U.S. to push China on Phase 1 trade agreement flows in 2021
U.S. trade representative Katherine Tai indicated in early October that efforts will be made by the Biden administration to ensure greater compliance from China with the Phase 1 trade agreement negotiated by former President Donald Trump. The deal called for China to purchase $200 billion of U.S. goods and services in excess of what was purchased in 2017 for both 2020 and 2021. According to the Peterson Institute for International Economics (PIIE), only 62 percent of that goal has been met.
Ag News Highlights
Dairy consumption remains strong
Despite the closing of restaurants and schools, per capita dairy consumption increased to a record high in 2020, according to the USDA. This result came from increased consumption of butter and ice cream rather than fluid milk or cheese, both of which were flat from 2019. While demand is not uniformly back to pre-pandemic levels across the country (likely due to differing Covid-19 policies), overall spending on dairy has remained strong through the recent surge in Covid cases.
Bacon prices sent higher
Contemporaneous with an uptick in demand over the summer, pandemic impacts and a hog disease known as porcine reproductive and respiratory syndrome (PRRS) have tightened pork supplies. These factors have caused a spike in pork prices, particularly bacon which is up by 30 percent from a year ago. Prices could stay high for a while. Although producers are likely to increase hog production, that may not help to moderate prices until 2022, according to Steve Meyer of Partners for Production Agriculture.
Delays at ports impacting ag exports
U.S. exports at the Port of Los Angeles are down by 23 percent from a year ago, according to Gene Seroka, executive director of the Port of Los Angeles. A bottleneck at the port resulting in record-high shipping rates is the primary culprit. Port officials say there could be as many as half a million shipping containers waiting to be offloaded in Los Angeles and Long Beach. Options for transportation of goods include companies chartering their own shipping containers — a solution likely only available to large companies — or paying the elevated shipping rates and accepting the delays that come with them. Delays are expected to continue for months, or possibly years.