Livestock
18Jan

China Trade Update: U.S. Considering Lifting Tariffs?

According to the Wall Street Journal, U.S. Treasury Secretary Steven Mnuchin discussed lifting some, if not all tariffs on China. He may even offer a tariff rollback during the next round of trade discussions. Those talks are planned to begin January 30th with China's economic chief. The WSJ cited people familiar with internal talks. The Journal said the proposal has not yet been introduced to President Trump. Also, the report stated Mnuchin faced push-back from U.S. Trade Representative Robert Lighthizer, who feels any concession could be seen as a sign of weakness. A Treasury Department spokesperson told CNBC: "Neither Secretary Mnuchin nor Ambassador Lighthizer has made any recommendations to anyone with respect to tariffs or other parts of the negotiation with China. This is an ongoing process with the Chinese that is nowhere near completion." The report from the Wall Street Journal resulted in the Dow seeing solid gains on Thursday. It closed up 162.94 to 24,370.10.
By Dairy, Ethanol, Grains, Livestock
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16Jan

Perdue Reopening Several FSA Offices for Just 3 Days

U.S. Agriculture Secretary Sonny Perdue has announced many FSA offices across the country will open for three days. In a Tweet, he stated the offices will be open on 1/17 (Thursday), 1/18 (Friday) & 1/22 (Tuesday) to help farmers with existing loans and other limited services. He says USDA will bring back 2,500 employees to work at those FSA offices. The partial government shutdown continues with no end in sight. Congressional Democrats remain opposed to President Trump's demand for $5.7 billion dollars to build a wall along the U.S.-Mexico border. Democrats say they'll discuss border security once the government has reopened. President Trump is expected later today to sign legislation that will provide workers with back pay after the shutdown ends. The measure, which would pay federal workers for the work they perform or are blocked from performing during the shutdown, was passed by the House and Senate last week. Secretary Perdue is expected to be on hand for that signing. The Trump Administration has acknowledged the prolonged standoff over the border wall funding is having a greater impact drag than previously thought. In a call with reporters, the White House Council of Economic Advisers chairman said the shutdown is reducing economic growth more than predicted.
By Dairy, Grains, Livestock
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10Jan

Trump Bailout Money Will Buy Pork Products from JBS

Brazilian-owned JBS, one of the largest meatpacking companies in the world, will sell 1.8 million pounds of pork products through President Donald Trump’s farm bailout program, according to USDA-Agricultural Marketing Service documents released Wednesday. U.S. taxpayers will buy about $5 million in pork products from JBS through the program, The Washington Post reports. USDA plans to spend up to $558,815,000 on pork purchases alone under the Food Purchase and Distribution Program to be distributed through the Food and Nutrition Service’s safety net of nutrition assistance programs. A large part of the program involves direct cash payments to farmers, although those payments are stalled due to the partial government shutdown. Agriculture Department officials announced Tuesday they are extending the application deadline for aid under this program for at least several weeks. Where Will the Funding Go? The $12-billion program was created to buy surplus commodities from farmers and ranchers to help them weather the effects of the long-running trade war with China, but some critics have questioned whether funding will also enrich large and foreign-owned firms. USDA terminated a $240,000 purchase contract with Smithfield Foods at the company’s request after a backlash on Capitol Hill over the award in November 2018. Smithfield Foods is owned by the Chinese conglomerate WH Group. Sen. Charles E. Grassley (R-Iowa) criticized the payment, arguing taxpayer money should not go to an international firm. “Why is USDA rewarding another foreign-owned meatpacker through its meat procurement program after the blowback it received from purchasing pork products from Chinese-owned Smithfield?” asked Tony Corbo, senior lobbyist at Food and Water Watch. JBS USA, with about 73,000 employees and 44 plants domestically, recorded more meat and poultry sales in the U.S. than any other company, according to the National Provisioner’s Top 100 Meat & Poultry Processors. JBS SA has more than 200,000 employees worldwide. A USDA spokesperson said USDA only buys American commodities, produced on American farms by American farmers. “Approved vendors who choose to participate in USDA food purchasing programs, regardless of their business structure or domicile, provide direct benefits to U.S. farmers and ranchers,” the USDA spokesperson said. The Washington Post reports American Custom Meats, Chicago Meat and Proportion Foods also will sell products to USDA under the bailout program, according to agency documents.
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09Jan

Trade Talks Update: Statement Released from U.S. Trade Representative

The U.S. Trade Representative released a statement following three days of meetings in Beijing: Statement on the United States Trade Delegation’s Meetings in Beijing On January 7-9, an official delegation from the United States led by Deputy U.S. Trade Representative Jeffrey Gerrish held meetings in Beijing with Chinese officials to discuss ways to achieve fairness, reciprocity, and balance in trade relations between our two countries. The officials also discussed the need for any agreement to provide for complete implementation subject to ongoing verification and effective enforcement. The meetings were held as part of the agreement reached by President Donald J. Trump and President Xi Jinping in Buenos Aires to engage in 90 days of negotiations with a view to achieving needed structural changes in China with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft of trade secrets for commercial purposes, services, and agriculture. The talks also focused on China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States. The United States officials conveyed President Trump’s commitment to addressing our persistent trade deficit and to resolving structural issues in order to improve trade between our countries. The delegation will now report back to receive guidance on the next steps.
By Dairy, Ethanol, Grains, Livestock
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08Jan

African Swine Fever Slashes China's 2018 Pork Profit Estimates

Two of China’s major pig producers sharply cut 2018 profit estimates on Monday, after African swine fever (ASF) devastated prices and demand for pork in the world’s largest hog producer in the second half of the year. Muyuan Foods Co. Ltd cut its 2018 net profit forecast to between 500 million yuan ($73 million) and 550 million yuan, down at least 20% from an earlier estimate in October, Reuters reported. The revised figures are nearly 80% down from the 2.4 billion yuan in profit reported for 2017. In addition, Wens Foodstuff Group Co Ltd said 2018 net profit is expected to be between 3.9 billion and 4.0 billion yuan, down about 40% from 6.75 billion yuan the year before. With approximately 100 outbreaks of ASF in China since last August, these warnings of lower profit estimates were not a major surprise. Muyuan said it was cutting its forecast following lower-than-expected live hog prices in the fourth quarter. Most of the company’s pig production is in northern China, where prices have been hit hard by measures aimed to control ASF spread, Reuters reported. Wens said ASF weighed on prices in the second half of 2018, following low prices in the first half. However, the company, which also produces poultry, benefited from a strong increase in chicken prices and from a 17.1% rise in the number of pigs it sold in 2018. As more shoppers turn to the country’s second most popular meat – chicken – poultry prices are on the rise. Producers of white-feathered broiler chickens are experiencing tight supply after China banned imports of the breeding birds from many producing countries because of outbreaks of bird flu. Major poultry producer Fujian Sunner Development Co Ltd upped its forecast for 2018 profits on Monday, mostly due to tighter supplies of chicken, Reuters reported. “Thanks to the tight supplies of meat chickens, performance in the sector continuously rose, sales exceeded the forecast and profits significantly improved,” the company said in a filing. With net profits expected around 1.5 billion yuan, that puts the company’s increase up about 380% from 315 million yuan in 2017.
By Livestock
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27Dec

Google Identifies Three Marketing Trends Affecting Pork Consumption

It’s no surprise that digital use is exploding in all areas of our lives, but pork producers at the World Pork Expo earlier this year heard how that the National Pork Board and the Pork Checkoff works with Google to reach consumers and influence meat and food purchases. In 2017, 31% food and beverage sales were influenced by digital media, said Steve Lerch, Google account executive for Advocacy and Associations. That’s $13 billion of a $43 billion industry. “We’re at a time in our country where there is more advertisement than ever. We are inundated with ads,” Lerch says. “So it’s so incredibly important to find the vehicles and platforms your customers like and that your customers value.” “Marketing is hard, and it’s changed. That’s why we are here,” Lerch says. Lerch and his team are working with the Pork Board, and other industry associations to target the right type of audience at the right time, monitoring current trends and using data to propel food information. Here’s three food trends they have identified that will be affecting how pork is consumed in 2019 and beyond: 1. Power and Misunderstanding of Protein People are shifting more towards fitness and strength, and away from focusing on weight loss and being skinny. “That’s really significant. It changes the way we talk to consumers and it changes the way we help consumers envision their goals,” he says. If 63% of people who exercise pay attention to how much protein they eat, there is new opportunity for pork. “That's great, right? We sell protein products, people are paying attention to how much protein they eat. That's wonderful. The problem is people don't understand protein. 40% of people think there is more protein in peanut butter than in eggs,” Lerch says. 2. Semi-Homemade Dinner Options Americans are eating on the go more than ever. Many food companies are changing products and packaging to accommodate this lifestyle. But while there is less time for family dinners, Lerch says their research shows that consumers still value home-cooked meals. The majority of American families eat meals together less than five days a week, but two of five American parents consider themselves aspiring chefs. “They want to cook those in-depth fancy meals for their family. They value that time in the kitchen, they value that time sitting at the table. They want to provide that to their kids. It just looks different,” Lerch says. “As marketers, we have to know how to adapt to that.” Instant pots, meal kits and video recipes are very appealing. And since 59% of 25- to 34-year-olds cook with either their smartphones or tablets as an immediate resource, it can help ensure pork is cooked properly. “It allows people to make these home cooked meals, these family dinners, but in a fraction of the time,” he adds. “It’s the new American family dinner. It just looks different. As marketers, we need to make our product fit into that area.” 3. Functional Foods and Stock Management Digital technology has really changed the way we do things—customers are not just influenced by product packaging in the store. They are engaging with your food brand long before ever walk into the store or the online retailer. With so much information available at our fingertips, consumers do about a 10-fold amount of research about food. “Two of three people in the U.S. say their meals are planned at home—not a crazy stat,” Lerch says. “But they are no longer going to the meat counter to ask questions—they are shopping and gathering information by phone.” As more people turn to websites and social media for information about how to cook and what ingredients to select, consumers need to be met in different ways. “It’s not enough if it tastes good, is high in protein—what does that protein do? It gives you energy, fuels you, helps you through your day. It’s about connecting the product to the function that is more important to consumers than it ever has been before.” There is also a rise in consumers asking questions about products they’ve already have. “There was a 28% increase last year in people asking how long various foods last,” Lerch says. “One of the most challenging and profitable things any marketer can do is to market to people already buying the product. Getting someone new to buy pork is hard. Getting someone who buys pork once a week to buy it twice a week, well, that’s hard too, but it’s real profitable.” Sometimes, it’s as easy as being useful to your consumers, and making sure they know how to use your product in the best possible way, Lerch says.
By Livestock
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17Dec

UPDATE: Where are the 2nd Round of Market Facilitation Payments?

It's on the mind of many producers right now: when will that second round of market facilitation payments be going out? Here's the latest on what we know: United States Agriculture Secretary Sonny Perdue was scheduled to meet with the White House Office of Management and Budget on Friday to discuss the matter. The payments are delayed right now. We're told it's due to optimism on China buying U.S. soybeans again and out of concerns about the cost of the program. Perdue told reporters he still expects the White House to approve the second round, despite China starting to buy U.S. soybeans again. As to when that second round of payments will be made, Perdue says "very soon". He believes the aid still needs to be sent since Mexico and Canada still have tariffs on goods and China has not removed theirs, either. The U.S. Department of Agriculture had authorized up to $12 billion in aid earlier this year for ranchers and farmers hit hard by the trade war with China. How big of a help are the payments? Tyne Morgan asked agriculture banker Keith Knudse of Security Bank in Nebraska. He said, "It could in some cases be the difference between profitability and making payments and not."
By Dairy, Grains, Livestock
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13Dec

House Passes The 2018 Farm Bill In Landslide Vote

The 2018 Farm Bill crossed the second of three hurdles on Wednesday when the House approved the measure in a landslide vote of 369-47 two days after the final conference report was made public. The bill will head to the Oval Office next. President Trump has previously indicated he will sign the bill. However, timing is unclear. “It is fitting that the House today considers the farm bill because 28 years ago, another proud Texan — President George H.W. Bush — signed the 1990 Farm Bill into law,” said House Chairman Mike Conaway prior to the vote. “And, for the first time since 1990, Congress is poised to pass a new farm bill in the same year that the legislation was first introduced.” He continued to say that a farm bill has not been needed by farmers as desperately as it’s needed today since the early 2000’s . “Our farmers and ranchers are going through a very difficult recession right now. Net farm income is down 50 percent from where it stood just 5 years ago — the largest drop since the Great Depression,” he said.
By Dairy, Grains, Livestock
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11Dec

U.S. Beef Exports Remain at Record Pace

U.S. Beef Exports Still Red-Hot; Pork Exports Slightly Below Year-Ago Level; Lamb Exports Trend Higher U.S. beef exports remained on a record-shattering value pace in October, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). October pork exports trended seasonally higher compared to recent months but were still below the results posted in October 2017. Lamb export volume in October more than doubled year-over-year, while value increased nearly 50 percent. October beef exports totaled 117,838 metric tons (mt), up 6 percent from a year ago, valued at $727.4 million – up 10 percent and the second-highest monthly total on record. For January through October, beef exports totaled 1.13 million mt, up 9 percent year-over-year, while value was up 17 percent to $6.92 billion. For beef muscle cuts only, exports increased 12 percent in volume (867,714 mt) and 19 percent in value ($6.19 billion). Exports accounted for 13 percent of total beef production in October, which was steady with last year, and 11.6 percent for muscle cuts only (down slightly). For January through October, exports accounted for 13.5 percent of total production and 11.1 percent for muscle cuts – up from 12.8 percent and 10.2 percent, respectively, last year. Beef export value equated to $317.53 per head of fed slaughter in October, up 5 percent from a year ago. For January through October, the per-head average was up 15 percent to $320.50. “Demand for U.S. beef continues to climb in nearly every region of the world, with annual records already falling in some markets,” said Dan Halstrom, USMEF president and CEO. “Per-head export value will also easily set a new record in 2018, which illustrates the strong returns exports are delivering for cattle producers and for the entire supply chain.” Halstrom added that upcoming trade negotiations with Japan are critical for the U.S. pork and beef industries, as all major competitors in the Japanese market will soon benefit from significant tariff reductions. USMEF, along with producers, exporters and other industry organizations submitted comments to the Office of the U.S. Trade Representative (USTR) underscoring the importance and urgency of these negotiations and will convey these points again in USTR’s Dec. 10 public hearing. New value records for U.S. beef in Korea, Taiwan, the Philippines Beef exports to South Korea, which had already set a new annual value record through September, remained on a torrid pace as October exports reached 20,171 mt (up 17 percent from a year ago) valued at $153.1 million (up 25 percent). January-October exports were up 35 percent in volume (200,666 mt) and 47 percent in value ($1.44 billion). These results included a 21 percent increase in chilled beef exports to 44,440 mt, valued at $431 million (up 31 percent). While Korea’s imports from Australia and New Zealand have also edged higher in 2018, U.S. beef’s market share has increased sharply, jumping from 49 to 53 percent. October beef exports to leading market Japan were up 12 percent from a year ago in volume (26,954 mt) and 13 percent higher in value ($166.8 million). For January through October, exports to Japan were up 7 percent from a year ago in volume (279,825 mt) while value increased 10 percent to $1.76 billion. Chilled beef exports to Japan were down 1 percent to 123,712 mt, but value increased 8 percent to $990 million. For January through October, other highlights for U.S. beef exports include: Beef exports to Taiwan were up 34 percent from a year ago in volume (49,135 mt), while value reached $455.3 million – up 36 percent and already easily surpassing last year’s annual record of $409.7 million. Chilled exports to Taiwan were up 30 percent in volume (19,878 mt) and 35 percent in value ($249 million), as the United States captured more than 75 percent of Taiwan’s chilled beef market – the highest market share of any Asian destination. Exports to the Philippines soared 29 percent in volume to 14,751 mt and reached $72.4 million in value – up 35 percent and setting a new annual record. Solid growth in Vietnam also helped push beef exports to the ASEAN region 14 percent ahead of last year’s pace in volume (39,719 mt) and 26 percent higher in value ($218.1 million). Exports to Mexico were up 1 percent from a year ago in volume (199,003 mt) and 8 percent higher in value ($879.2 million). Beef muscle cut exports to Mexico have shown particularly strong momentum in 2018, increasing 8 percent in volume (118,177 mt) and 11 percent in value ($691.6 million). Although October volume trended lower, January-October exports to China/Hong Kong were still 4 percent ahead of last year’s pace in volume (102,545 mt) and 24 percent higher in value ($823.5 million). This included exports to China of 5,677 mt valued at $48.6 million. Growth in the Dominican Republic, Jamaica and the Bahamas contributed to a 9 percent increase in the Caribbean region as exports reached 21,455 mt. Value was up 4 percent to $135.4 million. Led by strong growth in Costa Rica, Guatemala, Panama, El Salvador and Nicaragua, beef exports to Central America increased 18 percent year-over-year in volume (11,923 mt) and 14 percent in value ($64.6 million).
By Grains, Livestock
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10Dec

Crop Insurance Deadline Extended Due To Delayed Harvest

Farmers across the country have struggled with delayed harvest. This week USDA announced the Risk Management Agency (RMA) will provide flexibility for farmers who have been unable to complete harvest prior to December 10, the end date for insurance policies covering most spring-planted crops like including corn and soybeans. Sen. John Hoeven ( X – N.D.), chairman of the Senate Agriculture Appropriations Committee and a member of the Senate Agriculture Committee spoke with Agriculture Secretary Sonny Perdue last month and then sent a letter to the RMA, “urging them to issue guidance to farmers, insurance companies and loss adjustors on properly processing delayed crops and filing claims as harvest continues past the deadline.” “Our farmers need to know that their insurance policies will cover them when facing long delays in harvest,” said Hoeven. “We appreciate Secretary Perdue, Under Secretary (Bill) Northey and RMA Administrator (Martin) Barbre for working with us to issue this guidance prior to the December 10th deadline. Doing so provides much-needed certainty for our agriculture producers as they work through bad weather and difficult conditions to bring this year’s crop out of the field.” North Dakota is one of many states where farmers have abandoned harvest for the time being due to excessive moisture and snowy conditions. Hoeven’s office says that at the end of November there were 1 million acres of corn and 500,000 acres of soybeans left unharvested in North Dakota alone. “I appreciate Chairman Hoeven’s focus on the needs of our farmers and his efforts to get this guidance to them so they can continue to farm even after bad weather hurts their operations,” said USDA Farm Production and Conservation Under Secretary Bill Northey. Under RMA’s guidance, approved insurance providers may allow additional time to harvest when the following conditions are met: Farmers give timely notice of loss to their crop insurance agent; The approved insurance provider determines and documents that the delay in harvest was due to an insured cause of loss; Farmers demonstrate that harvest was not possible due to insured causes; and The delay in harvest was not due to a lack of sufficient equipment or manpower to harvest the crop by the end of the insurance period.
By Grains, Livestock, Weather
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