Federal News
U.S. exports to Mexico fall as uncertainty over NAFTA lingers
The Wall Street Journal | Posted on June 19, 2017Friction between the U.S. and Mexico over trade is starting to cut into sales for U.S. farmers and agricultural companies, adding uncertainty for an industry struggling with low commodity prices and excess supply.Over the first four months of 2017, Mexican imports of U.S. soybean meal—used to feed poultry and livestock—dropped 15%, the first decrease for the period in four years, according to data from the U.S. Department of Agriculture. Shipments of U.S. chicken meat fell 11%, the biggest decline for the period since 2003. U.S. corn exports to Mexico declined 6%. Mexico is the largest U.S. export market for those commodities.The numbers reflect how Mexican companies are now increasingly buying grain on a short-term basis and purchasing more chicken from Brazil, troubling some industry officials and analysts. The trade data, which is the latest available, indicates that Mexico is starting to follow through on aspirations to buy food from a wider range of countries, and reduce reliance on the U.S.“We have to send a signal to policy makers in Washington, and emphasize that we are not sitting still,” said Raúl Urteaga Trani, head of international affairs for Mexico’s Secretariat of Agriculture, who last month shepherded officials from 17 Mexican companies on a trade mission to South America, focused on corn, soybeans and wheat.
Trump’s Cuba Moves May Chill Long-Sought U.S. Farm Export Push
Bloomberg | Posted on June 19, 2017A rollback of Obama administration efforts to open Cuba to U.S. tourism and trade may chill a rebound in agricultural sales to the island nation, setting back a farm-lobby push that’s weathered two decades. U.S. Secretary of State Rex Tillerson signaled Tuesday that changes would come as soon as Friday, when President Donald Trump visits Miami. The moves may include new limits on travel and investment policies. While there’s no indications of a clampdown on agricultural sales allowed on a cash-only basis since 2000, cooled relations may drive buyers elsewhere, said Bob Young, chief economist for the American Farm Bureau Federation in Washington.The agriculture sector has long advocated an end to the trade embargo with Cuba in place since Fidel Castro consolidated power in the early 1960s. Companies including agricultural equipment maker Deere & Co. and soybean processor Bunge Ltd., along with the federation, the biggest U.S. farmer group, have supported full farm trade. "If we make it tougher on Cuba, there are other folks ready to line up and say, ‘We can help you with that,’" Young said.
Comment Period on GE Freeze-Tolerant Eucalyptus Extended to July 5, 2017
USDA | Posted on June 19, 2017The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) today announced the extension of the comment period to July 5, 2017, on documents related to a petition to deregulate two lines of genetically engineered freeze-tolerant Eucalyptus. The documents are the draft environmental impact statement (dEIS) and preliminary plant pest risk assessment (PPRA) prepared as part of the review of the petition submitted by ArborGen, Inc. This action will allow interested persons additional time to prepare and submit comments. Notice of this comment period closing date was published by the Environmental Protection Agency in the Federal Register on May 19, 2017.
Cancer agency left in the dark over glyphosate evidence
Reuters | Posted on June 19, 2017The World Health Organization's cancer agency says a common weedkiller is "probably carcinogenic." The scientist leading that review knew of fresh data showing no cancer link - but he never mentioned it and the agency did not take it into account.The epidemiologist from the U.S. National Cancer Institute had seen important unpublished scientific data relating directly to a key question the IARC specialists were about to consider: Whether research shows that the weedkiller glyphosate, a key ingredient in Monsanto’s best-selling RoundUp brand, causes cancer.Previously unreported court documents reviewed by Reuters from an ongoing U.S. legal case against Monsanto show that Blair knew the unpublished research found no evidence of a link between glyphosate and cancer. In a sworn deposition given in March this year in connection with the case, Blair also said the data would have altered IARC’s analysis. He said it would have made it less likely that glyphosate would meet the agency’s criteria for being classed as “probably carcinogenic.”But IARC, a semi-autonomous part of the World Health Organization, never got to consider the data. The agency’s rules on assessing substances for carcinogenicity say it can consider only published research – and this new data, which came from a large American study on which Blair was a senior researcher, had not been published.The lack of publication has sparked debate and contention. A leading U.S. epidemiologist and a leading UK statistician – both independent of Monsanto – told Reuters the data was strong and relevant and they could see no reason why it had not surfaced.Monsanto told Reuters that the fresh data on glyphosate could and should have been published in time to be considered by IARC, and that the failure to publish it undermined IARC’s classification of glyphosate. The legal case against Monsanto, taking place in California, involves 184 individual plaintiffs who cite the IARC assessment and claim exposure to RoundUp gave them cancer. They allege Monsanto failed to warn consumers of the risks. Monsanto denies the allegations.
China's WH Group targets beef and poultry assets in U.S. and Europe
Reuters | Posted on June 19, 2017Smithfield Foods Inc's owner, China-based WH Group Ltd (0288.HK), is scouting for U.S. and European beef and poultry assets to buy, in a move that would sharpen its rivalry with global meat packers Tyson Foods Inc and JBS SA.Smithfield Chief Executive Ken Sullivan told Reuters he is interested in the potential of diversifying into other meats to broaden the company's product portfolio, though no deals were imminent."We're a food company," he said. "No one said that we're strictly a pork company."Sullivan did not provide further detail, but parent WH Group is looking for targets in beef and poultry in the United States and Europe, according to Luis Chein, WH Group's director of investor relations. He declined to name specific targets.Chein declined to provide a timeline for expanding into the U.S. beef and poultry business or say how much money the company aims to spend.
Trump’s Cuba moves may chill long-sought U.S. farm export push
Bloomberg | Posted on June 16, 2017A rollback of Obama administration efforts to open Cuba to U.S. tourism and trade may chill a rebound in agricultural sales to the island nation, setting back a farm-lobby push that’s weathered two decades.U.S. Secretary of State Rex Tillerson signaled Tuesday that changes would come as soon as Friday, when President Donald Trump visits Miami. The moves may include new limits on travel and investment policies. While there’s no indications of a clampdown on agricultural sales allowed on a cash-only basis since 2000, cooled relations may drive buyers elsewhere, said Bob Young, chief economist for the American Farm Bureau Federation in Washington.The agriculture sector has long advocated an end to the trade embargo with Cuba in place since Fidel Castro consolidated power in the early 1960s. Companies including agricultural equipment maker Deere & Co. and soybean processor Bunge Ltd., along with the federation, the biggest U.S. farmer group, have supported full farm trade."If we make it tougher on Cuba, there are other folks ready to line up and say, ‘We can help you with that,’" Young said.U.S. agricultural exports to Cuba rose to $221 million in 2016 after three consecutive annual declines, according to U.S. Department of Agriculture data compiled by Bloomberg. Sales so far this year are outpacing last year’s by 19 percent. Trump’s tough line on Cuba isn’t deterring legislators and lobbyists. Senators including Republicans Mike Enzi of Wyoming and Jeff Flake of Arizona, along with Democrats Amy Klobuchar of Minnesota and Patrick Leahy of Vermont, introduced anti-embargo legislation last month."Instead of eating American-grown food, Cubans and tourists will be eating food from other countries,” unless trade is opened, Klobuchar said in a statement.
The Canadian Dairy Dispute
Farm Credit East | Posted on June 15, 2017Canada has been extremely protective of its dairy farmers for a long time. Governed by a supply management quota system, Canadian dairy producers have had higher and more stable milk prices than U.S. producers. Canada has about 11,700 dairy farms, and just under 960,000 cows.¹ Compare that to the U.S., which has about 64,000 dairy farms and 9.3 million cows. The Canadian government put a supply management system in place in the early 1970s in an effort to reduce production surpluses. A farm’s quota can be adjusted up or down on an as-required basis by the government, according to consumer demand. This system limits farm expansion and the limited supply affects consumers directly. Canadian consumers pay the equivalent of about $6.73 (USD) for a gallon of conventional whole milk, compared to about $3.20 in the U.S. Canada’s milk pricing formula and the subsequent loss of export markets has attracted national attention in the U.S., with federal and state lawmakers urging the Administration to find a way to get Canada to roll back its pricing scheme. Nonetheless, this will be a difficult fight for American trade negotiators. The U.S. still enjoys a substantial dairy products trade surplus with Canada, and there is no punitive tariff, per se, to fight against. Instead, Canada has manipulated the situation to position its domestic suppliers to undercut U.S. imports. For its part, Canada has argued this is strictly a domestic policy issue, and that it is not responsible for the oversupply situation in the United States.Meanwhile, U.S. dairy producers and cooperatives have been scrambling to come up with new markets for not only displaced exports, but production levels that continue to increase. While trade is absolutely critical to American agriculture, this situation is emblematic of the frustration that U.S. companies sometimes face – markets are developed by innovative businesses and then undercut by protective actions.
Millions of pounds of apparently fake ‘organic’ grains convince the food industry there may be a problem
The Washington Post | Posted on June 15, 2017The organic industry is creating an anti-fraud task force in the wake of a Washington Post report that millions of pounds of “USDA Organic” soybeans and corn imported through Turkey appear to have been fraudulent. Organized by the Organic Trade Association, the task force would develop methods for companies to ensure that imports of organic products are actually organic.“There is a strong desire on the part of industry to stop the incidence of fraud in organic,” said Laura Batcha, director of the association. “The consumer expects that organic products are verified back to the farm. The industry takes that contract with the consumer very seriously.” Last month, The Post reported that three enormous shipments of “organic” corn and soybeans - large enough to constitute a meaningful proportion of the U.S. supply of those commodities - had reached the U.S. Documents and interviews indicated that the shipments were not really organic - in fact, some had been treated with pesticides en route to the U.S. All three shipments hailed from Turkey, one of the largest exporters of organic products to the United States, according to Foreign Agricultural Service statistics. With the "USDA Organic" designation, the value of the shipments rose by millions of dollars.The report confirmed the suspicions of many U.S. farmers, who have seen prices by as much as a third as the volume of imports of organic corn and soybeans have climbed rapidly in recent years.After the story appeared, one of the nation’s largest organic inspection agencies, CCOF, issued a notice to its clients indicating that it “lacks confidence in the organic status of foreign grain. ” The agency instituted rules requiring that organic grain shipments be traceable back to growers.
Heritage Foundation’s Farm Policy Proposal Would ‘Devastate’ U.S. Farmers & Prove ‘Ineffective’ in Advancing Free Trade in Agriculture
Farm Policy Facts | Posted on June 15, 2017The new report entitled, “The Heritage Foundation’s Farm Policy Proposals: Harmful to U.S. Farmers and Ranchers and Ineffective in Advancing Free Trade,” addresses what the author believes are fundamental flaws in Heritage’s “blueprint” for agricultural policy, which calls for unilaterally eliminating U.S. farm policy. John Gilliland, an international trade consultant at Akin Gump Straus Hauer & Feld LLP and author of the study, explains how that would not only hurt America’s farmers and ranchers, but would also be an “ineffective tool in securing global free trade in agriculture.”The Heritage Foundation argues that eliminating farm policy would give the U.S. “moral authority to demand more of its trading partners,” but Gilliland suggests this would only weaken U.S. negotiating power to reverse rising foreign protectionist behavior. He writes:“Trade negotiations proceed in a uniquely transactional environment. Member countries give defensive concessions in order to secure offensive gains. To succeed in this environment, the United States needs bargaining power – tangible, offensive leverage that will convince other countries to come to the table.”Gilliland cites cotton as an example. He notes that while the United States has significantly reduced its support for American cotton growers in the farm bill, China ramped up “massive subsidization and stock-building programs” that created a glut in the global market, depressing cotton prices “to the detriment of farmers in the United States, Africa, and elsewhere.”Gilliland believes this experience is instructive for U.S. policymakers as he writes:“[A]ny ‘moral’ high ground U.S. farmers gained from the repeal of their farm support had virtually no impact on China’s willingness to devote billions of dollars in new subsidies for its own cotton industry.”In the face of this lopsided global playing field, Gilliland observes:“Eliminating the farm safety net and already low U.S. agriculture tariffs would further expose U.S. farmers to the manifold distortions of dozens of foreign governments… The U.S. farm economy is strong, innovative, and competitive. But it is not invulnerable against foreign treasuries and high market access barriers.”
USDA Posts Final Requirements for Exporting US Beef to China
DTN | Posted on June 15, 2017U.S. beef shipping to China will have to come from cattle that are under 30 months of age, are born in the U.S., Canada or Mexico, and are traceable back to a U.S. farm with a unique identifier. Those were some of the main ground rules laid out Monday as the U.S. Department of Agriculture spelled out the specific requirements China expects for reopening its beef market to the U.S. for the first time since 2003. The release of the technical requirements marks some of the final steps for U.S. packers to send beef to China.According to the North American Meat Institute, beef products processed after May 24 can be exported to China once a packing plant is approved by USDA as eligible to ship to China.