Farm Vote in 2020 Race Behind Trump’s Push for Swift Japan Deal
Japan Today – 07/08/2019
American farmers are stepping up calls on President Donald Trump to quickly strike a bilateral trade deal with Japan amid concerns about their loss of market share in the country following the recent enforcement of two free trade agreements not involving the United States. Trump appears determined to appease farmers and ranchers by giving them a level playing field with nations belonging to a revised Trans-Pacific Partnership — an 11-member FTA — and the European Union, which now has its own FTA with Japan, as he looks for a major win to bolster his 2020 re-election bid. The enforcement of the revised TPP last December cut tariffs on agricultural products from Australia, Canada, Mexico and New Zealand, making the United States less competitive in the world’s third-largest economy. The Japan-EU FTA took effect in February. Trump — who, according to polls, trails potential Democratic contenders such as former Vice President Joe Biden — needs votes from farming states for re-election, say U.S. agricultural groups. “Trump needs a trade win and Japan will be a big win,” said Vince Peterson, president of U.S. Wheat Associates, the export market development organization for the U.S. wheat industry, as he pointed to risks to export sales without a swift agreement with Japan.
Wheat Farmers Cope with Low Market Values, Tariffs
Spokane Journal – 07/03/2019
Over the past several years, the rip saw effect of falling wheat prices and climbing expenses has slashed income for wheat farmers, industry experts and local farmers say. Despite the recent addition of tariff-related pressures, however, some remain optimistic that relief could be on the horizon. According to the 2017 U.S. Census of Agriculture, which is conducted every five years by the United States Department of Agriculture, net cash farm income in Spokane County dropped by 67% from 2012 to 2017, and the total market value of products sold decreased by 22% during that period. Chris Mertz, northwest regional director for the USDA’s National Agricultural Statistics Service, says part of decrease in income is due to the fact that 2012 was an especially profitable year for wheat. “I remember when the 2012 numbers came out, I said, ‘This is going to be kind of an odd year,’” Mertz says. “That year, we had lower inventories and higher prices. Our average market year price in 2012 … for all wheat in the state of Washington, was $8.70 per bushel.” By comparison, the 2017 average market year price was $4.85 per bushel. The market value of all wheat grown in Spokane County in 2012 was just over $75,000; by 2017, that value dropped to about $30,000. While wheat production increased statewide by about 4.7 million bushels, Spokane County’s wheat production dropped by about 2.7 million bushels. Glen Squires, CEO of the Spokane-based state industry agency Washington Grain Commission, says wheat farmers also have been grappling with high operations expenses and stagnant income.
US Tariff Dispute with Partners Alter Global Agriculture Trade Flows
S&P Global – 07/08/2019
A series of tariffs imposed by the US on its major trade partners since early last year, and retaliatory actions have altered global agriculture trade flows and allowed other suppliers to make inroads into markets traditionally dominated by the US. Tariff and weather issues have led to most analysts lowering their estimates for US soybean and corn production this season, while US wheat output is expected to stay flat. The US introduced tariffs on billions of dollars’ worth of Chinese goods in March 2018. China retaliated by slapping its own tariffs on various US goods imports in July 2018, including a 25% tariff on soybeans. China is the world’s largest soybean importer, and is also the biggest market for US soybeans. The US and China recently agreed to resume trade talks, but uncertainty still prevails. Most of the top global agribusiness trading houses have identified the US-China trade dispute as a major risk to their bottom line and operational revenues this year.
Spring Wheat Market a Mixed Bag Regarding Prices
AgUpdate – 07/07/2019
The spring wheat market was kind of a mixed bag as the Fourth of July approached. “We had a nice rally in May/early June, which was driven by improving U.S. wheat export demand, significant planting delays of corn and concerns of what that final production will be,” said Jim Peterson, marketing director for the North Dakota Wheat Commission. At certain price levels wheat does compete with corn for feed demand, so corn concerns are potentially supporting greater wheat demand. Also, the wheat market has been reacting to heavy rains that have taken place in the soft red winter and hard red winter wheat regions which have raised disease threats and concerns about overall quality of those crops. As of June 23, producers were still struggling to harvest this year’s winter wheat crop. In fact, only 15 percent of the winter wheat crop had been harvested. That compares to 40 percent complete by that time last year and about 33 percent complete on average.
Day 7, Kansas Wheat Harvest Report
Kansas Wheat Commission – 07/07/2019
Rain continued to be hit or miss over the holiday weekend. Many Kansas wheat farmers spent their Independence Day in the wheat field. Some areas in south central Kansas have finally wrapped up their harvest, but there are still a lot of acres left to cut in the rest of the state. While some areas in northwest Kansas have begun, they have been chased out of the fields by scattered storms. Localized rainfall amounts range from zero to more than 8 inches across the state. There is still green wheat in some areas as well. Josh Debes, who farms near Hoisington, reported that, “with all things considered, late planting, hail damage and weed pressure, we’re pretty happy with this year’s crop.” While yields are lower than the last couple years, they are in line with the 10 year average. Debes says they are down to their last 30 acres of wheat to cut, but with 2 1/2” of rain Saturday night and more expected Monday night, they won’t be able to finish those up for a few more days. Harvest began June 26, which is much later than normal. Josh and his wife Julia returned to the farm five years ago, and this is the first time they have even cut wheat in July.
Source: U.S. Wheat Associates