READ the NAFB’s National Ag News for Thursday, May 11th

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READ the NAFB’s National Ag News for Thursday, May 11th

Canada Considering Trade Retaliatory Options

Canada is exploring retaliatory options after the Donald Trump administration announced tariffs on Canadian softwood lumber last month. Canada’s Prime Minister Justin Trudeau (true-doh) is exploring ways to push back against the United States, although what options Canada is considering remain unclear. A trade official from Canada called the move normal, according to Politico. The remarks came after Trudeau over the weekend said he is considering “carefully and seriously” a request from British Columbia Premier Christy Clark to ban U.S. shipments of thermal coal through Canadian West Coast ports. The U.S. softwood tariff was an indirect response to a change in dairy policy that impacted U.S. dairy exports to Canada.

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U.S. Views NAFTA Less Favorable than Canada, Mexico

A new poll released by the Pew Research Center says American’s view of the North American Free Trade Agreement is more negative than other NAFTA partner countries. The research shows that about half of U.S. citizens say the trade agreement is good for the U.S., while 76 percent of Canadians say the agreement is good for Canada. Meanwhile, 60 percent of Mexicans call the agreement good for Mexico. The research indicates that the differences in views may in part reflect the fact that both Canada and Mexico run merchandise trade surpluses with the U.S. In 2016, the U.S. ran a collective $74 billion trade goods deficit with its two NAFTA partners. Political partisanship is linked to views of NAFTA, most notably in the U.S. About two-thirds, 68 percent, of Democrats see NAFTA as good for the U.S., while only 30 percent of Republicans hold the same view. However, public support for NAFTA is somewhat higher today than it was in 2005, the last time Pew Research Center and Gallup regularly polled about the agreement.

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Agriculture Vulnerable Amid Trade Risks

U.S. agriculture stands to lose big if a trade dispute with Mexico or Canada surfaces. CoBank CEO Tom Halverson told Bloomberg News recently that agriculture is in a “vulnerable position.” President Trump withdrew the U.S. from the Trans-Pacific Partnership and is vowing to renegotiate the North American Free Trade Agreement. However, as Halverson point out, Mexico is considering Brazil and Argentina as potential trade partners for corn. He says the prospect of a dispute with a major trading partner like Mexico is the last thing that many farmers, ranchers and grain handlers in the U.S. would like to see right now, adding agriculture has already suffered through several years of low commodity prices and a strong dollar, which has made overseas sales tougher. He cautions that weak prices are affecting some agribusinesses that borrow from CoBank, and that’s starting to impact credit quality, and suggest that trade problems could put further pressure on cash flow and credit quality.

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Perdue to Announce USDA Reorganization Thursday Afternoon

Agriculture Secretary Sonny Perdue will announce “USDA reorganization” during an event in Cincinnati, Ohio Thursday afternoon. While details remain sparse, many suspect the Department of Agriculture will announce the creation of an office of an undersecretary for trade, according to the Hagstrom Report. Perdue will make the announcement at Consolidated Grain and Barge, a grain shipping company. Perdue is expected to tour the facility, then make his remarks at 2:30 pm eastern time. The 2014 farm bill called for splitting the position of Agriculture undersecretary for farm and foreign agricultural services into two positions, one to oversee the domestic Farm Service Agency and Risk Management Agency functions and another to be an advocate for exports and to oversee the Foreign Agricultural Service. However, no appointment or creation of the office was made during the Barack Obama administration.

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Secretary Perdue to Attend House Ag Committee Hearing on Rural Economy

Agriculture Secretary Sonny Perdue will take part in a House Agriculture Committee hearing next week on the rural economy. The House Agriculture Committee will hold the hearing next Wednesday, May 17th. The hearing seeks testimony on how the rural and farm economy is holding up amid a downturn in farm income and commodity prices. House Agriculture Committee Chairman Mike Conaway notes that the farm economy is in the midst of a four-year, 50 percent decline. He says Secretary Perdue will share his perspective on the economic outlook in rural America, along with his vision for USDA and the role it will play in ensuring that our country “continues to enjoy the safest, most abundant, and most affordable food supply in the world.”

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May WASDE Report Mostly Neutral

The monthly World Agriculture Supply and Demand Estimates report by the Department of Agriculture released Wednesday predicts a U.S. corn crop of 14.06 billion bushels, down 1.08 billion from last year. The monthly report is also projecting a U.S. soybean crop of 4.25 billion bushels, down from the 4.3-billion-bushel crop last year. USDA projects ending stocks for new crop corn at 2.11 bushels, and at 480 million bushels for soybeans. For the nation’s wheat crop, USDA lowered expected production to 1.25 billion bushels, down 25 percent from last year. Those numbers, however, do not reflect the recent damages to the winter wheat crop in Kansas and other states. The full report is available at USDA dot gov (https://www.usda.gov/oce/commodity/wasde/latest.pdf).

SOURCE: NAFB News Service

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