Canada, Mexico, and the United States are unlikely to ratify the “new NAFTA” until next year, but the tri-national proposal is mitigating farmers’ concerns about the trade war, said the Ag Economy Barometer released on Tuesday. Six in 10 farmers polled by Purdue for the barometer, a gauge of farmer confidence, said the United States-Mexico-Canada Agreement (USMCA) had either completely or somewhat relieved their concerns about their income.
The USMCA would preserve duty-free access for most farm exports, in effect since NAFTA was implemented in 1994, to the North American neighbors and provide modest openings for dairy and wheat into Canada.
Seven percent of farmers and ranchers taking part in the Purdue poll said the USMCA completely relieved their concerns about farm income over the next 12 months, 55 percent said it “somewhat” relieved their concerns, and 25 percent said “not at all.” Thirteen percent were undecided.
In the previous poll, 72 percent of respondents said the trade war would reduce their net income by at least 10 percent this year; half of them expected a drop of more than 20 percent.
Farmer confidence has improved in recent weeks. “However, producers’ perspective on current economic conditions remains much weaker than it was early this year before major trade conflicts erupted,” wrote Purdue economists James Mintert and Michael Langemeier. The current barometer reading of 136 is the highest since 143 in June, before tit-for-tat tariffs took effect in July.