Job Cuts Coming In The DuPont Dow Chemical Merger

DuPont will cut 1,700 jobs in its home state of Delaware and thousands more globally as it prepares for its merger with Dow Chemical.

Dow and DuPont announced earlier this month that they would join to create a giant chemical producer that will eventually be split into three independent companies.

At that time, DuPont announced a $700 million cost savings and restructuring program but did not specify how many jobs would be impacted or where. DuPont CEO Ed Breen sent a letter to employees Tuesday informing them that approximately 1,700 Delaware positions would be eliminated in the beginning of the year.

DuPont, which has been based in Delaware for 213 years, said it would have preferred to let affected employees know of the news first. But it made the announcement now, amid the holidays, because it is legally required to inform the state by the end of the year of the local job cuts. The company has approximately 54,000 employees worldwide and the restructuring program will ultimately affect about 10 percent of that workforce.

Delaware governor Jack Markell said the announcement of the job cuts is "deeply disappointing."

"DuPont's number one asset is its people, and the innovations that the company has produced during its storied history are a testament to the quality of those people," Markell said in a statement.

The combined company, called DowDuPont, will split into three separate entities that will focus on material science, agriculture, and specialty products.

That specialty products company, which would combine DuPont's nutrition and health, industrial biosciences, safety and protection, and electronics and communications segments with Dow's electronic materials business, will be based in Delaware.

The combined Dow-DuPont business will have dual headquarters in Delaware and Michigan, where each company is based, until it separates into three independent publicly traded companies focused on agriculture, material science and specialty products.

The Dow, DuPont deal, if it goes forward, would be among the largest in an unprecedented year in mergers and acquisitions. The value of buyouts proposed and completed this year has reached a staggering $5.03 trillion, up 37 percent from just last year, according to Dealogic.

It is the first time that takeovers have exceeded the $5 trillion level, fueled by extremely low interest rates. The Federal Reserve raised interest rates for the first time in nearly a decade less than two weeks ago.

Dow and DuPont expect their combination will cut annual expenses by $3 billion.

More Consolidation In The Crop Insurance Industry

(DTN) -- In a sign of more consolidation in the crop insurance industry, Cargill announced Tuesday it will sell its crop insurance agency, Cargill Crop Insurance LLC (CCI), to Silveus Insurance Group of Warsaw, Indiana. The transaction is expected to close in mid-January.

Silveus is a fourth-generation family owned agency that specializes in risk management decisions from both grain hedging and insurance perspectives. It was already one of the largest crop insurance agencies in the United States but will now employ close to 90 agents in the combined company serving all states.

"Running crop insurance agencies has become more difficult in recent years, with a lot of mega agencies changing," Tyler Silveus, CEO of Silveus, said in an interview with DTN. "We're fighting for scale and economics that technology can buy. As farms continue to consolidate, agencies will too."

Silveus believes its strength is in amassing technologies that can support a large, mobile agent force. While about 12,000 agents are listed on the Risk Management Agency website, Silveus estimates maybe only two-thirds are active. In addition, there is a shortage of beginning agents. "There aren't a lot of kids signing in to be crop insurance agents," he said.

Cargill entered the crop insurance agency business in 2007, but slumping commodity markets have pressured most grain trading giants to restructure operations and plan layoffs to boost profits. Several other agribusiness giants -- including Wells Fargo and John Deere -- have announced or sold their crop insurance units in the past year. Those sales had little impact on farmers, since the federal government dictates crop insurance prices and terms nationwide, much like it does with Medicare. The Cargill sale to Silveus is a bit different, since agencies are the ones who handle sales and service for crop insurance policies at the farmer level.

"The mission of our grain and crop inputs businesses is to effectively and efficiently help farmers make the most of their investments in agriculture, and help them manage their risks." Dave Baudler, president of Cargill AgHorizons U.S., said in a press release. AgHorizons includes the company's network of grain elevators and farm service centers in the country. "We believe we can accomplish this mission through our core grain marketing and risk management programs without being directly involved in the sale of crop insurance."

Silveus anticipates there will be more opportunities to work with Cargill clients, analyzing how both insurance and hedging practices protect against risk. Last season was the first year in many where crop insurance alone would not cover grain producers' cost of production, and 2016 crop insurance guarantees will likely follow suit, Silveus noted. "Growers will need a strong eye on their sales and hedging practices to see where their exposure lies."

Ethanol Exports to China a Record High in 2015

U.S. ethanol exports to China hit a record high in 2105, USDA said, attributing the increase to a trade mission to the Asian country in 2014.

“Our objective for every trade mission is to create new markets for farm products made in rural America,” USDA Under Secretary for Farm and Foreign Agricultural Services Michael Scuse said in a statement. “U.S. ethanol exports to China have jumped from $8 million to more than $86 million since our May 2014 visit. In October, we exported more ethanol to China than in the previous 10 years combined.”

According to data from FAS, U.S. exports of ethanol to China through the first 10 months of 2015 have reached $86.84 million. The previous record was 2013, when China imported $11.07 million worth of ethanol from the United States.

China is the largest customer for U.S. agricultural exports. According to USDA data, China has accounted for $15 billion of the United States’ $109 billion in agricultural product exports this year.

Kobe Beef Added to Japan’s Protected List

Japan has added Kobe beef to a list of government protected regional brands. The move comes as producers wait for what may be a flood of competing products stemming from the Trans-Pacific Partnership. Meatingplace reports Tokyo’s “geographical indication” system allows for special markings on packages of designated food items to help get consumers’ attention and boost sales. The government is promoting its agricultural products to help improve competitiveness before the TPP deal is in place, allowing for more competing products from 11 other countries, including the United States, to enter the market. Agriculture Secretary Tom Vilsack said recently at the National Chicken Council annual meeting that the deal gives the U.S. “a stake in the ground” in Asia, which in 15 years will be home to two-thirds of the global middle class.

Plants Adapting to Climate Change

Researchers at a Swedish University say increasing levels of carbon dioxide in the atmosphere have shifted photosynthetic metabolism in plants over the 20th century. The study is the first worldwide that reduces biochemical regulation of plant metabolism from historical specimens. In most plants, the uptake of CO2 through photosynthesis is reduced by a side reaction called photorespiration. The research group has now found that the CO2 increase in the atmosphere over the 20th century has shifted the balance between photosynthesis and photorespiration toward photosynthesis. This shift has so far contributed to the global vegetation’s ability to dampen climate change by absorbing a third of human-caused CO2 emissions. The change was noted in both wild plants and crops.

Sinking Ground Costing California Billions

One of the results of prolonged drought, along with the pumping of groundwater, is a sinking land, according to a recent report by the Washington Post. The sinking, in some places a foot a year, is not expected to stop anytime soon. Repairs to infrastructure throughout the Central Valley are costing the state billions of dollars. A sparse mountain snowpack in California’s driest four-year span on record has forced farmers in the Central Valley, the nation’s most productive agricultural region, to rely on groundwater to irrigate their crops. The prolonged drought also spawned a well-drilling boom in the region. But experts claim decades of overpumping has led to sagging lands. Farmers are not the only ones taking note of sinking land. The changes have damaged utility infrastructure such as gas lines as well. With a wet El Nino winter forecast, geologists also worry that sinking may cause water to pool, prompting flooding rather than flow toward the sea.

Weather Scientist Says Recent Violent Weather Not Caused by El Nino

The violent holiday weather including large snow storms, historic flooding and the first EF-4 Tornado to hit Dallas, Texas in more than 50 years was not caused by El Nino. That’s according to weather scientist Nicholas Bond at the University of Washington. He called the weather event that’s forced farmers to haul grain to higher ground, relocate cattle and some in instances in Texas find missing herds who’ve wandered off, merely a “fluke event.” He says El Nino is likely to bring drying and warmer temperatures to the Midwest, a welcomed reprieve, given the latest round of winter storms. But even with the dryer forecast, Missouri state climatologist Pat Guinan (Guh-NAN) says “We are not going to dry out anytime soon, regardless of what happens over the next few weeks,” according to the St. Louis Post-Dispatch.  El Nino is expected to bring needed moisture to areas such as California. Southern states are expected to receive above normal precipitation as well. This El Nino already has wreaked environmental and economic havoc in the Southern Hemisphere, disrupting the Australian cattle industry by parching pastures; hurting rice crops in Vietnam; hitting South Africa and parts of South America with drought and sparking wildfires from Australia to Indonesia.

Weather And Cattle Producers

Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist

2015 is showing her teeth one last time with a storm that is affecting people and animals across a majority of the country.  The massive storm includes a severe side with rain, flooding and tornados and a winter weather side with snow and blizzard conditions, all separated by a band of freezing rain and sleet. 

The dividing line between these storm components runs across the middle of Oklahoma resulting in a wide variety of conditions and challenges for Oklahoma cattle producers.  The one consistent component across both sides of the storm has been lots of wind.

Rain totals over the weekend across the eastern half of Oklahoma ranged from three inches to over 11 inches.  This final blast of moisture adds to a wet fall to make 2015 the wettest year on record with a statewide average over 54 inches, more than 50 percent above normal.

Above average moisture totals cover the state ranging from record precipitation totals in the south central, southeast and east central parts of the state to the Panhandle, which has seen the second highest moisture total on record in 2015.  Yearly rainfall totals through December 27 range from over 77 inches in the southeast, 154 percent of normal, to over 31 inches in the Panhandle, 151 percent of normal.

Cattle producers are dealing with cold and muddy conditions that are impacting cattle across a wide swath of the country extending from the Southern Plains through the Midwest and Corn Belt.  The combination of wet, cold and windy conditions causes significant cold stress for cattle and boosts nutritional requirements for cattle.

The winter weather side of this storm has brought significant snow totals across the West and Rocky Mountain regions and extended across the central and northern Plains.  The arctic air dipped south and combined with southern moisture to produce large snowfall and blizzard conditions from New Mexico and western Texas, across the Texas and Oklahoma Panhandles and western Oklahoma.

The storm caused road closures and disrupted travel in eastern New Mexico and the Texas Panhandle; with blowing snow and icing conditions making travel difficult and dangerous across western and central Oklahoma. 

While the storm is mostly a cattle management issue for cows, it will impact animal productivity for stocker cattle and feedlots. 

The widespread feedlot impacts will likely affect cattle and beef markets in the coming weeks. 

Feedlots in the Southern Plains are being hit with adverse weather for the first time this winter; having enjoyed very mild conditions so far this fall.  In contrast, feedlots in the Midwest and Corn Belt have already been dealing with muddy conditions and the current weather will aggravate those poor conditions, resulting in additional productivity losses. 

The poor animal performance and additional death loss are a direct economic loss for feedlots; while the broader beef market may reflect the impact of additional loss of beef tonnage as a result of lower carcass weights. 

FDA agrees to give food industry groups more time to weigh in on what “natural” should denote on product labels

The agency asked the public to comment in November on whether it should define the term and set guidelines for its use on food products. FDA said it has long considered “natural” to mean that nothing artificial or synthetic (including color additives) has been included in, or has been added to, a food that would not normally be expected.

The FDA said in November that the policy did not intend to address food production methods like the use of pesticides, nor did it explicitly address food processing or manufacturing methods like thermal technologies, pasteurization or irradiation.

FDA said its definition also failed to consider whether natural should be used to describe nutrition or other health benefits.

Public comments were originally due Feb. 10, but the Natural Products Association (NPA) asked the FDA for an additional 90 days to gather input from its members.

Specifically, the FDA asks for information and public comment on questions such as:

· Whether it is appropriate to define the term “natural,”

· If so, how the agency should define “natural,” and

· How the agency should determine appropriate use of the term on food labels.

The public now has until May 10 to submit comments.

Crop Insurance Indemnities at $4.4 Billion for 2015 Crops

Crop insurance indemnities total $4.4 billion for 2015 crops as of Dec. 28, up from $3.45 billion at the end of November, according to Risk Management Agency (RMA) data.

The level of net acres insured for 2015 crops appears to have set a new record, reaching 297.151 million, ahead of the prior high-water mark of 296.079 million acres in 2013.

The loss ratio for the program currently stands at .45, up slightly from a month ago when it was .37. Indemnities will continue to rise so that loss ratio will also climb. But the lowest loss ratios going back to 2003 are .54 for 2007, .56 for 2010 and .58 for 2009. Rice is the only program crop with a loss ratio greater than 1.0 for 2015 crops (indemnities paid out exceed the premiums paid in) with a mark of 2.48. Flue-cured tobacco carries a level of 1.14.

The total payouts at $4.4 billion are down more than 50% from the 2014 crop total of $9.115 billion. Wheat remains the top payout on a by-crop basis, with indemnities of $1.155 billion compared to corn at $1.118 billion. The next closest crop is soybeans at $832 million.

The downturn in payouts under the program reflects fewer crop issues facing producers and lower prices for most crops compared to 2014 levels. The indemnity levels are likely to continue rising as we move into calendar 2016. At this stage a year ago for 2014 crops, indemnities stood at $5.212 billion and eventually rose to $9.115 billion. The potential is there for 2015 crops to be one of the lowest payout levels in recent years and give the program one of its lowest loss ratios in years.

Declining Bee Population Hurting Crops

A new study by the University of Vermont found the U.S. population of wild bees has declined 23 percent over the last seven years. Wild bees are crucial to crop production and researchers note the study shows significant losses in food production areas, such as California’s Central Valley, the Midwestern Corn Belt and the Mississippi River Valley. The study is the first to map wild bee populations across the lower 48 states. 139 counties across the country with high volumes of crop production, with a focus on California, the Pacific Northwest, the upper Midwest and Great Plains, west Texas and the southern Mississippi River Valley. The study also found that in 39 percent of the regions targeted there is a “threatening mismatch” between rising demand for pollination and a diminishing supply of wild bees. Further, the study found the mismatch between pollen demand and bee populations to be most dramatic in regions where crops are grown that are most pollen-dependent, such as pumpkins, watermelons, pears, peaches, plums, apples and blueberries. Researchers placed blame on a number of threats, including pesticide use, climate change and disease, as well as the conversion of wild bee habitat into cropland.

Hershey Ditches Sugar Beets over GM Concerns

Hershey is transitioning out sugar beets for cane sugar because of concerns over genetic engineering. The Minneapolis Star Tribune reported that currently, the company’s sugar storage is 75% cane sugar and expected to be 100 percent sometime in 2016. For decades, the company had used sugar made from both beets and cane but decided earlier this year to stop buying sugar beets because it comes from genetically modified seeds. Hershey communications director Jeff Beckman confirmed that the kisses and many other products stocked on shelves since Halloween no longer contain beet sugar. The company also is transitioning away from artificial to natural ingredients. No matter how or where the company sources the sugar, it’s still just going to say “sugar” on the product ingredient labels. Beckman said the sourcing switch has nothing to do with the safety of beet sugar, and the company’s website contains references to numerous scientific groups that have concluded that GM sugar is safe to consume. Sugar beet farmers are feeling the impact, losing a top industry customer. Minnesota is the top sugar beet producer in the nation, followed by Idaho and North Dakota.

China Stockpiles to Challenge 2016 Imports

Large stockpiles of commodities could challenge agriculture imports for China in 2016. A new report by CoBank’s Knowledge Exchange Division says China has multiyear high supplies of commodities such as corn, wheat, cotton, milk powder and soybeans. The report finds that despite slowing economic growth, China's urban disposable incomes - which drive the country's food and agricultural consumption - are increasing 10 percent year-over-year. The report blames China's subsidization of its agricultural sector, which has yielded mounting stockpiles of commodities and strained storage capacity, as the real culprit leading to decreased imports in most categories. CoBank’s Dan Kowaklsi said “this issue has been brewing for years and is a result of China's drive to achieve food self-sufficiency.” That’s because China has subsidized its agricultural sector to the extent that supplies have considerably outpaced increasing consumer spending and consumption. The report cites USDA figures, which anticipate that China will import 46 percent less corn, 34 percent less cotton and 35 percent less milk powder during the current marketing year. Wheat, soybeans and other food grains are expected to rise, but by smaller margins than in prior years.

U.S. Faces an Aging Farm Population

An aging American farm population, the need to successfully transition land ownership from senior farmers to new industry entrants, and providing support and training for these beginning farmers, are top concerns for the future of the agriculture. That’s according to agricultural economist Ani Katchova with Ohio State University. She says “farm transitions have been identified as one of the major upcoming structural changes in agriculture that concerns policy makers.” Katchova made those comments at a public meeting earlier this month. Her research found that among U.S. farmers, 6 percent are 35 years old or younger, while 33 percent are greater than 65 years old. As for beginning farmers, many of them are middle-aged, according to the research.  Further, there were just more than 650,000 beginning farmers in 2007, and only 522,000 some in 2012, representing a 20 percent drop over the five-year period. She suggested more support and training, as well as help in acquiring access to farmland as a possible solution.

Court Battle Continues Over Collapse Of MF Global Holdings

Dow Jones) -- MF Global Holdings Ltd. collapsed more than four years ago, but former New Jersey Gov. Jon Corzine and the U.S. Commodity Futures Trading Commission are still sparring in federal court over who is to blame.

The brokerage firm collapsed in the fall of 2011 revealing a shortfall of more than $1 billion in customer accounts. In an exchange of court papers, lawyers for the CFTC and for Mr. Corzine argued whether Mr. Corzine is liable as the person in control when the brokerage tapped customer accounts to support its own proprietary operations.

Sued by the CFTC, Mr. Corzine says he is entitled to a pretrial ruling that the regulator has no case against him.

According to Mr. Corzine's lawyers, he never directed, authorized or encouraged the use of funds in segregated accounts, and wasn't even aware of the transgression until Oct. 30, 2011. By the close of business on Oct. 28, according to the CFTC, nearly $1 billion in funds that were supposed to be held safely for customers were instead being used by the brokerage.

MF Global filed for bankruptcy Oct. 31, 2011. Customers recovered the money that was taken from their accounts, but the bankruptcy failed to satisfy all the claims of creditors of the brokerage or its parent company.

In his letter seeking summary judgment, Mr. Corzine said it isn't his fault customers had to wait to reclaim their money. "Machinations" by James Giddens, the trustee who found and returned the missing customer money, are to blame, Mr. Corzine's lawyers said in a Dec. 18 letter to the Judge Victor Marrero, who is presiding over the case in federal court in New York. Mr. Giddens's representatives couldn't immediately comment.

Mr. Corzine resigned from the chairman and chief executive spots at MF Global, and was called to testify before Congress about the brokerage's troubles.

He and other MF Global executives have denied wrongdoing in their handling of MF's affairs as the cash-strapped firm foundered in the wake of risky bets on European sovereign debt.

The 68-year-old former Goldman Sachs chairman recently spoke to a group of New Jersey college students about his life's successes and setbacks. It marked the first public address since he was forced to testify about his involvement in MF Global's demise.

Earlier this year, Mr. Corzine and other former MF Global officials agreed to a $64.5 million settlement of an investor lawsuit.

CFTC lawyers say they have an open-and-shut case against Mr. Corzine, based in part on his own testimony, which allegedly "demonstrates that he used his power to shape policies and make direct determinations regarding the use of funds in customer accounts to satisfy the firm's liquidity needs."

Mr. Corzine's lawyers responded with a letter that argues he wasn't in control of the funds in the account, as transfers had to be approved by finance, treasury and operations personnel. As MF's chief executive, he had a general level of control, but not the type of grip that would entitle the CFTC to summary judgment in the suit, Mr. Corzine's lawyers contend.

Countering allegations he was lax in his oversight, Mr. Corzine's lawyers say he delegated tasks to competent personnel and "no principle of law or logic" supports the CFTC's position that he should be held to account for everything that went wrong.

A former U.S. senator, Mr. Corzine was defeated by Gov. Chris Christie in his 2009 re-election bid.

Major Trade Groups in favor of passing the Trans-Pacific Partnership

Last week, a major trade group pledged support to the Trans-Pacific Partnership trade deal. The National Foreign Trade Council vowed support for the TPP while saying it is encouraged by talks between lawmakers and the Obama administration aimed at making improvements to the TPP deal that will improve its chances of passage on Capitol Hill. The trade deal is gaining support from a large number of agriculture groups, as they say, the deal would substantially expand U.S. agriculture exports. The NFTC said the 12-nation TPP has the potential to serve as a major step forward in establishing rules-based global trade that will provide greater access to foreign markets. Other major groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers have yet to take a stance on the trade deal. Earlier this month, the American Farm Bureau announced it supported the TPP, saying the deal promises to expand opportunities to some of the fastest growing markets around the world.

Organic Trade Association to Ask USDA for Transitional Organic Designation

The Organic Trade Association intends to ask USDA’s Agricultural Marketing Service to establish a “transitional” organic designation for farmers who are converting their land to organic production. OTA Executive Director Laura Batcha says OTA would ask AMS to manage the transitional designation under its “Process Verified Program.” The designation, she added, would be a clear signal to the USDA’s Natural Resources Conservation Service, that a farmer is committed to the transition and worthy of the assistance NRCS can provide, according to the Hagstrom Report. Under the proposal, Farmers must not use prohibited chemicals on their land for three years before their production can be declared organic. During this time farmers have to use organic production methods while selling their crops as conventional, which usually means lower prices and incomes than certified organic producers get. Batcha also said that OTA expects AMS to give its application for an organic checkoff “a judicious review,” but hopes for approval in 2016.

EPA Extends Comment Period for Proposed Pesticide Applicator Certification Rule

The Environmental Protection Agency extended the public comment period on the proposed changes to the Pesticide Applicator Certification Rule an additional 30 days. The closing date for comments is now January 22nd, 2016. EPA is proposing stronger standards for pesticide applicators that are certified to apply the riskiest pesticides, known as restricted use pesticides. The goal is to reduce the likelihood of harm from the misapplication of those pesticides and ensure a consistent level of protection among states. The EPA proposes the rule that would establish a first-time-ever nation-wide minimum age of 18 for certified applicators and persons working under their direct supervision. The proposal also would require all applicators to renew certifications every three years. The EPA first proposed the certification rule in August of this year.

Chipotle Making Changes After E. Coli Outbreaks

Following dozens of illnesses attributed to E. coli, Chipotle has vowed to make changes in its supply chain. Founder Steve Ells vowed Chipotle will ramp up safety measures at the company’s nearly 2,000 locations. The company will likely rely less on local supplies that can’t comply with sophisticated testing and also prepare ingredients such as cilantro and lettuce in a central kitchen before shipping it to local restaurants. “In Other words,” wrote the Wall Street Journal, “Mr. Ells promises to bring his restaurants into the 20th century.” The newspaper notes that Chipotle’s marketing campaign was built around degrading agriculture, yet the campaign couldn’t exist without efficient agriculture. A cult-like following has gone so far as to publish a fabricated news story on a self-proclaimed “alternative news” website, claiming biotech companies, such as Monsanto, were attacking Chipotle by planting E. coli in Chipotle’s supply chain. The Wall Street Journal also reported that perhaps Chipotle’s anti-agriculture campaign may be no longer, pointing out that the company’s stock dropped below $500 for the first time in over a year just last week, and down 25 percent this year.

USDA to Survey Honey Bee Colony Health, Impact on Agriculture

USDA’s National Agricultural Statistics Service (NASS) is reaching out to beekeepers and farmers across the nation this month and next to gather information on the number and health of honey bee colonies, honey production and stocks, and the cost to farmers of pollination services. USDA says the surveys will be used to develop baseline data and additional goal metrics for winter, summer, and total annual colony loss in support of the National Strategy to Promote the Health of Honey Bees and Other Pollinators. Among its goals, the Strategy aims to reduce honey bee colony losses during winter to no more than 15% within 10 years. Beekeepers should expect to receive two surveys from NASS. They will receive the existing Bee and Honey Inquiry, which surveys beekeepers about honey production, price, and stocks, but not colony health. Beekeepers will also receive a new survey from NASS, which the agency will use to publish state-level estimates on key topics, including number of colonies, colonies lost, colonies added, and colonies affected by certain stressors.

Oil Stockpiles Fall

Oil Stockpiles in the United States fell to 484.8 million barrels last week, and the number of active drilling rigs fell by 3, resulting in a nearly 10 percent increase in West Texas Intermediate futures, the largest increase since August. With the ban on U.S. exports of oil lifted, sources said the first shipment of 600,000 barrels of oil is slated to leave a Houston port in January, with the tanker's destination believed to be Europe.

2015 Market Wrap: Here we are…where to from here?

Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist

The contrast between the beginning and end of 2015 is stark.  It has been a year of transition as the markets turned the corner from a long run of up-trending prices to the reality that growing cattle inventories and increasing beef production implies lower prices in the future. 

The idea that things will change is not a surprise but how that change will happen is most always impossible to predict. Cattle and beef market fundamentals have not changed nearly as dramatically as the recent volatility and free falling prices would suggest; but the process of changing market psychology from bullish to bearish is emotional, often overly dramatic and usually painful.

The second half of 2015 has been agonizing and frustrating for nearly everyone involved and the contrast between the annual averages and the end-of-year conditions are marked.  Cattle prices at the end of the year are sharply lower, although 2015 will have the highest average annual prices ever.

Beef production in 2015 will be down another 2 percent to 2.5 percent year over year, but production in the fourth quarter will be up an estimated 1.5 percent to 2.0 percent year over year.  The annual comparisons of 2015 and 2016 will show sharp differences; with average cattle prices lower and beef production increasing year over year.  However, most of the adjustments are already in place at the end of 2015 and current conditions provide the starting point for 2016.

Cattle and beef market fundamentals will continue to evolve as anticipated in 2016.

Herd expansion will continue, perhaps more modestly than in 2015, and the larger 2016 calf crop will contribute to significantly higher feeder cattle supplies by the end of the year; with bigger implications for beef production in 2017.

Carcass weights will continue higher, given continued cheap feed costs, but some of the incentive to overfeed cattle should be moderated with the realignment in feeder and fed cattle prices.  Beef production in 2016 will increase year over year based on higher carcass weights and increased cattle slaughter.

Feeder cattle supplies in 2016 will increase year over year but will be moderated by continued heifer retention and a likely moderation in feeder cattle imports from Mexico (already dropping in late 2015) and continued small imports of Canadian feeder cattle.

Pork and poultry impact

After jumping sharply higher in 2015, pork production is expected to increase only slightly in 2016 and, with improved pork exports, domestic pork consumption is likely to be slightly lower year over year in 2016.

Broiler production will likely increase at a much slower pace in 2016 and, with export markets recovering from avian influenza restrictions, domestic broiler consumption is expected to be only slightly higher in 2016.

Most of the projected increase in 2016 beef production will be offset by lower beef imports and stable, if not slightly higher beef exports; leading to only a small increase in domestic beef consumption.  In total, 2016 red meat and poultry consumption is expected to be close to 2015 levels, perhaps up fractionally.

It was impossible to anticipate the psychological upheaval in the second half of 2015 and, though it seems likely that the worst is past, it is impossible to say for sure that it is finished.

Nevertheless, given how much market adjustment has been done, in fact, likely overdone, here at the end of 2015, cattle prices are expected to recover some from the end of year levels and trade in more of a sideways range in 2016.

Hopefully the emotional whirlwind is mostly behind us and the New Year will bring less volatility and provide more stability and a stronger reflection between markets, especially futures, and cattle market supply and demand fundamentals.

Commercial Cow Slaughter Decreases 5%

Total commercial cow slaughter for January through October 2015 was 5 percent below 2014 slaughter for the same period while dairy cow slaughter through October averaged almost 4 percent higher, according to USDA’s latest Livestock, Dairy and Poultry Outlook report.  

Dairy cow slaughter accounted for 57 percent of the total cow slaughter, largely reflecting lower milk prices, which are not expected to improve into 2016.

Beef cow slaughter through October 2015 was down 18 percent from same-period 2014, reflecting low but expanding beef cow inventories.

While the monthly over-800-pound category of placements in 1,000-plus-head feedlots in October was again higher year over year, that heaviest category accounted for only 30 percent of total placements, down from the 40-plus percent of recent months.

As the proportion of over-800-pound cattle placements declines over the next few months, so should the proportion of marketings of extremely heavy fed cattle beginning next spring.

However, inexpensive corn and depressed fed cattle prices could still motivate cattle feeders to hold cattle on feed well beyond optimal finish in hope of higher prices farther down the road, USDA predicted.

Food Inflation Set To Rise In 2016

Food inflation is expected to wrap up 2015 just under its historical average increase of 2.6 percent, according to USDA’s monthly Food Price Outlook report for December. The agency’s forecast for 2016, however, has food inflation rising to between 2.0 percent and 3.0 percent for the year, up from 1.5 percent to 2.5 percent for the current calendar period.

Most of the projected increase in inflation is in food bought to be consumed or prepared at home. At-home foodstuffs are expected to rise in price to between 2.0 percent and 3.0 percent in 2016, up from 0.75 percent to 1.75 percent in 2015. The rate of inflation for food purchased away from home, by contrast, is expected to increase just a few tenths of a percentage point, to between 2.5 percent and 3.5 percent in 2016 from 2.2 percent to 3.2 percent in the current year.

Meat, poultry and fish is most important category on a weighted basis, and expectations for inflation in the category overall mirror those for all-food inflation. However, for 2015 projections vary widely by species, with beef and veal increasingly significantly — as much as 7.75 percent for the year — but moderating in 2016. Pork, meanwhile, is expected to finish up the year with price down by as much as 4.25 percent for the year.

For 2015, eggs have seen the biggest price hike: They are expected to finish the year at price that are 16.75 percent to 17.75 percent higher than a year ago.

Lawsuit Alleging Kraft Foods manipulated Wheat Prices Can Proceed

Federal regulators can proceed with a lawsuit against Kraft Foods alleging the company manipulated wheat prices. A Judge last week gave the go-ahead to a lawsuit brought by the U.S. Commodity Futures Trading Commission. The lawsuit alleges Kraft used its financial heft to illegally drive down wheat prices in 2011, according to the Chicago Tribune. In a 47-page opinion, U.S. District Judge John Robert Blakey rejected Kraft's attempt to have the lawsuit tossed, ruling that the CFTC's allegations were "sufficient to allege that Kraft intended to manipulate the wheat markets.” The CFTC alleged this summer that Kraft made $5.4 million in profit in late 2011 when it helped tank the cash price of wheat near its Toledo, Ohio, flour mill by purchasing far more futures contracts for wheat than it ever could have used. Kraft's purchase of $90 million in wheat futures at the Chicago Board of Trade represented a six-month supply of wheat — far more than the two months inventory Kraft typically aimed to keep, according to the CFTC, who says the move by Kraft sent wheat prices lower.

USDA Trade Mission Spurs Record Ethanol Exports to China

USDA reports a significant jump in ethanol exports to China this year, following a USDA-led trade mission to the country last year. Wednesday, USDA said the trade mission proved successful after representatives from nine state departments of agriculture and 28 U.S. companies, including renewable fuels businesses, traveled to northeast China to explore opportunities for trade in the region. U.S. ethanol exports to China have jumped from $8 million to more than $86 million since the May 2014 visit. In October, the U.S. exported more ethanol to China than in the previous 10 years combined, according to USDA Under Secretary for Farm And Foreign Agricultural Services Michael Scuse. China is the largest market for U.S. food and farm products – U.S. agricultural exports to China tripled over the last decade, now accounting for nearly 20 percent of all foreign sales of U.S. agricultural products. The past seven years have represented the strongest period for American agricultural exports, with U.S. agricultural product exports totaling $911.3 billion between Fiscal Years 2009 and 2015.

Christmas Tree Production Booming

More and more families are heading to Christmas tree farms for a live Christmas tree. From 2009 to 2014, USDA reported Christmas tree sales increased by more than $100 million dollars. The 2014 Horticultural Specialties report released earlier this month shows production increased from 13 million trees in 2009 to 20 million cut Christmas trees sold in 2014. Oregon, North Carolina and Michigan continued to rank top in the nation for number of trees sold, as well as the value of sales. With 15.4 million trees cut and sold, growers in these three states accounted for nearly 78 percent of all cut Christmas trees sold in the United States in 2014. USDA notes that’s an impressive jump, given tree farmers can invest more than eight years growing a Christmas tree for harvest.

Less Dairy Cows To Slaughter

Some 26,000 fewer dairy cows were sent to federally inspected plants in November than October, a decline of roughly 10%.  But, compared to year earlier numbers, culling was up 5.7%.

However, because each of these months had a different number of actual business days, culling per day in November 2015 was down 5.9% from October and 4.4% from November 2014.

Year to date, just over 100,000 more cows have been slaughtered in 2015 compared to last. That’s an increase of 3.9%.

CWT Program Is One Reason Your Milk Check Isn't Any Lower

Cooperatives Working Together (CWT) exported nearly 1.5 billion lb. of milk equivalent in 2015. In the grand scheme of things, that’s still less than 1% of U.S. milk production. But it does represent something like 3 or 4% of total U.S. exports.

And, more importantly, it represents a significant amount at a time when export volumes are down 9% and export values are down a staggering 27% through October. See export sales through October.

The critical thing is that these CWT exports also represent higher value products: 57 million lb. of cheese, 26 million lb. of butter and 50 million lb. of whole milk powder. Sales were made to 36 countries on all continents but Antarctica.

Had these products not been exported, they likely would have gone into inventory here and further depressed milk prices. “That’s a pretty big deal,” says Andy Novakovic, a dairy economist with Cornell University.

By exporting this amount of product, it not only buoyed commodity prices but raised fluid milk prices well, he says. Calculating just how much of a price impact CWT sales had gets complicated very quickly. That’s because you’d have to look at cheese, butter and whole milk powder individually, then calculate the impact on federal order prices and finally look at consumer sales.

The National Milk Producers Federation Board of Directors voted to double the CWT assessment from 2¢/cwt to 4¢/cwt in 2013. Roughly 70% of the nation’s milk supply is signed up for the program, which suggests CWT is collecting something in excess of $55 million annually. If even 90% of CWT assessments have been used to subsidize sales, butter sales alone might cover the cost. “They are getting their money’s worth,” says Novakovic.

Some have argued, and at times it is true, that CWT-assisted sales are competing with and taking sales from private sellers who can’t offer the same sales incentive. But that has been hardly the case in 2015.

U.S. cheese and butter prices have been well above world prices this year. In the case of butter, U.S. prices have sometimes been nearly double world prices. Even now, U.S. prices for cheese are still nearly 10% higher than world prices; butter is 40% higher. Couple that with a strong dollar, and you have a doubly strong head wind pushing against U.S. exports.

CWT might have its detractors. But as milk prices turn to ugly in the coming weeks and months, be thankful CWT is there to keep exports flowing off shore.     

House Will Again Attempt to Nullify WOTUS in 2016

A resolution to again attempt to nullify the Environmental Protection Agency’s (EPA) controversial Waters of the U.S. (WOTUS) rule will be introduced in House in 2016, Matt Sparks, a spokesman for House Majority Leader Kevin McCarthy, R-Calif., said.

Voting is planned on a Congressional Review Act challenge to the WOTUS rule next year in the House and the Senate is “in the process of putting the waters of United States repealer on [the president’s] desk,” Senate Majority Leader Mitch McConnell, R-Ky., told reporters.

A resolution to stop the WOTUS rule and prohibit the EPA from pursuing any similar rules in the future passed the Senate on Nov. 4 by a 53-44 vote, but didn’t make it to the President. President Obama has promised to veto any legislation to dismantle or nullify the WOTUS rule, should such a bill reach his desk.

The EPA’s issuance of the WOTUS rule under the Clean Water Act has provoked litigation from over 30 states and concerned organizations, representing agriculture, developers and industry. The rule is currently stayed due to a federal appeals court ruling. Attempts to include a provision in the recently approved Fiscal 2016 omnibus spending till to halt the WOTUS rule were also unsuccessful.

Washington Insider: More Food Safety Problems at Chipotle

The New York Times said Tuesday that The Centers for Disease Control and Prevention (CDC) is reporting that five more people became sick after eating at two more Chipotle Mexican Grill restaurants. It noted that the news was a further blow to the price of the company’s shares.

While the urban press has been critical all along of the company’s performance, this week’s outbreak is raising new, difficult questions. “All told, almost 500 people have been sickened after eating in a Chipotle in the last half of this year, according to Food Safety News.”

The Times suggests that there is increasing danger that consumers will conclude that the company has not done enough in spite of what they’ve been saying.

Chipotle’s problems appeared to be worsened by the CDC’s observation that while they have been able to identify the restaurants where people ate, “the way Chipotle does its record-keeping” has prevented the CDC from being able “to figure out what food is in common across all those restaurants,” according to Dr. Ian Williams, chief of the outbreak response and prevention branch of the CDC.

Chipotle says it is working to put in place programs to monitor the safety of each of the 68 ingredients it uses, using methods like high-resolution testing and additional food-safety training for its employees. “With all these programs in place, we are confident that we can achieve a level of food-safety risk that is near zero,” Chris Arnold, a spokesman for Chipotle told the Times.

Arnold said Chipotle had expected to see additional cases of E. coli poisoning like those that came to light on Monday. And, he argued that not all of the victims in the earlier outbreak had reported eating at a Chipotle.

The latest infection is the fifth linked to Chipotle since August, according to Food Safety News. Cased began in Minnesota and then surfaced in the Pacific Northwest.

Bill Marler, a lawyer who represents more than 50 victims from the four previous Chipotle food poisoning outbreaks, said he was stunned that the company was having yet another problem with food safety.

Marler also has been critical of Chipotle’s response to the scandal, although he said the steps the company is taking to improve food safety now seem to be good ones. “Even after watching their CEO on TV, I’m not sure they get it,” he said. “You really do have to have a culture of food safety from the top down.”

The Times notes that the market might be losing patience with the company. Chipotle’s stock is down 30% from its high of $757.77 in August.

So, this outbreak seems to be both surprising, considering the company’s efforts, and possibly indicative of some deeper problem. The difficulty tracking the source of the outbreak certainly is not confidence inspiring. The firm’s struggle to find a more reliable contamination control system should be watched carefully as it proceeds, Washington Insider believes.

Survey Aims to Collect Farmer Feedback on USDA Programs

A new online survey launched by the American Farm Bureau Federation will collect feedback from farmers and ranchers about their experiences with 10 Agriculture Department programs housed in three agencies. Results will be used by Farm Bureau to develop recommendations on how USDA can enhance its programs and make them more useful to farmers and ranchers.  All farmers and ranchers are encouraged to take the survey, which takes about 10 minutes to complete.  Farm Bureau will share feedback from the survey about what is working well with the programs and how they can be improved with USDA. To find more information, or to take the survey, visit USDA programs dot question pro dot com (http://usdaprograms.questionpro.com).

FSIS Developing ‘Geographic Claims’ Guidance for Beef, Pork

USDA’s Food Safety and Inspection Service will no longer enforce country-of-origin labeling requirements for beef and pork, but it is also developing guidance for companies that may wish to make “geographic claims,” according to the Hagstrom Report. An FSIS memo to inspection personnel this week said “FSIS is developing guidance for federally inspected establishments related to geographic claims they may wish to make on beef and pork muscle cuts and ground products with the COOL regulations no longer being enforced.” The memo comes after the omnibus spending bill that included a repeal of COOL was signed on Friday. USDA Secretary Tom Vilsack did not say anything about FSIS developing voluntary geographic claims standards in his statement regarding COOL last week. It is unclear how FSIS’s plan to develop geographic claims standards will fit into the WTO case. The National Farmers Union and consumer groups have said that consumers want to know where their beef and pork come from and will continue to demand labeling.

USDA Monthly Cold Storage Report

U.S. pork and chicken supplies both hit record highs for the month of November,  USDA reported in its monthly Cold Storage report.

Pork

Frozen pork supplies were down 7 percent from the previous month but up 14 percent from last year and the largest in November since the data was first recorded in 1915.

Stocks of pork bellies were up 131 percent from last month and up 15 percent from last year.

Poultry

Total stocks of chicken were up 3 percent from the previous month and up 27 percent from last year. Chicken stocks were record high for the month of November, since the data was first recorded in 1939.

Total pounds of turkey in freezers were down 46 percent from last month but up 1 percent from Nov. 30, 2014.

Total frozen poultry supplies on Nov. 30, 2015 were down 11 percent from the previous month but up 22 percent from a year ago.

Beef

Total pounds of beef in freezers were up 1 percent from the previous month and up 27 percent from last year.

Total red meat supplies in freezers were down 3 percent from the previous month but up 21 percent from last year. Total red meat is a record high for the month of November, since the data was first recorded in 1916.

Restricting Use Of Antibiotics To Have Modest Impact: USDA

Efforts to restrict use of antibiotics for enhancing livestock production are likely to have a modest impact on the industry, according to a USDA economist studying the issue.

A significant portion of livestock producers do not use antibiotics for production purposes, and farmers that do use the drugs to promote growth on average see only a 1 percent to 3 percent increase in productivity, said Stacy Sneeringer, an economist with USDA’s Economic Research Service.

For example, 48 percent of broiler producers, 51 percent of nursery hog producers and 38 percent of finishing hog producers reported they did not use antibiotics for growth promotion, according to the most recent data available.

Sneeringer spoke during a webinar looking at the findings of a recently released USDA reporton the economics of antibiotic use in U.S. livestock production.

She said potential effects of restrictions on antibiotic use for production purposes include:

• More feed required per unit of weight gain.
• Slower growth to market weight.
• Higher rates of death and illness among young animals.
• Reproduction levels might decrease.
• More animals weighing in at the higher and lower ends of the spectrum.
• More extensive bio-security and other disease prevention measures may be required.

While restrictions could result in higher costs of production, foreign buyers that previously rejected U.S. products due to antibiotic use may now permit them, Sneeringer also noted.

U.S. Wheat Associates Welcomes WTO Elimination of Export Subsidies

ARLINGTON, Virginia – U.S. Wheat Associates (USW), the export market development organization for the U.S. wheat industry, is very pleased with the recent decision by WTO members to eliminate agricultural export subsidies.   

Long banned for industrial goods, export subsidies are, along with guaranteed prices above world market levels and input subsidies, among the most harmful and distorting practices for world agricultural trade.  Although the WTO already banned export subsidies for industrial goods, many member countries are still authorized to use agricultural export subsides. While authorized subsidies are rarely used anymore, agreeing to eliminate them is no small matter. For example, while the European Union, collectively the world's largest wheat producer, no longer uses export subsidies it still has standby authority to do so. Other countries are using unauthorized export subsidies and should be challenged to prevent continued violations of current disciplines. Certainly, eliminating export subsidy authority at once for developed countries and by the end of 2018 for developing countries is a major step forward for world wheat trade. 

USW is concerned, however, that the Nairobi Ministerial also reauthorized developing and least developed countries' use of processing and transport subsidies for agricultural products, an authority that had expired in 2004. While this reauthorization is limited and temporary, it is still a step backward for agricultural trade similar to the setback of the 2013 Bali Declaration.   

There were also changes in language affecting food aid and export credits, but our negotiators successfully defended U.S. practices in those areas. While further negotiations will take place on special safeguards and government food stockholding for developing and least developed countries, no commitment was made to continue the Doha Development Agenda as such, which we consider a positive outcome. It is long past time for countries to shelve the failed Doha negotiations and move on to more productive trade liberalization efforts to address the challenges of the 21st century. 

USW’s mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 18 state wheat commissions and cost-share funding provided by USDA/Foreign Agricultural Service. USW maintains 17 offices strategically located around the world to help wheat buyers, millers, bakers, wheat food processors and government officials understand the quality, value and reliability of all six classes of U.S. wheat.  

Deal To Scrap Subsidies For Ag Exports Agreed To By WTO

 (Dow Jones) -- A deal to scrap subsidies for agricultural exports could level the playing field for farmers who don't currently benefit from much government help, while raising the stakes for producers elsewhere who do.

The World Trade Organization agreed at a meeting in Nairobi on Saturday to eliminate some $15 billion of subsidies on exported produce from milk to sugar and rice.

Farmers from countries like New Zealand, Australia and Canada, who get relatively limited help from their governments, cheered the move, which should make their produce more competitive in global markets.

Yet those farmers who receive more generous subsidies--a costly practice often criticized for manipulating prices--could lose their edge. Some of the biggest beneficiaries have been both in developed and developing countries including Switzerland, India and Thailand.

"The decision tackles the issue once and for all," said Director-General Roberto Azevêdo in a speech following the decision. "It removes the distortions that these subsidies cause in agriculture markets."

The agreement requires developed countries to eliminate subsidies starting Jan. 1, with the exception of some dairy, pork and processed products. Developing countries have until the end of 2018.

Export subsidies include any form of financial aid or support given by a government to a firm involved in exporting agricultural products. Opponents of subsidies say farmers in countries without them trade at a disadvantage in the global marketplace. The issue had been on the WTO's list of unfinished business: An agreement in 2005 to end all agricultural export subsidies by 2013 never came to fruition.

Farmers in Australia and New Zealand are among the least subsidized in the world, according to a 2014 Organization for Economic Cooperation and Development report, which measures domestic and export subsidies along with a number of tariffs. New Zealand farmer subsidies equate to just 1% of revenue, and those are 2.3% in Australia. That compares with 57% in Switzerland.

"For decades, export subsidies have threatened the livelihoods of Australian farmers," said Andrew Robb, Australia's Minister for Trade and Investment. "[Subsidies'] abolition will permanently remove a long-standing source of distortion in global agricultural markets."

However, analysts say the extent of the benefit is hard to quantify. Global export subsidies have fallen in recent years, so the financial impact could be limited. Rather, the fact that new subsidies won't be implemented is the clearest sign of progress, they say.

"Much of this is simply a promise not to do something that most countries stopped some time ago," said Tobin Gorey, director of agri-strategy at the Commonwealth Bank of Australia.

The news comes when India, the world's second largest sugar producer, is planning to release a mountain of the sweetener onto world markets. To reduce huge stockpiles amassed after five years of bumper crops, New Delhi has offered to give refiners a bonus for every ton of sugar they export. If they release the proposed 4 million tons of sugar onto the market, prices could fall by 15%, according to some traders.

Sugar prices hit seven-year lows in August before recovering in recent months.

Thailand, once the world's largest rice exporter, is another country that has supported its farmers with billions of dollars in subsidies. Thai farmers accumulated huge stocks of the grain after embarking on a plan to jack up rural incomes and boost spending by buying rice from farmers at up to double market prices. The program fell apart in early 2014 after incurring paper losses of some $15 billion. Much of the grain left unsold in government warehouses is now being sold in global markets.

For Switzerland, the agreement requires an end to subsidies for processed agricultural products, such as chocolate exports, over a five-year period. However, in a statement released by the Swiss government after the WTO's decision, officials said they would consider alternatives to continue to support the sector.

To be a sure, a number of other support measures remain in place to support local agriculture, including tariffs, quotas and domestic subsidies.

El Nino Remains Near it's Peak

(Dow Jones) -- The El Nino weather phenomenon remains near its peak with indicators suggesting that it will start to decline in 2016, Australia's Bureau of Meteorology said Tuesday.

"Sea surface temperatures and cloud patterns near the Date Line remain well in excess of El Nino thresholds. Below-surface ocean temperatures in the eastern tropical Pacific remain significantly warmer than average, but clearly some cooling has occurred in the past fortnight," the weather bureau said in its fortnightly update. Sea surface temperatures are important as these temperatures play a significant role in maintaining the strength and longevity of El Nino events.

El Nino occurs when winds in the equatorial Pacific slow down or reverse direction. That warms water over a vast area, which in turn can upend weather around the world. The severity of the phenomenon is measured by ocean temperatures and atmospheric convection activities. The phenomenon typically reduces rainfall across parts of southeast and southern Asia, and brings precipitation to the western U.S. and parts of South America.

El Niño events can lead to severe drought in parts of Southeast Asia and heavy flooding in North America, all of which cause challenges for farmers.

The weather pattern's influence on Australian rainfall is variable at this time of year, with both wetter and drier summers observed in past events depending on how quickly the event breaks down, said the weather bureau.

Multilateral WTO Agreement Good for Agriculture, Says AFB

The World Trade Organization closed its 10th Ministerial Conference with an agreement that will set a new direction for agricultural trade negotiations. The five-day conference that concluded over the weekend featured a deal between the WTO participating countries that will eliminate trade-distorting export subsidies and achieving disciplines on the use of export credits, according to the American Farm Bureau. Further, Farm Bureau says the agreement will lower agricultural trade barriers and strengthen U.S. agriculture’s ability to pursue market opportunities in international trade. House Agriculture Committee Chairman, Texas Republican Mike Conaway, said while the agreement addressed some critical issues for agriculture, it also fell short by allowing export subsidies for transportation and marketing for another eight years, even though authority to offer such subsidies expired in 2004. While the agreement acknowledges domestic cotton reforms by the U.S., Conaway said he was “disappointed that some acknowledgment was not made concerning the deeply harmful impacts that China and India’s domestic cotton policies are having upon cotton farmers around the world.”

Canada, Mexico, Pleased with COOL Repeal, Still Seeking Final Tariff Authorization

Following its passage, Canadian officials praised the U.S. spending bill that included a repeal of mandatory meat country-of-origin labeling. The repeal averted a potential trade war, according to Canadian Manufacturing, a Canadian industry based news source, as the bill avoids $1 billion worth of retaliatory tariffs Canada and Mexico were authorized to impose on the United States. A Canadian trade official called the repeal of COOL “a real vindication of the power and significance of the WTO dispute-resolution mechanism.” Canadian officials said they still planned to obtain formal approval this week from the WTO for retaliation, even though the tariffs won’t be imposed. Following the passage of the bill, USDA Secretary Tom Vilsack said “effective immediately, USDA is not enforcing the COOL requirements.” The tariffs targeted U.S. products including not only agricultural ones such as cattle, pork, apples, rice, maple syrup and wine, but extended to non-agricultural products, such as jewelry, office chairs, wooden furniture and mattresses.

Spending Bill Delays Anhydrous Regulations

The massive spending bill passed last week by Congress includes a delay in new anhydrous regulations. DTN reports that buried in the omnibus appropriations bill is a rider that forbids the Occupation Safety and Health Agency from requiring ag retailers to comply with Process Safety Management of Highly Hazardous Chemicals regulations. That gives agriculture retailers a reprieve on requirements that would make retail operations that sell anhydrous ammonia fertilizers to have the same level of safety rules and facility securities as chemical manufacturers. DTN reported earlier this year that while OSHA estimated the costs of facility safety renovations at $2,160 per site, the Ag Retailers Association estimated it would cost an average of $20,000 per site. Some retailers said costs would be more than $60,000 to comply and that they would stop selling anhydrous if the regulation exemption was removed.

TPP Tops Obama’s 2016 Agenda

The White House has placed passing the Trans-Pacific Partnership through Congress at the top of the Presidents 2016 agenda. President Obama expressed optimism that Congress can approve the trade pact, despite contrasting opinions on when a vote may occur. The President called the TPP “a big deal” and acknowledged that opponents in both parties make for “an interesting situation,” according to The Hill.  He said the White House will need to "stitch together the same kind of bipartisan effort" that helped his administration win a fight over fast-track trade authority. Senate Majority Leader Mitch McConnell indicated this month a vote does not seem likely to occur until after the November 2016 elections. However, House Speaker Paul Ryan said he wants to take a vote as soon as possible on the trade agreement if the pact lives up to the promises made by the White House. He said he does not have a date in mind but that the TPP is “very important” and "has a lot of promise” because it gives the United States the ability to write the rules of global trade in the fastest growing region in the world.