January 25, 2020

Policy; Trade (Cuba); Ag Economy; and, Regulations

Policy Issues

Michael Moss reported on the front page of today’s New York Times that, “At a remote research center on the Nebraska plains, scientists are using surgery and breeding techniques to re-engineer the farm animal to fit the needs of the 21st-century meat industry. The potential benefits are huge: animals that produce more offspring, yield more meat and cost less to raise.

“There are, however, some complications.

Pigs are having many more piglets — up to 14, instead of the usual eight — but hundreds of those newborns, too frail or crowded to move, are being crushed each year when their mothers roll over. Cows, which normally bear one calf at a time, have been retooled to have twins and triplets, which often emerge weakened or deformed, dying in such numbers that even meat producers have been repulsed.”

Today’s article stated that, “These experiments are not the work of a meat processor or rogue operation. They are conducted by a taxpayer-financed federal institution called the U.S. Meat Animal Research Center, a complex of laboratories and pastures that sprawls over 55 square miles in Clay Center, Neb. Little known outside the world of big agriculture, the center has one overarching mission: helping producers of beef, pork and lamb turn a higher profit as diets shift toward poultry, fish and produce.

“Since Congress founded it 50 years ago to consolidate the United States Department of Agriculture’s research on farm animals, the center has worked to make lamb chops bigger, pork loins less fatty, steaks easier to chew. It has fought the spread of disease, fostered food safety and helped American ranchers compete in a global marketplace.

“But an investigation by The New York Times shows that these endeavors have come at a steep cost to the center’s animals, which have been subjected to illness, pain and premature death, over many years. The research to increase pig litters began in 1986; the twin calves have been dying at high rates since 1984, and the easy care lambs for 10 years.”

In his article, Mr. Moss noted that, “The center’s director, E. John Pollak, declined to be interviewed, but in written responses, Agriculture Department officials said the center abides by federal rules on animal welfare. Many current and former employees vigorously defended the center’s work, saying it has helped improve the lives of animals, and people, around the world.”

After a very lengthy look at some of the practices of the center, which included a wide variety of specific examples, today’s article added that, “Meat producers have begun bankrolling their own research into ways to ease suffering. Last January, Tyson Foods told its suppliers to start using pain medicine when they castrate or remove the tails of pigs, and to stop putting pigs in pens so small they cannot move. Whole Foods and some other supermarkets are refusing to buy fresh meat from sources that do not meet their standards for animal welfare.

Universities that conduct experiments for the meat industry are also asking whether their research has overstressed animals. ‘We know we need these animals to be productive, but we also need to know if we’ve pushed them too far,’ said Janice Swanson, chairwoman of the behavior and welfare unit of the Department of Animal Science at Michigan State University.”

Meanwhile, Peter Andrey Smith, also writing in today’s New York Times, reported that, “Behind the immaculate gray walls of the Customs and Border Protection’s laboratory here [Savannah, Ga.] stands a cabinet containing three plastic vials filled with a sticky, yellowish substance. Honey, or so an importer has claimed.

“The lab’s task: Determine whether the samples are adulterated with sweeteners or syrups, and, if they really are mostly honey, figure out where it originated. If the honey comes from China, often the case, the entire shipment from which the samples came may be subject to additional taxes.”

The article explained that, “Americans consume an average of 1.4 pounds of honey a year, about three and a half six-ounce bottles. Some 70 percent of it is imported. In 2001, the Commerce Department enacted a stiff tariff on Chinese honey, nearly tripling the import duty, after American producers complained that Chinese competitors were dumping their products on the market.

Then, honey imports from other countries spiked, including from nations not known for large bee populations. According to the American Honey Producers Association, Malaysian beekeepers, for example, have the capacity to make about 45,000 pounds of honey annually, but the country has exported as much as 37 million pounds of honey to the United States in a year.

“As it turned out, Chinese honey was being shipped through ports such as Shanghai, or Busan, South Korea, and slapped with labels from other nations to skirt American duties. The practice is known as transshipment, or ‘honey laundering.’ Some of it was not even real honey, but a mix that included corn and rice sweeteners.”

(Note that additional information about “honey laundering” was included in yesterday’s report).

In other developments, Donnelle Eller reported yesterday at The Des Moines Register Online that, “A ‘holistic’ conservation approach to curbing fertilizer runoff polluting Iowa and U.S. streams will work quicker than litigation, U.S. Agriculture Secretary Tom Vilsack told The Des Moines Register’s editorial board Monday.

“Vilsack fielded questions about Des Moines Water Works’ decision this month to notify three rural counties that it plans to sue them. The utility charges that drainage districts in northwest Iowa are contributing to high levels of nitrates in Raccoon River, one of the metro area’s sources for drinking water.”

The Register article stated that, “Vilsack said a faster and better solution to reducing nutrient loss in U.S. waterways is a ‘holistic approach’ that he predicted will have ‘a profound impact’ on water quality, although he cautioned that it could take five to 10 years to see measurable improvements.

“Still, he said those efforts will move the issue farther than the ‘three, five, seven, nine, 10 years’ it will for Water Works’ lawsuit to be litigated.”

Ms. Eller pointed out that, “Vilsack said he sees Iowa farmers building conservation practices, with more than 20,000 farmers and landowners putting four million acres in federal conservation programs. Since 2009, he said, the agency has invested $1.7 billion in Iowa conservation.

“Vilsack said the federal agency is funding research that provides more insight ‘about the biology and biochemistry of nutrient application, runoff and water quality.’ It will help farmers and officials to ‘better measure what’s happening in the soil’ and craft better responses.

“‘It’s all extraordinarily complex,’ he said.”

With respect to the Farm Bill, Elizabeth Williams reported yesterday at DTN (link requires subscription) that, “When asked whether they had been to the Farm Service Agency (FSA) office to update their program base and yield, only about 20% of the farmers attending a Farm Credit Services of America meeting in central Iowa last week raised their hands.

“‘What are you waiting for?’ shot back Steve Johnson, Farm and Ag Business Management Specialist for Iowa State University.”

The DTN update noted that, “Extension advisers across the Midwest are singing much the same tune this season: With some farm yields and bases dating to the 1980s, nearly everyone should examine whether those shifts would benefit them, Iowa State, University of Illinois and Ohio State University economists agree. But as some of those experts at DTN’s recent Ag Summit concluded, documenting your historic yields could be especially challenging if you have recently acquired land. Don’t procrastinate on your paperwork.”

Yesterday’s article added that, “Those are ‘no brainer’ decisions, said Johnson. The next step, deciding between Production Loss Coverage (PLC) or ARC, may take more thought. Only about five people in the room of about 100 had ‘elected’ ARC or PLC at the FSA office. That deadline is March 31.

“‘I think over 80% of the acres in Iowa will elect to be in the ARC-county program,’ predicted Johnson. In his example, an actual central Iowa (Boone County) farm, ARC-county could pay $20 more per acre in 2014 than PLC. His ARC-county potential payment for 2014 on the 50/50 corn-soybean farm would be $37 per acre for that farm, based on his county benchmark maximum payment of about $88 per acre of corn. (He gets paid on 85% of his corn base.)”

“[In contrast, Texans will likely favor PLC by a wide margin, Texas A&M economists report. They have experienced repeated droughts which have decimated their historic yields and can’t afford — or aren’t offered — the 80% or 85% crop insurance coverage available in the Midwest. So in such cases, it could make sense to elect PLC in conjunction with a buy-up Supplemental Coverage Option (SCO) policy.]”

In transportation news, an update yesterday from Sen. Heidi Heitkamp (D., N.D.) stated that, “During a speech to the North Dakota Grain Dealers Association Annual Convention, [Sen. Heitkamp] today discussed her efforts to reduce agriculture rail shipment delays in North Dakota and highlighted the importance of expanding the state’s rail infrastructure to meet the growing needs of farmers and grain elevators.

“Heitkamp, a member of the Senate Agriculture Committee, spoke about the significant backlog of agriculture shipments North Dakota saw over the previous year and the work she has done to help improve transportation system reliability for elevators. She also discussed the need to make smart investments in rail infrastructure and her support for a proposed rule by the U.S. Commodity Futures Trading Commission (CFTC) that would administratively implement her bill to improve customer protections for farmers and elevators in North Dakota.”

More broadly, David Nakamura reported on the front page of today’s Washington Post that, “The tone and tenor of the Obama White House since Democrats suffered a crushing defeat during the November midterm elections have been anything but conciliatory and have raised doubts about whether the president can — or wants to — break through partisan gridlock before voters choose his successor next year.

“The president will enter the House chamber Tuesday night for his sixth State of the Union address riding a wave of confidence driven by an improving economy and brightening public approval ratings. And he seems as defiant as ever.”

The Post article noted that, “Although Obama has vetoed just two bills in his six years, the White House has threatened to veto five measures from Congress this month alone — including legislation that would authorize the Keystone XL oil sands pipeline, tie funding of the Department of Homeland Security to a rollback of Obama’s executive actions on immigration, and impose new economic sanctions on Iran.

“Obama vowed in a private meeting with Democrats last week that he will play ‘offense’ during the final two years of his presidency, building on the aggressive executive actions he laid out over the past two months. The legislative proposals he has previewed — including a plan for free community college and a revamping of the tax code — have been based firmly on his terms, drawing objections from Republicans.”


Trade Issues, Cuba

Nonetheless, William Mauldin reported in today’s Wall Street Journal that, “Improved economic and political winds look set to give President Barack Obama a new opening to complete at least one sweeping trade deal, despite reservations within his own party.

“The president and Republican congressional leaders are highlighting trade as a top area for cooperation this year, and Mr. Obama is likely to ask for expanded powers on the trade front when he addresses Congress Tuesday night.

“But before pushing to give Mr. Obama those powers, called trade promotion authority, Republicans first want the White House to be more aggressive in courting support for the legislation, particularly among skeptical Democrats.”

Randal C. Archibold reported in today’s New York Times that, “A delegation of members of Congress who have been some of the strongest advocates of lifting the American trade embargo with Cuba concluded a three-day visit here on Monday with optimism over trade deals but without an anticipated meeting with President Raúl Castro — apparently because of its decision to meet with several Cuban dissidents.

“The delegation, which included Senator Patrick J. Leahy, a longtime visitor who has long been involved in Cuban-American relations, emphasized the bright spots of the visit, particularly potential openings for American agricultural products in Cuba.”

Karen DeYoung reported in today’s Washington Post that, “The first scheduled meeting between U.S. and Cuban officials to reestablish diplomatic relations may not lead immediately to the opening of embassies here [Havana] and in the United States, a senior State Department official said Monday.

“State Department officials said those talks, to be here Thursday, would focus largely on the terms for reopening embassies in Havana and Washington, including how many diplomats can staff each diplomatic mission and the level of freedom they will have to travel outside the respective capitals.”

Bloomberg writers Eric Martin and Indira A.R. Lakshmanan reported yesterday that, “When Roberta Jacobson’s plane touches down in Havana this week, she will be the highest-ranking U.S. diplomat to visit the island since President Jimmy Carter’s administration. Her job? Help restore diplomatic relations severed at the height of the Cold War.

“Jacobson, the U.S. Assistant Secretary of State for Western Hemisphere Affairs, flies to Cuba for two days of talks with Cuban counterparts on Jan. 21, little more than a month after Presidents Barack Obama and Raul Castro announced plans to improve ties following a prisoner swap.

Jacobson’s arrival will kickstart negotiations that could eventually expand to include everything from demands for compensation by Cuban-American exiles and U.S. companies to improved human rights.”


Agricultural Economy

Leslie Josephs and Alexandra Wexler reported yesterday at The Wall Street Journal Online that, “Cotton prices are softening along with the global economic outlook.

“Major institutions and recent economic data have been pointing to weaker growth this year, and that could hurt demand for cotton textiles and clothing.

“The March cotton contract on the ICE Futures U.S. exchange fell 2.5% last week, settling at 59.23 cents a pound.”

And Vincent Boland reported earlier this week at The Financial Times Online that, “[Robin Talbot], one of Ireland’s leading cattle farmers, produces prime beef steak for the domestic and European markets from his 600-acre farm outside the village of Ballacolla, the heartland of grazing country amid the flat fields of County Laois in Ireland’s midlands.

But the lucrative market in the US, the largest consumers of beef in the world, has been denied him — until now.”

The FT article noted that, “Following an deal agreed recently between Washington and Dublin, he and his fellow Irish beef farmers are gearing up to sell their product to the US for the first time since a 15-year ban was imposed on European beef in the wake of the ‘mad cow disease’ outbreak in the 1990s.

“As Europe’s biggest beef exporter — overseas sales of Irish beef in 2014 were worth €2.3bn, accounting for about a fifth of all Irish food and drink exports — the reopening of the US market offers a potential lifeline to farmers such as Mr Talbot at a tough time for the industry.”



Todd Neeley reported yesterday at DTN (link requires subscription) that, “The U.S. Environmental Protection Agency will try to make sense of nearly 800,000 public comments in finalizing the waters of the United States rule early in 2015. Ag groups and others opposed to the rule question whether EPA can make a serious effort to respond to concerns within six months after the public comment period closes in November. In addition, EPA will face added pressure to enforce the rule at a time when the agency is shedding staff.

“EPA said in a statement to DTN that the agency has the necessary staff to finish the process on time. EPA also said the process will be made easier because many comments were identical letters sent through mass mailings. ‘The agencies have brought in field staff and contractor support to help manage this significant workload, and as a result will be able to respond to all comments adequately,’ EPA said.

“Tracy Meehan, former EPA assistant administrator for water, said the rule is likely to face a legal challenge. ‘They have to get it done under the Administrative Procedure Act and to protect their position in the inevitable litigation to follow,’ he said. ‘Moreover, WOTUS is a lot smaller than the carbon rules, which is much larger in terms of the number of comments, etc.’”

Keith Good

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