U.S. Ag Faces Headwinds as Japan FTAs Enter Year 2
USDA-FAS – 03/28/2019
On April 1, 2019, Japan will apply a second round of tariff cuts to agricultural imports from member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Japan-European Union Economic Partnership Agreement (EPA). Although the competitive impacts on U.S. exports will be felt across much of the U.S. export community over time, impacts will likely be felt for some products more immediately…Wheat is a state-traded item in Japan, and imported by the Japanese Ministry of Agriculture, Fisheries and Forestry (MAFF) through tenders. MAFF normally imports wheat duty-free and sells wheat to flour millers at the imported price plus a markup (which is used to promote domestic wheat production). Effective December 30, 2018, Japan instituted country-specific quotas for Canadian and Australian wheat pursuant to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Japan lowered the mark-up on state-traded wheat, and reduced tariffs on wheat products imported from CPTPP Member States, including U.S. wheat competitors such as Canada and Australia. Similar tariff cuts were made for EU Member States when the Japan-EU Economic Partnership Agreement (EPA) came into effect on February 1, 2019. A second round of cuts will come into effect April 1, 2019, for both CPTPP and EU Member States.
How Long Will Trump Keep US Steel and Aluminum Tariffs in Place?
Agri-Pulse – 04/01/2019
If American almond, citrus, pork, apple and dairy farmers want any chance of regaining their markets in China, Mexico and Canada, U.S. steel and aluminum tariffs will likely have to be lifted. The problem, however, is the threat of cheap foreign metal flooding the U.S. market is now as high as ever. It’s not a fact lost on President Donald Trump, who early on made it a priority to bring domestic prices up for the metals and protect the industry. Prices have risen, breathing new life into U.S. producers, according to the American Iron and Steel Institute (AISI), but the global threat remains. “Steel tariffs are working,” AISI said in a statement provided toAgri-Pulse. “Momentum in the steel industry as result of the Section 232 remedy, the administration’s policy actions and favorable economy are allowing companies to reopen idled mills, invest in new facilities and create jobs.” The Trump administration, arguing that Chinese overproduction of metals was a threat to national security, hit the country and other nations around the globe about a year ago with a 25 percent tariff on steel and a 10 percent tariff on aluminum. China ships very little steel and aluminum directly to the U.S., but the metals also make their way here by transshipment through third countries. China hit back with tariffs on $3 billion worth of U.S. farm goods.
White House Looks to Minimize Economic Impact of Trump’s Threatened Closure of Mexico Border
The Washington Post – 04/02/2019
Senior White House officials are exploring ways to exempt commercial trade from President Trump’s threat to shut down the U.S. border with Mexico, three people briefed on the discussions said, amid warnings that blocking the flow of goods between the two countries would have severe consequences for the U.S. economy. In brief remarks, Trump on Tuesday again threatened to close the border but would not definitively say whether he would do so, and he has not divulged his plans even to some of his closest aides. But the White House is bracing for the possibility and internal planning has reached an advanced stage, according to the three people, who spoke on the condition of anonymity because they were not authorized to disclose the deliberations…Sen. John Neely Kennedy (R-La.) said shutting down the border could cost the U.S. economy $1 billion to $2 billion each day.
Wheat Conditions Improve on High Plains
High Plains Journal – 04/02/2019
Mostly dry and warm weather prevailed across the state during the week ending March 31, according to USDA’s National Agricultural Statistics Service, Southern Plains Regional Field Office, Texas. The only significant rains were experienced in the Upper Coast, the Coastal Bend, South Texas and the Lower Valley, where precipitation ranged from trace amounts up to 2 inches. The rest of the state recorded little to no rainfall. There were 6.5 days suitable for fieldwork. Wheat conditions improved in the High Plains. Some wheat fields in the Southern Low Plains showed signs of freeze damage. Rust was found in some fields in the Cross Timbers. Small grains were progressing in the Blacklands and the Edwards Plateau.
BNSF Rail Delays Leave Farmers Waiting to Ship
Ag Week – 04/02/2019
Extreme winter weather paired with flooding in parts of the Midwest has led to delays for the BNSF Railway Company, and for commodities shipments. From March 16 to 22, the most recent dates available, almost 1,500 orders have been unfilled for between one and 10 days, and 1,886 orders are 11 days past due, according to a BNSF status report. During the same period in 2018, 80 orders were between one and 10 days past due, and only one order was past due by 11 days, BNSF reported. “While overall, one to 10 days past due is relatively minor, we’re working with all our customers across commodities impacted as a result of the significant flooding impacts to our network in the Midwest,” said BNSF spokeswoman Amy McBeth. “As we continue recovering, we expect service to normalize.”
Source: U.S. Wheat Associates