FarmPolicy

November 14, 2018

Food Security Issues; Food Safety (Animal Agriculture); Farm Bill; and EPA Issues

Editor’s Note: Monday’s (Labor Day) FarmPolicy.com update regarding the Farm Bill, direct payments, and nutrition issues is available here.

Food Security Issues

Neil MacFarquhar reported in Saturday’s New York Times that, “With memories still fresh of food riots set off by spiking prices just two years ago, agricultural experts on Friday cast a wary eye on the steep rise in the cost of wheat prompted by a Russian export ban and the questions looming over harvests in other parts of the world because of drought or flooding.

Food prices rose 5 percent globally during August, according to the United Nations, spurred mostly by the higher cost of wheat, and the first signs of unrest erupted as 10 people died in Mozambique during clashes ignited partly by a 30 percent leap in the cost of bread.

“‘You are dealing with an unstable situation,’ said Abdolreza Abbassian, an economist at the United Nation’s Food and Agriculture Organization in Rome.”

The article pointed out that, “The F.A.O. has called a special session of grain experts from around the world on Sept. 24 to address the supply question. Given that the fields stretching out from the Black Sea have been the main source of a huge leap in wheat trade over the past decade, the fluctuating weather patterns and unstable harvests there will have to be addressed, [Abbassian] said.

“It is an issue not limited to Russia alone. Harvest forecasts in Germany and Canada are clouded by wet weather and flooding, while crops in Argentina will suffer from drought, as could Australia’s, according to agricultural experts. The bump in prices because of the uncertainty about future supplies means the poor in some areas of the world will face higher bread prices in the coming months.

Food prices are still some 30 percent below the 2008 levels, Mr. Abbassian said, when a tripling in the price of rice among other staples led to food riots in about a dozen countries and helped topple at least one government.”

Saturday’s article stated that, “‘If you look at the numbers globally, the Americans, the Europeans and the Australians can make up the supply,’ Mr. Abbassian said of the wheat harvest, playing down the chances of repeating the 2008 crisis. ‘There is no reason for this hype, but once the psychological thing sets in it is hard to change that perception, especially if Russia keeps sending bad news.’”

Bloomberg writer Maria Kolesnikova reported on Friday that, “While prices have jumped, they’re still a long way off the peaks reached in 2008. Then, wheat reached a record $13.495 and rice rose as high as $25.07 per 100 pounds in Chicago. Rice for November delivery closed yesterday at $11.43. A United Nations’ index of 55 foods rose to 175.9 points last month, 18 percent below the 214 points recorded in June 2008. The world’s poorest nations will spend 37 percent less on cereal imports this year than at the peak, according to the UN.

“World wheat stockpiles are expected to be 174.8 million metric tons in the 2010-11 season, comprised of local marketing years, according to the U.S. Department of Agriculture. That’s 40 percent more than in 2007-08.”

Meanwhile, Ian Berry reported in Saturday’s Wall Street Journal that, “Corn prices rallied to a fresh 23-month high after a closely watched private crop forecaster called the abundance of U.S. grain supplies into question.

“Informa Economics, a Memphis, Tenn.-based agricultural consultancy, is projecting that the current U.S. corn harvest will yield on average 3.9% less than the latest estimate by the U.S. Department of Agriculture.

This is a significant downgrade in a time of tight global grain supplies. Russia has banned exports of wheat for several months in the wake of a record drought. This has put pressure on markets for other grains, as consumers such as livestock-feed suppliers look for substitutes, and sparked fears of global food shortages.”

The Journal article stated that, “Informa Economics estimates a final U.S. corn yield of 158.5 bushels an acre, according to information reviewed by Dow Jones Newswires. The firm doesn’t publicly release its predictions. That compares with the USDA’s most recent estimate of 165 bushels an acre.”

A yield around 160 bushels per acre would lead to uncomfortably tight supplies for the U.S. market, which is expected to make up the global shortfall created by Russia. The drought in the former Soviet Union and crop troubles in other parts of the world have sent grain prices sharply higher over the past two months,” the Journal article said.

Saturday’s update explained that, “Wheat and soybeans also continue to climb. Wheat futures gained 27.5 cents, or 3.9%, to $7.4125 a bushel, and soybeans rose 26 cents, or 2.6%, to $10.35.

“The USDA will release updated production figures on Sept. 10.”

With this background in mind, Bloomberg writer Maria Kolesnikova reported yesterday that, “Global grain supplies are adequate to meet demand and any ‘panic’ isn’t warranted, Russian Deputy Agriculture Minister Alexander Petrikov said.

“Russia, the world’s third-biggest grower, banned exports Aug. 15 after the worst drought in half a century. The country last season shipped 18.5 million metric tons of wheat overseas, or 14 percent of global exports, according to the U.S. Department of Agriculture. Prime Minister Vladimir Putin last week extended the grains and flour export ban to next year.

“‘There shouldn’t be any panic,’ Petrikov said in an interview in Moscow today. ‘The global market has enough reserves,’ Petrikov said.”

Food Safety (Animal Agriculture)

Elizabeth Weise reported late last week at USA Today Online that, “There is nothing small scale about Pearl Valley Eggs, deep in the heart of Illinois farm country. The egg farm itself, two miles south of the nearest town, is a neat collection of 350-foot- and 450-foot henhouses covered in white steel siding. They’re linked by overhead pipes that bring in ground corn and soybeans from the farm’s own feed mill.

“The farm employs 100 people and produces 800,000 to 850,000 eggs a day, seven days a week. ‘The chickens don’t stop laying eggs just because it’s the weekend,’ says Ben Thompson, 30, who runs the farm with his father, Dave.”

The article noted that, “Yet, in the face of the nation’s largest recorded egg recall, a total of 550 million eggs potentially infected with salmonella enteritidis, and revelations of filthy conditions at the two Iowa egg farms involved, many animal rights groups and organic supporters have pointed a finger of blame at industrial animal agriculture.

“Only by returning to small-scale, local farms (according to the organic and local supporters) or by ending or drastically limiting the use of animals as a food source (several animal rights groups), or both, can Americans protect themselves against such large, food-borne outbreaks.”

Ms. Weise stated that, “Ben Thompson of Pearl Valley Eggs begs to differ. The farm his father founded in 1987 about two and a half hours west of Chicago now houses a whopping 1.1 million Shaverchickens in seven henhouses. But since the Thompsons began testing a decade ago, the farm has never once had a positive test for salmonella enteritidis.

“Conveyer belts below each row whisk away the chicken manure. Another conveyer system in front of the cages brings clean, new food.

“A wall of four-foot fans at the end of the building, looking something like the bottom of a rocket ship, keeps the air quality inside almost as clean as the outdoors, as well as keeping temperatures down, despite up to 167,000 chickens to a house. On average only 1% of their hens die a year, a remarkably low number compared with the average of 3% to 4% in caged birds and 6% to 8% a year in cage-free birds, says Jeffrey Armstrong, dean of the School of Agriculture and Natural Resources at Michigan State University in East Lansing.”

The USA Today article added that, “The first question is whether caged or cage-free flocks are more at risk for salmonella. It depends on whom you ask.”

In related developments, Dan Eggen reported in today’s Washington Post that, “Even before the recent salmonella outbreak, the nation’s egg industry was struggling to fend off another threat: allegations that it was cruel to chickens.

“Egg producers are alarmed by efforts to ban small cages for hens, a movement that has gained momentum in an increasing number of states.”

The Post article stated that, “‘The cage-free movement is not only about providing a humane environment for animals,’ said Paul Shapiro, senior director of the society’s End Factory Farming campaign. ‘There is also a strong food-safety component as well.’

But the United Egg Producers, the U.S. industry’s top lobbying group, says there is no difference in safety between eggs produced by caged or free-range hens. The cooperative-style organization, based in Alpharetta, Ga., represents companies that provide about 85 percent of the 80 billion eggs produced in the United States each year.

“Group spokesman Mitch Head said measures to limit or outlaw the use of battery cages are based on emotions and flawed readings of scientific evidence. He warned that banning such cages altogether would lead to a 25 percent increase in egg prices, or about 25 cents per dozen at the current Grade A retail average.

“‘We would prefer that this be worked out through the marketplace and based on science,’ Head said. ‘Instead, it’s become a political and ballot-box issue. That makes us concerned.’”

The article added that, “Two California lawmakers, Reps. Diane Watson (D) and Elton Gallegly (R), have introduced a bill that would bar the federal government from buying eggs produced in battery-cage facilities. The measure, which has about three dozen co-sponsors, has been referred to the House Agriculture and government reform committees.”

In other news, Ken Anderson reported on Friday at Brownfield that, “Ohio agriculture department director Robert Boggs is clarifying his position on the animal welfare agreement brokered by Ohio ag interests and The Humane Society of the United States.

Boggs was quoted last week as saying he considered the agreement ‘non-binding’ on the Ohio Livestock Care Standards Board. But in a statement released this week, Boggs says the agreement provides ‘a middle ground’ on which Ohio agriculture ‘can move forward with a more clear, stable direction.’ He adds that the compromise agreement provides ‘a solid foundation for the board to build upon.’”

Farm Bill

Paul Hollis reported on Friday at the Southeast Farm Press Online that, “As time draws ever closer for a new farm bill, peanut producers might want to consider improving a program that hasn’t exactly worked according to plan.

“‘We took a model from other commodities, slapped it on peanuts, and expected it to work,’ says Tiffany Arthur, an economist with the Farm Service Agency’s Economic and Policy Analysis Staff. ‘Peanuts are a different commodity, and maybe we need a more unique program for peanuts.’”

Mr. Hollis explained that, “When the marketing loan concept was first introduced, says Arthur, the intent was to provide farmers with a portion of their expected revenue up front at harvest for the purpose of repaying creditors.

“‘Farmers then have nine months to market their crops and repay loans, allowing them to time their sales to capture higher revenues, rather than selling at harvest, when prices are usually lowest. But peanut option contracts circumvent this process,’ she says.

“Most farmers contract peanuts prior to planting or harvest, making the loan irrelevant to them, and shellers use the marketing loan in their stead, says Arthur.”

The article pointed out that, “Interest in a peanut revenue insurance program appears to be increasing grower support for mandatory reporting requirements, she [Arthur] says. Expected benefits include reduced risk for insurers considering revenue insurance, as well as higher coverage levels under such a program, increased coverage levels under the existing disaster program, a higher price guarantee under ACRE, higher coverage under SURE, and better price information for peanut growers negotiating contracts or cash prices.”

Meanwhile, with respect to the Farm Bill and direct payments, a subject that was highlighted in yesterday’s FarmPolicy.com report, Beth Wischmeyer reported yesterday at the Argus Leader Online (South Dakota) that, “A standing-room-only crowd in the Women’s Building auditorium Sunday at the State Fair watched candidates for the U.S. House debate a fitting topic for the venue: agriculture.

“Democratic candidate Stephanie Herseth Sandlin, Republican candidate Kristi Noem and Independent candidate B. Thomas Marking discussed ethanol subsidies and changes they would make to the farm bill.”

The article stated that, “Herseth Sandlin said in many conversations since passage of the 2008 farm bill, it is increasingly difficult to justify making direct payments to producers to the American taxpayer.”

And in other developments, a news release Friday from Senate Ag Committee Chairman Blanche Lincoln (D-Arkansas) stated that, “[Sen. Lincoln] today pressed the U.S. Department of Agriculture to purchase approximately 60 million pounds of Arkansas poultry through its Agricultural Marketing Service, in a letter sent to Secretary Tom Vilsack.”

EPA Issues

A news release Friday from the National Corn Growers Association stated that, “Since the Clean Water Act was passed in the early 1970s, the Environmental Protection Agency has interpreted the law to exclude lawful pesticide applications regulated under the Federal Insecticide, Fungicide and Rodenticide Act from National Pollutant Discharge Elimination System permits. But early in 2009, the Sixth Circuit Court of Appeals ruled the permits are necessary for the application of pesticides. The National Corn Growers Association sees this as a game changer that would impact any grower that uses pesticides.

“‘In the past, you knew if you were applying a pesticide according to the label language you were in compliance with federal pesticide law,’ said NCGA Director of Public Policy Rod Snyder. ‘At this point, with additional Clean Water Act requirements and the possibility of citizen suits under that act should a pesticide happen to reach a body of water, even a ditch or a puddle, you have a secondary layer of regulations with potential legal vulnerabilities that you did not have before.’”

Friday’s update noted that, “The citizen action suit provisions within the Clean Water Act are a major concern for NCGA. This interpretation of the law would require permits for pesticide usage. These provisions also make it possible for activist groups to directly sue farmers should they feel that there is a breach of a permit or a permit was not applied for at the agency. This would provide ample opportunities for lawsuits attacking farmers in the courts.

“The EPA developed and released a draft permit earlier this year. The agency is currently working out the details with a court-imposed implementation deadline of April 2011.”

Friday’s NCGA update noted that, “‘There is now legislation that has been introduced in both the House and the Senate that will clarify by saying that if you are following federal pesticide law and the label instructions no additional permits are required,’ said Snyder. ‘NCGA supports this legislation and thinks that it is a very clean cut way of returning to the way things were prior to the Sixth Circuit’s decision, where farmers would simply need to follow what’s on the label.’”

Keith Good

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