With help from Catherine Boudreau
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— Farmers will get one last turn at the trade aid trough after the Agriculture Department released a third and final tranche for producers stung by President Donald Trump’s trade war in 2019.
— Heavy flooding in the Midwest last year drove payouts from the federal crop insurance program to their highest levels on record for such a weather disaster. Saturated soils across the region could signal additional flooding this year, according to one disaster analyst.
— The coronavirus outbreak in China could throw a wrench into Trump’s “phase one” trade deal, including Beijing’s promise to buy huge sums of U.S. farm goods over the next two years. But Chinese officials aren’t yet asking for any extra flexibility on those purchases.
HAPPY TUESDAY, FEB. 4! Welcome to Morning Ag, where we’re guzzling coffee this morning after a long night of watching and waiting for Iowa caucus results. (If you went to sleep at a reasonable hour, catch up on all our coverage here.) Send tips to email@example.com and @ryanmccrimmon, and follow us @Morning_Ag.
THE TRADE AID TRAIN IS STILL CHUGGING: USDA on Monday rolled out the final tranche of payments to farmers and ranchers burned by Trump’s trade fights last year, an influx of funds that could bring the total payments for 2019 closer to $14.5 billion. (It’s the third batch of the second edition of Trump’s tariff relief program, so your host is going to call it “trade aid 2.3.”)
Pay day: “The payments will begin to show up in farmers’ bank accounts by the end of this week,” USDA announced.
ICYMI: The Trump administration has already paid around $11 billion to farmers and ranchers for their 2019 losses, on top of $8.6 billion for 2018. USDA approved the new bailout funds despite the recent thaw in trade tension with China since officials reached a limited trade deal in December and signed it last month.
Critics have questioned the design of the tariff relief plan, including the fairness of how the money is distributed among geographic regions and whether certain commodity producers are overpaid relative to their trade damages, as POLITICO reported on Monday.
— In response to the story, a USDA spokesperson said, “Every farm program delivered over the past 50 years could have been done in a different fashion according to some expert.”
SPRING FLOODS COST CROP INSURANCE $6.4B: Flood-related federal crop insurance payouts for the 2019 growing season total more than $6.4 billion so far — the costliest on record. Most of those indemnities are tied to the spring and summer floods across states like North and South Dakota, Minnesota, and Illinois, according to an analysis of USDA data by Steve Bowen, a meteorologist and head of catastrophe insight at Aon, an insurance company.
“Given the record rainfall that occurred and the multiple ‘waves’ of flooding that affected areas across the Mississippi, Missouri, and Arkansas River basins, the heightened impacts are not overly surprising,” Bowen told Pro Ag’s Catherine Boudreau. “Last year was a very tough year for farmers, and there are concerns that already saturated soils across the Plains and Midwest may set the stage for more possible flooding in 2020.”
Bowen said that in terms of overall economic costs — including damage to agriculture, infrastructure and other property — the 1993 floods along the Mississippi and Missouri rivers remain the costliest disaster in modern history at $38 billion in today’s dollars. Last year’s disaster cost about $20 billion, he said.
A sign of what’s to come? USDA economists last year found that more frequent and intense storms caused by climate change will ratchet up the price of crop insurance by between 4 percent and 22 percent, depending on future rates of greenhouse gas emissions.
The program is overseen by USDA and carried out by private companies. Taxpayers cover companies’ costs of administering the program and subsidize, on average, 60 percent of farmers’ premiums; growers pay the other 40 percent.
NO CORONAVIRUS FALLOUT FOR AG EXPORTS… YET: Trade analysts are skeptical China will be able to make the massive purchases of U.S. farm goods laid out in the new “phase one” agreement, given WTO rules and market limitations. Now the deadly coronavirus spreading in China is emerging as yet another obstacle to hitting those $40-billion-per-year ag import targets.
The outbreak has sickened thousands and dented Chinese economic activity. But so far, the White House hasn’t received any request from Beijing to discuss changes to its purchasing commitments, reports Pro Trade’s Adam Behsudi. The text of the partial trade agreement allows China to seek flexibility “in the event that a natural disaster or other unforeseeable event” makes it hard for one side to comply with the terms of the deal.
Speaking of skepticism: Bloomberg has more on the market reality that could up-end the export bonanza Trump has promised. Read up.
— A recent court ruling that overturned several EPA biofuel blending waivers for small oil refiners could scramble the delicate balance between the White House and its allies in oil and agriculture. Oil refiners are getting nervous as corn and ethanol advocates see the ruling as an opening to attack additional blending exemptions, Pro Energy’s Eric Wolff writes this a.m.
— Trump tonight will try to make the case that he’s turned “American carnage” into an American comeback when he delivers his State of the Union address to Congress, writes POLITICO’s Ben White. The president is expected to lean on his favorite campaign trail talking point: the strength of the U.S. economy. But it could be a tougher sell after GDP growth slumped to 2.3 percent in 2019.
— Former House Ag member Jeff Denham (R-Calif.) started lobbying for Fresh Harvest on agricultural visas and MEC Aerial Platform Sales Corp. on U.S. tariffs against China. Denham took on the clients on Jan. 3, the date he was cleared to start lobbying his former House colleagues under congressional ethics rules, per POLITICO Influence.
— Burger King said it has never billed its plant-based “Impossible Whoppers” as vegan products in a court filing last week, after a customer proposed a class action suit against the restaurant chain because the patty he ordered was cooked on the same grill as meat. Reuters has the details.
— Despite bipartisan support for expanding broadband connections in rural communities, millions of Americans still lack high-speed internet access. Democratic presidential candidates have proposed rural policy plans including billions for broadband infrastructure. The Verge has a deep-dive on what Monday night’s caucuses mean for getting Iowans online.
— Maryland Republican lawmakers filed a measure that would ban non-meat products from using meat names. The bill, which would address plant-based products as well as cell-based meats, is scheduled for a committee hearing on Thursday. More from The Frederick News-Post.
— The Philippines, the world’s 10th largest pork consumer, recorded another African swine fever outbreak in a province on the country’s southern Mindanao island. The Philippines is also the seventh-largest global importer of pork, Reuters reports.
— Deadly wildfires in Australia killed millions of bees and could jeopardize almond and honey production in the world’s second-biggest almond-growing nation. The U.S.-China trade deal could also put a dent in Australia’s rapidly growing exports to China. Bloomberg has the story.
— The International Dairy Foods Association hired Andrew Jerome as director of external communications. Jerome joined the milk industry group from Michael Torrey Associates and was previously comms director for the National Farmers Union. Read the announcement.
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