FarmPolicy

December 18, 2018

Ag Economy; Policy Issues; Immigration; and, Trade

Agricultural Economy

Emiko Terazono reported yesterday at The Financial Times Online that, “Global food prices fell to the lowest level in four years in 2014, as plentiful supplies of cereals, dairy products, sugar and vegetable oils pushed markets lower.

“The UN Food and Agricultural Organization said its December food price index fell more than 9 per cent from a year before. In 2014, the index averaged 202 points, down 3.7 per cent from 2013, the third consecutive yearly fall.”

The FT article pointed out that, “Dairy products faced the largest declines, thanks to a rise in exports and demand falling among some of the leading importers, such as China and Russia. Prices, which started the year at record highs, fell 34 per cent in December from a year before, helped by declines in milk powders, butter and cheese.”

Ilan Brat and Kelsey Gee reported in today’s Wall Street Journal that, “Historically, America’s dairy processors have focused on their home markets, but many of them have retooled in the past decade, boosting output to help supply infant formula, cheese and other products to China and other countries with rapidly expanding middle classes. Since 2012, U.S. milk-powder production capacity has increased 25%, according to Tim Hunt, a global dairy strategist for the Dutch banking group Rabobank.

Now, with prices down sharply from the highs reached last year, the companies are getting a crash course in the risks of competing globally and working to improve their use of hedging and other risk-management tools. They’re also trying to tap other destinations, from Mexico to Malaysia, for their products. They have little choice: While prices in the U.S. are generally higher, demand has been anemic.”

The Journal writers explained that, “The export boom was driven by several factors, most importantly a 2008 scandal in China in which tainted milk killed six children and sickened about 300,000 others, destroying the faith of Chinese consumers in the nation’s dairy industry.

“By 2014, the U.S. market share of global dairy exports had climbed to nearly 20% from 7% in 2003, according to the U.S. Dairy Export Council. Exports now account for the equivalent of about 16% of U.S. milk production, up from 5.7% in 2003 [related graph].”

Meanwhile, DTN writer Todd Neeley reported yesterday that, “A new strain of the porcine epidemic diarrhea virus, or PED, was recently identified in a Minnesota herd, but the news shouldn’t alarm pork producers, scientists told DTN. That’s because the new strain is nearly identical to the existing strain that caused the deaths of millions of piglets in the past 18 months.

Douglas Marthaler, assistant professor of veterinary population medicine at the University of Minnesota, and one of the scientists that discovered the new strain, said the latest mutation likely will not cause any harm to the pork industry in the short term.”

 

Policy Issues

In policy news related to animal agriculture, Heather Haddon reported yesterday at The Wall Street Journal Online that, “[T]he Garden State has become a flash point in the battle between animal-advocacy groups looking to ban the use of the crates and industry groups defending their right to the practice.

Opponents of the crates say they are cruel and don’t allow sows to turn around and lie down for their breeding cycle, which is about four years. Supporters say the devices help boost production because they keep sows from fighting and from rolling over on their babies.”

The Journal article noted that, “Gov. Chris Christie has twice vetoed legislation sent to him by the Democrat-led state Legislature to outlaw the use of the crates—most recently in November. In his veto message, he denounced the bill as unnecessary, calling it ‘a political movement masquerading as substantive policy.’

“Now, advocates of a ban said they are looking to override Mr. Christie’s veto or try to put it up before voters on the ballot.”

Ms. Haddon pointed out that, “Mr. Christie, a Republican considering a presidential run in 2016, has been lobbied by pork producers to veto the legislation. He has made political alliances with Republicans in Iowa—home to the nation’s first presidential caucuses and the largest pork market.”

Stephanie Strom and Sabrina Tavernise reported in today’s New York Times that, “An animal rights group released on Thursday a disturbing video of laying hens at a farm in Northern California that supplies eggs to Whole Foods and Organic Valley, among other retailers and distributors…[T]his latest dispute over the treatment of animals used in food production provides an example of how prevalent the use of graphic videos as a publicity tactic is becoming. But these videos can also be mystifying, if not misleading, for consumers paying attention to the varying certification standards of humane treatment available to producers and companies selling animal-based food.”

The Times article pointed out that, “A consumer, however, has almost no quick way of recognizing the varied criteria among a number of groups offering certification.

“Only organic certification is designated by a single seal, indicating compliance with a federal law. ‘Other than doing some personal research and going online to see what different certification labels require, it gets tricky for consumers — and for us, too,’ said A. C. Gallo, president and chief operating officer of Whole Foods.”

Reuters writer Karl Plume reported earlier this week that, “Armed with lessons learned from last year’s polar vortex, the U.S. transportation and shipping network faces its first big test of the winter this week as harsh cold and dangerous wind chills buffet the Plains to the East Coast.”

The article noted that, “It is the coldest weather since the region was hit last year by a polar vortex, which is a mass of frigid air that typically only resides over the north pole.

Midwest farmers delayed grain deliveries while hog farmers kept swine in warm barns. Plains feedlot operators sold cattle at higher-than-expected prices in weekly auctions early this week as beef packers scrambled to secure livestock struggling to retain weight in the bone-chilling cold.”

Mr. Plume indicated that, “Major freight railroads appeared more prepared after unprecedented service issues last year that impeded shipments of coal, grain and other goods.”

In other news, AP writer Darlene Superville reported yesterday that, “Michelle Obama’s anti-childhood obesity initiative is getting a new leader.

“The White House announced Thursday that Debra Eschmeyer has joined the staff in a dual role. She’ll be executive director of the ‘Let’s Move’ program and senior policy adviser for nutrition policy.”

AP writer Mary Clare Jalonick reported yesterday that, “For years, the government has told Americans to eat their vegetables. A rewrite of the government’s dietary guidelines could include some new advice, too, on sugar, salt, meat and caffeine.

“Whether individuals listen or not, the dietary guidelines affect nutritional patterns throughout the country – from federally subsidized school lunches to labels on food packages to your doctor’s advice. They also form the basis for the government’s ‘My Plate’ icon, which replaced the food pyramid a few years ago.

“A government advisory committee made up of medical and nutrition experts is set to issue preliminary recommendations this month.”

Meanwhile, McClatchy writer Lindsay Wise reported yesterday that, “Kansas Sen. Pat Roberts officially took the helm of the Senate’s agriculture committee Thursday, promising an ‘aggressive schedule’ of hearings focused on everything from farm programs and school meals to oversight of the Environmental Protection Agency.

“Roberts’ likely ascension to the chairmanship – his seniority put him next in line for the post – had been a selling point to Kansas voters in the Republican lawmaker’s tough campaign for re-election last year.”

The article indicated that, “He’ll make history as the first member of Congress to head both the House of Representatives and Senate agriculture committees.

“‘Production agriculture must rise to face a daunting challenge: feeding a growing and hungry global population,’ Roberts said in a statement Thursday.”

Also, Todd Neeley reported yesterday at DTN that, “The full U.S. Senate could begin floor debate early next week on legislation to approve the construction of the Keystone XL pipeline after the Senate Committee on Energy and Natural Resources on Thursday passed a bill that will be up for amendment starting next week.”

 

Immigration

Ashley Parker reported in today’s New York Times that, “House Republicans moved Thursday to create a bill that would fund most of the Department of Homeland Security while preventing President Obama from carrying out his recent executive action on immigration, in an effort to appease their more conservative members.

“If that approach passes the House, however, it is unlikely to clear the Senate, where Republicans will need at least half a dozen Democratic votes to overcome a filibuster. And even if the Senate approves the measure, Mr. Obama has threatened to veto Republican legislation that would undo his immigration action. Funding for the department is set to run out at the end of February, something both parties hope to avoid.

“Many conservatives see the funding bill as their best leverage to undo Mr. Obama’s immigration plan, which will allow as many as five million undocumented immigrants to live and work in the country.”

Ms. Parker explained that, “At the end of the last Congress, Representative Harold Rogers, Republican of Kentucky and chairman of the House Appropriations Committee, said that his committee did not have the authority to withhold money from Citizenship and Immigration Services, which is tasked with carrying out most of the president’s executive action, because the agency is funded by the fees it collects from immigration applications.

“But now, House Republicans are likely to align behind a plan, similar to one offered by Representative Mick Mulvaney, Republican of South Carolina, that would prevent the president from using any money, including those fees, to move ahead with his immigration measure.”

Today’s article added that, “Another proposal, spearheaded by Representative Robert B. Aderholt, Republican of Alabama and a member of the Appropriations Committee, would nullify Mr. Obama’s executive action on immigration from last year and prevent him from taking any new unilateral steps. Senator Jeff Sessions, Republican of Alabama and an outspoken opponent of an immigration overhaul, has signaled that he supports Mr. Aderholt’s legislation, and Senator Ron Johnson, Republican of Wisconsin and chairman of the Homeland Security and Governmental Affairs Committee, is offering similar legislation in the Senate.

But even with their new majority, Senate Republicans are unlikely to have the muscle to pass the House version.”

A news release yesterday from Rep. Steve King (R., Iowa) noted in part that, “[Rep. King] released the following statement after introducing his Defund Executive Amnesty Act. This bill will defund all executive amnesty created by our current, lawless administration.

“‘My bill defunds all of the President’s illegal and unconstitutional actions regarding immigration,’ said King. ‘Beginning with the Morton Memos and Deferred Action for Childhood Arrivals (DACA), and covering all of his most recent illegal and unconstitutional acts to expand DACA to 5 million more illegal immigrants. To make sure President Obama doesn’t attempt to find other ways to circumvent the Constitution, my bill also has a catch-all provision that bars any similar actions in the future and has language to make it clear illegal immigrants are not authorized to work in the United States.’”

 

Trade

An editorial yesterday at The Financial Times Online stated that, “A year ago President Barack Obama called on the US Congress to give him fast track authority to negotiate big trade deals in the Pacific and Atlantic. Harry Reid, then Senate majority leader, scuttled Mr Obama’s request saying it would be unwise to agree to it in an election year. Mr Reid’s caution was scant help to his fellow Democrats who went on to lose the Senate in last November’s midterm elections.

“This week, Republicans took formal control of both chambers of Congress. Working with them to enact Trade Promotion Authority is Mr Obama’s only real hope of securing his ambitious trade agenda. Doing so would help America’s economic resurgence and cement Mr Obama’s legacy. He should push for TPA’s passage at the earliest opportunity.”

John Brinkley succinctly indicated yesterday at Forbes Online that, “Let’s get something straight about the whole fast-track/free trade debate: without the former, you can’t have the latter.”

Vicki Needham reported yesterday at The Hill Online that, “House Minority Leader Nancy Pelosi (Calif.) on Thursday said Democrats aren’t opposed to trade, but want to make sure any deals negotiated by the administration help U.S. workers.

Pelosi and House Democrats are seen as a significant obstacle to the White House’s hopes of moving legislation through Congress giving Obama trade promotion authority, which would make it easier to negotiate deals by preventing Congress from amending agreements.”

And, Julie Hirschfeld Davis reported in today’s New York Times that, “President Obama is facing opposition from fellow Democrats to one of his top priorities: winning the power to negotiate international trade agreements and speed them through Congress.

“As Mr. Obama’s team works privately to line up support for the so-called trade promotion authority, a coalition of Democratic lawmakers and activists from organized labor, environmental, religious and civil rights groups is stepping up efforts to stop him.

“‘Fast track would be yet another insult to the American worker,’ Representative Rosa DeLauro, Democrat of Connecticut, said on Thursday at a news conference on Capitol Hill, where she predicted the effort’s defeat. ‘It will not happen. We are not going to do it.’”

Reuters writer Krista Hughes reported yesterday that, “Unions, progressive lawmakers, consumer advocates, environmentalists, and social justice and human rights lobbyists kicked off a campaign on Thursday to oppose fast-track, which would allow Congress a yes-or-no vote on trade deals in exchange for setting negotiating goals.

“‘This coalition exists because trade deals affect everybody,’ Representative Rosa DeLauro, a Democrat of Connecticut, told a news conference, as she predicted defeat for fast-track legislation, which is expected to be introduced early this year.

“But the Obama administration and business groups, which see the Republican-controlled Congress as the best chance in years for a trade agenda encompassing deals worth nearly $500 billion a year to the global economy, are confident of victory.”

Meanwhile, Mitsuru Obe reported yesterday at The Wall Street Journal Online that, “An upcoming governor’s race in a rural prefecture in southern Japan will be the first real test of whether Prime Minister Shinzo Abe has gained enough clout from his party’s landslide electoral win to take on a powerful interest group representing the nation’s small farmers.

“The poll that will be held in Saga prefecture on Sunday pits a candidate handpicked by the premier against a candidate backed by the Japanese Agricultural Co-operatives, which is better known as JA. Mr. Abe has made agriculture a key part of his pro-growth policies and JA, which has a decisive say over how farmers do business in Japan, stands in the way of that.

Both sides also take diametrically opposing positions toward the U.S.-led Trans-Pacific Partnership free trade initiative. Mr. Abe has been a keen supporter of the trade pact, arguing that it will help improve Japan’s global competitiveness, while JA has actively protested it, warning that the removal of tariff barriers on agricultural goods could decimate Japan’s farming sector.”

Also yesterday, DTN Ag Policy Editor Chris Clayton reported that, “Agricultural groups are lining up in droves to support President Barack Obama’s efforts to normalize trade relations with Cuba even as longtime critics in Congress pan the proposal.

“The U.S. Agriculture Coalition for Cuba formally rolled out its public launch Thursday in Washington with more than 30 major agricultural groups and businesses joining forces. The coalition’s goal is to end the 54-year-old embargo and open trade with the island.

The press conference in Washington included a mix of both Democrats and Republicans from agricultural backgrounds supporting the coalition’s efforts.”

The Washington Post editorial board indicated today that, “In announcing the normalization of relations with Cuba last month, President Obama violated two pledges he had made: to link such a liberalization to ‘significant steps toward democracy,’ including the freeing of all political prisoners; and to consult with Cuban civil society, including pro-democracy activists, on the change. In what looked at the time like a partial recompense, the White House announced that the Castro regime had agreed to free 53 detainees — or about half the number of political prisoners identified by Cuban human rights activists.

Now it’s becoming clear that Mr. Obama chose not to make even that half-step a condition for the broad relaxation of travel and economic restrictions he is granting to Havana along with the normalization of relations. As of Wednesday, three weeks after the U.S.-Cuba accord, Cuban human rights activists had reported only five released prisoners. On Thursday, Cuban blogger Yoani Sánchez tweeted that the number had risen to 26. Meanwhile, however, the State Department was emphasizing that steps toward normalization — including the highest-level visit by a U.S. official to Cuba in a half-century — will go forward this month whether the promised prisoner release is completed or not.”

Concluding, the Post noted that, “Were any of those latest detainees among those whose freedom was promised? Their families can’t know because the White House refuses to say. If they are on the list and the regime reneges on its commitment, the Obama administration won’t have to acknowledge it was cheated — and the normalization will go forward. Could that be the real reason for the secrecy?

Keith Good

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