Washington Insider -- Friday

Military Project Funds Shifted to Wall, States Complain

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

Near-Steady US July Ag Exports Outpaced By Import Growth

U.S. agricultural trade registered a deficit for July, marking three out of the last four months with trade red ink. U.S. ag export values held basically steady in July at $10.79 billion against imports that rose to $10.91 billion for the $115 million monthly deficit.

With the cumulative ag exports in Fiscal Year (FY) 2019 at $114.0 billion and imports at $110.4 billion, it suggests USDA’s recently updated outlook for FY 2019 ag exports to be close as imports would have to average just under $9.5 billion in August and September and exports would have to average $10.25 billion to meet the export forecast of $134.5 billion and imports at a record $129.3 billion.

Typically, imports register their lowest mark of the fiscal year in September. It would appear the import forecast from USDA is at risk for being too low at $129.3 billion. The value of ag imports has not registered back-to-back months of less than $10 billion since FY 2017.

The current forecast ag trade surplus of $5.2 billion would be the smallest since it was $4.57 billion in FY 2006.

Judge Orders Anheuser-Busch to Remove ‘No Corn Syrup’ Labels

U.S. District Court Judge William Conley Wednesday ruled that Anheuser-Busch has to stop using packaging on 12-packs and 24-packs of Bud Light that say “No Corn Syrup” once they run out of the packaging that it has or by March 2020, whichever comes first.

The decision came in the case filed by MillerCoors, which charged the statement on the packaging implies that Miller Lite and Coors Light contain corn syrup. MillerCoors uses corn syrup in the fermentation process but the final product does not contain corn syrup.

"In light of the limited number of beers in the light beer market, with Bud Light, Miller Lite and Coors Light accounting for almost 100 percent of sales, that same jury could also find a substantial segment of consumers would infer that Bud Light's principal competitors contain corn syrup," Conley said in his decision.

Anheuser-Busch said in a statement that it looked forward to defending its position in court, saying that MillerCoors was “resisting consumer demands for transparency in the ingredients used to brew its beers.”

Washington Insider: Military Project Funds Shifted to Wall, States Complain

As might be expected, the funding fight continues as the list of military projects to be deferred to provide the extra $3.6 billion funding for the southern border wall draws bipartisan complaints this week. The result, Bloomberg says, is an increase in pressure on Congress to resolve the long-running conflict – or to find the money elsewhere.

The administration already successfully faced down a bipartisan resolution to end the emergency declaration that was issued after Congress refused to appropriate funds for a border wall in a lengthy government shutdown earlier in the year. Congress was unable to override the veto, even though more than two dozen Republicans in the House and Senate joined Democrats to oppose that attempt to unilaterally shift taxpayer money.

The current list of projects the Department of Defense proposes to put aside includes nearly $1.1 billion targeted for facilities in 23 states, with the rest coming from projects in U.S. territories and overseas.

The cuts hit states represented by members of both parties, including $62.6 million for a middle school at Fort Campbell in Kentucky, the home state of Senate Majority Leader Mitch McConnell, R-Ky., and $160 million for engineering and parking projects at the United States Military Academy in New York, home to Senate Minority Leader Chuck Schumer, D-N.Y.

Alaska, represented by Republicans, and Virginia, represented mostly by Democrats, are also among the biggest losers on the hit list, as are Puerto Rico, Guam and the Virgin Islands, with the trio of territories targeted for $687 million in deferred projects.

A handful of Republican senators seeking re-election next year also are facing cuts in their states, including Sen. Thom Tillis, R-N.C., who once wrote a Washington Post op-ed to oppose the president’s emergency declaration, but who later flipped to vote with the president in March. Among the deferrals in his state are projects at Camp Lejeune, one of the state’s major employers. Projects in Arizona, Colorado, Texas and South Carolina are also on the list.

Amid the ongoing controversy over spending on the southern wall, China announced this week that its trade negotiators will travel to Washington early next month for talks boosting the chances for a resolution to the tariff war after weeks of uncertainty and escalation, Bloomberg says.

Vice Premier Liu He agreed to the visit in a phone call on Thursday morning Beijing time with Treasury Secretary Steven Mnuchin and U.S. Trade Representative (USTR) Robert Lighthizer, China’s commerce ministry said. Lower-level officials will have “serious” discussions this month to prepare for the talks, which had originally been expected to take place in September.

In addition, the U.S. and Japan are “still thrashing out details of a trade deal” that the administration hopes to sign this month, including the crucial issue of whether he’ll refrain from imposing higher tariffs on imported cars, Bloomberg said.

The president, at the Group of Seven meeting in France last month, celebrated what he called a “major deal” that he and Prime Minister Shinzo Abe would sign on the sidelines of the United Nations General Assembly, starting later this month in New York – although observers also note that so far the agreement only includes “broad strokes” of a trade deal.

So, we will see. It appears that the fall will mean increasing tensions over old topics like the economic outlook, trade and spending levels and priorities and that even details about the expected storm tracks can be highly controversial. The result is a broad array of constantly evolving debates that producers should watch closely as they intensify, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

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