Attack on Institutions; EU CAP Divisions; Transatlantic Similarities on Refugees; Biden Farm Policy
Attack on Institutions Donald Trump campaigned in 2016 against the institutions of government and called for “draining the swamp.” Now his opponents campaigning for the 2020 contest are attacking the institutions of the private sector economy. Various candidate positions involve opp...
Trump Policy Gets Support; Friends and Neighbors
Trump Policy Gets Support Dutch Prime Minister Mark Rutte is in Washington this week and told an Atlantic Council audience that instead of fighting the Trump administration’s effort to rewrite the rules for multilateral institutions like the WTO, “we” should accept this opport...
USMCA Hope; ERS/NIFA Solution
USMCA Hope House Ways and Means Committee Chairman Richard Neal (D-Massachusetts) reportedly said that congressional Democrats do not want to delay a vote on USMCA until 2020. Separately, it was noted that the relationship between the president and Democrats is toxic, but there will still be de...
A Guess at MFP Per Acre Payments
The Office of Management Budget reported yesterday that its review of the Market Facilitation Program (MFP) trade mitigation payments is finished. However, USDA has not yet announced the payment rates. What is known is that the rates will be based on a county average of previous years’ pl...
Race to Fix Labor
U.S. agriculture utilized a quarter-million temporary migrant workers last year under the H-2A agricultural guest worker program, and it was still far from enough labor. The problem, say farmers, is that the program is slow and too complex. Even though most applications for H-2A labor are filed...
Barriers and Ag’s Future; Plurilateral Future
Barriers and Ag’s Future The Greens and other liberal groups in Europe have aligned their sights on turning European agriculture into a chemical-free, non-intensive industry. Rather than just attack from the European Parliament’s largest committee, the Environment Committee, they ha...
Welcome and Unwelcome Biodiesel Policies Are Moving, Albeit Slowly
Two major policy issues for biodiesel are on the docket: 1) a review of the countervailing duties (CVDs) on biodiesel imports from Argentina, and 2) the retroactive extension of the biodiesel tax credit (BTC). The most likely time frame for action on either appears to be in the fourth quarter o...
The Fed’s Upcoming Decision: To Cut or Not to Cut?
The Federal Reserve looks poised to cut interest rates - or does it? This depends upon whether you consider what the Fed says it looks at – inflation and job growth – or read the minutes of its last meeting. Of course, the decision is catalyzed by the president’s jawboning the...
Charting a New Course; Economic Wake
Charting a New Course Former Vice President and now Democratic presidential candidate Joe Biden said this week that President Trump’s trade war tariffs have only hurt American businesses and consumers. However, the U.S. Federal Reserve says the trade war has contributed to a manufacturing...
Retaliation Against China; Retaliation Against Europe; SOE Concerns
Retaliation Against China The market rumor is that China is inquiring about U.S. soybeans, and it better be or else. President Trump and economic advisor Larry Kudlow have been warning that China has not been living up to a commitment to buy U.S. agricultural commodities. This is seen as a betr...
Drab WTO Reforms; Precaution or Patents
Drab WTO Reforms The U.S. has motivated other major WTO members to seek reforms for the organization, and the latest list of proposals reveals how moribund the institution can look from the outside. The U.S. proposed the most basic expectation by members – transparency. Now the EU, China...
Economic Chemistry Power; Plan B; Role of Government
Economic Chemistry Power The major powers (Europe, Russia, U.S. and China) have long used their dominant economic influence to coerce other nations into compliant policies. The U.S. has added labor and environment positions to its trade pacts ever since NAFTA in 1994. In its most recent trade a...
A Look at MFP Payments Through the WTO and the Federal Budget
On 24 July 2018, USDA Secretary Perdue announced a $12 billion trade mitigation package that would be administered in three parts: Food Purchases and Distribution, Ag Trade Promotion (to supplement the Market Access Program), and the Market Facilitation Program (MFP). The latter, which will acc...
U.S.-Japan FTA Will Cost; Varied GMO Approaches
U.S.-Japan FTA Will Cost Junnosuke Kobara at Nikkei provides analysis showing that while Japanese farmers may be few in number, they have outsized influence when voting as a bloc. The analysis is important because there is an Upper House election in two weeks, and the Abe government is negotiat...
Ethanol Facing Structural Changes in Liquid Fuel Market
The old saying “can’t see the forest for the trees” may be apt for the ethanol outlook for the next few years. Indeed, there’s been a great deal of looking at such trees as year-round E15 usage, small refinery wavers, the 2020 required volumes, and the upcoming Renewable...
EPA Announces 2020 Biofuel Volumes
EPA Administrator Andrew Wheeler signed the agency’s proposed 2020 Required Volume Obligations (RVO) under the Renewable Fuel Standard (RFS) today, which will be published next week in the Federal Register and be open for public comments. The EPA will also hold a public hearing on the pro...
Xi, Trump Should Reverse Positions; Deference to Israel
Xi, Trump Should Reverse Positions China’s position is that if a bilateral trade agreement is reached with the U.S., both sides must remove the punitive tariffs that each imposed on the other over the past year. Conversely, President Trump insists that the 25 percent duties he placed on s...
Another Stab at CFTC Reauthorization
Congress will soon be considering the Commodity Futures Trading Commission (CFTC) re-authorization act; the most recent actual legislative authorization was adopted as part of the 2008 farm bill, prior to the Dodd-Frank Act that assigned additional oversight of derivatives markets to the CFTC.&...
Technology Uptake Policy; Trade War Fallout
Technology Uptake Policy Climate change is making its mark in the U.S. Midwest this season with excess moisture and in other parts of the globe whether its heat in Europe, drought in Australia or excess snow in the Rockies and Alps. Research in the journal Nature says there is now no reversing...
Ethanol Margins Low, Politics High
USDA released its Grain Crushing and Co-Production report today; total ethanol use of corn in May was 460 million bushels, which stands at 104 percent of April but 98 percent from the same period last year. DDGS production was 1.94 million tons. Corn gluten feed production from wet...
Fake War News; Another Fund
Fake War News The U.S. and China announced a resumption of bilateral trade negotiations, supposedly calming markets even though nothing has changed about the dynamics working against a deal. Fundamentally, the two sides disagree and nothing this past weekend has closed the gap. The announcement...
No Ag Trade Details in Debates; A Beef with Free Trade
No Ag Trade Details in Debates Democratic primary candidates for the U.S. presidency debated this week, and little was said about trade and nothing about agriculture. While the fight with China was referenced, most of the focus was on free healthcare, free college, a more open immigration polic...
Taking Stock of the Political Risks Facing Agriculture
Markets, industries and companies are constantly exposed to political risk (i.e., the impact that changes in policies and regulations can have on profitability). Indeed, virtually every major company’s filings with the Securities and Exchange Commission (SEC) includes some comment or disc...
Eastern Europe’s Good Deal; Firms Prepare for Long War; Slick Cooking the Books
Eastern Europe’s Good Deal The Joint Research Centre of the European Commission published the results from analyzing the quality of 1,400 foods across 19 member states, which found no ‘East-West food quality discrimination in Europe.’ The study was precipitated by complaints i...
China Long Game; Wasted Effort
China Long Game Reports indicate that following the U.S.–China trade negotiations this weekend, President Trump will likely delay imposing tariffs on an additional $300 billion worth of imports from the Middle Kingdom. American consumers are not rebelling against the tariffs already in pl...
Inflation, Monetary Policy and Ag Trade
The Federal Reserve’s Federal Open Market Committee (FOMC) made some noteworthy changes to its economic outlook at last week’s meeting, revising its forecast of personal consumption expenditures (PCE) to 1.5 percent for 2019 and 1.9 percent for 2020. The PCE is the standard measure...
Organic Worries; Lessons for Xi-Trump Meeting
Organic Worries The organic food market is growing fast, especially in France, and projected to reach $100 billion globally, according to Ecocert. This has led Copa Cogeca’s Organic Working Party to reach the concern WPI forecast long ago – commoditization. The party’s Lone An...
Democrats on Trump Trade; Eagle versus Panda; Dems Back Trump
Democrats on Trump Trade The first Democratic presidential primary debate occurs this Wednesday, and candidates will be pressed for details on their various policy positions. For example, nearly half of them say they support challenging China but would approach it differently than President Tru...
Biodiesel Tax Credit and RFS Volumes with Some Surprises
The House Ways and Means Committee completed action on a tax extender package last Thursday night. It includes a three-year extension of the $1/gallon tax credit for biodiesel blending that matches the language already introduced in the Senate, meaning this will probably move through a House-Se...
USMCA Epiphany; Rotten Tomatoes; Commodities Not a Worry
USMCA Epiphany Canadian Prime Minister Justin Trudeau’s visit to Washington this week revealed an epiphany by President Trump and hope on the Hill. Instead of his typical nationalistic viewpoint, Mr. Trump finally characterized the USMCA as a trilateral arrangement and said that collectiv...
Trade Blame Game; Funding the War; Attack on Productivity
Trade Blame Game Deborah Elms of the Singapore-based Asian Trade Centre told a Washington audience this week that the U.S. flouting international trade rules is encouraging Asian countries to do likewise. This may be true if viewed in isolation, but then the inverse can also be said – Asi...
USMCA Codification; Mitigating the Mitigation; Expanding the Conflict
USMCA Codification What seemed unlikely just a few weeks ago now looks like a growing possibility – U.S. congressional passage of the USMCA. USTR Robert Lighthizer told members of Congress that he will do whatever it takes to mollify their concerns. The U.S. Chamber of Commerce says it no...
Legs of War; No Cigar
Legs of War The news that Presidents Trump and Xi plus their negotiators will have extended bilateral discussions around the G20 Summit was seen as hopeful but not definitive. Both sides are dug in deep and short of one side or the other (or both). As it incurs economic calamity, this war would...
Is the Immigration-Tariff Deal with Mexico a Template for China Breakthrough?
There is a great deal of speculation on whether Presidents Trump and Xi will actually meetand/or come to a deal at the G20 Summit in Osaka on 28 and 29 June. Much of the rhetoric from the U.S. side has continued to take a tough stance in trade talks with China. However, it is now more than a ye...
Trump G20 Plan; Trade Policy Potpourri
Trump G20 Plan Donald Trump has been relentless at pressuring other NATO members to meet their commitments in terms of funding the organization’s military capacity. His admonitions have been backed by NATO’s secretary general and major media organizations like the Financial Times. I...
Appropriations Amendments Tie USDA’s Hands and Scrutinize Administration on Trade
The House ag appropriations bill includes many restrictions on USDA’s use of appropriated funding, and there are 70 amendments that provide more stipulations. Yesterday was the deadline for filing amendments with the Rules Committee, which will meet next Tuesday to decide on the ones that...
Attack on Institutions; EU CAP Divisions; Transatlantic Similarities on Refugees; Biden Farm Policy
Attack on Institutions Donald Trump campaigned in 2016 against the institutions of government and called for “draining the swamp.” Now his opponents campaigning for the 2020 contest are attacking the institutions of the private sector economy. Various candidate positions involve opp...
Trump Policy Gets Support; Friends and Neighbors
Trump Policy Gets Support Dutch Prime Minister Mark Rutte is in Washington this week and told an Atlantic Council audience that instead of fighting the Trump administration’s effort to rewrite the rules for multilateral institutions like the WTO, “we” should accept this opport...
USMCA Hope; ERS/NIFA Solution
USMCA Hope House Ways and Means Committee Chairman Richard Neal (D-Massachusetts) reportedly said that congressional Democrats do not want to delay a vote on USMCA until 2020. Separately, it was noted that the relationship between the president and Democrats is toxic, but there will still be de...
A Guess at MFP Per Acre Payments
The Office of Management Budget reported yesterday that its review of the Market Facilitation Program (MFP) trade mitigation payments is finished. However, USDA has not yet announced the payment rates. What is known is that the rates will be based on a county average of previous years’ pl...
Race to Fix Labor
U.S. agriculture utilized a quarter-million temporary migrant workers last year under the H-2A agricultural guest worker program, and it was still far from enough labor. The problem, say farmers, is that the program is slow and too complex. Even though most applications for H-2A labor are filed...
Barriers and Ag’s Future; Plurilateral Future
Barriers and Ag’s Future The Greens and other liberal groups in Europe have aligned their sights on turning European agriculture into a chemical-free, non-intensive industry. Rather than just attack from the European Parliament’s largest committee, the Environment Committee, they ha...
Welcome and Unwelcome Biodiesel Policies Are Moving, Albeit Slowly
Two major policy issues for biodiesel are on the docket: 1) a review of the countervailing duties (CVDs) on biodiesel imports from Argentina, and 2) the retroactive extension of the biodiesel tax credit (BTC). The most likely time frame for action on either appears to be in the fourth quarter o...
The Fed’s Upcoming Decision: To Cut or Not to Cut?
The Federal Reserve looks poised to cut interest rates - or does it? This depends upon whether you consider what the Fed says it looks at – inflation and job growth – or read the minutes of its last meeting. Of course, the decision is catalyzed by the president’s jawboning the...
Charting a New Course; Economic Wake
Charting a New Course Former Vice President and now Democratic presidential candidate Joe Biden said this week that President Trump’s trade war tariffs have only hurt American businesses and consumers. However, the U.S. Federal Reserve says the trade war has contributed to a manufacturing...
Retaliation Against China; Retaliation Against Europe; SOE Concerns
Retaliation Against China The market rumor is that China is inquiring about U.S. soybeans, and it better be or else. President Trump and economic advisor Larry Kudlow have been warning that China has not been living up to a commitment to buy U.S. agricultural commodities. This is seen as a betr...
Drab WTO Reforms; Precaution or Patents
Drab WTO Reforms The U.S. has motivated other major WTO members to seek reforms for the organization, and the latest list of proposals reveals how moribund the institution can look from the outside. The U.S. proposed the most basic expectation by members – transparency. Now the EU, China...
Economic Chemistry Power; Plan B; Role of Government
Economic Chemistry Power The major powers (Europe, Russia, U.S. and China) have long used their dominant economic influence to coerce other nations into compliant policies. The U.S. has added labor and environment positions to its trade pacts ever since NAFTA in 1994. In its most recent trade a...
A Look at MFP Payments Through the WTO and the Federal Budget
On 24 July 2018, USDA Secretary Perdue announced a $12 billion trade mitigation package that would be administered in three parts: Food Purchases and Distribution, Ag Trade Promotion (to supplement the Market Access Program), and the Market Facilitation Program (MFP). The latter, which will acc...
U.S.-Japan FTA Will Cost; Varied GMO Approaches
U.S.-Japan FTA Will Cost Junnosuke Kobara at Nikkei provides analysis showing that while Japanese farmers may be few in number, they have outsized influence when voting as a bloc. The analysis is important because there is an Upper House election in two weeks, and the Abe government is negotiat...
Ethanol Facing Structural Changes in Liquid Fuel Market
The old saying “can’t see the forest for the trees” may be apt for the ethanol outlook for the next few years. Indeed, there’s been a great deal of looking at such trees as year-round E15 usage, small refinery wavers, the 2020 required volumes, and the upcoming Renewable...
EPA Announces 2020 Biofuel Volumes
EPA Administrator Andrew Wheeler signed the agency’s proposed 2020 Required Volume Obligations (RVO) under the Renewable Fuel Standard (RFS) today, which will be published next week in the Federal Register and be open for public comments. The EPA will also hold a public hearing on the pro...
Xi, Trump Should Reverse Positions; Deference to Israel
Xi, Trump Should Reverse Positions China’s position is that if a bilateral trade agreement is reached with the U.S., both sides must remove the punitive tariffs that each imposed on the other over the past year. Conversely, President Trump insists that the 25 percent duties he placed on s...
Another Stab at CFTC Reauthorization
Congress will soon be considering the Commodity Futures Trading Commission (CFTC) re-authorization act; the most recent actual legislative authorization was adopted as part of the 2008 farm bill, prior to the Dodd-Frank Act that assigned additional oversight of derivatives markets to the CFTC.&...
Technology Uptake Policy; Trade War Fallout
Technology Uptake Policy Climate change is making its mark in the U.S. Midwest this season with excess moisture and in other parts of the globe whether its heat in Europe, drought in Australia or excess snow in the Rockies and Alps. Research in the journal Nature says there is now no reversing...
Ethanol Margins Low, Politics High
USDA released its Grain Crushing and Co-Production report today; total ethanol use of corn in May was 460 million bushels, which stands at 104 percent of April but 98 percent from the same period last year. DDGS production was 1.94 million tons. Corn gluten feed production from wet...
Fake War News; Another Fund
Fake War News The U.S. and China announced a resumption of bilateral trade negotiations, supposedly calming markets even though nothing has changed about the dynamics working against a deal. Fundamentally, the two sides disagree and nothing this past weekend has closed the gap. The announcement...
No Ag Trade Details in Debates; A Beef with Free Trade
No Ag Trade Details in Debates Democratic primary candidates for the U.S. presidency debated this week, and little was said about trade and nothing about agriculture. While the fight with China was referenced, most of the focus was on free healthcare, free college, a more open immigration polic...
Taking Stock of the Political Risks Facing Agriculture
Markets, industries and companies are constantly exposed to political risk (i.e., the impact that changes in policies and regulations can have on profitability). Indeed, virtually every major company’s filings with the Securities and Exchange Commission (SEC) includes some comment or disc...
Eastern Europe’s Good Deal; Firms Prepare for Long War; Slick Cooking the Books
Eastern Europe’s Good Deal The Joint Research Centre of the European Commission published the results from analyzing the quality of 1,400 foods across 19 member states, which found no ‘East-West food quality discrimination in Europe.’ The study was precipitated by complaints i...
China Long Game; Wasted Effort
China Long Game Reports indicate that following the U.S.–China trade negotiations this weekend, President Trump will likely delay imposing tariffs on an additional $300 billion worth of imports from the Middle Kingdom. American consumers are not rebelling against the tariffs already in pl...
Inflation, Monetary Policy and Ag Trade
The Federal Reserve’s Federal Open Market Committee (FOMC) made some noteworthy changes to its economic outlook at last week’s meeting, revising its forecast of personal consumption expenditures (PCE) to 1.5 percent for 2019 and 1.9 percent for 2020. The PCE is the standard measure...
Organic Worries; Lessons for Xi-Trump Meeting
Organic Worries The organic food market is growing fast, especially in France, and projected to reach $100 billion globally, according to Ecocert. This has led Copa Cogeca’s Organic Working Party to reach the concern WPI forecast long ago – commoditization. The party’s Lone An...
Democrats on Trump Trade; Eagle versus Panda; Dems Back Trump
Democrats on Trump Trade The first Democratic presidential primary debate occurs this Wednesday, and candidates will be pressed for details on their various policy positions. For example, nearly half of them say they support challenging China but would approach it differently than President Tru...
Biodiesel Tax Credit and RFS Volumes with Some Surprises
The House Ways and Means Committee completed action on a tax extender package last Thursday night. It includes a three-year extension of the $1/gallon tax credit for biodiesel blending that matches the language already introduced in the Senate, meaning this will probably move through a House-Se...
USMCA Epiphany; Rotten Tomatoes; Commodities Not a Worry
USMCA Epiphany Canadian Prime Minister Justin Trudeau’s visit to Washington this week revealed an epiphany by President Trump and hope on the Hill. Instead of his typical nationalistic viewpoint, Mr. Trump finally characterized the USMCA as a trilateral arrangement and said that collectiv...
Trade Blame Game; Funding the War; Attack on Productivity
Trade Blame Game Deborah Elms of the Singapore-based Asian Trade Centre told a Washington audience this week that the U.S. flouting international trade rules is encouraging Asian countries to do likewise. This may be true if viewed in isolation, but then the inverse can also be said – Asi...
USMCA Codification; Mitigating the Mitigation; Expanding the Conflict
USMCA Codification What seemed unlikely just a few weeks ago now looks like a growing possibility – U.S. congressional passage of the USMCA. USTR Robert Lighthizer told members of Congress that he will do whatever it takes to mollify their concerns. The U.S. Chamber of Commerce says it no...
Legs of War; No Cigar
Legs of War The news that Presidents Trump and Xi plus their negotiators will have extended bilateral discussions around the G20 Summit was seen as hopeful but not definitive. Both sides are dug in deep and short of one side or the other (or both). As it incurs economic calamity, this war would...
Is the Immigration-Tariff Deal with Mexico a Template for China Breakthrough?
There is a great deal of speculation on whether Presidents Trump and Xi will actually meetand/or come to a deal at the G20 Summit in Osaka on 28 and 29 June. Much of the rhetoric from the U.S. side has continued to take a tough stance in trade talks with China. However, it is now more than a ye...
Trump G20 Plan; Trade Policy Potpourri
Trump G20 Plan Donald Trump has been relentless at pressuring other NATO members to meet their commitments in terms of funding the organization’s military capacity. His admonitions have been backed by NATO’s secretary general and major media organizations like the Financial Times. I...
Appropriations Amendments Tie USDA’s Hands and Scrutinize Administration on Trade
The House ag appropriations bill includes many restrictions on USDA’s use of appropriated funding, and there are 70 amendments that provide more stipulations. Yesterday was the deadline for filing amendments with the Rules Committee, which will meet next Tuesday to decide on the ones that...