CHINA, US REACH AGREEMENT ON BEEF, POULTRY AND NATURAL GAS

Trump administration officials hailed the deal as a significant step in their efforts to boost U.S. exports and narrow America's trade gap with the world's second-largest economy.

The United States would also allow U.S. companies to ship liquefied natural gas to China as part of the bilateral agreement reached following President Donald Trump's meeting with Chinese President Xi Jinping in April. The agreement covers a number of long-standing barriers in areas ranging from agriculture to energy to the operation of American financial firms in China.

Commerce Secretary Wilbur Ross hailed the agreement as "a herculean accomplishment" forged in record time.

"This is more than has been done in the whole history of U.S.-China relations on trade," Ross told reporters Thursday evening at the White House. "Normally trade deals are denominated in multiple years, not tens of days."

But while the agreement touches on many of the trade barriers American companies have long complained about, it remains to be seen just how far China will go to allow more American exports. Previous administrations have hailed market-opening agreements, only to be left disappointed.

"The key in these negotiations is specifics that are enforceable — literally the devil is in the details," said Scott Mulhauser, the former chief of staff at the U.S. Embassy in Beijing.

"The more these agreements include real, concrete outcomes rather than platitudes, rehashing old ground or punts to the future, the better they are. American companies, workers, farmers and more are eager for more access to Chinese markets and they'll look to ensure reality matches the rhetoric of these promises," Mulhauser said.

Trump made America's massive trade deficits and specifically the gap with China a major issue in his campaign and during the early days of his administration. He's argued that America's perennial trade deficits have cost millions of factory jobs and pledged to take a tougher stance in trade negotiations to lower the imbalances.

Under the agreement, the United States would welcome Chinese companies negotiating agreements to purchase U.S.-produced liquefied natural gas. The Energy Department has already authorized the shipment of 19.2 billion cubic feet per day of natural gas exports to China and other interested countries, the Commerce Department said.

A number of U.S. companies are seeking permits to build facilities to process liquefied gas, which would allow America to become a net exporter of gas, something it has not been since the 1950s. China is attempting to turn to natural gas as a way to reduce its dependence on coal and combat the country's extensive air pollution. The move would allow China to diversify its supply and provide a significant market for American suppliers — though the expansion could boost prices for U.S. consumers.

Ross downplayed the impact, pointing to the decline in natural gas prices. "If you look at it on a historical basis, there's plenty of room to go back up," he said. "It's not as though this is going to wreck anybody's pocketbook."

The agreement would also ease import restrictions on agricultural goods, including ending China's restrictions on beef imports. China imposed a ban on American beef in 2003 after a case of mad-cow disease, a ban that has remained in place despite extensive efforts by the Bush and Obama administrations to get it removed.

In exchange, the U.S. would allow the sale of cooked Chinese poultry — a move Ross said could be done safely. "We do not intend to endanger anybody's health or safety in the U.S.," he said.
The agreement would also streamline the evaluation of pending U.S. biotechnology product applications; pave the way for allowing American-owned suppliers of electronic payment services to begin the licensing processes in China; and facilitate the entrance of Chinese banks into the U.S. banking market, among other measures.

The agreement grew out of negotiations both countries agreed to start after Trump's meeting at his Mar-a-Lago estate in Florida with the Chinese president. The areas dealt with in the initial agreement represent export opportunities that American companies have long sought.

America's trade deficit in goods and services with China totaled $310 billion last year, by far the largest imbalance with any country. The deficit with China represented about 60 percent of the total U.S. deficit last year of $500.6 billion.

The two countries have also agreed to hold high-level talks this summer to be led by Ross, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Wang Yang to work on a one-year plan.
These talks represent the latest effort to resolve contentious trade issues between the world's two largest economies in a process that began during the administration of George W. Bush under Treasury Secretary Henry Paulson. Both countries got together twice a year. The Obama administration continued that effort but reduced the frequency of the talks to once a year. BY MARTIN CRUTSINGER AND JILL COLVIN.

AMERICAN MEAT FARMER BUOYED BY CHINA.

In what they hope to be the first of many deals that would further open the world’s largest market of middle-class consumers, President Trump and his trade team, led by Commerce secretary Wilbur Ross, began taking steps to settle  two prominent trade disputes with China that have stumped the American livestock business for years.

Starting later this year, U.S. cattle ranchers will be able to sell their beef in China, which has refused American imports since the mad cow disease breakout in 2003. Trade bans of U.S. beef around the world, including China, contributed to the value of U.S. beef exports falling from $3 billion in 2003 to $1.1 billion in 2004, according to trade publication Food Safety News.

The U.S. beef industry has been lobbying for years to reopen the Chinese market. A breakthrough came in September when China announced its intent to lift the ban without specifying a time period, and further negotiations on technical details began.

The push to reopen the Chinese beef market likely was aided by the U.S. approval to allow fully-cooked Chinese chicken to enter the U.S., a deal that was also announced Thursday. Chinese chicken has been banned in the U.S.  due to sanitary and health concerns.

Livestock industry officials welcomed the announcement. U.S. beef producers will sell more to Chinese customers who are increasingly willing spend on foreign meats, including Australian and Brazilian imports. 

 Allowing Chinese chicken to be sold in the U.S. would mean more global competition, but it could lead to the end of a ban on U.S.-produced chicken in China, says Jim Sumner, president of USA Poultry & Egg Export Council, an advocacy group. China stopped accepting American chicken imports in 2015 due to fears of bird (avian) flu. “It’s more important for us get that market back,” Sumner says.

“We’re making a lot of progress” on China, he says. “We can’t produce enough chicken wings to satisfy demand here. So it’s all good. We’re glad to see it happen because our industry believes in free, open trade.”

Chinese chicken farmers got a huge break last year when Agriculture Department inspectors completed a review of China’s poultry slaughterhouse inspection systems and concluded that its sanitary and food safety standards were adequate.

Sumner says opening the U.S. chicken market is gradual. Fully cooked chicken from China won’t be sold directly in grocery stores and are used mostly by restaurants and pre-packaged food manufacturers as ingredients for other meals, such as soup, he says. “Any imports from China would be very limited and (serve) special variety niche markets,” he says.

Some critics of imports say concerns about Chinese chicken processors are valid. Outbreaks of the avian flu have been frequent in the country, and its labeling standards are lagging, they say.
Still, accepting Chinese chicken imports -- a top priority of Chinese officials -- likely was in exchange for lifting China's ban on U.S. beef, Sumner says. And American beef producers are eager for more business.

“China has really become a major importer of beef over the last few years. We certainly missed out on that without having access,” says Kent Bacus, director of international trade and market access for the National Cattlemen's Beef Association. “This is something we’ve been working on for the last 13 years.”

Asian consumers tend to favor certain cuts that aren’t as popular in the U.S. – chuck roast, tongue, stomach, short ribs and heart – and demand for these items in China could help raise the value of U.S. cattle, he says.

With more Chinese consumers seeking western restaurants, U.S. beef producers also are hoping to see their beef in steakhouses in Beijing and Shanghai. “We’re going to get better prices,” Bacus says.  BY ROGER YU

COWS, HORSES AND FORKLIFTS

Iris Ordonez, 25, is an assistant manager at Fair Oaks Farms in Fair Oaks, Ind.

Q. What is your background for working on a farm?

A. I was born into it. My family is from New Mexico, where my father was the foreman on a dairy farm. One of my early memories is bottle-feeding the calves at 5 or 6. They were as big as I was, and I could hardly hold the bottle. My older sister Imelda showed me how to stick my finger in their mouth so that they would start suckling and I could switch to the bottle.

When did you move to Indiana?

When I was about 7. The owner of Fair Oaks Farms once owned the New Mexico farm, and a lot of employees from the first farm followed us when we came here, so we’re with people we’ve known for years. My three siblings also work on the farm with me, and I get to spend time with my nieces and nephews.

What are your responsibilities as assistant manager?

I help my dad manage the work that has to be done, including giving employees their work assignments. I also manage the feeders and manure scrapers and do some clerical work.

What else do you do?

I can drive all our vehicles, including a tractor, forklift and front-end loader. We’re one of the Fairlife co-op farms, and occasionally I drive a semi truck and deliver feed to our other dairy sites. I vaccinate our cows and birth them, although a breeder or herdsman is with me during the births in case I need assistance. I also inseminate our cows.

Have you tried other jobs?

I worked in retail at a mall for a while because I thought I might like selling.

What might surprise visitors to your farm?

How much farming has changed over the years. There’s still a bit of a stereotype of farmers in overalls doing many jobs by hand, but it’s not like that. Even the way we milk cows has changed. We have what’s called a milking parlor, where they’re milked in a circle by machine, and we’re also using crops for fuel now.

How do you relax?

I ride horses three or four times a week in the afternoons. We have over 20 on the farm. That, to me, is fun. BY PATRICIA R OLSEN

EYE ON AGRICULTURE: FRESH FOOD FOR ALL AT STICK AND STONE FARM.

For farmers Chaw Chang and his wife and business partner, Lucy Garrison, not only does the term describe the Full Plate Farm Collective they’re a key part of, it’s also an accurate snapshot of their daily lives. With four children ranging in age from infancy to ten years old, the two are continuously working, both on the agricultural and the home front.

Stick and Stone did not start out looking the way it does today, Chang recalled. When he and Garrison purchased the land on Route 96, between Jacksonville and Ithaca, it was brushland that hadn’t been farmed in years. Today, certified organic vegetables like green beans, winter squash (including butternut, acorn, spaghetti and delicata), beets, carrots and cooking greens (such as kale and collards), along with a selection of Asian vegetables and greens, are raised on the Ulysses farm and acreage in the neighboring community of Enfield.

 “We grow a lot of things that people haven’t tried before or might not have even heard of,” Chang said. “We’re a conduit for people to feel like they have a connection with farming.”

Chang asserted that Stick and Stone, with the various ways they market their crops, is one of the most diversified farms in the area. For example, rather than operating as an individual CSA (Community Supported Agriculture), the farm is a key part of Full Plate Farm Collective, a multi-farm collaboration. This works well for the farms involved because it lets them each focus on a specific set of crops, rather than needing to grow everything themselves, and share other resources like equipment.

Additionally, having a CSA allows Chang and Garrison to acquire more capital in the beginning of the growing season. Having this cash flow has allowed them to take more risks and increase the scale of their farming.

 “I’m not sure I could, or would have, gotten a loan for that amount of money from a bank,” he elaborated.

Stick and Stone sells their produce wholesale too. Chang was one of the first farmers to reach out to local restaurants, encouraging them to include fresh, local vegetables on their menus. Since then, Stick and Stone has expanded their wholesale market to include Wegmans and GreenStar Natural Foods Market.

Their third vegetable venue is the Ithaca Farmers Market, during both summer and winter.
“The Farmer’s Market gives us another outlet for our products,” Chang said. “Having multiple outlets ensures that we will sell all the vegetables we grow.”

Because vegetables are highly perishable, they have to be sold quickly for a farmer to make money. Unfortunately, he observed, lots of vegetable farmers go out of business because they grow more than they can sell.

Keeping their main focus on the Tompkins County area was a mission-driven decision for the couple.
“We like having the CSA so we can feed the people in our community directly,” Chang noted.
Chang and Garrison also try to keep the emphasis on face-to-face, or phone, interaction with their consumers and buyers. They purposely chose not to have an individual website for the farm (though Full Plate Farm Collective has one), are minimally involved with Facebook, and don’t feel a need to increase their presence on social media.

 “Maintaining and paying for these doesn’t interest us,” Chang said. “We want to engage with the community in a real, personable way rather than a virtual one.”

In another value-driven decision, Full Plate Farm Collective has partnered with Cornell Cooperative Extension in a non-profit program called Healthy Food for All. The program enables WIC and Food Stamp-eligible households to purchase a farm share at half the regular cost and receive fresh, quality vegetables each week. HFFA participants can take advantage of free cooking classes to gain skills and learn how to prepare the variety of produce in their share.

Chang is a strong advocate for land stewardship, serving on the Tompkins County Farm Bureau and the Agriculture Committee for the Town of Ulysses. The town is updating their zoning laws and he wants to ensure that the new laws are ag-friendly and that local farmers are represented fairly.

Another issue that is on his mind is climate change, which has led to more extreme weather in recent years and has had a significant impact on farming as a whole. Climate change has already resulted in huge, unpredictable losses for farmers, he said.

 “We’ve had two 100-year floods and one of the worst droughts on record,” Chang said. “What should have happened in 500 years, has happened in three to four years.”

Rain is the biggest problem, he contended, both in terms of crops and the surrounding environment. More rain requires farmers to do more cover cropping and use more drain tiles in their fields. This converts what would have been ground water into surface water, resulting in more water in the surrounding ditches which then overflow and cause damage to the roads. Other problems include more leaching of nutrients from the soil and increased insect and disease pressures on the crops.
Many people seem to think life is easy for today’s farmers, Chang observed. However, this simply isn’t true. He and Garrison have to deal with all sorts of modern-day work problems, including taxes, regulations and workers’ compensation. A farmer needs to be well-versed in all aspects of business, technology, science and human resource management, along with having a complex understanding of plants and animals.

 “We’re not specialized like other professions,” he said. “We need a broad knowledge base. Most people don’t have this complexity of knowledge.”

Chang has clearly put a lot of thought into why farming is such a good fit for him personally.
“I’m production, rather than service-oriented,” he said. “I’m independent. I like to feel like I’m being productive every minute I’m working.” BY SUE HENNINGER

THE NEXT MONTH WILL BE CRITICAL FOR DISEASE DEVELOPMENT.

Recent cold, wet field conditions and fluctuations in soil temperatures have put early-planted corn at risk for seedling disease, and there may be considerations for replant in some areas.

“It’s been a mixed bag across the country,” says Randy Hagen, knowledge transfer manager at Monsanto.

“Cold soil temperatures and episodes of recent rainfall are especially favorable for some of the most common and damaging seedling diseases favored by cold wet conditions,” says Tamra Jackson-Ziems, University of Nebraska (U of N) Extension plant pathologist in a U of N Cropwatch article. “Numerous seedling diseases can take advantage of any of these conditions.”

Monitor seedling emergence and stand establishment in the coming weeks so diseases can be detected early.

Seedling diseases can be caused by any of several common soilborne organisms, such as Pythium, Fusarium, Rhizoctonia, or parasitic nematodes. To complicate things, seedling diseases can be confused with insect injury, herbicide damage, planting problems, or environmental stresses that often have similar symptoms, says Jackson-Ziems.
Look for these symptoms of seedling diseases:

• Rotted seed prior to germination   
• Rotted or discolored seedlings after germination prior to emergence
• Postemergence seedling damping off 
• Root or hypocotyl decay

At least 14 species of Pythium have been identified that can cause seedling blight and root rot. These pathogens require excessive moisture, says Jackson-Ziems.

“The pathogen overwinters in soil and infected plant debris by producing thick-walled oospores that can survive for several years in the absence of a suitable host and favorable weather conditions. In addition to wet soil conditions, some species of Pythium are favored by cold soil conditions and are most likely to cause seed and seedling diseases lately,” says Jackson-Ziems.

At least six Fusarium species can cause seedling diseases and root rots. Stressed plants due to weather extremes (temperature and moisture), herbicide damage, and physical injury are more prone to infection and disease caused by Fusarium species, says Jackson-Ziems.

“Rhizoctonia species can also cause seedling diseases, but tend to be more common in drier growing conditions,” says Jackson-Ziems. “Rhizoctonia tends to cause reddish-brown lesions that can girdle and rot off roots. Root and crown rot may be severe enough to cause seedling death.”

Management

The most common method for disease management is the use of seed treatment fungicides.
In general, corn has protection from early disease because it’s been treated, says Hagen. Most seed corn is already treated with more than one seed treatment fungicide, often an insecticide, and, sometimes with a nematicide.

These products can provide protection against some of the pathogens that cause seedling diseases; however, they only provide protection during the first few weeks immediately after planting.

Scout fields

Diseases may still develop due to extended periods of inclement weather or if they are under severe pathogen pressure, says Jackson-Ziems.

The next month or so will be critical, says Hagen. “Look at field history, what has happened in your area, and what conditions are present today,” he says.

He recommends knowing what potential disease exists in your field. “Don’t wait until the last minute,” says Hagen. “Check your fields regularly, and ask your agronomist a lot of questions. Being aware is an important management tool in today’s world.”

~Pay additional attention to areas that had standing water, warns Hagen. In places with a lot of standing water, there’s a higher risk of disease.

“If it is cold and wet, pay attention to that,” he says. “Those are potential signs for future diseases. But if it gets hotter and drier during the summer, that will go away.”

For some of those diseases, there’s nothing you can do, says Hagen. But knowing that history will help your to make management decisions next year.

If you’re considering replant, don’t make a snap decision. “Wait on replant until it’s a time where it makes sense,” says Hagen.

So far, replant has been minimal throughout the Midwest, says Hagen. But if you’re in a situation where replanting is a consideration, remember these steps:

1. Evaluate the stand in several areas throughout the field.
2. Consider the soil type. Soil type is key to understanding if there’s a chance for crusting and compaction, says Hagen.
3. Check the herbicide history.
4. Consider the time of year. If it gets too late, you may need to switch maturities to an earlier product. But until it gets later, you may not want to change the maturity.
5. Factor in early frost dates.

BY KACEY BIRCHMIER.

WEEKLY OUTLOOK: UPDATING CORN, SOYABEAN, EXPORT PACE.

As the focus of corn and soybean markets turns to 2017 prospects for production, the pace of old-crop corn and soybean consumption carries implications for carryover stocks into the 2017-18 marketing year. The level of corn and soybean consumption in export markets provides an indication of demand strength moving into the next marketing year. The recent pace of exports in soybean and corn markets and the implications for stocks at the end of the marketing year is considered in this post.

Corn exports in the current marketing year exceed the pace for a year earlier through March and currently exceed the historical pace to meet USDA projection of 2.225 billion bushels. The 2016-17 marketing year corn exports through March came in at 61% of the total exports projected during the entire marketing year. This pace is substantially higher than the 43% pace during the same period last year, but poor crop performance in South America gave life to expanded exports through the summer months of 2016.

The rate of weekly export inspections continues to show strength with 28.37 million bushels exported for the week ending May 4. Cumulative Census Bureau export estimates from September 2016 through March 2017 exceeded weekly export inspections by 43 million bushels. If the margin exhibited at the end of March continued, exports through May 4 equaled 1.585 billion bushels. With 17 weeks remaining in the marketing year, 37.6 million bushels per week are necessary to meet the USDA projection. Over the last six weeks, corn export inspections averaged 55 million bushels per week with a high of 61.7 million bushels and a low of 52.4 million bushels.

As of April 27, 575 million bushels of corn had been sold for export but not shipped. Additional sales of 3.82 million bushels per week are necessary to reach 2.225 billion bushels based off of current sales figures and estimated export levels through May 4. For the last six weeks ending April 30, new sales averaged 34.6 million bushels per week. The current pace and sales of corn appear supportive of the current 2.225 billion bushels projection. In assessing the potential for increased exports of corn during the marketing year, the large Brazilian second crop of corn will play a major role since total Brazilian corn production is projected at 3.68 billion bushels, which are up 39.5% from last year’s poor crop.

Soybean exports typically slow as the South American soybean crop enters the world market. Numerous reports of Brazilian farmers holding onto soybeans due to low prices in the local currency provides support for soybean exports lagging behind the normal pace in Brazil. U.S. soybean exports in the current marketing year exceed last year’s pace through March. The 2016-17 marketing year soybean exports through March sit at 87.5% of the total exports projected during the entire marketing year. This pace is higher than the 80.5% pace during the same period last year, but progressing at a similar pace to the previous two marketing years.

The rate of weekly export inspections continues to vacillate with 12.84 million bushels exported for the week ending May 4. Cumulative Census Bureau export estimates from September 2016 through March 2017 exceeded weekly export inspections by 23 million bushels. If the margin exhibited at the end of March continued, exports through May 4 equaled 1.853 billion bushels. With 17 weeks remaining in the marketing year, 10.1 million bushels per week are necessary to meet the USDA projection. Over the last six weeks, soybean export inspections averaged 23.8 million bushels per week but varied with a low of 16.4 million bushels for the week ending April 13 and a high of 32.7 million bushels for the week ending April 6.

As of April 27, 251 million bushels of soybean had been sold for export but not shipped. This number exceeds the 172 million bushels necessary to reach 2.025 billion bushels based off of current sales figures and estimated export levels through May 5. For the last six weeks ending April 27, new sales averaged 14.7 million bushels per week. The current pace and sales of soybeans appear supportive of the current 2.025 billion bushel projection and give credence to the possibility of increased soybean exports for the 2016-17 marketing year. While some commentators see the potential for an increase in USDA projections, it may be too soon for this type of speculation.

The release of the May 10 WASDE report provides the first look at USDA projections for the 2017-18 marketing year. The strength of corn and soybean export demand bodes well for meeting USDA export projections. The ability to exceed these export projections is a possibility, but it is heavily dependent on South American exports and the continued growth in demand from importers. At this point, the ending stock projections outlined in the last WASDE supply and demand figures appear to be the levels we will see moving into the 2017-18 marketing year. BY TODD HUBBS.

SOYA BEANS DROP 5C FRIDAY: BRAZILS BIGGER CROP PRESSURES SOYABEAN MARKET.

DEE MOINES, Iowa --On Friday, the CME Group's farm markets lean lower.
In early trading, the July corn futures are 1/4¢ lower at $3.69, while December futures are 1/4¢ lower at $3.87.

July soybean futures are 5¢ lower at $9.61, November soybean futures are 4 3/4¢ lower at $9.59.
July wheat futures are 1¢ lower at $4.32.

July soy meal futures are $1.20 per short ton lower at $313.70. July soy oil futures are unchanged at 32.49¢ per pound.

In the outside markets, the Brent crude oil market is $0.06 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 22 points lower.

Thursday's Grain Market Review
Corn futures closed lower on Thursday as investors who made money on yesterday’s gains sold contracts and booked profits.

Prices rose on Wednesday after the U.S. Department of Agriculture said U.S. inventories at the end of the marketing year on May 31 would total 2.29 billion bushels, missing estimates for 2.33 billion bushels. Wheat stockpiles were pegged at 1.15 billion bushels, missing forecasts for a total of 1.16 billion bushels.

After prices rose 2% yesterday, investors who’d made money on the market are likely selling to take profits, analysts said.

Futures also dropped after the Conab, Brazil’s agricultural statistics agency, said this morning that corn output in the country should reach 92.8 million metric tons, up from 91.5 million projected a month ago. Soybean output is forecast at 113 million tons, up from 110.2 million in April.

Weather forecasts are also calling for rain to stop for a few days, giving growers a chance to accelerate planting next week. As much as six times the normal amount of rain has fallen in the past two weeks in much of Illinois and Indiana, keeping producers out of fields. Drier weather should allow the pace of planting to improve, analysts said.

Corn futures for July delivery fell 4 1/2¢ to $3.69 1/4 a bushel on the Chicago Board of Trade.
Soybeans lost 4 3/4¢ to $9.65 1/2 a bushel in Chicago. Soy meal declined $3.40 to $314.30 a short ton, and soy oil added 0.24¢ to 32.52¢ a pound.

Wheat futures bucked the trend and rose on concerns about damage to the Kansas crop from a snowstorm the last weekend of April. The heavy snow likely snapped plants that had been heading, according to participants on last week's Kansas Wheat Tour.

Wheat for July delivery rose 2 1/2¢ to $4.34 1/4 a bushel and Kansas City futures added 2¢ to $4.41 1/4 a bushel. BY SUCCESSFUL FARMING STAFF.

HUZZAHS FOR NEW USDA TRADE OFFICE, QUALMZ ABOUT STEWARDSHIP AND RURAL DEVELOPMENT.

Agriculture Secretary Sonny Perdue unveiled a USDA reorganization that would take effect in mid-June, highlighted by creation of a high-level office to promote U.S. farm exports, with President Trump’s call for a smaller and more efficient government still on the docket. Small-farm advocates said rural economic development was downgraded by Perdue’s package “in favor of boosting international trade.”

Groups speaking for grain and livestock producers applauded the new post of undersecretary for trade, mandated by the 2014 farm law. Exports generate 20 cents of each $1 in farm income and Perdue said the new undersecretary “will help me…to be an unapologetic advocate for American products. My message for farmers is simple: You grow it and we’ll sell it,” he said in an essay in the Wall Street Journal.

A USDA spokesman said the reorganization will become effective in 30 days and does not need legislative approval. The plan is “a down payment” on Trump’s executive order for agencies to propose a more efficient and smaller government, he said. “As we move forward, as we see opportunities to make further changes to the department that will improve the delivery of services to our wide array of customers, we will do so. USDA is in the process of preparing materials in response to the order.”

The package unveiled on Thursday would abolish the undersecretary for rural development and unite crop subsidy and land stewardship programs in the same operating arm. Both are significant changes. Lawmakers and the two largest farm groups were guarded in their initial assessments of those steps.
Rural development will become an office that reports directly to Perdue – an elevation in importance, according to USDA. The National Sustainable Agriculture Coalition (NSAC) questioned how much time Perdue would have for rural programs among his many duties. Groups such as the Environmental Defense Fund said “as long as conservation priorities do not take a back seat to farm production goals, both farmers and the environment can benefit” from having one undersecretary over see crop subsidies and conservation, as proposed by Perdue.

“The impacts of such a significant reorganization are hard to predict without more information from USDA and the administration,” said president Roger Johnson of the National Farmers Union, who cited the White House proposal in March for a 21 percent cut in discretionary spending by USDA.

The senior Democrat on the Senate Agriculture Committee, Debbie Stabenow, said Perdue’s package “would eliminate an important voice for rural America” – the undersecretary. The Republican chairmen of the Senate and House Agriculture Committees welcomed the undersecretary for trade and said they would review the rest of the package.

Said House Agriculture Chairman Michael Conaway, “The committee will take a very close look at each of the proposed changes and this will be one of the many important topics we cover when the secretary appears before the committee next week.” Perdue is to testify on the rural economy on Wednesday.

The new undersecretary for trade would oversee the Foreign Agricultural Service with its global network of agricultural attachés and would lead USDA trade policy. That would diminish the power of the No. 3 officer at USDA, the undersecretary for farm and foreign agricultural services, whose office would be oriented to domestic programs and re-named as the undersecretary for farm production and conservation in charge of the farm subsidies, crop insurance and conservation.

At present, the Farm Services Agency, which runs the farm program, also controls the Conservation Reserve, the largest land-idling program. A different undersecretary has jurisdiction over land, water and wildlife stewardship programs for working lands. The reorganization would end the division of authority.

Perdue said the goal of the new mission area of farm production and conservation “is to provide a one-stop shop for USDA’s primary customers: America’s farmers, ranchers and foresters.”
The NSAC said a change in the organization chart did not guarantee less paperwork at the farm level. “With no full proposal yet released that details this part of the reorganization, it is difficult to say whether or not it will result in more effective outcomes for farmers and the environment,” it said. BY CHUCK ABBOTT.

U.S CHINA AGREE TO FIRST TRADE STEPS UNDER 100-DAY PLAN.

WASHINGTON/BEIJING, May 12 (Reuters) - The United States and China have agreed to take action by mid-July to increase access for U.S. financial firms and expand trade in beef and chicken among other steps as part of Washington's drive to cut its trade deficit with Beijing.

The deals are the first results of 100 days of trade talks that began last month, when a meeting between U.S. President Donald Trump and Chinese President Xi Jinping proved far more friendly than had been expected after last year's U.S. presidential campaign, but the immediate impact was unclear.
"This will help us to bring down the deficit for sure," U.S. Commerce Secretary Wilbur Ross said at media briefing in Washington. "You watch and you'll see."

The United States ran a trade deficit of $347 billion with China last year, U.S. Treasury figures show.
By July 16, the 100th day after the leaders' meeting, China agreed to issue guidelines that would allow U.S.-owned card payment services "to begin the licensing process" in a sector where China's UnionPay system has had a near monopoly.

China will also allow U.S. imports of beef no later than July 16, and the United States will issue a proposed rule to allow Chinese cooked poultry to enter U.S. markets.
Foreign-owned firms will also be able to provide credit rating services in China.
"We believe that Sino-U.S. economic cooperation is the trend of the times... We will continue to move forward," Chinese Vice Finance Minister Zhu Guangyao told a Beijing media briefing.

Trump had pledged during his presidential campaign that he would stop trade practices by China and other countries that he deemed unfair to the United States. His tough talk toward Beijing had fueled early fears of a trade war.

But Trump's rhetoric toward China has softened in the past month, expressing admiration for Xi and saying he wanted Beijing to help deal with the North Korean nuclear threat.

Shortly after their meeting, Trump said he had told Xi that China would get a better trade deal if it worked to rein in North Korea. China is neighboring North Korea's lone major ally.

On Friday, when asked whether the trade talks with the United States were related to North Korea, Zhu said economic issues should not be politicized.

UNCERTAIN BENEFITS

But while the world's two biggest economies agreed to take a number of steps by July 16, it was not clear how much these new deals would increase trade in the near term.

Ker Gibbs, the chairman of the American Chamber of Commerce in Shanghai, said the measures were a good beginning but not a breakthrough.

"Past foot-dragging means we won't celebrate until these promises are executed," Gibbs said, calling the opening in the electronic payments market "mainly symbolic".

"This should have been done years ago when it would have made a difference. At this point, the domestic players are well entrenched so foreign companies will have a hard time entering the China market."

China is the top export market for U.S. agriculture products, with the total value of exports rising by more than 1,100 percent since 2000 to $21.412 billion in 2016, so beef sales are potentially lucrative for U.S. exporters.

China had conditionally lifted its longstanding import ban on American beef last year, but few purchases have been made. The ban was imposed in 2003 due to a case of bovine spongiform encephalopathy (BSE), or mad cow disease, in Washington state.

And U.S. credit card operators Visa Inc and MasterCard Inc have yet to be independently licensed to clear transactions in China, despite a 2012 WTO ruling mandating that Beijing open the sector and rules issued by the central bank to let foreign firms enter the market.

Visa said in an emailed statement it looked forward to submitting an application for a bank-card clearing institution license, which, "once granted", would allow it to support economic development in China.

MasterCard welcomed the announcement, saying it looked forward "to having full and prompt market access in China". The United States also signaled that it was eager to export more liquefied natural gas, saying China could negotiate any type of contract, including long-term contracts, with U.S. suppliers.

For U.S. gas drillers, China provides a potential customer base beyond countries such as Japan and South Korea, where the long-term demand outlook is bleak due to mature economies, rising energy efficiency and falling populations.

Potential cooperation between the United States and China on LNG would not have any immediate impact on supplies, as China currently does not need new gas supplies and the United States is not yet able to deliver more.

Randal Phillips, Mintz Group's Beijing-based managing partner for Asia, said that Washington was too focused on selling more to China and should instead seek to address structural imbalances created by Chinese industrial policies and barriers to investment.

"That's going to be the challenge, and hopefully the Trump administration doesn't start declaring victory," he said. (Reporting by Ayesha Rascoe in Washington; Michael Martina, Kevin Yao and Matthew Miller in Beijing; and John Ruwitch in Shanghai; Editing by Simon Cameron-Moore and Nick Macfie) BY AYESHA RASCOE AND MICHAEL MARTINA.

3 BIG THINGS TODAY, MAY 12.

1. Soybeans Down Slightly in Overnight Trading on Bigger Brazil Crop

Soybean futures were modestly lower in overnight trading after Brazil’s agricultural consultancy raised its outlook for the country’s crop and as dry weather moves into the Midwest.

Statistics agency Conab said on Thursday that the domestic crop would total a record 113 million metric tons, up from a month-earlier projection of 110.2 million. Argentina’s crop was pegged by the Buenos Aires Grain Exchange at 57.6 million tons, up 1 million from a prior estimate.

The U.S. Department of Agriculture said in a report on Wednesday that it expects Brazilian growers to harvest 111.6 million tons of soybeans.

Meanwhile in the U.S., some dry weather is on the way to the Midwest where as much as six times the normal amount of rain has fallen in the past two weeks, according to the National Weather Service. The break in the rain should allow growers to get into muddy fields to plant their corn and soybean crops, which are behind the normal pace for this time of year.

Soybean futures for July delivery fell 3 ¾ cents to $9.62 ½ a bushel overnight on the Chicago Board of Trade. Soymeal declined 20 cents to $314.70 a short ton and soy oil futures lost 0.20 cent to 32.29 cents a pound.

Corn futures were unchanged to $3.69 ¼ a bushel in overnight trading.
Wheat futures for July delivery fell ½ cent to $4.33 ¼ a bushel in Chicago. Kansas City futures declined ¾ cent to $4.40 a bushel.

2. Export Sales of Corn, Wheat Plunge in Week That Ended on May 4

Corn and wheat sales plunged week-over-week to their respective marketing-year lows, according to the U.S. Department of Agriculture.

Corn sales for delivery in the seven days that ended on May 4 totaled 277,700 metric tons, down 64% from the previous week and 66% from the prior four-week average and the lowest since the marketing year started on Sept. 1, the USDA said in a report.

Mexico was the biggest buyer, taking 109,400 metric tons, Japan was in for 89,500 tons, Venezuela took 30,000 tons, Jordan bought 26,300 tons and Ireland purchased 19,600 tons.

Wheat sales also plummeted last week as exporters actually saw net reductions in sales for the marketing year that ends on May 31. While it’s not terribly unusual this close to the end of the fiscal season to see sales decline, total sales last week came in a negative-24,200 tons.

Purchases of 66,500 tons by Indonesia, 63,000 tons by China, 51,600 tons by Egypt, 32,400 tons by Chile and 30,900 tons by Algeria were more than offset by cancellations. Unknown buyers curbed a purchase of 315,400 tons, Japan cancelled a sale of 34,700 tons and Nigeria nixed a cargo of 4,500 tons.

Sales for the 2017-2018 marketing year that starts on June 1 totaled 273,400 metric tons with China the big buyer, taking 60,000 tons. Mexico was in for 56,000 tons, an unknown buyer purchased 46,000 tons and the Philippines took 45,000 tons.

Soybean sales weren’t terrible at 381,400 tons, up 20% from the prior week but down 4% from the four-week average.

Unknown buyers took 89,400 tons, Japan bought 60,000 tons and Bangladesh purchased 58,300 tons, according to the USDA. The Netherlands was in for 57,700 tons and Indonesia bought 31,400 tons.

3. Drier Weather Expected Through at Least The Weekend in Most of Eastern Midwest

Drier weather is in store for much of the eastern Midwest where rain has been prevalent for the past few weeks, at least for a while.

No rain is in the forecast for northern Illinois or Indiana through the weekend, with the first chance of storm popping up on Monday night, though the risk of a thunderstorm is “limited,” according to the National Weather Service.

Flooding will still continue as rivers have already breached their banks in many areas including northern and north-central Illinois, the NWS said in an early report on Friday.

In the southern Plains, meanwhile, it’s going to be a “picture perfect” weekend with warm weather and sunshine forecast, the agency said. That should help some fields dry out a bit as they head into the home stretch before the harvest. BY TONY DREIBUS.