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READ the NAFB’s National Ag News for Friday, February 19th
U.S., China to Continue Trade Talks This Week
The U.S. and China will continue talks this week that will hopefully lead to an end to the trade war between the two economic superpowers. A Reuters article says sources from both sides feel the recent negotiations kept things moving forward. The Trump Administration still seems committed to the March 1 deadline to reach a deal or raise tariffs on more Chinese imports. President Donald Trump had said recently that he’s “reluctantly willing to let the target date slide.” The recent talks focused on agriculture, property rights, technology, non-tariff barriers, and currency. Chinese President Xi (Zhee) Jinping met Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin (Muh-NOO-chin) after a full week of talks that included lower-level officials. If the two sides don’t’ reach a deal and the deadline isn’t extended, tariffs on $200 billion worth of Chinese imports will rise from 10 percent to 25 percent. After the conclusion of talks on Thursday, which included a banquet for officials, Mnuchin said on Twitter that he and Lighthizer held “productive meetings with President Xi’s top economic adviser.” Lighthizer says they’ve made good progress on important and difficult issues. While there’s additional work to do, Lighthizer describes U.S. officials as hopeful.
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Farm Income Down 20-Straight Quarters
The Midwest and the Mid-South parts of the country saw farm income decline in the fourth quarter of 2018. In spite of the pressure on farm incomes, the value of quality farmland, ranchland, and pastureland rose. Those observations come from the latest Agricultural Finance Monitor, which is published by the Federal Reserve Bank of St. Louis. The 22 agricultural banks that responded to the Fed Survey are located in seven Midwest and Mid-South states, including Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri, and Tennessee. Lenders continued to report declining farm incomes compared to a year earlier. The last quarter of 2018 was the 20th-straight quarter of lower farm incomes. Farm income expectations improved slightly in the first quarter of 2019. One Missouri lender says, “We’ve heard rumors of large farmers filing for bankruptcy. Farmers in our area still have crops in the field.” The past surveys done by the Fed showed expectations of dropping farmland value. In spite of that, quality farmland value rose 3.4 percent in the fourth quarter of last year when compared to 2017. Cash rents for quality farmland rose 2.9 percent in the fourth quarter.
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USDA Releases Ten-Year Farm Income and Trade Projections
The USDA is preparing to issue its Agricultural Projections to 2028 report next month. Some of the tables they’ll use to come up with the projections were issued last week. Looking at 2019, USDA projects crop receipts to reach $200 billion, up slightly from last year. Direct government payments, including those from the Market Facilitation Program, are projected to drop by $13 billion from a year ago, coming in at $10.2 billion this year. Total expenses are projected to drop by 1.5 percent from 2018. The University of Illinois’ Farm Policy News says based on the overall projections for receipts and expenses, USDA projects 2019 farm income at $77.6 billion, up from 69.2 billion a year ago. Crop receipts and total expenses are projected to rise even into 2020. Net farm income is projected to hold stable, somewhere between $75.6 billion and $79.5 billion through 2028. In other USDA projections, the agency doesn’t expect soybean exports to return to pre-trade war peak levels until the 2026-2027 growing season. The reason is due to South American soybean competitors who gain global market share. However, the projections in the USDA outlook assume that China’s retaliatory tariffs stay in place.
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Senate Reauthorizes Pesticide Registration Improvement Act
The Senate Ag Committee and its leadership, including Chair Pat Roberts and Ranking Member Debbie Stabenow, announced that the Senate passed the Pesticide Registration Improvement Act. In the announcement, the Senators said, “The unanimous Senate passage of the bipartisan PRIA legislation provides certainty to farmers, consumers, and many other stakeholders. We’re urging our colleagues in the House to pass the legislation as soon as possible.” The legislation moves into the House of Representatives and is the same bill that was passed by unanimous voice vote back in the Senate during June of 2018. As recently as December of last year, a number of agriculture groups urged Congress to pass the legislation. PRIA establishes a framework for registering pesticides with the Environmental Protection Agency. The original intent was to create a more predictable and effective evaluation process for affected pesticide decisions. The legislation includes technical changes and extends authority for the EPA to collect updated pesticide registrations and registration fees through 2023.
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USDA: Keep Plan B Ready on Summertime E15 Sales
It’s been well-documented that the Environmental Protection Agency is working to complete a rule by the summer driving season that would allow year-round E15 sales. The USDA is worried about the work being completed on time. According to a DTN report, the USDA says the EPA would have to use some discretion in restricting E15 use if the rule isn’t ready to roll out by June 1. USDA Deputy Secretary Stephen Censky says the EPA is working hard and is very committed to getting a new rule in place and announced in time for the summer driving season. “I know that the EPA has some enforcement discretion,” Censky says. “They could announce that they won’t force folks to stop selling E15 in several states and that retailers won’t have to worry about having enforcement actions taken against them.” For years, the ethanol industry has urged EPA to equalize the Reid Vapor Pressure regulations between E10 and E15. Because of those regulations, E15 has been largely unavailable to retailers for sale during the summer months. The industry contends that adding five percent more ethanol to the nation’s fuel supply during the summer driving season would be helpful in reducing tailpipe emissions even further.
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Winter Weather Cattle Loss May Be Covered by LIP
It’s been a tough winter for farmers, especially for beef and dairy producers. Extreme weather across a good chunk of the nation have resulted in some excessive livestock deaths. Ranchers who have experienced those losses may be eligible to recover some of those losses, thanks to the Livestock Indemnity Program. A Drovers article says the program provides needed benefits to eligible livestock producers who suffer the deaths of livestock outside the normal range of mortality, due to conditions like adverse weather, disease, and predator attacks. Eligible losses don’t automatically trigger payments. Livestock owners must provide evidence of such losses to the Farm Service Agency. To qualify for program benefits, livestock must have died in excess of normal mortality rates as a direct result of eligible loss conditions, such as weather or predators. Livestock farmers also qualify for the benefit if livestock were injured due to an eligible loss condition and were sold at a reduced price because of that injury. If death losses occur, producers are reminded to record the date, take pictures, and report it directly to the Farm Service Agency.
