January 19, 2020

GMO Labeling; Ag Economy; Rural America; EPA; CFTC; and, FDA

GMO Labeling Bill Introduced in Congress

Reuters writer Carey Gillam reported yesterday that, “A Republican congressman from Kansas introduced legislation on Wednesday that would nullify efforts in multiple states to require labeling of genetically modified foods.

“The bill, dubbed the ‘Safe and Accurate Food Labeling Act,’ was drafted by U.S. Rep. Mike Pompeo and is aimed at overriding bills in about two dozen states that would require foods made with genetically engineered crops to be labeled as such.

“The bill specifically prohibits any mandatory labeling of foods developed using bioengineering.”

Benjamin Goad reported yesterday at The Hill’s RegWatch Blog that, “Business-backed legislation establishing voluntary labeling standards for food made with genetically modified ingredients was introduced Wednesday to groans from safety advocates, who called it a thinly veiled effort to block mandatory requirements.

“The Safe and Accurate Food Labeling Act, offered by Rep. Mike Pompeo (R-Kan.), comes amid calls from consumer rights and food safety groups for increased federal regulations governing the ingredients — known as GEs or GMOs — that are present in about 80 percent of food in the United States.”

The Hill update noted that, “Pompeo said he expected the House Energy and Commerce Committee, on which he sits, to hold a hearing on the bill as early as June, and touted bipartisan backing in the lower chamber.

“Reps. G.K. Butterfield (D-N.C.), Marsha Blackburn (R-Tenn.), Jim Matheson (D-Utah) and Ed Whitfield (R-K.Y.) have signed on as co-sponsors.”

Greg Horstmeier reported yesterday at DTN (link requires subscription) that, “More than 20 states have considered or are considering labeling requirements for foods that contain GE-ingredients. The most famous attempts to date include efforts in California and Washington, which saw bitter advertising battles between groups opposed to GE products versus seed trait manufacturers, their professional groups such Bio, and the Grocery Manufacturers Association.

“‘What we want to prevent is a patchwork of statutes,’ Pompeo said in a meeting with agricultural reporters before the official introduction of the bill.

“Such efforts, if successful, would make it ‘enormously difficult’ to operate a food system with components and products that cross various state borders, Pompeo said. ‘Some of the campaigns in some of the states aren’t really to inform consumers but really are aimed at scaring them,’ he said at the news conference.”

Reaction to the proposed legislation included: Rep. Chellie Pingree (D., Maine) (“This bill is nothing but an attempt by chemical companies like Monsanto and giant food industry players to stop grassroots efforts around the country to require GMO labeling.”); American Soybean Association (“welcomed” the bill); National Corn Growers Association (“announced its support” for the bill); National Milk Producers Federation (“applauded introduction” of the bill); and Bob Stallman, President of the American Farm Bureau Federation (“encouraged by the bipartisan leadership” of the lawmakers for introducing the measure).

Recall that in May of last year, during the Senate Farm Bill debate, a news release from Sen. Bernie Sanders (I., Vt.) indicated that, “The Senate today rejected by a vote of 71 to 27 an amendment by [Sen. Sanders] to let states require labels on food or beverages made with genetically modified ingredients…[C]o-sponsored by Sens. Mark Begich (D-Alaska) Michael Bennet (D-Colo.), Richard Blumenthal (D-Conn.) and Jeff Merkley (D-Ore.), Sanders’ amendment would have made clear that states have the authority to require the labeling of foods produced through genetic engineering.”


Agricultural Economy

David Pierson reported yesterday at the Los Angeles Times Online that, “Prices for the crispy treat [bacon] rose 13% in February from a year earlier to $5.46 a pound, according to the U.S. Bureau of Labor Statistics, which looked at average prices in cities nationwide.

Overall retail pork prices grew 7% in February from a year earlier to $3.73 a pound, according to the U.S. Department of Agriculture’s Economic Research Service.

“The rising costs could be linked to a rare disease called porcine epidemic diarrhea, which is killing millions of pre-weaned piglets across the country.”

(Click here for a closer look at food price indicators from February, and see this one-minute summary from yesterday, which highlighted U.S. beef prices and wheat conditions).

And, an update this week from NOAA (National Oceanic and Atmospheric Administration) indicated that, “After an extremely dry stretch from December through mid-February, a few storms found their way to the drought-stricken California coast late this winter. Unfortunately they were only enough to make a small dent in large water deficits that have built up since the 2011-12 water year.”

Bloomberg writer Alan Bjerga reported yesterday that, “The drought that is withering vegetable and fruit crops in California may push up food prices more than the dry spell that ravaged the Corn Belt in 2012, U.S. Agriculture Secretary Tom Vilsack said.

“That’s because the current crisis has brought planting in California to a near-halt, while corn and soybean crops were still being produced during the 2012 drought, he said.

“‘It’s simply because folks aren’t planting,’ Vilsack told reporters today after a discussion at the Council on Foreign Relations in New York. That may force the U.S. to rely on more-expensive imports of perishable goods, he said.”

In addition, Bloomberg writer Marvin G. Perez reported yesterday that, “The layer of dust on Jeremy Brown’s cotton fields in west Texas is increasing the chance that Americans will start paying more for underwear or blue jeans.

“The drought that parched cropland and pastures across the state since 2011 has left Brown’s farm in Dawson County looking like a desert less than a month before he will sow 1,900 acres of cotton. Brown said crop conditions ‘are as bad as last year,’ when he abandoned 60 percent of plantings.

Crop prospects are worsening in Texas, the top grower, as inventories before this year’s harvest head for a 36 percent plunge in the U.S., the world’s biggest exporter.”

And AP writer Tamara Lush reported yesterday that, “This year’s Florida orange crop is approaching the fruit’s lowest harvest in decades, and experts say a deadly bacteria that’s infecting the trees is to blame.”

Meanwhile, Tony C. Dreibus reported in today’s Wall Street Journal that, “U.S. soybean futures rose to a more than eight-month high after federal forecasters projected tighter-than-expected domestic supplies of the oilseeds.

Soybean stockpiles will total 135 million bushels before this autumn’s harvest. That is the smallest amount in 10 years as strong, China-led export demand soaks up inventories, the U.S. Department of Agriculture said in a monthly crop report Wednesday [full report, U.S. corn variables here, U.S. soybean variables here].

Mr. Dreibus explained that, “The figure was below analysts’ estimates of about 139 million bushels and marked a 7% decline from last month’s projection by the government.

“Analysts said the forecast shows how robust demand from China to feed soybeans to livestock is cutting into U.S. supplies even as Brazil and Argentina, the U.S.’s main rivals in growing and exporting soybeans, have produced large crops this year.”

The Journal article added that, “The USDA estimated U.S. corn stockpiles at the end of the 2013-14 season would be at 1.331 billion bushels. That compares with analysts’ estimates for 1.403 billion bushels and the government’s forecast last month of 1.456 billion.”

Bloomberg writer Jeff Wilson reported yesterday that, “World [soybean] production was reduced to 284.05 million tons from 285.43 million estimated in March,” and added that, “The USDA forecast prices at the farm [for soybeans] will average $12.50 to $13.50 a bushel in the 12 months that began Sept. 1, compared with $12.20 to $13.70 estimated a month earlier.”

And a separate Bloomberg article yesterday reported that, “On March 31, corn futures in Chicago entered a bull market after touching a 40-month low of $4.0625 a bushel on Jan. 10. The price at the farm gate may average $4.40 to $4.80 in the 12 months that began Sept. 1, compared with $4.25 to $4.75 forecast in March, the USDA said.”

For additional analysis on yesterday’s WASDE report, listen to this conversation with University of Illinois agricultural economist Darrel Good, who was interviewed yesterday by Todd Gleason of University of Illinois Extension.

Also yesterday, Bob Meyer reported at Brownfield that, “The latest World Agricultural Supply and Demand Estimates raised the 2014 milk production projections as strong prices are expected to encourage farmers to add more cows and push them for more production per cow. Total milk production is now projected to be 206.1 billion pounds this year, up 400 million from last month’s estimate. If realized it would be nearly 5 billion pounds above last year’s production.

“Thanks to that continued strong demand, the cheese price estimate was raised 11.5 to 12.5 cents pegged at between $1.985 and $2.035 per pound this year. The butter price is expected to run between $1.76 and $1.84 this year, a 14.5 to 15.5 cent increase over last month’s estimate. Dry whey increased 3.5 cents to 61.5 to 64.5 cents per pound while the nonfat dry milk price range narrowed a bit, now expected to be between $1.83 and $1.87 per pound this year.

“The higher product prices translate into higher milk price projections, Class III is now estimated to range between $20.40 and $20.90 this year, up 35 to 45 cents from last month’s estimate. Class IV was raised 60 to 70 cents projected at $21.05 to $21.65 and the all milk price is pegged at $22.55 to $23.05 up $1.05 to $1.15 compared to the March estimates.”

Also with respect to dairy, Bloomberg writer David Stringer reported yesterday that, “While China’s economy may be slowing, its love affair with pizza is raging.

“And from Hoboken, New Jersey, to Pudong, Shanghai, you can’t make pizza pie without mozzarella. That’s good news for Fonterra Cooperative Group Ltd. (FSF), the world’s biggest dairy exporter and China’s top supplier of the cheese.

“The Auckland-based company plans to lift mozzarella output to 50,000 metric tons a year by September 2015, enough to garnish about 350 million pizzas.”

In a closer look at U.S. crop acreage issues, University of Illinois Agricultural Economists Darrel Good and Scott Irwin indicated yesterday at the farmdoc daily blog (“The Relationship between Planting Intentions, Actual Plantings, and Prevented Plantings over 2007-2013”) that, “The USDA’s Prospective Plantings report of March 31 has stimulated an on-going conversation about the relationship between the magnitude of planting intentions estimates and the magnitude of final planted acreage estimates.  In particular, the smaller than expected corn acreage in the March 31 report has prompted considerable discussion about the possibility of the USDA survey undercounting total acreage and this is the reason for the ‘low’ figure for corn. In a farmdoc daily post last week, we examined the data and concluded that there does appear to be some room for planted acreage estimates for principal crops to exceed this year’s estimate of planting intentions.  Our analysis focused on the sampling variability inherent in ‘final’ estimates of planted acreage.

A related question is whether the historical relationship between planting intentions and final planted acreage provides further clues how planted acreage in 2014 might deviate from planting intentions.  The analysis of that relationship is complicated by the annual variation in the amount of acreage that goes unplanted due to adverse weather conditions.  Consequently, the analysis in today’ post examines the relationship between final planted acreage estimates, March planting intention estimates, and the magnitude of prevented planted acres reported to the USDA’s Farm Service Agency for the period 2007 through 2013.  This is a relatively short period for such an analysis, but the analysis is limited by the publically available data on prevented plantings.  The acreage relationships are examined for corn, soybeans, combined corn and soybeans, and all principal crops.”

After additional analysis, yesterday’s farmdoc update noted that, “Our analysis indicates that the prospective plantings of corn, soybeans, and all principal crops are unbiased estimates of final planted acreage. However, there is considerable variation in the relationships from year-to-year and prospective plantings substantially under-estimates the sum of final planted acreage and prevented plantings for the same categories. The inconsistent relationships in planting intentions, actual plantings, and prevented plantings only adds to the difficulty of anticipating actual planted acreage of principal crops in 2014 based on March intentions.  Even in view of this uncertainty, recent history strongly suggests that 2014 March intentions for planting of principal crops understates the total of planted acreage plus prevented acreage.  We argued last week that a conservative estimate of the understatement is in the range of 2-4 million acres and our analysis today suggests it is still a reasonable benchmark.  However, we cannot say with any degree of certainty whether these additional acres will show up in planted acres or prevented plantings.”

In other news, Tara Bahrampour reported on the front page of today’s Washington Post that, “A problem known as ‘food insecurity’ — a lack of nutritional food — is not typically associated with U.S. college students. But it is increasingly on the radar of administrators, who report seeing more hungry students, especially at schools that enroll a high percentage of youths who are from low-income families or are the first generation to attend college.

“At the same time that higher education is seen as key to financial security, tuition and living expenses are rising astronomically, making it all the more tempting for students to cut corners on food.”

The New York Times editorial board indicated today that, “More than a million children attend public schools in New York City. About 780,000 of them are poor enough to qualify for a free or reduced-price lunch. Getting into the program requires some paperwork, which is a burden but not a terrible one; the application is just one page. So why do so many eligible children — about 250,000 — not participate?

“The problem, advocates for schoolchildren say, isn’t so much aversion to the menu — today across the city, it’s roast turkey, stewed beans, sweet plantains and an oatmeal raisin cookie (plus chickpea salad, for high schoolers) — as it is the embarrassment and bullying that come from being identified as poor, from being seen taking the ‘free-free,’ the derisive nickname New York schoolchildren give to subsidized lunches.”

Also, Jessica Wohl reported yesterday at the Los Angeles Times Online that, “Wal-Mart is trying to make organic food more accessible to its budget-conscious shoppers.

“The retailer is making a bigger bet on the fast-growing category, teaming with Wild Oats to sell organic packaged food priced in line with conventional foods and at least 25% cheaper than other organic brands it currently carries.”


Rural America

Norma Cohen reported yesterday at The Financial Times Online that, “The years 2010–13 mark the first extended period of depopulation in rural and exurban America, although the latest figures show the pace slowed last year.

US Department of Agriculture data indicate a net loss of 28,000 from rural and non-metropolitan counties between July 2012 and July 2013, following a decline of 48,500 a year earlier. The total net loss since 2010 has been around 100,000, despite growth in the general population.

“‘This period [of decline] may simply be an interruption . . . or it could turn out to be the end of a major demographic regime that has transformed small towns and rural areas throughout the country for decades,’ the USDA said.”

For additional background on rural population, see this update from March.


EPA (Environmental Protection Agency)

DTN writer Todd Neeley reported yesterday (link requires subscription) that, “A group of U.S. senators said in a letter to President Barack Obama on Wednesday that the proposed Clean Water Act rule violates a presidential promise to ‘cut red tape’ and the agency is trying to ‘obtain de facto land use authority.’

“The senators’ response comes after EPA Administrator Gina McCarthy told agriculture journalists in Washington, D.C., this week that the agency isn’t making a ‘land grab’ and that the agency is trying to forge better relationships with the agriculture community.”


CFTC (Commodity Futures Trading Commission)

Andrew Ackerman reported yesterday at The Wall Street Journal Online that, “A House panel voted to limit the ability of the Commodity Futures Trading Commission to impose its derivatives rules abroad, advancing legislation that critics say would make it easier for foreign subsidiaries of U.S.-based banks to circumvent tough U.S. rules.

The House Agriculture Committee included several provisions aimed at restricting the CFTC’s authority in legislation that outlines the commission’s powers. The reauthorization measure, which would run for five years, cleared the panel on a voice vote and now goes to the full House.

“Several of the bill’s provisions, including the curbs on swaps rules for U.S. banks operating abroad, are unlikely to gain traction in the Senate, where Agriculture Chairman Debbie Stabenow (D., Mich.) plans to introduce her own bill, according to Senate aides.”

Reaction to the Ag Committee’s action yesterday included: Rep. K. Michael Conaway (R., Tex.) (“One of the most important changes we make is finally requiring the Commission to quantify the costs and benefits of a rule when it is first proposed.”); National Grain and Feed Association (“Commended” the Committee for its work on the bill); Futures Industry Association (“Commends the House Agriculture Committee for its continued bi-partisan approach to developing thoughtful legislation.”); Roger Johnson, President of the National Farmers Union (“Reauthorization of the [CFTC] must reinforce, not undermine, Dodd-Frank’s provisions and CFTC’s expanded oversight.”); National Council of Farmer Cooperatives (“The bill recognizes the many difficulties and costs to hedgers—including farmer co-ops and their farmer-owners—that have resulted from the implementation of the Dodd-Frank Act and CFTC’s customer protection rule.”)


FDA (Food and Drug Administration) Issue

National Milk Producers Federation (NMPF) President Jim Mulhern indicated in a statement yesterday (“Statement on Introduction of House Bill Blocking Changes in FDA Regulation of Brewers’ Grains for Use as Animal Feed”) that, “The [NMPF] supports the legislation introduced this week by four House members to stop the Food and Drug Administration from making it harder to use beer by- products in animal feed.”

Yesterday’s update noted that, “Last fall, the FDA suggested imposing stricter requirements for handling spent grains sold or donated to farmers as part of new feed regulations proposed under the 2010 Food Safety Modernization Act. The changes would require spent grains to be dried and packaged, before being passed on to farmers. Typically, farmers now receive wet grains, which help hydrate livestock.

“Both the beer industry and agricultural groups, including NMPF, object to the planned changes, and we are encouraged that the FDA has said recently it will review its draft language. In the meantime, we support the legislative approach offered by Reps. Steve Womack (R-AR), Reps. Peter Welch (D- VT), Chellie Pingree (D-ME) and Cory Gardner (R-CO) to highlight the importance of this issue.”

Keith Good

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