The deal benefits farmers, but it isn’t without its irritants
With a few weeks before Canada, the United States, and Mexico formally begin reviewing the USMCA, ag industry reps testified before the House Committee on Agriculture about the deal from an agricultural perspective.
Since the three countries enacted the deal six years ago, the value of U.S. ag exports to its northern and southern neighbors combined has increased by almost 50 percent.
Here’s what three witnesses expressed during the Agricultural Perspectives on the Future of the USMCA meeting.
Michael Licthe, the chief insights and optimization officer for Dairy Farmers of America, highlighted the overall benefits of the USMCA while acknowledging there’s work to do on the dairy front as it pertains to access to Canada.
“USMCA remains the most commercially significant trade agreement for the U.S. dairy industry,” he said. “Mexico and Canada collectively account for over 40 percent of all U.S. dairy exports by value. Mexico and Canada are by far the top two export destinations for U.S. dairy exports, and have been consistently for decades.”
While Mexico is abiding by the commitments laid out in USMCA, Canada isn’t.
In 2022, a USMCA panel agreed with the United States that Canada is breaching USMCA commitments by reserving most of the in-quota quantity in its dairy tariff-rate quotas (TRQs) for the exclusive use of domestic processors.
This prompted revised TRQs from Canada.
In 2023, however, a USMCA panel ruled in favour of Canada’s updated TRQs.
“Canada’s dairy policies remain one of the most significant trade and competitiveness concerns facing U.S. agriculture within USMCA,” Licthe said. “While USMCA secured important new dairy market access and pricing provisions, Canada’s implementation has fallen well short of the negotiated intent.”
An example of this, Licthe cited, is access under the Yogurt and Buttermilk quota.
The negotiated quota for 2025 was 4,135 metric tons, but Canada only allowed 382 metric tons into the country.
“The inability for U.S. producers and processors like DFA to serve demand from willing customers in Canada makes these trade barriers an ongoing source of frustration,” he said.
Dave Puglia, the president and CEO of Western Growers, also gave testimony.
The fruit, vegetable, and tree nut sector he represents exported more than $7 billion of products to Canada and Mexico in 2024.
“Collectively, these two markets rank first (Canada) and second (Mexico) in terms of exports and represent roughly two thirds of all global U.S. fresh produce exports,” he said.
Overall, Western Growers supports a renewed and improved USMCA to keep the zero-tariff access to Canada and Mexico.
In terms of improvements, one area of concern is labor law enforcement in Mexico to ensure an even playing field.
“One of the biggest persistent disadvantages U.S. producers can and do have when competing against imports is the disparity in labor costs and standards,” Puglia said.
Another way USMCA could be improved is through bankruptcy protection and reciprocity.
Canada and the U.S. have passed laws to grant fresh shippers first-priority status in the event of a buyer bankruptcy.
It’s time Mexico does the same, Puglia said.
“Such a tool would establish trilateral safeguards, ensuring fair and secure trade across all three North American markets,” he said.
Jamie Beyer, a soybean farmer from Wheaton, Minn., and board member with the American Soybean Association, also participated in the committee meeting.
Canada and Mexico purchased a combined $4 billion of U.S. soybeans in 2024/25, accounting for more than 13 percent of total soybean exports.
USMCA provides the stability U.S. soybean farmers need, she said.
“In contrast to the relationship with our Chinese partners, the North American trade relationship is the picture of stability for the U.S. soybean industry,” she said.
An area of possible improvement lies with shipping between the U.S. and Mexico.
Canada and the U.S. have an arrangement allowing grain to travel between the two countries without reinspection.
The U.S. and Mexico don’t have this, which causes delays and additional costs.
“Mexico employs zero tolerance for the presence of soil in grain; whereas in the U.S. soil is considered foreign material and is allowed up to two percent for #2 soybeans and three percent for #2 corn,” Beyer testified. “When Mexico finds soil in U.S. grain, fumigation is required at a cost of approximately $70,000 per shuttle train and delaying transport by approximately two days.”