Melvin Medeiros: Free trade with Canada, Mexico is critical for dairies
By Melvin Medeiros
Oct. 28, 2019
As a second-generation dairy farmer, I have learned a thing or two about managing uncertainty. Whether it’s bovine health and reproduction concerns, shifts in the overall milk marketplace or certain environmental challenges, there are known unknowns that have always been part of the business, and you learn to prepare for them.
It’s been more than a year since the United States-Mexico-Canada Agreement (USMCA) was finalized by leaders of the three North American countries. Mexico ratified the trade deal in June, Canada has pledged its commitment, and now it is time for Congress to take a vote.
USMCA’s predecessor, the North American Free Trade Agreement (NAFTA), eliminated tariffs on all food and agricultural products across North America, creating a stable, predictable marketplace that ended up quadrupling agricultural exports from the U.S. to Mexico and Canada over the past 25 years. In fact, because of this agreement, Mexico today buys more American dairy products than any other country in the world, amounting to $1.4 billion in sales in 2018 alone. And since California is the nation’s top milk-producing state, Mexico is an extremely important export destination for our dairy farmers.
NAFTA was a great framework for American agriculture, and so is the USMCA. The USMCA preserves many of NAFTA’s important provisions, like locking in existing access to Mexico, all while improving rules to remove unfair trade barriers and expand our access into the North American market.
Importantly, the USMCA would open trade opportunities into Canada for U.S. dairy producers, which was largely excluded from the original NAFTA agreement. The agreement would force Canada to reform its costly milk pricing system to help ensure a level playing field for U.S. dairy producers looking to enter the Canadian marketplace. It’s truly a win-win situation. U.S. dairy will grow and continue to thrive while Canada will have access to the highest-quality milk products in the world.
The U.S. International Trade Commission has estimated that the USMCA would result in U.S. dairy exports increasing by $314 million per year—mostly to Canada. And after a few years of depressed milk prices and uncertainty in the global market, that is a welcome boost.
The USMCA would also benefit the manufacturing industry, which is critically important to the success of agriculture. According to the National Association of Manufacturers, over 25,000 California manufacturing firms export to Canada and Mexico, and nearly 100,000 manufacturing jobs in the Golden
State depend on trade with our neighbors to the north and south. But that would likely change without a strong, tariff-free agreement in place. In fact, without a renewed trade agreement, California’s manufactured goods could be subject to $10.1 billion in extra taxes, the NAM estimates.
U.S. dairy farmers need certainty in the North American market and they need Congress to ratify the USMCA fast.
Melvin Medeiros is CEO of Medeiros Holstein Dairy Farm in Fresno County and represents the Dairy Farmers of America’s western area, including Modesto and Stanislaus County. He wrote this for The Modesto Bee.