MNI EXCLUSIVE: US Farmers Shrug Off Virus Impact on China Buys

By Brooke Migdon

     WASHINGTON (MNI) - American farmers are cautiously optimistic that the

United States' Phase One trade agreement with China will revitalize the

agricultural economy despite the increasing likelihood that China will fail to

meet its purchase targets this year amid the coronavirus outbreak,

representatives of the American Farm Bureau Federation and its affiliates told

MNI.

     With the U.S. planting season still a few months away for most states,

farmers are holding off on recalibrating their intended crop yields, agriculture

sector sources said.

     "Before we get too carried away worrying about whether or not they can meet

the commitments, we need to give this time to play out," American Farm Bureau

Federation Executive Vice President Dale Moore said Tuesday, adding that U.S.

farmers are "very positive about the future."

     The U.S. agriculture industry took a hit last year as U.S. President Donald

Trump's trade war with China yielded higher production and consumer costs, but

China's commitment to buy USD40 billion to USD50 billion in farm goods over the

next two years has U.S. farmers refusing to let the spread of coronavirus dampen

their positive prospects for the year.

     The newest strain of coronavirus that has infected tens of thousands

globally and killed more than 600 as of late Friday, according to media reports,

has also curbed consumption and potentially hinders China's ability to meet its

total USD200 billion purchase goal outlined in the Phase One accord.

     But the long-term economic impact of the coronavirus could be "overblown,"

said Mark Tuttle, a director of the Illinois Farm Bureau.

     "This just happens to be something we don't know much about," he said. "But

we know we're going to sell our crop. The virus is going to postpone some

decision making, but we'll get through it."

     Tuttle said the coronavirus is not a major concern right now for most U.S.

farmers. However in years past overproduction has led to falling market value

and financial strain, especially for soybeans, for which China has historically

been a major export destination. 

     White House economic advisor Larry Kudlow said Friday that Chinese

President Xi Jinping told Trump in a phone call earlier that morning that the

coronavirus could delay China's purchase of U.S. goods, but that it would only

be a temporary setback.

     U.S. Agriculture Secretary Sonny Perdue told reporters Wednesday that he

was not aware of any current requests from China asking for "flexibility" in

meeting its purchase targets, but he would not be surprised if such a request

was made as the country's near-term economic outlook is presently unknown.

     "We would be asking the same thing," he said. "We don't know when this

coronavirus will be corralled, we don't know how long it'll go on."

     Perdue said USDA is hopeful that an effective cure for the virus will be

developed by the end of the year, if not sooner.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

[TOPICS: M$A$$$,M$Q$$$,M$U$$$,MT$$$$,MX$$$$,MGQ$$$,MGU$$$]