Trade

Breaking: Mexican Border Closed Again as New World Screwworm Comes Within 370 Miles of the U.S.

Thu, 10 Jul 2025 13:38:15 GMT

On July 8, Mexico’s National Service of Agro-Alimentary Health, Safety and Quality reported a new case of New World screwworm (NWS) in Ixhuatlan de Madero, Veracruz, Mexico, which is approximately 160 miles northward of the current sterile fly dispersal grid on the eastern side of the country and 370 miles south of the U.S./Mexico border.

This new northward detection comes approximately two months after northern detections were reported in Oaxaca and Veracruz, less than 700 miles away from the U.S. border, which triggered the closure of our ports to Mexican cattle, bison and horses on May 11, 2025 .

While USDA announced a risk-based phased port re-opening strategy for cattle, bison and equine from Mexico beginning as early as July 7, 2025 , this newly reported NWS case raises significant concern about the previously information shared by Mexican officials and severely compromises the outlined port reopening schedule of five ports from July 7 to Sept. 15. Therefore, in order to protect American livestock and the U.S. food supply, Secretary of Agriculture Brooke Rollins has ordered the closure of livestock trade through southern ports of entry effective immediately.

“The United States has promised to be vigilant — and after detecting this new NWS case, we are pausing the planned port reopening’s to further quarantine and target this deadly pest in Mexico. We must see additional progress combatting NWS in Veracruz and other nearby Mexican states in order to reopen livestock ports along the Southern border,” Rollins says. “Thanks to the aggressive monitoring by USDA staff in the U.S. and in Mexico, we have been able to take quick and decisive action to respond to the spread of this deadly pest.”

To ensure the protection of U.S. livestock herds, USDA is holding Mexico accountable by ensuring proactive measures are being taken to maintain a NWS free barrier. This is maintained with stringent animal movement controls, surveillance, trapping and following the proven science to push the NWS barrier south in phases as quickly as possible.

In June, Secretary Rollins launched a 5-point plan to combat NWS by protecting our border at all costs, increasing eradication efforts in Mexico, and increasing readiness. USDA also announced the groundbreaking of a sterile fly dispersal facility in South Texas. This facility will provide a critical contingency capability to disperse sterile flies should a NWS detection be made in the Southern U.S.

Simultaneously, USDA is moving forward with the design process to build a domestic sterile fly production facility to ensure it has the resources to push NWS back to the Darien Gap. USDA is working on these efforts in lockstep with border states – Arizona, New Mexico and Texas – as it will take a coordinated approach with federal, state and local partners to keep this pest at bay and out of the U.S.

USDA will continue to have personnel perform site visits throughout Mexico to ensure the Mexican government has adequate protocols and surveillance in place to combat this pest effectively and efficiently.

Click to enlarge.

(USDA)

Your Next Read: Protect Your Livestock: Signs of New World Screwworm

Breaking News: Mexican Ports to Reopen in Phases for Cattle Trade Starting July 7

Tue, 01 Jul 2025 19:28:22 GMT

Secretary of Agriculture Brooke Rollins announced today a risk-based phased port re-openings for cattle, bison and equine from Mexico beginning as early as July 7.

The announcement is following the extensive collaboration between USDA–Animal and Plant Health Inspection Service (APHIS) experts and their counterparts in Mexico to increase New World screwworm (NWS) surveillance, detection and eradication efforts. The port reopening timeline is:

Douglas, Ariz. – July 7
Columbus, N.M. – July 14
Santa Teresa, N.M. – July 21
Del Rio, Texas – Aug. 18
Laredo, Texas – Sept. 15

After each reopening, USDA will evaluate to ensure no adverse effects arise.

Progress Being Made to Stop Progress of NWS

According to USDA, progress has been made in several critical areas since the ports were closed on May 11 , including:

Resolution of challenges with conducting flights in Mexico that has allowed the team to consistently conduct sterile NWS fly dispersal seven days each week
Dispersal of more than 100 million flies each week
USDA sent five APHIS teams to visit, observe and gain a deeper understanding of Mexico’s NWS response. The APHIS teams were allowed the opportunity to share feedback.

USDA says there has not been a notable increase in reported NWS cases in Mexico, nor any northward movement of NWS over the past eight weeks.

“At USDA we are focused on fighting the New World screwworm’s advancement in Mexico. We have made good progress with our counterparts in Mexico to increase vital pest surveillance efforts and have boosted sterile fly dispersal efforts. These quick actions by the Trump Administration have improved the conditions to allow the phased reopening of select ports on the Southern Border to livestock trade,” Rollins says. “We are continuing our posture of increased vigilance and will not rest until we are sure this devastating pest will not harm American ranchers.”

The National Cattlemen’s Beef Association (NCBA) says it supports the plan to strategically reopen key ports of entry.

“NCBA and our state affiliates have spent months working with USDA to safeguard the U.S. cattle industry from the threat of New World screwworm. We strongly support USDA’s five-pronged plan to fight the screwworm, which includes bolstering sterile fly production by renovating a facility in Metapa, Mexico, and by building a new fly dispersal facility at Moore Air Base in south Texas,” says NCBA CEO Colin Woodall. “Today’s announcement to reopen key ports of entry is a measured, thoughtful approach by Secretary Rollins to allow some trade while also ensuring the American cattle industry is protected from this pest.”

While the Douglas, Ariz., port presents the lowest risk based upon the geography of Sonora and a long history of effective collaboration between APHIS and Sonora on animal health issues, USDA intends to reopen additional ports in New Mexico, and if it is proven safe to do so, in Texas, over the coming weeks. Additional port openings will be based on APHIS’ continuous reevaluation of the number of cases and potential northward movement of NWS, Mexico’s continued efforts to curb illegal animal movements, and implementation of further rigorous inspection and treatment protocols.

“We trust Secretary Rollins made this decision with the latest information from USDA staff in Mexico, and we know she will continue holding her counterparts in the Mexican government accountable for eradicating screwworm,” Woodall adds. “NCBA and our state affiliate partners will continue working with USDA and key members of Congress to protect the United States from New World screwworm.”

Continuing Efforts

USDA is working with Mexico’s National Department of Health, Food Safety and Food Quality (SENASICA) on outreach, education and training efforts to raise awareness and put producers on high alert about NWS, along with utilizing their well-functioning central laboratory for diagnosing cases. While Mexico has made great progress on animal movement controls and surveillance, additional progress will help ensure the remaining U.S. ports reopen. Enhanced animal movement controls to stem illegal animal movements from the south, along with robust surveillance and NWS risk mitigations beyond check points will be critical in pushing back NWS. APHIS technical teams continue to engage with SENASICA to improve the overall NWS posture in Mexico and implement the rigorous steps needed to keep this pest away from our border.

Mexico will also begin renovation of its sterile fruit fly facility in Metapa this week, with renovation expected to be completed by July 2026. Renovation of this facility will allow for production of between 60-100 million sterile NWS flies each week. This is a critical step towards reaching the goal of producing the estimated 400-500 million flies each week needed to re-establish the NWS barrier at the Darien Gap.

Only cattle and bison, born and raised in Sonora or Chihuahua, or that are treated according to cattle and bison NWS protocol when entering these states, will be eligible for import. See Importing Live Cattle and Bison From Mexico to the United States for more information on cattle and bison import requirements.

In addition, reopening the Del Rio (Aug. 18) and Colombia Bridge (Sept.15) ports will be contingent on Coahuila and Nuevo Leon adopting the same NWS protocols for cattle and bison as those now required of Sonora and Chihuahua for cattle or bison entering those states.

Equine may import from anywhere in Mexico. They require a seven-day quarantine at the port of entry and must import in accordance with the equine NWS protocol and other requirements detailed on USDA APHIS | Import Horses from Mexico webpage . Approved equine facilities are available at the Santa Teresa, N.M., port and will be available for entry of horses when that port is reopened.

In May 2025, USDA suspended imports of live cattle, bison, and equines from Mexico into the U.S. due to the continued and rapid northward spread of NWS. During the weeks of June 2 and June 16, teams of APHIS experts conducted robust onsite assessments of Mexico’s NWS response efforts to fully reassess the risk of NWS incursions to the U.S. posed by importation of Mexican cattle across our southern border.

Your Next Read: Open Heifers Explained: What You Need to Consider to Increase Preg Rates

U.S. Cattle Industry Urges Mexico's Border to Remain Closed Over Spread of New World Screwworm

Tue, 13 May 2025 20:26:20 GMT

New World screwworm (NWS) has been detected in Mexico only 700 miles from the U.S. border. With the impending threat, National Cattlemen’s Beef Association (NCBA) says it’s not a matter of if the U.S. gets the deadly pest — but when.

Mexican officials said Tuesday they won’t close the southern border to cattle from Central America, but the U.S. cattle industry strong supports USDA’s decision over the weekend to suspend cattle, horse and bison imports from Mexico , saying the 15-day suspension will likely be extended due to Mexico’s lack of action so far.

NWS Detected 700 Miles From the U.S.
It’s an issue that started in November. The detection of NWS in Chiapas, which is near the Guatemala border, caused USDA to close the border to cattle imports. While shipments resumed in February, USDA says Mexico isn’t doing enough to eradicate the invasive pest, causing an even greater threat to the U.S. cattle industry. And now NCBA wants the U.S. to ramp up efforts as well.

“When we discovered New World screwworm flies in the southern border of Mexico right before Thanksgiving back in November, at that point in time, USDA provided counsel, they provided some money to help the Mexican government try to stop the incursion of the fly,” Colin Woodall, CEO of NCBA, told AgriTalk’s Chip Flory.

“But unfortunately, because of the ineptitude of the Mexican government, quite frankly, the corruption of the Mexican government, the inability to actually allow the planes that are carrying the sterile males to land and to be able to do their job, they have now come further north,” Woodall says. “And right now we know that New World screwworm flies have been detected just 700 miles south of the U.S. Border.”

Woodall told AgriTalk’s Flory that the pest is now way too close for comfort.

Mexico Won’t Close Mexico/Central America Border
According to Reuters, Mexico’s agriculture minister said on Tuesday it will take a long time to eradicate the pest. While the officials said they won’t close Mexico’s southern border to cattle from Central America, Mexico will tighten the flow of cattle from the south of the country to limit the potential spread of the screwworm.

“We are going to be restricting cattle movement from the south of the country much more tightly,” Mexican Agriculture Minister Julio Berdegue said on Tuesday, adding that “closing the border is a complex issue that needs to be carefully analyzed, because it also impacts the national meat supply.”

MEXICO AGRICULTURE MINISTER:

WILL TAKE A LONG TIME TO ERADICATE SCREWWORM FROM MEXICO AND CENTRAL AMERICA
— PiQ (@PiQSuite) May 13, 2025

Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, spoke with Drovers about the geography of southern Mexico and how the NWS has been able to move further north.

“Mexico has that narrow point down there at the bottom, the Isthmus of Tehuantepec, then to the east of it is the Yucatan Peninsula. To the west is the rest of Mexico, and that narrow gap is, historically, where we established the boundary way back when,” Peel explains. “When we initially controlled screw worm in the U.S., we pushed it down through Mexico and got it past below that isthmus, and that was the boundary for years. Then we eventually got it down to Panama, but it got away from them. In Panama, it came back up through Central America, and now that’s the reason we closed the border. It’s actually jumped past that isthmus and is into a part of Mexico now where it’s going to be increasingly difficult to contain it, just physically. That’s the concern and the reason for this latest action.”

NCBA Blames Corruption in Mexico’s Government
Woodall told AgriTalk the country has poorly managed the situation so far and was pointed with his words, saying it’s because of the Mexican government’s failures that Rollins stepped up and closed the border on Sunday to “send a very clear signal that they have failed, and they’ve got to step up their approach.”

“We do know that the first meeting to review the ban is in about 15 days, and then it’ll be reviewed on a month-by-month basis,” Woodall said on AgriTalk. “That’s what the secretary has said. But unless they do something miraculous as far as changing the approach that they are taking in trying to address this in Mexico, I doubt that it’ll be lifted in 15 days just because of what we’ve already seen. They’ve had six months to step up here and try to address it, and they’ve fumbled the ball.”

“They’ve had six months to step up here and try to address it, and they’ve fumbled the ball.”

Colin Woodall, Chief Executive Officer, NCBA

The corruption claims are rooted in what the U.S. has experienced over the past several months. As the U.S. has tried to ramp up efforts to help stop the spread, Woodall told Flory that there have been instances where the government wouldn’t allow U.S. planes to fly over impacted areas, or not allow those planes to land.

“Will they allow that without additional hurdles or trying to extort money from these planes?” Woodall says. “Will they be true cooperators in helping us get those sterile flies delivered into the country? And can we show that there is a check in their northern approach? If we can look at some things like that, then we’ll be willing to go back to the table, because as I said, we know that this is an economic impact on us, but it’s also a pest that we do not want here domestically.”

The Risks of NWS If It Enters the U.S.
The risks are high. Not only is the U.S. beef cattle herd the smallest in more than 60 years, NWS can be lethal to other species.

“We have to be prepared, and that’s why I talked about it. We need to make sure producers understand what to look for because if you don’t catch it fast, you’re going to lose that animal,” Woodall says. “Also this is not just a cattle issue; we’re talking all warm-blooded animals. This can be on birds. This can be on hogs. It can be in pets like dogs. And it can be in people. So, this is going to be a significant issue that we have to deal with not just as a cattle industry, but us in agriculture because I think it also could look really bad from an optics standpoint if somebody’s dog gets screwworms and they want to blame us as agriculture for being responsible for it.”

“This is not just a cattle issue; we’re talking all warm-blooded animals. This can be on birds. This can be on hogs. It can be in pets like dogs. And it can be in people.”

Colin Woodall, CEO of NCBA

Woodall says NWS is a nasty parasite. It hasn’t been in the U.S. since the 1960s, but the reason it’s so difficult to manage is it lays larva, and the larva dig into the flesh of the animal, basically eating the flesh.

“That’s how it develops,” Woodall says. “And so, if it’s not treated, within four to seven days, you can lose an animal. This is a significant animal health issue.”

Currently, there’s a sterile fly production facility in Panama. Jointly funded by the U.S. government, the facility produces a little more than 100 million sterile flies a week, according to Woodall.

“Now, when we were dealing with this down in southern Mexico, 100 million were enough to be able to stop it,” he says. “But now that they have gone through that phytosanitary border and are coming north, that’s no longer going to be enough. We do not have enough sterile flies.”

NCBA Is Working with Congress and USDA to Ramp Up Sterile Fly Production Domestically
NCBA is talking to both USDA and Congress about building a sterile fly production facility in the U.S. When NWS was a problem in the U.S. more than 60 years ago, there was a production facility based in Texas.

There is legislation to do just that. The STOP Screwworms Act was introduced by Rep. Tony Gonzales (R-TX) and Sen. John Cornyn (R-TX). It would fund the opening of a new sterile fly facility in the United States, with the legislators saying the bill would help protect both livestock and human health from the New World screwworm.

“One of the things that we’re also talking to the secretary about and also with Congress is how do we have the funding to build a sterile fly production facility here in the United States because that is the only way we’re going to stop these flies, get them out of the United States, out of Mexico, and ultimately push back into South America,” he says.

“One of the things that we’re also talking to the secretary about and also with Congress is do we have the funding to build a sterile fly production facility here in the United States?”

Colin Woodall, CEO, NCBA

He says in the ‘60s, it took more than 400 million sterile flies a week to eradicate the issue.

“We are focused on getting the domestic production up and running as quickly as possible, so is Secretary Rollins,” Woodall says. “She’s doing a tremendous job in leading this effort. This is something that she has taken on personally. And so I have a lot of faith in her and her willingness to help us as an industry push back this pest, eradicate it as quickly as possible and try to get back to normal training.”

Groups like the Texas & Southwestern Cattle Raisers Association (TSCRA) also support a bill to protect the U.S. from NWS.

“The STOP Screwworms Act is a vital step in protecting the U.S. cattle herd from the growing threat of the New World screwworm. This legislation provides USDA the support needed to construct or retrofit domestic sterile fly production infrastructure which Texas Southwestern Cattle Raisers Association believes is essential in preventing a widespread outbreak,” President Carl Ray Polk Jr. said in a statement. “We are grateful to both Sen. Cornyn and Rep. Gonzales who understand the importance of acting quickly to support cattle raisers and ensuring the threat of the New World screwworm is taken seriously at the highest levels in Washington.”

Read More: U.S. Suspends Mexican Cattle, Horse and Bison Imports Over Screwworm Pest

Beef Industry Sees Some Silver Linings As Reciprocal Tariffs Go Into Effect

Thu, 03 Apr 2025 15:07:02 GMT

President Donald Trump unveiled a series of tariffs on Wednesday afternoon during his “Make America Wealthy Again” event in the White House Rose Garden.

Using his International Emergency Economic Powers Act authority, he announced the U.S. will impose a 10% tariff on all countries that will take effect April 5, 2025, at 12:01 a.m. EDT.

Trump will also impose an individualized reciprocal higher tariff on the countries with which the U.S. has the largest trade deficits to take effect April 9, 2025, at 12:01 a.m. EDT. All other countries will continue to be subject to the original 10% tariff baseline.

Livestock Industry Weighs In On Announcement

During the event, which was broadcast live across the U.S. and abroad, Trump held up a chart showing specific countries in line for what he described as reciprocal tariffs.

“ We will charge them approximately half of what they are — and have been — charging us,” he said. “So, the tariffs will not be a full reciprocal. I could have done that, I guess, but it would have been tough for a lot of countries.”

Joe Schuele, U.S. Meat Export Federation senior vice president of communications, responding to the announcement in a prepared statement, said the president’s executive order provides more clarity on the administration’s approach to reciprocal tariffs.

“USMEF’s main concern is obviously how our trading partners will react,” Schuele said. “We are hopeful that they will focus on eliminating barriers to trade rather than imposing restrictive countermeasures.”

National Cattlemen’s Beef Association (NCBA) Senior Vice President of Government Affairs Ethan Lane also issued a statement after attending President Donald J. Trump’s announcement at the White House.

“For too long, America’s family farmers and ranchers have been mistreated by certain trading partners around the world,” Lane said. “President Trump is taking action to address numerous trade barriers that prevent consumers overseas from enjoying high-quality, wholesome American beef.

“NCBA will continue engaging with the White House to ensure fair treatment for America’s cattle producers around the world and optimize opportunities for exports abroad,” Lane added.

A partial list of the countries Trump called out and specific tariff percentages to be imposed include:

China - 34%
European Union - 20%
Vietnam - 46%
Taiwan - 32%
Japan - 24%
India - 26%
South Korea - 25%
Thailand - 36%
Switzerland - 31%
Indonesia - 32%

Reciprocal tariffs laid out by President Trump.
(The White House )

Some Trade Partners Inhibit U.S. Opportunity

A recent article in Drovers, Cattle and Hog Markets See Opposite Impact of Tariffs, shows that tariffs on U.S. beef and cattle imports can have a net effect of tightening supplies, and that’s price positive.

Numerous countries are imposing tariff and non-tariff trade barriers on American beef that inhibit opportunities to export product, added NCBA’s Lane who offered five examples:

Australia has sold roughly $29 billion of beef to American consumers. Meanwhile, the U.S. has not been able to sell $1 of fresh U.S. beef in Australia due to non-scientific barriers, Lane said.
Vietnam places a 30% tariff on U.S. beef while Australian beef faces no such tariff.
Thailand places a 50% tariff on U.S. beef.
Brazil and Paraguay have a history of dangerous foot-and-mouth disease, but despite overwhelming evidence of their animal health risk, the Biden administration continued to allow U.S. market access to Brazil and Paraguay.
The European Union places numerous non-scientific “Green Deal” restrictions on American beef, limiting market opportunities.

Grain Growers Brace For More Financial Pain

Potentially caught in the middle of the new tariff battles are those farmers who produce cattle and grain. That describes Chase Dewitz, who shared his perspective on AgriTalk. His family operation includes more than 34,000 acres of pasture, row crops, 1,500 head of beef cows and a feedlot. His current concerns revolve around grain exports.

“I think there’s going to be some pain here for a while, and the biggest thing is these export markets. We have handed China to Brazil, and we’re just pushing them away more and more, and we’ve allowed this to happen,” said Dewitz, who is based in central North Dakota, near Steele.

During the 2018 trade war with China, U.S. agriculture experienced more than $27 billion in losses, according to the American Soybean Association. The association says the U.S. has yet to fully recover its former market share of soybean exports to China, the world’s No. 1 buyer of the commodity .

“The policies of the last 30, 40, 50 years have just pushed this thing so far,” Dewitz said. “And without some major pain, I don’t know how you reset that.”

Other grain growers expressed similar nervousness about tariffs and declining optimism in the Purdue University-CME Group Ag Economy Barometer for March. Forty-three percent of the farmers surveyed cited shifting trade policy as the No. 1 driver of their negative outlook.

In addition, farmers were pessimistic about the outlook for the future of ag export markets, particularly for grain. Five-year expectations for U.S. exports reached an all-time low for the survey, according to James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

A recent AgWeb poll that found more than half of farmers don’t support Trump’s use of tariffs .

Dewitz said U.S. farmers want changes that will bring about fairer trade agreements but no one likes financial pain.

“Everyone says, ‘this needs to be fixed,’ and then on the backside they say, ‘as long as it doesn’t affect me,’” he said. “Well, it’s going to affect everybody.”

Listen to the full conversation with farmers and producers, including Dewitz, on “AgriTalk” here: Farmer Forum - AgriTalk

Your next read: Mexico’s President Says the Country Won’t Retaliate with More Reciprocal Tariffs on U.S. Products

USDA Maintains Cattle Imports Amid Second New World Screwworm Case in Mexico

Thu, 20 Feb 2025 14:35:44 GMT

USDA announced it will not impose new restrictions on cattle imports from Mexico despite the latest detection of New World screwworm in a cow from Tabasco state. The decision follows the agency’s implementation of a pre-clearance inspection and treatment protocol, which aims to ensure safe livestock movement and mitigate screwworm risks. This comes after a previous screwworm case prompted Washington to halt Mexican cattle shipments in November, exacerbating already tight U.S. cattle supplies.

On Feb. 1, USDA’s APHIS announced the resumption of cattle and bison imports from Mexico under a new comprehensive protocol. With herd levels at a 74-year low and high beef prices, traders had speculated during Tuesday trading that another import ban might follow, briefly driving up feeder cattle futures.

The new comprehensive protocol includes:

Pre-export inspection pens in San Jeronimo, Chihuahua, and Agua Prieta, Sonora
Multiple veterinary inspections and treatments
Insecticide dipping of approved animals
Final APHIS inspection before crossing at designated ports of entry
The United States and Mexico have been working to approve additional pre-export inspection pens and reopen trade through other ports of entry.

APHIS has allocated $165 million in emergency funding to protect U.S. livestock, pets, and wildlife from the NWS threat. The agency is also collaborating with partners in Mexico and Central America to eradicate the parasite and restore the biological barrier in Panama, including the deployment of sterile flies to control the screwworm population.

Canada, Mexico Hit Back with Retaliatory Tariffs on U.S. Imports

Mon, 03 Feb 2025 12:39:14 GMT

In response to President Donald Trump’s decision to impose 25% tariffs on Canadian and Mexican goods , Canada announced its own 25% tariffs on $155 billion worth of U.S. imports. Mexican President Claudia Sheinbaum also announced its own retaliatory measures to Trump’s 25% tariffs, but no specifics were unveiled.

Canada Strikes Back
Prime Minister Justin Trudeau stated that the tariffs will roll out in two phases, starting Feb. 4 on $30 bil. targeting American products such as alcohol, produce, household goods, and industrial materials, the same day the American tariffs are set to begin.

The tariffs on the other $125 billion worth of goods will come in 21 days, to allow impacted Canadian companies to adjust their supply chains. Trudeau emphasized that Canada’s response would be “strong but appropriate,” while also considering non-tariff measures like restrictions on critical minerals.

The move has drawn mixed reactions within Canada, with provincial leaders urging strategic countermeasures while ensuring minimal harm to the domestic economy. Meanwhile, the White House justifies the tariffs as a measure against drug trafficking and illegal border crossings, further straining trade relations between the two countries.

American items that Canadians tariffs will be applied to include:

Beer, wine, and bourbon
Fruits and fruit juices including orange juice, as well as vegetables
Perfume, clothing, and shoes
Major consumer products such as household appliances and furniture
Sports equipment
Other materials such as lumber and plastics

The government of Canada says a more detailed list of impacted products will be released soon.

More Tariffs Coming
Foreign Affairs Minister Mélanie Joly said on Jan. 31 that Canada’s retaliatory tariffs would be coming in rounds. “There would be a first round of measures, second round of measures, and a third round of measures,” Joly said at a press conference in Washington. “And we’ll keep ourselves also some leverage.”

When asked if Canada would be shutting off oil exports to the U.S., Trudeau said he will be ensuring Canada’s response will be “equitable” and won’t be damaging to one part of the country more than the others. Energy-rich Alberta has strongly opposed any export tariffs on oil, or for Canada to stop oil exports altogether. Trump said on Jan. 31 that the U.S. tariffs will be lower on Canada’s oil and gas exports, at 10%, while other goods will have a tariff of 25%.

Canada’s trade surplus in merchandise with the U.S. was around $100 billion (US$59 billion) last year, according to a report by TD Bank. If Canadian oil exports to the U.S. are removed from the figure, the “scales tip to America’s favor,” the report says, meaning the United States would have a $60 billion (US$41 billion) trade surplus.

Canada and U.S. Conduct Two-way Trade Worth $1.3T Every Year

According to the Canadian Chamber of Commerce, 2.3 million Canadian jobs are supported by exports to the U.S., and 1.4 million American jobs are supported by exports to Canada. A Bank of Canada analysis says that under a mutual 25% tariffs scenario, Canada’s GDP would take a 2.4% hit.

Mexico Announces Plans for Retaliation
Mexican President Claudia Sheinbaum announced its own retaliatory measures to Trump’s 25% tariffs, but no specifics were unveiled. Sheinbaum said she had told her economy minister “to implement Plan B” which she said “includes tariff and non-tariff measures” though it was not clear what those measures were exactly.

China Reacts
China’s Ministry of Commerce denounced Trump’s tariffs, saying they undermine “the normal economic and trade cooperation” between the U.S. and China.

The ministry said it would challenge the U.S. action at the World Trade Organization (WTO) and take countermeasures “to firmly safeguard its own rights and interests.” The WTO dispute settlement mechanism has been dysfunctional for years amid U.S. opposition to the appointment of new judges.

Your Next Read:
Trump Officially Signs Three Executive Orders Imposing 25% Tariffs on Canada and Mexico, 10% Tariffs on China

Trump Officially Signs Three Executive Orders Imposing 25% Tariffs on Canada and Mexico, 10% Tariffs on China

Mon, 03 Feb 2025 12:36:35 GMT

Big tariffs, big risks, big impacts: When populism and commercial agriculture collide.

President Donald Trump signed three executive orders for tariffs Saturday, the first time a president has used powers granted under the International Emergency Economic Powers Act of 1977. The orders also include retaliation clauses that would ramp up tariffs if the countries respond in kind. Trump cut the levy on imports of Canadian energy to 10%.

Trump officially announced plans to impose new tariffs on imports including computer chips, pharmaceuticals (without specifying which, at what level or when it would take effect), steel, aluminum, copper, oil, and gas by mid-February, expanding his administration’s trade war strategy. He said he would put new taxes on imported oil and gas on Feb. 18 and aimed to do the same for steel and aluminum this month or next month. This move is separate from scheduled tariffs — 25% on Canadian and Mexican goods and 10% on Chinese products set for Saturday, Feb. 1 — and aims to pressure Mexico, Canada, and China to address issues such as border security, drug trafficking, and migration.

Here’s the detailed Fact Sheet from the White House .

Of note: Canadian officials were told by U.S. officials on Saturday that the tariffs would be implemented on their goods on Tuesday, according to people familiar with the situation. Senior figures on Capitol Hill were briefed on the decision.

Trump also hinted at additional tariffs on EU products, citing poor treatment of the United States, though details remain vague. The president said he “absolutely” would impose tariffs on their shipments to the United States. “We are treated so badly: They don’t take our cars, they don’t take our farm products; essentially, they don’t take almost anything. And we have a tremendous deficit with the European Union. So, we’ll be doing something very substantial with the European Union,” he said.

Related News: Canada, Mexico Hit Back with Retaliatory Tariffs on U.S. Imports

Big impact. Such levies targeting imports from America’s top three trading partners — which together accounted for more than 41% of the U.S.’ goods trade in the January-November period of 2024 — potentially affect trillions of dollars in merchandise, like cars and farm products.

Trump said there was nothing the three countries could do now to stop the tariffs.

Trump announced general tariffs at his Mar-a-Lago, Florida estate. White House spokesperson Karoline Leavitt said the tariffs would be implemented immediately, but as noted, Canada said tariffs would be implemented on their goods on Tuesday. It typically takes weeks for tariffs to take practical effect.

Key points:

Sector-specific tariffs: New duties will target high-tech and industrial sectors, potentially covering more imports by dollar value than previous tariffs on China. Trump also suggested Friday he’d consider new tariffs on oil and gas, potentially by Feb. 18, though it wasn’t clear what he was referring to.
The duties come on top of existing tariffs on those products. The first Trump administration imposed tariffs on more than $300 billion worth of Chinese goods to respond to an array of unfair trade practices, including intellectual property theft. The Biden administration kept all of them in place and increased rates on $18 billion in goods, including electric vehicles, solar panels, medical equipment, lithium-ion batteries, steel, and aluminum.
A second wave of tariffs could follow a comprehensive review of the trade relationship among the three countries (Canada, Mexico and China) that Trump has ordered completed by April 1.
Exemptions and negotiations: There are ongoing discussions about potential carve-outs for critical industries (like oil and automobiles) amid intense lobbying by U.S. business and labor groups. Some hope for exemptions to mitigate domestic economic risks. Trump told reporters in the Oval Office on Friday that there was nothing Canada, Mexico and China could do to avoid the tariffs before Saturday. “Not right now,” he said, telling reporters that his tariff threat wasn’t a negotiating tool. “It’s a pure economic [decision],” he said. But he did say he was considering a lower tariff on Canadian crude oil — 10% instead of 25% (and that it was he announced on Saturday). At nearly $100 billion in 2023, imports of crude oil accounted for roughly a quarter of all U.S. imports from Canada, according to U.S. Census Bureau data. The tariff on China would be for what Trump said was failing to stop the manufacturing of fentanyl precursor chemicals.

Why a lower tariff on China? Trump’s threats on tariffs are clearly not all bark and no bite, said Wendy Cutler, vice president of the Asia Society Policy Institute in Washington and a former acting deputy U.S. trade representative in the Obama administration. “He’s clearly in an action-oriented mode and wants to use these tariffs to pressure the three countries to address serious U.S. concerns,” Cutler said. “This is the beginning of the story, this is the first salvo in what’s going to be a long four years,” she said. On why the tariff on Chinese goods will be 10% and not 25%, Cutler said this shows that Trump “may be more interested in seeking a trade deal” with Beijing.

Trump said the Biden administration had not enforced trade deals beneficial to U.S. farmers. During a Friday press conference in the Oval Office, Trump criticized the previous administration’s handling of trade agreements. During his previous term, Trump initiated trade disputes, particularly with China, which significantly impacted U.S. agricultural exports. He stated that China had committed to buying $50 billion a year in farm products, but claimed that former President Joe Biden didn’t enforce this commitment. Trump said, “We’re going to enforce it,” referring to this $50 billion annual purchase agreement with China. His recent statements suggest a continuation of this aggressive stance on trade, framing it as necessary to protect American farmers and correct perceived imbalances left unaddressed by the Biden administration.

· Trump’s team was initially considering a grace period between the announcement of the tariffs on Saturday and when they would be imposed, but White House press secretary Karoline Leavitt played down that possibility on Friday. Leavitt said that a Reuters report stating that the tariffs wouldn’t be implemented until March 1 was “false.”

· Reasons for the tariffs. Trump on Friday said, “We’ll be announcing the tariffs on Canada and Mexico for a number of reasons. Number one is the people that have poured into our country so horribly and so much,” he said about migrants that have entered the United States via its southern and northern borders. “Number two are the drugs, fentanyl and everything else, that have come into the country and number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of [trade] deficits,” Trump said. “I’ll be putting the tariff of 25% on Canada and separately 25% on Mexico and we will really have to do that because we have very big deficits with those countries. Those tariffs may or may not rise with time,” he said.

· International reactions: Leaders from Canada, Mexico, and China are preparing responses. The scale of their responses will depend on whether Trump’s actions match his rhetoric, according to officials in Canada and Mexico.

Canada comments. “You will find when we do respond, at least initially, that we will focus on tariffing American goods that actually are sold in significant quantities in Canada, and especially those for which there are readily available alternatives for Canadians,” Natural Resources Minister Jonathan Wilkinson said in an interview cited by Bloomberg on Friday ( link ), hours after Trump reiterated his plan to bring in tariffs on Canada, Mexico and China.
Of note: Canadian officials were told by U.S. officials on Saturday that the tariffs would be implemented on their goods on Tuesday, according to people familiar with the situation.

Canadian Prime Minister Justin Trudeau warned of economic fallout, and Canada even weighed an export tax on oil to undercut Trump’s ability to exclude gasoline price hikes from his tariff fight. Mexican and Canadian officials have expressed frustration that they don’t know what actions would satisfy Trump’s demands, despite weeks of meetings between senior officials. A Canadian contact said Trump “keeps on moving the goal post… If Trump was trying to build anti-American sentiment in a country like Canada (who get mad about little except for hockey), he is executing well.” Trudeau’s government won’t unveil its retaliation list until it sees what the Trump administration moves forward with. After Trump tied tariffs to what he called an “invasion” of migrants and fentanyl, Canadian officials in December unveiled a $900 million border plan, to add helicopters, drones and other surveillance capacity. “Canada’s border is strong and we’re making it stronger,” said Public Safety Minister David McGuinty, speaking to reporters. “When our largest ally raises concerns, we take it seriously.” McGuinty was in Washington Friday to meet with U.S. border czar Tom Homan. Bloomberg reports that Canadian officials come to the discussions armed with documents, charts and even time-lapse videos of certain border crossings. Only 1.5% of migrants apprehended by U.S. Customs and Border Protection in the 2024 fiscal year and 0.2% of fentanyl seized at U.S. borders came from Canada.

Ontario Progressive Conservative Leader Doug Ford spoke in anticipation of Trump’s tariffs on Canadian imports, which are set to be implemented on Saturday, calling them “reckless… I wish I had better news to share but Donald Trump couldn’t have had been more clear. He’s moving forward with these reckless tariffs. He’s chosen to tear up decades of good will that has made life better for workers on both sides of the border, for businesses on both sides of the border, for families on both sides of the border,” Ford said at a campaign event in Brampton.”

Mexican President Claudia Sheinbaum vowed to counter with retaliatory measures. Sheinbaum said: “We have Plan A, Plan B, Plan C, depending on what the government of the United States decides. It’s very important that Mexicans know that we will always defend the dignity of our people, respect for our sovereignty and a dialogue among equals [with the U.S.], not with subordinates.” Sheinbaum noted that Mexico has been open to receiving its citizens sent back under Trump’s plan for mass deportation of unauthorized migrants and that it was prepared to take some from other countries, which represented a concession. Deputy Economy Minister for Trade Luis Rosendo Gutierrez is expected to travel to Washington on Monday, according to reports. But he can’t meet with U.S. trade or Commerce Department officials until they’re formally ratified, they said. Instead, he’ll talk to business leaders and associations. Sheinbaum has also pointed to Foreign Minister Juan Ramon de la Fuente as a key interlocutor to US Secretary of State Marco Rubio. High-level teams from Mexico’s foreign ministry and the State Department are in frequent communication working on security and migration, Mexico is the No. 1 trade partner of the United States, and sends 80% of its exports north. Mexico supplies around half of America’s imported fruit and two-thirds of imported vegetables, in dollar terms — tomatoes, berries, bell peppers, cucumbers. And it’s the largest source of imported beer. Mexico also is the No. 1 provider of medical devices to American hospitals and doctor’s offices, from surgical gloves to scalpels. Mexico emerged last year as the top market for American agricultural exports, totaling $30 billion.

· USMCA impact. While the U.S., Canada and Mexico have a standing free-trade agreement, it isn’t clear that the expected tariff action would immediately violate that pact. The U.S.-Mexico-Canada Agreement (USMCA), like most trade pacts, includes a provision that allows for the imposition of tariffs on national-security grounds.

One of Trump’s tariff goals is to push Canada and Mexico to accelerate a renegotiation of USMCA, now slated for July 2026. President Trump and his supporters believe that imports of cars and steel from Mexico (and China’s involvement in such activity) are weakening U.S. manufacturers. And they say the USMCA, the trade deal Trump signed in 2020 to replace the North American Free Trade Agreement, needs to be updated — or perhaps, scrapped.

Of note: According to economists at S&P Global, of the imports coming into the United States from Canada and Mexico, more than 18% of their value was created in the United States, before being sent to those countries. That’s far more than the proportion for other countries, and a sign of how closely the economies are integrated.

One out of three cars sold in Mexico last year came from China. That means Chinese exports are now meeting Mexican demand for cars, rather than exports from the United States, a blow to the U.S. auto industry.

· Economic impact concerns: “I think there could be some temporary, short-term disruption and people will understand that,” Trump said. Trump said the tariffs “will reinvigorate industry. “The way you bring it back to the country is by putting up a wall. And the wall is a tariff wall,” he said. “The tariffs are going to make us very rich and very strong.” He dismissed concerns that placing steep taxes on many foreign goods would lead to renewed inflation in the United States, where prices are still rising faster than the Federal Reserve’s target. “Tariffs don’t cause inflation. They cause success,” the president said.

Although Trump dismissed worries about inflation and supply chain disruptions, critics warn that broad tariff applications could disrupt trade and lead to higher prices for consumers, especially in border regions heavily reliant on imports from North America. Tariff-related price increases would hit consumers’ wallets at a time when beef prices are near record highs and costs for eggs have climbed after bird flu eliminated millions of egg-laying hens. “Any increase in expenses in the form of a tariff subsequently serves as a ‘food tax’ on consumers for imported products and is not a workable solution,” National Grocers Association spokesman David Cutler said.

Tariffs are paid by American importers and borne by consumers, though offset potentially by price reductions abroad. The burden will fall disproportionally on low-income households who spend more of their income on physical goods relative to higher income households who spend more of their income on services and experiences, which aren’t subject to tariffs.

A new analysis from the Budget Lab of Yale estimated that the proposed tariffs could raise annual costs on households by roughly $1,300. Researchers at the Peterson Institute for International Economics in Washington estimate that a 25 percent tariff on all exports from Mexico and Canada would lower U.S. gross domestic product by about $200 billion for the duration of the second Trump administration. A model gauging the economic impact of Trump’s tariff plan from EY Chief Economist Greg Daco suggests it would reduce U.S. growth by 1.5 percentage points this year, throw Canada and Mexico into recession and usher in “stagflation” at home. “We have stressed that steep tariff increases against U.S. trading partners could create a stagflationary shock — a negative economic hit combined with an inflationary impulse — while also triggering financial market volatility,” Daco wrote on Saturday.

Facts and figures: 17% of U.S. goods exports go to Canada, 16% go to Mexico and 7% go to China and totaled $763 billion in the first 11 months of 2024.

Of note: For many items, there is roughly a three-month wait until the tariffs impact consumer prices as retailers sell their existing inventory that are not subject tariffs. Getting a firm impact assessment of tariffs is difficult because some exporters will absorb some of the additional costs, and currency changes by some countries will temper the impacts. There will also mean changes to trade flow patterns as buyers seek alternatives sources and sellers look for other importers.

Mexican Economy Minister Marcelo Ebrard said a 25% duty on Mexican goods would have a multibillion-dollar impact on U.S. consumers, affecting millions of households. “Mexico is the main exporter of finished products like automobiles, computers, TV screens and refrigerators,” he said, adding that tariffs would also raise prices of fresh fruit and vegetables, meat and beer. “This impact will be greater in border states and cities that are big consumers of Mexican goods, like California, Texas, Florida and Arizona,” Ebrard said.

A Wall Street Journal opinion item ( link ) was headlined: The Dumbest Trade War in History; Trump will impose 25% tariffs on Canada and Mexico for no good reason.

House Ag Committee Chairman GT Thompson (R-Pa.): Trump’s tariff policy is a crucial tool. Following the imposition of tariffs on Mexico, Canada, and China by the United States, House Ag Chairman GT Thompson issued the following statement: “President Trump’s tariff policy has been an effective tool in leveling the global playing field and ensuring fair trade for American producers. Look no further than Colombia’s about face on accepting repatriated criminal migrants at the mere threat of tariffs. After four years of the Biden/Harris administration’s failure to expand foreign markets, which led to an inflated agricultural trade deficit of $45.5 billion, America’s producers deserve an administration that will fight for them. I look forward to working alongside of President Trump to support our hardworking producers and to make agriculture great again.”

House Ag Committee Ranking Member Angie Craig (D-Minn.) released the following statement ( link ): “No one wins in a trade war. The last time President Trump started a trade war, costs went up for America’s family farmers and consumers. The same will happen today. The cost of imported goods like oil, lumber, avocados, tomatoes, bell peppers, lettuce, broccoli, cucumbers, onions and mushrooms and other fresh food are likely to go up for Americans. At a time when farmers are struggling with high input costs and the American people continue to struggle with the cost of groceries, these tariffs will make it more expensive for farmers to grow food and for consumers to buy it. Additionally, when American farmers face the inevitable retaliatory tariffs from our trading partners, their profits take a hit. This action is especially questionable since President Trump’s previous administration negotiated our last trade agreement – USMCA — with Canada and Mexico.”

Imported goods.

(Bloomberg)

Tariffs coverage. Depending on carve-outs, this round of Trump tariffs could cover more trade in dollar value than his first-term duties on China. Trump’s four tranches of tariffs on Chinese goods in 2018-19 covered imports valued at around $360 billion at the time. New tariffs on Canada and Mexico plus additional tariffs on China would — if all items are subject to the action — cover imports valued at more than $1.3 trillion in 2023. Canada and Mexico combined supplied about 28% of U.S. imports in the first 11 months of 2024, according to Census Bureau data. China accounted for an additional 13.5%.

Price hikes: From Tonka trucks to tequila. While cars and lumber are obvious price hike targets, some unexpected items could see increases, too, according to the Wall Street Journal ( link ):

Cherry tomatoes: Canada and Mexico supply much of the U.S. market.
Tonka trucks: Made exclusively in China, these toys may see a price jump from $29.99 to nearly $40.
Maple syrup: With most commercial production coming from Canada, costs could rise. Canada and the U.S. are the only two countries that produce this at commercial scale, according to Canada’s agriculture department. More than 60% of Canada’s production is exported to the U.S.
Tequila & avocados: Mexico is the top supplier, meaning Super Bowl snacks and drinks could cost more.
Smartphones: Previously spared, they may now be hit with new tariffs.
Sledgehammers: Already taxed at 25%, additional tariffs could push prices even higher.

Securing the U.S. border and dealing with fentanyl are the two major goals of the Trump tariffs. According to Robert Marbut, former homelessness czar for the first Trump administration, fentanyl has killed more Americans in the past five years than all wars combined in the past 100 years. Marbut criticized Canada’s liberal drug policies and Mexico’s unstable regions, where cartels control the drug trade. He said that if the U.S. government is going to tackle fentanyl, it needs to recriminalize drugs domestically, stop China from sending precursors, get the biker gangs in Canada under control, and force Mexico to rein in the cartels. “Fentanyl is a hundred times more powerful than morphine,” he said. “Fentanyl dusts will kill children, fentanyl dusts will kill adults. So just three grains of salt equivalent will kill anybody.”

Tariffs as a revenue raiser. Peter Navarro, a Trump trade adviser, told CNBC on Friday that the tariff effort can replace the revenue of tax cuts. “Tariffs can easily pay for that,” Navarro said. “President Trump wants to move from the world of income taxes and countless IRS agents to the world where tariffs, like in the age of McKinley, will pay for a lot of government that we need to pay for and lower our taxes.” Perspective: The non-partisan Congressional Budget Office has put the cost of extending the 2017 tax cuts — Trump’s top legislative priority — at $4.6 trillion over 10 years. A 25% tariff on the more than $900 billion in annual imports from Canada and Mexico would raise roughly $225 billion annually or $2.3 trillion over 10 years if the tariffs had no impacts on trade, which many economists see as unlikely.

Of note: Navarro thinks corn exports haven’t been entirely benign. Navarro said that NAFTA had kick-started America’s illegal immigration problem, because when the United States began exporting corn to Mexico after the trade pact took effect, that put Mexican agricultural workers out of jobs, sending some of them into the United States. “That’s where that began, our illegal immigration problem,” he said.

Tariffs impact on the U.S. ag sector. American Farm Bureau Federation President Zippy Duvall wrote ( link ) to President Trump Friday urging him to consider U.S. farmers before proceeding with tariff action. “American farmers and ranchers rely heavily on export markets for their business success, especially during these times of economic distress across rural America,” Duvall wrote. A targeted approach to tariffs, with specific exemptions for fuel and fertilizer imports, Duvall added, could “minimize negative repercussions” for farmers. Mexico and Canada account for around a third of all U.S. agriculture exports, buying $30 billion and $29 billion, respectively. China received around $26 billion of ag products last year, Duvall said.

U.S. farmers face rising costs amid proposed Canadian import tariff. The proposed 25% tariff on Canadian imports is expected to have significant repercussions for U.S. farmers, particularly in their access to potash and fertilizers. Key Impacts:

Increased fertilizer costs: U.S. farmers rely on Canada for 85-86% of their potash. The tariff could raise fertilizer prices by $50 to $75 per ton, cutting into profit margins and potentially reducing crop yields.
Short-term supply challenges: With spring planting nearing, farmers may struggle to meet urgent fertilizer needs, as domestic production accounts for less than 10% of U.S. demand. Many farmers have already purchased and applied fertilizer for the 2025 crop season, potentially mitigating immediate impacts, but farmers are unclear as to whether their undelivered fertilizer from Canada will be impacted.
Long-term market shifts: Importers may seek alternative suppliers, and Canadian producers could absorb some costs, but a more significant price increase is expected for the 2026 crop season.
Broader economic consequences: Higher fertilizer costs may lead to rising food prices, strain U.S./Canada agricultural ties, and provoke potential retaliatory trade measures from Canada.

Survey quantifies Canadian farmers’ concern about impact of tariffs, potential trade war. New data from Real Agriculture’s RealAgristudies ( link ) confirms and quantifies the level of concern in Canada’s agriculture sector if the U.S. implements 25% tariffs on Canada on Feb. 1. Farmers who primarily produce livestock are slightly more likely to expect an impact on their farm business than mixed or primarily crop-focused farmers. Interestingly, there wasn’t much difference in how farmers see the potential impact when you compare age, farm size and geography.

Results of a survey of 660 Canadian farmers between Jan. 23 and Jan. 29 showed: 59% of respondents expect the proposed Trump tariffs will negatively impact their business. Only 7% feel there will be no effect. Another 7% don’t know if there will be an impact, while 27% see a possible impact of the Trump tariffs on their farm business.

When it comes to the likelihood of a trade war that significantly decreases Canadian agricultural exports, 29% of respondents feel that scenario is very likely, while 46% say it’s likely; 11% feel a trade war that hurts ag exports is unlikely.

Livestock producers tend to see a trade war as more likely (88%) than mixed (72%) or primarily crop producers (75%).

In terms of how Canada should respond to the tariffs, 34% of respondents said “all of the above” to including export tariffs on key items to the U.S., dollar for dollar retaliation and cutting off certain U.S. imports into Canada; 23% of farmers see an export tariff on key items like potash and energy as the best response as the best singular option.

· Tariff impact support for some industries. Canadian government officials have said that they would consider bailing out businesses and supporting workers who are most affected. Some industries would be swiftly disrupted: Agriculture, automobiles and energy suppliers, pillars of all three economies, would be upended by blanket tariffs.

Tariff aid for U.S. farmers. During her Senate confirmation hearing on Jan. 23, USDA Secretary nominee Brooke Rollins addressed concerns regarding potential tariffs and their impact on U.S. farmers. She acknowledged the possible adverse effects of such tariffs on the agricultural sector and emphasized her preparedness to implement support measures to mitigate these impacts. Rollins stated that she had consulted with former USDA Secretary Sonny Perdue, who oversaw $23 billion in trade aid to farmers during the previous Trump administration, and expressed readiness to execute a similar approach if necessary. She affirmed her commitment to working with the White House to ensure that any negative consequences of tariff implementations on farmers and ranchers are effectively addressed. While acknowledging the potential challenges posed by the proposed tariffs, Rollins conveyed confidence in Trump’s understanding of the agricultural community’s concerns. She described Trump as “the consummate dealmaker” who recognizes the significant support he has received from rural America and the agricultural sector.

U.S. farmers and various trade groups are very apprehensive about not only the potential negative impacts of tariffs on the U.S. ag sector, but what they do to garner new trade agreements, especially as they see China, Brazil, Russia and Ukraine announcing new trade accords or in the process of inking new ones.

Upshot: This latest tariff announcement underscores the escalating tensions in international trade policies and the potential for significant economic consequences if the disputes deepen. The tariff moves will test (1) the limits of Trump’s honeymoon period in his second term in the White House; (2) the U.S. economy and its tentative victory over inflation; (3) American consumers’ appetite to swallow fresh price increases; and (4) the patience of allies. The move against allies Canada and Mexico is a signal that no country is safe from his push to reshape global trade. Big experiment, big impacts, big risks, both economically and politically.

Iowa Secretary of Ag Weighs In on The H5N1 Battle, Vaccine Potential And Trade Sensitivities

Wed, 29 Jan 2025 13:48:13 GMT

Eggs continue to be a hot topic in the news as supplies are down, prices are up – and expected to go even higher – and consumers are understandably concerned.

At the center of the issue, fanning the on-going problem for poultry and dairy producers as well, is the Highly pathogenic H5N1 avian influenza A virus (HPAI H5N1).

AgriTalk Host Chip Flory broached the topic with Iowa Secretary of Agriculture Mike Naig on Tuesday.

At the heart of their conversation was a two-part question – how does the U.S. address the virus and, in the process, prevent any potential negative ramifications on trade?

Naig says the federal government is taking what he described as a three-legged stool approach to addressing the problem in both industries.

He described the three legs of the stool as being USDA’s Animal and Plant Health Inspection Service (APHIS), individual state animal health officials and industry.

“We work very closely with APHIS on this, meaning that they’re the ones that are providing the indemnity payments to producers. They are providing the disposal and cleanup assistance, but they must work in close collaboration with the states and state animal health officials,” Naig says. “And then, of course, you’ve got to have the third leg, which is industry.”

Biosecurity Measures
Naig noted that while the virus hit the poultry industry hard in 2015, it struck even harder in 2024.

“It’s not just in the Midwest or West, it’s been really all across the country now, affecting the egg laying industry, broilers and turkey production,” Naig says.

A significant positive, Naig says, is that biosecurity measures in the poultry industry appear to be preventing farm-to-farm spread. “The industry continues to get high marks for that, which wasn’t the case in 2015, which was so devastating because we didn’t have those strategies in place.”

“I believe, and our experience has been, that our USDA partners in this regard have been very strong,” he adds.

As Naig addressed the three-legged stool approach the U.S. is taking to addressing the virus in dairy, he says the three partners have more work to do.

“Frankly, there’s been a lot of criticism to share around the three legs, if you will, on how states have reacted, or how strongly USDA should have reacted, and what the industry is doing to try to contain that virus. So, I would say on the dairy side of things, it’s a different story (than in poultry). There’s a lot more work that’s yet to be done to even understand how that virus is impacting those (dairy) herds.”

What Is The Role For Vaccines?
Flory asked Sec. Nagy whether he believes a vaccine could be part of the solution to the virus or whether that would set up too many trade barriers. Flory also asked whether the virus is stable enough for a long enough period of time for a vaccine to be developed that would work effectively.

Both are questions the U.S. is grappling with as it tries to get ahead of the virus in dairy and poultry.

Earlier this month, Reuters reported the U.S. will rebuild a stockpile of avian influenza vaccines for poultry that match the strain of the virus circulating in commercial flocks and wild birds, citing the Department of Agriculture.

Naig told Flory that he believes a vaccine could be developed, with regard to poultry specifically, and its use negotiated into trade agreements.

“Those are challenges, and yet those are things that can be worked on and can be done, but it’s not easily done. I would want to put a flag there,” Naig says.

“I’m supportive of developing … we should try to figure out whether this can be an effective tool. If you’re in the broiler business or if you’re in the turkey meat business or if you’re in the egg business or maybe you’re in the genetics business, those are very different in terms of how you view that vaccine.”

Naig explains part of the different viewpoints on vaccine use have to do with the difference between poultry business segments.

“We need to recognize that those sectors are different in how they’ll view and potentially use a vaccine,” Naig says.

“Don’t treat them all the same. It’ll make way more sense for some than others.”

Naig did not weigh in on vaccine development for the dairy industry specifically.

The full conversation between Naig and Flory on AgriTalk is available below.

Your next read: Think Egg Prices Are Already Too High? USDA Says Retail Egg Prices Could Jump Another 20% in 2025

More Action Needed By Mexico Before Reopening Border for Feeder Cattle Imports, Says Vilsack

Sun, 19 Jan 2025 20:54:32 GMT

A letter sent Friday by outgoing USDA Secretary Tom Vilsack to Mexico’s Secretary of Agriculture Julio Antonio Berdeguê acknowledges the progress made in reopening cattle trade between the two countries following the detection of New World Screwworm (NWS) in Mexico, but says more action is needed to resume trade.

Key developments:

Technical collaboration between U.S. and Mexican teams
Full technical agreement on protocol reached on Dec. 12, 2024
Ongoing work to approve pre-export NWS inspection facilities.

Vilsack emphasizes the importance of expediting the approval process for these facilities to resume safe export as soon as possible, citing the significance of trade for a safe and affordable food supply.

The letter also addresses efforts to combat the spread of New World Screwworm:

Emergency funding has been authorized to increase sterile fly production
Production has increased fivefold in the past year
Enhanced regional response through increased dispersal, surveillance, education, and partnerships
Acknowledgment of Mexico’s partnership in sterile fly releases, movement controls, and surveillance
Shared goal to push the pest south to the Darien Gap

Vilsack requests immediate support from Secretary Berdegué for the establishment of two planned sterile fly dispersal centers in Southern Mexico to strengthen current efforts.

The letter maintains a cordial and cooperative tone throughout, emphasizing:

Shared commitments and goals
Acknowledgment of Mexico’s efforts and partnership
Expressions of gratitude for collaboration
Requests for continued support and expedited action

Industry sources say specific testing will take place Monday, Jan. 20, and that and other tests will go a long way in establishing a trade resumption timeline.

NWS Trade Impacts Started in November
As previously reported, USDA’s Animal and Plant Health Inspection Service (APHIS) suspended imports of live cattle and bison from Mexico on Nov. 22, 2024, following the detection of New World screwworm (NWS) along Mexico’s southern border. This pest can have a significant negative impact on cattle health, and U.S. authorities have been working to develop protocols to screen animals coming into the country.

Several factors are influencing the timeline and pace of reopening:

Facility inspections: Both countries have agreed on protocols, but implementation requires facility inspections and approvals.
Quarantine period: A seven-day quarantine after animal checks
Port readiness: The most important port to get moving again is Santa Teresa, New Mexico.

The temporary suspension of cattle imports from Mexico has had notable effects on the U.S. cattle market:

Reduced supply: About 250,000-300,000 fewer head of cattle are estimated to have been imported due to the suspension.
Price support: The trade disruption has been supporting feeder cattle and calf prices in the U.S.

U.S. Imports of Mexican Cattle Disrupted

Mon, 02 Dec 2024 19:28:20 GMT

The Nov. 22, 2024, announcement that New World screwworm was detected in southern Mexico resulted in the temporary suspension of live cattle imports from Mexico. This raises many questions about the implications this might have on U.S. cattle markets. Some history and context are helpful to understand the potential impacts.

An average of 1.17 million head of Mexican cattle were imported into the U.S. in the 20 years from 2004-2023, ranging from a minimum of about 703,000 head in 2008 to a maximum of 1.47 million head in 2012 (Figure 1). Mexican cattle imports represent 3.3% of the total U.S. calf crop on average. Figure 1 also includes 2024 preliminary weekly imports through the first 47 weeks of the year. Imports of Mexican cattle have averaged 84.5% steers and 15.5 percent spayed heifers over the past 20 years (Figure 1). However, in the five years from 2019-2023, the percentage of heifers increased to an average of 21.3%.

Figure 1. Cattle imports from Mexico

(Peel/USDA)

Figure 2 shows the average seasonal pattern of Mexican cattle imports for the last five years. Mexican cattle imports have maintained a relatively stable seasonal pattern for many years with peak months in the spring and in November/December with lows in summer. In recent years the seasonal pattern has equalized slightly with fractionally lower peak months and higher summer lows. However, the pattern remains as seen in Figure 2.

Figure 2. Seasonality of Mexican Cattle Imports

(Peel/USDA)

USDA has indicated that the border is expected to be closed at least three weeks from the late November announcement. Protocols are being developed for a partial opening of the border (New Mexico and Arizona ports) which will include a pre-export inspection of all cattle; treatment for insects; and a seven-day quarantine, followed by the usual border inspection and crossing process. It seems likely that few, if any, additional Mexican cattle will be imported in 2024. The 2024 import value in Figure 1 is based on the preliminary weekly data through Nov. 23 with a total of 1.24 million head. This may well be very close to the import total for the year.

Figure 3. U.S. Imports of Mexican Cattle

(Peel/USDA)

Figure 3 shows the year-to-date monthly official import totals through September. Imports of Mexican cattle were up 21.3% year over year for the first nine months of the year. The pace suggested that total annual imports could be about 1.5 million head. Most of the increase was due to additional spayed heifer imports, up 87.2% year over year and accounting for 35% of total cattle imports.

Figure 2 shows that November and December typically account for roughly 22% of annual imports. Assuming no imports for the last week of November and all of December and given the pace of imports thus far in the year, it is likely that annual imports will be reduced by 200,000 - 250,000 head from the probable total before the screwworm announcement.

The lack of Mexican cattle imports for the remainder of the year will have some immediate impact reducing an already tight feeder supply. However, some of the feedlot impact is not immediate because a portion of the imported Mexican cattle are lightweight and typically go through stocker/backgrounding programs before feedlot placement. In the January–September period this year about 24% of the imported cattle were less than 200 kilograms (441 pounds). It’s important to remember that most of the cattle not imported for the remainder of the year will enter the U.S. eventually…just with a delay. As long as the current situation does not drag out excessively or result in some permanent changes in import regulations, the primary feeder cattle market impact will be a change in timing with a short-term tightening of supply and the delayed cattle arriving in the coming weeks/months.

Your next read: ASEAN Customers Study U.S. Pork and Beef in Trend-setting Korea

New World Screwworm: Latest Update from USDA-APHIS

Tue, 26 Nov 2024 14:59:49 GMT

On Nov. 25, USDA’s Animal and Plant Health Inspection Service (APHIS) held a meeting to discuss the U.S. response to the news of a single case of New World Screwworm (NWS) found in a cow in Chiapas, Mexico. U.S. and Mexican officials are working closely together, but the border has been temporarily closed to live cattle imports.

“Our priority is to ensure there is no risk to our domestic industry, followed by the goal of reopening the border as soon as possible,” says Dr. Michael Watson, administrator of USDA’s APHIS.

In September, work had already begun on protocols in the event NWS was found in Mexico. Those protocols have been reviewed with Mexico for their understanding and will be made public once finalized.

Points of Protocol
Dr. Burke Healey, senior leader for policy and operations for APHIS, shared protocol will likely include pre-export inspections by Mexican veterinarians overseen by SENASICA, the equivalent to APHIS, before allowing cattle imports to resume. The inspections will make sure:

appropriate logs accompany animals coming into and leaving the facility
cattle are treated with ivermectin
there’s a seven-day quarantine period

Upon passing inspection, cattle will again be inspected by U.S. officials, along with additional inspections for tuberculosis and ticks. The cattle will be dipped, and then presented to cross the border. Healey says federal inspection sites will focus on ports in Chihuahua and Sonora.

“Those five ports are on the Mexican side, so those inspections and all of that protocol are taking place in Mexico and not on U.S. soil,” he explains.

The ports in Texas will be considered for reopening once the protocol details have been finalized and are working as expected, he adds.

Cristobal Zepeda, regional manager for North America for APHIS, says U.S. and Mexican officials maintain a close working relationship and that communication is key in this situation. Mexico had previously instituted three federal inspection points at strategic locations where cattle come into the country near the border with Guatemala and other areas.

“All animals are downloaded and inspected for wounds visually and through detector dogs,” Zepeda says. “They’re sprayed with an insecticide and receive ivermectin. The system works. That’s how it was picked up.”

Mexico has not completed its investigation but acknowledges the infested cow might have been imported from Guatemala.

While the timeline for reopening trade is tentatively estimated to be at least three weeks, it quite possibly could extend into January as Mexico typically closes ports for two weeks during Christmas and New Year’s, Healey says.

Control the Spread
The discussion also covered the potential impact on the livestock industry, which could be in the billions if NWS reaches the U.S., and the importance of sterile fly production.

The U.S. imports 1 million to 1.1 million cattle from Mexico annually. All Mexican cattle are required to have a Mexican origin ear tag and documentation of the herd of origin, TB test of that herd of origin and a TB test of the specific animals being presented for export. These requirements will remain in place.

Sterile flies from a Panama facility will be sent to Mexico to help control the spread of NWS further south and into Central America. Capacity from that facility is around 95 million per week. Mexico is also looking at retrofitting fruit fly plants to produce about 60 million sterile files a week.

The APHIS website will provide NWS updates .

Be On the Lookout
Adult screwworm flies are about the size of a common housefly (or slightly larger). They have orange eyes, a metallic blue or green body, and three dark stripes along their backs.

If you see mammals and birds with the following signs, report them to your state veterinarian:

Irritated behavior
Head shaking
Smell of decay
Evidence of fly strike
Presence of fly larvae (maggots) in wounds

Your next read: Lidocaine Infused Bands Minimize Castration Discomfort for Young Calves

APHIS Increases Import Restrictions on Animal Products from Mexico on Confirmed Case of New World Screwworm

Mon, 25 Nov 2024 14:42:29 GMT

On Nov. 22, Mexico’s Chief Veterinary Officer informed USDA about a confirmed case of New World screwworm (NWS) in Chiapas, near the Guatemala border. These fly larvae infest warm-blooded animals, including humans, causing severe infections.

USDA’s Animal and Plant Health Inspection Service (APHIS) has heightened import restrictions on animal products from Mexico and intensified efforts in Central America to contain the pest’s spread. APHIS is collaborating with regional partners, releasing sterile flies and maintaining vigilance along the southern U.S. border.

Producers are urged to inspect livestock and pets for signs of infection, such as wounds or larvae, and report suspected cases promptly. Human infections, though rare, require immediate medical attention.

“Although USDA eradicated NWS from the United States in 1966 using sterile insect technique, there is a constant risk of re-introduction into the United States,” APHIS stated on the agency’s website .

Market Impact:

This will primarily impact feeder cattle imports from Mexico, and feeder cattle prices popped on the news. Mexico ships around 100,000 head a month to the U.S. The trade is seasonable, and we are on the backside of the Fall season. The restrictions are estimated to be in force for at least a month, sources note.

One trade source said, “Feeder cattle supply in the January inventory could show a 1.2 million head reduction. Anything to shorten Mexico supplies is important.”

USDA’s Preventive Measures

APHIS has taken several steps to protect U.S. livestock and wildlife from the New World Screwworm:

• Enhanced import restrictions: Stricter controls have been placed on animal products entering the U.S. from Mexico.
• Increased surveillance: APHIS is likely to have intensified monitoring at border crossings and ports of entry.
• Collaboration with Mexican authorities: USDA is working closely with Mexican officials to address the situation at its source.

Impact on Trade and Travel

The detection of New World Screwworm in Mexico and the subsequent USDA actions may have significant implications:

• Trade disruptions: Importers of Mexican animal products may face delays or restrictions.
• Travel advisories: Travelers returning from Mexico might encounter additional screening measures for pets or animal-derived goods.

Background:

New World Screwworm is a serious veterinary pest that can cause severe damage to livestock and wildlife populations. Its detection in Mexico represents a potential threat to animal health in the region, necessitating swift and coordinated action from agricultural authorities on both sides of the border.

USDA’s proactive approach underscores the importance of international cooperation in preventing the spread of agricultural pests and diseases. As the situation develops, further updates from APHIS and other USDA agencies are expected to guide stakeholders and the public on necessary precautions and compliance with new regulations.

North American Cattle Groups Advocate for Oversight of Lab-Grown Proteins, Beef Imports

Fri, 17 May 2024 17:10:37 GMT

Leaders of the National Cattlemen’s Beef Association (NCBA), Confederación Nacional de Organizaciones Ganaderas (CNOG), and Canadian Cattle Association (CCA) signed a joint statement to continue advocating for greater oversight of emerging lab-grown proteins, protecting cattle from animal diseases, and promoting the sustainability of the cattle industry. This action builds on the recent statement signing with Cattle Australia and furthers the international partnerships between cattle producers.

“The signing of this joint statement is an important step that unites cattle producers across North America and around the world to promote and protect efficient cattle production,” said NCBA President and Wyoming rancher Mark Eisele.

Following the joint statement signing, NCBA, CNOG, and CCA also signed a letter addressed to U.S. Trade Representative Katherine Tai, Secretaria de Economía Raquel Buenrostro Sanchez, and Minister of Export Promotion, International Trade and Economic Development Mary Ng urging the U.S., Mexican, and Canadian governments to re-engage in opening markets for beef exports and provide stronger science-based oversight of beef imports. Unfortunately, the three governments have expanded market access for beef imports while providing little opportunities for beef exports. If this continues, it will place North American cattle producers at a competitive disadvantage to other beef producers, including South America.

“I am also pleased that American, Mexican, and Canadian cattle producers are standing together to hold our trade partners accountable. For the United States, we have significant concerns that Brazil continues to have access to the U.S. market even though they have a repeated history of failing to disclose animal health concerns, including cases of atypical BSE,” Eisele added. “We continue urging our respective governments to protect the beef supply by blocking Brazilian imports. We are pleased to be partners on these issues and act as the voice of cattle farmers and ranchers to our respective governments.”

NCBA has previously raised concerns with Brazil’s access to the American market due to the country’s failure to report cases of atypical bovine spongiform encephalopathy (BSE) in a timely manner to the World Organization for Animal Health (WOAH). These atypical cases occur spontaneously, but countries are required to report any cases within 24 hours to WOAH. The United States has upheld the 24 hour requirement continuously, but Brazil has often delayed reporting cases from anywhere between 35 days and nearly 2 years . That lack of transparency increases the risk to food safety and makes Brazil an unreputable trading partner.

The letter and joint statement were signed at the CNOG 2024 convention in Hermosillo, Sonora, Mexico by NCBA President Mark Eisele, CNOG President Sr. Homero García de la Llata, and CCA President Nathan Phinney.
View the statement here.

View the letter to U.S., Mexican, and Canadian trade officials here.

Ag Economists Turn More Positive Longer-Term On the Farm Economy

Thu, 20 Jul 2023 20:01:20 GMT

The July Ag Economists’ Monthly Monitor shows weather extremes and wild swings in the commodity markets are the two biggest factors impacting short-term outlooks, but the economists surveyed expressed a more favorable view longer-term. The latest survey also shows the biggest wildcard for agriculture over the next year could be geopolitical risks tied to China and the war in Ukraine.

This is the second survey of the Ag Economists’ Monthly Monitor , a joint effort between the University of Missouri and Farm Journal. The first-of-its-kind survey collects insights from ag economists across the U.S. Nearly 60 economists are asked each month to provide their forecasts and views. They represent a wide geography with expertise in grains, livestock and policy.

This month’s survey showed several key changes from June. Economists say they believe USDA’s current corn and soybean yield projections are still too high, and they anticipate a drop in forecasted corn and soybean prices. The economists in the July survey also predict cattle and hog prices could continue to climb higher this year.

“To me, the biggest thing that sticks out in the July survey is the more positive view 12 months into the future relative to where we were in June,” says Scott Brown, University of Missouri agricultural economist who helps author the survey each month. “In the very short run, the economists are a little less positive than where they were in June. I think that has a lot to do with the weather and general market moves we’ve seen over the last few weeks.”

(Farm Journal)

The longer-term optimism revealed in the survey is despite economists’ expectations for two consecutive years of declining net farm income, falling short of the record set in 2022. The July Monthly Monitor forecasts net farm income to fall to $132.8 billion in 2023, which is below the $134.7 billion in the June survey and USDA’s current net farm income estimate of $136.9 billion. That’s still a big drop from 2022, when USDA says net farm income reached $162.7 billion.

This month’s survey also tried to peel back the layers of what commodities might be aiding the more positive long-term outlook versus weighing on the overall health of the ag economy in the short-term.

“On the crop side, it’s positive to very positive,” Brown says. “There are a few in the negative category, but a majority of economists responded the crops side of the equation looks positive. Whereas, on the livestock side, we have more negatives than we have positives.”

Economists say there are several positive developments that could shape U.S. agriculture, such as continued productivity and efficiency gains; a healthy farm economy and balance sheets; projected shifts in interest rates; new and expanded opportunities for renewable fuels; and the strength of the U.S. cattle market and meat exports as a whole. Geopolitical issues could also impact global crop production and, in turn, bring some demand back to the U.S.

Cuts to Projected U.S. Crop Yields

The survey was sent to ag economists the day after USDA released its most recent yield forecast in the July WASDE report. In what was called a rare move early in the growing season, USDA cut its corn yield forecast by 2.2% to 177.5 bu. per acre, down from 181.5 bu. per acre in the June report. The July Ag Economists’ Monthly Monitor is nearly 3 bu. per acre lower than USDA, with the group of ag economists projecting a yield of 174.9 bu. per acre.

“For me, the interesting piece of this story is there’s a lot of variability in the responses from those being surveyed, which highlights how varied the weather has been as you move around the country,” Brown says. “We had yield estimates slightly below 170 bu. per acre on the low end and some above 180 bu. per acre on the high end.”

(Farm Journal)

Brown says the soybean estimate also came in lower than both USDA’s July WASDE report and the June Ag Economists’ Monthly Monitor survey. USDA estimates soybean yield at 52 bu. per acre, and the average ag economists’ estimate is 50.6 bu. per acre, a 0.5 bu. cut from the June survey.

“There was a little less variability from top to bottom on those yields, but when you look at prices, even with what was a lower corn yield, their estimate of 2023/2024 corn prices went from $4.99 in June to $4.80 in the July survey,” Brown says.

(Farm Journal)

What Economists are Watching the Next Six Months for Crop Prices

When asked what factors will impact crop prices in the next six months, economists said:

Final yields
Export demand and competition
Weather domestically and abroad
Geopolitical risk in the Black Sea and China, including developments that impact ag exports in Ukraine/Russia

“I think a couple of things stick out beyond the weather discussion, and one is export demand as well as global competition, such as what’s going to happen with South America in terms of competing with U.S. corn and soybean markets.

“The economists certainly continue to talk about the geopolitical risk in the Black Sea and China, in particular, and what that means for our ability to export corn and soybeans as we look ahead,” Brown says. “Those are really the two big ones that came out of this survey.”

What Livestock Economists Are Watching the Next 6 Months for Livestock

Ag economists think the following factors will impact prices the next six months:

Changes in feed costs and impact of corn prices
Rising milk prices
Consumer meat demand and influences from macroeconomic factors, both domestically and abroad
Placements of cattle on feed

Brown says while the majority of economists are concerned about feed costs and the impact on livestock producers, the second-biggest concern revealed in the survey is demand. Economists pointed to both domestic and international demand as possible problem areas.

“2021 and 2022 were extremely positive from a demand standpoint, and we seem to be backing up a little bit in 2023,” Brown says.

Economists More Bullish on Cattle and Hogs

The July Ag Economists’ Monthly Monitor shows economists are more positive when asked about cattle and hog prices, but they have a more negative view on dairy, which they consider the biggest weight in the livestock sector.

“When you look at where pork prices have gone over the last month, it’s gotten more positive. Now, I don’t want to suggest we’re back in black ink, but we have seen recovery in things like the pork cutout value,” Brown says. “The economists continue to worry about how the general economy will affect livestock going forward, but overall, it seems we’re seeing a more positive view from the livestock perspective in this month’s survey.”

(Farm Journal)

Based on the July monitor, economists expect average milk prices to fall back to 2021 levels, but production costs will continue to be higher in 2023 versus 2021.

“No. 1, the economists continue to worry about feed costs,” Brown says. “We continue to see fairly high feed costs affecting profitability. So even in the case of beef cattle, where we’re talking record cattle prices, we’re not talking record profitability because of the feed cost side.”

(Farm Journal)

Longer-Term Look at the Health of Agriculture

Over the next 12 months, there are several things that could shape the health of the ag economy, according to the July survey:

Crop prices and production costs, including inputs, rental rates, land values and supply chain disruptions
Subsequent impact on producer margins and the protein sector from rising interest rates and inflationary pressure
Weather considerations, including drought conditions in the short run and yield impacts in longer run
Geopolitical tensions and competitiveness of U.S. ag exports
Changes in consumer demand domestically and abroad, new markets for agricultural products, including biofuels

“One thing that came pretty strongly out of the survey is the continued increases in productivity in agriculture, which makes us more efficient,” Brown says. “The farm economy is generally healthy, and when you look at balance sheets, they are still really, really strong in many cases. That’s despite a lot of the issues we’ve talked about.”

In the July survey, economists voiced more concerns about interest rates and the impact on operating loans. One economist also mentioned the industry might be underestimating the negative impact Proposition 12 could have on the entire livestock industry.

The Turbulent Relationship Between the U.S. and China

While none of the ag economists surveyed think the U.S. will enter into a trade war with China in 2023, economists continue to remain cautious about China, which could have a direct impact on U.S. agriculture.

When asked to list the top factors shaping trade relations between the U.S. and China, economists said:

POTUS and political polarization in the U.S.
Non‐agricultural geopolitical tensions, including national security concerns, support of Taiwan and limits on technological production
Changes in China’s economic growth, including population and demographics
Russia’s invasion of Ukraine and Russia’s relationship with China
Quality, price and availability of U.S. products compared with global competitors

Potential Events/Factors Not Getting Enough Attention Today

The July survey also asked economists to outline any factors or events that currently aren’t receiving enough attention but could shape agriculture over the next 12 months. One economist brought up impacts of geopolitical risks and fallout from the war in Ukraine, but also a potential war between the U.S. and China.

Other potential events that could cause a major shakeup in agriculture include:

Weather events, domestically and abroad, warranting a broader conversation on climate
Potential for a significant recession in China
Focus on renewable diesel obscuring importance of RFS in overall biofuel use
Workforce concerns for producing, processing and transporting agricultural products domestically and abroad
Declining EU pork production and commerce implications of Proposition 12
Strikes at shipping ports in Vancouver and potential for upward pressure on potash prices with reduced production capacity at Nutrien mines in Saskatchewan

Previous Ag Economists’ Monthly Monitor Coverage

Most Ag Economists Think It’s Unlikely the 2023 Farm Bill Will Be Written in 2023

High Production Costs Could Weigh on the Ag Economy Through 2024, New Survey of Economists Finds

High Production Costs Could Weigh on the Ag Economy Through 2024, New Survey of Economists Finds

Wed, 28 Jun 2023 19:15:23 GMT

Stronger cattle prices combined with the recent run-up in crop prices aren’t enough to outweigh concerns about the impact high input prices will have on farmers this year and into 2024. While most economists agree the next 12 months could produce more financial challenges for agriculture, views vary on how much financial pressure producers will see and offer differing opinions on the U.S. crop production picture and commodity/feed prices.

The results are part of the June Ag Economists’ Monthly Monitor, a new survey of nearly 50 agricultural economists from across the country. It’s the first survey of its kind, collecting insights from economists who represent both the private and public sectors. The economists represent the ag sector across a wide geography and also have expertise in grains, livestock and policy.

The survey is conducted anonymously to allow the highly respected agricultural economists to speak more openly about their economic and production forecasts since their responses won’t be attributed to the university, company or organization they represent. The Ag Economists’ Monthly Monitor is a joint effort between the University of Missouri and Farm Journal . The university conducts the survey, collects and crunches the data while Farm Journal distributes the results.

Main Takeaways from the June Survey

Highlights from the first Ag Economists’ Monthly Monitor include:

The perceived financial health of U.S. agriculture is trending lower and is expected to continue to decline over the next 12 months.
Production costs, global competition, geopolitical risks, drought and demand headwinds are among the main drivers.
The majority of agricultural economists expect farm income to drift lower, with some expecting levels to land closer to the five-year average in 2024.
High production expenses are the biggest obstacle in 2023.
2023 crop yield estimates vary widely among the economists surveyed.
Economists expect crop prices to drift lower in 2023 and 2024.
Beef cow supplies are forecast to continue to decline this year.

A Current and Future Snapshot of the Agriculture Economy

The monitor shows the perceived financial health of U.S. agriculture has moved slightly lower over the past year, and economists expect that trend to continue over the next 12 months.

(Farm Journal)

The main drivers of the waning outlook include production costs, global competition, geopolitical risks, drought and domestic demand for agricultural commodities.

“I think what’s most surprising is that, on average, those more than 40 economists are in alignment with the more general perception of where agriculture is heading,” says Scott Brown, an agricultural economist with the University of Missouri, who helps author the survey. “What surprised me is the amount of volatility around that average estimate. It just reminds me there’s so many issues at play today, and when trying to predict or suggest the future, even these economists have a wide opinion in terms of where we’re headed in different commodities.”

Falling Net Farm Income

The Monthly Monitor shows all respondents expect farm income to decline from the record level of 2022 for 2023 and 2024. The range of survey responses is what produced the most volatility, with responses varying by as much as $51 billion from the highest to the lowest estimate.

Some economists are projecting farm income levels to return to the 2017-21 average in 2024. The main driver for 2023 forecasts is the expectation for higher production expenses. The biggest factor for the waning outlook in 2024 is the outlook for lower commodity prices.

“It seemed like cattle was the most optimistic commodity out of the mix,” Brown says. “I think there was still some expectation that corn and soybean prices could stay on the higher end, but generally there’s less optimism than coming off the records we would have seen back in 2022. That’s when farm income was a little north of $160 billion, and when you look at some of the forecasts for 2024 in our survey, it’s closer to $120 billion on average. Some are even suggesting farm income levels could fall back to where we were pre-2020, so pre-COVID.”

(Farm Journal)

Wide Range of Yield Estimates

Ahead of USDA’s updated look at planted acres in the June acreage report set to be released Friday, economists don’t see many big changes compared with what farmers intended to plant in March. According to the June Ag Economists’ Monthly Monitor, the average survey result was 92.05 million planted acres for corn, which is up slightly from the 92 million acres reported by USDA’s farmer survey in March. The range included 90.5 million acres on the low end and 93 million acres on the high end.

Economists think farmers planted 87.98 million acres of soybeans this spring, slightly higher than the 87.5 million acres reported in March. The highest estimate was 89 million acres of soybeans, with the lowest estimate of 87 million acres.

In March, USDA reported farmers intended to plant 11.26 million acres of cotton. The survey showed economists think with the weather challenges in areas such as Texas, cotton farmers actually planted 11.24 million acres, with the maximum response of 11.9 million and 10.95 million on the low end.

Brown points out the yield variation largely depends on upcoming weather, but the dry weather is creating a wide range of yield estimates this year. According to respondents in June, the average estimate for yield includes:

Corn: 178.68 bu. per acre versus 181.5 bu. per acre (USDA’s current estimate)
Soybeans: 51.06 bu. per acre versus 52 bu. per acre
Wheat: 44.47 bu. per acre versus 44.9 bu. per acre
Sorghum: 68.17 bu. per acre versus 69.2 bu. per acre
Cotton: 855.18 pounds versus 841 pounds

“I think when you look at both corn and soybean acres, there wasn’t a lot of deviation from the Prospective Plantings report USDA came out with a few months ago, so we didn’t see a big change there,” Brown says. “On the yield side, there are certainly some differences. The average yield estimate, on the corn side from the survey was a little more than 178 bu. per acre, with a downside of 175 bu. Likewise on soybeans, that came in at about 51 bu. per acre. Both corn and soybeans are below where USDA currently sees yields. I will say those are going to change quickly as we look at weather and what’s occurred since the survey would have gone out roughly a week ago now.”

(Farm Journal)

Economists also expect crop prices to decline this year and next; however, there is a wide range in estimates signaling volatility will continue.

The average corn price is estimated to hit $4.99 per bushel for the current crop year and $4.74 for 2024/2025. The high range of the estimate for this year is $6 per bushel, with a low of $4.25 per bushel. Soybeans are also expected to trend lower, with an average estimate of $12.52 per bushel this year. The high came in at $14 per bushel. The low estimate was $10.85 per bushel. The average estimate for 2024/2025 is $11.90 per bushel.

Wheat prices are estimated to average $7.63 per bushel this year, with a low of $7 and a high of $8.49. The average estimate for wheat prices in 2024/2025 is $7.10 per bushel, with a high of $8 and a low of $6.49.

(Farm Journal)

Mixed Outlook on Livestock

The June Ag Economists’ Monthly Monitor also asked economists to provide estimates about beef cow inventory as of July 1, which is a report USDA will release on July 21. Economists who responded expect cow inventory to fall to 30 million head, which represents a decline of 1.2%.

Respondents also see fed cattle prices in 2024 trending to over $181 per hundredweight. But responses also produced high volatility, with one economist even thinking fed cattle prices will average above $195 per hundredweight in 2024.

Most everyone expects a contraction,” Brown says. “With the dry weather we’ve had in cattle country, Oklahoma, Kansas, Nebraska, Missouri, to name a few, I think we will continue to see fewer beef cows when we get that report out in mid-July. There were some who are even calling for larger declines than the nearly 30 million head. It reminds me we’re going to get tighter, and we’re not done talking about record cattle prices if these forecasts hold true.”

(Farm Journal)

Economists are less optimistic about hog prices and milk prices producers will receive this year.

Ahead of the next Hogs and Pigs report from USDA later this week, economists think the breeding hog inventory will be 99.27%, compared to 100.5% one year ago. Economists are more bullish when it comes to exports, but not enough to improve their outlook on hog prices.

“They weren’t as optimistic on cattle or dairy,” says Brown. “When you look at what they were saying for 2024 hog prices, still, the average was below $61. Which if costs stay where they are today, that means red ink continues into 2024. Likewise, the projected all milk price for 2024 is $20.50 in our survey. That probably also makes red ink in 2024.”

The Likelihood of a U.S. Recession

Another major economic indicator for livestock producers is the general economy, as it historically has a direct impact on domestic demand. Of those surveyed, economists expect interest rates to move up 2% over the next six months.

“Although there was a wide range of responses, most economists felt the U.S. economy is not currently in a recession and will not enter one during 2023,” Brown says. “I will point out, though, there appears to be continued uncertainty about the expected general economy health for 2023, given survey responses.”

The majority of economists “somewhat disagree” the U.S. will enter into a recession this year. While at least eight economists say they “somewhat agree” a recession is looming yet this year.

(Farm Journal)

Looking Ahead to July

The June Ag Economists’ Monthly Monitor survey is a current snapshot of economists’ views. The survey will be sent to participating economists just days after USDA releases its WASDE report each month. Less than two weeks later, the results will be released.

“It is fairly current, but I’ll just say weather matters a lot, as we talked about, especially with yields. We’ll see how this changes, being able to now come back to the same group and ask what they expect corn and soybean yields to be in another few weeks. We’ll also have the first survey under our belt, and it will be interesting to watch those changes,” Brown says.

Looking to the second survey, Brown says he’s interested in watching changes to the crop-yield side of the equation. Longer-term, he thinks the monthly monitor will reveal bigger trends about the general economic health across all of agriculture and how those forecasts change from month to month.

“I’m really curious to watch [the general economic health] as we get more observations, and see what July looks like relative to June in terms of overall economic health,” he says. “I’m curious to watch as this group of experts continues to digest what’s happening in agriculture.”

Canada Warns on 'Product of USA' Regulation

Thu, 27 Apr 2023 15:41:48 GMT

In early March, the USDA proposed the label be restricted to meat, poultry and eggs that are born, raised, slaughtered and processed in the United States. Currently, foreign meat that is processed in U.S. plants can be labeled “Product of USA.” Arun Alexander, Canada’s deputy ambassador, isn’t convinced this is a good practice.

Canada’s “Product of USA” Outlook

Alexander in Washington, said Tuesday, “We are concerned about the real-world consequences” of changing the rules on the voluntary “Product of USA” label. He went on to say the integrated livestock market “is a real reflection of the value and importance of local and regional food systems.”

With animals from both nations available to processors, plants can operate at full capacity, he said. “Small and medium-sized processors are the ones that can least afford to segregate products.”

Related story: USDA Seeks to Limit Use of ‘Product of USA’ Label By Packers

Of the voluntary “Product of USA” label, Alexander said, “I think we have to look at the specific products to make sure we don’t disrupt those effective supply chains. And so we are willing to work together with the United States to implement measures that achieve the objective but also not disrupting those supply chains.”

The Upshot

According to Alexander, Canada “will participate in USDA’s consultation process” on the regulation. The public comment period on the proposal runs through June 11.

John Phipps: Are Tariffs Part Of The Problem With Inflation?

Thu, 11 Aug 2022 20:37:09 GMT

From Gary McIntyre in Hawkeye, Iowa:

“Can you please explain how tariffs placed on goods coming from one country into another really work? I understand the U.S. has over 500 tariffs on various products coming from China currently. It is being considered to drop it down to the 300 range. Was some objective met that some tariffs might be cancelled? Also, wouldn’t tariffs contribute to inflation?”

Gary, I was just thinking about revisiting my tariff Agsplainer from 2018 when the tariffs on Chinese products were enacted by President Trump. The spoiler is this: tariffs are taxes paid by buyers – American consumers – not sellers in China.

Related News: Ag Groups Call for Tariff Relief to Help Ease Inflation

That said, one development may lessen this desired price action. All along supply chains of every kind, profit inflation is now one of the big drivers. Consumers are conditioned to expect inflation and still wary of supply problems, so an opportunity to increase margins is hard for retailers to pass up.

There is another bonus to removing tariffs – reciprocal removal of Chinese tariffs on goods we export to them – like ag products.

Related News: Biden Administration Justifies Trump-Imposed Duties on Chinese Goods

President Biden likely to address War, Food and Fuel Costs, Ocean Shipping Reform

Tue, 01 Mar 2022 22:26:27 GMT

President Joe Biden will give his first State of the Union address Tuesday evening, and it likely won’t be the speech he and his staff had anticipated giving even a week ago.

USDA Secretary Tom Vilsack said it will be a difficult address for Biden to give because of Russia’s invasion of Ukraine.

“Our thoughts and prayers are extended to those brave people (in Ukraine) who are fighting fiercely against the bully that’s trying to take over their country,” Vilsack said during a discussion with AgriTalk Host Chip Flory on Tuesday afternoon.

Earlier on Tuesday, Biden authorized a decision to release 30 million barrels of oil from the Strategic Petroleum Reserve. Much of that decision, Vilsack said, was in response to the war in the Ukraine. However, the decision also was made in part to try and address the prices Americans are paying for fuel.

“There’s no question the president is cognizant of the higher prices American farmers and families are paying right now at the pump,” Vilsack said.

He also referenced Biden’s decision to authorize the USDA to provide assistance to the biofuel industry and expand the infrastructure for higher blends as an effort to stem higher fuel prices.

“Remember, we’re putting $100 million dollars on the table for E15 expansion and higher blends in the country,” Vilsack said. “It’s why (Biden) basically signed off on the EPA providing record levels of biofuels in 2022. Whether it’s in the speech tonight or not, let’s just make sure we look at the entire picture here, because it’s a pretty significant one.”

When Flory asked whether the president would address the Department of Justice’s investigation into the meatpacking industry and cattle market prices tonight, Vilsack demurred.

“You know, that’s being pretty closely held, as all investigations are,” he told Flory.

Broad-Ranging Topics

Additional topics Biden is likely to address in the State of the Union range from climate change to infrastructure improvements, health care, and child-care costs.

Vilsack reminded AgriTalk listeners that the U.S. has had a growing economy in the past year. “We’ve had the fastest job growth in history; we’ve had the fastest economic growth of the country in 40 years. Let’s not forget that,” he said.

When Flory asked whether there will be any surprises in the speech, Vilsack replied, “Well, see if the president mentions anything about ocean shipments and references actions by the Department of Justice, the Maritime Commission, directed at ocean shippers.

“That may not be something that people would normally think about,” Vilsack continued. “But given the fact that we’ve had so much difficulty in terms of getting things to and from the United States, that has exacerbated the supply chain challenges that often result in higher costs.”

President Biden’s address is slated for 9 p.m. Eastern on Tuesday.

To hear the complete discussion between Secretary Vilsack and Flory on AgriTalk, listen here:

Farmer Support For Trump Holds Strong And Steady

Tue, 17 Nov 2020 05:16:07 GMT

President Donald Trump remains in U.S. farmers’ good graces, according to the latest Farm Journal Pulse survey, despite an ongoing trade war with China and a 2019 average net-farm income that is projected to be less than half of what it was in 2013.

The Pulse survey sent via text to approximately 5,000 farmers on Monday asks, “Do you approve or disapprove of the way Donald Trump is handling his job as president?”

Of the 1,129 farmers who responded to the survey, 50% say they strongly approve while another 24% say they somewhat approve.

(Farm Journal)

Farmer approval ratings for Mr. Trump are statistically the same as they were in December 2018, when the Pulse survey regarding his job performance was first conducted. The survey has been conducted five times in the past year-and-a-half, the most recent in late April.

Randy Russell, The Russell Group, attributes the high marks for Mr. Trump to a couple of reasons, including his efforts to rein-in China’s theft of U.S. intellectual property.

“The Chinese have been stealing our intellectual property and forcing companies to transfer technology to them. We’re at a pivotal point, and for the first time we’ve got a president who’s trying to do something about it. Farmers may not agree with every tactic he uses or everything he says, but they support what he’s trying to accomplish,” Russell said earlier this year.

In May, Mr. Trump announced tariffs on $200 billion worth of Chinese imports. Beijing responded by imposing duties on $60 billion worth of U.S. goods. President Trump has said he is prepared to apply additional tariffs on $300 billion of Chinese goods, if a trade resolution with the country is not forthcoming. He is supposed to meet with China president Xi Jinping at the G-20 summit, which is scheduled for June 28-29 in Osaka, Japan.

To review interactive maps from previous Pulse surveys, go to Agweb.com and click on the link, Farm Journal Pulse. Text the word PULSE to 31313* to participate in future surveys.

To weigh-in on the Pulse survey results, you can reach Farm Journal Editor, Rhonda Brooks, at rbrooks@farmjournal.com.

Trump Approval Sky High in Ag | Agweb.com

Farmers Show Cautious Optimism for Tariff Aid Plan | Agweb.com

Buoyed by Stronger Support from Rural America than 2016, Trump Wins Second Term as President

Donald Trump won all battleground states in a virtual red wall while the blue wall (Pa., Wis., Mich.) cratered for Democratic challenger Kamala Harris as she faced the greatest political comeback in U.S. history.

Trump also won battleground states of North Carolina and Georgia and was close in Nevada and Arizona, two states not yet officially called. It looks like Trump will eventually garner over 300 electoral votes. Trump is the first candidate in over a century to reclaim the White House after losing it. Trump, who won election in 2016 as the 45th president, now will be the 47th and just the second candidate in U.S. history to win nonconsecutive White House terms.

The Republican Party was on track to win the popular vote for the first time since 2004.

“America has given us an unprecedented and powerful mandate,” Trump told supporters as he declared victory.

Trump garnered even stronger support in rural America versus his still robust rural vote in this first administration. That is likely a backlash against the ag policy moves of the Biden/Harris administration that focused on underserved and minority rural citizens.

Trump also won strong support among working-class voters. The AP VoteCast survey, which included more than 120,000 registered voters nationally, showed he won 55% of voters without a college degree. That was up from 51% in 2020 in his race against Biden. Harris, meanwhile, struggled to pull together the diverse coalition that elected Biden in 2020, and she was weighed down by negative views of the economy under the Biden administration.

— It’s Trump’s GOP and his party has changed in a massive realignment. It now focuses on the working class, younger Americans, including young Black men, and Hispanics. It already focused on rural Americans; Trump gained even more rural votes in this election.

—“A new star is born,” Trump said in his acceptance speech: Elon Musk, who helped Trump and the GOP in campaign funding and messaging. It is unclear what role Musk will play in the next Trump administration, but the president-elect previously said he wants Musk to lead an effort to make the government more efficient. Of note: Musk vowed to keep his political action committee going beyond the presidential election, a sign the world’s richest person is building a political machine to support Trump.

— Republicans did much better than most expected in Senate races, with a likely pickup of four seats, to 53 (perhaps more), up from their 49 total in the current Congress. They include:

• West Va.: Open seat (Joe Manchin). Jim Justice (R) beat Glenn Elliott (D)

• Mont.: Incumbent Jon Tester (D) lost to Tim Sheehy (R)

• Ohio: Incumbent Sherrod Brown (D) lost to Bernie Moreno (R)

• Pa.: Incumbent Bob Casey Jr. (D) lost to Dave McCormick (R)

• Mich.: Open seat (Stabenow). Elissa Slotkin (D) is clinging to a 4,600 vote lead over former GOP Rep. Mike Rogers.

• Wis.: Incumbent Tammy Baldwin (D) is slightly ahead of Eric Hovde (R)… after late results from Milwaukee and Racine put her in the lead.

• Nev.: Incumbent Jacky Rosen (D) leads Republican Sam Brown in both Washoe and in Clark County, where the outstanding vote likely benefits her. With many absentee ballots, this race may not be called for a while, much like the 2022 Senate contest.

• Ariz.: Open (Kirsten Sinema). Ruben Gallego (D) beat Kari Lake (R)

• Neb.: Incumbent Deb Fischer (R) squeaked by Dan Osborn (Independent)

• Texas: Incumbent Ted Cruz (R) beat Colin Allred (D)

• Current GOP Sens. Deb Fischer (Neb.) and Ted Cruz (Texas) both won their races that Democrats thought they had a chance of winning.

— What the GOP Senate tally means: This will mute to some degree GOP Senate moderates in the new Congress, including Sens. Susan Collins (Maine), Lisa Murkowski (Alaska), newly elected John Curtis (Utah) and Bill Cassidy (La.). The Senate GOP count gives Republicans powerful leverage in tax and spending battles.

— Several House races are still too close to call, but it appears Republicans will hold on to its narrow majority in the chamber. But Democrats were leading in some close races and several California races could still tip the House chamber to the Democrats. If the GOP keeps control of the chamber, that means another contentious House Speaker vote perhaps changes in its rules.

— Election winners include:
• Trump and his campaign strategy. Also, Trump’s victory coattails helped Republicans win a few Senate contests previously mentioned and helped keep the House in GOP control.
• GOP issues, including the border, tax/economic/inflation policy, energy, reduced regulations and a push for a reciprocity trade policy.
• Sen. Steve Daines from Montana played a significant role in the 2024 Senate races as the chairman of the National Republican Senatorial Committee (NRSC). In this position, he was responsible for leading the Republican efforts to flip control of the Senate from Democratic to Republican majority.

— Losers include:
• Kamala Harris who mostly refused to answer questions and make clear the policies she wanted. Her strategy of focusing on abortion and women voters was not enough to beat Trump.
• Former House Speaker Nancy Pelosi (D-Calif.), who led the maneuvers to get President Joe Biden to relinquish his re-election run for president and pushed Harris to pick Tim Walz of Minnesota as her vice president when election experts thought she should have picked Pa. Gov. Josh Shapiro.
• Harris’ campaign strategy that at the end relied on elite musical entertainers, a failed strategy that Hillary Clinton also tried. Nearly $16 billion were spent this election season, with Democrats spending a lot more than Republicans. The GOP saw the benefit of podcasts, which were a free way of getting their message across to voters.
• Pollsters who underestimated Trump voters for the third consecutive presidential election. Another loser: Iowa pollster Ann Selzer, who on Saturday predicted Harris over Trump in Iowa by 3 points; Trump won the state by double digits. Her poll turned out to be an outlier.
• President Biden’s family who helped push him to run for re-election only to wait until it was very late to see him pushed aside and forced to drop out.
• Most of the mainstream (legacy) media who clearly favored Harris and did several things that showed their bias.

— Now what?
• Trump should have learned from mistakes during his first term and will not likely make poor choices of some Cabinet and other personnel who ended up writing negative books about him.
• Trump’s Cabinet: The new GOP Senate next year will be able to provide the votes for Trump to get the Cabinet he wants. Unclear is what role RFK Jr. will play in Trump 2.0. He would not likely be confirmed by the Senate for any Cabinet position.
• High odds that a Trump favorite, Doug Burgum of North Dakota, will come into Trump 2.0 administration, perhaps as Energy Secretary, Burgum will bring ag-related interests relative to the RFS and tax incentive programs like 45Z/Sustainable Aviation Fuel (SAF). On global climate policy, Carbon Brief said Trump’s return to the White House would likely result in the U.S. missing its climate pledges “by a wide margin,” though it noted that some Biden administration policies such as a mammoth clean-tech spending program may “prove hard to unpick.”
• The lame-duck session of Congress may be encouraged to complete lingering business, including fiscal year (FY) 2025 funding, disaster aid, and perhaps a new farm bill and an ag economic aid measure.
• Foreign policy: Trump will take a more aggressive role in foreign policy rather than the near pacificist approach taken by Biden/Harris.
• Supreme Court: In the next few years, one to several existing SCOTUS members could likely depart.
• Republicans are now in position to reshape the federal judiciary.

— Budget reconciliation: With Republicans capturing the White House and Senate, and perhaps keeping control of the House, that means several budget reconciliation measures until 2026 elections could alter that situation. That means higher odds that Trump will get a lot of what he wants relative to 2017 Tax Act policies which mostly expire at the end of 2025.

— During the first days of his second term, Trump will issue executive orders dealing with border issues and energy-related matters, topics which Biden altered in recent years. Trump will also put into play that for every new regulation, up to ten regulations must be swept away.

— The ag sector will focus on Trump 2.0’s trade policy. Trump has said “tariffs” is his favorite word in the dictionary and has consistently said he would use them against China. He has also said he would put 10% to 20% tariffs on imports from other countries, but that is seen as leverage in discussions with countries for a key goal of his new term: reciprocal trade agreements. Key will be if former U.S. Trade Rep Robert Lighthizer comes into the new Trump administration as most expect and if so, under what role. It may be as Commerce or Treasury Secretary. Trump recently said he would slap on tariffs against Mexico if their new president doesn’t comply with holding illegal immigrants into her country.

— International reactions to Donald Trump’s return to political prominence:
• Israeli Prime Minister Binyamin Netanyahu referred to the outcome as “history’s greatest comeback,” signaling strong approval and a continued bond between the two leaders.
• Indian Prime Minister Narendra Modi referred to Trump as a “friend,” reflecting close ties and potentially anticipating cooperative efforts.
• Cautious optimism from Western leaders: France, Britain, and Italy’s leaders expressed a diplomatic hope for future collaboration, signaling their willingness to maintain stable relations with Trump while hedging their tone.
• Far-right leaders in Europe cheered, indicating ideological alignment or a belief that Trump’s policies resonate with their political goals.
• Measured Response from Ukraine: Ukrainian President Volodymyr Zelenskyy gave restrained praise by highlighting appreciation for a “peace through strength” approach. This suggests caution from Zelensky, likely stemming from Trump’s past relationship with Russia and potential implications for Ukraine’s security situation.

— Market reactions:
• Bitcoin is bullish on the news as Trump and Musk are supporters. Bitcoin jumped to a record high above $75,000.
• U.S. equities will likely show a continuation of higher levels as Trump’s wins will mean better tax/investment opportunities than if Harris had won.
• Banks, brokers: Robust stock markets and an end to the Biden administration antitrust crackdown should mean more profits for banks and brokers… and less regulation. Bank of America, Citigroup, Morgan Stanley, JPMorgan Chase, Charles Schwab and Goldman Sachs are all up 6% or more in premarket trading.
• Treasury yields jumped, and the dollar surged on the election results (While Trump has advocated for a weaker dollar, many investors say his policies will achieve the opposite). Treasury yields are soaring on the view that Trump’s agenda — more spending, low taxes, tariffs, restricted immigration — will fuel inflation. The 10-year US Treasury note edged towards 4.5%, a level not seen in about six months, before pulling back a bit. Bitcoin spiked to a record and the Mexican peso lost as much as 3.5%.
• Oil, gold: A stronger greenback makes dollar-denominated commodities more expensive for international buyers, so crude and precious metals are falling.
• The yuan weakened the most in two years and Chinese stocks fell on the specter of Washington slapping tariffs of up to 60% on Chinese goods. The move could further weaken the world’s second-largest economy and disrupt global supply chains.
• Ag markets will be cautious over Trump’s aggressive trade policies. Soybeans dropped given concerns about trade tensions with China, the biggest buyer.
• Federal Reserve policymakers will watch to see if Trump’s policies via across-the-board tariffs and aggressive tax cuts are inflationary.

— A key state ballot issue in South Dakota is poised to have gone against carbon pipelines. This referendum let voters decide whether to uphold a pipeline bill that was passed by legislators. With 82% of votes in, 60% have voted no and 40% voted yes. A no vote would mean the state law in question would be rejected and that raises fresh questions about the Summit Carbon Solutions pipeline and similar projects.

Trade

Breaking: Mexican Border Closed Again as New World Screwworm Comes Within 370 Miles of the U.S.

Breaking News: Mexican Ports to Reopen in Phases for Cattle Trade Starting July 7

Progress Being Made to Stop Progress of NWS

Continuing Efforts

U.S. Cattle Industry Urges Mexico's Border to Remain Closed Over Spread of New World Screwworm

Beef Industry Sees Some Silver Linings As Reciprocal Tariffs Go Into Effect

USDA Maintains Cattle Imports Amid Second New World Screwworm Case in Mexico

Canada, Mexico Hit Back with Retaliatory Tariffs on U.S. Imports

Trump Officially Signs Three Executive Orders Imposing 25% Tariffs on Canada and Mexico, 10% Tariffs on China

Iowa Secretary of Ag Weighs In on The H5N1 Battle, Vaccine Potential And Trade Sensitivities

More Action Needed By Mexico Before Reopening Border for Feeder Cattle Imports, Says Vilsack

U.S. Imports of Mexican Cattle Disrupted

New World Screwworm: Latest Update from USDA-APHIS

APHIS Increases Import Restrictions on Animal Products from Mexico on Confirmed Case of New World Screwworm

North American Cattle Groups Advocate for Oversight of Lab-Grown Proteins, Beef Imports

Ag Economists Turn More Positive Longer-Term On the Farm Economy

Cuts to Projected U.S. Crop Yields

What Economists are Watching the Next Six Months for Crop Prices

What Livestock Economists Are Watching the Next 6 Months for Livestock

Economists More Bullish on Cattle and Hogs

Longer-Term Look at the Health of Agriculture

The Turbulent Relationship Between the U.S. and China

Potential Events/Factors Not Getting Enough Attention Today

Previous Ag Economists’ Monthly Monitor Coverage

High Production Costs Could Weigh on the Ag Economy Through 2024, New Survey of Economists Finds

Main Takeaways from the June Survey

A Current and Future Snapshot of the Agriculture Economy

Falling Net Farm Income

The Likelihood of a U.S. Recession

Looking Ahead to July

Canada Warns on 'Product of USA' Regulation

Canada’s “Product of USA” Outlook

The Upshot

John Phipps: Are Tariffs Part Of The Problem With Inflation?

Related Topics: John Phipps’ Tariff 102: Do Tariffs Accomplish Policy Goals?

Related Topics: John Phipps’ Tariffs 103: Tariffs and Politics

Related News: Ag Groups Call for Tariff Relief to Help Ease Inflation

Related News: Biden Administration Justifies Trump-Imposed Duties on Chinese Goods

President Biden likely to address War, Food and Fuel Costs, Ocean Shipping Reform

Farmer Support For Trump Holds Strong And Steady

Trump Approval Sky High in Ag | Agweb.com

Farmers Show Cautious Optimism for Tariff Aid Plan | Agweb.com

Buoyed by Stronger Support from Rural America than 2016, Trump Wins Second Term as President