USDA Announces Mexico Trade Progress; Farmer Aid Details

Just as the USDA announces the first round of trade aid to US farmers for trade lost in President Trump’s tariff wars with US trading partners, comes news from the President that the US and Mexico may be on the cusp of a new trade agreement.

Monday, the USDA announced the first round of a $12-billion aid package to farmers amounting to $4.7 billion.  It is to come to farmers in the form of direct payments.  Those hit hardest by the trade retaliatory trade actions.

The USDA’s Agricultural Marketing Service is to administer a Food Purchase and Distribution Program to purchase up to $1.2 billion in commodities targeted by retaliatory tariffs.  The USDA’s Food and Nutrition Service is to distribute these commodities through nutrition assistance programs and child nutrition programs.

The Foreign Agriculture Service’s Agricultural Trade Promotion Program is to receive $200 million to develop foreign markets for US agricultural products.

Payment rates were listed in a USDA release as $0.06 a pound for cotton for an estimated initial payment of $276.9 million; $0.01 a bushel for corn for an estimated initial payment of $96.0 million; $0.12 per cwt for milk for an initial estimated payment of $127.4 million; $1.65 a bushel for soybeans for an initial estimated payment of $3.63 billion; $0.86 a bushel for sorghum for an initial estimated payment of $156.8 million, and $0.14 a bushel for wheat for an initial estimated payment of $119.2 million.

Pork producers were to be paid payments based on 50% of the total number of pigs they had on hand on Aug. 1 at a rate of $8 per pig for a total of $290.3 million of the $4.7 billion in the first round of payments.

 

NAFTA GOING BY THE WAYSIDE

 

Just as then-candidate Donald Trump said during his presidential campaign that he didn’t like multi-lateral trade agreements, the Administration Monday announced a trade “understanding” with Mexico.  In doing so, the name North American Free Trade Agreement could be in jeopardy.

It’s not a done deal, though, as Congress would need to sign off on the agreement.

Trump was quoted by CBS News saying the final pact could be called the “United States-Mexico trade agreement.”  At the same time, the President held open the door for Canada to join in the new pact.

However, it was not clear if Canada would be interested.  Trump said he and Canadian Prime Minister Justin Trudeau would be meeting “in a little while,” CBS said.  Press announcements from Canada continue to stress a NAFTA deal, saying Canada would need to sign off on any deal.

But in May, Canada rejected a five-year sunset clause President Trump wanted in the pact, refusing to come to the US for further NAFTA talks if the clause were included.

 

CATTLE, BEEF RECAP

 

280 head of fed cattle traded Wednesday on the Livestock Exchange Video Auction at $109.50 per cwt, down from the last sale at $110.07 three weeks earlier.

Cash cattle traded last week at $109 to $109.50 per cwt on a live basis, steady to down $1 from the previous week.  Dressed business was done at $172 per cwt, down $1 to $2.

The USDA choice cutout Monday was up $0.31 per cwt at $213.63, while select was up $1.03 at $204.85.  The choice/select spread narrowed to $8.78 from $9.50 with 65 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Friday, was $150.64 per cwt, down $0.21.  This compares with Monday’s Aug settlement of $150.22, up $1.02 and the Sep settlement of $150.67, up $3.20.