A while ago we were talking about some of the changes the Trump administration is bringing to our world. Most of what we talked about were beneficial to agriculture, and government is obviously moving to be more business-friendly. But there are some storm clouds gathering, and we may be seeing some real problems ahead for ag producers.
First, it’s concerning that the President’s first budget has some very serious cuts that would drastically affect farming interests. The budget has been blasted by several national farm groups. The USA Rice Federation said: “Trump budget declares war on agriculture.” The National Cotton Council said that the president’s budget was “extremely concerning”. The American Farm Bureau Federation said “It would gut federal crop insurance, drastically reshape voluntary conservation programs and negatively impact consumer confidence in critical meat and poultry inspection.”
Fortunately for these important Ag interests, Presidential budgets seldom survive their first meeting with congress. Not many of the cuts are likely to happen, at least not now, but they do show Mr. Trump’s hand. He may not be the friend of agriculture he seemed to be during the campaign.
But even more threatening than his budget is Trump’s desire to rewrite NAFTA. Coupled with his treatment of Mexico, a rewrite of those trade rules could be very damaging to our exports. Ag losses could be substantial.
Is it possible the President doesn’t understand just how big of a partner Mexico has become with American agriculture? Due to NAFTA, China, Canada and Mexico are the United States’ top trading partners. The USDA estimates agriculture exports to Mexico accounts to 20-percent of farm income for US producers.
And, while Mexico has been a good customer for US goods, Trump’s continued threat to make Mexico pay for his border wall has enraged Mexican officials. These officials are threatening to create new deals with other nations to replace existing trade with us. Since March, in fact, Mexican trade officials have been talking with several other countries that could provide the grains, cotton, and other agricultural products that we currently ship to them. It’s concerning enough that Secretary of Agriculture Sonny Perdue asked the administration to soften its approach to NAFTA.
We sincerely hope the new administration is listening.
I’m Len Wilcox and that’s the Western View from AgNet West.