READ the NAFB’s National Ag News for Thursday, January 2nd
Sponsored by the American Farm Bureau Federation
Trump Will Sign Phase One Deal January 15
President Donald Trump put a date on signing the Phase One trade deal with China, thanks to Twitter. He’ll sign the deal with China on January 15, making the agreement between the two largest economies official. The highlight of the deal that’s most interesting to agriculture is China will increase its purchases of U.S. agricultural products in exchange for the U.S. lowering tariffs on some of its imports. “The ceremony will take place at the White House,” Trump says on Twitter. “High-level representatives of China will be present.” In addition to the ag purchases, China agreed to new commitments on intellectual property protections, forced technology transfers from U.S. companies, as well as new currency practices. Bloomberg says the deal will calm some of the fears that the trade war between the nations would continue long term. The president also says he’ll be traveling to Beijing at a later date to begin Phase Two negotiations. The precise details of the agreement haven’t been released to the public yet. U.S. Trade Representative Robert Lighthizer says the details will come out when it’s officially signed by both countries.
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China Bans Pork Imports from Indonesia Due to ASF
China is doing everything it can to rebound from the African Swine Fever epidemic that decimated its hog herds. Chinese customs officials say they’ve banned imports of pigs, wild boars, and related products from Indonesia due to the ASF virus outbreak in the northern part of the country. A Reuters article says the deadly disease roared across China itself after first being detected in August of 2018. Some estimates say the disease reduced the world’s biggest pig herd by up to 40 percent. Beijing has recently issued a series of new measures to boost pig production, while also maintaining strict prevention and control measures designed to prevent new outbreaks of the disease. China’s General Administration of Customs says on its website that as of December 17, Indonesia had reported almost 400 cases of African Swine Fever outbreaks. As of mid-December, official reports say the virus has killed almost 30,000 pigs across a province in north Indonesia. Authorities are still trying to quarantine the area, which has suffered millions of dollars in economic losses.
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China Loosens Restrictions on Importing GMO Crops
A government body in China has given its approved safety certificates to 203 new genetically modified crops for planting and import purposes. Official documents that came out Monday should pave the way for wider GMO adoption in the country. The Chinese Ministry of Agriculture and Rural Affairs shared three lists of newly approved GMO crops, including soybeans, corn, cotton, papaya, and many others. One market source told Agri Census Dot Com that, “It might be possible that China will open up domestic planting of GMO soybeans sometime soon.” China has maintained tight restrictions on using GMO crops in domestic planting in the past. However, it’s been more willing to import GMO crops in recent years, including soybeans, corn, and rapeseed. Soybeans, corn, and rapeseed that were domestically produced within China are said to be non-GMO. Two of the newly approved crops were developed in the U.S. and were licensed for import; One for soybeans and the other is papaya. The newly approved certificates will be valid between three and five years, depending on the crop.
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2019 Squeezing Grain Elevators in Rural America
CoBank says it isn’t just farmers that saw lower cash returns in 2019. Grain elevators will also see their profit margins drop compared to the previous year. The lower returns are blamed on a higher basis for corn, soybeans, and wheat. A release from CoBank’s Knowledge Exchange Division says, “In addition to having to buy a more expensive basis, grain elevators are offering farmers incentives to sell bushels, such as lower rates on storage, free delayed pricing, and free grain drying.” Lower quality and high-moisture grain coming in from wet fields around rural America also boost elevator costs. Propane shortages in 2019 also continued to put a damper on elevator revenue. As if that’s not enough, drying wet grain can lead to commodity shrinkage, which adds to lost bushels and higher costs for elevators. CoBank says those challenges from 2019 will likely carry into the new year. “Grain elevators’ margins will get squeezed in 2020 by the tightness in basis, diminishing carries in the futures markets, and many other challenges from low test-weight and high-moisture grain,” CoBank says.
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Organic Sales Doubled Over Five Years; Percentage Still Small
U.S. organic sales doubled between 2012 and 2017, even though the total value of U.S. agricultural sales remained flat. The USDA says growth in the organic sector has taken off since the early 2010s as food manufacturers, retailers, and livestock producers have increased their demand for organic foods and inputs. Organic operations’ average sales were just over $400,600 in 2017, more than doubling the average sales for all farms, which came in at just over $190,000. The organic share of all agricultural sales in the U.S doubled to two percent between 2012 and 2017, but the share was over six percent in some states. California took the top spot in the nation in terms of organic and overall ag sales. Most of the other top organic producing states were in the Pacific Northwest, which is a major grower of organic produce. Other states were in the Upper Midwest, a major producer of organic milk, and the Northeast U.S., which has many smaller-scale organic farms. Pennsylvania and North Carolina had the fastest organic growth between 2012 and 2017.
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Study Shows Farmers are Paying Higher Wages Than Ever Before
Farm Journal recently conducted a study that encompassed all sectors of agriculture. What they found was farmers are paying more in wages than at any point in history. They’re more efficient in using their available labor. However, they’re still frustrated. The survey of more than 2,100 farmers included almost 200 dairy farmers. Of the total producers, 87 percent say they pay more in wages than they did five years ago. While 58 percent of the employers have offered higher wages to attract labor, few can and do offer benefits. Just 20 percent of the farmers offer health insurance. Almost 45 percent offer their employees paid time off. A handful of the dairy farmers in the survey says they milk their cows with robotics. But, the majority of the dairy farmers say milking help is the hardest position to both fill and retain employees. Employers’ biggest frustrations are those who show up late, don’t show up at all, or don’t follow protocols in place. They say the best employees have a sense of ownership, which is easier to say than to find.
