Game of Chicken; Hard and Fast Numbers; Glyphosate Addiction
Game of Chicken U.S. officials were celebrating China’s announcement that after half a dozen years of bogus excuses for keeping out American poultry, Beijing opened its market. The announcement came a week after the U.S. announced the opening of its market to cooked Chinese poultry meat...
Livestock Round Up
China Opens to Chicken On 31 October, we reported that its was expected that broilers would be included in any U.S. China trade deal, and although that deal remains elusive, China announced today that it would open its market up to U.S. poultry. The access is effective immediately. As we...
Expanded Trade War Tools; Olive Dynamics
Expanded Trade War Tools The Trump Administration expanded its areas of attack on the WTO, bringing in questions about procedures and allocation of resources. The multi-pronged attack is intended to further pressure the institution into reform of its appellate process and other perceived defici...
China versus USMCA; Global MRL’s
China versus USMCA The U.S. Congressional calendar is tight and Trump trade negotiators only have so much band width. This is leading some in the Washington trade community to speculate that the White House will emphasize USMCA passage in the next few weeks. President Trump has backed away from...
Cold Weather, But Natural Gas at Near Record Inventories
Last week we reported on the backlog of propane deliveries across the Corn Belt and noted that farmers who have the capability to use natural gas have a relative advantage. Propane stocks are very near the top of their five-year average, but most of the inventory is in the Gulf, positioned for...
Brazil Disses G20; Narrow Trade Benefits
Brazil Disses G20 Some developing countries came out last week for more generous WTO terms, including expanded special and differential treatment and other forms of so-called policy space to avoid market-based policies. Sounding like an echo of the Trump Administration, the U.S. - leaning Bolso...
Will Technology Complicate the Next Farm Bill?
In a recent interview with Politico, House Agriculture Committee chairman Collin Peterson (D-Minnesota) confirmed that he hasn’t decided whether he will run for re-election in 2020. A big factor in his forthcoming final decision: the 2022 farm bill. According to Peterson, "It's gett...
USMCA Down, Now Up; Buy the Rumor – How’s That Working Out?; WTO Showdown
USMCA Down, Now Up U.S. House Democrats are sounding more positive about their ability to pass USMCA, though it is unclear whether it will be this year or next. They are being warned about attempting passage in a presidential election year, but this isn’t the old days before social media...
More Money, More Problems
USDA Secretary Sonny Perdue announced that his agency was “authorized” to make the second round of 2019 Market Facilitation Program (MFP) payments. The program set aside $14.5 billion to be made in three tranches. So far, $6.7 billion has been sent out under the 2019 version of MFP,...
Trump Effect; China to Create Farmland
Trump Effect Deborah Elms, Executive Director of the Asian Trade Centre in Singapore, writes in the Nikkei that President Trump’s demand that more countries give up their classification as “developing” countries will “be a legacy that long outlasts the Trump administrati...
PRC Pattern Against U.S.; Nationalization’s Limitations
PRC Pattern Against U.S. A final trade agreement between the U.S. and China remains elusive, with Beijing now insisting on more extensive tariff elimination by Washington. As if to highlight the power of its position, China announced that it will buy $100 million worth of European pork in 2020...
More CAP Bashing; USMCA Political Dealing; Trade War’s Cost
More CAP Bashing A reported 2,500 scientists have written the European Parliament advising reform of the Common Agricultural Policy to address biodiversity, yet their proposed solution hardly seems scientific. They want policy to end intensive and “factory” farming. It is true that...
Propane Bottleneck in Corn Belt
Back on 22 July, we wrote … this year’s corn crop will likely have a very high moisture content. There hasn’t been a need for drying in the past five or so years, so that will add a new wrinkle to storage and the corn market this year. And that has turned out to be the...
CAP: Reaping What it Sows
New York Times reporters investigated the operation of the Common Agricultural Policy and reported today that it is used for “corruption and self-dealing in Central and Eastern Europe. Basically, land sales and consequently the payments that go with them are manipulated by political leade...
Nothing but Politics Ahead
As of today, there are 365 days until the 2020 elections. That will cast a big shadow on all Congressional activity from here on out. For the Presidential primaries, there are 91 days until the Iowa caucuses and 99 days until the New Hampshire primary. That could cast a big shadow on Congress&r...
Unnecessary Protectionism; Solving the Wrong Problem; GSP Leverage
Unnecessary Protectionism The pro-trade group, Hinrich Foundation, correctly calculates that the relative commercial strengths of the U.S. and Brazil make them perfect free trade agreement partners. After all, the U.S. is more competitive in capital goods, consumer products and machinery, while...
Latest Economic Data’s Relevance to Farm Economy Outlook
The Federal Reserve cut interest rates by 25 basis points this week, for the third time in a row. The new target for the federal funds rate is now 1.5 to 1.75 percent, which was what the equity markets were hoping for. Both the S&P 500 and Nasdaq indexes hit intraday recor...
USMCA Trouble; Thai Troubles; Farmers versus the Facts
USMCA Trouble U.S. House Ways & Means trade subcommittee member Bill Pascrell (D-New Jersey) says he is leaning toward voting against USMCA because the Mexicans are not doing enough meaningful labor reform. Organized labor in the U.S. has taken a strong line, demanding actions by Mexico tha...
U.S. – China Should Agree on Fake
In addition to losing a place for a planned signing after Chile canceled hosting next month’s APEC meeting, the U.S. – China Phase One trade agreement is reportedly stalled over agricultural purchases. It is somewhat ironic that the leaders of a non-market economy are having to educ...
House Biofuel Hearing on “Abuse of Secret Waivers” - Octane Standard Proposed
The House Energy and Commerce Committee held a hearing this morning entitled, “Protecting the RFS: The Trump Administration’s Abuse of Secret Waivers” about the small refinery exemption (SRE) process. Specifically, the hearing focused on a legislative proposal sponsored by Hou...
The End of U.S. Agricultural Exports; Labor Blocks USMCA
The End of U.S. Agricultural Exports Agriculture is the first sector receiving retaliation in trade disputes and there is no end in sight for trade wars. The Trump Administration contention that the U.S. has fared badly over the past 25 years of the WTO is not unique, it is largely shared by ma...
17 Days Left for USMCA and BTC; Shorter Time for Appropriations
There are only 18 days scheduled on the legislative calendar before Congress recesses for Christmas. There is a lot to do, which Congress will have to balance with its impeachment inquiry – a contentious issue which is not fostering much bi-partisan nor bi-cameral cooperation. The recent...
Argentine Election Impacts; Technological Sovereignty; Your Survey Answer; Food Trends
Argentina Election Impacts Argentines went to the voting booths for a general election yesterday (27 October) that was deemed fateful for agriculture. As the public opinion polls predicted, Alberto Fernández and Cristina Fernández de Kirchner won and will become President and Vice...
Ending EU’s Big Ag; Whipsaw on China
Ending EU’s Big Ag The French government institution France Stratégie issued a report calling for a complete overhaul of the Common Agricultural Policy (CAP) and not just a tweaking. The proposal calls for compensating farmers for their employment rather than for their agricultural...
Canadian Ag Policy, Eh?; Korean Example at OECD
Canadian Ag Policy, Eh? After winning a plurality of seats but not a majority, Justin Trudeau and his Liberal Party will have to govern as a coalition and no one expects much to happen, especially in rural western Canada. Western Canada, where the Conservatives control politics, is agriculture...
Breakthrough for Farm Labor Bill in Congress
Since 2011, there have been more than two dozen farm labor reform bills proposed in the U.S. Congress with no major progress to addressing the issue of agricultural workers. This week, a bipartisan compromise bill will be introduced that has a better than 50/50 chance of passing, despite the ai...
WTO Will Be Fixed; Europe’s Poultry Squawks
WTO Will Be Fixed Former WTO Deputy Director Alan Wolff told a Washington audience this week that the Appellate Body situation can be resolved but probably not before the 1 December deadline. He noted that every WTO member professes to support the institution and its dispute settlement function...
CAP Battle Tomorrow; Weaponized Trade Policy; Too Much Internet
CAP Battle Tomorrow Environmental groups will be leading protests tomorrow as the new European Parliament (EP) meets in Strasbourg. Using small farmers as their backdrop, they are demanding that the EP rewrite the Common Agricultural Policy (CAP) to give less support to large farmers and spend...
SRE Saga Continues; Administration Ready to be Done
As we’ve noted, both the biofuels and petroleum industry are less than impressed with the Administration’s plan to reallocate SREs as a supplement to the 2020 required volume obligations (RVOs). Both industries have reacted negatively and RINs prices have dropped, but the plan is un...
The Evolving Trading System; CAP’s Fault; Fooled Foodies
The Evolving Trading System WTO Director General Roberto Azevêdo laments that people are forgetting the importance of a rule-based system of economic cooperation. Former Clinton Administration trade negotiator Harry Broadman laments that under President Trump, the U.S. has become more lik...
Canadian Federal Elections and Ag Trade
Canada will hold its federal parliamentary election on Monday 21 October. Polling shows a tight race. The latest 10 major published polls (for what polling is worth) conducted from 11 through 16 October shows the following: Overnight tracking this week by CBC shows the Liberal Party moving up...
Bad Tariff Idea; Hurdles to New Breeding Techniques
Bad Tariff Idea In an effort to rationalize the imposition of tariffs by President Trump, some Republicans are trying to create support for them by directing their use toward politically attractive ends, such as aiding poor people. The concept of redirecting punitive duties has already been tri...
Morality Trade
Trade and industry are not just distorted by tariffs a la Donald Trump, but increasingly by sanctions intended to protect a political or moral principle. • India says it will not buy Malaysian palm oil because Kuala Lumpur disagreed with New Delhi’s actions in Kashmir. &b...
Ethanol versus Oil; Impeachment Answer/U.S.-China Outcome; Self-Designation
Ethanol versus Oil Global ethanol use is predicted to increase but its main purpose is not to replace oil but to boost octane and thus reduce air pollution. Indeed, it is apparently difficult to get rid of oil. Colombia University economists modeled the impact of a carbon tax on petroleum consu...
EPA Biofuel Plans Locks in E15
The Trump Administration rolled out its proposed reforms to the biofuels required volume obligations (RVO) today. • EPA will project the amount of SRE’s exempted in a program year by using as a reference the past three years’ volumes recommended by the Department of...
What the Trade Deficit Says about the U.S. Economy
USDA released its weekly sales report last week with some mixed news, but another trade report has some interesting insights into the overall economy: the August international trade report from the Department of Commerce. The U.S. trade deficit in all goods and services was $54.9 billion...
Game of Chicken; Hard and Fast Numbers; Glyphosate Addiction
Game of Chicken U.S. officials were celebrating China’s announcement that after half a dozen years of bogus excuses for keeping out American poultry, Beijing opened its market. The announcement came a week after the U.S. announced the opening of its market to cooked Chinese poultry meat...
Livestock Round Up
China Opens to Chicken On 31 October, we reported that its was expected that broilers would be included in any U.S. China trade deal, and although that deal remains elusive, China announced today that it would open its market up to U.S. poultry. The access is effective immediately. As we...
Expanded Trade War Tools; Olive Dynamics
Expanded Trade War Tools The Trump Administration expanded its areas of attack on the WTO, bringing in questions about procedures and allocation of resources. The multi-pronged attack is intended to further pressure the institution into reform of its appellate process and other perceived defici...
China versus USMCA; Global MRL’s
China versus USMCA The U.S. Congressional calendar is tight and Trump trade negotiators only have so much band width. This is leading some in the Washington trade community to speculate that the White House will emphasize USMCA passage in the next few weeks. President Trump has backed away from...
Cold Weather, But Natural Gas at Near Record Inventories
Last week we reported on the backlog of propane deliveries across the Corn Belt and noted that farmers who have the capability to use natural gas have a relative advantage. Propane stocks are very near the top of their five-year average, but most of the inventory is in the Gulf, positioned for...
Brazil Disses G20; Narrow Trade Benefits
Brazil Disses G20 Some developing countries came out last week for more generous WTO terms, including expanded special and differential treatment and other forms of so-called policy space to avoid market-based policies. Sounding like an echo of the Trump Administration, the U.S. - leaning Bolso...
Will Technology Complicate the Next Farm Bill?
In a recent interview with Politico, House Agriculture Committee chairman Collin Peterson (D-Minnesota) confirmed that he hasn’t decided whether he will run for re-election in 2020. A big factor in his forthcoming final decision: the 2022 farm bill. According to Peterson, "It's gett...
USMCA Down, Now Up; Buy the Rumor – How’s That Working Out?; WTO Showdown
USMCA Down, Now Up U.S. House Democrats are sounding more positive about their ability to pass USMCA, though it is unclear whether it will be this year or next. They are being warned about attempting passage in a presidential election year, but this isn’t the old days before social media...
More Money, More Problems
USDA Secretary Sonny Perdue announced that his agency was “authorized” to make the second round of 2019 Market Facilitation Program (MFP) payments. The program set aside $14.5 billion to be made in three tranches. So far, $6.7 billion has been sent out under the 2019 version of MFP,...
Trump Effect; China to Create Farmland
Trump Effect Deborah Elms, Executive Director of the Asian Trade Centre in Singapore, writes in the Nikkei that President Trump’s demand that more countries give up their classification as “developing” countries will “be a legacy that long outlasts the Trump administrati...
PRC Pattern Against U.S.; Nationalization’s Limitations
PRC Pattern Against U.S. A final trade agreement between the U.S. and China remains elusive, with Beijing now insisting on more extensive tariff elimination by Washington. As if to highlight the power of its position, China announced that it will buy $100 million worth of European pork in 2020...
More CAP Bashing; USMCA Political Dealing; Trade War’s Cost
More CAP Bashing A reported 2,500 scientists have written the European Parliament advising reform of the Common Agricultural Policy to address biodiversity, yet their proposed solution hardly seems scientific. They want policy to end intensive and “factory” farming. It is true that...
Propane Bottleneck in Corn Belt
Back on 22 July, we wrote … this year’s corn crop will likely have a very high moisture content. There hasn’t been a need for drying in the past five or so years, so that will add a new wrinkle to storage and the corn market this year. And that has turned out to be the...
CAP: Reaping What it Sows
New York Times reporters investigated the operation of the Common Agricultural Policy and reported today that it is used for “corruption and self-dealing in Central and Eastern Europe. Basically, land sales and consequently the payments that go with them are manipulated by political leade...
Nothing but Politics Ahead
As of today, there are 365 days until the 2020 elections. That will cast a big shadow on all Congressional activity from here on out. For the Presidential primaries, there are 91 days until the Iowa caucuses and 99 days until the New Hampshire primary. That could cast a big shadow on Congress&r...
Unnecessary Protectionism; Solving the Wrong Problem; GSP Leverage
Unnecessary Protectionism The pro-trade group, Hinrich Foundation, correctly calculates that the relative commercial strengths of the U.S. and Brazil make them perfect free trade agreement partners. After all, the U.S. is more competitive in capital goods, consumer products and machinery, while...
Latest Economic Data’s Relevance to Farm Economy Outlook
The Federal Reserve cut interest rates by 25 basis points this week, for the third time in a row. The new target for the federal funds rate is now 1.5 to 1.75 percent, which was what the equity markets were hoping for. Both the S&P 500 and Nasdaq indexes hit intraday recor...
USMCA Trouble; Thai Troubles; Farmers versus the Facts
USMCA Trouble U.S. House Ways & Means trade subcommittee member Bill Pascrell (D-New Jersey) says he is leaning toward voting against USMCA because the Mexicans are not doing enough meaningful labor reform. Organized labor in the U.S. has taken a strong line, demanding actions by Mexico tha...
U.S. – China Should Agree on Fake
In addition to losing a place for a planned signing after Chile canceled hosting next month’s APEC meeting, the U.S. – China Phase One trade agreement is reportedly stalled over agricultural purchases. It is somewhat ironic that the leaders of a non-market economy are having to educ...
House Biofuel Hearing on “Abuse of Secret Waivers” - Octane Standard Proposed
The House Energy and Commerce Committee held a hearing this morning entitled, “Protecting the RFS: The Trump Administration’s Abuse of Secret Waivers” about the small refinery exemption (SRE) process. Specifically, the hearing focused on a legislative proposal sponsored by Hou...
The End of U.S. Agricultural Exports; Labor Blocks USMCA
The End of U.S. Agricultural Exports Agriculture is the first sector receiving retaliation in trade disputes and there is no end in sight for trade wars. The Trump Administration contention that the U.S. has fared badly over the past 25 years of the WTO is not unique, it is largely shared by ma...
17 Days Left for USMCA and BTC; Shorter Time for Appropriations
There are only 18 days scheduled on the legislative calendar before Congress recesses for Christmas. There is a lot to do, which Congress will have to balance with its impeachment inquiry – a contentious issue which is not fostering much bi-partisan nor bi-cameral cooperation. The recent...
Argentine Election Impacts; Technological Sovereignty; Your Survey Answer; Food Trends
Argentina Election Impacts Argentines went to the voting booths for a general election yesterday (27 October) that was deemed fateful for agriculture. As the public opinion polls predicted, Alberto Fernández and Cristina Fernández de Kirchner won and will become President and Vice...
Ending EU’s Big Ag; Whipsaw on China
Ending EU’s Big Ag The French government institution France Stratégie issued a report calling for a complete overhaul of the Common Agricultural Policy (CAP) and not just a tweaking. The proposal calls for compensating farmers for their employment rather than for their agricultural...
Canadian Ag Policy, Eh?; Korean Example at OECD
Canadian Ag Policy, Eh? After winning a plurality of seats but not a majority, Justin Trudeau and his Liberal Party will have to govern as a coalition and no one expects much to happen, especially in rural western Canada. Western Canada, where the Conservatives control politics, is agriculture...
Breakthrough for Farm Labor Bill in Congress
Since 2011, there have been more than two dozen farm labor reform bills proposed in the U.S. Congress with no major progress to addressing the issue of agricultural workers. This week, a bipartisan compromise bill will be introduced that has a better than 50/50 chance of passing, despite the ai...
WTO Will Be Fixed; Europe’s Poultry Squawks
WTO Will Be Fixed Former WTO Deputy Director Alan Wolff told a Washington audience this week that the Appellate Body situation can be resolved but probably not before the 1 December deadline. He noted that every WTO member professes to support the institution and its dispute settlement function...
CAP Battle Tomorrow; Weaponized Trade Policy; Too Much Internet
CAP Battle Tomorrow Environmental groups will be leading protests tomorrow as the new European Parliament (EP) meets in Strasbourg. Using small farmers as their backdrop, they are demanding that the EP rewrite the Common Agricultural Policy (CAP) to give less support to large farmers and spend...
SRE Saga Continues; Administration Ready to be Done
As we’ve noted, both the biofuels and petroleum industry are less than impressed with the Administration’s plan to reallocate SREs as a supplement to the 2020 required volume obligations (RVOs). Both industries have reacted negatively and RINs prices have dropped, but the plan is un...
The Evolving Trading System; CAP’s Fault; Fooled Foodies
The Evolving Trading System WTO Director General Roberto Azevêdo laments that people are forgetting the importance of a rule-based system of economic cooperation. Former Clinton Administration trade negotiator Harry Broadman laments that under President Trump, the U.S. has become more lik...
Canadian Federal Elections and Ag Trade
Canada will hold its federal parliamentary election on Monday 21 October. Polling shows a tight race. The latest 10 major published polls (for what polling is worth) conducted from 11 through 16 October shows the following: Overnight tracking this week by CBC shows the Liberal Party moving up...
Bad Tariff Idea; Hurdles to New Breeding Techniques
Bad Tariff Idea In an effort to rationalize the imposition of tariffs by President Trump, some Republicans are trying to create support for them by directing their use toward politically attractive ends, such as aiding poor people. The concept of redirecting punitive duties has already been tri...
Morality Trade
Trade and industry are not just distorted by tariffs a la Donald Trump, but increasingly by sanctions intended to protect a political or moral principle. • India says it will not buy Malaysian palm oil because Kuala Lumpur disagreed with New Delhi’s actions in Kashmir. &b...
Ethanol versus Oil; Impeachment Answer/U.S.-China Outcome; Self-Designation
Ethanol versus Oil Global ethanol use is predicted to increase but its main purpose is not to replace oil but to boost octane and thus reduce air pollution. Indeed, it is apparently difficult to get rid of oil. Colombia University economists modeled the impact of a carbon tax on petroleum consu...
EPA Biofuel Plans Locks in E15
The Trump Administration rolled out its proposed reforms to the biofuels required volume obligations (RVO) today. • EPA will project the amount of SRE’s exempted in a program year by using as a reference the past three years’ volumes recommended by the Department of...
What the Trade Deficit Says about the U.S. Economy
USDA released its weekly sales report last week with some mixed news, but another trade report has some interesting insights into the overall economy: the August international trade report from the Department of Commerce. The U.S. trade deficit in all goods and services was $54.9 billion...