Agriculture secretary talks China soybean sales and trade payments
China bought soybeans this week, but Agriculture Secretary Sonny Perdue told reporters today that USDA has no indication of additional planned purchases and that he will meet with Office of Management and Budget Director Mick Mulvaney on Friday to discuss the second tranche of the payments to farmers for lost sales that President Donald Trump has promised.
There have been media reports that OMB wants to hold up the payments in hopes that sales to China make them unnecessary.
Perdue said that today Mulvaney “is always looking to hold on to money.”
Agriculture Deputy Secretary Steve Censky said today in Iowa that USDA is “arm wrestling” with OMB over the Market Facilitation Program and its costs, DTN/The Progressive Farmer reported.
“We’re pushing for that announcement to be made soon,” Censky said. “We’re pushing for the second half of the MFP payments to be made. We have been having discussions within the administration and our friends on the budget office. So we’re taking it to the president that this is a promise that has been made, the situation hasn’t changed, the farmers are still feeling the impacts, so we hope to be having a decision in the very near future.”
ASA President Davie Stephens, a grower from Clinton, Ky., said in a news release today that China’s purchases have been small in comparison with traditional levels of exports and that farmers still need the trade aid payments the Trump administration has promised them.
The sales are “positive news for our growers and for U.S-China trade relations. American soybean farmers prosper when they have access to international markets, and our trade relationship with China is critically important to our industry,” Stephens said.
He added, “The news of resumed sales represents a positive step under the current 90-day agreement to suspend new tariffs and negotiate on trade issues agreed to by President [Donald] Trump and President Xi [Jinping]. Beyond yesterday’s sale announcement, it is vital that this 90-day process result in lifting the current 25 percent tariff that China continues to impose on U.S. soybean imports. Without removal of this tariff, it is improbable that sales of U.S. soybeans to China can be sustained.”
While ASA is hopeful that soy farmers will be able to resume delivery of high-quality soy to China, Tuesday’s sale announcement is only the first step in rebuilding soybean exports to China and will not fix the prolonged period of low prices soybean farmers have faced since the trade war began, the group said. Stephens said the roughly $2 drop in soybean prices experienced since last May continues to harm soybean farmers.
“It is critical for Secretary Perdue to move forward with his commitment to announce the second half of Market Facilitation Program payments. When USDA calculated the harm incurred by the tariffs on soybean prices, it assumed that China would still purchase at least 50 percent of the 32 million tons of U.S. soybeans it bought in 2017. With only a fraction of this amount accounted for in this week’s announced sale, it is critically important that we see additional purchases and actual deliveries, and for USDA to make a payment on the second half of 2018 soybean production,” Stephens said.
–The Hagstrom Report