Episode summary
Why American Farmers Are Nervous About USMCA
Wall Street Week
· · 12 min · Guests: Stu Swanson, Tom Halverson
Summary
American farmers are approaching the U.S.-Mexico-Canada trade negotiations as a test of whether policymakers can avoid making a fragile situation worse. The host reports that growers have already been hit by weak export markets, especially China, and that Iowa farmer Stu Swanson says cash flow, financing and even farm survival are under pressure after years of lower commodity prices and rising stress.
The bright spot, according to CoBank CEO Tom Halverson, is USMCA and the export growth it has supported. He argues that U.S. agricultural exports to Mexico and Canada have risen about 600% since NAFTA, and that the biggest risk now is reversing that progress through new tariffs or market barriers. Both Halverson and Swanson favor a 16-year renewal over annual reviews because long-term certainty would support investment decisions.
Swanson says Mexico is now the largest export market for U.S. corn, and that exports to Canada and Mexico are so large they materially affect carryouts and farm economics. But he also says farmers need more than preservation: they need new trade deals beyond North America to replace lost export markets and restore profitability.
Key takeaways
- Stu Swanson says many farmers are operating on hope that is starting to dwindle as financing tightens and losses mount.
- Tom Halverson says U.S. ag exports to Mexico and Canada have grown about 600% since NAFTA, making USMCA a major liberalization success.
- Both Swanson and Halverson prefer a 16-year USMCA renewal because annual reviews would prolong uncertainty and delay investment decisions.
- Swanson says Mexico is the largest export market for U.S. corn, making the North American trade relationship a major profit driver.
- Swanson argues U.S. agriculture ultimately needs more trade deals with the rest of the world, not just preservation of the current pact.
Notable quotes
“This is a story about not making things worse”
“-Unfortunately, the clock is ticking on us. We're at this point where we need to get a plan going forward”
“-Since NAFTA to today, since it was inception to today, U.S. ag exports to Mexico and Canada have grown about 600 percent”
“-The most important thing I can say about that is, you know, this has been a massive trade liberalization success in the agricultural sector”
“The more successful and the more prosperous Canada and Mexico, the more prosperous and successful is the United States in general, but particularly American agricultural producers”
How the episode opens
Westin: This is a story about not making things worse. As the U.S., Mexico and Canada negotiate over continuation of their three-way trade agreement, U.S. farmers look on with apprehension.
They've already been hit hard by troubled export markets elsewhere in the world, particularly to China. -Our farmers are true patriots because China and others have targeted, China and others, remember this, have targeted our farmers. Westin: In rural Iowa, Stu Swanson has just planted his 34th and likely most challenging crop.
-Unfortunately, the clock is ticking on us. We're at this point where we need to get a plan going forward. Or the operation may come to an end.
And my farming operation, I would do anything I had to keep it alive. I would go find another job. I would downsize or upsize or whatever I need to do.
But the heritage of and the sacrifices that my parents and grandparents made, I don't want to be the generation or the person that fails and lets them down. It's something I think about daily. It's something I think a lot about in the dark of night that keeps me up.
We have to find a way going forward. And we've kind of been operating on hope the last few years. That hope is starting to dwindle.
Westin: Swanson is a corn, soy and pig farmer and on the board of the Iowa Corn Growers Association. We met him a year ago on his farm amid a tough period for the agriculture industry. A lot of farms, I understand, are actually cash negative.
Are you cash positive? -I haven't ran a number to tell you today. Certainly, we know that over the last three years, we've seen about a 30 percent decline in commodity prices.
I think over that same time, we've seen the nine major crops all be underwater.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- usmca negotiations
- farm economy pressures
- trade disputes
- commodity prices
- export uncertainty
Companies and tickers mentioned
- CoBank
Watch the episode
Watch “Why American Farmers Are Nervous About USMCA” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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