FarmPolicy

January 16, 2019

Ag Economy; Budget- Immigration; Policy Issues; and, Biofuels

Agricultural Economy- Trade Issues- Biotech, and Transportation News

Anthony Faiola reported on the front page of today’s Washington Post that, “On a velvety green patch of the French countryside, organic farmer Jean Cabaret gave a little shudder. A looming trade deal with the United States, he fears, may make his worst culinary nightmare come true: an invasion of Europe by American ‘Frankenfoods.’

“‘Hormone-boosted beef. Chlorine-washed chicken. Genetically altered vegetables. This is what they want for us,’ warned Cabaret, standing before his majestic herd of free-range cows. ‘In France, food is about pleasure, about taste. But in the United States, they put anything in their mouths. No, this must be stopped.’

“In Europe, this is a season of angsteven paranoia — over a historic bid to link the United States and the 28-nation European Union in the world’s largest free-trade deal.”

Today’s article indicated that, “Passage of the Transatlantic Trade and Investment Partnership (TTIP) could be a globalization milestone, creating a megamarket of 800 million consumers from Alaska to Finland, Hawaii to Greece. Import duties — many of which already are low — could be further reduced. More important, the deal could finally tackle nontariff barriers, including differing data-protection and food-safety standards that have long stood in the way of transatlantic commerce.

“But even as time runs out for President Obama to sign a deal before leaving office, European and U.S. advocates have been surprised by the increasingly hostile reception on this side of the Atlantic. It is jeopardizing the chances of a deal that proponents say could create millions of new jobs by dramatically boosting U.S.-E.U. trade.”

In his Post article, Mr. Faiola pointed out that, “U.S. officials and food producers call European fears misguided, describing American standards of food safety as among the highest in the world. U.S. officials point to studies showing American standard practices — including chlorine washing of chickens — as unquestionably safe.

“‘We’re not trying to force anybody to eat anything,’ Michael Froman, the U.S. trade representative, said in an interview with The Washington Post this week. But, he added, ‘we do feel like the decision as to what is safe should be made by science.’”

Meanwhile, AP writer Raf Casert reported yesterday that, “The European Union is taking a big step toward giving EU member states the power to ban the cultivation of genetically modified crops even if they have been approved by the food safety authority of the 28-nation bloc.

“The European Parliament and member states agreed Thursday that national governments can have the final say in the matter a move that goes counter to many EU initiatives, which traditionally seek a common stance on EU policies.”

More specifically on the biotech issue, DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Mark Lynas is making the rounds with presentations and talks about his conversion from a hard-core anti-biotech activist to a pro-biotech advocate.

“A British author and environmentalist, Lynas gained his reputation in the 1990s as a leader in European campaigns against genetically engineered crops. He helped build resistance to GMOs that remains entrenched in Europe today. There are online videos of Lynas throwing a pie at an author who wrote an environmental book Lynas and others opposed. Lynas also personally destroyed several experimental crops.”

Mr. Clayton noted that, “In January 2013, Lynas publicly came out and reversed his position on biotechnology. As an environmentalist, Lynas then began to argue he and others were counterproductive. ‘Now, I’m trying to put right some of the things I was involved in,’ he said.

“Lynas, 41, is a visiting fellow at Cornell University’s Office of International Programs, now working with the Alliance for Science, a project created to focus on encouraging more public, open dialogue about the science behind biotechnology. The project is funded by the Bill and Melinda Gates Foundation.”

The DTN article stated that, “Lynas said he was studying climate change and his work on the issue forced him to reconsider the role of biotechnology in protecting the ability to grow food in a hotter climate. Lynas noted major scientific societies around the world have concluded climate change is occurring and humans are influencing climate change because of higher greenhouse-gas emissions. Those same scientific groups also have concluded biotechnology is a safe way to adapt crops to changing growing conditions.

“‘The scientific evidence was very clear on this that crop improvements by modern molecular techniques of biotechnology is quite safe,’ Lynas said. ‘There’s no room for dispute on this if you are on the right side of science.’”

Donnelle Eller reported earlier this week at The Des Moines Register Online that, “‘There I was, in a completely inconsistent position, saying to everyone who was a climate change denier, ‘the science is clear. This is what 97 percent of scientists agree’’ about, [Lynas] said. ‘But, oh no, on GMOs you’ve got to ignore the science.’

“Since shifting his stance on GMOs, Lynas said he’s worked with scientists in developing countries where genetic modifications can help alleviate hunger.”

Separately, Andrew Revkin reported yesterday (“On Smaller Farms, Including Organic Farms, Technology and Tradition Meet ”) at the Dot Earth blog (New York Times) that, “I spent yesterday morning at a remarkable meeting of young farmers meshing tradition and technology to sustain healthy soils and produce bountiful crops in a changing economy and climate.

“They had gathered for a ‘pre conference’ ahead of the seventh Young Farmers Conference hosted by the Stone Barns Center for Food and Agriculture in the lower Hudson Valley the rest of this week. A recurring theme was that the best way to sustain America’s smaller farms, both organic and conventional, is through an intensified focus on technology.”

And beyond EU trade issues, in more specific news regarding the Trans Pacific Partnership (TPP), a joint news release yesterday from the National Milk Producers Federation, U.S. Dairy Export Council and International Dairy Foods Association stated that, “The U.S. dairy industry advised top U.S. government agricultural trade negotiators that their efforts on any final Pacific Rim free trade agreement must put access to foreign markets for U.S. dairy farmers and processors first, and avoid pressure from other countries to regionalize all new market access opportunities in the Trans-Pacific Partnership negotiations.”

A news release yesterday from Rep. Rosa DeLauro (D., Conn.) stated that, “Four leading members of Congress today called on United States Trade Representative Michael Froman to ensure ‘real, meaningfully enforceable labor protections’ are included in the Trans-Pacific Partnership (TPP). Democratic Representatives [DeLauro], George Miller, Loretta Sanchez and Mark Pocan also requested a status update from Ambassador Froman so they can better understand what measures and assurances are being discussed as part of the TPP negotiations, which have been conducted largely in secret.”

And Bloomberg writer Carter Dougherty reported yesterday that, “The Tea Party is aiming to stop one of the few initiatives President Barack Obama and Republicans in Congress say they both want in the coming year: more free trade.”

Also with respect to the agricultural economy, Reuters news reported yesterday that, “World food prices were stable for the third consecutive month in November, as higher cereals and vegetable oils prices were counteracted by marked falls in sugar and dairy products, the U.N.’s food agency said on Thursday.”

In transportation news, USDA’s weekly Grain Transportation Report indicated yesterday that, “The transportation costs of shipping soybeans to China and Europe were mixed from the United States but declined from Brazil during the third quarter. The transportation costs of shipping soybeans from Minneapolis, MN, and Davenport, IA, to Europe through the U.S. Gulf increased by 13 and 17 percent (see table 1), and the cost of shipping to China increased by 7 and 9 percent (see table 2), from to the previous quarter. The costs of shipping from Fargo, ND, and Sioux Falls, SD, to China through the Pacific Northwest (PNW) decreased by 4 percent from both locations. The transportation costs of shipping soybeans from Brazil to Europe and China also decreased during the quarter.”

And a news release yesterday from Rep. Kevin Cramer (R., N.D.) noted that, “Today [Rep. Cramer] announced BNSF Railway and Canadian Pacific Railway (CP) have publicly filed updated weekly grain backlog status updates as required by the U.S. Surface Transportation Board (STB).”

 

Budget- Immigration

Kristina Peterson reported in today’s Wall Street Journal that, “House Republican leaders are displaying a trait seldom seen in this Congress: efficiency.

The GOP-controlled House appeared on track to pass next week a measure keeping the government running after its current funding expires on Dec. 11, with few detours or delays to appease the party’s conservative wing.

“As part of their strategy, House GOP leaders allowed a vote on a bill seeking to prevent President Barack Obama from shielding millions of illegal immigrants from deportation. It passed 219-197, but the Democratic-controlled Senate is expected to ignore the bill and the White House said Mr. Obama would veto it in any case.”

Today’s article noted that, “But the vote on that measure, from Rep. Ted Yoho (R., Fla.), helped channel the partisan fight over immigration policy away from the spending measure needed to keep the government running. The bill gave the most conservative Republicans a vehicle for registering their displeasure over Mr. Obama’s actions.

“Democrats, who may later support the appropriations bills currently under bipartisan negotiations, attacked Mr. Yoho’s bill as a GOP overreaction to the president’s policy.”

Ms. Peterson added that, “Facing a similar fiscal deadline this month, the House is expected to vote next week on a measure tying together 11 spending bills to fund the government through September 2015. To give Republicans an opportunity to target immigration funding next year—when they control both chambers of Congress—funding for the Homeland Security Department would be extended just until early next year.”

Robert Costa and Ed O’Keefe reported in today’s Washington Post that, “House Republicans voted to rebuke President Obama for his unilateral overhaul of the nation’s immigration system Thursday, passing legislation to curb the White House’s ability to protect millions of people from being deported.

“But the effort was largely symbolic: The Democratic-controlled Senate plans to ignore the bill, and the White House has said it would veto it.”

The Post writers explained that, “Still, the political consequence of the bill that passed by a 219-to-197 vote (three Republicans voted present) is the bolstered standing of House Speaker John A. Boehner (R-Ohio), leaving him well positioned to pass an omnibus spending bill next week that would fund the government beyond Dec. 11, when current funds will expire. Some of the most conservative GOP members wanted to tie the immigration defunding measure to the larger government spending bill.

“But Boehner’s ease in persuading his unruly conference to forgo a politically risky showdown underscores a new pragmatic streak in his ranks since the GOP’s big gains in the midterm elections.”

Allison Sherry reported yesterday at the Minneapolis Star Tribune Online that, “Rep. Collin Peterson was among only three Democrats Thursday who supported a symbolic vote banning the executive branch from deferring deportation of undocumented immigrants — a direct aim at President Barack Obama’s November executive order on immigration.”

 

Policy Issues: Livestock Production; Taxes; Regulations; and, the Farm Bill

Reuters writers Michael Erman and Brian Grow reported yesterday (“Special Report: Powerful antibiotic for cows often misused by farmers“) that, “It is one of the most potent antibiotics used by U.S. cattle and dairy farmers, the key component in the top-selling drug line of Zoetis, the world’s largest animal health company.

“But the strength of the antibiotic ceftiofur – and the frequency with which it’s being misused on farms across America – has created a threat to human health that may overshadow the drug’s effectiveness, a Reuters examination shows.”

The writes indicated that, “FDA spokeswoman Juli Putnam said the agency ‘is aware of the increase in ceftiofur residue violations’ and is gathering more information to ‘better understand the matter.’”

In a news release yesterday, Rep. Louise Slaughter (D., N.Y.) commented on the Reuters article and stated in part that, “These are the sorts of abuses that occur when federal agencies refuse to take the necessary steps to protect public health. We have been warned by the World Health Organization about a post-antibiotic future where routine infections become fatal and common surgeries become obsolete without antibiotics to stave off infection. The only way to avoid that fate is to enforce mandatory limits on the overuse of antibiotics on the farm. That’s exactly what my legislation would do, and that’s why it’s supported by 450 outside scientific groups and 40 American cities.”

In other news related to livestock production, an article this week from the California Farm Bureau noted that, “Whether there will be a shortage of eggs or a price increase remains uncertain at this point, but one thing is certain: When California rings in the New Year, eggs sold in the state will have to comply with new regulations.

Proposition 2, which affects how California egg farmers house their hens, takes effect on Jan. 1. Approved by voters in 2008, the law prohibits specific farm animals from being confined in a way that prevents them from being able to turn around, lie down, stand up and fully extend their limbs.

“At the same time, another new law, Assembly Bill 1437, which passed in 2010 and requires out-of-state producers who sell shell eggs in California to comply with Proposition 2, also takes effect.”

The article noted that, “Ken Klippen, spokesman for the National Association of Egg Farmers, which opposes the California egg law, belongs to the camp that says Californians will see some egg shortages and higher prices next year. He said while it is uncertain how many out-of-state producers have made the necessary changes to comply with Proposition 2, some started the process after passage of AB 1437, as California remains the nation’s largest egg market and those producers want to continue selling eggs here.”

Meanwhile, in developments regarding taxes and infrastructure, Chris Clayton reported yesterday at the DTN Ag Policy blog that, “It wasn’t too long ago that the idea of raising any tax was viewed as an anathema. Yet, ag groups are nudging political leaders to step up spending on infrastructure in a variety of ways, whether it’s convincing Congress to boost the diesel tax for inland waterways or looking for a tax increase to fund road repairs at the state level.

“The National Grain and Feed Association was one of more than a dozen agricultural groups that called on the Senate to pass S. 2955 to increase the taxes on diesel fuel for barge operators as a way to boost financing inland waterways infrastructure.

“The Senate bill is comparable to a provision in a House bill that passed on Wednesday. It would increase the diesel tax on barges and tow-boat operators from 20-cents a gallon to 29-cents a gallon. The revenue generated would go to the Inland Waterways Trust Fund.”

In regulatory developments, Louis Sahagun reported yesterday at the Los Angles Times Online that, “The California Fish and Game Commission on Wednesday granted endangered species protections to the tricolored blackbird, approving the designation on a temporary, emergency basis…[T]he declaration will come at a cost to dairy farmers and their crops, warned Noelle G. Cremers, director of natural resources and commodities for the nonprofit California Farm Bureau Federation.

“‘It could mean losses in the tens of thousands of dollars for an individual farming operation if the birds have colonized its fields,’ Cremers said.

“Audubon California and the U.S. Department of Agriculture’s Natural Resources Conservation Service are leading a program that pays dairy farmers to delay harvesting their silage crops through the nesting season. So far, however, that program has failed to stem the decline.”

And in Farm Bill news, an update yesterday from USDA stated that, “U.S. Department of Agriculture Secretary Tom Vilsack today announced that the application deadline for the dairy Margin Protection Program (MPP) will be extended until Dec. 19, 2014. The program, established by the 2014 Farm Bill, protects participating dairy producers when the margin – the difference between the price of milk and feed costs – falls below levels of protection selected by the applicant.”

 

Biofuels

Bloomberg writer Mario Parker reported yesterday that, “The U.S. is adding ethanol to the list of fuels it dominates in world markets.

Exports of the additive derived from corn rose 31 percent this year to the highest level since 2011, meeting demand from South Korea to Persian Gulf oil producers. The growth in sales follows a tripling of gasoline and diesel exports since 2009.

“While the shale-oil boom created a stream of refined products flowing overseas, the ethanol surge is being driven by record crops. The U.S. is producing about 66 million metric tons more corn than a decade ago, almost as much as the rest of the world will export this year. Global demand for U.S. ethanol is helping ward off a glut after the government eased obligations to blend the fuel with gasoline.”

The article noted that, “As more countries institute pollution policies, the U.S. could expand its list of ethanol customers, said Darrel Good, professor emeritus in agricultural and consumer economics at the University of Illinois at Urbana-Champaign.”

Also, University of Illinois agricultural economists Scott Irwin and Darrel Good noted in a detailed analysis yesterday at the farmdoc daily blog (“How Much Will Falling Gasoline Prices Affect Ethanol and Corn Demand?”) that, “Overall, we see little risk of total ethanol use falling below 13.9 billion gallons, and consequently, corn use for ethanol of less than 5 billion bushels.”

Keith Good

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