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READ the NAFB’s National Ag News for Friday, June 28th

U.S., China Reach Tentative Truce on Tariffs

The U.S. and China have agreed to forgo the next round of tariffs that President Trump threatened to impose on $300 billion in Chinese goods. That report comes from both Politico and the South China Morning Post. It comes ahead of a meeting between Trump and Chinese President Xi (Zhee) Jinping this weekend at the G-20 Summit in Osaka, Japan. One source tells the South China Morning Post that Trump’s decision to temporarily halt raising tariffs on more Chinese goods was President Xi’s price for agreeing to meet with him in Japan. It’s well known that agriculture has been one of the hardest-hit economic sectors by Trump’s trade dispute with China. Other countries have responded to American tariffs on imports by trying to exert pressure on a big part of the electorate that ultimately helped Trump win the presidency. Also on the trade front, U.S. Trade Representative Robert Lighthizer made a pre-Japan visit down Pennsylvania Avenue in Washington, D.C., this week to get some more face time with House Democrats before heading overseas for the G-20 gathering. Trump’s trade boss left Democrats feeling more optimistic about getting their concerns with the U.S.-Mexico-Canada Trade Agreement resolved

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China Bans Canadian Beef/Pork Imports

China issued a sudden ban on Canadian beef and pork exports, which will create a huge loss for Canada’s livestock sector. A livestock industry group says China is one of its top five international markets. Chris White, president of the Canadian Meat Council, says this decision will affect everyone in the entire Canadian value chain, including the farmers who raise the animals and the packers that process the product, as well as the companies that ship the product overseas. The Chinese Embassy said Tuesday that it asked Canada to suspend all meat exports after a shipment of pork was found to contain traces of ractopamine. It’s a feed additive that’s restricted in China. After detecting the residue, China says a further investigation found forged veterinary health certificates attached to that batch of pork. The CMC says the Canadian government is asking why beef products were also suspended because the failed certificates pertained just to pork. Canadian exports to China had been experiencing a big jump in 2019 when compared to last year. With the ban, Canadian companies now have to find other markets to ship their products to.

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USDA Will Defend Trade Aid at WTO

The World Trade Organization has been receiving complaints about the aid money that U.S. farmers are getting from the government. However, Ag Secretary Sonny Perdue says he’s not concerned that the payments will be a problem. “We had to design a program very carefully to make sure we do not violate the WTO limit,” he said to reporters in Washington. “We feel like we’re safely within those confines and we’re prepared to defend that should anyone challenge it.” China, India, the European Union, Ukraine, and Australia have all fired off criticism at the USDA’s two aid packages for farmers that could total up to $28 billion in assistance designed to counteract retaliatory tariffs implemented on U.S. farm goods. Australia calls the aid a “dangerous precedent” that could distort world markets. China says they appreciate that the U.S. respects the interest of its farmers. “We would appreciate it if the U.S. can also respect the WTO rules,” China says. An Agri-Pulse report says several member countries in the WTO are fearful that the U.S. will give its farmers a third trade assistance package next year, which Perdue says he won’t rule out.

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ASF Claims More Territory in Asia

A Pork Checkoff news release says in just 30 days, the African Swine Fever Virus is claiming more territory across all parts of Asia. Statistics from the Food and Agriculture Organization say that ASF is now in Cambodia, China, Laos, Mongolia, North Korea, and Vietnam. Experts predict its relentless march won’t stop there. The death loss continues to grow. In Vietnam, officials say more than 2.5 million pigs have been culled from the national herd due to ASF. The disease has spread to almost every province in the nation. Pork makes up 75 percent of the total meat consumption in Vietnam, which is a country of 95 million people. The Chinese picture doesn’t look a whole lot better. The Chinese government and larger private producers are doing what they can to improve the situation but it’s still a struggle. The nation’s swine herd shrank nearly 21 percent on the year to a level not seen since the early 1990s. Dutch lender Rabobank forecasts the herd will decline between 20 and 30 percent in 2019 from the previous year. China had a record herd size of 428 million head in 2018. A senior analyst at Rabobank says Chinese farmers haven’t tried to rebuild their herds in spite of calls from the government to do so. They’re worried that they could lose their stock again due to the disease. The Rabobank analyst says it typically takes two or three years to have a recovery of stock. However, with the size of China’s herd, it will likely take up to five years.

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Rural Mainstreet Index Above Growth Neutral in June

The Creighton University Rural Mainstreet Index climbed above growth neutral in June. The monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture shows a positive growth in the region. “Higher agricultural commodity prices and rebuilding from recent floods boosted the RMI for the month,” says Dr. Ernie Goss, founder of the index. “Despite the negatives from the ongoing trade war, almost 70 percent of the rural bankers support either raising or continuing tariffs.” Jeff Bonnet is president of the Havana National Bank in Illinois, who says estimates go as high as 15 to 20 million acres that farmers couldn’t get planted to crops. Bonnet says, “Based on this information, corn prices should be nearly six dollars per bushel, if not more. What are we missing here?” It’s the sixth time in the past seven months that the Rural Mainstreet Index climbed above growth neutral. Unfortunately, more than one in four bank CEOs reported rising loan defaults due to farmer financial woes. Almost half the bankers say that because of crisis-level farm income, farmers in their area have responded by selling the farm, or otherwise leaving it.

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Perdue Tells Farm Co-Ops to Call Congress on USMCA

Ag Secretary Sonny Perdue met with members of the National Council of Farmer Cooperatives earlier this week. He told their executives to talk to Congress about voting on the U.S.-Mexico-Canada agreement on trade. Noting that he can’t directly encourage lobbying, Perdue told members they should follow their “hearts and minds” in talking with Congress. Perdue told the executives in attendance that he’s very positive about the role of Speaker of the House Nancy Pelosi, saying she’s “taking her deliberations on the USMCA very seriously.” He says there are some tweaks that are “doable” to satisfy Democrats who are critical of the bill. He covered a wide variety of topics, including the Market Facilitation Program. He says details should be coming shortly, noting that the USDA has been “opaque” about the details because the administration didn’t want the aid program to influence planting decisions. As the planting season is all but wrapped up, it’ll be much more time appropriate to release more detailed information.

SOURCE: NAFB News Service

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By Brian Allmer - The BARN

Brian Allmer & the BARN are members of the National Association of Farm Broadcasting (NAFB), the Colorado FFA Foundation, the Colorado 4H Foundation, the Colorado Farm Show Marketing Committee, 1867 Club Board Member, Denver Ag & Livestock Club Member, the Weld County Fair Board, the Briggsdale FFA Advisory Council, Briggsdale 4H Club Beef Leader & Founder / Coordinator of the Briggsdale Classic Open Jackpot Show.