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READ the NAFB’s National Ag News for Monday, July 29th
Application Period for MFP Payments Opens
Farm Service Agency offices starting today (Monday) are accepting producer applications for the Market Facilitation Program payments announced last week. The payments are part of the $16 billion trade aid package for producers in 2019. The Department of Agriculture expects the first round of payments to start mailing around mid-to-late August. A producer will receive 50 percent of the per-acre payment rate in the first round of payments. So, if a county-level rate is $60, the producer would receive $30 per-acre in August, and the remaining $30 would be split between two additional payments, if they’re determined necessary by the Trump administration, later in the year. Producers have until Friday, December 6, 2019, to apply. Dairy and hog producers are also eligible for aid, but have specific requirements producers must follow during the application process. USDA is encouraging all eligible producers to contact their local FSA office to apply, or find the application and requirements, along with the list of agricultural products covered, at www.farmers.gov/mfp.
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More Reaction to U.S. Trade Assistance Package
The U.S. Department of Agriculture announced the details of the 2019 Market Facilitation Program payments last week, which includes up to $14.5 billion in direct assistance to producers. The first round of payments will get underway in August. Davie Stephens, president of the American Soybean Association, says his group appreciates the help. “The county rate for farmers in areas with a higher percentage of crops suffering from negative trade impacts will receive a higher offset for the damages we’ve seen because of the tariffs,” he says. “We appreciate the Administration’s efforts to determine how the payments will work and hope that our soybean growers will feel some relief from the assistance.” Signup for farmers with eligible crops begins on July 29th (today). The National Cotton Council also expressed its appreciation for the Administration recognizing the economic pressures caused by the trade tensions with China. NCC Chair Mike Tate says the assistance is timely as U.S. cotton’s economic health is deteriorating. Cotton futures have fallen by 30 cents per pound since the summer of 2018. “There’s no doubt this downward price pressure is due in large part to cotton sales to China being substantially lower than what we expected before the tariffs,” Tate says. “Pressure is building in the distribution chain as U.S. cotton exports lag and stocks continue to build higher.”
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Chinese Government Allows Some Tariff-Free Purchases from the U.S.
The Chinese government permitted several domestic companies to purchase U.S. agricultural products without tariffs. People familiar with the situation tell Bloomberg that the companies will buy U.S. cotton, corn, sorghum, and pork without facing the extra costs of the tariffs. Some textile mills have permission to buy a total of 50,000 tons of U.S. cotton without the 25 percent duty. The total amounts of the corn, sorghum, and pork purchases weren’t available. The move follows the approval for purchasing three million tons of U.S. soybeans last week Bloomberg says there could be a second round of exemptions, depending on how trade talks progress. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin (Muh-NOO-chin) are in China this week for the first high-level, face-to-face discussions since the talks broke down in May. In a press conference last week, China’s commerce ministry said companies are willing to buy U.S. farm products, but only in line with domestic demands, and the purchases are their own decisions. A ministry spokesman says there are no direct connections between purchases and the resumption of trade talks.
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Japanese Delegation in Washington This Week for Trade Talks
U.S. Trade Representative Robert Lighthizer told Agri-Pulse last week that a delegation from Japan will be in Washington this week for trade negotiations. The talks are scheduled to get underway on Thursday, August 1. Lighthizer will actually be in China early this week to continue discussions aimed at ending the trade war between the U.S. and China. However, he’s expected to be back in Washington for talks with the Japanese. Japan and the U.S. had been talking earlier this year, but those talks were suspended due to elections in Japan, which have now taken place. U.S. agriculture couldn’t be more excited about the possibility of a trade deal with Japan, which buys a lot of American pork, wheat, dairy, wine, along with fruits and vegetables. Japan was prepared to lift tariffs on U.S. agricultural products when America was part of the Trans-Pacific Partnership Agreement. Some of America’s main competitors, such as Australia and Canada, who remained in the pact, are now enjoying the benefits of reduced tariffs. Japan has also cut tariffs on goods from the European Union, another chief competitor of America, as the two nations recently reached a free trade deal of their own. Japan is the fourth-biggest market for U.S. agricultural exports.
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Large Banks Leaving Ag Lending, Rabobank Filling the Gap
Top U.S. banks like J.P. Morgan and Capital One are on the way out of ag lending. However, Banking Dive magazine says Rabobank will be stepping in to fill that gap. The nation’s top 30 banks saw a decline of 17.5 percent, or about $3.9 billion, in their farm-loan portfolios between the peak of December 2015 and March of this year. However, Rabo AgriFinance, which only lends to farmers, saw its business jump seven percent during that same time frame. “In my opinion, the big banks have never played a significant role in ag lending, even when they’ve had exposures to it,” says Executive Vice President Curt Hudnutt. “We’re solely focused on food and agribusiness, so we know we have to be in this sector in the good times and bad.” He says when things don’t go well for clients, Rabo AgriFinance is even more active than normal because the company believes it can bring the right solutions to the right producers and help them weather downturns. The U.S. Department of Agriculture says farm debt will rise to approximately $426.7 billion this year, levels that are approaching the 1980’s farm crisis. Hudnutt says Rabo AgriFinance has about $15 billion in total loans outstanding.
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USDA Says Hemp Production Rules Will Be Ready In August
The U.S. Department of Agriculture announced last week that it will complete the federal rules governing domestic hemp production by August. The website Hemp Industry Daily Dot Com says the agency had previously said in February that it wouldn’t release the final rules until the 2020 growing season. However, states and Native American tribes began to submit their hemp production plans for the USDA to review starting the day after the 2018 Farm Bill was signed. Under the bill, states and tribes can run hemp oversight themselves, but they have to submit their plans for that oversight to USDA, which has up to 60 days to respond. States that don’t submit a plan will be subject to the still-unwritten federal regulations. Even in states that said they planned to wait for federal guidance, many hemp bills have moved forward in their legislatures, allowing farmers to participate in the 2019 growing season under the rules in the 2014 Farm Bill. The USDA is also providing new assistance to the hemp industry, including advising the industry on properly importing hempseed into the U.S.
