Sponsored by the American Farm Bureau Federation
READ the NAFB’s National Ag News for Monday, May 13th
U.S., China Wrap Up Trade Talks with No Deal
U.S. and Chinese officials wrapped up trade talks with no deal. However, there wasn’t any breakdown in talks, even as the U.S. Trade Representative moved forward on raising import tariffs from 10 to 25 percent on $200 billion in Chinese goods. Farmers and agricultural organizations across the country are very concerned about the move. The National Association of Wheat Growers, the American Soybean Association, and the National Corn Growers Association were hoping a deal would be in place by March first, right before farmers started back into their fields. Instead, the trade war with China is escalating. “U.S. wheat growers are facing tough times right now,” says Wheat Growers Association President Ben Scholz, “and these additional tariffs will continue to put a strain on our export markets and threaten decades worth of market development efforts.” Davie Stephens, ASA President, says his group believes President Trump supports farmers. “We’d like the President to hear us and believe what we are saying about consequences as the trade war drags on,” Stephens says. “Adding to the current problems, it took us 40 years to develop the China soy market. For most of us in farming, that’s two-thirds of our lives.” Lynn Chrisp, Corn Growers President, says corn farmers are watching the tariff battle as many can’t even get into fields to plant this year’s crop due to wet weather. The Administration says China has 3-4 weeks to come to an agreement or face tariffs on $325 billion in tariffs on items currently not covered by duties.
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More Trade Assistance for Farmers Coming?
U.S. Ag Secretary Sonny Perdue is in Japan this week, talking with officials from America’s fourth-largest agricultural customer. In a Twitter post, the secretary says he was on the phone with President Trump and discussed the increase in tariffs on $200 billion in Chinese imports and the negative impact it will have on farmers. Perdue’s tweet says, “While China may backtrack, @POTUS is steadfast in his support for U.S. farmers. He directed @USDA to quickly put together a plan to help American farmers. @POTUS loves his farmers and will not let them down!” Perdue will make stops in Japan and South Korea, participating in the G-20 Agriculture Minister’s Meeting. President Trump said in a Friday Twitter post that the increase in the tariffs will be used to buy farm goods. He expects the new duties to generate more than $100 billion in extra revenue. The president was unhappy with the pace of negotiations and increased duties from 10 to 25 percent on $200 billion worth of Chinese goods. In a Friday tweet, Trump said, “You’re all-time favorite president got tired of waiting for China to help out and start buying from our FARMERS, the greatest anywhere in the world!” Beijing has promised to retaliate in kind.
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House Ag Chair Reacts to Pence Visit in Minnesota
Vice President Mike Pence made a visit last week to talk with farmers and other agricultural officials in Glyndon, Minnesota. House Ag Committee Chair Collin Peterson reacted to Pence’s visit to his district. “He visited my district to urge me to get the Speaker of the House to bring up a vote on the U.S.-Mexico-Canada trade agreement,” he says. “As a supporter of USMCA, I’m happy to make that request. However, the Vice President also knows that there are some hurdles to get over between now and getting this done.” First things first, Peterson says the Administration needs to submit it to the House so it can be considered. There are also challenges in the Senate as Finance Committee Chair Chuck Grassley says Republicans have told the Administration it’s “dead on arrival” without removing the Section 232 Tariffs on steel and aluminum from Canada and Mexico. Peterson says the Administration hasn’t given his farmers any assurance that the tariff war with Canada and Mexico would end even if USMCA is officially passed. “My farmers are facing the double whammy of commodity prices below the cost of production and an uncertain trade future in all of their regular export markets,” Peterson adds.
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EPA Proposal Would Raise Biofuel Mandate in 2020
The Environmental Protection Agency is proposing an increase in the biofuels mandate. Two sources with knowledge of the proposal told Reuters that the agency wants to increase the volume of biofuels that refiners must blend annually to 20.04 billion gallons in 2020. That’s up from the requirement of 19.92 billion gallons in 2019. The proposal is currently under review by other government agencies before it can be finalized. It includes 15 billion gallons of conventional biofuels like ethanol, which is unchanged from this year. The proposal also includes 5.04 billion gallons of advanced biofuels, such as those made from agricultural waste, up from 4.92 billion in 2019. The biofuel mandate has helped farmers by creating a huge market for ethanol and other biofuels. However, oil refiners say compliance with the mandate costs a lot of money. An EPA spokesman did confirm that the agency has submitted the proposal but wouldn’t comment on anything it contained. As part of the advanced biofuel proposal, the agency set mandates for cellulosic ethanol at 540 million gallons and non-cellulosic at 4.5 billion gallons. The agency also set a biodiesel mandate of 2.43 billion gallons for 2021.
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Frustration Over Continued Delay in Disaster Aid Package
The White House and Congress are still trying to come to an agreement on disaster aid months after hurricanes and wildfires hit the country hard in many areas. Politico says one Georgia Republican is fed up. Representative Austin Scott says the White House is undercutting its pledge to farmers. Scott says the White House Office of Management and Budget hasn’t sent Congress a formal disaster request to supplement federal emergency aid that’s already been authorized. When the House passed a disaster aid package, the OMB issued a statement of administration policy opposing funds for crop and livestock losses. The agency argued that existing USDA programs like crop insurance were enough to cover the damage. “When things are handed off to the people at the Office of Management and Budget,” Austin says, “they consider the American farm family nothing but subsidy-sucking freeloaders.” That means there’s a “disconnect” between what’s coming from the administration and what the administration is telling farmers they’re going to do. Several issues continue to hold up disaster talks, including Trump’s opposition to Democrats demand for more money for Puerto Rico. It also includes a push by Senate Appropriations Chair Richard Shelby for more money to work on harbor maintenance.
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Latest WASDE Report Calling for Fewer Soybeans, More Corn Production
This month’s World Agriculture Supply and Demand Estimate Report is calling for higher corn production, lower soybeans, and a slight jump in wheat production. The corn crop is projected at 15 billion bushels, up from last year and the second-highest on record. Lower exports will mean higher ending stocks, with total corn supplies at a record-high of 17.2 billion bushels. The season-average farm price for corn is projected to be $3.30 a bushel. The U.S. soybean crop is projected at 4.15 million bushels, 394 million lower than last year. U.S. export share is expected to rise to 35 percent from the record low of 32 percent because of higher supplies and competitive prices. Soybean ending stocks are projected at 970 million bushels, a drop of 25 million. The season-average price for soybeans is projected at $8.10 a bushel. The U.S. wheat crop is projected to be 1.897 million bushels, up less than one percent from last year. Wheat supplies are increased by 41 million bushels because of higher carry-in stocks and larger production. The projected season-average price is $4.70 a bushel.
