The price reduction is actually less than had been expected reflecting a lower New Zealand currency, strong demand from China and some thoughts the world dairy market may recover later this year and into 2013.

Not only is Fonterra the largest dairy exporter in the world, it is also one of the largest companies in New Zealand accounting for 7 percent of GDP. Estimates are the reduction will take $500 million ($380.4 million U.S.) out of the country’s $200 billion ($152.16 billion U.S.) economy.

“We projected this will mean over $350 to $370-Million a year of new sales in the not too distant future of ag products now that we’re competitive,” says American Farm Bureau Trade Specialist Dave Salmonsen.  He adds – it took a long time in coming. The negotiations began with Colombia eight years ago and the deal was essentially completed six years ago. In that time span, Argentina – and, just last year Canada – reached tariff agreements with the South American country.

“You know, the U.S. paved the way and showed that this could be done and what potential benefits would be, but, our process bogged down and moved so slowly that other countries took advantage of it.”

Total US exports under the Colombia FTA will grow by more than one-Billion dollars, according to government estimates.

More than half of U.S. ag products going to Columbia are now tariff-free and in the next few years tariffs will be phased out completely.

~AFBF contributed to this report~

Wheat came out at 24.893 million bushels, down 3.111 million from the week ending May 10 and 6.318 million lower than the week ending May 19, 2011. With less than two weeks left in the 2011/12 marketing year, wheat inspections are 993.584 million bushels, compared to 1.229 billion late in 2010/11.

Corn was reported at 23.263 million bushels, 4.370 million less than the week before and 12.809 million below a year ago. At this point in the current marketing year, corn inspections are 1.160 billion bushels, compared to 1.265 billion this time last year.

Soybeans were pegged at 12.684 million bushels, a decrease of 7.856 million from the previous week but an increase of 3.227 million from last year. So far this marketing year, soybean inspections are 1.133 billion bushels, compared to 1.382 billion a year ago.

Sorghum inspections totaled 239,000 bushels. That’s up 71,000 bushels from the prior week but down 2.753 million from a year ago. 2011/12 sorghum inspections are 41.771 million bushels, compared to 111.857 million in 2010/11.

Through the first quarter, year-over-year pork exports were up eight percent in volume and 20 percent higher in value.  

In March, pork export value, per head slaughtered, set a new all-time monthly record of $59.92. 

U.S. Meat Export Federation (USMEF) chairman and Indiana pork producer Danita Rodibaugh says those numbers are “exciting”. 

“Our prediction, not only from USMEF, but also other economists were that our exports would be challenged this year—but for pork, they were surprisingly up,” Rodibaugh says, “and we continue to see some positive returns in the export area, especially when we look at value per head.  We’re just shy of sixty dollars per head return because of the export market.” 

Rodibaugh says those results – especially the record-high export value per head – serve as a reminder of how critical pork exports are to producer profitability.

President Obama announced a new global partnership to improve food security between governments, donor countries and the private sector. The President said the food security effort which includes $3 billion in corporate pledges builds on a $20 million commitment made by the G8 in 2009 aimed at boosting farmers’ incomes and helping 50 million people lift themselves out of poverty over the next 10 years.

Monsanto says it is working on the development of corn which utilizes water more efficiently as well as building a dealer network on the continent. DuPont says it will invest more than $3 million to help small farmers over the next three years. Syngenta is developing seeds for African farmers and expects to build a $1 billion business over the next decade. AGCO says it will invest $100 million in distribution infrastructure, model farms and training sites.

While food security is (was) the focus on Friday, the Euro Zone economic crisis will take center stage on Saturday.