February 27, 2018 / 9:58 PM / 6 months ago

UPDATE 1-USDA issues soy planting, export tips as China trade tensions mount

(Adds USDA quote)

By Karl Plume

CHICAGO, Feb 27 (Reuters) - The U.S. Department of Agriculture on Tuesday issued grower and grain exporter guidelines to reduce weed seeds in U.S. soybean shipments, after top importer China tightened import specifications on the most valuable U.S. agricultural export.

The move is intended to soothe rising tension over agricultural trade between the world's top two economies after a recent series of trade spats.

The USDA guidelines cover a range of measures, from how farmers should plant their fields to how exporters including Archer Daniels Midland Co, Bunge Ltd and Cargill Inc should clean their grain before loading ships, the agency said.

In a handout to farmers and others attending an industry gathering in Anaheim, California, on Tuesday, the USDA recommended that growers "plant soybeans in narrow rows spaced apart 15 inches (38 cm) or less" and "avoid harvesting weeds when possible."

"These are best management practices that, by and large, production agriculture is already aware of and implementing. We're just asking, as part of this process, on the production side that we refocus on some of those best management practices," said Greg Ibach, USDA's under secretary for marketing and regulatory programs.

Trade tensions between Beijing and Washington have been simmering for months, even as the agrarian sector struggles with record supplies of grains, low commodity prices and slumping U.S. farm incomes.

The fear, say export sources, is that trade restrictions on soybeans could be used as a weapon in the disputes. The United States exported about a third of its soybeans to China last year in trade valued at $12.4 billion, according to USDA.

BEAN FIGHT

In January, Washington slapped steep duties on imported washing machines and solar panels, triggering a probe by Beijing into U.S. sorghum that was widely seen as retaliation.

Weed seeds in soybean shipments prompted Beijing to tighten scrutiny of U.S. shipments beginning on Jan. 1, in a move that is expected to delay some U.S. cargoes and raise costs for farmers and exporters in the United States.

China announced late last year that U.S. soybean shipments arriving at its ports containing up to 1 percent of foreign material would be expedited while shipments with more than 1 percent could be held back for testing.

Beijing's policy change comes amid a global glut of soybeans and heightened competition from rival exporters such as Brazil and Argentina.

Shipping data reviewed by Reuters suggested that half of U.S. soybean shipments last year would have been held back for further testing.

Of the 5.3 million tonnes of U.S. soybeans shipped to China so far this year, the USDA is not aware of any shipments rejected, delayed or discounted in price because they contained foreign material, said spokesman Will Wepsala.

GROW NARROWER ROWS

Growers and shippers had been awaiting the guidelines from USDA's Animal and Plant Health Inspection Service since news of China's policy shift in December.

The recommendations are aimed at raising production and handling practices to minimize the risk of import delays or rejections, USDA officials said.

The agency urged farmers to control weeds by planting crops in rows 15 inches (38 cm) wide or less, use a variety of different weed killers and rotate crops in fields from year to year. Adjusting harvest equipment settings and regularly cleaning equipment and grain bins can also prevent seeds from getting into harvested grain, the USDA said.

Grain elevators and export terminals were asked to examine incoming soybeans more closely and clean them if necessary.

For farmers, the weed control measures may increase the cost of production, but those costs may be offset by higher revenues from larger crop yields resulting from fewer weeds in fields, USDA's Ibach said. Exporters, meanwhile, may benefit as improved crop quality lifts demand for U.S. shipments, he said.

The USDA also said it would work with China's General Administration of Quality Supervision, Inspection, and Quarantine to promptly address any phytosanitary issues. (Reporting by Karl Plume in Chicago Editing by Matthew Lewis and Sandra Maler)

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