On Wednesday, January 29, President Trump signed the United States-Mexico-Canada Agreement (USMCA). Today I’ll review the economic impact of agricultural exports from Texas, and the Texas 13th Congressional District to Canada and Mexico, our two USMCA trading partners.
Upcoming Dates
January 31 – Cattle
January 31 – Sheep and Goats
February 5 – Hemp Learning Session, Dumas (Click here for details)
February 5 – Castro Ag Conference
DEADLINE APPROACHING February 6-7, 2020 – Developing this Year’s Marketing Plan for Feed Grains and Cotton, Amarillo AgriLife Research & Extension Center; Preregister at https://agriliferegister.tamu.edu/Grain
February 11 – Hemp Learning Session, Dimmitt (Click here for details)
March 3 – High Plains Dairy Conference (Click here for details)
U.S.-Mexico-Canada Agreement
The United States-Mexico-Canada (USMCA) trade agreement is a free trade agreement (FTA) that includes all of North America. USMCA replaces the North American Free Trade Agreement (NAFTA). Canada and Mexico are vital markets for U.S. agricultural products. From 2014-2018 Canada was the number one export destination for U.S. agricultural goods, totaling $104 billion. During the same time U.S. exports to Mexico totaled $92 billion, putting Mexico in third in the rankings.
U.S. Agricultural Exports to Top 5 Export Destinations
Source: FAS GATS
USMCA is very similar to NAFTA; however a few key changes are important to agricultural producers. USMCA expands dairy markets in Canada through tariff rate quotas and the elimination of Canada’s milk classes 6 and 7. USMCA also eliminates practices used to discriminate against U.S. wheat during the grading process in Canada, and mandates they do not use country of origin labeling requirements on wheat inspection certificates.
USCMA is not only good for the U.S., it is good for Texas. The top three exports to Mexico from Texas in 2018 were: (1) beef and veal, hides and skins, beef cattle; (2) cotton lint and cottonseed; and (3) other dairy products which includes dairy, butter, dry milk, cheese, and whey.
USMCA & the Texas 13th Congressional District
The Texas 13th Congressional District (Texas 13th) encompasses the Texas High Plains and much of the Rolling Plains region. The two largest cities in the district are Amarillo and Wichita falls. The Texas 13th includes some of the most productive agricultural land in the state. In fact in 2018 the Texas 13th was responsible for 24% ($6 billion) of the total agricultural cash value for the state. In 2018 the Texas 13th produced 37% ($3.1 billion) of the state’s total beef, 25% ($740 million) of the state’s total cotton lint and cottonseed, 40% ($740 million) of the state’s total milk, and 27% ($1 billion) of the state’s total food and feed crops including corn, wheat, sorghum, hay, and ensilage.
The Texas 13th Congressional District
As a result of the Texas 13th’s significant agricultural production, agricultural exports to USMCA partners are an important market for the district. In 2018 Texas 13th exports to Mexico totaled $165.9 million, of which $101.4 million were animal products and $64.5 million were plant products. In 2018 Texas 13th exports to Canada totaled $81.9 million, of which $69.9 million were animal products and $12 million were plant products.
Estimate of Texas 13th Congressional District 2018 Agricultural Exports to Canada and Mexico
*Other Dairy includes Other Dairy, Butter, Dry Milk, Cheese, and Whey
**Other Poultry includes Turkey and Eggs
Texas A&M AgriLife Extension faculty estimated the economic impacts of Texas and Texas 13th agricultural exports to Canada and Mexico using IMPLAN, an economic input/output model. IMPLAN estimates indicate that the total business activity supporting Texas 13th Congressional District agricultural exports to Canada and Mexico was $439 million in 2018 (Table 1). This activity included farm gate level business activity of $248 million and off-farm business activity of $191 million.
Farm and related sector value added, or income, generated by agricultural exports was $145 million. Another $46 million was generated off-farm in the form of input supplies, transportation, energy, finance, real estate, health care, wholesale/retail trade, and eating and drinking places. Exports to Canada and Mexico resulted in 1,788 full and part-time jobs in the Texas 13th Congressional district in 2018. Employment to produce Texas agricultural goods to be exported to Canada or Mexico were estimated to be 611 jobs. The balance of employment, 1,176 jobs, were located in other sectors including other agriculture, business services, transportation and warehousing, retail, and healthcare.
Estimated Impacts of 2018 Texas 13th Congressional District and Texas Agricultural Exports to Canada and Mexico
Chart Challenge
The chart this week is on theme. I’ve produced a graph using data from the Foreign Agricultural Service Global Agricultural Trade System (FAS GATS). The chart shows U.S. exports to one of our top five trading partners, broken down by category.
