January will bring market movers, including President-elect Donald Trump’s plans after the inauguration. This is according to Andrick Payen, a grains and oilseed analyst with Rabo Agrifinance.
Payen says countries are responding in two ways to the new administration’s stance on implementing tariffs: debating retaliatory measures and increased purchasing before potential tariffs.
“It’s prudent for other countries to start making that calculated risk in terms of whether that happens or not or how strong the tariffs are going to be,” he says.
For example, Mexico relies heavily on the U.S. for agricultural products. Mexico will likely purchase more goods before President Trump takes office, Payen says. Mexican President Claudia Sheinbaum has also said Mexico would retaliate if Trump follows through with his proposed 25 percent tariff.
Existing trade agreements, such as the United States Mexico Canada Agreement or USMCA, do not guarantee positive trade relationships will continue.
“The previous administration when Trump was president, the NAFTA back then was discussed, and he wanted a new renegotiation,” Payen recalls. “I think with a new administration, probably that’s going to be the case again, where there’s going to be a lot of points that probably they’ll want to discuss.”
An ongoing debate between the U.S. and Mexico has been around Mexico’s approach to biotech corn. Mexico does not want to use genetically modified corn for human consumption. This is corn that has traits that make it resistant to drought or pests, for example. The Office of the United States Trade Representative argues Mexico’s measures are not based on science and threaten to disrupt American exports of agricultural products to Mexico, including corn, harming American farmers.
Payen says Mexico’s new leader, President Sheinbaum, is not likely to change the course on that.
There’s good news for 2025, too. Low grain prices make the U.S. more competitive in the international market. Domestic demand for protein and ethanol is a good story right now for U.S. farmers.
“It’s the first time we find ourselves, in this business, in this cycle,” Payen says. “I think that it’s important to have a good marketing strategy moving forward.”
