Producer Groups Argue Changes To NAFTA

As US President Donald Trump sets the wheels in motion to renegotiate the North American Free Trade Agreement, the largest cattle-producer organizations in the US, Canada and Mexico sent letters to the presidents of all three countries expressing their concerns.

They said the beef business would have little to gain from new NAFTA negotiations.

“Recent statements about the possible dissolution of NAFTA or potential renegotiation of NAFTA are deeply concerning to us because of the unnecessary risk it places on our producers,” the letter said.  “While there may be general agreement among the countries to improve some parts of the NAFTA framework, we urge you to recognize that the terms of the agreement affecting cattle producers are strongly supported as they currently exist and should not be altered.”

The National Pork Producers Council joined in with its own letter urging President Trump to make sure that tariffs remain at zero for pork traded in North America.




The cattle groups also took the opportunity to urge President Trump, Prime Minister Justin Trudeau of Canada and President Enrique Pena Nieto of Mexico to “reject efforts to use NAFTA as a platform to resurrect failed policies, especially the misguided mandatory country-of-origin labeling policy that was the law of the US for over seven years.”

Country of Origin labeling was law in the US until Congress was forced to repeal it by the World Trade Organization as being unlawfully discriminatory against cattle and meat from Canada and Mexico.

The smaller US cattlemen’s organization R-Calf USA weighed in by urging US negotiators to insert Mandatory Country-of-Origin Labeling into a new NAFTA trade agreement.  A statement on its web site said MCOOL “empowered consumers to initiate demand signals for country-specific beef products.  COOL ended the packers’ ability to unilaterally decide from which countries’ supply chain to source the cattle and beef necessary to satisfy the domestic consumers’ appetite for beef.”

R-Calf USA went on to say that “COOL is a quintessential element for fulfilling President Trump’s directive to ‘Buy American.’  Domestic consumers cannot choose to support the domestic cattle supply chain by choosing to buy American beef because American beef is undifferentiated among the beef from the more than 20 countries that multinational packers are currently sourcing cattle and beef.”

The NCBA and its Canadian and Mexican allies countered by saying, “MCOOL failed to deliver its proponents’ promise to increase consumer demand or consumer confidence,” the group said.  “Instead, it created massive disruptions in live cattle trade that hurt beef producers across North America and jeopardized the jobs of American workers that depend on processing those cattle.”




Since NAFTA was implemented in 1993, beef exports to Mexico have grown by more than 750%, according to the US Meat Export Federation.  Exports now account for as much as 13% of US beef production.




After cattle traded on the livestock exchange last Wednesday at an average of $134.81 per cwt on a live basis, down $3.59 from $138.40 a week earlier, cash cattle began to trade at $133.75 to $135.75 live and $215.00 dressed.

However, much more trade occurred on Thursday and Friday at $133 to $134 live, with some up to $135.50, down $4 to $5 from mostly $138 last week.  Some dressed-basis action also occurred at $212 to $213.

The USDA’s choice cutout Tuesday was down $2.14 per cwt at $245.74, while select was off $1.66 at $221.17.  The choice/select spread narrowed to $24.57 from $25.05 with 111 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Monday was $143.27 per cwt, up $0.39.  This compares with Tuesday’s May settlement at $144.25, unchanged.