15 million U.S. jobs. Specific to Illinois corn, one shouldn’t forget that Mexico is our largest foreign buyer of corn.
Regarding NAFTA, the letter states:
“Together Canada, Mexico and the United States make up one of the most competitive and successful economic regions in the world. The success of this trading relationship has come largely from economic cooperation, integration, and policy alignment.
In the 20 years since NAFTA was implemented, the U.S. food and agriculture industry has become increasingly efficient and innovative—growing to support millions of jobs. The market integration provided by NAFTA has increased competitiveness in the face of a rapidly changing global economy. Although some important gaps in U.S. export access still remain, increased market access under NAFTA has been a windfall for U.S. farmers, ranchers, and food processors. U.S. food and agriculture exports to both countries have more than quadrupled, growing from $8.9 billion in 1993 to $38.6 billion in 2015.”
Illinois Corn looks forward to working with the Trump Administration to remove barriers to foreign market access and in building upon our existing trading relationships. We know that corn demand through exports is an important part of Illinois corn farmer profitability.
Here are some key points about NAFTA:
- The U.S. feed grains industry has benefitted substantially from NAFTA.
- Rising demand for feed and food has created new opportunities for intraregional trade in grains and oilseeds. Poultry and hog producers in Mexico, for instance, rely heavily on imported feedstuffs as they seek to meet their country’s growing demand for meat.
- Over the past 20 years, U.S. agricultural exports to Canada and Mexico tripled and quintupled, respectively. One in every 10 acres on American farms is planted to feed hungry Canadian and Mexicans.
- Since 1994, U.S. corn exports to these regional partners have increased more than seven-fold.
- Prior to the agreement, Mexico maintained strict controls on grains via licensing requirements and provided guaranteed prices to domestic producers of many field crops, including corn. Under NAFTA, Mexico transitioned to a system featuring duty-free trade with the U.S. and Canada and rising demand for feed and food has created new opportunities for intraregional trade in grains.
- According to the most recent numbers available from USDA, Mexico is the top market for U.S. corn while Canada ranks as the ninth largest customer.
- Mexico is also the #2 customer for U.S. distiller's dried grains with solubles (DDGS) and a leading buyer of U.S. barley and sorghum
- In the 2015/2016 marketing year, U.S. exports of corn to Mexico and Canada totaled more than 14 million metric tons, a record high in the tenure of NAFTA, valued at $2.68 billion.