U.S. agricultural goods make up a piece of the trade pie among the U.S., Mexico and Canada. The U.S.'s neighboring countries are important markets for Oklahoma.
Last week, the U.S. declined to renew the United States-Mexico-Canada Agreement (USMCA), which replaced the North America Free Trade Agreement in 2020. That doesn't mean the agreement is canceled. Instead, the countries now have 10 years to hammer out details of how they trade in the future.
The agreement is a big deal for Oklahoma crops, said Todd Hubbs, grain marketing specialist at the Oklahoma State University Extension. He said Mexico is the state's largest wheat, corn, milo and oil seeds export market.
"All of these things would impact Oklahoma growers if for some reason down the line USMCA got torn up," Hubbs said. "It just goes into a yearly review unless there's a formal withdrawal, and we haven't heard that yet."
This comes as farmers are facing high input costs, particularly on fuel and fertilizer because of the War in Iran. Crop prices are also relatively low. Hubbs said generally, there were large crops around the world last year and the industry has been working through them.
Although the USMCA has its critics, farm groups pushed for renewal. Hubbs said people working in the crops sector have not been upset with the trade setup – loads of corn and wheat go to Mexico, and ethanol or corn moves to Canada.
"It's very difficult from a crop markets perspective for me to see a positive in this," he said. "Now, if they had negotiated a whole new deal, right? That was really positive for us. But how can it get any more positive than it is now?"
The countries also trade a lot of beef back and forth across their borders. While the U.S. exports cattle to Mexico and Canada, it imports even more. That's because the U.S. is larger, said Derrell Peel, livestock marketing OSU extension specialist.
He said there won't be a major price shock immediately – but long-term uncertainty behind the scenes could impact cattle markets.
"It's probably lost opportunities is really the real impact here and that comes from the uncertainty of just not knowing," Peel said. "Parties on both sides of the border are going to be a little more cautious and a little more conservative in their plans, relative to what they might have done if we had more certainty about the fact that we were going to continue to have this trading relationship."
The cattle industry operates on a long time frame, it's not instantaneous. Peel said having more certainty among producers is important.
The U.S.'s cattle herd remains low. Supplies just got tighter because the southern border is closed to live cattle to help prevent the spread of the New World screw worm, a parasitic pest.
"It's created some additional challenges for the beef industry in the U.S. because we're in kind of a short volume situation right now," Peel said.
This report was produced by the Oklahoma Public Media Exchange, a collaboration of public media organizations. Help support collaborative journalism by donating at the link at the top of this webpage.
