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Articles of Interest- Wednesday, May 15, 2019

Articles of Interest- Wednesday, May 15, 2019

Retaliatory Tariffs Target US Farmers as China Seeks to Maximize Leverage

S&P Global – 05/13/2019

China’s latest retaliatory tariffs signaled a focus on key U.S. farming and manufacturing interests, spurring further concern for U.S. industries already been hurt by the spat between the two economic powerhouses. U.S. stocks responded with one of the deepest sell-offs in months. China’s Ministry of Finance on May 13 said it would raise tariffs to up to 25% on $60 billion of annual U.S. exports June 1, an answer to the Trump administration’s latest tariff rate hike on Chinese products. Because China imports far fewer goods from the U.S. than the U.S. does from China, it cannot match U.S. tariffs dollar for dollar, instead of relying on the steepness of rate hikes and targeting politically important products. Doug Barry, a spokesman for the U.S.-China Business Council, said that many jobs are at risk in the escalation of tariffs, particularly in the agricultural sector. “We grow protein for world markets and cannot consume it all domestically,” Barry said. “Our farmers must have access to global markets, and China is by far the biggest.”China has all but ceased its imports of U.S. wheat due to the trade war, said Steve Mercer, a spokesman for the U.S. Wheat Associates, meaning that this latest impact will not be detectable for the product. He said wheat farmers “want to see the trade war end as quickly as possible in a way that restores the export opportunities that were building for wheat farmers in China before it started.”

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Demand for Wheat Imports Increasing in Nigeria

World-Grain – 05/13/2019

As Nigerians increasingly shift to consuming greater amounts of wheat flour-based products, the country is forecast to increase wheat imports in 2019-20 by 4%, according to a May 10 Global Agricultural Information report from the U.S. Department of Agriculture (USDA). USDA said the rise in consumption is attributable to population growth of 2.5% annually in Nigeria, whose population accounts for nearly half of that in West Africa. Wheat production in 2019-20 in Nigeria is projected to reach 60,000 tonnes, unchanged from the previous year’s production number, USDA said, while wheat imports are forecast at 5.6 million tonnes. “Flour millers favor imports, indicating that local wheat has a higher protein content, lower moisture, lower gluten,” USDA said. “Despite Nigerian millers’ preference for imported wheat, the government is aiming to reduce wheat imports by 50%. To reduce imports, the government is requiring millers to purchase local wheat at a fixed price of $400 per tonne.”

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Drought Hit Australia to Import Wheat for First Time in Over a Decade

S&P Global – 05/15/2019

Australia will import foreign-grown wheat for the first time since 2007 following an approval issued by the Department of Agriculture and Water Resources late Tuesday. The permit issued is for a single shipment of bulk wheat from Canada, which is expected to arrive in Australia in the next six to eight weeks. The vessel consists of high protein wheat for milling purpose, destined for Port Kembla in New South Wales, a trader based in Australia said. The move comes after months of market speculation about wheat imports as widespread drought in the east coast of Australia damaged wheat crops, driving up domestic prices to historical levels. The current decade low 2018/2019 harvest season saw Australian wheat production drop by 19% to 17.3 million mt, according to the Australian Bureau of Agricultural and Resource Economics and Sciences. The combined wheat output from New South Wales, Victoria and Queensland was down by 45% from the previous season to 4.15 million mt. With the severe drought having slashed wheat output in the East Coast, the region relied on Western Australia for it’s wheat supply in both the feed and milling industry. However, protein levels were low for wheat grades in Western Australia, tightening supply of high protein wheat.

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Crop Progress Report May 14, 2019

North Dakota Wheat Commission – 05/14/2019

Warmer, drier conditions prevailed over much of the hard red spring wheat region over the last week, allowing for decent planting progress.  According to the weekly USDA Crop Progress report, planting in all of the four major producing states advanced an average of 25 percentage points.  On a national average, 45 percent of the U.S. spring wheat crop is in the ground, still behind last year’s pace and the five-year average.  In North Dakota, 37 percent of the acres have been planted compared to 58 percent on average and 47 percent last year.  Some producers in the state report being done with spring wheat planting, while others are just getting started.  Progress is quite variable depending on location.  The week ahead shows warm, dry conditions until the weekend when chances of precipitation are forecast.
Spring wheat emergence is also behind average with about 10 percent of the U.S. crop emerged, similar to last year, but behind the five-year average of 34 percent.  In North Dakota, only about 2 percent of the crop has emerged.

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David Gammill Reappointed to Oklahoma Wheat Commission

Oklahoma Farm Report – 05/15/2019

Oklahoma Secretary of Agriculture, Blayne Arthur, has re-appointed David Gammill to a five-year term on the Oklahoma Wheat Commission Board. Gammill, a wheat producer from Chattanooga, will represent District IV, which includes Caddo, Comanche, Cotton, Greer, Harmon, Jackson, Kiowa and Tillman counties.  Gammill was the top vote getter at the Wheat Commission District Election held last week in Cotton County- his name and two others were submitted to Secretary Arthur to be considered for the five year term as a member of the Commission. “We are excited that David Gammill has been re-appointed to the Oklahoma Wheat Commission board,” said Mike Schulte, Executive Director of the Oklahoma Wheat Commission. “His knowledge and experience with wheat production as a farmer and active roles held with the OWC Board and U.S. Wheat Associates Board continue to make him a valuable leader for the wheat industry on both state and national levels.”

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Source: U.S. Wheat Associates