FarmPolicy

August 22, 2019

Ag Economy; Biotech; Farm Bill; Regulations; and, Political Notes

Agricultural Economy

Reuters writer Karl Plume reported yesterday that, “The top U.S. rail regulator ruled on Wednesday that all Class 1 railroads operating in the United States must provide detailed weekly freight service reports, a decision that cited months of congestion that has hit the grain and power industries particularly hard.

Carriers must submit detailed data on average train speeds, dwell times and other service metrics on a temporary basis beginning on Oct. 22, the Surface Transportation Board said. They must also jointly submit a narrative summary of operating conditions at the Chicago gateway, a busy rail hub that is a choke point in the national network.

“The ruling was a victory for the agriculture and power industries, which have argued for more transparency from rail carriers about the products they carry on their networks. Some have accused railroads of prioritizing crude shipments from shale oil fields in North Dakota over grain and coal, a charge the carriers deny.”

Sen. John Hoeven (R., N.D.) indicated yesterday that, “‘Today’s decision is an important step forward in improving railroad transparency, which will help our shippers and agriculture producers make informed decisions as they work to get their products to market,’ said Hoeven. ‘However, there is still more to be done. We are going to continue our push to ensure railroads make the much-needed investments in rail infrastructure and personnel to resolve existing rail delays, especially during harvest, and prevent future delays.’”

Sen. John Thune (R., S.D.) noted in part yesterday that, “I welcome the additional transparency the STB is seeking from the nation’s largest freight railroads as service delays continue to cause challenges for agriculture producers and other shippers across the country.”

Sen. Al Franken (D., Minn.) stated yesterday that, “‘Rail service in Minnesota is a mess—it’s hurting farmers, businesses, utilities, and communities throughout our state,’ said Sen. Franken. ‘They all tell me that shipping delays are a serious threat to their livelihoods, and that they’re fed up with rising prices and subpar service. Ever since joining the Senate, I’ve had a simple message for the STB: do your job by forcing the railroads to do theirs. This decision by the STB is a step in the right direction, but we need more. That’s why I’ll continue working hard to force real action to address the rail backlog and improve service for our state.’”

And Sen. Heidi Heitkamp (D., N.D.) stated yesterday that, “‘For more than eight months, our farmers and grain elevators have lost out because of serious agriculture shipment delays across the state,’ said Heitkamp. ‘To stop these delays, prevent them in the future, and help our farmers do their jobs, we need to hold the railroads accountable. Over the past several months, I’ve been in regular contact with STB Chairman Elliot and pressed him to look at the delays in our state and determine if there’s anything the agency can do. Today, the STB is taking needed action to hold the railroads accountable, require more transparency from the railroads on all products shipped on the rails, and make sure all products – whether grain, oil, coal, or anything else – are treated equally and fairly in how they are transported. Chairman Elliot understands the serious consequences of delays on the rails, and he and I will continue to work together to make sure we can reduce this backlog so our nation’s producers, processors, and their families continue to thrive.’”

Meanwhile, Bloomberg writer Jeff Wilson reported yesterday that, “Corn futures rose, capping the longest rally in eight months, as demand for grain to make ethanol increased, while rains slowed the harvest in the U.S., the world’s biggest producer.”

“In the week ended Oct. 3, U.S. ethanol production rose 2.3 percent from a week earlier, while inventories declined 0.9 percent, government data showed today. Rain from Arkansas to Pennsylvania will delay harvesting in the next 10 days as drier weather in the western Midwest will firm soils for collecting soybeans, said Dave Marshall, a farm-marketing consultant for Toay Commodity Futures Group LLC.”

Also with respect to rain as a harvest variable, the National Weather Service tweeted this map yesterday and stated that, “Heavy ‪#rain developing in central U.S. Thursday. Flash Flood Watches in effect. ‪http://go.usa.gov/RRX

While anticipating the abundant harvest this year in the U.S., an update yesterday from Purdue University stated that, “This year’s projected record corn crop has many farmers looking for alternatives to traditional storage bins and silos, which are expected to fill up quickly now that the harvest is underway.

One of the most popular options, commonly known as a ‘bag silo,’ is a collapsible, soft-sided grain storage unit that resembles a long, low Quonset hut.

Klein Ileleji, a grain post-harvest technology expert at Purdue University, said potential users should be aware that the bags, which can measure up to 12 feet in diameter and 328 feet in length, require careful site preparation, regular monitoring for moisture content and temperature, and special tools for loading and unloading.”

A news release yesterday from the University of Missouri Extension Service indicated that, “Land prices in Missouri increased in the past year at a rate higher than expected.

“Results of the 2014 University of Missouri Extension annual land value survey of lenders, appraisers and brokers showed an increase for cropland values by 4.6 percent, nearly double what survey respondents predicted last year.

“‘That’s a bit surprising given the weakness in crop prices,’ says Ron Plain, University of Missouri Extension agricultural economist. ‘The days of $6 and $7 a bushel corn are behind us, with corn prices headed toward $3 a bushel and maybe in some spots a little bit lower.’”

In more specific news regarding livestock, Reuters writers Tom Polansek and Sybille De La Hamaide reported yesterday that, “The World Organization for Animal Health said on Wednesday that an animal-feed supplement suspected of spreading a deadly pig virus is not likely to transmit the disease if manufacturers follow proper safety measures.

“Multiple studies suggest that spray-dried porcine plasma, a supplement containing pigs’ blood that is fed to piglets, is not a likely source of Porcine Epidemic Diarrhea virus (PEDv) ‘provided that good manufacturing practices and biosecurity standards are followed,’ the organization, known as the OIE, said in a fact sheet.”

The Reuters article pointed out that, “The virus has killed an estimated 8 million piglets, or 13 percent of the U.S. hog herd, since it was first identified in the United States last year, pushing U.S. pork prices to record highs. The disease has also been found in Mexico, Canada, Japan and other countries.”

With respect to trade developments, Adam Behsudi, Doug Palmer and Matthew Korade indicated yesterday at Politico that, “Acting Deputy U.S. Trade Representative Wendy Cutler will travel to Japan on Friday to get bilateral trade talks with Tokyo back on track, according to a USTR notice.

“USTR Michael Froman and Japan’s minister in charge of Trans-Pacific Partnership affairs, Akira Amari, met last month to try to advance bilateral market access issues that are holding up the 12-country Asia-Pacific trade deal. But those talks ended abruptly when Amari walked out of the meeting before it was scheduled to end.”

The Politico item added that, “The U.S. is pressuring Japan to lower or eliminate tariffs on sensitive farm goods, such as beef and pork. The two countries are also meeting bilaterally to address auto trade issues. U.S. car companies complain that numerous barriers keep them out of the Japanese auto market despite Japan’s lack of auto tariffs.

“Cutler will meet with Hiroshi Oe, a deputy chief negotiator handling the agricultural talks, and Takeo Mori, in charge of the automobile trade talks. Darci Vetter, USTR’s chief agricultural negotiator, is scheduled to join Cutler in Japan later next week.”

In other news, Reuters writer Karl Plume reported yesterday that, “Big agriculture companies, such as Monsanto, Deere and DuPont Pioneer, have spent hundreds of millions of dollars on technologies that use detailed data on soil type, seed variety, and weather to help farmers grow more at a lower cost. But as the race for dominance on the farm heats up, a number of small tech startups are launching competing products.

“They are powered by many of the same data sources such as freely available rainfall totals from the National Weather Service and field boundaries gleaned from Google Maps. They also tap data gathered by farm machines and transferred via flash drive or beamed wirelessly to the cloud.

Agriculture is the latest industry hoping to capitalize on Big Data, or using new technologies to gather and analyze large, complex, previously unwieldy data sets to anticipate behavior and results and boost efficiency.”

 

Biotech

Reuters writer Dominique Patton reported yesterday that, “Swiss-based seed firm Syngenta had applied for cultivation approval for its Viptera GMO corn in China, but later halted the process to focus on winning import permission for the grain, a company spokesman told Reuters.

“Syngenta is being sued by grain exporters Cargill and Trans Coastal Supply Co for failing to gain import approval for the GMO corn, also known as MIR162, in China before selling the seed to farmers in the United States.

“The two companies claim they suffered from combined damages of more than $130 million after China began rejecting cargoes of U.S. corn containing the trait last year. China is the world’s second largest corn consumer.”

Bloomberg News reported yesterday that, “China, the world’s most-populous country and the biggest consumer of rice, soybeans and wheat, has begun a campaign to push genetically modified organisms as it seeks to expand food supplies. While no domestic grain crops are bioengineered, President Xi Jinping has endorsed the technology used to boost output everywhere from the Americas to Africa. China’s Ministry of Agriculture said Sept. 28 it would use media, seminars and street advertising to combat the perceived risks.

Meat consumption has surged in China as the economy expanded almost six-fold over the past decade and incomes rose. That led to an increase in livestock herds and demand for feed. The nation is already the biggest soybean buyer and will become the top corn importer by about 2020, the U.S. Department of Agriculture estimates. Most of its overseas supplies are produced from seed genetically engineered to grow with certain traits, like killing pests or tolerating herbicides.”

And a news release yesterday from the National Chicken Council indicated that, “According to a study of over 100 billion animals, including nine billion broilers annually, genetically engineered (GE) crops were found to be safe to feed to livestock.  The study, published in Science Review, included data from 1983, before GE crops, to 2011 and found improved feed-to-gain ratios and decreased age to market.”

 

Farm Bill

A recent article by Mikkel Pates of Agweek Magazine stated that, “Dairy farmers have until Nov. 28 to sign up for the new Margin Protection Program under the new federal farm bill. Most will wait until after harvest, but officials urge not to wait until the last minute.

Jim Salfer, a University of Minnesota extension educator, spoke to 40 producers and others attending an informational meeting in Fergus Falls, Minn., on Sept. 30. It was the second in a series of 18 informational meetings scheduled through Nov. 7 throughout the state. Decisions will be similar for farmers in Minnesota, North Dakota and South Dakota, he said.”

The article noted that, “U.S. Rep. Collin Peterson, D-Minn., is concerned that farmers might not sign up, as milk prices are strong now because an unprecedented 17 percent of U.S. milk production is being exported.

“‘One of the problems with having such a dependence on exports is that it can change in a hurry, and it can be very volatile,’ he said.

“‘I’m hoping that everybody signs up for the catastrophic coverage, pays the $100 administrative fee, and locks in their production base so they get adjustments going forward,’ said Peterson, an accountant by trade. ‘If you’re a smaller producer, below 4 million pounds, the $7 margin coverage is so inexpensive that I think it’d be a mistake not to take it.’”

 

Regulations

A news release yesterday from Sen. John Thune (R., S.D.) stated that, “Today, [Sen. Thune], Ranking Member of Senate Commerce, Science, and Transportation Committee, along with a number of committee and subcommittee leaders, sent a letter to U.S. Secretary of Interior Sally Jewell and U.S. Secretary of Commerce Penny Pritzker requesting the U.S. Fish and Wildlife Service (FWS) and the National Marine Fisheries Service (NMFS) withdraw proposed rules and a draft policy relating to critical habitat under the Endangered Species Act (ESA).

“‘These latest proposals follow a troubling trend, at both services, of expanding the ESA beyond its lawful scope,’ wrote the senators. ‘In 2011, the FWS reached a secret sue-and-settle agreement with two radical environmental groups to require listing determinations on more than 250 species across the entire United States.’”

 

Political Notes

– “For Pat Roberts of Kansas, a pivot from agriculture concerns has repercussions,” by Paul Kane (Oct. 8, The Washington Post Online).

– “Facing Longer Odds, Democrats Shift Funds,” by Michael R. Crittenden. (Today’s Wall Street Journal).

Keith Good

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