What Is TPP and Strong Ethanol Exports - Friday, 27 January 2017

Ethanol exports out of the U.S. have continued to show strength during the first quarter of the year.  For the start of the 2016-17 marketing year these exports are up 85% and are at the highest level in 5 years for this timeframe.  Our top customers have been Brazil, Canada and China with India, Peru, South Korea and Mexico rounding out the top 7 importers with purchases totaling 88% of our total ethanol exports for the first quarter. Currently in Brazil sugarcane, which has often been used for ethanol production, has been rerouted and is being used for sugar production.  To enforce government mandates for ethanol use the country is now importing large amounts of U.S. ethanol.


We have heard a lot in the news lately about the U.S. pulling out of the 12 country TPP (Trans-Pacific Partnership) that President Obama agreed to last February.  Together these 12 countries account for 40% of the world’s economic output.  What has been somewhat misleading to the public regarding this action is the fact that the TTP was never approved by Congress so what has really changed?  During the campaign for the presidency neither Clinton nor Trump approved of the TPP and the policy faced serious opposition across all party lines had it been brought to Congress for a vote. Opponents have characterized the deal as a “secretive deal that favored big business and other countries at the expense of American jobs and national sovereignty.” Supporters believed that the deal would improve America’s position in the Asia-Pacific region which currently is largely influenced by China. Of the 12 countries that entered into this potential agreement the only country to ratify the policy so far has been Japan.  The wording of the original TPP allowed up to two years for participating countries to ratify;  at least 6 of the original nations were required to participate and a minimum of 85% of the total GDP to be represented in order for the policy to take effect.  The U.S. represents 60% of the overall GDP of the nations involved so even if the other 11 nations voted to ratify the agreement it would never go into force.

Winter has returned to the Midwest.  The jet-stream had positioned itself in the western portion of the country which locked the stormy and cold weather in the western U.S. and brought warmer than normal temps to much of the eastern U.S.  The pattern is now beginning to flip and will allow for warmer and drier conditions in the West and cold air out of Canada to plunge southward into the Midwest and eastern U.S. bringing temps 15-25 degrees below normal. 

The Weather Company has issued their forecast for spring 2017.  According to their data the southern tier of the country have the best chance for warmer than normal temps from March through May with the remainder of the country to see near average allowing for “a quick and successful planting season.”  

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