4 years, 7 months ago American Farm Bureau Federation
A Chinese state news agency says the country will lift punitive tariffs imposed on U.S. soybeans and pork. Both China and the U.S. have made conciliatory gestures ahead of upcoming negotiations that will hopefully lead to an end to the trade war between the two nations. The Chicago Tribune says China will suspend tariff hikes on soybeans, pork, and some other farm goods. The Chinese Commerce Ministry says Beijing also supports “domestic companies in purchasing a certain amount of U.S. farm produce,” but didn’t give out any specific details. A release from the National Pork Producers Council says, “If media reports are accurate, this is a most welcome development.” The Chinese have placed punitive tariffs of 60 percent on most U.S. pork products, bringing the effective tariff rate for most U.S. pork to 72 percent. NPPC President David Herring says, “U.S. pork exports could singlehandedly make a huge dent in the trade imbalance with China. When you consider that China is the largest producer and consumer of pork in the world, the importance of this market to U.S. pork producers is clear.”
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China Buys Soybeans Ahead of Trade Talks
Privately run Chinese firms bought at least ten boatloads of U.S. soybeans late last week. Reuters says that was the most significant Chinese purchase since June. The move comes ahead of high-level talks next month which both sides hope will end a trade war that’s gone on for over a year. The purchases totaled more than 600,000 tons and will be shipped out from export terminals in the Northwest U.S. between October and December. Reuters says the purchases are hopefully another indication that trade tensions between the two countries are easing. Talks hit another low point last month when China suspended all U.S. farm product purchases in response to threats by President Trump to impose more tariffs on Chinese imports. Jack Scoville, Vice President of Price Futures Group in Chicago says, “I’m impressed that the day they allow their commercial interests to buy from the United States, we’ve got this much sold immediately. Clearly, they’re trying to show what they can do if we get back to a normal trade relationship.” Also, late last week, the USDA reported China buying 10,878 tons of U.S. pork in the week ending September 5, the most in a single week since May.
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Farm Leaders, Congressmen Rally for USMCA
Farm group leaders and members of Congress gathered at the National Mall in Washington, D.C., last week to rally for approving the U.S.-Mexico-Canada agreement on trade. The rally happened in front of a 25-foot RV decorated with pro-USMCA signs that had traveled 20,000 miles to 30 states and made 100 stops to promote approval during a “Motorcade for Trade” event sponsored by Farmers for Free Trade. The Hagstrom Report says House Ag Committee Chair Collin Peterson of Minnesota was in attendance. He’s already deviated from his personal history of opposition to trade agreements by endorsing the USMCA months ago. Peterson told folks attending the rally to be patient, but to also expect a vote sometime this fall. While U.S. Trade Rep Robert Lighthizer has sent his proposals to address Democrat concerns to House leadership, Peterson says he hasn’t seen them yet. Farmer leaders also repeated earlier statements that USMCA will provide farmers with new market access to Canada and Mexico while keeping the zero-tariff platform they rely on. Farmers for Free Trade also held a roundtable discussion last week for ag groups to discuss the impact of the USMCA on each sector.
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Top Democrat Attempting to Block Trade Aid
House Appropriations Committee Chair Nita Lowey of New York is proposing to block a White House request regarding its farm trade aid program. A Washington Post review of the draft legislation says it would potentially mean trouble for President Trump’s ability to direct aid payments to thousands of American farmers. A key Republican lawmaker says the Democrat’s move could potentially stall a key bill needed to avoid another government shutdown. The farm bailout is one of several unresolved issues that lawmakers will have to work through to meet a deadline by the end of this month. Up until now, the payments haven’t needed congressional approval. However, the timing of the next round of payments is directly tied to approval from Congress. The USDA is planning to spend about $28 billion in payments over two years. However, the program Trump is using for the payments has a $30 billion spending limit, which they’re expected to hit this year before completing the second round of payments. Republicans have said they won’t support the government funding bill if it leaves the farm payment issue unresolved.
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Trump Touts “Progress” on Biofuels Deal
President Donald Trump says his administration has made progress on a biofuel reform package after meeting with key farm-state senators late last week. The meetings were part of an ongoing effort to boost ethanol demand to help hard-hit corn farmers. Trump is having a hard time trying to appease two key constituencies, Big Oil and Big Corn, that he hopes will help propel him to reelection in 2020. “I think we had a great meeting on ethanol for the farmers,” Trump said to reporters at the White House last week. “Let’s see what happens.” Politico says despite recent meetings, it appears the White House doesn’t intend to slow down the Environmental Protection Agency’s use of waivers that allow some refiners to ignore ethanol-blending requirements under the Renewable Fuels Standard. It also seems as though the White House won’t offset the volumes expected to be lost to those exemptions in the annual rule. Trump is pushing a plan to add another 500 million gallons of ethanol and 500 million gallons of advanced biofuels to the 2020 blending mandate to appease farmers.
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Wisconsin Legislation will Stop Mislabeling of Dairy Products
The Wisconsin Dairy Business Association is applauding three state lawmakers for new legislation designed to stop the use of misleading labels on imitation milk and other “dairy” products. The legislation would ban the labeling of products as milk or as a dairy product or ingredient if the food was not made from the milk of a cow, sheep, goat, or other mammals. Tom Crave, DBA President, says, “The plant-based food industry increasingly masquerades its products as real dairy foods. This mislabeling confuses customers who often make judgments about a food’s nutritional value based on its name.” Crave says words do matter. “Milk is milk and cheese is cheese,” he adds. “Customers deserve transparency.” A recent national survey about imitation cheese confirms customer confusion. About one-quarter of customers mistakenly think plant-based products that mimic cheese contain milk. About one-quarter of customers purchase plant-based foods that mimic cheese because they believe them to be low in calories and fat, as well as without additives. The reality is plant-based foods contain a comparable amount of fat and calories and substantially more additives than dairy cheeses.
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Democrats are proposing at least a delay in Market Facilitation Payments to farmers hit hard by ongoing trade wars with China and other countries. House Appropriations Chair Nita Lowey is proposing to leave an extension of spending authority for tariff rescue, or Market Facilitation Program payments, out of a short-term spending bill to keep the government open.
The Commodity Credit Corporation’s $30 billion borrowing limit is expected to be hit before USDA completes the second-round of MFP unless Congress acts. American Farm Bureau’s RJ Karney says AFB is not pleased…
“Farm Bureau does have serious concerns with the recent reports, with the draft House continuing resolution that’s circulating.”
Especially with farmers facing trade wars, disasters, continued low prices, and labor shortages…
“And, any attempt to not include the Commodity Credit Corporation’s anomaly, would be detrimental to farmers and ranchers.”
And could also affect other payments like CRP, ARC, and PLC. Republicans say they won’t accept MFP limits with the trade disputes continuing, but can’t say if the move is a negotiating tactic or simply politics, in trying to hurt the president with his base. But AFB’s Karney adds…
“This was the initial draft that was sent over to the Senate. So, our understanding is, there are negotiations underway…and, as the chairwoman said, things could still change.”
Including if the GOP-controlled Senate insists on an MFP ‘fix’ in its short-term spending bill. Without a ‘fix,’ USDA says the timing of the trade payments could be impacted. Just 2-point-3 billion of 14-and-a-half billion had been paid as of early September.
