NATIONAL AG NEWS SPONSORED BY THE AMERICAN FARM BUREAU FEDERATION
National Ag News for March 27, 2022
USTR Hearing Before Senate Committee Gets Testy
U.S. Trade Representative Katherine Tai testified before the Senate Finance Committee last week, and the discussion turned contentious. The Hagstrom Report says both Democrats and Republicans had a lot to say about the administration’s agricultural trade policies. Committee Chair Ron Wyden (D-Ore.) said he has real concerns that USTR isn’t doing enough to break down the barriers our exporters face. “I’ll draw a line here – the U.S. cannot conclude agreements with Japan, Indonesia, or the EU that leave issues facing our exports unaddressed,” Wyden said. In other remarks, Tai said she’s open to trade talks with China. “While we keep the door open to conversations with China, including on its Phase 1 agreement commitments,” she said during prepared remarks, “we must also defend our values and economic interests from the negative impacts of China’s unfair economic practices.” Her remarks didn’t indicate specific plans for discussions with China’s new economic team.
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Planting Survey Shows Smaller 2023 Corn Crop
Farm Futures conducted its March survey and found farmers opting for more drought-consistent crops this spring as depleted soil moisture levels present a big challenge for farmers. Steep input costs are also a factor in acreage decisions this spring. As a result, Farm Futures expects that 2023 planted corn acreage will drop one percent from last year to 87.7 million acres. If that corn number is realized, the projected 87.7 million acres would be the smallest-planted U.S. corn acreage since 86.4 million acres got planted in 2009. Survey results show farmers in the Plains have the highest chance of changing some corn acres in 2023. Farm Futures’ soybean estimate of 89.6 million acres is a 2.5 percent increase from last year and would be the second-largest soybean crop on record. Farm Futures’ total wheat estimates are noticeably similar to acreages from a year ago but include 3.4 percent more winter wheat acres.
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ERS Releases Report on U.S. Export Crop Competitiveness
The USDA’s Economic Research Service released a report titled “U.S. Export Competitiveness in Select Crop Markets,” and it showed the U.S. is still the world’s top corn exporter. The report says that export shares and exports-to-production ratios indicate that the United States is still the top exporter of corn, tree nuts, and cotton. However, it also says other competitors have gained shares in the global wheat and soybean markets. “Over the last decade, the U.S. lost its position in the global wheat market as the EU, Russia, and Ukraine gained market shares,” the report says. “Similarly, Brazil and Argentina continue to pose a challenge to U.S. soybean exports.” Brazil has been the largest exporter of soybean oilseed since 2021. The ERS report also shows the United States’ involvement in trade agreements contributes to its export competitiveness. “From 2012 through 2020, the U.S. didn’t establish any new free trade agreements,” the report says.
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Food Prices Drop Slightly From January and February
The Food Price Index averaged 129.8 points in February 2023, down 0.6 percent from January and continuing the downward trend for the eleventh-consecutive month. As of February, the index has dropped 30 points from the peak it reached in March 2022. The marginal decline in February reflected significant drops in the price indices of vegetable oils and dairy together with smaller drops in cereals and meat indices. The sugar price index was the only one to rise sharply, up 8.1 points to 124.9 in February. The Cereal Price Index averaged 147.3 points in February, down a fraction from January and two points above its level one year ago. The Vegetable Oil Price Index averaged 135.9 points, down 4.5 points from January and reaching the lowest level since early 2021. The Dairy Price Index was 131.3 points, 3.6 points lower than in January, and the Meat Price Index dropped fractionally to 112 points.
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Plant Closure Raises Antitrust Concerns
Tyson Foods recently announced it will be closing a Virginia processing plant in May. The two-month notice given to its chicken suppliers has raised concerns among farmers and legal experts about Tyson’s compliance with antitrust regulations. Those regulations require a company like Tyson to give a 90-day notice before they end a contract. The planned closure means chicken producers are scrambling to find new buyers in a region with few or no options. Reuters says there may be forthcoming fines for Tyson under the Packers and Stockyards Act, the U.S. antitrust law requiring the minimum advance warning. However, Tyson says it’s not canceling any farmers’ contracts and will pay the growers for the full remainder of their contracts, keeping them in compliance with federal antitrust regulations. Antitrust issues in meatpacking have been a priority for the USDA because four companies control up to 85 percent of the beef, pork, and chicken markets.
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Kansas Winter Wheat Struggling with Drought
Spring is typically a good time for rain on winter wheat. However, intense drought conditions in western Kansas continue to hurt winter wheat. Less than 20 percent of Kansas winter wheat is in good to excellent condition. The U.S. Drought Monitor says only 15 percent of Kansas’ acres are not experiencing any level of drought stress. More than 36 percent of the state reported D4 exceptional drought compared to just a little over one percent last year. D3 extreme drought conditions are hurting 16 percent of the state, with D2 severe drought hitting 13 percent of Kansas. Dennis Todey of the Midwest Climate Hub says the best chance of precipitation this spring is in the areas currently experiencing extreme drought to exceptional drought. Still, he says it’s going to be very hard to eliminate the drought in those areas. Todey says the worst drought is outside of corn and soybean growing areas.
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