Trade issues continue to be an important executive branch focal point; today’s update takes a closer look at recent news items regarding agricultural trade with China, the European Union and India.
Farm Policy News
The Navigable Waters Protection Rule – A New Definition of WOTUS
A news release from the U.S. Environmental Protection Agency (EPA) on Thursday stated that, “Today, at an event at the National Association of Home Builders International Builders’ Show in Las Vegas, EPA Administrator Andrew Wheeler and Assistant Secretary of the Army for Civil Works R.D. James will announce a new, clear definition for ‘waters of the United States.'”
Kansas City Fed: Farm Lending Declines For a Second Consecutive Quarter
In an update last week from the Federal Reserve Bank of Kansas City (“Farm Lending Declines at End of 2019”), Nathan Kauffman stated that, “The volume of agricultural lending at commercial banks remained elevated, but declined for a second consecutive quarter. Total non-real estate farm loans decreased about 12 percent in the fourth quarter and declined over consecutive quarters for the first time since early 2017.”
Uncertainty Lingers Regarding Chinese Purchases of U.S. Farm Goods
Bloomberg writers Mike Dorning and Michael Hirtzer reported last week that, “President Donald Trump’s phase-one trade deal with China offers the promise of more overseas sales for American farmers, but the impact of the agreement remains unclear.”
Federal Reserve: Observations on the Ag Economy- January 2020
Last week, the Federal Reserve Board released its January 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.
Senate Passes USMCA, Providing Reassurance and Certainty to Farmers
Wall Street Journal writer William Mauldin reported on Thursday that, “The U.S. Senate easily passed an overhaul of North America’s trade rules on Thursday, sending a major Trump administration priority to the president’s desk.”
U.S., China Sign Phase One Trade Deal- Agricultural Purchases Included
Financial Times writer James Politi reported on Wednesday that, “The US and China have signed an agreement to pause the trade war that has weighed on the global economy for nearly two years, while leaving in place tariffs on hundreds of billions of dollars of Chinese imports.”
African Swine Fever Continues to Propel “Profound” Market Changes
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.”
“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.”