Mexico Will Be Biggest USMCA Test, The Mexican Border Will Open Soon, and It's Dry Out

Today we start with a look at the issues related to Mexican trade as part of the USMCA negotiations, then review when the border will reopen to Mexican cattle in August. We wrap up with a look at just how dry it's been in corn-growing states. 

Transcript

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Hello and welcome to Chat BDC here, the top stories from Black Dirt Daily today, which is Tuesday, July 28th. Today we're going to focus on Mexico first with a report on how they could be a sticking point in the USMCA negotiations. Plus, how the border could open up for Mexican cattle in August, and we'll wrap up with something you probably already know. Hey, it's dry out there. So let's get to it. Starting out in dairy with a report on from Dairy Herd Management, Tyne Morgan writes that as the U.S.-Mexico-Canada trade negotiations are underway, agriculture groups are united around one priority: protect the integrated North American market that has become critical for U.S. producers of all kinds. But those close to the Trump administration say it's not so simple. Former U.S. Trade Representative Bob Leitheiser says Mexico will likely be the biggest challenge in the talks, not Canada, owing to the current trade deficit, with Mexico as a major reason why. The latest round of discussions between the U.S. and Mexico as part of an ongoing annual review process was held in Mexico last week. The two countries agreed on a formal fourth round of bilateral negotiations, which is scheduled to be held in Washington, D.C. in early September. Also, adding another layer of uncertainty to U.S. MCA discussions, President Trump announced last week plans to impose a 50% tariff on certain Canadian goods, escalating trade tensions between the two countries after months of political friction. The administration used Section 338 of the Tariff Act of 1930 to respond to what it calls discriminatory treatment of U.S. products. The tariff increases, which cover a range of Canadian exports, including wine, honey, textiles, fishing rods, jewelry, and furniture, are set to take effect on August 19th. Unlike previous tariff actions against Canada, products covered under the USMCA will not be exempt from the new duties. Still, even with the fresh trade uncertainty, Leitheiser says Mexico is a country to watch. Time put together a great article, and I encourage you to spend some time reading it. There's a link to it on BlackDirtDaily.com. Moving over to cattle markets, an article by Angie Denton on drovers, USDA announced today a coordinated phased reopening of southern cattle ports contingent on Mexico's adherence to a joint action plan. Beginning August 24th, USDA will open the Douglas, Arizona port of entry to cattle trade while simultaneously initiating the operational steps necessary for subsequent openings at the Santa Teresa, New Mexico, and Columbus, New Mexico ports. Every animal entering the U.S. through these ports will undergo a full USDA inspection to ensure it's free of any signs of New World Screwworm.

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Secretary of AG Brooke Rollins says that the closure of the southern ports of entry for the last year has been a tough but necessary action to control the spread of New World Screw Worm in Mexico and protect the American livestock industry. She says that thanks to the work across the federal government as well as state, local, and industry partners, it's now safe to open the Douglas, Arizona port in 30 days to resume the hundreds-year-old movement of cattle. There'll be a phased reopening of ports to livestock trade, contingent, as we said, on satisfactory progress on priority action plan milestones. We mentioned that the port will be open at Douglas, Arizona, which borders Sonora to livestock trade. The closest active case to the Douglas port is about 325 miles, detected on July 22, 2026. After evaluating the success of the initial reopening and potential impacts or risk assessment changes, APIS will then consider reopening the Santa Teresa and Columbus ports to live cattle, bison, and horses. The reopening timeline will remain flexible and may be adjusted based on Mexico's progress in meeting the action plan milestones and addressing critical issues. The opening of ports may be paused if USTA identifies increased risk in Sonora or Chihuahua via post-opening audits or other observations and information. Finishing up with a quick look at the weather from DTN Progressive Farmer, it's probably not a surprise if you've been living in the I States that it's been dry for a while. In fact, a study by DTN lead analyst Rhett Montgomery of July precipitation during the past 30 years finds that, for U.S. corn areas on a weighted basis, July 2026 has the least precipitation for the month since July 2014, which is a dozen years ago. Montgomery study uses weather observations gathered from DTN's collection of on-farm weather stations. In percentage terms, July 2026 had 38% more precipitation than July 2014. However, this year's precipitation total is about a third less than a year ago, and on the temperature side this July it was warmer both a year ago and 12 years ago in 2014. The corn crop stress implied by the 12-year low in July rainfall, along with sustained heat, places a premium on August conditions. Montgomery noted that August was key for corn yield performance back in 2014, saying that 2014 rebounded to have a good August for rainfall and corn yield was a record that fall. That's an important feature though, he says.com as well for the full stories behind these topics, and don't forget to sign up for the Black Dirt Daily newsletter. I'll be back tomorrow with more business news across Dag and Financial Markets. And until then, I'm Mike Opperman. Goodbye for now.