READ the NAFB’s National Ag News for Wednesday, December 12th
Sponsored by the American Farm Bureau Federation
Senate Passes Farm Bill, House Consideration Expected Wednesday
The Senate Tuesday afternoon approved the 2018 farm bill, titled the Agriculture Improvement Act of 2018. Senators, without debate, approved the bill 87 to 13, placing action on the House of Representatives to pass and send the legislation to President Trump for his signature. Ranking Democrat of the House Agriculture Committee last week said “almost all” House Democrats support the bill. Farm groups across the spectrum of agriculture expressed support for the bill and called on lawmakers to move the farm bill across the finish line. The American Farm Bureau Federation endorsed the bill while calling for final approval. AFBF President Zippy Duvall called the bill a “complete package” gives farmers and ranchers the needed tools to “weather this ongoing storm,” referring to the farm economy. National Farmers Union President Roger Johnson says passage of the bill “cannot come soon enough” as farmers and ranchers face the worst farm economy decline in more than 30 years. Johnson calls the bill a “critical step” towards providing relief.
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Farm Bill Makes Significant Dairy Policy Reforms
The farm bill, or Agriculture Improvement Act of 2018, makes promised reforms to better serve dairy farmers. The National Milk Producers Federation says the bill, being considered this week, provides support to a struggling dairy sector. The updated dairy program includes higher coverage levels in a renamed Margin Protection Program that address deficiencies in the current program’s feed-cost formula, greater flexibility to allow producers of all sizes to access Tier 1 premium rates, and expanded access to additional risk management tools, allowing producers to participate in both MPP and the Livestock Gross Margin insurance program. Also applauded by NMPF, the bill includes full funding for trade promotion programs and nutrition provision intended to enhance consumption of fluid milk. NMPF says the law’s provisions build on improvements enacted in the Bipartisan Budget Act earlier this year, including dairy safety net reforms as well as risk management provisions.
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China to Begin U.S. Soy Purchases Soon
China will soon announce the first purchases of U.S. soybeans under an agreement between the U.S. and China at the G20 Summit. Following the conversation, President Trump announced the purchases as the two nations enter trade talks. Bloomberg News reports China plans to announce the purchases this month, which will be destined for state reserves. The final decision will be made by the State Council or cabinet, and details to be decided include whether the volume should be five million tons or eight million tons and if commercial companies should buy a further two million tons and be reimbursed for the 25 percent tariffs. Resuming purchases of U.S. soybeans should help offset some trade-related economic downfalls for U.S. farmers, as China is the world’s biggest consumer of soybeans, but stopped U.S. purchases after implanting tariffs against the United States.
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White House Delays Trade Aid Payments
The Market Facilitation Program trade payments expected early this month to farmers are on hold, for now. The White House is delaying the second round of payments amid the expectation China will soon resume buying U.S. soybeans. The payments, as part of the $12 billion trade mitigation package, are being held up by the White House Office of Management and Budget, where the package has been stalled for more than a week. Sources close to the matter told Reuters that the payment will likely eventually be approved after some “back and forth.” A Department of Agriculture spokesperson says USDA is “in discussions” with the White House and anticipate the payment rates will be “published before the end of the year.” The delay comes as China recently pledged to resume purchases of U.S. soybeans. Export inspections for U.S. soybeans are down 42 percent from last year due to the trade war, and the halt of purchases by China.
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Farm Groups Applaud New WOTUS Proposal
Agriculture groups welcomed the signing of a proposal to rework the Waters of the U.S. Rule. The Trump administration rolled out the proposal at the Environmental Protection Agency to much fanfare from agriculture and farm-state lawmakers. The National Cattlemen’s Beef Association called the proposal a “fresh start.” NCBA says the new rule proposed by the Trump administration would protect private property rights, safeguard U.S. waters, restore state and local authorities and respect the intent of Congress in limiting jurisdiction to “navigable waters” in the Clean Water Act. American Farm Bureau Federation President Zippy Duvall, who attended the signing of the proposed rule, says it will “empower farmers and ranchers to comply with the law, protect our water resources and productively work their land without having to hire an army of lawyers and consultants.” The 2015 WOTUS rule is currently in effect in 22 states. The EPA and Army Corps of Engineers are currently in the process of repealing the 2015 WOTUS rule.
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USDA Releases December WASDE Report
The December World Agriculture Supply and Demand report released Tuesday offers a typically quiet-minded update. This month’s corn outlook is for less corn used for ethanol, reduced imports, and larger ending stocks. Corn used to produce ethanol is reduced 50 million bushels to 5.6 billion, based on recent data that shows corn used for ethanol during the September to November quarter declined relative to the prior year for the first time since 2012. The season-average corn price received by producers is unchanged from last month at a midpoint of $3.60 per bushel, but the range is narrowed 5 cents on each end to $3.25 to $3.95 per bushel. U.S. Soybean supply and use projections are unchanged from last month. With soybean exports and crush unchanged, soybean ending stocks are projected at a record 955 million bushels. The U.S. season-average soybean price for 2018/19 is forecast at $7.85 to $9.35 per bushel, unchanged. The outlook for 2018/19 U.S. wheat this month is for unchanged supplies, lower exports, and higher ending stocks. The projected season-average farm price is up $0.05 per bushel at the midpoint with the range narrowed to $5.05 to $5.25.
