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March 19, 2017

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Interesting, but then was the furore over NAFTA by Trump and his supporters about agriculture or manufacturing? I might be mis-remembering, but I seem to remember a lot of the talk about jobs migrating was in relation to manufacturing jobs and less agricultural jobs.

In regards to the effects of a NAFTA collapse on agriculture though, what about the effects on beef, poultry and pork? You've spoken on crops but not livestock. Any chance of doing a short post on that?

And I would imagine that a reshuffling of agricultural trade would be interesting in terms of exactly which markets the US producers turn to with the loss of the Mexican market. The EU market is of course an option, but only insofar as the crops are not GM if I remember rightly. I think Russia still bans imports from the West, which leaves Asia, Oceania and Africa.

The increased gains for Argentina and Brazil are interesting as well as a Trump inspired demise of NAFTA sounds like it might just rekindle Latin American trade and integration...which would be a silver lining in my book.

The farm furore over NAFTA is strong, but in reverse: farmers really don't want to see it go away. And they're right: they've got a protected market there. It'll take work to sell more to Asia if the Mexicans start buying Argentine and Brazilian wheat and soya, while American corn farmers will just lose.

But it won't be as catastrophic as they're suggesting. Annoying, problematic, but not catastrophic.

Hmm...I suppose overall it won't be catastrophic, but a couple of individual farmers might lose out big time. And that fear would definitely drive a strong response to the prospecting of losing NAFTA.

I was wondering though what the longer term prospects might be for American v Latin American wheat and soya in Asia though. Yes agricultural products are sold on a world market, but what is the landed costs for American v Argentinian v Brazilian wheat and soya in Asia? If the Latin American crops are more cost competitive in Asia (which I am assuming might be the case since that is where they are being sold now as opposed to the American produce), then a Argentine-Brazilian shift to Mexico will see Asian consumers getting wheat and soya for higher prices, but they may still seek the Latin American wheat and soya...which in turn could spur Argentine and Brazilian farmers to put more land under wheat and soya no? If so then when they do begin to produce more wheat and soya, provided their prices don't increase in response to the increased demand for their wheat/soya from both Mexico and Asia then they can out-compete the American producers in both Mexico and Asia and that would spell trouble in the long term.

All of that though hinges on two speculations - 1. that the Argentine and Brazilian farmers can put more land under wheat and soya and 2. that their prices won't increase to the point where American wheat and soya remain competitive.

Check the links! They have the information you're looking for, I think.

U.S. farmers are very worried about Brazilian soya, much less so Argentine wheat.

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