KEEP OUR RANCHERS SMILING AND OUR CATTLE NERVOUS

Our New Mexico cattle may soon be smiling from ear tag to ear tag recognizing that with the
potential shrinking access to world-wide cattle and beef markets, their life expectancy could see
a significant increase. Of course, the reciprocal to a smiling cow is a frowning rancher. Given
the tough talk on trade agreements such as the North American Free Trade Agreement, or
NAFTA, a poorly negotiated or renegotiated trade agreement could deal a severe blow to the US
cattle industry, and so goes the national cattle industry, so goes the New Mexico cattle industry.

During the month of February, both live cattle and feeder cattle futures dropped significantly,
driven mainly by the uncertainty of negotiations of future trade agreements. Drops in the cattle
futures markets are leading indicators of the overall direction of cattle prices regardless of where
cattle or beef producers are in the supply chain. With America exporting approximately 20% of
its agriculture products and maintaining a favorable agriculture product export/import ratio with
our major trading partners for over 50 years, it is essential that cattle and beef producers stay
actively engaged in future trade negotiations to ensure that their voices and concerns are heard.

In New Mexico, the dairy and cattle ranching sectors account for a significant portion of
agriculture sales comprising approximately 75% of overall receipts. While the majority of New
Mexico beef cattle are shipped to other regional states for fattening and slaughter and not to
foreign countries, per se, the ultimate destination of cattle and beef products directly impacts the
prices New Mexico cattle producers receive for their cattle products. In the integrated,
globalized economy that exists today, the belief that isolationism is good for the cattle industry is
simply put flawed thinking. History shows us time and time again that protectionism
inevitably has a negative impact on product and service producers and cattle producers are not
immune from this history. The ability to open additional cattle markets as opposed to closing
existing cattle markets is essential for sales and price growth and the primary reason why cattle
and beef producers must become vigorously involved and represented in upcoming trade
negotiations.

Our foreign competitors are anxiously waiting for Americas move on trade policy, recognizing
the shift in protectionist attitudes and evaluating their trade policies accordingly. I visited
Australia two years ago and there is no doubt that they are seeking opportunities to expand their
foreign cattle markets. A growing world population affords the opportunity to grow cattle and
beef product markets and as these potential markets grow so does the opportunity to get greater
involvement in a global economy. Lets keep our ranchers smiling and our cattle nervous. For
ranchers and economic developers with a vested interest, get keenly involved with proposed
trade policies and ensure that your efforts make a positive difference. Current and future trade
agreements need to be reviewed and modified regularly. Contact your federal, state, and local
elected officials and ask them to work collectively with the executive branch to develop and
execute trade agreements that are in the best interest of the cattle industry.