US Farmers Look for Economic Boost From NAFTA Negotiations

Ken Beck characterizes his life as a farmer in the U.S. right now as a gamble.

“Risky at best,” he told VOA. “There is no money in this game anymore.”

Beck says he is entering a fifth year of losing money, due in part to lower corn and soy prices, along with high input costs for fertilizer and seed. 

But he says there is something the U.S. government can do to help.

“Trade. Which is under attack right now.”

The Trump administration’s decision to withdraw from the Trans Pacific Partnership, or TPP agreement, earlier this year erased Beck’s hope for increased demand, and ultimately a boost in prices for his corn and soybeans.

That is why he now is closely watching the U.S. government’s efforts to renegotiate the North American Free Trade Agreement, or NAFTA, with Canada and Mexico.

Campaign promises

Renegotiating NAFTA fulfills a campaign promise made by President Donald Trump. While much of the focus is on manufacturing jobs, the original NAFTA agreement, signed in 1994, provided a critical boost for U.S. agricultural exports, and farmers like Beck are concerned about any changes to the current agreement that could negatively affect their bottom line. 

“For a corn producer, grain producer, NAFTA’s been extremely good,” said Beck, standing not far from some of that produce which could ultimately travel south of border after it is harvested later this year.

The U.S. sent more than $2.5 billion of corn to Mexico in 2016, making the U.S. one of the top suppliers to its southern neighbor.

“They have a rising middle class there that wants to eat protein, and I produce protein,” Beck explained.

But this year, Mexican imports of both U.S. soybean and corn are down, and Beck knows his protein isn’t the only one on the market.

“Mexico for the first time in history bought corn from Argentina. Was it cheaper? No. But they are sending a signal,” he said.

Other signals that concern Beck are those from President Trump, who has threatened to withdraw from NAFTA, creating further uncertainty for U.S. farmers.

“I think everybody’s running a little bit scared because we are in uncharted territory,” he told VOA.

“If you have a shock like pulling out of TPP or not keeping the agreement going on NAFTA, it makes the markets nervous and it lowers the farmers farm income,” said Tamara Nelsen, senior director of commodities for the Illinois Farm Bureau. 

She has heard from many farmers in recent weeks, including those she met with during the 2017 Farm Progress show in Decatur Illinois — one of the largest Farm shows in the country — who tell her they are concerned about the increased rhetoric as negotiations continue.

“We hope that some of the rhetoric, like anti-trade, anti-exports for agriculture, will turn around and we’ll actually have some achievements,” said Nelsen.

Status quo

Meanwhile, Beck says he isn’t looking for dramatic changes for agriculture in NAFTA, and would be satisfied with the status quo.

“Hopefully cooler heads prevail and we can tweak this,” he said, “or do a little something, and nothing much really changes.”

Whatever happens, Nelsen says it’s important to reach a new agreement — soon. “There’s a presidential election next year in Mexico, and so if things do not move quickly, it’s possible they might make progress here in the U.S. and Canada and Mexico in the next four months, and then we might see a slide into some stalemate. So the hope is, by Ag groups and others, to keep it moving.”

Beck also hopes negotiations keep moving, because time to make money isn’t on his side at the moment.

“Decisions in the next few weeks are going to have to be made for next year already,” he noted. “If you are going to start cutting costs, where do you start?”

As Beck keeps one eye on his bank account, the other is looking at the skies above his Illinois farm as he deals with the other major unknown in his life right now — the weather.