Sponsored by the American Farm Bureau Federation
READ the NAFB’s National Ag News for Friday, March 1st
Chinese Grain Subsidies Are Too High
U.S. Wheat Associates (USW), along with other commodity groups and the USDA, welcomed a ruling from the World Trade Organization dispute panel regarding Chinese grain subsidies. The WTO panel ruled that Chinese government payments to farmers for grains exceeded China’s WTO agreements and significantly distort global wheat trade. The dispute panel formed after the U.S. Trade Representative’s Office challenged China’s domestic agricultural support programs for wheat, corn, and rice through the WTO dispute settlement process back in September of 2016. USW President Vince Peterson says they’re pleased that the Trump Administration has continued to support his group through the dispute. “U.S. farmers have been hurt by China’s overproduction and protectionist measures for too long,” Peterson says, “and it’s past time for China to start living up to its commitments.” A 2015 Iowa State University study said China’s domestic market support price for wheat at the time of almost $10 per bushel cost U.S. wheat farmers between $650 and $700 million annually in lost income by preventing export opportunities and suppressing global wheat prices. “The past two decades have been a lost opportunity for the WTO negotiating function as major countries like China have refused to take on new responsibilities,” Peterson says. “Perhaps this will be the wake-up call countries need to realize restricting trade opportunities hurts everyone.”
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Lighthizer Cautious About China Trade Progress
At a hearing with the House Ways and Means Committee this week, U.S. Trade Representative Robert Lighthizer said it’s unclear if negotiations with China will bring the trade war to an end. Politico says that’s a far more cautious outlook than President Trump has presented recently. Lighthizer says “much still need to be done” before a deal can be reached between the two countries. He also warned that negotiations, as well as the broader U.S. trade agenda, will crumble if Congress doesn’t pass the U.S.-Mexico-Canada Trade Pact. “It just has to pass,” Lighthizer says. “If it doesn’t, you’ll have no credibility at all with China and you’ll have no credibility on any deals with your other trading partners.” The USTR office is set to formally postpone raising duties on $200 billion in Chinese goods, which was set to happen on Saturday. There is no new date set for potentially hiking up the tariffs. Lighthizer is planning a trip to Tokyo, Japan, probably in the next month, to discuss China and open up U.S.-Japan trade negotiations.
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Will E15 Rule Be Ready for Summer Driving in 2019?
Ag Secretary Sonny Perdue appeared before the House Ag Committee to talk about the state of farm country in rural America. Perdue said that he didn’t expect the Environmental Protection Agency to complete its E15 rulemaking process in time for the 2019 summer driving season. An Ethanol Producer Dot Com article says during an appearance before the House Agriculture Committee, Perdue was questioned by three members on E15 and the refinery exemptions granted under the Renewable Fuels Standard during the hearing. At that point in time, the USDA was encouraging EPA to announce discretionary enforcement of current regulations. However, the next day, Perdue made an announcement that he’d just been informed by EPA Chief Andrew Wheeler that the E15 rule allowing year-round sales of higher ethanol blends will very likely be ready by this summer. In talking to reporters, Perdue says, “Today, Acting Administrator Wheeler told me it was very likely that they could get the rule done and would do so, if at all possible.” EPA says it’s working “expeditiously” to finish the rule by June first. The agency also expects to have a draft rule proposal later in March.
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Wheeler Confirmed as Head of EPA
The Senate approved Andrew Wheeler as the Head of the Environmental Protection Agency. The former coal lobbyist was confirmed by a vote of 52 to 47. The Washington Post calls Wheeler a “veteran of Washington political and industry circles who’s aided in President Trump’s push to roll back environmental regulations put in place under former President Obama.” At his confirmation hearing in January, Wheeler talked about the dozens of rules that the EPA has rolled back over the past few years. He also made it explicitly clear to lawmakers that he intends to continue the Trump Administration’s reversal of environmental regulations. “Through our deregulatory actions, the Trump Administration has proven that burdensome federal regulations are not necessary to drive environmental progress,” Wheeler said at his confirmation hearing. “Certainty and the innovation that thrives in a climate of certainty are key to progress.” In addition to the rollbacks, Wheeler has also rolled out initiatives aimed at reducing lead exposures around the country.
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Farm Debt Levels Equalling 1980s Farm Crisis
The amount of farm debt has risen rapidly to $409 billion. That’s up from $385 billion in 2018. U.S. Ag Secretary Sonny Perdue says demand for loans remains “historically high.” A Reuters article says the strain on the American farm belt is becoming more and more comparable to the agricultural crisis of three decades ago. The strain is being caused by multiple factors, including commodity prices remaining low for an extended period of time, storms damaging crops, and the loss of export markets due to trade disputes with key trading partners. “Farm debt has risen more rapidly over the last five years, increasing by 30 percent since 2013,” Perdue said in testimony before the House Agriculture Committee. “It’s up from $315 billion in 2013 to $385 billion in 2018. That number has now risen to $409 billion this year. We last saw those levels in the 1980s.” USDA Chief Economist Rob Johansson says USDA is concerned about a potential decline in farmland real estate values in the years ahead. Those real estate prices have been a key support for equity in U.S. agriculture. However, Johansson is quick to point out that it hasn’t happened yet. The amount of farmland that may come up for sale in the future is a big concern to ag bankers. Lenders fear that could trigger an across-the-board drop in land prices.
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USDA Begins Process to Regulate Hemp Production
The USDA is moving forward on the process of creating regulations that would oversee commercial hemp production in the United States. The Packer Dot Com says once the information-gathering is wrapped up, the agency will then use the information to write regulations that will include provisions for federally-regulated hemp production. The regulations will also include a process for submitting state, as well as Indian tribal production plans to the agency. USDA says regulations for states and tribes who submit plans will include things like land to be used for planting, testing, effective disposal of plants and products, compliance with law enforcement, and many others. The law requires USDA to complete reviews of its plans within 60 days once the regulations are effective. USDA is also required to establish a plan to monitor and regulate hemp production in states or Indian tribes that don’t yet have an approved state plan. The USDA’s intention is to roll the regulations out by the fall of this year in order to make sure growers who want to plant hemp can be ready for the 2020 growing season.
