Crop insurance | Trump and Putin | Dicamba ban vote | Syngenta | Renewables top nuclear | Japan now top U.S. corn buyer | Vilsack talks dairy and NAFTA 2.0 | EU-Japan trade accord gets U.S. farm groups nervous | Food industry mega changes | House budget markup next week
— Crop insurance cap map. Kansas State released a map showing the number of insured acres on average that are needed to reach a $40,000 proposed cap on subsides per farm. The map shows the impact for specific counties across the country.
— President Donald Trump meets with Russian President Vladimir Putin on the sidelines of the G20 meeting in Hamburg, Germany. The conversation comes as Trump faces an investigation into his campaign’s possible links to Russia. Trump tweeted this morning he looks forward to the meeting, saying there is “much to discuss.”
— Arkansas Legislative Council to vote today on dicamba ban. The vote will be on whether to authorize a state Plant Board decision to put in place a 120-day ban on the pesticide dicamba. The vote follows more than 500 complaints from farmers that drift from the chemical’s use on neighboring fields was harming their crops. The state Plant Board on June 23 passed emergency rules to ban dicamba, as well as increase fines to up to $25,000 and moved up the effective date of those fines. The herbicide is mainly sprayed on soybean and cotton fields to kill invasive pigweed.
— Syngenta settles farmer’s contamination suit ahead of trial. Syngenta AG reached a confidential settlement with a Nebraska farmer who claimed the company mishandled marketing of its genetically modified seed, causing U.S. corn prices to plummet. With the settlement, Syngenta averts a trial that was scheduled to start July 10. Terms weren’t disclosed, according to Bloomberg.
Almost two weeks ago, Syngenta lost a $218 million jury verdict for a class of Kansas farmers who brought similar claims against the Swiss agrochemical company, which has been acquired by China National Chemical Corp. The Basel-based company completed its $43 billion takeover by ChemChina in June.
Syngenta faces its next class action in a Minnesota court in August, where farmers are seeking more than $600 million. The farmers claim Syngenta rushed its GMO seed to market before getting approval from China to export the grain there. In 2013, China stopped shipments after calling the corn contaminated by the GMO seed, setting off a five-year depression in prices, the farmers claim. They also allege Syngenta misled them on when the Chinese would approve the seed.
Syngenta disputes the damages, or that it did anything wrong. The company didn’t sell the seed until approved by the U.S. and didn’t need Chinese approval, Syngenta lawyers have argued.
The federal judge overseeing multiple class actions in Kansas set several trial dates Thursday for additional class actions to be tried in that court. The claims of Arkansas and Missouri farmers will go forward in January, while Illinois and Nebraska go to trial in April.
— Renewable forms of energy top nuclear plants in U.S. power mix for first time since 1984. America’s nuclear plants have fallen behind wind farms, solar panels and other renewable energy suppliers as a source of electricity. In March and April, U.S. power from utility-scale renewables topped output from reactors for the first time since July 1984, according to a U.S. Energy Information Administration report. Supplies from wind and solar rose to a record, while heavy rains in the West boosted hydroelectric power and nuclear generation dropped to the lowest monthly level since April 2014.
— EU mulling U.S. trade retaliation list. EU officials have started assembling a list of U.S. goods, including Kentucky bourbon, orange juice, and dairy products, to target for retaliation over President Trump’s threat to limit steel imports due to national security concerns, the Financial Times reported.
— Mexico no longer top U.S. corn buyer. Mexico is no longer the biggest buyer of corn from the U.S., a development that shows trade tensions are pushing American grain toward other markets while Mexico lines up new suppliers. Sales to Mexico through May were $1.04 billion, down 6.7% from a year earlier, USDA said Thursday in a monthly update, according to Bloomberg. That contrasts with the 32% increase for the overall value of U.S. corn exports in the period. Japan boosted its purchases 53% to $1.19 billion to become the largest importer of American corn. In recent weeks, Mexican purchases were rebounding as the peso recovered. Of note, U.S. dairy-product exports to Mexico are up 23% year-over-year, according to USDA data.
— Vilsack says talks on dairy in NAFTA 2.0 negotiations will be markedly easier with Mexico than Canada. Former USDA Secretary Tom Vilsack says Mexico has been much less confrontational on dairy than Canada. Agriculture trade relations with Mexico are becoming more normal after early concerns about the U.S. “pulling the rug out from under them,” Vilsack said in a Bloomberg interview. Canada’s supply-management system allows them to dump milk powder at prices below world market, making its policies a global concern, Vilsack said. “In a perfect world,” Canada would drop Class 7 milk designation before NAFTA talks begin to stabilize markets and speed negotiations, Vilsack noted. Vilsack is currently president and CEO of the U.S. Dairy Export Council, based in Arlington, Virginia.
— Japan to add measures to support farmers after EU trade deal. Japan will take measures to boost competitiveness of domestic farm products in global markets and to turn agriculture to the export-oriented industry, Agriculture Minister Yuji Yamamoto said in a statement. The remarks followed confirmation of a new trade agreement between Japan and the EU.
— U.S. commodity groups fret growing number of trade agreements sans U.S. “We have been falling behind for too many years, and our farmers and exporters are finding themselves having to compete with higher tariffs in key markets,” said Jaime Castaneda, senior vice president at the National Milk Producers Federation. “Japan is just the latest example of additional benefits that Australia and the EU will have over the U.S.” In the new EU-Japan trade accord, Japan committed to eliminate a 4.3% tariff on high-quality cuts of pork over a 10-year period. Over the same period, the duty on low-quality cuts would drop from $4.33 per kilogram to roughly $0.45 per kilogram. That deal nearly matches what U.S. pork producers would have had under the Trans-Pacific Partnership (TPP) agreement that was pulled back by President Donald Trump. Regarding beef, the EU-Japan deal will eventually reduce Japan’s import tariff on beef from 38.5% to 9%. Australia and Japan reached a deal in 2015 that now gives Australian beef a 12% tariff advantage, which is growing by the year.
— Budget chairwoman predicts markup of FY 2018 budget next week in House. The House Budget Committee may mark up its fiscal 2018 budget resolution next week, according to Chairwoman Diane Black (R-Tenn.). Disagreement still exists over how much to reduce mandatory spending and how to set up an overhaul of the nation’s tax code through the budget reconciliation process. Black said that she expects the resolution will cut 1% of mandatory spending during the 10-year budget window. “Guys, it’s one penny on a dollar. One penny on a dollar. And if we can’t find a way to cut one penny on a dollar, shame on us. And that is where the biggest fight is right now — between the one side and the other side.” The 1% mandatory spending cut Black spoke about would represent a $339 billion cut over the next 10 years, when the Congressional Budget Office’s projected mandatory outlay of $33.9 trillion for 2018 to 2027 is used. But where exactly those mandatory cuts would come from remains murky. Black said that every committee should be able to find somewhere it can reduce spending.
— Big food manufacturers trying to regain lost market share. Big-name packaged food manufacturers like Campbell’s, Kellogg’s and General Mills are struggling as consumers demand fresher products and purchase inexpensive store brands. The Wall Street Journal this week examined (link) how the industry is doing some soul searching to regain market share. For example, Campbell Soup Co. said on Thursday it would buy Pacific Foods, which makes organic soups and broths, for $700 million in cash to boost its health food options amid changing consumer tastes.
