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Farm and Food File

By Staff | Nov 6, 2019

If China agreed to purchase “$40 to $50 billion” of U.S. farm goods in “the next two years,” as President Donald J. Trump announced Oct. 11, the futures market-where market reality is quickly sorted from political talk-literally wasn’t buying it.

In fact, November soybean futures, the nearby contract, opened Monday, Oct. 14 at $9.405 per bu. and closed at $9.405, an almost unheard of result given that U.S. farmers are in the middle of their annual soybean season and the White House is in the middle of another monthly China tariff fight.

The December corn futures were even less impressed. Traders opened corn at $4.01 per bu. that day and finished the session nearly four cents per bu. lower. Prices then drained lower for the next two weeks.

And hogs? Every U.S. market player knows African Swine Flu continues to decimate the Chinese hog herd-some guesses put pig losses at a staggering 45 percent nationwide. So the President’s Oct. 11 announcement of “substantial” ag exports to China propelled December hog futures through the roof, right?

Not even close. Indeed, two weeks after the White House’s ag-exports talk, December hog futures were $5 per hundredweight, or more than seven percent, lower than the day of the announcement.

Traders had a good reason for their cold reception to the President’s red-hot news. Most have been burned by fiery White House talk before so few were buying a pound of anything-witness soybean futures’ remarkably flat day-until they got confirmation.

Not only did it not come, news the next day proved the traders’ worries to be correct; China openly downplayed the White House’s giddy enthusiasm for any $50 billion ag deal and claimed no such agreement had been put to paper.

The market’s overall sustained, lower reaction, however, is pointing to other, more ominous problems between China and the U.S. than just ag.

For example, the problem that started this trade war-the thorny, unresolved issue of China’s required technology transfer by U.S. firms to do business there-is rarely mentioned by either side.

But it’s more than just technology transfers. If the U.S. and China agree to any interim ag deal in the coming month, reported Reuters Oct. 25, that deal still “will not cover U.S. allegations of Chinese hacking into U.S. companies and government agencies, state subsidies, [or] Beijing’s alleged dumping of lower-priced products on global markets”

How can any U.S.-Chinese ag deal-an increased likelihood-stay above water with all that weight hanging around its neck? The market appears to be betting that it won’t.

Another reason to worry is the sudden stern tone U.S. leaders have taken on China in speeches both there and in the U.S. The first to grumble was Terry Branstad, the former Iowa governor who now serves as U.S. ambassador to China.

On Oct. 21, Branstad publicly offered some “unusually pointed remarks [that] turn on a catchphrase-reciprocity-that U.S. officials have invoked to justify a tougher approach toward China on issues including commerce and diplomacy,” explained the Washington Post.

Branstad was speaking on behalf of the White House and proof came three days later when Vice President Mike Pence, reported the New York Times, “denounced American companies that he said had compromised American values like free speech to appease the Chinese Communist Party.”

China didn’t take either slap lightly. A day after the Pence speech, a Chinese government spokeswoman said the Vice President’s speech “‘exuded sheer arrogance and hypocrisy, and was packed with political prejudice and lies'”

The American directness and the equally curt Chinese reply do not sound like two nations nearing agreement on anything. In fact, the unusually tough, undiplomatic talk sounds more like two nations preparing for a cold war rather tha two nations preparing to end a trade war.

If that’s the case-and who knows given this mercurial White House-then the futures traders’ bet soon will pay off yet again.

The Farm and Food File is published weekly through the U.S. and Canada. Past columns, events and contact information are posted at www.farmandfoodfile.com.

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Farm and Food File

By Staff | Nov 6, 2019

The first obvious sign of the season-long flood is a perfectly level, three-foot high ring of dried mud on the machine shed’s siding. Nature put it there and, in time, will likely wash it away.

Across the road, 100 feet behind a noticeably tilting mailbox, stands the empty, sagging farmhouse of my youth. It sports no mud ring because it sits on a small, sandy rise that isn’t evident unless you’re on a bicycle or roller skates.

The house, however, has bigger problems than mud. Water filled its original cellar and basement for the first time since the tall, imposing levees were built to protect it and the surrounding farm from the Mississippi River in the early 1950s. But the levees also made the now-protected river bottoms into a bathtub that, once filled with record rainfall, has nowhere to drain.

The floodwater, made stale by summer heat, now grows mold in every shady spot on the house’s exterior. It especially prospers on the screened-in porch where my great Uncle Honey napped after our daily noon dinners. Now the walls appear to nap as each sags noticeably toward the torn screen door my father walked through a million times on his way to and from the fields and milking parlor.

I don’t go inside – it’s not my family’s house anymore – but the interior might be worse than the exterior because several windows are open, presumably, to air out the rooms my brothers, sister, and I sweated and froze in 50 years ago. Curtains flutter in the October breeze.

Other, more terminal signs-broken storm windows, patches of missing siding, a disconnected gas meter, remnants of a tattered American flag-point to the farmhouse’s begging-for-the-bulldozer appearance. It has been on a downward path since my parents sold the farm 20 years ago and it now looks like it will soon hit bottom.

In truth, the bottom was never that far off when we lived there. Until I was five or six, the house’s furnace was a woodstove in the kitchen. There was no proper basement to flood until my father had one dug in the mid-1960s. Air conditioning finally arrived the year I left for college.

Moreover, the house stood out for what it didn’t have – a dining room, a second bathroom, built-in closets, level floors, a heated upstairs – than what it did have: one electrical outlet per room, salamanders and turtles in the basement, and a front door that no one but traveling salesmen ever knocked on.

And yet it somehow still stands, barely, now at the confounding intersection of practicality and sentimentality. By almost every farm measure it should be knocked down to raise more corn and soybeans, not left to raise more farm children and memories.

Instead, it has been left to wither and age, much like our farm programs, disgracefully and unforgivably so. In their best days, both were simple, unadorned structures designed and built to serve hardworking people. Now, without foolishly large infusions of cash, both fail quickly and completely.

Ironically, the most enduring feature on the tired, wreck of a house is its green, steel roof. I can’t remember who put it on, Dad or the new owner, but it was a supremely hopeful act to put a 100-year roof on a 100-year-old farmhouse less than a mile from one of the fiercest, flood prone rivers in the world.

I like that roof. I like its hope, forlorn or misplaced as it may now be, and I hope the owners allow it to stand as testament to the hopeful, hardworking people who once found their futures under it.

The Farm and Food File is published weekly through the U.S. and Canada. Past columns, events and contact information are posted at www.farmandfoodfile.com.

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