Cattle industry concerned by Trump pledge on Nafta



The largest US cattle trade group said it’s “very concerned” about President Donald Trump’s pledge to renegotiate the North American Free Trade Agreement, which calls into question whether the industry will continue to enjoy its current level of market access in Mexico and Canada.
A shakeup of Nafta now would come as US beef output is forecast to rise to a six-year high. More supplies mean the industry must continue to export or face a chronic oversupply.
“Americans are not going to eat more beef at the same price,” said Kent Bacus, director of international trade and market access at the National Cattlemen’s Beef Association. “If there’s a surplus, we have to move that product to other countries, and to sustain the expansion, we need to expand export markets.”
US beef exports rose 78 percent by volume since 1993, the year before Nafta was enacted, according to US Department of Agriculture data. As of 2015, Mexico was the largest foreign buyer of American beef and Canada was No. 4, according to figures compiled by the US Meat Export Federation.
Nafta “has been a very lucrative opportunity because of strong demand in Mexico and Canada,” Bacus said in an interview on Wednesday at the group’s conference in Nashville. Those kinds of hungry export markets are badly needed.
US cattle inventory expanded in 2016 for a third straight year, the longest stretch in a decade. Frozen-beef stockpiles stood at a record at the end of last year.

For 2017, the USDA forecasts domestic production will rise to 26.019 billion pounds and exports to 2.64 billion pounds, the highest levels since 2011. The meat will also have to compete with what’s expected to be a record production of chicken.
Ample, cheap supplies of US beef may dominate global markets this year and the country could be a net-beef exporter by 2018, market analyst Mike Murphy of CattleFax said at the Nashville conference. Growth in world beef output this year will come mostly from the US, he said.
Trump said Thursday he wants to begin 90 days of consultations on Nafta, which has been in place since 1994 and eliminates trade barriers between the US and its two neighbors.
While Trump has labeled the deal as unfair, US exports of many agricultural products to Canada and Mexico have soared since it was enacted.

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