Does cattle sector have Trump’s ear on NAFTA?

The leaders of America’s agricultural groups are perplexed.

U.S. organizations that represent corn growers, wheat growers, pork producers and other farm groups are strong supporters of the North American Free Trade Agreement. Their leaders have said, forcefully and repeatedly, that American farmers benefit from free trade with Mexico and Canada, but they might as well be shouting at a hurricane because no one in U.S. President Donald Trump’s administration is listening.

Trump continues to insist that NAFTA is harmful to U.S. farmers because America has an agric-food trade deficit with Mexico and Canada.

This begs the question: who are Trump and his team listening to when it comes to agricultural trade?

No one knows for certain, but one possibility is America’s cattle producers.

The National Cattlemen’s Beef Association publicly supports NAFTA, but two other cattle groups, which are smaller than the NCBA, are vehemently opposed to the deal.

R-CALF USA and the U.S. Cattlemen’s Association claim that NAFTA is detrimental for American ranchers because the U.S. has a trade deficit in beef and cattle with Canada and Mexico.

In a May news release the U.S. Cattlemen’s Association said America “imported $2.25 billion more in beef and cattle than it exported among NAFTA countries” in 2016.

That’s compared to a surplus in beef trade of $226.7 million in 1994, when NAFTA was implemented.

“By 2016 the surplus in beef had become a deficit of $710.4 million, and the combined deficit in cattle had grown to $1.55 billion,” said USCA president Kenny Graner.

Do cattle producers have power in D.C.?

  • Groups that represent beef producers, even small organizations, can influence politicians because America’s cattle industry is large.
  • U.S. Department of Agriculture statistics show that cattle production ranks No. 1 for farm cash receipts in the United States.
  • In 2016, cattle production generated $78.2 billion in farm receipts, or 21 percent of all farm receipts in America.
  • Corn was a distant second at $47.2 billion.

Source: Staff research

The USCA numbers are a bit misleading because data from its own news release shows that America had a trade surplus in beef with Canada and Mexico from 2006-14.

In certain years during that period the surplus topped $1 billion.

Secondly, they omit the fact that U.S. beef exports are booming. Total beef exports to all nations grew from $3.6 billion in 2008 to $7.2 billion in 2017.

As well, they don’t mention that cattle imports create jobs at American feedlots and meat packing plants.

R-CALF, which has more members than USCA, shares similar information on beef trade and NAFTA, particularly the idea that trade deficits harm America’s farmers.

“When you measure the strength of the economy, the net exports is what matters,” said Bill Bullard, chief executive officer of R-CALF.

“If you export more than you import, you grow your economy. If you import more than you export, you weaken your economy.”

The two organizations and their message that Canada and Mexico are winning and American farmers are losing because of NAFTA is almost identical to Trump’s position on the trade deal.

That similarity is likely more than coincidence.

“A lot of the information that is provided in tweets is not factually correct, so where do they get that from?” said John Masswohl, director of international and government relations with the Canadian Cattlemen’s Association.

One such tweet came in early June, when Trump said American farmers are struggling because Canada puts up “massive barriers” to U.S. agri-food.

Masswohl, who has decades of experience in trade issues, said R-CALF and the U.S. Cattlemen’s do have influence in Washington, especially when a new administration and new people take office.

“They try to get in quick and baffle people with stats (that) often are not reliable or credible,” he said.

“They’re able to fool or dupe policy makers for a short period of time. Then eventually people discover that they’ve been led down the garden path.”

The NCBA is the dominant cattle organization in the U.S. and it publicly supports NAFTA. However, that’s not clear from its website.

As of June 14, the NCBA had issued 48 news releases in 2018. Not one of them expressed support for NAFTA.

Max Moncaster, a NCBA media rep, said the absence of news releases is not indicative of the association’s position on the trade deal.

“If you look at any of our public comments, it always talks about doing no harm and making sure that NAFTA stays in place. We’re really big supporters of the agreement,” he said.

“Within the NCBA and our affiliates and our members, support for NAFTA is really, really strong.”

Bullard sees it differently.

The leaders of ag groups like the NCBA may back NAFTA, but the average cattle producer in America does not.

“I firmly believe that (ranchers) are, overwhelmingly, opposed to NAFTA,” he said, adding R-CALF represents grassroots producers.

Other associations represent the entire beef industry.

“NAFTA is supported by the leadership of those (groups) who are closely aligned with the meat packing industry.”

However, Bullard doesn’t buy the notion that Trump is listening to R-CALF and the U.S. Cattlemen’s Association. While they may speak the same language as Trump on trade, that doesn’t mean they have the president’s ear.

“To some extent, but the president found this out (the trade imbalance) on his own,” he said.

“(So) groups were aligning themselves against what they considered to be a failed national trade strategy.”

R-CALF and its anti-NAFTA stance may not sway Trump, but it is part of a larger lobby group that does have influence on the White House.

Bullard sits on the board of the Coalition for a Prosperous America, which includes representatives from American unions, manufacturers, state level farmers unions and the steel industry.

On its website, the coalition says it defeated the Trans-Pacific Partnership trade deal and “helped foster an online trade revolution through Facebook and Twitter.”

“This group has been extremely effective at reaching out to the administration,” Bullard said.

“Our chairman … is Dan DiMicco, the former chair of Nucor Steel…. He has personal relationships with Robert Lighthizer (U.S. Trade Representative) and Peter Navarro (White House trade adviser).”

Bullard said R-CALF and the Coalition for a Prosperous America are working in “symmetry” with Trump on trade.

They affirm Trump’s instincts and encourage the president to “stay on course” with trade reform.

What other U.S. farm groups oppose NAFTA?

  • The National Farmers Union has divisions in 33 states and represents about 200,000 farm families, making it one of the largest farm organizations in the U.S.
  • The NFU doesn’t like President Donald Trump’s tactics and nasty rhetoric on trade issues. Nonetheless, the group does back his position on agricultural trade.
  • On March 7 the NFU board said: “Farmers Union … wants to ensure family farmers and ranchers benefit from fair trade relationships with our trading partners. Our members are severely disadvantaged by our current ‘free trade’ agenda that has amassed massive trade deficits and shipped away our sovereignty. While Farmers Union appreciates President Trump’s stated intent to fix these problems, his tactics to this point have insulted and alienated our closest trading partners.”
  • On Jan. 30 NFU president Roger Johnson said: “Family farmers and rural residents are looking to President Trump to deliver on his promises to fix the nation’s failed free trade agreement framework. The president, rightly so, spoke to how our past trade agreements disadvantage the working class, family farmers and their communities. These agreements operate under a failed framework that the president can begin to fix by replacing NAFTA with an agreement that addresses our massive trade deficit and lost sovereignty.”

Source: Staff research

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Comments

  • Bill Bullard

    The numbers from the U.S. Cattlemen’s Association (USCA) that the author found to be “a bit misleading” are not R-CALF USA numbers. R-CALF USA has made clear that the U.S. has had a trade deficit in the trade of cattle, beef, beef variety meats and processed beef with Canada and Mexico both before and during NAFTA. In 1994 that deficit was $731 million. The deficit continued each and every year under NAFTA and was $2.1 billion in 2017, having grown nearly three-fold in 23 years. R-CALF USA considers any trade agreement that causes the U.S. to perpetually incur a trade deficit averaging $1.3 billion per year a very stupid agreement. Why should the U.S. be forced to continually absorb Canada and Mexico’s overproduction and overcapacity rather than provide opportunities to grow the U.S. cattle herd and attract new cattlemen into our U.S. cattle industry? We believe President Trump and his trade team agree with our assessment and that’s why they are working to substantively change NAFTA.

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