READ the NAFB’s National Ag News for Wednesday, October 31st – Halloween!

READ the NAFB’s National Ag News for Wednesday, October 31st – Halloween!

Sponsored by the American Farm Bureau Federation

USDA Planning Trade Aid Round Two Distribution

The Department of Agriculture is readying round-two of trade mitigation payments for farmers. The payments are the second half of the $12 billion program by the Trump administration to compensate farmers for losses stemming from Trump’s trade agenda. Agriculture Secretary Sonny Perdue said he doesn’t expect the payments “any later than December,” according to Politico. USDA previously used about $6.3 billion to facilitate the program that also includes commodity purchases and trade promotion. The second round of payments offers the same per-bushel or per-head amount to farmers as the first round. Corn growers will receive one cent per bushel, and soybean growers will receive $1.65 per bushel, per 50 percent of production. Hog producers will receive $8 per head and dairy farmers will receive 12 centers per hundredweight. Meanwhile, wheat producers will get 14 cents per bushel, sorghum growers 86 cents per bushel and cotton producers six cents per pound.

U.S. Planning Another Round of China Tariffs

The United States is readying more tariffs against China if there is no positive momentum following a meeting between President Trump and China’s President Xi Jinping (she-gin-ping). Bloomberg News reports the new round will be announced if the talks during the G20 summit between the two fails. The new round, proposed to be announced in early December, would apply to imports from China not previously targeted by U.S. tariffs. The U.S. has already imposed tariffs on $250 billion in trade with China. And, ten percent tariffs on $200 billion in imports that took effect in September are due to increase to 25 percent starting next year. Trump has also threatened tariffs on all the remaining goods imported from China to the United States, worth $505 billion last year. China has targeted U.S. agriculture throughout the trade war, which has decreased markets for U.S. commodities in China.

70 Percent of Farmland to Change Hands in Next 20 Years

Farmers National Company says 70 percent of farmland will transfer ownership over the next 20 years. The transfers will occur by sale, will, trust beneficiary or gifts, according to the company. For farm and ranch operations, land is by far the most significant asset in this transfer of wealth. Over the next five years, ten percent of the 911 million acres of agricultural land in the United States will change hands, which equates to two percent per year. About one percent will change ownership each year through inheritance, gifting, or closed sales. The other one percent will be sold in the open market, which equates to about 4.25 million acres per year on average available for purchase. The company says some of the sales will be from farmers and ranchers retiring, while the rest will probably be inheritors deciding to sell the land asset. Finally, the company says the next generation of landowners will typically be more removed from the farm or ranch and will be seeking information and guidance from various sources for making decisions.

Canada Announces New Dairy Working Groups

Agriculture and Agri-Food Canada this week announced new dairy working groups to address industry concerns. Agriculture Minister Lawrence MacAulay announced the new working groups comprised of dairy farmers and processors. Canada says that while informal engagement has already begun with the dairy sector, the working groups bring together officials from Agriculture and Agri-Food Canada, representatives from national dairy organizations and associations, as well as regional representatives. MacAulay says the working groups will help “make sure the sector remains strong, stable, and competitive well into the future.” One of the working groups will focus on helping dairy farmers adjust to the U.S.-Mexico-Canada Agreement that will replace the North American Free Trade Agreement, and discuss support for other trade deals. A separate working group that will chart a path forward to help the dairy sector innovate and remain an important source of jobs and economic growth for future generations. Canada’s government will also engage with provincial and territorial governments on an ongoing basis throughout the process.

CHS Will Restate Three Years of Earnings

CHS will restate three years of earnings after discovering what the cooperative calls a technical accounting error. In a letter to cooperative leaders, CHS says it is restating results for 2015, 2016, 2017 and part of 2018, because rail freight contract values and quantities were intentionally overstated and certain rail freight items were incorrectly accounted for as derivatives on the balance sheet. Management discovered the misstatements during an investigation and has since terminated the employee responsible. CHS has filed a document with the Securities and Exchange Commission announcing the intent to restate the financial results. CHS says that while the investigation is not yet complete, findings to date indicate there was no monetary loss, however the company will incur additional costs related to this matter. Any overstated non-cash values will be written off and reflected in the restated financial results.

Grocery Shoppers Still Prefer in Store Purchases

Online grocery shopping is on the rise, but a new study shows grocery shoppers still prefer in-store purchases. Meat industry publication Meatingplace reports online grocery shopping remains a small niche in the  $800 billion industry, generating less than five percent of sales. Online grocery sales grew four points from last year, but the number of online food and beverage buyers, defined as those who make six or more purchases a year, is still just 17 percent. Only 38 percent of consumers have shopped in the format even once, and less than half of them, 44 percent, say they are loyal to the format. Loyalty rates of online grocery shoppers are well below the 75 percent level needed to ensure a viable, successful business model, according to researchers at Tabs Analytics. The research firm released the finding in its sixth annual food and beverage study which also found grocery sales overall increased in the past two years as median income rose and the unemployment rate declined.

SOURCE: NAFB News Service