Agriculture leaders of Canada and Mexico will speak at the USDA 95th Agricultural Outlook Forum later this month. The Department of Agriculture recently announced Minister Lawrence MacAulay of Canada and Secretary Victor Villalobos Arambula of Mexico will join U.S. Secretary of Agriculture Sonny Perdue for the forum’s keynote address on February 21.

The session will mark the first time the three ministers have spoken jointly at a public forum since the signing of the U.S.-Mexico-Canada Agreement in November 2018. Secretary Perdue says the forum will focus on how USMCA will facilitate agricultural trade among the three countries. USDA says this year’s Agricultural Outlook Forum, themed “Growing Locally, Selling Globally,” highlights current issues and trends affecting agricultural production and global markets.

USDA says the event also offers a platform for exchanging ideas, information and best practices among producers, processors, policymakers, government officials, and non-governmental organizations.

China continues to purchase U.S. soybeans with a more than one million metric ton buy on Friday, and another 600,000 metric ton purchase reported Monday. Following a round of trade talks last week, China pledged to purchase another five million metric tons of U.S. soybeans.

Friday’s purchases by state-owned firms were believed to be destined for China’s state reserves, and thus immune from high import tariffs, according to Reuters. The 25 percent tariffs, imposed last summer in retaliation for U.S. tariffs on Chinese goods, remain in place for U.S. soy imports by commercial crushers in China.

With ongoing trade talks, China began purchasing U.S. soybeans at the end of December. China halted the purchases of U.S. soybeans when the tariff was put in place and purchased most of its needed supply from Brazil. Trade talks between China and the U.S. have a March 1 deadline set by the Trump administration, and Trump said over the weekend “we have a good chance to make a deal.”

Growth Energy filed a petition in the Court of Appeals for the District of Columbia Circuit challenging the Environmental Protection Agency’s failure to address small refinery exemptions in its 2019 renewable volume obligation rulemaking, which was issued late last year.

“EPA’s inaction on addressing lost gallons due to small refinery exemptions in this rulemaking is a clear violation of law,” said Growth Energy CEO Emily Skor. “In doing nothing to remedy these and other deficiencies, EPA has again failed to meet its statutory obligation to ensure that annual RVOs are met each year.”

Under the Renewable Fuel Standard, refineries producing transportation fuel must demonstrate each year that they have blended certain volumes of renewable fuel into gasoline or diesel fuel or acquired credits from others called renewable identification numbers, or “RINs”, representing all of part of those volume obligations.

The RFS allows certain “small” refineries – those with a throughput of less than 75,000 barrels per day – to petition EPA for a temporary extension of an earlier exemption from the renewable fuel volume requirements. The exemption is supposed to exempt only those refiners who can show that compliance with the RFS would cause “disproportionate economic hardship.”

In 2018, Growth Energy says they became aware of a stark increase in the number of small refinery exemptions being granted in recent years, with no apparent effort by EPA to publicly identify those who received the exemptions, explain the increase, or account for renewable fuel obligations lost to the exemptions.

Growth Energy says that despite repeated challenges by them and others in 2018, both in petitions and comments to the agency and before federal courts, EPA has steadfastly failed to make good its statutory obligation to ensure that RVOs established by the Agency are met each year. EPA explicitly refused to take up the issue of small refinery exemptions in its 2019 RVO rulemaking, stating that such exemptions were “beyond the scope” of the rulemaking.

Brazil and China are looking to hold the first high-level political and economic talks they’ve had since 2015. A Reuters article says Brazil’s agricultural trade secretary expects the move will boost farm trade between the two countries. Reuters says the first meeting of the China-Brazil High-Level Coordination and Cooperation Committee is expected during the second half of this year.

The meeting will likely move talks forward on permitting more Brazilian meatpackers to export to China. It should also accelerate Chinese approval of genetically modified products. China is Brazil’s largest trading partner and the top importer of Brazilian soybeans. Brazil exports to China totaled $64.2 billion last year, a 35 percent jump year-over-year, thanks in large part to the trade war between China and the U.S. China recently sent a delegation to Brazil to visit factories that produce beef, poultry, and donkey.

The visual inspection is the first step in the process of allowing more Brazilian plants to export to China. Brazil has products that have been waiting two years for Chinese officials to approve them for importing.

Ag Secretary Sonny Perdue announced that his department awarded $200 million to 57 organizations through the Agricultural Trade Promotion Program. The Hagstrom Report says the goal is to help U.S. farmers and ranchers find and get into new export markets around the globe. The promotion funds are part of the package that also included the Market Facilitation Program payments to farmers hurt be retaliatory tariffs, as well as a food distribution program to assist producers of targeted commodities.

In making the announcement, Perdue made a thinly-veiled reference to China by saying, “This infusion will help us develop other markets and move us away from being dependent on one large customer for our agricultural products. This is seed money, leveraged by hundreds of millions of dollars from the private sector that will help to increase our agricultural exports.”

Every sector of U.S. agriculture was allowed to apply for cost-share assistance under the program. The Foreign Agricultural Service looked at all the applications in terms of the potential for export growth in the target market, direct injury from the imposed retaliatory tariffs, and the likelihood that the proposed project will have a direct impact on agricultural exports.

The Trade Promotion Program provides assistance to eligible groups for things like consumer advertising, public relations, point-of-sale demonstrations, trade fair participation, and market research.

U.S. President Donald Trump expressed some optimism last week about potentially reaching a trade deal with China. However, in the same breath, the New York Times says the president may consider leaving some tariffs in place even if the two sides eventually come to a landmark deal.

“Without the tariffs, we wouldn’t even be talking,” Trump says in an interview with the Times, conducted after two days of trade talks wrapped up. “And I made that point very clear to them.” Trump says he plans on meeting with Chinese President Xi Jinping next month, and the U.S. President says China was prepared to make “some significant changes” to Beijing’s economic policies. Some of the changes include better market access for American companies, as well as buying more American products.

The president had a letter from President Xi read aloud for reporters, and it included a commitment to buy five million tons of soybeans. That caught administration officials a little off guard. U.S. Trade Representative Robert Lighthizer was more guarded in his tone, saying the two sides haven’t put together the framework of an agreement yet. He did say the main achievement so far was, “that the two sides are still talking. It didn’t come off the rails.”

The staff at FSA offices across the nation have been back in action taking applications and issuing payments. Because of the furlough, national headquarters has extended some deadlines we want to make you aware of:

February 14–final date to opt-in on the Market Facilitation Program (MFP)
February 18-Office Closed for President’s Day
February 28-final date to enroll in the 2018 Livestock Forage Program (LFP)

Please note that you must “opt-in” to the MFP by the new revised deadline of 2/14/18, even if your harvest is not complete. Producers who are not completed with harvest will have until 5/1/2019 to certify their 2018 production. Please be aware of the need of landowners to apply for their share of the 2018 production. The deadlines are the same for them and we don’t want anyone to miss getting their payment on this program.

Please contact your local FSA office if you have any questions.

The first half of 2019 should see a shift away from current El Nino conditions. That prediction came from Dr. Art Douglas of Creighton University, who spoke during the CattleFax Outlook Seminar at the NCBA Cattle Industry Convention and Trade Show. Douglas says as the trend develops, it should allow the eastern third of the country to remain drier as the jet stream pushes Gulf moisture across the southern parts of the U.S.

“After a cooler February, the U.S. will enjoy a relatively mild spring with a reduced threat of delayed planting,” Douglas told the crowd. As far as the markets go, CattleFax analyst Kevin Good says he is expecting prices to remain strong. “We’ve been on a good run for the past few years and I expect that to keep going in 2019,” Good says. “However, I do expect margins will begin to compress and leverage to shift from the cow-calf and stocker sectors over to the feeders as we expand the supply of cattle.”

Price risk will remain in place over the next few years thanks to five years of expanding herds. “Cattle producers, on average, will receive a smaller percentage of the retail beef dollar as larger cattle supplies increase price pressure across all segments of the industry,” he says. “Retail beef prices will likely see some inflation in the year ahead.”