Sorghum

Setting the Record Straight: What China Actually Agreed to Buy—And When Those Ag Purchases Will Happen

Mon, 03 Nov 2025 23:05:31 GMT

The White House announced a sweeping new U.S.–China trade agreement late last week that includes substantial commitments from Beijing to purchase U.S. agricultural products — marking what officials call a “breakthrough” in restoring and expanding trade flows between the two countries.

According to the White House fact sheet , China will buy 12 million metric tons of U.S. soybeans by the end of 2025 and 25 million metric tons annually through 2028. The deal also restores trade in sorghum, hardwood logs, and a range of other commodities while lifting retaliatory tariffs on U.S. beef, pork, dairy, wheat, corn, cotton, and other farm products.

Yet, with mixed messages from the White House and U.S. Treasury Secretary Scott Bessent, there was some confusion on whether China would purchase an additional 12 million metric tons of soybeans, of if it was 12 million total.

As AgMarket.Net’s Jim McCormick pointed out, the U.S. already sold China 5.9 million metric tons earlier this year, before the trade war broke out. Comments from Bessent made it sound like China would be 12 million metric ton total, which would have equated to only buy an additional 6.1 million metric tons yet this year.

However, the White House Fact Sheet released over the weekend cleared the air, saying, “China will purchase at least 12 million metric tons (MMT) of U.S. soybeans during the last two months of 2025 and also purchase at least 25 MMT of U.S. soybeans in each of 2026, 2027, and 2028. Additionally, China will resume purchases of U.S. sorghum and hardwood logs.”

What This Means for U.S. Farmers

For U.S. row-crop producers and livestock farmers alike, the agreement could spell renewed demand from one of the world’s largest agricultural importers. The 25 MMT annual soybean commitment alone represents a major market opportunity for U.S. producers, especially in key states such as Iowa, Illinois and Minnesota — and for U.S. sorghum growers in the High Plains. The lifting of tariffs on beef, pork and dairy also opens additional channels for livestock- and dairy-product exporters.

At Kansas State University, Dr. Allen Featherstone, head of the Department of Agricultural Economics, calls the deal an encouraging sign for U.S. farmers — especially after years of market turbulence.

“It certainly is a bright spot and big news,” Featherstone says. “Traditionally, China has been buying between 25 and 34 million metric tons. So certainly, the 25 million for the next three years will put that in the range of what historically has been done. The 12 million between now and January certainly is a heavy lift but also a big buy.”

Timing And The Broader Picture

According to the White House, the buys start immediately: 12 MMT in the last two months of 2025 and then on into each of the next three years. The scope of the deal also signals more than agriculture: China has agreed to suspend retaliatory tariffs on U.S. goods announced since March 4, 2025 and to remove its “unreliable entity” and end-user listing measures.

Featherstone says that timing matters, since late fall and early winter are when China typically turns to U.S. soybeans before switching to Brazil in February and March.

“Based on current prices, it’s about a $4.5 billion deal between now and January,” he explains. “If you look at where we are the next three years, it’s about a $10 billion deal — and that’s good news.”

He points out that soybeans remain the No. 1 U.S. export to China, making the commodity a central part of trade negotiations.

“For the last three years, soybeans are the number one import in China from the U.S.,” Featherstone says. “As they’re trying to get leverage over the U.S., the soybean market is one of the places where they can have leverage.”

The Next Hurdle? Tracking the Purchases Amid a Government Shutdown

While the commitments are substantial, Featherstone cautions that verifying China’s purchases will be more difficult due to the ongoing U.S. government shutdown, which has delayed USDA export reporting.

“Tracking will be important,” he says. “Last week they purchased three vessels — about 180,000 metric tons. There are sources besides the government, but certainly not having the government data is a problem.”

Without weekly USDA export reports, private-sector analysts are relying on commercial shipping data and trade wire confirmations to track shipments. Economists warn that these unofficial estimates often vary widely, adding uncertainty to market reactions.

Opportunities and Caveats

Agribusiness groups, U.S. exporters and farm economists will be tracking how the commitments translate into actual purchases and shipping logistics. The upside is clear: large volume commitments from China boost U.S. export potential, may help stabilize or raise soybean, sorghum and other commodity prices, and can provide relief to ag sectors hard-hit by prior trade disruptions.

But there are caution flags too. Commitments do not always guarantee immediate shipments. Market conditions, logistics, currency movements, and China’s domestic production may influence actual demand and timing.

Exporters will want to monitor how quickly China follows through, whether the buys are genuinely incremental (vs. simply re-directing existing purchases) and how U.S. logistics chain handles increased volumes.

How This Will Impact Farmers and Ranchers in the Months Ahead

According to the White House fact sheet, here’s how the trade and economic deal, reached between President Donald J. Trump and President Xi Jinping of China, China committed to buying large amounts of soybeans, but China also said it would start purchasing sorghum again. On the livestock front, tariffs were suspended on beef, pork, dairy and more.

So, what should farmers and ranchers watch in the months ahead?

Soybeans: Given the huge volume — 12 MMT in 2025, then 25 MMT annually — soybean exporters will want to watch new crop availability, global competition (e.g., Brazil, Argentina) and U.S. export origination points.
Sorghum & hardwood logs: These categories were specifically called out for resumption of trade, suggesting new or renewed market access in China.
Livestock, dairy & other ag products: With tariffs suspended on beef, pork, dairy, and aquatic products, U.S. meat and dairy exporters may gain longer-term access to Chinese markets.
Tariff & non-tariff measures: The removal of retaliatory tariffs and other counters means fewer barriers for U.S. ag exports, but exporters should still watch for regulatory or sanitary measures that often influence trade.
Supply chain & logistics readiness: Meeting large volume commitments will test U.S. export capacity, shipping, port access and coordination between exporters and farmers.

Looking Ahead

The China-U.S. deal marks a potentially significant turning point for U.S. agricultural exports in 2025: large-scale Chinese commitments, tariff relief, and expanded access could open new markets and relieve pressure in certain ag sectors.

But the real story will be how fast, how reliably, and how fully China follows through with purchases — and how U.S. producers, exporters, and logistics systems respond.

High Production Costs Could Weigh on the Ag Economy Through 2024, New Survey of Economists Finds

Wed, 28 Jun 2023 19:15:23 GMT

Stronger cattle prices combined with the recent run-up in crop prices aren’t enough to outweigh concerns about the impact high input prices will have on farmers this year and into 2024. While most economists agree the next 12 months could produce more financial challenges for agriculture, views vary on how much financial pressure producers will see and offer differing opinions on the U.S. crop production picture and commodity/feed prices.

The results are part of the June Ag Economists’ Monthly Monitor, a new survey of nearly 50 agricultural economists from across the country. It’s the first survey of its kind, collecting insights from economists who represent both the private and public sectors. The economists represent the ag sector across a wide geography and also have expertise in grains, livestock and policy.

The survey is conducted anonymously to allow the highly respected agricultural economists to speak more openly about their economic and production forecasts since their responses won’t be attributed to the university, company or organization they represent. The Ag Economists’ Monthly Monitor is a joint effort between the University of Missouri and Farm Journal . The university conducts the survey, collects and crunches the data while Farm Journal distributes the results.

Main Takeaways from the June Survey

Highlights from the first Ag Economists’ Monthly Monitor include:

The perceived financial health of U.S. agriculture is trending lower and is expected to continue to decline over the next 12 months.
Production costs, global competition, geopolitical risks, drought and demand headwinds are among the main drivers.
The majority of agricultural economists expect farm income to drift lower, with some expecting levels to land closer to the five-year average in 2024.
High production expenses are the biggest obstacle in 2023.
2023 crop yield estimates vary widely among the economists surveyed.
Economists expect crop prices to drift lower in 2023 and 2024.
Beef cow supplies are forecast to continue to decline this year.

A Current and Future Snapshot of the Agriculture Economy

The monitor shows the perceived financial health of U.S. agriculture has moved slightly lower over the past year, and economists expect that trend to continue over the next 12 months.

(Farm Journal)

The main drivers of the waning outlook include production costs, global competition, geopolitical risks, drought and domestic demand for agricultural commodities.

“I think what’s most surprising is that, on average, those more than 40 economists are in alignment with the more general perception of where agriculture is heading,” says Scott Brown, an agricultural economist with the University of Missouri, who helps author the survey. “What surprised me is the amount of volatility around that average estimate. It just reminds me there’s so many issues at play today, and when trying to predict or suggest the future, even these economists have a wide opinion in terms of where we’re headed in different commodities.”

Falling Net Farm Income

The Monthly Monitor shows all respondents expect farm income to decline from the record level of 2022 for 2023 and 2024. The range of survey responses is what produced the most volatility, with responses varying by as much as $51 billion from the highest to the lowest estimate.

Some economists are projecting farm income levels to return to the 2017-21 average in 2024. The main driver for 2023 forecasts is the expectation for higher production expenses. The biggest factor for the waning outlook in 2024 is the outlook for lower commodity prices.

“It seemed like cattle was the most optimistic commodity out of the mix,” Brown says. “I think there was still some expectation that corn and soybean prices could stay on the higher end, but generally there’s less optimism than coming off the records we would have seen back in 2022. That’s when farm income was a little north of $160 billion, and when you look at some of the forecasts for 2024 in our survey, it’s closer to $120 billion on average. Some are even suggesting farm income levels could fall back to where we were pre-2020, so pre-COVID.”

(Farm Journal)

Wide Range of Yield Estimates

Ahead of USDA’s updated look at planted acres in the June acreage report set to be released Friday, economists don’t see many big changes compared with what farmers intended to plant in March. According to the June Ag Economists’ Monthly Monitor, the average survey result was 92.05 million planted acres for corn, which is up slightly from the 92 million acres reported by USDA’s farmer survey in March. The range included 90.5 million acres on the low end and 93 million acres on the high end.

Economists think farmers planted 87.98 million acres of soybeans this spring, slightly higher than the 87.5 million acres reported in March. The highest estimate was 89 million acres of soybeans, with the lowest estimate of 87 million acres.

In March, USDA reported farmers intended to plant 11.26 million acres of cotton. The survey showed economists think with the weather challenges in areas such as Texas, cotton farmers actually planted 11.24 million acres, with the maximum response of 11.9 million and 10.95 million on the low end.

Brown points out the yield variation largely depends on upcoming weather, but the dry weather is creating a wide range of yield estimates this year. According to respondents in June, the average estimate for yield includes:

Corn: 178.68 bu. per acre versus 181.5 bu. per acre (USDA’s current estimate)
Soybeans: 51.06 bu. per acre versus 52 bu. per acre
Wheat: 44.47 bu. per acre versus 44.9 bu. per acre
Sorghum: 68.17 bu. per acre versus 69.2 bu. per acre
Cotton: 855.18 pounds versus 841 pounds

“I think when you look at both corn and soybean acres, there wasn’t a lot of deviation from the Prospective Plantings report USDA came out with a few months ago, so we didn’t see a big change there,” Brown says. “On the yield side, there are certainly some differences. The average yield estimate, on the corn side from the survey was a little more than 178 bu. per acre, with a downside of 175 bu. Likewise on soybeans, that came in at about 51 bu. per acre. Both corn and soybeans are below where USDA currently sees yields. I will say those are going to change quickly as we look at weather and what’s occurred since the survey would have gone out roughly a week ago now.”

(Farm Journal)

Economists also expect crop prices to decline this year and next; however, there is a wide range in estimates signaling volatility will continue.

The average corn price is estimated to hit $4.99 per bushel for the current crop year and $4.74 for 2024/2025. The high range of the estimate for this year is $6 per bushel, with a low of $4.25 per bushel. Soybeans are also expected to trend lower, with an average estimate of $12.52 per bushel this year. The high came in at $14 per bushel. The low estimate was $10.85 per bushel. The average estimate for 2024/2025 is $11.90 per bushel.

Wheat prices are estimated to average $7.63 per bushel this year, with a low of $7 and a high of $8.49. The average estimate for wheat prices in 2024/2025 is $7.10 per bushel, with a high of $8 and a low of $6.49.

(Farm Journal)

Mixed Outlook on Livestock

The June Ag Economists’ Monthly Monitor also asked economists to provide estimates about beef cow inventory as of July 1, which is a report USDA will release on July 21. Economists who responded expect cow inventory to fall to 30 million head, which represents a decline of 1.2%.

Respondents also see fed cattle prices in 2024 trending to over $181 per hundredweight. But responses also produced high volatility, with one economist even thinking fed cattle prices will average above $195 per hundredweight in 2024.

Most everyone expects a contraction,” Brown says. “With the dry weather we’ve had in cattle country, Oklahoma, Kansas, Nebraska, Missouri, to name a few, I think we will continue to see fewer beef cows when we get that report out in mid-July. There were some who are even calling for larger declines than the nearly 30 million head. It reminds me we’re going to get tighter, and we’re not done talking about record cattle prices if these forecasts hold true.”

(Farm Journal)

Economists are less optimistic about hog prices and milk prices producers will receive this year.

Ahead of the next Hogs and Pigs report from USDA later this week, economists think the breeding hog inventory will be 99.27%, compared to 100.5% one year ago. Economists are more bullish when it comes to exports, but not enough to improve their outlook on hog prices.

“They weren’t as optimistic on cattle or dairy,” says Brown. “When you look at what they were saying for 2024 hog prices, still, the average was below $61. Which if costs stay where they are today, that means red ink continues into 2024. Likewise, the projected all milk price for 2024 is $20.50 in our survey. That probably also makes red ink in 2024.”

The Likelihood of a U.S. Recession

Another major economic indicator for livestock producers is the general economy, as it historically has a direct impact on domestic demand. Of those surveyed, economists expect interest rates to move up 2% over the next six months.

“Although there was a wide range of responses, most economists felt the U.S. economy is not currently in a recession and will not enter one during 2023,” Brown says. “I will point out, though, there appears to be continued uncertainty about the expected general economy health for 2023, given survey responses.”

The majority of economists “somewhat disagree” the U.S. will enter into a recession this year. While at least eight economists say they “somewhat agree” a recession is looming yet this year.

(Farm Journal)

Looking Ahead to July

The June Ag Economists’ Monthly Monitor survey is a current snapshot of economists’ views. The survey will be sent to participating economists just days after USDA releases its WASDE report each month. Less than two weeks later, the results will be released.

“It is fairly current, but I’ll just say weather matters a lot, as we talked about, especially with yields. We’ll see how this changes, being able to now come back to the same group and ask what they expect corn and soybean yields to be in another few weeks. We’ll also have the first survey under our belt, and it will be interesting to watch those changes,” Brown says.

Looking to the second survey, Brown says he’s interested in watching changes to the crop-yield side of the equation. Longer-term, he thinks the monthly monitor will reveal bigger trends about the general economic health across all of agriculture and how those forecasts change from month to month.

“I’m really curious to watch [the general economic health] as we get more observations, and see what July looks like relative to June in terms of overall economic health,” he says. “I’m curious to watch as this group of experts continues to digest what’s happening in agriculture.”

USDA Projects Soybean Supply Dip, Corn Flat

Fri, 20 Nov 2020 05:49:02 GMT

Corn

This month’s 2017/18 U.S. corn outlook is for larger production, increased feed and residual use, and nearly unchanged ending stocks. Corn production is forecast at 14.280 billion bushels, up 96 million from last month. Corn supplies are higher, as a larger crop more than offsets a reduction in beginning stocks based on the Grain Stocks report. Projected feed and residual use is increased 25 million bushels. With supply and use changes essentially offsetting, corn ending stocks are up 5 million bushels from last month. The projected range for the season-average corn price received by producers is unchanged at $2.80 to $3.60 per bushel.

Corn exports are raised for Mexico and Argentina, with largely offsetting reductions for Russia and Ukraine. Argentina’s 2016/17 exports are lowered for the local marketing year beginning March 2017 reflecting a slower-than-expected pace of exports to date. Projected 2017/18 food, seed and industrial use for corn in China is raised based on recent trade data indicating a higher-than-expected level of corn product exports. Foreign corn ending stocks for 2017/18 are down from last month, mostly reflecting declines for China and Mexico that are only partially offset by increases for Argentina and Turkey. Global corn stocks, at 201.0 million, are down 1.5 million from last month.

Soybeans and Other Oilseeds

U.S. oilseed production for 2017/18 is projected at 132.3 million tons, down 0.5 million from last month mainly on lower sunflowerseed, canola, and cottonseed production. Soybean production is forecast at 4,431 million bushels, nearly unchanged from last month with higher harvested area offsetting lower yields. Harvested area is projected at a record 89.5 million acres, up 0.8 million. The soybean yield is forecast at 49.5 bushels per acre, down 0.4 bushels. With lower beginning stocks, soybean supplies for 2017/18 are projected down 44 million bushels. With use projections unchanged, ending stocks are projected at 430 million bushels. If realized, ending stocks relative to use would be the highest since 2006/07.

The 2017/18 U.S. season-average soybean price is forecast at $8.35 to $10.05 per bushel, unchanged from last month. Soybean meal and soybean oil price projections are also unchanged at $290 to $330 per short ton and 32.5 to 36.5 cents per pound, respectively. Global oilseed production for 2017/18 is projected at 577.0 million tons, down 1.6 million as reductions for soybeans, rapeseed, and sunflowerseed are partly offset by increases for cottonseed and peanuts. Global soybean production is projected down 0.6 million tons to 347.9 million on lower forecasts for Russia and Ukraine. Higher production for China and Mexico is partly offsetting. Sunflowerseed production is also lower for Russia and Ukraine on lower yields. Rapeseed production is lowered for Australia where yields are impacted by below-normal rainfall.

Global oilseed exports for 2017/18 are down 0.4 million tons to 173.9 million on lower soybean and sunflowerseed exports. Soybean exports are lowered for Ukraine while sunflowerseed exports are lowered for Ukraine and Russia. Lower rapeseed exports for Australia are offset by higher exports for Ukraine. Global oilseed ending stocks for 2017/18 are projected down 1.6 million tons from last month to 107.9 million mainly reflecting backyear adjustments that reduced soybean carrying for Brazil and the United States.

Sorghum

Grain sorghum production is forecast down from last month, as a 2.4-bushel per acre increase in yield to 72.2 bushels per acre is more than offset by a reduction in harvested area. Barley and oat production estimates are updated based on the Small Grains report. Global coarse grain production for 2017/18 is forecast up 2.8 million tons to 1,319.4 million. The 2017/18 foreign coarse grain outlook is for greater production, consumption, and reduced stocks relative to last month. Foreign corn production is forecast higher, with the largest reductions for Russia, Ukraine, Ethiopia, and Tanzania more than offset by increases for a number of countries including Nigeria, Turkey, and Mozambique. The projected corn yields for Russia and Ukraine are reduced based on reported harvest results to date. Historical revisions are made to Nigeria’s corn, sorghum, and millet production estimates to better reflect statistics published by the government.

WHEAT

Projected 2017/18 U.S. wheat supplies are decreased modestly this month as reduced beginning stocks are partially offset by slightly higher wheat production. Beginning stocks were revised downward in the latest NASS Grain Stocks report while wheat production increased in the NASS Small Grains Annual Summary to 1,741 million bushels. Although all wheat production increased minimally from last month, the by-class changes are relatively more significant as larger Durum and Hard Red Spring production more than offset declines in Hard Red Winter and Soft Red Winter. Projected 2017/18 feed and residual is reduced 30 million bushels this month to 120 million as the NASS Grain Stocks report indicated lower-than-expected June-August disappearance. Additionally, projected 2017/18 U.S. corn supplies are the second highest on record, which is expected to dampen wheat feed and residual use for the rest of 2017/18. The other wheat use categories are unchanged this month and projected 2017/18 ending stocks are higher at 960 million bushels but still well below last year’s 1,181 million. The projected 2017/18 season-average farm price is unchanged this month at the midpoint of $4.60 per bushel but the range is narrowed 10 cents on each end to $4.40 to $4.80.

Global 2017/18 wheat supplies are increased, primarily on higher production forecasts for Russia, EU, and India more than offsetting a decline in Australia. Based mainly on harvest results to date, Russia’s 2017/18 wheat production is increased 1.0 million tons to a new record of 82.0 million tons. This is well above last year’s previous record of 72.5 million tons. EU wheat production is raised 2.2 million tons to 151.0 million, largely on higher production in France. Australia’s wheat production is reduced 1.0 million tons to 21.5 million on persistent dry conditions in most of eastern Australia. This would be Australia’s lowest wheat output since the 2008/09 crop year.

Foreign 2017/18 trade is fractionally higher this month as reduced exports by Australia are offset by increased exports from Canada. Projected imports are lowered for India and Turkey as increased 2017/18 production for both countries is expected to reduce import needs. Total world consumption is projected higher, primarily on greater usage by India, EU, and Russia on their increased supplies. Projected global ending stocks are nearly 5.0 million tons higher this month at 268.1 million, which is a new record.

Livestock, Poultry and Dairy

The forecast for 2017 total red meat and poultry production is raised from last month as higher broiler and turkey production more than offset fractionally lower beef and pork production. Beef production is reduced from the previous month largely due to lower expected fourth-quarter carcass weights. The pork production forecast is lowered on smaller-than-expected third-quarter commercial hog slaughter which more than offset higher expected second-half carcass weights. The broiler production forecast is raised on expectations of increased slaughter later in the year based on hatchery data. The turkey forecast is increased as higher third-quarter slaughter more than offsets expected declines in fourth-quarter slaughter. The 2017 egg production forecast is raised from last month on higher hatching egg production.

For 2018, the total red meat and poultry forecast is raised from the previous month as higher expected beef and pork production more than offset declines in turkey production. Beef production is little changed from last month although first half production is lowered as pasture conditions are expected to slow the pace of placements in the latter part of 2017. However, heavier carcass weights are expected to offset a portion of the decline. Pork production is raised from last month on higher slaughter. In the Quarterly Hogs and Pigs report, released September 28, producers indicated they farrowed about 2 percent more sows in June-August and intend to farrow approximately 1 percent more sows over each of the next two quarters. With larger pig crops in the second half of 2017 and into 2018, pork production is forecast higher. The 2018 broiler and egg production forecasts are unchanged from the previous month. Turkey production forecasts for 2018 are lowered on slow recovery in demand which is expected to dampen the pace of expansion.

Beef import forecasts are raised in 2017 and 2018 on increased shipments of processing beef from Oceania. The 2017 and 2018 beef export forecasts are raised on strong demand in a number of key trading partners. Pork imports for 2017 and 2018 are raised from last month. The 2017 pork export forecast is lowered from the previous month on recent trade data, but no change is made to the 2018 export forecast. Annual broiler, turkey, and egg export forecasts are unchanged.

Cattle price forecasts are unchanged for 2017 and 2018. Hog price forecasts are lowered for the last quarter of 2017 and into 2018 on larger supplies and pressure from abundant supplies of red meat and poultry. The annual broiler price is forecast slightly lower for 2017 but is unchanged for 2018. Turkey price forecasts are lowered in 2017 and 2018 on slow recovery in demand. Egg price forecasts are raised on near-term demand strength which is expected to carry over into next year.

The milk production forecast for 2017 and 2018 is raised on a slightly more rapid pace of growth in milk per cow. However, forecast cow numbers for late 2017 and 2018 are slightly lower. Fat basis imports for 2017 and 2018 are raised on strength in butter imports but skimsolids imports are lowered for 2017 and unchanged for 2018. Exports on a fat basis are raised for 2017 on stronger butter and cheese exports, and increased sales of butter and anhydrous milkfat are expected to support higher fat basis exports in 2018. Skim-solids exports for 2017 and 2018 are raised, primarily on stronger expected shipments of whey products.

For 2017, butter and nonfat dry milk (NDM) prices are lowered on large supplies, but the whey price is unchanged at the midpoint and the cheese price forecast is raised on current demand strength. For 2018, continued demand strength for cheese is reflected in a higher price forecast, while butter, NDM, and whey prices are lowered on larger supplies and pressure from international prices. The Class III price is raised for 2017 on stronger cheese prices, but for 2018, lower whey prices are expected to more than offset the increases in cheese prices, and the price forecast is lowered. The Class IV price is lowered for both years due to lower forecast butter and NDM prices. The 2017 all milk price forecast range is $17.75 to $17.85 per cwt, unchanged at the midpoint, but the 2018 price is lowered to $17.45 to $18.35 per cwt.

Cotton

The 2017/18 U.S. cotton supply and demand estimates show lower production, exports, and ending stocks relative to last month. Production is reduced 643,000 bales, largely in Texas and Georgia. Domestic mill use is unchanged from last month, but the export forecast is reduced 400,000 bales to 14.5 million, due to reduced U.S. production and strong competitor shipments. Ending stocks are forecast 200,000 bales below the previous month’s forecast. The resulting stocks-to-use ratio of 32.5 percent is virtually unchanged from the previous month’s forecast, and the highest since 2008/09. The forecast range for the marketing year average farm price is 55.0 to 65.0 cents per pound; the midpoint of 60.0 cents is unchanged from the previous month’s projection.

The global cotton supply and demand forecasts for 2017/18 include relatively small increases from the previous month for production, consumption, and trade. Production is raised about 100,000 bales as larger expected crops in Argentina, Brazil, and Greece more than offset the reduction in the forecast for the United States. Vietnam is the primary driver behind a 250,000-bale increase in projected world consumption, while a 440,000-bale increase in projected 2017/18 world cotton trade reflects increases in India, Australia, and Brazil that more than offset lower expected U.S. exports.

Read the full report.

New Tariff Aid Plan Offers Single Payment for All Non-Specialty Crops

Fri, 20 Nov 2020 05:25:31 GMT

As USDA worked to craft a second year of tariff aid payments under the Market Facilitation Program (MFP) they faced two significant challenges: a significant pushback from corn growers who feel they were shortchanged by the penny per bushel payment they received in 2018 and a desire to not skew planting intentions with a 2019 crop that is largely still in seed bags. USDA offered up its solution to both problems on Thursday with a second year MFP plan that will deliver payments at a single rate for all covered commodities.

Each county will be assigned an MFP payment rate based on historical production. All growers in a county will receive the same rate, regardless of the eligible crop grown. Payments will be based on reported planted acres for 2019 which cannot exceed 2018 plantings.

USDA did not release information on payment rates in a call with reporters announcing the program.

“Unfortunately, when the Chinese decided late in the game, after several visits to, to renege on many the (trade) commitments they’d already made, to his credit, President Trump immediately directed me to again create a program,” USDA Secretary Sonny Perdue said in a call with press to announce details of the program. “Because he knew that farmers would bear the brunt of this lack of a trade deal with China once again. So he has demonstrated his great affection and affinity for America’s, farmers and ranchers and he does know that because of the agricultural trade surplus, our farmers and producers, ranchers are going to bear the brunt of these trade disputes disproportionately.”

Program payments will be split into three tranches, the first coming as soon as late July. Second and third payments would come in late fall and early 2020 respectively, according to Perdue. The later two rounds of payments could be cancelled if the U.S. and China can resolve the trade dispute, Perdue said.

Covered crops are: alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, mustard seed, dried beans, oats, peanuts, rapeseed, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, upland cotton, and wheat.

Dairy producers will receive a per hundredweight payment based on production history similar to the 2018 program while hog producers will receive payment based on inventory in a specific time frame. USDA indicated that rates and the time frame for determining hog inventories will be announced at a later date.

Tree nut producers, fresh sweet cherry producers, cranberry producers, and fresh grape producers will receive a payment based on 2019 acres of production.

The overall scope of tariff aid has expanded from $12 billion in 2018 to $16 billion this year. That expansion comes because USDA took a broader look at trade distorting practices according to USDA Chief Economist Robert Johansson.

“We account for some other variables such as repeated distortionary trade policies by China and other countries that have contributed to the slow pace of market adjustment and trade that we’ve seen for agricultural production,” Johansson said. “So that brings us to the $16 billion level.”

Of that $16 billion, the bulk, $14.5 billion is targeted for direct payments to farmers. Of the remainder, $1.4 billion is slated for commodity purchases through the Food Purchase and Distribution Program and $100 million is to be issued through the Agricultural Trade Promotion Program to assist market development.

China Targets U.S. Farm Imports With Tariffs on Soy, Corn

Fri, 20 Nov 2020 05:12:54 GMT

(Bloomberg) -- Trade tensions between the U.S. and China ratcheted higher after the Asian nation said it will follow through on plans to levy tariffs on a range of American farm goods including soybeans and corn.

An additional 25 percent tariff will levied on about $50 billion of U.S. imports, China’s Ministry of Finance said Saturday in a statement on its website. Tariffs on about $34 billion of those imports will start July 6, covering agricultural products including: soy, corn, wheat, cotton, rice, sorghum, beef, pork, poultry, fish, dairy products, nuts and vegetables.

Farm commodities have been a key battleground in the escalating trade war between the world’s two biggest economies. China previously announced plans to impose 25 percent duties on products including soybeans, wheat, corn, sorghum, cotton and beef in response to proposed tariffs from the U.S. In April, the Asian nation started levying additional taxes on American fruit, nuts, pork and wine.

In 2017, China’s agriculture imports from U.S. were worth $24.1 billion, the People’s Daily reported on May 24, citing customs data. That’s about 19 percent of total farm imports worth $125.86 billion, according to Ministry of Agriculture and Rural Affairs data.

SOYBEANS

China still buys more soybeans from the U.S. than any other agricultural commodity, in a trade that was worth $14 billion last year. It’s the world’s biggest importer and America’s largest buyer. While about a third of U.S. production goes to the Asian country annually, China last year bought more from Brazil. The existing import duty is 3 percent.

China is the world’s biggest pork producer and consumer and its industry relies on soybean meal, a product of soybean crushing, to feed its pigs. Rising costs for hog farmers risk increasing the price of pork, a component of the country’s consumer price index.

CORN

China’s corn imports from the U.S. surged almost 240 percent last year to about 757,000 tons, worth $160 million, according to customs data. That compares with 1.8 million tons imported from Ukraine. Total imports were 2.8 million tons in 2017, well below its 7.2 million ton low-tariff-rate quota. So-called in-quota corn imports incur a 1 percent duty.

The world’s second-biggest corn producer and consumer has been grappling with a glut that’s prompted the government to encourage lower domestic output and increase use of the grain. Chinese buyers can also be wary of U.S. corn as genetically-modified grain sometimes comes under increased scrutiny from authorities.

WHEAT

China is the world’s top wheat consumer and purchases from the U.S. climbed 80 percent last year to 1.6 million tons worth $391 million. That compares with 1.9 million tons imported from Australia. The country hasn’t issued its full low-tariff-rate import quota of 9.6 million tons this year as the world’s largest producer seeks self sufficiency in the staple grain. In-quota wheat imports incur a 1 percent duty.

MEAT

China is one of the world’s fastest-growing beef import markets as western-style steak becomes more popular with middle-class consumers and land constraints limit domestic supply. The Asian country only started buying American beef again last year after banning imports in 2003 when a cow in Washington state was discovered with mad cow disease.

In the six months after the ban was lifted, China purchased $31 million of U.S.-origin beef, U.S. Department of Agriculture data show. The USDA estimates that China’s total imports of beef will top 1 million tons in 2018, compared with 974,000 tons last year.

China has levied an additional 25 percent tariff on pork imports from the U.S. since April. The country currently buys no poultry or poultry products from the U.S. after banning imports because of concerns over bird flu in 2015. In February it dropped anti-dumping and anti-subsidy duties imposed since 2010 on American supplies.

SORGHUM

The grain used in animal feed has been closely watched by agricultural markets as an indicator of the relationship between the two countries. In May, China scrapped an anti-dumping and anti-subsidy probe into imports from the U.S. just a month after imposing a 178.6 percent anti-dumping deposit in an investigation that began in February.

The deposit roiled sorghum trading for a month as buyers scrambled to re-sell more than 20 cargoes of U.S. grain. China imported about $957 million of U.S. sorghum in 2017 and purchases fell 15 percent in the first quarter of this year from a year earlier, according to customs data.

COTTON

Cotton represents another major trade flow from the U.S., the world’s third-biggest producer. Exports of raw cotton from the U.S. fetched $5.8 billion last year, government data show. China levies a 1 percent duty on about 894,000 tons a year of cotton imports that come under its low-tariff-rate quota system. Beyond that, purchases are subject to a duty as high as 40 percent.

Earlier this month, the government issued an additional 800,000 tons of import quotas to private firms to ease concerns about a looming shortage. Purchases from the U.S. were about 506,000 tons in 2017 out of a total 1.2 million tons.

©2018 Bloomberg L.P.

A New Day at USDA

Thu, 19 Nov 2020 03:23:06 GMT

“It’s a brand new day at USDA,” Ag Secretary Tom Vilsack told attendees at the American Agricultural Law Association annual meeting Sept. 25. He was referring to this administration’s thrust to support and grow rural communities. For farmers, the bottom line is a new focus on “value added, local, natural,” etc. and less emphasis on field crops and traditional commodity programs.

The administration’s cornerstones for rural development are broadband for rural communities, continued development of a next-generation ethanol industry, farm-grown energy, and encouraging local connections with consumers and institutions.

Asked about USDA support for ag research, he replied: “Ag research is important but its impact on rural areas is indirect.” USDA’s new National Institute of Food and Agriculture, headed by plant breeder Roger Beachy, will encourage research projects that will have an impact on rural America, he says. In addition, more of the funds will be distributed through competitive grants that “leverage” their impact, and less through earmarked projects at land grant universities.

–Linda H. Smith