With the exception of gasoline, which has been inching downward in price recently, Americans are encountering rising prices on almost everything. The United States is not alone in its struggles with inflation. People around the globe are battling higher and higher prices, including the citizens of Mexico, whose president and trade officials are engaged in a trade dispute that could harm both sides in the argument.
Tortilla prices and trade relations between the United States and Mexico are at stake in a feud that could undermine trade relations between Mexico and the United States. Mexico is a major purchaser of US-grown corn, but Mexicans will be looking at increased tortilla prices in 2024 and 2025 if the Mexican government refuses to negotiate with the US regarding genetically modified corn supplied by the US
The situation has attracted the attention of US corn producers, including Nebraska farmers who supply a major portion of the corn exported to Mexico. If Mexico backs out on its agreement to import US corn, it would be a considerable hit to the Mexican economy. It’s estimated that reneging on the agreement would boost corn prices significantly, which would translate into corn price increases of 30% in 2024 and 42% in 2025. The tortilla price hikes are likely because genetically modified corn is less expensive than non-modified varieties.
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To acquire the equivalent of the corn Mexicans agreed to buy in the United States-Mexico-Canada Agreement would cost Mexico an additional $5.6 billion.
The Nebraska Corn Board and Nebraska Corn Growers Association aren’t taking the situation lightly. They allege that Mexican President Andrés Manuel López Obrador’s corn import ban violates the USMCA pact. NeCGA has repeatedly requested a USMCA enforcement case to be initiated.
Mexico’s handling of the corn export agreement is frustrating for Nebraska corn growers. They claim Mexicans are reneging on a deal made in good faith and are ignoring decades of science regarding the safety of genetically modified corn.
“We must continue to follow the science,” said Jay Reiners, Nebraska Corn Board chairman. “We must have the ability to feed the population of Mexico. Agriculture uses science, and Mexico’s decree does not follow decades of science we’ve used and trusted.”
In October, Gothenburg farmer Andy Jobman, president of the NeCGA, published an opinion piece urging President López Obrador and Mexican officials to protect, support and expand trade for US products, including GM corn. Jobman and the Nebraska Corn Board believe that the Biden Administration and federal trade representatives have been timid about trade discussions abroad, including the Mexican corn agreement.
US farmers consistently point to scientific proof about the safety of genetically modified corn as well as its history of dramatically increased yields. US farmers want to produce enough food and agricultural products for a growing world, but scientifically based arguments are still encountering resistance, even from long-term, dependable trade partners such as Mexico.
The same brand of resistance follows ethanol, a corn byproduct that’s helping motorists burn a cleaner fuel and rein in high gasoline prices.
Despite the renewable fuel’s desirable qualities, ethanol gets criticized by some consumers and vehicle makers, and Uncle Sam fails to support federal ethanol production standards. The federal Renewable Fuels Standard is supposed to set annual production levels for ethanol. The RFS goal is to ensure that investors in the clean renewable fuel will have reliable demand for their product.
Corn growers received good news last week from a strong supporter.
Nebraska’s senior US Senator Deb Fischer is leading a bi-partisan push to allow the year-round sale of E-15 blended fuels. Congressional passage of Fischer’s legislation would be a significant boost for corn growers by boosting demand for their product.