Mark Stephenson, an economist at the University Wisconsin at Madison, is concerned about a scenario that could bring trouble to U.S. dairy producers if the NAFTA talks fall apart. Like many in agriculture, he is concerned about the possibility of not having a NAFTA agreement if negotiations fall apart.
“Mexico is our largest customer. About 40% of our exports go to Mexico so we wouldn’t want to lose those. Those would be pretty important to us.” There’s no way to know for sure, but futures markets may have noticed that Mexico is looking to other countries for dairy products. “It is known that Mexico has increased purchases from other sources, including the EU and New Zealand, over the last few months,” he says. “Futures markets are information sponges and will have taken note of that.” To make matters worse for the U.S., Stephenson says the 11 remaining Trans-Pacific Partnership nations are looking to finalize that agreement, which means Canada and Mexico could squeeze the U.S. even further. “Canada and Mexico could look at favorable treatment between those two countries so that Canada becomes a preferred supplier for Mexican needs of dairy as opposed to the U.S. under that kind of condition. That would be especially true if NAFTA fails.”
Stephenson spoke to Wisconsin county and town government officials, and the Professional Dairy Producers during the Agricultural Community Engagement seminar Tuesday in Stevens Point, Wisconsin.