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READ the NAFB’s National Ag News for Thursday, May 30th
Bloomberg: EPA Ready Scrap Rin Market Reform
The Environmental Protection Agency is reportedly ready to scrap RIN market reforms as it readies a rule to allow year-round E15 sales. Bloomberg News reports the shift comes as the agency races to meet a May 31 rulemaking deadline. The official summer driving season starts Saturday, leaving little time to announce the rule. The RIN market modifications are part of the same rule allowing year-round E15. However, for the rule to benefit drivers this year, it’s thought that the rule must be finalized before the summer driving season. The market reforms would have implemented trading restrictions on RIN credits. While the EPA may be backing off the aggressive RIN market reforms, agency officials will apparently continue to evaluate other market changes requested by President Trump. Year-round E15 sales is a welcome move by the U.S. biofuel industry and corn farmers because it has the potential to increase demand for U.S. ethanol.
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China a More Reliable Trade Partner than U.S.
An analysis from a German bank calls China a more stable trading partner than the United States. Commerzbank, a self-described international commercial bank with branches and offices in almost 50 countries, announced the report this week. In its study, 61 percent of respondents expect a gloomier economic outlook for the next couple of years. The report cites political and economic troubles, assessing China as a more stable trade partner than the United States or Great Britain. The survey polled roughly 2,000 German-based companies, of which just over half were exporters. More than two-thirds of the companies surveyed have a physical presence in the United States. The report comes as the U.S. is embattled in multiple trade negotiations, including the final steps of the U.S.-Mexico-Canada agreement, the start of talks with Japan, and the trade war with China. Talks remain stalled with China after nearly reaching an agreement, and the trade war between the U.S. and China continues to escalate as a result.
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China Could Take Years to Tame ASF
China’s recovery and attempt to reign in African swine fever may take years, according to the World Organization for Animal Health. China, the world’s biggest pork producer, could see up to 200 million pigs die or culled this year because of the virus, prompting shortages of pork locally and promising global change to pork production and exports. OIE Deputy Director General Matthew Stone told Reuters, “China is going to deal with this African swine fever for many years to come.” Those comments echoed a statement by Dr. Dave Pyburn of the National Pork Board last week. In a panel discussion to the U.S. Meat Export Federation, Pyburn told attendees “it’s there, and it’s going to stay there,” adding “I’m not going to say that in five years that it would be over with.” This week, the OIE launched a global initiative, to be coordinated with the United Nations’ Food and Agriculture Organization, to try to keep the disease in check. The initiative seeks to control the disease and strengthen prevention and preparation efforts.
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House Ag Subcommittee Schedules Hearing on USDA Relocation Plans
The House Agriculture Committee announced a subcommittee hearing next week on the proposed relocation of two Department of Agriculture agencies. The committee plans the hearing, “Examining the Impacts of Relocating USDA Research Agencies on Agriculture Research,” for Wednesday, June 5. Members of the Biotechnology, Horticulture and Research subcommittee will examine the proposed move of the Economic Research Service and the National Institute of Food and Agriculture. USDA is expected to soon announce the final site proposals for the two agencies, after narrowing the list down to three. USDA says the list includes the Kansa City metro, Research Triangle Park near Raleigh, North Carolina, and multiple potential locations in Indiana. The plan faces pushback from some lawmakers and USDA employees, as employees of the Economic Research Service voted this month to unionize, joining the American Federation of Government Employees. The National Institute of Food and Agriculture plans a similar vote in June. USDA says the move would cut costs, improve employee wellbeing and cost of living, and bring the agencies closer to stakeholders.
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Canada’s Realized Net Farm Income Declines
2018 realized net farm income for Canadian farmers fell 45 percent from 2017, the biggest annual drop since 2006. Statistics Canada released the data this week that shows realized income for the year at C$3.9 billion, falling on stagnant farm cash receipts against significant increases in feed, fuel and interest costs. Farm income fell just 2.8 percent in 2017 from 2016. AgCanada reports realized net income is the difference between a farmer’s cash receipts and operating expenses, minus depreciation, plus income in kind — not to be confused with “total net farm income,” defined as realized net income adjusted for changes in farmer-owned inventories of crops and livestock. Total net farm income dropped to C$3 billion in 2018, decreasing across all provinces, mainly on lower on-farm stocks of barley, corn, non-durum wheat and soybeans and lower cattle and calf inventories. Farm expenses were up in every province, totaling C$50.6 billion, up 6.5 percent from 2017 for the largest percentage increase since 2012.
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Late Planting with Grain Sorghum Could Provide Farmers Opportunity
As farmers seek a solution to the prolonged wet spring and lack of planting, National Sorghum Producers and the Sorghum Checkoff are reminding producers grain sorghum is an option that can provide opportunity to growers. As wet conditions persist for farmers across the U.S., producers calculating options as major crop plant deadlines loom, need to keep a few considerations in mind when planting grain sorghum, according to NSP. Grain sorghum can typically be planted later than other crops, and sorghum is a lower risk option, specifically as it relates to seed costs. For example, sorghum seed typically costs $9-$18 per acre depending on seeding rate, while corn seed typically costs $55-$110 an acre depending on seeding rate and traits. Harvest costs are often lower, as well. NSP CEO Tim Lust says “despite trade uncertainty, demand for feed grain remains strong across the globe.” Interested growers should contact National Sorghum Producers for more information on local bids and crop information.
