Grains

Three days after President Trump was inaugurated, one of his first exercises of presidential power was withdrawing the U.S. from the 12-nation Trans-Pacific Partnership (TPP). The remaining 11 nations are expected to sign the final trade agreement in March, and now U.S. farmers and ranchers are pushing for a last-minute rejoin. In a letter to U.S. Trade Representative Robert Lighthizer, the U.S. Food and Agriculture Dialogue for Trade urged him to re-engage in trade talks with other member-nations of TPP, which is driven by Japan, Australia, and Canada. "Once this happens, our sector will be placed at a substantial disadvantage as other countries gain entry into [agricultural] markets at substantially lower tariffs and under preferential terms," the letter read. Collin Woodall, senior vice president of government affairs with the National Cattlemen's Beef Association (NCBA), says some countries in the TPP would like to see the U.S. rejoin the agreement, but for now, it looks unpromising. "All of the people who are on board right now are doing everything they can to finish the negotiations on NAFTA and KORUS," he said. "There's not a lot of people sitting around looking at things to do. I don't believe getting back to TPP is something we're going to see in 2018." At the World Economic Forum in Davos, Switzerland last month, Trump made the suggestion of re-entering TPP "if it is in the interests of all." Legislatures from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam still need to ratify the deal.

As tensions escalate between the U.S. and China, one crop is emerging as the most powerful weapon in a potential trade war: the soybean. China is the biggest buyer of American soybeans, picking up about a third of the entire U.S. crop, which it uses largely to feed 400 million or so pigs. President Xi Jinping's administration is studying the impact of restricting soybean imports in retaliation for U.S. tariffs on washing machines and solar panels, people familiar with the situation told Bloomberg last week. Any China soybean curbs would directly hit farmers in Midwestern U.S. states that President Donald Trump needs to win re-election in 2020. Yet they would also pose a big risk for Xi: His nation is the world's largest pork producer and consumer, and higher costs for pig farmers could increase prices of meat for his nation's 1.3 billion citizens. Food prices have long been a politically sensitive issue for China's ruling Communist Party, which rose to power in 1949 in the wake of economic mismanagement that led to hyperinflation. A surge in the cost of everything from pork to electronics in the late 1980s also stoked dissatisfaction in the run-up to the Tiananmen Square protests. Worst-Case Scenario "Using soybeans to retaliate against the U.S. would be a worst-case scenario" for China, said Li Qiang, chief analyst with Shanghai JC Intelligence Co., a private grains consulting firm. "Pork is a staple meat for Chinese people." China's Commerce Ministry and Agriculture Ministry didn't immediately respond to faxed questions about the potential impact of restrictions on soybeans. On pig farms in rural Tianjin, some 200 kilometers (124 miles) from Beijing, concern is growing. Standing next to a sow delivering piglets, Shi Ruixin said his costs would increase sharply if China squeezed U.S. soybean imports. "Hog feed prices will rise as well as pork prices," the 68-year-old farmer said. The seasonality of the soybean trade is one reason that China can't easily replace U.S. supply, even though authorities in Beijing have sought to diversify. Last year, China's imports from Brazil rose 33 percent to about 51 million metric tons, while those from the U.S. fell 3.8 percent to 33 million tons. Sun Chao, the president of Tianjin Tianjiao Group -- the hog feed producer that supplies Shi -- said that U.S. soybeans meet Chinese demand from October to February, when the South American crop is still growing. "U.S. supplies can't be replaced," said Sun, who manages a cooperative with 150 farmers and 30,000 pigs. "We rely on each other." Extremely Concerned Chinese officials began looking into measures against soybeans in January as trade tensions with the Trump administration began to heat up. The Commerce Ministry held a meeting with some Chinese companies to get feedback, and no conclusions were reached, Bloomberg reported earlier this month. Any final decision would be made by senior Chinese leaders. "We are extremely concerned by suggestions that U.S. exports, including soybeans, may face unjustified trade restrictions," Agriculture Secretary Sonny Perdue said in a statement. "American farmers are facing serious economic challenges without having to face bogus barriers erected strictly for political purposes. We are examining all tools available to us to assist our stakeholders." Painful for Everybody Trump has sought to close a trade gap in goods with China that surged 8.1 percent last year to a record $375 billion, according to Commerce Department data. Besides the duties on imported solar panels and washing machines, the administration last year began a probe into China's aluminum and steel sales and its intellectual property practices. China has responded by launching an anti-dumping and anti-subsidy investigation against U.S. shipments of the grain sorghum, a substitute for corn. Restricting soybeans would have an even bigger impact on American farmers. "It would definitely put downward pressure on prices," said Dave Salmonsen, senior director of congressional relations with the American Farm Bureau Federation, the biggest U.S. farmer group, based in Washington. "We're already in a surplus situation, and losing China would just make everything worse." Still, one U.S. farmer who hosted Xi during his 2012 visit to the U.S. doubts China will take action against soybeans. Grant Kimberley, who raises 4,000 acres of corn and soybeans northeast of Des Moines, Iowa, said Chinese soybean restrictions would lead to "dramatic swings" in prices that would disrupt trade throughout the world. "It would be painful for everybody," Kimberley said. "Painful for the Chinese, painful for the U.S. I don't see why anyone would want to do it."

A strain of bird flu that's deadly to poultry but poses no immediate public health concern has been detected in Missouri, state agriculture officials announced Sunday. The Missouri Department of Agriculture said in a news release that the virus was confirmed in turkeys at a grower facility in Asbury in the southwest part of the state. Preliminary tests also came back positive for the virus at a commercial turkey facility in Fortuna in the central part of the state. Sarah Alsager, a spokeswoman for the department, said in an email that it's the same highly pathogenic H5N2 strain of avian influenza that's been confirmed in Washington, Oregon, Idaho and Minnesota. The virus is carried by wild waterfowl that aren't sickened by it. The incubation period is about 21 days. In an effort to "contain and eliminate the disease," the unidentified Missouri facilities that were affected have been quarantined, the release said, adding that the remaining turkeys in the "involved flocks" will be killed and won't enter the food system. It was not immediately clear how many birds were infected. Officials also are performing surveillance and conducting testing at properties near the affected facilities to ensure the virus has not spread. The release said the Missouri Department of Health and Senior Services will monitor workers who may have been exposed to the virus but describes the step as a precaution. The agency said the U.S. Department of Agriculture is sending a team to Missouri to assist with the response.

Additional packing capacity marked 2017 as a stand out year for hog producers. Large export and domestic demand also kept cattle supplies robustly current. Now, consumers are finally getting to take home the bacon and steaks, respectively. Pork production hit a record high in December, according to USDA-National Agricultural Statistics Service (NASS) Livestock Slaughter report, released Jan. 25. Pork production in December totaled 2.23 billion pounds, up 1% from December 2016. Hog slaughter totaled 10.5 million head, down slightly from December 2016. The average live weight was up 3 lb. from the previous year, at 286 lb. In total for the year, pork slaughter was up 3% from 2016, to 121 million head. Accumulated Beef Production Ends Year 4% Higher Beef production in December, at 2.15 billion pounds, was 1% below the previous year. Cattle slaughter totaled 2.58 million head, down 1% from December 2016. The average live weight was down 2 lb. from the previous year, at 1,379 lb. Veal production totaled 6.6 million pounds, 4% below December a year ago. Calf slaughter totaled 46,400 head, down 5% from December 2016. The average live weight was up 5 lb. from last year, at 245 lb. Lamb Production Lower Lamb and mutton production, at 12.8 million pounds, was down 2% from December 2016. Sheep slaughter totaled 188,100 head, 5% below last year. The average live weight was 136 lb., up 3 lb. from December a year ago. U.S. Read Meat Production Up U.S. commercial red meat production totaled 4.40 billion pounds in December, up slightly from the 4.40 billion pounds produced in December 2016. January to December 2017 commercial red meat production was 52.0 billion pounds, up 3% from 2016. Accumulated beef production was up 4% from last year, veal was down 1%, pork was up 3% from last year, and lamb and mutton production was down 3%.