5 years, 6 months ago American Farm Bureau Federation
Soybean crushers in Brazil are running low on soybeans as they face tougher competition from Chinese buyers over the remaining 2017-2018 season supplies. A Bloomberg report says crushers in Brazil worked with negative margins since the second half of September. The pace of processing has slowed since the soy rally has doubled premiums this year, putting a squeeze on domestic producers. Other plants have halted all activities and say they won’t start up again until the upcoming harvest starts in the first quarter of 2019. One industry analyst says soybean product inventories are running low, with some plants announcing they no longer have soy oil to sell. The industry group representing soybean processors says crushing margins are getting pressure from higher soybean prices. However, it didn’t really slow the pace of processing until August of this year. Brazil soybean stocks are expected to fall by 1.5 million tons to their lowest-level since 1999. September exports totaled 4.6 million tons, with 91 percent heading to China.
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Dropped Tariffs Could Mean Less USDA Trade Aid Relief
Ag groups are largely supportive of the new U.S.-Mexico-Canada Trade package. However, many of those same groups say their biggest concern right now is ending retaliatory tariffs on U.S. agricultural products Those duties were put in place after President Trump imposed tariffs on steel and aluminum imports. Ag Secretary Sonny Perdue told Reuters this week that, with a trade deal in hand, the tariffs usefulness when it comes to Mexico and Canada have diminished. “I think it’s time we go back to our previous relationship which had no tariffs on steel and aluminum,” Perdue adds. If that happens, it could mean USDA will scale back on the second installment of its trade aid program. Perdue tells Reuters, “If the tariffs do come off and the tariff impact lessens, it will have some impact over the mitigation efforts because those efforts were based on the fact that they would be tariff damage-related.” USDA has already made $6.3 billion available for direct payments to farmers, commodity purchases, and marketing assistance. The department was scheduled to decide on a possible second round of trade reimbursements by early December. The agency had initially budgeted up to $12 billion for the aid program.
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Trump, XI Likely to Meet at Upcoming G-20
An Associated Press article says U.S. President Donald Trump and Chinese President XI (zhee) Jinping may meet during the G-20 summit in Argentina scheduled for late November. China says it is in contact with the U.S. amid reports of the upcoming meeting. A Chinese Foreign Ministry spokesman offered no specifics but did say he’d seen the relevant reports. Trump’s top economic adviser Larry Kudlow tells CNBC that there is “some movement” toward a meeting at the G-20. Kudlow says, “They have lots to talk about, so we’ll see.” On the word of the potential meeting, global indexes had gained after a couple days of sharp drops. Treasury Secretary Steven Mnuchin (Muh-NOO-chin) has advised against naming China a currency manipulator, which is something that would trigger penalties, and reports say that move has eased some tensions between the U.S. and China. It’s not currently known if the U.S. will even consider lifting $250 billion in tariffs on Chinese imports, which triggered retaliatory tariffs on American imported goods. Despite the U.S. tariffs on Chinese goods, the trade deficit between the two countries defied expectations and widened in both August and September of this year.
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Environmental Groups: No Farm Bill Better Than Bad Bill
The Food Research and Action Center (FRAC) and a group of left-leaning environmental groups will hold a press conference Monday to tell Congress “No farm bill is better than a bad farm bill.” The Hagstrom Report says the announcement means the lobbying coalition on the farm bill is officially split on the importance of passing a farm bill this year. Major farm groups like the American Farm Bureau and National Farmers Union, along with commodity and conservation groups, are calling on Congress to finish the farm bill this year. But FRAC and other major nutrition groups never signed on to letters written to Congress by the other groups. Talks of a farm bill extension are growing as big differences remain between the House and Senate versions of the farm bill, especially over the work requirements for participants in the Supplemental Nutrition Assistance Program. A FRAC spokeswoman says, “We are pushing for passage of the Senate bill as the pathway to a good farm bill.” House Ag Committee Ranking Member Collin Peterson backs the Senate SNAP provisions. However, he says that he and House Democratic leadership want to finish the bill this year, even though Peterson would chair the committee if Democrats take over the House. Other groups participating in the news conference include the Environmental Working Group, Food Policy Action, as well as the National Resources Defense Council.
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USMCA Fate Could Rest with Democrats After Elections
Politico says the new North American trade agreement likely won’t get voted on before 2019. That’s because of a packed Congressional schedule at the end of this year, as well as a limited political will to hold a vote. That likely means Democrats will have a huge say in whether or not the deal gets enacted, if as many polls suggest, they take control of the House. Politico says a Democratic majority in the House would have to balance a commitment to opposing President Trump against the potential benefits of the deal. If Democrats take power, it means labor questions suddenly become much more important. There are still questions remaining from the party and labor groups about how new labor provisions in the agreement will be enforced. One example is pushing Mexico to improve workers’ rights and wages. Unions see that effort as critical to easing downward pressure on U.S. wages. U.S. Trade Representative Robert Lighthizer worked to respond to labor-related concerns raised by Democrats and unions during the negotiation. Politico says he’s not sweating a Democratic-controlled House. One Democratic aide says, “I don’t think Lighthizer is the least bit afraid of a House controlled by Dems and I think he’s played those cards well.”
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Hurricane Hits Georgia, Florida Agriculture Hard
Farmers in Georgia and Florida are still trying to get a handle on the extent of damage left behind by Hurricane Michael. One thing officials do know for sure is that Michael devastated Georgia’s cotton crop. Georgia typically produces the second-largest cotton crop in the nation. USDA had predicted a cotton crop of 2.9 million bales this year, second only to Texas in total production. However, only 15 percent of Georgia’s crop had been harvested before the storm came through. 20 percent of the state’s cotton crop was planted late, so some of that may be okay. Richie Seaton of the Georgia Cotton Commission told Agri-Pulse that the rest of the crop took a direct hit at a time when it was most vulnerable to storm damage. “Michael is going to cost the state of Georgia billions of dollars in damage,” Seaton says. Georgia’s pecan orchards were hit hard by Hurricane Irma last year and took another hit from Michael. In Florida, the timber industry was hit hard, along with some poultry, dairy, and aquaculture operations were damaged as well. The state’s Ag Department says the tomato crop was damaged as well.
