News & Media

Market Briefs for March 30, 2017

Carbon regulations changes
On March 28, President Donald Trump signed an executive order unwinding many of the policies put in place by the previous administration regarding energy and climate change regulations. The order is reported to do the following:

  • Begin the process of overturning the U. S. Environmental Protection Agency (EPA) carbon emissions standards for existing and newly constructed power plants, known as the Clean Power Plan;
  • Withdraw Obama-era interagency calculations of the “social cost of carbon,” a metric regulators use to weigh the damage from increased carbon emissions;
  • Direct the Interior Department to end its moratorium on coal leasing on federal lands;
  • Direct EPA and Interior to review rules that govern oil and natural gas development, including EPA’s methane emissions rules for new sources and Interior’s rules that govern fracking on federal lands;
  • Scuttle a White House directive that required agencies to consider climate change when reviewing energy, infrastructure and other proposed projects under the National Environmental Policy Act;
  • Require federal agencies to broadly review existing rules and policies that might thwart energy development. Agencies have 180 days to craft recommendations; and
  • Rescind several of Obama’s policy memos and orders on tackling climate policy broadly.

Brazil shutters processing plants
On March 27, Brazil ordered three more food-processing plants to suspend production as the country works to contain fallout regarding corruption in its meat sector. So far, Brazil has temporarily closed six of the 21 food-processing plants under investigation, and 15 of those plants are not allowed to export meat. They are still allowed to produce meat for the domestic market, however. Brazil hopes that other nations will follow China’s lead in lifting its ban on meat from the country and that the European Union will not follow through with tougher restrictions.

China eases beef restrictions
On March 24, China removed its final restrictions on imports of Australian beef as part of Chinese Premier Li Keqiang’s visit to the country. The nation will now accept chilled beef exports from all licensed exporters, whereas previously it accepted beef from just 11 authorized shippers. China also announced early-stage plans to co-develop a major mine, rail and port project in western Australia.

U.S. beef on menu
The National Cattlemen’s Beef Association, U.S. Meat Export Federation and the North American Meat Institute, in a letter sent March 27, asked the White House to try to overcome the ban on U.S. beef that China has maintained since the height of the mad-cow disease scare in 2003. When President Donald Trump dines with Xi Jinping during his visit to Mar-a-Lago early in April, he might try having his staff serve the Chinese president a little U.S. beef. It’s not likely something he gets to try too often, though the industry is hoping to change that.

Aggressive Chinese bean buys
China imported nearly 5.538 MMT of soybeans during February, a 22.85-percent surge from the year prior. The U.S. supplied more than 4.426 MMT of these beans, with Brazil shipping China 687,350 MT. Two months into the 2017 calendar year, China had brought in nearly 13.194 MMT of soybeans, up 29.79 percent from last year at this point.

Dow-DuPont gains EU approval
A merger between Dow Chemical and DuPont, valued at $130 billion, received approval March 27 from the European Commission, the European Union’s regulatory body. The commission demanded a number of divestitures, and both companies signaled in a dual press release that they would be open to additional sales to accommodate other regulatory agencies as well.

AI in Georgia
Chickens at a commercial poultry-breeding operation in Chattooga County, Georgia, have tested positive for H7, presumptive low pathogenic avian influenza (LPAI). This is the first confirmation of avian influenza in domestic poultry in Georgia. The announcement follows similar confirmations from Alabama, Kentucky and Tennessee in recent weeks. The Georgia case is considered a presumptive low pathogenic avian influenza because the flock did not show any signs of illness.

Crop planting report
Growers hope to plant another record soybean crop this spring while scaling back corn acres, according to Farm Futures’ latest survey of intentions for 2017. Producers said they expect to plant nearly 89 million acres of soybeans, up 6.6 percent from the all-time high set in 2016. Corn ground would fall 3.9 percent to 90.3 million acres.

Soft red winter wheat plantings are expected to be at 5.5 million acres, down 8.6 percent from 2016. Sorghum plantings should be at 6.2 million acres, down 7.7 percent, and cotton plantings at 12.3 million acres, a 22-percent increase over 2016 plantings.

Cotton AWP moves higher
The Adjusted World Price (AWP) for cotton will be 68.26 cents per pound, effective March 28, according to the U.S. Department of Agriculture. That is up from 67.92 cents per pound the prior week and marks the second time in the last two weeks the AWP has been at 68 cents or more.

Japanese reduces tariffs
On April 1, the beginning of Japan’s fiscal year, Japan will further reduce the tariffs Australia has to pay for the beef it exports there. Australia will have its Japanese tariff rates on frozen beef drop from 27.5 percent to 27.2 percent, the U.S. Meat Export Federation confirms. The U.S. and other countries pay 38.5 percent. Despite this, U.S. beef continues to hang tough, owning 40 percent of Japan’s beef import market in 2016, compared to Australia, which had 51 percent.