Last week, the Federal Reserve Banks of Chicago, Kansas City and Minneapolis released updates regarding farm income, farmland values and agricultural credit conditions from the third quarter of 2020.
Farm Policy News
China’s Grain Buying Is “Rocking the Global Market”
Late last week, Reuters writers Hallie Gu, Maximilian Heath, and Naveen Thukral reported that, “Chinese feed producers, pig farmers and traders are reshaping the global grain market as they scour the world for supplies amid a domestic shortfall that sent local corn prices to record highs and is expected to fuel global food inflation in 2021.”
Record 2020/2021 Grain Crop Expected in Brazil
Brazil is expected to produce a record grain crop in 2020/2021, despite the drought that affected planting in some regions. On Tuesday, the National Supply Company (Conab) projected 268.9 million tons of grain production, 4.6% more than 2019/2020.
China’s Corn Imports Estimated to Hit 22 Million Metric Tons, USDA- FAS
A report earlier this month from USDA’s Foreign Agricultural Service (FAS), “China’s Corn Imports Estimated to Hit 22 Million Metric Tons,” stated that, “The forecast for China’s corn imports for MY 2020/2021 is increased from 7 MMT to 22 MMT. The jump is attributed to depleted stocks to meet current demand. Continually rising domestic corn prices will also drive demand for additional imports in MY 20/21.”
USDA Agricultural Projections Show Increased Soybean Acres in 2021
On Friday, the USDA’s Office of the Chief Economist released selected tables prepared for the Department’s upcoming Agricultural Baseline Projections report.
CRS Report: Farm Bill Revenue Support, 2014-2020
A report last month from the Congressional Research Service (CRS), “U.S. Farm Policy: Revenue Support Program Outlays, 2014-2020,” stated that, “Provisions of Title I of the 2018 farm bill (Agriculture Improvement Act of 2018;P.L. 115-334) authorize a set of revenue support programs for major program crops for crop years 2019-2023 as part of the so-called farm safety net. This includes three principal revenue support programs— Marketing Assistance Loan (MAL), Agricultural Risk Coverage (ARC), and Price Loss Coverage (PLC).”
German Pork “Effectively Trapped in Europe” Due to African Swine Fever, as China Rebuilds Herds
Late last week, Bloomberg News reported that, “China is flying in record numbers of pigs to improve genetics and boost productivity while rapidly rebuilding the nation’s hog population after it was decimated by African swine fever.”
As Importer’s Need for Corn and Soybeans Seen Rising, Few Countries Currently Competing with U.S. for Export Demand
Bloomberg News reported last week that, “China’s corn imports could more than double to 17 million tons in 2020-2021 from a year earlier on prospects for a smaller domestic harvest and a recovery in demand for hog feed, according to the head of the logistics information department at COFCO Trading Co.”
La Niña in Brazil Could Impact Chinese Demand for U.S. Soybeans and Support Prices
Soybean prices rose recently on the Chicago Mercantile Exchange, driven by the delay in planting the Brazilian crop, among other factors.
Kansas City Fed: Farm Lending Remained Muted in Third Quarter
In an update last week from the Federal Reserve Bank of Kansas City (“Ag Lending Update: Fewer Loans Issued to Farmers Limit Lending Activity”), Cortney Cowley and Ty Kreitman stated that, “Farm lending remained muted in the third quarter of 2020 but increased from last year according to the National Survey of Terms of Lending to Farmers.”
China Has Purchased 71% of Its Phase One Target- and Could Issue More Corn Import Permits
A news release from USDA on Friday stated that, “The Office of the U.S. Trade Representative (USTR) and [USDA] today issued a report highlighting the progress made to date in implementing the agricultural provisions in the U.S.-China Phase One Economic and Trade Agreement, which is delivering historic results for American agriculture.”
Federal Reserve: Observations on the Ag Economy- October 2020
On Wednesday, the Federal Reserve Board released its October 2020 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. The report included several observations pertaining to the U.S. agricultural economy.
FAS Report: Corn Ethanol Production Booms in Brazil
A report earlier this month from USDA’s Foreign Agricultural Service (FAS), “Corn Ethanol Production Booms in Brazil,” stated that, “Plentiful, and generally cheap, corn supplies in Brazil’s Center-West region have enticed investment in the corn ethanol sector over the last few years.”
Robust Soybean Export Forecast, While Countries “Bulk Up” Their Food Supplies
Mark Ash and Dana Golden explained in this month’s Oil Crops Outlook, from USDA’s Economic Research Service (ERS), that, “Despite an unchanged yield, USDA pegs the 2020/21 U.S. soybean crop down by 45 million bushels this month to 4.268 billion as the sown acreage is revised down by 731,000 acres to 83.1 million.”
Argentina- First Country to Approve GMO Wheat and Expects Authorization from Brazil
Last week, the Argentine government approved the first transgenic wheat in the world, tolerant to drought and ammonium glufosinate herbicide. The variety HB4 was developed by biotechnology companies Bioceres (Argentina) and Florimond Desprez (France).
Smaller Corn and Soybean Supply Forecast, as Derecho Harvest Impact Grows
Reuters writer Mark Weinraub reported late last week that, “U.S. corn and soybean supplies will be smaller than previously forecast, as adverse weather reduced the acreage that farmers will harvest, the U.S. government said on Friday.”
Recent FAS Reports Highlight Soybean, Meat, and Corn Export Variables
Reports this month from the USDA’s Foreign Agricultural Service (FAS) have provided updated information on market variables impacting soybeans, meat, and corn. Today’s update highlights some of the key findings from these FAS publications.
African Swine Fever in Germany Continues to Impact Pork Markets
Reuters News reported this week that, “One more case of African swine fever (ASF) has been confirmed in a wild boar in the eastern German state of Brandenburg, Germany’s federal agriculture ministry said on Wednesday.”
Pandemic, Drought, and Derecho Among Factors Impacting the Farm Economy
In an update late last month at the USDA blog, Robert Johansson, the Department’s Chief Economist, highlighted how the COVID-19 pandemic was adversely impacting the American farm economy.
FAS Report- Biggest Challenge For U.S. Ag Trade With China: Strong Competition, Especially From Brazil
A recent report from USDA’s Foreign Agricultural Service (FAS), “China: Evolving Demand in the World’s Largest Agricultural Import Market,” stated that, “As part of the Phase One Agreement, China has committed to purchase $12.5 billion more agricultural and related products from the United States over 2017 levels.”