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READ the NAFB’s National Ag News for Friday, February 22nd
China Offers $30 Billion More of U.S. Ag Purchases
China is proposing additional purchases of U.S. agriculture products of $30 billion a year in trade talks with the United States. Bloomberg reports the offer would be on top of pre-trade war levels and continue for an undefined period of time. Agriculture Secretary Sonny Perdue told reporters Thursday it was “premature” to comment on the proposal, adding he didn’t want to raise expectations. But, if an agreement is reached, Perdue says the U.S. structural reforms can “recover markets very, very quickly.” The proposal is part of the talks between trade officials from the U.S. and China taking place in Washington, D.C. this week. In response, Arlan Suderman of INTL FCStone, expressed caution, noting “China will say what needs to be said to get a deal, but the key component will be in the verification and enforcement.” The talks face a March 1 deadline, although President Trump has recently suggested he would consider extending the deadline.
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USDA Expects Exports to Fall $1.9 Billion in 2019, Pending Trade Agreements
The Department of Agriculture is projecting a $1.9 billion drop in exports this year, led by a decline in trade with China. While talks remain ongoing between China and the United States, USDA during its 95th annual Agricultural Outlook Forum Thursday predicted 2019 fiscal year exports at $141.5 billion. USDA Chief Economist Robert Johansson told attendees China is expected to fall from the top market for U.S. exports in 2017, to the fifth largest market in 2019, pending the outcome of trade talks. The U.S. so far in 2019 has exported 13.5 million metric tons less of soybeans than the same time last year, according to Reuters. Meanwhile, USDA is forecasting record milk and animal protein production. USDA also predicts soybean plantings will decline this year as corn plantings increase. Corn plantings for the year are predicted at 92 million acres, up 3.3 percent from 2018, and soybean plantings are predicted at 85 million acres, down 4.7 percent from last year.
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Gene Editing Development Stalled; NPPC Renews Call for USDA Oversight
The National Pork Producers Federation is urging the Department of Agriculture to assume regulatory oversight of gene editing for livestock. The call from NPPC follows the slow pace of developing a regulatory framework at the Food and Drug Administration. NPPC says the process is “stalled” at FDA, and that “USDA is best equipped to oversee gene editing for livestock production” according to NPPC President Jim Heimerl (Hi’-merle). NPPC says gene editing accelerates genetic improvements that could be realized over long periods of time through breeding. For example, it allows for simple changes in a pig’s native genetic structure without introducing genes from another species. Emerging applications for the pork industry include raising pigs resistant to Porcine Reproductive and Respiratory Syndrome, a highly contagious swine disease that causes significant animal suffering and costs pork producers worldwide billions of dollars. Despite no statutory requirement, the FDA currently holds regulatory authority over gene editing in food-producing animals.
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BLM, Forrest Service, Lower 2019 Grazing Fees
The federal government is reducing charges for federal grazing in 2019. The federal grazing fee for 2019 will drop to $1.35 per animal unit-month for public lands administered by the Bureau of Land Management and $1.35 per head-month for lands managed by the USDA Forest Service. This represents a decrease from the 2018 federal grazing fee of $1.41 per animal unit month. The fees are set by the Bureau of Land Management and the Forest Service. Each year, the federal lands grazing fee is calculated as part of a standard formula outlined in the grazing regulations. Public Lands Council President Bob Skinner welcomed the change, saying “Ranchers across the West trust the formula and the process, which ensures fair and equitable access to forage on federal lands.” The grazing fee applies in 16 Western states on public lands administered by the BLM and the Forest Service. The BLM manages more than 245 million acres of public land located primarily in 12 Western states, including Alaska.
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E-Commerce Compressing Margins for Ag Retailers
Online agricultural retail startups are compressing margins for traditional ag retailers through increased competition and price transparency. A new report from CoBank shows that while e-commerce platforms remain a relatively small portion of the overall ag retail marketplace, growth in the segment has been significant in recent years and will continue to increase. A CoBank researcher says traditional ag retailers that “successfully embrace the challenges introduced by e-commerce will succeed as tomorrow’s cutting-edge ag retailers.” E-commerce platforms that lack a physical footprint will struggle to fully serve farmers, especially in the tight and uncertain time windows of production agriculture. Some traditional ag retailers have already begun responding to the challenge by doubling down on their service and distribution capabilities while building their own online presence. Only a small percentage of crop farmers are purchasing inputs online today, but that is beginning to change. In 2017, USDA figures show that only 25 percent of crop farmers purchased inputs online, up from just 16 percent in 2013.
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Corteva Acquires BASF’s Clearfield Canola Production System
Corteva Agriscience has acquired the Clearfield Canola Production System called Clearfield canola in Canada and the United States from BASF. Corteva is the Agriculture Division of DowDuPont. The acquisition representants a full line of canola products in Canada, consisting of the Clearfield canola herbicide-tolerant trait and a line of herbicides sold in Canada. Corteva says the acquisition enables the company to expand its position to include out-licensing of the Clearfield canola trait to other seed companies in Canada and the United States. A Corteva spokesperson states the acquisition “ supports Corteva Agriscience in supplying genetics for one of the most consumed vegetable oils globally.” Corteva Agriscience is intended to become an independent, publicly traded company when the previously announced spinoff is complete by June 2019. The division includes DuPont Pioneer, DuPont Crop Protection and Dow AgroSciences.
