Trump Announces Xi’s Upcoming Visit Amid Trade Issues

Ag Day could bring news about $10 billion farmer economic aid | Canada dairy issues | U.S. pork exports to China fully restored | RFS primer

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March 18, 2025 03:37 AM

Updates: Policy/News/Markets, March 18, 2025

— It’s National Ag Day. The theme for 2025 is “Agriculture: Together We Grow.” It could also be the day we get official information about the $10 billion in farmer economic aid Congress cleared last Dec. 21.

— Trump announces Xi’s upcoming visit amid trade tensions. President Donald Trump stated that Chinese leader Xi Jinping would visit Washington in the “not too distant future” as trade tensions escalate between the two nations. Trump has raised tariffs on Chinese imports to 20%, citing Beijing’s failure to curb the flow of illegal fentanyl. The Wall Street Journal reported discussions about a potential “birthday summit” in June, though Trump did not confirm a specific date. China has accused the U.S. of using fentanyl as a pretext for tariffs, while both sides remain deadlocked on trade talks. Despite escalating tensions, Trump has signaled openness to a new trade deal.

— Lawmakers push Trump administration to address Canada dairy trade issues. As U.S./Canada trade tensions rise, farm-state lawmakers are urging the Trump administration to confront Canada over its dairy trade policies. Lawmakers and dairy industry groups argue that Canada is failing to meet its U.S.-Mexico-Canada Agreement (USMCA) commitments, particularly on dairy market access and export limits. In a bipartisan letter (link) to key trade officials, lawmakers called for the administration to prioritize these issues in USMCA sunset review talks and broader trade negotiations. They criticized Canada’s restrictive Tariff Rate Quotas (TRQs), which limit U.S. dairy exports, and accused Canada of exploiting loopholes to circumvent export caps on dairy protein.

With new reciprocal tariffs set for April 2, the Trump administration is under increasing pressure to make dairy trade a focal point in upcoming USMCA discussions. Dairy groups argue that stronger enforcement could boost U.S. exports and lower prices for Canadian consumers.

— Border crackdown nets more eggs than fentanyl. President Donald Trump’s push to curb opioid smuggling at the U.S.-Mexico border has led to an unexpected result — more seizures of eggs than fentanyl. Since October, U.S. Customs and Border Protection (CBP) has intercepted 3,768 poultry-related products, compared to just 352 fentanyl seizures, as egg prices soar due to avian flu. In parts of Texas, egg smuggling has surged by 54%, and in San Diego, it has more than doubled. With U.S. egg prices reaching record highs — up to $10 per dozen — consumers and suppliers are resorting to unconventional methods, including smuggling, selling eggs individually, and even committing large-scale heists. Meanwhile, border officials are cracking down, issuing fines up to $300 for first-time offenders and destroying illicit egg cargoes.

— U.S. pork exports to China fully restored. The National Pork Producers Council (NPPC) announced that all 300+ U.S. pork harvesting and cold storage facilities have successfully renewed their registrations to export to China. This five-year renewal, achieved through negotiations by USDA and the U.S. Trade Representative, ensures continued market access for U.S. pork producers.

China remains a key market, particularly for specialized pork products like offals, which provide higher value returns. Exports account for over 25% of U.S. pork production, supporting 140,000 jobs and generating $8.6 billion in 2024.

— USDA moves to permanently increase meat processing speeds. The Trump administration announced plans to permanently allow U.S. poultry and pork processing plants to operate at faster speeds, a win for meat industry groups. USDA’s decision formalizes higher processing speeds currently allowed under waivers, with chicken plants processing up to 175 birds per minute.

The USDA directive instructs the Food Safety and Inspection Service (FSIS) to remove outdated requirements that have slowed production and increased costs. Key changes include extending waivers for higher line speeds in processing facilities and eliminating redundant worker safety data submissions.

USDA Secretary Brooke Rollins emphasized the importance of keeping American producers competitive globally by cutting unnecessary bureaucracy while upholding food safety. Rulemaking to formalize these adjustments will begin immediately.

Meat industry groups, such as the National Chicken Council, support increased line speeds, arguing that they are necessary for efficiency and competitiveness in the global market. The National Pork Producers Council (NPPC) praised the move for making the New Swine Inspection System (NSIS) increased line speed program permanent. According to NPPC President Duane Stateler, this move will provide financial security and stability for pork producers, preventing potential losses of up to $10 per hog.

The announcement was also cheered by House Ag Chairman Glenn “GT” Thompson (R-Pa.) and Senate Ag Chairman John Boozman (R-Ark.) in a statement said, “This is great news for American meat and poultry companies that continuously lead food and worker safety standards worldwide. We applaud [USDA] Secretary Rollins for taking quick and decisive action to allow these businesses to expand their operations in a safe and efficient manner. We look forward to continued collaboration with the administration throughout the rule making process.”

PERSONNEL

— Trump appoints Michelle Bowman as Fed’s top banking supervisor. President Donald Trump named Federal Reserve Governor Michelle Bowman as the central bank’s new vice chair for supervision, replacing Michael Barr. Bowman, a former bank executive and Kansas state regulator, is considered more industry-friendly and has served on the Fed’s Board of Governors since 2018. Trump praised her expertise in inflation, regulation, and banking, stating that she will help correct what he sees as economic mismanagement over the past four years. The appointment comes ahead of a key Federal Open Market Committee meeting, where interest rates are expected to remain unchanged.

FINANCIAL MARKETS

— Equities yesterday:

— CBO to release long-term budget outlook on March 27. The Congressional Budget Office (CBO) will publish The Long-Term Budget Outlook: 2025 to 2055 on Thursday, March 27, at 2 p.m. ET. This annual report provides 30-year federal budget and economic projections based on demographic, economic, and budget forecasts from January 2025. The projections assume current laws remain unchanged and do not account for administrative actions or judicial decisions made after early 2025.

AG MARKETS

— Indonesia raises palm oil export levy to fund biodiesel expansion. Indonesia will increase its palm oil export levy to between 4.5% and 10% of the crude palm oil reference price, up from 3% to 7.5%, to support a mandated rise in biodiesel use, a plantation fund official announced, according to Reuters. This year, the biodiesel mix requirement increased to 40% from 35%, with a potential rise to 50% in 2026. Authorities also plan a 3% palm oil blend for jet fuel next year to curb fuel imports. The new levy rates will take effect three days after regulatory approval, with 35.47 trillion rupiah ($2.15 billion) allocated for subsidies in 2024.

— Brazil advances toward E30 fuel adoption. Brazil’s tests on increasing the ethanol blend in gasoline to 30% (E30) showed “consistent performance” and “real environmental benefits,” according to Energy Minister Alexandre Silveira. He emphasized that E30 would make Brazil independent of gasoline imports for the first time since 2010. Currently, gasoline in Brazil contains 27% ethanol. Raising this to 30% would boost ethanol demand and require an estimated 9 billion reais ($1.59 billion) in investments. The Ministry of Mines and Energy projects E30 could lower gasoline prices by up to 0.13 reais per liter. The proposal will be submitted to the National Energy Policy Council, though no exact timeline was provided.

— China/U.S. trade tensions boost Brazilian soybean premiums. Ongoing trade disputes between China and the U.S. have driven up Chinese demand for Brazilian soybeans, raising export premiums at Brazilian ports. At the Port of Santos, April shipments now carry a 65-cent-per-bushel premium, rising to 75 cents for May. Analysts expect this trend to persist as China adjusts to new customs policies that have extended soybean delivery times. Despite Brazil’s record harvest, strong demand is keeping premiums elevated.

— Agriculture markets yesterday:

FARM POLICY

— CRP shifts focus, reducing impact on planted acres. The Conservation Reserve Program (CRP) has evolved significantly since its inception in the mid-1980s. Initially designed to idle farmland during periods of oversupply, it later transitioned to prioritizing conservation efforts by enrolling environmentally sensitive lands. More recently, the program has shifted toward Grasslands CRP, which primarily enrolls pasture and rangeland rather than cropland.

Since 2020, Grasslands CRP has expanded rapidly, reaching 9.77 million acres by late 2024, surpassing both general and continuous signup enrollments. This shift has diminished the program’s influence on annual corn and soybean planting decisions. With a program cap of 27 million acres and lower per-acre payments for Grasslands CRP, future growth remains uncertain unless adjustments are made in the next farm bill.

ENERGY MARKETS & POLICY

— Oil prices rise amid geopolitical tensions and China stimulus plans. Oil prices inched higher on Tuesday, driven by instability in the Middle East and China’s economic stimulus plans. However, concerns over global growth, U.S. tariffs, and uncertainty surrounding Ukraine ceasefire talks limited gains. Brent crude rose 0.5% to $71.43 per barrel, while WTI increased 0.5% to $67.90.

— Oil prices rose Monday amid geopolitical tensions and Chinese demand. Oil prices edged higher on Monday as geopolitical risks and strong Chinese economic data buoyed market sentiment. Brent crude gained 49 cents (0.7%) to $71.07, while WTI rose 40 cents (0.6%) to $67.58. The U.S. ramped up military operations in the Middle East, targeting Yemen’s Houthi rebels, while President Trump warned Iran of consequences, heightening supply concerns. Meanwhile, Chinese crude oil throughput increased 2.1% in early 2025, signaling stronger demand. A weaker U.S. dollar further supported prices. Despite Monday’s gains, Brent remains down nearly 5% this year, weighed by economic slowdown fears and OPEC+ plans to boost output in April. Analysts suggest tighter U.S. sanctions on Iran could counterbalance this increase. Separately, Trump is set to discuss the Ukraine war with Putin, with potential Kyiv concessions on the table. A peace deal could boost Russian crude exports, pressuring oil prices. U.S. crude inventories are expected to rise, while gasoline and distillate stocks may decline ahead of key data releases.

— Clean fuel groups urge EPA to set 5.25-billion-gallon RFS BBD for 2026. A coalition of clean fuel, farm, and feedstock groups urged the EPA to set the 2026 Renewable Fuel Standard (RFS) biomass-based diesel (BBD) volume at 5.25 billion gallons. In a letter (link) to EPA Administrator Lee Zeldin, organizations including Clean Fuels Alliance America and the American Farm Bureau Federation emphasized the need for timely and robust fuel volume targets. They argue that setting ambitious targets will bolster farm security, create jobs, and support U.S. energy independence. Industry leaders highlight that biodiesel and renewable diesel production has doubled due to significant investments, underscoring the need for higher RFS volumes to sustain growth.

— A look at the RFS. The mandated (and implied mandated) levels for biofuels under the Renewable Fuel Standard (RFS) for 2023, 2024, 2025 are as follows:

These levels reflect a steady increase in the use of biofuels in the U.S. fuel supply, with a focus on advanced biofuels and biomass-based diesel.

Key points:

Conventional ethanol: The implied conventional ethanol volume was set at 15.25 billion gallons for 2023, including a supplemental 250 million gallons, and at 15 billion gallons for both 2024 and 2025.
Supplemental standard: A supplemental standard of 250 million gallons was added for 2023 to comply with a court decision but does not apply to 2024 and 2025.
Growth in advanced biofuels: The majority of the growth in total renewable fuel volumes comes from increases in advanced biofuels.

The implied conventional ethanol volume under the RFS is calculated based on the total renewable fuel volume requirement minus the advanced biofuel volume requirement. Step-by-step explanation:

Implied Conventional Ethanol Volume = Total Renewable Fuel Volume − Advanced Biofuel Volume

Data for 2025:
· Total Renewable Fuel Volume: 22.33 billion gallons
· Advanced Biofuel Volume: 7.33 billion gallons

Calculation:
Implied Conventional Ethanol Volume for 2025 = 22.33 − 7.33 = 15.00 bil. gallons

Soybean and biodiesel groups have complained that the EPA’s RFS mandates for biomass-based diesel and advanced biofuels are too low for several reasons:

Industry growth expectations: The groups feel that the EPA’s volumes do not reflect the industry’s growth potential. The finalized volumes for 2023, 2024, and 2025 are seen as underwhelming and do not account for the current production levels or future growth expectations of the industry.
Support for low-carbon fuels: Biodiesel and renewable diesel are recognized for their ability to significantly reduce greenhouse gas emissions. However, the EPA’s modest increases in volumes are perceived as insufficient to support the rapid decarbonization goals set by the Biden administration.
Economic and environmental benefits: The groups argue that biodiesel improves the environment and economy, yet the EPA’s rule does not adequately prioritize these benefits. They believe that higher volumes would better align with the environmental and economic advantages of biodiesel.
Investment and infrastructure: The industry has made significant investments in infrastructure and production capacity, expecting higher demand driven by more ambitious RFS targets. The current volumes may not be enough to support these investments, potentially leading to underutilization of capacity.
Comparison to recommendations: Industry advocates had recommended much higher volumes, but EPA set the levels at roughly one-third of these recommendations, leading to disappointment and concerns about the future of the industry.

The recent EPA mandates for biofuels under the RFS are generally seen as conservative compared to industry projections for growth. A look at EPA mandates vs industry projections:

Biomass-based diesel:

EPA mandates: The EPA set biomass-based diesel volumes at 2.82 billion gallons for 2023, 3.04 billion gallons for 2024, and 3.35 billion gallons for 2025.
Industry projections: The industry had expected higher volumes, considering existing production levels and investments in new capacity. For instance, the U.S. market reached 3.1 billion gallons in 2021, and there are projections for significant growth beyond the EPA’s targets.

Advanced biofuels:

EPA mandates: Advanced biofuel volumes are set at 5.94 billion gallons for 2023, 6.54 billion gallons for 2024, and 7.33 billion gallons for 2025.
Industry projections: The industry anticipates more rapid growth in advanced biofuels, driven by technological advancements and increasing demand for low-carbon fuels.

Conventional ethanol:

EPA mandates: The implied conventional ethanol volume is capped at 15 billion gallons for 2024 and 2025.
Industry projections: Some industry groups argue that higher volumes could support greater market penetration and align with climate goals, but the EPA’s rule maintains the current level.

Key differences:

Growth rate: Industry projections often suggest a faster growth rate than what the EPA mandates provide, reflecting optimism about technological advancements and market demand.
Investment and capacity: The industry has made significant investments in production capacity, which the current EPA volumes may not fully utilize.
Market potential: The biofuels market is expected to grow significantly due to factors like renewable energy targets and public awareness, which could support higher volumes than those set by the EPA.

Upshot: While the EPA mandates provide some growth, they are seen as cautious compared to the industry’s potential and projections for expansion.

As for 2026 RFS RVOs, by law, the RVOs under the RFS are to be finalized 14 months ahead of when they become effective — by Nov. 1, 2024, for 2026. However, the Biden administration openly signaled in their regulatory agenda that they planned to propose the 2026 levels in March of this year and finalize them in December. The regulatory review embarked on by the Trump administration has likely slowed down the process on at least the proposed levels, but typically the proposed levels are often not released before June and have previously been finalized in November. It is still not clear why the Biden administration openly defied the law in delaying the RVOs for 2026 until late 2025. EPA is left to determine the levels for the RFS since the mandated levels laid out in the Energy and Policy Act of 2007 are no longer in effect.

TRADE POLICY

— Trump’s trade team seeks stability amid tariff chaos. Bloomberg reports (link) that Jamieson Greer, President Donald Trump’s top trade negotiator, is attempting to inject order into sweeping new tariffs expected next month, after previous announcements roiled markets and fueled business uncertainty. Greer is moving to impose structure on the administration’s upcoming tariff rollouts, aiming to avoid the confusion that marked previous announcements. By reinstating a formal policy process, including a public comment period, Greer hopes to temper uncertainty and limit potential legal challenges. However, internal debates persist, with some officials urging caution while Trump remains determined to press ahead with sweeping new import duties on April 2.

WEATHER

— NWS outlook: Heavy snow over the Northern/Central Rockies on Tuesday; light to moderate snow from the Central Plains to the Upper Great Lakes on Tuesday; and heavy snow/ blizzard conditions over Central Plains to the Upper Great Lakes on Wednesday... ...There is a Slight Risk (level 2/5) of severe thunderstorms over parts
of the Middle Mississippi/Ohio Valleys and Upper Great Lakes on Wednesday... ...There is an Extreme Risk of fire weather over the parts of the Southern High Plains on Tuesday.

KEY DATES IN MARCH

8-20: FOMC blackout where Fed officials cannot comment on monetary policy or the economy.
18: NCAA men’s basketball finals
18-19: FOMC meets (interest rates)
20: Spring equinox
20: NCAA women’s basketball finals
21: USDA Chicken & Eggs report | Cattle on Feed | Milk Production
25: USDA Cold Storage report | USDA Food Price Outlook
27: USDA Hogs & Pigs report
27: MLB Opening Day
28: Personal Consumption Expenditures Price Index
29: Last day of Ramadan
31: USDA Prospective Plantings, Grain Stocks and Rice Stocks reports | Ag Prices

LINKS