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USMCA Could Mean Big Things for Small Portion of Iowa Ag Economy

DES MOINES, Iowa -- One promise of President Trump’s campaign checklist? Done. Well, almost. Once it is officially ratified the USMCA will replace NAFTA as the trade deal between the U.S., Mexico, and Canada.

The USMCA is still built on the framework of NAFTA, free agriculture trade flowing through North America. Julie Kenney is the Deputy Secretary for the Iowa Department of Agriculture and says going back to the way things were before the renegotiation process is welcome news.

“Canada and Mexico are our first and second largest trading partners so It's absolutely critical that we have access to those markets and it looks like this will provide us just that. So, from an Iowa farmer perspective, Secretary Naig and our entire department were really focused on making sure that we've got zero tariff barriers both in Mexico and in Canada.

Mexico, which is the number one importer of U.S. dairy, had slapped a 25% tariff on the product after the Trump Administration placed tariffs on their aluminum and steel. This deal also allows added access to the Canadian dairy market, allowing the U.S. to sell $560 million worth of product to our neighbors in the north.

“We're seeing this as an added bonus because it does give our dairy farmers, and dairy farmers across the country added access to that Canadian market that's so important to them, and it looks like poultry and eggs will also have some added access to the Canadian market” said Kenney.

While increased demand is good for every dairy farmer, big farms who sell to co-ops stand to see the biggest impact.

“Those co-ops export products, so anything that can help their co-op will help their price on their milk check, so this is going to have a good effect on all dairy farmers across the United States”

The deal also allows the U.S. to export products that used to be restricted like butter, cream, and cheese. Mitch Schulte, Executive Director with the Iowa dairy association, says it's too early to give solid numbers when it comes to how much money is expected to come from the USMCA, but things are looking up.

“It’s definitely a waiting game to see how things will pan out but I do think it’s going to be very promising for the dairy producers in Iowa” he said.

The deal also gives modernized protections to things like patents and intellectual properties.

Iowa is the 11th leading state in dairy production with most of them coming from the northeast and northwest corners of the state.