Farmers are sitting on their checkbooks instead of buying new equipment because of the Sino-U.S. trade war and planting delays in the United States, said the chief executive of Deere and Co., the world's largest farm equipment manufacturer. Deere, which also makes construction and logging equipment, said overall sales fell 3 percent during May, June and July, led by a 6- percent drop in agriculture and turf, its largest division.
U.S. farmers will harvest their smallest corn and soybean crops since 2013, but the trade war will constrain exports of America’s two major crops for the second year in a row, forecast the USDA on Monday. Soybeans would sell at the lowest average price at the farm gate in 13 years.
The Trump administration can pay billions of dollars in trade aid to farmers and ranchers this year, and in 2020, too, if it wishes, because Congress quietly and reliably replenishes funding for the Commodity Credit Corp., sometimes referred to as the “USDA’s bank.” (No paywall) (No paywall)
In a steady escalation of the Sino-U.S. trade war, Chinese companies halted purchases of U.S. farm exports on Monday. The largest US farm group said China's actions were "a body blow to thousands of farmers and ranchers who are struggling to get by."
During the second day of trade talks in Shanghai, Chinese officials “confirmed their commitment to increase purchases of U.S. agricultural exports,” said the White House on Wednesday. “The U.S. side agreed to create favorable conditions for it,” said a Chinese editor believed to have contacts in the government.
President Trump was ambivalent about this week's trade talks with China, saying "I don't know if they're going to make a deal," even as China hinted at goodwill purchases of U.S. farm exports. Meanwhile, the White House said China, the second-largest economy in the world, ought to shed its status at the WTO as a developing nation and to play by the same rules as the United States and other industrial nations.
The Trump administration will send more than $7 billion in trade war payments to farmers this summer, a total that could soar to more than $14 billion if the Sino-U.S. dispute persists into the winter, said officials on Thursday. For the second year, agriculture is the only sector of the U.S. economy to receive trade mitigation payments.
The United States and Mexico are among the world’s largest corn producers, and both are expanding production. A USDA report says that despite their geographic proximity, there are fundamental differences in the “corn economies” of the two countries.
On Thursday, for the second time this week, the White House called on China to buy U.S. farm exports. After meeting with President Xi Jinping nearly two weeks ago, President Trump said China would begin “almost immediately” to buy large amounts of U.S. food and ag exports. So far, those purchases have not materialized.
Mexico’s Senate ratified the “new NAFTA” on a 114-4 vote on Wednesday, making Mexico the first country to approve the free trade agreement. Prime Minister Justin Trudeau of Canada is to meet President Trump at the White House Thursday to discuss the path forward on the pact.