READ the NAFB’s National Ag News for Tuesday, August 22nd

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READ the NAFB’s National Ag News for Tuesday, August 22nd

First Round of NAFTA Talks Conclude

The first round of talks between the U.S., Canada, and Mexico, ended last week with all three sides saying they’re committed to getting negotiations done as quickly as possible. The next round of talks is scheduled for September 1-5 in Mexico. Talks then move to Canada in late September before coming back to America in October. Bloomberg says a joint statement issued by the countries acknowledges that there’s a lot of work ahead in the coming months but all three countries are committed to an accelerated and comprehensive negotiation process. The goal is to update the agreement and establish 21st century standards to benefit all citizens. Part of the pressure to get negotiations done as quickly as possible likely comes from elections held next year in Mexico as well as the U.S. congressional midterm elections in November of 2018. The opening round got off to a tense start last week as U.S. Trade Representative Robert Lighthizer said the U.S. wouldn’t accept a “tweaking” of the deal that President Trump says has failed Americans and gutted U.S. manufacturing. Experts tell Bloomberg the most challenging parts of the discussions come when negotiators deal with issues like dispute resolution and the rules-of-origin that dictate local content requirements in products traded between the countries.


Farm Debt Likely to Reach All-Time High in 2017

Low commodity prices have made things tough by bringing down land values, tightening balance sheets, and increasing the stress level of America’s producers. Unfortunately, that means farmers are continuing to take on more debt. The amount of outstanding farm debt is likely to reach an all-time high this year. Brent Gloy of Agricultural Economic Insights says if the debt level climbs another five percent from current levels, it will reach an all-time high. MILK online says unlike the 1980s farm crisis, farm debt to asset ratios are still very low today in comparison. A Farmer Mac research expert says the amount of leverage on farms over the past several years remains low. USDA historical data shows that in spite of that large amount of debt, farmers are still in good position. The Economic Research Service shows debt-to-asset ratio is 14 percent. During the 1980s, that same number reached a high of over 22 percent. The lowest point was back in 2012 at 11.3 percent. Farm prices were very volatile ahead of the 1980s crash, which meant farmers didn’t have an opportunity to stockpile assets. Going into this downturn, record-high commodity prices helped farmers get their financial houses set up before prices tumbled.


California Announces Pesticide Restrictions

California took a step toward banning the pesticide chlorpyrifos (klohr-peer’-uh-fohs). The move comes in spite of a Trump administration effort to turn back the Obama-era effort to ban the chemical. The state’s Environmental Protection Agency says farmers and other users will be asked to increase the buffer zones between the fields where they spray the chemical and inhabited areas like residential areas and school zones. The L.A. Times says the agency will move ahead with plans to ban the chemical as a known hazard to humans under Proposition 65. California growers used more than one million pounds of the chemical in 2015 on more than 60 crops, including almonds, grapes, walnuts, oranges, and cotton. The California Department of Pesticide Regulation says the overall use of the chemical has dropped by half between 2005 and 2015. Environmental activists say California is still moving too slowly on the issue. Paul Towers, a spokesman for the Pesticide Action Network of North America, says the agency is actually issuing voluntary guidelines instead of new rules regarding pesticide application. Towers also says the state’s EPA scientists aren’t focusing on the chemical’s effects on children’s brains.


Will Crop Tour Have an Effect on Markets?

The Farm Journal Crop Tour this week will take another look at corn and soybean conditions across the Midwest as market prices slid last week. Jerry Gulke of the Gulke Group says if tour participants find fewer bushels than recent government predictions, the markets may have already seen its highest production numbers of the season. Gulke tells Farm Journal’s Ag Web Dot Com he’s hoping for positive results. “If they come out of the fields saying that government estimates might have been right,” Gulke says, “that’s not going to look good.” Commodity prices had a tough go last week as prices continued to drop thanks to rain reports in growing regions around the country, including North Dakota, where the drought has been at its most intense. Gulke suspects crop conditions are quite as good as the government thinks. “Crop ratings show that things are pretty bad in some areas,” Gulke says. While the trade has been skeptical of farmer-oriented tours in the past, Gulke says they have a lot more credibility than in the past, adding, “Let’s hope crop condition numbers are bad enough that they come out and say we’ve seen the highest production numbers we’re going to see this year.”


Cattle Loss Limited from Montana Wildfires

Montana has lost almost a half million acres of land thanks to wildfires. More than half of that acreage total came from just one fire. The Montana Stockgrowers Association tells Drovers Cattle Network Dot Com that cattle losses from the fires have been limited. 29 fires are currently active in Montana, with the bulk of them burning in the western part of the state where cattle numbers are more limited. The biggest fire is the Lodgepole Complex fire in eastern Montana. “Most of the people affected by the Lodgepole fire are getting a better handle on things,” says Jay Bodner, Director of Natural Resources for the Montana Stockgrowers Association. “Luckily, we did see minimal cattle losses from the fire.” So far, there haven’t been any reports of major cattle losses from the fires. Some cattle were unfortunately electrocuted by power lines when a power pole burned down. Bonder says he doesn’t think the cattle death toll will be as widespread as the fires that ravaged the southern plains in March. The latest drought monitor shows almost 12 percent of Montana is listed under the most extreme category of drought.  


Study Shows Positive Impact of American Sheep Industry

A new Sheep Industry Economic Impact Study completed recently shows that sheep continue to be a good investment for America. The impact analysis revealed that every one dollar spent in sheep and sheep-related production added an additional $2.87 to the American economy in 2016, nearly three times the initial investment. Among some of the study’s findings, a $2.02 billion investment in sheep production activities, ranging from lamb production at the farm gate to wool sock exports, generates a total economic benefit of $5.80 billion. Every $1 invested in sheep production and related activities generates $2.42 in total labor income. The Employment Multiplier revealed that every 10.4 jobs in the sheep industry at the farm gate supports a total of 19.50 jobs. The previous economic impact study was done in 2011. While the sheep industry has contracted in size since then, the new study captures an improvement in value-added benefits, including wool hosiery exports, lanolin, and the pelt-shearing value.

SOURCE: NAFB News Service