January 27, 2020 Recap: Policy Issues; Trade; Agricultural Economy; and, Biotech

Policy Issues

On Friday, the House Appropriations Subcommittee on Agriculture held a budget hearing and heard testimony from USDA Inspector General Phyllis Fong.

During the hearing, Subcommittee Chairman Robert Aderholt (R., Ala.), Subcommittee ranking member Sam Farr (D., Calif.) and Rep. Chellie Pingree (D., Maine) all referenced a recent New York Times article that focused on animal production research procedures and operations at a federal facility in Nebraska. The lawmakers expressed support for the IG to investigate some of the issues raised in the Times article in more detail.

Rep. Sanford Bishop (D., Ga.) raised the issue of fraud and error payments in the SNAP, WIC and farm programs, and Rep. David Young (R., Iowa) brought up antibiotic issues and livestock production during his conversation with IG Fong.

Complete highlights from Friday’s hearing have been posted here.


Canada Confirms Case of Mad Cow Disease

Reuters writers David Ljunggren and Scott Haggett reported on Friday that, “Canada confirmed its first case of mad cow disease since 2011 on Friday, but said the discovery should not hit a beef export sector worth C$2 billion ($1.6 billion) a year.

“The news, however, helped boost U.S. cattle prices.

“The Canadian Food Inspection Agency (CFIA) said no part of the animal, a beef cow from Alberta, had reached the human food or animal feed systems.”

The Reuters article stated that, “Asked whether he was concerned about exports being harmed, Agriculture Minister Gerry Ritz told reporters in Calgary: ‘Not at this time, no.’

“He added, however, that markets in South Korea and Japan were generally very concerned about the potential risk from BSE.”

Paul Vieira reported on Friday at The Wall Street Journal Online that, “Cattle futures markets initially shrugged off any concerns that the mad-cow disease finding in Canada would limit cattle supply.

“Canadian officials said they had been in contact with the country’s trading partners about the discovery and initial findings. However, at a barley growers event in Alberta, Canadian Agriculture Minister Gerry Ritz said he wasn’t worried about the potential impact on trade.”

The Journal article added that, “While live-cattle futures in Chicago traded higher following the announcement early Friday, analysts said that the impact to the market would likely be muted because it remains an isolated case and because the meat industry and regulators have gotten better at containing such outbreaks.”


West Coast Ports- Sunday Update

Following Saturday’s executive branch action by President Obama on the ongoing West Coast port dispute, Tiffany Hsu, Andrew Khouri and Time Logan reported on the front page of Sunday’s Los Angeles Times that, “With idled cargo ships piling up along the coastline, President Obama ordered his labor secretary to California to try to head off a costly shutdown of 29 West Coast ports.

Obama dispatched Tom Perez on Saturday to jump-start stalled labor talks between shipping companies and the dockworkers’ union. The move ramps up pressure to resolve a dispute that stranded tens of thousands of containers on cargo ships over the holiday weekend.”

The article noted that, “On Saturday morning, 32 massive ships were anchored outside the ports, unable to unload thousands of cargo containers filled with auto parts, electronics and clothes destined for store shelves across the country.”

With respect to agriculture, today’s LA Times article added that, “Elsewhere in the state, the agriculture industry is in pain.

“Ronald C. Leimgruber, namesake and owner of a farm in Holtville in southeastern California, said his small company normally exports two or three 20-ton loads of alfalfa hay and grasses a week . Now, he’s forced to stockpile it or sell it cheaper domestically.

“‘You do whatever you can to survive,’ he said.

“Customers have canceled orders, and Leimgruber fears they may never come back.”

Erik Eckholm reported in today’s New York Times that, “At the president’s request, Thomas E. Perez, the secretary of labor, will travel to California to ‘meet with the parties to urge them to resolve their dispute quickly at the bargaining table,’ according to a statement issued by Eric Schultz, a White House spokesman. Mr. Perez will try to mediate a settlement between an association of the major shipowners of the West Coast and the union of longshoremen who unload those ships, which collectively bring in half the nation’s imported cargo.

“The White House statement said the president was acting ‘out of concern for the economic consequences of further delay’ and added, ‘Secretary Perez is already in contact with the parties and will keep the president fully updated.’

“The unusual decision to intervene in contract negotiations came as American retailers, the U.S. Chamber of Commerce and agricultural exporters said they had already lost hundreds of millions of dollars because of mounting port congestion, with spare parts and consumer products from Asia not arriving on time and exports like oranges and apples left to rot.”

The New York Times article noted that, “The total number of ships waiting to dock at these two conjoined ports on Saturday, including bulk and general cargo carriers, was 32.”