With the threat of Corona Virus and African Swine Fever looming over the markets, trade hasn’t bounced back as quickly as producers and traders hoped after the Phase One trade agreement with China. However, USDA Under Secretary Bill Northey is optimistic China will stay true to its promises.
“They've got some challenges right now with coronavirus and the transportation issues and rebuilding that back,” Northey told U.S. Farm Report Host Tyne Morgan at Commodity Classic Thursday. “I believe they're committed to it. We've seen them reduce some tariffs. We've seen them encourage some domestic buyers to buy from the U.S.”
Nailing down timing for these exports is another story altogether.
“They are continuing to buy, they certainly been buying a lot of pork, as I understand it, some of our other meats and some of our other specialty crops,” Northey says. “And so, I think it's moving I don't have a sense of timing.”
What about MFP?
The Trump Administration will be watching trade closely throughout the year before making a final decision on Market Facilitation Program (MFP) payments. While President Trump did Tweet about the possibility of MFP payments, it’s still not a guarantee and will be weighed heavily on market performance.
“So, I think, I hope, we see that enough trade that no one is looking for a MFP [payment],” Northey says. “We certainly are at a place that's a lot better than what we were two or three months ago, even with the coronavirus.
“I would say later this year, looking at the 2020 crop, I don't know whether that's summer or fall, I don't know what that time is. [But] we'll get a sense as we get closer, are we seeing trade step up [in such a way] that it feels back to a normal situation? Are we seeing the market still struggle? Are we seeing some hangover from the last two years?” he says.
Northey anticipates farmers might see MFP 3.0 if the trade and market situation isn’t back to ‘normal.’ If an announcement is made, he says they’ll be careful to do it at a time that doesn’t impact planting or crop mix decisions.
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