USDA Forecasts Record Farm Exports in FY 2021

The Department of Agriculture projects U.S. farm exports for 2021 at $164 billion, the highest on record. USDA announced its quarterly agricultural trade forecast this week. The results represent an increase of $28 billion, or 21 percent, from last fiscal year’s total, and a $7-billion increase from USDA’s previous 2021 forecast published in February. The annual export record of $152.3 billion was set in 2014. Agriculture Secretary Tom Vilsack says the estimate "shows that our agricultural trading partners are responding to a return to certainty and reliability from the United States." Key drivers of the surge in exports include a record outlook for China, record export volumes and values for several products, sharply higher commodity prices, and reduced foreign competition. China is poised to be back on top as the United States' number one customer, with U.S. exports forecast at $35 billion, eclipsing the previous record of $29.6 billion set in 2014.

Stabenow Urges USDA to Implement Food and Ag Supply Chain Provisions

Senate Agriculture Committee Chair Debbie Stabenow urges the Department of Agriculture to implement American Rescue Plan provisions to protect food and farm workers. In a letter to Agriculture Secretary Tom Vilsack, Stabenow states the American Rescue Plan "included resources so that the people who power our food and ag supply chain are protected and have the resources they need to stay safe and keep the shelves stocked." In the letter, Stabenow highlights supply chain provisions of the legislation, as well as programs in the Consolidated Appropriations Act, including measures to increase purchases of food for donation, supply chain infrastructure investments and others. Additionally, Chairwoman Stabenow highlighted the capacity of some existing programs at USDA to help make the supply chain more resilient and flexible in the face of large-scale disruptions. Stabenow writes, "This is also an opportunity to better prepare the food supply chain in the event of a future disruptive event.”

USDA Not Appealing Court Decision on Pork Slaughter Line Speeds

The Department of Agriculture will not appeal a federal district court ruling on faster line speeds in slaughterhouses. USDA told the Hagstrom Report that only the Justice Department can make a decision about the appeal. The comments came less than a day after the National Pork Producers Council urged USDA to intervene in the matter before the ruling takes effect at the end of next month. NPPC cites an analysis by an Iowa State University economist that shows the ruling will result in a 2.5 percent loss in pork packing plant capacity nationwide and more than $80 million in reduced income for small U.S. hog farmers. However, the United Food and Commercial Workers International Union praised the response from USDA. The union represents over 250,000 meatpacking and food processing workers. UFCW International President Marc Perrone says, “UFCW is calling on CEOs across the pork industry to work with the USDA to slow their line speeds.”

Perdue Documents Ag Confined Space Injuries

Purdue University's Agricultural Safety and Health Program recently released the annual 2020 Summary of U.S. Agricultural Confined Space-Related Injuries and Fatalities report. The program reported 64 fatal and nonfatal cases involving agricultural confined spaces, including 35 grain entrapments, seven falls into or from grain storage structures, four asphyxiations and 12 equipment entanglements. The total number of cases represents a 4.5 percent decrease from the number documented in 2019, exceeds the five-year average and the number of reported mining-related fatalities in 2020. The report says, “there is a direct correlation between out-of-condition grain and an increased likelihood of worker exposure to entrapment situations.” Further, the report reminds farmers to never enter a grain bin with evidence of crusting on the surface or within the grain mass. If the grain is crusted or the floor outlets are plugged, contact a professional grain salvage service that has the equipment and experience to remove out-of-condition grain.

ASA Announced Wool Assurance Website

The American Sheep Industry Association launched the American Wool Assurance website last week at AmericanWoolAssurance.org. The website allows American sheep producers to take a crucial step in certifying their wool through a voluntary, American industry-driven certification process. The American Sheep Industry Association worked with Colorado State University the past two years to develop the voluntary program and standards that will allow manufacturers to purchase American wool with confidence that the animals producing that wool have been raised with a high level of care. Industry input from producers, shearers, buyers, extension, animal welfare experts and processors was critical in the development of program standards. ASI Deputy Director Rita Samuelson states, “This is something that consumers and brands are asking for increasingly, and so it has become important to retailers, processors and wool buyers in recent years.” ASA says Sheep producers interested in earning certification should go to AmericanWoolAssurance.org and sign up as soon as possible.

NCBA to Honor Cattle Feeder Hall of Fame Inductees in August

Cattle Feeders Hall of Fame inductees and award winners will be honored in August. The event, August 9, will precede the 2021 Cattle Industry Convention and NCBA Trade Show, to be held in Nashville, Tennessee. The Cattle Feeders Hall of Fame was established in 2009 to honor the exceptional visionary men and women who have made lasting contributions to the cattle-feeding industry. Inductees for 2021 are Johnny Trotter, president and CEO of Bar-G Feedyard in Hereford, Texas, and Steve Gabel, founder of Magnum Feedyard in Wiggins, Colorado. Dr. Gary C. Smith, visiting professor in the Department of Animal Science at Texas A&M University, will receive the Industry Leadership Award. George Eckert with Green Plains Cattle Company in Garden City, Kansas, and Gaspar Martinez with Harris Feeding Company in Coalinga, California, will receive the Arturo Armendariz Distinguished Service Award. Information on the 2021 Cattle Industry Convention and NCBA Trade Show, including tickets to the 2021 Cattle Feeders Hall of Fame banquet, can be found at convention.ncba.org.

Washington Insider: US, China Talk Trade

U.S. Trade Representative Katherine Tai and Chinese Vice Premier Liu He held discussions Wednesday evening, the first such session between the two since the Biden administration took office. The session was labeled candid on trade issues between the two sides.

Tai discussed the Biden administration's guiding principles on trade policy and her continuing review of the U.S.-China trade relationship in a virtual meeting, the Office of the U.S. Trade Representative's (USTR) said. And Tai said she expected further discussions with Liu ahead.

No doubt future discussions, depending on timing, will center on the review of U.S.-China policies that USTR is conducting. A review that is still underway, so timing of the next Liu/Tai discussion is not yet certain.

All Tai has said so far about the Phase One agreement is that her view is “mixed” on the agreement that included purchase commitments made by China for manufactured goods, energy and of course agricultural commodities.

From the Chinese side, their Ministry of Commerce described the call as “candid, pragmatic and constructive.” Outstanding issues include tariffs imposed by former President Donald Trump and U.S. sanctions against Chinese companies. The latter is one where the U.S. is not alone as several other countries have been targeting Chinese firms as well.

What has not been given any mention publicly is the situation where the U.S. and others are putting restrictions on imports of cotton/textiles from Xinjiang over the issue of the Uyghur minority. Many outside of China say the Uyghurs are being subjected to forced labor, something China vehemently denies and there have been numerous articles in Chinese state-run media that seek to counter the allegations being made by the Western World.

But even before Tai and Liu spoke, lower-level discussions took place Tuesday night. Chinese trade staffers on that call also called on the U.S. to roll back remaining tariffs on Chinese products. During the call, the Chinese stressed the importance of tariff rollbacks as a necessary component of next steps in the relationship.

It is important that Liu was the point person on the call as there had been talk of him being replaced in the role that saw him negotiate the Phase One agreement with Robert Lighthizer, USTR under President Donald Trump.

In letting Liu, President Xi Jinping's right hand on the economy, speak with Tai, the Chinese leadership is signaling the continued importance of the economic relationship to Beijing.

When it comes to the Phase One agreement, many continue to point out that China is running behind its two-year purchase commitments under the deal. Both Chinese and U.S. data indicated that to be the case.

But agriculture has done better than the other sectors relative to the purchase targets. Long-time trade folks have pointed out that the purchase commitments are kind of the “shiny object” in the deal. Several U.S. commodity interests point to other components of the Phase One agreement as being perhaps even more important.

Indeed, those other matters are things that deal with sanitary and phytosanitary issues, some of the biggest areas where trade problems arise.

Of the more than 55 policy changes that China committed to on agriculture trade, some 50 of those have been implemented. And some have had an immediate impact. Take the agreement between the U.S. and China that was announced in February 2020 where China cannot block all poultry imports from the U.S. in the event we have a bird flu outbreak. China halted its imports of U.S. poultry in 2015 after the bird flu outbreak, and only agreed to reopen its market under the Phase One agreement.

Less than two weeks after that agreement was announced on the regionalized approach to poultry trade issues, the U.S. confirmed a case of bird flu in turkeys in South Carolina. The result was China only blocked poultry from South Carolina, not all of the U.S.

The other that many point to is China now accepts export certification for meat and poultry plants by the U.S. Food Safety and Inspection Service. That has meant more than 4,000 plants can now ship product to China, up from around 1,500 before the Phase One deal.

The changes made by China are important in that they cover not only trade under the Phase One agreement but they put in place changes that will govern future ag trade between the two sides.

And that increased trade between the two sides spurred by the Phase One agreement helped push USDA to raise its forecast for U.S. ag exports in Fiscal Year (FY) 2021 to a record $164 billion.

The U.S.-China relationship is a key one and it is one that has rising tensions as a component. It does not appear that China wants to walk away from the Phase One agreement, but they are pushing the “new” administration on the issue of tariffs, tariffs that got them to the table to negotiate the deal in the first place.

So we will see. U.S. agriculture has clearly benefitted from the Phase One agreement. Perhaps not as much when viewed from the purchase commitments. But when the other critical changes that China has taken governing trade in agricultural products are considered, it is a relationship that so far is a sizable benefit to U.S. agriculture. But the China-U.S. relationship is a delicate one and must be watched closely, Washington Insider believes.

Biden Budget Arrives Today

The Biden administration's Fiscal Year (FY) 2022 budget arrives today and contains hefty spending for FY 2022 and lots of budget red ink.

For agriculture, the key focus will be on what the plan offers for a spending plan at USDA and what kind of spending increases for areas like conservation that might be included. The focus there will be on what kind of signals, if any, the administration opts to send relative to using those programs to address climate change.

With the Democrats in control of the House and Senate, it ups the odds the Biden budget plan will be able to get through. But there will be changes as lawmakers often want to put their own stamp on certain areas of any spending plan. Even the budgets proposed by the Trump administration were not adopted lock, stock and barrel when Republicans held both the House and Senate.

USDA To Work With Hog Plants That Will Need To Slow Line Speeds

USDA's Food Safety and Inspection Service (FSIS) said the agency will not challenge a court ruling which vacated a portion of the “New Swine Slaughter Inspection System” (NSIS) relative to line speeds at hog processing plants.

“The Court vacated the rule only insofar as it eliminated the maximum line speed cap for NSIS establishments,” FSIS said of the decision by the U.S. District Court for the District of Minnesota. “The other provisions of the final rule were not affected by the Court's decision.”

The court issued a 90-day stay to give plants time to adjust, FSIS said. “At this time, establishments operating under NSIS should prepare to revert to a maximum line speed of 1,106 head per hour on June 30, 2021,” the agency said. “We will work with the establishments to comply with the Court's ruling and minimize disruptions to the supply chain.”

Those supply chain disruptions were cited by the National Producers Council (NPPC) as they called on USDA to appeal the decision. They pointed to an economic analysis showing the ruling would mean a 2.5% loss in pork packing capacity and an $80 million drop in income for producers. The group also said they will continue to “pursue all avenues” on the matter.

Friday Watch List

Markets

Friday is the final trading session ahead of a three-day weekend celebrating Memorial Day. Grain prices could be volatile Friday with several weather factors at play and forecasts closely watched. A report on U.S. personal incomes and consumer spending is due out at 7:30 a.m. CDT, followed by the University of Michigan's consumer sentiment index at 9 a.m. Grains and livestock close at their normal times Friday. Grains will next trade at 7 p.m. CDT on Monday evening.

Weather

Friday brings an unseasonal dose of freezing cold to the northern Plains and far northern Midwest, with possible damage to crops. Meanwhile, light to moderate rain is in store for the eastern Midwest, which will offer favorable crop moisture. We'll also see a swath of rain extend into the Delta and southeastern Plains. Other crop areas will be dry. Showers will work into the western and central Plains during the Memorial Day holiday weekend.

National FFA Organization Picks New CEO

The National FFA Organization and the National FFA Foundation have new leadership after picking Scott Stump as the new CEO of both organizations. Stump lives on a small ranch in Colorado with his wife, Denise, and their three children. He has a background in agricultural education, career and technical education, and the FFA. He received his bachelor’s degree in Agricultural Education from Purdue University. “it’s with great anticipation that I return to National FFA in this leadership role,” Stump says. “I know from personal experience as a student and as a parent the positive difference FFA makes in the lives of students across this nation.” Stump also says he looks forward to working with FFA’s talented national staff, committed board members, state and local leaders, and supporters to advance and expand the organizations’ collective impact. Ronnie Simmons, Chair of the National FFA Foundation Board of Trustees, says they’re excited to welcome Scott Stump to their team. “Scott brings decades of experience to the table, having been a part of FFA and agricultural education at nearly every level, including as a student member, classroom teacher, state staff, and national staff,” Simmons says. Stump replaces Mark Poeschl, who resigned in January after leading the organization for five years.

Groups Ask Court to Vacate Trump Water Rule

Environmental groups have asked a federal court to vacate the Navigable Waters Protection Act enacted during the Trump Administration. The motion for a summary judgment comes as the Biden administration continues to review the existing water rule. DTN says the South Carolina Coastal Conservation League filed the motion in a South Carolina U.S. District Court. They asked the court to vacate the rule based on what they call undisputed facts, including what they say has been lost protection for U.S. waters. In its motion, the Coastal Conservation League says the Army Corps of Engineers has been “flooded” with requests to get approved jurisdictional determinations securing the right to “pollute or fill newly excluded streams and wetlands free of the Clean Water Act’s permitting regulations.” They say in the past year that the law has been in effect, the rule’s threat to the nation’s waters has already been profound. However, agriculture groups support the current rule because they say it simplifies questions about the Clean Water Act jurisdiction that farmers face on their land. The groups call the Trump-era rule an “arbitrary policy reversal” that removed the Clean Water Act’s protections for millions of miles of streams and tens of millions of wetland acres.

NBB Happy with Biodiesel Tax Credit Extension Proposal

The National Biodiesel Board thanked a bipartisan group of senators and representatives for introducing the Biodiesel Tax Credit Extension Act of 2021. Senators Chuck Grassley (R-IA) and Maria Cantwell (D-WA) and Reps Cindy Axne (D-IA) and Mike Kelley (R-PA) introduced the legislation that would provide the biodiesel and renewable diesel industry certainty for an additional three years. It would support continued growth in the U.S. production of better, cleaner fuels that are reducing carbon emissions now and boosting rural economies. “As Congress looks to jumpstart economic growth, rebuild infrastructure, and reduce carbon emissions, they can count on biodiesel and renewable diesel to help achieve those goals,” says Kurt Kovarik, NBB Vice President of Federal Affairs. “Biodiesel and renewable diesel are on average 74 percent less carbon-intensive than petroleum diesel and have cut more than 140 million tons of carbon emissions since 2010.” The U.S. biodiesel and renewable diesel industries support 65,000 jobs in America and more than $17 billion in economic activity each year. Biodiesel production supports approximately 13 percent of the value of each U.S. bushel of soybeans. “The biodiesel tax credit continues to be extremely successful in expanding consumer access to clean, low-carbon fuels,” Kovarik adds.

Iowa Coalition Reminding Biden of His Biofuels Promise

Iowa lawmakers sent a letter to President Joe Biden and Ag Secretary Tom Vilsack asking them to support the biofuels industry and seeking information on how proposed tax changes will affect farmers. The senators and representatives sent the letter to remind Biden that he promised to promote renewable fuels, including ethanol, to support rural America. The letter points out that despite the promise, the administration’s proposed infrastructure bill would spend $174 billion to subsidize electric vehicles while hardly mentioning the biofuel industry. A Successful Farming article said when the plan was introduced in March, Ag Secretary Vilsack announced that the president’s proposed $2 trillion infrastructure plan, known as the American Jobs Plan, would include money toward increasing the production of biofuels. The Iowa lawmakers say they want the president to recognize that biofuels can be used as a permanent energy solution to help decarbonize the transportation sector. “Biofuels should not be treated as a transition fuel but prioritized as a fuel of the future,” the letter says. The lawmakers also state in the letter that they want data from the USDA showing how a proposed change in the tax law affecting capital gains taxes would affect farm estates.

Foundation for Agriculture Awards Ag Literacy Grants

The American Farm Bureau Foundation for Agriculture awarded $9,500 in grants to ten communities that are creating new ways to educate the public about agriculture. The end goal of each grant is to help communities with the funding they need to help people of all ages understand agriculture and the important role it plays in their lives. “The Foundation for Agriculture is pleased to highlight these ten communities that are bringing innovative agriculture literacy ideas into the classroom,” says Daniel Meloy, the foundation’s executive director. “The grant program is an exceptional way for educators, volunteers, and other leaders to get started on or expand an ag literacy project.” The criteria for selecting winners included the effectiveness of demonstrating a strong connection between agriculture and education, how successfully the project enhances learner engagement in today’s food, fiber, and fuel systems, as well as the timeliness and processes for accomplishing project goals. The foundation gave grants to recipients in Arizona, Georgia, Iowa, Kentucky, Minnesota, Nebraska, New Jersey, and South Carolina.

USDA Initiative to Quantify Climate Benefits of CRP

The USDA’s Farm Service Agency announced an initiative to quantify the climate benefits of the Conservation Reserve Program contracts. The multi-year effort will enable USDA to better target CRP toward climate outcomes and improve existing models and conservation planning tools while supporting USDA’s goal of putting American agriculture and forestry at the center of climate-smart solutions to address climate change. "CRP is a powerful tool for implementing voluntary, measurable conservation outcomes to mitigate the impacts of climate change,” says FSA Administrator Zach Ducheneaux (DOO-sheh-know). “Nearly 21 million acres are currently enrolled in the program that prevents the equivalent of more than 12 million tons of carbon dioxide from entering the atmosphere.” He also says further quantifying program benefits will allow the agency to better target CRP to achieve continued climate wins across environmentally sensitive lands while strengthening their modeling and conservation planning resources for all producers.

Washington Insider: Fed Says Taper Talk Coming

The U.S. central bank is poised to start at least talking about when it will start to adjust its monetary policy as the U.S. economy continues to climb from the depths of the pandemic.

The Federal Reserve has set the target range for the key Fed funds rate, the interest rate that governs costs of borrowing across the economy, at a range of 0% to 0.25%, in a bid to provide low-cost money so that the economy can recover from the COVID-19 pandemic. The Fed is also purchasing some $120 billion in bonds in a bid to keep interest rates low.

As the economy recovers, a reduction or tapering of those bond purchases is expected as the Fed's first action to tighten monetary policy as it seeks to not let the economy grow too fast to spur inflation that would cause damages across the economy and curtail economic activity.

For months, Fed Chairman Jerome Powell has said it is not yet time for the Fed to start “talking about talking about” tapering the bond buys. That comment he made months ago has become a source of questions nearly every time he has met with reporters, and he has maintained that it is not yet time for that to happen.

But that time is getting closer. The April 27-28 meeting of the Federal Open Market Committee (FOMC), the meeting of Fed officials where they set monetary policy, indicated that to be the case. The recap of the meeting issued last week noted that FOMC members thought that if the U.S. economy continues to make strong progress, “it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases.” That is “Fed speak” for talking about tapering.

This mention is important because coming out of the financial crisis, the Fed also embarked on purchasing securities/bonds in a bid to keep interest rates low. A comment from then-Fed Chairman Ben Bernanke in congressional testimony that the Fed was talking about reducing those bond buys spooked investors and roiled stock and financial markets, a response that was called the “taper tantrum.”

Bernanke responded by emphasizing over and over in following appearances that the Fed was not ready to take such a step. In fact, the Fed did not take that action for several months after Bernanke's comment. Powell, it seems, learned from the Bernanke experience. That is why he has taken grate pains to emphasize that the Fed does not think things have reached a point where the bond buys need to be reduced.

Powell also pledged that when the Fed does take such a step, it will not be a surprise to markets. He wants to avoid another “taper tantrum” from unfolding in the markets. So, based on the minutes from the April meeting and comments from Fed officials in recent days, we're getting closer to the discussion taking place on tapering those bond purchases.

This sets the stage for the U.S. central bank to tighten its easy monetary policy. That will mean borrowing costs will start to increase. That will start a new chapter for the U.S. economy as it will start to increase costs for consumers to do many things, like buying a home, buying a car, and using credit cards and more.

So we will see. The process of raising interest rates has begun as the economy recovers. And, it means that agriculture will be seeing a rising cost component in the form of higher interest rates. While any increases are not expected to be large, this is still situation which needs to be watched closely, Washington Insider believes

USDA Ups Grocery Store Price Outlook

Upward revisions to food at home (grocery store) price forecasts for several food categories prompted USDA's Economic Research Service (ERS) to up their forecast rise in grocery store prices to an increase of 1.5% to 2.5% in 2021 versus 2020--the midpoint is right in line with the 20-year average of 2.0%.

Overall food price inflation is still forecast at 2% to 3% (2.4% 20-year average) with food away from home (restaurant) prices seen rising 2.5% to 3.5% (2.8% 20-year average) from 2020 levels.

So far this year, overall food prices are up 1.7% from the same period in 2020, with grocery store prices up 1.2% and restaurant prices up 2.4%.

“Forecast ranges for meat categories, poultry, eggs, dairy products, fats and oils, and fresh fruits were also revised upward,” USDA noted, with only fish and seafood forecasts left steady with the month-ago outlook. “Forecast ranges for cereals and bakery products, nonalcoholic beverages, and other foods were revised downwards” compared with USDA's month-ago forecasts.

“The meat and poultry price increases were driven by high feed costs and strong domestic and international demand,” USDA said. “In addition, winter storms and drought disrupted the beef supply, and high prices for sows dampened pork production.”

Senate Agriculture Committee Republicans Want USDA Analysis On Tax Plan

Republican members of the Senate Agriculture Committee are calling on USDA Secretary Tom Vilsack to make public a detailed explanation and any supporting economic analyses that clarifies how the Biden administration's proposed tax increases will affect farm estates.

The panel's Ranking Member John Boozman, R-Ark., authored a letter to Vilsack that questioned USDA's analysis of President Joe Biden's proposed changes in capital gains tax rates and the modification to stepped-up basis on America's family farms and ranches.

The letter specifically asks for an explanation of how USDA arrived at the conclusion 98% of farm estates will not be impacted by the proposed tax changes.

“The proposed tax impacts are dependent on a number of factors, including but not limited to appreciation in farmland assets prior to a property owner's death, size of the farm operation and associated assets, income of the heirs, and the farm's ownership structure. Given these factors, we are writing to seek a detailed explanation and supporting economic analysis clarifying how these tax provisions will affect farm estates, including specifically how USDA arrived at the conclusion that fewer than 2% of farm estates will be impacted by the proposed tax changes,” the senators wrote.

Thursday Watch List

Markets

USDA's weekly export sales report, U.S. jobless claims, durable goods orders for April and first-quarter U.S. GDP are all set for release at 7:30 a.m. CDT Thursday, along with an update of the U.S. Drought Monitor. The U.S. Energy Department reports on natural gas inventory at 9:30 a.m. The International Grains Council's monthly supply and demand estimates are also due out Thursday morning. Even with all of Thursday's reports, the latest weather forecasts get top attention.

Weather

Light to moderate rain is in store for the northern and western Midwest and portions of the Northern Plains Thursday. This includes areas which were bypassed by recent rainfall. We'll also see some light snow in colder air. The rain moves into the eastern Midwest and southern Plains later Thursday with a broad area of severe storm potential in the southern Plains.

USTR Begins USMCA Dispute Panel on Dairy Trade with Canada

U.S. Trade Representative Katherine Tai Tuesday announced the U.S. has requested and established a dispute settlement panel under the United States-Mexico-Canada Agreement regarding dairy trade. The request seeks to review measures adopted by Canada that “undermine the ability of American dairy exporters to sell a wide range of products to Canadian consumers.” The U.S. is challenging Canada’s allocation of dairy tariff-rate quotas, specifically the set-aside of a percentage of each dairy TRQ exclusively for Canadian processors. Agriculture Secretary Tom Vilsack responded, “This is an important step for American agriculture and one that brings the U.S. dairy sector closer to realizing the full benefits of the USMCA.” Vilsack adds the action “puts our other agricultural trading partners on notice that they must play by the rules.” Praising the announcement, National Milk Producers Federation President and CEO Jim Mulhern states, “Canada has failed to take the necessary action to comply with its obligations under USMCA by inappropriately restricting access to its market.”

Senate Finance to Consider Clean Energy for America Act

The Senate Finance Committee Wednesday (today) will consider the Clean Energy for America Act. The legislation introduced last month will overhaul the federal energy tax code. Committee Chairman Ron Wyden of Oregon states, “The federal tax code is woefully inadequate to address our energy challenges.” The legislation consolidates current energy tax incentives into emissions-based provisions that incentivize clean electricity, transportation and energy efficiency. The incentives would be available to all energy technologies if they meet emissions reduction goals. The bill provides long-term incentives for battery and fuel cell electric vehicles and electric vehicle charging. It also provides a technology-neutral tax credit for domestic production of clean transportation fuel that are at least 25 percent cleaner than average, with clean fuels required to reach net-zero by 2030 to qualify. Senate Agriculture Committee Chair Debbie Stabenow says the bill “simplifies our tax code and shifts tax incentives away from oil and gas to clean energy,” adding the change is long overdue.

NPPC: Federal Judge Ruling Disastrous for Small U.S. Hog Farmers

Left unchallenged, a recent federal district court ruling will result in a 2.5 percent loss in pork packing plant capacity nationwide, according to the National Pork Producers Council. NPPC says the ruling would reduce income by more than $80 million for small U.S. hog farmers. NPPC is urging the Department of Agriculture to intervene before the ruling takes effect at the end of next month. The federal court’s decision struck down a provision of USDA’s New Swine Inspection System allowing for faster harvest facility line speeds. NPPC says the court's ruling will have the opposite effect sought by those seeking to expand the number of meatpacking plant facilities. Lawmakers have recently called for increasing the number of pork processing facilities nationwide by bringing smaller state plants up to federal inspection standards. NPPC President Jen Sorenson says, “With the stroke of a judge’s pen, the lives of many hog farmers will be upended if this misguided ruling takes effect.”

Growth Energy Applauds Senate Push for Transparency on Refinery Exemptions

Farm state Senators recently reintroduced the Renewable Fuel standard Integrity Act. Senators Tammy Duckworth, an Illinois Democrat, and Deb Fischer, a Nebraska Republican, reintroduced the legislation as a companion to House legislation introduced in February. The bipartisan proposal would require small refineries to petition for Renewable Fuel Standard hardship exemptions by June first of each year. Currently, EPA does not provide any deadline for refiners submitting a request for a small refinery exemption. The change would ensure that EPA properly accounts for exempted gallons in the annual Renewable Volume Obligations it sets each November. Senator Duckworth states the bill would "bring much-needed transparency to the waiver process and prevent it from being misused to benefit billion-dollar oil companies at the expense of hardworking Americans again." Biofuels groups welcomed the bill. Growth Energy CEO Emily Skor says, "This legislation provides long-overdue transparency for requests to avoid blending more low carbon renewable fuels that are key to America's low-carbon future."

Organic Sales up During Pandemic

U.S. organic sales soared to new highs in 2020, jumping by a record 12.4 percent to $61.9 billion. The increase marked the first time that total sales of organic food and non-food products have surpassed the $60 billion mark, according to the Organic Trade Association. The organization released the data as part of its 2021 Organic Industry Survey. In almost every organic food aisle, demand jumped by near-record levels, propelling U.S. organic food sales in 2020 up a record 12.8 percent to a new high of $56.4 billion. In 2020, almost six percent of the food sold in the United States was certified organic. The COVID-19 pandemic caused consumer dollars to shift almost overnight from restaurants and carry-out to groceries, with traditional staples and pantry and freezer items flying off the shelves. Consumer habits were upended, online grocery shopping and grocery deliveries exploded, and new products were tried as families ate three meals a day at home.

JBS, Pilgrims, Announce Free Community College Tuition Program for Rural America

JBS USA and Pilgrim's this week announced the launch of Better Futures. The effort is a free-of-charge, two-year college tuition program providing more than 66,000 company team members and their dependent children the opportunity to pursue their higher education dreams. Better Futures removes a major financial barrier to college attendance and stands to become the largest free college tuition program in rural America. JBS USA and Pilgrim's advisors will also help team members, many from first-generation American families, navigate the application process, which can be a deterrence to people applying to college for the first time. To be eligible, JBS USA and Pilgrim's team members need only to have worked with the company for the last six months and remain in good standing with the company through completion of their education. College tuition is paid upfront by the company. If there is a facility where a college is not conveniently located, the companies will provide an online community college option.

Washington Insider: Fights Ahead in Carbon Accounting

As the focus on carbon emissions rises, there figures to be new battles looming on carbon accounting, according to the Bloomberg Green Insight newsletter.

The start examining the issue by looking at the claim Australian Prime Minister Scott Morrison made in April that the country had cut its emissions by 19% in 2019 compared with 2005 levels. He made the announcement during the climate summit organized by President Joe Biden.

Bloomberg labeled his claim on emissions reductions as "an attempt to burnish his country's coal-stained image."

But digging deeper, the Green Insight author Ashkat Rathi said that the figures touted by Morrison was merely an accounting trick. Turns out, it was a neat accounting trick. "Australia has made minimal progress towards net zero and its emissions trends are among the worst in the developed world," a new study from the Australia Institute concluded.

The study said that the reduction claims made by Morrison was only possible to get to if the land-use sector is included -- forests, agriculture and other related emissions. Taking those items out of the mix, the study said, Australia's emissions from fossil-fuel use and industry increased by 6% in 2018, relative to 2005.

The big focus is on fossil fuels as their contribution of emissions, something which Bloomberg said is something that only can happen over the course of decades, according to Pep Canadell, chief research scientist at CSIRO's climate science center.

But those emissions from land-use areas are certainly important. The Global Carbon Project said that the land-use sector added some 6.5 billion tons of emissions in 2019. To put that in perspective, that is about 20% of the emissions from fossil fuels for 2019.

But therein lies another key issue. Experts agree that measuring emissions from land use are not easy and the measurements used on emissions reductions are largely based on avoiding a hypothetical polluting activity.

Those emissions are going to be key in the climate change debate. Those also figure high on the list of things that will be focused on at the COP26 in Glasgow in November, Bloomberg said.

That COP26 confab will see countries seek to come up with ways to agree on rules for the Paris Agreement to create a new carbon market to help the public and private sectors trade those offsets. Presumably, that would also provide the basis for pricing those credits, another key factor in the process.

"The goal of the market is to reduce emissions, but without clear accounting and strict regulations there's a big risk of greenwashing," Bloomberg said.

One of the terms that figures in the mix is "avoided deforestation," that is based on the concept that the world will have to avoid cutting down forests in order to meet climate goals.

So to measure avoided deforestation, there will have to be a baseline of deforestation established. If, for example, that would be set at 1%, then if the rate of deforestation falls by 0.5% then those developing the projection can create offsets based on the 0.5% of emissions avoided because some trees weren't cut down. Those offsets could then be purchased by those who need such credits to "reduce" their carbon emissions.

But that also leaves the situation rife for the potential for "greenwashing" of figures and manipulating baselines by sellers to create a big batch of credits. That sets up a situation where those that need to buy the credits could obtain them at a cheaper price.

Then there is the potential for double counting. Bloomberg said that could arise as a company could delete emissions from their own accounts and a country could conceivably also cancel those same credits for that country.

And Bloomberg said that is a real situation. "One of the reasons Article 6 negotiations have failed at previous COP meetings is reportedly because Brazil objected to the phrase 'double counting' appearing in the rulebook governing the new carbon market," Bloomberg said.

So we will see. This situation could become a major issue ahead, particularly the matter of double counting and greenwashing and more. And agriculture figures prominently in the mix, particularly on land-use emissions. This creates a series of discussions and debates that agriculture will need to follow closely, Washington Insider believes.

NPPC Weighs In On Court Decision On Pork Plant Line Speeds

A recent ruling by a federal judge would be "disastrous" for small U.S. hog farmers, according to the National Pork Producers Council (NPPC).

Left unchallenged, a recent federal district court ruling will result in a 2.5% loss in pork packing plant capacity nationwide, and more than $80 million in reduced income for small U.S. hog farmers, according to an analysis by Dr. Dermot Hayes, an economist with Iowa State University. NPPC is urging USDA to intervene before the ruling takes effect at the end of next month. The ruling, NPPC said, "will dramatically reduce hog farmer market power--particularly smaller producers located near impacted plants--and undermine pork industry competition."

NPPC said the court's ruling will have the opposite effect sought by those seeking to expand the number of meat packing plant facilities. Lawmakers have recently called for increasing the number of pork processing facilities nationwide by bringing smaller state plants up to federal inspection standards. These facilities represent less than 1% of total harvest capacity.

Mexican Judge Rejects Bid to Freeze Mexico GMO, Glyphosate Plans

A request to freeze a government plan to ban imports of GMO corn and glyphosate by 2024 was rejected by Mexican Judge Martin Adolfo Santos Perez, marking the latest of what Mexico's National Council of Science and Technology (CONACYT) said have been 17 legal challenges of the order issued by Mexican President Andres Manuel Lopez Obrador.

The latest action was brought by the National Farm Council (CNA). The group argued that it is concerned "radical and unscientific interpretations" of the planned bans will stoke uncertainty. CONACYT has been directed to come up with an alternative to glyphosate.

USDA Secretary Tom Vilsack has said he has continued to discuss the issue with his Mexican counterpart and has indicated that the ban on GMO corn could apply only to corn used for food as opposed to feed, but the issue is not clear at this juncture.

Wednesday Watch List

Markets

The latest weather forecasts continue to get close attention Wednesday and we'll watch for an export sale announcement, but there haven't been any export sales reported since Thursday. The U.S. Energy Department's weekly inventory report is set for 9:30 a.m. CDT and includes an update of ethanol production after it broke above 1 million barrels per day last week.

Weather

Showers and thunderstorms are in store for much of the eastern Midwest along with the central and western Plains Wednesday. Storms are capable of producing locally heavy rain in these areas, including flash flooding. Severe storms are also likely with a threat of hail, high winds and tornadoes. Other areas will be dry. Frost potential is also featured in the far northern Plains Wednesday night

JBS Exits NCBA

JBS has left the National Cattlemen’s Beef Association as the group is taking a closer look at market consolidation. NCBA, along with other livestock and general farm organizations, met recently to discuss livestock market concerns. And lawmakers have requested the Department of Justice continue, and provide an update on, its cattle market investigation. Politico reports JBS suspended its membership to NCBA last year as part of an internal review. Now, JBS is no longer a member of NCBA, but company officials say they expect to remain involved with the group. In response to the lawmaker’s effort, NCBA’s Ethan Lane stated last week, “We have a high supply of cattle at one end of this equation and a high demand for U.S. beef at the other, but the middle is being absolutely choked by the lack of processing capacity.” Known as the big four, Tyson, JBS, Cargill and National Beef process more than 80 percent of U.S. beef.

Bill Would Give USDA Authority over Rural Broadband

House lawmakers last week introduced the Broadband for Rural America Act. The legislation would put the Department of Agriculture in the driver’s seat for rural broadband rather than the Federal Communications Commission. Georgia Republican Representative Austin Scott mentioned last week, "The FCC’s had their chance, and they haven’t gotten it done.” The bill is one of several infrastructure proposals from House Republicans. Scott says the legislation will provide new investments for USDA connectivity programs to bring high-speed internet infrastructure to rural communities. Specially, the bill would authorize $3.7 billion per year for rural broadband programs, including the ReConnect Rural Broadband Program, the Middle Mile Broadband Program, and the Innovative Broadband Advancement Program. The legislation would also target assistance focused on the most rural and least-connected residents, which are often the most expensive to connect. Finally, the bill aims to promote borrower accountability and protect taxpayers with new tools to ensure promised services are delivered to rural communities.

Organic Valley Announces Low Carbon Footprint Dairy on Path to Carbon Neutrality

Phase one of Organic Valley's dairy life cycle assessment evaluated on-farm greenhouse gas emissions from dairy farms using different management practices. The results are in, and farming practices of Organic Valley farmers have a measurable benefit for the planet, reinforcing the cooperative's commitment to bringing ethically made organic food to families. University of Wisconsin-Madison's assessment reveals that, on average, the dairy farms of Organic Valley's members have a smaller carbon footprint than average U.S. conventional and organic dairy overall. The most significant difference in calculations of the carbon footprint of Organic Valley milk is in the inclusion of carbon sequestration from pasture as well as from forage and crop production. Including carbon sequestration in the LCA reduced the net farm emissions of the cooperative's dairy farms by an average of 15 percent. In addition, on average, Organic Valley farmers report engaging in 50 percent more pasture grazing than that required by the National Organic Program.

Real Organic Project Meets with Secretary Vilsack

Farmers of the Real Organic Project met with Agriculture Secretary Tom Vilsack last week, discussing what the group calls the “organic problem.” The meeting followed a letter sent to Vilsack last month signed by 43 former members of the National Organic Standards board. The farmers told Vilsack, “the National Organic Program is in serious trouble because of the failure of the USDA to uphold the integrity of the Organic Standards.” The standards board is intended to represent a broad spectrum of interest groups. However, the group alleges, “The choices by the USDA are often skewed, with mid-level Agribiz managers oftentimes taking a farmer position.” In the last eleven years, the program has failed to successfully bring a number of key recommendations to rulemaking. The group’s April letter states, “This failure has led to real damage to trust in and the integrity of the organic program, as the NOP has failed to respond to serious challenges to the meaning of organic from industry.”

AEM Offers Insights on High Machinery Sales

The Association of Equipment Manufacturers says there are several factors driving the current machinery sales trends. In the first quarter of 2021, total farm tractor unit sales are up more than 50 percent in the U.S., and nearly 60 percent in Canada. AEM’s Curt Blades says, “We're operating in a very interesting market right now.” Over the last 12 months, there’s been a rise in under 40 horsepower, or small tractor sales. Blades says, “This is due largely to a lot of the industries that have done very well during the pandemic." Small tractors fall into that category as well as sales are spiking largely in suburbs with larger lots to help homeowners with improving the property. However, starting later in 2020, larger row-crop and articulated 4WD tractors have also enjoyed increasing sales success. Blades adds, “Tractor sales are strong, commodity sales are particularly good, and optimism is at an all-time high in the farming community."

USA Rice: USDA Acreage Forecast Higher than Actual Acres Planted

USA Rice says the Department of Agriculture’s acreage forecast for rice is higher than the actual acres planted. The USA Rice World Market Price Subcommittee met last week, to discuss supply and demand, rice stocks, and projected plantings.  Subcommittee members from all six rice states reported expectations that actual plantings for 2021 will be significantly lower than those estimated by USDA in the March projected plantings, with a total projected difference of 15 percent less acreage, due to a range of weather issues. Following the Subcommittee meeting, Chair Keith Glover and USA Rice staff met with teams from the USDA National Agricultural Statistics Service, Economic Research Service, and World Agricultural Outlook Board departments.  Glover provided feedback from Subcommittee members regarding NASS statistics, and reviewed the areas where members thought changes could be made. Glover states, “As always we were happy to meet with USDA to pass on input from our World Market Price Subcommittee.”

Washington Insider: Infrastructure Negotiations Continue

The White House has lowered its price tag on an infrastructure package to $1.7 trillion, down from an initial package of $2.25 trillion, as efforts to find bipartisan agreement on infrastructure spending continues.

Republicans had offered up a $568 billion package which some Democrats dismissed immediately as woefully short of what is needed. Indications are Republicans may be willing to bump their offer up by some $250 billion, but even that may not be enough to win much support among Democrats.

The offer to Republicans, White House Press Secretary Jen Psaki said, was made “in the spirit of finding common ground.” The offer, she noted, “exhibits a willingness to come down in size.”

While the size of the package is one objection from Republicans, the other is how the administration wants to pay for the plan. One of the key ways to pay for the administration's package is an increase in the corporate tax rate to 28% from the 21% that Republicans put in place via their 2017 tax package. But touching the GOP tax package is a non-starter for many Republicans, including Senate Minority Leader Mitch McConnell, R-Ky., who said as much last week. “If they're willing to settle for a targeted infrastructure bill without revisiting the 2017 tax bill, we'll work with them,” McConnell said, but he noted a package of $2 trillion or more “is not going to have any Republican support.”

Republicans, on the other hand, have suggested paying for their package in part by tapping unspent funds from the massive COVID-19 aid package. Other money could come from uncollected tax revenue or public-private partnerships.

But Biden has continued to meet with Republicans even as those in his own party are warning him not to let Republicans just negotiate for an extended period of time. But that does not appear to be the case – that Biden will let the negotiations drag on for weeks or months.

Biden will “change course” on the infrastructure plan if he can't get bipartisan support, White House senior adviser Cedric Richmond told CNN's State of the Union. "He wants a deal. He wants it soon, but if there's meaningful negotiations taking place in a bipartisan manner,” Richmond said. “He will not let inaction be the answer. And when he gets to the point where it looks like that is inevitable, you'll see him change course.”

That change in course is going the reconciliation route which would allow Democrats to move the infrastructure deal forward without needing to have 60 votes in the U.S. Senate.

Another factor which is chafing some on the Hill are items included in what is labeled infrastructure. Sen. Roy Blunt, R-Mo., has been involved in the negotiations with the White House, and said the price tag is one thing but that reflects the amount of various issues that are included.

But this situation is unfolding as other countries around the globe are investing in their infrastructure. Brazil, for example, has focused their attention on improving the infrastructure for their soybean industry. Brazil's infrastructure minister has predicted a boom in development of the nation's highways, railways and airports on the back of $50 billion in investment in concession projects by the end of next year.

“Brazil will become an immense construction site,” Tarcisio Gomes de Freitas told the Financial Times. “With the planned concessions, by the end of 2022, $50 billion will have been contracted in investments for the modernization of airports, ports, highways and railways. In other words, the equivalent of more than 30 years of the public budget for infrastructure,” he said.

Indeed, Brazil has put $10 billion into an array of projects that include airports, seaports, rail lines to reach into the interior of Brazil and more.

But Brazil is also looking at the infrastructure effort with an eye on climate change. The country current sees some 65% of their distribution system in trucking and only 15% by rail.

Freitas said that connecting the interior of the country with Amazon River arteries would reduce up to 1 million tons of carbon dioxide.

Brazil has production costs for their soybean that are very favorable compared with the U.S. But it's getting their crops to export channels that is their biggest cost factor. And they look at infrastructure as not only addressing that situation but also making their country more eco-friendly.

Here in the U.S., infrastructure was hoped to be one of the topics that could find Republicans and Democrats working together. But so far, that hope is not being materialized, at least not to the point where the two sides are ready to put a package together that can get votes from both sides of the aisle.

And that is part of the irony. Both Democrats and Republicans agree that infrastructure is something that benefits all Americans and it is not a partisan matter. Few can disagree that the nation's roads, bridges and rail system along with the lock and dams on the Mississippi River that move ag products to export locations are sorely in need of updates. Yet getting to that point where all can agree is moving at a slow pace. And that slow pace is coming while our foreign competitors continue to invest in what it takes to move their ag products in particular to export to the rest of the world.

We shall see. If budget reconciliation ends up being the route for infrastructure spending, it will keep the fractured Washington in place. And that is something agriculture needs to monitor closely as they produce the crops, livestock and other ag products that would benefit considerably from improving the farm-to-market system, Washington Insider believes.

Steel and Aluminum Import Tariffs Remain in Focus

The Section 232 tariffs imposed on imports of steel and aluminum by the Trump administration are still in place and the Biden administration has not yet signaled they are ready to lift or alter those duties.

A union and various steel industry groups are calling for President Joe Biden to keep steel tariffs in place. Leaders of seven groups wrote a letter last week addressed directly to the president on behalf of U.S. steel producers, fabricators, and workers emphasizing the impact that Trump's 2018 steel tariffs had on their industry. They said that the move was necessary because surges in steel imports threatened nearly 2 million domestic jobs.

“Since the tariffs took effect, American steel producers have announced plans to invest more than $15.7 billion in new or upgraded facilities -- investments that are now beginning to bear fruit in the form of permanent, family-sustaining steel jobs and economic activity that supports communities across the United States,” the letter said.

Meanwhile, the UK government has indicated it will put new tariffs on imports of U.S. wine, chocolate and lobsters as it rebalances the list of goods it will target for import duties the U.S. imposed on imports of steel and aluminum. The British trade ministry said the new tariffs would be aimed at "the needs of the UK economy and shaped to defend industries across the UK."

No specific tariff rates were mentioned and the list published reflected a six-week consultation with businesses and other stakeholders.

State Lawmakers Urge USDA to Conduct Another Beef Checkoff Vote

A new producer referendum on the Beef Checkoff is being called for by 131 state lawmakers from 11 states. In a letter to USDA Secretary Tom Vilsack, the lawmakers said the $1-per-head assessment needs to be voted on again by producers.

“This tax was voted on in 1985 under the auspices that the money raised would go to promote exclusively USA beef,” said in their letter. “Unfortunately, that money is being funneled away from its original intent and is being used by private associations and entities that do not exclusively represent USA beef.”

It is not clear whether USDA will act on the request and whether there would be enough producer support for altering the checkoff if it were put to another vote by producers.

Tuesday Watch List

Markets

Tuesday starts with attention on the latest forecasts and any export sales news that might arise. At 9 a.m. CDT, there are reports on April new home sales and a consumer confidence index in May.

Weather

Tuesday will bring scattered shower and thunderstorm activity to the central and southeastern Plains, central Midwest, far Northern Plains, Northwest, and Canadian Prairies. Rainfall will be mainly light; however, some locally heavy amounts are possible in the Plains storms. Other areas will be dry. Strong winds are also in store for the northern Plains during the afternoon.

USDA Announces Plan for Black farmer payments

The USDA says it plans to make debt relief available to Black farmers. The announcement came one day before Ag Secretary Tom Vilsack participated in a roundtable discussion with Black farmers in Georgia. A spokesman says Vilsack will be traveling to other states to discuss the plan in the weeks ahead. Late last week, the Farm Service Agency published the first notice of funding availability for loan payments for eligible borrowers who have qualifying direct farm loans under the American Rescue Plan. “The Plan has made it possible for USDA to deliver historic debt relief to socially disadvantaged farmers and ranchers beginning in June,” Vilsack says. “USDA is recommitting itself to gaining the trust and confidence of America’s farmers and ranchers using a new set of tools provided in the American Rescue Plan.” The Plan authorizes funding and authorization for the FSA to pay up to 120 percent of direct and guaranteed loan with outstanding balances as of January first of 2021. He says the tools are designed to increase opportunity, advance equity, and address systemic discrimination in USDA programs. To learn more about the loan payments to socially disadvantaged farmers, go to www.farmers.gov/americanrescueplan.

SD/MN Senators Ask Colleagues to Sign onto Meatpacking Letter

Senators Mike Rounds (R-SD) and Tina Smith (D-MN) wrote a letter to U.S. Attorney General Merrick Garland regarding the state of the U.S. meatpacking industry. They asked him to enforce or examine America’s antitrust laws to restore fairness in the marketplace for cattle producers and are asking their colleagues in both the House and Senate to sign the letter. The Hagstrom Report says the letter was released last week by R-CALF USA, which is launching an effort to get 200 members from both chambers of Congress to sign the letter. Producers want to know why boxed beef prices are rising while the prices they get for their cattle are stagnant. During an R-CALF USA Facebook Live event held last week, Rounds said it’s vital for producers to let consumers know about the industry’s issues. He’s also asking R-CALF members to put the letter out in front of consumers outside of their home states. South Dakota is one of nine states where livestock outnumber people. Rounds says those states support more market transparency, but those same states make up just five percent of the country’s population. Rounds says meatpackers currently sit in the middle of the situation, noting that the industry is controlled by only four companies.

Reps Ask Biden Administration to Utilize USMCA Enforcement Measures

A bipartisan group of representatives sent a letter to U.S. Trade Representative Katherine Tai and Ag Secretary Tom Vilsack regarding dairy and the U.S-Mexico-Canada Agreement. They’re asking the administration to move ahead with enforcement measures negotiated in the USMCA to support U.S. dairy farmers. A key part of the USMCA agreement was the promise of new export opportunities for America’s dairy industry, including the introduction of fairer trade rules to ensure American-made dairy exports can compete on a level playing field. The coalition says it’s crucial that the Administration hold U.S. trading partners accountable to their tariff commitments. So far, Canada hasn’t taken actions to alter its dairy tariff-rate quotas to bring them into compliance with the USMCA. That undermines the ability of American dairy farmers and producers to sell a wide range of products to Canadian consumers. The representatives say the immediate use of enforcement measures is necessary to ensure Canada delivers on their obligations in a way that’s fully consistent with the agreement. “USMCA made key advancements for our dairy farmers,” says Representative Ron Kind (D-WI). “However, I’ve long said trade agreements are only as strong as their enforcement, and we need to make sure our trading partners live up to their end of the deal.”

Coalition Defends Gray Wolf Delisting

A coalition of agriculture and forestry groups filed court motions in defense of delisting the gray wolf under the Endangered Species Act. Three cases filed by environmental and animal welfare groups in California challenge the final delisting ruling issued by the U.S. Fish and Wildlife Service last November. The coalition is defending the delisting because it recognizes the successful recovery of the wolf and enables responsible wildlife management and protection of private property by farmers, ranchers, and forest resource users. The coalition provided the court with personal stories that illustrate the harm inflicted by unchecked wolf populations on livestock ranchers and farmers, natural ecosystems, and other wildlife. A Minnesota farmer stated in the filing that he lost 26 calves in a single year to gray wolves. Groups in the coalition include the American Farm Bureau Federation, the American Forest Resources Council, the American Sheep Industry Association, the National Cattlemen’s Beef Association, and the Public Lands Council. Since being listed under the ESA in 1974, the gray wolf has exceeded recovery goals by more than 300 percent. This has been a runaway success story, with uncontrolled populations now threatening livestock and rural communities across the country.

Hard Red Winter Wheat Tour Finishes Last Week

The Wheat Quality Council’s 2021 Hard Red Winter Wheat Tour finished up last week. The total weighted average yield estimate was 58.1 bushels per acre, a likely tour record that DTN says far surpasses USDA’s national yield projection of 52.1 bushels per acre. It’s the highest tour yield estimate in 19 years and the best in the event’s history, which stretches back over 40 years. The tour made 250 stops in multiple fields, most of which were in Kansas. They did visit several fields in southern Nebraska and northern counties in Oklahoma. Kansas is the nation’s largest winter wheat producing state, and Kansas farmers planted 7.3 million acres last fall. Harvest will get underway in June. Kansas Wheat CEO Justin Gilpin says recent rainfall greatly helped to improve crop conditions after a dry early spring. He also says good prices prompted many farmers to closely monitor their crops for disease pressure and spray fungicides to keep the crop healthy. He was also quick to credit improved wheat genetics in helping plants better endure stress, such as drought. “Mother Nature has been good to the crop over the past two weeks with rain,” Gilpin tells DTN. “The yield estimate is a testament to wheat breeders and better genetics.”

NCGA Soil Health Institute Will Close

The Soil Health Partnership, a project of the National Corn Growers Association, is scheduled to close the doors for good on May 28. John Mesko, the groups senior director, says SHP has accomplished its original mission of determining the economic and environmental impact of conservation practices and communicating the importance of soil health to farmers and the agriculture community. “Despite our good work, the empirical on-farm research that SHP conducted is expensive,” Mesko says. “Add to that our high level of farmer-facing support, with field staff covering 16 states and a bona fide research and data analysis staff, and the current cost of SHP exceeds the existing levels of support.” In carrying out the mission, Mesko says they developed the best-in-class farm research protocols, farmer engagement strategies, and an elite suite of communication channels to tell the story. They also released key findings that included 2019 and 2020 cover crop planting reports, two published research papers, held several important webinars, and a study on the economic impact of conservation practices on farms.

Washington Insider: Escalation in US-Canada Lumber Dispute

The U.S.-Canada dispute over softwood lumber appears to be heading to an escalation. Bloomberg reported that the U.S. Department of Commerce issued new preliminary rulings on antidumping tariffs on Canadian softwood lumber imports that would double the current duties if implemented.

The International Trade Administration calculated a preliminary duty of 18.32%, but the current amount of 8.99% is in effect as there has not been a final determination, a Commerce official said Friday.

The final determinations will not be in place until later in the year. But the report will no doubt catch the attention of many in trade circles, particularly in Canada.

But this is only the latest chapter in what has been a seemingly decades-long battle between the two sides. Both sides have traded trade actions over softwood lumber.

Canada took a complaint to the WTO and in 2019, the world trade body said the U.S. had violated international trade rules in the way it calculated tariffs on Canadian imports of softwood lumber. That resulted in the current duty level of 8.99% which went into place in November, a trim from the level of 20.23% that had been in place.

British Columbia has been the most vocal in the situation. "We find the significant increase in today's preliminary rates troubling," Susan Yurkovich, president of the British Columbia Lumber Trade Council, said in in a statement. "It is particularly egregious given lumber prices are at a record high and demand is skyrocketing in the U.S. as families across the country look to repair, remodel and build new homes."

A big portion of U.S. lumber imports comes from British Columbia.

As for the preliminary increase, the U.S. Lumber Coalition welcomed the development. "A level playing field is a critical element for continued investment and growth for U.S. lumber manufacturing to meet strong building demand to build more American homes," Jason Brochu, co-chair of the coalition, said in a statement.

The National Association of Home Builders has urged the Biden administration to negotiate a new trade deal with Canada to secure supplies and halt further hikes, Bloomberg said.

But the situation is not only a concern in Canada but also in the U.S. as the current duties have pushed up lumber prices at a time when residential construction has been on the rise. Low U.S. interest rates have translated into low mortgage rates. And with a low supply of homes on the market, new construction efforts have been rising. Permits to build new homes have been posting strong increases at an annualized rate each month even as the level of starts is not coming close to the potential level that would be signaled by permits.

That is in no small part as lumber prices have risen dramatically. There has been a roughly 300% increase in lumber prices the past year. In fact, some builders and construction firms are bidding construction or addition jobs on a labor-only basis, saying that the materials cost will be what it costs.

If the higher duties go into effect, that will cause another rise in building costs for renovations, remodelings, additions and new construction. Already, the higher lumber prices are prompting some to hold off on such projects, but the potential increase in tariffs on Canadian lumber could cause some to "bite the bullet" and go ahead with on-hold projects in a bid to get them rolling before even higher costs are seen.

The situation has been interesting on the policy front. U.S. Trade Representative Katherine Tai told lawmakers she was eager to reach a softwood lumber agreement with Canada, being well aware of increased costs seen on the U.S. side of the border. But she also told lawmakers recently that Canada was not interested in any such agreement.

But then after the Free Trade Commission meeting last week between the U.S., Mexico and Canada, Canadian Trade Minister Mary Ng told reporters she wanted to reach an agreement with the U.S. on softwood lumber.

It is not clear why there appears to be a disconnect from the top trade officials in the two countries. But it is a disconnect that so far has not reached the point of the two sides setting time to sit down and discuss the matter in detail.

So we will see. The current tariffs have boosted lumber prices at an inopportune time on this side of the border. It would be an accomplishment by Tai and the Biden administration if they were to put this dispute behind them with some kind of a resolution. But the length of time this dispute has run, positions may not be as easy to change.

But it is a trade matter that agriculture needs to watch closely as it feeds throughout the U.S. economy and an escalation could prove damaging to the U.S.-Canada relationship on several fronts, Washington Insider believes, as history has shown that other sectors outside of those at the heart of a dispute can get snared as collateral damage.

Appropriations Timing Set In House

House Appropriations Committee action on the one dozen Fiscal Year (FY) 2022 spending bills is planned for a three-week period around the July Fourth recess, according to a report from CQ RollCall.

Subcommittee markups would start June 24 and run through June 28--before the chamber exits July 1 for its break. A final subcommittee markup would be held July 12.

In the full committee, markups would be held from June 29-July 1, with work resuming July 13-16. Given the timeline that House Majority Leader Steny Hoyer, D-Md., has laid out of wanting to get all the spending measures through the House by the August recess, it may mean several of the bills could be packaged together.

Several hearings on FY 2022 budgets for various agencies are on tap this week and more will be coming after the Memorial Day break. So far, the FY 2022 USDA budget hearing has not yet been scheduled in either chamber.

USDA Sets Payouts to Socially Disadvantaged Farmers in Motion

USDA's Farm Service Agency (FSA) has released the initial notice of funding availability (NOFA) for eligible borrowers with direct loans under the Farm Loan Programs (FLP) or Farm Storage Facility Loan (FSFL) programs authorized by the American Rescue Plan Act of 2021 (ARPA).

"FSA will pay 120% of direct loan balances outstanding as of January 1, 2021, for socially disadvantaged farmers and ranchers," the agency said. A subsequent notice addressing guaranteed loans and remaining loan balances will be published within 120 days of the initial NOFA that is expected to be published this week.

All eligible direct loan borrowers are included in the initial NOPA "except those who no longer have collateral or an active farming operation," FSA said. "These borrowers often have more complicated cases and may not have the same opportunities to invest in their farming operation to manage tax liabilities. FSA expects these cases to account for approximately 5% of eligible direct loan borrowers. Procedures for payments to these borrowers will be addressed in a subsequent NOFA, which also will include eligible guaranteed loan borrowers."

"Eligible Direct Loan borrowers will begin receiving debt relief letters from FSA in the mail on a rolling basis, beginning the week of May 24," FSA announced, with the agency indicating that effort will run through June. Those receiving the letters have to sign and return it to FSA. In June, FSA said it would begin to process signed letters for payment. "About three weeks after a signed letter is received, socially disadvantaged borrowers who qualify will receive 20% of their total qualified debt by direct deposit which may be used for tax liabilities or other fees associated with payment of the debt." Those payments will be issued on a "rolling basis," FSA noted.

Monday Watch List

Markets

Traders will catch up on the latest forecasts by Sunday evening and be attentive to any export sales news that arises. USDA's weekly grain inspections report is due out at 10 a.m. CDT. USDA's monthly cold storage report will be out at 2 p.m., followed by Crop Progress at 3 p.m. with new crop ratings for winter and spring wheat.

Weather

Light to moderate rain is in store Monday in the far Northern Plains and Canadian Prairies, offering more needed moisture. We'll also see light showers in portions of the central and southeastern Plains. Other primary crop areas will be dry. Temperatures will be seasonal to above normal, with notable heat in the Southeast.

Court Vacates Midnight Refinery Exemptions

Biofuel groups hailed an order from the Tenth U.S. Circuit Court of Appeals vacating three small refinery exemptions granted to Sinclair the day before President Biden’s inauguration. The decision came promptly after the Environmental Protection Agency filed a petition asking the court to overturn the waivers on April 30. Sinclair responded on May 18 that it didn’t oppose the EPA request. “We’re pleased the court has vacated these improperly granted waivers and is sending them back to EPA for reconsideration,” says Renewable Fuels Association President and CEO Geoff Cooper. “If these exemptions had been allowed to stand, they would have erased RFS blending requirements for 260 million gallons of low-carbon renewable fuels.” He says it would also have destabilized rural communities and been a big step backward in the fight against climate change. National Corn Growers Association President John Linder says, “We look forward to working with EPA Administrator Michael Regan to uphold the Renewable Fuel Standard and appreciate his early action to change the EPA course when it comes to waivers.”

EPA Will Keep Biofuel Mandates Steady in 2021-2022

Three sources familiar with the matter told Reuters that the Environmental Protection Agency’s biofuel blending mandates for this year and next will be in line with those from 2020. The agency is said to be accounting for weaker fuel demand since the onset of COVID-19. That would mean the U.S. refining industry would avoid added costs normally associated with the usual expansion in renewable volume obligations under the Renewable Fuel Standard. That will come at the expense of biofuel producers and the corn industry, which depend on regular increases to expand their businesses. The required amounts of biofuels that refiners must blend into the nation’s fuel supply usually increase annually in hopes of reducing foreign petroleum imports and helping the nation’s farmers. Former President Trump delayed the 2021 proposal because of COVID-19 and the 2020 election. The EPA says it intends to issue both the 2021 and 2022 volumes proposals later this summer. In the last ruling back in 2019, the EPA mandated that American refiners blend 20.09 billion gallons of renewable fuel into the nation’s fuel mix for the 2020 compliance year. That mandate included 15 billion gallons of conventional biofuels like ethanol. The upcoming volume proposals are expected to largely be the same amounts.

Ethanol Production Tops One Million Barrels

The Energy Information Administration says U.S. ethanol output topped the one-million-barrel mark for the first time in 14 months, while stockpiles also rose last week. Ethanol production jumped to an average of 1.032 million barrels a day in the week ending on May 14. The latest EIA report says that’s up from 979,000 barrels a day, on average, during the prior week and the highest level since March 13, 2020. The Midwest, by far the largest ethanol-producing region, saw its output come in at an average of 985,000 barrels a day, up from 940,000 the previous week. That’s the highest level since the week ending on February 28, 2020. Gulf Coast production jumped to an average of 20,000 barrels a day, up from 16,000 the previous week. Rocky Mountain output rose to 10,000 barrels a day from 8,000, and East Coast production rose to 7,000 barrels a day from 6,000 a week before. The West Coast was the only region where output didn’t improve, holding fast at an average of 9,000 barrels a day. Inventories rose, but only slightly, coming in at 19.4 million barrels last week, up from 19.39 million the prior week.

USDA Releases 90-Day Climate-Smart Progress Report

The USDA published its 90-Day Progress Report on Climate-Smart Agriculture and Forestry this week. The agency says it represents an important step toward President Biden’s Executive Order on Tackling the Climate Crisis at Home and Abroad and the shift towards a whole-of-department approach to solutions. “With the right tools and partnerships, American agriculture and forestry can lead the world in solutions that will increase climate resistance, sequester carbon, enhance agricultural productivity, and maintain critical environmental benefits,” says Ag Secretary Tom Vilsack. “At this pivotal time, the president has called upon USDA to develop a strategy for climate-smart agriculture and forestry as part of a whole-of-government effort to addressing the climate crisis.” He also says central to USDA’s approach is the concept that whatever the agency does must work for farmers, ranchers, and landowners. The goal is to combat the climate crisis and conserve and protect the nation’s lands, biodiversity, and natural resources like soil, air, and water. Through research, conservation practices, and partnerships, USDA is looking to find solutions to agricultural challenges, enhancing economic growth, and create new streams of income for farmers, ranchers, producers, and private foresters. More information on the progress report is available at www.usda.gov.

First Long Flight Powered by Biofuels is Successful

A coalition of companies came together to carry out the first long-haul flight powered by a renewable fuel called Sustainable Aviation Fuel. Air France Flight 342 took off from Paris and headed to Montreal with its tanks full of the renewable aviation fuel produced in French manufacturing plants. Renewable Energy Magazine says the flight is a tangible result of four groups that came together to decarbonize transportation and to develop a new supply chain for the fuel. The biofuel used for this flight was made from waste and residue sourced from the French economy. A company called Total produced the biofuel from used cooking oil at a biorefinery and a factory in France without using any virgin plant-based oil. The 16 percent blend of biofuels on this flight lessened the CO2 emissions by 20 tons. Air France-KLM is known as a pioneer for testing sustainable aviation fuels. In addition to this flight, French company Airbus is conducting several series of tests to certify that airliners can fly with 100 percent Sustainable Aviation Fuel. Benjamin Smith, CEO of Air France-KLM, says, “For many years, the Air France-KLM Group has been committed to reducing our environmental footprint. Supporting the emergence of an economically viable French aviation biofuel sector is a priority for our group and the country.”

U.S. Chicken Producer Charged with Price-Fixing

Claxton Poultry Farms Incorporated has been indicted in Colorado on charges of price-fixing broiler chickens produced for sale to restaurants and grocery stores. A Successful Farming Dot Com article says the U.S. Justice Department announced the charges on Thursday. The company’s president and vice president were previously indicted for their roles in a nationwide conspiracy to fix chicken prices from 2012 to 2019. If the company is found guilty, Claxton could be fined up to 100 million dollars or twice what it gained in the price-fixing. Claxton is based in Georgia and sells 300 million pounds of chicken every year to 750 customers, including some of the country’s biggest restaurant and grocery store chains. In February, Pilgrim’s Pride Corporation, one of the largest American poultry producers, pled guilty and was sentenced to pay $107.9 million to settle the federal charges that it conspired to fix chicken prices and passed on the costs to consumers and other purchasers. Pilgrim’s Pride is primarily owned by Brazilian meatpacker JBS SA.

Biden Budget Release Pushed Back By One Day

The Biden administration's Fiscal Year (FY) 2022 budget proposals will not be released until May 28, according to the Office of Management and Budget (OMB), one day later than had been previously signaled.

The budget release will be looked to for more details on the Biden tax and spending plans for FY 2022, including the $4 trillion the administration has proposed for infrastructure and social spending.

And it will allow lawmakers on the Hill to really dig into the government funding issues ahead via the annual appropriations measures.

And the situation will also factor into the efforts by Democrats to push through a budget resolution that will allow the use of budget reconciliation to bypass Senate rules that normally require 60 votes to get things like the $4 trillion in spending envisioned in the infrastructure and social plans.

Court Invalidates Three SREs Granted Late By Trump Administration

The Tenth Circuit Court of Appeals on Wednesday invalidated three small refinery exemptions (SREs) granted by the Trump administration to Sinclair Wyoming Refining Company, returning the matter to EPA for review. EPA sought the court action, arguing the SREs--one for the 2018 compliance year and two for the 2019 compliance year--had been fully examined.

Sinclair declined to oppose the EPA request.

Biofuel backers welcomed the action, with Renewable Fuels Association CEO Geoff Cooper hailing the court action as they agreed the waivers had been "improperly granted."

While a victory for biofuel supporters, the biofuel waiver issue is currently before the U.S. Supreme Court following an earlier Tenth Circuit decision that invalidated three SREs for the 2016 compliance year. And EPA has said they will not act on any pending SREs until after the nation's top court issues its ruling.

And the number of pending SREs continues to rise as EPA now shows there are 32 pending for the 2019 compliance year and 18 for the 2020 compliance year, an increase of two for both years.

Friday Watch List

Markets

The latest weather forecasts have gotten a lot of attention in this week's markets and will again Friday. China's appetite for U.S. new-crop corn has also gotten a lot of press and traders will be watching for the possibility of a seventh consecutive purchase on Friday. A report on U.S. existing home sales for April is due out at 9 a.m. CDT. USDA's cattle on-feed report for May 1 is set for 2 p.m. CDT with analysts expecting roughly 11.58 million head, a modest drop from last month's 11.90 million head.

Weather

A stream of moisture from the Gulf of Mexico will produce a band of scattered showers arcing north-northeast from Louisiana and eastern Texas through Lake Superior on Friday. Additional showers and thunderstorms are expected across the Northern Plains with some late afternoon and evening thunderstorms in the High Plains, the latter of which could be strong to severe. Showers should continue to improve soil moisture and ease drought across northern areas that have been in desperate need over the last several weeks. Snow in western Montana will continue through the day and there will be some occasional showers in the West as well.

FFA Announces Hybrid Annual Convention

The National FFA Organization announced Wednesday the organization will hold its annual in-person convention this fall in Indianapolis. The event, which traditionally brings more than 65,000 attendees, will take place October 27-30. Expected in-person events during the convention include the American FFA Degree Ceremony, Career Success Tours, competitive events, delegate business sessions, entertainment, the National FFA Expo and shopping mall, general sessions, student and teacher workshops, and the National Days of Service. In addition to the in-person event, the organization will also offer a virtual program, including student and teacher workshops, the virtual FFA Blue Room, National Days of Service and the streaming of general sessions. Dr. James Woodard, national FFA advisor, says, “We are excited to bring an in-person event back to our members and the city of Indianapolis.” In 2020, the organization canceled the in-person event due to the COVID-19 pandemic and instead offered a virtual experience. For more information, visit convention.FFA.org.

Produce Industry Sounds Alarm Over Pallet Shortage

The United Fresh Produce Association says pallet shortages are disrupting the produce supply chain. The organization says the lack of pallets is adding stress to a supply chain that is already facing significant challenges. Other supply chain issues include a lack of available trucks and shipping containers, labor challenges and a pending shortage of resin used to make reusable containers and pallets. Expectations are that the pallet shortage will continue for months, perhaps for the balance of 2021. The shortage of lumber and wood products has increased the cost of raw lumber 200 percent to 350 percent and makes the cost of wood pallets increase incrementally.  Some report over the past few weeks, pallet costs have increased more than 400 percent, if the pallets are even available. The organization warns that without ensuring pallet availability for produce shipments, "there is little doubt that it will be very difficult, if not impossible,” to meet consumer produce demand.

USDA Announce Cosby as NRCS Chief

The Department of Agriculture Wednesday announced the appointment of Terry Cosby to serve as chief of the Natural Resources Conservation Service. Cosby began his career with USDA in 1979 as a student trainee in Iowa. Over Cosby's 42 years with the agency, he has served in numerous capacities, most recently, Acting Chief of NRCS and State Conservationist for Ohio. Cosby also served in leadership positions at the agency in Iowa, Missouri and Idaho, before his time in Ohio. The National Association of Conservation Districts welcomed the announcement. NACD President Michael Crowder says of Cosby, “His extensive experience in conservation as a farmer, a sportsman and state conservationist will further strengthen NRCS’s impact on the nation’s land.” USDA also announced Meryl Harrell as deputy undersecretary for Natural Resources and Environment. Harrell most recently served as the Executive Director of the Southern Appalachian Wilderness Stewards. Both will assume their positions Monday, May 24.

Meat Institute Responds to DOJ Investigation Calls

The North American Meat Institute this week defended its members against allegations of wrongdoing in the cattle market. The response follows a closed-door meeting between livestock and farm groups focusing on ways to improve cattle market transparency and a letter from Republican lawmakers to the Department of Justice. The lawmakers requested DOJ continue its investigation regarding cattle market manipulation. In reaction, Meat Institute spokesperson Sarah Little told the Hagstrom Report, “In July 2020, USDA analyzed the effects of the 2019 Holcomb facility fire and the pandemic, finding no wrong-doing and confirming the disruption in the beef markets was due to devastating and unprecedented events.” She pointed to several announcements to build new packing facilities or expand capacity that will increase cattle slaughter capacity roughly four percent. In the letter to DOJ, the group or republican lawmakers state, “while black swan events do not always prove wrongdoing, additional attention can reinforce confidence in the system.”

NIFA Invests Over $2.3M for Small Business Innovation Research

The Department of Agriculture this week announced a $2.3 million investment as part of the USDA Small Business Innovation Research Program. USDA’s National Institute of Food and Agriculture recently awarded eight grants totaling $812,900 to small businesses to improve plant production and protection. Additionally, NIFA awarded eight grants totaling $797,600 for animal production and protection, and seven awards totaling $706,100 for conserving natural resources. NIFA Director Dr. Carrie Castille says the program, "stimulates technological innovations in the private sector and strengthens the role of federal research and development in support of small businesses." Funded plant production projects include research into domestic vanilla production, blueberry pollinators and plant-based proteins. Animal production projects include vaccine research, testing animal feed for quality and herd reproductivity data. Finally, conservation projects include fertilizer and irrigation research. The next Phase 1 request for Small Business Innovation Research applications is scheduled to open in July 2021, with a deadline in October 2021. Learn more at nifa.usda.gov.

Application Period Open for Conservation Innovation Grants Program

The Department of Agriculture’s Natural Resources Conservation Service is investing up to $15 million to support the development of new conservation tools and practices. Specifically, NRCS is seeking new tools, approaches, practices and technologies to further natural resource conservation on private lands through the Conservation Innovation Grants program. USDA says CIG partners use creative problem solving and innovation to address our nation’s water quality, air quality, soil health and wildlife habitat challenges, all while improving agricultural operations. This year, funded grant partners will focus on climate-smart strategies for water resources, soil health, nutrient management, grazing lands conservation and strategies to increase conservation adoption. NRCS intends to expend at least ten percent of the total funding for CIG Classic on projects that are focused on providing conservation benefits to historically underserved producers. All U.S.-based non-Federal entities and individuals are eligible to apply. Proposals must be submitted through Grants.gov before July 20, 2021.

Washington Insider: USMCA Sessions End With No Major Breakthroughs

The first meeting of the Free Trade Commission (FTC), a panel established under the U.S.-Mexico-Canada Agreement (USMCA) is now history, taking place the first two days of this week.

The first day saw U.S. Trade Representative Katherine Tai meet one-on-one with Canadian Trade Minister Mary Ng and separately with Mexican Economy Minister Tatiana Clouthier. Those discussions saw Tai raise several issues, but the readouts from the parties involved did not signal any new or major breakthroughs were scored.

Tuesday saw the three trade chiefs meet together and get presentations from various working group committees that were established under USMCA. Those panels provided various updates on issues and developments they were responsible for.

One of the concrete developments that emerged came from the panel that met on small and medium-sized enterprises. That resulted in the setting up a session October 13-14 in San Antonio, Texas, for a "dialogue" on issues for those businesses. So that is at least a positive.

The joint statement released by the three countries was long on the usual phrases that mark these kinds of meetings -- the talks were labeled "robust" and the three held discussions in which they said they would "recommit to fully implementing, enforcing, and fulfilling the Agreement's terms and high standards throughout the life of the USMCA."

On issues of labor and environment, ones where Tai was expected to push her counterparts to think about putting a climate change component into the deal, those talks were termed "robust, forward-looking discussions." But again, that offers little in terms of substance regarding how the Canadians or Mexicans received what Tai was expected to bring up.

Reports also indicate Mexico raised matters on automotive content rules under USMCA and Mexico called on the U.S. to review its ground transportation rules that provide Mexican truckers access to the U.S. market. The U.S. raised labor issues during sessions, noting that recent matters raised by both the U.S. and Mexico show "how well this can be used by both countries."

On key ag trade topics, there was also little signs there was progress made. The U.S. filed a case late in the Trump administration which charged Canada was not fulfilling its commitments on implementing import quotas for dairy. Tai acknowledged that case in testimony last week before the U.S. Congress, but it's not clear any headway was made -- Ng related she signaled Canada believes it is implementing the provisions in USMCA when it comes to dairy.

As for issues such as Mexico's policies on glyphosate and GMO corn, reports indicate that Mexico's economy ministry the country "reiterated its commitment to ensure compliance with the obligations assumed in the chapter on Sanitary and Phytosanitary Measures, as well as to promptly address any problems or concerns that may arise."

There also appears to be a difference of opinion between the U.S. and Canada on the issue of softwood lumber, another long-running dispute between the two that has seen the U.S. impose duties on imports of softwood lumber from Canada. Reports said that Ng she pressed the U.S. on its "unwarranted and unfair" tariffs on imports from Canada and the country would defend the sector and also sought to reach some kind of agreement. Interestingly, Tai told U.S. lawmakers last week that she, too, wanted to find some kind of agreement with Canada, but our neighbors to the north were not interested in negotiating.

To be fair, the first meetings involving all three trade chiefs from the three countries should not have been expected to have all of the issues raised by each country resolved. That would have been a major development. But a session like this was more than likely used by each official as a way to "test the waters" and get a read on the official that will be on the other side of the table when it comes to really negotiating on these issues. That's when the statements of "robust" or "productive" talks could take on additional meaning.

For example, an agreement suddenly on something like softwood lumber would have been shock since that dispute has been around for a long, long time.

Keep in mind, this was also the first FTC meeting ever. So all three officials were probably feeling their way a bit relative to what they could -- or perhaps more importantly, couldn't do.

So we will see. The trade issues that existed before the meeting are still there. And it appears there was little ground given by any of the officials. That means these will remain issues to be dealt with along with others that could also come to light in coming weeks and months. So these are clearly matters that farmers need to monitor closely, especially ones that deal with dairy, GMOs and glyphosate, Washington Insider believes.