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China First Year Phase One Agreement Ag Purchases aimed at $20 Billion

2 years ago AFBF

The phase one agreement with China would boost U.S. ag exports to at least $20 billion in its first year. The overall agreement includes $40-50 billion of U.S. farm commodity sales to China over a roughly two-year period. China claims it would aim to buy at least $20 billion worth in the first year, if the agreement is signed, according to Bloomberg News. $20 billion would boost U.S. export sales to China back to levels seen before the tit-for-tat trade war began. China imported $9.1 billion of U.S. farm products in 2018, down from the 2017 level of $19.5 billion. China and the U.S. are working out the details of the limited phase one agreement that could be signed next month. Meanwhile, Vice President Mike Pence delivered a closely watched speech on China in Washington, D.C. Thursday. In his remarks, Pence called on China to “start anew by ending the trade practices that have taken advantage of the American people for far too long.”

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EPA Proposes Pesticide Application Exclusion Zone Requirements Update

The Environmental Protection Agency Thursday issued a notice of proposed rulemaking regarding application exclusion zones, known as AEZ. The National Corn Growers Association says the proposal would make two major changes for farmers. The changes include modifying the AEZ so it is only enforceable on a farmer’s property. The proposal would replace the current regulation requiring farmers to ensure individuals are outside of the pesticide AEZ not only on their property, but off their property as well. The proposal would also exempt farm owners and their immediate family members from the requirement that they leave their home during certain pesticide applications. EPA Administrator Andrew Wheeler stated in an agency news release the updates maintain safety requirements, “while providing greater flexibility for farmers.” The American Farm Bureau Federation welcomed the proposed rule change. AFBF President Zippy Duvall says, “every effort to make the rule more sensible and practical for farmers while safeguarding workers is important.” EPA will accept comments on the proposal through a 90-day comment period.

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USDA Encourages Producers to Contact Insurance Agents for Delayed Harvest

The Department of Agriculture says farmers in the federal crop insurance program facing harvest delays should contact their Approved Insurance Provider. USDA says those farmers should file a Notice of Loss and request more time to harvest. Producers in several states, including Colorado, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin, and Wyoming, have been affected by extremely wet and snowy conditions early this fall. Martin Barbre, Administrator of USDA’s Risk Management Agency, says, "producers covered by Federal crop insurance should contact their insurance agent as soon as possible to determine what actions they can take." Producers must file a Notice of Loss and request more time to harvest before the end of the insurance period, so that federal crop insurance claims are settled based on the amount of harvested production. The end of the insurance period for crops such as spring-planted wheat and barley is October 31, and for corn and soybeans is December 10. Insurance providers may allow additional time to harvest, on a case-by-case basis, under specific circumstances.

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Drought Expanding in South, Southwest

Drought conditions expanded in the South and Southwest over the last week, while the Midwest largely remains drought-free. The weekly Drought Monitor Thursday showed drought and abnormal dryness expanded across parts of Texas and Oklahoma. But, other parts of Texas,  Arkansas, Louisiana, Mississippi and Tennessee experienced a reduction of drought and abnormal dryness. Meanwhile, 75 percent of the Southeast region of the U.S. remains in classified drought conditions. However, heavy rain, locally over five inches, contracted drought and abnormal dryness across much of the region. Much of the Four Corners states in the west are in a classified moderate to severe drought. Parts of Illinois, Ohio, Indiana and Kentucky are considered abnormally to moderately dry, while much of the Upper Midwest and High Plains remain mostly drought-free. California, along with the Pacific Northwest, remains mostly drought-free, as well. Meanwhile, more rains are expected in the South and Southeast over the next week, providing potential drought relief for those regions.

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Hawley, Blackburn, Introduce Bill to Move Most Federal Agencies

Missouri Senator Josh Hawley introduced legislation this week to move the Department of Agriculture to Missouri. Joined by Tennessee Senator Marsha Blackburn, the Republicans seek to move the headquarters of USDA to Missouri and the Department of Education to Tennessee. However, the legislation doesn’t stop there, as the bill would move 90 percent of ten federal agencies out of Washington, D.C., and into what the lawmakers describe as economically distressed regions. Hawley claims federal employees of the two agencies are “too removed from the rest of America.” The Helping Infrastructure Restore the Economy, or HIRE Act, the Senators claim, would “move policymakers directly into the communities they serve.” Senator Blackburn says moving federal agencies out of Washington, D.C., “boosts local economies and lowers costs.” The Senators cited the relocation of two USDA agencies, the Economic Research Service and the National Institute of Food and Agriculture, along with the Bureau of Land Management’s planned move to Colorado, in introducing the legislation.

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USDA Opens Registration for the 2020 Agricultural Outlook Forum

The Department of Agriculture Thursday opened registration for its 2020 Agricultural Outlook Forum. Planned for February 20-21 next year, the event is the largest annual meeting of USDA. The 2020 event, themed “The Innovation Imperative: Shaping the Future of Agriculture,” will feature more than 30 sessions. The topics include innovations in agriculture, global trade trends, food loss and waste, conservation, and the science of food safety. USDA’s Chief Economist will unveil the outlook for U.S. commodity markets and trade in 2020 and discuss the U.S. farm income situation. USDA’s Agricultural Outlook Forum began in 1923 to distribute and interpret national forecasts to farmers in the field. The goal was to provide the information developed through economic forecasting to farmers so they had the tools to read market signals and avoid producing beyond demand. USDA says the event will be at the Crystal Gateway Marriott Hotel in Arlington, Virginia. The 2020 Forum’s program will be announced at the beginning of November. Registration information is available at usda.gov.

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 Senate Republicans are ramping up their push for a House vote on the U.S.-Mexico-Canada trade deal, as concerns grow that Democrats are running out the clock to deny President Trump a win on trade.

GOP Senators took to the floor to call on House Speaker Nancy Pelosi and Democrats to stop stalling on USMCA, with just 20-legislative days left this year and impeachment expected to eat up much of that.

Ohio’s Rob Portman, a former U.S. Trade Representative in the Bush Administration, says the deal, already ratified by Mexico, is worth more than $2 billion in new U.S. ag sales…

“The dairy protections in Canada have been changed, so we have a chance to send our dairy to Canada now, from Ohio and other states like us. But, it’s much more than that…it’s about commodities, it’s about wheat, soybeans and corn…it’s about our proteins--beef, poultry, pork. This is one that’s really going to help our farmers. That’s why one-thousand farm groups now, around the country, have now supported this agreement.”

Portman calls USMCA a “godsend” for U.S. farmers, amid the China trade fight and low commodity prices.

North Dakota Senator and former Governor John Hoeven agrees…

“Low commodity prices in our country, which is making it very difficult for our farmers and ranchers. And the best way to work out of that, is with trade agreements, that allows us to sell more, globally. According to the ITC, when fully implemented, the USMCA will increase ag and food exports to Canada and Mexico, by 2.2 billion.” 

Ohio’s Portman argues USMCA has the enforceable labor and environmental provisions NAFTA lacks, plus minimum wage and domestic auto content requirements that Democrats should also support.

But Portman acknowledges the obvious…

“There’s a lot of politics, right now…and I get that.  But, folks, this is not even an election year.  So, let’s finish it up this year, before we get into the 2020 election year.  Let’s be sure, before Thanksgiving, we have that agreement passed in the House and sent over here to the Senate to take a look at it.  It’s too important. We need to put the American people first and politics second, and get this done.” 

Portman predicts, if put to a vote in the House, USMCA would pass with bipartisan support. 

Democrats, meanwhile, are optimistic they can strike a deal with the White House. Representative Richard Neal, who chairs the Democrats panel on USMCA, told reporters, “We’re making progress” earlier this week. And, U.S. Trade Representative Robert Lighthizer says the two sides have "narrowed our differences considerably." 

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