READ the NAFB’s National Ag News for Monday, October 14th
Sponsored by the American Farm Bureau Federation
U.S., China Reach Limited Trade Agreement
The U.S. reached a limited trade agreement with China on Friday afternoon that would pave the way for resolutions on broader issues later in the year. Business Insider Dot Com says it temporarily defuses a dispute between the worlds’ two largest economies. President Donald Trump told reporters in the Oval Office that, “We’ve come to a very substantial phase one deal.” China reportedly agreed to sginificantly increase agricultural purchases, as much as $40-50 billion worth. China also agreed to certain intellectual property measures, as well as concessions related to financial services and currency. The U.S. will delay a tariff increase that was set to take effect this week as the deal is finalized. China had already been making more purchases of agricultural goods like soybeans and pork heading into the talks last week in Washington, D.C. The U.S. was threatening to increase tariffs Tuesday on approximately $250 billion worth of Chinese goods, upping the duties from 25 to 30 percent. The agreement will take three to five weeks to get written down on paper. It marks the first breakthrough in the 1.5-year trade war that has hurt the economies of both nations. Trump also told reporters that this is just the first phase of a broader agreement. It’s important to note that the Chinese Vice Premier doesn’t have the full authority to approve the agreement. China’s President Xi Jingping must agree to the deal as well.
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More Optimism Surrounding USMCA Passage
One of the biggest hurdles to passing the U.S.-Mexico-Canada Trade Agreement could soon go away. Mexico recently promised House Democratic Leadership that it would improve its enforcement of new labor standards to protect the rights of workers in that country. The LA Times says Mexican President Obrador also told Democrats during meetings in Mexico that his government would add more funding to make sure Mexico complies with the agreement’s provisions. That could mean the road to the revised North American Free Trade Agreement could become much easier with Mexico’s concessions to labor concerns. That’s assuming Obrador’s assurances are put into writing as House Democrats want. The Democratic trip to Mexico comes almost a full year after Trump signed the new trade pact with the leaders of Mexico and Canada. Congress hasn’t approved the deal yet and House Speaker Nancy Pelosi says it won’t come up for a vote in the chamber until all of their concerns are resolved. U.S. Trade Representative Robert Lighthizer has worked with a group of House Democrats who want Mexico to improve its policy on labor, pharmaceutical, and environmental issues. However, the changes don’t require reopening the agreement with Mexico and Canada, something that would derail the trade pact entirely.
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McKinney Will Lead Trade Mission to Vietnam
USDA Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney will lead a trade mission to Vietnam on October 15-18. It’s a large trade mission as McKinney will be accompanied by almost 80 industry and government representatives looking to grow agricultural export opportunities into one of the fastest-growing regions in the world. The mission will be based in Ho Chi Minh City, and it will also include buyer delegations from Thailand and Burma. “The size of this trade mission speaks to the phenomenal potential that exists for U.S. exports in Vietnam and the surrounding countries,” McKinney says. “Since the United States normalized relations with Vietnam in 1995, our agricultural exports have grown exponentially, reaching a record $4 billion last year.” Sales of U.S. food and farm products to Thailand and Burma also set records last year, reaching more than $2.1 billion and $126 million, respectively. The heads of six state departments of agriculture from Montana, New Mexico, North Dakota, South Dakota, Texas, and Wyoming will join McKinney on the trip. Officials from agriculture companies and commodity organizations will also be making the journey to Asia with McKinney.
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Tomato Virus Entering U.S. Through Mexican Imports
The Florida Department of Agriculture and Consumer Services issued an alert regarding the Tomato Brown Rugose Fruit Virus. The disease has been recently found in Mexican tomatoes at several grocery stores throughout the state. Multiple large-scale greenhouses in Mexico were confirmed to have shipped infected tomatoes to Florida. The virus can affect both tomatoes and peppers, causing severe yield reduction for growers and defects that make the fruit unmarketable to consumers. A Florida Tomato Exchange news release says this disease making its way into the U.S. tomato and pepper crop would be a crisis for American growers and shouldn’t be taken lightly. Growers around the world are already on high alert as the fruit virus, which originated in the Middle East, spread to Europe and Mexico. What makes the disease even more of a concern for growers is that it can be transmitted by touch. That makes it easy to spread the disease from infected imports in the marketplace to producer fields or greenhouses. The Florida Tomato Growers are asking the USDA to follow the lead of the European Commission, which voted to implement a quarantine status in all EU countries to help prevent the spread of the disease.
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Beef Exports Trail Last Year’s Record Number
August beef exports this year were below the record-large numbers in August of last year. That’s according to data from the USDA that was compiled by the U.S. Meat Export Federation. August beef exports totaled just over 114,000 metric tons, a four percent drop from the large volume of a year ago. The export value dropped eight percent, coming in at a little more than $690 million. January through August beef exports were also just below last year’s record pace, declining two percent in volume to 881,500 metric tons and one percent in value at $5.44 billion. Exports accounted for 14 percent of total U.S. beef production in August. In terms of specific markets, beef exports to Korea slowed nine percent compared to 2018. That drop followed value records on beef shipments to Korea that were set in June and July. However, January-August exports to Korea were still eight percent ahead of last year’s record pace in volume and 10 percent higher in value. Beef variety meat exports to Japan have been a bright spot in 2019, increasing 31 percent in volume and 18 percent in value. “The U.S. beef industry is excited about the prospect of lower tariffs in Japan,” says USMEF President and CEO Dan Halstrom. “At 38.5 percent, the Japanese tariffs U.S. beef faces are the highest of any of our major markets.”
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Crowdfarming Platform Launched
Steward, the world’s first crowdfarming platform, announced it is now open to individual investors. The platform allows people to invest directly in sustainable farms. Platform founder Dan Miller says the crowdfarming model creates a win-win for both farmers and investors, unlike traditional farm funding. Farmers can purchase the land and equipment they have to have while investors earn a return while they support regenerative agriculture. “Access to capital is a critical problem that limits many farmers, but for every farm that needs funds, there are many people ready to invest,” Miller says. “We created Steward as a platform for people to invest directly in sustainable farms, knowing that their dollars will earn a return while they make a positive impact.” Steward offers a variety of investment options, including a diversified portfolio of farm loans, individual farm loans, or Steward itself. The company does its homework and vets each farm, developing a customized plan with the farmer to get the funds they need to grow and operate their business. Steward has invested more than $2.2 billion in 16 sustainable farms to date.
