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Potential progress on a U.S. and China trade deal rippled through the market Monday morning, with soybeans shooting 18 cents higher on the Chicago Mercantile Exchange. President Donald Trump tweeted "China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products- would be one of the best things to happen to our farmers in many years!" The president followed up with another tweet less than two hours later, saying "Under our potential deal with China, they will purchase from our Great American Farmers practically as much as our Farmers can produce." However, it's a trade truce, and not a trade deal, that's reality today. Treasury Secretary Steven Mnuchin said over the weekend that the trade spat between the U.S. and Chain is on hold, with a possible framework that could boost U.S. ag exports by 35 to 40 percent yet this year. Since the agreement isn't signed, USDA leaders are vowing to take a cautious approach, trying to not become "overly excited" or make predictions on what this trade deal could mean. "I continue to be very cautiously optimistic, repeat very cautiously optimistic," said USDA Under Secretary for Trade and Foreign Agricultural AffairsTed McKinney. "Most details relative to where we land on major trade agreements are not complete. McKinney says there are rumblings surfacing that U.S. Commerce Secretary Wilbur Ross is planning a trip to China next week. It's a trip not locked in, but Ross plans to lead a delegation back to Beijing to work through a possible trade deal. McKinney says agriculture will be at the top of the list of items to work through. Despite the president making bold statements about China purchasing "as much as our Farmers can produce," McKinney knows business transactions still need to take place. "Ultimately these are largely not government to government transactions," said McKinney. "We can help set structure and help set expectations - and we're very happy and fully engaged to do that - but market based demand is going to be a big factor." McKinney thinks the trade agreement framework sets the stage for bolstering trade to China, however, he's looking for more concrete solutions to possibly come from Ross' trip next week. "I'm not aware of any specific commodities have been discussed, but I think the door is fairly wide open for those to pick up next week and for that I'm grateful and excited," said McKinney. McKinney says while he likes the president's enthusiasm about trade ground that could be gained from a deal, he views the president's optimism as more of a challenge for U.S. agriculture. "I do not want people to get overly excited; I think we should be very cautiously optimistic," said McKinney. "I'll remind people that we've seen this before, and sometimes the excitement generates benefits and realities and sometimes it does not. And so, until we get through next week or perhaps following weeks - it may take two or three rounds of this - I'm going to refrain from saying anything more than I'm cautiously optimistic."

The U.S. Department of Agriculture, citing lack of interest from growers, has put an end to a campaign for a national research and promotion program for organic produce and other products. The measure, backed by the Organic Trade Association, would have assessed producers to pay for the program, raising at least $30 million a year. When the OTA officially petitioned the USDA three years ago for the program, it cited a survey showing a 2-to-1 margin of support for the issue. The OTA, which dubbed the program GRO Organic (Generic Research Promotion Order for Organics), would have administered the program under the supervision of the USDA, as with research and promotion orders for hass avocados, mangoes, watermelons and other commodities. Growers and handlers with gross revenue of less than $250,000 would have been exempt. A 3-month public comment period that ended in April 2017 garnered more than 14,700 comments, according to a USDA news release. The USDA cited specific concerns expressed in those comments, which led to its decision to not pursue the program: How organic promotion would affect other commodities; The method of assessing imports, and tracing imported products; The financial burden on small producers; The burdens of paperwork; and The methodology used in voting. More than 1,400 growers and others in the organic products supply chain pledged their support on the Organic Trade Association's website, but few large-scale growers of conventional fruits and vegetables signed on to the program. The setback doesn't preclude another proposal on the check-off program, according to the release. "Termination of the rule making process removes communication restrictions and allows the USDA to engage fully with all interested parties to discuss and consider the future needs of the industry," according to the release.

No longer can vegan and vegetarian food be labeled with meat or dairy specific terms like "burger" or "milk" in France. An amendment passed by the French Parliament now makes it illegal for food processors to label vegan and vegetarian food with terminology commonly used for meat and dairy products. This includes products originating from animals such as steak, cheese, sausage or any other terms used for traditional meat and dairy foods. According to the British Broadcasting Company, a violation of the new law could result in fines up to 300,000 Euros (US$363,156). The amendment was proposed by Jean Baptiste Moreau, a farmer and member of France's Parliament, and passed on April 19 in an agriculture bill. Moreau is also a member of President Emmanuel Macron's political party La République En Marche. "It is important to combat false claims. Our products must be designated correctly: the terms of #cheese or #steak will be reserved for products of animal origin," Moreau said in a tweet. Moreau argued that dairy or meat labels on vegan and vegetarian food were misleading for consumers. A 2017 court case by the European Court of Justice served as a precedent because that case determined plant-based foods could no longer use terms like milk, butter and cheese to label products in the European Union.

Beyond overcoming political differences, every part of the farm bill comes with a price tag “There’s little additional money to spend on the farm bill,” says Jim Wiesemeyer, Washington policy analyst for Pro Farmer and Farm Journal. “That’s why everyone is saying the farm bill will be evolutionary rather than revolutionary.” Wiesemeyer and Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri, share the following political obstacles: 1. SNAP: The Supplemental Nutrition Assistance Program (SNAP) is the biggest challenge to getting a farm bill done in 2018. That’s because both parties and the president must agree on a solution. Proposals include creating stricter work and eligibility requirements. “But the Democrats on the committee say that’s not acceptable,” Westhoff says. 2. Dairy: Few producers liked the 2014 Dairy Margin Protection Program, Westhoff says. The Bipartisan Budget Act keeps the program but reduces premiums for small producers and removes a cap on a livestock insurance program. 3. CRP: There’s talk of boosting the Conservation Reserve Program (CRP) cap from 24 million acres to 29 million acres. “To offset that cost, they would offer lower rental payments for maturing and new contracts,” Wiesemeyer says. 4. ARC and PLC: The Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs need changes, Wiesemeyer says. “For PLC, there will be an opportunity for higher reference prices, and for ARC, information will now come from the Risk Management Agency rather than NASS [National Agricultural Statistics Service],” he says. “But substantial changes would cost too much money.” 5. Niche Programs: The beginning farmer and farmers market promotion programs, for example, have strong support but no baseline after fiscal year 2018. “But extending all of these programs would cost $3 billion,” Westhoff says. 6. Crop Insurance: Wiesemeyer says the specific crop insurance language is not necessarily a challenge—it’s the amendments that follow. “They are typically voted down, but I still see it as a hurdle,” he says.

Tough talks on trade continue to escalate tensions between the U.S. and China as both countries threaten to impose more tariffs. In early April, Beijing slapped a 25% tariff on pork and a 15% tariff on apples, almonds and other goods. Soybeans, cotton and beef are some of the products next in line to take hits from Chinese tariffs that could go into effect after May 11. At that point, the administration has up to 180 days to make a final decision. The stakes are high. A 25% tariff on soybeans, for example, would cost the U.S. economy about $3 billion annually, estimates Wally Tyner, Purdue University agricultural economist. “Interestingly, China would lose about the same amount,” he adds. The threat of $150 billion-worth of tariffs on Chinese goods is a stick the Trump administration is using to crack down on intellectual property theft by the country. “He’s threatening to light American agriculture on fire. Let’s absolutely take on Chinese bad behavior, but with a plan that punishes them instead of us. This is the dumbest possible way to do this,” said Ben Sasse, R-Neb., in a prepared statement. Tyner agrees and says the answer to the problem of intellectual property theft is for Trump to go after China in the international courts. “You have to play the game the way it’s designed to be played,” Tyner says. “You don’t cure theft by stealing from your own people, which is what we’d be doing if we impose the tariffs.” Short-term, Tyner says the tariff would cause little harm because the U.S. exports few, if any, soybeans to China this time of year. However, if a tariff is imposed and stays in place for three or more years, Tyner anticipates Brazil would seize the market opportunity and ramp soybean production up by as much as 9 million acres beyond its current 82.2 million acres. “That would lead to Brazil permanently displacing some U.S. soybeans,” Tyner says. To soften the blow, the U.S. would likely turn to the export markets Brazil cast aside in its rush to court China. But those markets would not be able to totally replace the lost Chinese markets. “U.S. global exports of soybeans would still fall 37%,” Tyner says. If a trade war does ramp up, Illinois farmer Austin Rincker is hopeful China would eventually return as a U.S. soybean customer. “We have a very good infrastructure compared to the rest of the world and have built a good relationship with the Chinese. I think they’d eventually be back,” says Rincker, who raises corn, soybeans and beef cattle near Moweaqua, just south of Decatur. Rincker, who is serving his second term as chairman of the marketing committee for the Illinois Soybean Board, bases part of that expectation on what he observed when visiting Shanghai in 2015. “The populations of Illinois, Indiana, Iowa and half of Nebraska would fit into that city,” he says. “I’d never seen a population density like that. It helped me understand what the middle class looks like there.” Some members of the agricultural industry are less optimistic. “Don’t say China can’t do this. They surely can and they’ve proven they can,” Tom Sleight, president and CEO of the U.S. Grains Council, told Farm Journal reporter Betsy Jibben with “AgDay.” “We’ve seen this happen in feed grains. This can potentially happen in protein meal as well.” Indeed, China’s commerce ministry says, “China has very detailed countermeasures” and will “fight at any cost” to defend its economic interests. There are also other ways China could counter U.S. tariffs—and undermine Trump in the process. John Payne, publisher of “This Week In Grain” told Jibben China has signaled a plan to buy 100 million metric tons of soybeans this next marketing year. “If [China] goes with that number, the only way in my opinion they can get that number out of South America is for South America to import beans from the U.S.” “China’s not stupid,” Tyner adds. He points to China’s calculated decision to go after Trump’s voter base in rural America. Consider the pork tariff. The U.S. exported $1.1 billion of pork to China in 2017 and is considered the third-largest customer in terms of value. “The U.S. has 550,000 jobs in the pork industry, and 110,000 of those jobs are tied to exports. There’s a lot at stake here and we have been delivering that message to the administration, and we’ll continue to do that,” says Jim Munroe, spokesman for the National Pork Producers Council. A 25% soybean tariff could cripple farmers’ support for Trump, which is significant. According to an Associated Press (AP) review of election data, the president won 89% of all soybean-producing counties. “On average, two out of three voters supported Trump in those counties,” the AP reports. Trump’s administration is evaluating how it can potentially shield already-financially stressed farmers from further loss. One option that Trump and Agriculture Secretary Sonny Perdue are considering is a plan to pay $15.3 billion in federal funds to those affected by the tariffs. At press time, the countdown to May was on and none of the existing or threatened tariffs had been resolved. “I frankly don’t think the president understands what he’s getting into,” Tyner says. “Maybe he does, and this will all be negotiated away. If it isn’t, we all lose.” Despite the initial blows, the two countries still have time to negotiate an agreement that would neither cripple U.S. farmers’ already tenuous market opportunities nor hurt China’s burgeoning middle class. It’s the outcome Rincker hopes for as he readies for planting. “I’m for free trade,” says the 29-year-old farmer. “We’ve invested a lot of dollars in meeting the needs of the Chinese and trying to grow that market, and we want it to continue. It’s a $14 billion industry for us.” Like almost half of the farmers who responded to a recent Farm Journal Pulse, Rincker is unsettled. “But we’re far enough into spring and with our fertilizer [program] that we will maintain our rotation,” he says. It’s the same scenario most U.S. farmers face.

The average value of an acre of Iowa farmland is $6,951, which is a 2.9% increase for the six-month period ending March 1. That’s according to the twice-yearly survey conducted by the Iowa Chapter of the Realtors Land Institute (RLI). Coupled with the previous six-month gain reported by RLI in September, an average acre of Iowa farmland increased nearly 5% for the year ending March 1. The annual increase ends the four-year decline in farmland values since their March 2013 high. Yet, despite this year’s increase, values are down 20% from the 2013 high. The survey pegs the average value of an acre of high-quality cropland at $9,376 per acre, up 2.8% for the six months. The average value for medium-quality cropland is $6,925 per acre, which is up 2.8%. The average value of an acre of low-quality cropland is reported at $4,552, up 3.5%. All nine Iowa crop reporting districts showed an increase in the average value of farmland. The gain varied from a 1.6% rise in the South Central district to a 4.3% boost in the East Central district. Three districts boast an average value in excess of $10,000 for high-quality cropland. While, only one, the Northwest district, reported an average value in excess of $10,000 an acre in the September survey. The Northwest district remains the state’s high-price leader with an overall average value of $10,969 per acre for high-quality cropland. The East Central district reports an average value of $10,254 per acre and the Central district lists an average of $10,107 an acre. As usual, the South Central district lists the lowest price for high-quality cropland with a value of $7,272 an acre. The next lowest-priced district is the Southwest at an average of $8,064 an acre. All remaining districts list a value of $9,035 an acre or better for high-quality cropland. The East Central district sports the strongest annual gain in average value at 7.9% followed by the Northeast district’s 6.8% annual increase. The West Central district reports only a 2.8% yearly rise while the South Central district lists the smallest annual gain at 1.1%. Every Iowa Crop District Reports a Boost in Cropland Value Non-Crop Land Increases The survey shows the average value of an acre of non-tillable pasture at $2,829, up 3.2%, and the average value of an acre of timber at $2,442, also up 3.2%. While up 3.2% on average across the state, strong gains in the value of non-tillable/timber land were noted in the Southeast, South Central, Central and North Central crop districts. The gains reflected strong demand for hunting ground, fishing and other outdoor recreation. Many times, the demand came from out-of-the-area investors. The strongest gain, 9.6%, was in the North Central crop district, followed by the Southeast district with an 8% increase. The South Central district notched a 5.5% rise and the Central district saw a 4.6% gain. The number of farm properties available for purchase remains low. The survey found sales volume during the six-month period was either steady with or slightly lower compared to a year earlier, which was also considered to be below-average in sales volume. Farmers accounted for 83% of all purchases over the past six months, up from 72% a year ago. Investors accounted for 13% of all purchases, which is down from about 26% in the March 2017 survey. Kyle Hansen, Hertz Real Estate Services, Nevada, Iowa, and survey coordinator, suggests investors might have become less aggressive in the face of competitive bidding from farmer buyers and from prospects of rising interest rates. The survey found investors are looking for a 3.2% rate of return on cropland purchases and a 4.6% rate of return on the purchase of CRP ground, Hansen notes. The survey also noted 15% of all sales were influenced in some way by a 1031 exchange.

To shield farmers from feeling the brunt of China's tariff action, the Trump administration is considering direct payments through the Commodity Credit Corporation analysts say. In tit for tat action between President Trump and China's President Xi on Thursday night, President Trump announced that he is considering another $100 billion of additional tariffs against China. "Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers. In light of China's unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs," Trump said. In addition he has 'instructed' Agriculture Secretary Sonny Perdue to “use his broad authority to implement a plan to protect our farmers and agricultural interests.” According to Pro Farmer's Jim Wiesemeyer, USDA has been instructed to come up with a plan. “Details are sparse, but if any plan is implemented, it will likely rely largely on the Commodity Credit Corporation (CCC) Charter Act, which could mean direct payments for some producers,” he explains. The CCC is able to assist through loans, purchases, payments and other operations, Wiesemeyer explains. “The Act also authorizes the sale of agricultural commodities to other government agencies and to foreign governments and the donation of food to domestic, foreign, or international relief agencies,” he says. CCC has an authorized and outstanding capital stock of $100 million held by the U.S. Treasury. “Importantly, CCC has the authority to borrow up to $30 billion from the Treasury at any one time,' Wiesemeyer says. 'These funds are used to implement the programs authorized under the CCC Charter Act and various other statutes, including the 2014 Farm Bill.” Still, farmers will tell you they'd rather make their money on the market rather than receive government payment, says Ashley Arlington of AgriAuthority.

A meat packer in Texas has been forced to recall more than 7,000 lb. of raw beef after it was produced and packaged without being federally inspected. According to the U.S. Department of Agriculture's (USDA) Food Safety and Inspection Service (FSIS), frozen and fresh beef produced at PFP Enterprises, also known as Texas Meat Packers, in Fort Worth, Texas, on March 23-24 was not federally inspected. The products included pre-seasoned beef for fajitas, beef skirt diced for tacos and beef flank steak for fajitas. The products subject to recall bear establishment number "EST. 34715" inside the USDA mark of inspection. Items were shipped to nine states including: Alabama, Arkansas, Indiana, Louisiana, Mississippi, Missouri, Oklahoma, Texas and Wisconsin. A total of 7,146 lb. of product is affected. Officials from FSIS were made aware of the problem on March 30 when inspection personnel reviewed establishment records and determined Texas Meat Packers operated on March 24 without inspection. Thus far there are no reports of food borne illnesses from the products. However, FSIS is urging consumers to return any products or throw them away to stop any possible threats of food borne illness. Consumers are being urged not to eat any of the impacted beef.

The U.S. is taking the next step to levy $50 billion worth of tariffs on Chinese imports to protest alleged technology theft. Late Tuesday the Office of the U.S. Trade Representative (USTR) published a proposed list of products imported from China that could be subject to additional tariffs. The proposed list covers 1,300 products from such industries as aerospace, information and communication technology, robotics, and machinery. Some of that machinery includes agriculture equipment. In March President Trump announced that the United States would retaliate against alleged theft of intellectual property by Chinese companies. The White House says China policies "coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises." The USTR filed a request with the World Trade Organization to address China's technology licensing requirements. This is typically the first step in the WTO dispute settlement process. The proposed list will now undergo further review in a public notice and comment process. After completion of this process, USTR will issue a final determination on the products subject to the additional duties.

For 2018, Nebraska farmland prices average $2,745, which is a 3% drop from a year ago. This annual drop is less than the 9% drop seen in 2017 and similar to the 4% drop reported in 2016, according to a preliminary report of the 2018 Nebraska Farm Real Estate Market survey. Overall, Nebraska farmland per-acre prices have dropped 17% since reaching a high of $3,315 in 2014. Low commodity prices and property tax policies are behind the declining farmland values, says Jim Jansen, agricultural systems economics, University of Nebraska. All of the seven land classes in the state dropped in value, compared to last year. Tillable grazing land values declined by 6%—the largest drop, followed by non-tillable grazing land and hayland, which each declined by 5%. Gravity irrigated cropland dropped by 4%, and center pivot irrigated cropland decreased by 1%. Dryland cropland with irrigation potential declined by 2%, while dryland cropland without irrigation potential posted a 1% drop. Looking ahead, survey respondents report Nebraska cropland values will hinge on the earning potential for the major commodities grown across the state, input expenses and monetary policies influencing the cost of borrowing for future land purchases. Regulation policies around the use of water for irrigation were also identified as major influences for irrigated cropland values. For pasture values, demand for beef and availability of forages during periods of drought are two of the major factors. Recent increases in exports of beef from Nebraska to China remain critical for the value of cattle raised in the state, Jansen notes. Also, extended periods of drought might increase the price and availability of forages, which will influence the potential market value of hayland. Softer Rental Rates Across the state, cropland and pasture rental rates dropped, on average, 2% to 7%. Irrigated cropland rental rates declined 2% to 5%, while dryland cropland rents showed minor increases. Property taxes are a pivotal concern during rental negotiations, the survey respondents say. “Landlords face the prospects of low returns on their land after accounting for property taxes,” Jansen says. “Tenants face tight cash flows with current commodity prices, input expenses and rental payments. Negotiating an equitable rental rate remains a challenge for landlords and tenants.” Pasture and cow-calf pair rental rates were mixed, depending on the location. Most districts experienced declines of 2% to 7%, while just a few areas saw increases of 2% to 3%. This annual survey, conducted by the University of Nebraska-Lincoln, polls appraisers, farm managers and ag bankers.