EP. 1 - National Turkey Federation & Other Groups Join NCGA as Allies in the Agriculture Coalition for USCMA

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USMCA's six-year review is upon us, and it needs our support.

The United States-Mexico-Canada Agreement, more commonly called the USMCA, has been undeniably good for American agriculture.

And as we approach the sixth anniversary of its implementation, USMCA is undergoing its mandated review period, during which the parties will decide specifics about the agreement's future.

In order to ensure that agriculture's voice is heard during this process, the National Corn Growers Association, the National Turkey Federation, and many other ag stakeholders are banding together in support.

So in this episode of the Cobcast, we discuss the Agriculture Coalition for USCMA with one of its key members-NTF President and CEO Leslee Oden, as well as NCGA's Director of Public Policy, Trade, and Biotechnology Nancy Martinez.

Together, we'll recap what led us to this point, discuss the USMCA's economic impact on the agriculture sector, and highlight the importance of predictability in trade agreements.

We'll also uncover a few key points where the agreement could be improved, discuss the process of lobbying for those improvements, and emphasize the value that industry-centered coalitions bring to the negotiating table.

Direct Share Link: https://cms.megaphone.fm/channel/ncga?selected=PDM2991970818

Nancy Martinez

USMCA provides this stable, reliable market access. That's why we banded together now.

Leslee Oden

For the poultry industry and more specifically for turkey, we are more of a long-lived bird. Creating these stable markets so that we can have a reliable place for our producers to send their products is incredibly important.

Dusty Weis

Hello, and welcome to the Cobcast, Inside the Grind with the National Corn Growers Association. This is where leaders, growers, and stakeholders in the corn industry can turn for big-picture conversations about the state of the industry and its future.

You've heard us talk about the countdown to the 250^th anniversary of the nation's founding, and what better way to recognize it than talking about one of America's most impactful trade deals for agriculture.

We're going over a lot today on the USMCA, so make sure you're following this show in your favorite podcast app, and sign up for the National Corn Growers Association newsletter at NCGA.com.

I'm Dusty Weis, and today we're joined by NCGA's Nancy Martinez, Director of Public Policy, Trade, and Biotechnology, as well as Leslee Oden, President and CEO of the National Turkey Federation.

They're going to tell us about a new coalition of agricultural stakeholders who are amplifying the ag industry's message in Washington, focusing on how valuable the United States-Mexico-Canada Agreement is to farmers, ranchers and across the value chain.

Nancy, Leslee, thank you so much for joining us here on the podcast.

Leslee Oden

Glad to be with you today.

Dusty Weis

So, Leslee, the National Turkey Federation, like the National Corn Growers Association, is an important voice in the agriculture industry. Our members grow corn to feed and fuel the world, your members raise and process turkey to feed the world. So we've got a lot in common, but we also face a lot of the same challenges.

I imagine that we even have a few of the same members if you go down the rolls and take a close look at it. But what else can you tell me about your organization and your membership?

Leslee Oden

Well, I think a fun fact is that 70% of a turkey's diet is mixed with corn and soybean meal. So obviously you all play a critical role in our business, and we thank all of the corn growers for the hard work that they do to supply the US turkey industry with top tier quality feed ingredients for our turkeys so that we can raise healthy turkeys to both sell domestically and abroad.

And so we're the national association that represents both the growers, processors, and our allied industry here in Washington, DC on legislative and regulatory issues. And it's just an honor to represent all the turkey growers and processors across this nation that supply a bountiful amount of turkey to the world.

Dusty Weis

Geographically speaking, whereabouts are your members located and how many of them do you have spread across America?

Leslee Oden

Well, the largest Turkey producing state is Minnesota, quickly followed by North Carolina. So our turkeys like it up north. They like that colder weather, which is also in the heart of corn country, too. We've got a lot of turkeys also in Iowa, but we're spread across around 13 to 14 various different states, but mainly in the upper Midwest and along the eastern coastline.

Dusty Weis

Certainly, we end up being allies on a lot of the same issues here. And so, Nancy, this is where we wanted to bring you in and talk about the US-Mexico-Canada Agreement. That's a trade pact that was signed in 2018 and it replaced NAFTA back then. It also set the table for trade between these three nations and has provided some important benefits for us in the corn industry.

Now its future is up in the air again. So can you give us a little bit more background on the USMCA and detail why we're in the process of building a coalition to reinforce it?

Nancy Martinez

Yes, absolutely. So the US-Mexico-Canada agreement entered into force in 2020. And as part of the provisions in there, the agreement is subject to a review every six years. So we are approaching a historic time period where we are going to review this agreement.

And this has never happened before for USMCA. And so as part of this process, USTR opens a stakeholder comment period to hear perspectives from a wide range of industries, agriculture specifically, but manufacturing, other interest groups, even regular citizens can voice their opinion in the stakeholder comment period.

So as we were preparing comments from the corn side, we noticed that in talking with our friends in US agriculture, there is a vast majority of us that held these very important views of USMCA and about how foundational the markets are for our industries and collectively US agriculture as a whole.

Mexico and Canada are the top markets for the vast majority of US agriculture stakeholders, and the US is the top trading partner for each Mexico and Canada.

So as we were comparing notes in the submission process, it really became a no-brainer for us to build this coalition so we could collectively share how foundational these markets are.

Dusty Weis

So, Leslee, as this coalition has coalesced, your organization joined the agriculture coalition for USCMA. Where are you seeing the value in this effort for your members?

Leslee Oden

Yeah, and I think Nancy did a great job kind of explaining the whole agreement. For us, I mean, we've been wanting to be a part of this coalition because of the modernization that USCMA provided after it replaced NAFTA in 2020.

Without USCMA, it would create uncertainty and higher costs and reduce competitiveness for our growers and so, with USCMA intact and this coalition effort, it's really important for our members to remain in that competitive marketplace. For US turkey growers and processors, Mexico is our largest export market.

We've got a value of over $500 million in our latest projections, and on average, we export around 9% around the globe. But 75% of that is going to Mexico. And so it's been a huge success for our membership with the creation of NAFTA and obviously with the modernization with USCMA.

And so that's why it's really critically important for us as we go into this review, that there are areas where we could see some further modernization for turkey growers and processors, but overall, the agreement has really stabilized the marketplace for the US turkey industry.

Dusty Weis

Nancy, on the point of coalition building, we've got the National Corn Growers Association, we've got the National Turkey Federation. But what are some other members of this coalition that have signed on so far? And are there other members out there that you're hoping will join in as well?

Nancy Martinez

Yeah, first of all, we're open for any member in the US agriculture sector that wants to be a part of our group association wise, and also many companies as well. So we've got some of the dairy friends as part of our coalition. We've got the pork producers. We also have a variety of some in the ethanol sector, our row crop friends, CropLife.

We just have a large variety of different folks in the ag space.

Dusty Weis

And how valuable is it to have as many different organizations as possible, really speaking with one voice in Washington and throughout North America on this?

Nancy Martinez

Yeah. While we all have diverse challenges and diverse needs, we all benefit from the trading relationship with Mexico and Canada. So I think it's important that we all come together to share the positive aspects of the USCMA.

Oftentimes, the review can be bogged down by concerns and, you know, the need for some major improvements. We wanted to make sure that the positive benefits of the agreement also was factored into how USTR sees the review.

Dusty Weis

Narrowing it back down to how USCMA has benefited corn and the corn industry here for a second, we know that Canada and Mexico account for nearly a third of all US ag exports. But why are these two markets especially important for US corn growers?

Nancy Martinez

Well, I'm also going to put a number behind that one third fraction, that's $60 billion worth. So it's very important to us AG as a whole. And the United States actually runs a $9 billion trade surplus in bulk commodities within North America. So very important there.

But for the corn story, we've had significant success with Mexico, the top customer of US corn. It's the same size as our second, third, fourth and fifth largest markets. Last year, that market was worth a little over $5.5 billion.

And we have a similar success story in Canada. Over a third of all of our ethanol exports go to Canada. So USCMA created these economic conditions where we can have very strong exports, but we also have tools in USCMA that help us when there's a trade action that could threaten our export activity.

So, for example, when Mexico put forward a decree to ban biotech corn, we were able to use something called a dispute settlement to eventually get Mexico to withdraw that decree after a panel report came out in favor of the United States. So not only does USCMA create those great economic conditions, but it has the right tools that we need when there's a negative trade action.

Dusty Weis

Leslee, when you're traveling the country talking to your members, how do they see USCMA? Where have they seen the benefits out on the turkey farm?

Leslee Oden

Well, I think if you even go back to NAFTA, even before USCMA, I mean we were rarely supplying Mexico with products. And if you look today, it's 75% of our export market. And at an extremely high value of over $500 million. And so that is real money in the pocket of our growers and processors. But at the same time, it's allowing us to have that zero tariff ability for trade with both Mexico and Canada.

It's also helped strengthen our sanitary provisions to promote more science-based products so that it protects human and animal health for us. Really having that duty free access into Mexico has been really transformational for our industry.

And I also think it's been transformational for the Mexican people as well. The products that we're sending to Mexico are fresh products that they're transforming into chorizos and sausages, and these just really decadent type products.

And so for us, it's a win-win both for the US turkey growers and processors, but also for the Mexican consumer, and how they've been able to really take our product that can be a blank canvas and turn it into these really tremendous products.

Dusty Weis

I got to tell you guys, we've got to stop scheduling these recording sessions for around the lunch hour because as soon as you started bringing up turkey chorizos and turkey sausages, my stomach started grumbling. So let's bring this back down to numbers again, because if I start thinking about food, I'm going to be way out there before we can do anything about it.

But Nancy, since USCMA took effect, agricultural exports to Mexico are up by $10.7 billion… and to Canada, they're up by $7.6 billion. How did those gains translate into real value at the farm gate for our members?

Nancy Martinez

So because of the stability of these export markets, the US farmer can be globally competitive. So all of the cost savings that farmers have because of the efficiencies in USCMA, because they have a strong export market in Mexico and in Canada, the US farmer can look to other places in the world to get more corn out there and more ethanol and more DDGs.

So I would say that USCMA has had ripple effects in the farm economy. Another stat that I will make sure is out there is that the food and ag sector employs 24 million Americans. So it's not just only the farmers that see the benefits of this trade agreement, but it's on the food manufacturing side as well.

Dusty Weis

Leslee, we spent a lot of time talking about market access when it comes to these kinds of things. But there's also trade policy behind the USCMA. And I know that on the animal ag side, trade policy goes beyond just these markets. On the animal ag side, what impact has it had on issues like avian influenza, which we've heard about in the news this year?

Leslee Oden

Well, I think it's really important to know that avian influenza knows no boundary. It doesn't know that USCMA exists, but it also plays a really critical role in our relationship with both Mexico and Canada, because we share those borders and because the threat of avian influenza has mainly been through the migration population of our wild geese and wild ducks and waterfowl and so forth.

But it's really offered an opportunity for us to help on the regionalization agreements so that we can have trade to be unaffected during times of an outbreak, so that we can still have that product flowing across borders to both Mexico and Canada. And so for us, maybe USCMA is not the policy tool that we're going to be talking about avian influenza.

It certainly helps our relationship with both countries of making sure that that access to the product is available, and that we're looking at science-based formulations so that we can make sure that trade is free flowing for all countries.

Dusty Weis

It kind of feels like lately there's a story in the news, like every week, that's going to impact the markets for our ag products. This coalition that we're building now emphasizes certainty as a top goal. Why is predictability in trade agreements so important for growers and producers?

Nancy Martinez

Yeah, I would just say, you know, the headwinds are real. Our farmers are juggling high inputs, low commodity prices and then market uncertainty. And so USCMA provides this stable, reliable market access. And our farmers have to make planting decisions a year in advance.

So when they have to juggle between purchasing a piece of equipment or trying to conduct their nutrient management plan, all of these things are extra risky if we don't have a stable market.

So the tools that USCMA has to create this predictability is very important, especially when farmers are dealing with the unstable relationship with some of these economic issues.

Leslee Oden

Yeah. And I think, obviously you just talked about avian influenza, and I think that's probably been one of our biggest disruptors from a trade perspective. But because of the regionalization agreements that we've had, we've been able to create more stability.

I think there's further work that can obviously be done in that area. But for the poultry industry and more specifically for turkey, we are more of a long-lived bird compared to our friends in the broiler industry. We raised our turkeys, our males up to 22 weeks of age, and our females, which are our hens, up to 15 to 18 weeks. Which is significantly different compared to the broiler industry, which is around seven weeks of age.

And so because of that, we have other industry threats that do come in and that disruptors being animal health challenges because we're on the ground a little bit longer. But creating these stable markets that we can have, that they have a reliable place for our producers to send their products and to sell their products is incredibly important.

And so that's what that stabilization does for our producers. And while, you know, there's been a tremendous amount of success in Mexico for our industry, we've also seen some trade inequity when it comes to Canada. And I think that's an area that we're hoping to explore during this review so that we can create a better balance of trade with our friends to the North.

Dusty Weis

Your producers want to know that if they invest in bringing up a Tom Turkey, that 22 weeks from now, there's still going to be a market for that turkey.

Leslie Oden

Absolutely. It's incredibly important whether we're selling that here domestically or we're selling it abroad. It's really important to provide that stability to a producer.

Dusty Weis

So we mentioned the mandatory review period that's coming up for USCMA. What risks do farmers and producers face if that review creates more uncertainty, annual renewals or even an expiration in 2036?

Nancy Martinez

So we don't quite know how the review is going to go. And like I said, this is a historic review. It's never happened before. But I think all of us in the US ag space are worried that a period of prolonged review, annual reviews, prolonged negotiation would just leave our industry in limbo. Uncertainty creates challenges, risks, it will impact the bottom line that farmers have to deal with.

And so we're really hoping for a review process that's productive, that can ultimately preserve the trilateral partnership that we have with the three of our countries together.

And so while we don't quite know how the administration will fully approach the review, that's why we've banded together now to make sure that our story about USCMA, about the success of the agreement, is a major factor in how they approach the review.

Dusty Weis

Supply lines and logistics are two things that often get governed by these trade deals as well, and certainly things that have been in the news here this last 5 or 6 years. About 31% of US trade-related rail traffic is tied to Canada and Mexico.

Can you tell us a little bit more about how transportation and inspection issues at the border affect exports and eventually profitability for growers and producers?

Nancy Martinez

So the transportation systems provided under USCMA are very important for the US corn industry, rail in particular. We know that disruptions at the border can be very costly for farmers, even just hours of a delay, days of a delay can cost billions of dollars. So having the efficiencies provided under USCMA to make sure the rail system is moving in a productive manner means cost savings for farmers.

We also have a lot of tools in USCMA to help deal with some of the challenges if there is a disruption, and we've made some suggestions within our overall comments of how to use these working groups to make sure that those disruptions don't interfere with our exports.

Dusty Weis

So the coalition that we've built in support of USCMA has said that it supports targeted adjustments, but not a rewrite. What kinds of specific improvements are we looking at? Things like aligning inspection standards and how would they benefit farmers?

Leslee Oden

Well, I think for us, protecting that Mexico market is going to be critical. It's a $500 million market for us. We want to see some of those targeted improvements if possible. Protecting that duty free access to Mexico, but also establishing a fairer TRQ with Canada for the turkey industry.

During the creation of USCMA, there were TRQs established for the chicken and dairy industry, and the turkey industry was left behind.

And so I think that's a really targeted approach that we want to make sure, when we talked earlier about that trade imbalance and trade inequity, that's an area that we're hoping to improve with this review, not something that requires the opening of the full agreement. We still want that to remain intact, but some targeted improvements to really help benefit the US Turkey industry is going to be critically important for us.

Dusty Weis

Nancy, what about from your perspective at Corn Growers? What would a successful review look like for America's corn producers?

Nancy Martinez

Obviously, preserving the agreement going forward is a key and our main priority. However, we have a couple things that we would like addressed.

So because of Mexico's action to ban biotech corn, we are seeking a clarification that will not involve a major rewrite, will not be controversial. And this clarification says that Mexico cannot use non-science reasons to ban biotechnology, and we think that will be important to shield us going forward.

The other thing that we are seeking is ethanol access opportunity in Mexico. Mexico is far behind some of our other international markets in terms of ethanol access. And so we're using the working group strategy that is currently under USCMA to just provide some technical assistance to get ethanol on a level playing field there.

Dusty Weis

Well, last question then here for Leslee, I know we started this conversation with a nod to the United States's 250th anniversary this year, and we are proud to raise corn. It is and always has been America's crop. But let's not forget that founding father Ben Franklin, kind of viewed the turkey as America's bird, "A bird of courage," he famously wrote in a letter to his daughter.

So as your organization looks ahead to our 250th anniversary celebration, how are you planning to celebrate at NTF? And what do you hope that people remember about the turkey's place in American culture and on American dinner plates?

Leslee Oden

Well, we agree it is a bird of courage, but I think it's also that courage applies to the hard-working men and women of this industry that get up every day and night to tend to their flocks amidst all of the challenges that are facing our country at this time.

And I think as America goes to celebrate its 250th anniversary, for us, it's just really talking about the story of resilience, the courage to get up and tend and provide products and turkey products, might I add, to the US and globally.

So for us, it's really important to have that bird as part of our founding moments. But to see where that has transformed for the US turkey industry and the hard-working men and women that we get to represent on an everyday basis here in DC. So I'm looking forward to celebrating all year long with all of our producers throughout the countryside.

And it's going to be one heck of a celebration.

Dusty Weis

A momentous year, certainly for American agriculture, but also an important year for American growers. The stakes are high, and we need policymakers focused on ensuring that both of our memberships have what they need to continue feeding the world.

The Agriculture Coalition for USCMA is elevating farmer needs in the lead up to the agreement's renegotiation and renewal. And so we thank all of you for your work on this important priority.

Leslee Oden, president and CEO of the National Turkey Federation and NCGA Director of Public Policy, Trade and Biotechnology, Nancy Martinez, thank you both for joining us here on the Cobcast.

Leslee Oden

It was great to be with you.

Nancy Martinez

Thanks, Dusty.

Dusty Weis

And thank YOU for listening. We hope you'll join us again next month for another episode of the Cobcast: Inside the Grind with the National Corn Growers Association.

If you're on X, you can follow @NationalCorn for more news and updates from NCGA. Visit NCGA.com to sign up for the association's email newsletter, and make sure you're following this show in your favorite podcast app.

The Cobcast is brought to you by the National Corn Growers Association, with editing by Matt Covarrubias. And it's produced by Podcamp Media, branded podcast production for businesses. PodcampMedia.com.

For the National Corn Growers Association, I'm Dusty Weis.

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