EPA Now Shows 52 New Petitions Pending For Small Refinery Exemptions From RFS

EPA’s dashboard showing the number of small refinery exemption (SRE) requests increased by 52 as of June 18, with those new requests for compliance years 2011 through 2018.

The updated data now provides a level of petitions filed for prior compliance years under the Renewable Fuel Standard (RFS) in what ethanol backers say is an attempt by refiners to become eligible for SREs ahead based on the 10th Circuit Court ruling that determined for the a refiner to be eligible for SREs they had to be extensions of prior requests.

“Petition counts include submissions from small refineries that are seeking reconsideration of petitions that were previously denied,” EPA said. “Accordingly, the count for any compliance year may include petitions from the same small refinery being represented as both a denial and still pending.”

There also are 27 requests pending for the 2019 compliance year and one for the 2020 compliance year.

China’s Purchases of US Ag Products Expected to Rise Shortly

China plans to accelerate purchases of U.S. farm goods to comply with the Phase One trade deal with the U.S. following talks this week between Secretary of State Mike Pompeo and his Chinese counterpart.

“During my meeting with CCP Politburo Member Yang Jiechi, he recommitted to completing and honoring all of the obligations of Phase One of the trade deal between our two countries,” Pompeo said in a tweet Thursday.

China intends to step up buying of everything from soybeans to corn and ethanol after purchases fell behind due to COVID-19 disruptions, said two people familiar with the matter cited by Bloomberg.

This would confirm the expectation cited by U.S. Trade Representative Robert Lighthizer in congressional testimony that he expected China to live up to their commitments in the Phase One deal and that their purchases of U.S. ag products – and other goods – would be rising soon.

Bloomberg reported that through the first four months of 2020, China purchases of U.S. ag goods were at $4.65 billion, well shy of the total of $36.5 billion in U.S. ag products China committed to purchase in 2020.

Another source cited in the Bloomberg report indicated that Chinese state buyers were being urged to make all efforts possible to meet the Phase One agreement terms. U.S. officials and trade sources have continued to maintain they fully expect the purchase commitments by China to be met and they also have reminded that China has also taken many actions on other trade issues that were covered in the Phase One agreement.

Monday Watch List

Markets
Now summer has officially begun, traders will be checking the latest weather forecasts and any new export sale announcements. A report on U.S. existing home sales is due out at 9 a.m. CDT, followed by USDA's weekly report of grain export inspections at 10 a.m. USDA's monthly cold storage report is released at 2 p.m. CDT and the Crop Progress report is at 3 p.m. Updated crop ratings and winter wheat harvest progress will get most of the report's attention.

Weather
Showers and thunderstorms will cross the Midwest, portions of the Plains and Delta Monday, with mostly favorable moisture for developing crops. Temperatures will be seasonally mild in most areas; however, the far southwestern Plains will see some extreme heat.

Lighthizer Testifies on China Trade Deal, Criticizes WTO

U.S. Trade Representative Robert Lighthizer had a lot to say about the president’s economic agreement with China during testimony in Washington on Wednesday. He says Beijing is buying more American products and that the Asian nation would live up to the terms of the Phase One agreement. Lighthizer says his office is closely tracking the number of goods China is purchasing from the U.S. and is in frequent contact with Chinese officials. The New York Times says even though China has committed to purchasing $200 billion in goods by the end of next year, many analysts say that’s not realistic given the impacts of COVID-19 around the world. “Every indication is that despite COVID-19, China is going to do what it says it will do,” Lighthizer said during testimony. He pointed out the administration’s new or revised trade deals with Japan, Canada, and Mexico have improved terms for American businesses and farmers. However, he was more guarded on a possible deal with the European Union happening soon, accusing the EU of thinly-veiled protectionism. Lighthizer also renewed the administration’s fight with the World Trade Organization, saying the WTO needs “radical reform.”

Organic Farmers say USDA “Let Down” Organic Dairies

The Organic Farmers Association is asking members of Congress to ensure that USDA’s National Organic Program complies with the law and finalizes the Origin of Livestock rule as quickly as possible. A recent deadline for the National Organic Program to finalize the long-awaited Origin of Livestock rule has passed by. The Association says the rule is necessary to close a loophole in organic dairy standards that has supported rapid growth in larger organic dairies and consequently put family organic dairy farmers out of business across the country. As many as 70 organic farm organizations from around the nation sent a letter to members of Congress, including the House and Senate Ag Committees, asking them to pressure the USDA to make sure the NOP complies with a congressional mandate and finalizes the origin of organic livestock rule as soon as possible. “The organic community is united in the immediate need for this rule,” says Kate Mendenhall, Director of the Organic Farmers Association. “We are disappointed this long-awaited deadline passed without any action from the NOP.” The groups that signed onto the letter agree that continued delays in implementing the rule will prolong the dire economic consequences facing organic dairy farmers, as well as jeopardize consumer trust in the organic label.

U.S. Dairy Calls for An End to EU Dairy Dumping into International Markets

An economic analysis published this week shows the serious impact of the European Union’s Skim Milk Powder Intervention Program on U.S. dairy. The program hit U.S. farm-gate milk prices especially hard during 2016-2019. The report says the U.S. was economically harmed in three ways. First, the EU program depressed the global price of skim milk powder, lowering U.S. milk prices, and contributing to a $2.2 billion loss in 2018 and 2019. The program also inflated the EU market share, resulting in a drastically smaller export market share for U.S. dairy exporters, which led to export losses totaling $168 million in 2018-2019. Finally, the analysis says when the EU unleashed its stockpile of skim milk powder into the global marketplace, the disposal affected U.S. competitiveness in historically important export markets like Southeast Asia. The International Dairy Foods Association, the National Milk Producers Federation, and the U.S. Dairy Export Council sent a letter to U.S. Trade Representative Robert Lighthizer and Ag Secretary Sonny Perdue, pointing to the analysis as proof the EU’s SMP Intervention Program has wreaked havoc on the U.S. dairy industry. They’re asking the government to help prevent the EU from using future intervention practices to dispose of dairy products into the global market at discounted prices.

Farm Progress Show is a Go

The nation’s largest outdoor farm event is on in 2020. The Farm Progress Show is officially a go near Boone, Iowa, despite COVID-19. In making the announcement, organizers say the show is an essential business event that provides farmers with much-needed information and tools. “We know that the market is dealing with a lot of issues,” says Matt Jungmann, the event manager. “However, agriculture is a critical business for this country, and farmers are looking for ways to get better at what they do.” The Des Moines Register says the show attracts thousands of Iowa and U.S. farmers, as well as dozens of agricultural companies. The show is scheduled for September 1-3 and has drawn people from as many as 45 countries in previous years. Organizers say they will take safety precautions, including providing additional space to allow for social distancing, numerous hand sanitizing stations, and enhancing efforts to clean buildings. “Farmers are struggling with low corn, soybean, and other commodity prices, and they need more information and tools to boost profitability than ever before,” show officials said in their statement on Wednesday. The World Pork Expo and the Iowa State Fair were both canceled this year because of COVID-19.