FarmPolicy

November 18, 2019

Monday Morning Highlights: West Coast Ports, Budget, and, the Ag Economy

West Coast Ports

Laura Stevens reported in today’s Wall Street Journal that, “West Coast ports are finally working at full speed again—for the most part— but it will likely take months for the backlog to clear, port officials and logistics experts said.”

The Journal article added that, “Port and logistics experts estimated it could take anywhere from about two to six months to get the U.S. supply chain—which makes sure T-shirts end up on shelves and auto parts are available for manufacturing—back on track.

“Port problems have been causing widespread pain for shippers, retailers, meat and poultry companies and manufacturers across the country. Farmers couldn’t get produce to Asia, leaving some fruit rotting in containers, and some auto manufacturers were forced to fly in parts to keep plants running.”

Today’s article noted that, “Farmers producing crops including oranges, potatoes, Christmas trees and soybeans have all been hard hit, as cargo arrived spoiled in Asia or couldn’t get there at all, said Peter Friedmann, executive director of the Agriculture Transportation Coalition. U.S. farmers are already competing with similar crops being grown around the world as the dollar strengthens, and the slowdown has been a tough blow, he said.

Farmers may have a hard time winning back customers lost over the past couple months, he said, adding, ‘People who are sourcing these products can’t afford a lack of dependability.'”

Sec. of Labor Tom Perez discussed his role in the port dispute resolution on MSNBC and CNBC on Monday morning.

Budget

Michael A. Memoli reported in today’s Los Angeles Times that, “Republicans were hammered over the 1995-96 government shutdowns, losing House seats in the next election and boosting President Clinton’s sagging approval ratings.

“They shot themselves in the foot again with the 16-day government shutdown in 2013 over Obamacare, although their record-low public approval ratings rallied in time to dominate the 2014 midterm election.

Now it appears the party is heading toward another budget-related standoff, this time over immigration policy and the Homeland Security Department, which is scheduled to run out of funding Saturday.”

The article noted that, “But buoyed by a Texas federal judge’s order last week to temporarily halt the president’s immigration plan, other Republicans are betting heavily that this time things will end differently for the party.

“They predict Democrats will shoulder the blame if the Homeland Security Department runs out of money and see no reason to drop their demand that renewed funding include amendments blocking President Obama from implementing his program to defer deportation for millions of immigrants in the country illegally.”

Kristina Peterson reported on the front page of today’s Wall Street Journal that, “In one of the first signs of movement, Senate Republicans, still mulling their options, are most likely to end up supporting a short-term extension of the agency’s current funding, potentially for one or two months, according to GOP aides. But that would meet some conservative opposition in the chamber, and a short term deal also could face hurdles passing the House, where many Republicans are demanding legislative steps to block the president’s immigration policy.”

Today’s article added that, “Many Senate Republicans would like to avoid a lapse in national-security funding at a time of high-profile global threats from Islamic State militants, cybersecurity concerns and other unrest. Homeland Security Secretary Jeh Johnson, speaking on Sunday morning news shows, raised concerns about the funding impasse coming amid fresh terrorism threats, such as a video from Somali terrorist group al-Shabaab purportedly calling for an attack on the Mall of America in Minnesota.

“If funding were to lapse, though, Mr. Johnson said most of the agency’s 240,000 employees, including airport-screening and border-control agents, would still have to work because they are considered essential. He said 30,000 employees would be furloughed, and he said none of the employees would be paid until an agreement was reached.”

Agricultural Economy

Christian Berthelsen reported in today’s Wall Street Journal that, “The rebound in the cotton market is showing signs of wear.

Cotton prices have gained 13% since touching a 5½-year low of 57.30 cents a pound in late January as the U.S. had been selling more of the fiber overseas. But prices faltered Friday after weekly government data showed a large number of orders for U.S.-grown cotton were canceled.

“The news came one day after federal forecasters said growers would likely plant more acres with cotton this spring than an industry group had previously projected.”

And Mitsuru Obe reported today at The Wall Street Journal Online that, “Japanese agriculture minister Koya Nishikawa abruptly resigned over a fundraising scandal Monday, depriving Prime Minister Shinzo Abe of his point person on widely anticipated agriculture reforms only months after he was chosen for the job.

“Mr. Nishikawa’s resignation comes as Mr. Abe’s Liberal Democratic Party is expected to submit legislation to parliament next month that would drastically scale back the political power of small farming co-operatives, helping pave the way to the sector’s overhaul.”

Robin Harding reported today at The Financial Times Online that, “Shinzo Abe, the Japanese prime minister, has lost an important ally on the Trans-Pacific Partnership trade deal after his agriculture minster resigned in a scandal over political donations.”

The FT article added that, “The resignation matters because Mr Nishikawa is a longstanding member of the LDP’s ‘agricultural tribe’. He acted as a firewall for Mr Abe against internal party critics on trade deals and farm reform.

“Negotiators are near a deal on the huge TPP agreement, and agricultural reform is one of Mr Abe’s top priorities this year, so the loss of Mr Nishikawa is a blow to the prime minister’s agenda.”

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Monday: How labor secretary helped broker dock deal- MSNBC

From the MSNBC Morning Joe program (Feb. 23)- U.S. Dept. of Labor Secretary Tom Perez joins Morning Joe to discuss Walmart’s plan to increase its wages for workers and a resolution to the West Coast dockworkers labor dispute.

For more details on this issue, see these FarmPolicy.com updates from Saturday and Sunday.

Sec. Perez was also on the CNBC program Squawk Box on Monday:

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Sunday Recap: West Coast Ports; Trade; Dietary Guidelines; Ag Economy; and, Policy Issues

West Coast Ports

A tentative agreement on the West Coast port dispute was reached on Friday, while articles on Saturday cautioned, “that the new contract won’t immediately resolve the delays.” Some lawmakers also weighed in on the developments expressing relief and a need for quick implementation of the agreement. A recap of news from Friday and Saturday can be found here at FarmPolicy.com.

The cautionary tone was amplified in an article by Tiffany Hsu, Andrew Khouri and Peter Jamison on the front page of Sunday’s Los Angeles Times titled, “Despite West Coast ports’ labor deal, normality not yet on horizon.” The writers indicated that, “West Coast ports are emerging from the most contentious labor dispute in more than a decade, but lingering resentment and structural problems may complicate a return to normality.”

For more, see this FarmPolicy.com update.

Trade Issues

President Obama used his weekly address on Saturday to call on Congress to pass Trade Promotion Authority (TPA).

While The Wall Street Journal reported on Saturday that “House and Senate negotiators are converging on a deal” regarding TPA- more details at FarmPolicy.com.

A news release on Friday from U.S. Wheat Associates indicated that, “Several influential countries are not complying with the domestic agricultural support commitments they made as members of the World Trade Organization (WTO). That is the conclusion of a study sponsored by U.S. commodity organizations and introduced to agricultural negotiators Wednesday, Feb. 18, 2015, in Geneva, Switzerland. Those organizations made the point that recognizing the current realities in agricultural support and trade could help improve the chances of finally reaching a Doha Round agreement.

“The study was conducted by DTB Associates, Washington, DC, and updates a similar study conducted in 2011. U.S. Wheat Associates (USW) was one of the sponsors of the latest study indicating that the governments of India, China, Turkey, Brazil and Thailand have dramatically increased trade distorting subsidies for wheat, corn or rice production over the past ten years to levels that exceed their WTO agreements — in most cases by large margins. That information has not been readily available to WTO negotiators.”

The news release noted that, “For more information, visit www.dtbassociates.com/docs/DomesticSupportStudy11-2014.pdf and www.dtbassociates.com/docs/domesticsupportstudy.pdf.”

And Democrat Leader Nancy Pelosi (Calif.), along with several House Democrats, including Collin Peterson (Minn.), just concluded a trip to Cuba, for more on this trip and Cuba issues, see this FarmPolicy update.

Dietary Guidelines

Following Thursday’s release of dietary guidelines from a government advisory committee, reactions from lawmakers and other interested parties have been publicized, including different views from former United States Deputy Secretary of Agriculture Kathleen Merrigan and American Farm Bureau Federation President Bob Stallman on the “sustainability” aspect of the guidelines.

The South Dakota congressional delegation also “expressed their concern about the misleading and inconsistent guidelines on meat consumption in the report.”

More details here, at FarmPolicy.com.

Agricultural Economy

News articles and reports highlighting aspects of the U.S. agricultural economy can be found in this update on Saturday at FarmPolicy.com.

And news release on Friday from the Food and Agriculture Organization of the United Nations stated that, “The model of agricultural production that predominates today is not suitable for the new food security challenges of the 21st century, FAO Director-General José Graziano da Silva said today.”

The release added that, “Agriculture has a potentially large role to play not only in guaranteeing food security but also in building resilience to the affects of climate change and in reducing humankind’s emissions of global warming gases, according to the FAO Director-General.

“‘The impacts of climate change are no longer an anticipated threat. They are now a crystal-clear reality right before our eyes,’ he warned, adding: ‘Climate change will not only affect food production but also the availability of food and the stability of supplies. And in a global, interdependent economy, climate change makes the global market for agricultural products less predictable and more volatile.’”

Policy Issues

The House Ag Committee will hold hearings this week on Wednesday and Thursday regarding Farm Bill nutrition issues; while, on Tuesday, the Senate Ag Committee will hold a hearing on Farm Bill implementation and hear testimony from Sec. of Ag. Tom Vilsack.

Sec. Vilsack is also scheduled to appear on Wednesday at the House Appropriations Subcommittee on Agriculture.

Recall that earlier this month, the House Appropriations Subcommittee on Ag heard from USDA Inspector General Phyllis Fong.

Meanwhile, Tom Steever reported on Friday at Brownfield that, “The Chairman of the Senate Agriculture Committee says cutting crop insurance subsidies is a non-starter, but the Kansas Republican also expresses the need to convince detractors that the risk management tool has value.

“Senator Pat Roberts says there are people who believe that crop insurance subsidies should be reformed, which he says is the nice way to describe a cut.

“‘Usually they want the money for something else,’ Roberts told Brownfield Ag News at the Western Farm Show in Kansas City Friday, ‘either that or they just do not feel that farmers ought to have subsidized crop insurance.’”

Mr. Steever added that, “Roberts says Obama budget writers see crop insurance subsidies as low hanging fruit where money can be saved.

“‘We’re determined to educate these folks to the value of crop insurance; that’s going to be an ongoing effort, but that’s the way it’s been for years,’ said Roberts.  ‘We’re going to put that down as a top priority.’”

And Ron Nixon reported in Saturday’s New York Times that, “To understand America’s fragmented food safety inspection system, consider a slice of frozen pizza. The pepperoni is examined by the Agriculture Department, the cheese and tomato sauce by the Food and Drug Administration, each agency using its own methods for inspecting and testing.

“If someone gets ill sampling that slice’s tasty goodness, the Centers for Disease Control and Prevention might sound the alarm, but it would fall to the F.D.A. to pressure the pizza maker for a recall.

The Obama administration wants a single new agency to sweep all that away: the Food Safety Administration, a colossus that would be housed within the Department of Health and Human Services to ‘provide focused, centralized leadership, a primary voice on food safety standards and compliance with those standards,’ the administration said in its new budget request.”

Keith Good

Cuba Trade Issues

Categories: Trade

Lauren French reported on Friday at Politico that, “Congress should work quickly to end the decades-old trade embargo against Cuba, House Minority Leader Nancy Pelosi said during a visit to the island nation.

“‘I do believe that there is strong bipartisan support in the Congress of the United States to lift the embargo,’ the California Democrat said during a news conference Thursday in Havana, according to a transcript made available Friday morning. ‘I also think that it would be important for us to move as quickly as possible … to move in a positive way to remove Cuba from the list of concerned states.'”

Rep. Pelosi also issued a statement on Friday which noted in part that, “Following a press conference, the delegation proceeded to our final meeting in Havana with the First Vice President of Cuba, Miguel Díaz-Canel. We engaged in a constructive dialogue about the future of our two countries and discussed how we could work together on agriculture, biotechnology and small business to our mutual benefit. All of the participants in the meeting agreed that a critical step towards normalization is the establishment of formal diplomatic relations.”

And The Washington Post editorial board indicated today that, “For all the high expectations, and deep anxieties, that surround the U.S.-Cuba thaw that President Obama announced two months ago, the reality is that the process is still in its very early days. The two countries have not agreed even on one of the simpler bilateral issues: opening full-fledged embassies in each other’s capitals. Cuban President Raúl Castro sounded an ominous note by hinting that complete normalization might depend on such far-fetched demands as the hand-over of the U.S. naval base at Guantanamo Bay or reparations for the U.S. embargo.”

The Post stated that, “U.S. political leaders would be well advised not to succumb to, or foster, exuberance about the transformation in economic relations that might be at hand — much less about the pending transformation of the Cuban regime. Official contacts must not sugarcoat or lend undeserved legitimacy to a dynastic dictatorship that remains one of the most repressive on the planet.

“Consider the just-concluded visits to Havana by a House delegation led by Democratic leader Nancy Pelosi (Calif.) and a three-senator group made of Democrats Mark R. Warner (Va.), Amy Klobuchar (Minn.) and Claire McCaskill (Mo.) — the tone and tenor of which were too starry-eyed by half. Ms. Klobuchar gushed that she and her colleagues ‘walked freely around the streets and talked with anyone we wanted,’ apparently oblivious to the political surveillance within which those ‘free’ conversations occurred. Ms. McCaskill posted charming photos of vintage cars on her Instagram account; nothing depressing, like images of Cuba’s poverty, though.”

Sunday’s opinion item concluded by stating: “No one, not even a politically powerful American visitor, is immune to being exploited by the Cuban propaganda machine; no one is truly free on that island. U.S. lawmakers need to understand that, fully, and behave accordingly.”

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West Coast Ports- “Normality not yet on Horizon,” LA Times

A tentative agreement on the West Coast port dispute was reached on Friday, while articles on Saturday cautioned, “that the new contract won’t immediately resolve the delays.” Some lawmakers also weighed in on the developments expressing relief and a need for quick implementation of the agreement. A recap of news from Friday and Saturday can be found here at FarmPolicy.com.

The cautionary tone was amplified in an article by Tiffany Hsu, Andrew Khouri and Peter Jamison on the front page of Sunday’s Los Angeles Times titled, “Despite West Coast ports’ labor deal, normality not yet on horizon.” The writers indicated that, “West Coast ports are emerging from the most contentious labor dispute in more than a decade, but lingering resentment and structural problems may complicate a return to normality.

Activity picked up Saturday at Western harbors after the dockworkers union and employers reached a tentative agreement late Friday on a new five-year contract that will cover 20,000 workers at 29 ports.”

The article added that, “‘I think the parties have an understanding of the impact of this disruption,’ U.S. Labor Secretary Thomas E. Perez said in an interview. ‘They understand that they not only have to restore service, they have to restore confidence.'”

“Trade experts said that it could be months before ports were operating at their normal pace,” the article said; adding that, “Even before the union was accused of slowing operations in November, the ports had struggled with delays for months, experts said.

“A truck trailer shortage and the increased reliance on massive container vessels contributed to the worst freight backlog in a decade at the San Pedro ports. At the Los Angeles port, a single ship now often carries 14,000 containers. Two years ago, a large ship would have held 8,000 to 10,000 of the steel boxes.”

Laura Stevens reported on Sunday at The Wall Street Journal Online that, “West Coast ports are finally working at full speed again, but it will likely take months for the backlog to clear, port officials and logistics experts said.”

The Journal article noted that, “‘Just based on the mathematics, it will be about three months before we return to a sense of normalcy,’ said Gene Seroka, executive director of the Port of Los Angeles.”

Also, Marianne Levine reported on Saturday at Politico that, “Labor Secretary Tom Perez said Saturday that in bringing resolution to a tense labor-management dispute at the West Coast ports he never said President Barack Obama might impose a solution unilaterally.

“‘What I did tell them is they have no time, they have to move forward [and] they’re playing with fire,’ Perez said in an interview with POLITICO.”

The article added that, “Perez said the White House came into the negotiation neutrally and did not have a specific proposal in mind. However, he said the White House was not neutral over the time line to reach a solution.”

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Saturday Update: Highlights on the U.S. Ag Economy

Donnelle Eller reported on the front page of the Business Section in Saturday’s Des Moines Register that, “Deere & Co., the maker of farm and construction equipment, said net income plummeted 43 percent in the first quarter with lower corn and soybean prices reducing demand for big green combines and tractors.

“The Moline, Ill.-based company warned its total farm equipment sales this year will tumble 23 percent, because of continued pressure from low commodity prices and falling farm incomes. The decline is expected to be sharper in the U.S. and Canada this year, falling 25 to 30 percent.”

The Register article added that, “In a conference call, Deere said large farm equipment sales would be hit hardest, pointing to an industry report that indicates U.S. and Canada demand for large tractors and combines will be half as much this year as 2013 levels.”

Also in Saturday’s Register, Christopher Doering reported that, “The amount of corn used to produce ethanol will drop slightly during the 2015-16 marketing year, as consumers drive less, the federal government said Friday.

“The Agriculture Department forecast corn used for ethanol production at 5.2 billion bushels during the marketing year that begins Sept. 1 — a decline of 25 million bushels from the current year. If realized, about 38 percent of the 13.6 billion-bushel corn crop expected to be harvested this fall would go to toward producing the renewable fuel.”

On Friday, USDA’s National Agricultural Statistics Service (NASS) released its monthly Cattle on Feed report, which stated in part that, “Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.7 million head on February 1, 2015. The inventory was slightly above February 1, 2014.”

And with respect to U.S. milk production, NASS indicated in its monthly Milk Production report on Friday that, “Milk production in the 23 major States during January totaled 16.5 billion pounds, up 2.1 percent from January 2014.”

Meanwhile, AP writer Kourtney Liepelt reported on Saturday that, “The nation’s dairy goat herd climbed 2 percent in the past year to 365,000 animals, but producers said their annual sales are rising even faster — up by 15 percent or more. In Iowa, the number of goat farms has climbed from less than 20 a decade ago to about 200, behind only Wisconsin and California.

“Sheep and goat milk accrued $92.2 million in sales in 2012, according to the most recent figures available from the U.S. Agriculture Department’s census, with combined sales about a third higher than in the previous 2007 census…[M]uch of the new demand appears to be due to increased interest in artisan cheeses and populations that are more accustomed to goat milk, such as Hispanic and Jewish communities, Cornelius said. In much of the world, goat milk is more common than cow milk.”

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CBS News: Record West Coast drought shows no signs of easing

From CBS News on Friday, “The flip side to the frigid weather in much of the U.S. is record warmth in the West. Parts of Alaska hit the mid-50s this week.

“And it’s dry — 93 percent of California is in a severe drought that’s going on four years.”

The CBS update noted that, “And in Oregon, the snowpack on Mount Hood is so low, farmer Jon Laraway fears water rationing come spring.

“‘Growers may have to go on a schedule basis, where they can’t irrigate as much,’ Laraway says. ‘We’ve never had to do that on this side of the valley.'”

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Saturday Update: President Calls on Congress to Pass Trade Promotion Authority

From the White House, “In this week’s address, the President underscored the importance of continuing to grow our economy and support good-paying jobs for our workers by opening up new markets for American goods and services.

“While America’s businesses, ranchers, and farmers are already exporting goods at record levels, there’s more room for growth with 95 percent of the world’s customers living outside our borders. In order to pursue new trade agreements, the President called on Congress to pass trade promotion authority so that the U.S. — not China — can play a leading role in negotiating 21st century trade deals that protect our workers, support good wages, and help grow the middle class.”

A complete transcript of the President’s remarks can be found here.

Reuters news reported on Saturday that, “Congressional Republicans have been supportive of trade deals. Senator Orrin Hatch, the Republican chairman of the Senate Finance Committee, has said he hopes to introduce a ‘fast track’ bill in February.

“Senate Majority Leader Mitch McConnell said in a statement that Obama needed to ‘continue what must be a sustained effort to move his own party forward’ on working on trade legislation.

Labor and environmental groups allied with Democrats have been pushing hard against the idea. Even among the Obama-friendly crowd at the Democratic National Committee on Thursday, several people wore ‘Stop Fast Track’ stickers.”

William Mauldin reported in Saturday’s Wall Street Journal that, “House and Senate negotiators are converging on a deal to ease the passage of trade agreements, a key step in putting the divisive issue before the full Congress as the White House pursues a sweeping trade pact in Asia.

“The legislation, known as trade promotion authority or fast track, comes as the Obama administration is seeking to conclude negotiations on a 12-nation Pacific trade deal—the economic centerpiece of the president’s rebalancing of U.S. policy toward Asia.”

The Journal article stated that, “Aides to congressional committee leaders Sen. Orrin Hatch (R., Utah), Sen. Ron Wyden (D., Ore.) and Rep. Paul Ryan (R., Wis.) have settled most disagreements over the legislation, say people familiar with the talks.

“One remaining issue—a technical but crucial element—is how Congress would be able to remove an unacceptable trade deal from the fast track process, these people say. Complications on that issue or others could still delay or unravel any agreement, they say.

“A deal to introduce the legislation could be reached in days, observers say, after Mr. Ryan returns from a trade-focused trip to Asia.”

Mr. Mauldin noted that, “Mr. Hatch on Friday called a hearing next week of his Senate Finance Committee to discuss trade policy and potentially the new bill. But Mr. Wyden, the top Democrat on the panel, said a hearing is ‘premature’ because a final deal hasn’t been struck yet. Mr. Ryan said Thursday in Japan that a deal is ‘very close.’

“Many Democrats, labor unions and environmental groups oppose the legislation, saying it is a way for the administration to push a deal with unacceptable provisions through Congress.”

Meanwhile, Vicki Needham reported on Friday at The Hill Online that, “Negotiators of a massive trade deal spanning from Latin America to Asia are scheduled to meet next month in Hawaii.

“The U.S. Trade Representative’s office said Friday that the United States will host a chief negotiators meeting from March 9-15 to continue hammering out the details of the Trans-Pacific Partnership (TPP).”

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Saturday Update: West Coast Ports- Tentative Five-Year Agreement Reached

Laura Stevens reported on Friday night at The Wall Street Journal Online that, “West Coast port employers and their union came to a tentative five-year agreement on a new contract late Friday night, a union spokesman said, bringing an end to a nine-month negotiation process which resulted in significant slowdowns at the ports.”

Andrew Khouri, Chris Kirkham and Peter Jamison reported in Saturday’s Los Angeles Times that, “Shipping companies and dockworkers reached a tentative deal late Friday on a new labor contract, avoiding a shutdown of 29 ports that would have choked off trade through the West Coast.

“The agreement, which still needs approval from union members and individual employers, should start easing severe congestion that’s been building for months at the nation’s busiest ports, in Los Angeles and Long Beach, along with other major gateways.

“Details of the proposed five-year contract for about 20,000 West Coast dockworkers were not released. The dockworkers have been without a contract since July. The two sides had been negotiating since May.”

The article added that, “Trade experts cautioned that the new contract won’t immediately resolve the delays, particularly at L.A. and Long Beach, which together handle roughly 40% of the nation’s incoming container cargo.

It will take weeks, if not months, just to clear the current backlog, port officials said.

The congestion stems in part from issues unrelated to the labor dispute. Before slowdown accusations surfaced in early November, the L.A and Long Beach ports already were struggling with the worst freight backlog in a decade, in large part because of a truck trailer shortage and the increased use of mammoth container vessels that hold more cargo.”

A separate U.S. Department of Labor tweet indicated that:

Jack Healy reported in Saturday’s New York Times that, “But analysts said the deal would not immediately resolve the congestion that has cost businesses millions of dollars and left goods stranded on ships, waiting to be unloaded, or in warehouses, waiting to be shipped to Asian markets. Even as normal operations resume here at the ports of Long Beach and Los Angeles, the busiest in the nation, analysts said it would take months to clear the backlog.”

The Times article added that, “The disputes brought crippling delays that cascaded beyond the 29 West Coast ports that were affected and through the wider American economy. California broccoli, oranges and lemons bound for markets in China, Japan, South Korea or Australia began to rot in storage.”

House Majority Leader Kevin McCarthy (R., Calif.) tweeted on Friday:

And House Ag Committee Member Dan Newhouse (R., Wash.) indicated on Saturday that, “I am encouraged that a resolution to this devastating labor dispute may finally be in sight. For nine long months, the two parties held trade-dependent communities hostage by crippling the movement of goods at our ports. Even if an agreement is imminent, the domino economic effect of the port slowdown on businesses and agricultural producers will continue even after the backlog at the ports is cleared. The loss of market share and confidence of overseas trading partners will not be restored overnight, and it is appropriate to evaluate all options that would end the economic threat posed by such disputes in the future.”

“Last week, Rep. Newhouse, Rep. Dave Reichert (R-WA), Rep. Kurt Schrader (D-OR), and Rep. Jim Costa (D-CA) introduced a bipartisan resolution in the House urging an end to the contract negotiation between the PMA and the ILWU.”

House Ag Committee Member Rep. Pete Aguilar (D., Calif.) indicated on Saturday that, “I’m very pleased to hear the news that an agreement was reached between the International Longshoremen and Warehouse Union and the Pacific Maritime Association. I applaud both organizations for working together to see this through, as well as U.S. Labor Secretary Perez for assisting with negotiations. As our nation is just in the early stages of economic recovery, reaching an agreement was pivotal for the stability of California’s economy and the United States as a whole. Again, I commend both groups for their cooperation and look forward to getting our ports and trade operations back on track.”

Sen John Thune (R., S.D.) indicated on Saturday that, “Despite the unnecessary impacts of this prolonged labor dispute, I urge swift adoption so that agricultural producers and businesses can regain the full use of ports on the West Coast to ship goods overseas and receive necessary shipments of merchandise. There’s no question the slowdown has cost billions of dollars through unnecessary harm to American businesses and consumers.”

And American Soybean Association President Wade Cowan noted on Saturday that, “Disruptions like the one we saw out west have the potential to throw the country’s farm economy into disarray. A devastating impact like that isn’t a bargaining chip. It goes without saying that we are relieved to see a resolution to the dispute, and we encourage both parties to ratify this new contract and get back to work as quickly as possible.”

Previous developments from Friday below.

In the ongoing labor dispute that is disrupting the operation of several West Coast Ports, Laura Stevens and Melanie Trottman reported on Friday at The Wall Street Journal Online that, “Negotiations between West Coast port employers and workers came to a head on Friday as the U.S. Secretary of Labor threatened to force the parties to resume talks in Washington, D.C., if they didn’t reach a new contract agreement by day’s end.

“Secretary Thomas Perez told West Coast mayors on a conference call Thursday night said that if the two groups couldn’t come to a resolution within 24 hours, they would be invited to the nation’s capital.”

The Journal writers noted that, “The U.S. president doesn’t have legal authority to summon the parties to Washington and such meetings rarely occur, ‘but it would be extremely difficult for either party to refuse to go,’ said Seth Harris, a former acting labor secretary and former deputy labor secretary in the Obama administration who is now a lawyer in Washington for law firm Dentons. ‘To not go would be an acceptance of blame that neither party would want,’ Mr. Harris said.”

“As of Friday morning, 27 ships were at anchor outside the ports of Los Angeles and Long Beach, three fewer than Thursday. On a typical February day last year, no ships were in line,” the Journal article said.

Bloomberg Photo–Ships wait to unload cargo at the Port of Los Angeles in Los Angeles, California, on Feb. 18, 2015. Photographer: Patrick T. Fallon/Bloomberg

James Nash and Alison Vekshin indicated on Friday that, “The impasse in talks toward a five-year contract between the International Longshore and Warehouse Union and the Pacific Maritime Association threatens to close seaports responsible for more than 40 percent of U.S. trade. Perez arrived in San Francisco on Feb. 17, dispatched by President Barack Obama after a federal mediator failed to bridge the gap between the two sides.”

A news release Friday from House Ag Committee member Rep. Dan Newhouse (R., Wash.) stated that, “Last week U.S. Congressman [Newhouse], Congressman Reichert (R-WA), Congressmen Schrader (D-OR), and Congressman Costa (D-CA) introduced a bipartisan resolution in the House urging an end to the contract negotiation between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU). Now, just a week later, the resolution has been signed by 61 members of Congress.”

Rep. Newhouse discusses impact of ports dispute for local growers.

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Update: 2015 Dietary Guidelines Advisory Committee Report

Categories: Nutrition

Following Thursday’s release of dietary guidelines from a government advisory committee, former United States Deputy Secretary of Agriculture Kathleen Merrigan made the following tweet:

On the other hand, American Farm Bureau Federation President Bob Stallman indicated on Friday that, “We are, however, concerned that the report’s lengthy foray into sustainability issues goes well beyond both the group’s expertise and its clearly defined mission. Its conclusions would have benefitted from the contributions of agronomists, animal scientists, ecologists and others with deeper expertise in agriculture and sustainability.

“The report makes many good observations about the need for a balanced diet, but we are troubled that it also repeats alarmist and unsubstantiated assertions about land use first promulgated by a UN agency with scant agricultural understanding. These assertions contradict the views of the UN’s own agricultural experts and fly in the face of decades of scientific consensus. The overall guidelines also ignore easier and more effective ways ordinary Americans can reduce their carbon footprints.

We suspect the report’s unrealistically pessimistic view of sustainability colors its views regarding meat in the American diet. Instead of supporting the health benefits of lean meat consumption — as previous advisory committees have consistently done — the authors focus only on a diet ‘higher in vegetables, fruits, whole grains, low- or non-fat dairy, seafood, legumes, and nuts; moderate in alcohol (among adults); lower in red and processed meat.'”

Meanwhile, a news release Friday from Sen. John Thune (R., S.D.) stated that, “Following a new report from the Obama administration’s Dietary Guidelines Advisory Committee, which advises the U.S. Department of Agriculture (USDA) and U.S. Department of Health and Human Services (HHS) on the suggested 2015 dietary guidelines, U.S. Sens. [Thune] and Mike Rounds (R-S.D.) and Rep. Kristi Noem (R-S.D.) expressed their concern about the misleading and inconsistent guidelines on meat consumption in the report.

“Every five years, USDA and HHS review the dietary guidelines for American food consumption. The new report recommends to the secretaries what should be included in the dietary guidelines that will be issued later this year. The report leaves lean red meat out of what it considers to be a healthy diet, which is not only a great concern to dietitians who support consumption of lean red meat but is also concerning for the South Dakota livestock industry.”

Nina Teicholz indicated in a column in Saturday’s New York Times that, “The committee’s new report also advised eliminating ‘lean meat’ from the list of recommended healthy foods, as well as cutting back on red and processed meats. Fewer protein choices will likely encourage Americans to eat even more carbs. It will also have policy implications: Meat could be limited in school lunches and other federal food programs.

“It’s possible that a mostly meatless diet could be healthy for all Americans — but then again, it might not be. We simply do not know. There are no rigorous clinical trials on such a diet, and although epidemiological data exists for adult vegetarians, there is none for children.”

AP writer Mary Clare Jalonick reported on Friday that, “A tax on sugary drinks and snacks is one way a government panel of nutrition experts thinks Americans can be coaxed into eating better. Some members of Congress are already pushing back on the idea, saying the panel has overstepped its bounds.

“The panel’s recommendations will help determine what gets into the new version of dietary guidelines being prepared by the Agriculture and Health and Human Services departments. The advice includes eating more fruits and vegetables and whole grains and limiting added sugars and fat.

“However, the panel goes beyond previous versions of the dietary guidelines by suggesting a broad list of possible policy changes — a tax is just one — that could make it easier for people to follow that diet advice.”

Ms. Jalonick added that, “Other ideas put forth by the committee were placing nutrition labels on the front of food packages and requiring public buildings to serve healthier foods. The committee also suggested incentives for eating fruits and vegetables, though it didn’t detail how that could work. Panel members said incentives might be vouchers for farmers markets or subsidies for growers or grocery stores.

The panel endorsed adding a line on the nutrition facts label for added sugars, which the Obama administration has already proposed. It also backed the administration’s standards for healthier school lunches.

“Senate Agriculture Committee Chairman Pat Roberts, R-Kan., criticized the report shortly after it came out Thursday, saying the committee strayed from its science-based nutrition recommendations.”

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Friday Update: Policy Issues, Ag Economy; Trade; and, Biofuels

Policy Issues

In addition to the House Ag Committee hearings next Wednesday and Thursday on food stamp issues, on Tuesday, the Senate Ag Committee will hold a hearing on Farm Bill implementation and Farm Credit Administration nominations.

Secretary of Agriculture Tom Vilsack is scheduled to address the Senate panel; however, the Committee will hear from producers first.

In a discussion this week on the Kansas Ag Network Online with Kelly Lenz, Senate Ag Committee Chairman Pat Roberts (R., Kan.) noted that, “I have concerns about the direction of the farm policy, but we’re not going to open up that bill. We are going to take a look at some of the glitches.”

He added that, “But after every farm bill you have a technical correction or you have some things that you can take care of with administrative action.”

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USDA Report- Farms and Land in Farms

On Thursday, USDA’s National Agricultural Statistics Service (NASS) released its annual Farms and Land in Farms report for 2014.

The report stated that, “The number of farms in the United States for 2014 is estimated at 2.08 million, down 18 thousand farms from 2013. Total land in farms, at 913 million acres, decreased 1.03 million acres from 2013. The average farm size for 2014 is 438 acres, up 3 acres from the previous year.”

The AP reported on Thursday that, “The U.S. Department of Agriculture says in a new report that the number of farms and ranches in Nebraska continues to slide.

“In an annual report released Thursday the USDA says Nebraska farms fell to 49,100 last year, 500 fewer than the year before. The small farm category, those with annual sales of less than $100,000, fell by 800 farms while larger farms exceeding $100,000 in sales increased by 300.”

A separate AP article indicated that, “Kansas farms averaged 754 acres, up 8 acres from the previous year.”

With respect to North Dakota, the AP noted that, “Land in farms and ranches in North Dakota totaled 39.3 million acres, unchanged from 2013. But the average size of operation was up 21 acres from the year before, at 1,297 acres.”

And in Iowa, a report indicated that, “The number of Iowa farms has fallen 1.2 percent since 2010, while the average farm size is up 1.2 percent in the same period, a reflection of national trends.”

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2015 Dietary Guidelines Advisory Committee Report

Categories: Nutrition

Recall that in a February 11th House Ag Committee hearing, Chairman Michael Conaway (R., Tex.) and Secretary of Agriculture Tom Vilsack had an exchange on the Dietary Guideline issue.

Sec. Vilsack noted that, “Well, first of all, these are recommendations which the Department of Health & Human Services and the Department of Agriculture are free to accept, reject, or modify based on, ultimately, the decision-making that we are responsible for. Secondly, these folks get together, they do literature review of the latest science. It’s supposed to be driven by science and it needs to be driven by science. There is a lot of issues that have to be resolved yet. This is by no means finalized.”

Chairman Conaway pointed out that, “Well, again, you know, we’ve mentioned the science-based decision-making process, and nutrition science ought to drive the train and not sustainability or environment things, other things like that. It ought to be nutrition-based science, so appreciate that.”

AP writer Mary Clare Jalonick reported today that, “A government advisory committee is recommending the first real limits on added sugars, but it’s backing off stricter ones for salt and cholesterol. It calls for an environmentally friendly diet lower in red and processed meats.

“The Agriculture and Health and Human Services departments will use Thursday’s report to write new dietary guidelines, due by the end of the year. The guidelines influence everything from federally subsidized school lunches to food package labels to doctors’ advice.”

Wall Street Journal Video: Diet Experts Push More Plants, Less Meat in Nod to Environment

Tennille Tracy reported on Thursday at The Wall Street Journal Online that, “The focus on sustainable diets is angering the meat industry, particularly beef producers, accused of taking a particularly heavy toll on the environment.

“‘The committee’s foray into the murky waters of sustainability is well beyond its scope and expertise,’ said Barry Carpenter, president of the North American Meat Institute, which represents beef and poultry producers.

“The meat industry believes the panel, which has been meeting for well over a year, is pursuing a broader antimeat agenda, even though it doesn’t recommend specific daily reductions in meat or poultry consumption.”

Roberto Ferdman and Peter Whoriskey reported on Thursday at The Washington Post Online that, “The advisory panel’s report prompted immediate criticism from Congress — as well as a warning from Rep. Robert B. Aderholt (R-Ala.), chairman of the Appropriations subcommittee that oversees the budget for the Agriculture Department.

“‘Chairman Aderholt is skeptical of the panel’s departure from utilizing sound science as the criteria for the guidelines,’ according to Brian Rell, a spokesman. ‘Politically motivated issues such as taxes on certain foods and environmental sustainability are outside their purview.’

“He warned that the panel committee would ‘keep this in mind’ as it considers funding the agencies this spring.”

Bloomberg writers Alan Bjerga and Doni Bloomfield reported today that, “Americans should pay taxes on sugary sodas and snacks as a way to cut down on sweets, though they no longer need to worry about cholesterol, according to scientists helping to revamp dietary guidelines as U.S. obesity levels surge.

“The recommendations Thursday from the Dietary Guidelines Advisory Committee also call for Americans to reduce meat consumption and to take sustainability into account when dining.”

The Bloomberg writers pointed out that, “The sustainability initiative endorses plant-based diets and urges more consumption of farm-raised fish as ways to alleviate stress on the environment. The idea sparked action in Congress: An appropriations bill passed last year includes a nonbinding provision telling the USDA and HHS to ‘only include nutrition and dietary information.’

“HHS, which will write the guidelines, and the USDA jointly appointed the committee, then will act on its recommendations after considering public comment for 45 days. Final guidelines are to be released by the end of this year” [related USDA news release here].

See also these Bloomberg video with Mr. Bjerga:

Senate Ag Committee Chairman Pat Roberts (R., Kan.) indicated on Thursday that, ““I am glad the Dietary Guidelines Advisory Committee report has finally been released, so we can all stop wondering what it was going to say. This report is disappointing, as it is clear with some of these recommendations, the non-political, science-based process has gone awry. The Dietary Guidelines are an essential part of combating obesity and improving the diets of all Americans, and it is crucial the Guidelines be free from political influence and be completely based in nutrition science. It appears this has not been the case, and that is troubling news. As USDA and HHS take this report into consideration and develop the 2015 Dietary Guidelines for Americans, I hope they work to restore integrity to the process and preserve the independent, unbiased and nutrition science-based nature of previous Guidelines.”

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West Coast Ports- Los Angeles Times- Thursday; Lawmakers Weigh In

On Thursday, the Los Angeles Times continued its detailed coverage of the West Coast port dispute (See articles from Saturday, Sunday, and Wednesday).

On the front page of the Business section, Andrew Khouri and Tiffany Hsu reported that, “The labor dispute that has stalled dozens of massive ships off the ports of Los Angeles and Long Beach isn’t limited to the nation’s busiest cargo complex.

“The high-volume harbors at Oakland, Seattle and Tacoma, Wash., also have battled severe bottlenecks for months as the International Longshore and Warehouse Union and employer group Pacific Maritime Assn. have wrangled over a new contract for 20,000 dockworkers at ports from San Diego to Bellingham, Wash.

“U.S. Labor Secretary Thomas Perez met with both sides Wednesday, the second straight day of direct White House involvement to break the stalemate.”

The article noted that, “For exporters such as Sage Fruit in Yakima, Wash., the delays have caused pain.

Packages of apples, cherries and nectarines have arrived in Asia as much as eight weeks late, said sales manager John Onstad.

“‘They certainly weren’t in the condition the customers were expecting,’ he said.

“As the latest holiday weekend shutdown loomed, ‘we had a lot of customers who simply said, ‘We don’t even want to purchase your product,” Onstad said.

And the Los Angeles Times editorial board opined on Thursday that, “Let’s hope Perez can talk some sense into the two sides, which together are holding American businesses and the Southern California economy hostage…[T]o protect their competitive advantage, L.A. and Long Beach must scale up to accommodate larger ships that carry twice as many containers as the ports are used to handling.

“The important work of preparing for a changing industry is stalled while the shipping companies and dockworkers are locked in a dispute. It’s time to make a deal.”

Meanwhile, a news release on Thursday from Sen. John Thune (R., S.D.) indicated that, “Senate Committee on Commerce, Science, and Transportation Chairman [Thune], Commerce Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security Chairman Deb Fischer (R-Neb.), Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-Tenn.), Health, Education, Labor, and Pensions Subcommittee on Employment and Workplace Safety Chairman Johnny Isakson (R-Ga.), House Committee on Transportation and Infrastructure Chairman Bill Shuster (R-Penn.), Transportation Subcommittee on Coast Guard and Maritime Transportation Chairman Duncan Hunter (R-Calif.), House Education and Workforce Committee Chairman John Kline (R-Minn.), and Education and Workforce Subcommittee on Health, Employment, Labor, and Pensions Chairman Phil Roe, M.D. (R-Tenn.) have sent a letter to President Barack Obama urging action on the unnecessary gridlock of goods at 29 West Coast shipping ports.”

A separate news release Thursday from Sen. Dianne Feinstein (D., Calif.) stated that, “U.S. Senators [Feinstein] and Barbara Boxer (both D-Calif.) today called on both parties in the West Coast ports dispute to act swiftly to reach a final agreement. In a letter to International Longshore and Warehouse President Robert McEllrath and Pacific Maritime Association President and CEO James C. McKenna, the Senators expressed their concern that despite a narrowing of differences, the parties have not been able to resolve the labor dispute because they cannot agree on the selection of an arbitrator.”

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USDA Outlook: Crop and Livestock Prices, Production- Land Values

In a presentation today at the USDA Outlook Forum in Arlington, Va., USDA Acting Chief Economist Robert Johansson indicated that, “Row crop prices have declined significantly from record highs in recent years, but remain well above levels seen in the early 2000s. Consecutive record crops have trimmed prices for many crops. Further price reductions are expected for the 2015/16 crop year, falling near Farm Bill reference prices for many crops. Wheat prices for 2015/16 are estimated at $5.10 per bushel, a decline of 15 percent from the current year; the PLC reference price for wheat is $5.50 per bushel. Corn prices are projected to fall to $3.50 per bushel for 2015/16; the reference price for PLC is $3.70 per bushel. Soybeans prices are forecast at $9.00 per bushel in 2015/16; the reference price for PLC is $8.40 per bushel. The all-rice price is forecast at $13.10 per hundredweight for 2014/15 (the reference price for long-grain rice is $14.00 per hundredweight). Cotton prices are projected at 60 cents per pound (cotton it is not covered by the PLC program).”

Note that separate analysis from land grant institutions puts the 2015/16 prices of corn and soybeans at slightly higher levels: $3.87, $9.27 and $3.97, $9.84.

For additional crop price analysis, see this presentation from University of Illinois agricultural economist Darrel Good from December, which included the following slide with a low $4 projection:

Dr. Johansson also noted that, “In 2015, U. S planted area for the 8 major crops is expected to decline modestly, falling by 3.3 million acres to 254.6 million as falling crop prices and narrowing production margins push some acres out of production even as Conservation Reserve Program (CRP) area continues to decline.” He added that, “Overall corn and soybean acreage is expected to total 172.5 million acres, down 1.8 million acres from last year. Corn area shows the single largest reduction with area expected to fall 1.6 million acres in 2015 to 89.0 million acres, down 8.2 million acres from its recent peak in 2012. Soybean area is expected to fall modestly from its record area in 2014 to 83.5 million acres, with movement out of soybeans tempered by its lower operating costs and forward marketing opportunities in the past few months.”

Note this related Bloomberg article, as well as this tweet from University of Illinois agricultural economist Scott Irwin.

Gregory Meyer reported on Thursday at The Financial Times Online that, “The USDA’s forecasts issued on Thursday deviated slightly from long-term projections published this month, with the latest corn acreage figure 1m acres higher than before and soyabean acreage 0.5m acres lower. Final crop production is a function of acres harvested and yields per acre.”

With respect to livestock, Dr. Johansson indicated that, “Turning to the livestock, dairy and poultry sectors, we project that total meat and poultry production will be at a record high of 95 million pounds in 2015, mostly due to record pork and broiler production. Milk production is also projected to be at record levels in 2015, at 211.5 billion pounds.”

More specifically, Dr. Johansson pointed out that, “Cattle numbers have been trending down since the 1970s, and drought and other adverse impacts on forage in the South over the past 5 years have driven even larger declines in the cattle herd than might otherwise have been expected. Drought continues in the Southwest, but there have been some signs of recovery in the Southern Plains and elsewhere. Returns to cow-calf operators have been at levels that encourage herd retention which would point to a turnaround in the cattle cycle. Producers are now responding by increasing herds; the number of beef cows on January 1, 2015 was up 2 percent from 2014 and the number of heifers retained for addition to the cow herd was 4 percent higher. The latest NASS cattle inventory last month recorded the first increase in herd size since 2007.”

While addressing livestock related prices, Dr. Johansson stated that, “As a result of increased production and falling export demand in 2015, prices for pork, broilers, and dairy products are projected to fall from last year’s levels. Hog prices are expected to fall to $56 per hundredweight, down 26 percent from last year’s record prices. Broiler prices are expected to remain high, although down 4 percent from last year’s record prices. In contrast, steer prices are expected to increase and are forecast at record levels in 2015 due to continued tight supplies and the time required to expand production. Milk prices are expected to fall 26 percent from last year’s records.”

And Dr. Johansson added that, “Land values are expected to decline by less than one percent overall in 2015.”

For more details on land values see recent reports from the Federal Reserve Banks of Chicago and St. Louis, as well as the Federal Reserve Bank of Kansas City.

Keith Good

Thursday Morning Highlights: Policy; Ag Economy; Trade; and, Regulations

Policy Issues

Next week, the House Agriculture Committee will hold two hearings on nutrition related issues.

On the 25th, the Full Committee will Review the SNAP Program, and on the 26th, the Nutrition Subcommittee will hold a hearing to better understand the SNAP population through published research.

The Nutrition Subcommittee is chaired by Jackie Walorski (R., Ind.) and the ranking member is Jim McGovern (D., Mass.).

Rep. Walorski issued a news release yesterday, which stated that, “[Rep. Walorski] visited Martin’s Super Market in South Bend today in an effort to tout legislation that encourages businesses to donate food inventory to local food shelters. During the visit, Walorski was joined by Rob Bartels, CEO and president of Martin’s Super Market and Milt Lee, executive director of the Food Bank of Northern Indiana.

“Last week, the House passed legislation that would allow tax deductions for charitable contributions of food inventory. H.R. 644, The Fighting Hunger Incentive Act, permanently extends the deduction for businesses to donate food inventory to local food shelters and pantries.”

In other nutrition related news, Roberto A. Ferdman reported yesterday at the Wonkblog (Washington Post) that, “One of the simplest ways to put poor kids in a position to succeed is to make sure they eat breakfast…[F]ortunately, there’s a program that tries to make sure low-income children are able to eat breakfast each day: the decades old School Breakfast Program, which helps provide free or near-free morning meals to poor students….[U]nfortunately, the program is failing to live up to its potential.

“The School Breakfast Program still isn’t feeding nearly as many poor students as it should be. In fact, the program is falling short by at least ten million students, if not more, according to a new study by the Food Research and Action Center (FRAC).”

(more…)


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