READ the NAFB’s National Ag News for Friday, November 10th

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READ the NAFB’s National Ag News for Friday, November 10th

NAFTA Withdrawal Contingency Plans

Ag Secretary Sonny Perdue says he’s in the process of drawing up contingency plans for the agriculture industry, in case the U.S. withdraws from the North American Free Trade Agreement. The Washington Examiner says those comments come just days ahead of the fifth round of talks between the U.S., Canada, and Mexico. There hasn’t been a lot of measurable progress as Canada and Mexico are rejecting the Trump Administration’s more controversial proposed changes to the deal. That has made the threat of breakdowns in negotiations a real possibility. Perdue says a breakdown in communications could mean the U.S. would pull out of the pact. “We’re talking to the administration and Congress about some mitigation efforts if that were to occur,” says Perdue, “such as how we would protect our producers with the safety net if prices respond negatively to withdrawal.” Still, Perdue says these are only contingency plans and that he expects the NAFTA negotiations to succeed. “There’ll be some nervous bumps along the road, in the meantime,” Perdue says.

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Arkansas Dicamba Restrictions Await Final Approval

In-season application restrictions of dicamba now await final approval in Arkansas. The Arkansas State Plant Board voted to prohibit the use of dicamba from April 16 through October 31. The board vote was 10-3, with one member recusing from voting. The regulations include exemptions for dicamba use in a pasture, rangeland, turf, ornamental, direct injection use for forestry, and home use. A DTN report says the rule is now awaiting final approval by the Executive Subcommittee of the Arkansas Legislative Council. Arkansas State Plant Board Director Terry Walker says it’s possible that the legislature could get it on the calendar right away during the next session, or even call a special session because it’s a hot-button topic. The board moved the meeting to a hotel in Little Rock in order to accommodate the number of people that wanted to participate in the event. As further proof of the event’s magnitude, a number of armed security personnel were on hand to prevent trouble. The preparation came about because of the contentious nature of the issue but the hearing started and finished peacefully.

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Cautious Optimism Ahead in Grain, Ethanol Markets

CoBank says rising incomes around the globe will help push demand higher and create more opportunities for U.S. exports in grains, oilseeds, and ethanol. A new report from CoBank’s Knowledge Exchange Division says things like commodity surpluses around the globe, trade agreement negotiations, and the relative strength of key currencies all will influence the scope of growth over the next three years. Tanner Ehmke, the manager of the Knowledge Exchange Division, says in the absence of major weather disruptions, global grain surpluses will continue over the next three years. “Acreage expansions and improvements to yields in competing export markets will be the headwinds for U.S. exports,” he says. “The bright spot will be the continuing growth in demand. As the global middle class grows, so will the opportunities for U.S. exports.” Ehmke says the combination of anemic growth in domestic corn demand and growing competition in the export markets will only bring minor improvements unless more free trade agreements are signed. Wheat farmers are struggling on an uphill climb against Russia’s dominance in the world wheat market. Soybean farmers are chasing Brazil, the world’s top supplier, but growing demand for livestock feed will help sustain growth.

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Ten Things Canada Wants From NAFTA Modernization

North American Free Trade Agreement negotiations get going again in Mexico City on November 15. While the contentious issues like dairy supply management get a lot of headlines, there are quite a few items the countries do agree on. Shaun Haney covers Canadian agriculture for the website Real Agriculture Dot Com. He tells Farm Journal’s Ag Web Dot Com that round four of the negotiations was very disappointing to Canadian producers. “When looking at beef and pork, the U.S. and Canada are completely on the same page,” Haney says. “They’re working together to lobby governments on both sides of the border.” However, dairy management is an issue getting a lot of publicity. However, it’s not the only change that Canada is looking for in the negotiations. Haney talked with dairy producers at a gathering in Las Vegas, trying to help them understand Canada’s perspective on several issues. Canada wants labor standards addressed, primarily due to working conditions in Mexico. Canada wants tighter environmental protections in the new agreement, as well as cultural exemptions in certain industries, and to put together a process to regulate anti-dumping. “Outside of the dairy bubble, we have a lot in common, with a lot of things we agree on,” Haney says.

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Fixing the Dairy Safety Net

The dairy safety net in the farm bill needs to be fixed. Scott Brown, University of Missouri dairy economist, says the thing he’d like to see is more participation in the safety net, known as the Margin Protection Program. “The last thing I’d like to see is a disaster happen and no one has signed up for the program,” says Brown. A good-sized number of options have been discussed, including reducing the premiums or allowing dairy farmers to purchase more coverage. Some proposals also include going back to the original feed coefficients in the milk-feed formula. Brown says, “That would make feed more important and possibly increase the likelihood of payments. “The one thing Brown wants to see discussed more is taking a more regional approach when improving the MPP. In the original discussions on MPP, some had wanted the feed formula to be different in different areas to reflect regional differences. The reason is that some areas of the country grow their own feed while other areas purchase most of their feed.  

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Farm Economy Looking for Solid Footing

The farm economy in the seven-state area that makes up the Kansas City Federal Reserve district continues to show signs of stabilizing in the third quarter of 2017. According to the Kansas City Fed’s quarterly Survey of Agricultural Credit Conditions, that news comes as financial stress continued to build and income continued to decline. Farm income was lower than last year but the decrease was smaller than in recent years. Banker expectations of future declines in farm income moderated throughout the District during the third quarter of this year. Farmland values are somewhat lower than a year ago. The value of irrigated and non-irrigated cropland declined three and six percent, respectively. While the decline hasn’t reached the magnitude of the 1980s farm crisis, the duration of the downturn in cropland values has approached that of the 1980s. Farm loan repayment rates declined for the 16th consecutive quarter, which is indicative of the prolonged downturn in the District’s farm economy. Although lenders continued to report increasing financial strain among their agricultural borrowers, bankers indicated that a sharp increase in the sale of farm assets was unlikely.

SOURCE: NAFB News Service

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