READ the NAFB’s National Ag News for Friday, February 23rd

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READ the NAFB’s National Ag News for Friday, February 23rd

Mexico Buying More Brazilian Corn as NAFTA Negotiations Continue

Mexico purchased ten times more corn from Brazil last year than it had previously. Reuters says that’s due to the uncertainty regarding the potential outcome of the North American Free Trade Agreement negotiations. Mexican government data and top grain merchants all say they fear supply distruption from the U.S. if the White House ever followed through on its threat to withdraw from the pact. Mexico is already on track to buy more corn from Brazil in 2018. That’s a move that hurts an already struggling U.S. ag sector faced with low commodity prices and rising South American competition. U.S. farmers, food processors, and grain traders have spent months trying to make sure relationships don’t fall part if the NAFTA negotiations suddenly fall apart. They’re trying to protect over $19 billion in sales to Mexican buyers of corn, soybeans, poultry, and dairy. Despite that, Mexican corn imports from Brazil are climbing, totaling over one-half million metric tons in 2017. That’s a more than 900 percent jump over the previous year. The purchases all came in the last four months of 2017.


NCGA Responds to Cruz Speech on RFS

Texas Senator Ted Cruz spoke this week before workers at the bankrupt Philadelphia Energy Solutions Refinery. He says the bankruptcy was caused by the law requiring refiners to purchase Renewable Identification Numbers, or RINs, mandated by the Renewable Fuels Standard. A Delaware Dot Com Article calls the RINs a “receipt that shows gasoline sold at a filling station contains an ethanol mix.” However, Kevin Skunes (Skoo’-nehs), National Corn Growers Association President, says Cruz is way off base. He says most of the nation’s oil refiners are showing double-digit profit increases, but the problems of Philadelphia Energy Solutions are self-inflicted. “That company’s investors put their interests ahead of their workers’ interests,” he says, “and it’s disingenuous for Cruz to say he’s looking out for refinery workers when he’s really looking out for the Wall Street investors who made bad business decisions yet still ensured they got their payouts first, putting refinery jobs at risk.” He adds that the Environmental Protection Agency, university experts, and financial analysts all confirm that refinery owners aren’t facing a RIN price impact because they recover any costs through the price they get for their refined products. “Cruz is trying to upend the RFS to bail out refiners who opted not to invest in blending infrastructure,” Skunes says, “so they could blend renewable fuels and get free biofuels credits.”


Section 199A Fix Is Coming

A DTN report says Congress may be close to replacing the Section 199A language in the new tax law that curbs the advantages of farmers who sell their products to cooperatives rather than private companies. Iowa Senator Chuck Grassley says a possible fix would give farmer cooperatives the same tax benefits they had under the old Section 199A, known as the Domestic Production Activities Deduction. That tax break amounted to about nine percent of a cooperative’s income and up to half the amount of wages paid to cooperative workers. Cooperatives then passed on the benefits of the deduction to their farmer-members. Grassley says, “I think there is enough agreement in Congress to do what we originally intended to do, which is maintaining the status-quo for co-ops. With enough agreement, we’re going to go ahead and get it done, even if co-ops aren’t completely satisfied with what we’re doing.” The fix coming out of Congress will essentially reinstate the law that was in effect prior to the 2017 tax bill and reestablish the Domestic Activities Deduction to the way it was over the last dozen years. Grassley says the Section 199A change will likely be included in the omnibus spending appropriations bill that has a March 23 deadline. Now that lawmakers and President Trump have agreed on a budget, Grassley feels the appropriations bill won’t be as big of a political battle to get passed.


Perdue Promotes “Harvest Box”

Ag Secretary Sonny Perdue wants people who don’t like the idea of “America’s Harvest Box” to know that they are very serious about the idea. He says House Ag Committee Chair Mike Conaway is open to considering a small-scale pilot program in the 2018 Farm Bill. The Secretary has faced a lot of criticism since the proposal came out last week as part of President Trump’s fiscal 2019 budget. However, Perdue and his team are defending the idea. A Pro Ag report says they might be finding some open minds on Capitol Hill as well. “We think it’s our responsibility to create new, innovative ideas of delivering food to the people who need it,” Perdue says, “and this is one area.” During a recent tour through California, he did say there are some logistical concerns to the idea but called it “a real idea, not a sham.” Conaway has a great deal of the House Farm Bill already written, but he’s not ruling out the idea of a pilot project in the program. A committee aide says, while Conaway is open to the idea, no decisions have been made yet. Perdue says that’s encouraging because new ideas often need to be introduced on a small scale to see if they’ll work as intended.


Changes Made to H-2C Immigration Bill

A bill proposed by Virginia Republican Representative Bob Goodlatte would scrap the current H-2A program which is party controlled by the U.S. Labor Department. It would institute an H-2C program that would be overseen by the U.S. Department of Agriculture. Goodlatte has made several amendments to the legislation after listening to concerns from ag groups. A Milk Business Dot Com article says the changes would let farmers have more time to comply with E-Verify. The bill would alleviate concerns over the maximum visa length, extending the term from 18 to 24 months. That change would allow more people to be visa recipients in the program after the first year. It’s not known for sure if the bill will get to the House floor for a vote. Many Republicans, as well as Secretary Perdue, support the bill. Last month, Perdue expressed concern that if Goodlatte’s bill wasn’t part of a broader package on immigration reform, he didn’t see another opportunity in the near future to address the serious problem of labor shortages in all sectors of agriculture. While the American Farm Bureau supports the bill, the California Farm Bureau says it wouldn’t work for California farms and ranches as it’s currently written, and plans to offer recommendations on a more practical program.


USDA Releases 2018 Planting Estimates

While some planters are already working in Texas, the Corn Belt seems a long way away from planting because of snow and ice. However, the USDA is already thinking about planting. During the Agricultural Outlook Forum in Arlington, Virginia, the U.S. Department of Agriculture released its acreage estimates for 2018. The USDA says corn and soybean acres will be split, with 90 million acres going to corn and another 90 million to soybeans. The agency says wheat acres should rise to about 46.5 million. Cotton is also expected to jump one million acres over the 2017 estimate of 12.6 million acres. This year’s cotton acreage estimate is officially 13.3 million acres. Some analysts believe that soybeans could actually move past corn in the overall number of planted acres, with the potential for 91.5 million acres of soybeans in the ground. Soybean prices have rallied recently over South American weather concerns, but the export numbers haven’t been as favorable to soybeans in recent weeks.

SOURCE: NAFB News Service