New NCGA President Focuses on Policy

OMAHA (DTN) -- Tom Haag, the newly minted president of the National Corn Growers Association, said Tuesday the group has several challenges ahead of it, including trying to push a United States-Mexico-Canada Agreement (USMCA) dispute-settlement case against Mexico to head off a potential ban on biotech corn as early as 2024.

A possible ban on U.S. biotech corn going into Mexico is a looming trade issue -- yet Mexico remains the top buyer for U.S. corn. Mexican buyers imported 16.4 million metric tons (mmt) (646 mb) in the 2022-23 crop year that ended Sept. 1, up more than 10% from prior year, according to USDA trade data. Mexico has already committed to buying nearly 4.6 mmt (181 mb) for the 2023-24 crop year.

Initially it was understood Mexico would institute some ban on genetically modified organisms (GMOs) in food grade corn in 2024, as well as ban the herbicide glyphosate. Mexico stopped approving any new corn varieties involving glyphosate for import in 2018.

Right now, there is a lack of clarity from Mexican officials on just what exactly would fall under the import ban.

"As we get deeper into this, it gets tougher and tougher because it might ban going into our livestock feed," Haag said. "American farmers are not going to stop growing corn or GMO corn."

NCGA staff have been discussing the USMCA with the U.S. Trade Representative's Office (USTR). NCGA wants the USTR to launch a dispute settlement case with Mexico under the USMCA trade agreement. USTR officials have said Mexico is not living up to its commitments under the USMCA deal. Haag said NCGA staff briefed him on that issue earlier Tuesday.

"That's something that's been brought up," Haag said, adding, "We would encourage a lawsuit with USTR to go against Mexico on their trade agreements. Because of what they signed in the trade agreement for USMCA ... we would then have every right to push USTR to file a lawsuit."

An updated study released this week by the trade group BIO and conducted by World Perspectives Inc. cited that the average cost of corn in Mexico would increase 19% and tortilla prices would increase 16%, on average. In the first year of the import ban, non-GM corn prices would increase 48% to $8.14 a bushel and Mexico would pay an additional $571 million for imported corn. Prices would increase for corn protein, fiber, oil and thousands of processed foods.

Also, Mexico's livestock production would contract by about 1.2% annually. Poultry production would fall 17% while hog production would contract 13%, the study estimated.

The study also showed more Mexican households would struggle with access to affordable food. Some items such as eggs would see prices rise to the point they would almost be a luxury item.

"It would be a loss for American farmers moneywise, but the thing it would also do is increase the food value in Mexico," Haag said.

Haag talked about several issues involving NCGA on Tuesday with reporters. He officially took over as president on Oct. 1. Haag farms about 1,900 acres of corn and soybeans with his son near Eden Valley, Minnesota.

Haag also said he wants NCGA to continue to work on increasing ethanol blends. He put in a plug for the Next Generation Fuels Act, which would allow up to 30% ethanol blends. The bill has been introduced in both chambers of Congress but has not advanced out of committee in either chamber. Still, Haag was optimistic about the legislation's chances.

"The ball's rolling so I think there's a great opportunity for that to follow through because if we can get a 30% blend, I think if they want to use the science behind our technology that we can compete with the electric vehicles," he said. "Going forward, we can use more ethanol and that makes more grind for corn farmers down the road."

On the farm bill, which is due to expire next fall, Haag mainly emphasized NCGA's top goal right now "is to be leaving crop insurance alone. Leave it where it's at. It works. It's a private-public entity and we need that tool in our toolbox to continue down the road in farming."

Haag note other factors in the farm bill such as raising reference prices under ARC and PLC will have to depend on the money available. "We don't want to all of a sudden say, 'OK, let's do this; rob Peter to pay Paul over there,'" Haag said. "That doesn't solve the situation."

Looking at high fertilizer costs, Haag said NCGA leaders have talked with a key industry player, Mosaic, and tried to stress the impact higher fertilizer costs have had on farmers. He noted fertilizer prices have declined recently, but Haag added high prices for crops will not continue. "They're going to eventually start moving down and with that we're hoping they (fertilizer companies) realize they are going to have to do the same thing and follow suit," Haag said.

Last week, USDA announced $500 million will be available to help increase American-made fertilizer products. See "Fertilizer Prices Remain Evenly Mixed; USDA Announces Grants to Boost Production," https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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