READ the NAFB’s National Ag News for Tuesday, November 26th
Sponsored by the American Farm Bureau Federation
Trump Twitter Tirade on USMCA Inaction
The president once again took to Twitter to lash out at House Democrats over their inaction on the U.S.-Mexico-Canada Trade Agreement. President Trump placed the blame for leaving USMCA squarely on Speaker Nancy Pelosi and House Democrats for leaving USMCA “dead in the water.” USMCA isn’t the only legislation that’s awaiting action as the House and Senate are both out of session for the Thanksgiving break. There aren’t many days left on the congressional schedule in 2019. Politico says Democrats are expected to conduct negotiations with U.S. Trade Representative Robert Lighthizer by phone this week. However, the House’s impeachment process and yet another government shutdown deadline looming will likely take up a lot of that remaining time on Capitol Hill through December. The good news for USMCA proponents is Mexico passed a budget for 2020 that includes more money for overhauling its labor laws. That could give some reassurance to House Democrats and U.S. labor groups, who’ve been worried that Mexico wouldn’t follow through on its labor commitments under the three-nation trade agreement. It’s been one of the biggest sticking points that’s held up Congressional ratification.
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Commission says Mexican Tomato Imports Threaten Domestic Production
The U.S. International Trade Commission ruled Friday that Mexican tomato imports threaten local production. That decision comes after the U.S. Commerce Department had already determined that Mexican tomatoes were likely to be sold at an unfairly low price as they were dumped into the U.S. market. The Florida Tomato Exchange asked for a dumping investigation shortly after the U.S. and Mexico signed a new trade deal. The Florida group says the ITC’s decision gives credibility to its long-standing concerns about Mexican imports. The Mexican-based Fresh Produce Association of the Americas says it is disappointed in the decision, saying that rising Mexican imports simply reflects growing demand by U.S. consumers for Mexico’s produce. Mexican officials say, “Consumers prefer vine-ripened tomatoes, and this is why (U.S.) domestic gassed-green tomatoes continue to lose market share in the U.S.” The ITC ruling means that the recently negotiated tomato suspension agreement is still in effect. The deal will bring much-heavier inspection requirements for tomatoes entering the U.S. If the deal is ended for any reason, the U.S. will then impose a 21-percent duty on Mexican tomatoes, which account for nearly half the tomatoes sold in the U.S.
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“Phase Two” U.S. and China Agreement not Imminent
U.S. and Beijing officials, lawyers, and other trade experts all tell Reuters that a “phase two” trade deal between the U.S. and China is nowhere near imminent. The two largest economies in the world are still having trouble getting the phase one deal signed. Back in October, U.S. President Trump said he expects to quickly start on phase two negotiations after the phase one deal is completed. The phase two trade deal would focus on the U.S. accusations that China steals U.S. intellectual property by forcing U.S. companies to transfer technology to Chinese rivals. Reuters says things like the 2020 presidential election, phase one deal difficulties, combined with the president’s reluctance to work with other countries to pressure China into playing by World Trade Organization rules are starting to dampen hopes for a more ambitious agreement in the future. Officials in Beijing have already commented publicly that they won’t start discussions on a phase two agreement until after the 2020 election because they want to see if Trump wins a second term. Reuters reported last week that signing the phase one agreement has the potential to slide into 2020.
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Rural Mainstreet Index Rises Again
The Creighton University Rural Mainstreet Index for October climbed above growth-neutral. The index is a monthly survey of bank CEOs in rural areas of a 10-state region that depends on agriculture and/or energy. The index rose to 51.4 in October, up from 50.1 in September. While the reading is still weak, it’s the highest reading since last June. It’s the third time in the last four months that the index came in above growth neutral. Doctor Ernie Goss of Creighton says, “Federal agriculture crop support payments and somewhat higher grain prices have boosted the Rural Mainstreet Index slightly above growth neutral for the month. Even with that said, almost three of four bank CEOs reported continuing negative impacts from the trade war.” By way of comparison, the farmland and ranchland price index for October slumped to a weak 40.3 from September’s 43.1. It’s the lowest reading since last March and the 71st-straight month that the index has been below growth neutral. The October farm equipment-sales index improved to 39.7 in October, up from 35.9 in September.
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Bill will Help Preserve Family Farms
A bill introduced in the House of Representatives last week will help more farm families continue operating their farms after the death of a loved one. The Preserving Family Farms Act of 2019 is sponsored by Jimmy Panetta of California and Jackie Warlorski of Indiana and has the full support of the American Farm Bureau Federation. “Farm and ranch families often face a significant financial burden when they have to pay estate taxes,” says AFB President Zippy Duvall. “Farm families should be able to pay based on how their land is used, rather than its potential value as commercial property, such as a shopping center.” The legislation will give more families hope they can hold onto their farm when a loved one passes away. The bill modernizes the special use valuation provision of the estate tax. This valuation allows the property to be appraised as farmland rather than its development value when determining estate taxes. Increasing the amount of farmland or ranchland that can be valued at agriculture value rather than development value would help protect family-owned farm and ranch businesses by assessing estate taxes on the actual value of the businesses they’ve spent decades building. “We strongly urge members of the House to co-sponsor this important bill,” Duvall says.
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Brazil says the U.S. will Open to Beef Imports Soon
Brazilian officials tell Bloomberg it’s a matter of “if, not when,” the U.S. will reopen its market to Brazil’s meat exports. The trade and foreign relations secretary for Brazil’s Agriculture Ministry says, “We are 100 percent confident that it will happen. Our meat has the necessary quality to be exported to the U.S. Our meat’s quality is not an issue.” No date has been set in stone yet as to when the U.S. will begin accepting imports from Brazil. The U.S. has several questions about the current state of Brazil’s beef industry. Brazil provided additional answers and is now waiting for the U.S. to finish its analysis of those answers. As recently as October, the U.S. informed Brazil it would keep the ban on fresh-beef imports in place. The U.S. suspended imports from the largest economy in Latin America back in 2017. American inspectors found Brazilian beef to contain blood clots and lymph nodes. Brazil said the findings were abscesses that came about from a reaction to components of a foot-and-mouth disease vaccine. Because of that incident, Brazil reduced the vaccine dosage and made changes to the product’s compound.
