READ the NAFB’s National Ag News for Thursday, December 31st – New Year’s Eve

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Grain Worker Strike Ends in Argentina

Argentina’s port and grain union workers have ended a 20-day strike after reaching an agreement on Tuesday, with the settlement coming after the government intervened in the dispute. The move lifts a major work stoppage that had left more than 150 ships stranded at the country’s ports. Argentina is one of the world’s largest suppliers of soybeans, corn, and wheat. The strike has hampered the large flow of grain out of the country, which has weighed down grain markets for several weeks. Failure to unload those grain ships at Argentina’s ports had cost the government approximately 1.9 billion dollars in payments to the ships’ owners. Market traders were concerned that an ongoing strike would cause global end-users to look to the U.S. for soybeans, but the U.S. is already dealing with tight soybean supplies. The possibility of expanding dryness in soybean-growing areas of South America over the next two weeks was adding fuel to a recent rally in soybean prices, which hit a six-year high earlier this week. Analysts at Bower Trading say weather and demand news will likely be the biggest market drivers now that the strike is over.

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China will Miss Phase One Buying Deadline

China is a long way from meeting the commitments in its trade deal with the U.S. Farm Progress Dot Com says the latest data shows the Southeast Asian nation has imported just over half the goods it promised to buy from America in the Phase One Trade Agreement. Over the first 11 months of the year, China bought about 50.5 percent of the total 2020 target of $172 billion. That’s according to Bloomberg calculations based on figures from the U.S. Custom’s Administration. The outlook for the trade deal is uncertain as a new administration prepares to take office in Washington, D.C. As of the end of November, data shows that China had bought 54 percent of targeted manufacturing products, 53 percent of agricultural goods, and 31 percent of the energy products. Aggregate soybean imports reached $8.1 billion from January-November, compared with $10.2 billion in 2017. The trade deal says China’s imports of manufactured, agricultural, and energy goods in 2020 were to be no less than $32.9 billion, $12.5 billion, and $18.5 billion on top of 2017’s levels, putting the year’s targets at $110.4 billion, $36.6 billion, and $25.1 billion.

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China to Increase Corn Production and Imports

Chinese demand for corn will continue rising, with imports from the U.S. likely to improve in future years. University of Illinois economists say China was self-sufficient in corn production until 2015 and then relied on imports from Ukraine until 2019. The lower corn output over the last year in Ukraine forced China to turn to the U.S. for additional corn supplies. Economists Scott Irwin and Joe Janzen with the University of Illinois say China will likely increase domestic corn production, boost imports from overseas sellers, and dig into its stockpiles this year. “If Ukrainian production returns to normal and the Brazilian corn price is competitive with the U.S., both of which appear likely, U.S. exports of corn to China are likely to be lower in 2021-2022 than what’s projected for the current marketing year,” they say. “Even so, U.S. corn exports to China will likely be higher than in previous years.” The economists say they expect U.S. corn acreage to drop by 1.1 million acres to a total of 90.9 million next year, while soybean acres will rise 7.7 million acres to 90.8 million. Their report says ending stockpiles will have difficulty increasing much in the 2020-2021 marketing year.

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European Union, United Kingdom Trade Deal Becomes Official

Boris Johnson, the Prime Minister of Britain, signed the post-Brexit trade deal with the European Union on Wednesday. Reuters says he added his signature to that of European Union leaders after the document was flown from Brussels to London. The trade deal was first announced on December 24, and it sets out the terms of Britain’s new relationship with the EU following its exit from the bloc earlier this year. The new deal will officially take effect on January 1, replacing a transitional arrangement in which EU trade rules applied to Britain. Johnson’s signature came hours after British lawmakers voted overwhelmingly in favor of the legislation implementing the deal. Lawmakers voted 521 to 73 to progress the bill to its final stages. The accord preserves Britain’s zero-tariff and zero-quota access to the European Union’s 450 million consumers, preventing a more chaotic split that had been feared by British businesses.

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Food Prices Rise During COVID-19

The USDA says grocery store prices rose 5.6 percent higher in June of 2020 compared with June of last year. Retail prices rose for all food-at-home categories except for fresh fruits. Many of the increases were a result of the coronavirus. COVID-19 disrupted the supply chains of multiple commodities and affected consumers’ food spending patterns. That put upward pressure on wholesale and retail food prices. Closing schools and stay-at-home orders in the spring of 2020 resulted in the dairy industry switching from supplying products for schools and restaurants to supplying products to grocery stores and other food-at-home retailers. Adapting to the change placed upward pressure on retail prices for dairy products, which rose 5.1 percent from June of last year to June 2020. Beef also suffered from supply chain disruptions. Decreased slaughter volumes because of COVID-19 led to a bottleneck in supply, which boosted prices. Retail beef and veal prices in June of 2020 were 25 percent higher than in June 2019. Much of this increase occurred after February of this year. The retail prices of other commodities rose as well, including egg prices were up 12 percent in June of this year compared to June 2019, while pork and poultry prices increased 11.8 and 8.7 percent, respectively.

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USDA Extends COVID-19 Flexibilities

USDA’s Risk Management Agency is extending crop insurance flexibilities for producers during COVID-19. Specifically, the relief provided for electronic notifications and signatures that are extended through July 15, 2021. Organic certification, replant certification, and assignment of indemnity is extended through June 30, 2021. “We recognize that American agriculture continues to face challenges due to COVID-19,” says RMA Administrator Martin Barbre. “RMA remains committed to providing the flexibility that supports the health and safety of all parties while also ensuring that the federal crop insurance program continues to serve as a vital risk management tool.” RMA is also allowing Approved Insurance Providers further flexibilities for production reporting, submitting written agreement requests, and obtaining producer signatures for written agreement offers. Producers’ signatures for written agreement offers issued by RMA on or before June 30, 2021, with an expiration date on or before July 30, 2021, will allow producer signatures to get accepted after the expiration date with proper self-certification or documentation. However, all documentation and signatures for these offers must be completed no later than August 2, 2021. For more information, go to the Risk Management Agency’s website or contact your crop insurance agent.

SOURCE: NAFB News Service

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.