Mexico, Canada trade continues to grow, despite uncertainty

(Granjas Carroll, the second-largest pork producer in Mexico, was one of a number of Mexican trade delegations that recently visited Minnesota)

Despite uncertainty surrounding the U.S.-Mexico-Canada Agreement (USMCA), trade between Canada and Mexico flourished during the 2018/2019 marketing year. Both countries set new records for purchases of grain from American suppliers, according to the U.S. Grains Council.

Trade continues to grow with both countries thanks in large part to the market access provided by the existing North American Free Trade Agreement (NAFTA). Grains in all forms (GIAF) exports have more than tripled to Mexico since NAFTA, with Canada increasing more than 500 percent since the agreement was in place.

Corn exports to Mexico, which is already the largest market for American corn, surpassed 16 million metric tons (634 million bushels) during the recent marketing year, setting a new record high. Canada also increased their U.S. corn purchase during the 2018/2019 marketing year, importing 2.42 million metric tons (95.3 million bushels).

DDGS and ethanol have also experienced strong export growth in both countries. Last year, Canada imported 331 million gallons of ethanol, equivalent to 117 million bushels in corn, and slightly increased its purchase of U.S. DDGS to 667,000 metric tons. Mexico remained the largest buyer of DDGS, importing more than 2 million metric tons during the 2018/2019 marketing year. Mexico also brought more than 33 million gallons across the border, a nearly 20 percent increase from the year prior.

Ratification of USMCA, which would update NAFTA, continues to be a top priority for the Minnesota Corn Growers Association (MCGA). Grassroots engagement by MCGA membership and in-person Capitol Hill visits by MCGA directors recently raised awareness of the importance of the agreement in Washington D.C.

Positive signs have emerged from policy leaders in Washington. U.S. House Speaker Nancy Pelosi recently said a vote in the House on USMCA is imminent. USMCA ratification before the end of the year would bring much-needed certainty to corn farmers in Minnesota and beyond.

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