READ the NAFB’s National Ag News for Tuesday, July 14th

Sponsored by the American Farm Bureau Federation

Trump: China Phase Two Agreement Unlikely

President Donald Trump recently told reporters a Phase Two agreement with China is not likely. The President said aboard Air Force One last week, “I don’t think about that,” adding, “The relationship with China has been severely damaged.” Bloomberg News reports the Trump administration continues to pressure China over the COVID-19 outbreak, alleging a cover-up by China, among other things. Regarding his relationship with China, Trump says, “They could have stopped the plague, they didn’t,” referring to the COVID-19 pandemic. The Phase One agreement included $200 billion of U.S. agriculture exports over two years. However, trade analysts say China isn’t purchasing at a pace to reach that level yet, and some say the level of purchases needed to meet the total is unattainable. Last month, state-owned companies in China suspended purchases from the United States over political issues. Also last month, Trump said the Phase One agreement was “fully intact,” the same day adviser Peter Navarro said it was effectively dead.

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CoBank Issues Quarterly Economic Review

CoBank says the recent rebound in the U.S. economy is real, but the sharpest post-shutdown economic gains are almost certainly behind us, and a long grind to shore up a shaky economy lies ahead. Despite COVID-19, U.S. grain has been moving and basis has generally tightened since April 1. Ethanol production and margins began to recover during the second quarter, but coronavirus resurgence is likely to limit future demand. The U.S. chicken sector swiftly filled retail meat cases when demand shifted and the red meat supply dropped. CoBank expects around three percent industry growth for the sector in 2020. Beef production and prices have now returned to pre-pandemic levels, and concerns are now shifting from supply to demand. The pork industry has rebounded from a supply chain shock that saw U.S. production fall by nearly half, before climbing back to above prior-year levels two months later. Finally, dairy farmers struggled through extreme market volatility last quarter. Diary prices are recovering, although farmers have yet to benefit.

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USDA Seeks to Increase Rural Investment Through Streamlining Loan Programs

The Department of Agriculture seeks to “cut the red tape” to make it easier to invest in rural America. USDA Monday announced steps to streamline access to four flagship loan programs. The programs include the Water and Waste Disposal Loan Guarantees Program, Community Facilities Guaranteed Loan Program, Business and Industry Guaranteed Loan Program, and the Rural Energy for America Guaranteed Loan Program. Under the initiative, USDA will eliminate duplicative processes and launch a single platform for the four loan programs. Agriculture Secretary Sonny Perdue says the changes “will make it easier for private lenders to use USDA programs to invest in rural businesses and grassroots rural economic development efforts.” USDA is seeking public comments on the regulatory reforms expected to take effect on October 1, 2020. USDA also plans to conduct a series of listening sessions this summer on the proposed changes. For more information on how to register for the listening sessions, visit www.rd.usda.gov.

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Farmers Report Concerns About Sales Reps on Farms During Pandemic

A survey from Farm Journal found 45 percent of farmers have reservations about allowing sales representatives back onto their farm. The survey released last week, also found in order for input suppliers to be allowed back on the farm, 50 percent say social distancing would be required. Additionally, 18 percent want outside vendors to wear proper personal protection equipment, such as masks. However, not everyone is voicing that concern about sales representatives and non-employees coming on their farm. The survey found 36 percent say they’re not concerned about visitors. Of the 640 farmers surveyed by Farm Journal, just 11 percent say they are not ready for visitors. Growing concerns or not, consultant Dick Wittman, thinks navigating new business practices today may be permanent solution in agriculture. Wittman says, “It’s making people rethink how we can do business in the future. We don’t need to have everybody interacting every day in an office.”

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Shoppers Still Fear Empty Grocery Shelves, Seek Bargains

A recent survey finds grocery shoppers are looking for bargains, and half of consumers fear empty grocery shelves. Marketing agency Acosta says 53 percent of shoppers say product availability is a top priority. The American Farm Bureau Federation last week reported beef and pork supply chains are recovering from the pandemic panic buying. However, the industry needs to work through a backlog of slaughter ready animals. Meanwhile, more than one-third of shoppers are worse off financially than they were before the COVID-19 pandemic. The report says low prices will be a priority for 45 percent of shoppers post-pandemic. Acosta CEO Darian Pickett says, “A recession is here and will significantly impact the shopping habits of those affected.” Pickett says product availability remains a concern and shopper are focusing on health, wellness and safety more than ever. The survey also shows consumer priorities of social distancing, low prices, customer safety and promotions and deals on grocery products.

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Fuel Demand Struggling as COVID-19 Cases Rise

After falling for the first time in ten weeks, the national average price of gasoline has rebounded in the last week, rising 1.1 cents per gallon to $2.19. The national average price of diesel has decreased 0.2 cents and stands at $2.43 per gallon over the same period. GasBuddy’s Patrick De Haan says demand is struggling as coronavirus cases continue to increase in several states. De Haan says he expects gas prices to move sideways with the lack of a clear national trend, as we “remain in a COVID-19 holding pattern.” Crude oil prices continue to hold near recent highs. But overall, as demand rebounds have stalled, so too has the rally in oil prices. In addition, OPEC’s strongest production cuts are to expire at the end of July, leading to more oil production, responding to the recovery in global oil demand. Last week saw a notable 5.7-million-barrel rise in U.S. crude oil inventories, which now stand 17.5 percent above year-ago levels. 

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.