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Your Pro Farmer newsletter is now available... This is your final newsletter for 2021, so as is our tradition, Pro Farmer named our ag story, person and event of the year. In addition, we offer our outlooks for the corn and soybean markets for the new year, which could be highly dependent on South American crops that are facing increased moisture stress, especially in southern Brazil. There’s a plethora of other market and economic news in this week’s newsletter, including a flurry of activity by central banks around the world, highlighted by a change in stance from the Fed, in response to surging inflation. Click here to access this week’s newsletter.
South American weather pattern to remain about the same... The pattern of northern and central parts of Brazil getting rains, while southern areas remain dry will continue through the weekend and into next week, according to World Weather Inc. Some rain is predicted Monday into Wednesday in the drier areas of southern Brazil. After that, rain chances will favor central and northern Brazil.
In Argentina, east-central areas could receive some rains next week, while other locations will be mostly dry and temps will rise.
Limited rainfall forecast for southern Brazil, northern and western Argentina and Paraguay will continue to stress crops and reduce yield potential. Despite the expected warmer and drier bias, weather and crop conditions in central and northeastern Brazil and east-central Argentina are expected to remain favorable.
Vilsack, Buttigieg urge ocean carriers to prioritize ag shipments... USDA Secretary Tom Vilsack and Department of Transportation Secretary Pete Buttigieg have sent a letter to ocean carriers, urging them to minimize disruptions for agricultural shipments, according to Politico. Buttigieg will be at the Port of Savannah today where he will focus on issues at ports.
Buttigieg told Agri-Talk (link) this week that other efforts on the supply chain side have begun to show progress. “We have seen very encouraging signs of things like the rate at which containers are sitting around those ports for a long time,” he noted. “That’s been cut in half at some of the key ports on the West Coast. And that’s very encouraging.”
Seaboard Foods to limit California pork sales... The nation’s second-biggest hog producer, Seaboard Foods, announced it will limit sales of certain pork products in California due to a measure requiring farmers to provide more space for animals raised for food sold in the state.
The company, which produces about 7.2 million hogs a year, “will no longer sell certain whole pork products into California due to California’s Proposition 12,” according to a company spokesperson.
Russia to set wheat export quota at 8 MMT... Russia plans to set its grain export quota at 11 MMT, including 8 MMT of wheat, from Feb. 15-June 30, 2022 to ensure domestic supplies and limit price increases. The quota was previously planned at 14 MMT of grain, including 9 MMT of wheat.
In 2021, the grain export quota was 17.5 MMT from mid-February through June 30, with no separate limit for wheat. But Russia is exporting a lot less wheat this year due to a smaller crop and the rising wheat export tax. To date, Russian wheat exports are down by 37.5% since the start of the 2021-22 marketing year on July 1.
The wheat export tax will increase to $94.00 per MT for the week of Dec. 22-28, a 236% surge from the beginning of June when the country launched its formula-based duty.
In November, Russia’s ag ministry said it may change a formula it uses to calculate this tax if global prices continued to rise to further protect the domestic market.
Argentina plans controls on corn, wheat export volumes... To control domestic supplies and inflation, Argentina’s government has established a system to control corn and wheat exports to “equilibrium volumes,” without providing specifics. In a resolution published in the official gazette, the ministry said, “In order to provide predictability, it is appropriate to publish equilibrium volumes corresponding to products of agricultural origin.”
Corn growers continue to push for fertilizer price relief... The National Corn Growers Association (NCGA) and state organizations sent a letter asking Mosaic executives to “voluntarily withdraw your countervailing duties and allow critical supply back into the U.S. at a time of inadequate supplies and soaring phosphate prices.” The letter notes, “... only 15% of phosphorous imports now come into the U.S. without tariffs. And experts say that using Commerce and ITC to manipulate the supply curve does indeed dictate price to farmers.”
NCGA, along with other ag groups, submitted an amicus brief in November in a case filed in the U.S. Court of International Trade seeking to overturn the tariffs. A ruling in that case is not expected any earlier than summer of 2022. The organizations argue that Mosaic can request the countervailing duties can be cancelled.
At the state level, the Iowa Corn Growers Association (ICGA) asked the Iowa Attorney General’s office to investigate higher input prices including fertilizer. “...we are asking you to investigate on behalf of the ICGA and Iowa’s corn farmers, any actions that may include any or all of the following: price gouging, anti-trust violations, impact of the concentration of participants in the market, or any other consumer or farmer protection causes of action that may be available,” says the letter.
Other state corn grower groups are also asking for fertilizer price investigations in their states.
UK, Australia sign free-trade deal... Britain and Australia signed a bilateral free-trade deal projected to eliminate tariffs and open sectors like agriculture. The elimination of tariffs on Australian wine, and a tariff-free quota for beef will help exporters hit by sanctions from China to pivot to British sales. British cars, whiskey, confectionary and cosmetics will see tariffs phased out in Australia.
Under the deal, tariffs will be eliminated on 99% of Australian goods exported to Britain. An initial tariff-free quota for Australian beef of 35,000 MT will lead to the elimination of duties after 10 years. Australian sugar and sheep meat will also benefit from initial tariff-free quotas, with all tariffs removed after eight and 10 years, respectively.
Britain says the deal has safeguards to protect farmers.
The final terms of the deal will be put before British parliament for scrutiny. Lawmakers can theoretically block a treaty indefinitely, but this power has never been tested.
Senators seek India wheat, rice WTO case... Eighteen U.S. Senators sent a letter to USDA Secretary Tom Vilsack and U.S. Trade Representative Katherine Tai requesting the administration pursue a World Trade Organization (WTO) case against India’s domestic support for rice and wheat production, according to the National Association of Wheat.
“American rice and wheat producers are Growers operating at a clear disadvantage compared to their competitors, primarily from India, where the government is subsidizing more than half of the value of production for rice and wheat, instead of the 10% allowable under [WTO] rules,” the letter reads.
Beginning in 2018, the U.S. highlighted the problem of non-compliance in India through counternotifications at the WTO Committee on Agriculture. Since then, India has raised support prices multiple times. In October, India announced they plan to pay fertilizer companies $3.8 billion to protect their wheat and rice farmers from higher input prices.
Norway grants money to clean hydrogen, ammonia projects... Projects to produce emissions-free hydrogen and ammonia got financial support from Norway’s government. At its fertilizer factory at Heroeya in Norway, Yara will pursue a pilot project to produce emissions-free hydrogen and ammonia. Horisont Energi plans to produce emissions-free ammonia, with carbon dioxide emissions captured and stored under the seabed in the Barents Sea.
Today, most of the hydrogen in the world is produced from natural gas, while associated carbon dioxide (CO2) is released into the atmosphere. Clean hydrogen could be produced by splitting water molecules with the help of renewable energy, or by capturing and storing associated CO2.
