4 years, 10 months ago AFBF
President Trump announced his intention to impose a five percent tariff on Mexican imports because of illegal immigration. He vows to keep those tariffs in place until Mexico stops illegal immigrants from entering the U.S. through the southern border. The proposed move will take effect on June 10 and doesn’t give Mexico a lot of time to react to it. Trump says the levy “would gradually increase until the illegal immigration problem is remedied, at which time the tariff will be removed.” The tariffs could potentially go as high as 25 percent by October 1. The move comes just days after Trump removed the tariffs on steel and aluminum imports that caused direct retaliation against U.S. farm goods. Economists are warning that the move could be extremely negative for both countries. Bloomberg describes the initial reaction from Mexican officials as “measured.” Mexican President Obrador said in a letter to Trump on Twitter that he “doesn’t want confrontation.” Mexico’s foreign minister and other officials were scheduled to visit Washington D.C. last week in order to come to an agreement. Mexico’s undersecretary for foreign relations for North America told reporters that Mexico wouldn’t retaliate before discussing the matter with the U.S. However, if Trump follows through on the threat, the undersecretary says that “would be a very serious matter.”
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NPPC: Leave Mexican Tariffs at Zero
The National Pork Producers responded to President Trump’s plan to impose a five percent tariff on all Mexican imports by June 10. NPPC President David Herring appealed to Trump to reconsider his plans to open a new trade dispute with Mexico. “American pork producers cannot afford retaliatory tariffs from its largest export market which Mexico will surely implement,” he says. “Over the last year, trade disputes with Mexico and China have cost hard-working U.S. pork producers and their families about $2.5 billion.” Herring is asking Washington to move forward with ratification of the U.S.-Mexico-Canada trade agreement and preserve zero-tariff pork trade in North America for the long term. “We’re also asking for a trade agreement with Japan,” he says, “as well as a resolution to the trade dispute with China. U.S. pork has a historic opportunity to make inroads into the Chinese market as the country continues to struggle with the African Swine Fever outbreak.” For most of the past year, American pork farmers have lost about $12 per hog due to trade retaliation by Mexico, which recently lifted the retaliatory tariffs last week. Those numbers come directly from Iowa State University Economist Dermot Hayes, who says U.S. pork producers will lose the entire Mexican market if they face protracted retaliation. Mexico brought in 20 percent of total U.S. pork exports last year.
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EPA Approves Year-Round E15
The U.S. Environmental Protection Agency issued a final rule that will allow consumers uninterrupted access to E15 all year long. Vital Dot Com says the announcement comes just in time for the official start of the summer driving season. The new EPA rule changes a nearly ten-year-old limitation on year-round E15, which restricted E15 sales in most markets from June 1 to September 15. U.S. renewable fuels supporters are hopeful that this will get things going in the right direction for boosting ethanol sales across the country and give a much-needed shot-in-the-arm to the struggling ag economy. While more than 1,800 fuel stations across the country in 31 states currently offer E15, that number will likely get much bigger because of the new ruling. Industry experts say many more retail chains will likely install E15 pumps in the months ahead. Biofuel industry advocates say the new rule is quite a milestone for the industry and ends a decade of work by many people, including congressional members, farmers, and biofuels advocates from across rural America.
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McKinney to Lead Record-Sized Trade Mission to Columbia
Colombia and Panama are among the fastest-growing markets in the western hemisphere for U.S. farm and food products. U.S. Under Secretary for Trade and Foreign Agricultural Affairs Ted McKinney will lead a group of American exporters seeking to tap into that market potential on the largest-ever international trade mission. The group will head to Bogota, Columbia, on June 4-7. “The record size of this trade mission delegation demonstrates the degree of U.S. exporter interest in these markets,” McKinney says. “I’m thrilled that the representatives from 54 agribusinesses and associations, as well as six state agriculture departments, are on board and ready to connect with potential customers from both Colombia and Panama.” The United States entered into trade agreements with both countries in 2012 and the agricultural export growth to both countries has been robust. “Our food and farm exports to Colombia have nearly tripled, from $1.1 billion in 2012 to a record $2.9 billion in 2018,” McKinney says. “And while Panama is a much smaller market, we’ve also seen our exports go up significantly, from $490 million in 2012 to $683 million last year.”
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Flooding Problems Moving Further South
Flooding has hit farmers from Minnesota down to the Gulf of Mexico hard, thanks to heavy rainfall in the Mississippi River and Missouri River watersheds. A DTN report says flooding problems are spreading further south. Storms along the Arkansas River watershed have cost thousands of people their homes in both Oklahoma and Arkansas. The Army Corps of Engineers is warning Arkansas farmers and state residents that flooding may last weeks or even months. Arkansas farmer Robert Stobaugh spoke on an Arkansas Farm Bureau podcast recently, saying that he already has corn underwater, but he did stop planting right before the river waters rose. Mike Schulte, Executive Director of the Oklahoma Wheat Commission, tells DTN that the combination of rain, flooding, tornadoes, and hail have probably dented the winter wheat crop harvest by 20 percent. That’s especially disappointing because Oklahoma had enjoyed perfect grain-fill weather, and a harvest forecast last month had come in at 119 million bushels of wheat. Arkansas Governor Asa Hutchinson sent a federal disaster request to Washington, D.C., last week. Louisiana Governor John Bel Edwards says the president recently approved federal disaster aid for his state. Mississippi Governor Phil Bryant says the flooding in his state is “historic,” noting that of the 544,000 acres of flooded land, 250,000 of those acres are farm ground.
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African Swine Fever Now In North Korea
North Korea is now on the list of Asian countries infected by African Swine Fever. The industry website Meating Place Dot Com says the country’s ministry of agriculture confirmed the first outbreak took place on May 23. The World Organization for Animal Health says the outbreak resulted in 77 pigs dying from the disease, while another 22 pigs were culled from the herd. A new report from CoBank says China and southeast Asia are already expected to be facing a massive shortfall in animal protein supplies over the rest of this year, into 2020, and possibly for years to come yet. China accounts for half the world’s pork production and consumption all by itself. The Chinese breeding herd is down 22 percent from last year and the overall hog herd numbers are down 21 percent. However, estimates from industry experts say those numbers are likely higher than what China has been reporting. Feed demand is also expected to drop significantly and could be down long term as China tries to become more feed-efficient while it rebuilds its domestic herd numbers. Vietnam says it’s lost 1.7 million pigs to its own ASF outbreak, culling a half-million pigs in the last two weeks alone. The World Organization for Animal Health recently announced it launched a global initiative with the United Nation’s Food and Agriculture Organization designed to control the disease and boost prevention efforts around the world.
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Summertime E15 sales and threatened new tariffs on Mexican goods collided last week in a ‘good news, bad news’ scenario for U.S. agriculture. Ethanol and farm groups hailed EPA’s final rule to allow year-round sales of E15 gasoline, while also boosting transparency in the ethanol compliance-credit market to detect price manipulation, which has been an oil industry complaint. EPA’s Air Office chief Bill Wehrum called the rule the oil industry still plans to challenge in court, but President Trump promised to corn and ethanol producers, a ‘win-win’…
“We think it’s going to provide a substantial additional market opportunity for ethanol producers…and we think it will provide greater market confidence for those responsible for complying, which, for the most part, is the oil refiners.”
But Wehrum strongly denies the ethanol industry’s charge that the EPA indiscriminately handed out small refinery hardship waivers, destroying ethanol demand, and says changes to blender-pump requirements, also of concern, are being considered separately. As for the last-minute E15 rulemaking, just in time for the summer driving season…
“Over time, we believe, and the industry believes, you’ll see E15 sold, as the infrastructure and distribution system catches up to the availability of this fuel…will take some time…so it’s not going to happen today, and it’s not going to happen tomorrow, but it’ll happen over time.”
Some 15-hundred stations already pump E15. Meantime, President Trump threatened Mexico with a new 5-percent tariff, rising to 25-percent over several months, unless it stops massive illegal immigration—a move seen as undermining ratification of the NAFTA-replacing, USMCA. American Farm Bureau’s Dave Salmonsen…
“We certainly don’t want to get back in a situation where Mexico feels the need to retaliate…and whether it’s on those same ag products, again, or maybe a different set of products. We just got done with that, we don’t want to start that up, again.”
The latest tariff spat comes just as the U.S., Mexican, and Canadian governments began taking the formal steps needed to start USMCA ratification. Mexico’s foreign minister headed here last Friday to try to get President Trump to find another solution for the border migration crisis.
