The trade-enhancement agreement with Japan that lowers agricultural tariffs in Japan, signing of the US-Mexico-Canada (Trade) Agreement and the Phase 1 trade agreement with China have been positive developments for US farmers, even though commodity market reaction has been muted.
That statement came from Keith Good, social media manager for the University of Illinois Farmdoc project.
Good went on to report that a recent Congressional Research Service report said, “US agricultural exports have been a major contributor to farm income especially since 2005. As a result, the financial success of the US agricultural sector is strongly linked to international demand for US products.”
In his latest report, Good took a look at news stories regarding agricultural trade with China, the EU and India.
CHINA
US producers eagerly anticipate stepped-up Chinese purchases, but Reuters reported that “China’s purchases of US agricultural products will not impact its imports from other countries.” China welcomes the entry of competitive US products and hopes the US could create conditions to facilitate exports to China.
However, the New York Times said, “The United States and China are already gearing up for the sale of tens of billions of dollars in American-made products to Chinese buyers in the coming months. If carried through, it would strengthen President Trump’s election-year claims of achieving victory in his trade war with Beijing.
“The two sides are also clear on what that means for other countries. China could pull off those purchases only if it stopped buying a lot of farm products and merchandise from countries in Europe, Latin America and East Asia. Many of those countries are American allies, and some are not pleased at the prospect of losing China and its giant economy as a consumer of their exports.”
EUROPEAN UNION
Last month, the Wall Street Journal reported that, “With a China trade deal signed and a new North American deal passed by Congress, the European Union stands out as the big US trading partner unable to reach a significant trade pact with the Trump administration.
“As the White House contemplates the next steps of its trade agenda, the EU suddenly finds itself, rather than China, under the most urgent threat of tariffs and under the most pressure to negotiate,” the Wall Street Journal said.
There are signs the EU is ready to negotiate some trade terms with the US but will not open its markets completely, Good said.
INDIA
Reuters reported that, the US wants India to buy at least another $5 to $6 billion worth of its farm goods if New Delhi wants to win reinstatement of a key US trade concession and seal a wider pact.
Ahead of a Trump visit to meet Prime Minister Narendra Modi, negotiators are hammering out terms for a trade deal that would include New Delhi rolling back higher tariffs on some farm goods such as almonds, walnuts and apples.
CATTLE, BEEF RECAP
Cash cattle trading was reported in the Plains last week at $122 to $122.50 per cwt on a live basis, down $1 to $4.50 from the previous week. Dressed-basis trades were reported at $194 to $195 per cwt, down $4 to $4.50.
The USDA choice cutout Monday was down $1.44 per cwt at $211.56, while select was down $3.24 at $207.42. The choice/select spread widened to $4.14 from $2.34 with 90 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Friday was $141.98 per cwt, down $0.40. This compares with Monday’s Mar contract settlement of $136.65, up $0.57.