READ the NAFB’s National Ag News for Wednesday, January 3rd

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READ the NAFB’s National Ag News for Wednesday, January 3rd

KORUS Talks Set for Washington This Week

The U.S. and South Korea will hold formal trade talks starting Friday regarding the Korea-U.S. Free Trade Agreement, known as KORUS. Officials from Korea and the U.S. will meet in Washington, D.C. Friday to discuss “potential amendments and modifications” to the five-year-old deal, according to Politico. The two nations met last year to discuss concerns surrounding the trade agreement as President Trump repeatedly criticized the trade pact, and threatened to withdraw the U.S. unless changes are made. However, U.S. officials have so far not followed trade promotion authority procedures required to pursue major changes to the deal, suggesting they do not anticipate the talks will result in changes to U.S. law that would require congressional approval. South Korea was the third largest importer of U.S. corn during the latest marketing year, and is currently the fifth largest U.S. agricultural export market.

2018 Price Outlook

A University of Illinois economist expects 2018 crop prices to remain below high levels seen earlier this decade due to global inventories. Economist Todd Hubbs explains that global economic growth continues to build on the momentum seen over the last year, offering some limited upside for demand. Growth in China and emerging markets in Asia is projected to remain strong throughout 2018. The prospects of improved growth support commodity demand, but significant changes to trade policy could mitigate the demand growth in export markets. Meanwhile, Hubbs says that the livestock markets continue to respond to the growing demand for meat globally and lower feed costs. Prices in the livestock sector look to level out after declining from the highs seen in 2014 and the subsequent supply response. Meanwhile, livestock production levels are expected to increase in 2018.

Index Shows Farmer Optimism Increasing

A survey of farmers shows optimism is increasing in the Midwest farm country, despite continued low prices. The latest DTN/The Progressive Farmer Agricultural Confidence Index found increasing optimism, posting an overall score of 113, up 9 points from August and 15 points higher than the “Trump Bump” survey of a year ago. The so-called “Trump Bump” represented an increase in the index following the election of President Trump on the idea of decreased regulation. Farmers’ attitude about their current situation was twice as positive as November 2016, despite growing concerns from ag lenders and little end in sight to flat commodity prices. Index levels above 100 are considered optimistic, those less than 100 are viewed as a pessimistic attitude as compared to baseline scores when the index began. For the most recent survey, farmers put their present views at 95, up 19 points from August, and more than twice the score of 44 in November 2016. Their expectation score is 123, up three from August and down four from a year ago, or essentially flat year-on-year.

USDA Survey Shows Millennials Prefer Fruits, Vegetables

A recent Department of Agriculture report shows that millennials prefer fruits and vegetables over grains and meats. The USDA report analyzed food-buying data by generation. Agri-Pulse reports that millennials spend the smallest share of their food budgets on grains, white meat and red meat. Millennials, those born between 1981 and the mid-2000s, are now the largest, most diverse living generation, surpassing Baby Boomers, in the United States. As such, USDA says their purchasing behavior heavily influences the current retail landscape. Another important finding is that as they have more money to spend, millennials appear to have a stronger preference for fruits and vegetables than other older generations. The report also says millennials do spend more on red meat as their income rises. However, economists found a clear trend, noting that there are “consistent generational differences in meat consumption,” finding each expenditure trend for white and red meat decreases with each younger generation.

Report Shows 2014-15 HPAI Impact

A new report by the Department of Agriculture’s Economic Research Service found the spread of highly pathogenic avian influenza in the United States was not as big an effect as the closing of key export markets. The report studied the poultry industry during the 2014-15 HPAI outbreak, and concludes that trade restrictions during and after the outbreak affected all poultry commodities, but the overall market impact differed for each commodity. Meat industry publication Meatingplace points out that the effects of the trade disruptions also lasted longer than the direct effects of bird culls. Trade restrictions decreased overseas demand for broiler products and led to lower prices for broiler producers. Prices for many poultry products remained at multiyear lows in 2016, partly due to lingering export weakness related to the outbreak.

Marijuana Operation Seeks Farm Status in Washington State

A Washington State marijuana grower argues his farm should be exempt from the state’s Clean Air Act because it is an agricultural activity. An appeals panel will tour the operation this month to help decide whether smells from the harvest of marijuana should have the same leniency as odors from raising livestock and other agricultural activities, according to the Capital Press. The Green Freedom farm is appealing fines issued by a clean-air agency in hopes the move will set a precedent for marijuana farmers to being regulated like any other producer. The state has previously said the farm was too small for the exemption. The agency claims that Green Freedom’s greenhouses and other farm operations cover only 3.2 acres, falling short of the five-acre threshold needed to be eligible for the exemption. Ownership of the farm says it covers 5.7 acres. However, the state agency also says growing marijuana can’t be considered an agricultural activity because it is still covered by the state’s controlled substances act and is not taxed like an agricultural product.

SOURCE: NAFB News Service