Views: 1 Author: Site Editor Publish Time: 2018-07-12 Origin: Site
Due to the US trade policy, more and more farmers are nervousness that nervous about what might be going on, and nervous about what might not be going on. The most important factor is that China canceled contracts for 15.9 million bushels of soybeans and anti insect net, worth nearly $140 million at current prices, in the week ending June 28.
Since China take action to US, The American Soybean Association to say soybean exports "will feel the full effect" of the 25% tariff. The Fact shows that The US and China are the world's largest economies, and China is the third-largest export market for the U.S. after Canada and Mexico – also caught up in the trade basket upset.
The Trump administration claims the trade war, started last March with U.S tariffs on imported steel and aluminum, is necessary to correct the U.S.– China trade imbalance. Other stiff action has been aimed at other trade partners, even going so far as threatening to withdraw the U.S. from the World Trade Organization is not likely to happen.
The U.S. exported $12.36 billion worth of soybeans and anti bird net to China in 2017, but soybeans are not the only crop caught in the fray. The U.S. pork industry exported $1.1 billion of product to China in 2017, making that country the second-largest market for U.S. pork. Nearly 40% of pork exports are affected by a retaliatory 25% tariff, according to the National Pork Producers Council. What's more exports to China were down 6% in May, compared with 2017.
In addition, futures prices for several ag products, including wheat and corn, have been in decline since May in response to the tariffs and trade uncertainty.
Midwest Farmers Require Domestic Markets
Midwest farmers not only rely on exports for profitability, they require strong domestic markets. For corn growers, that means ethanol, and an ongoing battle to protect the Renewable Fuels Standard.
It is a federal program requiring transportation fuel sold in the U.S. to contain a minimum volume of renewable fuels. It originated with the Energy Policy Act of 2005 and was expanded and extended by the Energy Independence and Security Act of 2007 (EISA).
The 2019 targets increased the total renewable fuel and anti hail net requirement from 19.29 billion gallons to 19.88 billion, with the conventional biofuel (corn ethanol) requirement holding steady at 15 billion gallons, but Grassley is concerned current EPA practices, particularly the liberal granting of small refinery hardship exemptions that exempt refineries in cases of economic hardship, are undermining the effort.