Sponsored by the American Farm Bureau Federation
READ the NAFB’s National Ag News for Thursday, September 12th
China Removes Some Tariffs, Pork, Soybean Tariffs Remain
China this week announced tariff exemptions for 16 U.S. products, but not for top agricultural commodities. China’s Minister of Finance says the exemptions will apply to some anti-cancer drugs and lubricants, as well as animal feed ingredients of whey and fish meal. China says the exemptions are an effort to remove tariffs on products not easily sourced from countries other than the United States. The exemptions are valid for one year, expiring in September 2020, and 12 products on the list are eligible for tariff refunds. The exemptions do include products used in piglet feed, difficult to source in large volumes from elsewhere. The exemptions do not include U.S. pork or soybeans, two commodities China has targeted in retaliation to U.S. tariffs. Some analysts view the move as a friendly gesture but don’t see it as a signal that both sides are readying a deal, according to Reuters. The U.S. and China are set to meet next month in Washington, D.C. to continue high-level trade talks.
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Tariffs Cost U.S. Importers $6.8 Billion in July
Trade group Tariffs Hurt the Heartland claims the tariffs enacted by President Donald Trump cost U.S. importers a record $6.8 billion in July. The vast majority were on Chinese goods, though the administration has imposed on other commodities. Michelle Meyer, an economist with Bank of America, says, “The unpredictable nature of the trade will keep businesses, at best, in wait-and-see mode.” Before the trade war with China began, the organization says the U.S. was shipping $1.47 billion more in hardwoods overseas than American companies were importing. However, that surplus shrank last year as the U.S. imposed double-digit tariffs on Chinese goods, and Beijing retaliated. The industry is agricultural but relies on a crop that can take 30 years to mature as opposed to a single growing season. Members of the Hardwood Federation, a Washington-based trade group representing the $210 billion industry, are eager for a trade agreement, though they believe it will still take considerable time to rebuild the ground they have lost in China.
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EU Ag Commissioner Named to Trade Post
The European Union Ag Commissioner is taking a new job, becoming the EU trade commissioner. Phil Hogan will take the place of Cecilia Malmström in November, according to Politico. Hogan will oversee trade talks with the United States, if the talks launch, pending a standoff over the inclusion of agriculture. Hogan will also be tasked with developing retaliations against countries blocking the dispute settlement system of the World Trade Organization, which includes the United States. Hogan was appointed to the trade position by European Commission President-elect Ursula von der Leyen (lay-in), who says she will travel to Washington “the moment I’m in office,” to discuss tariffs threats with President Donald Trump. Hogan says he is looking forward to helping von der Leyen pursue a “strong, open and fair trade agenda,” and strengthening Europe’s role as a global trade leader, adding that trade is “political priority” for the European Commission. Hogan has served as European Commissioner for Agriculture and Rural Development since November 2014.
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Processing Equipment Manufacturer Says U.S. Lacks Hemp Processing Needs
Hemp farmers are worried about losses because of a lack of processing equipment. Delta Separations, a manufacturer of hemp processing equipment, claims the holdup is because U.S. banks won’t make loans for processing equipment. The company’s CEO says banks are “scared that the FDIC will penalize them for supporting anyone that has the word cannabis in their supply chain.” Because of this, the company claims farmers fear $7.5 billion of hemp will be rotting in fields this fall. The U.S. lacks roughly 90 percent of the processing capacity needed for hemp. Hemp represents a potential $8.5 billion market, according to the company, which says much of the potential is contributed to CBD oils. CBD is one of the fastest-growing consumer product segments, as 128,00 acres of hemp were planted this year, a 300 percent increase, now the hemp cultivation is legal. The 2018 farm bill legalized hemp for production, and the Department of Agriculture is working on guidance for hemp production and processing, due out later this year.
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AEM Releases August Ag Equipment Sales Numbers
August 2019 saw increases in U.S. sales of combines and four-wheel-drive tractors as well as total U.S. two-wheel-drive tractor sales compared to August of last year. The Association of Equipment Manufactures monthly sales report shows four-wheel-drive tractor sales increased 19.3 percent in August compared to last year and combine sales increased 11.5 percent. Total sales of two-wheel-drive tractors in August increased 1.9 percent compared to August last year. Sales of under 40 horsepower two-wheel-drive tractors increased 2.1 percent, while sales of 40-100 horsepower tractors decreased 1.4 percent, and sales of 100-plus horsepower tractors increased 13.6 percent. For Canada, August four-wheel-drive tractor sales were flat and combine sales decreased 45.4 percent. August two-wheel-drive tractor Canadian sales were mixed, with a 9.9 percent increase in small tractors, and a 4.2 percent increase in 40-100 horsepower tractors. AEM’s Curt Blades says that, while the numbers are flat to positive for the year, “we and the industry remain cautious about the overall Ag economy.”
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ESMC Partners with United Soybean Board,
The Ecosystem Services Market Consortium has received $255,000 from the United Soybean Board to help develop an ecosystem service protocol for the Soy and Corn Belt. ESMC’s ecosystem services protocols measure soil organic carbon, greenhouse gas emissions, water quality and water use efficiency. Through the partnership, ESMC will work with soybean farmers in Illinois, Indiana, Iowa, Minnesota, Missouri, Nebraska and Ohio in a pilot project covering 50,000 acres. The Consortium will be building on its experience with an initial pilot project in the Southern Great Plains on 12 ranches in Oklahoma and Texas. ESMC champions a voluntary, market-based approach to incentivize farmers and ranchers to implement conservation practices that provide quantified ecosystem benefits. The resulting environmental credits will be available for purchase by corporations to meet their sustainability goals when ESMC launches its marketplace in 2022. The Consortium’s long-term goals are to enroll 30 percent of available land in the top four crop regions and top four pasture regions to impact 250 million acres by 2030.
