Federal aid offsets flagging ag sales
US farmers this season are on track to collect the most federal aid in the last decade after lawmakers early this year raced to allocate emergency funds to help relieve the prevailing economic stress from the Covid-19 outbreak.
Federal assistance is estimated to top nearly $32.2bn this year, according to the US Department of Agriculture's (USDA) September projections. More than 60pc of this season's payouts are funded by emergency aid and assistance amid the coronavirus pandemic.
Lawmakers earmarked more than $30bn in coronavirus assistance between the CARES Act and the USDA's relief package earlier in 2020. The colossal amount of federal aid this year is expected to push net farm earnings to a six-year high despite a decade-low in combined crop and livestock sales as farmers grapple with lower prices and demand stemming from the pandemic.
Cash receipts from crop and livestock sales are expected to fall by 3pc from last year, and American Farm Bureau chief economist John Newton said this year's emergency funding was necessary to buoy farmer balance sheets.
"Without [federal aid] we would see much more pressure in the farming community," Newton said. "The money we are making from the market continues to be under pressure."
Livestock and poultry values slipped as restaurant demand contracted under stay-at-home orders that were implemented to slow the contagion, and the nation's meat processing capabilities were unable to meet the surge in grocer demand, according to Newton.
Meanwhile, corn growers simultaneously grappled with evaporated demand from the ethanol sector, which pushed corn values to new lows and dashed early-year optimism.
The USDA estimates a 5pc recovery from last season in corn demand from the ethanol sector during the 2020-21 crop year, which began this month, although demand is on pace to remain below pre-coronavirus levels. Despite an incremental recovery in corn demand from the ethanol sector during the 2020-21 crop year, Newton added more federal assistance is needed to help keep farmers afloat.
"Folks were optimistic that this was going to be the year," Newton said. "We renegotiated trade in 50pc of our markets [and] we were expecting a big crop. Folks were optimistic that the export market would bounce back and generate the revenue-generating opportunity."
But offshore sales have sagged as Chinese purchases of US agricultural products remain on pace to fall short of the targets laid out in the so-called phase I trade agreement signed in January. Sales to China through July were less than one-quarter of 2020 targets, according to trade data, despite ramped-up purchases this summer.
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New US rule may let some shippers swap railroads
New US rule may let some shippers swap railroads
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Milei's bid to open Argentina's economy passes
Milei's bid to open Argentina's economy passes
Montevideo, 30 April (Argus) — Argentina's congress today approved the government's sweeping economic legislation that could open the door to more private-sector investment in energy and commodities. The bill passed on a 142-106 vote, with five abstentions, after a marathon 20-hour debate. Changes include privatizing some state-owned companies, controversial labor reforms and measures to promote LNG development. The omnibus legislation, which includes 279 articles, is an important victory for President Javier Milei's administration and will change the way many sectors, including energy, operate in the country. Lawmakers aligned with Milei's Liberty Advances party swiftly moved to the second stage of the process, which requires approval of individual articles. The omnibus bill was initially approved in February, but the administration withdrew it after congress failed to approve several key individual articles. That original version included 664 articles. Several of the more controversial articles were brought up immediately after the blanket approval and easily passed. They included an article allowing for privatization of state-run enterprises — national power company Enarsa is on the list — and another delegating to the administration the power to eliminate state agencies without having to consult with congress. Also approved was the article on labor reform. The country's oilseed industry and port workers' unions called a strike the previous day to pressure congress to modify the labor reform. That did not happen. It passed in a separate 136-113 vote. The strike started to fizzle with approval of the legislation. Approval of the package includes several articles the administration says will open the door to major investments in the energy sector. Chapter II specifically covers natural gas, and introduces new regulations for LNG. The chapter includes five articles that allow for 30-year contracts for LNG export projects and guarantees that gas supply cannot be interrupted for any reason. The energy secretariat has six months to design the implementing rules for LNG. The government wants to speed up monetization of the Vaca Muerta unconventional play, which has an estimated 308 trillion cf of natural gas reserves. It is pushing for Malaysia's Petronas to fully commit to a large-scale LNG facility that would start with a $10bn investment. Chapter IX of the legislation creates a new framework, known as the Rigi, for investments above $200mn. It offers tax, fiscal and customs benefits. Companies have two years from implementation of the legislation to take advantage of the Rigi. The chapter on this framework is one of the most complex in the bill, including 56 articles. It includes specific references to energy projects, from power generation to unconventional oil and gas development. The administration claims the legislation will help tame inflation and stabilize the economy. Inflation was 276pc annualized through February, but is declining, and Milei announced that monthly inflation would be in single digits when the March numbers are announced. The country recorded a 0.2pc quarterly fiscal surplus in the first quarter of this year, something not achieved since 2008. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia's 2024-25 wheat, barley exports to fall: USDA
Australia's 2024-25 wheat, barley exports to fall: USDA
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Estoques de etanol no Centro-Sul recuam em abril
Estoques de etanol no Centro-Sul recuam em abril
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