READ the NAFB’s National Ag News for Wednesday, October 26th…

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CLICK HERE to listen to TODAY’s BARN Morning Ag News with Brian Allmer…

Sponsored by the American Farm Bureau Federation

Federal Reserve Member Looking to December for Next Rate Boost

Federal Reserve Bank of San Francisco President John Williams says the best time for the U.S. central bank to raise rates again likely will be at its policy gathering in December. Williams still expects one rate increase this year, and says it could happen at either of the two remaining rate-setting Federal Open Market Committee meetings in 2016. However, he says it could be better to wait a bit longer to boost what is now a 0.25 percent to 0.50 percent overnight target rate range, according to Pro Farmer’s First Thing Today. That is because Fed Chairwoman Janet Yellen will have a press conference at the December meeting, but not at the gathering scheduled for November. Williams says: “We can always take policy actions at any meeting, but I think there are some advantages, in my own mind, around a press conference.”

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Estate Tax Proposed Changes Would Lose Court Battles

A Kansas Farm Bureau representative and agriculture law professor says proposed changes to the estate tax would likely be struck down if finalized and litigation followed. Roger McEowen predicts that if the Internal Revenue Service finalized a proposal that would crack down on a tactic for family operated companies to reduce asset values to skirt the estate tax, plaintiffs suing the agency are likely to prevail. Politico reports that the IRS proposal, in general, would end most of the so-called valuation discounts, which can be applied to intra-family transfers of interest when there are restrictions attached, such as on liquidation and voting rights. The American Farm Bureau Federation and its state organizations, including Kansas, plan to request the IRS scrap the entire proposal. McEowen says the issue has been a source of litigation against the IRS, and courts have routinely held that the valuation discount is reasonable.

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Syngenta Files Appeal in Class Action Lawsuit

Syngenta has moved forward with an appeal claiming the class action lawsuit over its Agrisure Viptera corn brand is built on “fundamental errors. Syngenta was allowed to appeal a federal judge’s ruling allowing the ligation to proceed. The class action lawsuit was filed on behalf of thousands of U.S. corn farmers seeking up to $5 billion from Syngenta. The group claims Syngenta’s Viptera trait found in an export cargo in China prior to China’s approval led to income losses. Syngenta noted that the alleged losses also came as U.S. corn farmers were harvesting the largest corn crop in 50 years, which sent prices 30 percent lower, according to AgWeb. In a statement, Syngenta says the company believes the class certification is inappropriate, given the many ways farmers grow and sell corn in different markets across the United States. Syngenta claims the lawsuits lacks merit and that the Agrisure Viptera trait was commercialized in full compliance with regulatory and legal requirements.

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Ag Mega-Mergers Delayed

Two agriculture industry mergers expected to be completed by the end of the year now look delayed into the early part of 2017. Dow Chemical and DuPont’s merger may be delayed until February, as European antitrust officials take more time to consider potential competition issues in pesticides and crop seeds, according to Bloomberg. The European Commission this month delayed its decision deadline until February 6th as it sought additional information about the transaction. Meanwhile, the Syngenta-ChemChina deal will likely take more time for regulatory approval after the two failed to submit paperwork by a deadline Friday. For that deal, The Wall Street Journal says European regulators have set an initial deadline for the merger probe for October 28th to decide whether to clear the deal unconditionally, or open an in-depth investigation, which would last several more months and likely lead the EU to demand concessions. One analyst expects the deal to be completed within the second half of next year.

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Export Exchange Wrapping up in Detroit

The 2016 Export Exchange hosted by the U.S. Grains Council and the Renewable Fuels Association comes to a close Wednesday. More than 200 international buyers and end-users of coarse grains and co-products from more than 35 countries were attending the event in Detroit, Michigan. The Export Exchange, occurring once every two years, allows attendees to meet and build relationships with domestic suppliers of corn, distiller’s dried grains with solubles and other commodities. Grains Council CEO Tom Sleight says the event is “critical for our industry” at a time when farmers are looking at a record corn harvest and “the clear need for international trade.” As part of the conference, RFA President Bob Dineen presented an overview of the upcoming U.S. presidential election and its potential impact on trade. Dineen says despite who wins the election next month, “trade is too important to our consumers, our agricultural system and our entire economy to be relegated to the kind of hyperbolic, overblown and ultimately counterproductive political rhetoric.”

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U.S. Coffee Demand Growing

The International Coffee Organization says coffee consumption in the United States is expected to grow at two percent a year until 2020. The United States is the world’s largest national coffee market and accounted for 16 percent of global coffee consumption during the 2015-16 coffee growing season. A spokesperson for the International Coffee Organization says: “Coffee has emerged as the winning beverage as the U.S. has turned away from soft drinks.” The Organization says worldwide, the global demand for coffee is expected to slow because of sluggish economic growth in Europe and Brazil, which together account for about half of global demand. The Specialty Coffee Association of America says the strong pace of growth for coffee reflects the strength of the U.S. dollar and the relative strength of the country’s economy. The drink has also benefited from promotion as a healthy beverage, at the expense of sugary drinks. The Wall Street Journal reports that in the 2015-16 season, global coffee production hit roughly 143 million bags, compared with 142 million bags in the previous season. Each bag holds 60 kilograms of coffee beans.

SOURCE: NAFB News Service

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