READ the NAFB’s National Ag News for Tuesday, December 17th
Sponsored by the American Farm Bureau Federation
USMCA: Mexico Objection Won’t Stop House Vote
An objection by Mexico won’t stop the U.S. House from approving the U.S.-Mexico-Canada Agreement. Mexico had promised reciprocal measures regarding labor enforcement inspections. However, Agri-Pulse reported late Monday that Mexico was going to withdraw the objection. Mexico previously approved the agreement this summer, and even approved the modified agreement last week, before announcing the concerns. An official from Mexico is in Washington, D.C., this week to talk with lawmakers. President Donald Trump sent implementing legislation for USMCA to the House late last week, and the chamber still plans to vote and approve the agreement this week. Spending bills are expected Tuesday, followed by a vote on the articles of impeachment Wednesday, setting up a vote on USMCA Thursday, in the House. Meanwhile, the U.S. Senate will not consider USMCA until January, or later, following impeachment hearings. Also, last week, Senate Majority Leader Mitch McConnell said there was “no chance” the chamber would remove the president from office.
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Skepticism Remains over China Deal
Commodity markets have done relatively little in reaction to the phase one trade agreement between the U.S. and China. Trade expert Jim Bower in his daily newsletter, states there “remains a lot of skepticism” regarding the agreement, suggesting it’s “unclear” how China can manage to increase purchases of U.S. agricultural products. The agreement reportedly includes $40-$50 billion in annual purchases of U.S. ag products by China for two years. And, a fact sheet on the agreement states that the agriculture provisions address “structural barriers to trade,” and will support a “dramatic expansion” of agricultural exports. The agreement, expected to be signed in early January, received cautious praise from U.S. agriculture. U.S. Trade Representative Robert Lighthizer told CBS over the weekend regarding the phase one agreement, “This is totally done. Absolutely.” The U.S.-China Business Council called the agreement “an encouraging first phase,” while adding, “but, this is just the beginning.” The council says both sides “must commit to developing a new paradigm and economic relationship.”
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Farm Credit Administration: Expect Low Crop Prices in 2020
A quarterly report to the Farm Credit Administration last week suggests commodity prices will mostly remain low next year. The report cites large global supplies of crops in storage, saying that will limit attractive price opportunities for U.S. farmers. For the next three years, soybean prices are projected at roughly $8.50 a bushel, with corn at $3.70 a bushel. The report says livestock and dairy returns are likely to be positive in early 2020, but trade risks remain elevated. Meanwhile, the report says that while it’s been a difficult year in 2019 for farmers and ranchers, facing trade disruptions, weather extremes and low prices. Crop insurance indemnities, farm programs, and Market Facilitation Program payments continue to provide financial support to the farm economy. The report says farm financial conditions may become more challenging next year without stronger markets, or more aid payments. Further, the Farm Credit System remains financially sound, according to FCA, and lenders continue to have the risk-bearing capacity to respond to the credit needs of agriculture.
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USDA Seeks Input on Environmental Quality Incentives Program Rule
The Department of Agriculture wants input on proposed changes to the Environmental Quality Incentives Program known as EQIP. The rule takes effect upon publication and includes changes to the program in the 2019 farm bill. Natural Resources Conservation Service chief Matt Lohr says the new rule will “enable NRCS to better support locally-led conservation efforts while also expanding producers’ ability to address significant resource concerns.” NRCS will make available $1.2 billion for producers in fiscal 2020, and NRCS state offices will announce signup periods for EQIP in the coming weeks. Changes to EQIP include creating incentive contracts and payments for incentive practices. The new rule requires NRCS to offer an advance payment option for historically underserved producers. USDA also proposes changing the payment cap for producers participating in the Organic Initiative to $140,000 for contracts entered between fiscal 2019 through 2023. Finally, the new rule expands the Conservation Innovation Grant program. The comment period closes February 18, 2020.
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U.S. ACOE: Missouri River Flood Event Over
The Army Corps of Engineers Kansas City District Monday declared the Missouri River flood event over. The district’s emergency operations center returned to normal operations for the first time since March 13, 2019 – 279 days. However, emergency work continues to repair a levee in Northwest Missouri damaged by flooding this year. As of last Wednesday, all Missouri River stages within the Kansas City District area of operations were below flood stage for the first time since March 13 of this year. Forecasts call for the water levels to continue to decrease. Flooding began during the March so-called bomb-cyclone winter storm, and continued all year in the lower reaches of the Missouri River, downstream of the Gavins Point Dam in Yankton, South Dakota. The Corps is continuing to draw down excess water, as releases from the dam will be reduced to 25,000 cubic feet per second in January and remain near that rate for the remainder of the winter. Normal winter releases range between 12,000 and 17,000.
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Booker Announced CAFO Moratorium Legislation
Senator Cory Booker Monday announced legislation to phase out concentrated animal feeding operations, known as CAFOs. The New Jersey Democrat says the Farm System Reform Act of 2019 would place an immediate moratorium on new and expanding large CAFOs, and phase out by 2040 the largest CAFOs as defined by the Environmental Protection Agency. The legislation would also restore mandatory country-of-origin labeling requirements for beef and pork and expand to dairy products. Additionally, it would prohibit the Department of Agriculture from labeling foreign imported meat products as “Product of USA.” Booker labels CAFOs as “large factory farms,” claiming the operations “are harmful to rural communities, public health, and the environment, adding “we must immediately begin to transition to a more sustainable and humane system.” As noted by Politico, Booker, a vegan, has said he’s not interested in telling Americans what to eat. However, proposing sweeping reforms to the U.S. food system is routine for the Senator.
