Washington Insider -- Tuesday

Broad Media Focus on Shutdown

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Second Round of Farmer Aid Payments Coming

USDA Monday announced the second and final round of payments under the Market Facilitation Program (MFP) aimed at assisting farmers impacted by trade actions by other countries.

The second round of payments covers the second half of 2018 production for eligible commodities.

Farmers only need to sign up once for the MFP to be eligible for the first and second round of payments. Signup remains open though January 15 and producers have until May 1, 2019, to provide production evidence.

The second round of payments will be made at the same level as the first round for almond, cotton, corn, dairy, hog, sorghum, soybean, fresh sweet cherry, and wheat producers.

For farmers who have already applied, completed harvest, and certified their 2018 production, a second payment will be issued on the remaining 50% of the producer’s total production, multiplied by the MFP rate for the specific commodity.

EU Net Grain Importer So Far in 2018/19

The European Union (EU) has become a net importer of grain for the first time in more than a decade after drought cut their grain output, strong wheat export competition from Russia and record corn imports. As of December 16, the EU has imported 13.15 million metric tons of grain so far in 2018/19 against exports of 12.64 million metric tons, European Commission data showed.

The last time the EU was a net grain importer was 2007/08, when the harvest was also damaged by drought.

EU soft wheat exports so far in 2018/19 stand at 7.5 mmt as of December 16, down 25% from 9.9 mmt at the same stage of last season. Barley exports reached 2.5 mmt, down 1% from a year earlier. Meanwhile, corn imports stood at 9.9 mmt, up 41% from 7.0 mmt a year earlier.

Washington Insider: Broad Media Focus on Shutdown

This appears to be a “captivating moment” in Washington as President Trump is seen as becoming “increasingly isolated less than a week ahead of a potential government shutdown and even members of his own party admit that he has backed himself into a corner with his demands for $5 billion in funding for a wall on the Mexican border,” The Hill says this week.

“Everybody is looking to him for a signal about what he wants to do, and so far it’s not clear,” Sen. John Cornyn, R-Texas, said of the president.

Few Republicans will criticize the president on the record but behind the scenes there is frustration that he has weakened the GOP’s negotiating position with Democrats. There is also a sense that he might not be worried about the fallout for his party if his own supporters delight in his fighting with Democrats.

“Trump will get the blame, but he won’t care,” one GOP lawmaker told The Hill. “And the base will love him for it.”

Trump’s declaration last week that he would be “proud” to shut down the government to secure $5 billion for his border wall emboldened Democrats, The Hill says.

They say they will only agree to measures that extends last year's funding level, which would provide $1.6 billion for border security, including $1.3 billion for pedestrian fencing.

Rep. Nancy Pelosi, D-Calif., the presumed next Speaker, publicly challenged Trump on whether Republicans could muster enough votes to pass such a bill in the House.

“You won’t win,” she told him at an extraordinary televised Oval Office meeting last Tuesday alongside Senate Minority Leader Charles Schumer, D-N.Y.

The House GOP’s decision to adjourn until Wednesday night, just two days ahead of the shutdown deadline, seemed to indicate that she was correct, though top Republicans continue to insist that they may bring the bill to a vote before then and cautioned members that they should be prepared to return to Washington early. Recent news stories suggest that the Republicans may have trouble mustering their troops for this “lame-duck” fight.

While Republicans dutifully blame Democrats, most seem to agree that, were it not for Trump, there would be little trouble keeping the government open.

“The six bills we have are basically written and read out, ready to go, and with this one it’s only a portion of it that’s in dispute, so when the people who disagree come to an agreement, we can move,” said Rep. Tom Cole, R-Okla., an appropriator.

Republicans have also made clear that they oppose shutting down the government.

“One thing I think is pretty clear no matter who precipitates the government shutdown is the American people don’t like it,” said Senate Majority Leader Mitch McConnell, R-Ky., who has been key to passing many of Trump's key accomplishments.

“I don't think anybody wants a shutdown,” added Rep. Scott Perry, R-Pa.

Cole warned that “you will lose a shutdown fight if you start it.”

Since Trump and Democrats laid down their lines at last week’s explosive Oval Office meeting neither side has budged. Democrats, naturally, blame the president.

“We've agreed to 99.9%. We disagree on the wall, but they want to shut down the government,” House Minority Whip Steny Hoyer, D-Md., told The Hill. “And we thought the Mexicans were going to pay for it,” he added.

The Hill noted that the president also “seems to lack public support on the matter,” according to a recent NPR/PBS NewsHour/Marist Poll, which found that 57% of respondents wanted the president to avoid a shutdown and compromise on the wall.

But the sentiment was different among Trump’s base, which has often been key to his decision making. The poll found that 65% of Republicans surveyed did not want Trump to compromise, but the President tried to throw the blame back at Democrats, accusing them of hypocrisy on border security.

“Let’s not do a shutdown, Democrats - do what’s right for the American People!” he wrote.

So far, the best prospects to avoid a shutdown that would affect 800,000 federal workers across the country seem to be short stopgap measures to push the fight until after Christmas or into 2019.

Still, “it depends, really, on what the president would be willing to consider,” Cornyn said.

It is hard to tell exactly how deeply the President is dug in on this issue, and where and what he sees as his main options. Certainly, this is a fight producers should watch closely as it proceeds, Washington Insider believes.

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