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READ the NAFB’s National Ag News for Monday, April 8th
Trump Backs Off Threat to Close Southern Border
President Donald Trump backed away from a recent threat to close the southern border with Mexico after widespread opposition. The Washington Post says the president gave Mexico a “one-year ultimatum” to halt the flow of drugs and migrants into the United States. The president told reporters late last week that he would impose a 25 percent tariff on Mexican auto imports, and then would close the southern border if Mexico didn’t make enough progress on drugs and migrants flowing into the U.S. He also didn’t provide a clear path on how his administration will deal with the record upswing in migrants. The president’s announcement comes amid reports that the U.S. Border Patrol was at the breaking point. The threat to close the border took administration aide by surprise. The change in plans was sparked by heavy pushback from both the business and agriculture communities. Members of Congress, as well as White House advisers, warned of potential economic damage from such a drastic move. The Mexican government doesn’t seem concerned. The Mexican Undersecretary for North America simply says, “We are not concerned.”
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Democrat Concerns Over USMCA Making Progress
Mexican President Obrador pledges to help make sure the nation’s Senate will overhaul labor laws to enforce workplace standards. Politico says that’s a major sticking point for American lawmakers as they look at possibly ratifying President Trump’s signature trade achievement. During a press conference, Obrador said, “We don’t want there to be any excuse to reopen the negotiations for the deal.” The good news is that Mexican officials are optimistic the new laws will be passed soon. However, they’re less sure of the legal time frame needed to implement the changes. Congressional Democrats aren’t sure the current rules in the USMCA agreement are secure enough to enforce labor standards. Many have called for reopening the deal to strengthen that language. That’s an idea that Mexico, Canada, and the Trump Administration all oppose. Vice President Mike Pence says the White House wants Congress to get the deal ratified by this spring. House Speaker Nancy Pelosi says she won’t bring the pact up for a vote until she sees evidence of the revised Mexican labor laws in effect. Last Thursday, the Speaker said she won’t try to use the trade pact as a bargaining chip to achieve Democratic policy priorities.
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Trump Says Trade Talks “Rounding the Turn.”
President Donald Trump said last week that trade talks with China “are rounding the turn” and that something “monumental” is coming in the next few weeks for both countries. During an appearance in the Oval Office with both negotiating teams, Trump said, “We have a way to go, but it’s not very far.” China’s top trade negotiator told Trump that “because of your direct involvement, we do have great progress.” An Associated Press report says U.S. and Chinese negotiators dove into their ninth round of negotiations midway through last week. The report says the two countries have made significant progress on some of the more contentious issues in the discussions. For example, China passed a law last month that loosens restrictions on foreign investment, which is designed to prevent Chinese companies from forcing American countries to hand over technology. Beijing is also expected to agree to sharp increases in the number of purchases from America, including agricultural commodities, in order to help reduce the sharp trade deficit America has with China. That trade deficit came in at a record amount of $379 billion last year.
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NBB Thanks Representatives for Proposed Biodiesel Tax Extension
The National Biodiesel Board is grateful that several representatives in the House introduced legislation that would provide a two-year extension of the biodiesel and renewable diesel tax incentive. The NBB says the Biodiesel Tax Credit Extension Act will provide certainty for 2018 and 2019 to biodiesel producers and their employees. “NBB and its members are grateful to the representatives for their leadership to extend the expired biodiesel tax incentive,” says Kurt Kovarik, Vice President of Federal Affairs. “We continue to appreciate the strong bipartisan support in Congress for biodiesel and renewable diesel industry workers.” He says biodiesel companies and their workers are facing a lot of uncertainty in their future because the biodiesel tax incentive has been expired for 15 months. “The economic pressure is building and it’s threatening the future of the industry,” he says. “It’s putting good-paying, blue-collar jobs and production of a low-carbon, domestic fuel at stake. It’s also adding economic pressure to farmers who’ve already been hit hard from both sides by unfavorable weather and trade disputes.” Kovarik adds that this bill will provide the agricultural economy some certainty and relief for 2018 and 2019.
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CoBank Says U.S. Protein Demand Uncertain in 2019
Beef, chicken, and pork supplies are expected to continue their expansion from 2018 levels. However, CoBank says domestic and international demand bring a lot more uncertainty this year. A new report from CoBank says overall U.S. animal protein production climbed by 2.5 percent last year. Pork led the way at three percent. Per capita, U.S. protein consumption has grown by nine percent since 2014. This year is expected to test the record set back in 2006, potentially coming in at one percent higher than the current record. However, CoBank says price weakness in chicken and pork reflects what it calls “fatigue” among U.S. consumers, which means supplies are likely to continue to climb even higher. The bank says trade issues remain a wildcard for animal protein markets overseas. Trade negotiations with Canada, China, Japan, Mexico, and Korea could dominate opportunities for U.S. protein producers, especially considering that the talks with China and Japan are currently ongoing. Trade flows with Canada and Mexico are still up in the air and awaiting U.S.-Mexico-Canada trade agreement ratification by all three countries. If it’s not approved by all three participants, that means trade flows with Canada and Mexico would be interrupted.
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Study: Biofuels Don’t Raise Food Prices
A recent study published in the trade journal Biomass and Bioenergy concludes that there is no evidence of food price increases because of biofuels. There’s also no evidence of other lands converting to agriculture because of biofuel. The Hagstrom Report says the National Wildlife Federation had reached a different conclusion using satellite data. The study was conducted by scientists at the University of Idaho and the Agriculture Department. It was funded by the National Institute of Food and Agriculture, as well as the USDA Office of the Chief Economist. The study findings say, “The use of satellite data is prone to error in classifying certain land uses, such as distinguishing between cropland used to grow hay and pasture land for grazing. Although an automated satellite image classification provides a convenient way to quantify land use change, the results could be highly misleading if not carefully verified.” The study was also highlighted in a recent news release from the Renewable Fuels Association.
