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Articles of Interest- Thursday, May 16, 2019

Articles of Interest- Thursday, May 16, 2019

Argentina Braces for Competition as Brazil Mulls Opening Up Duty-Free Wheat Imports

S&P Global – 05/14/2019

Argentina is bracing itself for competition in the Brazilian wheat market, where it currently dominates with a 80-90% market share, as the latter considers allowing 750,000 mt of tariff-free wheat imports from outside of the Mercosur trade bloc that includes Argentina, Brazil, Paraguay, Uruguay and Venezuela. Brazil had decided to buy up to 750,000 mt of duty-free wheat from outside Mercosur in 1995, but could not implement it. Talks of the measure have, however, resurfaced after Brazilian president Jair Bolsonaro’s visit to the US in March. The Mercosur bloc’s main purpose is the free movement of goods, services and production factors. According to the US Department of Agriculture, closer relations between Brazil and the US after Bolsonaro’s election in October facilitated the announcement of the tariff rate quota during his visit to Washington. “The TRQ (tariff rate quota) will be open to all exporting countries, but it appears that US wheat exported through the Gulf of Mexico may be particularly competitive,” the USDA said in a report in April.

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On Trade Aid, Farm Bureau Laments Once-Promising China Markets

The Progressive Farmer – 05/15/2019

Zippy Duvall, president of the American Farm Bureau, asked President Donald Trump in a letter Tuesday to ask his trade negotiators to “make a deal as soon as possible” with China to end tariffs that have created “near-unprecedented economic uncertainty and hardship” for farmers. The tariff fight with China is destroying a once-promising export market for U.S. farmers and contributing to the risk at least some farmers won’t plant a crop this spring, Duvall’s letter to the president stated. Duvall also asked President Trump to maintain the trade aid package created last year. The trade mitigation payments helped keep some farmers in business while the trade talks with China continued. “However, time is running out for many in agriculture,” Duvall wrote. “I am hearing anecdotal reports of farmers, particularly those who are dealing with planting delays due to weather, deciding not to plant a crop this year because there’s just no market for it.”

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Trump-Xi Showdown May Be Turning Point for US-China Trade

Agri-Pulse– 05/15/2019

President Donald Trump says he’s still confident the U.S. and China can reach a deal to end the trade war, but talks have all but collapsed, both sides are threatening even more or steeper tariffs and the U.S. is scrambling to protect farmers with more aid. Much may hinge on a scheduled meeting between Trump and Chinese President Xi Jinping when the two leaders attend a G-20 summit in Osaka, Japan, in late June. No new negotiating rounds have yet been scheduled before Trump and Xi are scheduled to meet. “I think it’s going to turn out extremely well,” Trump said Tuesday about the talks in general with China. “We’re at a very strong position.”  But it doesn’t feel that way for many in the U.S. ag sector, especially the farmers and ranchers who have been hit the hardest by China’s retaliatory tariffs. “The U.S. has been at the table with China eleven times now and still has not closed the deal,” says American Soybean Association President Davie Stephens. “What that means for soybean growers is that we’re losing. Losing a valuable market, losing stable pricing, losing an opportunity to support our families and our communities. These trade negotiations are serious for us. Farming is our livelihood.”

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U.S. Vote on the New NAFTA Could Slip to Late 2020, Says Grassley

Successful Farming – 05/15/2019

The war has pushed the new NAFTA, a pact that Canada, Mexico, and the U.S. back with varying degrees of enthusiasm, into the shadows on Capitol Hill. Senate Finance Chairman Charles Grassley said on Tuesday that a vote on the free trade agreement could be delayed for a year or more by presidential politicking unless Congress starts work soon. “If we don’t get it done this year, it won’t get done until after the next presidential election,” said Grassley. During a teleconference, he pointed to “selfish banking lobbyists” as an obstacle to the United States-Mexico-Canada Agreement. The USMCA faces other hurdles, too. Chief among them is a tri-national fight over steel and aluminum tariffs and demands by House Democrats for stronger language on labor and environmental protections. The White House has yet to send the USMCA to Congress for consideration.

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US Organic Winter Wheat Yields Poised to Increase

High Plains Journal – 05/15/2019

Mercaris, a market data and auctions startup supporting the growth of organic and non-GMO agriculture in the U.S., today released its monthly market update for May, reporting the potential for a highly mixed, but generally positive, year for organic winter wheat yields. Generous moisture added to soil since last fall puts U.S. overall winter wheat yields on track for their best year since 2016. Mercaris estimates 66% of U.S. organic winter wheat crops are rated “good” to “excellent” for the week ending May 5, in comparison to only 49% last year at this time, according to data gathered from the U.S. Department of Agriculture National Agricultural Statistics Service. The positive outlook is buoyed by the winter wheat-producing states of Montana, Kansas, and Texas showing more than 25% increases in “good” to “excellent” crop ratings. Big gains in organic wheat yields are also expected across the High Plains and Northeastern U.S.

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Source: U.S. Wheat Associates