Thursday June 14 Ag News

Nebraska Hosts Chinese Pork Producers

Nebraska soybean farmers fostered trade relationships over lunch with visiting Chinese pork producers last Friday.

The tour, coordinated by the United States Soybean Export Council (USSEC), brought producers from various Chinese organizations to Illinois, Iowa, Nebraska, South Dakota and Minnesota to meet with pork industry experts and farmers.

Cale Buhr, market development coordinator for the Nebraska Soybean Board, presented to the group about Nebraska soybean quality and how it impacts the pork industry. In 2016, Nebraska exported $1.07 billion of soybeans and soybean products to China—51 percent of total soybean production. Buhr explained how U.S. soybeans contain higher amino acid content than competitors’ and how that affects the overall quality of the feed.

“It’s important to explain to these producers that U.S. soybeans continue to create the highest quality feed for them,” Buhr said. “Our goal is to use our time with them to listen to what they have to say and sustain a preference for U.S. soybeans.”

Nebraska Soybean Board member Richard Bartek of Ithaca, Neb., attended the lunch. No stranger to hosting trade mission trips from other countries, Bartek said he values the chance to meet foreign trade partners.

“In the U.S. we produce more than we can consume, and China is our biggest foreign buyer, so it’s always very nice to meet with people who are using our soybean commodities in another country,” Bartek said. “I think they came away understanding we work hard to see that they get a good product.”

This tour was one of many the Nebraska Soybean Board will host in partnership with USSEC in 2018. Bartek views the trips as an important opportunity for soybean farmers.

“It does the soybean industry a lot of good if we can have a personal relationship with our foreign buyers and our end users in this country as well,” Bartek said.



 Smith Announces New Staff Member Jacy Spencer

Congressman Adrian Smith (R-NE) announced the addition of Jacy Spencer to his Grand Island staff, who will serve as Community Liaison - Agriculture Specialist.

“I’m happy to announce Nebraska native Jacy Spencer will join my staff,” Smith said. “Jacy will serve as a community liaison focusing on agriculture and I have no doubt she will be a great asset to Nebraska’s Third District.”

Spencer has strong ties to the Nebraska Sandhills. Her family homesteaded land east of Brewster in 1886 and has been ranching there since. Spencer is a graduate of the University of Nebraska-Lincoln where she studied agricultural economics and minored in animal science and entrepreneurship. She joins Smith’s staff after completing policy internships in Washington, D.C. with the National Corn Growers Association, the National Cattlemen’s Beef Association, and the Public Lands Council.

Third District residents in need of assistance are encouraged to contact Smith’s Grand Island office at 308-384-3900, his Scottsbluff office at 308-633-6333, or his Washington, D.C. office at 202-225-6435.



This Week's Drought Summary
droughtmonitor.unl.edu
Over the last week, dry conditions continued in the Desert Southwest and in parts of the Central Rockies, leading to drought persistence and degradation in these areas. Farther east across the Great Plains, scattered thunderstorms led to some areas improving or staying out of drought, while some areas that missed the rain were degraded. In the Upper Midwest and Northern Plains, precipitation patterns also dictated areas which experienced degrading and improving conditions. Near normal or wetter than normal conditions occurred over most of the eastern United States, where few changes to the USDM depiction were made.

Midwest
June warmth continued across the Midwest over the past week with temperatures of 6 or more degrees warmer than normal recorded in southwest Illinois, much of Missouri, and central and western Iowa. Although rain occurred over large sections of the region, pockets of continued dryness and high temperatures resulted in low streamflows, soil moisture deficits, and vegetation stress and led to the introduction of severe drought in northeast and central Missouri and southeast Iowa as well as a small expansion of moderate drought. Heavy rains in Illinois, Indiana, and Iowa, led to the removal of all or parts abnormally dry areas. Farther north, dry conditions in the Michigan Upper Peninsula, northern Wisconsin, and far east-central Minnesota led to the expansion of abnormally dry conditions where short term precipitation deficits continued to build.

High Plains
Significant rainfall fell in parts of the High Plains region, while most of the mountainous areas remained dry. Thunderstorms in northeast Colorado, Nebraska, and northwest and eastern Kansas delivered between 0.5 and 3 inches of rain, helping to prevent additional drying caused by the high temperatures. Similar rainfall totals in southwest Kansas were enough to lessen precipitation deficits and result in an improvement from extreme to severe drought. Aside from the Black Hills, much of the Dakotas saw rainfall amounts over a half inch, with some areas exceeding 2 inches. This rainfall led to the removal of abnormal dryness in some areas west of the Missouri River in South Dakota and far southern North Dakota. Recent rainfall also helped decrease moderate drought in northwest South Dakota, though if recent hot weather and a high atmospheric demand for moisture continues, a reversion back to moderate drought conditions may occur. Severe drought was reduced in coverage in north-central North Dakota, where precipitation deficits over multiple time scales had decreased sufficiently for an improvement. Meanwhile, over the central Rockies, continued warm, dry weather exacerbated longer term precipitation deficits leading to an expansion of drought and abnormal dryness in north-central Colorado and south-central Wyoming.

Looking Ahead
The National Weather Service medium range forecast calls for two significant areas of wet weather over the next 7 days (June 13 to June 20). Widespread and potentially heavy rainfall is expected to bring 2 to 5 inches of rain to coastal and central Texas and southern Louisiana. Rainfall may also extend into the Southern Plains and the remainder of the Gulf Coast region.

Farther north, showers and thunderstorms are likely from the Northern Rockies to the High Plains and Upper Great Lakes. Rainfall over the northern tier is likely to be locally heavy (3 to 5 inches) creating the potential for isolated flooding. In contrast, dry weather is expected to prevail over the Pacific Coast and the drought inflicted areas of southern California, southern Nevada, and western Utah.



Agriculture Associations Appeal to Congress: We Need #TradeNotTariffs

After weeks of engaging with the Trump Administration to gain insight into the future of trade tariffs, agriculture producers and related industries dependent on exports to China are turning to Congress for help.

The White House has declared that by June 15 it would announce its final list of $50 billion in Chinese products that would be subject to 25 percent tariffs under Section 301 of the Trade Act of 1974. In response, China’s Commerce Department announced several months ago that it would impose retaliatory tariffs on 106 U.S. goods amounting to roughly $50 billion in imports.

In the announcement, China specifically stated that it will impose a 25 percent tariff on imports of U.S. soybeans, a tax that could be devastating to growers of the number one U.S. agricultural export, with sales to China last year totaling $14 billion.

Davie Stephens, a Kentucky soybean grower and Vice President of the American Soybean Association (ASA), is among growers distraught over the prospect of tariffs on trade.

“Crop prices have dropped 40 percent in just the last five years, and farm income is down 50 percent compared to 2013. A recent study by Purdue University economists predicts that soybean exports to China could drop by a whopping 65 percent if China imposes a 25 percent tariff on U.S. soybeans. As a soy grower, I depend on trade with

China – China imports roughly 60 percent of total U.S. soybean exports, representing nearly 1 in 3 rows of harvested soybeans,” Stephens said.

Soybeans are one of a number of crops that could see steep and lasting effects if China retaliates against U.S. tariffs.

“America’s wheat farmers are experiencing continued drought, historically low commodity prices, and trade uncertainty. Adding a 25 percent tariff on exports to China for U.S. wheat is the last thing we need during some of the worst economic times in farm country,” stated National Association of Wheat Growers (NAWG) President Jimmie Musick, a wheat farmer from Sentinel, Okla.

Echoing those concerns are members of National Corn Growers Association (NCGA). North Dakota farmer and NCGA President Kevin Skunes says, “Farmers are busy in the fields and need to be able to count on markets for their crops when it comes harvest time. They cannot afford the immediate pain of retaliation nor the longer term erosion of long-standing market access and economic partnerships with some of our closest friends and allies.”

Retaliatory tariffs imposed by China would not only directly affect America’s producers, but also tangential industries that support agriculture, a concern that is pressing among members of the Association of Equipment Manufacturers (AEM).

“On behalf of the 1.3 million equipment manufacturing workers our industry represents, we urge the Trump Administration to refrain from putting in place economically damaging tariffs. We strongly oppose a trade war with China because no one ever wins in these tit-for-tat disputes. As we have said repeatedly, tariffs are taxes on American consumers and will put good-paying U.S. manufacturing jobs at risk,” Dennis Slater, President, Association of Equipment Manufacturers (AEM) commented.

AEM, ASA, NCGA, NAWG are among the grower and industry groups whose members are asking Congress to convince the administration to halt tariffs and go back to the negotiating table. Under the hashtag #TradeNotTariffs, members of these organizations are also raising awareness on social media by sharing with the public what tariffs could mean for their livelihoods – and how severe that outlook could be.



Trump Approves Plan to Impose Tough China Tariffs

(AP) -- President Donald Trump has approved a plan to impose punishing tariffs on tens of billions of dollars of Chinese goods as early as Friday, a move that could put his trade policies on a collision course with his push to rid the Korean Peninsula of nuclear weapons.

Trump has long vowed to fulfill his campaign pledge to clamp down on what he considers unfair Chinese trading practices. But his calls for billions in tariffs could complicate his efforts to maintain China's support in his negotiations with North Korea.

Trump met Thursday with several Cabinet members and trade advisers and was expected to impose tariffs of at least $35 billion to $40 billion on Chinese imports, according to an industry official and an administration official familiar with the plans. The tariffs could reach $55 billion, said the industry official. The officials spoke on condition of anonymity in order to discuss the matter ahead of a formal announcement.

If the president presses forward as expected, it could set the stage for a series of trade actions against China and lead to retaliation from Beijing. Trump has already slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies, and his proposed tariffs against China risk starting a trade war involving the world's two biggest economies.

The decision on the Chinese tariffs comes in the aftermath of Trump's summit with North Korean leader Kim Jong Un. The president has coordinated closely with China on efforts to get Pyongyang to eliminate its nuclear arsenal. But he signaled that whatever the implications, "I have to do what I have to do" to address the trade imbalance.

Trump, in his press conference in Singapore on Tuesday, said the U.S. has a "tremendous deficit in trade with China and we have to do something about it. We can't continue to let that happen." The U.S. trade deficit with China was $336 billion in 2017.

Administration officials have signaled support for imposing the tariffs in a dispute over allegations that Beijing steals or pressures foreign companies to hand over technology, according to officials briefed on the plans. China has targeted $50 billion in U.S. products for potential retaliation.

Wall Street has viewed the escalating trade tensions with wariness, fearful that they could strangle the economic growth achieved during Trump's watch and undermine the benefits of the tax cuts he signed into law last year.

"If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt. Those are all historic ingredients for an economic slowdown," Gary Cohn, Trump's former top economic adviser, said at an event sponsored by The Washington Post.

But Steve Bannon, Trump's former White House and campaign adviser, said the crackdown on China's trade practices was "the central part of Trump's economic nationalist message. His fundamental commitment to the 'deplorables' on the campaign trail was that he was going to bring manufacturing jobs back, particularly from Asia."

In the trade fight, Bannon said, Trump has converted three major tools that "the American elites considered off the table" --- namely, the use of tariffs, the technology investigation of China and penalties on Chinese telecom giant ZTE.

"That's what has gotten us to the situation today where the Chinese are actually at the table," Bannon said. "It's really not just tariffs, it's tariffs on a scale never before considered."

The Chinese have threatened to counterpunch if the president goes ahead with the plan. Chinese officials have said they would drop agreements reached last month to buy more U.S. soybeans, natural gas and other products.

"We made clear that if the U.S. rolls out trade sanctions, including the imposition of tariffs, all outcomes reached by the two sides in terms of trade and economy will not come into effect," foreign ministry spokesman Geng Shuang said Thursday.

Beijing has also drawn up a list of $50 billion in U.S. products that would face retaliatory tariffs, including beef and soybeans -- a shot at Trump's supporters in rural America.

Scott Kennedy, a specialist on the Chinese economy at the Center for Strategic and International Studies, said the Chinese threat was real and helped along by recent strains exhibited among the U.S. and allies. "I don't think they would cower or immediately run to the negotiating table to throw themselves at the mercy of Donald Trump," Kennedy said. "They see the U.S. is isolated and the president as easily distracted."

Ron Moore, who farms 1,800 acres of corn and soybeans in Roseville, Illinois, said soybean prices have already started dropping ahead of what looks like a trade war between the two economic powerhouses. "We have to plan for the worst-case scenario and hope for the best," said Moore, who is chairman of the American Soybean Association. "If you look back at President Trump's history, he's been wildly successful negotiating as a businessman. But it's different when you're dealing with other governments."

The U.S. and China have been holding ongoing negotiations over the trade dispute. The United States has criticized China for the aggressive tactics it uses to develop advanced technologies, including robots and electric cars, under its "Made in China 2025" program. The U.S. tariffs are designed specifically to punish China for forcing American companies to hand over technology in exchange for access to the Chinese market.

The administration is also working on proposed Chinese investment restrictions by June 30. So far, Trump has yet to signal any interest in backing away.

"I think the tariffs are coming," said Stephen Moore, a former Trump campaign adviser and visiting fellow at The Heritage Foundation. "It really does depend on whether China makes a move to ameliorate Trump's concerns, and so far they haven't."



NAFTA Talks Will Extend Into Summer, Canadian Official Says

Discussions on the North American Free Trade Agreement will continue into the summer, Canada's Foreign Minister Chrystia Freeland said following a face-to-face meeting in Washington with the Trump administration's chief trade envoy on Thursday.

The pledge to carry on with NAFTA renegotiations comes on the heels of a tumultuous Group of Seven summit in La Malbaie, Quebec, which ended with President Donald Trump rejecting a final communique by the leaders over comments by Canadian Prime Minister Justin Trudeau on a U.S.-Canada trade row. The U.S. had previously agreed to sign on.

Trade analysts and officials say relations between the U.S. and Canada have hit a low point after the U.S. extended steel and aluminum tariffs to include Canada, the European Union and Mexico, which is likely to complicate talks on NAFTA. Canada has announced retaliatory tariffs that are set to come into effect July 1. Trump warned retaliatory tariffs would be a mistake.

"All three countries are clear that meaningful progress has been made to date and we need to keep working hard to get to a deal on a modernized NAFTA," Freeland told reporters in Washington, after a one-hour meeting with U.S. Trade Representative Robert Lighthizer. Although Mexican elections are approaching on July 1, the three "will be working hard over the summer," she said.

A representative for Lighthizer wasn't immediately available for comment on the meeting. Freeland said she also discussed NAFTA's fate with Mexico's Economy Minister Ildefonso Guajardo over the weekend.

NAFTA talks have stalled over content rules for the auto industry, as well as U.S. demands to eliminate dispute settlement mechanisms from the pact and introduce a so-called sunset clause under which NAFTA would expire in five years unless explicitly renewed by its members.

Trudeau has been adamant Canada wouldn't accept a sunset clause, and the issue foiled an attempt by the Canadian leader to patch together an agreement in late May.

NAFTA talks will face an additional hurdle this summer as the U.S. heads into midterm elections. Further complicating matters are possible U.S. tariffs on imported vehicles -- something the president alluded to in a tweet attacking Canada and Trudeau in the aftermath of the G-7 summit.

Freeland also participated in a closed-door meeting with members of the Senate Foreign Relations Committee on Wednesday, one day before her meeting with Lighthizer. During the meeting, she expressed gratitude toward Americans but also pain over the tension in the relationship with the U.S., according to one lawmaker in the room.

Asked for her opinion of reaching a bilateral agreement between the U.S. and Canada -- a notion Trump has brought up frequently -- Freeland said that as a practical matter such an arrangement would be difficult to implement, the lawmaker said. Any agreement would have to be ratified by Congress, raising a collection of thorny issues that could be hard to sort out.

A spokesman for Freeland declined comment on the U.S. lawmaker's remarks because the meeting was held behind closed doors. On Wednesday, Freeland told reporters that she had discussed tariffs and U.S.-Canada relations during the meeting, among other topics.



U.S. Drives for More Inclusive, Science-Based Approach by WHO on Dairy Nutrition Recommendations

A controversial topic that the National Milk Producers Federation first tackled in 2016 – international guidelines discouraging the consumption of milks by toddlers – was again on the agenda during a World Health Organization (WHO) meeting last month. The World Health Assembly (WHA) also considered a recommendation to advance a WHO-proposed “toolkit” that would limit the ability of the private sector to help shape nutrition policies, including those affecting dairy consumption.

The WHA is the annual convening of World Health Organization countries to issue resolutions and set the path for future WHO programming. Given the importance of international organizations in shaping policies and guidelines, NMPF has been increasingly focused on threats to global dairy consumption and trade posed by some misguided approaches through the WHO.

Together with U.S. partners like the U.S. Dairy Export Council (USDEC), NMPF educated the Trump Administration on the importance of the issue to ensure that the United States was prepared to take a firm stance in support of child nutrition and open-door policy-making. To cultivate allies, NMPF partnered with the Pan-American Dairy Federation (FEPALE) to share information on the proposal’s impacts on dairy sectors in the Americas, and support efforts to raise concerns with governments across Latin America. Those efforts ultimately resulted in a WHA resolution that the United States was able to support and that addressed our strongest concerns.

The discussion on dairy consumption by young children now shifts to the Codex realm, where the organization’s leadership will consider whether to preserve Codex’s independent and irreplaceable role as the world’s leading science-based, consensus-driven, standard-setting organization.