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READ the NAFB’s National Ag News for Monday, JUly 1st
Trump, Xi Reach Another Trade Truce at G-20
U.S. President Donald Trump and Chinese President Xi Jinping were face-to-face for 80 minutes while both were at the G-20 summit in Osaka, Japan, over the weekend. Trump agreed to postpone his plans to put tariffs on another $300 billion in Chinese goods. The hope is that it will allow Washington and Beijing to resume trade talks after things fell off the rails in March. After the meeting, Trump said, “We’re holding off on tariffs and they’re going to buy farm products.” After the sit-down, China bought 544,000 metric tons of soybeans, which the USDA says is the country’s largest purchase since March. While more farm goods going to China is good news for producers, the decision to postpone tariffs is also good for U.S. businesses and consumers. However, Politico points out that China hasn’t fulfilled previous promises from earlier negotiations. China had said it would purchase as much as 14 million tons of soybeans as part of prior short-term trade deals with Trump. Another report notes that the Chinese government’s summary of the current truce mentions nothing about more food and farm purchases from the U.S. One thing not in the truce is no timeline for concluding the trade talks. There aren’t any guarantees that the two countries will be able to come to an agreement on major issues like structural changes to the Chinese economy that the administration is looking for.
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Australia; U.S., China Truce Must Not Hurt Australian Farmers
Australia’s trade minister Simon Birmingham weighed in on the truce struck over the weekend between the U.S. and China. Birmingham says the Australian government will be watching “very closely” to make sure the truce doesn’t put the squeeze on Australian ag exports. The Guardian Dot Com says presidents Donald Trump and Xi Jinping reached a “ceasefire” in a conflict that continues to threaten global economic growth. One of the things Trump mentioned first after the ceasefire was announced over the weekend was that China had agreed to buy a “tremendous amount of food and agricultural products from American farmers.” The Australian trade minister was in Osaka, Japan, for the G-20 and said the deal between Washington and Beijing must be compliant with World Trade Organization rules, allowing Australian farmers to compete with other exporters on fair terms. Birmingham said taking a “long-term perspective,” he felt it was good news that Trump and Xi appeared to be toning down the trade hostilities between the two countries. “However, we’ll be keeping an eye on the detail and monitoring the situation closely,” he said.
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Prevented Planting Could Reach Over 10 Million Acres
The total number of unplanted acres this year could eventually top 10 million. The Hagstrom Report quotes USDA Undersecretary for Farm Production and Conservation Bill Northey as saying the final number could be the highest in years. The number of acres farmers say went unplanted ranges from two million to 10 million acres. A USDA survey of farmer planting intentions came out last week but was heavily criticized as out of date and not accurate. USDA’s National Ag Statistics Service says it will re-survey farmers on their planting intentions. Northey did say he doesn’t know exactly when NASS will conduct that second survey. USDA has already processed prevent plant claims totaling over $151 million. Officials say the total is likely to reach more than $1 billion before it’s all said and done. Northey and Natural Resources Conservation Service boss Matthew Lohr say they want to encourage farmers to plant cover crops if they couldn’t get cash crops in their fields. Northey also says if farmers want to be eligible for the Market Facilitation Program that’s intended to address the loss of international markets due to trade disputes, the acres have to be planted.
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U.S. Ethanol Groups Hosting First Global Ethanol Summit
The U.S. Grains Council, Growth Energy, and the Renewable Fuels Association are teaming up to host the first-ever Global Ethanol Summit October 13-15 in Washington, D.C. The goal of the first event is to hopefully engage a wide range of global ethanol leaders and talk about the benefits of expanding global ethanol use. Over 250 ministerial-level officials, senior-level industry leaders, as well as ethanol producers and refiners from more than 40 countries have been invited to attend. Ryan LeGrand, USGC president and CEO says they’re very excited to open up a unique opportunity for policymakers and ethanol users from across the globe. “The Global Ethanol Summit is a natural progression of our regional conferences and will continue to build on the momentum we have established to expand ethanol’s global use and trade over the last five years of outreach,” he says. RFA President and CEO Geoff Cooper says, “The Global Ethanol Summit will lead to a greater global understanding of the economic and environmental benefits of ethanol, as well as the important role that effective public policy and free trade play in the realization of those benefits.” Growth Energy CEO Emily Skor says ethanol has experienced an unprecedented level of international popularity over the past two years. “The Global Ethanol Summit is a valuable opportunity for attendees to forge stronger trade relations and provide foreign stakeholders with access to the expertise learned in the American ethanol industry,” Skor says.
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CoBank: Record Rains, Trade Problems Upend Ag Economy
CoBank says the world’s economy is continuing to slow down and the ongoing U.S.-China trade dispute is one of the reasons. While there are hopes that the two countries will continue talks, CoBank says optimism for the trade dispute ending in 2019 is fading. In addition to the trade challenges, too much rainfall has significantly impacted the U.S. agricultural sector. The latest Quarterly Rural Economic Review from CoBank says global economic development continues to go in the wrong direction as tariffs put a drag on global trade and manufacturing. Financial stress continues to build on the agricultural sector. Domestic demand hasn’t kept up with last year’s large corn supplies. However, soybean crush remains robust due to low soybean prices. Ethanol producers who are getting squeezed by the longest low-margin period in years are now facing the possibility of limited corn due to planting challenges. The animal protein sector continues to be negatively impacted by things like African Swine Fever, trade challenges, and bad weather. Hog prices and feed costs indicate healthy margins for producers in 2020, but that could change if pork exports don’t pick up.
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Corn Pollination Will Occur Very Late, May Lead to Additional Stress
As farmers well know, pollination is the most critical phase of corn development for determining potential corn yields. Corn pollination has already begun to occur in the Delta and Southeast Regions, while it will eventually expand into the Midwest in the weeks ahead. Because of significant delays in planting, corn pollination will occur much later than normal. Maxar’s Weather Desk says the 50 percent corn-pollination date is expected to be on July 27, 10 days later than the five-year average and 15 days behind 2018. The eastern part of the Midwest will see the biggest delay, where it will occur three weeks later than the five-year average. The delayed development in the Midwest could push pollination into what’s typically a drier time of year. Normal precipitation will occur during the expected pollination window around early August in states like Illinois, Indiana, and Ohio. Weather Desk Meteorologist Kyle Tapley says, “Late pollination increases the potential for stress on the corn crop in all these areas.” While floodwaters have receded in some parts of the Midwest, there are still solid precipitation chances in the largest corn-producing areas across the region, including Iowa.
