The United States-Mexico-Canada-Agreement (USMCA) – or what’s being referred to as NAFTA 2.0, announced today by the Trump administration – could result in some good news for Colorado agriculture.

State Commissioner of Agriculture Don Brown told Colorado Politics Monday that Colorado’s wheat and dairy sectors could benefit most from the new agreement, which still must be ratified by Congress (sometime next year) and by the governments of the two other nations.

The new agreement isn’t likely to go into effect until 2020.

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Dairy has been for months one of the biggest hurdles to a new agreement with Canada. Its quota and pricing system has heavily restricted dairy exports from the United States.

Brown said the country also dumps a lot of powdered milk into the worldwide markets, making it tougher for U.S. dairy to compete. Tariffs on U.S. dairy headed to Canada, such as powdered milk, can be as high as 270 percent.

Under the new agreement, Canada will drop two of its restrictions on milk exports that Brown said allowed the country to get around the NAFTA agreement. It will also open up the Canadian market to more of those products. “That will help our dairy industry a lot,” Brown said.

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Another help to Colorado is in how Canada will grade wheat exports from the United States, Brown said. Previously, wheat grown in Canada was subject to one set of standards; U.S. wheat to another. Canadian wheat could be milled into flour. But wheat from Montana, for example, would be classified in Canada as feed grain, which meant a much lower price, even if the wheat is flour-quality.

What that means for Colorado farmers is that their wheat can be exported to Canada with higher prices for the farmer, Brown said. Another more indirect impact is that if Montana exported a lot of wheat to Canada, that would create more demand for Colorado wheat in the United States. There hasn’t been much of a market for Colorado wheat in Canada, Brown said, but that could change under this new agreement.

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With regard to Mexico, there’s good news on that front as well, Brown said. All the tariffs on agriculture products from the United States to Mexico will be removed. “That allows a lot of Colorado products – pork and pinto beans – to go without tariffs.”

“Agriculture needed good news,” Brown said, particularly because the current farm bill expired on Sunday and a new one might not surface until after well after the election.