Members of Kansas’ U.S. congressional delegation can help ranchers and feeders continue to benefit from unrestricted cattle and beef trade by expeditiously approving the U.S.-Mexico-Canada Agreement, or USMCA. This new agreement would allow science-based, duty-free beef trade between the three countries to continue, as it has under the North American Free Trade Agreement.
Since NAFTA went into effect in 1993, U.S. beef exports to Mexico have surged 545%, while exports to Canada have increased 106%. According to the U.S. Meat Export Federation, U.S. beef exports during 2018 totaled $1.06 billion to Mexico and $745 million to Canada. Mexico and Canada consistently are among the top five export markets for U.S. beef. Preferential access granted through NAFTA allowed beef trade with these two countries to flourish.
While USMCA improves on NAFTA in certain areas, it is pretty difficult from the beef industry’s perspective to do better than zero tariffs, zero quotas and science-based standards. Beef producers are pleased that USMCA makes no major changes to the market access provisions that have helped make the U.S. cattle and beef industry an export powerhouse.
U.S. beef exports currently are worth $323 per head of fed cattle, with Mexico and Canada accounting for $70 of the total. In the case of Mexico, the vast majority of consumers want affordable protein that fits their taste preferences. Consumers there are willing to pay more for beef items that have little or no value in our domestic market. The U.S. sold $240 million worth of tongue, tripe and heart to Mexico last year. International demand for these items helps boost the value of U.S. beef.
Trade with Canada includes a wide range of beef cuts and often is driven by regional demand, primarily because it is more efficient to source beef out of the U.S. rather than shipping it across Canada. Much of the U.S. beef exported to Canada ends up in major consumer markets in the eastern part of the country.
During 2017, U.S. beef accounted for 9% of Mexico’s beef consumption and 15% of Canada’s beef consumption. The export value generated is shared back through the U.S. beef value chain to stocker operators and cow-calf producers, like me, making my cattle worth more at sale time.
The alternate reality of free trade between our countries was apparent during the bovine spongiform encephalopathy or “mad cow” incident of the early 2000s. Before that, Canada was shipping feeders to the U.S. for finishing in our feedyards and processing at our packing plants. During the time that U.S. imports of Canadian cattle were banned, Canada increased feeding and packing capacity in response. It is never in our best interest to force customers and partners to become competitors. In the bigger picture, we are the most sustainable beef producers in the world. Pushing production elsewhere because of trade restrictions makes the global beef system less efficient.
Cattle and beef need to move freely for the North American system to operate efficiently. Each of the three countries has specific advantages to raising cattle and producing beef. Part of sustainability and environmental responsibility is letting each producer, industry segment and country do what they do best to optimize resources. Working together across our borders, we further the opportunities for all beef producers.
We have a lot at stake in the decision resting with Congress on USMCA. Unrestricted, duty-free access under USMCA would continue to allow U.S. cattle and beef producers to capitalize on growing demand in Canada and Mexico.
The Kansas Livestock Association and its 5,500 members are encouraging our Kansas congressional delegation to be leaders by stepping forward in support of swift ratification of USMCA.
Barb Downey is a fourth-generation rancher from Wabaunsee County, Kansas. She and her husband, Joe Carpenter, operate the ranch, which consists of registered Angus and commercial cowherds that graze pastures in the Kansas Flint Hills. She is serving this year as president of the 5,500-member Kansas Livestock Association.