Update for September 17th
Update for September 17th, 2019
The weekly USDA crop conditions report left corn unchanged at 55% rated Good to Excellent vs 68% in 2018. 93% of the corn has entered the dough stage and 68% is dented, 19% behind the 5 year average. Corn rated as fully mature is estimated at 18%, well below the 5 year average of 39% and 4% of the U.S. corn crop has been harvested to date.
Soybean conditions fell again this week as Good to Excellent ratings were reduced by 1% to 54% and the Poor to Very Poor ratings were increased by 2% to 14%. Crop maturity remains a major concern, typically 100% of the U.S. soybean crop should be finished setting pods this year 5% is still in the stage in addition only 15% of the crop has begun to drop leaves vs the 5 year average of 38%.
Last month, former Iowa governor and current U.S. ambassador to China, Terry Branstad met with President Trump at the White House. During the course of the 2 hour meeting Branstad warned the president, you have a problem in Iowa! He explained that while farmers have remained loyal throughout the economic hardships caused from the extended trade-war with China, they would not tolerate policies favoring big oil at their expense. Branstad showed President Trump along with his top security and economic advisors a map of counties in Iowa that had turned republican during the 2016 presidential election that are now considered at risk for the November 2020 election. In addition he listed specific comments made by Democratic presidential candidates that attacked Trump for his betrayal to corn farmers with his biofuel’s policy and his obvious disregard to headlines regarding the closing of ethanol plants across the Midwest.
The information shared by Branstad came as a shock to President Trump who had been assured by political advisors earlier that he had Iowa “locked”. One of the sources that reported this meeting to Reuters stated, “This was the first time that the president was made fully aware of how angry these farmers are over this issue and that he could have a serious problem in Iowa and potentially other states where this topic is an issue.” It was during this meeting that President Trump dispatched Cabinet members to develop a plan to calm the anger by developing a long-term solution farmers and the biofuel industry will support.
Somehow President Trump managed to win the support of both Big Oil and Big Corn during his first run for election, now he’s in a bind trying to satisfy both groups. Since taking office Trump’s EPA has issued 85 SRE waivers, these waivers have saved the oil industry hundreds of millions of dollars but in the process has enraged the corn lobby and the ethanol industry.
Recent reports say the Trump Administration has decided to reallocate three years of waived biofuel blending quotas (2016, 2017, 2018) beginning in 2020. While details are still emerging, Reuters reports today that the plan calls for the EPA to calculate a three year rolling average of total biofuels exempted from mandates under the SRE program since 2016. That total will then be added back into the annual biofuel blending quota over the next 3 years. So for example Reuters calculated that in 2020, 1.35 billion gallons would be added to the tentative agreement to boost next year’s blending volume by 1 billion gallons. If this plan is enacted next year’s blending mandate would amount to nearly 22.4 billion gallons, 2.4 billion more than the EPA’s current proposal.
A group of U.S. House democrats have joined together to deny funding to the CCC in an effort to block aid payments to struggling farmers. Fortunately farm-state lawmakers from both parties and both chambers have expressed their support to the committed payments under the Market Facilitation Program and other farm programs and agree that such a move makes no sense. House Republican Leader Kevin McCarthy explained in a tweet that democrats are trying to “squeeze” American farmers by blocking this aid. “Farming is hard enough work as it is. But now Democrats are trying to squeeze American farmers even more by blocking a program that helps them withstand China’s unfair trade policies. We’ve got to start putting America first!”
Interesting Fact: In 2017 U.S. Agriculture contributed $1.053 trillion to the U.S. gross domestic product. Consider this, if U.S. Agriculture was set apart as its own country it would rank as the 16th largest economy in the world, situated between Mexico and Indonesia!
Working-level trade teams from the U.S. and China are meeting in Washington this week. For the first time since tensions began the Trump Administration is now considering offering a limited trade agreement that would postpone and possibly roll back some of the U.S. tariffs in exchange for commitments on intellectual property and agricultural purchases. A face to face meeting for the two leaders could happen as soon as mid-November during an Asia-Pacific Economic Cooperation summit will be held in Santiago, Chili which both President Trump and Chinese Leader Xi Jinping plan to attend. In the meantime the deputy-level trade teams will continue to work towards an agreement both leaders can support.
The 6 to 10 day outlook from NOAA shows the continuation of above normal temps and rainfall chances are expected through the last full week of September.Advertisement
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