(NAFB) U.S. Senator Joni Ernst of Iowa told the Iowa Corn Growers Association this week that President Donald Trump appears to be reassessing his position on the North American Free Trade Agreement. Ernst told farmers Monday that “I think he has doubts,” when it comes to withdrawing from NAFTA. Iowa’s Cedar Rapids Gazette reports that Ernst expects a follow up NAFTA meeting with the President, following a meeting between Trump and a group of farm-state Senators in December. She says the goal is to make sure the President understands that NAFTA is “a good thing nationwide,” and not just for one particular economic sector. The NAFTA negotiations will resume later this month in Canada. Ernst fears that if the talks fail, Mexico, the top buyer of U.S. corn, will find mass supplies of the commodity from other nations.

(NAFB) U.S. House Speaker Paul Ryan of Wisconsin says the biggest problem with the North American Free Trade Agreement “comes from the North,” referring to Canada. Ryan points to Canadian dairy producers dumping low-cost products on the market to compete with Wisconsin farms, as the real issue with NAFTA. Late last week, the Republican said NAFTA needs updated, but said the U.S. should work within the framework of the deal that took effect in 1994, rather than withdrawing from the agreement. Bloomberg reports that dairy has long been one of the sticking points in Canada-U.S. trade, especially for Ryan’s native Wisconsin. Canada’s system of tariffs and quotas, known as supply management, restricts much of its market. The U.S. is proposing changes to the program through NAFTA, but Canada has so-far refused, calling the system “fair.”

U.S. Wheat Associates (USW) sounds an alarm today in reaction to the Department of Commerce’s announcement that it has submitted to the White House the results of its Section 232 investigation of the national security implications of steel imports. Done at the prodding of a large segment of the U.S. steel industry, the investigation and its potential results likely ignore the implications for other U.S. sectors from extreme trade protections for commonly traded steel. The World Trade Organization’s national security exception from normal trade rules has traditionally been narrowly defined for truly exceptional products deemed necessary to maintain essential security interests. There is a good reason for this cautious approach, respected by virtually every country: common usage of it would undermine decades of carefully negotiated trade rules that foster peaceable global trade. Specifically, USW says that it believes that there is no greater national security interest for a country than being able to feed its people, which is best achieved through open markets. If the United States restricts steel imports under a national security claim, some countries may use the same pretense to restrict imports of U.S. wheat and other agricultural products.

A provision in the overhaul of the U.S. tax code had some unintended negative side effects on certain agribusinesses across the country. The provision gives producers a chance to cut down on their taxable income if they sell their commodities to agricultural cooperatives. It appears that farmer-owned cooperatives like CHS, Inc., came out ahead of other agribusiness giants like Cargill and Archer Daniels Midland. The Republicans who crafted that part of the tax bill were John Thune of South Dakota and John Hoeven of North Dakota. Both say they were trying to preserve an important provision from the previous tax code and that the outcome for co-ops was not intentional. They’re now working with other lawmakers and officials from the agriculture industry to find a reasonable solution. USDA Undersecretary for Marketing and Regulatory Programs, Greg Ibach, says the aim of the Tax Cuts and Jobs Act was to spur economic growth across America, including agriculture. The goal was to preserve the benefits of Section 199A for cooperatives and their patrons. He says the current language picks winners and losers in the ag marketplace, which is not something that should happen.gress Fixing Farm Co-op Tax Change

The U.S. Department of Agriculture will start sending additional money to row crop farmers in 14 counties throughout seven states who are enrolled in the Agriculture Risk Coverage program. The move comes after the USDA reevaluated the program using a different method of determining county yields. Politico says the reevaluation was directed by a provision in the fiscal 2017 government spending measure, which authorized up to $5 million for a pilot project. North Dakota Senator John Hoeven sponsored the pilot program and announced on Thursday that USDA was putting it into place. The pilot program is intended to address farmers’ reports of widespread differences in ARC subsidies from one county to the next, due to the yield data the department uses when calculating payments. USDA uses the data obtained by the National Ag Statistics Service through survey responses. The problem is those survey responses have declined in recent years. When enough farmers in a county don’t respond to the surveys, the department uses data from the Risk Management Agency, and those two sets of data can be very different. The pilot program gives the USDA’s Farm Service Agency state offices a larger role in ensuring accurate yield calculations, which should fix data differences between counties.

The Kansas City Federal Reserve Bank says the outlook for agriculture remains down, but is beginning to show signs of stabilization. The bank notes that while aggregate measures of farm income are significantly lower than in previous years, the farm income forecast for 2017 was relatively unchanged from the 2016 estimate. Although farm income was expected to stabilize, growing inventories and trade uncertainty remain key risks to the outlook. High yields boosted production of corn and soybeans to near-record levels for the fourth year in a row, creating higher inventories and an expectation of prices holding at lower levels. Alongside growing domestic supplies, demand from exports and international trade have become more important, but agricultural producers and bankers have expressed concerns over increasing foreign competition and uncertainty surrounding trade deals, such as the North American Free Trade Agreement. In the cattle sector, price variability is a primary concern, but despite larger inventories, prices and net margins are above year-ago levels.

Be it a threat, or intention, if President Donald Trump starts the withdrawal process from the North American Free Trade Agreement, Mexico will drop the trade pact. If Trump decides to leave NAFTA, he would trigger a six-month process to withdraw from the agreement. An official from Mexico said this week that if Trump announces a U.S. withdrawal from NAFTA, “at that moment the negotiations stop.” AgCanada reports that Mexico remains firm on its position to get up and leave from the negotiating table if Trump goes through with the move. While a NAFTA termination letter would start the six-month exit clock ticking, the U.S. would not be legally bound to quit NAFTA once it expires. Washington could use the move as leverage over Canada and Mexico in talks to update the 24-year-old trade pact.

Canada is becoming more convinced that President Donald Trump will soon announce U.S. intentions to withdraw from the North American Free Trade Agreement. President Trump told reporters at the AFBF annual convention earlier this week that he is negotiating tough for farmers, but did not rule out the possibility of withdrawing from the agreement. While the administration seemed to attempt to reassure farmers that the renegotiation will be completed and be better for agriculture, it appears Canada is calling it a bluff. A top unnamed government official from Canada told Reuters: “The government is increasingly sure about this…it is now planning for Trump to announce a withdrawal.” Negotiators from the NAFTA partner nations are due to meet for a sixth round of talks starting January 23rd, in Canada.