FarmPolicy

April 23, 2017

Policy; Immigration; Biotech; Biofuels; Ag Economy; Trade; and, Regulations

Policy Issues

Secretary of Agriculture Tom Vilsack was a guest on yesterday’s AgriTalk radio program with Mike Adams, where the conversation focused on beef checkoff issues, COOL (Country of Origin Labeling), Farm Bill implementation, and trade with Cuba (audio replay here, MP3- 11:30). An unofficial FarmPolicy.com transcript of yesterday’s discussion is available here.

On the checkoff issue, Sec. Vilsack indicated that, “Well, Mike, it was fairly obvious that the industry was not interested in having a second checkoff, and obviously the only reason we proposed it was because I believe, and I think most in the industry believe, that we need additional resources for promotion and research in the beef industry. This is an industry that faces some interesting challenges at home, and some great opportunities abroad, and there is an opportunity, I think, with increasing the checkoff and increasing investment in the checkoff, to do more research and more promotion and more marketing.

“But the industry made the decision that they were not interested in a second checkoff, and they have been unable to reach consensus on how to increase the existing checkoff, so when the writing is on the wall, you basically have to pay attention to the attitude of the folks you’re trying to serve. And it’s an unfortunate circumstance. My hope is that the industry will take an opportunity now to reach consensus, to figure out a way to strengthen the beef checkoff program.”

And in comments regarding beef imports, Sec. Vilsack pointed out that, “But if there is an equivalency determination, which is to say that the processes are equal to or better than what the U.S. does, and if it comes from an area where we’ve already done a risk assessment and find little or no risk, and that there are protections, then the science and the international rules basically say we have to open up our market opportunities, and then that allows us to go to other countries who are creating barriers to our beef products and be able to articulate and say very clearly we live by these rules and we think that—and we live by the science, and we think everyone should live by the rules and the science so that you have a much more objective system, rather than a subjective one.”

Addressing COOL related issues, Sec. Vilsack noted yesterday on AgriTalk that, “Well, I think it’s important for people to understand that the Department of Agriculture is in a very difficult spot here. The United States Congress has directed us to create a labeling system that basically allows us to distinguish meat products that have been processed and produced and raised in the United States from those that have not. And the reality is the WTO, that we belong to, has essentially said if you require a segregation of animals so that you’re able to comply with that labeling requirement, that creates a disadvantage and an unreasonable disadvantage, competitive disadvantage, for Mexican and Canadian producers. And so they have ruled that we, at this point in time, are in violation of WTO regulations.

Now, we’re appealing that, and there’s an opportunity, obviously, for us to make the case to an appeals board that the decisions that have been made up to this point are incorrect. If we win the appeal, then we can continue to proceed as in the past. If we lose the appeal, we have determined here at USDA that the only other recourse would be for Congress to change the law, either by repealing the law or by providing some sort of more generic label that would distinguish between products that are produced in North America.”

And on potential trade with Cuba, Sec. Vilsack pointed out that, “It’s a positive. Look, we do $400 million worth of trade today with Cuba in agriculture in poultry and some of the bulk commodities. There’s no question that the President’s action removing barriers will make it a lot easier to do trade with Cuba. It’s 90 miles away from our shores. It’s a tremendous opportunity for American agriculture.

“And frankly, it’s a gateway to convincing the Cuban people that there’s a better way to do things. I think when they see the great diversity, the affordability, the quality of what we raise agriculturally and then begin to see, potentially, other American made products be able to be available, they’re going to start asking the question how can this possibly be, what can we do in our country to make Cuba more like America. And I think that, long-term, is going to be better for the Cubans, and certainly better for us.”

Meanwhile, Laura Barron-Lopez reported yesterday at The Hill Online that, “Senate Republicans were defiant Wednesday in the face of multiple veto threats from President Obama for the bills at the top of their legislative agenda.

“‘It seems with every new day we have a new veto threat from the president,’ Senate Majority Leader Mitch McConnell (R-Ky.) said.

“The Obama administration issued formal veto threats for bills that would approve the Keystone XL pipeline and raise the threshold for defining full-time work under ObamaCare from 30 to 40 hours per work. Senate Republicans are working to bring both bills to the floor, perhaps as early as next week.”

An update yesterday from Sen. Heidi Heitkamp (D., N.D.) stated that, “[Sen. Heitkamp] today took to the Senate floor, urging her colleagues to support legislation that would approve construction of the Keystone XL pipeline. The project has awaited a decision from the President for more than six years and this bill, of which Heitkamp is a cosponsor, would sidestep the need for Presidential approval and enable Congress to grant a permit and authorize the project to move forward.”

Separately, Andrew Ackerman and Siobhan Hughes reported in today’s Wall Street Journal that, “A push by House Republicans to roll back a series of Wall Street regulations failed to advance Wednesday amid resistance from Democrats, an unexpected setback for the GOP’s efforts to use its increased majority to ease financial rules.

“Republicans were six votes short of the two-thirds support needed to advance the legislation, which included a controversial delay to a provision stemming from the 2010 Dodd-Frank requirement that banks sell stakes in certain complex securities. The bill failed by a vote of 276-146.

“The bill needed ‘yes’ votes from two-thirds of lawmakers under a fast-track process in which the normal rules are suspended. Leaders typically use the so-called suspension process for noncontroversial bills they are confident will pass.”

In other news, AP writer Brian Melley reported yesterday that, “Foie gras can go back on the menu in California after a federal judge on Wednesday overturned the state’s ban on the sale of the fatty duck and goose liver.”

And Denise Grady reported in today’s New York Times that, “An unusual method for producing antibiotics may help solve an urgent global problem: the rise in infections that resist treatment with commonly used drugs, and the lack of new antibiotics to replace ones that no longer work.

The method, which extracts drugs from bacteria that live in dirt, has yielded a powerful new antibiotic, researchers reported in the journal Nature on Wednesday.”

 

Immigration

David McCabe reported yesterday at The Hill Online that, “The new Republican chairman of the Senate Judiciary Committee says the House should act first on comprehensive immigration reform.

“‘I think since we spent so much time on immigration last time and the House didn’t do anything, I want to wait for the House to take some action and review what they’ve done and then act if I think it’s going to be productive for the Senate to act,’ Judiciary Chairman Chuck Grassley (R-Iowa) told reporters Wednesday, the Des Moines Register reports.”

Seung Min Kim reported yesterday at Politico that, “House Republicans are ready to fire the opening salvo in the war over President Barack Obama’s executive actions on immigration.

“House leadership plans to move as early as next week on legislation to override Obama’s actions that could protect millions of undocumented immigrants from deportations. That move is likely to be paired with spending for the Department of Homeland Security, which got only short-term funding from an agreement in December.”

The Politico article noted that, “No final strategy decisions have been made, and it’s not clear what language the GOP leadership will ultimately use.”

 

Biotech

Ryan Sabalow reported yesterday at the Indianapolis Star Online that, “Advocates hoping to see labels on genetically modified foods have a Republican state senator as an unlikely ally in Indiana.

“Sen. Dennis Kruse, R-Auburn, has introduced legislation that would require companies to label foods produced by genetic engineering. Under the bill, a company also couldn’t use ‘natural’ on its label if the product contained genetically modified organisms, known as ‘GMOs.’ Violators could face infractions.”

 

Biofuels

Bloomberg writer Mario Parker reported yesterday that, “The biggest plunge in U.S. gasoline prices since 2008 is slowing as higher ethanol boosts the cost to make the motor fuel.

Ethanol futures surpassed gasoline last month for the first time since March. Faced with higher costs, refiners and blenders used the least ethanol in a year last week.”

Yesterday’s article stated that, “Ethanol prices have fallen one-third as much as gasoline since late June because the cost of corn, used to make the biofuel, has increased from a five-year low in September. Instead of blending, refiners are buying credits to meet federal requirements, driving up the cost for those to the highest since August 2013.”

Mr. Parker pointed out that, “The rise in the cost of the credits, known as Renewable Identification Numbers, has been helped by President Barack Obama’s Nov. 21 decision to delay setting 2014 consumption quotas, leaving refiners uncertain of how much ethanol they should have used last year and how much they’ll need in 2015.

Corn-based ethanol RINs for 2014 have risen 50 percent to 89.03 cents in the past month on the New York Mercantile Exchange. Certificates for 2015 have jumped to 79 cents, data compiled by Bloomberg show.”

And Nicole Friedman reported in today’s Wall Street Journal that, “Prices at the gas pump are heading even lower.

Gasoline futures fell to nearly a six-year low on Wednesday after U.S. government data showed oil and fuel supplies rising to a record high last week, the latest evidence of a petroleum glut that has rattled financial markets and raised questions about the strength of global economic growth.”

 

Agricultural Economy

Ted Booker reported yesterday at the Watertown Daily Times (N.Y.) Online that, “Dairy farmers say a massive milk glut across the Northeast has compelled Dairy Farmers of America to charge them extra to find a home for it. Some farms were even asked by the national cooperative to dump their milk during the holiday season, when milk processors were shut down.

“The newly imposed milk charge of 50 cents per hundredweight, which took effect in October, has affected all farmers who are members of DFA, according to Jon R. Greenwood, owner of a 1,200-cow farm in Canton who is a member of the cooperative. He said the charge has been needed by the farmer-owned cooperative to cover the cost to transport and dispose of the glut of milk that New York processors can’t take in. The cooperative has been forced to spend more to transport milk longer distances to plants in other states and sell it at discount prices, he said.

“Though Mr. Greenwood noted that dairy farmers enjoyed record-high milk prices in 2014, the charge from DFA has come at a time when milk prices are steadily declining from month to month. Processors are bringing in as much milk as they can handle, he said, and demand for U.S. milk exports overseas has fallen. Farmers are expected to have a challenging time making a profit in 2015, he said.”

Meanwhile, Jacob Bunge and Chelsey Dulaney reported yesterday at The Wall Street Journal Online that, “Monsanto Co.’s fiscal first-quarter earnings fell less than analysts had expected, helped by strength in its soybean-seed segment, but the company warned that declines in global corn acreage would pinch profit in its current quarter.

“The world’s biggest seed company by sales warned that farmers are changing their planting intentions and tightening spending on farm supplies amid the weakest grain prices in years, translating to lower-than-expected profits in Monsanto’s core corn-seed business.”

 

Trade

Vicki Needham and Laura Barron-Lopez reported yesterday at The Hill Online that, “The Senate’s top Republican reiterated on Wednesday that he is ready to work with the Obama administration on its ambitious trade agenda.

“Senate Majority Leader Mitch McConnell of Kentucky said that he is involved in ‘active discussions’ to move ahead on Trade Promotion Authority, which would give Congress an up or down vote on any trade agreements that reach Capitol Hill.

“‘I am happy the president has now become a born-again free trader. It’s high-time,’ McConnell told reporters.”

Also, a news release on Monday from Sen. Bernie Sanders (I., Vt.) indicated that, “[Sen. Sanders] today asked the chief trade representative for the United States to turn over the full text of a proposed Trans-Pacific Partnership trade agreement…In a letter to United States Trade Representative Michael Froman, Sanders called it ‘troubling’ and ‘unacceptable’ that the only sources for Congress to assess what would be the largest global trade deal in history are a few leaked documents.”

An update yesterday from the European Commission (“European Commission publishes TTIP legal texts as part of transparency initiative”) stated that, “The European Commission today published a raft of texts setting out EU proposals for legal text in the Transatlantic Trade and Investment Partnership (TTIP) it is negotiating with the US. This is the first time the Commission has made public such proposals in bilateral trade talks and reflects its commitment to greater transparency in the negotiations.”

Meanwhile, Todd Neeley reported yesterday at DTN that, “The effects of the West Coast port labor dispute already may be rippling east to farm country, prompting an Iowa senator to seek relief from the situation.

“Sen. Charles Grassley, R-Iowa, told reporters Wednesday that he’ll ask the Obama administration to help end the dispute after Grassley said he received word that at least some railroad companies operating in Iowa already have stopped accepting at least some shipments to West Coast ports.”

More broadly, Eric Morath reported in today’s Wall Street Journal that, “The U.S. economy appears to be maintaining its strong momentum in part because falling oil prices are offsetting weaker demand overseas.

A strengthening dollar and slowing economies in Europe and Asia were expected to cause global trade to be a drag on fourth-quarter economic output, but the latest figures the Commerce Department released Wednesday show lower oil imports are narrowing the trade gap, which aids growth figures.”

And a news release yesterday from the National Farmers Union (NFU) indicated that, “[NFU] President Roger Johnson argues in a POLITICO Pro guest column today that all future U.S. trade agreements should be negotiated with the goal of reducing the U.S. trade deficit, while ensuring that our trading partners are keeping up with their end of the agreement and abiding by U.S. standards.”

 

Regulations

A news release yesterday from Rep. Bob Goodlatte (R., Va.) stated that, “At the start of this Congress, [House Judiciary Committee Chairman Goodlatte] and Congressman Collin Peterson (D-Minn.) introduced H.R. 185, the Regulatory Accountability Act (RAA). This legislation requires federal bureaucrats to adopt the least costly method to effectively implement the law. Last Congress, the House of Representatives passed the RAA as part of a jobs and economic growth package.”

A statement yesterday from Bob Stallman, the president of the American Farm Bureau Federation, indicated that, “The American Farm Bureau Federation strongly supports the Regulatory Accountability Act of 2015. We applaud the leadership of Reps. Robert Goodlatte and Collin Peterson in reintroducing this measure, which has traditionally received bipartisan support, and we will work actively for swift approval by Congress.”

Timothy Cama reported yesterday at The Hill Online that, “Senate Republicans are planning a full-on assault against a wide range of the Obama administration’s environmental rules, with a focus on overturning them or cutting their funding.

“Sen. Jim Inhofe (R-Okla.), chairman of the Environment and Public Works Committee, told reporters Wednesday that the Congressional Review Act (CRA) will be a primary tool for the GOP.”

An update yesterday at E&E Online stated that, “U.S. EPA has picked a Colorado state agriculture official and longtime Hill staffer to advise the agency on farm policy and serve as a liaison to farmers and ranchers.

Ron Carleton, 60, has been deputy commissioner for the Colorado Department of Agriculture since 2012, but he spent more than three decades on Capitol Hill handling agriculture, energy, environment, water and land management issues.”

And Bloomberg writer Whitney McFerron reported today that, “The European Union has a bug problem.

After regulators in late 2013 banned pesticides called neonicotinoids, linked in some studies to the unintended deaths of bees, farmers across the continent applied older chemicals to which many pests had developed a resistance, allowing them to survive. Now, infestations may lead to a 15 percent drop in this year’s European harvest of rapeseed, the region’s primary source of vegetable oil used to make food ingredients and biodiesel, according to researcher Oil World.”

Keith Good

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