Putting its warnings into action, the Biden administration officially accused Mexico on Thursday of violating North American trade rules by prohibiting imports of genetically modified white corn used in making tortillas, a staple of the Mexican diet. Mexico, the birthplace of corn and a top U.S. trade partner, said it was ready to defend its ban before a USMCA dispute panel.
The Biden administration asked for USMCA consultations with Mexico over its ban on imports of GMO corn for human consumption, the last step before filing a trade complaint in the long-running dispute.
The United States lost its place as the world's largest wheat exporter a decade ago, and now its leadership in exports of corn, cotton and tree nuts is being challenged, said a new USDA report. "Changes in global patterns of production and agricultural markets affected U.S. export competitiveness during the last two decades," said the Economic Research Service.
With a corn-state senator demanding speedy action, U.S. trade representative Katherine Tai said on Thursday that she would not allow a dispute with Mexico over genetically modified corn “to go on indefinitely.” A 30-day period for technical consultations between the nations, arguably the last chance to avert a USMCA trade complaint, expires on April 7.
Drought in Argentina and lackluster sales in the United States, two of the world’s major suppliers, will reduce global corn exports to their lowest volume in three years, said USDA analysts on Wednesday. Shipments from another leading source, Ukraine, were in question because an extension of the Black Sea Grain Initiative past March 18 has not been resolved.
On the day before President Biden was to meet Mexican President Andres Manuel Lopez Obrador, the head of the largest U.S. farm group called for prompt resolution of a threat by Mexico to block imports of U.S. corn in one year's time.
Biden administration officials refused to say more than that they were studying potential resolutions to a blossoming dispute over GMO corn exports on Wednesday, although Mexico’s agriculture minister said an informal agreement already existed. Minister Victor Villalobos claimed U.S. officials were satisfied with a proposal to delay a ban on the import of GMO corn until 2025, according to a published report.
Ahead of a visit by Mexican government leaders, Agriculture Secretary Tom Vilsack said on Thursday that the Biden administration was ready to challenge Mexico under North American trade rules unless it “rectifies” a presidential decree that would ban imports of genetically modified corn at the start of 2024.
Thanks to high demand for American-grown corn, soybeans, and meat, U.S. farm exports will soar to a record $164 billion this year, far above the current mark of $152.3 billion, set in 2014, said the Agriculture Department on Wednesday. China, reclaiming its spot as the No. 1 customer, would account for $1 of every $5 in overseas sales.
Private exporters reported the sale of 1.15 million tonnes of U.S. corn for delivery to China by the end of August, said the USDA on Tuesday. The corn, equivalent to 45.3 million bushels, was worth $251 million based on futures prices in Chicago.
China, the world's largest importer of soybeans and cotton, is developing an appetite for corn as well as it expands livestock production. Exporters reported sales totaling 3.74 million tonnes of U.S. corn to China in three days this week.
Thanks to a buying spree, China is far and away the top customer for U.S. corn six weeks into the marketing year, said chief executive Ryan LeGrand of the U.S. Grains Council on Thursday. Its purchases of 10.4 million tonnes for delivery during 2020/21 are twice as large as sales to date to Mexico, usually the No. 1 importer.
China is far short of meeting its "phase one" commitment to buy huge amounts of U.S. food and ag exports, but Agriculture Secretary Sonny Perdue said, "We expect a big shipping season this fall." On Thursday, Chinese companies made one of the largest corn purchases in half a century of USDA records.
U.S. farmers will harvest their smallest corn and soybean crops since 2013, but the trade war will constrain exports of America’s two major crops for the second year in a row, forecast the USDA on Monday. Soybeans would sell at the lowest average price at the farm gate in 13 years.
The WTO ruled in favor of the United States in its complaint that China had rigged its tariff system to constrict entry of foreign-grown grain. The ruling was the second U.S. victory in seven weeks against trade-distorting Chinese agricultural practices.
Thanks to continued strong demand from overseas buyers, U.S. corn exports this trade year could be the second highest ever, the Foreign Agricultural Service said on Thursday.
American corn faces import levies of up to 25 percent, according to a 10-page list of potential targets for retaliatory tariffs released by the European Commission, reported AgriCensus. The tariffs would counter the Trump administration's announcement that it intends to imose high tariffs on imports of steel and aluminum.
U.S. corn farmers are seeking federal court approval of a $1.5-billion settlement with Syngenta for its decision to sell them a GMO corn variety before China had approved it for import, reported Reuters.