U.S. Wheat Associates Hosts Mexico Wheat Trade Conference in Cancun
"Mexico has been a good friend of ours for a lot of years" said Kolstad. "They're our southern border friend and one of our top five importers of U.S. wheat around the world. So, they're a very important market for us."
Mitch Skalicky is U.S. Wheat's regional vice president in its Mexico City office and explains why Mexico likes having a trading relationship with the U.S. wheat industry.
"I think they like it because it's very good quality wheat" said Skalicky. "It's a uniform, predictable quality of wheat. It's close, it's convenient and it's easy to receive through various logistical channels both by water meaning boat or by rail."
Kolstad says there's good reason why checkoff dollars that he other farmers invest are used to growing important export markets like Mexico.
"The export markets are very important to the United States" said Kolstad. "We grow approximately 50 million metric tons a year of wheat and over half of that has to be exported. And with 95 percent of the world's consumers living outside of our borders, we have to get to these other countries and sell our wheat. If we only sell within our domestic markets, the prices are going to just go down, down and down. And we don't need that."
A big factor in continuing this important trading relationship is finalizing the new U.S-Mexico-Canada Agreement which has hit another speed bump after President Trump announced his intention to impose a five percent tariff on Mexican imports because of illegal immigration. But, Skalicky says the Mexicans remain hopeful a final agreement can be worked out that benefits both countries.
"I think they certainly feel it's a very challenging time" said Skalicky. "I think that they've been very patient. They've been very tolerant. They've also been very understanding. I think that they would really like to try to work this out through a series of negotiations if possible."
The stakes are high for the U.S. wheat industry here in Mexico. That's because every day that passes without the U.S. Congress ratifying the new USMCA is another day of opportunity for other wheat exporting countries like Canada and Russia to displace U.S. wheat in this very lucrative Mexican market.