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Irrigated malt barley looked good in early July and Scott Buxbaum of Fairfield, Mont., in late July expected it will yield a respectable 100 bushel per acre range when harvest starts in the first week of August. Photo taken July 1, 2014, near Fairfield, Mont. (Forum News Service/Agweek/Mikkel Pates)

Barley growers wary of NAFTA revisions

SHEYENNE, N.D. — Mark Seastrand raises barley on his Sheyenne, N.D., farm. As a director of the North Dakota Barley Council and barley sector director of the U.S. Grains Council, he's helped to sell U.S. barley to Mexican beer makers, too.

So Seastrand and others in the U.S. barley industry are concerned by President Donald Trump's intention to reopen the North American Free Trade Agreement, or NAFTA.

"We really do need to protect that market," Seastrand says.

Here's why barley exports are important to Seastrand and other U.S. barley farmers:

• Beer is Mexico's leading ag export to the United States. Last year, the U.S. imported $1.9 billion of Mexican beer — a number that continues to grow.

• Mexican beer companies get the majority of their barley from the United States. Over the past 10 marketing years, Mexico has bought 31.2 million bushels of U.S. barley valued at $220 million.

• Barley fares best in dry, cool conditions, and North Dakota, Montana and Idaho dominate U.S. production of the crop. Last year, the three states combined for about 75 percent of the U.S. production. Minnesota and South Dakota farmers grow it, too.

Difficult backdrop

Once, North Dakota was the nation's dominant producer of barley and the crop was grown across much of the state. But a long wet cycle, which has made barley riskier to grow, discouraged many farmers from growing the crop. Today, it's raised mainly in semi-arid western North Dakota, eastern Montana and Idaho.

Many area farmers also have complained that barley prices are too low to warrant growing it, especially given the greater risk of raising the crop.

Against that difficult backdrop, the U.S. barley industry has worked hard and successfully to win sales to Mexican buyers, who in the past had bought from other countries, Seastrand says.

NAFTA — which allows U.S. barley and malt to enter Mexico duty-free — has been a huge help for American barley producers, Seastrand says.

It's helped Mexico's fast-growing beer industry, too. Mexico recently topped Germany to become the world's fourth-largest beer producer.

Mexican visit

A team of Mexican malt buyers and brewers recently visited the United States, including North Dakota and Montana, to talk about how NAFTA has been benefitted both the United States and Mexico.

Collin Watters, executive vice president of the Montana Wheat and Barley Committee, was among the U.S. officials who met with the Mexican delegation.

He says the Mexican beer industry officials stressed how much they like the current arrangement.

From their perspective, "NAFTA is working really well right now in this segment of the industry," Watters says. "And there's concern that this might change in a renegotiation in NAFTA."

Some people might wonder if U.S. sales of American-made beer, which also uses U.S. barley, would increase if less imported Mexican beer is consumed. Asked about that, Watters says, "If those drinkers choose beer (regardless of origin) that is made with U.S.-grown barley over wine or spirits, it's a good thing for barley growers.

It's worth noting that in 2016, overall U.S.beer sales were flat while sales of imported beer rose 6.8 percent, according to information from the Brewers Association.

Imported beer accounted for about 20 percent of 2016 U.S. beer sales, with Mexico supplying most of the imports.

Seastrand says it's premature and pointless to speculate on what might happen with NAFTA.

But he's sure of this:

"Our buyers want to continue doing business with us," Seastrand says. "Everyone is just nervous, waiting to see what Trump will come up with next. Not to pick on our president, but he really needs to get in tune with what American farmers are thinking."

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