6 years, 2 months ago AFBF
A recent report by CoBank expects the farm economy to tighten again in 2018, and experts say that will lead to more farmers filing Chapter 12 bankruptcy. DTN-The Progressive Farmer reports that wheat and dairy producers are among the hardest hit, with an increase in Chapter 12 bankruptcy filings in Kansas and Wisconsin, reaching the highest level since 2012 last year. the number of Chapter 12 filings has been on the rise since 2014 when there were about 380 filings. That number spiked to just more than 500 in 2017. Chapter 12 is designed specifically for farmers with regular annual income and allows them to stop debt collection and establish repayment plans of three to five years with creditors. The law also allows farmers to restructure debt without forming creditors' committees. Meanwhile, the report points out that trade is “mission critical” for agriculture in 2018. CoBank says: “U.S. agriculture has a lot at stake as these negotiations unfold, and the rhetoric is likely to get worse before it gets better.”
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TPP 11 Agreement in Place, Signing set for March
Just as Trans-Pacific Partnership nations seemed ready to leave Canada behind, the nation has reached an agreement to sign the trade pact. Renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the agreement comes after talks in Japan this week, according to CBC News of Canada. With Canada now on board, with the approval of its agriculture sector, the TPP 11 agreement is scheduled for a signing ceremony in March. A senior Canadian official says the deal also opens Canada's beef exports to Japan at the expense of America cattle farmers. U.S.-based National Cattlemen’s Beef Association says the U.S. withdrawal from TPP is a “missed opportunity.” NCBA will have a representative in Canada attending the North American Free Trade Agreement talks later this week. An NCBA spokesperson says: “We encourage negotiators in Montreal to continue building on the progress made in previous rounds so the United States can focus on tearing down trade barriers in Asia and around the world.”
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Study: Killing NAFTA Kills Manufacturing, Agriculture Jobs
A new report by Business Roundtable suggests that ending the North American Free Trade Agreement would result in job losses of more than 1.8 billion in the United States. As negotiators are meeting in Canada this week, the report was released to “urge the administration to take into account the potential damage of withdrawing from NAFTA.” Drafting two scenarios, the report considers potential tariff increases by the U.S. on Canada and Mexico and increases in duties on most-favored-nation rates, while considering no change in trade between Mexico and Canada. The report finds that most of the job losses would affect workers holding lower-skilled occupations, including production workers in manufacturing and agriculture and lower-wage workers in services industries. The report estimates the if the U.S. would walk away from the agreement, agriculture exports would fall between 4.7 and 6.6 percent, up to an initial value loss of $70 million. Meanwhile, the U.S. Grains Council says U.S. corn exports last year were worth $3.2 billion to NAFTA member countries.
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U.S. Ag, Equipment Companies, Benefiting from Trade with Cuba
U.S. agriculture is benefitting from trade with Cuba, according to new figures released by the U.S.-Cuba Trade and Economic Council. Exports of food and agricultural products from the U.S. to Cuba in November of 2017 were pegged at $21.2 million, compared to $10.59 million in November 2016, and $6.24 million in November of 2015. There were also substantial increases in sales of farm equipment and products for hotels and airlines. Chicken in various forms was the biggest export, followed by herbicides, according to the Hagstrom Report. In 2015 and 2016, the Obama administration expanded the list of products authorized for export to Cuba from the United States, as long as the importers were not affiliated with the Cuban government. Further, John Deere and Caterpillar opened agricultural distribution centers and have been the biggest exporters of farm equipment, but neither company has issued sales figures for their operations in Cuba.
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Largest East Coast Refiner Bankrupt, Cries Foul over RFS
The largest oil refinery on the U.S. East Coast will file for Chapter 11 bankruptcy, and Philadelphia Energy Solutions LLC, owner of the complex, claims the Renewable Fuel Standard is to blame. Since 2012, Philadelphia Energy Solutions has spent more than $800 million on credits to comply with the law, making it the refiner's biggest expense after the purchase of crude, according to Reuters. The company owns two refineries and can convert about 335,000 barrels of crude oil per day to products such as gasoline, jet fuel and diesel, employing about 1,100 people. The bankruptcy comes six years after a private equity firm, along with others, rescued the company from financial distress in a deal supported by tax breaks and grants. Following an agreement with its creditors, the company has secured access to $260 million in new financing, and said it expected the bankruptcy filing to have no immediate impact on its employees.
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Millennials Spend Less Per-Person on Groceries
Recent data released by the Department of Agriculture shows that millennials are spending less per-person at the grocery store. A recent analysis by USDA's Economic Research Service of 2014 grocery store data found that compared to older generations, millennial-headed households spent the least per person on food at home. However, like the other generations analyzed, millennial households with higher incomes tend to spend more on grocery store foods than millennial households with lower incomes. The data shows that millennials spend between roughly between $75 and $150 per month, per-person, on groceries. Meanwhile, the data shows that baby boomers spend between roughly $125 and $200 per month, per-person, on groceries. However, USDA notes that differences in food-at-home spending between the generations may reflect the younger generations' stronger preference for eating out, which may change as they age.
