4 years, 10 months ago AFBF
The Ag Economy Barometer dropped again in May. The barometer reading of 101 was 14 points lower than a month earlier and was the lowest barometer reading since October 2016. For the second month in a row, the decline in farmer sentiment was attributable to big declines in both the Index of Current Conditions, which fell from 99 in April to 84 in May, and the Index of Future Expectations, which fell from 123 in April to 108 in May. A rating below 100 is negative, while a rating above 100 indicates positive sentiment regarding the agriculture industry. This month's declines in the barometer and its two sub-indices effectively erased all of the large improvement in farmer sentiment that took place following the November 2016 election. And, producers’ confidence that the trade dispute with China will be resolved quickly is dissipating as farmers were also less confident that the trade dispute would ultimately be resolved in a way that favors U.S. agriculture than they were earlier in the year.
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Federal Reserve Hints at Openness to Lower Interest Rates Due to Trade War
Federal Reserve Chairman Jerome Powell is open to cutting interest rates if necessary, due to trade disputes between the U.S. and others. Powell opened a Chicago Fed conference stating “we do not know how or when these issues will be resolved,” adding “we are closely monitoring the implications," according to Bloomberg News. Powell says the Federal Reserve will "act as appropriate" to sustain the current economic expansion in the United States. Earlier in the week, St. Louis Fed President James Bullard called for a rate cut, citing the threat to economic growth posed by trade tensions. Investors appear to expect up to a half percentage point cut in the rate. Meanwhile, President Trump has increased trade tensions, escalating the trade war with China after nearly reaching an agreement, and threatening new tariffs against Mexico. The already historically low-interest rates prompt some fear that the Federal Reserve Bank would have a limited response, should an economic recession occur, as rates generally can't be cut below zero.
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EPA Enacts Exemption for Farmers from Emission Reporting
Environmental Protection Agency Administrator Andrew Wheeler Tuesday announced the final rule amending the Emergency Planning and Community Right-to-Know Act, which exempts farmers. The amendments clarify that reporting of air emissions from animal waste at farms is not required under the law. Wheeler says the change “allows emergency responders and farmers to focus on protecting the public and feeding the nation, not routine animal waste emissions.” Farm groups welcomed the exemption. The rule is the final piece in the implementation of the FARM Act, which passed Congress with bipartisan support last year and eliminated the need for livestock farmers to estimate and report emissions from the natural breakdown of manure. National Pork Producers Council President David Herring says the measure was approved because “it was unnecessary and impractical” for farmers to report. And, National Cattlemen’s Beef Association President Jennifer Houston says Congress made “a common-sense decision” to exempt livestock producers, adding NCBA is “glad to see EPA fully implement the law.”
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Brazil Stops Beef Exports to China over BSE Case
Brazil temporarily halted beef exports to China this week after reporting an atypical case of mad cow disease. The ban was implemented Monday morning. Brazil’s Agriculture Ministry says the suspension is part of a bilateral health protocol signed by the two countries in 2015. China is the largest beef importer by sales from Brazil, according to Reuters, as China purchased $1.5 billion of Brazilian beef last year, or 322,000 metric tons. The case of atypical bovine spongiform encephalopathy (in-sef-o-lop-athy), commonly referred to as mad cow disease, was reported last Friday in a 17-year-old cow in Mato Grosso, Brazil’s leading agricultural state. The case was considered “atypical” as the animal contracted the BSE protein spontaneously, rather than through the feed supply. Brazil expects the temporary ban of exports to China to be lifted quickly, as an Agriculture Ministry spokesperson points out that Brazil is still considered free of mad cow disease by the World Organization for Animal Health.
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National Chicken Council: E15 to Increase Corn Price and Supply Volatility
The National Chicken Council says the recent rule to allow for year-round E15 brings the “potential for price and supply volatility in the corn market.” Council President Mike Brown told meat industry publication Meatingplace the Reid vapor pressure waiver for E15 would result in a rapid expansion of corn use under the Renewable Fuel Standard. Brown says the Environmental Protection Agency’s rule allowing year-round E15 “neglected to consider the impact on the broiler industry, and for poultry and livestock feeders.” The EPA announced the final rule last week, just in time for the summer driving season and to the delight of the ethanol industry and corn farmers. Meanwhile, the American Petroleum Institute claims the EPA “acted outside its statutory authority” in granting year-round E15 through a rushed rulemaking process. API, long opposed to the RFS, claims E15 could harm consumers and their vehicles. However, ethanol groups and the National Corn Growers Association contend E15 is good for farmers, consumers and the environment.
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FSA to Begin Accepting Nominations for County Committee Members
The Department of Agriculture’s Farm Service Agency will begin accepting nominations for county committee members on Friday, June 14, 2019. Producers who participate or cooperate in an FSA program may be nominated for candidacy for the county committee. Individuals may nominate themselves or others as a candidate. FSA Administrator Richard Fordyce says, “there’s an increasing need for diverse representation including underserved producers, which includes beginning, women and minority farmers and ranchers.” Committees make decisions about how federal farm programs are administered locally. Nationwide, more than 7,700 dedicated members of the agricultural community serve on FSA county committees. The committees are made of three to 11 members and typically meet once a month. Members serve three-year terms. Producers should visit their local FSA office to find out how to get involved in their county’s election. All nomination forms for the 2019 election must be postmarked or received in the local FSA office by August 1, 2019.
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Senate Finance Chair Chuck Grassley says he and other Republicans are looking at a possible resolution to block President Trump’s anti-migrant tariffs on Mexico, but hopes it never comes to that.
Grassley says it's not clear yet if lawmakers can use a 'resolution of disapproval,' the way they did when they failed earlier to block the president's emergency border wall declaration…
“…Just what extraordinary power the president’s going to use…is it going to be new? That’d probably be subject to a resolution of disapproval. If it tacks onto some other emergency discussion he’s had, it probably wouldn’t be. So, I’m discussing the president’s latest announcement with my fellow senators…and I’m doing that to determine what action Congress might take.”
Grassley is hopeful that Mexico’s foreign minister here this week, can reach a deal with the White House on the border crisis, averting the tariffs and likely damage to chances for finalizing the U.S.-Mexico-Canada trade deal, key for U.S. agriculture…
“And hopefully, these tariffs will never be implemented, and then we can move ahead with the USMCA, because getting that passed, is my top priority…but, as I said before, we can’t have a trade agreement with significant tariffs in the way.”
Grassley argues the up-to-25-percent tariffs by October, if President Trump goes ahead with them, make USMCA ratification “very difficult,” and could harm other talks with Japan and the European Union…
“It hurts our credibility…and I think that’s one of the big things for the president to move USMCA along, is to enhance our credibility with future negotiations that are going on now with Japan, and possibly in the future, with Europe…and, for sure, it ought to encourage China.
White House officials argue the threatened tariffs are unrelated to the USMCA and continue to demand Mexico stop the mass migration of illegal immigrants into the United States.
