Japan-EU Trade Agreement Threatens U.S. Pork Exports to Japan

The Department of Agriculture’s Foreign Agricultural Service says a Japan-EU trade agreement threatens U.S. pork exports to Japan. Japan and the EU announced finalization of negotiations on the Japan-EU Economic Partnership Agreement in December of last year. For 2017, Japan imported $1.68 billion of pork from the U.S. and $1.69 billion from the European Union. Japan ranked as the world’s largest importer of pork and pork products in 2017, growing imports from $4.9 billion in 2016 to $5.2 billion in 2017. USDA says the trade agreement between Japan and the EU, similar to the Trans-Pacific Partnership, marks a change in trade with Japan eliminating tariffs on more than 60 percent of its pork and pork product tariff lines within 12 years. Additionally, the agreement has established a volume-based safeguard for EU pork imports that will be phased out over 11 years. USDA says larger exports of European processed pork products can be expected under the agreement, and USDA says agricultural exporters from the United States will face challenges as the EU gains preferential tariffs under the agreement.

Northern Storms Easing Drought, Dryness Worsening in the Southwest

The latest U.S. Drought Monitor shows late-season winter storms are shrinking dry conditions in the northern Midwest and Plains states, but the southwest remains critically dry. Parts of Kansas, Oklahoma and Texas, and further westward, are in prolonged extreme or exceptional drought, according to the latest report. As of April 17th, the two largest wildfires in Oklahoma had charred more than 300,000 acres of grass and brush and had destroyed more than 100 structures. Meanwhile, the report notes that Kansas wheat was recently rated 46 percent as poor to very poor. In Oklahoma and Texas, nearly two-thirds of winter wheat is rated poor to very poor. Meanwhile, the National Weather Service outlook for next week calls for the likelihood of near to below-normal temperatures across most of the eastern half of the U.S., while warmer-than-normal weather will cover the West. Near to below-normal precipitation across the majority of the country should contrast with wetter-than-normal conditions in a few areas, including the Atlantic Coast States and central and southern sections of the Rockies and High Plains, according to the report

Baldwin, Ernst, Introduce Farm and Ranch Stress Assistance Network Bill

Senators Tammy Baldwin and Joni Ernst Thursday introduced legislation to fund the Farm and Ranch Stress Assistance Network. The two say the legislation will provide farmers with critical support and resources to respond to the difficult economic times. A recent study by the Centers for Disease Control and Prevention found agricultural workers have a higher suicide rate than any other occupation. The Facilitating Accessible Resources for Mental health and Encouraging Rural Solutions for Immediate Response to Stressful Times, named the FARMERS FIRST Act, will establish helplines, provide suicide prevention training for farm advocates, create support groups and reestablish the Farm and Ranch Stress Assistance Network. Senator Baldwin of Wisconsin says the legislation “will provide funding for local resources and expand access to stress reduction strategies and suicide prevention programs.” Ersnt of Iowa says “we must do more” to ensure farmers and ranchers “have access to the mental health resources and supports they need.”

USDA Announces Senior Level Leadership

Secretary of Agriculture Sonny Perdue Thursday announced the selection of senior leaders in several U.S. Department of Agriculture agencies. Perdue appointed Ken Isley as Foreign Agricultural Service Administrator, Joel Baxley as Rural Housing Service Administrator, and Martin Barbre as Risk Management Agency Administrator. In addition, Perdue announced the appointment of Tommie Williams as Minister-Counselor for Agriculture at the U.S. Mission to the United Nations Agencies for Food and Agriculture in Rome. Ken Isley most recently served as a Special Adviser for Corteva Agriscience. Joel Baxley comes to USDA with 23 years of real estate finance experience. Martin Barbre is an Iowa farmer and past president of the National Corn Growers Association and a member of the Illinois Corn Growers Association. Tommie Williams of Georgia started his career as a farmer and later founded several successful businesses. Secretary Sonny Perdue says the new appointees “will be key” in helping USDA advance towards President Trump’s goal of increasing prosperity in rural America. 

Hoping for New Opportunities as Castro Steps Down in Cuba

By Ben Conner, USW Vice President of Policy

Cuban President Raúl Castro stepped down this week, closing a six-decade chapter in Cuban history with a Castro leading the communist island nation. During Raúl Castro’s tenure, Cuba’s government has very slowly transitioned to authorize some private sector activity and taken modest steps towards improving relations with the United States. 

Hopefully this transition of power will provide an opportunity for a new generation of Cuban leaders to accelerate reforms and further open their country to international trade and investment, while allowing a more free exchange of goods and services between themselves and with U.S. citizens and organizations. 

Certainly, obstacles on the U.S. side remain, particularly the outdated trade embargo that prevents most U.S. exporters from assessing and taking their own risks in trade with Cuba. U.S. farmers stand to benefit if the U.S. Congress ends the embargo, which would open the door to the largest Caribbean island wheat market. 

Since the most recent President Castro took over from his brother, Fidel, in April 2011, the Cuban government has not purchased any U.S. wheat. At its peak, Cuba was a 500,000 metric ton (MT) market for U.S. wheat, and today it regularly imports around 800,000 MT from other origins. While wheat trade is allowed with Cuba under current U.S. law, other U.S. restrictions make exports cost prohibitive, and the overall embargo poisons the well for any meaningful trade relationship. 

This can and should change. U.S. wheat farmers need as many open markets as possible. A leadership transition in Cuba is not a frequent event; let us hope both sides make the most of it.  

Trump Tweet Tamps Down Hopes of US Rejoining TPP

Just days after telling senior officials to examine rejoining the Trans-Pacific Partnership (TPP) agreement, President Donald Trump has again fired off a tweet that sends mixed signals on this topic. “While Japan and South Korea would like us to go back into TPP, I don’t like the deal for the United States,” Trump wrote. “Too many contingencies and no way to get out if it doesn’t work. Bilateral deals are far more efficient, profitable and better for OUR workers. Look how bad WTO is to US.”On his third day as president, Trump pulled the U.S. out of the Trans-Pacific Partnership, fulfilling a promise to scuttle a pact he once said was “pushed by special interests who want to rape our country.” Before rejoining the TPP, Trump would want assurances that the U.S. would fare better than under the deal agreed to by former President Barack Obama, White House officials said. But getting those concessions would be tough as each country has a veto over new members.

Groups Welcome Japan Decision on ETBE

A new biofuel policy adopted by Japan will allow for imports of Ethyl Tertiary Butyl Ether (ETBE) from U.S. corn-based ethanol, a development welcomed by U.S. renewable fuel and grain groups. The Japanese policy calls for an increase in the carbon intensity reduction requirements of ethanol used as a feedstock to make ETBE to meet a 55% reduction, up from 50%, and recognizes corn-based, US-produced ethanol’s ability to meet that goal, even with the higher greenhouse gas (GHG) reduction standard.Japan will now allow U.S. ethanol to meet up to 44% of a total estimated demand of 217 million gallons of ethanol used to make ETBE, or potentially 95.5 million gallons. Japan imports nearly all of the ETBE from ethanol that it uses, according to an announcement from Growth Energy, the Renewable Fuels Association and U.S. Grains Council. “For the first time, the U.S. ethanol industry will have the opportunity to compete for a portion of Japan’s fuel blending market,” said Growth Energy Chief Executive Officer Emily Skor.