TRADE NEWS TODAY: USDA RELEASES TRADE AID PROGRAM DETAILS, DEAL BROKERED WITH MEXICO
Breaking news today, all of which will impact Illinois and American corn farmers, is that U.S. Secretary of Agriculture Sonny Perdue announced the details of the $12 billion trade aid package and that a trade deal has been reached with Mexico.
Included within the $12 billion trade package is a new Agricultural Trade Program (ATP), which will offer $200 million for overseas market development. We understand that this program will:
- offer one-time funding for overseas market development programs
- be structured like the existing Market Access Program (MAP), in which IL Corn via the U.S. Grains Council has successfully participated for decades
- Require applications to be due Nov. 2 with work to start immediately
Also included within the plan is a one cent per bushel payout to corn farmers. According to a National Corn Growers Association commissioned analysis, which USDA and the Office of Management and Budget had access to, the trade disputes in question are estimated to have lowered corn prices by 44 cents per bushel for the crop grown in 2018.
This estimate equals $6.3 billion in lost value on the 81.8 million acres projected to be harvested in 2018.
Stay tuned for more information as this issue develops.
Also out of the USDA today is an announcement on trade between the United States and Mexico.
From Secretary of Agriculture Sonny Perdue: “President Trump is delivering on his promise to renegotiate the old, outdated North American Free Trade Agreement (NAFTA), making good on his pledge to strike the best deals possible for all of our economic sectors, including agriculture. The President has achieved important improvements in the agreement to enable our agricultural producers to be treated more fairly. This breakthrough demonstrates that the President’s common-sense strategy of holding trading partners accountable will produce results. President Trump and Ambassador Lighthizer, our U.S. Trade Representative, are to be congratulated for their determination, vision, and leadership.
“The agreement specifically addresses agricultural biotechnology to keep up with 21st Century innovations. And we mutually pledge to work together with Mexico to reduce trade-distorting policies, increase transparency, and ensure non-discriminatory treatment in grading of agricultural products.
“This is nothing short of a great victory for farmers and ranchers, because locking in our access to Mexican markets is critical to supporting farm income and strengthening rural communities. Mexico has historically been a great customer and partner and we are happy to have this resolved for our agricultural producers.
“We now hope that Canada will see the need to settle all of the outstanding issues between our two nations as well and restore us to a true North American Free Trade Agreement.”
Politico reports that Mexico is considering a bilateral deal but would prefer a trilateral deal with Canada as the country has often reiterated.
Mexico is the number one importer of U.S. corn, buying 12,373,252 bushels in 2018 so far at a total value of $2,245,726,771.