-September 27,2019-

Brazil gains market share as trade war grinds on

Brazil is taking advantage of US weakness on the trade front with China and  other countries as the trade war grinds on. A report from the University of Tennessee suggests the US could lose market share term even if an agreement is reached.

A press report says University of Tennessee’s Aaron Smith, associate professor and Extension crop marketing specialist, and Andrew Muhammad, professor and trade policy specialist, discuss the long-term effect of trade disruptions.

If the issue is resolved soon, markets likely will respond, but long-term, U.S. agricultural trade could suffer, they say. Market shares lost to competitors during the trade war will be hard to recover.

“One thing I find concerning is the amount of investment going into Brazil from China,” Smith said, “and Brazil having the capacity to increase their production to meet a larger portion of Chinese import demand for agricultural goods.”

He said short- and long-term market share damage will affect corn, soybeans and cotton, among other commodities. The size of Brazil’s farms is a factor, too. “When you hear about some of these farms that buy 50-plus cotton pickers, that’s not a short-term investment; that’s anticipating a long-term demand.”

Biggest challenge for Brazil

He said the biggest challenge for Brazil as a competitor with U.S. agriculture has always been infrastructure. “Brazil has made tremendous strides in the past decade, and then you start seeing additional investment coming in from Chinese companies that can assist them moving forward, providing them additional resources to close the infrastructure gap with the U.S.”

Colombia avocado exports climb

Avocados continue to be one of Colombia’s hottest exports and during the first half of 2019 have increased by 37% says a press reports. Europe is showing  an increase taste for avocados and Colombia is helping to supply that hunger. The includes the US where Colombia exports have soared 700%.

Weather hurts processing tomato harvest

USDA says contracted production for California processing tomatoes is forecast at 11.5 million tons, averaging 49.8 tons per acre. The current forecasted production is 4.1 percent below last year’s contracted production, and 5.0 percent below the May forecast. The projected harvested acreage of tomatoes grown under contract is 231,000 acres, an increase of 0.4 percent compared to 2018.

Rainy weather and cooler temperatures delayed planting and slowed crop growth in early spring. Reports of hail damage in Fresno County during May lowered expected yields. There were also concerns that high temperatures in July and August, as well as disease pressure, has adversely impacted the crop.

Cheese at $2/lb / Six year high

Info from Western United Dairymen

Cheese markets continued last week’s upbeat tone, with both blocks and barrels rocking a solid increase. Blocks gained 6.05 cents to $1.9992/lb, while barrels gained 7.16 cents to $1.8246/lb. These are the highest cheese prices we have experienced since the FMMO was implemented in California.

The last item block cheese was at $2 or above was 2014. At the beginning of 2019 block prices were down in the $1.40 range.

Domestic demand for cheese has been robust. According to USDA data, American cheese consumption in July was up 6.5% from the year before. USDA’s nonfat dry milk price had the second best performance this week, gaining 0.91 cent to $1.0534/lb. Outside the US, the price continues to move upward. The latest skim milk powder price average reported by Dairy Market News (DMN) in Oceania this week was $1.2134/lb—up a nickel from last month.