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READ the NAFB’s National Ag News for Monday, JUly 1st
Little Attention for Ag in Democratic Debates
The first debates that kicked off the 2020 run for the White House didn’t spend a lot of time on American agriculture. Moderators during the first night of debate didn’t ask any questions about rural America. Thursday night, one candidate was asked about how farmers hurt by climate change can be helped. However, Politico points out there were still some candidates who squeezed in some conversation on American agriculture. During the Wednesday night debate, New Jersey Senator Cory Booker said rapid consolidation has hurt the agricultural economy. Booker talked about his legislation that would halt ag company mergers until Congress can update its antitrust laws. Former rep Beto O’Rourke said that farmers need to be part of the solution to combatting climate change. “We’re going to free ourselves from fossil fuel dependence,” he said, “and we’re going to put farmers and ranchers in the driver’s seat.” Thursday night, Pete Buttigieg ((BOOT-uh-judge) said he supports a carbon tax and dividend, as well as soil carbon sequestration. During his remarks, the current Mayor of South Bend, Indiana, said, “Rural America can be part of the solution instead of being told that they’re part of the problem.”
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Pelosi Wants “Surgical” Changes to USMCA
House Speaker Nancy Pelosi says the U.S.-Mexico-Canada Agreement may need to be opened up again and changed with “surgical precision” before the House will vote on it. “It wouldn’t be like we’re opening it up and inviting a free-for-all,” she said last week. The deal requires all three countries involved to ratify the agreement before it goes into effect. Mexico already ratified the agreement, while it’s also expected to pass easily in Canada. The prospects for passage are much more difficult in the Democratic-controlled U.S. House. Democrats are asking for stricter enforcement language on labor and environmental provisions. They also want a shorter term on the 10-year exclusivity for costly biological drugs. “We don’t want to pass this agreement as just a slightly different deal from NAFTA with a little sugar on top if it really isn’t going to be enforceable,” she says. U.S. Trade Representative Robert Lighthizer has repeatedly said he’s willing to work with Democrats on changes they’d like to see in order to implement the trade deal. However, he has also said it’s too late to reopen the negotiations, which Canada and Mexico also oppose doing.
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The Toll of Trade Wars
As U.S. President Donald Trump and Chinese President Xi (Zhee) Jinping were talking trade over the weekend in Osaka, Japan, a Reuters report detailed some of the tolls the trade dispute has taken. President Trump has said repeatedly that bad trade deals with China and other countries have cost millions of American jobs. Tariffs between the two largest economies in the world have done some damage, including disrupting international supply lines and shaking global financial markets. Fitch Ratings estimates that the U.S. slapping tariffs on another $300 billion in Chinese goods would chop .4 percent from the world economic output. The International Monetary Fund has forecast a .5 percent reduction, equal to the entire GDP of a country like South Africa. Swiss bank UBS says an escalation in U.S. tariffs would stunt global growth by 75 basis points over the next six quarters. An impact like that would resemble a mild global recession. Trump has said, “China pays the tariffs” that he imposed on their goods. However, Reuters says that’s not true. The tariffs are paid by companies that import Chinese goods. Those same companies have to pass those higher costs onto the buyers and consumers of their products.
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USDA Plantings Report Shows Lowest Soybean Acres Since 2013
The USDA issued its June 1 Acreage and Stocks Report last week. USDA is estimating that U.S. farmers planted 80 million acres of soybeans, down 10 percent from last year. That number represents the lowest soybean planted acreage in the United States since 2013. Compared to last year, acres planted to soybeans are down in all 29 reporting states. Corn planted area came in at 91.7 million acres, three percent higher than last year. The all-wheat planted area for 2019 is estimated at 45.6 million acres, five percent lower than 2018. Cotton acreage is estimated at 13.7 million acres, down three percent from last year. The Stocks Report shows a lot of old crop commodities in storage. Soybean stocks totaled 1.79 billion bushels, which were 47 percent higher than June 1 of 2018. On-farm soybean stocks came in at 207 million bushels, 58 percent higher than last year. Corn stocks in all positions as of June 1 are 5.2 billion bushels, down two percent from last year. On-farm storage is 2.95 billion bushels, up seven percent from last year. Old crop wheat storage estimates came in at 1.07 billion bushels, two percent lower than last year. However, on-farm wheat stocks were up 58 percent over last year, coming in at 207 million bushels.
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U.S. Hog Herds Climb Four Percent
The U.S. inventory of all hogs and pigs came in at 75.5 million head as of June 1. According to the USDA Hogs and Pigs Report, that’s a four percent increase from the same time last year, as well as a one percent rise from March 1. Breeding inventory rose one percent from both last year and the previous quarter, coming in at just over 6.4 million head. Market hog inventory was 69.1 million head, four percent higher than in 2018 and one percent higher than last quarter. That number is actually the highest June first market hog inventory since estimates began in 1964. The March-May 2019 pig herd was 34.2 million head, up four percent from last year, it’s the highest level since estimates began in 1970. Supplies of hogs and pigs are swelling amid strong domestic and international demand. However, China is a bit of a wildcard as the country deals with a shrinking herd from African Swine Fever, all while they’re engaged in trade disputes with both the United States and Canada.
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Over Five Thousand Producers are Signed Up for DMC
USDA Undersecretary for Farm Production and Conservation Bill Northey says more than 5,000 dairy operations have signed up for the new Dairy Margin Coverage Program. The exact number was 5,364 as of last Thursday afternoon. Northey says about 40,000 dairy operations are eligible to enroll, but overall he’s pleased with the number of producers who’ve signed up since June 17. The DMC, created by the 2018 Farm Bill, replaces the Margin Protection Program for Dairy, which many producers didn’t like. The Hagstrom Report says the new program will make payments to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount, which is selected by each producer when they sign up for the program. Northey did say the DMC will not solve all the problems of the dairy industry but told reporters last week that it “offers a little bit of support in a challenging time.” The program is retroactive to January first, while USDA is hopeful of making payments soon. The White House Office of Management and Budget is still working on approving all the details of the program.
