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Chinese Importers Buy Even More U.S. Soybeans

4 years, 6 months ago American Farm Bureau Federation

The U.S. Department of Agriculture says that private exporters reported the sale of 264,000 tons of U.S. soybeans to China for delivery in the 2019/2020 marketing year. The deal comes as hopes continue for a partial trade deal between the world’s two largest economies. Reuters says this is the first U.S. government confirmation of a soybean sale to China since October 11, when President Trump announced that China will buy up to $50 billion in American farm commodities thanks to a partial trade agreement. A prior report showed U.S. soybean export sales of 475,200 tons, which included just 68,300 tons to China during the week ending on October 17. Those numbers were quite a bit lower than analysts’ projections for that week, ranging from 800,000 to 1.6 million tons. Earlier last week, Beijing had offered major Chinese and international soybean processors waivers that would exempt them from tariffs on imports of up to 10 million tons of U.S. soybeans. USDA has confirmed sales totaling six million tons of soybeans to China since the marketing year began on September 1. That compares with just 431,000 tons over the same time in 2018, as well as 8.4 million tons during the same period in 2017, before the trade war.


Ag Sales Could Hit Pre-Trade War Levels by 2020 Election

U.S. farmers could see a return to a pre-trade war level of ag sales to China by the 2020 election. Bloomberg says that would relieve economic pressure on one of President Trump’s key voting blocs as he campaigns for another term. The president announced a tentative partial trade deal back on October 11. China is looking to buy $20 billion worth of agricultural products per year if the partial deal with the U.S. is signed. People familiar with the negotiations told Bloomberg that China would consider boosting that level of purchases as high as $40-50 billion. That would take China’s imports of American commodities back to near-2017 levels before the feud broke out between the White House and Beijing. People close to the situation say increasing the level of purchases would depend on President Trump removing remaining punitive tariffs. Beijing says it will exempt some U.S. agricultural goods from tariffs if the U.S. removes tariffs imposed on September 1 and cancels the tariff hike scheduled for December. President Trump is hoping that he and Chinese President Xi Jinping will sign a phase-one deal when they meet in Chile next month. Chinese officials have also said publicly that talks are progressing.


Mexico Says U.S. Congress Will Move on USMCA Trade Deal Soon

Mexico’s Deputy Foreign Minister for North America said Friday that he believes U.S. lawmakers will begin the process of approving the U.S.-Mexico-Canada Trade Agreement soon. He believes it will move forward in the U.S. Congress now that Mexican President Obrador has vowed to increase wages and funding for labor reforms. A Yahoo Dot Com article says the USMCA must win approval in a divided U.S. Congress, where Republicans control the Senate and Democrats control the House. At a news conference last week, the Deputy Foreign Minister said, “The progress made in dialogue with House Speaker Pelosi, U.S. lawmakers, and negotiators makes us think that the end to this complex story is near, that soon we’ll see the United States initiate the formal process for approving the trade deal.” Mexican President Obrador has vowed to increase wages and other labor provisions in a campaign to convince House Democrats to ratify the North American trade agreement. When reporters asked if Mexico’s push to convince U.S. lawmakers about its commitment to implement the labor reforms was working, the Deputy Minister said, “I think we’re getting there.” President Obrador sent a letter recently to Speaker Pelosi calling for ratification “soon,” to not have the 2020 election process “Impede or delay” its finalization.


Rabo Agrifinance Offering Industry’s First Organic Transition Loan

Farmers looking for organic certification on all or part of their operations can get some financial help from Rabo Agrifinance. The company has developed a loan product so farmers can get the capital they need up front to help with costs associated with changing production practices. Farmers can then schedule loan repayments when they get additional revenue from selling certified organic products. The USDA requires a three-year transition period for farmers to get their land certified as organic. The deputy head of Rabo Agrifinance says, “During that transition period, farmers often experience yield loss in comparison to conventional production, and they can’t collect organic premiums for that land’s production to compensate for the lower yield. That challenge has created a financial barrier against making the transition to organic production.” Farmers want to take advantage of consumer demand for organic products, but they often have trouble penciling out how they’ll survive the transition period it takes to be able to meet that demand. Stephen Nicholson, a grain and oilseed analyst at Rabo Agrifinance, says the demand for organic products has grown faster than domestic production.  


USDA Releases Partial List of Agricultural Projections to 2029

The USDA will release selected tables prepared for the upcoming “USDA Agricultural Projections to 2029” report on November 1. USDA will post online tables containing long-term supply, use, and price projections to 2029 for major U.S. crops and livestock products. The tables will also include supporting U.S. and international macroeconomic assumptions. The short-term projections from the October 11, 2019, WASDE report are used as a starting point. The complete USDA Agricultural Projections to 2029 will be released in February of 2020. The complete report will include a full discussion of the commodity supply and use projections, as well as projections for farm income and global commodity trade. The early-release tables will be posted to the Office of the Chief Economist’s website at www.usda.gov/oce. USDA’s long-term agricultural projections represent a departmental consensus on a ten-year representative scenario for the agricultural sector. The projections don’t represent USDA forecasts, but rather reflect a conditional long-run scenario based on specific assumptions about macroeconomic conditions, policy, weather, and international developments, along with no domestic or external shocks to global agricultural markets.


Legislation Will Protect America’s Food Supply

The Senate unanimously approved bipartisan legislation designed to address the shortage of agricultural inspectors who protect the nation’s food supply and agricultural industries at the border. The Protecting America’s Food and Agriculture Act of 2019 would ensure the safe and secure trade of agricultural goods across the nation’s borders. It authorizes the U.S. Customs and Border Protection to hire additional inspectors, support staff, and even canine teams to fully staff American airports, seaports, and land ports of entry. “Agriculture is a critical economic driver across the country, but longstanding shortages of agricultural inspectors limit Customs and Border Protection’s ability to prevent pests, diseases, and other dangers from entering our country and putting production agriculture at risk,” says Michigan Democrat Gary Peters, one of four senators who introduced the legislation. Senate Ag Committee Chair Pat Robers says, “By strengthening the agricultural inspector workforce at the border, American agriculture and our entire food system will be safer.”


 A Congressional panel will hear from industry witnesses this week on Environmental Protection Agency’s controversial proposed rule to reform its biofuels waiver process. The Tuesday hearing is billed “Protecting The RFS: The Trump Administration’s Abuse of Secret Waivers.”

Corn and ethanol groups complain the EPA’s proposed ‘fix,’ brokered by President Trump, doesn’t keep Trump’s promise of more than 15-billion gallons of ethanol use, based on actually waived gallons, but uses lesser Energy Department estimates instead. Renewable Fuels Association chief Geoff Cooper plans to be on Capitol Hill…

I expect to be at that hearing and we will certainly be sharing with the committee our views on the damage wrought by these exemptions and our views on how to rectify this problem.” 

Thirty-one exemptions were granted to small oil refiners recently. That deprives the ethanol industry of almost one-and-a-half billion gallons of demand, following some 2-point-6 billion lost to earlier waivers. Cooper complains the “goalposts keep shifting” on a ‘fix.’…

We had both EPA and the president say, very recently, that the agreement should result in more than 15-billion gallons…the president at one point said we’re going to be close to 16-billion gallons, by the time this is all said and done.  So, now, the sands have shifted and they’re portraying the deal as a net-15-billion gallons, only.” 

But Cooper says even that might not be possible using DOE estimates of lost gallons. RFA and a coalition of biofuel and ag groups were in court again last week with a petition challenging EPA’s waiver process for the 31 small refinery exemptions it recently granted.

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