Yesterday, Pat Murphy, President of the Northern Canola
Growers Association (NCGA) & US Canola Association, as well as Barry
Coleman, Executive Director, NCGA, along with representatives from the National
Barley Growers Association, National Sunflower Association, US Dry Bean
Council, and USA Dry Pea & Lentil Council came to Washington, DC to meet
with senior U.S. Department of Agriculture officials to reiterate that these
crops have experienced price declines as a result of the retaliatory trade
tariffs and should be included in the trade aid calculations at a value that
accurately reflects the loss, even though these crops did not have direct
tariffs imposed by China. The group met with USDA Deputy Secretary Steve
Censky, Under Secretary for Farm production and Conservation Bill Northey, and
USDA Chief Economist Rob Johansson.
Deputy Secretary Censky opened the meeting with an
acknowledgement that the Market Facilitation Program (MFP) is a blunt and
imperfect instrument. The groups each presented data and information
demonstrating the correlation between prices of their commodities with those
such as soybeans and wheat that have had tariffs directly imposed. USDA
was urged to ensure that the loss values attributed to barley, canola, dry
beans, peas and lentils is accurately calculated so that producers in counties
where those crops are grown are not unfairly penalized. USDA indicated
that the MFP is in the rulemaking process and therefore they could not disclose
or discuss the specific numbers they are considering.
The proposed rules are currently at the Office of Management
& Budget (OMB) for review. Under Secretary Northey indicated that
USDA did not expect to have a second round of the MFP, but that changed when
negotiations with China broke down. He acknowledged the outcome won’t be
perfect between commodities and won’t fully offset the losses, but is better
than doing nothing. Chief Economist Johansson indicated that they have looked
at the 2018 MFP to determine what worked and what didn’t and the concerns that
were voiced over the methodology used. He said there were “a lot of
needles to try and thread”. USDA indicated that more details would be
provided in the coming weeks.
Following the meeting at USDA, the group also met with majority and minority committee staff for the Senate and House Agriculture Committees. These were information sharing meetings. The committees have not been directly involved in the development of the MFP methodology or decisions. The committee staff recognized and agreed with the perspectives and concerns we raised. The committees will be closely reviewing USDA’s proposed methodology and calculations when that information is provided.
NCGA just received confirmation that canola will be included in the recently
announced Ag trade Package from USDA. Other crops left out in last year’s
payments will also be included. Payments will
be based on a single county rate multiplied by a farm’s total plantings to those
crops in aggregate in 2019. Per acre payments are not dependent on which crops
are planted in 2019, and therefore will not distort planting decisions.
Total payment-eligible plantings cannot exceed total 2018 plantings.
Payments will be made in up to three tranches, with the second
and third tranches evaluated as market conditions and trade opportunities
dictate. The first tranche will begin in late July/early August as soon as
practical after Farm Service Agency crop reporting is completed by July 15th.
If conditions warrant, the second and third tranches will be made in November
and early January.
Further details on the payments will be provided this afternoon.
The Northern Canola Growers Association wishes to express its concern that canola be included as an eligible commodity under the recently announced aid package for farmers. Canola growers have suffered tremendous market losses as a direct result of the trade dispute with China and canola oil has now been slapped with a retaliatory tariff into China. These market losses are negatively impacting canola growers and influencing planting decisions.
The attached chart shows how canola prices have
dropped right along with soybeans. In
fact, canola prices have dropped even harder than soybeans recently due to the
ban on canola imports from Canada into China due to the arrest of the Huawei
executive. This will result in ending
stocks of canola nearly doubling this crop season, further dampening prices.
In North Dakota, which produced over 80 percent of
the U.S. canola crop, the cash price at the ADM Velva crushing plant for canola
has dropped from $17.78 on June 15, 2018 to $15.00 as of today, a decline of 16
Using the 2018 national average
yield of 1,861 pounds/acre, U.S. canola producers are facing an average loss of
$51.74 per acre, equal to almost $103
million in lost revenue when applied to the 1.99 million acres of canola
planted in 2018.
We therefore request
that canola be included in the announced aid package as an eligible commodity
so that canola growers can recoup a portion of the lost revenue as a result of
the ongoing trade dispute with China.
The Northern Canola Growers Association (NCGA) spoke at a
recent meeting with Senator Hoeven, state leaders and USDA Ag Secretary Sonny
Perdue to visit with producers in the state to hear concerns about trade
related issues. The NCGA highlighted two main items regarding
1) The huge price drop canola growers have experienced given
the trade situation;
2) The canola industry request to Ambassador
Lighthizer that canola oil achieve the same tariff reduction into Japan as the
Canadians just received in December under the CPTPP.
There was universal agreement at the meeting that many
commodities are suffering right now, so when it was mentioned that the canola
price drop is causing real pain, the Secretary was not surprised. The
Secretary reiterated that he did not want to give anyone any assurances that
there would be another MFP payment this year.
The NCGA asked for any help canola growers can get – direct
aid, MFP payments or some other assistance. The NCGA also pointed out a
letter from a frustrated member that represents a lot of frustration from
canola growers on how canola prices have dropped along with soybeans since the
summer of 2018 and yet no Market Facilitation Payments were provided for canola
growers. The NCGA also highlighted the recent situation with Canadian
canola exports being blocked into China and the resulting projected increase in
ending stocks that is depressing the forward price outlook.
The NCGA said North Dakota is the largest canola producing
state in the nation and has five crush plants all located within a 150-mile
radius. It was also mentioned that the canola industry has requested that
canola oil be granted the same tariff reductions as Canada just obtained under
the Comprehensive & Progressive Agreement for Trans-Pacific Partnership
(CPTPP). This would result in the ability of U.S. canola crush plants to
sell canola oil into Japan tariff-free by 2023.
Other items of interest brought up at the meeting included:
The Secretary said even though huge commitments
to buy U.S. commodities have been made by China, we still don’t know the
timeline of those purchases.
He was optimistic a trade deal could happen
quickly with Japan.
Several groups appealed for direct aid at the
beetles, mainly striped flea beetle, Phyllotreta striolata (Fabricius), are
being captured in pheromone traps by Lesley Lubenow at the Langdon REC.
mainly striped flea beetle, Phyllotreta striolata (Fabricius), are being
captured in pheromone traps by Lesley Lubenow at the Langdon REC. The striped
flea beetle is small, 1/32 to ⅛ in. in length, with two
yellow stripes on their black wing covers (Figure 1). They emerge earlier than
the more common crucifer flea beetle, Phyllotreta cruciferae Goeze.
Crucifer flea beetles are black beetles with an iridescent blue sheen on the
wing covers. Flea beetles have enlarged hind femora (thighs) on their hind legs
which they use to jump quickly when disturbed. Their name, flea beetle, arose
from this behavior.
Phyllotreta flea beetles
have a single generation in the northern Great Plains. They overwinter as
adults in the leaf litter of shelterbelts or grassy areas and rarely overwinter
in canola stubble. Beetles emerge when temperatures warm up to 57 to 59°F in
early spring. Flea beetles feed on volunteer canola and weeds, such as wild
mustard, before moving to spring planted canola fields. Depending on the
temperature, it may take up to three weeks for adults to leave their
overwintering sites. Warm, dry, and calm weather promotes flea beetle flight
and feeding activity throughout the field, while simultaneously slowing canola
growth. When weather conditions are cool, wet, and windy, flea beetles may
creep slowly into the field and concentrate feeding on the field edges.