By NANCY GONDO
The war of words between the U.S. and Mexico over trade has prompted concern over what might happen to cross-border shipments of corn and meat — and even avocados. But there’s one market that’s already feeling the effects: nonfat dry milk.
Futures prices in Chicago are down 12% this year. This decline is fueled largely by the “uncertainty stirred up by the heated rhetoric” between the two countries, said Ben Laine, an economist at CoBank ACB. While there’s been no change in trade policy so far, buyers in Mexico have started searching for sources of milk powder other than the U.S., he said.
More than half of nonfat dry milk produced in the U.S. is exported, and Mexico is the top destination. Agricultural trade between the nations has come under increased scrutiny as President Trump has said repeatedly he wants to overhaul the North American Free Trade Agreement, accusing Mexico of gaining an unfair advantage from the accord. Mexico has rejected his claims, and in recent weeks has made overtures to Brazil and Argentina about securing farm supplies as an alternative to U.S. imports.
“The trade issue is significant,” said Beth Ford, chief operating officer of Land O’Lakes, one of the largest U.S. …read more
Via:: IBD Futures