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Monday, August 31, 2020
CFAP Deadline is Approaching
The USDA’s Farm Service Agency is reminding farmers and ranchers that the deadline to apply for the Coronavirus Food Assistance Program is September 11. The program is designed to provide direct relief to producers who faced price declines and additional marketing costs due to COVID-19. “FSA offers several options for farmers and ranchers to apply for CFAP, including a call center where employees can answer your questions and help you get started on your application,” says Richard Fordyce, Administrator of the Farm Service Agency. “As we get closer to the deadline, now is the time to check out our resources on our website and contact the call center or your local office for your last-minute questions.” Over 160 commodities are eligible for CFAP, including certain non-specialty crops, livestock, dairy, wool, specialty crops, eggs, aquaculture, and nursery crops and cut flowers. All eligible commodities, payment rates, and calculations can be found online at farmers.gov/cfap. Customers seeking one-on-one support with the CFAP application process can call 877-508-8364 to speak directly with a USDA employee who can offer general assistance. This is the recommended first step before producers talk to the team at their local FSA county office.
Top Ag Negotiator Tones Down Approach to Phase One Trade Deal
The United States’ top agricultural negotiator appears to have toned down his rhetoric on the Phase One Trade Deal between the U.S. and China. During a speech given to the U.S. Soybean Export Council, Gregg Doud didn’t talk about the binding nature of the deal, its enforcement mechanisms, or the ability to reimpose tariffs. When asked about the sanctions for non-compliance, he stressed the fact that the deal is a two-year commitment. Investing Dot Com says the speech was in sharp contrast to some other appearances by the U.S. Trade Representative’s chief agricultural negotiator. At the USDA’s annual forum back in February, he said both nations would meet every month to discuss progress, while also noting that a lack of compliance could allow each of the nations to impose tariffs equivalent to the size of the damage. During his appearance with USSEC, he said, “Everyone wants to measure month to month, how we are doing there. At least from my perspective, we have to give this some time.” American farm exports to China have been running behind the pace needed to reach the $36.5 billion commitment this year. Shipments for the first six months of 2020 totaled just 23 percent of the overall target.
Grassley Applauds Lower Taiwan Barriers for Beef and Pork
Iowa Senator Chuck Grassley applauded Taiwan’s announcement of lower trade barriers for U.S. beef and pork. “Taiwan is taking steps to improve market access for American beef and pork producers by trying to bring its measures in line with international standards,” says Grassley, the Chair of the Senate Finance Committee. “I welcome this progress because our farmers have been kept out of this market for far too long.” He says Taiwan’s leadership will need to work with the legislature to finalize this process, but that’s expected since Taiwan is a vibrant democracy. “I’ll be following this matter closely and look forward to an improved agricultural and economic relationship between Taiwan and the American people,” he adds. At a press conference last week, the President of Taiwan said she’d instructed the government to ease regulations to allow imports of American pork containing trace amounts of an animal-feed additive used by some U.S. farms, as well as U.S. beef products from cattle age 30 months and older. U.S. officials have long regarded these restrictions as the main barrier to closer trade links with Taiwan.
SD Governor Merges Agriculture, Environment and Natural Resources Departments
South Dakota Governor Kristi Noem announced the merger of the state’s Departments of Agriculture and the Environment and Natural Resources. She says the merger will make for a streamlined South Dakota Department of Agriculture and Natural Resources. Hunter Roberts, the current Secretary of Environment and Natural Resources, will oversee the new department. Beginning on September 8 and until the merger is complete, Roberts will serve as the interim Secretary of Agriculture while also continuing to lead the Department of Environment and Natural Resources. “Lieutenant Governor Rhoden has stepped up to guide the Department of Agriculture through this important transitional period, and I really appreciate the hard work and leadership,” Noem says. “Agriculture is our number one industry, and under Secretary Roberts’ leadership, this department will serve producers better than before.” Roberts also says that “South Dakotans know our farmers and ranchers are the best conservationists, and this department will promote our number one industry while we simultaneously protect our natural resources.”
Conservation Compliance Final Rule Falls Short
The American Farm Bureau says farmers will remain powerless in the Highly Erodible Land and Wetland Conservation Final Rule made public last week by the USDA. Farm Bureau advocated for clear rules and safeguards to ensure fair treatment of farmers in conservation compliance, but the final rule does not remedy unfair enforcement by the Natural Resources Conservation Service. “After decades without a finalized rule in this area, we finally have one, but it, unfortunately, falls short,” says AFB President Zippy Duvall. “Farmers and ranchers are some of the strongest advocates of conservation, as demonstrated by the 140 million acres they’ve voluntarily committed to federal conservation programs.” Duvall also says that’s not what this is about. “This is about unfair treatment, which we’ve clearly laid out for USDA in previous comments and many meetings, backed by court rulings,” he adds. The AFB says farmers deserve a fair process and clarity, including an understanding of the exemptions authorized by Congress. They also deserve to be protected from repeated, unjustified, costly decisions by the NRCS. “Although we appreciate recent actions by USDA to rectify historic wrongs, this was a missed opportunity to ensure fairness going forward,” Duvall says. “We will continue to examine this rule and our options to address its shortcomings.”
Farmers to Families Food Box Program Reaches 75 Million Boxes
The USDA’s Farmers to Families Food Box Program has distributed more than 75 million food boxes in support of American farmers and families affected by COVID-19. President Trump recently announced another $1 billion will be added to the Farmers to Families Food Box Program while the economy continues to reopen. “The delivery of 75 million food boxes has helped an incredible number of Americans in need,” says Ag Secretary Sonny Perdue. “I couldn’t be prouder of the great job done by the food box program staff and the many farmers, distributors, and non-profits that helped to get this program off the ground for the American people.” Perdue also says the program is almost finished with its second round of deliveries and they’re working harder than ever to continue to build on their success of the program. The third round of purchasing starts on September 1, when USDA plans to purchase combination boxes to ensure all recipient organizations have access to fresh produce, dairy products, fluid milk, and meat products. Additional box types will be considered on an as-needed basis.
Washington Insider: New Economic Inclusiveness Fed Policy
POLITICO is reporting this week that the Federal Reserve has unveiled a new policy promoting “broad-based and inclusive” job gains, a major shift acknowledging the central bank should help disadvantaged Americans.
As you might expect, the new policy is already controversial, but for somewhat surprising reasons. Many Democrats are saying that the pledge to focus on maximum employment doesn't go far enough.
“As the COVID-19 pandemic crisis and its economic impacts disproportionately affect communities of color, and communities around the country march in the streets for justice, the Federal Reserve must do everything it can to ensure the recovery is equitably shared,” said Rep. Maxine Waters, D-Calif., with other Democrats has introduced a bill requiring the Fed to focus on race, in a statement.
The mounting calls for economic activism are putting the apolitical institution in an uncomfortable spotlight even as it breaks with past policies that have been blamed for exacerbating inequality. Fed Chair Jerome Powell this week maintained that the bank's policy tools aren't nimble enough to specifically help certain populations. But he has focused on giving a leg up to “those left behind.”
“The single most important thing we can do here is to support a strong labor market,” Powell said Thursday, when asked how the Fed could help minorities. Civil rights activists, including the late Coretta Scott King, have championed that Fed mandate, which was signed into law in 1978.
But ending racial inequality “is more of an all-government, society project that we need to take on forcefully,” he said. “It can't just be the way the Fed manages interest rates.”
The Fed's new plan entails keeping interest rates low for as long as it takes to employ as many people as possible, though it may take years before that policy begins to benefit the most financially vulnerable. It's an acknowledgment that rate hikes in previous business cycles, intended to head off inflation, have caused some people to miss out on the benefits of economic growth. Disproportionately, those people have been minorities.
“The entire 1980s under [former Fed Chairman] Paul Volcker and his war on inflation, each and every month the Black unemployment rate was above 10%,” said William Spriggs, a professor of economics at Howard University and the AFL-CIO's chief economist. “Black America was forced to live an entire decade in a depression.
“Black America was the easiest group of folks to make understand what it means when you never let the economy return to full employment,” he added.
The Fed is pledging not to raise interest rates until prices begin to rise more rapidly — allowing inflation to move slightly above its target of 2%. That will likely push unemployment lower than it otherwise would be able to go, giving chronically out-of-work Americans a crucial opportunity to rebuild a connection to the workforce.
But Democrats, including Waters and Sen. Elizabeth Warren, D-Mass., want the central bank to pursue more aggressive policies that aim to close racial wage and employment gaps, including through its supervision of banks and community development initiatives.
Those lawmakers, with others like Sens. Kirsten Gillibrand, D-N.Y., and Cory Booker, D-N.J., and Rep. Ayanna Pressley, D-Mass., have introduced a bill that would require the Fed to pursue policies in a way that “minimizes and eliminates racial disparities in employment, wages, wealth, and access to affordable credit.”
Biden has also included in his platform a call for the Fed to be required to “aggressively target” such racial gaps, beyond its current congressional mandates of price stability and maximum employment.
Powell has bemoaned the tragedy of the pandemic, which thrust the country into a deep recession and put millions out of work just as the decadelong expansion was starting to boost wages and create employment opportunities for low-income people.
Atlanta Fed President Raphael Bostic, the first Black head of a regional Fed branch, has called systemic racism “a yoke that drags on the American economy.”
The Fed's goals in its policy shift are broader than just employment; seeking modestly higher inflation would allow the central bank to raise rates higher down the road, giving it more room to later cut them — its standard stimulus response in the face of a downturn. It's also aiming to avoid the fate of Japan, which for decades has struggled against deflation and sluggish growth.
Still, the pivot represents a years-long evolution at the central bank, as 50-year-low unemployment never yielded problematic levels of inflation. Essentially, if the Fed is raising rates in anticipation of inflation that's not actually coming, it's merely slowing down job and wage gains.
“In December 2015, when the Fed started to raise rates, [Black unemployment] was 8.5% compared to 5% overall,” said Amanda Fischer, policy director at the Washington Center for Equitable Growth. “To call that a tight labor market is pretty stunning.”
Plenty of Fed observers argue that the central bank isn't well-suited to reducing racial inequality. “It gives the Fed too much credit, and it avoids all the really hard questions,” said Norbert Michel, an economist at The Heritage Foundation, a conservative think tank.
Others point to the potential for low rates to inflate financial bubbles; with borrowing costs low, investors might decide to put their money into riskier assets that offer a higher rate of return. The fallout of financial crises also hits poor and minority Americans the hardest.
“[Though] well-intentioned, the Fed's new policy will just give it more reason to keep rates near zero for a very long time, pumping more cheap debt into the system, making the big bigger, the rich richer, and dragging down economic innovation and growth,” former FDIC Chair Sheila Bair tweeted on Friday.
Critics who argue the Fed's policies heighten wealth inequality point to structural factors: The central bank's methods of stimulating the economy boost financial asset prices — enriching those who actually hold those assets, while benefiting everyone else more indirectly, if at all.
“Monetary policy as a way to juice the economy is broken, and the transmission mechanism has been broken because wealth is so concentrated in the top 1 percent and the top 10 percent,” Fischer said. “If we want monetary policy to get back to working again, we need to reduce wealth inequality.”
As you might expect, the new policy is already controversial, but for somewhat surprising reasons. Many Democrats are saying that the pledge to focus on maximum employment doesn't go far enough.
“As the COVID-19 pandemic crisis and its economic impacts disproportionately affect communities of color, and communities around the country march in the streets for justice, the Federal Reserve must do everything it can to ensure the recovery is equitably shared,” said Rep. Maxine Waters, D-Calif., with other Democrats has introduced a bill requiring the Fed to focus on race, in a statement.
The mounting calls for economic activism are putting the apolitical institution in an uncomfortable spotlight even as it breaks with past policies that have been blamed for exacerbating inequality. Fed Chair Jerome Powell this week maintained that the bank's policy tools aren't nimble enough to specifically help certain populations. But he has focused on giving a leg up to “those left behind.”
“The single most important thing we can do here is to support a strong labor market,” Powell said Thursday, when asked how the Fed could help minorities. Civil rights activists, including the late Coretta Scott King, have championed that Fed mandate, which was signed into law in 1978.
But ending racial inequality “is more of an all-government, society project that we need to take on forcefully,” he said. “It can't just be the way the Fed manages interest rates.”
The Fed's new plan entails keeping interest rates low for as long as it takes to employ as many people as possible, though it may take years before that policy begins to benefit the most financially vulnerable. It's an acknowledgment that rate hikes in previous business cycles, intended to head off inflation, have caused some people to miss out on the benefits of economic growth. Disproportionately, those people have been minorities.
“The entire 1980s under [former Fed Chairman] Paul Volcker and his war on inflation, each and every month the Black unemployment rate was above 10%,” said William Spriggs, a professor of economics at Howard University and the AFL-CIO's chief economist. “Black America was forced to live an entire decade in a depression.
“Black America was the easiest group of folks to make understand what it means when you never let the economy return to full employment,” he added.
The Fed is pledging not to raise interest rates until prices begin to rise more rapidly — allowing inflation to move slightly above its target of 2%. That will likely push unemployment lower than it otherwise would be able to go, giving chronically out-of-work Americans a crucial opportunity to rebuild a connection to the workforce.
But Democrats, including Waters and Sen. Elizabeth Warren, D-Mass., want the central bank to pursue more aggressive policies that aim to close racial wage and employment gaps, including through its supervision of banks and community development initiatives.
Those lawmakers, with others like Sens. Kirsten Gillibrand, D-N.Y., and Cory Booker, D-N.J., and Rep. Ayanna Pressley, D-Mass., have introduced a bill that would require the Fed to pursue policies in a way that “minimizes and eliminates racial disparities in employment, wages, wealth, and access to affordable credit.”
Biden has also included in his platform a call for the Fed to be required to “aggressively target” such racial gaps, beyond its current congressional mandates of price stability and maximum employment.
Powell has bemoaned the tragedy of the pandemic, which thrust the country into a deep recession and put millions out of work just as the decadelong expansion was starting to boost wages and create employment opportunities for low-income people.
Atlanta Fed President Raphael Bostic, the first Black head of a regional Fed branch, has called systemic racism “a yoke that drags on the American economy.”
The Fed's goals in its policy shift are broader than just employment; seeking modestly higher inflation would allow the central bank to raise rates higher down the road, giving it more room to later cut them — its standard stimulus response in the face of a downturn. It's also aiming to avoid the fate of Japan, which for decades has struggled against deflation and sluggish growth.
Still, the pivot represents a years-long evolution at the central bank, as 50-year-low unemployment never yielded problematic levels of inflation. Essentially, if the Fed is raising rates in anticipation of inflation that's not actually coming, it's merely slowing down job and wage gains.
“In December 2015, when the Fed started to raise rates, [Black unemployment] was 8.5% compared to 5% overall,” said Amanda Fischer, policy director at the Washington Center for Equitable Growth. “To call that a tight labor market is pretty stunning.”
Plenty of Fed observers argue that the central bank isn't well-suited to reducing racial inequality. “It gives the Fed too much credit, and it avoids all the really hard questions,” said Norbert Michel, an economist at The Heritage Foundation, a conservative think tank.
Others point to the potential for low rates to inflate financial bubbles; with borrowing costs low, investors might decide to put their money into riskier assets that offer a higher rate of return. The fallout of financial crises also hits poor and minority Americans the hardest.
“[Though] well-intentioned, the Fed's new policy will just give it more reason to keep rates near zero for a very long time, pumping more cheap debt into the system, making the big bigger, the rich richer, and dragging down economic innovation and growth,” former FDIC Chair Sheila Bair tweeted on Friday.
Critics who argue the Fed's policies heighten wealth inequality point to structural factors: The central bank's methods of stimulating the economy boost financial asset prices — enriching those who actually hold those assets, while benefiting everyone else more indirectly, if at all.
“Monetary policy as a way to juice the economy is broken, and the transmission mechanism has been broken because wealth is so concentrated in the top 1 percent and the top 10 percent,” Fischer said. “If we want monetary policy to get back to working again, we need to reduce wealth inequality.”
Hatch Act Complaint Filed Against USDA's Perdue
Citizens for Responsibility and Ethics in Washington filed an ethics complaint against USDA Secretary Sonny Perdue, charging that his participation in a Families to Food Box event with President Donald Trump on Monday was a violation of the Hatch Act.
The Hatch Act prohibits any executive branch employee from using his or her “official authority or influence for the purpose of interfering with or affecting the result of an election.”
Democratic lawmakers have also raised concerns about the inclusion of a letter from President Trump that is included with the food boxes.
The Hatch Act prohibits any executive branch employee from using his or her “official authority or influence for the purpose of interfering with or affecting the result of an election.”
Democratic lawmakers have also raised concerns about the inclusion of a letter from President Trump that is included with the food boxes.
Taiwan Announces Shift on Imports of US Pork, Beef
Taiwan will ease restrictions on imports of U.S. pork and beef, announcing they will allow shipments of U.S. pork containing the feed additive ractopamine and will allow imports of U.S. beef from animals older than 30 months of age.
Taiwan's leader, Tsai Ing-wen, said the decision is in line with their interests and their goals of “strategic development,” adding it could boost ties between the U.S. and Taiwan. “It will be an important start for Taiwan-U.S. economic cooperation at all fronts,” she commented.
Council of Agriculture Minister Chen Chi-chung said the new rules will take effect January 1.
U.S. Trade Representative Robert Lighthizer has cited the pork and beef restrictions by Taiwan as being an impediment to a closer trade relationship between the two.
Taiwan's leader, Tsai Ing-wen, said the decision is in line with their interests and their goals of “strategic development,” adding it could boost ties between the U.S. and Taiwan. “It will be an important start for Taiwan-U.S. economic cooperation at all fronts,” she commented.
Council of Agriculture Minister Chen Chi-chung said the new rules will take effect January 1.
U.S. Trade Representative Robert Lighthizer has cited the pork and beef restrictions by Taiwan as being an impediment to a closer trade relationship between the two.
Friday, August 28, 2020
More CFAP Funding Possible after Labor Day
Agriculture Secretary Sonny Perdue this week hinted at more Coronavirus Food Assistance Program aid for farmers on the horizon. Perdue confirmed that the Department of Agriculture is considering “shortly after Labor Day” offering a second wave of CFAP relief during a press call. Funding for the next round of payments would come from the additional $14 billion Congress allocated in the Coronavirus Aid, Relief and Economic Security Act to replenish the Commodity Credit Corporation account after July 1, 2020. Many agriculture groups say more relief is needed for farmers and ranchers as the first wave of CFAP will close September 11 when the sing up period closes. Although, farm groups are lobbying for even more aid, like the $20 billion included in the failed Senate aid package last month. Lawmakers are expected to try again in September to pass another round of economic stimulus, but it is uncertain if agriculture will be included.
USDA Outlook Forecasts Increased Exports
U.S. agricultural exports in fiscal year 2021 are projected at $140.5 billion, up $5.5 billion from previous estimates. The Department of Agriculture this week released its Outlook for U.S. Agricultural Trade report. The report says the increase is primarily driven by higher exports of soybeans and corn. Soybean exports are forecast up $4.2 billion from fiscal year 2020 to $20.4 billion, largely due to expected strong demand from China and reduced competition from Brazil. Corn exports are projected up $700 million to $9.0 billion on expectations of higher export volume. Livestock, poultry, and dairy exports are forecast up $500 million to $32.3 billion in 2021, led by higher beef and veal, variety meat, dairy, and poultry. Agricultural exports to China are forecast at $18.5 billion, an increase of $4.5 billion, largely on higher expected soybean sales. Agricultural exports to Canada and Mexico are forecast at $21.0 billion and $19.3 billion, respectively. And 2021 U.S. agricultural imports are forecast at $136.0 billion, $4.3 billion higher than previous estimates.
Senators Seek Robust Enforcement of USMCA Dairy Agreements
A bipartisan group of 25 Senators is identifying challenges with implementing several dairy-related provisions in the United States-Mexico-Canada Agreement. Underscoring USMCA’s importance to the dairy industry, the group asks the U.S. government in a letter to use USMCA’s enforcement measures to ensure full compliance with the trade deal. The Senators collectively state, “we ask that you use USMCA’s enforcement measures to hold our trading partners accountable to their trade commitments.” The U.S. Dairy Export Council and the National Milk Producers Federation commend the coalition of Senators for standing up for dairy farmers, processors and exporters and pressing for fair and full implementation of USMCA’s dairy provisions. The lawmakers say Canada has already begun implementing USMCA in a way that thwarts its market access promises and prevents U.S. dairy from making full use of the trade agreement. There are also unanswered questions concerning how Mexico will translate its commitments to safeguard common name cheeses into action.
Democrats Denounce USDA Inaction to Provide School Meals to Children
Democratic lawmakers want the Department of Agriculture to reverse a decision to provide meals to students throughout the entire school year. Senator Debbie Stabenow, a Michigan Democrat and member of the Senate Agriculture Committee, states, "The Department's refusal to extend all school meal waivers is inconsistent and baffling during this national crisis." In the Families First Coronavirus Response Act, Congress granted authority to the USDA to issue waivers so schools and community sponsors could provide school meals to children during the COVID-19 pandemic. USDA has stopped short of extending all available flexibilities that keep children fed while schools are closed and also reduce administrative burdens for schools. In a letter to Agriculture Secretary Sonny Perdue on August 14, Stabenow urged USDA to take action and use its full authority to provide healthy meals to students for the duration of the school year. Secretary Perdue responded on August 20 and refused to extend waivers that allowed states and schools to more seamlessly operate through the emergency summer meal programs.
Gillibrand Urges USDA to Provide Direct Relief to Small Farmers
Kirsten Gillibrand, a Senate Democrat from New York and Senate Agriculture Committee member, is urging the Department of Agriculture to provide direct relief for small farmers. Gillibrand says she is “demanding” USDA to “answer for the inequitable distribution” of payments under the Coronavirus Food Assistance Program. In a letter to Agriculture Secretary Sonny Perdue, Gillibrand is calling on USDA to address gaps in CFAP that “have left small farmers in crisis.” Specifically, Gillibrand is urging USDA to make the program more equitable for small farmers and ranchers, collect data on farm size and demographics for CFAP applications, and set aside at least 50 percent of all assistance funds specifically for small and mid-scale operations, with payment amounts calculated the same for all producers, based on revenue losses. Gillibrand states, “The disparities in federal farm relief are unfair to our small farmers who are facing insurmountable debt and are struggling to stay afloat due to the pandemic.”
USDA Extends Signup Deadline for New Conservation Pilot Program
The Department of Agriculture is extending the deadline to November 20, 2020, for the Soil Health and Income Protection Program. The new pilot program enables farmers to receive payments for planting perennial cover for conservation use for three to five years. Signup opened March 30, 2020, for the pilot program, which is part of the Conservation Reserve Program and available to producers in Iowa, Minnesota, Montana, North Dakota, and South Dakota. Farm Service Agency Administrator Richard Fordyce says, “We want to ensure our producers are given adequate time to enroll in this pilot program to improve soil health on their farms.” Producers can apply for three-, four-, or five-year CRP contracts to establish perennial cover on less productive cropland in exchange for payments. This pilot enables producers to plant perennial cover that, among other benefits, will improve soil health and water quality while having the option to harvest, hay, and graze outside the primary nesting season. Producers can enroll up to 50,000 acres in the program.
Washington Insider: EU Trade Chief Departs
The EU likely will struggle to find a candidate to match the stature of departing trade chief Phil Hogan who resigned late Wednesday amid a public outcry over attending an Aug. 19 dinner in his native Ireland “that broke the country's rules to fight the coronavirus," Bloomberg reports.
Known as “Big Phil” in Brussels for his 6-foot-5-inch frame, he was also a dominant policy figure in nine months as EU trade commissioner.
In a 27-member club where top jobs like his are jockeyed for and filled based on a Byzantine combination of nationality, party affiliation and experience, Hogan was proof that such a system doesn't always come at the expense of competence, Bloomberg said.
In fact, Hogan's five-year stint as EU agriculture commissioner from 2014 to 2019 was reason enough for European Commission President Ursula von der Leyen to hand him the trade portfolio when she took office in December. As farm chief, Hogan had helped the bloc forge landmark tariff-cutting agreements with Japan and the Mercosur group of Argentina, Brazil, Paraguay and Uruguay.
In political terms, Hogan also fit the bill for the broader trade portfolio because he was the first member of Europe's Christian Democrats to take on the job (other than on a caretaker basis) in 20 years, Bloomberg said. Liberals from Sweden and Belgium and Socialists from the UK and France held the post in the interim.
The Christian Democrats are the EU's biggest political family and include German Chancellor Angela Merkel. At a time of heightened global commercial tensions triggered by everything from greater U.S. protectionism to pandemic-induced shocks to supply chains, Hogan bolstered the bloc's unity and weight in trade matters.
Last week he proved icy Brussels-Washington trade relations could start to thaw with officials including U.S. Trade Representative Robert Lighthizer, whose middle name is Emmet — after the Irish patriot of the late 18th and early 19th centuries called Robert Emmet.
Hogan and Lighthizer on Friday announced a surprise deal to eliminate EU tariffs on goods including American lobster, barely a blip in the overall trade relationship in dollar terms but valuable enough politically for President Trump to “sound like a winner.” It was a long way from late 2019, when Hogan irked U.S. officials by accusing them of protectionism and criticizing Trump's “America First” trade doctrine.
Now, von der Leyen has her work cut out finding a replacement for a key member of her team. While the Irish government is responsible for nominating a new commission appointee from the country, von der Leyen will decide on the person for the trade portfolio.
Bloomberg also notes that von der Leyden could opt to give the trade role to one of the remaining 25 commissioners now handling other policy matters—but, at the moment, there's no obvious pick in that group. And, Bloomberg thinks that whoever gets the job will face serious challenges ranging from the EU's post-Brexit ties with the UK and China's commercial rise to a high-profile dispute with the U.S. over aircraft subsidies and deadlock at the World Trade Organization. So von der Leyen can't afford to pick unwisely.
At the same time the EU is searching for a replacement trade manager, the U.S. is facing also faces head winds in its efforts to achieve target levels of sales of farm products to China over the coming two years. “That's unlikely to happen, if you believe the USDA forecasts,” Bloomberg says.
U.S. farm product exports to China are expected at $18.5 billion in Fiscal Year (FY) 2021 that starts October 1, although they are expected to exceed the $14 billion reported for the prior 12 months, USDA reported on Wednesday, up $1 billion from their prior forecast. While the periods don't quite align with the annual trade deal targets, the forecasts point to a significant shortfall.
China pledged to buy $36.5 billion in U.S. agricultural goods in 2020 and $43.5 billion the following year, figures many traders and analysts have long considered ambitious. USDA's recent estimates indicate that meeting the targets for both years would require enormous purchases in the fourth quarters.
Chinese purchases have fallen behind partly because the coronavirus hurt demand and disrupted logistical operations including the functioning of ports in the Asian nation. Shipments in the first half of the year hit only 20% of the pledge, USDA data showed.
Still, the administration is touting a rosy outlook, especially after China made its biggest-ever purchase of U.S. corn in July, with cargoes set to arrive at Chinese ports in coming months.
China “got off to a slow start but boy, has the momentum picked up,” Ken Isley, administrator of USDA's Foreign Agricultural Service, said at a U.S. soybean industry conference Tuesday. “The pace of purchases is really rolling right now.”
“It's going to be difficult for them to hit that 2020 number, but we expect them to attempt to do it with very good faith,” observers said.
So, we will see. Clearly a strong U.S. export performance in China will be an important political target and certainly one producers should watch closely as the season advances, Washington Insider believes.
Known as “Big Phil” in Brussels for his 6-foot-5-inch frame, he was also a dominant policy figure in nine months as EU trade commissioner.
In a 27-member club where top jobs like his are jockeyed for and filled based on a Byzantine combination of nationality, party affiliation and experience, Hogan was proof that such a system doesn't always come at the expense of competence, Bloomberg said.
In fact, Hogan's five-year stint as EU agriculture commissioner from 2014 to 2019 was reason enough for European Commission President Ursula von der Leyen to hand him the trade portfolio when she took office in December. As farm chief, Hogan had helped the bloc forge landmark tariff-cutting agreements with Japan and the Mercosur group of Argentina, Brazil, Paraguay and Uruguay.
In political terms, Hogan also fit the bill for the broader trade portfolio because he was the first member of Europe's Christian Democrats to take on the job (other than on a caretaker basis) in 20 years, Bloomberg said. Liberals from Sweden and Belgium and Socialists from the UK and France held the post in the interim.
The Christian Democrats are the EU's biggest political family and include German Chancellor Angela Merkel. At a time of heightened global commercial tensions triggered by everything from greater U.S. protectionism to pandemic-induced shocks to supply chains, Hogan bolstered the bloc's unity and weight in trade matters.
Last week he proved icy Brussels-Washington trade relations could start to thaw with officials including U.S. Trade Representative Robert Lighthizer, whose middle name is Emmet — after the Irish patriot of the late 18th and early 19th centuries called Robert Emmet.
Hogan and Lighthizer on Friday announced a surprise deal to eliminate EU tariffs on goods including American lobster, barely a blip in the overall trade relationship in dollar terms but valuable enough politically for President Trump to “sound like a winner.” It was a long way from late 2019, when Hogan irked U.S. officials by accusing them of protectionism and criticizing Trump's “America First” trade doctrine.
Now, von der Leyen has her work cut out finding a replacement for a key member of her team. While the Irish government is responsible for nominating a new commission appointee from the country, von der Leyen will decide on the person for the trade portfolio.
Bloomberg also notes that von der Leyden could opt to give the trade role to one of the remaining 25 commissioners now handling other policy matters—but, at the moment, there's no obvious pick in that group. And, Bloomberg thinks that whoever gets the job will face serious challenges ranging from the EU's post-Brexit ties with the UK and China's commercial rise to a high-profile dispute with the U.S. over aircraft subsidies and deadlock at the World Trade Organization. So von der Leyen can't afford to pick unwisely.
At the same time the EU is searching for a replacement trade manager, the U.S. is facing also faces head winds in its efforts to achieve target levels of sales of farm products to China over the coming two years. “That's unlikely to happen, if you believe the USDA forecasts,” Bloomberg says.
U.S. farm product exports to China are expected at $18.5 billion in Fiscal Year (FY) 2021 that starts October 1, although they are expected to exceed the $14 billion reported for the prior 12 months, USDA reported on Wednesday, up $1 billion from their prior forecast. While the periods don't quite align with the annual trade deal targets, the forecasts point to a significant shortfall.
China pledged to buy $36.5 billion in U.S. agricultural goods in 2020 and $43.5 billion the following year, figures many traders and analysts have long considered ambitious. USDA's recent estimates indicate that meeting the targets for both years would require enormous purchases in the fourth quarters.
Chinese purchases have fallen behind partly because the coronavirus hurt demand and disrupted logistical operations including the functioning of ports in the Asian nation. Shipments in the first half of the year hit only 20% of the pledge, USDA data showed.
Still, the administration is touting a rosy outlook, especially after China made its biggest-ever purchase of U.S. corn in July, with cargoes set to arrive at Chinese ports in coming months.
China “got off to a slow start but boy, has the momentum picked up,” Ken Isley, administrator of USDA's Foreign Agricultural Service, said at a U.S. soybean industry conference Tuesday. “The pace of purchases is really rolling right now.”
“It's going to be difficult for them to hit that 2020 number, but we expect them to attempt to do it with very good faith,” observers said.
So, we will see. Clearly a strong U.S. export performance in China will be an important political target and certainly one producers should watch closely as the season advances, Washington Insider believes.
Pressure Building On Administration To Take Action Against Canada Over Dairy
A group of 25 senators have become the latest to press the Trump administration to take action against Canada under enforcement provisions in the U.S.-Mexico-Canada Agreement (USMCA) over dairy.
The latest letter to U.S. Trade Representative Robert Lighthizer and USDA Secretary Sonny Perdue sounds familiar themes as raised by 104 House members in a prior letter and by the U.S. dairy industry almost immediately after USMCA took effect in July.
Their main focus continues to be the tariff-rate quotas (TRQs) on dairy announced by Canada, which “appear to run counter to numerous USMCA provisions,” the senators said in the latest letter. Plus, they called on the administration to make sure that Canada eliminates its Class 6 and 7 dairy pricing policy.
But they also are pointing at Mexico, noting the country needs to be prodded on enforcement of side letters pertaining to geographical indicators.
The latest letter to U.S. Trade Representative Robert Lighthizer and USDA Secretary Sonny Perdue sounds familiar themes as raised by 104 House members in a prior letter and by the U.S. dairy industry almost immediately after USMCA took effect in July.
Their main focus continues to be the tariff-rate quotas (TRQs) on dairy announced by Canada, which “appear to run counter to numerous USMCA provisions,” the senators said in the latest letter. Plus, they called on the administration to make sure that Canada eliminates its Class 6 and 7 dairy pricing policy.
But they also are pointing at Mexico, noting the country needs to be prodded on enforcement of side letters pertaining to geographical indicators.
USDA Cuts FY 2020 US Ag Export Forecast, Sees Big Boost For FY 2021
U.S. ag exports to China in Fiscal Year FY) 2021 are forecast to rise to $18.5 billion, up from $14 billion in FY 2020, a forecast that USDA raised by $1 billion from its prior outlook.
China factors into increases for several commodities, including sorghum, wheat and soybeans, according to USDA.
Note that the FY basis (October/September) is not on the same as the Phase One agreement — a calendar year. U.S. ag exports to China in so far in FY 2020 (through June) were at $11.113 billion, USDA noted, up sharply from $6.753 billion at that point in FY 2019.
Overall U.S. ag exports in FY 2021 are forecast at $140.5 billion against imports of what would be a new record of $136 billion, leaving a trade surplus of $4.5 billion.
As expected, USDA lowered its outlook for FY 2020 U.S. ag exports, trimming it by $1.5 billion to $135 billion, while raising imports by $1.5 billion to a new record of $131.7 billion.
That would leave a trade surplus of just $3.3 billion, the smallest since it was $2.31 billion in FY 1972. The trade levels were considerably different in FY 1972 — ag exports totaled $8.24 billion against imports of $5.94 billion.
The updated FY 2020 forecast suggests USDA expects exports of $32.8 billion over the July-September period with imports of $31.2 billion.
China factors into increases for several commodities, including sorghum, wheat and soybeans, according to USDA.
Note that the FY basis (October/September) is not on the same as the Phase One agreement — a calendar year. U.S. ag exports to China in so far in FY 2020 (through June) were at $11.113 billion, USDA noted, up sharply from $6.753 billion at that point in FY 2019.
Overall U.S. ag exports in FY 2021 are forecast at $140.5 billion against imports of what would be a new record of $136 billion, leaving a trade surplus of $4.5 billion.
As expected, USDA lowered its outlook for FY 2020 U.S. ag exports, trimming it by $1.5 billion to $135 billion, while raising imports by $1.5 billion to a new record of $131.7 billion.
That would leave a trade surplus of just $3.3 billion, the smallest since it was $2.31 billion in FY 1972. The trade levels were considerably different in FY 1972 — ag exports totaled $8.24 billion against imports of $5.94 billion.
The updated FY 2020 forecast suggests USDA expects exports of $32.8 billion over the July-September period with imports of $31.2 billion.
Friday Watch List
Markets
There are a host of important economic reports on Friday morning, including personal income, consumer spending and sentiment, and core inflation. We'll also be looking for additional comments from the Federal Reserve conference. Perhaps most importantly, traders will be focused on any changes to the weather outlook for the central U.S, and of course, more China demand.
Weather
Thunderstorms with locally heavy rain and possible damaging winds are in store for the northern Midwest Friday. We'll also see rain in portions of the southern and eastern Midwest, Mid South and Delta from tropical depression Laura. Other crop areas will be dry. Temperatures will be cool north, seasonal to above normal central and southeast and very hot southwest.
There are a host of important economic reports on Friday morning, including personal income, consumer spending and sentiment, and core inflation. We'll also be looking for additional comments from the Federal Reserve conference. Perhaps most importantly, traders will be focused on any changes to the weather outlook for the central U.S, and of course, more China demand.
Weather
Thunderstorms with locally heavy rain and possible damaging winds are in store for the northern Midwest Friday. We'll also see rain in portions of the southern and eastern Midwest, Mid South and Delta from tropical depression Laura. Other crop areas will be dry. Temperatures will be cool north, seasonal to above normal central and southeast and very hot southwest.
Thursday, August 27, 2020
FAPRI Released August Baseline Report
The University of Missouri’s Food and Agricultural Policy Research Institute's latest baseline report reflects corn losses stemming from the derecho (Deh-RAY-cho) in Iowa earlier this month. FAPRI released its August baseline report Wednesday. According to the report, corn-planted area in 2020 is projected to be 92.0 million acres, a sharp decline from March intended acres. A modest downward adjustment in Iowa corn yields, given the derecho event, pushes the production estimate 203 million bushels lower than USDA's estimate to 15.075 billion, a record production volume. Carryout stocks sharply increase, and corn farm prices are expected to fall to $3.24 per bushel. Meanwhile, projected soybean-planted area rose to 83.8 million acres in 2020/21, up sharply from last year. Soybean stocks hold steady in 2020/21 as a strong growth in exports is offset by a rebound in production, in part, on above-trend yields. Farm prices for soybeans hit a recent low of $8.24 for 2020/21.
Soybean-to-Corn Price Ratio Favors Soybeans
A report from the Department of Agriculture suggests soybeans are increasing in profitability over corn. The soybean-to-corn price ratio is often used as one of several tools in measuring profitability of soybeans and corn. The current ratio of U.S. soybean to corn prices has recently risen, sending a signal to farmers that the relative profitability of soybeans has increased over corn, according to USDA’s Economic Research Service. The ratio, which averaged 2.51 over the past 20 years, can tell farmers whether planting, harvesting, and storing one or the other crop might be advantageous. When the USDA June 2020 Acreage report indicated that less corn acreage had been planted than expected in early spring, futures prices for corn in marketing year 2020/21 increased by eight percent. Soybean futures prices increased at the same time. Since late June, expectations of higher corn yields eroded the futures price for corn by 2.4 percent, while the price for soybeans increased by 1.1 percent. This differential in prices led to an increase in the soybean-to-corn price ratio from 2.64 to 2.71, a 2.5 percent increase from late June.
China Importing Record Pork Volumes
China pork imports hit a record volume in July, more than doubling to 430,000 metric tons from a year earlier. Chinese importers have been bringing in huge volumes of meat this year to fill a large domestic supply shortage after African swine fever killed millions of pigs, according to Reuters. The data does not include the origin of pork, but major suppliers include the United States, Brazil, the European Union and Canada. The record comes as many countries saw a slowdown in processing earlier this year, creating a backlog of market-ready animals, due to the coronavirus pandemic. Further, China has slowed the import process by instituting coronavirus checks of frozen food containers. For the first half of 2020, China’s pork imports reached 2.65 million metric tons, up from just over one million tons a year ago. Meanwhile, China’s July beef imports reached 210,000 metric tons, and first half 2020 shipments were pegged at 1.2 million metric tons.
House Democrats Investigating Farmers to Families Food Box Program
The House Coronavirus Crisis subcommittee seeks data on the Farmers to Families Food Box Program from the Department of Agriculture. Committee Chair, Representative James Clyburn, a Democrat from South Carolina, made the request in a letter to Agriculture Secretary Sonny Perdue. Clyburn cited concerns of "questionable contracting practices, a lack of accountability, and a failure to deliver food to many communities that need it most." Congress passed the Families First Coronavirus Response Act in March, which authorized USDA to purchase food directly from producers and distribute it to Americans in need of food assistance. The Democrat says USDA reportedly awarded contracts to companies that "never knew about" a required foodservice industry license and companies that lacked industry networks to source and deliver food. Clyburn alleges that rather than focusing on addressing these problems, the Administration "appears to be seeking political benefits from the program, including by inserting a letter signed by President Trump in food boxes."
EPA, USDA Announce Competition to Advance Agricultural Sustainability
The Department of Agriculture and Environmental Protection Agency this week launched the Nex Gen Fertilizer Challenge. The initiative is a joint partnership and competition to advance agricultural sustainability in the United States. The competition includes two challenges that seek proposals for new and existing fertilizer technologies to maintain or improve crop yields while reducing the impacts of fertilizers on the environment. The first challenge, the EEFs: Environmental and Agronomic Challenge, aims to identify existing enhanced efficiency fertilizers that meet or exceed certain environmental and agro-economic criteria. The second challenge, the Next Gen Fertilizer Innovations Challenge, aims to generate new concepts for novel technologies that can help address environmental concerns while maintaining or increasing crop yields. Along with EPA and USDA, the competition is coordinated with The Fertilizer Institute, the International Fertilizer Development Center, the National Corn Growers Association, and The Nature Conservancy. Registrants must submit their entries by October 30, 2020, for the EEFs Challenge and by November 30, 2020, for the Next Gen Fertilizer Innovations Challenge.
Iowa Creates Program to Help Ruel Retailers Recover from COVID-19 Disruptions
Iowa Governor Kim Reynolds this week allocated $100 million of CARES Act funding for Iowa Agriculture. The funds include $60 million for the Iowa Livestock Producer Relief Fund. The fund will provide grants of up to $10,000 to eligible producers of pork, beef, chicken, turkeys, dairy, fish or sheep to serve as working capital to stabilize livestock producers. Also included in the funding is the State Biofuel Grant Program, receiving $15.5 million. This fund will provide relief to Iowa ethanol and biodiesel producers based on gallons produced. Meanwhile, the Renewable Fuel Retail Recover Program, worth $7 million, Supports a program that helps expand retail fueling infrastructure for higher blend renewable fuels. Finally, the Iowa Beginning Farmer Debt Relief Fund, worth $6 million, provides eligible beginning farmers with a long-term debt service payment of up to $10,000, to be paid directly to their lender. Iowa Corn Growers Association President Jim Greif says, “every bit of help is needed,” while thanking Reynolds for the support.
Washington Insider: The Fight Over Diet Advice
Food Safety News is reporting this week that suggestions that meat alternatives such as plant-based burgers should be included in the National Dietary Guidelines would be extremely unpopular in some quarters. Still, others already extol the benefits of vegetables and fruits — and that it would only be a modest step for the government to recommend meatless products for use in school cafeterias and nursing homes.
Such a change would certainly cause fireworks among groups that raise livestock and who believe that meat is the “backbone of a healthy diet.” However, the report also notes that while the role of meats in U.S. diets has long been central, “without a doubt, people's eating preferences do change as time goes by. Doctors' advice also changes.”
FSN says that while consumers do not often follow the guidelines precisely, they affect federal nutrition policies and form the basis for changes to programs such as the National School Lunch and Breakfast Programs. And, the government hopes “that people will substitute healthy foods such as vegetables, fruits, grains, nuts, and lean meats for junk food — at least for some of it.” This, in turn, is expected to improve people's health.
FSN notes that the most recently released advisory report took place against a backdrop of significant and worsening health issues related to nutrition in the United States — including overweight and obesity. More than 70% of Americans are overweight or obese and these cause both public health problem and are linked to chronic diseases such as cardiovascular disease, type 2 diabetes, and some types of cancer.
In addition, 6 in 10 Americans have a chronic health condition and 4 in 10 have 2 or more. And while various conditions contribute to the prevalence of these diseases, unhealthy dietary patterns and a lack of physical activity are especially important.
Another health-related problem is that many low-income people simply don't have access to healthy food. FSN says that in 2018, more than 37 million people, including 6 million children, lived in households that were uncertain of having or unable to acquire, enough food to meet their needs.
The federal guidance already advises consumers to choose diets higher in vegetables, fruits, nuts, legumes, whole grains, lean meats and seafood, appropriate dairy foods and unsaturated vegetable oils while reducing red and processed meats, saturated fatty acids and cholesterol, and beverages and foods with added sugars.
Still, FSN notes that the guidelines don't recommend cutting out meat altogether but that meats should be lean and the portions small — no larger than the palm of your hand or your cellphone. However, some nutritionists note that alternative meats like the Impossible Burger and Beyond Meat burgers are highly processed and made with a lot of ingredients. And they contain a lot of sodium, which is often linked to an increased risk of high blood pressure, a major cause of stroke and heart disease.
FSN says American consumers are increasingly seeking out “natural” foods — that is, foods without a long list of ingredients and choosing “nutrient-dense” foods that provide substantial amounts of vitamins and minerals (micronutrients) and relatively few calories compared to forms of the food that have solid fat and/or added sugars.
FSN also points out that Impossible Foods CEO Pat Brown argues that that the critics of plant-based meats are missing the point and that “our product is substantially better for the consumer than what it replaces,” he said.
These new plant-based burgers and other meat options are actually directed toward meat-eaters, especially since vegetarians make up only 3% of the U.S. population. According to a long-term study published in the Journal of the American Medical Association Internal Medicine, swapping only 3% of total calories in the diet from animal to plant protein was found to be linked to a 10% decrease in the risk of death.
As for the guidelines, Michele Simon, executive director of the Plant-Based Foods Association said she is pleased to see the Advisory Committee follow the science and recommending a mostly plant-based diet while reducing saturated fats as well as red and processed meats. But when asked if the dietary guidelines should include recommendations in favor of plant-based meats, she thinks that the ball is in the consumer's court. “We are pleased that the recommendations follow the science that we should all reduce our meat intake,” she said, “however consumers should choose whether to make that change in their diets.”
So, we will see. The current crop of alternative meat products seem to be much more competitive with livestock and meat products than those developed earlier. Still, it will be necessary for them to compete economically as well as on the basis of taste and nutrition — a process that will take some time, and which producers should watch closely as it proceeds, Washington Insider believes.
Such a change would certainly cause fireworks among groups that raise livestock and who believe that meat is the “backbone of a healthy diet.” However, the report also notes that while the role of meats in U.S. diets has long been central, “without a doubt, people's eating preferences do change as time goes by. Doctors' advice also changes.”
FSN says that while consumers do not often follow the guidelines precisely, they affect federal nutrition policies and form the basis for changes to programs such as the National School Lunch and Breakfast Programs. And, the government hopes “that people will substitute healthy foods such as vegetables, fruits, grains, nuts, and lean meats for junk food — at least for some of it.” This, in turn, is expected to improve people's health.
FSN notes that the most recently released advisory report took place against a backdrop of significant and worsening health issues related to nutrition in the United States — including overweight and obesity. More than 70% of Americans are overweight or obese and these cause both public health problem and are linked to chronic diseases such as cardiovascular disease, type 2 diabetes, and some types of cancer.
In addition, 6 in 10 Americans have a chronic health condition and 4 in 10 have 2 or more. And while various conditions contribute to the prevalence of these diseases, unhealthy dietary patterns and a lack of physical activity are especially important.
Another health-related problem is that many low-income people simply don't have access to healthy food. FSN says that in 2018, more than 37 million people, including 6 million children, lived in households that were uncertain of having or unable to acquire, enough food to meet their needs.
The federal guidance already advises consumers to choose diets higher in vegetables, fruits, nuts, legumes, whole grains, lean meats and seafood, appropriate dairy foods and unsaturated vegetable oils while reducing red and processed meats, saturated fatty acids and cholesterol, and beverages and foods with added sugars.
Still, FSN notes that the guidelines don't recommend cutting out meat altogether but that meats should be lean and the portions small — no larger than the palm of your hand or your cellphone. However, some nutritionists note that alternative meats like the Impossible Burger and Beyond Meat burgers are highly processed and made with a lot of ingredients. And they contain a lot of sodium, which is often linked to an increased risk of high blood pressure, a major cause of stroke and heart disease.
FSN says American consumers are increasingly seeking out “natural” foods — that is, foods without a long list of ingredients and choosing “nutrient-dense” foods that provide substantial amounts of vitamins and minerals (micronutrients) and relatively few calories compared to forms of the food that have solid fat and/or added sugars.
FSN also points out that Impossible Foods CEO Pat Brown argues that that the critics of plant-based meats are missing the point and that “our product is substantially better for the consumer than what it replaces,” he said.
These new plant-based burgers and other meat options are actually directed toward meat-eaters, especially since vegetarians make up only 3% of the U.S. population. According to a long-term study published in the Journal of the American Medical Association Internal Medicine, swapping only 3% of total calories in the diet from animal to plant protein was found to be linked to a 10% decrease in the risk of death.
As for the guidelines, Michele Simon, executive director of the Plant-Based Foods Association said she is pleased to see the Advisory Committee follow the science and recommending a mostly plant-based diet while reducing saturated fats as well as red and processed meats. But when asked if the dietary guidelines should include recommendations in favor of plant-based meats, she thinks that the ball is in the consumer's court. “We are pleased that the recommendations follow the science that we should all reduce our meat intake,” she said, “however consumers should choose whether to make that change in their diets.”
So, we will see. The current crop of alternative meat products seem to be much more competitive with livestock and meat products than those developed earlier. Still, it will be necessary for them to compete economically as well as on the basis of taste and nutrition — a process that will take some time, and which producers should watch closely as it proceeds, Washington Insider believes.
Rise in Food Prices Pauses, But Still Above-Average For 2020
Consumers caught a break at the grocery store as food at home prices were down 1% in July compared with June, even though they still are up an average of 3.1% so far this year compared with 2019. Even as food prices have fluctuated, USDA's Economic Research Service (ERS) still forecasts the Consumer Price Index (CPI) for food at home will increase from 2.5% to 3.5% in 2020 versus 2019, unchanged from their month-ago outlook. But that is still considerably above the 20-year average of a 2% increase.
Food away from home (restaurants) rose 0.5% in July from the June level, the ERS said, and they are up an average of 2.4%. For all of 2020, USDA forecasts an increase of 1.5% to 2.5%, below the 20-year average for an increase of 2.8%.
Overall food prices are forecast to rise 2% to 3% in 2020 from 2019 levels, slightly above the 20-year average of 2.3%. The prices for all food fell 0.3% in July from June but have increased an average of 2.8% so far this year.
Food away from home (restaurants) rose 0.5% in July from the June level, the ERS said, and they are up an average of 2.4%. For all of 2020, USDA forecasts an increase of 1.5% to 2.5%, below the 20-year average for an increase of 2.8%.
Overall food prices are forecast to rise 2% to 3% in 2020 from 2019 levels, slightly above the 20-year average of 2.3%. The prices for all food fell 0.3% in July from June but have increased an average of 2.8% so far this year.
CFAP 2 Still Aimed for Early September
A second installment of farmer payments via the Coronavirus Food Assistance Program (CFAP) is still on tap to be unveiled in early September, according to USDA Secretary Sonny Perdue.
In a briefing with reporters on an unrelated topic, Perdue was asked about how USDA would be utilizing the additional $14 billion in authority available to the agency under the Commodity Credit Corporation (CCC).
The additional CCC monies “will be used in the CFAP 2,” Perdue said, echoing comments he made previously on AgriTalk that a second round of the program was on tap.
While there has been pressure on USDA for the dates it used to determine payments under the initial CFAP effort, Perdue suggested one reason for the April 15 cutoff was “to get money out quickly.”
He said USDA is looking at the cutoff going forward and also highlighted moves by the department to cover more commodities under the program and the recent decision issue the final 20% payments to producers under the initial CFAP effort.
Information on the second CFAP effort could come “very shortly after Labor Day,” Perdue said.
In a briefing with reporters on an unrelated topic, Perdue was asked about how USDA would be utilizing the additional $14 billion in authority available to the agency under the Commodity Credit Corporation (CCC).
The additional CCC monies “will be used in the CFAP 2,” Perdue said, echoing comments he made previously on AgriTalk that a second round of the program was on tap.
While there has been pressure on USDA for the dates it used to determine payments under the initial CFAP effort, Perdue suggested one reason for the April 15 cutoff was “to get money out quickly.”
He said USDA is looking at the cutoff going forward and also highlighted moves by the department to cover more commodities under the program and the recent decision issue the final 20% payments to producers under the initial CFAP effort.
Information on the second CFAP effort could come “very shortly after Labor Day,” Perdue said.
Thursday Watch List
Markets
Thanks to China's recent buying spree, Thursday morning's weekly export sales report will get plenty of attention at 7:30 a.m. CDT and be joined by weekly U.S. jobless claims, a second estimate of second-quarter U.S. GDP and an update of the U.S. Drought Monitor. Natural gas inventory is released at 9:30 a.m. and the latest weather forecasts will offer an update of rain expectations from Hurricane Laura.
Weather
Hurricane Laura will bring heavy rain and high winds into portions of the Deep South Thursday. Some of this moisture will also work into the southeastern Midwest. Other primary crop areas will continue to be dry. Temperatures again have a very warm to hot trend for all but far northern areas.
Thanks to China's recent buying spree, Thursday morning's weekly export sales report will get plenty of attention at 7:30 a.m. CDT and be joined by weekly U.S. jobless claims, a second estimate of second-quarter U.S. GDP and an update of the U.S. Drought Monitor. Natural gas inventory is released at 9:30 a.m. and the latest weather forecasts will offer an update of rain expectations from Hurricane Laura.
Weather
Hurricane Laura will bring heavy rain and high winds into portions of the Deep South Thursday. Some of this moisture will also work into the southeastern Midwest. Other primary crop areas will continue to be dry. Temperatures again have a very warm to hot trend for all but far northern areas.
Wednesday, August 26, 2020
China, Lighthizer Talk Trade Agreement
China reaffirmed this week its commitments included in the Phase 1 trade deal. The pledge comes out of a conversation between U.S. Trade Representative Robert Lighthizer and Chinese trade officials, the first formal dialogue since early May, according to Reuters. In a statement following the call, Lighthizer says, “Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement.” The call was scheduled for August 15, the six-month anniversary of the trade deal, but both sides offered conflicting statements about why the original call was canceled. China cited scheduling conflicts, while President Donald Trump claimed he canceled the meeting himself. China's pace of purchasing U.S. ag commodities is lagging from expectations, leaving some questioning if China will follow through. The USTR statement continues, “The parties also discussed the significant increases in purchases of U.S. products by China as well as future actions needed to implement the agreement.”
Trump Announces More Funding for Food Box Program
President Donald Trump Monday announced an additional $1 billion for the Farmers to Families Food Box program. The announcement came the same day Trump secured the Republican nomination to run for another term. The Department of Agriculture announced the program earlier this year, along with $3 billion in funding to help farmers and consumers during the COVID-19 pandemic. Through the program, USDA purchases food from farmers, then local distributors pack and deliver the boxes to families in need. The White House announced that the number of food boxes distributed recently reached 70 million. Trump says, “Altogether, we’ve delivered over $3 trillion in economic assistance to the American people, and the American farmer has done very well,” adding, “I never hear any complaints from the American farmer.” Trump made the comments at Flavor First Growers and Packers in Mills River, North Carolina, and was joined by Agriculture Secretary Sonny Perdue.
Iowa Lawmakers Estimate Crop Losses in Request for Relief
Federal lawmakers from Iowa estimate potential derecho (Deh-RAY-cho) losses at 725 million bushels of corn, and nearly 153 million bushels of soybeans. The estimate was part of a letter sent to Agriculture Secretary Sonny Perdue recently requesting a Secretarial Disaster Designation for 57 Iowa counties. The lawmakers say the severe storm swept through much of Iowa with sustained winds in excess of 100mph. Within the requested 57 counties, there are 8.2 million corn acres and 5.6 million soybean acres. Based on satellite imagery and preliminary storm reports, approximately 3.57 million acres of corn and 2.5 million acres of soybeans can be seen to be severely damaged, with millions more acres affected to varying degrees. Iowa producers have also suffered significant damage to homes, grain bins, barns, and other infrastructure critical to their farming operations and livelihoods. The lawmakers say, “It is critical that you grant this Secretarial Disaster Designation that will make these producers eligible for resources that will help mitigate these significant losses.”
Ethanol Groups File Court Briefing Supporting Year-round E15
Responding to the oil industry’s effort to undermine the expansion of E15, ethanol groups filed a court brief supporting E15. Growth Energy, the Renewable Fuels Association, and National Corn Growers Association filed the brief in the U.S. Court of Appeals for the D.C. Circuit late last week. The brief supports and defends the Environmental Protection Agency’s 2019 regulation that finally allowed year-round availability of E15. As intervenors in the oil industry’s lawsuit against EPA’s regulation allowing year-round E15, Growth Energy, RFA, and NCGA are “vigorously protecting the agency’s final rule,” which extended the Reid Vapor Pressure volatility waiver for E10 blends to E15 as well. The organizations further point out that extending the volatility waiver from E10 to E15 is appropriate because the volatility of the fuel actually decreases as more ethanol is added into gasoline beyond E10. The brief states, “This Court should not allow the petroleum industry and its allies to stymie competition in this comparatively small but important portion of the U.S. transportation fuel supply.”
USDA Assists Farmers, Ranchers, and Communities Affected by Recent Wildfires
The Department of Agriculture Tuesday announced assistance for agricultural producers affected by recent wildfires. The assistance will help eligible farmers and ranchers reestablish their operations. Wildfires have burned more than two million acres, mostly in western states. Nearly 28,000 personnel from the local, state and federal levels are responding to 157 separate incidents, 95 of which are large, uncontained fires. USDA officials say more than 6,000 firefighters from the USDA Forest Service are battling wildfires alongside state and federal partners. Bill Northey, USDA Under Secretary for Farm Production and Conservation, says, “USDA is ready to offer all the assistance we can to the affected farmers, ranchers and communities to help them recover.” When major disasters strike, USDA has an emergency loan program that provides eligible farmers low-interest loans to help them recover from production and physical losses. Farmers and ranchers impacted by wildfires are encouraged to contact their local USDA Service Center to learn more.
USDA Announces Urban Ag and Innovation Grants
The Department of Agriculture Tuesday announced the selection of recipients for about $4.1 million in grants and cooperative agreements for urban agriculture. Through funds come from the new USDA Office of Urban Agriculture and Innovative Production. These are the first recipients of the grants and cooperative agreements. The program supports a wide range of activities through two grant types, which are Planning Projects and Implementation Projects. Activities include operating community gardens and nonprofit farms, increasing food production and access in economically distressed communities, providing job training and education, and developing business plans and zoning. Priority was given to projects located in or targeting an Opportunity Zone, which is a census tract designation for low-income communities. The Office of Urban Agriculture and Innovative Production was established through the 2018 Farm Bill and is led by USDA’s Natural Resources Conservation Service For a complete list of grant and cooperative agreement recipients and project summaries, visit farmers.gov/urban.
Washington Insider: Great Inflation Debate Heats Up
Hardly any question carries greater weight in economics right now, or divides the financial world more sharply, than whether inflation is on the way back, Bloomberg explains in an article this week.
One camp is convinced that the no-expense-spared fight against COVID-19 has put developed economies on course for rising prices on a scale they haven't seen in decades. The other one says the virus is exacerbating the conditions of the past dozen years or so--when deflation, rather than overheating, has been the big threat.
For now, the jury is out, Bloomberg says. And, the data that will ultimately settle the question could take years to trickle in. In the meantime, investors and the public are left to weigh the arguments. Bloomberg presents what it calls some of the “main ones.”
The idea that the money supply affects prices directly is still a widely held view. And those who hold it are pointing to the wave of money created by governments to fight the pandemic–-and predicting that sooner or later it will wash through the whole economy and push prices up.
In many countries, money supply is growing at some of the fastest rates on record and unlike a decade ago, when a similar infusion of money never moved much beyond banks' balance sheets, there are signs this time around the cash is making its way into the pockets of consumers and companies.
Bloomberg thinks that it is “the use of money, not just its creation, that affects prices.” That's one explanation for subdued inflation since 2008, even as central banks cranked up the printing presses. And the same forces may still be at work.
In the U.S. the “velocity” of money — the frequency with which it changes hands, as people use it to buy goods and services — fell off in the 2008 financial crisis, never really recovered, and has collapsed to unprecedented lows now.
“The link between money supply and inflation is still very tenuous,” says Derek Tang, an economist at LH Meyer/Monetary Policy Analytics in Washington. “We may have a ton of money supply. But that's not necessarily going to lead to a ton of inflation.”
Observers argue that spending may bounce back faster than it did after 2008 and drive prices higher because a more aggressive policy response has cushioned the blow to household finances. Stock markets have taken months instead of years to recover. Home prices didn't take much of a hit. And lower down the income ladder, governments have provided substantial support to workers who got furloughed or fired.
“We're clearly not back to normal in the short term until people spend the money that the Fed has created and the government has sent them,” says John Ryding, chief economic advisor at Brean Capital.
Policy makers often cite a trade-off between inflation and unemployment—the idea that prices will only face sustained upward pressure when the economy is using all its resources, including labor. The strength of that link is uncertain, but “if there's any connection at all, then it should ease concerns about inflation.” Employment everywhere has slumped, with little prospect of a quick rebound to pre-pandemic levels.
Bloomberg already sees evidence that disruptions to supply chains are pushing prices up, however. In China, for example, food inflation has been accelerating in the last couple of months, and a squeeze on imports because of the pandemic is one reason why.
The long-run risk is that the virus will escalate tensions like the ones behind the U.S.-China trade war. Governments may become more reluctant to rely on other countries for strategic goods, such as masks and medicine or computer chips. They could pressure business to bring manufacturing home, even when it's more expensive.
The fight against COVID-19 has often been compared with an actual war, the kind of disaster that historically has triggered inflation. But there's an important difference, Bloomberg says. Military conflicts wreck the supply side of the economy leading to bottlenecks and shortages that push prices up. The coronavirus has left those facilities intact — even if they're not being used right now.
In a pandemic, it's demand that takes the main hit, says Alicia Garcia Herrero, chief Asia Pacific economist with Natixis SA. “Capital is not destroyed or depleted, so it is much easier to end up with excess capacity,” she says. That distinction is one reason she's “in the deflation camp.”
So, we will see. While there is still strong concern about the possible impacts of high debt levels, there seems to be much broader tolerance among the public than there was as recently as a decade ago. Certainly, high inflation is deeply dreaded as it has always been, but so is the opposite — especially, unemployment and job loss. Thus, the “inflation debate” is more important than usual and should be watched closely by producers as it intensifies, Washington Insider believes.
One camp is convinced that the no-expense-spared fight against COVID-19 has put developed economies on course for rising prices on a scale they haven't seen in decades. The other one says the virus is exacerbating the conditions of the past dozen years or so--when deflation, rather than overheating, has been the big threat.
For now, the jury is out, Bloomberg says. And, the data that will ultimately settle the question could take years to trickle in. In the meantime, investors and the public are left to weigh the arguments. Bloomberg presents what it calls some of the “main ones.”
The idea that the money supply affects prices directly is still a widely held view. And those who hold it are pointing to the wave of money created by governments to fight the pandemic–-and predicting that sooner or later it will wash through the whole economy and push prices up.
In many countries, money supply is growing at some of the fastest rates on record and unlike a decade ago, when a similar infusion of money never moved much beyond banks' balance sheets, there are signs this time around the cash is making its way into the pockets of consumers and companies.
Bloomberg thinks that it is “the use of money, not just its creation, that affects prices.” That's one explanation for subdued inflation since 2008, even as central banks cranked up the printing presses. And the same forces may still be at work.
In the U.S. the “velocity” of money — the frequency with which it changes hands, as people use it to buy goods and services — fell off in the 2008 financial crisis, never really recovered, and has collapsed to unprecedented lows now.
“The link between money supply and inflation is still very tenuous,” says Derek Tang, an economist at LH Meyer/Monetary Policy Analytics in Washington. “We may have a ton of money supply. But that's not necessarily going to lead to a ton of inflation.”
Observers argue that spending may bounce back faster than it did after 2008 and drive prices higher because a more aggressive policy response has cushioned the blow to household finances. Stock markets have taken months instead of years to recover. Home prices didn't take much of a hit. And lower down the income ladder, governments have provided substantial support to workers who got furloughed or fired.
“We're clearly not back to normal in the short term until people spend the money that the Fed has created and the government has sent them,” says John Ryding, chief economic advisor at Brean Capital.
Policy makers often cite a trade-off between inflation and unemployment—the idea that prices will only face sustained upward pressure when the economy is using all its resources, including labor. The strength of that link is uncertain, but “if there's any connection at all, then it should ease concerns about inflation.” Employment everywhere has slumped, with little prospect of a quick rebound to pre-pandemic levels.
Bloomberg already sees evidence that disruptions to supply chains are pushing prices up, however. In China, for example, food inflation has been accelerating in the last couple of months, and a squeeze on imports because of the pandemic is one reason why.
The long-run risk is that the virus will escalate tensions like the ones behind the U.S.-China trade war. Governments may become more reluctant to rely on other countries for strategic goods, such as masks and medicine or computer chips. They could pressure business to bring manufacturing home, even when it's more expensive.
The fight against COVID-19 has often been compared with an actual war, the kind of disaster that historically has triggered inflation. But there's an important difference, Bloomberg says. Military conflicts wreck the supply side of the economy leading to bottlenecks and shortages that push prices up. The coronavirus has left those facilities intact — even if they're not being used right now.
In a pandemic, it's demand that takes the main hit, says Alicia Garcia Herrero, chief Asia Pacific economist with Natixis SA. “Capital is not destroyed or depleted, so it is much easier to end up with excess capacity,” she says. That distinction is one reason she's “in the deflation camp.”
So, we will see. While there is still strong concern about the possible impacts of high debt levels, there seems to be much broader tolerance among the public than there was as recently as a decade ago. Certainly, high inflation is deeply dreaded as it has always been, but so is the opposite — especially, unemployment and job loss. Thus, the “inflation debate” is more important than usual and should be watched closely by producers as it intensifies, Washington Insider believes.
CFAP Payments Rise To $9.222 Billion
Payments under the Coronavirus Food Assistance Program (CFAP) increased to $9.222 billion as of August 24, up from $9.02 billion the prior week.
Payouts for livestock remain the highest at $4.607 billion, with $2.425 billion for non-specialty crops, $1.699 billion for dairy and $479 million for specialty crops.
By commodity, USDA said that $3.992 billion has gone for cattle, $1.699 billion for dairy, $1.634 billion for corn, $573.8 million for hogs, $466.8 million for soybeans and $237.7 million for upland cotton. No other commodities have seen payments totaling $100 million or more.
Iowa still tops the list of states receiving CFAP money at $921 million, followed by Nebraska at $664 million, Minnesota at $573 million, Texas at $544 million and California at $515 million.
Payouts for livestock remain the highest at $4.607 billion, with $2.425 billion for non-specialty crops, $1.699 billion for dairy and $479 million for specialty crops.
By commodity, USDA said that $3.992 billion has gone for cattle, $1.699 billion for dairy, $1.634 billion for corn, $573.8 million for hogs, $466.8 million for soybeans and $237.7 million for upland cotton. No other commodities have seen payments totaling $100 million or more.
Iowa still tops the list of states receiving CFAP money at $921 million, followed by Nebraska at $664 million, Minnesota at $573 million, Texas at $544 million and California at $515 million.
US, China Hold Phase One Discussion
U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steve Mnuchin and Chinese Vice Premier Liu He held discussions via telephone Monday evening, Washington time, to assess the status of the Phase One trade agreement between the two countries.
A statement from the Office of the U.S. Trade Representative (USTR) said the “regularly scheduled call” saw the parties discuss “steps that China has taken to effectuate structural changes called for by the Agreement that will ensure greater protection for intellectual property rights, remove impediments to American companies in the areas of financial services and agriculture, and eliminate forced technology transfer.”
The discussions also covered the “significant increases in purchases of U.S. products by China as well as future actions needed to implement the agreement.”
The Xinhua News Agency said the discussion was a “constructive dialogue on such issues as strengthening bilateral coordination of macroeconomic policies and the implementation of the China-U.S. phase-one economic and trade agreement.”
Both the U.S. and Chinese side said they were committed to implementing the trade deal.
USTR said the two sides “see progress and are committed to taking the steps necessary to ensure the success of the agreement,” while Xinhua reported the two countries “agreed to create conditions and atmosphere to continue pushing forward the implementation of the trade deal.”
A statement from the Office of the U.S. Trade Representative (USTR) said the “regularly scheduled call” saw the parties discuss “steps that China has taken to effectuate structural changes called for by the Agreement that will ensure greater protection for intellectual property rights, remove impediments to American companies in the areas of financial services and agriculture, and eliminate forced technology transfer.”
The discussions also covered the “significant increases in purchases of U.S. products by China as well as future actions needed to implement the agreement.”
The Xinhua News Agency said the discussion was a “constructive dialogue on such issues as strengthening bilateral coordination of macroeconomic policies and the implementation of the China-U.S. phase-one economic and trade agreement.”
Both the U.S. and Chinese side said they were committed to implementing the trade deal.
USTR said the two sides “see progress and are committed to taking the steps necessary to ensure the success of the agreement,” while Xinhua reported the two countries “agreed to create conditions and atmosphere to continue pushing forward the implementation of the trade deal.”
Tuesday, August 25, 2020
Rural Mainstreet Index Inches Up in August; Still Negative
The Creighton University Rural Mainstreet Index increased slightly in August from July’s weak index number. A monthly survey of bank CEOs in rural areas of a 10-state region that depends on agriculture and energy shows the August index is the sixth-straight month of a number below growth-neutral. The August index showed a slight increase at 44.7, up from July’s 44.1. However, that number is still in a recessionary economic zone. It was still a significant increase from the record-low in April of 12.1. The index ranges from 0 to 100, with an index of 50 representing growth neutral. “Farm commodity prices are down by 10.4 percent over the past 12 months,” says Dr. Ernie Goss, who oversees the Rural Mainstreet Index. “Despite the input of $32 billion in USDA farm support payments this year, only eight percent of bankers reported their area economy had improved compared to July, while 18 percent say economic conditions have gotten worse.” Along those same lines, the farmland price index rose above growth neutral for only the second time in the last 81 months, with the August reading at 50.1, up from July’s 45.6. The August farm equipment-sales index dropped to 32.8 from 34.4 in July.
Peterson Wants Clarification on CFAP Payment Methodology
Late last week, House Ag Committee Chair Collin Peterson sent a letter to Ag Secretary Sonny Perdue on the Coronavirus Food Assistance Program. He’s asking for clarification on how USDA determined the eligibility of different crops, livestock, and poultry species under CFAP. In the letter, Peterson contends that the data used by USDA to calculate CFAP payments was limited to only the earliest parts of the pandemic, missing the full extent of damage to specific commodities. “Some would argue that the full agricultural market impacts of the closure of schools, restaurants, catering, and agricultural processing facilities due to COVID-19 were not fully realized during the CFAP covered period, with losses for many commodities extending well into the second and third quarters of this year,” writes Peterson. The ag chair also took issue with the reasons that certain commodities were denied payments. “Hundreds of commodities were denied eligibility for ‘insufficient data’ and ‘lack of information,’ though it would seem that the well-documented shutdown of school meals, restaurants, and foodservice demand would have impacted those food crops, and the loss of export, landscape, and retail markets for no-food crops and livestock/poultry,” he adds. “I trust USDA is working to assist producers who’ve been denied to this point.”
Lighthizer Promises Help for Southeast Tomato Growers
U.S. Trade Representative Robert Lighthizer promises tomato growers in the southeast United States that he will address their concerns about imported Mexican tomatoes. Trade Vistas Dot Com says American producers are upset about the surging numbers of Mexican tomato imports under the U.S.-Mexico-Canada Agreement on trade. The United States is the second-largest producer of tomatoes in the world, but with each American eating an average of more than 20 pounds of tomatoes every year, imports are necessary to satisfy the high demand. Mexico is the largest exporter in the world and the top international supplier to the U.S. Fresh produce growers in the Southeast U.S. say Mexico is continuing to undercut their prices, dumping cheap fruits and vegetables into the U.S. market during their peak harvest time. The USDA and the Department of Commerce recently held two hearings to collect feedback on whether trade policies are harming America’s seasonal produce growers. Following those hearings, Lighthizer says he is working with Ag Secretary Perdue and Commerce Secretary Wilbur Ross to come up with a plan to address grower concerns by September 1.
USDA Programs Ready to Assist Those Impacted by Tropical Storms Marco and Laura
The USDA is reminding communities, farmers and ranchers, families, and small businesses in the path of Tropical Storms Marco and Laura that they have assistance programs to help. USDA staff in regional, state, and county offices are ready and eager to help in the wake of natural disasters. USDA partnered with the Federal Emergency Management Agency and other disaster-focused organizations to create the Disaster Resource Center. The center’s website and web tool now provide an easy access point to find USDA disaster information and assistance. The USDA also developed a disaster assistance discovery tool specifically targeted to rural and agricultural issues. The tool walks producers through five questions that generate personalized results identifying which USDA disaster assistance programs can help them best recover from a natural disaster. USDA also encourages residents and small businesses in impact zones to contact their local USDA offices to help meet their individual needs. The USDA’s Animal and Plant Health Inspection Service is urging those in the potential path of the storms to prepare now, not just for yourselves but for livestock and pets too.
July Cattle Numbers in Feedlots 11 Percent Higher Than 2019
The USDA says placements of cattle in feedlots during July totaled 1.892 million head, 11 percent higher than in July of 2019. That number is larger than what industry experts had predicted going into last Friday’s report. Feeding operations needed supplies, especially cattle that could be turned around in a short time. Most of the placements weighed between 700 and 900 pounds. The cattle placed in July will be marketed through the winter and into early spring. By weight, placements of cattle less than 600 pounds totaled 420,000 head. Placements between 600 and 699 pounds were 315,000 head, and placements of cattle between 700 and 799 pounds totaled 435,000 head. In the heavier weights, cattle between 800 and 899 pounds numbered 458,000 head, 900 to 999-pound cattle totaled 195,000 head, and 70,000 of those placements totaled more than 1,000 pounds. July cattle marketings were 1.99 million head, one percent lower than last year. The total number of cattle on feed as of August 1 was 11.284 million head, two percent above 2019, and the highest inventory for the month since the series of reports first began in 1996. Nebraska was among the highest states with 2.22 million cattle on feed.
Livestock and Sportsmen Groups Enter Historic MOU on Conservation
The National Cattlemen’s Beef Association and the Public Lands Council signed a Memorandum of Understanding with Ducks Unlimited and Safari Club International. The MOU outlines the groups’ shared commitment to the conservation of natural resources through sustainable multiple uses. The agreement also outlines the groups’ efforts to cultivate healthier ecosystems, wildlife populations, and economies through active management. Hunting, fishing, and livestock grazing are all key components of successful, comprehensive management plans for the nation’s public lands and resources. The MOU also highlights decades of successful voluntary conservation programs and formalizes a partnership to allow these groups to coordinate multi-sector projects in the future. “One thing cattle producers and the sportsmen communities have in common is a shared commitment to being good stewards of the land,” says NCBA President Marty Smith. PLC President Bob Skinner says, “Ranchers are true conservationists and we’re proud to partner with groups whose members also work to protect open spaces and manage our country’s natural resources for a better future.”
Washington Insider: New Asian Trade Alliance Considered
India is already seeing some success luring supply chain investments away from China, and is considering teaming up with Japan, Australia and others to counter Chinese dominance as trade and geopolitical tensions escalate across the region, Bloomberg explains.
Bloomberg calls the three interested countries export powerhouses and says they are discussing a “supply resilience initiative.” The talks are now at a working level but Japan would like to elevate them.
Even without the other two nations, India's latest set of incentives to entice businesses away from China “seems to be working,” Bloomberg says, with companies from Samsung to Apple's assembly partners showing interest.
Prime Minister Narendra Modi's government in March announced incentives that make electronics manufacturers eligible for a payment of 4%-6% of their incremental sales over the next five years. About two dozen companies pledged $1.5 billion in investments to set up mobile-phone factories in the country.
Besides Samsung, those that have shown interest include Wistron, Pegatron and Foxconn. India has also extended similar incentives to pharmaceutical businesses. The group “plans to cover more sectors, which may include automobiles, textiles and food processing,” Bloomberg says.
Numerous countries in Asia and elsewhere have been actively looking to diversify supply chains amid the U.S.-China trade tensions and the coronavirus outbreak – conditions that are making it cheaper for businesses to open shop. Vietnam remains the most favored investment destination, followed by Cambodia, Myanmar, Bangladesh and Thailand, according to a survey by Standard Chartered.
The incentives would help bring an additional investment of $55 billion over five years, adding 0.5% to India's economic output, according to analysts led by Neelkanth Mishra at Credit Suisse.
The latest output-linked incentive plan is a “win for Make in India,” Amish Shah, an analyst at BofA Securities, said in a report to clients. He sees gains for industrials, cement, pharmaceuticals, metals and logistics, with long-term indirect benefits across many sectors.
Meanwhile, the campaign of U.S. President Trump, who is vying for re-election in November, just released a second-term agenda that includes a goal of bringing back 1 million factory jobs from China and offers “Made in America” tax credits.
The Congressional Research Service (CRS) reported last week that since the COVID-19 outbreak was first diagnosed, it has spread to over 200 countries and all U.S. states. In addition, CRS says the pandemic is negatively affecting global economic growth “beyond anything experienced in nearly a century.”
Estimates so far indicate the virus could trim global economic growth by 3.0% to 6.0% in 2020, with a partial recovery in 2021, “assuming there is not a second wave of infections.”
Still, the economic fallout from the pandemic raises the risks of a global economic recession with levels of unemployment not experienced since the Great Depression of the 1930s. The report emphasizes the “human costs in terms of lives lost” that will permanently affect global economic growth in addition to the cost of rising levels of poverty, lives upended, careers derailed, and increased social unrest.
Global trade could also fall by 13% to 32%, exacting an especially heavy economic toll on trade-dependent developing and emerging economies. CRS says the full impact of these trends will not be known until the effects of the pandemic peak. The report provided details and an overview of the global economic efforts and costs to date and response by governments and international institutions to address the pandemic impacts.
Policymakers and financial and commodity market participants generally have been hopeful of a global economic recovery starting in the third quarter of 2020. Some forecasts, however, raise the prospects that the pandemic could negatively affect global economic growth more extensively and for a longer period of time with a slow, drawn-out recovery.
Without a quick resolution of the health crisis, the economic crisis may persist longer than most forecasters have assumed, CRS says – and it may require policymakers to weigh the most effective mix of additional fiscal and monetary policies that may be required without the “benefit of a relevant precedent to follow.” Additional measures “may have to balance the competing requirements of households, firms, and state and local governments. CRS says.
Various U.S. states reversed course in late June to impose or reimpose social distancing guidelines and close down businesses that had begun opening as a result of a rise in new confirmed cases of COVID-19, raising the prospect of a delayed recovery, CRS said.
So, we will see. Certainly, the impacts of the pandemic are continuing to be both enormous and difficult to evaluate – efforts producers should watch closely as they are debated and implemented, Washington Insider believes.
Bloomberg calls the three interested countries export powerhouses and says they are discussing a “supply resilience initiative.” The talks are now at a working level but Japan would like to elevate them.
Even without the other two nations, India's latest set of incentives to entice businesses away from China “seems to be working,” Bloomberg says, with companies from Samsung to Apple's assembly partners showing interest.
Prime Minister Narendra Modi's government in March announced incentives that make electronics manufacturers eligible for a payment of 4%-6% of their incremental sales over the next five years. About two dozen companies pledged $1.5 billion in investments to set up mobile-phone factories in the country.
Besides Samsung, those that have shown interest include Wistron, Pegatron and Foxconn. India has also extended similar incentives to pharmaceutical businesses. The group “plans to cover more sectors, which may include automobiles, textiles and food processing,” Bloomberg says.
Numerous countries in Asia and elsewhere have been actively looking to diversify supply chains amid the U.S.-China trade tensions and the coronavirus outbreak – conditions that are making it cheaper for businesses to open shop. Vietnam remains the most favored investment destination, followed by Cambodia, Myanmar, Bangladesh and Thailand, according to a survey by Standard Chartered.
The incentives would help bring an additional investment of $55 billion over five years, adding 0.5% to India's economic output, according to analysts led by Neelkanth Mishra at Credit Suisse.
The latest output-linked incentive plan is a “win for Make in India,” Amish Shah, an analyst at BofA Securities, said in a report to clients. He sees gains for industrials, cement, pharmaceuticals, metals and logistics, with long-term indirect benefits across many sectors.
Meanwhile, the campaign of U.S. President Trump, who is vying for re-election in November, just released a second-term agenda that includes a goal of bringing back 1 million factory jobs from China and offers “Made in America” tax credits.
The Congressional Research Service (CRS) reported last week that since the COVID-19 outbreak was first diagnosed, it has spread to over 200 countries and all U.S. states. In addition, CRS says the pandemic is negatively affecting global economic growth “beyond anything experienced in nearly a century.”
Estimates so far indicate the virus could trim global economic growth by 3.0% to 6.0% in 2020, with a partial recovery in 2021, “assuming there is not a second wave of infections.”
Still, the economic fallout from the pandemic raises the risks of a global economic recession with levels of unemployment not experienced since the Great Depression of the 1930s. The report emphasizes the “human costs in terms of lives lost” that will permanently affect global economic growth in addition to the cost of rising levels of poverty, lives upended, careers derailed, and increased social unrest.
Global trade could also fall by 13% to 32%, exacting an especially heavy economic toll on trade-dependent developing and emerging economies. CRS says the full impact of these trends will not be known until the effects of the pandemic peak. The report provided details and an overview of the global economic efforts and costs to date and response by governments and international institutions to address the pandemic impacts.
Policymakers and financial and commodity market participants generally have been hopeful of a global economic recovery starting in the third quarter of 2020. Some forecasts, however, raise the prospects that the pandemic could negatively affect global economic growth more extensively and for a longer period of time with a slow, drawn-out recovery.
Without a quick resolution of the health crisis, the economic crisis may persist longer than most forecasters have assumed, CRS says – and it may require policymakers to weigh the most effective mix of additional fiscal and monetary policies that may be required without the “benefit of a relevant precedent to follow.” Additional measures “may have to balance the competing requirements of households, firms, and state and local governments. CRS says.
Various U.S. states reversed course in late June to impose or reimpose social distancing guidelines and close down businesses that had begun opening as a result of a rise in new confirmed cases of COVID-19, raising the prospect of a delayed recovery, CRS said.
So, we will see. Certainly, the impacts of the pandemic are continuing to be both enormous and difficult to evaluate – efforts producers should watch closely as they are debated and implemented, Washington Insider believes.
US, EU Reach Lobster Trade Deal
U.S. and European Union (EU) officials said Friday they reached agreement on a plan for the EU to lower tariffs on imports of lobster from the U.S. and other suppliers, with the U.S. agreeing to lower duties on a list of other items of equal value.
EU Trade Commissioner Phil Hogan announced the action even as some indicated they had hoped the issue might be dealt with in broader negotiations between the two sides. But those trade negotiations are proceeding very slowly as the U.S. is currently focused on a trade deal with the UK over one with the broader EU.
Still, the U.S. lobster industry is welcoming the development with their attention also on the trade situation with China.
EU Trade Commissioner Phil Hogan announced the action even as some indicated they had hoped the issue might be dealt with in broader negotiations between the two sides. But those trade negotiations are proceeding very slowly as the U.S. is currently focused on a trade deal with the UK over one with the broader EU.
Still, the U.S. lobster industry is welcoming the development with their attention also on the trade situation with China.
House Ag Chair Raises Questions on CFAP
House Agriculture Committee Chairman Collin Peterson, D-Minn., is asking USDA to clarify its eligibility standards for the Coronavirus Food Assistance Program (CFAP), writing USDA Secretary Sonny Perdue in an August 21 letter.
Peterson said that he viewed the data used by USDA as only considering the earliest parts of the pandemic, missing the full extent of damage to different commodities. “Some would argue that the full agricultural market impact of the closure of schools, restaurants, catering, and agricultural processing facilities due to the COVID-19 public health crisis were not fully realized during the CFAP covered period, with losses for many commodities extending well into the second and third quarters of this year,” Peterson said.
He also raised questions about commodities that were not deemed eligible under CFAP. Hundreds of commodities were denied CFAP eligibility for “insufficient data” and “lack of information,” though it would seem that the “well documented shut-down of school meals, restaurants, and food service demand would have impacted those food crops, and the loss of export, landscape, and retail markets for the non-food crops (e.g., pima cotton) and livestock/poultry,” he wrote. “And, producers of processed food commodities (e.g., raisins) and aquaculture seem to have been completely excluded from the program.”
Peterson said that he viewed the data used by USDA as only considering the earliest parts of the pandemic, missing the full extent of damage to different commodities. “Some would argue that the full agricultural market impact of the closure of schools, restaurants, catering, and agricultural processing facilities due to the COVID-19 public health crisis were not fully realized during the CFAP covered period, with losses for many commodities extending well into the second and third quarters of this year,” Peterson said.
He also raised questions about commodities that were not deemed eligible under CFAP. Hundreds of commodities were denied CFAP eligibility for “insufficient data” and “lack of information,” though it would seem that the “well documented shut-down of school meals, restaurants, and food service demand would have impacted those food crops, and the loss of export, landscape, and retail markets for the non-food crops (e.g., pima cotton) and livestock/poultry,” he wrote. “And, producers of processed food commodities (e.g., raisins) and aquaculture seem to have been completely excluded from the program.”
Monday, August 24, 2020
Pro Farmer Predicts Record Yields
Pro Farmer estimates a 14.8-billion-bushel corn crop, with an average yield of 177.5 bushels-per-acre. For soybeans, Pro Farmer estimates a 4.3-billion-bushel crop with an average yield of 52.5 bushels-per-acre. Pro Farmer released the projections Friday following its annual Midwestern Crop Tour. Both corn and soybean yield estimates would be record crops, but not as big as projected by the Department of Agriculture earlier this month. Pro Farmer trimmed 525,000 from harvested acres, 300,000 coming from Iowa. The Iowa cut stems from the derecho (der-ray-cho) storm that destroyed crops this month, but the bigger concern for the state is drought. Pro Farmer pegged Iowa corn yields at 180 bushels-per-acre, and soybeans at 55 bushels-per-acre. The week long tour found Illinois has the best-projected corn yield at 205 bushels-per-acre, and the top projected soybean yield at 62 bushels-per-acre. The tour samples corn and soybean crops in Illinois, Indiana, Iowa, Minnesota, Nebraska, Ohio and South Dakota.
Coronavirus Aid Delayed, Likely Won’t Include Ag Provisions
Congress won’t consider any coronavirus relief until September, and the streamlined package won’t likely include agriculture. Senate Republicans indicate they plan to introduce a “skinny” bill next month, according to the Hagstrom Report. The Senate returns to session on September 8, and the House has scheduled to return for committee meetings on September 8, with the full House returning to session September 14. The delay sets up speculation the general coronavirus aid may be included in spending bills Congress must pass by September 30, the end of the current fiscal year. Congress must also pass the spending bills to avoid a government shutdown. Many in agriculture agree more aid is needed for farmers and ranchers facing losses from the COVID-19 pandemic. The failed HEALS Act in the Senate would have provided an additional $20 billion for agriculture. The CARES Act included $14 billion for agriculture, and the Coronavirus Food Assistance Program includes $16 billion for agriculture.
China, U.S. Trade Talks Coming
More trade talks between China and the U.S. are on the horizon. However, the questions of if and when remain. Last week, the Trump administration declined to confirm any plans to meet with China regarding the Phase 1 trade deal. According to Reuters, a spokesperson for China’s Commerce Ministry last week stated bilateral talks would be held "in the coming days" to evaluate the agreement's progress. Previously planned for August 15, China claims the meeting was moved due to a scheduling conflict. Yet, President Donald Trump claims he canceled the meeting, because, he says, “I don’t want to deal with them now.” China is buying more U.S. commodities, a promise made in the Phase 1 agreement. However, the most recent data suggests China is behind pace to fulfill its commitments. China has committed to buying more new crop soybeans and sorghum from the United States. And, while China is purchasing more U.S. new crop corn, the purchases still lag from prior levels.
NCGA: Communication Key for Successful 2020 Harvest
Amid the COVID-19 pandemic, communication is the key to a successful harvest this fall, according to the National Corn Growers Association. Jeff Bender, director of the Upper Midwest Agricultural Safety and Health Center, tells NCGA following CDC guidelines, including social distancing, remains important even if your community has not had a COVID-19 diagnosis. However, most importantly, communication is the key this year. That means talking with delivery points this fall. NCGA suggests farmers should be asking about local and state regulations affecting operations, delivery protocols and delivery scheduling. Additionally, you should ask if there will be an open office and how you will receive a delivery ticket, among other questions regarding new technology and customer information. Also, don’t forget general safety, either. A large crop often translates into longer days and increased logistics. The hectic work schedule can lead to problems with fatigue, loss of concentration and injuries. Bender says, “Throughout harvest, be respectful of others' safety and remember it's about everyone's health, business continuity and community.”
USDA Announces Public Meeting on Salmonella: State of the Science
The Department of Agriculture’s Food Safety and Inspection Service will host a virtual public meeting on Salmonella next month. Federal agencies included in the meeting will discuss the commitment to reduce pathogen contamination to decrease salmonella infections associated with regulated food items. The week before the public meeting, USDA's Office of Food Safety will release the “Roadmap to Reducing Salmonella: Driving Change through Science-Based Policy,” which outlines how USDA will advance programs and policies that are science-based, data-driven, and promote innovation to reduce Salmonella in meat, poultry, and egg products. Salmonella is a foodborne pathogen of concern in multiple FSIS-regulated food products. To address foodborne sources of Salmonella, FSIS is committed to aggressively targeting Salmonella in regulated meat, poultry, and processed egg products through various strategies and initiatives. The virtual public meeting will be held on September 22, 2020, from 9:00 a.m. to 3:15 p.m. ET. Registration information is available at fsis.usda.gov.
USPS Delays Deliver Dead Chicks to Small Poultry Farmers
Poultry farmers say postal service delays are causing deliveries of live chicks to result in dead chicks. Shipping of live chicks is common through the United States Postal Service. However, Maine poultry farmer Pauline Henderson says delays in shipping resulted in 800 dead chicks at her farm. She told local media the dead birds she received shipped in the normal amount of time but were apparently mishandled. Farmers like Henderson allege recent operation overhauls, including cuts in sorting equipment, have made USPS an unreliable shipper for live chicks. The Portland (Maine) Press-Herald reports thousands of birds that moved through the Postal Service’s processing center in Shrewsbury, Massachusetts, all met the same fate, affecting several farms in Maine and New Hampshire. Representative Chellie Pingree, a Maine Democrat, penned a recent letter to the USPS and Agriculture Secretary Sonny Perdue. Pingree alleges the Trump administration “attacks on the Post Office are devasting small farmers.” Pingree is among the many Democrats calling for the removal of Postmaster General Louis DeJoy.
Washington Insider: USDA Pushes Back at Food Program Effort
Bloomberg is reporting this week that Ag Secretary Sonny Perdue, facing bipartisan congressional pressure to maintain expanded food options for children during the coronavirus pandemic, is rejecting a move he said would amount to “a universal school meals program.”
With the fall semester kicking off both virtually and in-person, lawmakers want all options on the table if classrooms are forced to lock their doors once more. That concern turned reality over the past few weeks for schools from Michigan to Mississippi, Bloomberg says.
House Education and Labor Chairman Bobby Scott, D-Va., and Senate Agriculture, Nutrition, and Forestry ranking member Debbie Stabenow, D-Mich., whose panels oversee school food programs, have called for the extension of two programs that provide free meals to children in low-income areas when school is out.
The Summer Food Service Program and the Seamless Summer Option operate not only over summer break, but also during unanticipated closures — such as when schools shuttered in the spring due to COVID-19 outbreaks.
Perdue rejected the request to renew all nationwide waivers for unexpected closures through the next school year. “Americans are a generous people, and there are already opportunities for breakfast, lunch, and snacks, and weekend meals for children in need,” he said in a Thursday letter.
“While we want to provide as much flexibility as local school districts need during this pandemic, the scope of this request is beyond what USDA currently has the authority to implement and would be closer to a universal school meals program which Congress has not authorized or funded,” Perdue added.
Program advocates criticized the USDA position. “The tragic rise in child hunger across the country will surely get worse,” Scott said last week. He called Perdue's decision “irresponsible.” The Agriculture Department can extend the waivers under the Families First Coronavirus Response Act Scott and Stabenow said in an Aug. 14 letter.
Perdue countered that his agency continues to “utilize all options within our statutory and budget authority and with the funding that Congress provided” with the third coronavirus stimulus law. He offered the department's technical assistance if Congress were to pursue an expanded program.
The administration has issued extensions for other nationwide waivers, allowing meal service outside of traditional times and in nongroup settings for the 2020-2021 school year. The USDA didn't renew a waiver for the area eligibility requirement, which limits “open site” meal service for summer meals programs to places where at least half the children are in low-income households.
Democrats aren't alone in calling for USDA action, Bloomberg said. In fact, Senate Agriculture Chairman Pat Roberts, R-Kan., spearheaded a recent letter from 20 GOP senators asking Perdue to use waivers, grants, or reimbursements to allow schools and sponsor organizations to feed students learning both in-person and remotely.
“As the school year begins, the challenges brought on by the COVID emergency persist,” they wrote.
Expanded food options have “broad bipartisan support,” said Sen. Tina Smith, D-Minn., an Agriculture Committee member who signed a similar July 29 letter from more than 30 senators, arguing that the president's attempt to bypass Congress on stimulus is offering only limited economic relief, the Washington Post reported this weekend — suggesting that efforts to increase antivirus programs are increasingly supported.
The food programs are but two of the numerous programs that are being challenged during the current outbreak. For example, Democrats have not restarted meaningful economic relief negotiations since the President's recent executive actions and congressional aides do not expect talks to resume until after Labor Day, the Post says. Many economic experts say the absence of a broader economic deal with Congress is sharply limiting the recovery and is hurting unemployed Americans, given the administration's challenges in implementing new jobless benefits, the Post says.
The report criticizes the administration's recent efforts aimed at bypassing stalled stimulus negotiations and argued that its directives have “produced limited economic relief for Americans hurt by the coronavirus pandemic, despite promises by top White House aides that help would come within weeks.”
So, we will see. Now the political campaigns are increasingly dominating the media and ratcheting up the already high levels of toxicity. These are increasingly important fights and should be watched closely as they proceed Washington Insider believes.
With the fall semester kicking off both virtually and in-person, lawmakers want all options on the table if classrooms are forced to lock their doors once more. That concern turned reality over the past few weeks for schools from Michigan to Mississippi, Bloomberg says.
House Education and Labor Chairman Bobby Scott, D-Va., and Senate Agriculture, Nutrition, and Forestry ranking member Debbie Stabenow, D-Mich., whose panels oversee school food programs, have called for the extension of two programs that provide free meals to children in low-income areas when school is out.
The Summer Food Service Program and the Seamless Summer Option operate not only over summer break, but also during unanticipated closures — such as when schools shuttered in the spring due to COVID-19 outbreaks.
Perdue rejected the request to renew all nationwide waivers for unexpected closures through the next school year. “Americans are a generous people, and there are already opportunities for breakfast, lunch, and snacks, and weekend meals for children in need,” he said in a Thursday letter.
“While we want to provide as much flexibility as local school districts need during this pandemic, the scope of this request is beyond what USDA currently has the authority to implement and would be closer to a universal school meals program which Congress has not authorized or funded,” Perdue added.
Program advocates criticized the USDA position. “The tragic rise in child hunger across the country will surely get worse,” Scott said last week. He called Perdue's decision “irresponsible.” The Agriculture Department can extend the waivers under the Families First Coronavirus Response Act Scott and Stabenow said in an Aug. 14 letter.
Perdue countered that his agency continues to “utilize all options within our statutory and budget authority and with the funding that Congress provided” with the third coronavirus stimulus law. He offered the department's technical assistance if Congress were to pursue an expanded program.
The administration has issued extensions for other nationwide waivers, allowing meal service outside of traditional times and in nongroup settings for the 2020-2021 school year. The USDA didn't renew a waiver for the area eligibility requirement, which limits “open site” meal service for summer meals programs to places where at least half the children are in low-income households.
Democrats aren't alone in calling for USDA action, Bloomberg said. In fact, Senate Agriculture Chairman Pat Roberts, R-Kan., spearheaded a recent letter from 20 GOP senators asking Perdue to use waivers, grants, or reimbursements to allow schools and sponsor organizations to feed students learning both in-person and remotely.
“As the school year begins, the challenges brought on by the COVID emergency persist,” they wrote.
Expanded food options have “broad bipartisan support,” said Sen. Tina Smith, D-Minn., an Agriculture Committee member who signed a similar July 29 letter from more than 30 senators, arguing that the president's attempt to bypass Congress on stimulus is offering only limited economic relief, the Washington Post reported this weekend — suggesting that efforts to increase antivirus programs are increasingly supported.
The food programs are but two of the numerous programs that are being challenged during the current outbreak. For example, Democrats have not restarted meaningful economic relief negotiations since the President's recent executive actions and congressional aides do not expect talks to resume until after Labor Day, the Post says. Many economic experts say the absence of a broader economic deal with Congress is sharply limiting the recovery and is hurting unemployed Americans, given the administration's challenges in implementing new jobless benefits, the Post says.
The report criticizes the administration's recent efforts aimed at bypassing stalled stimulus negotiations and argued that its directives have “produced limited economic relief for Americans hurt by the coronavirus pandemic, despite promises by top White House aides that help would come within weeks.”
So, we will see. Now the political campaigns are increasingly dominating the media and ratcheting up the already high levels of toxicity. These are increasingly important fights and should be watched closely as they proceed Washington Insider believes.
DEA Publishes Rule to Update Regs Based On 2018 Farm Bill
The Drug Enforcement Administration (DEA) has published an interim final rule which reflects the 2018 Farm Bill provisions on hemp and reflecting Controlled Substances Act (CSA) amendments that have already taken effect, saying the changes do not add additional requirements to the regulations.
The DEA said there are no additional costs resulting from these regulatory changes and they are expected to result in annual cost savings for affected entities.
Comments are due by October 20.
The DEA said there are no additional costs resulting from these regulatory changes and they are expected to result in annual cost savings for affected entities.
Comments are due by October 20.
Focus On Seasonal Produce Moves to Trump Administration
The Office of the U.S. Trade Representative, USDA and Department of Commerce (DOC) have received two days of testimony via hearings August 13 and 20 on the matter of imports of fresh and seasonal produce into the U.S.
The sessions have seen produce growers from Florida and Georgia testify that shipments of these products from Mexico are negatively impacting U.S. growers, but also that the produce industry and others indicate the situation merely is a case of market competition and not trade-distorting efforts by Mexico.
The administration has pledged to develop a policy response by September 1. Special Ag Trade Negotiator at USTR Gregg Doud remarked at the August 20 session that he was struck by the “stark contrast” between growers and other ag groups.
“Everybody has put a lot of time and effort into their testimony and next step is for the administration to put time and effort into how to move this forward and that's exactly what we will do,” he said.
USDA Secretary Sonny Perdue acknowledged the issue has been “one of the most frustrating things” his agency has dealt with. “Help us figure out how we can help and mitigate the issues that you're facing and the challenges you are facing with something realistic that we can do under United States law and trade policy,” Perdue urged.
It remains to be seen if the administration will come back with a plan that will make it easier for U.S. produce growers to challenge imports from Mexico, a provision that was not included in the final U.S.-Mexico-Canada Agreement (USMCA).
The sessions have seen produce growers from Florida and Georgia testify that shipments of these products from Mexico are negatively impacting U.S. growers, but also that the produce industry and others indicate the situation merely is a case of market competition and not trade-distorting efforts by Mexico.
The administration has pledged to develop a policy response by September 1. Special Ag Trade Negotiator at USTR Gregg Doud remarked at the August 20 session that he was struck by the “stark contrast” between growers and other ag groups.
“Everybody has put a lot of time and effort into their testimony and next step is for the administration to put time and effort into how to move this forward and that's exactly what we will do,” he said.
USDA Secretary Sonny Perdue acknowledged the issue has been “one of the most frustrating things” his agency has dealt with. “Help us figure out how we can help and mitigate the issues that you're facing and the challenges you are facing with something realistic that we can do under United States law and trade policy,” Perdue urged.
It remains to be seen if the administration will come back with a plan that will make it easier for U.S. produce growers to challenge imports from Mexico, a provision that was not included in the final U.S.-Mexico-Canada Agreement (USMCA).
Monday Watch List
Markets
Checking over the latest weather forecasts is usually where traders turn first Monday, followed by the usual USDA reports. USDA's weekly grain inspections report is out at 10 a.m. CDT followed by USDA's monthly cold storage report at 2 p.m. and the crop progress report at 3 p.m. CDT. Any trade news that comes up will also be noticed.
Weather
Hot and dry conditions will cover most primary crop areas Monday. This combination will lead to further drying and crop stress. Southeastern U.S. areas will have periods of tropical rain as Tropical Storm Marco in the Gulf of Mexico moves closer to the mainland.
Checking over the latest weather forecasts is usually where traders turn first Monday, followed by the usual USDA reports. USDA's weekly grain inspections report is out at 10 a.m. CDT followed by USDA's monthly cold storage report at 2 p.m. and the crop progress report at 3 p.m. CDT. Any trade news that comes up will also be noticed.
Weather
Hot and dry conditions will cover most primary crop areas Monday. This combination will lead to further drying and crop stress. Southeastern U.S. areas will have periods of tropical rain as Tropical Storm Marco in the Gulf of Mexico moves closer to the mainland.
Friday, August 21, 2020
Crop Tour Highlights Midwest Drought Areas
The Pro Farmer Midwestern Crop Tour wrapped up Thursday after finding some unexpected drought areas. Drought conditions reported in the weekly Drought Monitor show classified droughts in The Dakotas, Western Nebraska, Much of Iowa, and small parts of Illinois and Indiana, and much of Ohio. Meanwhile, most of the Western U.S. is dry, with many severe and extreme drought classifications. While much of the attention focuses on the derecho storm that hit Iowa and other states, potentially destroying up to ten percent of the nation’s corn crop, parts of Iowa are in moderate to severe drought. Drought conditions expanded in western and northeastern Iowa in the last week. Organizers of the Drought Monitor say the expansion is in response to the short-term precipitation deficits during the past 60-day period, dry soils, and agricultural impacts. Pro Farmer scouts toured Western Iowa Wednesday, reporting lower expected yields for the region. Pro Farmer’s final national crop projections will be released Friday afternoon.
Bill Seeks Investment in Rural Public Transit
Legislation introduced this week seeks to improve public transportation in rural communities. Lawmakers say the Rural Transit Act, would increase the federal contribution for operating assistance in rural areas with high transit dependency. The bill was introduced by Senators Tina Smith, a Minnesota Democrat, Tammy Baldwin, a Wisconsin Democrat, and Mike Rounds, a South Dakota Republican. The Federal Transit Administration provides grants to support rural public transportation. However, the lawmakers say it can be difficult for certain rural communities to provide the necessary local contribution to qualify for assistance. Senator Rounds says the legislation would “allow transit operators in extreme need to receive a higher federal share of operating assistance.” The bill would increase the federal share to eighty percent for operating assistance in certain areas with high transit dependency. For a transit project to qualify, it must serve a county considered an “area of persistent poverty,” with 25 percent of residents over 65 years old.
CME Amending Cattle Price Limits
CME Group Thursday announced planned changes to live and feeder cattle futures price limits. Pending approval by the Commodity Futures Trading Commission, CME Group will implement the changes Monday, October 5, 2020. The changes amend daily price limits to adjust the current, initial daily price limit for Live Cattle futures from $0.03 to $0.04 per pound and for Feeder Cattle futures from $0.045 to $0.05 per pound. CME Group will maintain the existing practice of establishing expanded price limit levels at 150 percent of initial price limit levels, which will result in an increase in the expanded price limit for Live Cattle from $0.045 to $0.06 per pound and an increase in the expanded price limit for Feeder Cattle from $0.0675 to $0.075 per pound. CME Group also seeks to replace the current fixed daily price limit regimes, consisting of a fixed price limit and expansion mechanism, with a variable price limit regime that will be price-based and reset annually.
USDA Announces Prevented Planting Coverage Changes
The Department of Agriculture’s Risk Management Agency this week announced changes to Federal crop insurance prevented planting coverage. RMA will implement the changes for most spring crops with prevented planting coverage, next year, and for all crops with prevented planting coverage in 2022. The changes include expanding the “1 in 4” requirement nationwide. Currently, only producers in the Prairie Pothole National Priority Area are subject to the requirement, which requires producers to plant acreage in at least one of the four most recent crop years to be eligible for coverage on those acres. RMA made several modifications to existing policy and procedures to ensure prevented planting payments adequately reflect the crops the producer intended to plant. USDA also made changes to cover second-crop plantings following the failure of the first crop in a field. Finally, USDA will allow the use of an intended acreage report for the first two years for producers in a new county, where they have never produced the crop.
USDA Report Details U.S. Potato Usage
A little more than one-third of all potatoes grown in the United States are manufactured into frozen products, 85 percent of which are french-fries, according to the Department of Agriculture. USDA recently released a report on potato usage. Spurred by decades of explosive growth within the quick-service restaurant industry, processed potato products, which include frozen, chipped, dehydrated, and canned, became the major movers in the potato market, led by frozen french-fries. The share of potatoes consumed as frozen products rose from 27 percent in 1970-74 to 44 percent in 2015-2019. Research in the early 2000s indicated that quick-service restaurants alone accounted for about two-thirds of French-fry usage, with another six percent attributed to school cafeterias. The COVID-19 pandemic severely hobbled the foodservice sector, according to USDA, resulting in an abrupt slowdown in French-fry demand. In addition, exports of frozen potato products, which account for one-fourth of freezing potato utilization, remain well-below year-earlier levels.
FFA Membership Reaches Record
The National FFA Organization this week announced a record-high student membership of 760,113, an increase from last year’s 700,170 members. The top five student membership states are Texas, California, Georgia, Florida and Oklahoma. Interest in FFA and agricultural education continues to grow as membership continues to increase as well as the number of chapters. This year, the organization has more than 115,831 Latino members, more than 40,000 Black members and more than 12,000 members who are American Indian and Alaska Native. Forty-four percent of the membership is female, with 51 percent of the membership being male. FFA chapters can be found in 24 of the 25 largest U.S. cities. National FFA CEO Mark Poeschl (PESH-ull) says, “as we continue to bring agricultural education and FFA to more students, we see the enthusiasm of this generation reflected in the growth of our organization.” The National FFA Organization includes more than 8,700 local FFA chapters.
Washington Insider: Lack of New Subsidy Deal Concerns the Fed
The Hill and other media are reporting this week that Federal Reserve officials expressed deep concerns that the steady spread of the coronavirus would continue to slow the pace of economic recovery and drive the U.S. into a much sharper downturn later this year, according to minutes from its July meeting released Wednesday.
During the July 28-29 meeting of the Federal Open Market Committee—the Fed's policymaking arm — bank officials anguished over signs that the U.S. was losing ground in its fight against the pandemic and the recession it spurred.
Fed leaders cited a slowdown in hiring between May and June, rising cases of coronavirus across the U.S. and the expiration of crucial fiscal stimulus as critical threats to a fragile economy severely restrained by an uncontrolled pandemic.
“The path of the economy will depend significantly on the course of the virus and the ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term and poses considerable risks to the economic outlook over the medium term,” the minutes read.
The readout from the Fed's July meeting is the latest window into the growing concern over the economic impact of the pandemic among central bank officials. Fed Chairman Jerome Powell and several reserve bank presidents have issued increasingly direct calls for social distancing measures, widespread mask-wearing, and other practices proven to curb the spread of the novel coronavirus. In addition, the July FOMC minutes outline the warning signs that moved Powell and other Fed leaders to speak directly about the economic necessity of a robust public health response, The Hill said.
The July meeting wrapped days before a $600 boost to weekly unemployment benefits and an eviction and foreclosure ban expired, sapping fiscal support that economists considered crucial to preventing a deeper downturn.
“Participants noted that the fiscal support initiated in the spring through the CARES Act had been very important in granting some financial relief to millions of families,” the minutes read. Several officials argued that extending that aid “would likely be important for supporting vulnerable families, and thus the economy more broadly, in the period ahead.”
But Congress and the administration have been unable to strike a bipartisan deal ahead of the July 31 deadline and have been locked in a stalemate for weeks since. The broad disagreements among Democrats and Republicans are far greater than those between liberal and conservative economists, who largely agree on the need for another stimulus bill, The Hill said.
In a separate report, The Hill took an unusually critical position regarding Congressional efforts to provide necessary support. It asserts that “majorities in the Democratic-controlled House and Republican-controlled Senate also favor spending about $100 billion to help schools and universities implement full-bore distance learning for an uncertain duration. Yet both chambers went home for August without passing such aid.”
The Hill concludes that, “clearly, this isn't how our democracy is supposed to work — and the current lack of cooperation leads to the “monumental gridlock and dysfunction that has made Congress one of the least-respected and least-liked institutions in the land.”
The report cites a Washington Post early August report that “the talks on Capitol Hill had a dramatic and bitter unraveling.” The parties had managed to approve earlier aid packages,” but this time, “there seemed to be little goodwill or trust, and both sides dug in even as the economic recovery showed signs of losing steam, millions of Americans remained unemployed and deaths from the novel coronavirus continued to climb.”
The Hill then concludes that perhaps the most incomprehensible aspect of this behavior is that the leadership's self-imposed logjams steadily push more power and responsibility away from Congress and toward the executive branch. “We saw this when President Trump announced he would use his executive powers to shift funds (a constitutionally questionable action) to enhance unemployment benefits by $400 a week, partly replacing the $600 that has lapsed during Congress' impasses, the report said.
Now, the Hill thinks that “most Americans' expectations are probably quite low” and it counsels the Congress to “just pass measures you already agree on to help the country at least begin to address its toughest problems.”
So, we will see. Amid nominating conventions of both parties, a fairly new fight is focusing on how the fall elections should be held and votes cast and counted — perhaps the most contentious issue of all. These are a few of many debates and fights going on this fall that producers should watch closely as they emerge, Washington Insider believes.
During the July 28-29 meeting of the Federal Open Market Committee—the Fed's policymaking arm — bank officials anguished over signs that the U.S. was losing ground in its fight against the pandemic and the recession it spurred.
Fed leaders cited a slowdown in hiring between May and June, rising cases of coronavirus across the U.S. and the expiration of crucial fiscal stimulus as critical threats to a fragile economy severely restrained by an uncontrolled pandemic.
“The path of the economy will depend significantly on the course of the virus and the ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term and poses considerable risks to the economic outlook over the medium term,” the minutes read.
The readout from the Fed's July meeting is the latest window into the growing concern over the economic impact of the pandemic among central bank officials. Fed Chairman Jerome Powell and several reserve bank presidents have issued increasingly direct calls for social distancing measures, widespread mask-wearing, and other practices proven to curb the spread of the novel coronavirus. In addition, the July FOMC minutes outline the warning signs that moved Powell and other Fed leaders to speak directly about the economic necessity of a robust public health response, The Hill said.
The July meeting wrapped days before a $600 boost to weekly unemployment benefits and an eviction and foreclosure ban expired, sapping fiscal support that economists considered crucial to preventing a deeper downturn.
“Participants noted that the fiscal support initiated in the spring through the CARES Act had been very important in granting some financial relief to millions of families,” the minutes read. Several officials argued that extending that aid “would likely be important for supporting vulnerable families, and thus the economy more broadly, in the period ahead.”
But Congress and the administration have been unable to strike a bipartisan deal ahead of the July 31 deadline and have been locked in a stalemate for weeks since. The broad disagreements among Democrats and Republicans are far greater than those between liberal and conservative economists, who largely agree on the need for another stimulus bill, The Hill said.
In a separate report, The Hill took an unusually critical position regarding Congressional efforts to provide necessary support. It asserts that “majorities in the Democratic-controlled House and Republican-controlled Senate also favor spending about $100 billion to help schools and universities implement full-bore distance learning for an uncertain duration. Yet both chambers went home for August without passing such aid.”
The Hill concludes that, “clearly, this isn't how our democracy is supposed to work — and the current lack of cooperation leads to the “monumental gridlock and dysfunction that has made Congress one of the least-respected and least-liked institutions in the land.”
The report cites a Washington Post early August report that “the talks on Capitol Hill had a dramatic and bitter unraveling.” The parties had managed to approve earlier aid packages,” but this time, “there seemed to be little goodwill or trust, and both sides dug in even as the economic recovery showed signs of losing steam, millions of Americans remained unemployed and deaths from the novel coronavirus continued to climb.”
The Hill then concludes that perhaps the most incomprehensible aspect of this behavior is that the leadership's self-imposed logjams steadily push more power and responsibility away from Congress and toward the executive branch. “We saw this when President Trump announced he would use his executive powers to shift funds (a constitutionally questionable action) to enhance unemployment benefits by $400 a week, partly replacing the $600 that has lapsed during Congress' impasses, the report said.
Now, the Hill thinks that “most Americans' expectations are probably quite low” and it counsels the Congress to “just pass measures you already agree on to help the country at least begin to address its toughest problems.”
So, we will see. Amid nominating conventions of both parties, a fairly new fight is focusing on how the fall elections should be held and votes cast and counted — perhaps the most contentious issue of all. These are a few of many debates and fights going on this fall that producers should watch closely as they emerge, Washington Insider believes.
USDA Updates Payment Limits, Eligibility Rules
USDA has released new rules on payment limits and payment eligibility to reflect updated provisions in the 2018 Farm Bill.
The actions include that USDA may approve a waiver of the average adjusted gross income (AGI) limitation for participants of certain conservation contracts administered by the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS) on environmentally sensitive land.
Also, the mandatory changes expand the definition of “family member” to include first cousins, nieces, and nephews.
The Office of Management and Budget completed its review of the USDA plan July 29 and the final rule is published in today's Federal Register and was effective August 20.
The actions include that USDA may approve a waiver of the average adjusted gross income (AGI) limitation for participants of certain conservation contracts administered by the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS) on environmentally sensitive land.
Also, the mandatory changes expand the definition of “family member” to include first cousins, nieces, and nephews.
The Office of Management and Budget completed its review of the USDA plan July 29 and the final rule is published in today's Federal Register and was effective August 20.
China Says Trade Confab With US On Tap In Coming Days
China and the U.S. will hold trade talks on the status of the Phase One agreement between the two countries “in the coming days,” according to Chinese Commerce Ministry spokesman Gao Feng. He made the remarks during a briefing but did not offer any details, except to say, "Both parties have agreed to hold a call in the near future.”
Meanwhile, White House Chief of Staff Mark Meadows said this week that no talks had been scheduled as of yet. “There are no rescheduled talks ... at this point,” Meadows told reporters. “Ambassador Lighthizer continues to have discussions with his Chinese counterparts involving purchases and fulfilling their agreements.”
This comes as White House trade advisor Peter Navarro acknowledged China's stepped-up purchases of U.S. farm products as part of their commitments made under the Phase One trade deal.
Chinese Ambassador to the U.S. Cui Tiankai said at a Brookings Institution event last week that U.S. needed to make decisions on bringing bilateral ties between the two countries back to a normal track.
Meanwhile, White House Chief of Staff Mark Meadows said this week that no talks had been scheduled as of yet. “There are no rescheduled talks ... at this point,” Meadows told reporters. “Ambassador Lighthizer continues to have discussions with his Chinese counterparts involving purchases and fulfilling their agreements.”
This comes as White House trade advisor Peter Navarro acknowledged China's stepped-up purchases of U.S. farm products as part of their commitments made under the Phase One trade deal.
Chinese Ambassador to the U.S. Cui Tiankai said at a Brookings Institution event last week that U.S. needed to make decisions on bringing bilateral ties between the two countries back to a normal track.
Friday Watch List
Markets
USDA's weekly export sales report at 7:30 a.m. CDT always gets attention, but especially during this active time of year. U.S. jobless claims and an update of the U.S. Drought Monitor are also released at 7:30. A U.S. index of leading economic indicators follows at 9 a.m. CDT and natural gas inventory at 9:30 a.m. Thursday's weather forecasts and any additional trade news will also be noticed.
Weather
Thursday will again be very warm and dry over all primary crop areas. Rain will be confined to light showers in the Southeast. The dry pattern is indicated to remain in place through the next seven days. Precipitation chances increase at the end of the month.
USDA's weekly export sales report at 7:30 a.m. CDT always gets attention, but especially during this active time of year. U.S. jobless claims and an update of the U.S. Drought Monitor are also released at 7:30. A U.S. index of leading economic indicators follows at 9 a.m. CDT and natural gas inventory at 9:30 a.m. Thursday's weather forecasts and any additional trade news will also be noticed.
Weather
Thursday will again be very warm and dry over all primary crop areas. Rain will be confined to light showers in the Southeast. The dry pattern is indicated to remain in place through the next seven days. Precipitation chances increase at the end of the month.
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