READ the NAFB’s National Ag News for Thursday, November 7th
Sponsored by the American Farm Bureau Federation
Ethanol Industry Looking South for New Business
Corn growers and ethanol manufacturers are increasingly frustrated with blending waivers for oil refiners deflating the domestic biofuel market. While those groups continue to negotiate with the White House for a solution to the challenge, the industry is looking at foreign buyers as a way to make up for lost sales. Trade groups are looking south of the border for more business. The U.S. Grains Council and the American Coalition for Ethanol have been working with Mexican officials to promote the use of a 10 percent ethanol blend in Mexico. They’re hosting workshops on the topic and using them to target Mexico’s gas station owners, petroleum equipment retailers, as well as the nation’s ag and energy leaders. U.S. ethanol exports to Mexico have been used more for producing other products instead of as transportation fuel. However, retailers in border locations are buying more pre-blended E10 at U.S. locations and reselling it at Mexican gas stations. Mexico currently allows E10 sales nationwide, except in its three largest cities, which are Guadalajara (Gwad-ah-lah-HAR-ah), Mexico City, and Monterrey. But, Ryan LeGrand, CEO of the U.S. Grains Council, expects Mexico’s energy officials to offer up a proposal to allow E10 in those three locations by the end of 2019.
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NPB Study Shows Protein Opportunity in China
A new National Pork Board report looks into the short term and long-term need for protein in China. It also talks about how U.S. pork producers can position themselves to fill that need. The new report is titled “Pork 2040: China Market Assessment.” It also looks at the impact African Swine Fever is having on China’s short term and long-term protein needs and how the Chinese pork industry and supply chain will change as a result of the outbreak. Norman Bessac (bah-sack), the NPB’s Vice President of International Marketing, says “Pork is a critical part of the Chinese diet, with per capita consumption estimated to be nearly 88 pounds per person every year.” The report will help exporters position U.S. pork as the supplier of choice, which will add value for all U.S. pork producers. The NPB report says Chinese pork consumption peaked in 2014 and will continue a slow decline as the Chinese population grows to its highest level on record in 2030. Other proteins like chicken, fish, and beef, will become more available as Chinese disposable income increases, which means consumers will diversify their protein consumption. The report outlines key steps exporters can take before China’s domestic pork production rebounds, which experts predict will happen by 2025.
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Canada Resuming Beef, Pork Exports to China
Prime Minister Justin Trudeau says Canada’s beef and pork exports to China will resume, ending a four-month trade dispute with Beijing. Trudeau said earlier this week on Twitter that China has lifted the import ban it put in place earlier this year. “Good news for Canadian farmers today,” Trudeau tweeted. “Thanks to Ambassador Barton and the Canadian meat industry for their work on re-opening this important market for our meat producers and their families.” Farm Journal’s Ag Web Dot Com says the dispute began when China and Canada worked together and suspended all Canadian meat imports on June 25 after finding a forged delivery certificate on pork cargo, which was later confirmed by the Canadian Food Inspection Agency. Rick Bergmann, Chair of the Canadian Pork Council, appreciates the efforts of government officials to help restore their access to the Chinese market. In July, the council said Canada had put out an action plan that addressed some of the Chinese concerns and was waiting for a response. China is an important market for Canadian producers. In 2018, Canada’s pork exports totaled just about $4 billion, with over $500 million going to China.
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Grassley Working on Tariff Reform
Iowa Senator Chuck Grassley, who also chairs the Senate Finance Committee, is working on reforming Section 232 tariff authority. He says Congress gave away their authority on trade to the White House back during the Kennedy Administration. Agri-Pulse says Grassley is looking for legislators to take back some of the power they gave away. Grassley says some lawmakers are worried that such a move would upset President Donald Trump. Grassley’s response is “that shouldn’t stop Congress from acting.” Grassley’s staff has been busy trying to combine two bipartisan bills designed to tone down the president’s authority to impose Section 232 tariffs on foreign countries. The tariff authority was first put in place to punish other countries that threatened U.S. national security. “We need reforms to Section 232 that make it clearer where Congress stands on national security and trade,” Grassley says. “Such reforms would make it clearer to our trading partners that when Section 232 is used, Congress stands with the president.” The Finance Committee’s ranking Democrat, Ron Wyden, says there hasn’t been any agreement yet because both sides of the political aisle have concerns that need to be worked out.
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NBB Applauds Letter on Tax Incentives
Forty Democratic members of the House of Representatives sent a letter to Speaker Nancy Pelosi and Ways and Means Chair Richard Neal regarding expired tax incentives. They’re asking leadership to make an extension of expired tax incentives an urgent legislative priority before the end of the year. The National Biodiesel Board thanked them for their efforts and emphasized that renewing the biodiesel tax credits before the end of the year is crucial to reviving production. It would reopen production facilities and save countless jobs. The representatives say in the letter that, “Extending the biodiesel, alternative fuel vehicle refueling property, and second-generation biofuel producer tax credits are especially important to the regions we represent. Participants up and down the supply chain are experiencing hardship as a result of this lengthy collapse in credits.” NBB Vice President of Federal Affairs Kurt Kovarik says his group appreciates the representatives drawing attention to the economic situation facing advanced biofuel producers. “Nine biodiesel producers in six states have been forced to close, cut production, and lay off workers,” Kovarik says. “That’s because blenders count on Congress to renew the tax credit and demand a discount on the price of biodiesel.” He says producers have taken a loss for nearly two full years because of the expired credits.
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Is a Hemp Checkoff Coming from USDA?
A USDA official said earlier this week that the U.S. hemp industry could have a producer-funded checkoff program coming soon. The Agricultural Marketing Service’s Director of the Specialty Crops Programs’ Promotion and Economics Division spoke at the Hemp Industries Association’s annual conference. Hemp Industry Daily notes that the director said the hemp industry “clearly has shown interest” in paying fees to promote their product, saying that “the idea here is that a rising tide would lift every boat.” If a checkoff program comes to fruition, hemp would join 21 other crops that have their own checkoffs, including soybeans, cotton, milk, pork, watermelon, and even popcorn. Growers would pay mandatory fees to go into a fund that’s used for research and marketing. A checkoff would benefit the emerging hemp industry struggling to get out from under marijuana-related misconceptions. A checkoff program would also be seen as an endorsement from USDA, making hemp a legitimate crop with long-term potential. Thousands of farmers took the plunge into hemp production after the 2018 farm bill legalized production of the plant. That flood of new growers is why some hemp farmers are struggling to find markets for their first post-farm bill harvest. Despite increasing demand for hemp-related products, the rush of new growers appears to have driven down prices.
