5 years, 2 months ago AFBF
President Donald Trump had a lot to say about trade during his State of the Union speech before Congress. However, there may be a battle over trade policy coming in the near future. Trump’s hardline policies are drawing increased scrutiny on Capitol Hill. There’s another bipartisan bill coming before Congress designed to limit the president’s ability to impose duties based on national security. As the president made his first-ever address to a divided Congress, he spoke about his signature achievement, the USMCA trade agreement. Politico says the new agreement now partly rests in the hands of the Democratic majority in the House. Trump calls the agreement a “win for farmers and manufacturers,” as well as a no-brainer when compared to the “historic trade blunder and catastrophe known as NAFTA.” Democrats are already asking for some changes to the USMCA, including stronger labor protections. Several lawmakers also told Politico that there isn’t any hope of passing the pact while the steel and aluminum tariffs on Canada and Mexico are in place. Trump was more guarded in talking about trade discussions with China, saying “any agreement with Beijing must include real, structural change to end unfair trade practices, reduce the chronic trade deficit, and protect American jobs.”
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Ag Reacts to SOTU Speech
Agriculture groups heard some good things in the State of the Union speech. However, the reactions were somewhat mixed. Tariffs Hurt the Heartland group spokesman and former Congressman Charles Boustany (Boo-STAN-nee) reacted to President Trump asking Congress for more authority to impose tariffs through the Reciprocal Trade Act, which is currently before Congress. “The fact that the bill is dead on arrival in Congress is a good sign that Congress has had enough,” Boustany says. “it’s not surprising that a bill abdicating Congressional authority to oversee tariff increases isn’t popular.” National Cattlemen’s Beef Association President Jennifer Houston says, “We welcome President Trump’s call for passage of the USMCA agreement. With 96 percent of our potential consumers outside of our borders, foreign access is key for cattle producers.” American Farm Bureau President Zippy Duvall says, “Farmers and ranchers across the country need reforms to our immigration system, and we echo the president’s call for Congress to pass the USMCA agreement.” National Farmers Union President Roger Johnson says the speech didn’t recognize the harsh realities facing U.S. farmers. “If the President truly wants to support American farm families, he’ll begin to restore our reputation as a reliable trading partner and stop straining relationships with our top trading partners,” says Johnson.
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Battle Looming on President’s Right to Impose Tariffs
The U.S. Chamber of Commerce, Business Roundtable, and two other coalitions with dozens of trade associations involved are backing legislation dealing with tariffs in national security situations. Legislation before Congress would require congressional approval before the president can impose tariffs based on “national security.” President Donald Trump used that authority to impose tariffs on steel and aluminum imports, and he’s threatened to do the same thing with foreign-made vehicles and imported auto parts. Similar bills introduced last year to limit that authority didn’t make it through Congress. However, it’s a little more uncertain now that the Democrats control the House of Representatives. Business groups of all varieties say that the Trump tariffs and retaliatory duties that came from our trading partners in response have hurt American businesses. They say U.S. industry, farmers, and workers have all suffered financial strain and it’s time for Congress to step up and assert itself when it comes to American trade policy. Rufus Yerxa, president of the National Foreign Trade Council, says, “The support of such a broad cross-section of industry, agriculture, and retail groups says a lot about how harmful the steel and aluminum tariffs have been.” The Bicameral Congressional Trade Authority Act was introduced in both the House and Senate on January 30th, and supporters are still trying to figure out how much interest there is from other lawmakers.
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Beef Production Likely to Grow in 2019
A Drovers report says the final beef production numbers for 2018 will soon be out as USDA data is moving again after the government shutdown. The current numbers for 2019 will also soon be released by USDA. The January Cattle on Feed Report will come out on February 22nd. With all but the last few days of slaughter and carcass data out, 2018 beef production totals are all but wrapped up. Commercial beef production in 2018 should total 26.9 billion pounds. That’s 2.6 percent higher than the previous year and just lower than the record U.S. beef production total of 27.1 billion pounds in 2002. Beef production in 2019 is expected to continue growing. The forecast for this year comes in at a record 27.4 billion pounds, 1.8 percent higher than last year. Drovers says the total beef production number is likely to grow through at least 2020. Steer carcass weights increased just two pounds year-over-year in 2018 to 880 pounds, a smaller increase than most expected. Heifer carcass weights increased five pounds over the same period to 816 pounds. The modest increase in steer and heifer carcass weights helped to alleviate industry concern that relatively inexpensive feed would lead to even higher carcass weights.
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New Regulations Must Protect Both Farmers and Wetlands
The U.S. Department of Agriculture is moving forward on Highly Erodible Land and Wetland Conservation regulations. The American Farm Bureau submitted comments to the agency asking it to make sure the new Interim Rule balances the benefits for both farmland and wetland, as Congress intended. As it was written, the Interim Rule makes it much more difficult for producers to participate in the program and fails to give farmers an opportunity they should have to participate in the process. Farm Bureau says in written comments to the USDA that, “These conservation compliance programs operate fundamentally as regulatory programs, so they should operate with all the duties and rights that such a regulatory program entails. Equally important, all guidance, policy, and rules must match up with the statute.” Farm Bureau says USDA has been making regulatory determinations for far too long based primarily on guidance and policy that wasn’t put through the required public process. Farm Bureau says that error permeates the wetland identification and appeals process. “USDA holds all the cards, leaving farmers without the necessary tools to protect their property and due process rights,” the group says in its written comments.
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Brazil Soybean Harvest Lower but Still Solid
Soybean harvest in Parana (PAIR-ruh-nah), Brazil’s second-largest soybean-producing state, reached 25 percent, well ahead of last season’s pace. Government forecasting agency Deral says, although the state suffered through a mini-drought in December, early yield results show no material losses. Only six percent of the state's soy fields are reportedly in bad condition, compared to none last year. Deral says another 24 percent are considered "average," compared to 14 percent in the previous cycle. The remaining fields are considered in good condition. So, what does all that mean for farmers who are keeping an eye on the Brazil harvest? The weather issues in Brazil are not widespread nor significant enough to put a major dent in production. Brazil’s crop will be short of the record-high estimates of 122 million metric tons. Elsewhere in South America, Argentina is said to be looking at a good harvest, although they are still early in the season. Harvest expectations in Argentina look like a 53-to-55 million metric ton crop there, coming off 38 MMT in 2018.
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Pragmatism, not just politics, is weighing on farm goals in the wake of President Trump’s State of the Union address. Lawmakers’ divisions aren’t just partisan. Trump ally and GOP Finance Chair Chuck Grassley says China’s recent good-faith soybean buys don’t make up for damage from Trump’s tariff wars…
“Prior to the tariff, China was buying 60-percent, and now it’s 14-percent. If the current situation continues, there’s no doubt several million more acres of land could be developed in South America for soybean production. Once those supply chains develop, there’s little reason to believe they would suddenly be disbanded if China dropped its 25-percent tariff on US soybeans, following a negotiated agreement.”
Blaming the “unpredictability” of the administration’s trade policies, while hoping for a China deal including enforceable reforms by the March first deadline to head off more tariffs. President Trump also urged lawmakers to come together to pass the new U.S.-Mexico-Canada trade agreement. But trade chair Grassley says lawmakers will want to first take back some of the president’s Section 232 powers to levy tariffs on metals imports…
“He’s got to remove 232 tariffs so that Congress can focus on the US-Mexico-Canada Agreement, because it won’t be brought up, either by me or, if it was brought up by me, without that consideration, it’s not going to go forward. So, I want it to go forward. And, so, the first step is on aluminum and steel, to get those tariffs off.”
American Farm Bureau, National Cattlemen, and others echoed the president’s call to quickly ratify the USMCA. National Farmers Union blamed Trump for lost markets and further farm price losses.
