Sponsored by the American Farm Bureau Federation
READ the NAFB’s National Ag News for Wednesday, February 27th
Trump Budget Proposal to Include USDA Cuts
The Trump 2020 budget proposal will include “big cuts” to the Department of Agriculture, according to Agriculture Secretary Sonny Perdue. The budget request will propose cutting non-defense programs by five percent. However, Politico reports USDA is likely to face steeper budget cuts. Perdue noted that Congress usually disregards the president’s budget request, which in recent years has unsuccessfully called for cuts to USDA. Perdue says he would like to see the process return to a negotiation between the president and Congress, saying: “It’s like buying and selling a piece of land. You’ve got to get within the realm of negotiation there for people to take you seriously in that regard.” The Trump administration has previously proposed large cuts to crop insurance, agriculture research and rural development. Perdue says the budget will be conservative, but speaking of his team, says “we’ve done our best to advocate for farmers.”
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Coalition Asks Congress to Safeguard Crop Insurance
A coalition of more than 50 farm groups is asking lawmakers to safeguard crop insurance. The organizations, including the American Farm Bureau Federation, warned in a letter to top-ranking House and Senate budget leaders this week that “An overreliance on budget savings from the agriculture community and from crop insurance will unquestionably undermine rural economies.” 2018 farm profitability is expected to hit a low not experienced in more than a decade. The groups also noted the public-private partnership of crop insurance has been a consistent and reliable risk management tool for farmers, particularly at a time of heightened uncertainty in agriculture caused by natural disasters, trade disputes and government shutdowns. The letter says farmers and lawmakers “agree that crop insurance is a linchpin of the farm safety net” and is crucial to the economic and food security of rural America. The groups concluded the letter urging lawmakers to oppose cuts to crop insurance during this year’s budget process.
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USMCA Coalition Launched to Promote Trade Agreement
A group of industry and agriculture companies and associations have launched the USMCA Coalition, an effort to see the U.S.-Mexico-Canada trade agreement through ratification. The USMCA Coalition is a collection of more than 200 organizations, including the U.S. Chamber of Commerce, the American Farm Bureau Federation, and the Association of Equipment Manufacturers, with an objective “to secure congressional approval” of the trade agreement. AEM President Dennis Slater says completing the trade agreement will “guarantee North America’s manufacturing competitiveness” and support 1.5 million jobs across the U.S. and Canada. Equipment manufacturers contribute $188 billion combined to the U.S. and Canadian economies. Canada is the largest export market for U.S. manufacturers of heavy equipment and a more than $10 billion per year export market for U.S. equipment manufacturers. Meanwhile, U.S. agricultural exports to Canada and Mexico quadrupled from $8.9 billion in 1993 to $39 billion in 2017, according to AFBF, and the two countries are top markets for U.S. grains, dairy products, meats fresh fruits, and vegetables.
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U.S. Asks China for Lower Ethanol Tariffs
The U.S. has asked China to lower tariffs on ethanol imports as part of the ongoing talks between the two nations. Agriculture Secretary Sonny Perdue Tuesday confirmed the U.S. request, saying “we would certainly love below 15 percent,” tariff levels, but did not say what level the U.S. asking for, according to Reuters. Last summer, through the tit-for-tat trade war, China imposed retaliatory tariffs of up to 70 percent on U.S. ethanol shipments. It’s also unclear how receptive China is to the U.S. request, but Perdue says the two sides are “engaged in conversation.” Perdue says several other agriculture issues are “on the table” in the trade talks, including poultry access, issues over beef exports, feed grains, ethanol and distillers grains. Meanwhile, President Trump delayed a planned March tariff increase on Chinese goods, also seen as a deadline for the talks to conclude.
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Farm Credit 2018 Income Even with 2017
The Farm Credit System this week reported combined net income of $5.3 billion for 2018, as compared with $5.2 billion for the prior year. The system also reported combined net income of $1.3 billion for the fourth quarter of 2018, as compared with $1.5 billion for the fourth quarter of 2017. Tracey McCabe, President and CEO of the Federal Farm Credit Banks Funding Corporation, says earnings for the year “continued to reflect strong financial performance by system institutions.” Combined net income increased $143 million or 2.8 percent for 2018, as compared with the prior year. The increase resulted primarily from increases in net interest income of $264 million and noninterest income of $92 million, partially offset by increases in noninterest expense of $128 million and the provision for income taxes of $88 million. Net interest income increased $264 million or 3.4 percent to $8.0 billion for 2018, as compared with $7.7 billion for the prior year.
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Organic Spirits Company Announces Fund for Farmers
Prairie Organic Spirits has launched its Spirit of Change Fund that will commit one percent of sales to support the next generation of organic farmers and to help transition more conventional farmland to organic. The company is self-proclaimed as the nation’s leading organic spirits brand. Through the initiative, Prairie Organic is seeking to increase sales of organic spirits to equal five percent of all alcohol category sales. By achieving the goal, the company claims approximately 8.0 million acres of conventional farmland would be converted to organic and approximately 7.4 million pounds of pesticides would go unused annually. Organic alcohol sales make up less than one percent of total sales, while organic food and beverage sales are roughly five percent of the U.S. total. Through the fund, Prairie Organic will provide ten scholarships for interns accepted into the Rodale Institute’s Next Generation Scholarship Program, which provides practical, hands-on organic agriculture knowledge and skills to future organic farmers.
