Wisconsin ag leaders stress importance of NAFTA to state's farm, food economy

Carol Spaeth-Bauer
Wisconsin State Farmer
Americans for Farmers & Families logo

MADISON -  With six of seven rounds of North American Free Trade Agreement (NAFTA) renegotiations complete and progress moving slowly, some of Wisconsin's leading agricultural voices have joined forces to make the case for NAFTA. 

To help push for NAFTA preservation and modernization, 10 Wisconsin-based groups have joined the newly-formed pro-NAFTA organization Americans for Farmers and Families (AFF).  AFF is a national coalition of over 70 growers, producers, suppliers, transporters, retailers and consumers that is dedicated to educating lawmakers and the public about the importance of the Mexican and Canadian markets to America’s agricultural and retail economies. 

During a tele-press conference on Feb. 14, a few AFF members addressed the importance of NAFTA to Wisconsin's farmers and ag-based economy. 

Tamas Houlihan, executive director of the Wisconsin Potato and Vegetable Growers Association; Kari Kuehl, executive advisory committee chairperson with the American Dairy Coalition; and David Ward, Cooperative Network director of government relations and dairy and Nick George, president of the Midwest Food Products Association, all agreed on the importance of NAFTA for Wisconsin farmers. 

Potato industry

The Wisconsin Potato and Vegetable Growers Association is in favor of improving NAFTA but "we certainly don't want to withdraw from it," said Houlihan. 

While Wisconsin ranks third in the nation for the production of potatoes, it is first in the production of green beans for processing, beets for canning and cabbage for kraut, Houlihan said. State producers are second in the nation when it comes to the production of carrots and peas for processing.

The specialty crop production and processing accounts for $6.4 billion in annual economic activity and nearly 35,000 jobs, Houlihan pointed out. 

"The potato industry is strongly supportive of improving the conditions for trade that we confront with Canada and Mexico," Houlihan said. "But we also feel that these enhancements should be additive to the successes that U.S. potato growers secured in the 1993 North American Free Trade Agreement." 

U.S., Canadian and Mexican farm groups support modernized NAFTA

Two of the most valuable markets for U.S. potato growers are those in NAFTA with Canada as the second largest market in potato exports ($315 million annually) and Mexico the third largest potato market (over $250 million annually). 

"These two countries combined represent about one-third of total U.S. potato exports, so it is extremely important," Houlihan said."Despite the current size of these two valuable markets, exports could be substantially larger if improvements were made."

According to Houlihan, the potato industry believes that potato exports to Mexico could grow to $500 million annually with full unrestricted access for all U.S. fresh and processed potatoes. The same conditions would increase exports to Canada of potentially another $300 million annually.

Increased potato sales would also generate additional jobs — on farms, in agricultural processing, in transportation and other related sectors — jobs throughout rural America since potatoes are produced in 35 states, Houlihan added. 

"The biggest thing I want to say is that if the U.S. were to withdraw from NAFTA outright, the current zero tariffs on potato exports to Mexico would immediately revert to the most favored nation rate and that means those tariffs would increase from zero to anywhere from 50 to 70 percent, depending on the applied quota," explained Houlihan. "The resulting negative economic impacts would be substantial. Without those zero duties, our foreign competitors would take most of the market share in Mexico." 

Even though Wisconsin doesn't rank first in potato exports, "Every potato that's sold out of the U.S. helps ease the pressure on oversupply in the domestic market," said Houlihan. “By joining forces in Wisconsin and nationally, the agriculture industry is hoping to send a clear message on the need to preserve and enhance NAFTA — not withdraw from it.” 

Dairy industry

NAFTA and exports are very important to the dairy industry Kuehl and Ward stressed. 

The total impact on the state is huge and the American Dairy Coalition wants to make sure people have something to work with said Kuehl. 

"Looking at what we are up against with NAFTA, we need to make sure that we have something in place that can continue to have an outlet for our products," Kuehl said. "Right now Mexico and Canada buy a lot of our products and we need to have those trade availabilities for us."

Because of NAFTA, Wisconsin exported $2.7 billion in food and agricultural products in 2016, Kuehl said. 

"And all those exports, more than half went to NAFTA partners," Kuehl pointed out. "That indirectly supports over 1 million Wisconsin jobs and that's $48 billion in wages."

Kuehl added, "I can’t say enough about how important it is for us to have, and continue to have, a sustainable industry because even if it's not somebody that’s not a direct farmer — in one way or another — the dairy industry affects people's jobs whether it’s people in the food industry or transportation or hotels, that all is affected because of having a dairy economy in state."

With about 400 members, the Cooperative Network does about $44 billion in sales in a year with 90 percent of the 30 billion pounds of milk the members produce going into cheese, according to Ward. Over half that is processed by a farmer cooperative. 

NAFTA and exports are very important to the dairy industry, Ward stressed. 

"You could almost say that dairy farmers across the United States milk cows on the weekend for the export market," said Ward. "Fourteen percent of milk produced by dairy farmers is exported."

Mexico is the largest export market for U. S. cheese, with Canada coming in second, Ward pointed out. Total ag exports for the state are a little over 3 billion pounds with Canada the number one customer for total ag exports and Mexico number two. 

“Agriculture infuses nearly $90 billion each year into Wisconsin’s economy and leads to over 400,000 jobs,” said Ward. “Unquestionably, we need access to consumers in Canada and Mexico to sustain and grow our ag economy.”

 Ward pointed to the issue last April with Canada and it's "new pricing system for milk."

"We need to work on improving NAFTA, but we do not need to get rid of NAFTA," Ward added. 

“Canada and Mexico combined account for over half of the food and agriculture product exports from Wisconsin,” added George. “We hope the president and other key leaders understand just how devastating a blow a NAFTA withdrawal would be to Wisconsin’s producers and manufacturers.”