FarmPolicy

November 14, 2018

More Companies Move to Label #GMO Food Products

Categories: Biotech

Christopher Doering reported on the front page of the business section in yesterday’s Des Moines Register that, “More food companies are voluntarily disclosing if their products contain genetically modified ingredients, the latest sign that consumer groups may be gaining ground in their campaign to get a nationwide mandatory label.

“In just the past few weeks, candy-maker Mars, General Mills, Kellogg and ConAgra all announced they would be voluntarily labeling their products. They joined Campbell Soup, which became the first major food company to disclose the presence of genetically engineered organisms in January.

“Food executives say they have no choice but to include the ingredients on labels, citing growing pressure from consumers to know what’s in their food, a failure by Congress to adopt a nationwide standard, and the fact that Vermont on July 1 becomes the first state to require labeling.”

Mr. Doering explained that, “Companies that overhaul their label now, rather than wait, not only benefit by earning the trust of their customers, but they can potentially have a larger influence over how future state labels will look, food companies said.”

The Register article added that, “Sen. Chuck Grassley, R-Iowa, said he was not optimistic Congress could reach a deal before Vermont’s law takes effect this summer.”

Secretary of Agriculture Tom Vilsack has also recently expressed his views on the labeling issue, and Politico’s Morning Agriculture indicated today that, “After the failed effort to limit debate on Senate Agriculture Committee Chairman Pat Roberts’ voluntary GMO labeling bill last month, the Kansas Republican and other supporters vowed to try again when they returned from the two-week spring break. Now that they’re back, can middle ground be found to lure enough farm-state Democrats and states’-rights Republicans to vote for the bill? Talks on how to move forward could start this week, especially given that there are fewer than 90 days before Vermont’s mandatory GMO labeling law takes effect.”

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U.S. Ag Economy: “Mounting Pressure”

Nathan Kauffman, the Assistant Vice President and Omaha Branch Executive at the Federal Reserve Bank of Kansas City, indicated in a recent article (“Mounting Pressure in the U.S. Farm Sector“) that, “U.S. farm income has continued to decline, and is expected to remain low as planting season approaches across the country. The USDA projects real net farm income to be slightly less than a year ago; that projection would mark the second-lowest farm income total in more than 30 years (Chart 1). Prolonged weakness in the farm sector primarily has been driven by several consecutive years of low crop prices and persistently elevated input costs, while recent weakness in the livestock sector also has been a factor.”

Chart 1

The Fed update pointed out that, “The need for financing, and the potential for future financial stress, has continued to increase throughout U.S. farm country. Loan demand in the Tenth District is expected to increase again in the first quarter of 2016, which would be the third consecutive year in which lending needs in the farm sector increased relative to the previous year (Chart 3). Similarly, bankers responding to the fourth quarter survey indicated they expect loan renewals and extensions to continue to accelerate. Conversely, the rate at which loans are repaid at agricultural banks in the District was expected to soften further.

“Persistently strong loan demand at agricultural banks has been coupled with reports of increasing use of USDA Farm Loan Programs through the Farm Service Agency (FSA). From 2013 to 2015, FSA loan volumes increased more than 40 percent (Chart 4).”

Chart 4

The Fed update also noted that, “Despite strong loan demand and an increase in the federal funds target rate in December, interest rates on most farm loans have remained historically low. In fact, interest expenses for U.S. corn producers accounted for only 9 cents per bushel of production in 2014, the latest year for which data are currently available.”

Meanwhile, a recent update by Kevin Patrick, Ryan Kuhns, and Allison Borchers at Choices Online (“Recent Trends in U.S. Farm Income, Wealth, and Financial Health“) stated that, “The continued drop in farm sector income is expected to place downward pressure on farm asset values, which had appreciated during the previous several years. The resulting drop in liquidity from multiple years of lower income is also expected to increase the need for sector borrowing relative to the 2009-2013 period. As a result, the USDA predicts a decline in sector equity and an increase in leverage, which signals the potential building of financial stress within the farm sector. A portion of U.S. farm businesses are highly leveraged and are at increased risk of default. While measures of financial health are worsening relative to the profitable 2009-2013 period, they remain better than historic averages.”

And Rick Barrett reported in yesterday’s Milwaukee Journal Sentinel that, “Carrie Mess, like most dairy farmers, is losing money every time the cows are milked on her farm near Watertown.

“As farmers gear up for spring planting, those who sell crops on the commodities markets stand to lose buckets of money from low prices that are beyond their control.

“Simply put, what many farmers are paid for milk, grain or livestock now isn’t enough to cover their expenses. They’re taking out loans and tapping savings to remain in business, going to work every day knowing that it’s costing them money.”

With respect to other potential impacts of a slumping U.S. ag economy, the AP reported today that, “Kansas farm co-ops are feeling pressure to merge as shrinking farm incomes have producers looking for ways to cut their costs.

“In about six weeks, Farmers Cooperative Elevator in Garden Plain will vote on whether to merge with co-ops in Anthony and Kiowa. Andale Farmers Co-op voted in December to merge with Kanza Co-op, a large operation based in the Pratt County town of Iuka.”

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SNAP Issues (Food Stamps)- Some States Reimpose Limits as Employment Improves

Categories: Nutrition

Robert Pear reported in Saturday’s New York Times that, “Hundreds of thousands of people could soon lose food stamps as states reimpose time limits and work requirements that were suspended in recent years because of high unemployment, state officials and advocates for the poor said Friday.

“Liberal groups said that many unemployed childless adults with low incomes could be cut off, starting this month, as a result of the time limits, which date back to the 1996 welfare law.

“About 45 million people receive benefits in the food stamp program, now known as the Supplemental Nutrition Assistance Program, or SNAP. The Center on Budget and Policy Priorities, a liberal-leaning research and advocacy group, estimates that 500,000 to a million people will lose benefits this year.”

The Times article noted that, “‘Able-bodied adults without dependents are eligible for SNAP for only three months in any three-year period unless they are working or participating in qualifying education and training activities,’ said Kevin W. Concannon, the under secretary of agriculture in charge of food assistance programs.

“During and after the latest recession, which ended in mid-2009, most states qualified for waivers from the time limits. But the time limits will be in effect this year in more than 40 states. In 22 states, the limits are coming back for the first time since the recession.

As the economy improves, the Food and Nutrition Service said, many places no longer qualify for time limit waivers.”

Mr. Pear indicated that, “The people at risk of losing food aid are 18 to 49 years old. People under 18 or over 49, pregnant women and people who are medically certified as ‘unfit for employment,’ because of a disability, are generally exempt from the time limits.”

Saturday’s article added that, “Participation in the SNAP program more than doubled from 2003 to 2012. In December of last year, 45.2 million people were receiving SNAP benefits. The number has fallen by 2.6 million since reaching a peak in December 2012.”

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