READ the NAFB’s National Ag News for Monday, August 3rd
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Chinese Corn Purchases Sets Records as Tensions Grow
Chinese buyers made a record purchase of U.S. corn last week. Reuters says that extended a recent flurry of U.S. purchases as tensions continue to grow between the two largest economies in the world. The USDA says China bought 1.937 million tons of corn from private exporters that will be delivered in the 2020-2021 marketing year. That purchase is worth around $325 million and passed up the previous record of 1.76 million tons reported only two weeks ago. In another report, the USDA says soybean sales to China rose to 1.925 million tons for the week ending July 23, which was the biggest weekly total since November of 2016. China’s purchases of American farm goods totals $6 billion through May, while the Phase One Trade Agreement calls for a total of $36.5 billion in purchases this year. While the $6 billion total is 9.1 percent higher than the same period last year, it’s also 31 percent lower than the same time in 2017. Rising tensions had already slowed soybean purchases last week. U.S. Soybean Export Council CEO Jim Sutter says, “Chinese buyers are worried about a possible disruption in the implementation of the Phase One agreement, which is certainly not good for future purchases.”
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Perdue Says EU “Green Deal” Could Undermine Trade Talks with the U.S.
USDA Secretary Sonny Perdue says the European Union’s recently-published EU “Green Deal” strategies could “undermine trade and affect the viability of EU farmers.” Perdue’s claim was immediately refuted by his EU counterpart. Euractive (Yuhr-ACTIVE) Dot Com says Perdue spoke during a webinar on the transatlantic perspective on food security in a post-COVID world last week. Perdue commended the EU for focusing on sustainability and expressed a strong desire to work with the European Union. However, he criticized the new food policy, which he says, “seems to have forgotten the ‘farm’ in ‘Farm to Fork.’” The EU says the new Farm to Fork policy is intended to improve the sustainability of agriculture within the bloc and shorten the distance between the farm and the end-user. Together with the new biodiversity plan, those two policies make up the heart of the EU Green Deal. Perdue also says EU farmers were being left without the tools they need to do their jobs, warning that it could make farmers there uncompetitive. If that happens, it could then lead to EU protectionism, something that could “do some real damage to the global trade environment.” However, the EU Ag Commissioner says the emphasis on reinforcing shorter supply chains doesn’t imply any new trade barriers, adding that the bloc “isn’t against and needs international trade.”
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Cattle Producers Set Policy Priorities for the Future of the NCBA
A large number of cattle producers worked to identify a policy that would help to resolve concerns about live cattle marketing issues and help lead the industry to more robust price discovery. The National Cattlemen’s Beef Association’s Live Cattle Marketing Committee considered many proposals aimed at encouraging greater volumes of cash cattle trade. After sometimes intense debate, the committee and the NCBA Board of Directors unanimously passed a policy that supports voluntary efforts to improve the fed cattle trade over the next three months. However, it leaves the market open to the potential for future mandates if robust regional cash trade numbers are not reached by the industry. NCBA President Marty Smith says the work of the Live Cattle Marketing Committee caps off months of efforts to find industry and market-driven solutions to increase price discovery without government mandates. “The policy we passed today is the result of every state cattlemen’s association coming together to work through their differences and find solutions that meet the needs of their members,” Smith says, “all of whom agree that the industry needs more price discovery. The policy provides all players in the industry with the opportunity to achieve that goal without seeking government mandates.”
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Agricultural Fairs Rescue Act Introduced in Congress
The Agricultural Fairs Rescue Act was introduced in Congress late last week to help preserve agricultural fairs across the country. The legislation from Democrat Jimmy Panetta of California and Republican Billy Long of Missouri is also designed to help fairs recover from large financial losses they’ve suffered because of COVID-19. A large number of fairs across the country didn’t take place this summer because of safety concerns. The bill would provide $500 million in grant funding for agricultural fairs through their state departments of agriculture to help keep them functioning well into the future. “County and local fairs are very important to agriculture and our communities all across our country,” Panetta says. “Fairs provide our producers with the opportunity to market their crops and livestock and foster the next generation of farmers.” He points out that fairs are also an “economic engine” and a gathering place to highlight and celebrate our communities. A Drover’s report says agricultural and community fairs have been an important part of rural communities for over 250 years. State and local fairs also provide farmers and ranchers with the opportunity to educate the public about local agriculture. “Like many institutions, fairs have been hit by COVID-19,” Panetta says, “and we must assist if we are going to preserve these fairs for the future.”
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NCGA Talks Trade and Supply Chains During Virtual Town Hall
National Corn Growers Association President Kevin Ross joined other national agricultural leaders for an AgTalks virtual town hall last week. Participants talked about the future of agriculture, with a focus on trade, supply chains, and competition on a global scale. The town hall allowed panelists to provide updates from their industries and answer questions. Ross talked about the many challenges facing corn producers in 2020 and shared the NCGA’s recovery plans to help growers navigate the immediate challenges in the short term and to expand market access in the long term. “We’re thankful to have USMCA in force and Phase One trade deals with both China and Japan,” Ross says. “But we have lost ground to our competitors, and it’s time to pivot to more aggressive expansion in our trade. NCGA will continue to push for trade agreements in Southeast Asia and many other regions that have strong demand potential.” The AgTalks town hall series will help farmers learn and share their views with commodity associations at a time when most of the major in-person state agricultural events have been canceled or postponed because of COVID-19. Last week’s event focused on Iowa, with future events scheduled to focus on Minnesota, Michigan, Pennsylvania, and Wisconsin.
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Ethanol Ready to Capture More Carbon
Growth Energy CEO Emily Skor says ethanol plants are ready to capture more carbon. She submitted comments on the Internal Revenue Service’s proposed regulations under section 45Q. It’s a performance-based tax credit for carbon capture projects. In her comments, Skor asks the agency to offer credit for carbon dioxide captured for food and beverage purposes, which would promote investment in new carbon capture capabilities and ensure that the food and beverage industry is not forced to tap alternative sources of carbon dioxide. “The ethanol industry has more than 50 projects that on average capture 99,000 to 153,000 tons of carbon dioxide annually,” Skor says. “These facilities both capture qualified carbon oxides or are in the process of financing projects to capture and sequester carbon oxides.” She adds that more projects are on the way and 45Q can help accelerate that process. Without the tax credit, food and beverage producers may have to rely on non-renewable sources of carbon dioxide.
