President Trump Pledges Further Aid To U.S. Farmers
- On Tuesday, President Trump vowed to protect American farmers by signaling his desire to provide further aid a day after Chinese firms stopped U.S. agricultural purchases and Beijing threatened more tariffs on U.S. farm products.
- Trump tweeted "Our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do - And I’ll do it again next year if necessary!"
- Details of the USDA’s latest MFP aid package of up to $16 billion was announced in July. The first tranche of payments are expected to begin in August with subsequent payments scheduled in November and January.
- Increased agricultural purchases by China have been a cornerstone of the trade negotiations for the U.S.
- Last week Trump last week said Beijing had not fulfilled a promise to buy large volumes of U.S. farm products and vowed to impose a 10% tariff on a further $300 billion of Chinese imports on September 1.
- What It Means For The U.S. Farmer: Because the details are thin, we’re unsure how to interpret the president’s latest tweet. We believe that the language is supportive for the U.S. farmer, but the president offered no details about additional aid programs. At FBN, we believe that the U.S. farmer has a better chance to gain economically inside of a system that embraces free trade rather than government assistance.
- Brazilian agri-consultant Datagro is forecasting that Brazil will increase planted soybean acres by 2.5-3.5%.
- Corn acres could expand by 4% for the 2019/20 crop year.
- Datagro estimates that the increased soybean acres could result in production of 125 million to 126 million tonnes compared with 116.76 million tonnes during this year's harvest, which was impacted by drought.
- For corn, Datagro sees the expanded corn acres producing a Brazilian harvest of 104.28 million tonnes, compared with 100.02 million tonnes in 2018/19.
- What It Means For The US Farmer: At FBN, we believe that expanded Brazilian corn and soybean acres is expected and is not a positive development for the U.S. farmer. However there is a long way to go before any crop is harvested in Brazil. We will place more focus on Brazilian and Argentina corn and soybean production as details become available.
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