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Experts note risk if border is closed

Mexico key ally for state farmers by Nathan Owens | April 3, 2019 at 2:00 a.m.

President Donald Trump's notice Friday that he was thinking about closing the border with Mexico this week if it didn't do more to stop migrants from entering the United States would be hard on Arkansas farmers, officials said Tuesday.

Trump retreated Tuesday from his border threat, saying there was evidence the Mexican government is stopping more migrants from entering the U.S.

A closed border would bring to a screeching halt the more than $1 billion in daily trade between the U.S. and Mexico, including the commodities shipped from Arkansas, such as poultry and rice.

The total value of exports to Mexico from Arkansas was $851 million, according to 2017 U.S. Census Bureau data, a 24 percent increase from the year before, when Arkansas shipped $685 million worth of products.

Canada is Arkansas' leading export market, but Mexico is the state's largest market for agricultural goods.

In an email, Lauren Waldrip Ward, executive director of the Arkansas Rice Federation, said a border closing would be detrimental to the state's farmers.

"As the third largest destination for Arkansas grown rice, Mexico accounts for 14 percent of our export markets," she said. "Our farmers simply cannot afford to lose trade with Mexico. We must continue to preserve existing markets like Mexico, while also working towards new trade agreements that will benefit farmers."

At a national level, agricultural exports to Mexico totaled $19 billion in 2017, according to the Office of the U.S. Trade Representative. The most popular commodity was corn, followed by soybeans, pork, dairy and beef.

Mexico is also a destination for Arkansas-raised poultry, given the state's proximity to the U.S.-Mexico border, said Travis Justice, chief economist of the Arkansas Farm Bureau.

"We're one of their major customers and they're one of ours; their avocados come here and our poultry goes there," Justice said.

Census Bureau data show that $190 million worth of frozen chicken cutlets, including livers, and $222 million worth of Arkansas rice was exported from Arkansas in 2017. Arkansas' total commodity exports that year totaled $1.5 billion.

"We'll see how this thing plays out," Justice said. "But it has caused some ripples in the ag-production world."

Farm groups have expressed their concern about the fallout from trade barriers and about losses resulting from retaliatory tariffs with other countries. The National Pork Producers Council on Monday said it understood the president's border-security concerns, but it urged the administration to consider the implications of closing access to a market that is vital to rural America.

Justice said large state businesses likely have "ears on the ground" in response to the situation.

"I'm sure they are trying to feel out what's going on there to adjust their supply chains here," he said.

Messages were left Tuesday with some of the leading broiler chicken producers in the state, asking about any adjustments they considered in response to the possibility of a closed U.S.-Mexico border, as well as approximately how much of their production is exported to Mexico.

Spokesmen for Tyson Foods, Simmons Foods and George's Inc. either had no comment or did not immediately return messages.

In an email, Gary Mickelson, director of communications for Tyson, suggested reaching out to different trade groups for comment on the issue.

Business on 04/03/2019

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