China Snubs U.S. Soybeans While USDA Invests in Screwworm Defense

China has not made any U.S. soybean purchases from this fall’s crop, which has growers concerned about the relationship with the largest U.S. soybean purchaser ahead of harvest.

On this episode of Agri-Pulse Newsmakers, Ted McKinney, CEO of the National Association of State Departments of Agriculture, was asked about the trade landscape and what he’s watching for in USDA’s quarterly ag trade outlook due out next week. Plus, he discussed how NASDA members are partners in New World Screwworm eradication efforts.

Then, Texas State Veterinarian Dr. Lewis R. “Bud” Dinges and Boehringer Ingelheim’s Steve Boren discussed Ag Sec. Brooke Rollins’ recent New World screwworm investment in Texas and the private sector’s role supporting eradication and treatment efforts.

Watch the Episode

Want to receive Newsmakers in your inbox every week? Sign up!

Read the Transcript

Please note: This transcript has not been edited.

Lydia Johnson: Welcome to Agri-Pulse Newsmakers, where we aim to take you to the heart of ag policy. I’m your host, Lydia Johnson. Our guest this week is Ted McKinney, CEO of the National Association of State Departments of Agriculture, who joins us to discuss New world, screw worm and trade.

But first, here’s this week’s headlines.

The Trump administration is taking new steps to stop a major cattle pest from reaching the United States. The new World screw, worm the Food and Drug Administration was authorized this week to accelerate the approval of drugs for treating infected cattle. The USDA also announced a $750 million investment in a new facility for producing sterile flies in Edinburg, Texas, near the Mexican border. The facility will have the capacity to produce up to 300 million flies per week. Ag Secretary Brooke Rollins acknowledges that beef prices could continue to rise amid the suspension of Mexican cattle imports. The border has been shut down since November, with the exception of a brief reopening earlier this summer. Beef prices have risen by over 11% during the last year.

Rollins also announced this week that USDA will be cutting off subsidies for solar power projects on U.S. farmland. During her remarks in Tennessee. She asserted that solar panel usage is making it harder for producers to afford acreage. A USDA Rural Development memo obtained by Agri-Pulse indicated that solar and wind projects would be made ineligible for the Business and Industry Guarantee Loan Program, and that the Rural Energy for America program guaranteed loans and grants would be restricted to small scale projects. Solar projects containing Chinese components would also be ineligible for Reap, as would project some certified cropland as defined by the Farm Service Agency. The USDA directive is in line with a broader effort by the Trump administration and congressional Republicans to curb clean energy development and roll back broader efforts to address climate change.

The American Soybean Association appealed to President Trump this week to reach a trade agreement with China, which does not place any orders for U.S. soy for this fall’s harvest. In the letter, ASA says China has contracted with Brazil to meet future months needs to avoid purchasing any soybeans from the United States. China has long been the biggest export market for U.S. soy, soybean farmers are under extreme financial stress, the letter reads. Prices continue to drop, and at the same time, our farmers are paying significantly more for inputs and equipment. U.S. soybean farmers cannot survive a prolonged trade dispute with our largest customer. The white paper notes that by this time of the year, China has normally ordered about 14% of its expected purchases of U.S. soybeans going into the 2022 harvest. China had ordered 27% of its purchases. Overall, export sales of this fall’s soybean crop are down 81% from the five-year average.

Dozens of U.S. trading partners were hit with higher tariffs after President Trump’s August 1st negotiating deadline passed. We asked Ted McKinney, CEO of the National Association of State Departments of Agriculture, how this round of trade negotiations is different from what we’ve seen in the past.

Ted McKinney: I would say it’s we still need to see how it plays out. It’s clear to me that that agriculture, including our members, are trying very hard and showing patience with the strategy. And the starting point on that is, is what I’ve said all along. Trade was not fair on, on, on any number of measurements. And so the president being one that wants to get things done and get things done more hurriedly, didn’t see or have an appetite for a long run multi-year negotiations country by country. And so we’re we are where we are. And there seem to be some results, although most of us are waiting for the details. So, we’re getting to crunch time, though, you know, there’s still some soy and corn in the beans. Harvest is coming. Tariffs are setting in some of the reality that is coming. So, most of us are hitting our knees at night twice praying for results with different countries to start buying. China being among the leader probably there.

Lydia Johnson: The American Soybean Association warned this week that the ag sector will be hit with extreme financial stress if President Trump does not make a deal with China, and China has begun to mention that they have not purchased any U.S. soybeans from from this fall’s harvest. You know how concerned should farmers be about this situation and China’s lack of purchasing?

Ted McKinney: Well, you raise the soybean industry particularly. I think that’s, that’s that’s the poster child here. And it’s not this should not be news. We had hoped purchases had would occur before now, but, but the soy industry is the most vulnerable, the most acute in, in terms of, crisis or perhaps emerging crisis. And like everybody else, we hope and pray that China will start buying or that the negotiations can help facilitate that. Again, I say and we we know and we’ve talked with USTR and USDA and others administration, I believe I believe very firmly they have the American farmer, including the soybean farmer and processor. In their minds, I don’t think there’s any doubt that that’s been a part of it. Maybe it’s this very important stuff. On resolving Ukrainian issues that’s caused a diversion. Although I don’t know that USTR is in the middle of that. I think they’re still getting their work done. And so we remain hopeful that the strategy will work. But boy, crunch time is upon us. Or nearly so. There’s not much time left on that runway, and we’ve just got to, see some results. Otherwise, we’ve got to start thinking of some, compensation plan that, you know, had been hinted at several times in the past few months.

Lydia Johnson: If China, you know, ends up not purchasing us soy, do you believe that other countries can fill that void and and fill that market?

Ted McKinney: Yeah, it’s you know, China’s a, interesting group. The one thing they, they dislike more than anything else is to be beholden to any one country. Well, that’s kind of emerging with Brazil. And if that’s true, if they don’t like to be beholden any one country, then then maybe we shouldn’t see or could see buying.And at the same time they understand that, you know, we’re having a revisitation worldwide and between the U.S. and China on these things. And so I just hope that they’ll see the value of the American farmer.

Lydia Johnson: And USDA’s quarterly ag trade outlook is expected to be released next week. You know, I’m curious, what will you be looking for in that report? And do you think there’ll be any improvement in the trade deficit?

Ted McKinney: We knew that there was going to be a period of time to straighten this out. And, and, and if we’re if we’re relying on this next trade report as the be all, end all, that’s probably a little unfair as we try to turn this thing around, but most certainly over the next 2 or 3, certainly 4 or 5 and six years, we’ve got to see that. Because, you know, we were all aghast when we started to see that we were a net importer after how many decades of net exports. Now, I know some of that involves us selling less cost commodity and buying high cost wines and spirits. I know there’s elements of that, but I say rubbish too, that it still needs to be, a net export plus side of the equation, not a minus. So we’ve got to get there, but it’s going to take some time to introduce ourselves again and again and again to these new countries, see if we can reach a phase two agreement or a renewed phase one agreement with China. I remain bullish, I’m not losing sleep, but I’m coming close. We’ll be back with more newsmakers right after this.

Lydia Johnson: USDA recently announced a massive investment in a new facility in Texas to produce sterile flies to eradicate New World Screwworm. We asked Ted McKinney, CEO of the National Association of State Departments of Agriculture, how the pest threatens American agriculture and how state ag officials are partners in eradication efforts.

Ted McKinney: You talk about Co regulators and cooperators, our state vets. But and then by virtue of working for our commissioners, secretary director members are right there on the front line. I mean, as much as we love APHIS and others and we do, it’s our members that are going to see that cow that has screw worm first. It’s not going to be, APHIS — maybe those tick riders would see it first. And those are APHIS employees. But certainly the states are going to be deeply, deeply involved with it. And the high path avian influenza is a great model for how that works. Our state vets our commissioners and directors, our animal ag division members out in those states and the few commonwealths have been on point. So there was a euphoric cheer when we read and had a hint that maybe a new sterile fly production facility was coming, in addition to what had already been announced, which was the redistribution hub. There were not enough sterile flies coming out of Panama to do the job. And let me tell you, I have seen a cow affected by screwworm. I’ve been to that Panamanian, sterile fly facility. It’s incredible technology. It’s old technology, but it’s still very effective.

Lydia Johnson: The USDA has downsized this year, including staff to partners from from APHIS, the Animal and Plant Health Inspection Service, you know, which supports this new world screw and eradication efforts. As you mentioned. You know, does USDA still have the staff it needs to deal with the issue and also, you know, address the needs of farmers?

Ted McKinney: Well, we hope so. We haven’t, followed the person by person. By person, retirements or eliminations. But we know, generally speaking, that some areas have have lost some real talent in the spirit of reductions in force. I mean, I’ve been in the corporate world where I’ve seen that happen more frequently than the federal government. It’s just unheard of in the federal government. So in the main, I think the federal government will be fine. The short term, though, is the loss of those of those people in volumes that we’ve lost, that have that institutional knowledge of decades-long experience. That’s what we’re worried and we’ve got to fill. And all we can offer without criticizing our friends at USDA is, say, let us know how we can help and we are we’re stepping up. We’re, we’re where we can, where we’re asked to. And I think we’ll get through this.

Lydia Johnson: We’ll be back with more Agri-Pulse newsmakers. But first, Andrew Huneke looks at the higher beef prices and the tightening cattle inventory. In this week’s Ag by the numbers.

Andrew Huneke: Beef prices have reached record high numbers, and one of the main reasons is because of smaller cattle inventories. This chart shows the size of the country’s beef herd, including calves. It has dropped to just over 94 million head, which is the lowest since the early 1950s, according to the USDA estimates. The number is 1% lower than the last report in 2023, and has been gradually declining since 2019. Cattle producers have been reluctant to rebuild their herds after years of drought. Consumers are also seeing higher costs at the same time. This chart shows the average retail price per pound of ground beef. Prices were $6.25 per pound in July, the highest since 2015, when the Bureau of Labor Statistics began collecting data. That’s an increase of more than 2% from June. Those prices have been climbing since the beginning of the year. When it comes to trade. There have been import restrictions on Mexican cattle due to New World screw worm. President Trump’s tariffs on Brazilian beef imports may also affect ground beef prices. USDA’s most recent economic research report says Brazilian beef imports fell nearly 100 million pounds from May to June. For Agri-Pulse. I’m Andrew Huneke

Lydia Johnson: Welcome back. New world screw worm has not been detected in the US since the 1960s, but detections in Mexico have the US on defense against the flesh-eating parasite. We’re joined by Texas State veterinarian doctor Bud Dinges and Steve Borin with Boehringer Ingelheim. To get started, Doctor Dinges, what do we know about New World screw worms so far, and why does it pose such a serious threat to the United States?

Lewis R. “Bud” Dinges: Well, the New World screw arm is considered a foreign animal pest in a foreign animal disease. And we have to be vigilant in our surveillance. There’s, over, 40, 500 or over 5000 cases being, detected there being reported in Mexico at this time. So, we were waiting on some surveillance, more surveillance in our southern border states in Mexico. To better inform us where the worm, fly is. And in Mexico, to potentially, set off some trigger points, for us here in the United States. But we do have surveillance going on at our southern Texas border right now. We’re trapping for for new screening flies there in eight counties along the long southern border at this time.

Lydia Johnson: Ag Secretary Brook Rollins recently made an announcement in the Texas state capital to continue eradication efforts, including a $750 million investment in a new facility for producing sterile flies in Texas. Can you explain the sterile fly technology and how it can support eradication? Even if New World screw worm isn’t currently in the US?

Lewis R. “Bud” Dinges: You bet. Well, the, sterile insect technique is a well-tested technique over multiple generations. They actually developed that technique back in the 30s and 40s here. In, in Texas, I believe, at a research facility. But, it basically it sterilizes, the, the, the male fly, so the female fly only breeds one time in their lifetime. So you’re basically, she lays eggs after mating with the sterile male, and, she will, basically lay eggs that are non-viable. So over multiple, life cycles, they’re, you basically eradicate the fly.

Lydia Johnson: And, Steve, I want to bring you into the conversation here. During Secretary Rollins announcement, she underscored the need to collaborate with the private sector to to eradicate this pest. You know, I’m curious, how is your team preparing for the threat of New World Screwworm.

Steve Boren: We’re working closely with veterinarians and other livestock producers in the state of Texas and along the southern border. Our technical service teams are in the field to raise awareness about the new World. Screw worms to reinforce biosecurity measures, but also to support sustainable, far on farm parasite control. It is, very, very encouraging that Secretary Rollins has authorized the emergency use declaration. And, that is very, very important. We are the pioneer of ivermectin, and we have a number of products that have been put into the market and years past that have been effective in the control of New World, screw worm. Some of those have been in the marketplace for quite a long time. Ivermectin in itself does not have a new World screw worm and neither does any other products yet today in the US marketplace, because at the time that most of them were registered in licensed New World, screw worms were under control. Post the 60s eradication, I know we had one outbreak in the 70s that was very devastating, particularly. And along the southern border. But we are working closely with producers, with state veterinarians, and with the federal government, particularly with the center for Veterinary Medicine and with the FDA.

Lydia Johnson: The FDA was authorized to issue emergency use authorization for animal drugs that can combat a New World Screwworm infestation. No drugs are commercially available to treat it now. We asked Steve Boren with Boehringer Ingelheim, how that decision allows for companies to continue expanding treatment options for the parasite.

Steve Boren: Yeah, I think companies like Boehringer Ingelheim, as well as our competitors, are working rapidly to look at novel innovations that are out there in the marketplace that would allow us to take those technologies and bring them up into the United States. Now we have a lot of experience with New World screw worms, and particularly in South America and Brazil, and then the variety that’s to the northern part of South America. I mean, it is a devastating issue for livestock producers. Bringing those technologies as quickly as we can to the U.S. as a first and foremost on our mind. I mean, can you imagine how much labor would be required for every calf that’s born? If we have to administer a parasite aside almost immediately post-birth to avoid infection by this, by this biologic threat? So we we are looking at these active ingredients that we can potentially put into products and looking at ways to deliver those so we can put them in the hands of producers to be able to have effective control measurements. But those things do take time. But I am super encouraged by, the USDA and CVM or senator runner up Madison, and the approach that there has been put forward to integrate, not only FDA, but EPA and other regulatory agencies in this kind of emergency use. And I can’t commend the government enough to have taken that joint approach to accelerate that process and what normally takes many, many years.

Lydia Johnson: The threat of New World Screwworm, just 400 miles from the U.S. border, comes at a time when the US cattle herd is already low and beef prices are rising, partially because Mexican cattle imports have been suspended. Looking ahead, what will it take to reopen the border and to keep it open in the future?

Lewis R. “Bud” Dinges: The SENASICA, which is the USDA equivalent Mexico and USDA, worked on some inspection and treatment protocols for cattle crossing the border. Like you mentioned, the cattle supply here in the U.S. is that, the 75 year of lowest it’s been in 75 years? We really have to have some buy in from from Mexico, with surveillance, animal movement control, and moving or helping with the eradication and control down there. Once we we have some buy in from from the Mexican government and Mexican producers, with this issue. Hopefully we can get the southern border open back up and start moving some, cattle back into the United States for our cattle feeding industry.

Lydia Johnson: And, Steve, as we wrap up here, New World Screwworm is one of many animal health concerns. The sector is observed in recent years looking to Congress and the administration what is needed to continue having personnel and resources available to protect the U.S. livestock sector and safeguard animal health into the future.

Steve Boren: Well, it’s always, necessary to protect the U.S. livestock sector for food security. In the the big beautiful bill that was passed, there was funding for the Veterinary Countermeasure Bank, additional funding to be able to put towards livestock protection, vehicle breakage that the typewriters that that dog already that, but already mentioned Doctor Dinges. But first and foremost, it has to be prevention that if we can keep new worlds growers out of the United States, the need for the therapeutics that we can deliver to solve that once they’re infected, become unnecessary. And I hope that we never have the opportunity to sell those products in the United States, and that we’re effective at controlling disease before it reaches our border. As, Doctor Dingley mentioned, it’s a foreign animal disease. And it’s it is a serious and urgent threat that we need to address.

Lydia Johnson: We’ll be right back with more newsmakers. But first, Andrew Huneke looks at how California’s redistricting proposal could shift seats in the House in this week’s map it out.

Andrew Huneke: California Democrats have unveiled a redistricting plan that could shift as many as five Republican held U.S. House seats. Currently, Democrats control 43 of California’s seats, while Republicans control nine. The plan needs approval from state legislature before it can be voted on in a special election in November. They would go into effect as soon as next year’s election cycle, if enacted. This map shows the proposed redistricting in California. Red districts are currently represented by Republicans. Blue districts are currently represented by Democrats, and the districts with stripes are represented by House side committee members. When it comes to members of the House Ag Committee, Republican Doug Lamalfa district would gain more Democrat leaning areas, putting his seat in jeopardy. The Democratic districts could end up being further solidified by the plan, and they are represented by Jim Costa, Adam Gray, and Salud Carbajal. The other Republican districts that could see change are represented by Kevin Kiley, David Valadao, Darrell Issa, and Ken Calvert. Republicans have said this is a Partizan power grab, but Democrats countered by saying California is responding to Republican maneuvers in other states like Texas, and that the plan could restore balance to the House. For Agri-Pulse I’m Andrew Huneke.

Lydia Johnson: Thanks for joining us for another episode of Agri-Pulse Newsmakers. Both the House and Senate are out of session for August recess. The return to Washington after Labor Day. Tune in next week and check our website any time for the latest developments on all things food, farm and fuel policy. For Agri-Pulse. I’m Lydia Johnson. Thanks for watching.

Agri-Pulse is a trusted source in Washington, D.C., with the largest editorial team focused on food and farm policy coverage.