Grain Bins


Conference Rescheduled; U.S.-China Trade Touted

Posted on January 22, 2020

Mark your calendars for Friday, March 27. South Dakota Corn’s 34th annual conference is rescheduled for that day after a blizzard forced postponement from January 18. The good news is that the lineup of speakers and entertainment will be very similar to the original one.

“Finding an available date at the Sioux Falls Convention Center and rescheduling the program is a difficult undertaking, but everything is falling into place,” South Dakota Corn Marketing and Legislative Director Teddi Mueller said. “All of the speakers said they were looking forward to this event, and they’re working the new date into their schedules. We’ll update everyone as we get all of the details finalized.”

The educational lineup will include a water panel and presentations on grain marketing and weather marketing. For those of you who already have your tickets, hang on to them.

Mueller, who has worked for South Dakota Corn for 20 years, said this is the first time the annual event has ever been postponed. The No. 1 concern was everyone’s safety.

Oh, one other bit of good news. By holding the conference in March, it’s almost guaranteed the day will be sunny with a temperature in the 50s. Okay, that may be wishful thinking.

Let’s turn to another topic: trade.

The U.S.-China trade war dragged on far longer than we’d have liked and definitely took a toll. However, the two nations have finally reached a “phase 1” agreement that opens the doors to increased exports of agricultural products. China has pledged to purchase up to $80 billion in agricultural goods over the next two years.

One important part of the deal that hasn’t received as much publicity is China agreeing to set and follow new standards for genetically engineered products. Incomes are rising in China, which is leading to rapidly increasing demand for food and feed.

China has become the largest single-nation importer of agricultural products derived from biotechnology. However, product approvals in that country are often tied up for five to seven years. That has handcuffed American farmers and companies who have the technology to meet the demands but have to await approval. Under the new deal, China will complete reviews of new animal-feed products within 24 months.

The U.S. Grains Council (USGC)–a South Dakota Corn partner–has an office and staff in China that’s committed to increasing U.S. exports to that country. A speedier approval process will open doors to greater exports of corn, distillers grains, soybeans and feed.

Floyd Gaibler, USGC’s director of trade policy, told South Dakota Corn that the deal will also improve the transparency of China’s approval process.

“China’s asynchronous biotech approval process has been a major non-tariff trade barrier,” Gaibler said. “If the reforms are implemented and stay in effect, they will represent a major improvement to market access for U.S. corn and coproducts.”

CropLife International, an industry trade group, estimates that the direct financial impact of delays in Chinese approval of U.S. biotech crops is nearly $5 billion over five years. Current Chinese regulatory policies on genetically engineered seeds are seen as protectionist and favoring that country’s development of ag biotechnology. American farmers have been hesitant to buy GMO seeds that aren’t approved by China.

The Chinese market holds immense growth potential for U.S. agriculture. China is the second-largest corn consumer behind the United States and previously was the largest importer of DDGS and sorghum to supply the world’s largest swine, aquaculture and egg industries. China also has the world’s second-largest poultry industry.

According to the USGC, China has agreed to:

  • Operate a transparent, science-based regulatory system for products derived from agricultural biotechnology
  • Establish a simplified, science-based safety procedure to assess and authorize food ingredients derived from genetically engineered microorganisms
  • Pre-screen each application for review within five business days
  • Extend product authorizations to five years

The trade agreement is also expected to open significant opportunities for U.S. exports of meat. U.S. pork exports amounted to $700 million in 2017–before the trade war–and are now expected to reach $1.7 billion in the next two or three years.

The USDA estimates that beef exports could reach $1 billion annually. China will expand the scope of beef products allowed to be imported, eliminate age restrictions on cattle slaughtered for export there and loosen its restrictions on three synthetic hormones that have been legally used for decades in the United States. Poultry exports also have the potential to reach $1 billion annually.

This agreement is being called the “first phase” with negotiations on a second phase to follow.

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