UPDATE (1/29/20): President Donald Trump officially signed the U.S.-Mexico-Canada Agreement (USMCA) during a ceremony at the White House earlier today. Minnesota Corn Growers Association President Les Anderson was in attendance representing Minnesota’s 24,000 corn farmers. He was joined by National Corn Growers Association President Kevin Ross.
The nation’s corn farmers received positive trade news this week, as President Trump signed a phase one deal with China and the U.S. Senate passed the U.S. Mexico Canada Agreement (USMCA). The developments are a desperately needed bright spot for farmers after six years of low prices impacted by trade uncertainty.
First, USMCA was easily approved by the U.S. Senate today by a vote of 89-10 in a bipartisan victory for corn farmers protecting two vital export markets. Mexico and Canada continue to make up the largest, most reliable market for American corn. In 2018, 21.4 million metric tons of corn and corn co-products were exported to Mexico and Canada, valued at $4.56 billion.
Following President Trump signing the agreement, the remaining step for USMCA implementation is ratification by Canada (Mexico has already ratified the agreement). The legislative step is expected to take place later this month once the Parliament of Canada returns.
Ratification has been a priority for the Minnesota Corn Growers Association (USMCA) since the deal was signed last year.
“MCGA directors made numerous trips to Washington, and the state’s corn growers banded together to let their legislators know the importance of ratification,” MCGA President Les Anderson said. “We appreciate the work of Minnesota’s congressional delegation to bring this deal to the finish line. As we continue to have more trade certainty, we hope this will lead to a better outlook for the ag community moving forward.”
The phase one agreement signed with China on Wednesday was the second significant trade development to reduce market uncertainty this week.
The agreement included increased agricultural purchase commitments from China, including grains, distiller’s dried grains with solubles (DDGS) and ethanol, totaling at least $80 billion over the next two years. China’s 2020 purchase commitment is $36.5 billion, which is $12.5 billion above the 2017 baseline. In 2021, the commitment rises to $43.5 million, which is $19.5 billion more than 2017.
China also agreed to structural reforms, including those related to agricultural biotechnology, and sanitary and phytosanitary measures, which have the potential to increase market access for U.S. ag products.
The signing of the phase one agreement with China is a tremendous step in the right direction to restoring trade relationships between the two countries and the purchase commitments detailed in the agreement provide a much-needed lift for Minnesota’s corn farmers.
MCGA will work its national partners, including the U.S. Grains Council, to ensure purchase targets are hit in the years ahead.