Farm Bureau Press for January 17

JANUARY 17, 2020 • VOLUME 23 • ISSUE 1

Farm Bureau Press A PEEK INSIDE

ARFB “CAUTIOUSLY OPTIMISTIC” ABOUT U.S.-CHINA TRADE AGREEMENT Arkansas Farm Bureau noted cautious optimism after Wednesday’s signing

by President Donald Trump of “phase one” of a U.S.-China trade agreement, hopeful it can bring needed stability to agriculture markets that have been battered by uncertainty since trade disputes between the two countries have escalated.

“This action certainly has the potential to impact, in a positive manner, the Arkansas economy and the tax base of our state,” said Rich Hillman of Carlisle, president of the Arkansas Farm Bureau, the state’s largest agricultural advocacy group. “We thank members of the Arkansas Congressional delegation for their continued focus on this matter. At this point we are cautiously optimistic.”

As part of the “phase one” agreement, China has agreed to purchase increased amounts of U.S. agricultural and other products. Reduction or elimination of non-tariff barriers is included for meat, poultry, rice, dairy and other products.

ArFB celebrates US-MexicoCanada Agreement passage, page 2.

Arkansas Agriculture Hall of Fame Class of XXXIII, page 2.

The U.S. exported $19.5 billion of agricultural products to China in 2017. As a result of retaliatory tariffs, agricultural exports were reduced to $9.1 billion in 2018.

The agreement requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The Phase One agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years.

Importantly, the agreement establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement.

26th annual Arkansas State University Agribusiness Conference, page 3.

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ARFB GARDEN GRANTS AVAILABLE

ARFB CELEBRATES U.S.-MEX AGREEMENT PASSAGE Arkansas Farm Bureau celebrated Thursday’s Senate passage of the United States-Mexico-Canada agreement (USMCA), ratifying an update to the country’s largest agriculture trading partners.

When fully implemented, USMCA is expected to add $2.2 billion to the amount of agricultural and food exports to Canada and Mexico. The agreement is expected to provide a $65 billion increase in gross domestic product.

Agriculture provides more than $20 billion annually to Arkansas’s gross state product, with roughly one-third of production from Arkansas designated for the export market.

Butterfield Trail Middle School in Crawford County received a $500 Arkansas Farm Bureau Garden Grant for the creation of a new garden at their school.

The agreement will provide new market access for American dairy and poultry products while preserving the zero-tariff platform on all other ag products. Mexico and the United States have also agreed that all grading standards for ag products will be non-discriminatory.

The Outdoor Classroom Garden Mini-Grant Program is designed to show that agriculture is an integral part of our everyday environment and can demonstrate the connection between agriculture, food, fiber, conservation, wildlife and the urban environment.

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Additional provisions enhance science-based trading

Applications will be accepted Nov. 1 through Feb. 15 as long as funding is available. Programs will receive up to $500 for new gardens, and up to $250 for ongoing garden projects. The deadline to apply for these grants is Feb. 15.

For more information and an application, visit http:// bit.ly/ArFBGardenGrant.

ARFB FOUNDATION DONATIONS A memorial or honorarium donation to the ArFB Foundation is a great way to recognize someone for their involvement in agriculture in your community.

By making a memorial or honorarium donation, your gift will honor a special someone, as well as supporting the ArFB Foundation.

You can make your donation today by visiting https:// arfbfoundation.gvtls.com selecting the Memorial or Honorarium Donation option.

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The Arkansas Agriculture Hall of Fame plans to induct six individuals whose leadership and service have brought distinction to the state’s largest business sector.

The newest class represents timber, beef cattle, philanthropy, research, water management, conservation and reclamation, agricultural aviation, banking, civic leadership and outreach to farmers, a reflection of the broad and meaningful impact agricultural leaders have throughout Arkansas.

The inductees include ag aviator and longtime chairman of the Arkansas State Plant Board George Tidwell of Lonoke; Tuskegee Airman and retired Cooperative Extension agent Thomas Vaughns from Marianna; and Gene Woodall, a retired University of Arkansas faculty member who paved the way for crop yield increases by creating verification programs that are now emulated around the world. Additionally, posthumous induction will occur for timber landowner and philanthropist Jane Ross of Arkadelphia; Gene Sullivan, who served as state

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XICO-CANADA standards among the three nations as the basis for sanitary and phytosanitary measures for ag products, as well as progress in the area of geographic indications.

The agreement also includes measures that address cooperation, information sharing and other trade rules among the three nations related to agricultural biotechnology and gene editing.

Implemented in 1994, NAFTA removed barriers to intraregional trade, including agricultural products traded between Mexico and the U.S. and most agricultural products traded between the U.S. and Canada. Agricultural exports from the U.S. to Canada and Mexico have increased from $8.9 billion in 1993 to $40 billion in 2018.

The USMCA agreement was signed by the three countries in November of 2018. The implementing bill for the USMCA was sent to Congress on Dec. 13, 2019. USMCA passed the House on a 385-41 vote on Dec. 19, 2019.

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conservationist in three different states and guided key water management programs; and the late cattleman and banker Leo Sutterfield of Mountain View, who served as chairman of the Arkansas Beef Council and a member of the Arkansas Farm Bureau board of directors.

Induction ceremonies for Class XXXIII will be held Friday, March 6 at 11:30 a.m. at the Embassy Suites ballroom in Little Rock.

The new selections will bring to 175 the number of honorees in the Arkansas Agriculture Hall of Fame, begun in 1987.

The mission of the Arkansas Agriculture Hall of Fame is to build public awareness of agriculture and to formally recognize and honor individuals whose efforts have led to the prosperity of local communities and the state.

Luncheon tickets are $35 each. Individual tickets and tables of 10 are available by calling (501) 228-1609 or emailing aghalloffame@arfb.com. Online reservations can be made at http://bit.ly/AgHallTickets.

ARKANSAS STATE UNIVERSITY AGRIBUSINESS CONFERENCE The 26th annual Arkansas State University Agribusiness Conference will be held Feb. 12 and will focus on the Arkansas economy, agricultural legal issues, trade and farm policy and the agricultural credit and commodity markets.

The morning general session features four speakers and a panel discussion. Michael Pakko, chief economist and state economic forecaster at the UALR Institute for Economic Development, will discuss the U.S. and Arkansas economy and implications for rural Arkansas. Harrison Pittman, director of the National Agricultural Law Center in Fayetteville, will give an update on agricultural legal issues. Darci Vetter, former chief agricultural negotiator in the Office of the U.S. Trade Representative, will describe the agricultural trade situation and give her views on the future of trade policy. Agricultural policy and political analyst Jim Wiesemeyer will discuss the 2020 election and the implications for the agricultural and rural economy.

Conference director Bert Greenwalt will lead the discussion panel of General Session speakers.

The luncheon program will feature Arkansas Secretary of Agriculture Wes Ward.

The afternoon program features four concurrent commodity sessions. Terry Harris and Grayson Daniels from Riceland Foods will discuss the rice, soybean and corn markets. Jeff Johnson from Allenberg Cotton Co. and University of Arkansas economist Scott Stiles will discuss cotton industry issues. Arkansas State University professors David Newman and Mark Jordan will discuss the outlook for the poultry and beef industry.

A session on credit and farmland markets will feature presentations by Susannah Marshall from the Arkansas State Bank Department and Bill Shannon, an accredited arm manager with Farmers National Company.

For more information on the conference including registration, visit http://bit. ly/2020AgriBusinessConference.

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MARKET NEWS as of January 16, 2019 Contact Brandy Carroll 501-228-1268 brandy.carroll@arfb.com

In the annual production report, the 2019 corn crop was estimated at 13.7 billion bushels, down 5% from the 2018 crop estimate, even though harvested acres were up less than 1%. The decrease comes from a significant drop in yields thanks to adverse weather conditions throughout the 2019 growing season. The average yield in the U.S. was pegged at 168 bushels per acre, down 8.4 bushels from 2018. Corn stocks in all positions on December 1 totaled 11.4 billion bushels, down 5% from the same date in 2018. The Supply/Demand report raised total corn use to 14.07 billion bushels, and left the season-average on farm price unchanged at $3.85. The signing of a preliminary trade deal with China has not yet excited the corn market, as there are still many questions to be answered. Nearby March has tough resistance at $3.92, and support begins around $3.83. The market will be looking for direction from export demand and from prospective 2020 plantings, which will likely result in downward pressure on prices.

Soybeans Soybean prices reacted negatively to the signing of the U.S.-China phase-one trade deal. It is likely a case of “buy the rumor, sell the fact,” as the market had been anticipating the deal for some time. Technically, November violated support at $9.65, and looks poised to retrace a good portion of the gains charted since December 2.

The annual production report pegged U.S. soybean production down 20% from 2018, totaling 3.56 billion bushels. The average 4

yield per acre was pegged at 47.4 bushels per acre, down 3.2 bushels from 2018. Harvested acres were down 14%. Arkansas’ average yield was pegged at 49 bushels per acre, lower than the previous two years.

Positive movement was noted on the stocks front, with beans stored in all positions on December 1 down 13% from a year ago. Total stocks totaled 3.25 billion bushels, and the most recent quarter showed disappearance up 8% from the same period in 2018. The supply/demand report pegged the average on farm price at $9.00 per bushel, up 15 cents, reflecting stronger soybean oil prices.

Rice Rice was the only commodity to be singled out in a fact sheet by USTR as a part of the announcement package regarding the U.S.-China trade agreement. The 25% tariff on U.S. rice will not be removed, but China is said to have agreed to waive the tariff as part of the agreement.

There is no timeline for purchases to begin, however. Rice futures are reacting to the news in a generally positive fashion, but March has yet to challenge resistance at the recent high of $13.49 ½.

That high was charted in reaction to the annual production report.

2019 U.S. rice production totaled 185 million cwt, down 17% from the previous year. Planted acres were down 14%, and the average yield was pegged at 7,471 lbs. per acre, down 221 lbs. from the 2018 crop. Arkansas’ average yield was pegged at 7,480 lbs. per acre, down 40 lbs. per acre from 2018. The monthly supply/ demand report had good news for prices, showing lower supplies, increased use and declining ending stocks. The all rice season-average farm price was raised 20 cents to $13.20 per cwt.

Cotton Cotton futures also reacted negatively to the signing of the U.S.-China agreement. The market has rallied in recent weeks amid rumors of the deal. The lack of details released so far has been received

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negatively by the market, which will need to see some actual purchases to get excited and spark buying interest.

In the annual production report, Cotton production was pegged at 20.1 million bales, up 9% from 2018.

Acreage was up 16% at 11.8 million acres, but yield was down 47 pounds per acre at 817 pounds. The supply/ demand report included the lower production total, down 100,000 bales from the previous estimate, which carried over into ending stocks, which were pegged at 5.4 million bales. The season-average price is now estimated to be 63 cents per pound, up 2 cents from the previous estimate.

Livestock Live and feeder cattle futures remain strong. Short-term supply fundamentals are bullish. Supplies are tight, with cattle on feed as of December 1 was 1.8% below the year-ago total. Cutout values, however, have not yet recovered after the holiday and packer margins have eroded sharply since the spike last fall. Larger placements in the fall will also result in a increase in the supply of market ready cattle this spring. The possibility of exports to China could give the market a boost. February live futures are currently trading in a sideways pattern between resistance at $128 and support at $124. March feeders have resistance between $147-$148.

Dairy In the monthly supply/demand report, milk production forecasts for 2019 and 2020 were lowered from the December estimate on slower expected growth in milk per cow. The all milk price was lowered for 2020, and is now pegged at $19.25 per cwt.

EDITOR Ashley Wallace ashley.wallace@arfb.com