October 19, 2019

News on the Agricultural Economy

Bloomberg writer Jeff Wilson reported yesterday that, “China reaped its seventh record corn crop in eight years in the harvest now ending. That still won’t be enough to meet demand, driving a fivefold gain in imports as prices head for the highest-ever annual average.”

The article noted that, “‘It’s an amazing crop, but demand is just too strong,’ said Dan Cekander, the director of research at Newedge USA LLC in Chicago, who toured corn fields in Jilin Province, the top grower, during September. ‘Everybody has been projecting a record crop, and yet domestic prices are historically high, and the Chinese government just bought U.S. corn.’”

The Bloomberg article explained that, “China became the largest buyer of U.S. farm products in 2010. The nation purchased 1.98 million tons of U.S. corn for delivery before Aug. 31, 2012, six times the quantity a year earlier, USDA data show. An additional 4.7 million tons was sold to unknown destinations and 1.1 million of that amount may be to China, Newedge’s Cekander said.”

Marshall Eckblad reported in today’s Wall Street Journal that, “Cattle prices hit a record as signs emerged that supplies in the U.S. are tightening.

“Futures jumped as traders took note of this week’s bidding for live cattle in Nebraska and Colorado’s cash markets. Analysts said buying by meatpackers, the middlemen who slaughter the animals and then sell carcasses and cuts, is picking up ahead of the holiday season amid worries that the number of cattle available will dwindle in coming months as a result of this summer’s drought.”

The Journal article pointed out that, “Additionally, Japan may look to ease restrictions on beef imports from the U.S. and Canada. According to media reports, Japan’s Health Ministry could allow imports of cattle up to 30 months old. Current rules, which were put in place about a decade ago in response to concerns over mad-cow disease, only allow imports of cattle up to 20 months old.”

And Emiko Terazono reported yesterday at The Financial Times Online that, “Agricultural commodities prices are expected to remain at high levels well into 2012, the UN’s Food and Agriculture Organisation warned on Thursday.

“In its twice yearly Food Outlook report, the organisation said prices would continue to be extremely volatile, fluctuating on moves in the equity and energy markets.”

Keith Good

Farm Bill Issues; Supercommittee Developments; and Regulations

Categories: Audio /Budget /Farm Bill

Farm Bill Issues

A Reuters news article from yesterday (article posted at DTN, link requires subscription) reported that, “A new U.S. farm law would wipe out traditional crop subsidies except for a program that assures grain, soybean and cotton growers of a minimum return on their crops, a lawmaker drafting the plan said on Thursday.

Revenue protection — assuring growers of a guaranteed portion of their usual crop revenue — would become the new base of the U.S. farm program in the plan being drawn by the four leaders of the House and Senate Agriculture committees.

“Leaders hope to unveil the package by the end of the week. It would cut agricultural funding by $23 billion and could become law as part of a government-wide deficit-cutting bill later this year.”