Perdue on China's Private & Public Differences on Potential U.S. Ag Product Buys

Posted on 12/12/2019 8:39 AM

Trump team focus on Minnesota could impact Peterson election outlook

Updates since Part 1:

* China promises buys of U.S. farm products privately, then will not do publicly: Perdue
* China cancels some 2020 pork buys
* Big daily corn export sales to Mexico... fifth largest daily for corn
* What if Trump puts new tariffs on around $160 billion of Chinese products?
* White House focus on Minnesota for Trump win could impact Peterson race
* Another look at MFP payments
* Michelle Obama for president?
* Biden's latest ad focuses on he's the one that can beat Trump
* Trump administration issued just over 1 million acres in oil and gas leases in Alaska
* House approves bill with paid parental leave for federal workers
* Federal judge blocks Trump from using military funding to pay for border wall

Election watch: There are 53 days until the 2020 Iowa caucuses. 327 days until Election Day 2020.


U.S./China trade policy update:

  • China cancels 4,000 tonnes 2020 U.S. pork buys. They must be thinking supply rebound and reduced demand or that they can get that the tonnage bought cheaper... even with the cancellation fee. But still more China buys for 2019 of 5,600 MT.
  • Chinese officials told President Donald Trump that they would buy $40 billion to $50 billion worth of American farm goods but were reluctant to commit to contracts, USDA Sec. Sonny Perdue said in a Fox Business interview. Perdue said it’s a “problem” that China is willing to make commitments behind closed doors but then is slow to agree to contracts. He added that the outbreak of African swine fever that has killed millions of pigs in Asia won’t significantly boost U.S. food prices, since farmers can increase output to meet rising global demand. Perdue today is speaking at a conference in Omaha, Nebraska.
  • President Trump and his top trade policy officials will confer today on whether to apply tariffs on around $160 billion in Chinese imports of mostly consumer goods starting Sunday. Trump loves the theatrics around a key decision and this is another example. The Wall Street Journal detailed the products that would be affected should new tariffs be invoked:
    Tariffs proposed

Tariff trade offs

Daily U.S. export sales from USDA:

  • Export sales of 1,600,200 metric tons of corn for delivery to Mexico. Of the total, 1,074,420 metric tons is for delivery during the 2019/2020 marketing year and 525,780 metric tons is for delivery during the 2020/2021 marketing year. This was the fifth largest daily corn export sale.
  • Export sales of 110,744 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year.

    Marketing year for corn began Sept. 1.

Internal White House polling shows Minnesota could join Trump camp in 2020 elections. Sources say Minnesota is one of the “fallback states” Trump's re-election staff has focused on to pick up additional electoral votes, especially if he loses one or several states he won in 2016.

A Collin Peterson (D-Minn.) connection? If Trump puts adequate get-out-the-vote time and funding into Minnesota, some think these additional voters could be enough to defeat Peterson, who was in a tight race in 2016 even when Trump was not on the ticket.

The 2018 versus 2019 MFP payment issue is an interesting one, according to former USDA chief economist Dr. Joe Glauber, now Senior Research Fellow at the International Food Policy Research Institute.

Glauber looked at 2019 payments as of Dec. 3, 2019 and compared them to state totals for 2018. Southern states received much bigger increases in 2019 in percentage terms. And for some Corn Belt states payments are actually down from 2018 levels (“though that will likely not be the case presuming the third tranche is paid out in early 2020,” Glauber notes).

As far as the actual totals are concerned, the Midwest still dominates as pointed out in Part 1 of Policy Updates today (link).

The following is a map showing the percentage increase.

MFP map

Other items of note:

  • If the Democrats have no candidate able to garner the needed numbers to be the party's candidate, some observers signal that would aid two people: Michael Bloomberg or another surprise person if she unlikely chose to run: Michelle Obama. But anyone reading or listening to Michelle Obama's book, Becoming, would conclude there is no way she would want to run for president.

  • The Biden campaign, in an ad titled “The Only Way,” is doubling doubled down on its argument that the former vice president has the best chance of beating Trump in the general election. “The first and most important plank in my climate proposal is: Beat Trump.” Biden said.

  • Trump administration issued just over 1 million acres in oil and gas leases in Alaska. The Interior Department’s Bureau of Land Management on Tuesday held the auction on America’s largest piece of public land, the National Petroleum Reserve-Alaska. The auction, which netted just under $11.3 million, comes as the Trump administration is looking to expand oil drilling on the federal reserve.

  • The House approved a bill that includes paid parental leave for federal workers, the creation of the U.S. Space Force and new sanctions related to Russia’s energy ambitions. Link to WSJ article for details.

  • A federal judge has blocked the Trump administration from using billions of dollars in military funding to pay for a border wall, the second such decision in two days. The judge said the administration’s plans violated the constitutional design that gave Congress the power to appropriate money for government spending. Meanwhile, U.S. Immigration and Customs Enforcement made about 143,000 arrests in the 2019 fiscal year, a 10% decline from the previous year.

  • A new E.coli outbreak in the U.S. shows that distributors and regulators are still struggling to close gaps in food safety. An outbreak involving a romaine-based salad kit has sickened at least eight people in three states, the Wall Street Journal reports (link), and those cases could be connected to an outbreak last month that sickened more than 100 people in 23 states. The article notes large efforts are underway to track agriculture ingredients after previous romaine outbreaks, and companies including Walmart Inc. and several suppliers last year joined a global program aimed at using blockchain technology to track food from farm to fork. “Tracking ingredients and pathogens in U.S. food chains has improved but determining the root cause of an outbreak remains difficult. Leafy greens are especially susceptible to contamination because they are grown in open fields and eaten raw and tracking efforts haven’t moved fast enough to halt an outbreak,” the article said.


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