FarmPolicy

September 19, 2019

Tuesday Morning Highlights: Trade- Transportation Issues, Immigration, Ag Economy and Livestock Production

Trade- Transportation Issues

Laura Stevens, Suzanne Kapner and Leslie Josephs reported on the front page of Tuesday’s Wall Street Journal that, “As employers at the ports along the West Coast on Monday refused to unload ships for the sixth day out of the past 10, their nine-month contract dispute with port workers is becoming a significant business problem.

“Ocean carrier Maersk Line has canceled some sailings, while China Ocean Shipping (Group) Co. said it will skip at least one port. Truckers that normally haul an average of five containers a day away from the Port of Oakland, Calif., are lucky to haul one. A West Coast customs broker said that her customers are being assessed as much as $300 a day for containers that sit too long on the docks, though the containers are trapped there.”

The Journal writers noted that, “On Saturday, the White House said it would send the secretary of labor to take part in negotiations and urge both sides to come to an agreement. A federal mediator already had been engaged for the talks.

The Agriculture Transportation Coalition estimates that port delays and congestion have reduced U.S. agricultural exports by $1.75 billion a month, while the North American Meat Institute put losses to U.S. meat and poultry producers at more than $85 million a week, including hides and skins.”

Rita Trichur reported in today’s Wall Street Journal that, “The Canadian government is signaling that it could introduce back-to-work legislation as early as Monday to end a strike by unionized workers at Canadian Pacific Railway Ltd. that is snarling freight service across Canada.

“Canada’s Minister of Labour, Kellie Leitch, issued a strongly worded statement Sunday that blamed the union representing CP’s locomotive engineers and conductors for the breakdown in contract talks over the weekend, calling on its officials to abandon their strike and recommence negotiations with the company.

“Thousands of Canadian Pacific’s unionized workers walked off the job early Sunday in a legal strike after negotiations failed to produce a deal. Ms. Leitch, who personally intervened in the dispute, stressed the government would move swiftly to end the job action—a tack that it has increasingly taken to halt other labor disputes.”

The Journal article added that, “With no agreement reached, Canadian Pacific said it would implement a contingency plan to keep at least some freight service moving on its Canadian network with the help of managers.”

Immigration

Meanwhile, Fred Barbash reported on Tuesday at The Washington Post Online that, “A federal judge in Texas last night temporarily blocked the Obama administration’s executive actions on immigration. The judge, responding to a suit filed by 26 Republican-run states, did not rule on the legality of immigration orders but said there was sufficient merit to the challenge to warrant a suspension while the case goes forward.

“The Obama orders would offer a legal reprieve to the undocumented parents of U.S. citizens and permanent residents who have resided in the country for at least five years. This would remove the constant threat of deportation. Many could also receive work permits.”

The Post article indicated that, “The order was issued by Judge Andrew S. Hanen in Brownsville, Tex. Hanen was appointed to the bench by George W. Bush and has been outspoken against the administration’s immigration polices in other cases recently.

“The White House in a statement early Tuesday reported by the AP defended the executive orders issued in November as within the president’s legal authority, saying that the U.S. Supreme Court and Congress have said federal officials can set priorities in enforcing immigration laws.”

Agricultural Economy

University of Illinois agricultural economist Darrel Good noted yesterday at the farmdoc daily blog (“U.S. Soybean Production Prospects for 2015”) that, “Stocks of U.S. soybeans at the end of the current marketing year are expected to be at an eight year high. In addition, the current South American soybean harvest is estimated at a record 6.066 billion bushels, 378 million bushels larger than the 2014 harvest and 710 million bushels larger than the 2013 harvest. The USDA projects September 1, 2015 stocks of soybeans in South America at 2.205 billion bushels, 523 million bushels more than the inventory of the previous year.”

After additional analysis, Monday’s update stated that, “Compared with the current marketing year, expectations for the 2015-16 soybean marketing year include increased acreage, a further increase in year-ending stocks, and lower prices. The expected price decline is moderated by the likelihood that stocks at the end of the current marketing year will be about 90 million bushels less than projected last fall. That is equivalent to two million acres. Prices are not expected to be as low as the CBO baseline projection of $8.19 or even the USDA baseline projection of $8.50. The futures market currently points to a marketing year average near $9.50.”

Livestock Production

AP writer David Pitt reported yesterday that, “Modern meat production, in which thousands of animals are packed into barns for concentrated feeding operations, has proven to be efficient and profitable, but comes with its own set of problems.

From Washington state to North Carolina, federal lawsuits are challenging the livestock industry to change its ways, basing arguments on studies that increasingly show the impact that phosphorous, nitrates and bacteria from fertilizer and accumulated manure have on lakes and rivers, as well as air pollution that can be harmful to respiratory health.

“Livestock farmers insist they’re trying to ameliorate the problem by installing grass strips, tilling less and using other techniques to keep manure and fertilizer from draining into waterways.”

The AP article noted that, “The hog industry’s shift from small family farms to large-scale farms is dramatic, going from more than 200,000 in the early 1990s to just over 21,600 in 2012.

“A driving force behind some of the large-scale hog farms is Murphy-Brown LLC, which became part of the world’s largest pork producer when China-based WH Group bought corporate parent Smithfield Foods in 2013. WH Group aims to feed China’s appetite for meat with cheaper hogs from the United States, and that foreshadows increased production in the U.S., according to lawsuits filed in eastern North Carolina.

“The water- and air-quality lawsuits are mostly driven by advocates of locally grown food as well as animal-rights and environmental activists. But in some cases, farmers are going after farmers.”

Keith Good

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