Climate- Policy Issues; COOL; Ag Economy; Biofuels; Immigration; Biotech; and, EPA- Monday

Posted By Keith Good On March 31, 2014

Climate Issues- White House Proposal, and Farm Bill Issues

Justin Gillis reported on the front page of today’s New York Times that, “Climate change is already having sweeping effects on every continent and throughout the world’s oceans, scientists reported Monday, and they warned that the problem is likely to grow substantially worse unless greenhouse emissions are brought under control.

The report by the Intergovernmental Panel on Climate Change, a United Nations group that periodically summarizes climate science, concluded that ice caps are melting, sea ice in the Arctic is collapsing, water supplies are coming under stress, heat waves and heavy rains are intensifying, coral reefs are dying, and fish and many other creatures are migrating toward the poles or in some cases going extinct.”

Chapter Seven of the report, which is available here, is titled, “Food Security & Food Production Systems.”

Meanwhile, Amy Harder reported in Saturday’s Wall Street Journal that, “The Obama administration on Friday directed several federal agencies to clamp down on emissions of methane, a potent greenhouse gas emitted from natural gas and other industries, fleshing out an initiative that attempts to address environmental concerns without harming the nation’s booming natural-gas industry [Fact SheetFull Report].”

Kelsey Gee reported on Friday at The Wall Street Journal Online that, “The Obama administration’s push to cut methane emissions puts a bull’s-eye on an issue that has long drawn criticism of the agriculture industry from environmentalists.

“But the White House’s proposals for curbing gas emitted by livestock are relatively tame, relying strictly on voluntary measures that are largely already under way and are focused primarily on the dairy sector.”

Ms. Gee explained that, “Agriculture accounts for 36% of the human-related methane produced in the U.S., the White House said. Livestock is by far the biggest source, with the nation’s herd of about 88 million cattle particularly big producers [related graph].

“Cattle and other ruminant animals have digestive systems that use fermentation to metabolize plant materials that many animals can’t easily digest. The Darwinian advantage also produces methane that cattle exhale or belch in large quantities. Livestock emissions also come from giant pools of manure from cattle, pigs and other animals.”

The Journal article added that, “Thomas Hertel, a professor of agricultural economics at Purdue University who researches climate and environmental policies, said ‘it’s nice to see efforts being made’ to encourage low-cost methods to reduce gas emissions in agriculture, which ‘hasn’t been pushed very hard so far.’

“Still, he questioned how effective the voluntary measures would be.

“‘Clean energy, value-added manure, jobs, it all sounds good,’ said Mr. Hertel. ‘But reducing gas emission by 25% by 2020 seems like it will require more than letting the industry know there’s an opportunity out there.’

“Agriculture Secretary Tom Vilsack played down the new initiative. ‘It really doesn’t mean anything beyond continuing what we’re already doing,’ he said in an interview. He said the USDA already has a ‘very aggressive partnership’ with the dairy industry, including a commitment started several years ago to help fund the purchase of methane digesters.”

Neela Banerjee reported in Saturday’s Los Angeles Times that, “But methane digesters already in use are expensive, and there are sometimes no customers for the power they produce, which makes them a tricky sell to farmers, said Andrew Walmsley, director of government relations for the American Farm Bureau Federation.”

Coral Davenport reported in Saturday’s New York Times that, “Since cattle flatulence and manure are a significant source of methane, farmers have long been worried that a federal methane control strategy could place a burden on them. But Andrew Walmsley, director of congressional relations for the American Farm Bureau Federation, said that his group was pleased that, for now, the administration’s proposals to reduce methane from cattle were voluntary.

“‘All indications are that it’s voluntary,’ he said, ‘but we do see increased potential for scrutiny for us down the line, which would cause concern.’”

news release Friday from the National Milk Producers Federation and the Innovation Center for U.S. Dairy indicated that, “‘This announcement validates the path the dairy industry is on – one focused on proactive incentives that can increase farm income, not punitive regulations that would add more costs,’ said Jim Mulhern, president and chief executive officer of the National Milk Producers Federation, which develops and carries out policies that advance the well-being of dairy farmers and the cooperatives they own.”

National Farmers Union (NFU) Senior Vice President of Programs Chandler Gouleindicated on Friday that, “NFU is pleased that the administration’s strategy to reduce methane emissions recognizes that farmers and ranchers are important partners in the effort to solve our nation’s climate challenges. These efforts build on the robust support for renewable energy production included in the recently passed 2014 Farm Bill.”

Meanwhile, a news release from the Farm Service Agency (FSA- USDA) on Friday noted that, “[FSA] Administrator Juan M. Garcia today announced the extension of the Milk Income Loss Contract (MILC) program.

“The extended MILC protects dairy farmers enrolled in the program against income loss through Sept. 1, 2014, or until a new Margin Protection Program for dairy producers (MPP), established by the 2014 Farm Bill, is operational.”

In other livestock developments, The New York Times editorial board opined on Saturday that, “The Food and Drug Administration’s efforts to get the voluntary cooperation of drug companies to curb the overuse of antibiotics in animal feed is off to a rousing good start.

“The agency announced on Wednesday that 25 of the 26 manufacturers of the antibiotics of greatest concern had agreed to modify their labels to block such usage. They account for almost all sales of these drugs.”

After additional commentary, the Times opinion item stated that, “The agency pledged to monitor how well the companies are abiding by the changes and to take further actions if necessary. It will also be important to measure whether there is a decline in antibiotic use and antibiotic resistance on farms and ranches. If not, the F.D.A. may need to pursue other regulatory action.”

And, AP writer Frederic J. Frommer reported on Saturday that, “Two animal welfare groups and dozens of lawmakers are urging the Obama administration to improve humane treatment of poultry at slaughterhouses, citing statistics that show hundreds of thousands of chickens being accidentally dropped alive into scalding tanks every year.”

In a separate policy issue regarding cotton and Brazil, an article on Friday from Inside U.S. Trade reported that, “Officials from the Office of the U.S. Trade Representative and U.S. Department of Agriculture (USDA) headed to Brazil this week to hold discussions with their Brazilian counterparts on how to resolve the longstanding bilateral dispute over U.S. agricultural subsidies, including those for U.S. cotton producers.

“The U.S. officials traveled to Brasilia from March 25-26 primarily to discuss the fallout of the U.S. farm bill, which Congress passed in FebruaryThe two sides were expected to discuss whether the Obama administration can take any steps in implementing the bill that will make the new law more palatable to the Brazilian government.”

 

Country of Origin Labeling (COOL)

AP writer Mary Clare Jalonick reported on Friday that, “Shoppers who want to buy American beef for dinner instead of meat from Canada or Mexico will still be able to find the country of origin on the label.

“A federal appeals court ruling Friday  allows the government to go forward with rules that require labels on packaged steaks, ribs and other cuts of meat to say where the animals were born, raised and slaughtered. The meat industry attempted to block the rules, which went into effect last year, saying they are costly and provide no health benefits to the consumer.”

Ms. Jalonick added that, “In court, the meat industry said the rules go beyond what Congress intended and violate First Amendment rights to freedom of speech by forcing meat producers to provide information about their products. That information is of no real value to the consumer, the industry argued.

“Judge Stephen F. Williams of the U.S. Court of Appeals for the District of Columbia ruled those claims were unlikely to succeed in court and refused to block the labeling rules, agreeing with a lower federal court.”

National Farmers Union President Roger Johnson noted on Friday that, “I am extremely pleased with today’s decision.  Yet again, claims that the revised COOL regulations are unconstitutional or inconsistent with the COOL statute have been rejected in federal court.”

 

Agricultural Economy

Jesse Newman and Kelsey Gee reported in today’s Wall Street Journal that, “Scientists and regulators investigating the mysterious spread of a deadly virus plaguing the U.S. pork industry are stepping up their scrutiny of what the nation’s hog herd eats.

“With a dearth of solid leads, investigators are exploring whether something in pig feed could be a conduit for porcine epidemic diarrhea virus, which has spread to 27 states and killed millions of young pigs since it was first identified in the U.S. last April. One focus of the inquiry: porcine plasma, a widely used feed ingredient made from the blood of slaughtered hogs and fed to piglets [related graph].”

The article explained that, “The U.S. Food and Drug Administration, the Agriculture Department and pork-industry officials are examining a range of feed ingredients and manufacturing processes as well as other possible pathways for the virus, like contaminated air or dust particles carried from farm to farm.

“Though the evidence is inconclusive, some researchers say that porcine plasma could be spreading the virus from adult pigs that show few symptoms, or that some plasma may have been contaminated in transit.”

In related news, Bloomberg writers Elizabeth Campbell and Megan Durisin reported on Friday that, “The U.S. inventory of hogs farmers plan to sell for slaughter was 3.7 percent smaller on March 1 than a year earlier as a piglet-killing virus contributed to the smallest total herd in seven yearsthe government said  [related graph].”

Also on Friday, USDA’s National Agricultural Statistics Service (NASS) released its monthly Agricultural Prices report, which noted stated in part that, “The corn price, at $4.54 per bushel, is up 19 cents from last month but $2.59 below March 2013[related graph], the soybean price, at $13.60 per bushel, increased 40 cents from February but is $1.00 below March 2013 [related graph], and the March price for all wheat, at $6.90 per bushel, is up 41 cents from February but 89 cents below March 2013 [related graph].

With respect to livestock related prices, the NASS update noted that, “The March beef cattle price of $147 per cwt is up $3.00 from last month and $22.00 higher than March 2013 [related graph], and the March all milk price of $25.40 per cwt is up 50 cents from last month and $6.30 from March 2013 [related graph].

See also this one-minute FarmPolicy.com overview of the Ag Prices report.

Barbara Demick reported on the front page of Saturday’s Los Angeles Times that, “From an economic standpoint, Chinese investment in farmland has impeccable logic. One oft-cited statistic is that China has 20% of the world’s population and just 9% of its arable land.

“‘Throughout Chinese history, our land was never enough,’ said Tian Zhihong, a professor of international agriculture at China Agricultural University.

China suffers from chronic drought and desertification, and has compounded its problems in recent decades by polluting the land or paving it over in a headlong rush toward economic development. The Ministry of Land and Resources in December revealed the results of a five-year study (previously kept secret): 8 million acres of farmland, or roughly 2% of the country’s arable land, is too polluted for farming.”

The article added that, “When China’s largest pork producer, Shuanghui International Holdings, last year paid $4.7 billon for its U.S. counterpartSmithfield Foods Inc., it also acquired more than 100,000 acres of farmland in Missouri, Texas and North Carolina. (Virginia-based Smithfield didn’t disclose how much farmland was covered by the purchase, but just one subsidiary had reported it owned more than 100,000 acres in the three states.)

“In Australia, a Chinese-led consortium acquired a sprawling 200,000-acre cotton plantation known as Cubbie Station, complete with what is said to be the largest irrigation system in the Southern Hemisphere.”

And Kelsey Gee reported on Saturday at Barron’s Online that, “Milk futures are soaring to new heights as Asia’s growing thirst for the white liquid spills into the U.S. market. American companies shipped record amounts of milk powder, cheese, and lactose, which is used in infant formulas and bakery products, to Asia last year as drought curbed dairy production in other major exporters such as New Zealand.

U.S. dairy exports grew 19% by volume in 2013, according to the U.S. Dairy Export Council. Rising prices mean the value of those exports surged even higher, jumping 31% to $6.7 billion.

“At the same time, demand for dairy products in China and other Asian countries has risen rapidly, due to growing populations and changing tastes.”

See also this FarmPolicy.com update from March 20- “FarmPolicy.com Focus– USDA Milk Production Report, Prices.”

And with respect to trade issues, a news release Friday from the American Sugar Alliance stated that, “America’s sugar producers today asked the United States government to take corrective action against Mexico’s sugar industry for dumping subsidized sugar onto the U.S. market and inflicting harm on U.S. growers and taxpayers [related fact sheetpetition].”

 

Biofuels

Gregory Meyer reported on Friday at The Financial Times Online that, “The world’s biggest biofuels market is straining under a supply crunch.

“US prices for corn-based ethanol have leapt by two-thirds this year to surpass $4 per gallon in New York. Ethanol now costs more than petrol despite giving cars fewer miles per gallon.”

The FT article noted that, “The US Environmental Protection Agency has proposed slashing the corn ethanol mandate for the first time to 13.01bn gallons this year, down from the 14.4bn requirement outlined by federal statute.

“EPA administrator Gina McCarthy defended the proposal in a congressional hearing on Thursday, noting ‘infrastructure challenges and the inability at this point to achieve the levels of ethanol that are in the law.’”

The article added that, “But Michael Cosgrove, partner at Vectra Capital, a New York trading group, contends that demand will persist regardless.

“Practically speaking, the mandate ‘has absolutely nothing to do with the amount of ethanol that’s going to be produced or consumed in the US. Nothing. You’ve still got to blend a gasoline additive to meet minimum octane and oxygenate specs, and the only way to get there right now is to blend ethanol,’ he said.”

 

Immigration

Jennifer Medina reported in Sunday’s New York Times that, “California is home to an estimated 2.5 million illegal immigrants, more than in any other state. Perhaps nowhere else captures the contradictions and complications of immigration policy better than California’s Central Valley, where nearly all farmworkers are immigrants, roughly half of them living here illegally, according to estimates from agricultural economists at the University of California, Davis.”

Ms. Medina explained that, “That reality is shaping the views of agriculture business owners here, like [Chuck Herrin, who runs a large farm labor contracting company], who cannot recall ever voting for a Democrat. In dozens of interviews, farmers and owners of related businesses said that even the current system of tacitly using illegal labor was failing to sustain them. A work force that arrived in the 1990s is aging out of heavy labor, Americans do not want the jobs, and tightened security at the border is discouraging new immigrants from arriving, they say, leaving them to struggle amid the paralysis on immigration policy. No other region may be as eager to keep immigration legislation alive.

“The tension is so high that the powerful Western Growers Association, a group based in Irvine, Calif., that represents hundreds of farmers in California and Arizona, says many of its members may withhold contributions from Republicans in congressional races because of the party’s stance against a comprehensive immigration overhaul.”

The Times article added that, “After the 2012 presidential election, as Republicans spoke enthusiastically about the need to court Latinos, [Tom Nassif, the president of the Western Growers Association] was optimistic that immigration would become a top priority. But exasperation has replaced his confidence in recent months, and he said his group could withhold hundreds of thousands of dollars in congressional races in which it has usually supported Republicans.”

Ralph Reed and Russell Moore indicated in a column in today’s Wall Street Journal that, “Republicans in the House of Representatives—sensing the political winds at their backs heading into the midterm election and distrustful of President Obama’s willingness to enforce the law—have opted to do nothing about immigration. Their strategy is shortsighted.”

And Mary Kay Thatcher, Senior Director of Congressional Relations at the American Farm Bureau Federation indicated on Friday’s AgriTalk radio program with Mike Adams that, “We certainly keep working immigration, but I think that is a real uphill battle.” (Related AgriTalk audio clip

 (MP3- one minute)).

 

Biotech

Marc Lifsher reported yesterday at the Los Angeles Times Online that, “The high-stakes battle over labeling foods with genetically engineered ingredients is back.

“Less than two years after California voters narrowly turned down a labeling ballot measure, the state Senate is grappling with the issue. The 2012 campaign cost the food industry $46 million to fight, five times more than the amount spent by the measure’s proponents.

“By a 5-2 vote last week, the Health Committee approved Senate Bill 1381, by Sen. Noreen Evans (D-Santa Rosa), which would require labeling of genetically engineered bulk and packaged foods beginning in 2016. The legislation goes to the Rules Committee and perhaps the Agriculture Committee, where it could face trouble.”

 

EPA (Environmental Protection Agency) Issues

news release on Friday from Rep. Rick Crawford (R., Ark.) indicated that, “The U.S. House delegation from Arkansas introduced legislation Thursday requiring the U.S. Fish and Wildlife Service (FWS) to consider social and economic evaluations for affected private and public land owners before issuing a Critical Habitat Designation (CHD).

“The bill—known as the Common Sense in Species Protection Act, or H.R. 4319—has Rep. Rick Crawford (AR-1) as its sponsor, with Rep. Tim Griffin (AR-2), Rep. Steve Womack (AR-3), and Rep. Tom Cotton (AR-4) serving as cosponsors.”

 

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Keith Good
President
FarmPolicy.com, Inc.
Champaign, IL

 

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