READ the NAFB’s National Ag News for Monday, February 17th & 18th

READ the NAFB’s National Ag News for Monday, February 17th

Sponsored by the American Farm Bureau Federation

India Offers Dairy, Chicken Access in Trade Negotiations with the U.S.

In a bid to land a limited trade pact with the U.S., Reuters says India has offered to partially open up its poultry and dairy markets. The offer comes as India readies for President Donald Trump’s first official visit to the country at the end of this month. No country produces more milk than India, which has traditionally restricted dairy imports to protect the livelihoods of the 80 million households involved in the industry. Last year, Trump suspended India’s special trade designation that dated back to the 1970s. That move came after India put price caps on medical devices, such as cardiac stents and knee implants, as well as introduced new data localization requirements and e-commerce restrictions. The U.S. is India’s second-largest trading partner, trailing only China. India has offered to allow imports of U.S. chicken legs, turkey, and produce like blueberries and cherries, while also cutting tariffs on chicken legs from 100 percent to 25. U.S. negotiators would like that cut to ten percent. The Indian government is also offering to allow some access to its dairy market, but with a five percent tariff and quotas. However, dairy imports would need a certificate saying they aren’t derived from animals that have consumed feeds containing internal organs, blood meal, or tissues of ruminants.

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Phase One Trade Deal Officially Takes Effect

Not only was Friday Valentine’s Day, but it was also the first official day that the Phase One Trade Deal was in effect. Tariffs on both sides of the agreement officially began coming down. The coronavirus outbreak is causing concern about China meeting its obligations under the agreement. An Agri-Pulse report says U.S. experts are worried about whether ports, interior transportation, and soybean crushers are all operating at normal levels. However, industry sources and USDA data show that 1.6 million metric tons of U.S. soybeans were making their way across the Pacific Ocean and heading to China. The latest numbers show that 69,000 tons of soybeans left the U.S. and headed to China during the week of January 31st. During that same time frame, USDA reports showed net sales of 132,000 tons of soybeans to China for the 2019-2020 marketing year. The numbers show that soybeans are still going to China, even though information coming from out of China is almost non-existent. Officials point out that we still don’t know any specifics about how many purchases China will make under the Phase One agreement. Farm groups are looking for more specific information but don’t have any yet.

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Phase One Trade Deal Does Include Deadlines for China

While much of the attention on the deal between the U.S. and China centers around concerns on China meeting its purchasing requirements under the agreement, there are some deadlines it has to meet. There are some deadlines for the U.S. to meet as well. Politico said on Friday that, within the next seven working days, the USDA’s Animal and Plant Health Inspection Service and China’s Customs Agency are required to sign a protocol to allow for the importation of U.S. potatoes. China is also required by February 24 to formally recognize the U.S. dairy safety system is as safe as its own, as well as allow imports of American pork that’s been inspected by the USDA Food Safety and Inspection Service. China is also required by March 14 to lift its ban on U.S. pet foods containing ruminant ingredients and to eliminate cattle age requirements for imports of U.S. beef and beef products. The two sides are also required by that same date to begin technical discussions intended to pave the way for China to import U.S breeding cattle.

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Stronger Farmland Values are Supporting the Farm Economy

Strength in farm real estate markets provided support to the agricultural sector amid ongoing financial challenges. The Tenth District Survey of Agricultural Credit Condition from the Federal Reserve of Kansas City says non-irrigated cropland values and cash rents increased slightly in the fourth quarter of last year. Cash rents had been dropping since 2017 but rose slightly at the end of last year. Credit conditions in the District remained weak but deteriorated at the slowest pace in more than four years. Despite some signs of stabilization, geographic disparities persisted across the region. Land values were stronger on the eastern side of the District, while farm income and credit conditions were weaker on the west side of the district. Lower interest rates and reduced borrowing costs may have contributed to recent strength in the District’s farmland values. Demand for farmland remained strong in the fourth quarter of 2019, which could also have supported farmland values. Bankers who responded to the survey said that trade relief payments provided notable support to farm finances in 2019, but many also indicated that underlying weaknesses in the sector continued to be driven by low agricultural commodity prices.

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Midwest Bracing for More Flooding This Spring

States that border the Missouri River are forecast to experience an elevated flood risk this spring. The National Weather Service says those conditions will only be made worse by already saturated soils and a lot of snow to melt. The NWS issued its first Spring Flood Outlook last week, saying Nebraska, Iowa, Kansas, Missouri, and eastern North and South Dakota all face an above-average flooding risk. It’s not good news as many of those areas are still trying to recover from devastating flooding last year that damaged levees and cost farmers millions in crop losses. The U.S. Army Corps of Engineers says they are “very concerned at this point.” An Associated Press report says even in places where the Corps was able to patch holes in some levees, the normal level of protection won’t be there because initial repairs haven’t been done yet to the full height of the levees. Officials say levee repairs will likely take up to two years to complete. Part of the challenge is the water remained so high in some areas that officials couldn’t even assess the full scope of damage until just recently. Many levees in Iowa and Nebraska have been patched but work hasn’t begun yet in Kansas and Missouri.

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Hemp Industry Executive Blames FDA for industry Challenges

The Food and Drug Administration’s uncertainty over how to regulate the hemp industry is causing challenges that some companies can’t overcome. Warning letters to companies for selling products illegally has diminished big companies’ interest in hemp food products and made it difficult for processors to obtain working capital. Steven Bevan, president of GenCanna, says his Kentucky hemp processing company had to file for bankruptcy last week. “The FDA doesn’t have a pathway for accepting something that was an illegal product,” Bevan told attendees at the Crop Insurance and Reinsurance Bureau seminar on hemp. Crop insurers and companies that issue reinsurance are interested in hemp because the 2018 Farm Bill made it legal to grow the non-psychotropic relative of marijuana. There are three main hemp products, including fiber, seed, and flowers used to make CBD oil, which is used without FDA approval to treat a range of medical problems. In November, FDA warned consumers that it could not conclude CBD is safe for use in human or animal food, and it sent warning letters to 15 companies. Bevan called the FDA’s safety concerns “hogwash.” He says the FDA hasn’t ever removed a single CBD product from any store shelves. The result of the warning letters is that big companies are following their lawyer’s advice to say away from hemp.

SOURCE: NAFB News Service

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