💰 U.S. Ag Missing Out / 🚜 Got Equipment? / 🚂 Bidding War

While eleven countries are swapping goodies via the Comprehensive and Progress Agreement for Trans-Pacific Partnership (CPTPP), several U.S. ag groups are longingly looking across the pond and saying, “take us back.”

Refresher: Yep, it’s that TPP. When the U.S. withdrew from the trade agreement in early 2017, the other partnering nations basically said, “Fine, be that way,” and plowed ahead, creating a longer acronym just for kicks.

But now, some groups, including the International Dairy Foods Association (IDFA), are saying that U.S. farmers are missing out.

Michael Dykes, IDFA’s CEO, put it this way: “Members of that TPP, or CPTPP...are enjoying ratcheting down tariffs. We're not enjoying those.”

First things first: To get to the TPP, all routes must pass through the TPA. The Trade Promotion Authority law gives the executive branch carte blanche authority to negotiate trade deals, requiring only an up or down vote from Congress. The problem? TPA expires on July 1.

Friends in high places: At a recent trade conference, Ag Secretary Tom Vilsack gave TPA the nod -- urging Congress to “get serious about resuming and extending" the legislation.

Oh, and this: Vilsack also noted that U.S. ag would benefit from and should consider joining the CPTPP (**and the crowd goes wild**).

Where this goes: There’s a long road ahead, but noting Vilsack’s positive relationship with U.S. Trade Rep Katherine Tai, fingers are crossed that American agriculture gets an invite back to the club.

→ Nutrien’s new top dog. With the resignation of Chuck Magro, the fertilizer giant and vast retail network has appointed their chairman of the board, Mayo Schmidt, to the CEO chair.

→ CRP's next frontier: The USDA announced a goal to enroll 4 million new acres in the Conservation Reserve Program and is increasing payment incentives for farmers 20-50%.

→ Money in the bag: Grain supply chain software leader Bushel celebrated a $47 million Series C investment round.

→ Buzzworthy partnership. Syngenta Seeds is teaming up with The Bee Corp to trial Verifli, a hive grading technology, to see how infrared imagery and data analytics can predict a hive’s colony without manual inspection.

→ Beans win 2020. Soybeans won the ‘most likely to succeed’ poll via the 2020 Ag Export Yearbook, where the USDA noted the crop as the leading exported product at 18% [$25.7 billion] of all exports.

→ Progress report. As of the end of last week, crop planting data showed 8% of corn, 3% of beans, and 11% of cotton in the ground in the U.S.

→ ‘Wetting the bed’ beetles. Research at the University of Copenhagen is looking at next-gen efforts for pest control, where products create a hormonal imbalance that makes pests urinate to the point of dehydration.

Farm equipment makers have whiplash trying to scale production back up from pandemic cuts and supply chain disruptions to meet seasonably high sales spikes.

Rewind: This time last year, the havoc COVID-19 would wreak on the global economy and supply chains everywhere was just beginning.

Were you thinking about purchasing farm equipment amidst all that chaos? Many equipment makers didn’t think so, leading to production slowdowns.

However, epic commodity prices and better financial outlooks have farmers wanting to soup up their aging fleets with improved technology.

By the numbers:

Tractor sales shot up 81% in March compared to the same time last year
More than 62,000 tractors from all categories have sold in 2021, a 52% increase
Combine sales increased 17% in the first three months of 2021

So what exactly is the holdup?

Farm equipment companies are at full throttle to keep up with demand but are cinched by the tightest supply in North America in 18 years.

AGCO, one of the largest farm machinery makers, has their procurement team pulling a Dave Ramsey to get their 30-week emergency supply of semiconductor chips, steel and plastics stocked. All to keep tractors and other heavy equipment rolling off the lot.

Their version of beans and rice. Equipment makers are moving production away from some U.S. locations due to headcount restrictions and shipping supplies to plants that are normally sourced locally (ex: sending tires to Brazil because of their rubber shortage).

Ever wonder what the Farmers Edge IPO might mean for the industry? Or how new Nutrien leadership could shake up ag retail? What about guessing how many farmers have ‘digitized’ their acres with different agtech products?

Then, boy, do we have the go-to analysis for you.

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If you’re looking for a good deal on a cross-continent railroad, well… let’s just say it’s not a buyer’s market.

Just weeks ago, Canadian Pacific Railway (CP) revealed it had agreed to purchase the Kansas City Southern railroad for a sweet $29 billion. The purchase would create a 20,000-mile North American mega-track allowing commodities to move via rail across the United States, Mexico, and Canada.

And timing couldn’t be better: As pandemic-related disruptions begin to subside, supply chains are moving commodities around at lightning speed.

But not so fast…

Rival railroad behemoth Canadian National Railway Co. (CN) noted the proposal and decided to one-up their competitor. CN slid a contract across the table with a $33.7 billion offer.

Chairman of CN, Robert Pace, spoke to the superiority of their offer being a ‘more complimentary strategic fit’ and having ‘enhanced benefits for employees and local communities.’

Those are fightin’ words. CP clapped back at the petty move, stating, ‘The Canadian National management team has significantly underperformed over a decade and has a track record of underdelivering against its own projections.’

Let the bidding war commence. Kansas City Southern said it would evaluate the CN offer and ultimately give CP a chance to raise its bid if they found the deal superior.

Regulation might decide the victor. The heavy geo-overlap between CN and Kansas City Southern could make it hard to get approval via the Surface Transporation Board. Now many are speculating which will matter more: price or getting a deal over the finish line.