PBS: What the end of NAFTA would mean for farmers and ranchers
President Trump’s efforts to change the terms of NAFTA have divided farmers and ranchers, who depend, in different ways, on global trade. Special correspondent Grant Gerlock of NET traveled around the state to hear their perspective on the ways the trade agreement between the U.S., Mexico and Canada affects their income and livelihoods.
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Judy Woodruff:
But, first, we turn to trade.
President Trump’s tariffs on steel and aluminum angered allies around the globe. Here at home, his efforts to change the terms of the North American Free Trade Agreement, or NAFTA, have divided farmers and ranchers.
From PBS station NET in Nebraska, Grant Gerlock looks at how it might affect their income and livelihoods.
Grant Gerlock:
Alan Tiemann farms corn and soybeans in Eastern Nebraska. But like many farmers, when it comes to his business, he keeps a global perspective.
Alan Tiemann:
Ninety-five percent of the world’s population lives outside the U.S. So, it’s a huge factor, in that we’re not just producing for ourselves. We are producing for the world.
Grant Gerlock:
Exports are a necessity, Tiemann says. And America’s two closest neighbors are big clients. Canada is a top destination for prepared foods and fresh produce. Mexico is the number one export market for corn, $2.6 billion worth in 2017.
But where does that leave farmers? What do you do with all that grain if NAFTA falls through?
Alan Tiemann:
If NAFTA falls through, that’s just a scary thought. Up to like one-third of my income comes from exports. So NAFTA plays a huge part in that, and they’re the largest trading partner we have. We need trade.
Grant Gerlock:
For farmers, exports are an outlet for the extra grain raised in the United States. Without trade, there would be an oversupply and the prices farmers earn for their crops would fall.
In the beef industry, trade has become part of a border-blurring, multinational production system.
Craig Uden:
When you process one of these animals, it doesn’t go to the same place. You have pieces that go everywhere, OK?
Grant Gerlock:
Craig Uden operates Darr Feedlot in Central Nebraska where cattle put on weight before they go to market. Meat companies sell cuts of beef where they bring the best prices. Steaks and hamburger do well in grocery stores and restaurants in the U.S., but other cuts sell better overseas.
Craig Uden:
The tongues maybe to go Japan. OK? And the oxtail maybe goes to Europe.
Grant Gerlock:
NAFTA is part of how this works. Cattle from Mexico and Canada are often imported, tariff-free, to feed lots and packing plants in the U.S. From there, they become part of the beef supply parceled out on the export market.
Just as corn farmers fear an oversupply if NAFTA were terminated, Uden fears the U.S. would be saddled with more beef than Americans could eat.
Craig Uden:
And once it’s disruptive to the livestock sector, particularly in Nebraska, then it presses back down to the grain markets and the hay markets and the ethanol production.
Grant Gerlock:
That’s what Uden worries about if NAFTA goes away, but there are some in the cattle business who believe NAFTA has already done more harm than good.
David Wright operates a ranch in north central Nebraska where he raises calves that eventually grow up to go to feed lots. Wright agrees with President Trump that the current version of NAFTA doesn’t work and supports efforts to reform it. His argument sounds like the recent debates over steel and solar panels.
He says cheap cattle from Canada and Mexico undercut his business.
David Wright:
The cost of living or production in other countries is different than it is here. So, as long as we’re one of the highest economies in the world, I don’t see a lot of advantage in us trading for something that we already produce.
Grant Gerlock:
Last year, the U.S. exported nearly $2 billion of beef to Canada and Mexico, but also imported millions of cattle from the two countries.
Wright says those animals compete for space at feed lots.
David Wright:
Someone tell me how that is good for the producer here who is paying the real estate taxes to keep a school open, doing the business trying to keep the town open, as opposed to the guy in Canada who is really not.
Grant Gerlock:
According to a Department of Agriculture census, the number of large cattle feed lots has declined by more than 50 percent since the agreement was signed.
Wright fears, if NAFTA remains unchanged, that trend will continue.
Craig Uden:
If anything, they have kept us in the game.
Grant Gerlock:
Craig doesn’t think there are fewer cattle producers in the U.S. because of Canada and Mexico. He blames the cost of labor and keeping up with environmental rules.
The direction NAFTA turns under the Trump administration is not the only issue on farmers and ranchers’ minds. Some 60 percent of rural voters went for Trump in 2016. And that includes many farmers like Alan Tiemann, who says he’s been happy with the tax cuts that were passed and regulations that have been rolled back.
But NAFTA cuts straight to the bottom line of his business.
Alan Tiemann:
If we go in there putting tariffs and different things on all these products moving back and forth between the borders, who’s going to pay for that? The consumer is going to pay for that.
Grant Gerlock:
Dave Wright has been encouraged by economic growth and new jobs created so far under Trump. He says putting protections in NAFTA for American workers and cattle ranchers would reinforce that.
David Wright:
I need the consumer to have money in his pocket, so he can purchase my beef that’s put out for market. And if we’re sending jobs over to other countries, then what are our citizens going to be doing to earn a living?
Because if they don’t have revenue to spend on the product that I’m trying to sell, then I guess I don’t have a product to sell, then, you know?
Grant Gerlock:
Wright hopes cattle are part of the conversation as NAFTA talks continue, while other farmers like Tiemann hope to avoid the crossfire, as the Trump administration pushes for changes in trade.
For the “PBS NewsHour,” I’m Grant Gerlock in Lincoln, Nebraska.