READ the NAFB’s National Ag News for Friday, February 7th

Sponsored by the American Farm Bureau Federation

2020 Farm Income Forecast Looks “Average”

U.S. net cash farm income, the total income after expenses, is forecast to decrease $13.1 billion to $109.6 billion in 2020. When adjusted for inflation, the drop is almost 11 percent compared to the previous year. U.S. net farm income is a broader measure of profitability. It incorporates noncash items like economic depreciation and gross imputed rental income, and it forecast to increase by $1.4 billion to $96.7 billion in 2020. That’s a 1.4 percent jump over 2019. The USDA says if the forecast changes are accurate, net cash farm income in 2020 would be 0.6 percent below the inflation-adjusted average calculated throughout 2000-2018. Net farm income would be 5.4 percent above the average during 2000-2018. The two income measures will diverge this year because of how net sales from inventories are treated. Net cash farm income records the income in the year a sale took place, while net farm income counts it in the year production occurred. For example, high net sales at $14.9 billion from crop inventories forecast in 2019 are expected to boost net cash farm income significantly that year. Very low net sales from inventories ($0.5 billion) in 2020 are expected to contribute to a decrease in net cash farm income between the two years.

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U.S. Pork Exports Set Record in 2019

2019 was a banner year for U.S. pork exports in terms of volume and value, reaching almost $7 billion. That comes from USDA data compiled by the U.S. Meat Export Federation. Exports of U.S. beef were below 2019’s record levels, while lamb export volume was the second-largest on record. Pork exports rose to just over 282,000 metric tons in December, up 34 percent year-over-year and surpassing the previous high set in November of 2019 by nine percent. Export value was $760 million, up 44 percent from the previous year, breaking the previous record also set in November of 2019. These results pushed 2019 pork exports 10 percent above the previous year in volume and nine percent higher in value. December beef exports were a little over 111,000 metric tons, down one percent from last year, and valued at $682 million, a three percent drop. Exports in 2019 were down 2.5 percent from the previous year’s record volume, finishing at 1.32 million metric tons. The surge in pork demand was due in part to Chinese and Hong Kong demand for U.S. pork, which climbed to almost 110,900 metric tons in December. That’s more than quadruple the previous year’s volume. The value was six times higher than last year at the same time, totaling almost $275 million.

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Perdue: U.S. Must be Understanding if Coronavirus Affects Chinese Purchases

Ag Secretary Sony Perdue says the U.S. will have to be “tolerant” if the fast-spreading Coronavirus inhibits China’s ability to increase purchases of American farm goods. China pledged in the “Phase One” agreement to buy at least an additional $12.5 billion worth of farm goods in 2020 and at least $19.5 billion in 2021 over the 2017 level of $24 billion. Commodity traders and economists have questioned China’s ability to follow through on those commitments since the deal was signed. Now that the Coronavirus is continuing to spread, it poses a threat to China’s economic growth. “If they’re trying and the disease blows the economy out of the water, then we’ll need to be understanding,” Perdue told reporters during a cattle industry convention in Texas. Reuters says Perdue isn’t part of the government team that’s responsible for enforcing the terms of the agreement. He also didn’t say how the U.S. would need to adjust its expectations of China. The text of the agreement does contain a disaster clause, which Beijing has yet to formally invoke, which would allow for delays. China has reported that over 500 people have died in the Coronavirus outbreak.

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Trump Wants Trade Deal with Kenya

President Donald Trump and the president of Kenya are going to kick off bilateral trade negotiations this week as they meet at the White House. V.O.A. News Dot Com says this is an unusual effort for the president, who’s largely focused his trade efforts on major economic powers like China, Japan, and the European Union. Kenya ranks 98th among the U.S. trading partners with about $1 billion in two-way trade of goods in 2018. However, a trade deal with Kenya could create a template for future negotiations with other African nations. It would also help to thwart some of China’s rising influence in the continent. China took the top spot from the U.S. as Africa’s number one trading partner several years ago. Scott Eisner is president of the U.S.-Africa Business Center at the U.S. Chamber of Commerce. He says the agreement is likely to take several years to complete, especially if Trump follows the trade promotion authority law. That requires congressional input for comprehensive trade deals. If the two sides eventually agree, it would be the first trade deal between the U.S. and an African nation.  The U.S. currently has 20 free-trade deals in place with other countries, but none are on the African continent.

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Cattle Outlook Positive in 2020

With a plateau in U.S. cattle numbers and strong beef demand ahead, CattleFax says prices are likely to be stronger in the year ahead as consumers at home and abroad support industry profitability. That’s one of the big takeaways from the CattleFax outlook session in San Antonio, Texas. Kevin Good, CattleFax Vice President of Industry Relations and Analysis, says trade will play a significant role in beef and cattle markets. He expects higher total animal protein production will be offset by strong demand and increasing exports. “With strong demand for U.S. beef at home and rising demand overseas, the modest increases in supply will be more than offset by growing consumer appetite for our product,” Good says. CattleFax is projecting composite cutout prices will rise $3 during the upcoming year to reach $222 per hundredweight. Good also says CattleFax is projecting fed steer prices to average $120 per hundredweight during 2020, an increase of $3 from the previous year. Calf prices are also expected to move higher in the year ahead. CattleFax CEO Randy Blach (Block) predicts a lot less volatility in the market during 2020 than compared to last year.

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USDA Announces Details of RMA Hemp Protection Programs

The USDA announced the details of two programs that protect hemp producers’ crops from natural disasters. A pilot hemp insurance program through Multi-Peril Crop Insurance provides coverage against yield loss because of insurable causes of loss for hemp grown for fiber, grain, or CBD Oil. The Noninsured Crop Disaster Assistance Program coverage protects against losses associated with lower yields, destroyed crops, or prevented planting where no permanent federal crop insurance program is available. Producers can apply now, with the deadline to sign up for both programs set for March 16, 2020. “We are pleased to offer these coverages to hemp producers,” says USDA Undersecretary for Crop Production and Conservation Bill Northey. “Hemp offers a new economic opportunity for our farmers, who are anxious for a way to protect their product in the event of a natural disaster.” The pilot insurance program option for hemp producers is available in select counties in 21 states during the 2020 crop year. The Noninsured option provides protection against loss for hemp grown for fiber, grain, seed, or CBD for the 2020 crop year where no permanent federal crop insurance program is available.

SOURCE: NAFB News Service

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By Brian Allmer - The BARN

Brian Allmer & the BARN are members of the National Association of Farm Broadcasting (NAFB), the Colorado FFA Foundation, the Colorado 4H Foundation, the Colorado Farm Show Marketing Committee, 1867 Club Board Member, Denver Ag & Livestock Club Member, the Weld County Fair Board, the Briggsdale FFA Advisory Council, Briggsdale 4H Club Beef Leader & Founder / Coordinator of the Briggsdale Classic Open Jackpot Show.