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China Confirms Phase One Agreement Ag Purchases

4 years, 6 months ago AFBF

Chinese officials confirmed this week they are working on finalizing a “phase one” agreement with President Donald Trump that includes significant purchases of U.S. ag products. An official from China’s Commerce Ministry confirmed the purchases to reporters, but did not provide details on how much U.S. ag products China will buy. The spokesperson says, “China will increase U.S. farm purchases based on domestic demand and market principles,” adding the U.S. will “provide favorable conditions.” China will move forward with the purchases if President Trump cancels a planned round of tariff increases in December. President Trump says the agreement included Chinese purchases of U.S. ag products worth $40-50 billion over the next two years, and suggested the initial agreement could be finished and signed next month. Agriculture is taking a wait and see approach. Missouri Farm Bureau President Blake Hurst told Yahoo! Finance, “The challenge we have is that we’ve been promised a lot of things throughout these negotiations and not all of them have come to fruition.”

U.S. Dairy Thanks Trump for EU Trade Tariffs

The National Milk Producers Federation Thanked President Donald Trump for including European dairy products on a new tariff list. The organization Thursday sent a letter to Trump to “commend his Administration for its excellent judgment” for including the products. The tariffs stem from a U.S. World Trade Organization complaint about illegal subsidies to Airbus. The WTO approved the tariff list this week. However, Italy requested an agreement on a solution, rather than U.S. tariffs, during a White House visit. NMPF urged President Trump to stand with dairy farmers "and resist Italy's request that he side with the Italian farmers and cheesemakers who have blocked” U.S. cheeses from store shelves in the European Union. NMPF says the U.S. is running a $1.5 billion dairy trade deficit with Europe because of unfair trade practices that largely block U.S. access. EU policies such as Italian-initiated bans on American-made cheeses mean the EU can ship $1 billion in cheese each year while U.S. cheese exports to the EU are at $6 million.

Fed Beige Book: Farm Finances Deteriorating

The Federal Reserve Bank’s Beige Book updated this week suggests farm financial conditions are deteriorating. The report, published eight times a year, says the agriculture sector remained weak, while crop and cattle prices remained relatively stable. Bankers reported modestly higher loan demand and an improvement in loan quality. However, many Midwest districts report lower crop production and yield forecast. Lenders remain concerned as the ongoing impacts of adverse weather, weak commodity prices and trade disruptions, will continue. However, the Kansas City Federal Reserve Bank did note that the distribution of 2019 USDA trade relief payments could provide additional short-term support to farm cash flows. The Federal Reserve Bank of San Francisco reports lumber producers are scaling back due to lower exports, and apple growers report oversupply. And California farmland prices are decreasing due to current trade issues. Meanwhile, the Federal Reserve Bank of Texas reported trade issues were still very prominent on the minds of agricultural producers, but some banks reported more optimism regarding a resolution.

Stabenow Questions USDA SNAP Change During Senate Hearing

Senator Debbie Stabenow Thursday questioned the Department of Agriculture over its categorical eligibility rule proposal for the Supplemental Nutrition Assistance Program. USDA this week published an analysis finding the rule would remove nearly one million children from automatic enrollment for free school meals, and 40,000 would no longer be eligible for free meals. During a Senate Agriculture Committee hearing on farm bill implementation, Stabenow alleged that USDA “has continued to ignore what we’ve put in the farm bill,” which she says rejected changes to SNAP. Deputy Agriculture Secretary Stephen Censky says the changes are to ensure “eligibility requirements are being enforced.” Censky cited criticism over USDA's handling of eligibility by the Government Accountability Office, adding USDA "needs to do a better job" of making sure eligibility requirements are being enforced, and that states are not finding loopholes to increase enrollment. Stabenow says the analysis published this week by USDA, is flawed, adding "I would strongly urge you to reconsider" the proposal. USDA has reopened the comment period for the rule.

Organic Corn and Soybean Farmers Face Sharp Production Declines

Spring weather has taken a toll on U.S. organic commodity producers, shown by a significant drop in overall corn and soybean production for 2019, according to a new report. Organic industry data service Mercaris (Meh-CAR-us) just released its 2019 fall Organic Commodities Outlook. The report predicts a 12 percent year-over-year decline in organic corn production and a 14 percent decline in organic soybean production due to challenges during spring planting. In the Corn Belt, the report estimates organic wheat production will see a 19 percent decline. However, overall U.S. organic wheat production is predicted to increase seven percent over 2018 thanks to gains in areas outside of the Corn Belt, namely the High Plains and West regions. Meanwhile, organic livestock production growth is expected to slow but will still see a one percent increase overall. Because of that, imports should bridge the gap between domestic organic feed demand and U.S. 2019 production. Mercaris, who published the report, is a data services firm launched in 2013 focused on growing demand for organic foods.

USDA Declares United States Free from Plum Pox Virus

The Department of Agriculture Thursday declared the U.S. free of plum pox virus. USDA undersecretary for marketing and regulatory programs Greg Ibach made the declaration at a ceremony, saying the 20-year fight against the disease “is officially over.” Ibach says USDA has eliminated the disease, protection the $6.3 billion U.S. stone fruit industry. USDA calls plum pox is a serious disease impacting stone fruit such as plums, almonds, and peaches. No other countries where plum pox disease is known to occur have successfully eradicated the disease. Plum pox does not kill infected trees outright. However, it causes severe yield losses and greatly reduces the marketability. The virus spreads over short distances by aphids and over long distances via the movement of infected nursery stock or by grafting infected buds onto healthy trees. The disease was first detected in Pennsylvania in 1999. A USDA program helped test, remove and avoid infected trees.


President Trump says the U.S. has every right to impose tariffs against the European Union after winning a World Trade Organization case against EU subsidies to aircraft-maker Airbus.

After winning a WTO dispute, the U.S. is not afraid of a fight with EU regarding tariffs on $7.5 billion in EU goods…

“But, in a war of tariffs with the European Union, the trade imbalance is so great that we can’t lose that, because they do much more business than we do.”

But, Italy’s President Sergio Mattarella (mat-er-rell-uh) speaking through a translator during an Oval Office press conference with Trump, disagreed…

“And I believe it would be best to find a solution, immediately, instead of imposing tariffs, which would lead to other tariffs…and that would be a damage to both of our economies.”

Mattarella cited a pending EU WTO case against U.S. subsidies to Boeing.  But Trump says EU barriers to US products have gone on, too long…

“Our farm products, very hard to get them in…our cars, very hard to get them in.”

The President has already included some EU dairy products, including Italian cheeses, on a list of WTO-authorized retaliatory tariffs, at the request of the National Milk Producers Federation, citing a $1.5 billion dairy export deficit with the EU.

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