The value of U.S. – Mexico Agricultural trade is $41 Billion Dollars. $17.8 billion coming from U.S. exports into Mexico and $22.9 Billion coming from U.S. imports from Mexico. U.S. Ag-exports to Mexico have increased 70 percent since 1996 in terms of nominal value. Conversely when that value is adjusted for inflation the real increase in export value to Mexico is 53 percent higher in 2016 than in 1996. The actual volume of U.S. Exports has increased 50 percent since 1996. Thus, the volume and the value have both increased roughly 50 percent since 1996, when value is put into real terms.
Regardless of inflation rates, an increase of 50 percent in value and volume is significant, the main driving factor behind this growth is the North American Free Trade Agreement or NAFTA. In addition to increased free trade, greater technological efficiencies have been achieved through innovation allowing for the U.S. to gain absolute and competitive advantage in crop production for corn and soybeans especially.
For Figure 2 all values were kept on the primary Y-axis (left vertical) so that the value and volume of the various commodities can be compared easily. Corn and soybeans are exported in very high volumes however the values of those products are comparable to that of all the other main export commodities which are exported in lower volumes but are valued higher.
Finally, for the snap shot into trade check out the info graphic below. At the bottom of the trade graphic Iowa’s allocated share of exports to Mexico are included. This gives insight into the amount of value that export markets create for Iowa. Based on Iowa's production $542 million is exported in corn from Iowa, along with $386 million in soybeans, and $398 million in pork. In these commodities more than $1.4 billion is exported from Iowa alone, that makes up 8 percent of total U.S. Ag-exports to Mexico from these six commodities.
For an even more in depth look at U.S. Mexico Ag-Trade click here.
Preston Lyman is a Research Analyst with Decision Innovation Solutions (DIS). DIS is an Iowa-Based economic research firm which provides regular farm economics research and analysis to the Iowa Farm Bureau staff and members.