Last week, Financial Times writers Emiko Terazono, Andres Schipani and Jamie Smyth reported that, “China’s African swine fever epidemic has dramatically reshaped the global meat market and its trade patterns in the 18 months since the outbreak was first officially acknowledged.”
Farm Policy News
“Dimmed” Hopes That China Will Double U.S. Farm Purchases, as Phase-One Deal Signing on Schedule
Lingling Wei reported in Friday’s Wall Street Journal that, “Chinese President Xi Jinping’s chief trade negotiator will travel to Washington early next week to sign a phase-one trade deal with the U.S., China’s Commerce Ministry said Thursday, the first official confirmation by Beijing on the signing of an agreement that could help ease bilateral tensions.”
USMCA Moving Forward, Timeline Uncertain
William Mauldin reported in Wednesday’s Wall Street Journal that, “A Senate committee approved a replacement for the North American Free Trade Agreement, despite criticism from some lawmakers that it lacks sufficient protections for U.S. companies.”
Federal Reserve Bank of Dallas Ag Credit Survey- Fourth Quarter 2019, MFP Payments Noted
Last week, the Federal Reserve Bank of Dallas released its Agricultural Survey for the Fourth Quarter of 2019.
Brazil Forecast to Overtake U.S. as Leading Soybean Producer, USDA- FAS Report
A recent report from USDA’s Foreign Agricultural Service (FAS) stated that, “Brazil is forecast to overtake the United States as the leading soybean producer in the world during the 2019/20 season.”
Phase-One Deal Set for January 15th, as Chinese Imports of U.S. Soybeans Surge in November
Wall Street Journal writers Bob Davis, Andrew Restuccia and Lingling Wei reported on Tuesday that, “President Trump said he would sign the recently negotiated phase-one trade deal with China in Washington on Jan. 15—marking a formal truce in the U.S-China trade war—and would later travel to Beijing to negotiate a broader pact.”
$40 Billion of U.S. Farm Purchases Viable, According to JCI
Reuters writers Hallie Gu and Tom Daly reported late last week that, “China will make good on a pledge to purchase more than $40 billion per year of U.S. agricultural products under the recently agreed Phase 1 trade deal between the two countries, China’s top agriculture consultancy said on Friday.”
Frustration From the Corn Belt Over EPA Biofuel Refinery Waivers
Bloomberg writer Jennifer A Dlouhy reported this week that, “The Trump administration on Thursday set relatively flat quotas for plant-based fuels in 2020, rebuffing ethanol and biodiesel allies who said the targets don’t do enough to support the industry.”
African Swine Fever: An “Unprecedented Impact” in the Year of the Pig
News articles continue to point to various market disruptions caused by the ongoing African Swine Fever outbreak in Asia and beyond. Today’s update looks at a few of these items in more detail.
Iowa Farmland Value Grows 2.3% in 2019
A news release Wednesday from the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach indicated that, “It’s been a difficult year for farmers—the planting season saw an overabundance of rain and delayed planting, the United States’ trade war with China persisted, skewing both commodity prices and demand, and farm bankruptcies rose to the highest level since 2011. However, favorable interest rates, strong yields, and limited land supply combined to help drive Iowa’s farmland values up for only the second time in six years.”
Doubts Emerge About Chinese Agricultural Purchases of $40-$50 Billion After Initial Deal, “How Would They Do It?”
Don Lee and Alice Su reported in Saturday’s Los Angeles Times that, “The United States and China reached a preliminary trade agreement that includes the rollback of some tariffs on Chinese imports and a commitment by Beijing to make a substantial increase in purchases of American farm goods and other products and services.”
U.S. and China Reach Initial Trade Deal
Lingling Wei, Bob Davis, William Mauldin and Josh Zumbrun reported in Friday’s Wall Street Journal that, “President Trump has agreed to a limited trade agreement with Beijing that will roll back existing tariff rates on Chinese goods and cancel new levies set to take effect Sunday as part of a deal to boost Chinese purchases of U.S. farm goods and obtain other concessions, according to people familiar with the matter.”
USMCA on Course for Ratification in 2020
Natalie Andrews, William Mauldin and Anthony Harrup reported yesterday at The Wall Street Journal Online that, “A new U.S. trade deal with Mexico and Canada gained backing from House Democrats, setting the agreement on course for likely ratification by Congress in 2020 and marking a victory for President Trump after months of negotiations to modify it.”
African Swine Fever Roils Markets, as Food Prices Increase Amid Supply Concerns
Bloomberg News reported last week that, “China’s hog population has stopped shrinking and is starting to rise, after months of decline because of African swine fever, and the recovery should keep pork prices in check, a senior agriculture ministry official said.”
Farm Purchases Still an Issue in U.S., China Talks; China Waives Tariffs on Some U.S. Soybeans and Pork
Late last week, Wall Street Journal writers Grace Zhu, Eva Dou and Bob Davis reported that, “China’s trade negotiations with the U.S. remain on track, Beijing said, offering official reassurance after tensions flared between the world’s two biggest economies over human-rights issues in China.”
Trade War Percolates on Multiple Fronts, But President in No Rush on China Deal
On Monday, Financial Times writers James Politi, Bryan Harris and Benedict Mander reported that, “Donald Trump will reimpose tariffs on imports of steel and aluminium from Brazil and Argentina after accusing the countries of a ‘massive devaluation’ of their currencies that hurt US farmers. The move — which was announced by Mr Trump on Twitter on Monday — sharply escalates trade tensions with the two struggling Latin American economies as they build closer ties with China.”
2019 Farm Sector Income Forecast, November
The USDA’s Economic Research Service (ERS) indicated on Wednesday that, “Net farm income, a broad measure of profits, is forecast to increase $8.5 billion (10.2 percent) from 2018 to $92.5 billion in 2019. Net cash farm income is forecast to increase $15.5 billion (15.0 percent) to $119.0 billion.”
Federal Reserve: Observations on the Ag Economy- November 2019
Last week, the Federal Reserve Board released its November 2019 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.
USDA Agricultural Trade Outlook- FY20 Export Forecast Increased
On Monday, the USDA released its Outlook for U.S. Agricultural Trade, a quarterly report from the Department’s Foreign Agricultural Service (FAS) and Economic Research Service (ERS). Today’s update includes highlights from the report, which was coordinated by Kamron Daugherty and Hui Jiang.
African Swine Fever Continuing to Impact U.S. Pork Exports and World Protein Markets
Earlier this month, in its monthly Livestock, Dairy and Poultry Outlook, USDA’s Economic Research Service (ERS) explained that, “U.S. trade data through September indicate that in the first three quarters of 2019 total exports of red meat and poultry increased 1.1 percent. However, driven by a large increase in expected fourth-quarter shipments, exports for the year are forecast to increase more than 3 percent compared with 2018, followed by an increase in 2020 of about 7 percent.”