Tag Archives: Trade

Farmers are seeing payments from the first round of the latest trade aid in the mailbox. Farm Service Agency director Richard Fordyce says the first payments are being mailed out now, and farmers are reporting receiving the checks.

Round one of the three potential payments is 50 percent of the overall amount farmers may receive. USDA expects up to $14.5 billion of payments will be sent to farmers, pending on the trade negotiation progress. Another 25 percent of the total would go out later this fall, if the Department of Agriculture deems the payments necessary. The final round, if needed, is planned for some time around January.

The payments are meant to offset the losses stemmed from the Trump trade agenda and trade war with China. Payments range from $15 to $150 per acre, depending on location. Payments are also available for dairy and hog producers, under certain reporting parameters.

This is the second time the Trump administration has used the Market Facilitation Program since the trade war with China began.

The latest tomato agreement with Mexico shows the United States can work out trade disputes without resorting to tariffs and underscores the need to ratify the USMCA, the American Farm Bureau Federation said today.

 

“We are pleased and relieved to see progress with one of our largest and most important trading partners,” AFBF President Zippy Duvall said. “Mexico is a vital trading partner for American farmers and ranchers. We need this agreement and are grateful negotiators capitalized on the close relationship that exists between our two nations. We look forward to more progress on the trade front and are counting the days until the USMCA becomes law.”

 

Among other things, the tomato deal lifts current preliminary duties of 17.5% against Mexican tomatoes and suspends an anti-dumping investigation against Mexican producers begun earlier this year. The agreement also reinstates reference prices for various kinds of tomatoes to assure fairer pricing by Mexican competitors. The agreement is expected to take effect September 19, 2019 following a 30-day comment period.

 

All parties, including growers, back today’s agreement.

A coalition of U.S. dairy groups is urging the Trump administration to reach a trade agreement with Japan quickly. More than 70 dairy groups and companies sent a letter to Trade Representative Robert Lighthizer and Agriculture Secretary Sonny Perdue this week asking the administration to finalize a strong trade deal with Japan quickly.

The coalition, including the National Milk Producers Federation and U.S. Dairy Export Council, say Japan is an established market with a growing demand for dairy products. The letter states that a robust trade agreement with Japan “will bring a much-needed boost to the economic health of the U.S. dairy industry.”

The letter says the Japan-EU agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership have allowed the European Union, New Zealand and Australia to position themselves to take sales from the U.S. dairy industry. The U.S. exported $270 million in dairy products to Japan in 2018. Once the trade deals are fully implemented, the U.S. risks losing $5.4 billion in total export sales.

The world’s biggest pork consumer bought just over 10,000 tons of U.S. pork sometime between August 2-8. Reuters says that was the biggest purchase of American pork in almost two months.

The pork purchase is due for shipment this year as African Swine Fever continues to ravage the world’s biggest pork herd. The Chinese Commerce Ministry had said on August 5 that Chinese companies stopped buying U.S. farm commodities after yet another escalation in the trade war with America. Reuters says it’s not clear if the pork was bought before or after the August announcement. Analysts say the sales are seen as a sign that China needs meat from the United States to help offset the death loss of millions of pigs.

Steve Meyer is an economist with the commodity firm Kerns and Associates, who says, “It’s a new booking, which is positive.” China’s duty on American pork sits at a whopping 62 percent. President Trump backed off last week on part of his plan for 10 percent tariffs on all remaining Chinese imports starting on September 1. Late last week, China says it would counter the latest U.S. tariffs.

President Donald Trump’s recent comments on wheat exports to Japan have generated some negative press among one of his biggest groups of supporters.

The Hagstrom Report says when the president was speaking in Pennsylvania, one of the topics was the U.S. trade deficit with Japan. Trump said, “They send thousands, even millions of cars to us. We send them wheat. That’s not a good deal. And they don’t even want our wheat. They do it because they want us to at least feel that we’re okay.”

The National Association of Wheat Growers responded quickly via Twitter. “Mr. President, Japan is the number one market for U.S. wheat exports on average, where we hold just over 50 percent of the market. They don’t buy our wheat because ‘they want us to feel okay.’ They buy it because it’s the highest-quality wheat in the world. That’s not fake news.”

The negative reaction to Trump’s statement followed farmers venting about the administration’s policies when Ag Secretary Sonny Perdue appeared at Farmfest in Minnesota.

*Editor note*   Ag Secretary Perdue will be at  the Nebraska State Fair on Friday, August 23 for a town hall event at 11:30 in the Raising  Nebraska Building.

The United States will be able to nearly triple its annual duty-free exports of beef to the European Union (EU) over the next seven years under a new agreement signed today at the White House.

American ranchers will be guaranteed a bigger share of Europe’s beef market, with annual duty-free exports expected to grow from $150 million to $420 million when the agreement is fully implemented.

“American ranchers produce the best beef in the world. Thanks to President Trump’s leadership, this new agreement ensures that American ranchers can sell more of that beef to Europe,” said U.S. Trade Representative Robert Lighthizer, who signed the agreement with the Honorable Jani Raappana of Finland, representing the Presidency of the EU, and Ambassador Stavros Lambrinidis of the Delegation of the EU.

The new agreement negotiated by the Trump Administration establishes a duty-free tariff rate quota (TRQ) exclusively for the United States. Under the agreement, American ranchers will have an initial TRQ of 18,500 metric tons annually, valued at approximately $220 million. Over seven years, the TRQ will grow to 35,000 metric tons annually, valued at approximately $420 million.

Under the current agreement, U.S. duty-free beef exports to the EU are only approximately 13,000 metric tons annually, valued at approximately $150 million, and risked declines going forward.

Background
In 2016, the National Cattlemen’s Beef Association, U.S. Meat Export Federation, and the North American Meat Institute requested the U.S. Trade Representative to take tariff action under Section 301 of the Trade Act of 1974 to enforce the World Trade Organization dispute finding in favor of the United States against the EU’s ban on the use of hormones in cattle production. USTR held a public hearing on February 15, 2017.

Negotiations resulted in a new agreement, which was approved by the European Council on July 15, 2019. It will go into effect following the European Parliament’s approval, which is expected this fall. With the EU providing a country specific duty-free quota for U.S. beef, the United States has agreed as a part of the agreement signed today to conclude the proceedings under Section 301 of the Trade Act of 1974 initiated in December 2016.

 

Fischer Statement on U.S.-EU Beef Trade Agreement

U.S. Senator Deb Fischer (R-Neb.), a cattle-rancher and a member of the Senate Agriculture Committee, released the following statement after President Donald Trump announced a beef trade deal between the U.S. and the European Union (EU):

“The Beef State welcomes the news of this new trade agreement between the U.S. and the EU. Nebraskans produce some of the most high-quality and delicious beef there is and this deal marks another opportunity for our families, communities, and businesses. I look forward to continuing to work with this administration on opening more markets for our state’s hardworking ag producers.”

The trade deal announced today will allow the U.S. to export 35,000 tons of hormone-free beef to the EU per year.

 

Ricketts Praises President Trump’s EU Agreement to Increase Beef Exports

Today, Governor Pete Ricketts issued a statement following news that President Donald J. Trump signed a new deal with the European Union (EU), which will increase beef exports from the United States to the EU.

“For years, we have been working to increase the amount of beef Nebraska exports to the European Union,” said Governor Ricketts. “This agreement from President Trump presents a major growth opportunity for our state, and will help Nebraska build on our successes from the last 15 years. As we seize this great opportunity, I look forward to taking our message about Nebraska beef on the road during my trade mission to Germany this November.”

In 2005, only five percent of the U.S. beef entering the EU came from Nebraska. By, 2018, Nebraska’s share rose to 53%, and was valued at $124.3 million.

President Trump’s new deal will allow the U.S. to almost triple the amount of beef it is currently exporting. As the nation’s leader in commercial red meat production and a top three exporter of US beef, Nebraska agriculture stands to benefit greatly from the expansion of this marketplace.

In 2015, Governor Ricketts led a trade mission to the EU to promote Nebraska products.

 

Statement by Steve Nelson, President, Regarding European Union Deal on U.S. Beef

“President Trump’s announcement that the European Union will grant increased access to the European markets for U.S. beef is great news for Nebraska beef producers. Quality beef is in high demand in the European Union, particularly in countries like Germany and Italy. Today’s action will only boost opportunities for Nebraska beef producers to fill these markets moving forward.”

“Under the deal, U.S. farmers will ultimately be entitled to nearly 80 percent of the European Union’s quota on hormone-free beef over the next seven years. The quota is the result of a long-standing dispute between the two countries that led to several dispute settlement proceedings with the World Trade Organization that stem back to the European Union’s decades old decision to ban hormone-treated meat, despite overwhelming scientific evidence the product is safe for consumers.”

“Hopefully, today’s deal is a positive step in building relations to secure a bilateral trade deal with the European Union to open even greater access for U.S. agriculture products. Nebraska shipments of beef and beef products to the European Union ranged from $120-$143 million over the last five years. That’s between 40-50 percent of total U.S. shipments. With the agriculture economy struggling and the recent difficulties in trade negotiations with China, it’s critical we continue to grow agriculture market opportunities where we can.”

 

Secretary Perdue Statement on U.S. and E.U. Beef Agreement

U.S. Secretary of Agriculture Sonny Perdue issued the following statement after an agreement was signed between the United States and the European Union regarding beef trade between the two nations:

“Getting more US beef into the EU market is yet another example of President Trump expanding markets around the globe for our agriculture producers. EU consumers desire high quality products, and I have no doubt that when given the opportunity to purchase U.S. products we will see more Europeans choose to buy American. America’s farmers and ranchers are the most productive on earth and I thank President Trump and Ambassador Lighthizer for their continued work to promote the bounty of the American harvest across the world.”

 

USMEF Statement on Signing of U.S.-EU Agreement on Access for U.S. Beef

Today at the White House, U.S. Trade Representative Robert Lighthizer signed an agreement granting the United States a country-specific share of the European Union’s duty-free high-quality beef quota. U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom, who participated in the White House ceremony, issued the following statement:

This agreement provides more reliable and consistent access to the EU market and will be a tremendous boost for the U.S. beef industry. The agreement sends a very positive signal to customers in Europe who see a bright future for U.S. beef and to producers who are interested in expanding their non-hormone treated cattle (NHTC) business but have grown frustrated as they struggled to recover the additional production costs. USMEF greatly appreciates the tireless efforts of USTR and USDA to secure better access to this very high-value beef market.

The U.S. trade deficit shrunk slightly in June, as did the politically sensitive trade deficit with China, the principal target of President Donald Trump’s tariffs.

The gap between the goods and services the U.S. buys and what it sells abroad fell 0.3% to $55.2 billion in June from May, the Commerce Department said Friday. Exports declined 2.1% to $206.3 billion on declines in shipments of autos, computers, crude oil and consumer products. Imports also fell, 1.7% to $261.5 billion, on declines in crude oil and petroleum products.

On Thursday, Trump escalated trade hostilities again, announcing the U.S. will apply a new tariff of 10% on about $300 billion worth of products from China beginning Sept. 1. China on Friday threatened retaliation if those tariffs are enacted.

The deficit in the trade of goods with China fell 0.8% to $30 billion.

The U.S. has already applied tariffs of 25% on $250 billion worth of goods from China. China retaliated with tariffs on $110 billion in American goods, including agricultural products, in a direct shot at Trump supporters in the U.S. farm belt.

Trump has sought to reduce America’s persistent trade imbalance, which he sees as a sign of economic weakness and the result of bad trade agreements crafted by previous U.S. negotiators. He has slapped tariffs on foreign steel, aluminum, dishwashers, solar panels and on thousands of Chinese goods.

He also has renegotiated a trade pact with Canada and Mexico that awaits approval by Congress. The June trade deficit with Mexico was $9.9 billion, the highest on record.

Earlier this week, Trump’s trade negotiators completed a 12th round of talks with China aimed at pressuring Beijing to curb its aggressive push to challenge American technological dominance. That includes curtailing cyber theft and forcing foreign companies to hand over proprietary tech information. More talks are planned in September.

Economists say the trade gap is the product of economic factors that don’t respond much to changes in trade policy: Americans buy more than they produce, and imports fill the gap. A strong U.S. dollar has also put American exporters at a price disadvantage overseas.

On Wednesday, the Federal Reserve cut its key interest rate for the first time in a decade, partly to counter the impact of Trump’s trade wars. A looming concern at the Fed is that Trump’s trade conflicts, with his punishing tariffs on hundreds of billions of dollars in Chinese and European goods, have escalated the uncertainty for American companies. Some companies have put off plans to expand and invest.

A survey by the American Chamber of Commerce in South China has found that U.S. manufacturers suspended nearly half their investment projects valued above $250 million because of uncertainty in U.S.-China trade relations.

On Thursday, the Institute for Supply Management, an association of purchasing managers, said its manufacturing index slipped for the fourth consecutive month. Although manufacturing sector has expanded for 35 straight months, that growth has slowed, with many blaming Trump’s aggressive use of tariffs.

Tensions escalated Thursday afternoon when Trump tweeted that the negotiations would continue, but blamed China for not following through on stopping the sale of fentanyl to the United States or purchasing large quantities of farm goods such as soybeans.

On Friday, China’s government accused Trump of violating his June agreement with President Xi Jinping to revive negotiations aimed at ending a costly fight over Beijing’s trade surplus and technology ambitions.

Trump’s announcement surprised Wall Street on Thursday, leading to a 600 point swing on the Dow. The Dow ended the day down almost 300 points and appears to be headed lower again Friday.

Tom Vilsack, president and CEO of the U.S. Dairy Export Council (USDEC), testified before the Senate Finance Committee and urged Congress to swiftly ratify the United States-Mexico-Canada Agreement (USMCA).

In addition to locking in a zero-tariff relationship with Mexico and increasing market access to Canada, USMCA also reforms Canadian pricing practices and addresses other nontariff barriers, like geographic indication requirements, that threaten U.S. sales. All told, USMCA will provide a $314 million-a-year boost to the dairy industry, according to the U.S. International Trade Commission.

“Speaker Pelosi and Ambassador Lighthizer are working closely together to address any outstanding concerns surrounding the implementation of USMCA,” he added. “I encourage the Senate to play a constructive role in these talks in order to produce a final agreement that can be quickly passed and signed.”

A group of 14 Democrats sent a letter to Speaker Pelosi urging her to bring a vote by the end of the year on USMCA. Treasury Secretary Steven Mnuchin has reportedly told colleagues that Speaker Pelosi has committed to a vote on the revised NAFTA trade deal by October, according to Axios and as reported by Jim Wiesemeyer, Pro Farmer’s Washington analyst. Speaker Pelosi denies that commitment. The Trump administration, Axios reported, asked Pelosi to allow a vote on the USMCA as a side agreement to the budget deal, but she refused to put anything in writing.

In June, USDEC and 34 of its members signed a letter alongside nearly 1,000 farm organizations and rural businesses asking Congress to approve USMCA. One of those organizations, the National Milk Producers Federation (NMPF), echoed support for Vilsack’s comments and urgency to bring USMCA to a vote.

“As Secretary Vilsack testified, USMCA delivers key wins for America’s dairy farmers and the exports that drive stronger sales. With USMCA, dairy farmers will see more export opportunities and greater trade certainty. Without USMCA, we lose out on $314 million in additional dairy exports. We also lose the benefit of the new rules this deal puts in place, such as key reforms to Canada’s dairy system and stronger safeguards for our cheese exports to Mexico,” said Jim Mulhern, NMPF President and CEO in a statement.

“We commend the Senate for spotlighting USMCA’s importance and strongly support the testimony offered by USDEC on how the agreement benefits dairy. To usher in USMCA’s improvements for dairy farmers and build momentum for additional trade agreements with key markets like Japan, we urge swift action to resolve any outstanding issues and secure approval of USMCA.”

U.S. and Chinese envoys held “constructive” trade talks on Wednesday, the White House said, after President Donald Trump rattled financial markets by accusing Beijing of trying to stall in hopes he will fail to win reelection in 2020.

The meeting, aimed at ending a tariff war over trade and technology, ended about 40 minutes ahead of schedule. Neither delegation spoke to reporters before U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin left for the airport.

But White House spokeswoman Stephanie Grisham said in a statement hours later that “the meetings were constructive,” and that talks are expected to resume in Washington in September, though exact dates were not announced.

According to the statement, the Chinese confirmed their commitment to President Donald Trump to buy more U.S. agricultural exports, something Trump had publicly been casting doubt on.

Economists had said quick breakthroughs were unlikely because the two governments face the same disagreements over China’s technology policy and trade surplus that caused talks to break down in May. Trump and President Xi Jinping agreed in June to resume negotiations but neither has given any sign of offering big concessions.

The dispute over U.S. complaints that Beijing steals or pressures companies to hand over technology has battered exporters on both sides and disrupted trade in goods from soybeans to medical equipment. Trump has raised tariffs on $250 billion worth of Chinese imports while Beijing responded by taxing $110 billion of U.S. products.

Chinese leaders are resisting U.S. pressure to roll back plans for government-led development of industry leaders in robotics, artificial intelligence and other technologies. Washington complains those efforts depend on stealing or pressuring foreign companies to hand over technology.

For their part, American negotiators are reluctant to cede to Chinese demands that punitive U.S. tariffs be lifted immediately. Trump wants to keep some penalties in place to ensure Beijing carries out any agreement.

Rhetoric on both sides has hardened, prompting suggestions U.S. and Chinese leaders are settling in for a “war of attrition.”

In Washington, Trump accused Beijing of wanting to stall through the 2020 presidential election in hopes of being able to negotiate with a more malleable Democrat. He said that if reelected, he would get “much tougher” with Beijing.

“China would love to wait and just hope,” Trump told reporters Tuesday.

“They’ll pray that Trump loses,” he said. “And then they’ll make a deal with a stiff, somebody that doesn’t know what they’re doing.”

Separately on Twitter, Trump warned that if he wins in 2020, “the deal that they get will be much tougher than what we are negotiating now … or no deal at all.”

Asian stock markets tumbled Wednesday after Trump’s comments. The Shanghai Composite Index shed 0.7%, Hong Kong’s market benchmark dropped 1.3% and Tokyo lost 0.9%.

Trump’s “aggressively tinged” remarks were a “stark reminder to investors that the U.S. and China are no closer to an agreement and, in fact, might be drifting farther apart,” Stephen Innes of VM Markets said in a report.

Negotiators in Shanghai were also expected to discuss the fate of telecom equipment giant Huawei Technologies Ltd. Washington put the company, China’s first global tech brand, on a security list in May that blocks purchases of U.S. components and technology.

The United States says Huawei is a national security threat, an accusation the company denies. Trump has said it could be a bargaining chip in the trade dispute.

Denver, CO– Herd expansion, export markets, corn crop expectations and swine fever ramifications are among the factors that will have an impact on the upcoming U.S. cattle market, Randy Blach, CEO of CattleFax, told more than 700 attendees of the 2019 Cattle Industry Summer Business Meeting near Denver July 30, 2019. Blach was keynote speaker at the Opening General Session of the meeting, a gathering for leaders of the National Cattlemen’s Beef Association, Cattlemen’s Beef Board, American National CattleWomen and National Cattlemen’s Foundation.

Blach told the group that U.S. cattle herd expansion had slowed to a crawl, with the lion’s share of growth behind the industry. That slowing had been expected, he said. Record beef, pork and poultry supplies are having an impact on the market. For that reason and with record meat consumption expected next year, it’s critical for export markets to be opened and trade policy questions to be answered, he said.

However, consumers have responded well to the increased quality of beef production in this country, Blach said. There has been a 50 percent increase in prime and choice production over the past 15 years, and 80 percent of U.S. beef is now Prime and Choice. Beef has captured an additional 7 percent of market share of meat spending from poultry and pork. “It’s a great, great success story,” Blach said. “We have to continue to be the highest quality protein provider, delivering products we can stand behind that consumers love.”

Blach pointed out that the average consumer works only 12 minutes to be able to pay for one pound of high quality Choice beef. “That’s a bargain,” he said.

Corn crop uncertainty centered around the number of acres planted and yield potential is also of concern, as the impact of wet weather in grain producing segments of the country will be unknown until the middle of August, Blach said. Furthermore, ramifications of swine fever in China will add some unknowns to the equation. “We’re looking at a lot of volatility as a result of what’s happening in that part of the world,” he said.

“We have to remember that only 4 percent of the world’s consumers live in this country,” Blach added. “Currently 14 percent of beef and beef by products are exported. More than 20 percent of the value of every fed steer is generated by exports. We need to have more outlets for not only our beef, but our poultry and pork.”

Blach said that while an economic recession could have some serious repercussions on the beef cattle industry, the bottom line for producers is profitability, which in general the industry has seen in recent history. “If we’re not profitable, we’re not sustainable,” he said. “I do believe we’re going to stay profitable as we go through this cycle.”

Blach’s comments reflected information shared with CattleFax members in a Long Term Outlook produced last week. The Outlook provides an up-to-date look at the factors influencing the U.S. cattle market and its producers.

The Summer Business Meeting gives industry leaders a chance to meet and discuss the direction of programs for 2020. Beef Checkoff committees made up of members of the Cattlemen’s Beef Board and directors on the NCBA Federation Division meet to assess authorization requests submitted by checkoff contractors, submitting their suggestions to the Beef Promotion Operating Committee, which meets in September. The BPOC will develop a plan and budget and submit its recommendation to the full Beef Board for authorization. The 2020 program must be approved by the U.S. Department of Agriculture before it can begin Oct. 1, 2019.

Meanwhile, NCBA policy committees meet to develop a game plan for the organization’s efforts to support and protect the U.S. cattle industry in Washington, D.C. and across the country beginning in January of 2020. These include livestock marketing; federal lands; agriculture and food policy; cattle health and well-being; property rights and environmental management and international trade.