January 23, 2020

FAPRI Baseline Update

The Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri released its U.S. Baseline Briefing Book today.

The FAPRI report noted that, “Lower agricultural commodity prices have contributed to a sharp reduction in net farm income. The outlook for the next several years suggests continued pressure on farm finances is likely.”

The report added that, “Projected corn prices average $3.75 per bushel for the 2016/17 marketing year, up only slightly from 2015/16. Corn prices average less than $4.00 per bushel for the 2017-2025 period.

“Other crop prices also remain well below recent peak levels. Soybean prices average $8.73 per bushel in 2016/17, while wheat averages $4.97 per bushel and upland cotton averages 56.9 cents per pound.”

“With farm income well below recent peak levels and if interest rates increase as forecasted, there will be continued pressure on farm finances and farm real estate values,” the report said, while adding that, “Crop insurance net outlays are projected to average about $8 billion per year for fiscal years 2017-2025.”


Cargill to Reduce Antibiotics in Beef

Jacob Bunge reported earlier this week at The Wall Street Journal Online that, “Cargill Inc. plans to scale back antibiotics use in its U.S. cattle supply, one of the most significant steps yet among beef processors to reduce reliance on drugs used to treat human illnesses.

“The suburban Minneapolis company said it would eliminate one-fifth of such medically important antibiotics from cattle that Cargill processes into ground beef and steaks, affecting an estimated 1.2 million cattle annually.

“Cargill, which has previously taken steps to reduce antibiotics use in its U.S. turkey supply, is making the move in beef as more restaurants have announced plans to serve meat raised without antibiotics. Companies are responding to pressure from consumer groups and public health officials who have warned that widespread antibiotics use in animal agriculture and human medicine have helped bacteria evolve to resist antibiotics, potentially leaving doctors with fewer tools to treat some illnesses.”

For additional background on this issue, see this FarmPolicy update from last month.


Quick Take: March WASDE Update

Yesterday, the World Agricultural Outlook Board (WAOB) released its monthly World Agricultural Supply and Demand Estimates (WASDE), which stated in part that, “The midpoint for the projected corn price remains $3.60 per bushel.”

The report added that, “The U.S. season-average soybean price for 2015/16 is projected at $8.25 to $9.25 per bushel, down 5 cents at the midpoint.”

Jesse Newman reported yesterday at The Wall Street Journal Online that, “U.S. federal forecasters on Wednesday boosted their outlook for domestic soybean stockpiles while trimming estimates for global grain and soybean reserves.

“The Agriculture Department said in its monthly crop report that U.S. soybean inventories would reach 460 million bushels at the end of the 2015-16 season on Aug. 31, 10 million more than its February forecast and slightly above analysts’ expectations.

“‘Bigger picture, we’re swimming in corn, beans and wheat,’ said Doug Bergman, an analyst at investment firm RCM Asset Management in Chicago.”

Ms. Newman explained that, “​The muted reaction to Wednesday’s report comes as grain and oilseed prices have languished for months due to abundant global supplies, a robust U.S. dollar and stiff competition among exporters.

“While the report avoided piling on more bearish news, it didn’t provide much positive momentum for low crop prices that have pressured profits for farmers, seed companies and tractor makers, said Dan Cekander, president of market-research firm DC Analysis. The USDA in February projected U.S. farm incomes would fall to the lowest level since 2002 because of the continued slump in crop prices.”

University of Illinois agricultural economist Darrel Good also provided a brief recap of yesterday’s WASDE update:


Sen. Inhofe Notes Regulatory Concerns of Farmers, WOTUS Rule

Categories: Regulations

While discussing the U.S. Supreme Court vacancy on the Senate floor yesterday, Sen. James Inhofe (R., Okla.) noted that, “President Obama is not able to get his liberal agenda through Congress, he has turned to Executive action and to agency rulemaking to implement priorities. These regulations are actually making their way through our courts and are either going to be heard by the Supreme Court or have already been heard by the Supreme Court.”

He added that, “What we are saying is this: The President has a very liberal agenda on almost every social issue, every fiscal issue, every military issue. It is a very liberal agenda. So when the President can’t get things done through legislation, he then turns around and tries to do it through regulation.

“I will give an example. If you talk to the American Farm Bureau right now, they will tell you the greatest problem farmers and ranchers have—I know this because I am from the farm State of Oklahoma—is not anything in the Agriculture bill. It is the overregulation of the EPA. Of all the regulations that are damaging to farmers and ranchers in America, the one they single out as being the worst is the WOTUS rule; that is, the waters of the United States.

“Historically, it has always been in the jurisdiction of the States as to how to control and manage the waters of the United States, except in cases where it is navigable waters. Well, we understand that. We understand that is where the Federal Government should be involved. But 6 years ago there was a lot of legislation and one bill in particular that was offered in the House and the Senate that would take the word ‘navigable’ out. That being the case, that would mean all the waters in a jurisdiction would go from the States to the Federal Government, and we weren’t going to let that happen. But this is what is going on right now. Things they have tried to get passed through legislation and haven’t been able to do, they are trying to do through regulation.

“If the Supreme Court is split 4 to 4 in these two cases I just mentioned, the injunctions of the lower courts will stand until the underlying issues are fully litigated. That is what they are waiting for right now. The Court has said that until the litigation is cleared up, we are not going to act on this rule. Well, as you know, that is going to take a long time for that to happen.”


Transcript: Sen. Jeff Merkley Discusses GMO Labeling on Senate Floor

Categories: Biotech

Yesterday, Sen. Jeff Merkley (D., Ore.) discussed GMO labeling issues on the Senate floor, a transcript of his full remarks can be found here.

Senator Merkley, who is the ranking member on the Agriculture Appropriations Subcommittee, discussed a GMO labeling measure passed by the Senate Ag Committee, as well as an alternative bill that he has co-sponsored.

In part, Sen. Merkely indicated that, “We should enable the individual in our beautiful Republic to make the decision and not have Big Government make the decision or suppress information. That is what happens in the non- ‘we the people’ world. That is what happens in dictatorships. That is not what should happen here in the United States of America, where individuals have the right to know what is in their food.”

Sen. Merkley added that, “There are 64 other countries, including 28 members of the European Union, Japan, Australia, and Brazil, that all require some type of indication on the ingredients panel or on the package. Do you know who else is in that group? China. China is a dictatorship. China doesn’t deny its citizens the right to know. How is it possible that a bill in this Chamber has been introduced to take away the right of Americans to know what is in their food? Even China doesn’t do that, and we must not do it either.”

The Oregon Democrat added that, “Basically, a big concern of the food industry—totally legitimate—is that they don’t want 50 different standards in 50 different States or to have a bunch of counties decide to make up their own rules, which would result in hundreds or thousands of rules. If you operate a warehouse, you can’t send different cans of soups to grocery stores across the country. No. So that makes sense. They want a 50-State solution. Furthermore, they want to have it acknowledged that there is nothing pejorative about the concept of bioengineering or transgenic. They want to know that people know this is a situation where there are some positive benefits, and I have mentioned some of those positive benefits. They don’t want a label on the front of the package because they think it would be scary to consumers, and they want flexibility as to exactly what system they use to alert consumers.

The bill I put forward provides all of those goals for a 50-State solution. There is nothing on the front of the package, nothing pejorative, and provides flexibility for the food industry. It does not go to the final step that much of the food industry wants, which is no unpackaged labeling because then there is no compromise between the two sides.”