FarmPolicy

November 17, 2017

Antibiotics and Livestock Production

The Los Angeles Times editorial board indicated in today’s paper that, “On Tuesday, the U.N General Assembly will hold a high-level meeting to discuss one of the greatest contemporary threats to global public health. Not war, not Ebola, not Zika — but antibiotic-resistant microbes.

“Scientists and public health officials have been warning for decades that overuse of antibiotics would inevitably lead to a rise of bacteria that have adapted to the drugs and developed a resistance to them.”

After pointing out that, “Already, authorities say that slightly more than 2 million people in the U.S. are sickened each year from antibiotic-resistant microbes. About 23,000 of them die,” the opinion item added that: “Human overuse isn’t the only factor. More than 70 percent of the use of medically important antibiotics (that is, the ones developed to treat human illnesses) is by the agriculture industry for disease prevention and control and for growth production of livestock, though the latter is on the wane since federal guidelines were released in 2013 restricting use. Antibiotics are routinely added to livestock feed and water to keep animals from getting infections. Just as in humans, this overuse helps create antibiotic resistant strains.

“Perplexingly, overall use of antibiotics in livestock has increased slightly since the federal guidelines went into place. Some consumer groups have called for the FDA prohibit the use of antibiotics for disease prevention in animals, saying the the agricultural industry is still too reliant on prophylactic use. Though an outright ban on disease-prevention may be excessive, clearly more needs to be done to rein in overuse.

“Perhaps this can be answered by California in the next few years. Last year the state adopted the strictest law in the nation limiting antibiotic use in agriculture. Once it goes into effect in 2018, we’ll start to get better data that could shape an effective national policy on antibiotic use for livestock.”

And Geoffrey Mohan reported in today’s Los Angeles Times that, “Panera Bread and Chipotle Mexican Grill passed with flying colors, but KFC and Olive Garden were among the laggards in commitments to eliminate medically important antibiotics from their meat and poultry supply chains, according to a new report.

Strong progress nonetheless was made across the top 25 fast-food and casual dining retailers, suggesting that public pressure has helped slow the meat and poultry industry’s routine use of antibiotics that are critical to human health, according to the report released Tuesday by five consumer, environmental and public health groups.”

The article added that, “Subway, which last year received an F rating in the report’s inaugural edition, rose to a B for its commitment announced earlier this year to eliminate antibiotics across its entire menu. Last year, the restaurant chain did not even respond to the survey and did not offer public details of its antibiotics policies, the groups reported. Starbucks, which again earned an F rating, has maintained a similar silence for two years running.

McDonald’s rose a half grade, to C-plus in the wake of its decision earlier this year to eliminate antibiotics from its chicken supply.”

Today’s L.A. Times article also stated that, “Activists estimate that about 40% of the chicken supply chain is or will soon be free of antibiotics that are important to human health. A commitment by KFC, said [Sasha Stashwick, senior advocate for food and agriculture at the Natural Resources Defense Council], ‘could tip the industry over the 50% mark.’

“But the beef and pork industries have been much slower in adopting more aggressive policies regarding antibiotic use.”

Meanwhile, Melanie Evans reported in today’s Wall Street Journal that, “A new study by the Centers for Disease Control and Prevention found more widespread use by U.S. hospitals of powerful antibiotics designed to fight infections when less-robust antibiotics fail, a ‘worrisome’ development as bacteria grow increasingly immune to treatment, the researchers said.”

Ms. Evans noted that, “The study, published in JAMA Internal Medicine, found hospitals increasingly bypassed drugs considered the first line of defense against bacteria in favor of more potent antibiotics.”

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Sec. Vilsack Points to Positives in “Rural America”- While Senate Ag Committee set to Focus on “Farm Economy”

Tomorrow, Secretary of Agriculture Tom Vilsack will provide testimony before the Senate Agriculture Committee at a hearing titled, “The U.S. Department of Agriculture and the Current State of the Farm Economy.”

In perhaps would could be a precursor to some of the points Sec. Vilsack may highlight tomorrow, he penned a brief opinion item that was posted on Monday at The New York Times Online (“Rural America Has Already Begun to Rebound“) where he noted that, “Despite concerns about the fate of rural America, a number of key benchmarks show these areas have been growing economically since 2014. Many were surprised when the Census Bureau released data last Thursday showing median household income in non-metro areas of the United States had increased by 3.4 percent in 2015 and poverty rates had fallen.”

Sec. Vilsack stated that, “Rural populations have stabilized and are beginning to grow, the Agriculture Department reported earlier this year. Then we learned that rural counties had added more than 250,000 jobs in 2014 and 2015. As a result, the rural unemployment rate has dropped below 6 percent for the first time since 2007. Hunger is down in rural and urban areas alike. Today, about 8 million fewer people are struggling to provide adequate food for themselves or their families compared to the height of the recession.

“Taken together, these benchmarks demonstrate a turning point in rural communities.”

Note that the title of the Senate Ag Committee hearing includes the words “Farm Economy,” while Sec. Vilsack’s opinion item referenced “Rural America.”

As the U.S. looks to harvest record corn and soybean crops this fall, commodity prices have dropped and have caused a decrease in projected net farm income.

Secretary Vilsack has recently referenced the different components of “farm household” income by pointing to both “off farm income,” as well as “farm income.”

A recent DTN article, that included perspective from Sec. Vilsack, noted that, “The average American farm family has a median income of about $76,282, according to USDA, which is $19,782 higher than average U.S. household.”

And during a recent conference call with reporters, Sec. Vilsack expounded on the fact that overall “farm household” income, which includes “off-farm” income, as well as “farm income,” is significantly above national averages. This is primarily due to the fact that “off farm” income in farm households remains strong. Sec. Vilsack noted that what is done in the policy area of rural development is important because it helps to strengthen “off farm” income opportunities.

Perhaps these different components of “farm household” income will be a subject that is addressed in greater detail at tomorrow’s Ag Committee hearing.

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Focus on Trade, and Wheat Export Issues

Recall that last week, the U.S. action took action against Chinese domestic crop subsidies at the World Trade Organization (W.T.O.).

In his weekly electronic newsletter yesterday, House Ag Committee Member Randy Neugebauer (R., Tex.) stated that, “I am very pleased the United States has initiated a new agriculture trade enforcement action against China at the [W.T.O.]. U.S. Trade Representative Michael Froman and U.S. Agriculture Secretary Tom Vilsack announced last week that the United States is bringing a case against China to challenge the support China has provided for its own wheat, corn, and rice crops. Like other countries, China agreed to limits on its domestic government support for agriculture when it joined the WTO. However, China has exceeded the limits it agreed to on corn, rice, and wheat by $100 billion in 2015 alone. Excessive government support, such as the market-price support China provides, artificially inflates the prices Chinese producers receive, causing overproduction that keeps out U.S. exports. China’s actions have created an uneven playing field for American producers who are following the rules. Moving forward, I hope U.S. trade officials also pursue enforcement action against unfair Chinese policies that impact other crops, such as cotton.”

Some agricultural observers have indicated that wheat farmers may have the most to potentially gain from the U.S. W.T.O. action against China.

Several variables are currently at play that are negatively impacting the profitability of wheat production in the U.S.

Reuters news reported yesterday that, “Farmers in Oklahoma, the No. 2 winter wheat producing state, face potential losses of roughly $55 an acre for wheat in 2017, according to Kim Anderson, an agricultural economist at Oklahoma State University.”

The Reuters article added that, “The world wheat harvest hit a record in 2016, sending nearby Chicago Board of Trade futures to 10-year lows below $4 a bushel.”

Meanwhile, Emiko Terazono and Heba Saleh reported yesterday at The Financial Times Online that, “For the world’s wheat farmers already reeling from decade-low prices due to bumper crops around the world, it is the last thing they wanted.

Confusion surrounding quarantine rules in Egypt has effectively taken the world’s largest wheat importer out of the international market, depressing prices, which are already weak from plentiful harvests.

Wheat sales to Egypt have come to a standstill after the government announced in late August that there would be zero tolerance for any traces of ergot fungus, a naturally occurring fungus, despite internationally accepted standards which allow for levels of 0.05 per cent.”

The FT writers noted that, “The Egyptian government, which provides subsidised bread to citizens, is the top buyer of wheat, but few traders are now willing to put in their offers in the state-run wheat tenders after the country’s authorities recently rejected vessels from Romania as well as Russia.”

Yesterday’s FT article added that, “The virtual absence of the world’s largest buyer comes as wheat markets are groaning under excess supplies.

“The Australian government recently raised its wheat production forecasts for 2016-17 to the second highest on record, while the US Department of Agriculture also increased its world production estimates for the same period to a new record high of 744m tonnes due to increases in India, Kazakhstan, Brazil and Australia.”

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