News & Media

Market Briefs for March 9. 2018

Walmart’s new weapon
Walmart is developing new technology, called Eden, that says it will save the company $2 billion over the next five years. Eden will inspect produce and determine when it will spoil. If temperatures rise during deliveries, reducing shelf life, the technology could reroute trucks to closer destinations.

USDA authorizes ginning program
The cotton ginning cost share program will be similar to the one for the 2015 crop in that it will be a one-time payment determined by a producer’s 2016 cotton acres reported to the Farm Service Agency, multiplied by 20 percent of the average ginning cost for each production region. Signup runs from March 12 to May 11.

Trump wants studies for RFS changes
A waiver of the Reid Vapor Pressure (RVP) for E15 to allow sales of the higher ethanol blend year-round is emerging as a possible solution after three White House meetings last week on biofuels. Currently, E15 is restricted between June 1 and Sept. 15 because the EPA has found it contributes to summer smog pollution. But Senator Chuck Grassley acknowledged Thursday’s White House session yielded “no decisions.” Trump reportedly wants to see studies regarding the impacts of various options.

Brazilian soybean estimates raised
Brazil’s statistics agency Conab hiked its estimate of Brazil’s soybean crop by 1.47 MMT from February to 113.02 MMT, which would be just shy of last year’s record-large 114.08 MMT crop. On the other hand, Conab trimmed its total corn crop estimate by 720,000 MT to 87.28 MMT, which would be a dramatic cut from last year’s 97.84 MMT crop. It estimates Brazil’s first crop at 25.12 MMT and its second crop at 62.16 MMT.

Agreement for tax incentives
A final agreement on fixing a section (199A) of the new tax reform law that created huge financial incentives for farmers to sell their products to agricultural cooperatives rather than independent elevators is being circulated among lawmakers and industry stakeholders, according to Sen. John Thune (R-S.D.). He said the legislative language needs to be cleared by key negotiators and will be publicly available soon. “I’m sure there is not 100 percent unanimous consent, but the organizations we are working with, both on the private grain elevator side and co-op side, have been involved in all of this. So I think we are about there,” Thune said. He expects the provision will be included in a fiscal 2018 omnibus appropriations package, which Congress must pass by March 23 to avoid a government shutdown.

Low-path avian influenza detected
The first discovery of avian influenza in the U.S. in 2018 has been found in Jasper County, Missouri in a commercial turkey flock. The presumptive low-pathogenic H7N1 avian influenza was detected in a healthy commercial meat turkey, according to a notification from the Organization for Animal Health (OIE). The detection was made during routine, pre-slaughter testing and surveillance efforts, the OIE said. “There have been no clinical signs of illness or increased mortality on the premises,” the OIE said. USDA’s Animal Plant Health Inspection Service and the Missouri Department of Agriculture are conducting a comprehensive epidemiological investigation and have implemented enhanced surveillance and testing related to this finding, the OIE said. Two additional commercial poultry premises located within the 10-kilometer zone surrounding the initial find were tested negative for the virus.

Secretary Perdue’s position on the metals tariffs
USDA Secretary Sonny Perdue has found a way to play both sides of the tariff debate, praising the president’s proposed steel and aluminum tariffs as a good negotiating tactic while acknowledging that the agriculture sector could see adverse effects. “I plan to tell the president that he has them just where he wants them,’’ he said, adding that the tariffs have given the U.S. leverage to win concessions on steel and the North American Free Trade Agreement. “Let’s use this off-balance technique to extract what we would like in exchange whether it’s Mexico, Canada or our EU partners,” Perdue said at a Wall Street Journal forum. But Perdue acknowledged Trump’s trade rhetoric and style is generating anxiety throughout the ag sector, one that relies on exports for an average of 20 cents of every dollar earned. Agricultural goods are often early targets when countries retaliate against the U.S., Perdue admitted.

Trump wants $1 billion cut in U.S./China trade deficit
Trump is pushing for a $1-billion reduction in China’s trade deficit with the United States. “China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States,” Trump tweeted Wednesday morning. In 2017, the deficit between Chinese goods imported to the U.S. and American goods exported to China reached $375.2 billion — an 8 percent jump from $347 billion in 2016.