READ the NAFB’s National Ag News for Tuesday, May 29th

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READ the NAFB’s National Ag News for Tuesday, May 29th

Ross Heading to China June 2-4

U.S. Commerce Secretary Wilbur Ross will be in China June 2-4 for another round of talks amid trade tensions between the world’s two largest economies. Reuters says The trade dispute got a little more complicated this week when President Donald Trump announced a national security investigation into imports of cars and trucks. The probe could possibly result in tarfifs against China, as well as against key U.S. allies like Germany, Canada, Japan, and Mexico. Treasury Secretary Steven Mnuchin (Muh-NOO-chin) says Ross will be looking to negotiate a framework that could turn into binding agreements between companies. The constructive comments from both the U.S. and China after the last round of talks eased fears of a trade war between the countries. However, President Trump said this week that any deal would need a “different structure,” fueling yet more uncertainty over negotiations. Trump threatened to impose $150 billion worth of tariffs on Chinese goods, fueling threats of equal retaliation from Beijing, including tariffs on large U.S. imports like soybeans.

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Grassley-Conaway Subsidy Feud Escalates

Iowa Senator Chuck Grassley had some harsh words for House Ag Committee Chair Mike Conaway of Texas. The Grassley response came as Conaway said Grassley is wrong “every single time” when he complains about loopholes in the process by which USDA makes subsidy payments to farmers. Earlier this week, Grassley had said he would use the Senate farm bill to go after loopholes that non-farmers exploit to collect a lot of subsidy cash from the government. The House version of the farm bill doesn’t contain any payment limitations. House Freedom Caucus Chair Mark Meadows failed in his effort to promote an amendment that would rein in how much USDA is authorized to grant farmers coping with low commodity prices. In a three-tweet thread on Twitter, Grassley says Conaway should tell farmers why “I’m wrong for wanting to limit farm subsidies to FARMERS and not WALL ST Bankers living high on the hog. Farm subsidies meant as a safety net for farmers w/dirt under their nails.” Grassley encouraged the Freedom Caucus to vote against the House Farm Bill when it comes up again in June.

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OTA: Higher Organic Standards Up to Industry

The USDA recently withdrew its organic livestock and checkoff rules, which signals that the agency likely won’t be setting any higher standards for the organic seal. Laura Batcha (BATCH-ah), CEO of the Organic Trade Association, says it’s up to the industry to take over from here. At the OTA annual policy conference, she said USDA has gone as far as it’s willing to go with this. “It’s a real watershed moment for the industry,” she says. “This is the first time we are seeing the market impacted.” The Hagstrom Report says Batcha was referring to a flattening in the growth of organic egg and dairy sales. The livestock and poultry requirements would have imposed outdoor living requirements for animals involved in dairy and egg production. That rule has been withdrawn by USDA. At the same time, organic egg companies have labeled their eggs as pasture-raised and consumers have responded. Batcha says the dairy market is a little more complicated. There’s been an oversupply of organic milk at the same time that consumers are also turning to more plant-based protein. Batcha says the OTA is continuing its lawsuit against USDA for withdrawing the livestock and poultry rule.

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Wine is Newest Entry into Canada-U.S. Trade Challenges

Ag Secretary Sonny Perdue and U.S. Trade Representative Robert Lighthizer announced that the Trump Administration has requested the World Trade Organization establish a dispute settlement panel. This time, the U.S. wants the panel to examine unfair rules governing the sale of wine in grocery stores in British Columbia. The USTR Office is challenging BC regulations that discriminate against U.S. and other imported wine by allowing only BC-produced wines to be displayed and sold on regular store shelves. Perdue says, “We just want customers in British Columbia to have the opportunity to buy our great American wine. The practice of discriminating against U.S. wine is unfair and cannot be tolerated any longer. Our wine producers rely on export markets and deserve fair treatment from our neighbors to the north.” Lighthizer adds that Canada is an important market for U.S. winemakers, saying that “B.C. and other Canadian provinces need to play by the rules. The Trump Administration will continue to hold our trading partners accountable by vigorously enforcing U.S. rights under our trade agreements and by promoting fair and reciprocal trade through all available tools.” The B.C. regulations exclude all imported wine from being displayed on grocery store shelves.

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Brazil Truck Drivers Quit Working Because of High Diesel Prices

Brazilian truck drivers were protesting high diesel prices for a fourth day this week on Thursday. The truckers don’t plan to quit with blockades until measures to reduce fuel taxes are enshrined in the official gazette. Protests have been crippling highways across the nation. Brazil’s lower house of Congress voted to reduce taxes on diesel. The Senate has yet to vote on tax cuts that truckers say are needed before they’ll end the protests that threaten grain exports, industrial output, and even fuel supply at airports and gasoline stations. The state-run oil company announced a temporary ten-percent diesel price cut at the refinery. However, the head of a trucker’s group says that move isn’t sufficient. The truckers’ group, which is known as ABCAM, says the move isn’t sufficient because the cuts only last 15 days. After that, the company returns to setting domestic prices based on international oil prices. Even if the price cuts truckers are looking for get passed, it will still likely take several days to normalize cargo deliveries in the country when demonstrations come to an end. As of Friday, a Bloomberg report says the largest port in Brazil is running out of soybeans.

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Rural Mainstreet Index Chief Eyeing Two Economic Red Flags

The Rural Mainstreet Index has been steadily climbing over the last four months, signaling improving conditions in farm country. However, the man behind the RMI, Ernie Goss from Creighton University, says he has his eyes on two issues; trade and interest rates. A Farm Journal report says Goss credits exports as one of the biggest reasons for improving economic conditions, in spite of trade “saber rattling.” Because of the rattling sabers, Goss says he’s very concerned about the future of trade going forward. Goss says, “What about trade with China? What about trade with Japan?” He tells Chip Flory of Agri-Talk that he’s very concerned about trade with Asia as well as the North American Free Trade Agreement. “NAFTA is very important to us,” he says, “but now we have a NAFTA deal that may not even be sealed until the next session of Congress.” The other red flag he’s keeping an eye on is interest rates. The Federal Reserve recently indicated that an interest rate hike could possibly happen during the June meeting.

SOURCE: NAFB News Service

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