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Articles of Interest- Thursday, April 4, 2019

Articles of Interest- Thursday, April 4, 2019

Trade with Mexico Important for U.S. Agriculture

MTN News – 04/03/2019

President Trump’s threat to close the border with Mexico could impact agricultural trade between the two nations. Agriculture groups are not reacting much to President Trump’s threat of a border closure.  They are, however, sharing how important trade with Mexico is for both U.S. agriculture and consumers…The disruption of trade could also impact Montana grain producers. Ledger, Montana farmer Chris Kolstad is chairman of the U.S. Wheat Associates and explained how important of a market Mexico is for U.S. wheat and barley. “Mexico was the number one buyer of U.S. wheat just a couple of years ago,” Kolstad explained. “In fact, I think they held that title for two straight years. Mexico is a very important market for wheat and for barley as well. They are taking a lot of malt barley. The craft industry is big in Mexico and they like Montana barley.” A border closure may also impact how Congress will vote on the new U.S. Mexico Canada Agreement (USMCA).

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Consortium Eyes Saudi Grains Organization Flour Mills

World-Grain – 04/03/2019

Saudi Arabia-based AlRajhi Holding Group is partnering with Dubai-based Al Ghurair to put together a bid to acquire four flour milling companies operated by Saudi Grains Organization (SAGO), according to a report from Reuters. Citing three sources familiar with the situation, Reuters said AlRajhi and Al Ghuriar are seeking an adviser to help raise financing for the purchase. The reports come a little less than a year after Saudi Arabi’s Council of Economic and Development Affairs approved a privatization program that paved the way for the potential sale of the four flour milling companies by SAGO. The privatization is one of the 12 key elements of Saudi Arabia’s Vision 2030, which is focused on creating jobs and supporting economic development. The flour mills have a combined daily milling capacity of 12,630 tonnes (wheat equivalent) and process 3.3 million tonnes of wheat annually.

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Japan – U.S. Trade Talks Likely to be Held April 15-16

Reuters – 04/02/2019

Japan and the United States are likely to hold their first round of trade talks in Washington on April 15-16, a Japanese government source with direct knowledge of the matter told Reuters on Tuesday. Japanese Economy Minister Toshimitsu Motegi told reporters earlier on Tuesday he would travel to the United States as early as this month to start negotiations with his counterpart U.S. Trade Representative Robert Lighthizer. U.S. President Donald Trump has made clear he is unhappy with Japan’s $69 billion trade surplus with the United States – nearly two-thirds of it from auto exports – and wants a two-way agreement to address it.

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Farmers Expect to Win Sino-U.S. Trade War

Successful Farming – 04/03/2019

U.S. and Chinese officials are scheduled to open a new round of ministerial-level negotiations on Thursday to resolve the trade war, and American farmers believe their sector will be a winner in the end. By a 3-to-1 ratio, producers polled for Purdue’s monthly Ag Economy Barometer said they expect the dispute, which has stunted agriculture exports, will be resolved in a way that benefits U.S. producers. A sizable portion of respondents – 45% – said a settlement with China was likely before July 1, according to results released by Purdue on Tuesday. Producers were ebullient, too, about prospects for exports, a key source of farm revenue. Some 68% said they expect farm exports to increase over the next five years, “the most optimistic perspective on ag exports since we first posed this question in May 2017,” said economists James Mintert and Michael Langemeier in summarizing the poll results.

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Trade a Concern as Farmers Prepare to Sow Spring Wheat

Brownfield Ag News– 04/03/2019

North Dakota Wheat Commission policy director Jim Peterson says while soybeans get most of the attention, trade with China is extremely important to American wheat growers. “Soybeans have obviously caught the headlines just because of the importance of China and dominance of that market. But for spring wheat, China has been a growing export market out of the Pacific Northwest. So (a resolution to the trade war) can’t happen soon enough.” China was the fifth-largest customer of U.S. wheat before the trade war began. “A lot of the operating notes were pretty tight this year, and the budget outlooks (were tight too). I know there’s some old crop to move and price yet, so we’re hoping to see sales even as the talks are going on. Hopefully we can get a few sales on the books.” He tells Brownfield Japan is another crucial market.

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Source: U.S. Wheat Associates