The Department of Agriculture’s trade relief package is drawing criticisms that it favors soybean production over corn. Soybeans, no doubt a hotter commodity for China, which is targeting U.S. ag as part of the trade war with the U.S., have a much larger payout than corn. The payments are based on 2018 production levels that must be certified and provided to USDA. For soybeans, that’s $1.65 a bushel, for 50 percent of production. For corn, it’s a one cent per-bushel payment, for 50 percent of production, or considered as a half-cent payment on total production. The payout for soybeans is estimated to reach $3.7 billion, while the payments for corn are forecasted to reach $96 million. Texas Corn Producers Association President Joe Reed called the package a “slap in the face” to farmers working to make ends meet. Kansas corn President Ken McCauley says of the payments, “A half-cent is no relief from the market destruction we’ve seen for corn,” adding he’s “starting to feel picked on by the administration,” citing trade and the Renewable Fuel Standard. The payments become more troublesome for producers in drought pockets, such as Texas and Missouri, where corn production will be much lower than the rest of the nation.

Negotiators from Canada returned to Washington, D.C. this week to resume talks on the North American Free Trade Agreement with the United States. The U.S. is pushing to get a so-called handshake agreement with Canada, following a framework agreement with Mexico. The U.S. seeks to announce a deal by the end of this week, placing a deadline of Friday. However, that deadline is purely political, as the U.S. wants to notify Congress 90 days before the outgoing Mexican President’s term expires. Under Trade Promotion Authority, the administration must give Congress a 90-day notice before sending the agreement to Congress for consideration. Trump has suggested breaking up NAFTA, and signing separate deals with Mexico and Canada. However, Politico points out that by doing so, Trump could forfeit his ability to get a straight up-or-down vote in Congress without any amendments under trade promotion authority. Trump notified Congress last year he intended to renegotiate NAFTA, not strike bilateral trade deals. For agriculture, the updated agreement with Mexico included improved food safety standards, biotech approvals and no new tariffs.

(NCGA) The National Corn Growers Association this week has said that plans unveiled by the U.S. Department of Agriculture to provide aid to farmers negatively impacted by trade tariffs and ongoing trade uncertainty would be insufficient to even begin to address the serious damage done to the corn market as a result of the Administration’s actions. The organization reiterated its call for the Administration to rescind tariffs, secure trade agreements and allow for year-round sales of higher blends of ethanol; no-cost actions that would allow for the marketplace to drive demand. According to an NCGA-commissioned analysis, which NCGA provided to USDA and the Office of Management and Budget, trade disputes are estimated to have lowered corn prices by 44 cents per bushel for crop produced in 2018. This amounts to $6.3 billion in lost value on the 81.8 million acres projected to be harvested in 2018. USDA’s plan sets the payment rate for corn at just one cent per bushel. “NCGA has understood from the beginning that this aid package would neither make farmers whole nor offset long-term erosion of export markets. But, even with lowered expectations, it is disappointing that this plan does not consider the extent of the damage done to corn farmers,” Skunes said. “Once again, we are calling on the Administration to settle trade disputes and support a strong Renewable Fuel Standard. These no-cost, immediate actions would deliver a real win for rural America.”

Agriculture groups welcomed the aid offered by a Department of Agriculture relief package announced Monday, but urged the administration to end trade disputes. Pork exports are one of the hardest-hit export categories, as U.S. pork exports to China are down significantly for the year, with the value falling nine percent through June. The drop has come mostly because of the 50 percent additional tariff from China. The package will provide producers $8 per hog based on 50 percent of the number of animals they owned on August first. National Pork Producers Council President Jim Heimerl stated that the U.S. pork sector was “grateful” for the relief package, “what pork producers really want is to export more pork, and that means ending these trade disputes soon.” Iowa Senator Chuck Grassley said the relief package was “welcome news” for farmers, but added “what they really want are long-term markets, not handouts.”

Agriculture Secretary Sonny Perdue Monday announced details of the trade assistance package for farmers hurt by the President’s trade agenda. The $12 billion package will provide payments to producers as part of a “short-term relief strategy” to protect agriculture. The Department of Agriculture’s Farm Service Agency will administer the Market Facilitation Program to provide payments to corn, cotton, dairy, hog, sorghum, soybean and wheat producers starting September 4th, 2018. It’s important to note that payments will be based on actual production. Producers must harvest a crop and provide their production numbers to USDA before payment can be sent. The payments to producers will total $4.7 billion. Also included in the relief package, USDA’s Agricultural Marketing Service will administer a Food Purchase and Distribution Program to purchase up to $1.2 billion in commodities targeted by “unjustified” retaliation. And, through the Foreign Agricultural Service’s Agricultural Trade Promotion Program, $200 million will be made available to develop foreign markets for U.S. agricultural products.
Payments include:
Soybeans – 1.65 per bushel for 50 percent of production
Corn – One cent per bushel for 50 percent of production
Pork – 50 percent of the total number of pigs on hand as of August 1, $8 per pig.
Cotton – Six cents per pound of 50 percent production.
Sorghum – 86 cents per bushel of 50 percent production
The margin protection historic number at 12 cents per hundredweight times that production number. USDA has a number for 21,000 producers but for&; those who don’t have it can be calculated by USDA.
Eligible applicants must have an ownership interest in the commodity, be actively engaged in farming, and have an average adjusted gross income for tax years 2014, 2015, and 2016 of less than $900,000. Applicants must also comply with the provisions of the “Highly Erodible Land and Wetland Conservation” regulations. On September 4, 2018, the first MFP payment periods will begin. The second payment period, if warranted, will be determined by the USDA.
The initial MFP payment will be calculated by multiplying 50 percent of the producer’s total 2018 actual production by the applicable MFP rate. If the Commodity Credit Corporation announces a second payment period, the remaining 50 percent of the producer’s total 2018 actual production will be subject to the second MFP payment rate. Payments are capped per person or legal entity at a combined $125,000 for dairy production or hogs. Payment for dairy production is based off the historical production reported for the Margin Protection Program for Dairy. Payment for hog operations will be based off the total number of head of live hogs owned on August 1, 2018.

An advisor on trade development priorities to the Canadian federal government says that, even with all the drama, the 25-year-old North American Free Trade Agreement needed to be updated. Dennis Laycraft, who is also the Executive Vice President of the Canadian Cattlemen’s Association, said the world has changed a lot since NAFTA was signed back in 1992. An admitted optimist, Laycraft says there has to be an agreement made between Canada and the United States. First of the two biggest sticking issues includes the continued presence of an independent, disputes-resolution panel. The other big sticker is the U.S. demand for a Sunset Clause, which would force a NAFTA re-negotiation every five years. But now it looks like some headway was made on that front over the weekend. Mexico’s incoming trade negotiator said, on Saturday, that the U.S. has backed off of its demand. Even so Laycraft said he expects to see Canada back at the table soon. The current bi-lateral U.S. – Mexico round was focused largely on wage and labor issues. And on those discussions, Laycraft believes Canada did not need to be present.

Werner Baumann, Bayer Chief Executive Officer, tried to soothe the frayed nerves of investors after a recent jury award of $289 million during a trial regarding glyphosate. Baumann says the merger between Bayer and Monsanto still makes sense in spite of the challenges ahead. Baumann told a German newspaper that there is “no reason to break out in nervousness” in the aftermath of the verdict on August 10th. In his first public comments since the decision, Baumann says, “The fact is that absolutely nothing has changed about the compelling logic of the Monsanto takeover, the potential value creation for our shareholders, the attractiveness of the agriculture market, and the goals we communicated.” The California court awarded damages to a school groundskeeper that claimed Roundup caused his non-Hodgkin’s lymphoma because of allegations the herbicide causes cancer. Bayer has said it will appeal. The verdict shocked case observers both inside and outside of Bayer in the first of what may amount to thousands of cases. While jury verdicts are typically either overturned or reduced, financial analysts say Bayer could still face as much as $5 billion in costs linked to cases involving glyphosate, the main ingredient in Roundup.

WASHINGTON (AP) — The Latest on a U.S. trade agreement with Mexico (all times local):

11a.m.

President Donald Trump says he’ll be “terminating” the North American Free Trade Agreement as he pursues a deal with Mexico and starts negotiations with Canada.

 

A big deal looking good with Mexico!

— Donald J. Trump (@realDonaldTrump) August 27, 2018

Trump said Monday during an Oval Office event that he’ll be calling the emerging agreement the “United States-Mexico Trade Agreement.” He says it will mark the end of the NAFTA name.

Mexican President Enrique Peña Nieto was on speakerphone and says he hopes NAFTA partner Canada will eventually be incorporated into the deal.

Adam Austen, a spokesman for the Canadian Foreign Minister, says Canada had been in regular contact with the NAFTA negotiators.

He says, “We will only sign a new NAFTA that is good for Canada and good for the middle class,” adding that, “Canada’s signature is required.”

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10:25 a.m.

President Donald Trump is announcing a trade “understanding” with Mexico that could lead to an overhaul of the North American Free Trade Agreement.

Trump made the announcement Monday in the Oval Office, with Mexican President Enrique Pena Nieto joining by speakerphone.

Canada, which is part of NAFTA, is not participating in the announcement. Trump says negotiations with Canada have yet to begin and is calling on the country to negotiate fairly. He’s threatening anew to slap tariffs on Canadian cars if they fail to do what he wants.

Trump says the call is being held to “celebrate the understanding” the U.S. and Mexico have reached on trade.

He says, “It’s an incredible deal for both parties.”

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WASHINGTON (AP) — U.S. and Mexican negotiators were preparing Monday to announce a deal that would set the stage for an overhaul of the North American Free Trade Agreement.

The White House said it planned an announcement on trade later Monday morning.

U.S. Trade Rep. Robert Lightizer and Mexican Secretary of Economy Idelfonso Guajardo walked together into the White House without talking to reporters. The delegation also included Jesus Seade, a World Trade Organization veteran tapped by Mexican President-elect Andres Manuel Lopez Obrador as his future chief trade negotiator.

“A big deal looking good with Mexico!” Trump tweeted Monday morning. Earlier, Guajardo told reporters, “There is one very important issue to finish.”

U.S. and Mexican negotiators worked over the weekend to narrow their differences.

“There likely will be a deal today,” said Daniel Ujczo, a trade attorney with Dickinson Wright PLLC who has followed the NAFTA talks closely.

Once they reach an agreement, the third country in NAFTA — Canada — would be brought back in to finalize a revamp of the 24-year-old pact. But the countries still must resolve difficult issues, including U.S. complaints about Canada’s protection for its dairy farmers and the way disputes are resolved under NAFTA.

Adam Austen, a spokesman for Canadian Foreign Minister Chrystia Freeland, said: “Canada is encouraged by the continued optimism shown by our negotiating partners. Progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement.”

Austen said the Canadians had been regular contact with the NAFTA negotiators.

“We will only sign a new NAFTA that is good for Canada and good for the middle class,” he said, adding that “Canada’s signature is required.”

NAFTA reduced most trade barriers between the three countries. But Trump and other critics say it encouraged U.S. manufacturers to move south of the border to exploit low-wage Mexican labor.

Talks to overhaul the agreement began a year ago and have proven contentious.The Trump administration wants a higher percentage of auto production to come from within the NAFTA bloc before qualifying for duty-free status.

Talks have also been stymied by the Trump administration’s insistence on a “sunset clause” that would end NAFTA in five years unless all three countries agreed to continue it.

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