Friday Weather

Moderate to locally heavy rain is in store for the central Plains and western Midwest Friday. This is the start of a very wet pattern through the weekend. Planting disruption will be extensive. Northern areas will be dry but cool Southeastern locales will be dry and warm for progress. Northwestern areas will also be dry but with slow progress due to rain and snow earlier this week. 

The Army Corps of Engineers was shut out of the waters of the United States rule making process

OMAHA (DTN) -- The Army Corps of Engineers was shut out of the waters of the United States rule making process, even though EPA indicated the WOTUS rule was drafted in a joint effort with the Corps, a retired major general told a U.S. Senate Committee on Wednesday.Retired Major General John Peabody, who was the deputy commanding general for Civil and Emergency Operations from October 2013 through August 2015, said in written testimony to the U.S. Senate Environment and Public Works Committee that the Corps of Engineers played virtually no role in drafting the WOTUS rule.Peabody was one of five witnesses called to testify before the EPW committee as part of a review of the scientific and legal basis for the WOTUS rule.Current EPA Administrator Scott Pruitt announced in March the agency was prepared to consider a rewrite of the rule. In addition, sometime this year the U.S. Supreme Court will consider whether the U.S. Court of Appeals for the Sixth Circuit in Cincinnati is the proper venue for the many lawsuits filed.In August 2015, 105 pages of Corps memos were released by the U.S. House of Representatives Oversight and Government Reform Committee.The release came despite a request of Congress from Jo Ellen Darcy, who was the assistant secretary of the Army for civil works, to keep the memos out of the public eye. All the documents were stamped as "litigation sensitive" as they outline concerns from Corps legal counsel just weeks ahead of the release of the final rule.On Wednesday, Peabody spoke publicly for the first time about the drafting of the WOTUS rule."Beginning in November 2014, the Corps was marginalized from substantive participation in the rule-making process," Peabody said in his written testimony."Specifically, in late November or early December 2014 Corps staff made me aware that we were no longer being invited to the rule-making meetings, and therefore our involvement in developing the rule language had ceased. When I advised Ms. Darcy that Corps personnel were no longer being invited to rule meetings that were still being held, she re-confirmed that this was contrary to her specific direction, and she emphasized that she wanted Corps experts at the meetings. Although I assumed this would resolve the issue, notwithstanding her direction, nothing changed. I brought this up two or three more times in early 2015, but with no effect."Ken Kopocis, former deputy assistant administrator for water at EPA when the rule was drafted, said in his written testimony the rule was a cooperative effort by both agencies. Kopocis now serves as an associate professor at American University Washington College of Law in Washington, D.C.In addition, Kopocis questioned the need to rewrite the rule."The Clean Water Rule was developed and issued by the two agencies to ensure that the nation's waters could continue to provide these essential benefits, making waters better protected from pollution and destruction by having the scope of the Clean Water Act easier to understand, more predictable, and more consistent with the law and peer-reviewed science," he said in written testimony."Unfortunately, the rule's benefits of clarity, predictability and consistency have been put on hold by the Sixth Circuit, but that will ultimately be resolved. I personally am very aware of the controversy surrounding the scope of the Clean Water Act, but I also believe it is a disservice to the public that the current administration has indicated that it will undertake a new rule-making to replace the clean water rule."Peabody said EPA provided to the Corps a copy of the revised preamble to the rule for the first time in early March 2015. The next time the Corps saw the final draft, he said, came after it was sent to the Office of Management and Budget in early April 2015.That version of the rule "contained some statements we had not previously seen that were factually inaccurate, especially regarding the Corps," Peabody said."What was of greatest concern to me personally, and to the Corps senior leaders and staff with whom I discussed this issue at that time, was not that the Corps was excluded from most of the process of developing the rule," he said."The more concerning issue was that the marginalization of the Corps had caused Corps' expertise, concerns and related recommendations -- founded on serious and significant concerns with the viability of the rule from a factual, scientific, technical and legal basis -- to be so completely disregarded. Whenever we received periodic access to see updated versions of the draft final rule text or preamble, the serious concerns the Corps had repeatedly communicated were left largely unaddressed."The preamble to the final rule indicates the rulemaking was a joint effort of the EPA and the Corps. In addition, it says both agencies jointly reached "significant findings," and that the agencies came to important conclusions based on their experience and expertise."These statements and characterizations are untrue," Peabody said.Corps staff raised a number of technical concerns about the final rule.One of those concerns centered on a provision that says if lakes, ponds and wetlands are found to have a "significant nexus," or connection to waters regulated as jurisdictional waters, the entire water body is jurisdictional. The final rule says waters will be regulated as long as a portion is located within the 100-year floodplain or within 4,000 feet of an ordinary high-water mark or high-tide line.As a result, the Corps indicated to EPA the 4,000-feet provision was not based in science and should have required EPA to conduct an environmental impact statement. 

More than 80 farm groups ask congressional lawmakers to reform commodity checkoff programs

OMAHA (DTN) -- More than 80 farm groups asked congressional lawmakers to reform commodity checkoff programs in a letter sent to the U.S. Senate and U.S. House of Representatives on Thursday.Last month, the "Opportunities for Fairness in Farming Act" was reintroduced by Sens. Mike Lee, R-Utah, and Cory Booker, D-N.J. In the House, Reps. Dave Brat, R-Va., and Dina Titus, D-Nevada, introduced companion legislation to reform checkoff programs.The bills would make a number of reforms to the programs, including stopping federally mandated checkoff dollars from being transferred to parties that seek to influence government policies or action relating to agriculture issues.The measures would enforce a prohibition against conflicts of interest in contracting and all other decision-making operations of the checkoff program. In addition, federally mandated funds could not be used for anti-competitive programs or spent to disparage other commodities.The bills are designed to increase transparency of the individual boards' actions on how federal checkoff funds are spent. In addition, audits would be required for each checkoff program every five years.A lawsuit filed in 2014 by the Organization for Competitive Markets demanded the release of 9,300 pages of documents related to the USDA's Office of the Inspector General investigation into the beef checkoff program. The documents stem from two OIG audits of the beef checkoff and its contractors, including the National Cattlemen's Beef Association.The audits found producer investments in the checkoff are protected by a firewall that prevents beef checkoff dollars from being used for policy activities. Two audits by the OIG and several random audits by USDA found contractors to be in compliance with the laws that protect checkoff funds.In recent weeks, a federal court ordered the release of thousands of documents requested by the OCM, but most of them were heavily redacted.Colin Woodall, vice president of government affairs for the National Cattlemen's Beef Association, said he believes the bills are dead on arrival. Woodall said members of agriculture committees on both sides of Congress are unlikely to hold hearings on the bills."We are firmly against all of these bills," Woodall said."They would make the programs voluntary. The programs are mandatory to make sure everyone pays their fair share. Changing that, we don't believe would be a wise thing at this time. We're talking about dollars being paid by cattle producers, these are not tax dollars. It's not about improving the program, it's about an agenda. We will continue to see attacks on the checkoff. We have seen this for years."On Thursday, lawmakers received the letter signed by more than 80 organizations representing more than 250,000 ranchers, farmers, businesses and environmental groups, asking Congress to pass the legislation. The groups include the National Farmers Union, the OCM and R-CALF USA, as well as many state-level agriculture interests."In spite of this limited purpose, checkoff programs have repeatedly acted beyond the scope of their statutory mandate," the letter said."Lax oversight by the U.S. Department of Agriculture has resulted in collusive and illegal relationships between checkoff boards and lobbying organizations, both of which have repeatedly used checkoff funds to influence legislation and government action in spite of a broad statutory prohibition against these activities. Such advocacy efforts have an anticompetitive effect, benefiting certain producers to the detriment of others, and forcing some producers to pay into a system that actively works against them. Some of their tactics have gone so far as to expend government mandated fees to prevent new food products from entering the market."The proposed reforms in the two bills, the groups said, would help bring reform to the program."Together, these provisions would eliminate the abuses and conflicts of interest plaguing the checkoff programs and will restore for U.S. producers credible, unbiased programs that can effectively and efficiently promote their individual commodities," the letter said.Fred Stokes, a Mississippi farmer and founding member of the Organization for Competitive Markets, said in a statement the legislation is needed to level the playing field for all farmers."Egregious abuses of U.S. farmers' and ranchers' mandatory checkoff tax dollars have been exposed in the beef, pork, dairy, egg, and other checkoff programs," he said."The half-billion dollars that these programs take from farmers have become the cash cow for organizations that work against fair competition and market transparency, forcing independent family farmers and ranchers to essentially fund their own demise." 

Former USTR Says Future NAFTA Renegotiations Unpredictable

A former U.S. trade representative warned Canada that trade negotiations with the U.S. would be much less predictable with the Donald Trump administration. Obama-era USTR Michael Froman told Canada-based CBC News much of the North American Free Trade Agreement renegotiations with the Trump administration will likely be familiar ground, albeit with a less predictable partner. Froman helped lead the Obama administration to reach an agreement on the Trans-Pacific Partnership, a trade agreement President Trump removed the United States from upon taking office. Froman says: "We already have renegotiated NAFTA, it was called TPP.” Included in the TPP, Froman says Canada and Mexico agreed to a number of revisions that were not in NAFTA that helped make NAFTA a 21st-century agreement. He says it’s unclear what the new administration will seek that goes beyond the scope of the TPP agreement. Froman, now a distinguished fellow at the Council of Foreign Relations, said it can be reasonably expected that the White House will want to address supply management in the dairy industry, and seek changes to softwood lumber, among the vocal criticisms of the Trump administration of late.

U.S. Milk Exports to Mexico at Risk

$1.2 billion of milk exports from the U.S. to Mexico are at risk as Mexico appears to be seeking new trading partners. Mexico is America’s top dairy exporter, and as the Donald Trump administration makes trade relations uneasy with its North American Free Trade Agreement counterparts, Mexico is in talks to import dairy products from New Zealand. In the first two months of 2017, Mexico increased its imports of skim milk powder from the European Union by 122 percent over last year. Mexico has also been exploring talks with dairy powerhouse New Zealand. That country’s trade minister visited Mexico in February to discuss a potential trade deal, according to Bloomberg news. University of Missouri agricultural economist Scott Brown says Mexico is “looking to make sure they have market alternatives because of the rhetoric from the U.S. on renegotiating NAFTA.” But, CoBank economist Ben Laine says “it’s not just the NAFTA talk.” He says demanding that Mexico pay for a border wall and taking a hard line on immigration likely have an impact, as well.

Farm Bureau Responds to President’s Tax Plan

American Farm Bureau Federation President Zippy Duvall welcomed the inclusion of eliminating the estate tax in President Donald Trump’s tax plan unveiled this week. However, Duvall says tax reform must treat all businesses fairly, noting that “most farm and ranch businesses don’t operate like large corporations.” Duvall says most farms are family-run and depend on deductions and provisions that give them the flexibility they need to keep their businesses running in all seasons. Duvall says farmers and ranchers have already benefitted from congressional action to reduce the burden of the estate tax, known as the death tax, and that AFBF is “ready to bury the death tax once and for all.” Duvall also says lower tax rates will go a long way in helping farmers and ranchers. But the future of other important provisions for agriculture, like immediate expensing, the deduction for interest expense, cash accounting and like-kind exchanges, is still unclear. He says the tax code “should not add to the challenges” to farmers, and that AFBF is ready to work with the administration and Congress to address all of agriculture’s needs in tax reform. 

National Wheat Yield Contest Deadline for Winter Wheat Extended to May 15th

The National Wheat Foundation announces an extension for Winter Wheat enrollment in the National Wheat Yield Contest to May 15th! Growers now have until close of business on May 15th to register a winter wheat variety.This is a two week extension from the original deadline of May 1st. Contest Director, Steve Joehl, reasons, “The spring has been delayed by over two weeks across the northern tier states and winter wheat is just coming out of dormancy. Extra time to assess the wheat crop’s yield potential will be beneficial to attract more entries to the Contest from these states. In addition, growers there are up against spring planting deadlines, and are trying to seed at every opportunity. This extension provides those interested in entering some valuable time to complete the process.”The registration process is all online at http://yieldcontest.wheatfoundation.org. 

Chinese Market Likely a Key Component to Future Expansion of U.S. Beef Exports

It has been sort of the ultimate tease to the U.S. beef industry since the fall of 2016: The Chinese government’s expressed willingness to open China to American-produced beef. Although talks have been ongoing, no agreement has been reached on protocols for U.S. beef to move into the Chinese market. There is no indication of when such access might be realized or what conditions or restrictions will be attached to that access. “Questions of traceability and use of beta agonists and other technologies are likely to factor into U.S. access to Chinese beef markets,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist. “Still, there is significant hope and anticipation relative to the opening of the China marketplace. There are a lot of potential customers for U.S. beef in China.” China has been the fourth-largest beef-producing country for at least the last 20 years. For most of those years, China also has been the fourth-largest beef-consuming country, although it moved up to be the third-largest beef-consuming country in 2016 and is projected to be the second largest in 2017. Per capita beef consumption of beef in China is relatively low but has increased by about 20 percent in the last six years to a projected 2017 level of 12.7 pounds. “Growing per capita consumption multiplied by an estimated 2017 population of 1.39 billion people is pushing total beef consumption in China ahead of the European Union and second only to the United States,” Peel said. Economic growth is the principal driver of beef demand in China with an emerging middle class and rapid urbanization dramatically impacting beef demand. Population growth in China is slow, less than 0.5 percent per year, but still adds several million additional consumers each year. “The role of China in global beef markets has evolved rapidly in recent years,” Peel said. “Despite being a large beef producing and consuming nation for many years, China has never been a player in global beef markets until recently.” For many years China neither imported nor exported much beef. However, since 2012, growing beef consumption has resulted in a rapid increase in beef imports as consumption outpaced beef production in Asian nation. China emerged as the second-largest beef-importing country in 2016. Major beef suppliers to China in 2016 were Brazil, 29 percent of total Chinese imports; Uruguay, 27 percent; Australia, 19 percent; New Zealand, 12 percent; and Argentina, 9 percent. In 2017, Chinese beef imports are projected to be 950,000 metric tons, an increase of 17 percent from 2016. The United States has not had access to China for beef exports since 2003, though some U.S. beef reaches the country unofficially through Hong Kong and Vietnam. Of course, the rapid growth in Chinese beef imports recently provides significant export market potential for U.S. beef. Peel said the long-term potential of beef exports to China is likely larger and more certain while short-term prospects may be more modest as U.S. beef establishes market share and official shipments displace unofficial shipments. “Still, if U.S. access to China happens rather quickly, our 2017 U.S. beef exports could be boosted by an additional 1 percent to 3 percent this year in addition to the currently projected 6 percent to 7 percent year-over-year increase in beef exports,” Peel said. Prior to 2012, China represented less than 0.5 percent of total global beef imports. Projected 2017 beef imports in China will exceed 12 percent of global beef imports. “It seems clear China will continue to become an increasingly major factor in global beef markets,” Peel said. “Prompt U.S. access to the Chinese beef market may well be the most important component of expanded U.S. beef export potential in the coming years.” 

Current rules regarding antimicrobial use in livestock feeds intend to reduce overall use as a means of slowing the emergence of antimicrobial-resistant pathogens

Current rules regarding antimicrobial use in livestock feeds intend to reduce overall use as a means of slowing the emergence of antimicrobial-resistant pathogens. In a step toward measuring that impact, USDA will conduct a national study this summer, focusing on how antimicrobials are used on feedlots in the United States.Beginning in May, the USDA’s USDA’s National Animal Health Monitoring System (NAHMS), in collaboration with the National Agricultural Statistics Service (NASS), will survey U.S. feedlots with a capacity of at least 50 head. Results of the survey will help provide a baseline for comparisons as the industry works toward reducing antimicrobial use. The survey will document antimicrobial use in feedyards in 2016, prior to the full implementation of new rules from the FDA. Those changes included Guidance for Industry 213, which eliminates the use of medically important antimicrobials for growth promotion in food producing animals, and the veterinary feed directive (VFD) rule, which requires veterinary oversight for use of medically important antimicrobials in animal feed or water.Objectives for the NAHMS 2017 study include:Describe antimicrobial-use practices in feed and water on feedlots with a capacity of at least 50 head.Estimate the percentage of feedlots administering and the percentage of cattle receiving specific antimicrobials in feed and water by reasons for use.Provide baseline data on antimicrobial-use practices in place prior to implementation of FDA policy changes. This baseline can be used for evaluating trends over time.Describe antimicrobial stewardship practices on U.S. feedlots.Beginning in May, representatives from NASS will contact producers to inquire about their interest in participating in the study. Once establishing interest, APHIS personnel will begin contacting feedlot operators to schedule in-person interviews, which will be conducted by APHIS veterinarians. Data collection will end in August 2017.According to the USDA, information on antimicrobial-use practices will provide transparency to consumers and others regarding why antimicrobials are used in cattle feed or water and which antimicrobials they use. The study also will provide national snapshot of antimicrobial stewardship practices, such as recordkeeping related to antimicrobial use and whether a veterinarian was consulted in the decision to use antimicrobials. 

Washington Insider: Trade Policy Complexities

Governor Perdue was confirmed as Ag Secretary this week, and immediately rushed to the Whitten building to plunge into some of the ongoing ag policy fights, including immigration and trade. In fact, Bloomberg is suggesting that the administration needs to be aware that it could unwittingly do some serious damage to at least one ag market if it is not careful.Bloomberg sets the stage for its observations by discussing a tweet on Tuesday morning in which President Donald Trump told Wisconsin dairy farmers that America “will not stand for” the Canadian policies he says are hurting U.S. exports. The tweet argued that “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!” he said.But his next tweet might actually be a threat that could damage dairy farmers seriously Bloomberg argues. In that tweet, the President said, “Don't let the fake media tell you that I have changed my position on the WALL. It will get built and help stop drugs, human trafficking etc.”Bloomberg cautions that even as the Trump administration jousts with Canada, it might want to keep a closer eye on Mexico, America’s No. 1 one dairy market. This neighbor, which often figures prominently in U.S. government “crime and immigration rhetoric,” spent almost twice as much money on U.S. dairy products as Canada did in 2016. That’s $1.2 billion, Bloomberg said.The point is that U.S. policies and its rhetoric risk pushing Mexico to turn to new trading partners which could mean important losses for U.S. producers. In the first two months of 2017, Mexico increased its imports of skim milk powder from the European Union by 122% over last year, according to the EU Milk Market Observatory (as first reported by the Irish Farm Journal), Bloomberg says.Mexico has also been exploring talks with dairy powerhouse New Zealand. That country’s trade minister visited Mexico City in February to discuss a potential trade deal. “Why the moves by Mexico? In a word: Trump,” Bloomberg said.“Mexico is looking to make sure they have market alternatives because of the rhetoric from the U.S. on renegotiating NAFTA,” said D. Scott Brown, who teaches agricultural and applied economics at the University of Missouri. “This may be an opportunity to find other places to buy skim milk powder.” Rabobank also reported that tensions between the U.S. and Mexico are the reason for Mexico’s changing dairy purchasing strategy.The U.S. Dairy Export Council, currently led by Obama-era Secretary of Agriculture Tom Vilsack, also is stressing the importance of U.S. dairy to Mexico. “We all have an opportunity and a responsibility to maintain and strengthen relationships with those that we work with in Mexico, to reassure them that we’re going to continue to be open for business,” he said at the Dairy Forum in late January. “The relationships at the ground level, at the grass-roots level, can oftentimes overcome any stormy seas that might be created by comments coming from Washington.”This is not a short-term threat, Bloomberg suggests, and for now, past trade relationships seem to be holding: Exports of skim milk powder and nonfat dry milk powder to Mexico were up 14% in January and February from the same period a year earlier, according to the DEC, which stresses that it ships significantly more of the products than the EU does. That 122% increase brought the EU to only about 4,000 tons. In that time, the U.S. sent about 45,000 tons to Mexico and more than 70% of Mexico’s dairy imports come from America.But the surge in imports from the EU could signal a changing dairy landscape, Bloomberg says.We’re still seeing strong export sales but the unsettled markets make people nervous, makes the markets nervous, even though there’s no policy changes yet.And it’s not just the NAFTA talk, dairy market experts say. Demanding that Mexico pay for a border wall and taking a hard line on immigration likely have impacts, too. It’s probably some combination of things, DEC says. Likely some of the rhetoric early on shook up the markets initially. Now, concerns around NAFTA and trade are what’s keeping them worried.”Well, concerns about agricultural trade likely were important in the choice of Governor Perdue, and likely will be a key part of his responsibilities. Certainly, if anyone can quiet the trade waters, it is the new Secretary given his experience. However, that won’t be easy—the anti-trade feeling is clearly deep and important to many administration officials. How the administration squares those views still lingering from the campaign with the needs of trade dependent sectors like agriculture and others will be extremely important—a struggle that should be watched carefully as it evolves, Washington Insider believes. 

Farm groups respond with shock and dismay after reports that President Trump is considering an executive order to withdraw the United States from NAFTA

WASHINGTON (DTN) -- Major farm groups responded with shock and dismay Wednesday after reports that President Donald Trump is considering an executive order to withdraw the United States from the North American Free Trade Agreement.Politico first reported Wednesday that the White House had a draft executive order ready on NAFTA that "could be unveiled late this week or early next week." Politico reported those details came from two White House officials.Late Wednesday evening, the White House issued a statement summarizing phone calls President Trump had sometime in the afternoon with President Enrique Pena Nieto of Mexico and Prime Minister Justin Trudeau of Canada. The White House stated, "President Trump agreed not to terminate NAFTA at this time and the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the NAFTA deal to the benefit of all three countries."President Trump said, "It is my privilege to bring NAFTA up to date through renegotiation. It is an honor to deal with both President Pena Nieto and Prime Minister Trudeau, and I believe that the end result will make all three countries stronger and better."The White House statement came hours after leaders of some of the country's largest farm organizations stressed their support for President Trump while also leveling some of agriculture's harshest criticism of the White House since the president took office. Leaders of farm groups said pulling out of NAFTA would be devastating financially for farmers and they urged the White House not to pull the trigger on any plan to withdraw from the 23-year-old trade agreement.President Trump is constantly challenging major trading partners over U.S. trade deficits and has demanded to take tough actions to get better trade terms out of them. Trump has called NAFTA "a disaster" for the U.S. economy.NAFTA accounts for about $1.225 trillion yearly in direct trade across North America. In 2015, the U.S. exported $24 billion in ag products to Canada, making the Great White North the top market for U.S. ag commodities. The U.S. exported $18 billion in farm products to Mexico in 2015 as well.Agricultural leaders sought to stress the importance of trade to the industry when farmers and new Agriculture Secretary Sonny Perdue met with Trump on Tuesday. After learning about the possible NAFTA executive order, leaders from major grain, oilseed and protein farm organizations quickly denounced the idea.DENOUNCING IDEA TO LEAVE NAFTATom Sleight, president of the U.S. Grains Council, said the group was "shocked and distressed" that the Trump administration was considering a withdrawal from NAFTA. The Grains Council is the major group promoting corn, barley, sorghum and distillers grains to U.S. trading partners. Mexico and Canada are large, loyal customers of U.S. grains, Sleight noted. The executive order would disrupt both of those markets, negatively affecting farm income at a tenuous time for farmers already."An executive order as reported will have an immediate effect on sales to Mexico, market prices and the profitability of U.S. farmers, who are already facing below-cost-of-production prices," Sleight said. "Our top grain market is not a negotiating tactic."Sleight agreed with the Trump administration that there was a need to update and modernize NAFTA, but a notice of withdrawal was not the path to take."Before today, we believed we were on track to have a reasonable discussion about how to update the agreement in ways that make sense for all parties," Sleight said. "We hope we can get back to that position soon."The U.S. Wheat Associates and National Association of Wheat Growers responded in similar fashion. The groups jointly stated they "are alarmed" over the reports of the executive order. The groups stated Mexico is the largest buyer of U.S. wheat, importing more than 10% of all U.S. wheat exports, or roughly 100 million bushels of wheat sent to Mexico."NAFTA truly opened the door to the strong and growing market opportunity in Mexico," U.S. Wheat Associates and NAWG stated. "Closing that door would be a terrible blow to the U.S. wheat industry and its Mexican customers."Putting U.S. pork exports back on the pre-NAFTA tariff scale would be "financially devastating to U.S. pork producers," said Ken Maschhoff, president of the National Pork Producers Council, and a producer from Carlyle, Ill. Maschhoff said tens of thousands of jobs that rely on those exports would also be lost."The bottom line is U.S. pork trade with Canada and Mexico has been very robust, and we need to maintain and even improve that trade. We're all for modernizing NAFTA, but we cannot support efforts that would undermine the livelihoods of America's 60,000 pork producers."Texas farmer Wesley Spurlock, president of the National Association of Corn Growers, reminded President Trump that America's corn farmers helped get him elected. Spurlock said corn farmers are strong supporters and want to work with president on a strong trade policy. That said, Spurlock said, "Withdrawing from NAFTA would be disastrous for American agriculture. We cannot disrupt trade with two of our top trade partners and allies. This decision will cost America's farmers and ranchers markets that we will never recover."MEXICO: VALUABLE MARKET FOR U.S. CORN, SOYMexico is the top market for U.S. corn. Canada also is major buyer of both corn and ethanol, Spurlock said.Ron Moore, president of the American Soybean Association and a farmer from Roseville, Ill., reiterated much of the same theme. "Without mincing words, initiating a process to withdraw from NAFTA is a terrible idea, and it will only mean a longer and more difficult struggle for farmers to recover in this economy," Moore said.Mexico bought roughly $2.5 billion in soybeans, meal and oil last year, making it the No. 2 market overall for soybean products. Canada is a top buyer of both meal and oil as well. Moore called the Trump administration to "immediately abandon" any plans to announce intentions to withdraw from NAFTA and instead focus on modernizing the trade deal, Moore said."That's where the action should be; beginning withdrawal procedures before modernization negotiations even take place are counterproductive and send the wrong signal," Moore said.Moore pointed out Agriculture Secretary Perdue was just sworn in on Tuesday and the Senate has yet to even confirm Robert Lighthizer as the U.S. Trade Representative."We need to give both time to have input on NAFTA modernization," Moore said.Wednesday's news about the possible NAFTA withdraw came just hours after a Farm Foundation forum on the future of NAFTA. At that forum, Bob Stallman, former American Farm Bureau president, urged farmers to be more vocal about the importance of free trade. Stallman said statements that NAFTA has been a disaster amount to "fake news." Stallman did not mention Trump directly, but it was clear he had Trump in mind when he said at the event that "the statements in the news that NAFTA is the worst thing that has happened -- that is fake news." 

Farmers’ Share of the Food Dollar is Still Low

A Farm Journal report says some consumers may still look at grocery store prices and think farmers are making a lot of money off the commodities they produce. A U.S. Department of Agriculture report says for every dollar that consumers spend on food, farmers and ranchers get approximately 17.4 cents. The remaining 82.6 cents of every dollar goes to things like marketing, processing, wholesaling, transportation, and retailing. For example, for every pound of bacon purchased, the consumer spends $5.63 while the farmer earns 75 cents. Consumers will spend $3.99 for a pound of tomatoes and the farmer earns 29 cents. For every pound of lettuce consumers buy, they’ll spend $2.79 while the farmer earns a nickel. Lastly, an 18-ounce box of cereal will cost consumers $4.79 but the farmer will only earn a nickel. Compared to the retail price of most products, farmers will often only make pennies on the dollar. The food dollar series for the USDA’s Economic Research Service measures annual spending by consumers on domestically produced food. 

USDA Removes Database on Animal Mistreatment

Last week, the U.S. Department of Agriculture shut down a database that includes information about mistreated, injured, or killed farm animals. The Animal and Plant Health Inspection Service cited privacy concerns in taking down the website information. A CNN Dot Com article quotes an animal activist group saying the agency bowed to pressure from groups that don’t want the information so accessible. The USDA’s website had posted information that included official warnings, pre-trial settlements, administrative complaints, and inspection reports. An announcement from APHIS says the agency made the move to take out certain personal information from website documents involving the Horse Protection Act and the Animal Welfare Act. Michael Budkie (Bud-key), Executive Director of Stop Animal Abuse NOW!, says the information that was taken down already had redacted sections. “The documents they removed contain virtually no personal information,” Budkie says, “this is not about privacy.” He says the move was made due to pushback from industries that he says “exploit animals.” Documents that had been part of the website information must now be requested under the Freedom of Information Act, a process that can take months. 

138 food, ag groups urge Senate to expedite Lighthizer confirmation

WASHINGTON, April 26, 2017 - A total of 138 food and agriculture trade associations and companies working collectively through the diverse and broad-based U.S. Food and Agriculture Dialogue for Trade today urged the U.S. Senate to expeditiously vote to confirm Robert Lighthizer as U.S. trade representative (USTR). 

Montana Department of Agriculture reminds producers to get covered through the State Hail Insurance Program

Fillable Electronic Forms and Applications Available at hail.mt.gov 
Helena, Mont. – For over 100 years, the Montana State Hail Insurance program has been providing important hail coverage to Montana producers. Montana producers can conveniently access and fill out applications for state hail insurance online by going to www.hail.mt.gov.  “The Montana State Hail Insurance Program has been a great resource for our state’s producers for over 100 years,” said MDA Director, Ben Thomas. "With the unpredictability of Montana’s weather, it’s important to get covered.” Producers can insure crops against hail damage at the maximum coverage rate of $75 per acre for dryland and $114 for irrigated land. Rates charged are a percentage of the insured amount and vary by county depending on the hail loss history of an area. A detailed list of rates by county and crop can be found on the program’s website. An application for insurance and more details about payment options has been mailed to producers who previously purchased state hail insurance. For new policy applicants, information and applications are also available at www.hail.mt.gov. Completed forms can be emailed, mailed or faxed to the department or used as a reference when you contact the office by phone. 

White House Takes Important First Step to Reining in the Antiquities Act

WASHINGTON (April 26, 2017) – The Public Lands Council and the National Cattlemen’s Beef Association applaud the executive order signed today that calls for a review of designations made under the Antiquities Act by previous presidents.

Dave Eliason, PLC president, said while the Act was intended to preserve Native American artifacts and areas of historical importance, Presidents have instead used the Act to bypass Congress and local communities to place heavy restrictions on massive swaths of land. Most recently, President Obama boasted of using the Antiquities Act more than any previous president—locking up 256 million acres of land and water in 30 separate designations.

“Western communities have been calling on Congress for years to address the continued abuse of the Antiquities Act. Elevating millions of acres to monument status without local input or economic analysis results in unrecoverable losses to the local communities.”

 In 1996, southern Utah faced a devastating reality when President Clinton designated 1.9 million acres as the Grand Staircase-Escalante National Monument. Livestock grazing was drastically reduced from 106,000 AUMs. Now there are only 35,000 AUMs in use.

The Cascade-Siskiyou National Monument in Oregon was initially created in 2000 by President Clinton and comprised 53,000 acres of public land. In the final days of his tenure in the White House, President Obama went on to expand the monument by another 48,000 acres. This expansion will effectively prohibit logging on approximately 35,000 acres, adding to the risk of wildfire as fuel loads increase, and negatively affecting the economy of multiple counties within the monument.

“The Executive Order is an important first step to reining in past designations that were pushed through without local input,” said NCBA President Craig Uden. “However, in order to bring the Act back to its original intent, Congress must act. Sen. Murkowski’s bill S. 33 Improved National Monument Designation Process Act would require Congressional approval of new designations, taking the power away from the Administration and placing back into the hands of those most impacted.”

The livestock industry, which supports many of the western communities, stands ready to work with the administration and assist in their review of designations and calls on Congress to pass Sen. Murkowski’s legislation without delay. 

President Trump Signs Executive Orders to Boost Rural America

WASHINGTON (April 26, 2017) – President Trump is sending a clear signal this week that he is interested and engaged in helping boost rural America. With the executive order signed on Tuesday, USDA Secretary Sonny Perdue will chair a newly established Interagency Task Force on Agriculture and Rural Prosperity, charged “to ensure the informed exercise of regulatory authority that impacts agriculture and rural communities.”Craig Uden, National Cattlemen's Beef Association president, said he is glad to see President Trump’s engagement this week.“We are appreciative for President Trump making agriculture a high priority right out of the gate,” said Uden. “With Secretary Perdue in office and the establishment of this task force, we are in a strong position moving forward to develop policy that will bolster our rural economy rather than the continuous over-regulation we have recently faced.”President Trump has specifically asked the task force to look at issues that have been high priority for NCBA – such as needed changes to the death tax and the protection of private property rights.“The rural farm economy has suffered with a drop in net farm income and increasing regulatory environment. This is a great step forward to putting rural America back into focus and addressing the issues that have negatively impacted our industry over the years.”In addition to the executive order establishing the task force, President Trump signed another executive order this week calling for the review of previous designations under the Antiquities Act. The Act, while intended to preserve Native American artifacts and areas of historical importance, instead has been used to place heavy restrictions on the land, bypassing Congress and local communities.“The end result is a crippling effect to local economies – ranchers forced off the land, conservation efforts halted, and jobs lost,” said Uden. “We are pleased to see that the Administration recognizes the hardships these designations have caused and is willing to re-evaluate previous action. Trump’s action this week is a positive sign for rural America.” 

Cargill announces it has reached an agreement to sell its beef cattle feed yards in Leoti, Kan., and Yuma, Colo

Cargill announced today it has reached an agreement to sell its beef cattle feed yards in Leoti, Kan., and Yuma, Colo., to Omaha-based Green Plains Inc., a vertically integrated ethanol producer with existing feed yards in Kismet, Kan., and Hereford, Texas. The transaction will be finalized upon completion of a definitive agreement and regulatory review, officials said in a news release.    Under a multiyear agreement, Green Plains will continue to supply cattle to Cargill. The Leoti and Yuma feed yards have a capacity of some 155,000 cattle. Meanwhile, the approximately 90 people currently employed at Cargill’s Colorado and Kansas feed yards will be offered positions with Green Plains.“Selling our two remaining feed yards aligns with our protein growth focus by allowing us to redeploy working capital away from cattle feeding operations to other investments,” said John Keating, president of Cargill’s Wichita-based protein business operations and supply chain. “By partnering with Green Plains in a multiyear supply agreement, the Yuma and Leoti yards will continue to supply cattle to our beef processing facilities at Fort Morgan, Colo., and Dodge City, Kan., ensuring consistent high-quality beef products for our customers.”Over the past two years, Cargill has announced nearly $560 million in acquisitions and capital investments to grow its North American protein business. 

Wheat Grower Organizations Alarmed About Possible NAFTA Withdrawal

U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) are alarmed over media reports today that the Trump Administration is considering a withdrawal from the North American Free Trade Agreement (NAFTA). Mexico is our largest U.S. wheat buyer, importing more than 10 percent of all U.S. wheat exports this year. NAFTA truly opened the door to the strong and growing market opportunity in Mexico. Closing that door would be a terrible blow to the U.S. wheat industry and its Mexican customers. 

USW and NAWG understand that there are several elements of the trade agreement that could be re-examined and modernized. However, we believe withdrawing from NAFTA would be a serious mistake. It could lead to new tariffs on U.S. wheat and threaten to undermine the long-standing, loyal relationship U.S. wheat farmers have built with Mexico’s wheat buyers and food industry. That would be devastating to U.S. wheat farmers already facing unprofitable prices and increasingly aggressive wheat exporting competitors.  

Administration Proposes Comprehensive Tax Reform Plan, Includes Repeal of Death Tax

WASHINGTON (April 26, 2017) - This afternoon, top officials in the Trump Administration released their proposal for comprehensive tax reform, calling it the “biggest tax cut in U.S. history.” The plan is designed to serve as the starting point as Congress and the Administration work to pass a comprehensive tax reform package this year.
 
Danielle Beck, National Cattlemen's Beef Association director of government affairs, said the Administration included in the proposal immediate repeal of the Death Tax – a priority for NCBA.
 
“Permanent repeal of the death tax has been a priority for cattlemen and women for decades,” said Beck. “Since the Death Tax was implemented nearly a century ago it has not only failed to meet the misguided goals set by Congress, but has threatened the existence of many multi-generational farms and ranches.”
 
The tax reform proposal comes on the heels of an executive order signed by President Trump yesterday on Promoting Agriculture and Rural Prosperity in America. The EO establishes an Interagency Task Force on Agriculture and Rural Policy and contains specific policy goals aimed at supporting rural agriculture, economic development, job growth, and infrastructure improvement, including:
 
Promoting the preservation of farms and agribusinesses as they are passed from one generation to the next, including changes to the estate tax and the tax valuation of family or cooperatively held businesses. 
 
“The Death Tax is clearly on the Administration’s radar and for that we are appreciative,” said Beck. “NCBA will assist the Administration however we can as they work to put together a comprehensive tax reform package.” 

Brazilian meat companies lost BRL4.78 billion ($1.52 billion) in market value

Brazilian meat companies lost BRL4.78 billion ($1.52 billion) in market value from March 16 through April 17 after the Federal Police announced “Operation Weak Flesh,” according to consultancy firm Economatica. News about the investigation into a corruption scheme involving public sanitary inspectors and some Brazilian meat processing plants on March 17 prompted many countries to temporary halt Brazilian imports. Brazil's Federal Police has charged 63 people for participation on Saturday (15). 

U.S. Secretary of Agriculture Sonny Perdue will deliver a keynote address at the 2017 Montana Ag Summit in Great Falls

Montana Sen. Steve Daines announced Wednesday that newly confirmed U.S. Secretary of Agriculture Sonny Perdue will deliver a keynote address at the 2017 Montana Ag Summit in Great Falls five weeks from now.The Montana Ag Summit, co-sponsored by Daines and the Montana Chamber Foundation, will take place in Great Falls on May 31 and June 1. It will bring some of the nation’s highest-profile agricultural leaders to Montana’s Golden Triangle to meet with the public and discuss ongoing efforts to strengthen Montana agriculture’s international relationships, showcase current technological advancements and examine the challenges of federal policies and regulations for both the current and future generations of farmers and ranchers.“I’m excited to host Secretary Perdue in Montana for the Montana Ag Summit,” Daines stated in a news release. “This will be a great opportunity for Secretary Perdue to see Montana’s number one economic driver firsthand and talk with our hardworking farmers and ranchers. Nothing replaces seeing our state and hearing what’s on the minds of Montanans.”The former Georgia governor was confirmed by the U.S. Senate on Monday as secretary of the Agriculture Department. The vote was 87 to 11, with both Daines and Sen. Jon Tester (D-Mont.) voting to approve him as ag secretary. Perdue faced few obstacles during his confirmation hearings. He received endorsements from hundreds of food and agricultural groups nationwide, including major groups such as the Farm Bureau and the National Restaurant Association, and gained praise from Republicans and Democrats alike.“Our farmers and ranchers have long been waiting for this important role to be filled,” Sen. Pat Roberts (R-Kan.), chairman of the Senate Agriculture Committee, said prior to the vote to confirm Perdue. “Once Gov. Perdue becomes Secretary Perdue, I know he will put the needs of farmers and ranchers — and rural America — first.”Roberts also will attend next month’s Montana Ag Summit, bringing his added prestige and authority to an event which will also include the acting chairman of the U.S. Commodity Futures Trading Commission, the president of the United Grain Corporation and the president of Northwest Farm Credit Services.Perdue, 70, grew up on a Georgia farm and worked as a veterinarian before beginning his political career in the 1990s. He is viewed as both a fiscal conservative and an immigration hawk, who shepherded passage of some of the nation’s toughest measures against ille- gal immigration during his two terms as the governor of Georgia.As secretary of the Department of Agriculture, Perdue will face near immediate controversy. President Trump has proposed a 21 percent reduction in the department’s budget, and his aggressive stance on halting illegal immigration has caused anxiety within some segments of the ag economy, which relies heavily upon foreign labor to get the crops planted, cared for and harvested.During his confirmation hearings, Perdue told senators that he supports many of the programs that could be cut by Trump’s budget, particularly those that focus on agricultural research and rural infrastructure development.Another hurdle for U.S. agriculture on the near horizon will be passage of the next farm bill. The 2014 farm bill took over three years to hammer out, leaving the country without federal legislation on agriculture and food subsidy programs for more than a year and a half.To register and for more information on the 2017 Montana Ag Summit, visit www.agsummitmontana.com. 

Key Tasks Ahead for USDA Secretary Sonny Perdue

The former Georgia governor has a lot of work ahead of him, including some of the following key issues:Staffing: Perdue will have a say on some but certainly not all key USDA political appointments. But his trusted confidents will be part of his inner office.Budget issues: He will likely not defend too much the major spending cuts Trump proposed for agriculture. Congress will not go along anyway.New farm bill: As a former governor, Perdue knows well the interrelationships of the grain and livestock sectors and the importance of inputs... seed, fertilizer, equipment, etc. Cotton and dairy producers expect him to push for better safety nets the last farm bill was deficient in providing. After a new farm bill is signed into law, USDA must implement the many programs. Former USDA Secretary Tom Vilsack took an active interest in this during his tenure.Regulations: Less of them and getting rid of or significantly modifying existing ones, such as the Waters of the US (WOTUS) rule. While USDA does not have jurisdiction in this and some other regulatory areas, Perdue and USDA certainly will have a voice in how they are dealt with via the Trump administration and Congress.Education: Educating the White House, Cabinet and Congress about the business of agriculture — what is needed and what is not. He comes to the office with good communications skills based on our talks with people in and outside Washington. 

The White House will unveil details of the president's proposed tax overhaul Wednesday afternoon

The White House will unveil details of the president's proposed tax overhaul Wednesday afternoon, but the meat of the plan is already being reported by several major news organizations.The plan would reduce the corporate tax rate from 35% to 15%. That would include lowering the rate for "pass through" S corporations to 15% as well, which the Washington Post stated would affect small, family-owned businesses, as well as real-estate companies or law firms.The White House proposal also does not include the "border adjustment tax" proposed earlier in the year to offset trade deficits with countries such as China and Mexico. That border adjustment tax was also meant to offset the lower revenuew expected from such a major tax cut for businesses.The tax plan reportedly scores out at adding roughly $2 trillion to the national debt over 10 years. However, White House officials argue that the tax breaks will be offset by increases in economic growth over the next decade.A key to the tax plan will be the reaction of House Speaker Paul Ryan, R-Wis. As Politico noted, tax reform has been Ryan's baby. He was once chairman of the House Ways & Means Committee, which oversees tax policy. Ryan also pitched the border adjustment tax as a way to offset a cut in the corporate rate. That's because Ryan has argued that tax reform shouldn't add to the deficit. As Politico noted, Ryan could be "steamrolled" by the White House on tax reform, mainly because the president blames Ryan for failing to repeal and replace the Affordable Care Act. http://www.politico.com/…Politico also pointed out Ryan had proposed a corporate tax rate of 20% "because that's the lowest level he could realistically pay for."The lower rates would help major corporations that struggle to lower their current taxes. However, several major industries that would lose out include those that "deduct interest payments, expense their equipment and research, and transfer profits to foreign jurisdictions with lower rates."These tax breaks would go away in return for the lower rates. That could negatively affect farmers who are used to taking bonus depreciation, Section 179 expensing and deducting interest paid on land and equipment loans.Farmers who file 1040s and Schedule Fs would likely want to look at restructuring because the tax plan does not match lower individual income tax rates with the lower corporate rates. Farmers that rely on Schedule Fs could end up paying higher tax rates than those who have a corporate structure.For wage earners, the White House is proposing a modest raise the standard deduction, which would make taxes easier and lower overall taxes for average American families. That would largely offset the idea of eliminating the home mortgage deduction, which was an idea floated early by the White House Further, Treasury Secretary Steven Mnuchin wants to simplify the tax code so average Americans could fill out their taxes on a "large postcard." 

NRCS Offers Assistance for Flood Recovery

BOISE, Idaho, April 25, 2017 – The USDA Natural Resources Conservation Service (NRCS) is making assistance available to aid flood recovery efforts in Idaho. Curtis Elke, NRCS state conservationist for Idaho, has issued a local declaration of disaster for the 33 Idaho counties not covered by President Donald Trump’s disaster declaration of April 21. Severe winter storms and melting of record snowfall has created substantial widespread flooding across the state. Flooding has caused significant damage to private property as well as public infrastructure. Flooding continues to occur and more damage is expected. The NRCS Emergency Watershed Protection Program provides assistance to sponsors in areas that have been damaged by natural disasters, such as floods. The program eliminates threats to lives and property by installing conservation measures to reduce storm water runoff and prevent soil erosion. Eligible practices include removal of sediment and debris in channels to restore hydraulic capacity; measures that prevent massive soil erosion, landslides, or excessive runoff; removal of structures and obstructions that impede or impair the floodplain; and measures to prevent damage to public and private roads, culverts, and bridges when failure of those facilities would impair the watershed. Assistance may also be available through the NRCS Conservation Technical Assistance Program and the Environmental Quality Incentives Program (EQIP). To the extent possible, NRCS personnel are visiting damaged areas and working with their local partners to identify the full scope of the damage and prepare damage survey reports for potential recovery projects. NRCS is coordinating with other state and federal agencies in order to match needs with the appropriate assistance program. Assistance from the Emergency Watershed Protection Program is delivered through local sponsors. They can be any unit of federally-recognized tribal government, state government, or subunits of the state such as counties or cities, irrigation districts, flood control districts and conservation districts. A local sponsor can request Emergency Watershed Protection Program assistance through a local NRCS field office. For more information, contact your local NRCS field office or Bruce Sandoval, EWP Program Manager for NRCS Idaho, at Bruce.Sandoval@id.usda.gov . 

Demand for red meat appears strong

Demand for red meat appears strong as USDA's Cold Storage report showed record reductions in frozen inventories of beef and pork, while chicken stocks remain historically high.Total beef in cold storage dropped by 38 million pounds in March, which marks the largest such decline in that month since the 1970s. Also setting a record for March was the 40-million-pound decline in frozen boneless beef. Total frozen beef stocks fell 4 percent compared to March of 2016, with boneless beef down 5 percent year on year.Pork made some history as well. Bone-in ham stocks declined by 21 million pounds, the largest draw in at least 20 years. Overall frozen pork supplies were down 10 percent from March last year. Stocks of pork bellies were up 27 percent from last month but still down 68 percent from last year.Chicken stocks decreased, too, by 3 percent from last year, but Daily Livestock Report analyst Len Steiner notes that they’re “still high relative to historical norms, which will be a factor limiting industry production expansion prospects.”Total frozen poultry supplies were up 2 percent from a year ago, accounting also for turkey, up 16 percent from March 2016.  

A Nevada jury found two supporters of cattle rancher Cliven Bundy guilty on Monday

A Nevada jury found two supporters of cattle rancher Cliven Bundy guilty on Monday of charges stemming from an armed standoff with federal authorities in 2014 but deadlocked over charges against four other men.Gregory Burleson and Todd Engel, two of six Bundy supporters on trial Monday, were convicted of obstruction of justice and interstate travel in aid of extortion in a case that came to symbolize tensions in the American West over the federal ownership of land.Burleson also was found guilty of firearms charges and threatening and assault of a federal officer, according to Trisha Young, a spokeswoman for the Nevada District Attorney's Office.A mistrial was declared for the other four men after jurors could not agree on verdicts, even after Judge Gloria Navarro sent them back for further deliberations. The jury also was deadlocked on additional charges against Burleson and Engel.The unresolved charges will be the subject of a new trial, scheduled for June 26. All six men remain in custody, according to Todd Leventhal, the attorney for defendant O. Scott Drexler.The six, who prosecutors said were associated with or had been in contact with militia groups, each face 10 counts related to the standoff at Bundy's property about 75 miles (120 km) northeast of Las Vegas.They were charged with offenses including conspiracy against the government, conspiracy to impede a federal officer, assault, threatening and obstruction of justice.The men were among hundreds who traveled to the ranch in April 2014 to support Bundy, whose refusal to pay $1 million in fees for grazing his cattle on federal land became a cause celebre for some on the political right.Prosecutors described the defendants as armed, dangerous and intimidating to federal officers who were trying to enforce a court order stating that Bundy's cattle should be seized. Outgunned, authorities released the animals and left the area.Lawyers for the six men said they posed no threat and were simply backing Bundy in a case of unfair government overreach.Bundy and two of his sons are themselves defendants in a federal trial scheduled for later this year over the Nevada standoff.Last October, a jury acquitted Bundy's son Ammon and of his six followers in a trial over the armed occupation of a U.S. wildlife refuge in Oregon. The occupiers cast their protest as a patriotic act of civil disobedience in opposition to U.S. government control over public lands in the West. 

Fed cattle prices $3 higher and feedyard margins $32 per head higher

Packers were a little reluctant early last week, but pay up they did, driving cash fed cattle prices $3 higher and feedyard margins $32 per head higher. Cattle feeders turned an average profit of $474 per head last week as the Choice 5-area steer price reached $131.40 per cwt. It was the 22nd consecutive week of positive feedyard margins, according to the Sterling Beef Profit Tracker.Packers had plenty of motive to bid up, as their own margins topped $69 per head, about $1 better than the previous week. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.The cost of finishing a steer last week was calculated at $1,354 per head, which is $388 less than the $1,742 a year ago.  A month ago cattle feeders were earning $505 per head, while a year ago profits were calculated at $14 per head. Feeder cattle represent 73% of the cost of finishing a steer, compared to 77% last year.Farrow-to-finish pork producers lost $5 per hog last week, an $8 decline from last week’s $3 profit. A month ago farrow-to-finish pork producers showed a profit of about $23 per head.Pork packers saw their margins increase $5 per head to $31. Negotiated prices for lean hogs were $56.24 per cwt. last week, about $2.50 per cwt. lower. Cash prices for fed cattle are $5 per cwt. higher than last year and prices for lean hogs are about $11 per cwt. lower.Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $92 per cow. That would be $85 per head less than the estimated average profit of $177 for 2016. Estimated average cow-calf margins were $438 per cow in 2015.For feedyards, Nalivka projects an average profit of $210 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $24 per head in 2017, down from $114 in 2016. 

The White House is using Sonny Perdue's swearing in on Tuesday as Agriculture secretary as a backdrop to help show President Donald Trump is focused on the interests of farmers and agriculture

To mark Perdue's confirmation vote and first official day on the job, the president will sign an executive order on agriculture and host a roundtable Tuesday afternoon with Perdue and 14 other farmers from around the country.Perdue, a former governor of governor of Georgia, was confirmed in an 87-11 Senate vote on Monday evening. Perdue is expected to be sworn in Tuesday, then go to the U.S. Department of Agriculture headquarters to speak to USDA employees.Ray Starling, a special assistant to the president on agriculture, highlighted the executive order and the roundtable discussion. Starling said the meeting will mark the earliest that a president has held such a meeting with farmers, going back to President Ronald Reagan's term."We cannot find any reference to a presidential meeting with a group (of farmers) this size, this early in a presidential administration, back to Reagan's time," Starling said.President Reagan met with a large group of farmers in the early days of his administration because of the President Carter-era embargo on wheat exports to the Soviet Union, Starling said.The White House noted fewer than 1% of the American population farms, but agriculture is a dominate industry in most states.The executive order will sunset the White House Rural Council started under President Barack Obama in 2011. Trump's White House will then restart a similar inter-agency rural task force to look at legislative, regulatory, or policy issues that hinder economic growth in agriculture. Further, the new task force will work to promote agriculture, economic development, job growth, infrastructure improvements, technological innovation, energy security, and quality of life in rural America. The task force will be expected to produce a report within 180 days.Starling said issues such as rural development and rural infrastructure are part of the new task force's mission, but much of that work would still center on production agriculture. "We do believe that in these rural communities, the best thing we can do to make them grow quickly and economically is to focus on agriculture because it is the No. 1 driver in these rural communities," Starling said. "We certainly understand that is not the only silver bullet."A key to the executive order is that it will encourage agencies to roll back regulations on agriculture. The executive order will have some specific areas highlighted for agencies to consider changing, though Starling declined to detail those specifics. He did point to issues regarding biotechnology adoption, though Starling noted that biotech trade approvals are largely a trade issue as countries delay approving new traits after going through the U.S. regulatory process.Starling also suggested changes in the Food and Drug Administration of the implementation of the Food Safety Modernization Act. Starling indicated some concerns among farm groups over the extent of FDA-required on-farm inspections.The panel discussion that will go with the executive order is expected to include conversations on immigration reform that may be counter to some of the president's initiatives in that area. Ag groups largely want to see guest-worker programs expanded and streamlined, not tightened. The executive order will address issues about "access to a reliable workforce," Starling said.Further, the farmers are expected to stress the importance of trade to the industry. Starling said agriculture generates a net trade surplus and it is well understood that agriculture relies heavily on trade already. Starling indicated that will be stressed to the president by the farmers."These farmers will make sure they leave the impression on the president about how important agricultural trade is, and in particular how important that agricultural trade is just north and just south of our border here in the United States, namely Canada and Mexico," Starling said. 

Stakeholders Shift Focus to USTR

Hope among trade watchers are rising that the Senate will move swiftly to confirm Robert Lighthizer as U.S. Trade Representative (USTR) in the wake of confirming Sonny Perdue as USDA Secretary.The USTR nominee's fate depends on whether the Senate Finance Committee can agree to waive a lobbying requirement for him and support the Democrats’ priority for miners’ health and pension benefits. Supporters are hopeful a deal can be struck soon, but say nothing is yet settled.Talks continue on granting the waiver as part of a plan that includes shoring up miners’ health and pension benefits, which Democrats are using as a bargaining chip in the omnibus negotiations and for supporting the USTR nominee, according to congressional sources. The idea is to include the waiver and miners’ benefit fix in the upcoming omnibus spending bill.

Senate Confirms Perdue as USDA Secretary

The U.S. Senate Monday evening voted to confirm Sonny Perdue as Agriculture Secretary, just shy of 100 days after his nomination announcement by then President-elect Donald Trump. The Senate voted 87 – 11 to confirm Perdue. The White House said over the weekend Perdue would be sworn in Tuesday and immediately begin work at the Department of Agriculture. Perdue and his family were in the Senate gallery during the vote. The confirmation is a long-awaited win for agriculture and farm groups who are dealing with trade issues with Canada over dairy, disaster relief efforts from plains wildfires, and beginning farm bill talks. National Farmers Union President Roger Johnson told the Capital Press the former Georgia Governor will “have some catching up to do.” American Farm Bureau Federation President Zippy Duvall, also from Georgia, said in a recent editorial that the vote to confirm Perdue was “overdue,” adding “there’s important work ahead for the agriculture secretary.”

Trump Promises Ag Executive Order Tuesday

The White House over the weekend promised an executive order for agriculture. In a memo to reporters, the White House press office said President Donald Trump would hold a roundtable discussion with farmers on Tuesday, and sign an executive order to protect and provide relief for rural America. Details on the executive order are similar to the Rural Council established by an executive order by President Barack Obama in June 2011, according to DTN-Progressive Farmer. The expected Agriculture and Rural Task Force Executive Order would create an interagency task force to examine the concerns of rural America and suggest legislative and regulatory changes to address those concerns. Even before the Senate confirmation vote, the White House also said Sonny Perdue would be sworn in as Agriculture Secretary Tuesday.

AFBF Labor Expert Taking USDA Post

The American Farm Bureau Federation’s immigration and labor expert is heading to the U.S. Department of Agriculture. AFBF’s director of congressional relations for labor and immigration, Kristi Boswell, will serve as a senior adviser to Agriculture Secretary Sonny Perdue. Boswell starts next month at USDA and Politico reports she will be working on labor and immigration issues. Boswell is a registered lobbyist and under Trump administration rules, may require a waiver to work on any issues that she previously lobbied on. Boswell grew up on a farm in southeastern Nebraska where her family raised corn and soybeans, according to AFBF.  Before joining USDA and AFBF, Boswell practiced corporate defense litigation in Nebraska and worked as a political aide for a Nebraska state senator.

U.S., EU, Opening Door to TTIP Talks

The European Union and the United States could soon be reviving negotiations of the Trans-Atlantic Trade and Investment Partnership agreement. Commerce Secretary Wilbur Ross over the weekend told the Financial Times reducing the trans-Atlantic trade deficit in goods is a top priority. The $146 billion trans-Atlantic trade deficit is only second to China’s $347 billion deficit. Ross was hosting the European Union’s trade commissioner Monday to discuss how to proceed with TTIP talks that were launched under the Obama administration. Politics, negotiations and the United Kingdom vote to leave the EU stalled the talks. But the talks will likely remain stalled as Germany has an upcoming election in September, and Ross said the first priority of the U.S. regarding trade is renegotiating the North American Free Trade Agreement. Ross expects a NAFTA agreement will be reached by mid-2018.

Syngenta Corn Lawsuits Underway

The first of several lawsuits filed against Syngenta is underway. Syngenta is facing dozens of lawsuits that claim a move by the company depressed corn prices in 2013. The farmers involved claim Syngenta’s selling of a corn trait that was not approved to export to China, and found in shipments of U.S. corn to China, depressed U.S. corn prices and cost farmers millions of dollars in lost sales, according to Bloomberg News. Syngenta denies that China’s rejection of its GMO seeds harmed farmers in any way, saying it was the huge corn crop in 2013 that pushed prices lower. In June, Syngenta faces trial in a class-action lawsuit brought by Kansas farmers seeking $200 million, plus punitive damages. Another trial involving Minnesota farmers claiming $600 million in damages is set for August. Winning the lawsuit may be a tough sell, according to an ag-policy expert, who said the company had a green light from U.S. regulators to sell the GMO corn and there was no requirement to wait for Chinese officials’ approval to market the trait to U.S. farmers. A lawyer for Syngenta called the claims “speculative, at best.”

NFU President Attends March for Science in D.C.

National Farmers Union President Roger Johnson spoke to thousands attending the Washington, D.C. March for Science over the weekend that also included former Agriculture Deputy Secretary Kathleen Merrigan. Johnson spoke at the flagship march held in Washington, D.C., saying: “Farmers Union members are acutely aware of the important roles that science and science-based policies play in the success of American family farm operations.” Johnson says that by joining the March for Science movement, he hoped to “to highlight the need for life sciences research, science-informed policy, and effective communication of the latest advancements in science and technology.” Johnson called on the federal government to base policy on sound science and facts, noting that family farm operations are heavily impacted by federal policy. Johnson also said there should be more publicly funded, independent and peer-reviewed agricultural research to inform both farmers and policymakers. More than 70 percent of U.S. agricultural research is financed through private dollars. In a news release, Johnson noted that other Farmers Union leaders participated in marches in Ohio and Pennsylvania. 

Canadian government minister said Thursday that the administration is looking forward to trade negotiations with Donald Trump

TORONTO (AP) -- A Canadian government minister said Thursday that the administration is looking forward to trade negotiations with Donald Trump despite the U.S. president's recent ramp up of criticism of Canadian policy.Trump made his most critical comments yet about Canadian trade earlier in the day."We can't let Canada or anybody else take advantage and do what they did to our workers and to our farmers," Trump said in the Oval Office. "Included in there is lumber, timber and energy. We're going to have to get to the negotiating table with Canada very, very quickly."The president took issue with Canadian changes on milk classification that he said have put farmers in Wisconsin and New York state out of business. Canada changed its policy on pricing domestic milk to cover more dairy ingredients, leading to lower prices for Canadian products including ultra-filtered milk that compete with U.S. milk."Canada, what they've done to our dairy farm workers, is a disgrace. It's a disgrace," Trump said.Canadian Natural Resource Minister Jim Carr told The Associated Press that the government will make its arguments about trade based on facts."Decision makers make statements that indicate a position that they intend to take and we're in the business of responding to positions that are actually taken," Carr said when asked about Trump's comments. "Our government looks forward to sitting down with the United States. We will judge American policy when American policy is announced."Carr said Canada's government knows it can make a very persuasive case for the integration of the two nations' economies when the sides meet for trade talks in a few months. He said they can always look to improve the North American Free Trade Agreement.Trump said this week he would make "some very big changes" to the NAFTA treaty with Canada and Mexico or "we are going to get rid of NAFTA for once and for all."Canadian Prime Minister Justin Trudeau is worried about Trump's protectionist talk and has repeatedly sent his ministers to the U.S. to talk about the importance of the trade relationship. Carr will be in New York next week."It is part of the government of Canada's strategy to make arguments and make friends," he said.When Trudeau visited the White House in February, Trump praised the "outstanding" trade relationship between the United States and Canada, saying he would only be "tweaking" it going forward.Relations with the U.S. are crucial for Canada, since more than 75 percent of its exports go to the U.S. Eighteen percent of U.S. exports go to Canada."Canada would enter any negotiations with the objective to make it better for both countries," Carr said. "We have such a long and fruitful history of trade with the United States." 

EPA Administrator Refutes Notion That Agency Will Sit Idle

DALLAS, Texas (DTN) -- Speaking at an Earth Day Texas forum Friday, Environmental Protection Agency Administrator Scott Pruitt refuted the notion his agency would sit idle under President Donald Trump's watch. He also challenged the argument that President Barack Obama's administration was good for the environment.Pruitt pushed back on the comments of a few protestors who disrupted his event and attacked Pruitt's environmental record as Oklahoma attorney general, as well as his stances on issues such as climate change."When you look at the past administration, I ask you to consider something," Pruitt said. "Ask yourself, what did they achieve in terms of environmental outcomes?"Pruitt cited that roughly 42% of the country doesn't meet EPA ozone standards, affecting roughly 140 million people. The number of Superfund sites -- locations that have been designated with contaminated soil from industry -- is at 1,322 such places and grew under President Obama, Pruitt said. Then there was less investment for water infrastructure, leading to situations such as the lead contamination in Flint, Michigan."So I ask you, this past administration, where are their outcomes that are so good?" Pruitt said. "But yet here we are beginning our term and we're trying to set a new path forward of actually having objectives we can all count and measure and provide outcomes that are tangible to the American people."Pruitt spoke at Earth Day Texas, a three-day affair at the Texas State Fairgrounds that includes major speakers, entertainment and exhibits. It's the largest Earth Day event in the country, and to best describe the event, it's the chamber of commerce meets the environmental movement.That cross of business types blending with green idealism creates natural conflicts. That was reflected as three different people disrupted Pruitt's forum by shouting out comments on climate change and problems they believe EPA is ignoring in Texas. One protestor shouted that Pruitt sued EPA to prevent improvements in air quality when he was in Oklahoma. Pruitt countered, "We had 13 or so lawsuits against the EPA as I was attorney general. The Sierra Club has sued the EPA a lot more than I have over the years, largely because of non-compliance and EPA not doing their jobs historically."Pruitt characterized environmental improvements over the last four decades as a partnership between the states, industry and the federal government, though the administrator declined to acknowledge that industries nearly always resist any change reducing such pollutants. Instead, Pruitt pointed to the economic growth the country has seen while cutting back pollution over that time."I think what's happened over the last several years is we've been told we have to choose between jobs and protecting the environment," Pruitt said. "And I think that's a false choice." 

RFS, EPA To Have A Court Battle On Monday

The DC Circuit Court on Monday, April 24, holds oral arguments on challenges to the 2014-2016 Renewable Fuel Standard (RFS) volume requirements.The program has supporters and detractors among both political parties. EPA Administrator Scott Pruitt has asked judges to put other challenges to agency rules on hold, but EPA in this case is pushing maximize administrative flexibility.EPA will defend itself against charges it set volumes for conventional biofuels, advanced cellulosic biofuels and biomass biodiesel either too high or too low, depending on who you ask. It will defend its waiver to set the conventional biofuel requirements below congressional levels; and it will argue it was under no obligation to change who must comply with the program.

Trump Launches Probe of Steel Exports to US from China, Others

President Trump launched a trade probe against China and other exporters of cheap steel into the U.S. market, raising the possibility of new tariffs and sending shares of some U.S. steel makers up over 8 percent.The decision to use a 1962 law allowing the U.S. government to limit imports that threaten its security readiness is intended to deliver on Trump's campaign promises, but observers note it risks setting off trade tensions with China. Trump signed an executive order for a 270-day review to determine whether steel imports were harming national security. If the Commerce Department does find harm, Trump will have up to 90 days to decide whether to impose broad import restrictions.Only about 2% of American steel imports come directly from China. But global steel makers and industry experts blame China for shipping its surplus steel to other countries, which drives down prices and prompts those countries to further process the steel into high-value products for export to the US. Trump trade officials have suggested they could bring trade actions against those countries as well.The steel industry in the U.S. employs about 140,000 people, or less than one-tenth of 1% of the American work force, according to the New York Times. China’s steel makers, by contrast, employed 4.7 million workers in 2014, the last official figure released, or 0.6% of China’s labor force then.

Washington Insider: Busy Week Ahead in Capitol

The coming week will be an interesting and important one for agriculture. As lawmakers return after their two-week spring break, the Senate is expected to move quickly to a vote on the nomination of Sonny Perdue to be USDA Secretary, a test he is expected to pass easily.The White House anticipates Perdue will be sworn-in on Tuesday.And, there’s much, much more. President Trump is expected to release his tax plan later in the week, at about the same time House Republicans renew efforts to advance their own blueprint.However, tension in the Capitol is building the most over the question of whether lawmakers will be able to come to terms on a way to keep the government funded beyond Friday — the day the current funding mechanism expires.Bloomberg and others and others have been reporting all spring on details of the budget fight, but it’s a moving target. Democrats are pushing a draft bill that contains little for the White House to like in order to take advantage of what they think is the executive’s “desperation for a victory in the wake of the failure of the Republican health-care bill.”The downside to this is that the president could reject the deal, which could lead to a “shutdown showdown.” Bloomberg further notes that for House Speaker Paul Ryan, R-Wis., “completing the Fiscal 2017 spending bills was always going to be a major test.”Conservatives in the House regularly bolt on spending measures they consider too costly, forcing Republican leaders to partner with Democrats to pass appropriations bills—a squeeze play that has been going on since they took control of the House. For example, Ryan relied on Democrats to complete the fiscal 2016 funding cycle by arguing that he had just inherited a fiscal mess from his predecessor, John Boehner, an excuse he no longer can use.This year, Ryan may need to tack to the right to save his job and reject a bipartisan compromise that could threaten the shuttering of government operations, Bloomberg says.At this point, Republican congressional leaders say they are backing off attempts to convince Democrats to accept major spending cuts as part of the Fiscal 2017 package, arguing that Trump’s proposals for domestic agency cuts are best hashed out in the fiscal 2018 bills. Instead they are focusing on more limited goals including an increase in funding for defense.However, House and Senate aides say Trump is a wild card both because of his mercurial negotiating style and because this is his first time dealing with a government funding showdown."This is not a problem within the appropriations process. We can get this done and we can get it done in a bipartisan way," said House appropriator Tom Cole, R-Okla., just before the break.The spending cliff could have been avoided in December had Congress passed a bipartisan spending measure that had largely been negotiated for the remainder of the fiscal year. Instead, the incoming administration directed Republican leaders to hold off until the newcomers were in place and could weigh in on the spending decisions.The administration had decided earlier to use the shutdown deadline to prod Congress to agree to $33 billion in extra defense and border wall funding, partly paid for with $18 billion in domestic cuts.Senate Majority Leader Mitch McConnell, R-Ky., repeatedly says he expects to reach an accommodation with Senate Democrats, some of whom he will need to avoid a filibuster of the spending bills. Schumer told reporters this week there is “quiet agreement” that a deal can be struck if the President doesn’t insist on poison-pill amendments.Bloomberg says it thinks that Republicans and Democrats may be able to come together on an increase for the Defense Department smaller than the one the President requested. The request will not be paired with cuts to domestic agencies, a strategy that can be sold by the White House as a victory and by Democrats as a necessary concession in the face of increased threats in the Middle East, Afghanistan and the Korean peninsula.Speaker Ryan also has been saying he expects a stronger commitment to the military in the omnibus spending legislation. In a recent speech in London, the speaker said that part of the reason for his European trip is to reassure allies that Republicans intend to invest in the military.Appropriations Committee staff members have been whittling down the list of outstanding issues during recess, House and Senate aides say, but there are still a number to consider. At the start of the two-week congressional recess, negotiators were trying to agree on 115 points of contention on the spending package and so-called policy riders.With a Republican in the Oval Office, the demand for such riders has diminished, Ryan told Bloomberg — but it is still significant. One such issue is a rider to prevent funding to so-called sanctuary cities. There are others.The first move this week will likely be to extend the process for a few days for breathing room. Then, the heavily political issues will require decisions by the leadership. The odds now seem to favor passage of a budget and avoiding a shutdown, but that sound you hear is a Capitol holding its breath—a process producers should watch carefully as it proceeds, Washington Insider believes. 

Salad Shortage Because of California Rains

Over the last several years, California farmers have been plagued by drought. However, the problem in 2017 is too much rain, which may be putting a squeeze on the nation’s salad supplies. A Bloomberg report says it may take until sometime in May before the nation’s grocery store shelves are fully stocked with salads again. Unusually warm weather meant an early end to the winter growing season in southern California and western Arizona. The warm weather was followed by unusually heavy rains that pushed back planting dates along the coastal areas of California, which is the largest fruit and vegetable producer in the country. The delays have led to shortfalls of crops like lettuce and broccoli, sending wholesale prices much higher. For example, the cost of a carton of 30 celery heads has almost tripled to $25. A senior produce analyst with Rabobank in Fresno, California, says prices may remain volatile and “relatively elevated” through mid-May 

NAFTA Talks Not Happening Soon

President Donald Trump says the White House will offer some preliminary plans on the possible renegotiation of the North American Free Trade Agreement sometime within the next two weeks. While he didn’t get more specific than that, Politico’s Morning Agriculture report adds that a White House spokesman says the Administration is currently working on negotiating text with Congress. The White House will then proceed with the required 90-day notice to Congress once a U.S. Trade Representative is confirmed. Robert Lighthizer is the nominee for the position but his confirmation is being held up because of past work he’s done representing foreign governments in Washington, D.C. Democrats say he needs a waiver approved by both the House and Senate to be confirmed, while the White House says he doesn’t. Before the letter can be sent to Congress, the White House must complete a series of meetings with groups of lawmakers, one of which is the Senate Advisory Group on Negotiations. Democrats on the panel are refusing to meet with anyone but Lighthizer. As a result, Politico says it’s looking like the nominee will have to get the waiver, clear a committee vote, and then get the full Senate vote for confirmation. All that means the two-week timeline is more than a little uncertain.

Renewable Fuels Standard Heads to Court

The Environmental Protection Agency will be in Washington D.C. Circuit court starting Monday (April 24) as the court hears oral challenges to the 2014-2016 Renewable Fuels Standard Volumes. Politico’s Morning Energy Report says the RFS has supporters and detractors in both major political parties, so this case represents a rare nonpartisan issue for the EPA. The agency will have to defend itself against accusations that it set volumes for conventional biofuels, cellulosic biofuels, and biomass biodiesel too high or too low, depending on who’s speaking at the time in the courtroom. The EPA will need to defend its waiver to set the conventional biofuel requirements below congressionally-set levels. The EPA will also argue it’s under no obligation to change who must comply with the program. EPA’s positions in this case maximize administrative flexibility for the agency, something that EPA Administrator Scott Pruitt likely wants to preserve. The Morning Energy Report also stressed that this isn’t an issue that began when Donald Trump was elected as it’s been a debate for years.

Farm Lending Continues to Moderate

Lending activity at agricultural banks across the country continued to decline in the first quarter of 2017. A report from the Federal Reserve Bank of Kansas City says economic conditions in the farm sector are still weak, so borrowers and lenders have worked together to make adjustments in financing agricultural production across America. Ag lenders are making more adjustments to loan terms because of heightened risk in the ag sector. For example, the report says revenues from agricultural production are expected to decline again in 2017. Farm incomes from corn, soybeans, wheat, and cattle, are expected to drop by five percent compared to 2016. Some producers are making adjustments in the cost of their inputs when they can. The reduced amount of producer spending likely has contributed to reductions in the volume of new farm loans. The overall volume of non-real estate farm loans in the first quarter of this year dropped 16 percent from 2016. The Survey of Terms of Bank Lending to Farmers showed the decrease in the first quarter as the sixth consecutive year-over-year decline in the volume of new non-real estate farm loans and followed a significant drop in the fourth quarter of 2016.

Buffet Foundation/Drovers to Raise $2 Million for Wildfire Relief

Drovers, a Farm Journal Media franchise, and the Drovers Foundation have accepted a challenge from philanthropist and American farmer-rancher Howard G. Buffet to raise $2 million for wildfire relief. Last month saw devastating wildfires burn 1.6 million acres in Kansas, Texas, Oklahoma, and Colorado. Starting now, all monetary donations to the Drovers/Farm Journal Million Dollar Wildfire Relief Challenge will be matched dollar-for-dollar by the Howard G. Buffet Foundation, up to $1 million. Howard Buffet says, “This is a once-in-a-lifetime disaster that’s left ranchers with both immediate and long-term needs to rebuild what they’ve lost. We are pleased to partner with Drovers and the Farm Journal Foundation in this recovery effort and hope our matching contribution pledge will inspire others to show their support.” While the ag community rallied to deliver hay and other in-kind contributions, the long-term job of rebuilding is really just beginning. For example, roughly 18,000 miles of fencing needs to be rebuilt, likely at a cost of $10,000 a mile. All donations will be administered by the Working Ranch Cowboys Association, a respected nonprofit dedicated to assisting working ranch cowboys and their families in time of need. For more information on recovery efforts, check out Wildfire Relief Fund Dot Org. 

The war of words between the U.S. and Mexico over trade escalates

The war of words between the U.S. and Mexico over trade has prompted concern over what might happen to cross-border shipments of corn and meat -- even avocados. But there’s one market that’s already feeling the effects: nonfat dry milk. Futures prices in Chicago are down 12 percent this year. The decline is fueled largely by the “uncertainty stirred up by the heated rhetoric” between the two countries, said Ben Laine, an economist at CoBank Acb. While there’s been no change in trade policy so far, buyers in Mexico have started searching for sources of milk powder other than the U.S., he said. More than half of nonfat dry milk produced in the U.S. is exported and Mexico is the top destination. Agricultural trade between the nations has come under increased scrutiny as President Donald Trump has said repeatedly he wants to overhaul the North American Free Trade Agreement, accusing Mexico of gaining an unfair advantage from the accord. Mexico has rejected his claims, and in recent weeks has made overtures to Brazil and Argentina about securing farm supplies as an alternative to U.S. imports. “The trade issue is significant," said Beth Ford, chief operating officer of Land O’Lakes Inc., one of the largest U.S. farmer cooperatives. Nonfat dry milk for June delivery rose 0.9 percent to 87.3 cents per pound at 12:55 p.m. on the Chicago Mercantile Exchange. The most active futures contract closed at a 21-month high of $1.0425 on Jan. 6. Historically, prices under $1 aren’t unusual, but the commodity had been climbing steadily for several months before its slump this year, Laine said. “It was a shock when that ended so abruptly,” he said Wednesday. “It caught people off-guard.” Still, U.S. exports of nonfat dry milk to Mexico were strong in February, according to the latest data from the Department of Agriculture, totaling 56.3 million pounds, the highest since October 2015. To be sure, the dairy market is dealing with a glut. In an April 11 report, the U.S. Department of Agriculture lowered its forecast for 2017 prices to 86.5 to 90.5 cents from an earlier range of as high as 97.5 cents amid plentiful domestic and international supplies. U.S. dairy plants are running at full capacity to cope with rising milk production, Laine said. The volume not used for drinking milk or cheese is usually diverted to make powder, which can be stored more easily as inventory, Laine said. Arden Hills, Minnesota-based Land O’Lakes makes the powder as part of its butter production in states including California, a gateway for exports to Mexico and Asia. The dry-milk price decline is “very challenging” for processors, Ford said in a telephone interview. “The journey is going to be a little bumpy,” she said. One savior for nonfat dry milk may be the weakening dollar, which may make U.S. supplies more competitive on the global market, said Dave Kurzawski, a senior broker for INTL FCStone Inc.