China outbreak weighs on commodities, from oil to hogs [Wall Street Journal]
China’s coronavirus outbreak has scrambled the global trade in commodities, hitting the country’s massive appetite and challenging global supply lines set up to feed it. Markets for essentials like natural gas, copper and pork have all swooned amid worry over a broad weakening of demand. Prices for some natural resources are plumbing multiyear lows. Chinese companies are canceling orders for crude oil and other commodities, and the country’s once-heaving ports are quieter. Analysts say the disruption could be long lasting, as stockpiles of commodities grow and ships lay idle. Since the virus first emerged in the central Chinese city of Wuhan in late December, it has killed more than 1,000 people, primarily in mainland China, among more than 40,000 confirmed cases. As Chinese industry slows, and movement in and out of the world’s largest consumer of many commodities stalls, the effect on prices has been dramatic. Since Jan. 17, when China reported the severity of the outbreak, the price of Brent crude, the global oil benchmark, has dropped about 16% and the price of copper is down around 9%. Iron ore has fallen about 11% and a major benchmark in natural gas is trading at its lowest point since August 2009, after losing 20%.
California’s grape crush report not reflective of market, experts say [Napa Valley Register]
The average price of a ton of Napa Valley wine grapes rose almost 4 percent in 2019, according to the year’s Grape Crush Report. But experts say the report may not reflect true market conditions. The report, released Monday by the California Department of Food and Agriculture (CDFA), listed Napa’s average price per ton of wine grapes in 2019 as $5,797, up from $5,572 per ton in 2018. And the region isn’t alone in its growth: 10 of the state’s 17 grape pricing districts were commanding higher prices per ton of grapes than they had in 2018, according to data from the CDFA. That’s a surprising number, industry members said, considering the state of the industry this year, which faced a decline in consumer demand for the first time in 25 years and is still grappling with an oversupply with its roots in a historically large harvest in 2018. That coupling has birthed a glut market of sorts, though the numbers on the Grape Crush Report don’t seem to reflect those conditions.
Hemp takes center stage as 53rd annual World Ag Expo opens three-day run [Fresno Bee]
There’s always something new at the World Ag Expo, even after 53 years of parading the latest gizmos and techniques before farmers. At this year’s three-day show that starts Tuesday in Tulare, that something new is hemp. Yes, it’s commonly associated with marijuana. But while hemp is a cannabis plant, it’s low in THC (the part that gets you high). Traditional hemp can be grown in mass quantities for use in things like textiles and bioplastics. The 2018 Farm Bill ushered in a new interest in the product, according to expo representatives. At this year’s expo, plans are for 30 exhibitors and a seminar stage in a 9,400-square-foot tent devoted to hemp. Tuesday at 10 a.m., Hanka Gabrielova will speak on hemp. Gabrielova is accredited by the Czech Ministry of Agriculture as an adviser in organic farming with a specialization in hemp, according to the expo. On Wednesday, the inaugural Hemp Innovation Challenge takes the theater stage beginning at 1 p.m.. with entrepreneurs making business pitches in pursuit of prizes. Of course, the agriculture event that’s among the largest on the planet is more than hemp. There are seminars on dairy, water and international trade; live cooking demonstrations; and plenty of vendors pitching farm supplies including electric tractors.
https://www.fresnobee.com/news/business/agriculture/article240097493.html
Wisconsin Republicans propose tax cuts for farmers [Associated Press]
Wisconsin farmers would receive up to a $7,500 tax break this year under a bill that’s part of a fast-moving package of proposals Assembly Republicans unveiled Monday to dovetail with Democratic Gov. Tony Evers’ special session call to help the state’s struggling agriculture industry. It’s unclear whether the measures will have enough support to pass the Senate or be signed by Evers. The governor is reviewing the proposals and glad that lawmakers are working on efforts to help rural Wisconsin, said Evers’ spokeswoman Melissa Baldauff. Republicans touted their package of five new bills building off of what the governor proposed as being “bigger and bolder” than the Evers plan but did not have a total cost estimate. The Evers proposals would cost $8.5 million over two years, but did not include a pair of tax breaks Republicans are seeking. Wisconsin is home to nearly 65,000 farms and the agriculture industry contributes more than $100 billion annually to the state’s economy. But the state’s $46 billion dairy industry has been hit hard in recent years. Wisconsin has lost a third of its dairy farms since 2011, an average of two a day. One of the newly proposed Republican tax breaks would allow farmers and other sole proprietors to deduct the cost of health insurance from their income taxes. That would cost roughly $9 million a year, according to its sponsor Rep. Amy Loudenbeck. She did not know how many farmers would qualify.
https://apnews.com/98ec5605bab7cdb84260aa50a9e9ada6
Commentary: With Gov. Newsom’s new budget, California seeks to help all regions rise [CalMatters]
When Gov. Gavin Newsom unveiled his proposed budget, he reaffirmed a deeply held belief that some of California’s best work happens at the regional scale. We are, he said, “many parts but one body,” and laid out proposals for major investments in regional economic development and inland California. This commitment goes beyond the budget to the day-to-day operations of state government. A year ago, the governor tasked the two of us to launch Regions Rise Together, an ongoing initiative to better connect state government to all of the diverse regions across the state. We have spent the past year traveling to the Inland Empire, Kern County, Fresno, Northern San Joaquin County, the far northern part of our state, and beyond, listening to Californians talk about their unique assets and challenges, and bringing those ideas back to Sacramento. This budget is a reflection of those conversations.
https://calmatters.org/commentary/economic-development/amp/
Hard to swallow Newsom’s “voluntary agreements” under the threat of doom [San Joaquin Valley Sun]
First things first: you’d be wise to forget everything you’ve read or heard recently about “voluntary agreements,” which according to the usual suspects, will bring a just and peaceful end the seemingly never-ending battle over California water. Not true. Not even close. To be crystal clear: “voluntary agreements”, no matter who crafts and agrees to them, would result in more money and even more scarce surface water leaving the Valley. Whether it’s the offer made by water agencies to the State of California and the State Water Resources Control Board in December of 2018, or the latest “offer” made by Governor Newsom, both plans are bad. Really bad. But, as with many things, one option is worse than the other. With that as a primer, lets then agree on something: this is not a time to chalk-up another loss to the political majority while accepting defeat because we have no choice. We must remember something very important – agricultural production in California keeps this country secure. And if there were ever a time for water users to be united, the time is now. Agriculture, water agencies, cities, taxpayers, and trade organizations should have their eyes and ears wide open to what is happening to the water in California. This isn’t water in some far-away place that other people are talking and writing about. It’s your water. It’s our water.
http://sjvsun.com/ag/hard-to-swallow-newsoms-voluntary-agreements-under-the-threat-of-doom/
