Welcome
Monday, September 30, 2019
McConnell Tells Democrats “Time to Act on USMCA”
Much of Washington, D.C., is consumed with questions about Ukraine and the impeachment inquiry. However, Senate Majority Leader Mitch McConnell publicly scolded Democrats’ handling of the U.S.-Mexico-Canada Trade Agreement. Politico says McConnell wants House Democrats to pass the North American trade agreement, noting that “the time for excuses is over.” Speaking on the Senate floor, McConnell said Democrats continued objections to the new pact are nothing more than “heel-dragging.” He says the delay is because of the House impeachment inquiry and related investigations. “Canada, Mexico, and millions of Americans are waiting for Speaker Pelosi to remember that serving the public interest requires more than just picking fights with the President,” McConnell says. His comments come after House Democrats pledged last week that the newly-launched impeachment inquiry will not affect their ability to work with the administration to negotiate changes in four key areas of the agreement with our North American trade partners. Those areas include labor, the environment, access to medicines, and enforcement.
House Democrat says USMCA Vote Depends on Mexican Budget
Texas Democrat Henry Cuellar (KWAY-yar) says he expects Congress to vote on the U.S.-Mexico-Canada Trade Agreement in either November or December. The Hagstrom Report says that House Democrats consider that vote to be contingent on Mexico agreeing to spend more money on enforcing labor provisions in the agreement. Cuellar is one of the more vocal Democrats advocating for passing USMCA. At a recent speaking engagement, Cuellar says he’s spoken with both House Leader Nancy Pelosi and the White House about the prospects for USMCA since Pelosi announced a formal impeachment inquiry on President Donald Trump. He expects both the impeachment and USMCA approval will be kept on separate tracks. Cuellar, who has cautiously endorsed Pelosi’s impeachment inquiry, says, “The last couple of days have kind of complicated things, but we can walk and chew gum at the same time.” What House Democrats want is for Mexico to budget enough money to enforce the labor provisions in the agreement. Cuellar says U.S. Trade Representative Robert Lighthizer with doing a “very good job” on labor issues. However, the Mexican enforcement budget is still the key to getting House support.
China’s Ag Buying Surges Ahead of Next Round of Talks With U.S.
Late last week, China said it’s already bought a considerable number of U.S. soybeans and pork as it prepares for the next round of trade talks with Washington, D.C. The Chinese Ministry of Commerce says both countries are in “close communication” ahead of the next round of talks. A ministry spokesman says as China has ramped up its purchases, the tariffs on those recent orders will be exempted. The Ministry says that “China’s stance has always been consistent and clear, hoping the U.S. will meet China halfway.” China purchased $5.9 billion in U.S. farm products in 2018. Tensions between the two largest economies in the world seem to have eased ahead of trade talks next month. President Trump granted tariff exemptions to many Chinese products, while China says it will exempt U.S. agricultural products and other goods from additional tariffs. Trump said last week that a U.S. and China trade deal could possibly arrive sooner than expected. He made those comments shortly after House Democrats announced an impeachment inquiry.
Producers to Get “Top-Up” Payments
The U.S. Department of Agriculture says producers who are currently participating in the federal crop insurance program are in line for some extra help. Farmers who had a payable prevented planting indemnity related to flooding, excess moisture, or causes other than drought will automatically receive a “top-up” payment. Producers will get that payment from their Approved Insurance Providers starting in mid-October. Producers with Yield Protection and Revenue Protection with Harvest Price Option will get a 10 percent top-up payment. Producers with Revenue Protection will receive a 15 percent top-up. They don’t need to sign up to get the payments as all producers with a 2019 prevented planting indemnity will receive the top-up. “It was a challenging season for many of our farmers,” says USDA Undersecretary for Farm Production and Conservation Bill Northey. “We are doing everything we can to ensure that producers get the help they need.” The crop insurance industry will deliver the payments as part of the Additional Supplemental Appropriations for Disaster Relief Act of 2019. After the initial payment, additional payments will be made in the middle of each month as more prevented planting claims get processed.
NCBA Exposes OCM/HSUS Smear Campaign
The National Cattlemen’s Beef Association says the Organization for Competitive Markets is using half-truths and smear tactics to pit beef producers against each other. They say it’s clear that the Humane Society of the U.S. has taught the OCM staff some tricks to help them tear apart the beef industry from the inside. It’s no coincidence that they’ve chosen to do so at a time when the industry is struggling with market-related challenges and producer unrest to fire their latest shots. The NCBA points out that both groups would like farmers to think that the industry is weak when in reality the demand for beef is strong. That demand has been climbing for many years in both the United States and overseas. Much of that increasing strength comes from programs that are funded by the Beef Checkoff. HSUS knows this and opposes it because they’re against the consumption of animal products. The NCBA says that’s why they’ve come together with OCM to organize and fund the ongoing smear campaign. Discrediting the beef checkoff and the work done by contracting organizations allows the Humane Society, the OCM, and R-CALF to build up their membership numbers. The NCBA says division within the beef industry serves no one but the industry’s adversaries.
RFA Corrects EPA on Ethanol Demand
The Renewable Fuels Association sent a letter to the Environmental Protection Agency regarding its testimony before the House Committee on Science, Space, and Technology. The letter had a lot to say about the real impacts of small refinery exemptions under the Renewable Fuels Standard. The letter followed EPA assertion that there is “zero evidence” that the waivers are negatively impacting ethanol producers. “In light of our August letter and the continued evidence of deterioration in the ethanol market, we were disappointed to hear you make similar claims about the impact of the small refinery exemptions,” says RFA CEO Geoff Cooper to EPA Administrator Andrew Wheeler. “Several statements made during the hearing about ethanol supply and demand are inconsistent with government data and market intelligence. I write today to challenge your statements on the impact of exemptions and provide additional information.” Wheeler told the committee that ethanol production and consumption is “on the rise.” Data from the Department of Energy and even the EPA itself tell a different story.
Washington Insider: President Signs Stopgap Spending Measure
The Hill and other media are reporting this week that the president on Friday signed a stopgap funding measure to keep the government running until Nov. 21, an eight-week extension into the new fiscal year that begins this week. The measure was agreed in an effort to avoid another government shutdown this fall.
The legislation, which passed in the House last week and the Senate on Thursday, keeps 2019 funding levels in place while Democrats and Republicans look to hammer out a broader spending deal.
Controversy over the president’s proposed border wall has stalled most new spending bills, The Hill noted. While the House passed 10 of the 12 annual measures early in the summer, the Senate, where bipartisan support is required to pass legislation, has not been able to complete a single appropriations bill for the 2020 fiscal year.
In recent weeks, the Senate Appropriations Committee succeeded in marking up 10 bills, but several more bills, such as defense and homeland security, received only Republican support.
Democrats have continued to oppose the provision of an additional $5 billion for the wall at the U.S.-Mexico border, and insist that other bills should block the administration from using emergency powers to reprogram funds. So far, the administration has reprogrammed upwards of $6 billion from defense, military construction funds and a Treasury asset fund for the proposed wall.
In an effort to resolve the current standoff, the president was scheduled to meet with Senate Appropriations Committee Chairman Richard Shelby, R-Ala., about a way forward for the legislation. However, Shelby warned on Thursday that without a bipartisan deal on border issues, Congress might be forced to rely on stopgap measures—that is, continuing resolutions – for the entire 2020 fiscal year.
That would prevent agencies from embarking on new projects and deny them an already agreed-upon, multi-billion dollar boost in spending levels.
The stopgap measure signed last week also extended major health programs, flood insurance, authorization for the Export-Import Bank and disaster funds.
In the meantime, Bloomberg is reporting that China’s foreign minister hit back at President Donald Trump’s trade policies at the UN on Friday, warning that protectionism could plunge the world into a recession just as negotiators from both countries prepare to meet in Washington next month.
Foreign Minister Wang Yi, speaking from the General Assembly rostrum days after President Trump used the same setting to criticize China’s trade practices, said that “tariffs and provocations of trade disputes” are upsetting the global industrial and supply chain and risk undermining the “global economic and trade order.”
“China will not ever be cowed by threats, or subdued by pressure,” Wang said. “Erecting walls will not resolve global challenges, and blaming others for one’s own problems does not work.”
President Trump devoted much of his General Assembly speech on Tuesday to China’s trade practices, accusing Beijing of failing to adopt promised reforms and embracing an economic model dependent on massive market barriers, heavy state subsidies, forced technology transfers and the theft of intellectual property.
He defended his imposition of tariffs, saying he wouldn’t accept a “bad deal.”
As the trade conflict unfolded, China targeted American farmers – an important political constituency for the administration – in retaliation for U.S. tariffs by cutting purchases of soybeans and other commodities. The administration “has responded with a bailout for farmers that, so far, totals about $28 billion,” Bloomberg said.
“Regarding economic and trade frictions and differences, China is committed to resolve them in a calm, rational and cooperative manner, and is willing to demonstrate utmost patience and goodwill,” Wang said. “Should the other side act in bad faith, or show no respect for equal status or rules in negotiations, we will have to make necessary responses to safeguard our legitimate rights and interests.”
Trade talks are to resume in Washington early in October and China’s Vice Premier Liu He is expected to lead his country’s delegation.
So, we will see. The difficulty in completing work on the next U.S. budget along with Chinese saber rattling are both regarded as significant economic danger signs for the coming months, along with the growing political tensions in Washington. These are among the many ongoing and expected debates that producers should watch closely as they emerge, Washington Insider believes.
The legislation, which passed in the House last week and the Senate on Thursday, keeps 2019 funding levels in place while Democrats and Republicans look to hammer out a broader spending deal.
Controversy over the president’s proposed border wall has stalled most new spending bills, The Hill noted. While the House passed 10 of the 12 annual measures early in the summer, the Senate, where bipartisan support is required to pass legislation, has not been able to complete a single appropriations bill for the 2020 fiscal year.
In recent weeks, the Senate Appropriations Committee succeeded in marking up 10 bills, but several more bills, such as defense and homeland security, received only Republican support.
Democrats have continued to oppose the provision of an additional $5 billion for the wall at the U.S.-Mexico border, and insist that other bills should block the administration from using emergency powers to reprogram funds. So far, the administration has reprogrammed upwards of $6 billion from defense, military construction funds and a Treasury asset fund for the proposed wall.
In an effort to resolve the current standoff, the president was scheduled to meet with Senate Appropriations Committee Chairman Richard Shelby, R-Ala., about a way forward for the legislation. However, Shelby warned on Thursday that without a bipartisan deal on border issues, Congress might be forced to rely on stopgap measures—that is, continuing resolutions – for the entire 2020 fiscal year.
That would prevent agencies from embarking on new projects and deny them an already agreed-upon, multi-billion dollar boost in spending levels.
The stopgap measure signed last week also extended major health programs, flood insurance, authorization for the Export-Import Bank and disaster funds.
In the meantime, Bloomberg is reporting that China’s foreign minister hit back at President Donald Trump’s trade policies at the UN on Friday, warning that protectionism could plunge the world into a recession just as negotiators from both countries prepare to meet in Washington next month.
Foreign Minister Wang Yi, speaking from the General Assembly rostrum days after President Trump used the same setting to criticize China’s trade practices, said that “tariffs and provocations of trade disputes” are upsetting the global industrial and supply chain and risk undermining the “global economic and trade order.”
“China will not ever be cowed by threats, or subdued by pressure,” Wang said. “Erecting walls will not resolve global challenges, and blaming others for one’s own problems does not work.”
President Trump devoted much of his General Assembly speech on Tuesday to China’s trade practices, accusing Beijing of failing to adopt promised reforms and embracing an economic model dependent on massive market barriers, heavy state subsidies, forced technology transfers and the theft of intellectual property.
He defended his imposition of tariffs, saying he wouldn’t accept a “bad deal.”
As the trade conflict unfolded, China targeted American farmers – an important political constituency for the administration – in retaliation for U.S. tariffs by cutting purchases of soybeans and other commodities. The administration “has responded with a bailout for farmers that, so far, totals about $28 billion,” Bloomberg said.
“Regarding economic and trade frictions and differences, China is committed to resolve them in a calm, rational and cooperative manner, and is willing to demonstrate utmost patience and goodwill,” Wang said. “Should the other side act in bad faith, or show no respect for equal status or rules in negotiations, we will have to make necessary responses to safeguard our legitimate rights and interests.”
Trade talks are to resume in Washington early in October and China’s Vice Premier Liu He is expected to lead his country’s delegation.
So, we will see. The difficulty in completing work on the next U.S. budget along with Chinese saber rattling are both regarded as significant economic danger signs for the coming months, along with the growing political tensions in Washington. These are among the many ongoing and expected debates that producers should watch closely as they emerge, Washington Insider believes.
Pelosi, McConnell Comment On USMCA Situation
The top leaders of the House and Senate both made remarks Thursday relative to the U.S.-Mexico-Canada Agreement (USMCA).
“Let me just say … we are moving ahead on the U.S.-Mexico-Canada-Agreement (USMCA),” House Speaker Nancy Pelosi, D-Calif., told reporters as she concluded a news conference. “Again, we are hoping to be on a continued path to yes,” Pelosi added. Other House Democrats said the newly launched impeachment inquiry will not affect their work with the Trump administration to negotiate changes to the deal in four core areas: labor, environment, access to medicines and enforcement.
Senate Majority Leader Mitch McConnell, R-Ky., told Democrats that “the time for excuses is over.” In a speech on the Senate floor, McConnell said Democrats’ continued objections amount to little more than “heel-dragging,” and suggested a chief reason for the pact’s delay is the House’s impeachment inquiry and related investigations.
“Canada, Mexico and millions of Americans are waiting for Speaker Pelosi to remember that serving the public interest requires more than just picking fights with the president,” McConnell said. “It actually entails addressing the people’s business.”
Meanwhile, the House Democrats USMCA working group will meet with U.S. Trade Representative Robert Lighthizer today. The group will reportedly tell Lighthizer its responses to proposals USTR sent over earlier this month.
“Let me just say … we are moving ahead on the U.S.-Mexico-Canada-Agreement (USMCA),” House Speaker Nancy Pelosi, D-Calif., told reporters as she concluded a news conference. “Again, we are hoping to be on a continued path to yes,” Pelosi added. Other House Democrats said the newly launched impeachment inquiry will not affect their work with the Trump administration to negotiate changes to the deal in four core areas: labor, environment, access to medicines and enforcement.
Senate Majority Leader Mitch McConnell, R-Ky., told Democrats that “the time for excuses is over.” In a speech on the Senate floor, McConnell said Democrats’ continued objections amount to little more than “heel-dragging,” and suggested a chief reason for the pact’s delay is the House’s impeachment inquiry and related investigations.
“Canada, Mexico and millions of Americans are waiting for Speaker Pelosi to remember that serving the public interest requires more than just picking fights with the president,” McConnell said. “It actually entails addressing the people’s business.”
Meanwhile, the House Democrats USMCA working group will meet with U.S. Trade Representative Robert Lighthizer today. The group will reportedly tell Lighthizer its responses to proposals USTR sent over earlier this month.
Farmers To Automatically Get Bump Up In Prevent Plant Payment
Farmers with crop insurance who claimed prevent plant for 2019 will automatically get a “top-up” payment via the disaster aid package approved this year by Congress. Payments will be made by Approved Insurance Providers (AIPs).
The announcement from USDA clears up a question of whether the payments would be made via crop insurance or would come from the Farm Service Agency (FSA). Producers with Yield Protection and Revenue Protection with Harvest Price Exclusion will receive a 10% top-up payment while those with Revenue Protection policies will get a 15% payment.
Initial payments will be made in mid-October with additional payments the middle of each month after that as more prevent plant claims are processed. There were crop insurance indemnity claims on an estimated 19.6 million acres this year.
The top-up payments are separate from disaster payments via the Wildfires and Hurricanes Indemnity Program Plus (WHIP+).
The announcement from USDA clears up a question of whether the payments would be made via crop insurance or would come from the Farm Service Agency (FSA). Producers with Yield Protection and Revenue Protection with Harvest Price Exclusion will receive a 10% top-up payment while those with Revenue Protection policies will get a 15% payment.
Initial payments will be made in mid-October with additional payments the middle of each month after that as more prevent plant claims are processed. There were crop insurance indemnity claims on an estimated 19.6 million acres this year.
The top-up payments are separate from disaster payments via the Wildfires and Hurricanes Indemnity Program Plus (WHIP+).
Monday Watch List
Markets
After checking new weather forecasts for the week and any news over the weekend, the market will get ready for several reports on Monday's docket. USDA's weekly export inspections is set for 10 a.m., followed by the September 1 Grain Stocks report and Small Grains Summary at 11 a.m. Crop Progress is due out at 3 p.m. and will be watched for row crop maturity and spring wheat harvest progress.
Weather
Moderate to heavy rain is in store for the far Northern Plains and northern Midwest Monday. The heavy precipitation, including snow, will also be noted in the Canadian Prairies. Harvest disruption and crop damage is likely in these areas. We'll also see light rain in southern Texas. Other areas will be drier ahead of a new round of rain in the Plains and Midwest Monday night and Tuesday. Delta and Southeast areas will again be hot and dry.
After checking new weather forecasts for the week and any news over the weekend, the market will get ready for several reports on Monday's docket. USDA's weekly export inspections is set for 10 a.m., followed by the September 1 Grain Stocks report and Small Grains Summary at 11 a.m. Crop Progress is due out at 3 p.m. and will be watched for row crop maturity and spring wheat harvest progress.
Weather
Moderate to heavy rain is in store for the far Northern Plains and northern Midwest Monday. The heavy precipitation, including snow, will also be noted in the Canadian Prairies. Harvest disruption and crop damage is likely in these areas. We'll also see light rain in southern Texas. Other areas will be drier ahead of a new round of rain in the Plains and Midwest Monday night and Tuesday. Delta and Southeast areas will again be hot and dry.
Friday, September 27, 2019
Tester Introduces Mental Health Bill for Farmers
A bill introduced by Senator John Tester seeks to bring mental health resources and awareness to rural communities. The Montana Democrat this week introduced the Seeding Rural Resilience Act to help reduce stress and suicides in rural America. While Tester says, “there is no silver bullet,” he says the bill “provides better tools and resources for folks in rural communities to manage and reduce stress." Data from the Center for Disease Control shows the suicide rate is 45 percent higher in rural America than in urban areas. Tester says Americans in rural communities deal with substantial isolation, significant travel times for basic health services, lack of broadband access that would enable tele-health services, and stigmas against receiving counseling. The bill would provide Department of Agriculture employees voluntary stress management training, and for a partnership with Department of Health to create a $3 million public awareness campaign, and direct the Agriculture Secretary to work with stakeholders to identify the best practices for responding to farm and ranch mental stress.
House Passes Bill Allowing Cannabis Industry Access to Banks
The House of Representative this week passed a bill allowing banks to work with the cannabis industry. Known as the SAFE Banking Act, the Secure and Fair Enforcement Act of 2019 passed 321 to 103. However, with a mostly party-line vote in the Democrat-led chamber, the legislation faces an uncertain future in the Republican-led Senate. Sponsored by Representative Ed Perlmutter, (pearl-mutter) a Colorado Democrat, the bill allows marijuana-related businesses in states with some form of legalized marijuana and strict regulatory structures to access the banking system. Perlmutter notes that 47 states, four U.S. territories, and the District of Columbia, representing 97.7 percent of the U.S. population, have legalized some form of recreational or medical marijuana, including CBD oil. The bill was co-authored by Representatives Denny Heck, a Washington Democrat, and Steve Stivers, an Ohio Republican. Mike Crapo (cray-poh), a Republican Senator from Idaho who serves as the Senate Banking Chairman, told reporters he wants the Senate to vote on the measure in the coming month. However, Crapo says he does not support the bill.
Kind Introduces CURD Act to Protect Quality of Cheese
A bipartisan bill introduced by a dairy country lawmaker would create a formal definition of “natural cheese” to ensure consumers are fully informed when purchasing cheese. Representative Ron Kind, a Democrat from Wisconsin, this week introduced the bipartisan Codifying Useful Regulatory Definitions Act, called the CURD Act. Kind says the bill “will give customers the information they need to continue buying the quality Wisconsin cheese their families have used for generations.” The Wisconsin Cheese Makers Association says the legislation “preserves our industry’s ability to use this term to describe cheese made naturally with fresh milk and dairy ingredients.” Cheesemakers have been using this term for decades to differentiate “Natural Cheese” from “Pasteurized Process Cheese” in the grocery store. The term “natural cheese” is historically used to identify cheeses made directly from milk and distinguish those products from pasteurized process cheeses. It describes cheese that is made from milk to which salt, enzymes, and flavorings can be added, and is the result of the fermentation of milk by adding starter culture.
Grocery Manufacturers Association to Rebrand in 2020
The Grocery Manufacturers Association announced this week it will become the Consumer Brands Association, effective January 2020. The new identity is part of a sweeping overhaul of the 110-year old trade organization, led by President and CEO Geoff Freeman and the GMA board of directors. Leaders of the organization say GMA’s new advocacy agenda represents the broader interests of a modern consumer packaged goods company by focusing on four core pillars, enhancing packaging sustainability, championing smart regulation, creating frictionless supply chains and building trust, while also advancing a narrative about the industry’s social and economic impact. The organization faced controversy during the GMO labeling debate, along with labeling issues regarding added sugars. In 2017, several high-profile member-companies left the organization because of those issues. The trade organization has already begun to advance its strategic priorities. This summer, it released the industry’s first-ever economic study, which found the industry supports more than 20 million American jobs and contributes $2 trillion to the country’s GDP.
Farm Bureau Extends Rural Ag Innovation Challenge Application Deadline
Rural entrepreneurs have until mid-October to apply for the Farm Bureau Ag Innovation Challenge. The American Farm Bureau Federation, in partnership with Farm Credit, will accept applications for the 2020 Farm Bureau Ag Innovation Challenge through October 14. In its sixth year, the Farm Bureau Ag Innovation Challenge is a national business competition for U.S. food and agriculture startups. Entrepreneurs will compete for $145,000 in startup funds. The funds for the challenge are provided by sponsors Farm Credit, John Deere, Bayer Crop Science, Farm Bureau Bank and Country Financial. AFBF President Zippy Duvall says, "It takes faith, courage and creativity to start a business," adding that the funds in the challenge can help entrepreneurs "take their businesses to the next level." Ten semi-finalist teams will be announced on November 22 and awarded $10,000 each. The ten teams will at the 2020 AFBF Annual Convention in Austin, Texas, in January. Competitors can apply online at www.fb.org.
Washington Insider: US, Japan Trade Deal Signed
Despite earlier concerns regarding possible U.S. tariffs on Japan’s auto exports to the U.S., Prime Minister Shinzo Abe and U.S. President Donald Trump signed a trade agreement this week that removed that threat for now, Bloomberg — and others — are reporting.
Akio Toyoda, president of the Japan Automobile Manufacturers Association and the chief executive officer of Toyota Motor Corp., told Trade Minister Isshu Sugawara that he welcomed the pact. However, he was reported as noting that the industry “faces extremely difficult challenges,” citing a stronger yen, an impending hike in sales tax and other uncertainties and hopes for continued support for the sector.
In the months leading up to the deal, Toyoda had pushed for the interests of Japan’s $260 billion automobile industry, using unusually sharp language to rebuff earlier U.S. threats of auto tariffs.
Under the new agreement, Japan will eliminate or reduce import duties on $7.2 billion of U.S. food and agricultural products, while the U.S. will retain its existing 2.5% tariff on cars and light trucks.
“The pact maintains and strengthens the free and fair trade environment in the auto industry between Japan and U.S., and we welcome that,” Toyoda said. “The discussion toward avoiding further tariffs is very beneficial for stakeholders in both countries.”
During the negotiations, the association had stressed the fact that Japan’s auto industry has 24 factories, 45 research-and-development or design centers and 39 distribution centers in 28 U.S. states. Japanese carmakers have invested more than $50 billion in manufacturing facilities and provide more than 93,000 direct American jobs, the group said.
Japan has faced sharp criticism from the administration for the fact that it has accounted for more than a quarter of the $208.8 billion deficit the U.S. ran with the rest of the world in the trading of passenger vehicles and auto parts last year, Bloomberg said.
Bloomberg and others also noted that the agreement is “limited” and covered what U.S. trade officials called the “first stage” and “early achievements.” However, President Trump told reporters that he expects “in the fairly near future” that the U.S. will have “final comprehensive deals signed with Japan.”
Bloomberg repeats that the main “sticking point” in the more than year-long talks was Abe’s need for a guarantee that the U.S. will not impose “national security tariffs” on imported Japanese automobiles and auto parts. “Trump doesn’t intend to levy the duties on Japan for the time being,” U.S. Trade Representative Robert Lighthizer said.
Bloomberg cited U.S. election year politics as important in the agreement reached, and called the U.S. president “eager to make a deal with Japan to appease U.S. farmers who have been largely shut out of the Chinese market as a result of his trade war with Beijing.” American agricultural producers, also reeling from bad weather and low commodity prices, are a core component of the president’s political base.
The president said the agreement, which also covers a $40 billion digital trade agreement, would help reduce a chronic U.S. trade deficit. The countries’ goal is for the accord to go into force on Jan. 1, 2020.
Abe said he was pleased with the deal and said that it will help “bring benefit to everyone in Japan as well in the United States, namely consumers, producers, as well as workers.”
“I confirmed clearly with President Trump that the content of the agreement is intended to mean that extra tariffs will not be imposed on Japan’s cars or car parts and President Trump agreed on that,” Abe told reporters.
Foreign Minister Toshimitsu Motegi, Tokyo’s point man in the trade talks, said he had also confirmed with Lighthizer that no quotas or voluntary restraints would be imposed on Japan’s auto sector. In the longer term, the U.S. agreed to remove existing tariffs on the sector, according to a statement issued by the Japanese government, but no time line was given for this.
Bloomberg noted that the new pact won’t lower the barriers protecting Japan’s rice farmers — a powerful group supporting Abe’s ruling Liberal Democratic Party. This could help the prime minster smooth the deal’s course through parliament, where it must be ratified before coming into effect.
However, Senator Ron Weyden, D-Ore., the ranking member on the Finance Committee, criticized the narrow scope of the agreement. “The agriculture deal is not a comprehensive one and there is much more to do to level the playing field in Japan for American workers, businesses, farmers and ranchers.”
Senator Chuck Grassley, R-Iowa, who chairs the Finance Committee, told reporters that he’s happy with the deal, but added, “I think the negotiations ought to be more comprehensive than just for agriculture.” The President noted that this limited deal would not require a vote by Congress.
So, the new pact is good news for those producers whose products are included, but reflects no immediate change for others. However, it would seem to reflect a reduction in emphasis the administration is placing on the use of tariffs to improve the U.S. trade balance, a metric many analysts regard as “unreliable” in evaluations of important U.S. overseas markets, Washington Insider believes.
Akio Toyoda, president of the Japan Automobile Manufacturers Association and the chief executive officer of Toyota Motor Corp., told Trade Minister Isshu Sugawara that he welcomed the pact. However, he was reported as noting that the industry “faces extremely difficult challenges,” citing a stronger yen, an impending hike in sales tax and other uncertainties and hopes for continued support for the sector.
In the months leading up to the deal, Toyoda had pushed for the interests of Japan’s $260 billion automobile industry, using unusually sharp language to rebuff earlier U.S. threats of auto tariffs.
Under the new agreement, Japan will eliminate or reduce import duties on $7.2 billion of U.S. food and agricultural products, while the U.S. will retain its existing 2.5% tariff on cars and light trucks.
“The pact maintains and strengthens the free and fair trade environment in the auto industry between Japan and U.S., and we welcome that,” Toyoda said. “The discussion toward avoiding further tariffs is very beneficial for stakeholders in both countries.”
During the negotiations, the association had stressed the fact that Japan’s auto industry has 24 factories, 45 research-and-development or design centers and 39 distribution centers in 28 U.S. states. Japanese carmakers have invested more than $50 billion in manufacturing facilities and provide more than 93,000 direct American jobs, the group said.
Japan has faced sharp criticism from the administration for the fact that it has accounted for more than a quarter of the $208.8 billion deficit the U.S. ran with the rest of the world in the trading of passenger vehicles and auto parts last year, Bloomberg said.
Bloomberg and others also noted that the agreement is “limited” and covered what U.S. trade officials called the “first stage” and “early achievements.” However, President Trump told reporters that he expects “in the fairly near future” that the U.S. will have “final comprehensive deals signed with Japan.”
Bloomberg repeats that the main “sticking point” in the more than year-long talks was Abe’s need for a guarantee that the U.S. will not impose “national security tariffs” on imported Japanese automobiles and auto parts. “Trump doesn’t intend to levy the duties on Japan for the time being,” U.S. Trade Representative Robert Lighthizer said.
Bloomberg cited U.S. election year politics as important in the agreement reached, and called the U.S. president “eager to make a deal with Japan to appease U.S. farmers who have been largely shut out of the Chinese market as a result of his trade war with Beijing.” American agricultural producers, also reeling from bad weather and low commodity prices, are a core component of the president’s political base.
The president said the agreement, which also covers a $40 billion digital trade agreement, would help reduce a chronic U.S. trade deficit. The countries’ goal is for the accord to go into force on Jan. 1, 2020.
Abe said he was pleased with the deal and said that it will help “bring benefit to everyone in Japan as well in the United States, namely consumers, producers, as well as workers.”
“I confirmed clearly with President Trump that the content of the agreement is intended to mean that extra tariffs will not be imposed on Japan’s cars or car parts and President Trump agreed on that,” Abe told reporters.
Foreign Minister Toshimitsu Motegi, Tokyo’s point man in the trade talks, said he had also confirmed with Lighthizer that no quotas or voluntary restraints would be imposed on Japan’s auto sector. In the longer term, the U.S. agreed to remove existing tariffs on the sector, according to a statement issued by the Japanese government, but no time line was given for this.
Bloomberg noted that the new pact won’t lower the barriers protecting Japan’s rice farmers — a powerful group supporting Abe’s ruling Liberal Democratic Party. This could help the prime minster smooth the deal’s course through parliament, where it must be ratified before coming into effect.
However, Senator Ron Weyden, D-Ore., the ranking member on the Finance Committee, criticized the narrow scope of the agreement. “The agriculture deal is not a comprehensive one and there is much more to do to level the playing field in Japan for American workers, businesses, farmers and ranchers.”
Senator Chuck Grassley, R-Iowa, who chairs the Finance Committee, told reporters that he’s happy with the deal, but added, “I think the negotiations ought to be more comprehensive than just for agriculture.” The President noted that this limited deal would not require a vote by Congress.
So, the new pact is good news for those producers whose products are included, but reflects no immediate change for others. However, it would seem to reflect a reduction in emphasis the administration is placing on the use of tariffs to improve the U.S. trade balance, a metric many analysts regard as “unreliable” in evaluations of important U.S. overseas markets, Washington Insider believes.
RFA Rebukes EPA’s Wheeler on View Refiner Exemptions Don’t Cut Biofuel Demand
Congressional testimony by EPA Administrator Andrew Wheeler September 19 before a House committee have prompted the Renewable Fuels Association (RFA) to again criticize the EPA leader.
Wheeler testified to the House Science, Space & Technology Committee that small refinery exemptions (SREs) have had no impact on U.S. biofuel demand. “Several statements made during the hearing about ethanol supply and demand are inconsistent with government data and market intelligence,” RFA President and CEO Geoff Cooper said in a September 25 letter to Wheeler.
Cooper cited U.S. Energy Information Administration (EIA) data showing U.S. ethanol consumption fell from 14.485 billion gallons in 2017 to 14.382 billion gallons in 2018 – the first year-over-year decline in over 20 years. The drop in ethanol demand came despite gasoline demand remaining essentially steady from 2017 to 2018.
Plus, the latest EIA projections peg U.S. ethanol consumption at just 14.38 billion gallons for 2019, down from their forecast of 14.82 billion gallons that was made in January 2018 – before 2016 and 2017 SREs had been issued by EPA. In their updated outlook for ethanol consumption in 2019, EIA said that outlook “…assumes growth in higher-level ethanol blends is limited in the near-term by recent Small Refinery Exemptions that reduced volumes of renewable fuels required under the RFS.”
Wheeler testified to the House Science, Space & Technology Committee that small refinery exemptions (SREs) have had no impact on U.S. biofuel demand. “Several statements made during the hearing about ethanol supply and demand are inconsistent with government data and market intelligence,” RFA President and CEO Geoff Cooper said in a September 25 letter to Wheeler.
Cooper cited U.S. Energy Information Administration (EIA) data showing U.S. ethanol consumption fell from 14.485 billion gallons in 2017 to 14.382 billion gallons in 2018 – the first year-over-year decline in over 20 years. The drop in ethanol demand came despite gasoline demand remaining essentially steady from 2017 to 2018.
Plus, the latest EIA projections peg U.S. ethanol consumption at just 14.38 billion gallons for 2019, down from their forecast of 14.82 billion gallons that was made in January 2018 – before 2016 and 2017 SREs had been issued by EPA. In their updated outlook for ethanol consumption in 2019, EIA said that outlook “…assumes growth in higher-level ethanol blends is limited in the near-term by recent Small Refinery Exemptions that reduced volumes of renewable fuels required under the RFS.”
China Notes Soy, Pork Buys from US Are Without Duties
Details are still under discussion between the U.S. and China on high-level trade talks set for early October, according to China’s Commerce Ministry.
China is hopeful of making progress at the talks, Commerce Ministry spokesman Gao Feng said, pointing out that Chinese firms have made significant buys of U.S. pork and soybeans, purchases that are exempt from tariffs.
"We hope both sides can work together and take tangible actions to create favorable conditions for such cooperation," Gao said. He also reiterated a China view that they hope the U.S. will meet China half-way and find a win-win solution in the trade dispute.
China could buy even more U.S. farm products, according to Chinese Foreign Minister Wang Yi in New York. Asked by Reuters about the potential for more purchases, he said China would be willing to do so on products “needed by the Chinese market.”
China is hopeful of making progress at the talks, Commerce Ministry spokesman Gao Feng said, pointing out that Chinese firms have made significant buys of U.S. pork and soybeans, purchases that are exempt from tariffs.
"We hope both sides can work together and take tangible actions to create favorable conditions for such cooperation," Gao said. He also reiterated a China view that they hope the U.S. will meet China half-way and find a win-win solution in the trade dispute.
China could buy even more U.S. farm products, according to Chinese Foreign Minister Wang Yi in New York. Asked by Reuters about the potential for more purchases, he said China would be willing to do so on products “needed by the Chinese market.”
Friday Watch List
Markets
Weather will be of interest through the weekend with winter storms in Alberta and rain expected across the Northern Plains and central Midwest. Reports of U.S. durable goods orders and personal incomes are due out at 7:30 a.m. CDT, followed by a consumer sentiment index at 9 a.m. USDA's quarterly hogs and pigs report is set for 2 p.m. CDT with a 4% increase expected for all hogs.
Weather
Moderate to heavy rain is in store for the central Midwest Friday, disrupting harvest and threatening a new round of flooding. We'll also see light rain in the northern Plains ahead of a stormy weekend with rain and snow. Southern and southeastern areas will be dry and very warm to hot. Drought is building in the far Southern Plains, Delta, southeastern Midwest, and the Southeast.
Weather will be of interest through the weekend with winter storms in Alberta and rain expected across the Northern Plains and central Midwest. Reports of U.S. durable goods orders and personal incomes are due out at 7:30 a.m. CDT, followed by a consumer sentiment index at 9 a.m. USDA's quarterly hogs and pigs report is set for 2 p.m. CDT with a 4% increase expected for all hogs.
Weather
Moderate to heavy rain is in store for the central Midwest Friday, disrupting harvest and threatening a new round of flooding. We'll also see light rain in the northern Plains ahead of a stormy weekend with rain and snow. Southern and southeastern areas will be dry and very warm to hot. Drought is building in the far Southern Plains, Delta, southeastern Midwest, and the Southeast.
Thursday, September 26, 2019
U.S. and Japan Sign Trade Agreement
The U.S. and Japan have signed a trade agreement. President Donald Trump says the two sides have agreed to the first phase of the deal. The agreement is not finished enough to be signed, but the two sides signed a statement explaining the agreement is to be signed. Agriculture Secretary Sonny Perdue called the agreement a “big win” for agriculture, as the deal increases market access for farmers and ranchers to Japan. Once implemented, the agreement grants the U.S. the same level of agricultural tariffs for other nations included in the Comprehensive Agreement for Trans-Pacific Partnership. USDA says Japan has committed to provide substantial market access to U.S. food and agricultural products by eliminating tariffs, enacting meaningful tariff reductions, or allowing a specific quantity of imports at a low duty. The agreement is expected to be approved by the Japanese Parliament later this fall. The effective date could be January 1, 2020. Japan is the third global market for U.S. agricultural exports with nearly $13 billion in exports in 2018.
Farm Groups Welcome Japan Agreement
Agriculture groups say the intent to sign a final agreement with Japan will increase market access for U.S. farmers. The U.S. Grains Council says the first phase of the agreement signed Wednesday show that the agreement would bring commodities the organization represents largely back in line with the Trans-Pacific Partnership Agreement. National Corn Growers Association President Lynn Chrisp says, “with many farmers struggling amid challenging times in agriculture, this is very welcome news.” The U.S. Meat Export Federation called the announcement "excellent news for U.S. farmers and ranchers,” noting Japan is the largest value destination for U.S. pork and beef exports, estimated at $3.7 billion last year. American Farm Bureau Federation President Zippy Duvall says the announcement is “a positive step for America’s farmers and ranchers.” Duvall says AFBF is “thankful” for the agreement, and urges “trade negotiators to achieve many more like it.” Duvall added, “The time for trade wars has come and gone,” saying farmers and ranchers “need to get back to doing what they do best,” feeding the world.
Impeachment Inquiry Could Dampen Chances of USMCA
House Democrats seeking to impeach President Donald Trump spells trouble for the U.S.-Mexico-Canada agreement. White House officials claim the effort has “destroyed any chances of legislative progress.” Meanwhile, Iowa Republican Senator Chuck Grassley says if Democrats in the House use impeachment proceedings as a basis to not act on policy, the effort will halt progress on USMCA. Grassley says Congress “must step up and deliver” a finalized agreement for agriculture and other industries. House Agriculture Committee Chairman Collin Peterson, a Minnesota Democrat, says he believed the inquiry will be “a failed process.” Peterson worries the impeachment effort will further divide the country, “weakening our ability to act together on issues like passing USMCA.” Representative Richard Neal, a Democrat from Massachusetts who chairs the House USMCA working group, says he won’t let the impeachment process hinder progress on USCMA. However, Neal in a statement did say he “strongly backs” the call for formal impeachment by House Speaker Nancy Pelosi.
Livestock Producers Describe Trade Headwinds to Congress
Livestock groups told the Senate Agriculture Committee they need certainty in trade. During a hearing Wednesday, groups including the National Cattlemen's Beef Association and the National Pork Producers Council urged lawmakers to approve the U.S.-Mexico-Canada Agreement quickly. NCBA President Jennifer Houston says the U.S. needs to pass USMCA to "send a message to the rest of the world that the United States is open for business." Agriculture groups focused on other trade needs, including finalizing negotiations with Japan and China. A pork industry representative from NPPC told lawmakers the U.S. is missing out "on an unprecedented sales opportunity." Punitive tariffs have cost U.S. producers $8 per animal, or $1 billion last year, according to the organization. Affordable pork is in short supply in China because African swine fever has ravaged the Chinese hog herd and significantly reduced the production of pork. NPPC says “we need to remove market access uncertainty and level the playing field in the world's largest pork-consuming nation.”
EPA Granted Waivers Against Energy Department Recommendations
The Environmental Protection Agency granted some small refinery waivers against recommendations by the Department of Energy. Reuters obtained an August 9 memo that states the EPA granted “full exemptions for those 2018 small refinery petitions where the Department of Energy recommended 50 percent relief.” The waivers allow the EPA to exempt small refineries from complying with the Renewable Fuel Standard if the refineries can prove compliance would cause economic hardship. The memo did not specify how many refineries were involved. Biofuels producers and farmers are waiting for the White House to announce a mitigation plan for the waivers. President Donald Trump has promised a “giant package” for farmers to boost the ethanol market. Many expect the plan will reallocate lost biofuels due to the waivers. The 31 small-refinery exemptions granted by the EPA for 2018 amounted to about 1.6 billion gallons taken away from ethanol and biofuel use. Ethanol plants are stopping production, claiming the waivers are eroding demand for biofuels in the United States.
Gates Foundation Supports Small-Scale Food Producers in Climate Adaptation
The Bill and Melinda Gates Foundation this week announced $790 million to help small-scale food producers adapt to climate change. The funds stem from a partnership between the foundation, the World Bank and others. The group says climate change “is already taking a severe toll on farmers, especially in developing countries.” The commitment follows the recently released report from the Global Commission on Adaptation that calls for global leadership to accelerate adaptation. The Commission finds that investing in adaptation “can yield significant economic, environmental and social benefits.” The funds will support the organization CGIAR (C-G-I-A-R) formally called the Consultative Group for International Agricultural Research. The funds will assist the organization in developing innovations that will help smallholder farmers “improve their livelihoods and build resilience in the face of climate change.” CGIAR is self-described as a global partnership that unites international organizations engaged in research for a food-secured future. The global organization was founded in 1971 as an effort to reduce poverty and hunger.
Washington Insider: Tensions at the Economic Research Service
A political fight at USDA that has spanned decades has broken out once again, and seems as controversial as ever, Politico is reporting this week. It involves the former Bureau of Agricultural Economics and its modern derivative, the Economic Research Service.
Most reports about ERS history see 1961 as its beginning but its roots go back much further, even to the 1905 Office of Farm Management – which later became the Bureau of Agricultural Economics. That bureau was charged with analyzing USDA’s depression-era programs and became USDA’s “central planning agency” for policy and analysis of policy impacts.
In 1953, the incoming administration shifted BAE’s policy planning efforts to an administrative office and reassigned most of its research to operating agencies. It was reestablished as a separate agency, the Economic Research Service, in 1961 where it has operated since.
The agency sees its responsibility as conducting sound, peer-reviewed economic research – including the anticipation of issues that are on the horizon, as well as a broad range of statistical indicators that gauge the health of the ag and rural sector. These are used by the White House and other USDA agencies and many others across the nation. Most of the agency’s work is conducted in Washington, DC – its 2018 activities report said that it had no field staff.
Recently Trump administration began to shift many of the ERS positions and a few others to Kansas City, a decision that has been highly unpopular in ERS – Politico says it led to “mass attrition.”
A key aspect of the move is whether or not it will interfere with important agency functions. Now Politico says the agency is warning USDA officials that the move could lead to “significant delays in vital research reports.”
Politico says the internal USDA memo was drafted for planning purposes and identifies some 38 specific reports that may be delayed “because staff members have departed,” and which include research on topics such as consolidation in the dairy industry, food security among veterans, international agricultural market access and others. Some reports may even be discontinued, such as those that calculate “price spreads,” the share of food dollars that goes to farmers.
Asked to comment on the internal document, a USDA spokesperson told Politico that "ERS has taken important action to ensure mission continuity and delivery of mission critical work throughout the transition and as a result, the agency is on track to complete its congressionally mandated projects.
Separately, the union for the agency’s employees estimates that only 19 out of 280 employees have chosen to move, just 7 percent of total staff. USDA has a deadline of Sept. 30 for current employees to change their status and those "numbers are changing daily," Politico said.
Since the move was announced in August of last year, 88 employees left the agency and 50 staffers chose to retire, according to the union. Forty-four employees were granted special accommodations allowing them to temporarily keep working in Washington, such as via telework or an extension to their report date in the new office space. A reported 79 employees will stay in DC to carry out operations deemed "core" by USDA, Politico said.
USDA says it is actively recruiting for more than 100 positions for the agencies affected by the move.
Agriculture Secretary Sonny Perdue has defended the move as a means to cut costs, improve recruitment and retention of staff and bring USDA closer to farming communities. USDA claims that the relocation would save about $20 million per year over 15 years. But several employees and former officials dispute that estimate and suggest the department ordered the relocation to stifle research that contradicts the administration's agenda.
Congress is set to confront the issue during conferences of the fiscal 2020 spending bills. The House bill blocks the department from carrying out the move while the Senate measure provides $25 million in relocation funds.
An investigation by USDA's inspector general released this summer suggested that the department may have broken the law by not obtaining congressional approval before relocating two research agencies out of Washington, Politico says.
Many commodity and trade-related outlook products are expected to be released on time, the internal memo states. But most outlook reports “will be shortened if key staff depart before new hires are trained and if secure IT connections preclude remote participation” in the World Agricultural Supply and Demand Estimates report, an important forecast of market conditions for major crops and livestock.
A current ERS employee, granted anonymity out of fear of retribution, told POLITICO that cellphone service and Wi-Fi access was cut off several weeks ago. Photos have been removed from office walls and personal trash cans were taken as well, the staffer said.
So, this political fight continues and likely will intensify. The Economic Research Service is a highly regarded operation, responsible for important studies and analyses. At the same time, USDA notes that many offices of other agencies such as the Forest Service and the Bureau of Land Management – among many others – have highly decentralized operations. However, producers should watch closely to insure that the Department does not, in fact, cut back on important services as opponents of the ERS location shift change is happening, Washington Insider believes.
Most reports about ERS history see 1961 as its beginning but its roots go back much further, even to the 1905 Office of Farm Management – which later became the Bureau of Agricultural Economics. That bureau was charged with analyzing USDA’s depression-era programs and became USDA’s “central planning agency” for policy and analysis of policy impacts.
In 1953, the incoming administration shifted BAE’s policy planning efforts to an administrative office and reassigned most of its research to operating agencies. It was reestablished as a separate agency, the Economic Research Service, in 1961 where it has operated since.
The agency sees its responsibility as conducting sound, peer-reviewed economic research – including the anticipation of issues that are on the horizon, as well as a broad range of statistical indicators that gauge the health of the ag and rural sector. These are used by the White House and other USDA agencies and many others across the nation. Most of the agency’s work is conducted in Washington, DC – its 2018 activities report said that it had no field staff.
Recently Trump administration began to shift many of the ERS positions and a few others to Kansas City, a decision that has been highly unpopular in ERS – Politico says it led to “mass attrition.”
A key aspect of the move is whether or not it will interfere with important agency functions. Now Politico says the agency is warning USDA officials that the move could lead to “significant delays in vital research reports.”
Politico says the internal USDA memo was drafted for planning purposes and identifies some 38 specific reports that may be delayed “because staff members have departed,” and which include research on topics such as consolidation in the dairy industry, food security among veterans, international agricultural market access and others. Some reports may even be discontinued, such as those that calculate “price spreads,” the share of food dollars that goes to farmers.
Asked to comment on the internal document, a USDA spokesperson told Politico that "ERS has taken important action to ensure mission continuity and delivery of mission critical work throughout the transition and as a result, the agency is on track to complete its congressionally mandated projects.
Separately, the union for the agency’s employees estimates that only 19 out of 280 employees have chosen to move, just 7 percent of total staff. USDA has a deadline of Sept. 30 for current employees to change their status and those "numbers are changing daily," Politico said.
Since the move was announced in August of last year, 88 employees left the agency and 50 staffers chose to retire, according to the union. Forty-four employees were granted special accommodations allowing them to temporarily keep working in Washington, such as via telework or an extension to their report date in the new office space. A reported 79 employees will stay in DC to carry out operations deemed "core" by USDA, Politico said.
USDA says it is actively recruiting for more than 100 positions for the agencies affected by the move.
Agriculture Secretary Sonny Perdue has defended the move as a means to cut costs, improve recruitment and retention of staff and bring USDA closer to farming communities. USDA claims that the relocation would save about $20 million per year over 15 years. But several employees and former officials dispute that estimate and suggest the department ordered the relocation to stifle research that contradicts the administration's agenda.
Congress is set to confront the issue during conferences of the fiscal 2020 spending bills. The House bill blocks the department from carrying out the move while the Senate measure provides $25 million in relocation funds.
An investigation by USDA's inspector general released this summer suggested that the department may have broken the law by not obtaining congressional approval before relocating two research agencies out of Washington, Politico says.
Many commodity and trade-related outlook products are expected to be released on time, the internal memo states. But most outlook reports “will be shortened if key staff depart before new hires are trained and if secure IT connections preclude remote participation” in the World Agricultural Supply and Demand Estimates report, an important forecast of market conditions for major crops and livestock.
A current ERS employee, granted anonymity out of fear of retribution, told POLITICO that cellphone service and Wi-Fi access was cut off several weeks ago. Photos have been removed from office walls and personal trash cans were taken as well, the staffer said.
So, this political fight continues and likely will intensify. The Economic Research Service is a highly regarded operation, responsible for important studies and analyses. At the same time, USDA notes that many offices of other agencies such as the Forest Service and the Bureau of Land Management – among many others – have highly decentralized operations. However, producers should watch closely to insure that the Department does not, in fact, cut back on important services as opponents of the ERS location shift change is happening, Washington Insider believes.
Mixed Signals Continue from Trump on China Trade Deal Prospects
President Donald Trump Wednesday again shifted his commentary on the U.S.-China trade situation, proclaiming that an agreement between the two sides could come faster than most think.
"They want to make a deal very badly... It could happen sooner than you think," Trump told reporters in New York. He said China was trying to be nice to him and added to reporters: “I was nice to them.” Later on Wednesday, Trump commented, "We're having some very good conversations.”
He continued his positive tone, stating, "China is starting to buy our agricultural product again. They’re starting to go with the beef and all of the different things, pork, very big on pork."
But as he has shown previously, he followed up by commenting, “The question is, do we want to make a deal?”
His Wednesday remarks stand in contrast to the harsh words he delivered at the UN on Tuesday. “Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property and also trade secrets on a grand scale,” Trump said.
So the U.S.-China trade situation continues to marked by comments that at times are positive only to be followed by up remarks that quickly dampen hopes this trade issue is going to be resolved soon
"They want to make a deal very badly... It could happen sooner than you think," Trump told reporters in New York. He said China was trying to be nice to him and added to reporters: “I was nice to them.” Later on Wednesday, Trump commented, "We're having some very good conversations.”
He continued his positive tone, stating, "China is starting to buy our agricultural product again. They’re starting to go with the beef and all of the different things, pork, very big on pork."
But as he has shown previously, he followed up by commenting, “The question is, do we want to make a deal?”
His Wednesday remarks stand in contrast to the harsh words he delivered at the UN on Tuesday. “Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property and also trade secrets on a grand scale,” Trump said.
So the U.S.-China trade situation continues to marked by comments that at times are positive only to be followed by up remarks that quickly dampen hopes this trade issue is going to be resolved soon
US and Japan Ink Partial Trade, Boosting US Ag Access
President Donald Trump and Japanese Prime Minister Shinzo Abe signed a trade deal that covers agriculture and digital trade between the two countries in New York. But the agreement does not cover a huge portion of the U.S.-Japan relationship – autos.
Under the agreement, some $7.2 billion in U.S. ag goods will get improved access to the Japanese market, access equal to what would have resulted from the Trans-Pacific Partnership (TPP) agreement. After the deal is in place, more than 90 percent of U.S. ag goods will be able to go to Japan with more-favorable terms.
As for autos, that was kept out of the agreement. The issue had become a sticking point and prompted some downbeat expectations Tuesday for success. But jettisoning auto provisions helped seal the agreement signed by the two leaders in New York.
Most U.S. ag groups welcomed the deal and several indicated they looked forward to being on the same page as supplier from other countries that are part of the successor to TPP.
Under the agreement, some $7.2 billion in U.S. ag goods will get improved access to the Japanese market, access equal to what would have resulted from the Trans-Pacific Partnership (TPP) agreement. After the deal is in place, more than 90 percent of U.S. ag goods will be able to go to Japan with more-favorable terms.
As for autos, that was kept out of the agreement. The issue had become a sticking point and prompted some downbeat expectations Tuesday for success. But jettisoning auto provisions helped seal the agreement signed by the two leaders in New York.
Most U.S. ag groups welcomed the deal and several indicated they looked forward to being on the same page as supplier from other countries that are part of the successor to TPP.
Thursday Watch List
Markets
Weekly jobless claims and GDP numbers will be out on Thursday morning. We will also be watching for export sales, and confirmation of any new soybean sales to China, and any new details regarding the new U.S.-Japan trade deal signed on Wednesday.
Weather
A few thundershowers will move from the southeast Plains across the northern Delta Thursday and Thursday night but these look to be light. Light to moderate rain will develop across the southern Canadian Prairies and northernmost areas of the Northern Plains during this time. Mainly dry elsewhere in the key U.S. growing areas Thursday. Temperatures below normal in the west and central Canadian Prairies, near to above normal northern US, above normal southern U.S.
Weekly jobless claims and GDP numbers will be out on Thursday morning. We will also be watching for export sales, and confirmation of any new soybean sales to China, and any new details regarding the new U.S.-Japan trade deal signed on Wednesday.
Weather
A few thundershowers will move from the southeast Plains across the northern Delta Thursday and Thursday night but these look to be light. Light to moderate rain will develop across the southern Canadian Prairies and northernmost areas of the Northern Plains during this time. Mainly dry elsewhere in the key U.S. growing areas Thursday. Temperatures below normal in the west and central Canadian Prairies, near to above normal northern US, above normal southern U.S.
Wednesday, September 25, 2019
U.S., Japan Hit Sticking Point in Negotiations
U.S. President Donald Trump is hoping to sign a limited bilateral trade deal with Japan when he’s face-to-face with Prime Minister Shinzo Abe (AH-bay) on Wednesday at the U.N General Assembly. However, Japanese officials are pushing for a provision that the U.S. won’t like. Politico says Japan wants a provision in the agreement that would allow them to “blow up the agreement” and slap retaliatory tariffs on U.S. farm goods if President Trump moves forward with tariffs on automobiles from Japan. Multiple sources who are familiar with the negotiations tell Politico that the request is putting a speed bump in the final stages of the talks. Negotiators are looking to give Japan a full exemption from Trump’s tariff threats. However, Japanese officials are said to “remain cautious” about reassurances from Washington. This pact with Japan is a big priority for U.S. agriculture. Farm exporters say they’re losing market share to competitors like Australia, Canada, and the European Union. Competitors continue to benefit from greater access to the lucrative Japanese market.
More Optimism for Upcoming Talks Between China and the U.S.
The Chinese Vice Premier, who’s leading China’s efforts in the trade talks with the United States, will be back in Washington next week. An Agri-Pulse report says he’ll be across the table from U.S. Trade Representative Robert Lighthizer. Earlier this week on the sidelines of the United Nation’s General Assembly in New York, U.S. Treasury Secretary Steven Mnuchin (Muh-NOO-chin) said, “We’re looking forward to those conversations.” Deputy Ag Secretary Steve Censky spoke in Kansas City on Monday during the annual Ag Outlook Forum. He said the conversations that took place last week with Chinese officials were “positive and productive.” Several media reports say Chinese buyers purchased between 600,000 and 1.5 million metric tons of U.S. soybeans on Monday for delivery between October and December. The U.S. Soybean Export Council reports that China relaxed import tariffs for the purchases to make sense, given a price spread that favored U.S. soybeans. Additionally, Mnuchin admitted Monday that it was a White House decision to call off a planned trip a Chinese delegation was going to take to Montana and Nebraska this week. Mnuchin said officials “didn’t want any confusion around the trade issues.”
Chinese Demand Pushing Meat Prices Higher
China has recently been buying a lot of meat. The Wall Street Journal says their recent purchases are pushing up the prices of beef, pork, and poultry around the globe. Meat buyers are increasing their activity after African Swine Fever hit the country hard and reduced the size of the world’s largest pig herd by more than a third. Domestic pork prices have jumped in China and meat imports are rising in response and placing a strain on global meat supplies. For example, Brazil poultry shipments to China have jumped 31 percent compared to last year. Retail prices for chicken breasts, thighs, and legs have increased roughly 16 percent. European meat buyers are paying five percent more for pork because more of their domestically produced supplies are heading to China. American shoppers haven’t felt the impact yet, but that may change. Futures prices recently rose after Chinese officials say the country could exempt some U.S. pork and other agricultural goods from punitive tariff increases. Many American meat companies have watched as European and South American competitors have raced each other to supply China’s pork needs.
U.S. Biofuel Industry is Still Waiting
Despite meetings last week at the White House, the waiting is continuing for the biofuels industry. No new details have emerged on the possible reallocation of lost biofuels in the nation’s fuel supply. USDA Deputy Secretary Steve Censky (SEHN-skee) announced on Monday that the administration isn’t ready to give out details on potential changes in volume obligations to offset lost demand due to the Environmental Protection Agency’s small-refinery RFS waiver exemptions. Censky says the administration wants to ensure that potential policy changes will meet the blend level requirements under the Renewable Fuels Standard. Censky spoke at the Ag Outlook Forum in Kansas City. He says the next steps on any plan coming out of the White House will be taken by Larry Kudlow, the White House Economic Council Director. Censky says he doesn’t have any specific timeframe in mind yet for an announcement. “I’d love to have it sooner than later,” he says. “I think that farmers, as well as the biofuel community would love to have that kind of certainty announced soon. That’s what we’re advocating.” The 31 small-refinery exemptions granted by the EPA amounted to about 1.6 billion gallons taken away from ethanol and biofuel use.
HungerU Launches College Tour to Share Ag Story
This year’s class of HungerU (Hunger You) ambassadors are getting ready to launch a tour of colleges around the country. The preparation work included a day of educational presentations in Washington, D.C. For those who don’t know, HungerU, a Farm Journal Foundation program, is an educational and advocacy platform designed to engage university student populations around the country. A central purpose of HungerU is to communicate outside the agricultural bubble with future influencers, including voters, consumers, and community leaders. The goal is to educate people on the central and necessary role that modern agriculture plays in creating affordable, wholesome food for everyone. This year’s college tour focuses on the Mid-Atlantic states. Just a few of the schools include George Washington University, Howard University, the University of Pennsylvania, and more. This year’s ambassador team combines expertise in areas such as nutrition, communications, gardening, and many more. Additionally, this year’s fall tour marks the third year of the National Corn Growers Association’s partnership in the program
Food and Farm Facts Now Available to Tell the Story of Agriculture
The new Farm and Food Facts book, map, and pocket guide are now available. The information is produced by the American Farm Bureau Foundation for Agriculture. “Food and Farm Facts provides the opportunity to share the story of agriculture,” says Foundation Chair Zippy Duvall. “It talks about the how and why farmers do what they do to produce food, fiber, and renewable fuel. I hope it also puts into perspective how blessed we are to be Americans.” Food and Farm Facts will help answer questions like, “Where does our food come from and who grows it?” The 32-page, full-color book features updated facts and easy-to-read infographics that can be used in a variety of ways to help increase agricultural literacy. The Farm Bureau Foundation says the book will be a valuable resource in the classroom, at fairs and events, for student leadership organizations, and on social media.
Washington Insider: Concerns About US, Japan Trade Deal
The urban media is intensely interested in trade policy now, especially the talks with China but also with Japan. Thus, it was a modest surprise when the New York Times and others reported on Tuesday that the U.S. and Japan may fall short of signing a new deal this week, as negotiators from both countries grapple with how to resolve the U.S. threat to place tariffs on cars from Japan.
However, reports late Tuesday afternoon indicated the two sides had completed their negotiations.
The two countries had been working toward finishing a “limited” deal this week, as both President Donald Trump and Prime Minister Shinzo Abe of Japan prepare to appear side by side at the UN General Assembly meeting in New York.
The key holdup had been the U.S. threat to tax cars imported from Japan. The threatened levies would be similar to those already placed on steel and aluminum imported from Japan, Europe and other nations.
NYT says the President has long seen the threat to tax cars, which make up more than one-third of U.S. imports from Japan, as a source of leverage that has brought Japan to the trade negotiating table.
But that threat — and the U.S. administration’s “mercurial negotiating strategy” — has also become an obstacle to the deal’s resolution, the Times said. Japan is seeking a firm commitment from the administration not to tax its cars and is pushing to include a “sunset clause” that would cause the deal — and any benefits it has delivered to American agricultural producers — to expire if the U.S. follows through on its car tax threats.
The impasse raises questions about whether the United States and Japan will be able to finish the deal in the near future, in time for the Japanese legislature to consider it when it convenes next month.
The prospective deal was expected to reduce barriers to American exports of beef, pork and wheat, helping to shore up administration political support for U.S. farmers who have been badly hurt by his trade war with China, the Times said. In return, the United States would drop its barriers to Japanese machinery and chemicals and both sides would sign onto new standards for e-commerce and other digital trade.
After meeting with Abe at the summit of global leaders in France in August, Trump said that the United States and Japan had reached an agreement “in principle.” Last week, his administration sent a notification to Congress that it intended to enter into an agreement in the coming weeks.
Unlike a traditional trade agreement, which would cover nearly all sectors of the economy, the proposed Japan deal would be confined to a few sectors and products. But it would be an important political talking point for the president who has struggled to make progress in trade talks with China and has not persuaded congressional Democrats to pass the revised North American trade deal.
It could also help mollify American farmers and ranchers, who have complained about the administration decision to pull the U.S. from the Trans-Pacific Partnership, a multi-country trade deal that included Japan. The president argued then he could secure better trade terms for American farmers through bilateral talks.
While Japan initially resisted administration requests for one-on-one negotiations on trade, the threat of auto tariffs brought Japan to the negotiating table to discuss a more limited agreement. The administration determined this year that automobile imports posed a threat to U.S. national security by eroding its industrial base that also supplies its military. That allowed the president to impose tariffs on foreign cars and car parts as he has done on imports of steel and aluminum, including from Japan.
But in May the administration postponed that decision an additional six months as it continued to negotiate trade agreements with both Japan and the European Union. One of Japan’s main priorities has been a guarantee that its cars will not be hit by such a tax.
Daniel C. Sneider, a lecturer in East Asian studies at Stanford University, said inserting a clause into the deal that would withdraw Japan’s concession on agriculture if U.S. taxes cars “is a very clever solution to their problem.” He added current tensions at least in part arise from the perception that the administration “cannot be trusted” but that the Japanese cannot say that in public.
So, we will see. The proposed deals awaiting approval are very important for both economic and political reasons. However, the debates over approval likely will continue to be contentious and should be watched closely by producers as they evolve, Washington Insider believes.
However, reports late Tuesday afternoon indicated the two sides had completed their negotiations.
The two countries had been working toward finishing a “limited” deal this week, as both President Donald Trump and Prime Minister Shinzo Abe of Japan prepare to appear side by side at the UN General Assembly meeting in New York.
The key holdup had been the U.S. threat to tax cars imported from Japan. The threatened levies would be similar to those already placed on steel and aluminum imported from Japan, Europe and other nations.
NYT says the President has long seen the threat to tax cars, which make up more than one-third of U.S. imports from Japan, as a source of leverage that has brought Japan to the trade negotiating table.
But that threat — and the U.S. administration’s “mercurial negotiating strategy” — has also become an obstacle to the deal’s resolution, the Times said. Japan is seeking a firm commitment from the administration not to tax its cars and is pushing to include a “sunset clause” that would cause the deal — and any benefits it has delivered to American agricultural producers — to expire if the U.S. follows through on its car tax threats.
The impasse raises questions about whether the United States and Japan will be able to finish the deal in the near future, in time for the Japanese legislature to consider it when it convenes next month.
The prospective deal was expected to reduce barriers to American exports of beef, pork and wheat, helping to shore up administration political support for U.S. farmers who have been badly hurt by his trade war with China, the Times said. In return, the United States would drop its barriers to Japanese machinery and chemicals and both sides would sign onto new standards for e-commerce and other digital trade.
After meeting with Abe at the summit of global leaders in France in August, Trump said that the United States and Japan had reached an agreement “in principle.” Last week, his administration sent a notification to Congress that it intended to enter into an agreement in the coming weeks.
Unlike a traditional trade agreement, which would cover nearly all sectors of the economy, the proposed Japan deal would be confined to a few sectors and products. But it would be an important political talking point for the president who has struggled to make progress in trade talks with China and has not persuaded congressional Democrats to pass the revised North American trade deal.
It could also help mollify American farmers and ranchers, who have complained about the administration decision to pull the U.S. from the Trans-Pacific Partnership, a multi-country trade deal that included Japan. The president argued then he could secure better trade terms for American farmers through bilateral talks.
While Japan initially resisted administration requests for one-on-one negotiations on trade, the threat of auto tariffs brought Japan to the negotiating table to discuss a more limited agreement. The administration determined this year that automobile imports posed a threat to U.S. national security by eroding its industrial base that also supplies its military. That allowed the president to impose tariffs on foreign cars and car parts as he has done on imports of steel and aluminum, including from Japan.
But in May the administration postponed that decision an additional six months as it continued to negotiate trade agreements with both Japan and the European Union. One of Japan’s main priorities has been a guarantee that its cars will not be hit by such a tax.
Daniel C. Sneider, a lecturer in East Asian studies at Stanford University, said inserting a clause into the deal that would withdraw Japan’s concession on agriculture if U.S. taxes cars “is a very clever solution to their problem.” He added current tensions at least in part arise from the perception that the administration “cannot be trusted” but that the Japanese cannot say that in public.
So, we will see. The proposed deals awaiting approval are very important for both economic and political reasons. However, the debates over approval likely will continue to be contentious and should be watched closely by producers as they evolve, Washington Insider believes.
Grassley Blasts Delay in Biofuels Announcement
Patience on a biofuels announcement from the Trump administration is running thin with Sen. Chuck Grassley, R-Iowa. “This agreement we have with the White House, it is 15 billion gallons, why isn't that the end of it?” Grassley told reporters on a weekly call. "Let's either do our job or get off the pot. Let's call this thing to an end. We ought to have this paper from the EPA yesterday.”
Grassley has talked about an apparent agreement reached during a meeting at the White House some two weeks ago in which the Small Refinery Exemptions (SREs) would still be granted by EPA, but the agency would account for those in setting biofuel levels under the RFS.
“This is hurting the president more in Iowa than even the China debate,” Grassley said. “I think farmers have patience with China, the negotiations going on with China. They know China has been cheating. What they do not understand is, they are promised 15 billion gallons of ethanol to be used, but get 13.6 [billion gallons].”
EPA data shows that as of September 19, there have been 42 SREs requested, with 31 granted, six were denied, three were withdrawn or declared ineligible and two are listed as still pending.
Grassley has talked about an apparent agreement reached during a meeting at the White House some two weeks ago in which the Small Refinery Exemptions (SREs) would still be granted by EPA, but the agency would account for those in setting biofuel levels under the RFS.
“This is hurting the president more in Iowa than even the China debate,” Grassley said. “I think farmers have patience with China, the negotiations going on with China. They know China has been cheating. What they do not understand is, they are promised 15 billion gallons of ethanol to be used, but get 13.6 [billion gallons].”
EPA data shows that as of September 19, there have been 42 SREs requested, with 31 granted, six were denied, three were withdrawn or declared ineligible and two are listed as still pending.
US-China Talks Set for Week of October 7
Treasury Secretary Steve Mnuchin initially said Monday that U.S.-China trade talks with Vice Premier Liu He would take place next week in Washington, but later revised his statement to say that it would be the week of October 7.
“I think it is not next week but the following week we will be having those talks,” Mnuchin said in an interview with Fox Business Network, adding that deputy-level negotiations last week had made some progress in easing trade tensions.
Some people closely following the talks said they expect the confab to take place October 10-11.
“We look forward to those conversations,” Mnuchin said Monday on the sidelines of the United Nations General Assembly in New York. “The president has been very clear: if we can get the right deal, he wants the deal,” Mnuchin said. “If we cannot get the right deal, he is happy with the tariffs.”
Mnuchin also said the U.S. had requested China postpone visits to U.S. farms in Montana and Nebraska this week, a development which raised anxiety about the trade talks.
Word that the talks are scheduled has eased some concerns on the U.S.-China trade front, but have not totally removed concerns given the history of how quickly this issue can shift.
“I think it is not next week but the following week we will be having those talks,” Mnuchin said in an interview with Fox Business Network, adding that deputy-level negotiations last week had made some progress in easing trade tensions.
Some people closely following the talks said they expect the confab to take place October 10-11.
“We look forward to those conversations,” Mnuchin said Monday on the sidelines of the United Nations General Assembly in New York. “The president has been very clear: if we can get the right deal, he wants the deal,” Mnuchin said. “If we cannot get the right deal, he is happy with the tariffs.”
Mnuchin also said the U.S. had requested China postpone visits to U.S. farms in Montana and Nebraska this week, a development which raised anxiety about the trade talks.
Word that the talks are scheduled has eased some concerns on the U.S.-China trade front, but have not totally removed concerns given the history of how quickly this issue can shift.
Wednesday Watch List
Markets
The U.S. Census Bureau starts the day with a report of new home sales for August at 9 a.m. CDT, followed by the Energy Department's weekly reports of energy inventories at 9:30 a.m. U.S. ethanol inventory is included and showed an increase to 23.2 million barrels last week. Weather forecasts remain closely watched with row crops getting closer to harvest in southern states.
Weather
Light to moderate rain will cross the southern and eastern Midwest Wednesday. Dry conditions will be in place elsewhere. Temperatures will be seasonal to above normal north and central and hot south. A new storm system is indicated for northern and western crop areas during the coming weekend.
The U.S. Census Bureau starts the day with a report of new home sales for August at 9 a.m. CDT, followed by the Energy Department's weekly reports of energy inventories at 9:30 a.m. U.S. ethanol inventory is included and showed an increase to 23.2 million barrels last week. Weather forecasts remain closely watched with row crops getting closer to harvest in southern states.
Weather
Light to moderate rain will cross the southern and eastern Midwest Wednesday. Dry conditions will be in place elsewhere. Temperatures will be seasonal to above normal north and central and hot south. A new storm system is indicated for northern and western crop areas during the coming weekend.
Tuesday, September 24, 2019
Washington Insider: Congress Struggles Ahead of Coming Recess
The Hill and other media are reporting this week that the Congress is working under pressure to pass a continuing resolution to fund the government through Nov. 21 before it leaves town. The House already passed its stop-gap bill and Senate Majority Leader Mitch McConnell, R-Ky., has started the process of bringing it to the Senate floor, but it hasn’t been scheduled yet for a vote.
McConnell acknowledged earlier that a short-term bill would be needed to avoid an end-of-September shutdown and that a temporary continuing resolution for the outstanding parts of the government will be needed before that time. However, he hasn’t yet weighed in on the House-passed CR, which was unveiled last Wednesday. In addition to funding the government, the bill would require USDA to provide state-by-state data on the effects of the president’s trade war.
It also extends several health programs, the National Flood Insurance Program and authorizations for the Export-Import Bank.
The decision to punt the government funding fight to later in the year comes amid other significant battles that loom over the fiscal 2020 bills. While the House passed 10 out of its 12 funding bills, many of them include “poison pills” inserted by Democrats meaning they won’t get taken up as is by the GOP-controlled Senate.
The Senate, meanwhile, hasn’t passed any of its fiscal 2020 bills. Senate Democrats blocked an attempt by McConnell last week to bring the first funding package to the floor, which was expected to include funding for the Pentagon; the departments of Health and Human Services, Labor, and Education; the Energy Department and water development; and the State Department and foreign operations.
Democrats opposed bringing up the bill because of frustration about the top-line spending numbers for all 12 bills. Those estimates were approved by the Appropriations Committee in a party-line vote but opposed by Democrats who believed that they included extra border money in the Department of Homeland Security bill to replace that diverted by the administration for the border wall.
Democrats also opposed the Senate’s defense funding bill after Republicans objected to language that would prevent Trump from shifting military spending toward the wall without congressional sign off.
“The appropriations process demands that Republicans and Democrats work together. If one party decides to go it alone, it can wreck the spirit of bipartisanship necessary to responsibly fund the government. Unfortunately, Republicans elected to depart from a bipartisan path early in the appropriations process this year,” said Senate Minority Leader Charles Schumer, D-N.Y.
The Senate Appropriations Committee is scheduled to vote on four bills this week: interior and environment; commerce, justice and science; the legislative branch; and the Department of Homeland Security.
The DHS bill is expected to spark a brawl in the committee because Republicans included money for the U.S.-Mexico border wall and because it covers lightning rod issues like Immigration and Customs Enforcement and detention beds.
Senate Democrats could force a vote as soon as this week on a resolution to nix Trump’s emergency declaration on the wall. Congress previously voted to end the emergency declaration in February, but the House was unable to override the president’s veto. Under the National Emergencies Act, Democrats can force a vote on the resolution every six months. A bipartisan group of senators reintroduced the resolution on Sept. 11.
Democrats are fuming after the Pentagon announced earlier this month it would be moving forward with its plan to redirect $3.6 billion in military funding toward the wall under the emergency declaration.
Schumer said that Democrats would force a vote within the month, which would have to be this week before Congress leaves town. “The president’s national emergency declaration was, and is, an outrageous power grab by a president who refuses to respect the constitutional separation of powers,” Schumer said from the Senate floor at the time.
House Majority Leader Steny Hoyer, D-Md., announced Friday that the House will take up two bills led by Democrats and aimed at improving "how the Department of Homeland Security oversees border issues in a humane and responsible manner, including the care of children."
Both bills are expected to face an uphill battle in the Republican-controlled upper chamber.
So, we will see. It appears that there is little support for a government shutdown just now, but the number of inflammatory issues is very large — and reluctance to push bi-partisan agreement appears to be fully woven into the partisan politicking ahead of the 2020 election. Producers should watch each of these fights very closely as they intensify over the coming days, Washington Insider believes.
McConnell acknowledged earlier that a short-term bill would be needed to avoid an end-of-September shutdown and that a temporary continuing resolution for the outstanding parts of the government will be needed before that time. However, he hasn’t yet weighed in on the House-passed CR, which was unveiled last Wednesday. In addition to funding the government, the bill would require USDA to provide state-by-state data on the effects of the president’s trade war.
It also extends several health programs, the National Flood Insurance Program and authorizations for the Export-Import Bank.
The decision to punt the government funding fight to later in the year comes amid other significant battles that loom over the fiscal 2020 bills. While the House passed 10 out of its 12 funding bills, many of them include “poison pills” inserted by Democrats meaning they won’t get taken up as is by the GOP-controlled Senate.
The Senate, meanwhile, hasn’t passed any of its fiscal 2020 bills. Senate Democrats blocked an attempt by McConnell last week to bring the first funding package to the floor, which was expected to include funding for the Pentagon; the departments of Health and Human Services, Labor, and Education; the Energy Department and water development; and the State Department and foreign operations.
Democrats opposed bringing up the bill because of frustration about the top-line spending numbers for all 12 bills. Those estimates were approved by the Appropriations Committee in a party-line vote but opposed by Democrats who believed that they included extra border money in the Department of Homeland Security bill to replace that diverted by the administration for the border wall.
Democrats also opposed the Senate’s defense funding bill after Republicans objected to language that would prevent Trump from shifting military spending toward the wall without congressional sign off.
“The appropriations process demands that Republicans and Democrats work together. If one party decides to go it alone, it can wreck the spirit of bipartisanship necessary to responsibly fund the government. Unfortunately, Republicans elected to depart from a bipartisan path early in the appropriations process this year,” said Senate Minority Leader Charles Schumer, D-N.Y.
The Senate Appropriations Committee is scheduled to vote on four bills this week: interior and environment; commerce, justice and science; the legislative branch; and the Department of Homeland Security.
The DHS bill is expected to spark a brawl in the committee because Republicans included money for the U.S.-Mexico border wall and because it covers lightning rod issues like Immigration and Customs Enforcement and detention beds.
Senate Democrats could force a vote as soon as this week on a resolution to nix Trump’s emergency declaration on the wall. Congress previously voted to end the emergency declaration in February, but the House was unable to override the president’s veto. Under the National Emergencies Act, Democrats can force a vote on the resolution every six months. A bipartisan group of senators reintroduced the resolution on Sept. 11.
Democrats are fuming after the Pentagon announced earlier this month it would be moving forward with its plan to redirect $3.6 billion in military funding toward the wall under the emergency declaration.
Schumer said that Democrats would force a vote within the month, which would have to be this week before Congress leaves town. “The president’s national emergency declaration was, and is, an outrageous power grab by a president who refuses to respect the constitutional separation of powers,” Schumer said from the Senate floor at the time.
House Majority Leader Steny Hoyer, D-Md., announced Friday that the House will take up two bills led by Democrats and aimed at improving "how the Department of Homeland Security oversees border issues in a humane and responsible manner, including the care of children."
Both bills are expected to face an uphill battle in the Republican-controlled upper chamber.
So, we will see. It appears that there is little support for a government shutdown just now, but the number of inflammatory issues is very large — and reluctance to push bi-partisan agreement appears to be fully woven into the partisan politicking ahead of the 2020 election. Producers should watch each of these fights very closely as they intensify over the coming days, Washington Insider believes.
Biofuel Announcement Now on Hold as Trump Seeks Still More Info
As last week closed, it appeared that issues relative to US biofuel policy had been settled and an announcement from the Trump administration was expected to come. That assessment came from sources in the wake of the meeting September 19 between President Donald Trump and senators representing refining interests.
However, as this week opens, sources now indicate that Trump is seeking more perspective and options in the matter, reportedly bringing National Economic Council chief Larry Kudlow into the mix.
Expectations were that the Trump administration was poised to announce that they would use a three-year average to reallocate Renewable Fuel Standard (RFS) obligations that were covered by small refinery exemptions (SREs), starting with the 2020 compliance year. Coming out of the Thursday meeting, it appeared that refiner interests were likely to get a cap on prices for Renewable Identification Numbers (RINs), the credits refiners can buy to show compliance with the RFS.
However, now that the matter has apparently been thrown open once again, the expectation for an announcement has turned to uncertain relative to the timing of any announcement from the Trump White House.
However, as this week opens, sources now indicate that Trump is seeking more perspective and options in the matter, reportedly bringing National Economic Council chief Larry Kudlow into the mix.
Expectations were that the Trump administration was poised to announce that they would use a three-year average to reallocate Renewable Fuel Standard (RFS) obligations that were covered by small refinery exemptions (SREs), starting with the 2020 compliance year. Coming out of the Thursday meeting, it appeared that refiner interests were likely to get a cap on prices for Renewable Identification Numbers (RINs), the credits refiners can buy to show compliance with the RFS.
However, now that the matter has apparently been thrown open once again, the expectation for an announcement has turned to uncertain relative to the timing of any announcement from the Trump White House.
US, China Label Deputy-Level Talks ‘Positive’ & ‘Constructive’
U.S. and Chinese deputy-level talks Thursday and Friday in Washington were labeled “positive” and “constructive” by both the U.S. and China in separate statements issued following the talks.
The sessions were “aimed at improving the trade relationship between the two countries,” the Office of the U.S. Trade Representative (USTR) said in a statement. “These discussions were productive, and the United States looks forward to welcoming a delegation from China for principal-level meetings in October.”
The China Daily reported the talks “discussed the trade issues in a constructive way. Moreover, the two countries also talked the specific arrangements for the 13th round of China-U.S. high-level economic and trade consultations in Washington DC in October. The two sides agreed to maintain communication on relevant issues.” President Donald Trump declared Friday that the U.S. would not accept an interim agreement on trade as the U.S. is “looking for a complete deal.”
Speaking to reporters at a news conference Friday with Australian Prime Minister Scott Morrison, Trump said China’s offer to boost purchases of U.S. agriculture exports alone is not enough to compel his administration to sign a deal. Intellectual-property theft, he added, remains an issue that must be resolved.
As for the farm visits that were canceled, Han Jun, vice-minister at the Ministry of Agriculture and Rural Affairs, said the canceled visit was due to a change in the itinerary of the team. "There was a good outcome from the negotiations in the agriculture area too. The two sides had thorough and candid communications," Han said, according to a report by state-backed Yicai news outlet.
The sessions were “aimed at improving the trade relationship between the two countries,” the Office of the U.S. Trade Representative (USTR) said in a statement. “These discussions were productive, and the United States looks forward to welcoming a delegation from China for principal-level meetings in October.”
The China Daily reported the talks “discussed the trade issues in a constructive way. Moreover, the two countries also talked the specific arrangements for the 13th round of China-U.S. high-level economic and trade consultations in Washington DC in October. The two sides agreed to maintain communication on relevant issues.” President Donald Trump declared Friday that the U.S. would not accept an interim agreement on trade as the U.S. is “looking for a complete deal.”
Speaking to reporters at a news conference Friday with Australian Prime Minister Scott Morrison, Trump said China’s offer to boost purchases of U.S. agriculture exports alone is not enough to compel his administration to sign a deal. Intellectual-property theft, he added, remains an issue that must be resolved.
As for the farm visits that were canceled, Han Jun, vice-minister at the Ministry of Agriculture and Rural Affairs, said the canceled visit was due to a change in the itinerary of the team. "There was a good outcome from the negotiations in the agriculture area too. The two sides had thorough and candid communications," Han said, according to a report by state-backed Yicai news outlet.
USMCA, China Trade Talks Advancing This Week
Trade talks continue this week between the U.S. and China as the U.S.-Mexico-Canada Agreement inches closer to reality. President Donald Trump says talks last week between the U.S. and China "were very positive." Negotiations will continue this week ahead of high-level talks planned sometime next month. A Chinese delegation canceled U.S. farm visits last week, but apparently not because of the ongoing trade negotiations. Officials say the trips were canceled to avoid excessive media attention. Meanwhile, Democrats in the House of Representatives plan to submit a counterproposal to the White House this week on changes to USMCA, according to Politico. House Ways and Means Chairman Richard Neal says the USCMA working group would meet with U.S. Trade Representative Robert Lighthizer this week to “intensify the discussion.” Neal is hopeful the group and Lighthizer can “strike a deal soon,” that allows the House to vote on the agreement. Neal says the concerns raised by Democrats are not resolved but added the Trump administration has “made substantial progress.”
U.S. Dairy: Japan Trade Agreement Could Leave Dairy Behind
Lawmakers representing dairy country say the trade agreement with Japan fails to level the playing field for U.S. dairy. Late last week, a group of lawmakers joined Representative Ron Kind, a Wisconsin Democrat, in a letter to U.S. Trade Representative Robert Lighthizer detailing the issue. The lawmakers say U.S. dairy will have “inferior access to the market compared to competitors,” like the European Union and signatories of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The agreement fails to level the playing field for U.S. exports of cheese, butter, skim milk powder, ice cream and condensed milk, according to the lawmakers. The administration is required to consult with Congress when new trade agreement negotiations are happening in order to ensure any new agreement would include access for key agriculture sectors like dairy, according to the letter. However, “Those conversations never happened.” Representative Kind adds President Donald Trump “needs to stop using our farmers as pawns and start making trade deals that empower them.”
USCA: Successful USMCA Negotiation Will Include COOL
The U.S. Cattlemen's Association is urging President Donald Trump to reinstate country-of-origin labeling for beef in the U.S.-Mexico-Canada Agreement. Though COOL failed to make it into the final text of the trade pact replacing the North American Free Trade Agreement, the organization says, “there is still an opportunity to address the unfair treatment of cattle and beef in this trade agreement.” The association sent the request to President Trump in a letter, stating, “The impact of a poor cattle market and decreasing live cattle prices coincide with the continued decline in America’s rural economy and the rising income disparity between rural and urban residents.” USCA President Kenny Graner states, "We respectfully request the inclusion of a country-of-origin labeling program for U.S. beef products within the context of USMCA.” The letter continues to say USMCA without COOL “deprives U.S. Cattle producers of the ability to differentiate their product in the market.” The letter follows a similar effort in early July by a coalition of freshman House members.
Senate Democrats: Withdraw SNAP Proposal Eliminating Categorical Eligibility
A letter from 15 senators urges Agriculture Secretary Sonny Perdue to withdraw a proposal they say would take food assistance away from millions of families. The proposal would eliminate categorical eligibility under the Supplemental Nutrition Assistance Program. The 15 Democrats, including Debbie Stabenow of Michigan, say the rule would impact the "most vulnerable populations" in the U.S., including 13 percent of seniors currently receiving SNAP benefits. According to an analysis by Mathematica, at least 3.6 million SNAP participants will lose benefits as a result of the proposed rule. In the 2018 farm bill, the letter says Congress deliberately chose to exclude any changes to categorical eligibility due to the “devastating impact on families.” Additionally, the Senators raised concerns that the administration failed to conduct an accurate regulatory impact assessment. In a briefing to Congressional staff, USDA acknowledged that, at a minimum, 500,000 children would lose access to school meals. However, these impacts, among others, are not included in the required analysis.
Plant-Based Protein Market Projected at $40 billion in 2025
A market research study claims the plant-based protein market will be worth an estimated $40 billion by 2025. The report, published by MarketsandMarkets, says the sector is driven by the rising demand for so-called plant-based meat and healthy food products. Currently, the plant-based protein market is estimated at $18.5 billion. The $40 billion projection would represent a 14 percent growth rate. Researchers say public awareness regarding the increase in obesity levels due to unhealthy food consumption that includes packaged food, fast food, carbonated beverages, cold drinks, and excess consumption of animal meat has led to the demand for plant-based protein products. A significant increase in the usage of peas as a key ingredient is being noticed in the plant-based industry. The pea segment is projected to be the fastest-growing in the plant-based protein market during the forecast period. Pea protein is gaining popularity among plant-based protein manufacturers at a global level owing to its high protein content, and health benefits offered such as reduced cholesterol and lower blood pressure.
USDA Invests in Water and Wastewater Infrastructure Improvements in 25 States
The Department of Agriculture Monday announced $144 million in rural water infrastructure improvements. USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. Through the effort announced Monday, USDA will fund water projects in 25 states through 45 projects. The funds are authorized through the Water and Waste Disposal Loan and Grant program eligible applicants include rural cities and towns, and water districts. They can use the funds for drinking water, stormwater drainage and waste disposal systems in rural communities with 10,000 or fewer residents. Deputy undersecretary of rural development Donald LaVoy says "modern and reliable water and wastewater infrastructure systems are foundational to economic growth and quality of life in rural communities." One of the projects, $8.8 million for Winfield, West Virginia, will upgrade its wastewater treatment plant. USDA had $2.9 billion available for Water and Environmental Program loans and grants at the beginning of fiscal year 2019. For more information and a list of funded projects, visit www.rd.usda.gov.
Monday, September 23, 2019
House Passes Continuing Resolution That Allows Aid Payments to Farmers
On a bipartisan vote of 301 to 123, the House passed a continuing resolution that funds the government through November 21. The resolution includes a provision that will allow the Ag Department’s Commodity Credit Corporation to continue to make aid payments to farmers. That includes Market Facilitation Payments to help make up for export sales lost in recent trade wars. The Hagstrom Report says House leadership and USDA officials negotiated a provision that requires the Ag Department to report to Congress on the trade aid program. The bill goes to the Senate and is expected to be passed quickly. It then moves to President Trump’s desk for his signature. House Appropriations Chair Nita Lowey had initially left the CCC provision out of the bill but put it back in after getting pressure from both Republicans and Democrats. House Ag Committee Chair Collin Peterson is happy the assistance is continuing. “The call for more transparency in this program is a good one,” he says. “I appreciate USDA’s willingness to ensure that help gets out the door on time to the farmers who need it. At the same time, it allows taxpayers to see where the funds are going.”
Chinese Delegation Heads Home Early
Chinese trade negotiators did an about-face on Friday, canceling a visit to meet U.S. farmers after they wrapped up trade talks in Washington last week. A CNBC article says the Chinese delegation is headed back to China earlier than planned. Nicole Rolf, director of national affairs with the Montana Farm Bureau, says there wasn’t any explanation as to why they cut their trip short. Nebraska ag department officials also confirmed that the Chinese delegation called off a visit to farms in that state as well. U.S. Ag Secretary Sonny Perdue had confirmed last Thursday that the meetings were in the works as a way for China to build goodwill with American farmers. The Chinese delegation was going to visit Bozeman, Montana, and Omaha, Nebraska. The unexpected cancellation puts a damper on hopes that China would restart purchases of U.S. agricultural products, which it halted in April as retaliation against U.S. tariffs. China made up $5.9 billion in U.S. farm product exports in 2018. It’s the world’s top buyer of soybeans and purchased about 60 percent of U.S. soybean exports that year. Tensions between the two countries had eased as both countries held off on imposing additional tariffs on each other’s goods.
U.S. and Mexico Avoid Anti-Dumping Dispute on Tomatoes
Mexican tomato growers have signed a deal to raise the prices of the tomatoes they sell in the U.S. market. Politico says that ends a threat from Washington, D.C., to slap a 25-percent anti-dumping tariff on tomato imports. Commerce Secretary Wilbur Ross says the deal will protect U.S. growers from unfair trade practices. However, not all domestic importers were happy with the final agreement. They say the pact doesn’t include border inspection waivers for individual shipments if USDA can’t complete an inspection within a day. Lance Jungmeyer is president of the Fresh Produce Association of the Americas, who says the tomato deal is a step backward. “USDA has assured us the inspections can be done within 24 hours,” he says. “If that’s really the case, then there shouldn’t be a problem including language for a waiver if a deadline can’t be met occasionally.” The new deal will likely end the 17.5 percent duty that importers have paid since early May on Mexican tomato imports. The agreement also suspends the dumping investigation of Mexican tomatoes into the U.S.
China, Russia Agree to Double Their Trade in Five Years to $200 billion
China and Russia recently wrapped up three days of talks with an agreement to double their trade in five years. The two nations set a goal of increasing their trade to $200 billion in the next half-decade. Business Times says the two nations will work together to remove tariff and regulatory barriers to the exchange and trading of various goods. China and Russia will work to improve the flow of agricultural, industrial, and technological products and services. Soybeans were a big topic of conversation between the Chinese Premier and Russian President Putin. Soybeans have become a major issue for China during its trade dispute with the U.S. Industry experts have said that China will get a good number of soybeans from Russia, which still won’t be able to replace the U.S. as China’s main supplier. While Russia doesn’t produce nearly the number of soybeans as the U.S., it is planning to increase soybean production in eastern parts of the country to help increase exports to China
Labor Department to Modernize H-2A Requirements
Ag Secretary Sonny Perdue spoke positively about changes the Department of Labor will make to modernize the H-2A process. The Labor Department published a final, common-sense rule that becomes effective October 21, and eliminates the requirement to advertise job openings in local newspapers. Instead, it shifts the advertising to the Department of Labor and State Workforce Agency websites, which reach farther and are more cost-effective. The DOL’s Office of Foreign Labor Certification announced updates to the H-2A forms and online filing process for the H-2A temporary agricultural programs. Perdue says the two actions will ease regulatory burdens on U.S. farmers and ranchers, making it easier for them to follow the law and hire farmworkers through the program. “Both of these changes are absolutely critical and needed to improve the H-2A application process,” Perdue says. “By bringing these processes into the 21st century, it allows farmers to be able to better and more cost-effectively advertise for the workers they need and fill out the required forms faster and more efficiently.” He adds that no one should have to hire a lawyer just to hire a farmworker. The DOL’s final rule is designed to reduce burdens on American farmers and ranchers.
Taiwan Trade Mission Signs Letter of Intent to Purchase U.S. Wheat
Representatives from the Taiwan Flour Millers Association signed letters of intent to purchase wheat and other U.S.-grown commodities over the next two years. The millers, who signed the letters last week in Washington, D.C., are part of a biennial Taiwan Agricultural Trade Goodwill Mission. The wheat delegation first made stops in Oregon, Seattle, and Idaho before making the trip to D.C. The letter states that the Taiwan Flour Millers Association intends to purchase a total of 1.8 million metric tons, or about 66.1 million bushels of U.S. wheat between 2020 and 2021. The value of those purchases will be about $576 million. U.S. Wheat Associates President Vince Peterson says, “We’ve long had a mutually beneficial trade relationship with Taiwan’s milling and flour products industry. U.S. wheat farmers pioneered the market more than 60 years ago by meeting with members of the developing flour milling industry.” He says the members of the Taiwan Flour Millers continue to be reliable trading partners that fully recognize the value of purchasing quality U.S. grown wheat.
Washington Insider: Tough Trade Talks With China Continue
The New York Times is reporting that both the United States and China issued statements Saturday saying their recent talks were productive. At the same time, the Times noted that the combination of Friday’s tough words from President Trump and the cancellation of a planned U.S. trip by Chinese ag officials to two U.S. states seemed to cast a cloud over prospects for a trade deal and caused something of a sell-off in New York stock trading.
China’s state-run Xinhua news agency said Saturday that fairly senior negotiators had “conducted constructive discussions” in Washington in recent days and had “agreed to continue to maintain communication.”
The tone of the Xinhua statement was matched by a separate statement from the United States Trade Representative in Washington. “These discussions were productive, and the United States looks forward to welcoming a delegation from China for principal-level meetings in October,” the statement said.
In addition, the Times emphasized that both sides’ trade negotiators have continued to look for a resolution of their differences even as tensions ratcheted ever higher over the summer — although the report noted that its sources “all insisted on anonymity, citing diplomatic sensitivities in the negotiations.”
The delegation of Chinese ag officials that had planned to travel to Montana and Nebraska in the coming week but cancelled at the last moment did not act because of “any new difficulty in the trade talks,” the NYT said. Instead, the trip was canceled out of concern that it would turn into a media circus and “give the misimpression that China was trying to meddle in American domestic politics,” the Times said.
The Chinese government has long taken the position that countries should not interfere in each other’s domestic affairs, a position developed partly in opposition to foreign criticisms of China’s human rights record.
In recent weeks, the Chinese government and many Chinese internet users have also reacted angrily to calls by American officials for Beijing to show restraint in responding to increasingly violent pro-democracy protests in Hong Kong. China’s foreign ministry has repeatedly objected to what it describes as intervention in China’s internal affairs over Hong Kong.
The question now is whether Vice Premier Liu He of China can make any progress when he comes to Washington for high-level talks next month. While the dates for those talks have not been confirmed, they look likely to be scheduled for Oct. 10-11, the Times said.
The biggest obstacle facing negotiators may be agreeing on the scale and ambition of any deal they try to reach. The Times cited several of its sources that argue that China especially wants to reach a partial deal that would head off President Trump’s planned increases in American tariffs on Chinese goods set for Oct. 15 and Dec. 15.
China is also seen as becoming increasingly wary of seeking any comprehensive resolution of the dozens of issues facing the two countries. As a result, its negotiators have tried to focus the talks on issues that can be resolved through regulations that the country already plans to issue by early January to implement a new law on foreign investments that the National People’s Congress approved in March.
At the same time, Chinese trade negotiators have tried recently to exclude issues like data flows, the location of data and the setting of cybersecurity standards. These concerns tend to infringe on the turf of China’s internal security agencies, which have resisted any limits on their ability to conduct comprehensive surveillance within the country and are wary of allowing in American tech companies, the Times said.
The United States has tried to persuade Beijing to adopt broad changes to Chinese laws to make the country more open to imports and to limit subsidies for industries, particularly advanced manufacturing industries that compete with American industries.
However, President Trump objected on Friday to any partial deal. “I’m looking for a complete deal, I’m not looking for a partial deal,” the president said during a joint news conference with Prime Minister Scott Morrison of Australia. “We’re looking for the big deal.”
There have nonetheless been several discussions between the two sides on reducing the value of American tariffs that are still pending and which are set to increase even further by mid-December.
The United States also has been pressing China to buy more American food in exchange, purchases China likely will need as an epidemic of African swine fever has killed huge numbers of hogs and pigs.
The two sides have nonetheless undertaken a series of smaller, confidence-building trade measures in the past two weeks.
So, we will see. The pressure is strong and growing on both sides to strike some deal that will support increased trade and reduce recent reliance on broad tariffs — especially if the economies continue to exhibit signs of weakening. Clearly, the economic and trade talks and the fights they concern are issues producers should watch closely as they intensify, Washington Insider believes.
China’s state-run Xinhua news agency said Saturday that fairly senior negotiators had “conducted constructive discussions” in Washington in recent days and had “agreed to continue to maintain communication.”
The tone of the Xinhua statement was matched by a separate statement from the United States Trade Representative in Washington. “These discussions were productive, and the United States looks forward to welcoming a delegation from China for principal-level meetings in October,” the statement said.
In addition, the Times emphasized that both sides’ trade negotiators have continued to look for a resolution of their differences even as tensions ratcheted ever higher over the summer — although the report noted that its sources “all insisted on anonymity, citing diplomatic sensitivities in the negotiations.”
The delegation of Chinese ag officials that had planned to travel to Montana and Nebraska in the coming week but cancelled at the last moment did not act because of “any new difficulty in the trade talks,” the NYT said. Instead, the trip was canceled out of concern that it would turn into a media circus and “give the misimpression that China was trying to meddle in American domestic politics,” the Times said.
The Chinese government has long taken the position that countries should not interfere in each other’s domestic affairs, a position developed partly in opposition to foreign criticisms of China’s human rights record.
In recent weeks, the Chinese government and many Chinese internet users have also reacted angrily to calls by American officials for Beijing to show restraint in responding to increasingly violent pro-democracy protests in Hong Kong. China’s foreign ministry has repeatedly objected to what it describes as intervention in China’s internal affairs over Hong Kong.
The question now is whether Vice Premier Liu He of China can make any progress when he comes to Washington for high-level talks next month. While the dates for those talks have not been confirmed, they look likely to be scheduled for Oct. 10-11, the Times said.
The biggest obstacle facing negotiators may be agreeing on the scale and ambition of any deal they try to reach. The Times cited several of its sources that argue that China especially wants to reach a partial deal that would head off President Trump’s planned increases in American tariffs on Chinese goods set for Oct. 15 and Dec. 15.
China is also seen as becoming increasingly wary of seeking any comprehensive resolution of the dozens of issues facing the two countries. As a result, its negotiators have tried to focus the talks on issues that can be resolved through regulations that the country already plans to issue by early January to implement a new law on foreign investments that the National People’s Congress approved in March.
At the same time, Chinese trade negotiators have tried recently to exclude issues like data flows, the location of data and the setting of cybersecurity standards. These concerns tend to infringe on the turf of China’s internal security agencies, which have resisted any limits on their ability to conduct comprehensive surveillance within the country and are wary of allowing in American tech companies, the Times said.
The United States has tried to persuade Beijing to adopt broad changes to Chinese laws to make the country more open to imports and to limit subsidies for industries, particularly advanced manufacturing industries that compete with American industries.
However, President Trump objected on Friday to any partial deal. “I’m looking for a complete deal, I’m not looking for a partial deal,” the president said during a joint news conference with Prime Minister Scott Morrison of Australia. “We’re looking for the big deal.”
There have nonetheless been several discussions between the two sides on reducing the value of American tariffs that are still pending and which are set to increase even further by mid-December.
The United States also has been pressing China to buy more American food in exchange, purchases China likely will need as an epidemic of African swine fever has killed huge numbers of hogs and pigs.
The two sides have nonetheless undertaken a series of smaller, confidence-building trade measures in the past two weeks.
So, we will see. The pressure is strong and growing on both sides to strike some deal that will support increased trade and reduce recent reliance on broad tariffs — especially if the economies continue to exhibit signs of weakening. Clearly, the economic and trade talks and the fights they concern are issues producers should watch closely as they intensify, Washington Insider believes.
Labor Department Sets Final Rule On H-2A Changes
The Department of Labor (DOL) will modernize the burdensome H2A visa process, eliminating the requirement to advertise a job opening in print newspapers.
The advertising will now shift to the SeasonalJobs.dol.gov website, a mobile-friendly platform, and on State Workforce Agency websites. The changes will take effect October 21.
“Both of these actions by DOL are critical changes the Administration is making to improve the H-2A application process,” USDA Secretary Sonny Perdue said. “By streamlining these processes, DOL is bringing the H-2A process into the 21st Century allowing farmers to be able to better and cost-effectively advertise for workers they need and fill out the required forms faster and more efficiently, because no one should have to hire a lawyer to hire a farm worker.”
The advertising will now shift to the SeasonalJobs.dol.gov website, a mobile-friendly platform, and on State Workforce Agency websites. The changes will take effect October 21.
“Both of these actions by DOL are critical changes the Administration is making to improve the H-2A application process,” USDA Secretary Sonny Perdue said. “By streamlining these processes, DOL is bringing the H-2A process into the 21st Century allowing farmers to be able to better and cost-effectively advertise for workers they need and fill out the required forms faster and more efficiently, because no one should have to hire a lawyer to hire a farm worker.”
Biofuel Meetings Appear to Have Wrapped Up
The meeting between President Donald Trump and oil-state senators Thursday appears to be the final meeting on the topic of U.S. biofuel policy, with those lawmakers focusing on their concerns over a package of changes the administration has developed.
No details of Thursday's White House meeting have surfaced yet, although Sen. Bill Cassidy, R-La., said in a tweet that Trump had been receptive. “Just spoke with @realDonaldTrump on the renewable fuel standard — the president is very engaged on the issue, and feels as if we can work towards a solution which protects jobs,” Cassidy wrote.
Biofuel backers remain cautiously optimistic the package that reportedly has been agreed to will be the final word. However, they are also wary of the potential for the apparent package to change.
Said Senate Finance Committee Chairman Chuck Grassley, R-Iowa, last week: “I have been hoodwinked so many times, not just by EPA on this issue but by other bureaucracies as well, so I am going to see if what they talked about is the end product.”
It is not clear whether the plan will be announced prior to November 30, the date that EPA has to finalize Renewable Fuel Standard (RFS) volume requirements for 2020 biofuels and 2021 biodiesel.
The fact that neither biofuel backers nor oil industry interests are talking about the plan could be a sign it has met with approval by both camps. However, as signaled by Grassley, at least biofuel backers are wary until the final announcement is made.
No details of Thursday's White House meeting have surfaced yet, although Sen. Bill Cassidy, R-La., said in a tweet that Trump had been receptive. “Just spoke with @realDonaldTrump on the renewable fuel standard — the president is very engaged on the issue, and feels as if we can work towards a solution which protects jobs,” Cassidy wrote.
Biofuel backers remain cautiously optimistic the package that reportedly has been agreed to will be the final word. However, they are also wary of the potential for the apparent package to change.
Said Senate Finance Committee Chairman Chuck Grassley, R-Iowa, last week: “I have been hoodwinked so many times, not just by EPA on this issue but by other bureaucracies as well, so I am going to see if what they talked about is the end product.”
It is not clear whether the plan will be announced prior to November 30, the date that EPA has to finalize Renewable Fuel Standard (RFS) volume requirements for 2020 biofuels and 2021 biodiesel.
The fact that neither biofuel backers nor oil industry interests are talking about the plan could be a sign it has met with approval by both camps. However, as signaled by Grassley, at least biofuel backers are wary until the final announcement is made.
Monday Watch List
Markets
New weather forecasts for the week will be checked early Monday as will any news from over the weekend, especially if it concerns trade with China. USDA's weekly grain inspections will be released at 10 a.m. CDT, followed by the Crop Progress report at 3 p.m. Percentages of dented and mature corn remain markers of interest for this year's late planted crop.
Weather
Monday features a swath of rain from the Southern Plains to the eastern Great Lakes. Dry conditions will be in place elsewhere. Temperatures will be seasonal north and central and hot south.
New weather forecasts for the week will be checked early Monday as will any news from over the weekend, especially if it concerns trade with China. USDA's weekly grain inspections will be released at 10 a.m. CDT, followed by the Crop Progress report at 3 p.m. Percentages of dented and mature corn remain markers of interest for this year's late planted crop.
Weather
Monday features a swath of rain from the Southern Plains to the eastern Great Lakes. Dry conditions will be in place elsewhere. Temperatures will be seasonal north and central and hot south.
Friday, September 20, 2019
Former Ag Secretaries Join in Support of USMCA
A group of former Agriculture Secretaries joined current Secretary Sonny Perdue in backing the U.S.-Mexico-Canada Agreement. The group signed a letter to Congress urging lawmakers to pass the trade agreement to “provide certainty in the North American market for the U.S. farm sector and rural economy.” The group included former Agriculture Secretaries John Block, Mike Espy, Dan Glickman, Ann Veneman, Mike Johanns, Ed Shafer and Tom Vilsack. Secretary Perdue says the letter shows support for USMCA “crosses all political parties, specifically when it comes to the agriculture community.” USDA says the agreement will create new market access opportunities for U.S. exports to Canada of dairy, poultry, and eggs. In exchange, the U.S. will provide new access to Canada for some dairy, peanut, and a limited amount of sugar and sugar-containing products. Canada and Mexico are the first and second-largest export markets for U.S. food and agricultural products, totaling more than $39.7 billion in exports last year, supporting more than 325,000 American jobs.
Dairy Margin Coverage Enrollment Deadline Extended
The Department of Agriculture is giving dairy producers an extra week to sign up for the Dairy Margin Coverage program. USDA’s Bill Northey told lawmakers Thursday the deadline will extend to September 27. Northey made the comment during a House Agriculture Subcommittee on General Farm Commodities and Risk Management hearing. The Farm Service Agency later announced the deadline extension. More than 21,000 dairy farmers have signed up for the program. Authorized by the 2018 farm bill, the program offers protection to dairy producers when the difference between the all-milk price and the average feed cost, known as the margin, falls below a certain dollar amount selected by the producer. Margin payments have triggered for each month from January through July. Dairy producers who elect higher coverage levels could be eligible for payments for all seven months. Under certain levels, the amount paid to dairy farmers will exceed the cost of the premium. USDA encourages dairy producers to visit their Farm Service Agency office to learn more and enroll.
Study Confirms ASF Survives in Animal Feed
Researchers at Kansas State University say African swine fever can survive in feed grains, prompting greater concerns of the disease spreading. The research confirms the virus can survive a simulated 30-day transoceanic voyage in contaminated plant-based feed and ingredients. Detailed analysis shows the half-life of African swine fever in feed ranges from 9.6 to 14.2 days after exposure to varying temperature and humidity conditions simulating transoceanic shipment. This means it would take approximately two weeks for the total viable virus concentration to decay by half its original count during shipment. Over the last year, African swine fever has emerged on new continents and spread to historically negative countries. Surviving shipments overseas provides an opportunity for the virus to infect swine in the United States and other countries through imported feed. African swine fever is now considered endemic in China, where pork production is forecasted to fall 25 percent by the end of the year. The disease has also spread to several other Asian countries and recently to Western Europe.
AFIA: Japan Trade Agreement a Boon for Animal Food Industry
The American Feed Industry Association says a trade agreement with Japan will allow America's animal food and ingredient manufacturers greater access into Japan’s marketplace. President Donald Trump recently notified Congress of his intent to sign an agreement with Japan. AFIA President and CEO Joel G. Newman says the organization is hopeful the agreement “will show progress” in bringing the U.S. animal food industry closer to tariff levels offered to U.S. competitors in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Japan represents the United States' third-largest export market behind Canada and Mexico for feed, feed ingredients and pet food products at a value of $986 million in 2018. The agreement is expected to be signed along the sidelines of the United Nations General Assembly in New York this month. Agriculture has welcomed the agreement because it will remove market access barriers for U.S. exports to Japan. Top U.S. agricultural exports to Japan currently include beef, corn, pork, soybeans and wheat, totally $13 billion last year.
Health Groups Propose Recommendations on Drinks for Children
Leading medical and nutrition organizations recommend staying away from added sugars in drinks for children five and under. The groups say breast milk, infant formula, water and plain milk are part of the new set of beverage recommendations for children. They caution against beverages with added sugars, including flavored and low-calorie sweetened beverages. The new guidelines add to recommendations to avoid other drinks on the market targeting children such as toddler formulas, caffeinated beverages, and plant-based/non-dairy milks which provide no unique nutritional value. The recommendations were developed as part of a collaboration by experts at the Academy of Nutrition and Dietetics, American Academy of Pediatric Dentistry, American Academy of Pediatrics and the American Heart Association. The groups say research shows that what children drink from birth through age five has a big impact on their health, both now and for years to come. Spokesperson Megan Lott says the recommendations “represent a clear set of objective, science-based recommendations for healthy drink consumption.”
USDA Highlights 2018 Food Spending Habits
U.S. consumers spent $1.71 trillion on food and beverages in 2018, according to the Department of Agriculture. USDA’s Economic Research Service says spending at food-away-from-home establishments, restaurants, school cafeterias, sports venues, and other eating places, accounted for 54.4 percent of expenditures. The remaining 45.6 percent took place at grocery stores, supercenters, convenience stores, and other retailers. However, USDA says a 54.4-percent share of food expenditures does not equate to 54.4 percent of food quantities, as food purchased away from home is generally higher priced than food prepared at home. Food-away-from-home outlets incur costs for the workers required to prepare and serve food, as well as for buildings, equipment, and utilities. The away-from-home market, which accounted for about one-third of total food expenditures 50 years ago at 33.8 percent, has grown through the decades, except in some recession years. During most of the 2007–09 recession, food away from home spending stayed at or just below 50 percent before rising to 50.1 percent in 2009 and continuing to grow.
Washington Insider: Farmer Politics and Trade
Bloomberg is reporting this week that the administration has what it calls a "$28 billion bet that rural America will stick with the president." It begins with a long public phone call the White House made to a group being addressed by Ag Secretary Perdue. The President said, "horrible dishonest reporters will say that 'oh jeez, the farmers are upset.' Well, they can't be too upset, because I gave them $12 billion and I gave them $16 billion this year," he said.
A couple of years ago, such a pep talk might have drawn raucous applause from one of the president's key constituencies, Bloomberg said, but notes that this time the crowd was "subdued."
It cited a farmer who attended the event and said, "The aid package that has come in is a relief, and it softens the landing, but it's not a solution, it's a Band-Aid." When asked if the payments make him whole, the producer who grows 500 acres of soybeans near Decatur, responded, "Of course not." He'd rather have free trade, he said.
China hawks in Trump's administration want Beijing to quit subsidizing strategic industries, "but that hasn't deterred the White House from doling out billions in aid to American farmers who have become more dependent on government money than they've been in years," Bloomberg said. At $28 billion so far, the farm rescue is more than twice as expensive as the 2009 bailout of Detroit's Big Three automakers, which cost taxpayers $12 billion. And farmers expect the money to keep flowing: A Purdue University survey in August found the almost 60% of producers said "they anticipate another round of trade aid next year."
Farmers became collateral damage in the president's tit-for-tat tariff war with China, which is being waged primarily for the benefit of such sectors such as manufacturing and tech, Bloomberg notes.
Efforts to cultivate China's appetite for American soybeans stretch back almost four decades and China bought more than $12 billion worth in 2017. Sales have declined sharply in recent years as the tariff wars accelerated. The administration slapped additional tariffs on about $110 billion in Chinese imports on Sept. 1 and China responded with tariffs on American-raised pork, beef, chicken, and other agricultural goods.
Since then, the two sides have warmed, and in early September, China has reported that it will exempt some American soybeans, pork, and other agricultural products from more tariffs.
For American producers, the hit to exports has further strained finances amid a six-year slump in prices for agricultural commodities. Net farm income is projected to be down 29% this year from 2013 levels, and debt is expected to reach $416 billion.
Also, bad weather prevented farmers from planting about 11.4 million acres of corn and 4.5 million acres of soybeans, according to government estimates. Producers also have been dismayed that the administration has faltered on campaign pledges to uphold national consumption mandates for renewable fuels.
Bloomberg thinks farmers will receive $19.5 billion in direct government aid this calendar year, the most since 2005 -- a figure that does not include the $10.5 billion forecast this year in federally subsidized crop insurance payments, the main vehicle for the regular farm subsidy program.
Those funds won't cover all of farmers' losses. Iowa producers, for example, were purported to receive $973 million in direct payments from the first round of trade aid, covering a period in which Iowa State University estimated the trade war cost them $1.7 billion.
So, the stakes are unusually high just now as the U.S. and China begin to take what the press calls "baby steps to ease tensions in their trade war," through face-to-face talks in Washington.
However, Bloomberg warns, taken together the measures likely to be considered "pale in comparison to the oncoming hit from U.S. tariff increases still in the pipeline for October and December." At the same time, as evidence mounts in both nations of the economic damage that the trade war is doing, there appears to be more urgency for a deal.
Also, despite the goodwill gestures, the two sides remain far apart on fundamental issues and officials continue to trade barbs. China wants the U.S. to remove all extra tariffs, and the U.S. has long sought concessions on intellectual property and state-subsidies for industry that Beijing has been unwilling to give.
Clearly, producers should watch extremely closely as trade talks are undertaken in both the Atlantic and Pacific markets and as new trade interventions continue to be considered, Washington Insider believes.
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