READ the NAFB’s National Ag News for Monday, January 13th

READ the NAFB’s National Ag News for Monday, January 13th

Sponsored by the American Farm Bureau Federation

China Confirms January 15th Signing Day for “Phase One”

Wednesday is an important day for the trade dispute that’s dragged on between China and the United States. The South China Morning Post confirms that the Chinese Vice Premier will be heading to Washington to participate in the signing ceremony for a partial trade agreement between the two nations. The deal will boost U.S. agricultural commodity shipments to China in exchange for the White House cutting back on some of the existing tariffs on Chinese goods. U.S. President Donald Trump has said China will buy as much as $50 billion worth of agricultural goods every year within the next two years. However, Beijing still hasn’t confirmed any of those numbers yet. A deputy ag minister quoted by a Chinese magazine last week says his country has no plans to change its grain import quota system. Politico says trade analysts point out that could make it extremely difficult for Beijing to meet U.S. demands. The other fact that makes many economists skeptical is the most U.S. agricultural products China has ever purchased was $26 billion back in 2012. President Trump recently said on Twitter that he’ll be heading to Beijing to begin talks on Phase Two of an agreement, but a spokesperson for China’s Ministry of Commerce didn’t provide any additional details on potential talks.

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Hopes for Jump in U.S. Farm Exports Dim Ahead of Signing

Days ahead of the Phase One trade deal signing between the U.S. and China, hopes appear to have dimmed somewhat for a spike this year in U.S. farm shipments overseas. China recently made large buys of Brazilian soybeans and made a pair of unexpected policy moves, two things that Reuters says have put a damper on that optimism. China confirmed late last week that their Vice Premier will be in Washington to sign the Phase One partial trade deal with the U.S. Chinese forward purchases of Brazilian soybeans that totaled about 800,000 tons are causing doubts about whether Chinese buyers will have any need to tap into the vast soybean supplies available from the U.S. American traders who spoke anonymously with Reuters say China’s soybean needs have been covered through the first quarter of 2020. Adding to U.S. concerns, Beijing announced plans to suspend its implementation this year of a nationwide gasoline blend that contains 10 percent ethanol. The plan originally brought about the hope that U.S. exports of the biofuel to China would leap upward, as well as hopes of more corn shipments to the country to help it produce the biofuel domestically.

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Bad News for U.S. Beef/Chicken in Potential U.S.-U.K. Trade Deal

The U.S. beef and poultry industries got some bad news through a recent article on BBC Dot Com. Chlorine-washed chicken and hormone-treated beef will be kept out of the United Kingdom under any potential trade deal with the U.S. That comes straight from the UK environmental secretary. Theresa Villiers (VILL-ee-ehrs) tells the BBC that the current European Union ban on the products will carry over into UK legislation after the United Kingdom leaves the EU. Villiers says, “There are legal barriers to the imports and those are going to stay in place. We will defend our national interests and our values, including our high standards of animal welfare.” The EU says using chlorine to wash the chickens and kill salmonella infections allows American farmers to be careless with the welfare of chickens. There is no known human health threat from using the solution to keep chickens free of infection. The EU also says feeding cows with growth-enhancing chemicals could potentially have negative health effects on the humans that consumer the beef products. The United States says these rules are nothing more than an attempt by Europe to protect its producers. America has stated publicly that both of these meat products will be central to any possible U.K.-U.S. deal after Brexit.

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ADM Appears Close to Leaving Biofuels Business for Good

The Archer-Daniels-Midland Company is a giant agribusiness in the U.S. biofuels industry. However, that could be changing. Bloomberg says the company is in advanced stages of discussions on a deal that could mean a sale or joint venture for its ethanol dry mills. The agricultural company that dates back for 118 years is in discussions with multiple companies about its future. CEO Juan Luciano (Loo-see-AH-no) spoke last week about the discussions but wouldn’t name the fewer than five companies said to be involved. “We are advancing things along with several different parties, and I can say that we are advanced in those discussions,” he says. “We want to find either the right buyer or the right partner for these things.” He says while they haven’t made a final decision yet, “we are close.” ADM started producing ethanol back in 1978. This isn’t the first time they’ve taken steps to divest themselves of the dry mills. The company put the assets up for sale back in 2016, looked at the bids, and then decided to go ahead and keep the business. Luciano adds,” I wanted to make sure at the start of my tenure that we focused on nutrition and food, not fuels. I like ethanol and I believe there’s a lot of potential for the product. I just don’t feel it’s for us.”

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House Bill Introduced to Oversee USDA Checkoffs

Nevada Democrat Dina (Deena) Titus introduced legislation titled “The Opportunities for Fairness in Farming Act” (OFF) into the House of Representatives. The Hagstrom Report says it’s designed to create financial controls and transparency for the USDA agricultural checkoff programs. Titus says, “The USDA’s checkoff programs have operated without sufficient oversight for far too long. This legislation brings much-needed accountability and transparency.” She feels family farmers shouldn’t be forced to pay into organizations that may sometimes lobby against their interests and threaten animal welfare. Congress authorized the commodity checkoff programs that allow farmers to bill themselves to pay into research and promotion programs for their particular commodities. However, groups backing the legislation say that organizations like the National Cattlemen’s Beef Association and other groups get access to these funds and don’t use them for their intended purposes. Marty Irlby, executive director of Animal Wellness Action, says, “USDA’s runaway checkoff programs must be held accountable. Family farmers have a right to know where their hard-earned dollars are being spent.” Earlier this year, four senators introduced companion legislation into the Senate for consideration.

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Corn and Soybean Harvest Results Higher Than Expected in January WASDE Report

The January Word Ag Supply and Demand Estimate numbers show that the final 2019 corn yield came in at an average of 168 bushels per acre, nearly two full bushels above industry estimates. Total corn production was 13.7 billion bushels, up 31 million as higher yield more than offset a reduction in harvested acres, which totaled 81.5 million. The season-average corn price for producers is unchanged at $3.85 per bushel.  Soybean production came in at 3.56 billion bushels, eight million larger on higher yield results. Yield estimates were 47.4 bushels per acre, with harvested acres at 75 million, down slightly from the previous report. The season-average price for beans is $9.00 a bushel, up 15 cents in part because of stronger soybean oil prices. The outlook for wheat is stable supplies, increased feed and residual use, as well as lower stocks. Feed and residual use rose 10 million bushels on lower second-quarter stocks, while seed use dropped by one million bushels on lower planted area forecast for the upcoming season.  The season-average farm price for wheat is unchanged at $4.55 per bushel.

SOURCE: NAFB News Service

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