June 30, 2000

Congress Members Weigh in on Biotechnology. Senate Agriculture Committee Chairman Richard Lugar (R-IN) believes technologies that win acceptance eventually are those that demonstrate "a clear benefit to society with few risks." Rep. Tony Hall (D-OH), however, believes biotechnology has little relevance to poor and hungry people, "and its potential is uncertain." The views were expressed Thursday at an educational forum on biotechnology and world hunger held at the Capitol. 

Senate Panel Approves Uniform Labeling Food Bill. The Senate Agriculture Committee Thursday approved legislation designed to establish uniform food safety warning requirements throughout the 50 states. Individual states could not require food safety warnings on labels that would be at odds with federal standards. Food interests supported the legislation. 

Senate Approves Livestock Price Reporting Funds. The Senate Thursday approved more money to pay for a new program that reports price, volume and terms of sale for cattle, hogs and sheep. The increase was needed because USDA had underestimated by more than $1 million the cost of operating the program. The action Thursday brings the total level of funding to $6 million for this fiscal year. The money was included in a military spending bill. 

Term Limits on Some Farm Loans Suspended. The crop insurance reform bill passed by Congress and signed into law provides that farmers previously denied loans can now become eligible. The act suspended for two years term limits for direct and guaranteed USDA operating loans. 

House Panel Reviews Input Pricing. The House Agriculture Committee was told Thursday that the U.S. agricultural chemical market is extremely competitive with pricing considerations a high priority for companies seeking to market new products to farmers. It's also a complex market, made up of several hundred smaller segmented markets.

News Summaries

Negotiating Proposal Announced. Agriculture Secretary Dan Glickman and U.S. Trade Representative Charlene Barshefsky unveiled the agriculture negotiating proposal the United States will present in Geneva Friday (June 30) as part of world agriculture trade talks. Building on earlier world trade reforms, the United States proposes to eliminate export subsidies; reduce and strictly limit domestic supports; further open global markets by lowering tariffs and raising quotas; limit the use of agricultural monopolies that control imports and exports; give special consideration to the needs of the least developed and developing countries; recommit to the concept of the availability of food for all. The World Trade Organization's Committee on Agriculture is meeting in special session in Geneva to discuss further liberalization in world agricultural trade. This is the first opportunity for countries to present their negotiating proposals for the talks. 

Nearly $5 Million for Rural Areas. USDA has announced $4.7 million in rural development loans and grants in six states as part of a rural empowerment zone-enterprise community initiative. Speaking at the White House Empowerment Conference in Columbus, Agriculture Secretary Dan Glickman said that the funds, from USDA's Community Facilities Program, will build infrastructure and increase economic opportunity in distressed rural areas. Funds are used for job training, business development, career planning and job placement, and infrastructure improvements. New York, Georgia, Michigan, South Carolina, Florida, and Louisiana are the states that will be benefitting. Glickman also announced more than $785,000 in grants to benefit the nation's urban and community forests from Seattle, WA., to City Island, NY. Organizations in those communities will add another $1,151,000 for research and education projects for urban forests. 

Pork Board Approves Supplemental Funding. The National Pork Board has approved $4.64 million in supplemental funding for 18 projects to enhance promotion, research and consumer information programs. The board action came during a meeting held in conjunction with World Pork Expo in Indianapolis. Enhanced promotional efforts through retail merchandising will receive more than half of the supplemental funding, or $2.53 million. The consumer advertising area received an additional $264,000. Foreign Market Development programs received $275,000 in supplemental funding. Educating future generations of pork consumers will be enhanced by a $103,000 grant in supplemental funding to the Pork Information Bureau. Programs in the areas of swine health and pork safety will receive $777,000 which, among other projects, will help fund a pseudorabies awareness program applicable to the last stages of eradicating the swine disease. Supplemental funding for production technology and information amounted to $686,000. Some of this funding will help support ongoing educational efforts for the production and financial standards and a program to help understand business components for producers to capture added value. For year 2000, the board estimates that it will spend approximately $43.2 million in national programs. Allocation of those funds is 68% for promotions, 24% research and 8% for consumer information. 

Business Pressures for China Senate Vote. Big business on Thursday stepped up pressure on Senate Republican Leader Trent Lott to schedule a final vote in July on a landmark China trade bill, warning that foot-dragging could hurt American companies and set back Sino-U.S. relations, REUTERS reports. "If PNTR (permanent normal trade relations) is lost ... America will pay the consequences for decades," U.S. Chamber of Commerce President Thomas Donohue said in a joint statement with the National Association of Manufacturers, the Business Roundtable and the Information Technology Industry Council. "PNTR is an essential national priority, not just for economic reasons, but because it will set the stage for U.S.-China relations in the decades to come. It is important enough not to be delayed," said Samuel Maury, president of the Business Roundtable. Lott of Mississippi says he expects the Senate to vote in July on the trade bill, which would grant permanent normal trade relations to China. But he has refused to set a date, insisting that the Senate first complete work on key spending bills to fund the federal government and vote on legislation to combat weapons proliferation by China. PNTR has already won House of Representatives approval, and Senate passage is virtually assured if Lott brings the bill to the floor. Democrats have accused Lott of delaying the vote to maximize leverage on spending bills and to hurt presidential hopeful Al Gore before the Democratic convention in August. Once approved by the Senate and signed into law by President Clinton, the legislation would end the annual ritual of reviewing Beijing's trade status and guarantee Chinese goods the same low-tariff access to U.S. markets as products from nearly every other nation. In exchange for the trade benefits, China would open a wide range of markets, from agriculture to telecommunications, to U.S. businesses under the terms of a landmark agreement signed in November 1999. That agreement was a major step in China's bid to join the World Trade Organization. 

Panel Okays Commodity Futures Modernization Act. The Senate Agriculture Committee today approved by voice vote legislation to reform futures regulations and provide legal certainty for over-the-counter (OTC) financial derivatives. The Commodity Futures Modernization Act, passed on a voice vote, reauthorizes the Commodity Futures Trading Commission (CFTC) and reforms the Commodity Exchange Act (CEA) in three ways: incorporating the recommendations of the President's Working Group (PWG) on the legal treatment of OTC derivatives; codifying the CFTC's recent regulatory relief proposal to ensure that futures exchanges are appropriately regulated and remain competitive; and reforming the "Shad-Johnson" jurisdictional accord, which until now has banned U.S. exchanges from trading futures on single stocks or narrowly-constructed stock indexes. Equivalent products already trade in the OTC markets, on U.S. options exchanges and on overseas futures exchanges. 

Cuba Vote Expected in July. A vote on easing U.S. sanctions on Cuba is unlikely before mid-July, lawmakers said on Thursday, despite initial hopes that the potentially historic shift in U.S. policy could be sent to the president this week, REUTERS reports. The Republican plan would allow food and medicine sales to any Cuban buyer, including President Fidel Castro's government. It would be a major change in the four-decade-old U.S. embargo, although a number of regulations would remain. Sanctions were imposed on Cuba in the early 1960s as it accepted Soviet support. In the past few years, sentiment in Congress has shifted toward using trade as a way to foster democracy abroad. On Tuesday, Republican leaders announced a compromise between pro-trade farm-state lawmakers and the anti-Castro bloc to exempt food and medicine from all unilateral U.S. embargoes. Cuba would be the major beneficiary, but the legislation would put into law similar steps already taken by President Bill Clinton for Iran, Libya, Sudan and North Korea. Leaders said the language would be attached to some bill nearing a final vote in the Senate and House of Representatives. A procedural disagreement with the Senate thwarted an attempt to incorporate it immediately into a funding bill for military construction projects, House leaders said on Thursday. A spokesman for House Speaker Dennis Hastert said there had been no decision on what vehicle to use for the sanction step. But a number of lawmakers said it would probably be a $75 billion annual agriculture funding bill once House and Senate negotiators began work on the final compromise version. THE WALL STREET JOURNAL reports the House approved an $11.2 billion emergency-spending bill after a day-long standoff over lifting U.S. trade sanctions against Cuba for food and medicine. Speaker Dennis Hastert forced the delay in the vain hope of amending the bill with a Cuba trade provision, which had been brokered between conservatives and farm-state lawmakers in his party. Senators -- upset with the restrictive terms of the House trade deal -- threatened to filibuster, and the Illinois Republican backed down last night for fear of jeopardizing the underlying bill, which provides billions for the Pentagon and the drug war in Colombia. 

Anti-Sugar Buying Amendment Falls. An amendment aimed at blocking the USDA from making more sugar purchases was killed on Thursday without the House having an opportunity to vote, REUTERS reports. "The derailing of my amendment today, will permit the sugar program to continue its damage -- damage to our environment, damage to the taxpayer, damage to American jobs and damage to the consumer," Rep. Dan Miller (R-FL) said. Miller had planned to offer the amendment to the fiscal 2001 agricultural appropriations bill, but it was struck down by a parliamentary point of order. It would have blocked the agriculture department from buying more sugar. Miller is a longtime foe of the sugar program. Earlier this month, USDA bought 132,000 tons of sugar with the aim of propping up prices enough to stop processors from forfeiting sugar to the government under the federal loan program.

June 29, 2000

Lugar Claims USDA Misspent Funds. Senate Agriculture Committee Chairman Richard Lugar (R-IN) wants USDA to explain why funds that were designated for soil erosion prevention were spent on non-related items such as wall murals. In a new report to Congress, the USDA Office of Inspector General found that "over $20 million in USDA funds were improperly expended or obligated for the URP (Urban Resources Partnership) program during fiscal years 1994 through 1998." 

EPA Releases New Water Pollution Report. The Environmental Protection Agency, releasing new data from a 1998 assessment of the nation's waterways, says 40% of waterways assessed remain too polluted for fishing and swimming. The 40% level is consistent with findings of the last decade, the agency says. Runoff from agricultural lands and urban areas remains the primary source of the leading pollutants: siltation, bacteria, the nutrients phosphorus and nitrogen, and metals. 

Scientific Lack Detailed for Committee. The House Agriculture Committee, meeting to consider the condition of scientific expertise at the Environmental Protection Agency, Wednesday was told the need for additional science in environmental policy making "is unequivocally recognized," according to Derek Winstanley, chief of the Illinois State Water Survey, a division of the Office of Scientific Research and Analysis in the Illinois Department of Natural Resources. 

Grassley Praises Administration's Trade Proposal. Even as Agriculture Secretary Dan Glickman and U.S. Trade Representative Charlene Barshefsky prepared to reveal the Clinton Administration's agriculture proposal for world trade negotiations, Sen. Charles Grassley (R-IA) praised the administration for making "a very bold proposal." 

Combest, Stenholm Call on EPA to Withdraw Rule. Two days before the Environmental Protection Agency's (EPA) proposed Total Maximum Daily Load (TMDL) rules take effect, the House Committee on Agriculture, led by Chairman Larry Combest (R-TX), today renewed its for the EPA to withdraw the controversial regulations.

News Summaries

Wheat Exports to Iran a Hope. U.S. wheat growers remain hopeful of making sales to Iran, despite relatively little progress since the Clinton administration eased sanctions last year, a top industry official told REUTERS. "We've had some contact with the Iranians, but progress is very slow," said Alan Tracy, president of the U.S. Wheat Associates, an export market development farm group. In the coming days, Congress is expected to approve legislation to allow food and medicine sales to Cuba -- a move eagerly awaited by U.S. farm groups. The same legislation will also put into law actions taken by the administration last year to allow U.S. food and medicine sales to Iran, Sudan and Libya despite sanctions that continue on other trade with those countries. Since August, when the sanctions were eased, private Iranian buyers have bought about 600,000 tons of U.S. corn. However, Iranian wheat imports are controlled by the government, which has not yet seen the need to buy from the United States, said Gregg Doud, a wheat market analyst with World Perspectives, a commodity analysis firm. USDA forecast Iran will import 7.5 million tons of wheat in 2000-01, making it the world's largest wheat importer this year. However, it could easily fill that demand from other suppliers -- such as Canada, Argentina and Australia -- without turning to the United States, Doud said. 

EU Warned on Export Subsidies. Officials from farm produce- exporting countries warned the European Union on Wednesday it would face a challenge in the World Trade Organization (WTO) unless it moved soon to drop agricultural export subsidies, REUTERS reports from Geneva. The officials, representatives of the 18-member Cairns Group in the WTO, were speaking at a news conference before a two-day session of trade envoys preparing to start formal talks on a possible new pact to open up global farm trade. "Europe is essentially isolated on this issue," declared Geoffrey Raby, Australia's ambassador to the Geneva-based WTO, whose country is coordinator for the Group, a coalition of developed and developing states. Raby, and Argentine negotiator Hector Rogelio Torres, signaled that the Group would not agree to extend a WTO "peace clause" on agricultural disputes due to run out at the end of 2003 without a radical shift by the EU. "The end of the peace clause is not negotiable," declared Raby. "It all ends on December 31, 2003, and if there is no change, the EU has a huge problem." Rogelio Torres said Argentina was preparing cases against the EU that could be taken to the WTO's dispute settlement body from the start of 2004 -- and hinted that other complaints could even be filed before that date. The EU has made clear it was committed to maintaining direct payments to its farmers, something the 18 Cairns nations and many poor developing countries as well as the United States argue distort world agricultural trade. 

Corn Declines Yet Again. Corn prices fell 2%, declining for the fourth time in five sessions as forecasts for more rain in the Midwest improved prospects for a crop expected to be the third-largest on record, BLOOMBERG NEWS reports. "The bear has come out of the woodwork again, and it's going to attack the market,"' said Sid Love, a grains analyst with Kropf & Love Consulting Inc. in Overland Park, KS. Rainfall levels will be normal to above-normal in the U.S. Corn Belt from July 2 to July 6, the National Weather Service predicted this week. With normal temperatures forecast for the period, conditions will be ideal as corn plants pollinate and develop kernels, a growth stage that largely determines yields. Corn for December delivery, after the harvest, fell 4.25 cents to $2.13 a bushel on the Chicago Board of Trade, a closing low for the contract. The less-active July contract fell 4 cents to $1.9275 a bushel. That contract now has declined 23% from a two-year high on May 3, when traders were concerned that a summer drought would damage the corn crop. Temperatures in the Midwest next week are expected to hover around 90 degrees Fahrenheit. The corn crop, which will pollinate during the first half of the month, could be damaged if temperatures reach 97 to 102 degrees for several straight days. 

Analysts See Planting Changes. Farmers planted 0.3% fewer acres with corn than they intended earlier this year, after showers at planting time discouraged some from seeding the crop, a survey of analysts showed, according to BLOOMBERG NEWS. Farmers planted 77.67 million acres of corn this year, according to an average of eight analysts surveyed by Bloomberg, 210,000 fewer than the 77.88 million the government said in March that farmers intended to plant. Soybeans were planted on 75.04 million acres, the survey showed, 170,000 acres more than the 74.87 million estimated in March. "From central Iowa straight east, we saw a few extra rain days, and a few guys moved over into the beans," said Rich Nelson, a broker at Allendale Inc. in McHenry, IL. The little rain that came fell at "key planting times." Anxiety that the Midwest drought that began last year would persist through the summer also encouraged some growers to switch to soybeans, analysts said. Soybeans are normally more resistant to warm, dry weather than corn and are cheaper to plant. One acre of corn typically costs as much as $225 to produce, while soybeans average about $150 to $175 an acre, according to data compiled by Allendale. Farmers usually plant corn by mid-May and soybeans no later than June 1 to get the most bushels from each acre. 

Clinton Considers Signing Cuba Bill. President Bill Clinton said he will consider signing legislation allowing food sales to Cuba, but vowed the U.S. won't consider lifting broader sanctions until Fidel Castro shows a willingness to reach out to the administration and Congress, BLOOMBERG NEWS reports. Clinton, in a White House news conference, said Cuba and the U.S. were moving toward normal relations until 1996 when the Cuban air force shot down two private planes flown by a U.S. exile group, killing four Americans. "The deliberate decision to murder those people changed everything," Clinton said. "And it made me wonder whether Mr. Castro was hoping we never would normalize relations, so then he could use us as an excuse for the failures of his regime." The president's comments came a day after U.S. House negotiators agreed to allow food and medicine sales to Cuba for the first time in 40 years. The Senate backs a different form of the food sales bill. Clinton said he would review the final version of the measure that comes to him from Congress and will support it if it doesn't tie his hands on future action regarding Cuba.
 

June 28, 2000

Cuba Impasse Ended. House GOP leaders have reached a compromise to relax U.S. sanctions on Cuba, allowing food and medicine sales but no private or government financing on food sales. That ends five weeks of negotiations among Republicans to allow a vote to exempt food and medicine sales from unilateral U.S. embargoes. 

NAS Raps EPA for Lack of Scientific Standards. The National Academy of Sciences accuses the Environmental Protection Agency of possible "weak scientific performance" and "poor scientific credibility" by not providing for a "top science official" within the agency structure. The most senior science official now is the assistant administrator for research and development who has no needed agency-wide authority for regulatory and policy decision making, says NAS. 

ARS Finds Cropping Practices Beneficial. Increased organic matter in soil creates a healthy environment for soil-dwelling bacteria that suppress weeds, according to Agricultural Research Service scientists who for the first time have determined which cropping systems provide the best home for these beneficial bacteria. ARS scientists report that to create ideal soil conditions, farmers should rotate their crops, reduce tillage and keep herbicide applications to a minimum. 

House Panel Okays CEA Legislation. The House Committee on Agriculture Tuesday passed by voice vote, legislation sponsored by Rep. Tom Ewing (R-IL) that reauthorizes the Commodity Exchange Act (CEA) and modernizes laws for futures, futures options, and other derivatives including swaps. 

NGFA Wants Condo Storage Included. The National Grain and Feed Association wants USDA allow construction of new storage at commercial elevators under so-called "condominium" arrangements with producers to qualify for subsidized loans under USDA's subsidized storage loan program. USDA has issued an interim rule for the program which provides government-subsidized loans for construction of on-farm storage bins and related equipment.

News Summaries

U.S.-Australia War Over Wheat. A double-edged play by the United States and Australia, involving co-operation for farm trade reform but virtual warfare over wheat exports, was intensifying as World Trade Organization (WTO) meetings neared, analysts said. REUTERS reports that the focus on Australia-U.S. co-operation and competition in farm trade sharpened with a U.S. proposal tabled at the World Trade Organisation (WTO) in Geneva this week for broad farm trade reform to level the playing field around the world. The proposal calls for elimination of agricultural export subsidies, reductions in tariffs used to block farm imports and reform of state-trading enterprises (STEs). Australian farm groups and exporters on Wednesday reacted ambivalently, supporting reform but questioning the division between U.S. self-interest and its desire for reform. "We welcome any initiative to get a new round (on trade liberalization)," Lyall Howard, director of trade policy at the National Farmers Federation (NFF) said of the U.S. proposal. "(But) the frustrating thing about the Americans, when you're the world's leading power you obviously pursue self-interest and the Americans have never done otherwise." Howard said this when asked if the U.S. position was hypocritical, given its massive farm support measures. But U.S. leadership would be necessary for a multilateral reform round to go ahead in the WTO, he said. Cooperation between Australia and the U.S. will be displayed when Australia presents a paper on export subsidies to the WTO Committee on Agriculture next week -- the same session where the U.S. will present its level playing field proposals.

June 27, 2000

Pork Producers Want USDA Help. The National Pork Producers Council wants USDA to take three actions in an effort to keep hog prices from declining below $40 per cwt this fall, a benchmark considered to be the break-even price for many producers. NPPC cites declining cutout values, shrinking slaughter capacity and an expansionary hog-corn ratio to justify the actions. 

GAO Will Probe Pork Checkoff Procedures. The General Accounting Office (GAO) will investigate the validation, documentation and decision making process that culminated in the ordering of a referendum on the continuation of the pork checkoff program by USDA Feb. 25. 

House Panel Holds TMDL Hearing Wednesday. The House Agriculture Committee holds a hearing Wednesday on a bill designed to prevent the Environmental Protection Agency (EPA) from overriding congressional intent by imposing new rules regulating total maximum daily loads (TMDL) from non-point pollution sources. The hearing will be held at 10 a.m. in 1300 Longworth Building.

News Summaries

GM Corn Won't Enter Brazil. A cargo of Argentine corn purchased by Brazilian poultry and pig farms tested positive for genetically modified (GM) material and may not enter Brazil, the Agriculture Ministry said on Monday, according to a REUTERS report. Last week, ministry analysts tested samples taken from the 38,000-ton cargo, originally shipped by the Uruguayan subsidiary of private U.S. grain giant Cargill, and detected certain proteins that prove transgenic alteration. The vessel carrying the corn was not permitted to unload its cargo at the northern Brazilian port of Recife, capital of Pernambuco state, and has been lying offshore while the government team conducted its DNA tests over a number of days. Brazil outlaws the growing and marketing of genetically altered grains while neighboring Argentina, its largest trading partner and ally in the Mercosur bloc, is a major producer of GM corn and soybeans. Brazil, which cites environmental and human health concerns for its opposition to GM, is the hemisphere's last major competitor to the United States not to follow it down the transgenic trail. Despite growing more than 30 million tonnes of its own corn a year, Brazil still imports to meet internal demand. This year, due to a drought over the southern farmlands, demand is expected to exceed supply by at least two million tons. This corn was bought for use as animal feed by the Brazilian poultry industry, the world's largest, which along with its pig industry is the country's largest corn consumer. 

Corn Goes to Six-Month Low. Corn declined to a six-month low as a weekend storm in the Midwest extended weeks of wet weather that have erased the threat of drought damage to the nation's largest crop, BLOOMBERG NEWS reports. As much as five inches of rain fell in Iowa and Nebraska, two of the nation's biggest corn-producing states. Steady rains during the past six weeks have restored moisture to arid subsoil after a winter drought, improving the chances of a bumper fall harvest. Since early May, corn prices are down more than 22%. "We were terribly dry up until Memorial Day, but we've gotten about 10 inches of rain in June," said Russ Koeller, who planted 3,400 acres of corn near New Canton, IL. Barring extreme heat, there should be enough moisture for plants to develop kernels in coming weeks, he said. The government had forecast a drought this year, pushing corn close to a two-year high in May. Although a dry spring enabled farmers to plant corn more quickly than usual, parched soil threatened to stymie early growth. That concern has dissipated, with the harvest about three months away, analysts said. 

Cuba Sanctions Impasse Broken. Republican leaders in the House brokered a compromise early Tuesday to relax U.S. sanctions on Cuba to allow unfettered food and medicine sales but no private or government financing would be allowed on the food sales, REUTERS reports. The agreement would end five weeks of behind the scenes fighting among Republicans and allow a vote on exempting food and medicine from unilateral U.S. embargoes. Cuba would be the major beneficiary but Iran, Libya, Sudan and North Korea would be affected as well. If approved by Congress, it would be a significant change, politically and economically, in U.S. sanctions imposed in the early 1960s in hopes of ousting the Fidel Castro government. Cuba would face greater restrictions on financing than the other nations, which would be denied U.S. government credit but could seek private U.S. financing. The ban on U.S. financing for food sales to Cuba reflected the sensitivity of dealing with the Communist island 90 miles from Florida. Lawmakers worked out the compromise during a five-hour meeting in House Speaker Dennis Hastert's offices. Washington state Republican George Nethercutt advocated the food and medicine exemption while Florida Republicans opposed concessions to Cuba. 

China Trade Ahead for House, Again. The House likely is headed for another contentious vote on China's trade status, despite passage in May of permanent normal trade relations, lawmakers said on Monday, REUTERS reports. One of China's most outspoken congressional critics, Rep. Dana Rohrabacher (R-CA) has introduced a resolution that could deny trade privileges to Beijing until it becomes a full-fledged member of the World Trade Organization (WTO). "Since the vote in the House of Representatives last month in support of permanent normal trade relations (PNTR), Communist China has become more repressive of its own people, continued to threaten democratic Taiwan with military attack and has continued proliferation of weapons of mass destruction technology to rogue states," Rohrabacher's office said in a statement. There is little chance the resolution will pass, congressional aides said. "We'll work to defeat it," added a spokesman for Rep. Bill Archer (R-TX) who chairs the House Ways and Means Committee. The White House was also unfazed. "This is a decision for Congress to make. Our focus is on enacting permanent normal trade relations as soon as possible and we'll continue to work with both houses to that end," said White House spokesman Jake Siewert. The House approved permanent normal trade relations with China by a bigger-than-expected margin on May 24. Senate passage is virtually assured in July, ending the annual ritual of reviewing Beijing's trade status and guaranteeing Chinese goods the same low-tariff access to U.S. markets as products from nearly every other nation. 

Feeder Cattle Standards Updated. USDA is updating feeder cattle grade standards. The revision reflects changes in the genetic composition and production of beef cattle since the current grade standards were adopted in 1979. The frame size grades, which are an important tool used to predict the weight at which an animal will grade USDA Choice, are updated to reflect production and genetic changes. USDA is also adjusting the minimum requirements for the muscle thickness grades and increasing the number of grades from three to four to accommodate thicker muscled cattle and reflect current marketing practices. The updated frame size and muscle thickness grades will more accurately reflect the value of feeder cattle. Colorado State University conducted a project for AMS to study changes in beef industry production and marketing practices and in the genetic composition of beef cattle. The study, which was funded by AMS's Federal/State Marketing Improvement Program, was completed in 1998. Results of the study showed that adjustments in grade standards were justified and would improve the standards because there have been changes in production and marketing practices, as well as genetic changes in frame size and muscle thickness, over the past 20 years. The notice will be published in today's Federal Register. In order to allow the industry sufficient time to update its current system, the updated standards will be implemented Oct. 1. A copy of the notice is available electronically at: http://www.ams.usda.gov/lsg/rulemaking.htm. Copies of the official standards are available from: Herbert C. Abraham, Chief; Standardization Branch, Livestock and Seed Program, AMS, USDA; Room 2603-S, Stop 0254, P.O. Box 96456; Washington, DC 20090-6456 or telephone (202) 720-4486 or e-mail to herbert.abraham@usda.gov. The official standards are also available electronically at: http://www.ams.usda.gov/lsg/stand/st-pubs.htm.
 

June 26, 2000

Sharp Decline in Agricultural Exports Shrinks Surplus. The U.S. agricultural trade surplus for April contracted to almost half its $1 billion value in March. USDA says the decline was the result of a 16% drop in April exports, $750 million below March. On a brighter note, compared with last fiscal year, cumulative exports are up 2.3% to $30.7 billion. 

Leach Questions FCA Charters. House Banking Committee Chairman James Leach (R-IA) has voiced concern about the Farm Credit Administration's plan to issue charters to member institutions beginning Jan. 1. "The implications of the FCA's announcement ... are extraordinary, and I would urge you to suspend this initiative ... until proper processes involving formal rule making procedures are put in place and until there is adequate opportunity for congressional scrutiny and oversight," Leach said. 

Fuel Costs Up Nearly 70%, Hurting Farmers. American Farm Bureau President Bob Stallman says the 70% increase in fuel prices from last year's levels have increased farming expenditures $3 billion in the last year, adding to farmers' woes over low commodity prices and increasing expenditures in other input areas. 

USDA Declares Disasters in Four States. USDA has declared parts of Alabama, Florida, Nebraska, and New Mexico agricultural disaster areas due to drought, making farmers in those areas eligible for emergency low-interest loans. USDA also is allowing livestock grazing on some Conservation Reserve Program land in areas experiencing serious drought conditions. Loans also will be provided ranchers to get needed water to their livestock. 

Canola Source of Enhanced Livestock Feed. Canola, perhaps best known as the source of a healthful vegetable oil, may soon play a new role in boosting the health of our environment. Studies by Agricultural Research Service scientists have shown that this yellow-flowered member of the mustard family can suck selenium from soil and water that are contaminated with an overload of this mineral.

News Summaries

Large Meat Recalls Announced. IBP-Lakeside Packers, an Alberta, Canada company, is voluntarily recalling approximately 46,000 pounds of ground beef products distributed in the United States that may be contaminated with E. coli O157:H7. The recalled products were produced on May 31, and sent to distributors and wholesalers in Kansas, Kentucky and Tennessee, as well as locations in Canada. The problem was discovered through laboratory tests conducted by a customer of the Canadian firm and reported to the Canadian Office of Food Safety, which notified USDA. Another IBP plant, this one in Geneseo, IL, is voluntarily recalling approximately 266,000 pounds of ground beef that may be contaminated with E. coli O157:H7. The ground beef was distributed to wholesalers, distributors, and grocery stores in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Minnesota, Mississippi, Missouri, Nebraska, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin. The problem was discovered through samples collected by USDA's Food Safety and Inspection Service and the Arkansas Department of Health. 

`Bear Spreading' Expected in Hog Futures. Bear spreading, or selling of nearby lean hog futures contracts and buying of deferred contracts, is expected to dominate trade at the Chicago Mercantile Exchange Monday following Friday's quarterly U.S. Agriculture Department Hogs and Pigs report, livestock analysts said, according to a REUTERS report. July lean hog futures may trade steady to as much as 0.50 cents per pound lower at the opening in reaction to the report. USDA reported all hogs as of June 1 at 98% of the year-ago level, hogs kept for breeding at 96% and hogs kept for marketing at 98%. The average trade estimate for all hogs as of June 1 had been 97.2% of a year ago. Chuck Levitt, senior livestock analyst for Alaron Trading Corporation, said that based on these numbers, the report would have been bullish to CME pork futures if both hogs and bellies had closed only slightly higher Friday instead of sharply higher to limit up in pork belly futures. "If the July contracts for hogs and bellies weren't so strong today, I would have called the report bullish. But because we put so much on the front end of the futures today now you are going to end up with a stutter step," Levitt said. The report shows that pork production for the rest of the year will be running under year-ago levels. This confirms the speculation that hog numbers have remained low and confirms part of the reason for the strong rise in CME lean hog futures to new contract highs recently. 

House Blocks China Monitoring Money. The House Friday blocked funding for a White House initiative that would monitor China's compliance with a landmark trade deal, brushing aside pleas from U.S. officials preparing for Beijing's entry to the World Trade Organization, REUTERS reports. Less than a month after approving the market-opening trade pact, House Republicans refused on procedural grounds to provide the full $21.2 million requested by President Bill Clinton to ensure Beijing meets its WTO obligations and to fund other trade compliance efforts. The House, however, agreed to boost the budget for the office of the U.S. Trade Representative by $3 million, adding it to legislation funding the Justice, Commerce and State Departments in the fiscal year starting in October. White House officials were hopeful lawmakers would free all of the trade compliance money later in the legislative process, either in the Senate or when congressional negotiators reach a final compromise. If lawmakers refused, U.S. efforts to enforce the China agreement could be hampered. "They (the Chinese) have a record of not complying, and without vigilant monitoring and enforcement of that agreement by American agencies, U.S. workers, companies and consumers will have no assurance that they're going to receive the benefits," the Appropriations Committee's ranking Democrat, Rep. David Obey (WI) told the House. 

U.S. May Sell, But Will Havana Buy? As Congress wrangles over whether to ease the long-running U.S. embargo against Cuba to allow food and medicine sales, one big question remains: Will Havana buy? There is no doubt U.S. exporters are ready to sell, REUTERS reports. But some observers believe Havana's immediate response to any partial easing of the 38-year-old U.S. embargo would be as much political as commercial. "They would politicize it to the highest degree," one Havana-based European ambassador told REUTERS. He expected President Fidel Castro's government to try to exploit any chink opened in the thick wall of sanctions to try to obtain the removal of as many other layers as possible with the ultimate goal of dismantling the whole embargo. The veteran Cuban president, in comments made recently, cautiously welcomed as "important" and "necessary" the moves to free up food and medicine sales to the Caribbean island. But he added that remaining restrictions in the existing embargo legislation on U.S. financial and transport links with Cuba made the possibility of such sales "impracticable." "It requires the disappearance of the laws of the blockade," he added. Cuba has long accused the United States of waging "economic war" against it. Echoing this view, a Foreign Ministry spokeswoman told reporters Thursday that the proposal currently before the U.S. Congress would fall far short of normalizing bilateral business relations, because it did not cover transport and financing. U.S. supporters of the proposal, which is still the subject of a behind-the-scenes tussle in the House of Representatives, also say it would be worthless if it does not include provisions to allow U.S. banks to finance the sales, as they do for trade with other nations. Betting on a loosening of the embargo, a small army of U.S. farmers, agro-business executives, farm state politicians and health company representatives have trekked down to communist-ruled Cuba in the last year to explore the market, make contacts and offer their wares. Because of the U.S. embargo, Cuba has to shoulder the higher transport costs of importing its annual food needs from more distant markets. This includes some 350,000 tons of rice, much of it from Asia, and 950,000 tons of wheat, most of it from France in purchases backed by official export credits. Some analysts believe the proximity alone of U.S. ports to Cuba, and the freight savings this could mean, would still make the U.S. sales a real practical commercial possibility.
 

June 23, 2000

Podesta Favors Concentration Bill. John Podesta, President Clinton's chief of staff, told Senate Democratic Leader Tom Daschle (SD) the administration "strongly supports" a Senate bill to address problems for producers from agricultural concentration. The measure's sponsors, says Podesta, "have offered a bill that takes important steps to craft solutions to this difficult issue." 

Glickman Testifies on Export Promotion. Agriculture Secretary Dan Glickman told the House Agriculture Committee USDA has been working "at full throttle" to build long-term trade opportunities, increase exports, help relieve hunger abroad, and help farmers and ranchers earn an adequate income from their farms. But the committee wanted to hear more about USDA's failure to more fully use the Export Enhancement Program. 

RMA Readies New Crop Insurance Program. Risk Management Agency (RMA) Administrator Ken Ackerman says the agency will move quickly to make new program benefits available to farmers for insuring 2001 crops. The new benefits are primarily in the form of increased premium subsidy and adjustments to the formulas used to calculate coverage. 

Cleaner Wheat Sought by USDA. Agriculture Secretary Dan Glickman says USDA has taken two new steps designed to make U.S. wheat more competitive in world markets by encouraging the export of cleaner wheat. He said USDA immediately will raise the standard for cleanliness of wheat purchased for U.S. foreign food assistance programs by reducing the level of dockage permitted. 

Agriculture Looks to Senate Estate Tax Vote. The Senate's vote next week on eliminating the estate tax moves cattle producers one step closer to receiving relief from a levy they say is "overly burdensome," the National Cattlemen's Beef Association says. The Senate leadership has scheduled debate on the bill for Wednesday, June 28. The measure passed 279-136 in the House earlier this month on a strong bipartisan vote. The bill would reduce estate taxes in 2003, and by 2010 the measure would fully repeal death and gift taxes.

News Summaries

Owner Held in Sausage Plant Deaths. The sausage factory owner who had complained he was being harassed by the government over health violations allegedly shot to death three meat inspectors who had come to examine the plant in San Leandro, CA, THE ASSOCIATED PRESS REPORTS. Stuart Alexander, 39, chased down another inspector before quietly surrendering to police Wednesday afternoon, police said. Alexander, a former candidate for San Leandro mayor who had run into financial and legal trouble, was booked on murder and attempted murder charges. Killed were two inspectors from the U.S. Department of Agriculture and one from the state. It was unclear Thursday whether Alexander would face federal charges; under federal law, he could get the death penalty for the murder of a government employee. Alexander's plant in San Leandro, just south of Oakland, had been closed and recently reopened. The factory had been cited for not properly heating sausage that was labeled as fully cooked and for not using expiration dates on meat, the San Francisco Chronicle reported.

 Secretary of Agriculture Dan Glickman said he was "shocked and deeply saddened" to learn of the tragic shooting of two employees of USDA's Food Safety and Inspection Service and one employee of the California Department of Food and Agriculture at the Santos Linguisa Factory Thursday. yesterday. USDA inspectors perform an "extraordinary public service, one that is essential to protecting public health and safety. We often take their hard work and diligence for granted, never expecting them to face danger in the line of duty. USDA is cooperating with local and federal law enforcement agencies as they investigate this horrific tragedy,"Glickman added. 

Information Exchange by Cotton Announced. Arizona and California cotton producers will host Southeast cotton producers July 8-14 as part of the National Cotton Council/FMC Producer Information Exchange (P.I.E.) program. The program, managed by the Council's Field Services staff, is supported by a grant to The Cotton Foundation from FMC Corporation. Southeast producers, who farm in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia, will begin their Western tour at the Central Coast Winery in Bakersfield, CA, on July 9. The following day, the participants will receive an overview of California cotton production from Earl Williams, president and chief executive officer of the California Cotton Growers and Ginners Association. The group will then tour potato harvesting and processing centers around the area. On July 10, James Rudig, Area Manager, California Department of Food and Agriculture (CDFA), will discuss the Pink Bollworm Program and provide a tour of the CDFA Plant Health and Pest Prevention. The next day, the group will see more cotton operations during tours of Gilkey Farms, Boyett Farms and Hansen Ranches in the Corcoran area and visit the Curti Farms Dairy. The last two days will be spent in Arizona. On July 12, the group will tour farms and local agriculture sites in the Laveen area. The next day the group will get a helicopter tour of the Salt River Project and visit USDA's pink bollworm rearing facility. The tour will conclude with a presentation on the aflatoxin control project from Larry Antilla of the Arizona Cotton Research and Protection Council, Phoenix. 

Subcommittee Passes Markets Bill. A House of Representatives subcommittee on Thursday passed legislation to deregulate U.S. futures and derivatives markets to allow them to better face growing global competition, REUTERS reports. The House Agriculture subcommittee on risk management unanimously approved the bill, which would keep privately negotiated, or over-the-counter, derivatives free of government oversight, restructure the regulation of U.S. futures exchanges and allow the trading of futures on single stocks. The overhaul has won broad support in Congress amid fears outdated regulations are hurting U.S. competitiveness in global derivatives markets. But its prospects have been clouded by the short time remaining for action this year and continuing disputes between stock and futures exchanges and regulators. The full Agriculture Committee plans to vote on the legislation on Tuesday next week, after which it must clear both the House Banking and Commerce committees. Similar legislation is also pending in the Senate. 

USDA Wants France Targeted. USDA, anxious for progress in a long-running beef trade dispute with the European Union, wants to focus the brunt of $116.8 million in retaliatory duties on products of France, a department official said on Thursday, REUTERS reports. The United States has had 100% duties on $116.8 million of EU goods since July 1999 in the hope of pressuring the EU into dropping its 12-year-old ban on beef produced with artificial growth hormones. New legislation requires the Clinton administration to change the retaliation lists in the beef dispute every six months. It must do the same for another $191.4 million of retaliatory duties imposed in April 1999 in a dispute over access to the EU's banana market. The aide, who asked not to be identified, said the Agriculture Department's new hit list included bottled water -- such as Perrier and Evian -- and Roquefort cheese, canned peaches, foie gras, Swedish sausage and some beef products. USDA's desire to target France comes just before that country assumes the presidency of the EU on July 1 for the next six months, the aide said. 

Black Caucus Criticizes GOP. The Congressional Black Caucus, made up of mostly