Ag Secretary Sonny Perdue says he’s in the process of drawing up contingency plans for the agriculture industry, in case the U.S. withdraws from the North American Free Trade Agreement. The Washington Examiner says those comments come just days ahead of the fifth round of talks between the U.S., Canada, and Mexico. There hasn’t been a lot of measurable progress as Canada and Mexico are rejecting the Trump Administration’s more controversial proposed changes to the deal. That has made the threat of breakdowns in negotiations a real possibility.
Effective Tax Rate is the Most Important Factor in Tax Reform
Congress is just starting to consider changes to the federal tax code. As the process unfolds, AFBF economist Veronica Nigh says the effective tax rate is the most important factor for farmers when it comes to federal taxes. She explains there are three main factors that impact farmers within the federal tax code…
“The first is that most farms file under the individual code, not the corporate code, the second is that the vast majority of average farm’s assets are tied up in non-liquid assets, like land and buildings, and the third is that farm income is predictably unpredictable.”
Arkansas Dicamba Restrictions Await Final Approval
In-season application restrictions of dicamba now await final approval in Arkansas. The Arkansas State Plant Board voted to prohibit the use of dicamba from April 16 through October 31. The regulations include exemptions for dicamba use in a pasture, rangeland, turf, ornamental, direct injection use for forestry, and home use.
Contingency Plans for a Failed Re-Negotiation of NAFTA
As the fifth round of negotiations on changes to the North American Free Trade Agreement approaches, Agriculture Secretary Sonny Perdue is hoping for the best and preparing for the worst. U.S. pork and beef exporters, however, have grave concerns over any changes in the favorable access they currently have to Mexico and Canada, top markets for both proteins. Meanwhile, Pilgrim’s Pride CEO Bill Lovette, after reporting strong third-quarter results, shrugged off fears of trade disruption for U.S. chicken exports to Mexico, even if NAFTA is dissolved.
Pork exports enjoy a zero tariff rate on pork traded in North America. Mexico is the second-largest market for U.S. pork and Canada is the fourth.