Deputy Ag Secretary Steve Censky says last week’s preliminary trade conversations with Chinese officials were “positive, productive” talks.
Speaking in Kansas City, Mo., at the Ag Outlook Forum, hosted by Agri-Pulse and the Agricultural Business Council of Kansas City, Censky said he was happy to see China buying more ag products and rolling back additional tariffs on U.S. goods.
“We are pleased that we’ve seen China return to the market now purchasing some soy, purchasing some sorghum, and purchasing a few other commodities,” Censky said.
Censky said hopefully these signals mean China is prepared to deal “seriously” with market access and intellectual property constraints, but indicated “time will tell” in remarks to reporters after his speech.
Pat Westhoff, Food and Agricultural Policy Research Institute Director with the University of Missouri, said China has knowledge of sensitive constituencies for President Donald Trump.
“I think it is clear that the Chinese negotiators have figured out agriculture is a great pressure point for the president,” Westhoff said. “They recognize if they want to reward the president, they do something nice in ag and if they don’t, they do something bad in ag.”
Censky also said an upcoming October meeting with Chinese officials will give a better assessment of where things go. In a statement on Friday after last week's talks, the Office of the U.S. Trade Representative said it looked forward to "welcoming a delegation from China for principal-level meetings in October."
The U.S.-China trade war has been pointed to as another factor weighing down the farm economy. Censky acknowledged times are not so rosy in farm country, but says it's not like the 1980s.
“We have better risk management policies in place and so our crop insurance programs are more robust than when they were in the 1980s,” Censky said.
USDA’s Economic Research Service, in August, forecast net farm income at $88 billion, up 4.8% compared to last year.
“This is a pretty substantial increase from what was forecast in March,” USDA Deputy Chief Economist Warren Preston said at the event.
Preston pointed out Market Facilitation Program payments and federal crop insurance indemnity payments are keeping net farm income stable for this year.
"If we were strictly looking at the receipts versus expenses side of the ledger, we would be slightly down from 2018 and what is making up the difference this year is direct payments to farmers," Preston told Agri-Pulse. He also noted there has been more "belt tightening" from farmers with production expenses going down. Preston noted a nominal increase in production expenses for 2019 but said it is down 1.3 percent when adjusted for inflation.
Speaking in a panel discussion at the event, Westhoff said FAPRI's economic numbers look similar to USDA's.
“We could be talking about relatively tough numbers on the receipt side. We might have lower government payments and so we could be looking at a lower level gross income to the sector,” Westhoff said, trying not to scoop himself before FAPRI releases its analysis Tuesday in St. Louis.
The event also included a panel on workforce development, something Missouri Governor Mike Parson said was driving the state’s economy.
Parson also welcomed USDA employees from the National Institute of Food and Agriculture and Economic Research Service. The Department of Agriculture continues to look for a location for ERS and NIFA employees to work, but Censky told reporters Monday he hopes an announcement will be made in the next couple of weeks.
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