09-29-17 NFU’s Friday Farm Fact: Farmers Receive Less Than Sixteen Cents of the American Food Dollar

NFU’s Friday Farm Fact: Farmers Receive Less Than Sixteen Cents of the American Food Dollar

For generations, family farmers and ranchers have provided the essential service of growing nutritious, safe, and tasty food for our country and countries around the world. But farmers only receive 15.6 cents of every dollar Americans spend on food. The rest of the food dollar – more than 80 percent – goes to off-farm costs, like marketing, processing, wholesaling, and distribution. This number is particularly troubling considering the fact that net farm income has plummeted in recent years. This year, median farm household income is projected to be negative $1,400, meaning many farmers will actually lose money.

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READ the NAFB’s National Ag News for Friday, September 29th

NAFTA Nations Reports Progress Despite Tensions

Negotiators in the North American Free Trade Agreement talks say they’re making progress after the third round of talks concluded Wednesday. A Bloomberg report says that talk of progress comes as tensions grow between the U.S. and Canada over aircraft. The U.S. imposed trade duties on Canadian-made aircraft, inflaming tensions with Canada. The nations did make some progress in the talks, including closing out the chapter on small and medium-sized businesses. The U.S. Commerce Department made the decision to impose duties on Bombardier’s marquee jetliner on the final day of negotiations. Canada’s Foreign Minister calls the Trump Administration “protectionist,” saying that fact is no big secret to the rest of the world. At the same time, she says the Bombardier issue is separate from the NAFTA negotiations. Negotiators did say they made progress in several different areas, including telecommunications, digital trade, and state-owned enterprises. The chapter on competition will probably be agreed on before the next round of talks begins.

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Mexico Says U.S. Proposals Would Threaten Free Ag Trade

Pan Am Post Dot Com says the U.S. will be putting forth controversial proposals during the next round of North American Free Trade Agreement negotiations. The U.S. will allegedly be putting forth proposals for what it calls “seasonal windows” when it comes to agriculture trading with Mexico and Canada. The article says this type of a proposal would be a form of “managed trade” by establishing seasonal ag trade restrictions in North America. The president of the Mexican National Agriculture and Livestock Council offered an example of what that means. He says America wants to establish conditions saying that when Georgia produces strawberries, Mexico either won’t be able to export strawberries to the U.S. or would only be allowed to put the same amount of strawberries into the marketplace that Georgia has. Ag trade hasn’t been limited by seasonal windows since 2008, when a period of 15 years of gradual reduction was established. Mexico’s general coordinator of International Affairs says the Mexican government and producers won’t even consider discussing the proposal.

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Organic Field Crop Production Numbers Rising

Organic farming is a rapidly growing segment of U.S. agriculture. Organic vegetables, fruits, and livestock make up the bulk of the entire segment. However, a new USDA report shows organic field crops are making gains in the number of acres planted and overall value. The National Ag Statistics Service released the numbers showing that U.S. farms and ranches produced $7.6 billion in certified organic commodities in 2016. That’s up 23 percent over the previous year. The number of certified organic farms also climbed 11 percent higher, coming in at 14,217 last year. The number of certified acres is up 15 percent to five million acres. Livestock marketed as organic can only consume feeds certified through the USDA’s organic program. That’s helping to drive organic production of corn, soybeans, and hay. The USDA report says about 7,400 farms planted 1.6 million acres of organic field crops and hay last year. The value of organic field crop sales totaled up to more than $762 million in 2016, more than $100 million dollars higher than in 2015. Organic corn had the most acres planted, totaling almost 214,000 acres last year.

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Brazil Says U.S. Ban on Brazilian Beef May End in October

Brazil’s agriculture ministry says that the ban on fresh Brazilian beef exports to the United States may be lifted in October. The ban was first implemented in June. A Reuters article says it would end after the U.S. finishes evaluating the responses on documents sent in response to questions raised earlier this year during a U.S. veterinary mission to Brazil. Brazil exports three percent of its overall beef exports to the U.S., but America is seen as a leader in food safety and other countries will take their cues if America ends the ban. The prediction on the end of the ban came after Washington D.C. informed Brazil it would allow thermprocessed beef imports to resume from five beef plants in the country. Back in March, Brazil unveiled an investigation into meatpackers accused of bribing inspectors, which led many countries to ban Brazilian beef imports. While many countries have already lifted their ban, the U.S. has not yet done so, saying there is no timeline in place for lifting the ban as of yet.

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Packer Capacity to Keep Up With Expanding Beef Herd

A new report says the U.S. beef herd will keep expanding through the end of this decade but there shouldn’t be any need for increased beef packer capacity. The report from CoBank says the herd will increase 3-5 percent from 2018-2019. Improving pasture conditions and continued profitability in the beef sector have been fueling herd expansion in recent years. Trevor Amen, animal protein economist at CoBank, said over the last three years, the expansion has been the most aggressive on record. He says, “Recent slaughter numbers and the cattle on feed mix indicate the expansion rate may be slowing, but barring any significant export interruptions or weather events, the expansion will continue through the end of the decade.” The increasing cattle numbers are bringing more market-ready cattle through the supply chain but expectations are that slaughter capacity should remain sufficient. Amen says plants will be adding extra working hours to get through the increasing supply through 2019. The biggest potential concerns as the industry drifts closer to capacity are labor availability and unforeseen plant shutdowns for maintenance.

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China Set to Import $100 Million Worth of U.S. Peanuts

China is buying U.S.-produced peanuts on a very high level. The USDA says that will continue. An Agri-Pulse report says China will purchase $100 million dollars of American peanuts. Sales data so far in 2017 says it very well could happen. The U.S. has already sold $29 million dollars’ worth of peanuts from Texas, Georgia, Alabama, North Carolina, Virginia, as well as other states in just the first seven months of this year. The peanut industry is taking notice of the potential for China as a large market for its products. Total peanut exports were worth $4 million dollars just a few years ago, which means peanut farmers are very optimistic about the future of China as an export market. The jump in peanut exports to China actually began just last year. China ramped up its imports during the summer of 2016, with the total imports last year at $172 million. That’s a roughly 700 percent increase from the $22 million China imported as recently as 2015.

SOURCE: NAFB News Service

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