USDA on Friday pegged corn planting at 90.89 million acres with soybeans coming in at 89.51 million acres

 (DTN) -- Despite expectations in the grain trade that soybean planted acres would top corn acres this year, USDA on Friday pegged corn planting at 90.89 million acres with soybeans coming in at 89.51 million acres.USDA released planted-acre estimates for major crops on Friday as well as quarterly grain stocks.GRAIN STOCKSQuarterly corn stocks for June 1, 2017, came in at 5.225 billion bushels, the largest on record and 514 million bushels higher than a year ago. The March-May "disappearance" or use, was 3.4 billion bushels, up 290 million bushels from the same quarter last year.Of the total corn stocks, 2.84 billion were stored on farms, up 15% from last year. Off-farm stocks were pegged at 2.38 billion bushels, up 6% from a year ago.Soybean quarterly stocks totaled 963 million bushels, which was slightly below the pre-report average estimate. Total quarterly use from March to May was 775 million bushels, up 18% from last year.The soybean stocks are up 11% from a year ago. On farm stocks on June 1 were projected at 333 million bushels, up 18% from a year ago. Off-farm stocks were estimated at 631 million bushels, up 7% from a year ago.All-Wheat ending stocks were pegged at 1.18 billion bushels, which hit the high-end of the pre-report estimates. Wheat stocks are up 21% from a year ago. Still, quarterly use for wheat was pegged 472 million bushels, up 19% from a year ago.On-farm wheat stocks are projected at 192 million bushels, which is down 3% from last year. Off-farm stocks are pegged at 993 million bushels, up 28% from last year.ACREAGECorn remains king at 90.89 million acres, up 890,000 acres from USDA's prospective plantings report in March. The corn acreage topped the high end of the pre-report estimates by 290,000 acres. Still, corn acreage is down 3.11 million acres from last year.Soybeans don't capture the acreage crown, but come in at 89.51 million acres, which was 440,000 acres below the pre-report average estimate and just slightly above USDA's prospective planting projection. Still, the soybean plantings are a record and 7% higher than last year.All-Wheat planted acres came in at 45.66 million acres, the lowest all-wheat planted acres since USDA began keeping records in 1919. Winter wheat acres are pegged at 32.84 million acres, down 9% from last year, but right at the pre-report average estimate. Spring wheat acres are projected at 10.9 million acres, which also fell below analysts' expectations and USDA's prospective planting projection.Cotton acreage is rebounding this year with planted area of 12.1 million acres, up 20% from last year. Upland cotton acres are estimated at 11.8 million acres, up 19% from a year ago.Grain sorghum acres came in at 5.99 million, above pre-report expectations as well, but still down 11% from a year ago.

Senate Ag Panel Clears Pesticide Registration Bill

Approval of the Pesticide Registration Enhancement Act (PREA) of 2017 (HR 1029) was secured by the Senate Agriculture Committee today by a unanimous voice vote.The version approved by the Senate ag panel would shorten the end date for the reauthorization from 2023 to 2020 via a manager's amendment offered by Senate Ag Committee Chairman Pat Roberts, R-Kan. The bill still has to go through the full Senate before it will be returned back to the House for another vote."This historically noncontroversial, bipartisan legislation is vitally important to both the U.S. Environmental Protection Agency, as well as farmers and farmworkers," said Roberts and Ranking Member Debbie Stabenow, D-Mich., in a statement after the vote. "Not only does this legislation provide certainty to the pesticide industry, but it also provides new products to farmers for crop protection and to consumers to protect public health."PREA would renew the Environmental Protection Agency's (EPA) authority to collect fees from pesticide makers to register the products and to approve their use around humans and in the environment. It would increase by almost 12% the amount of money the agency can raise to maintain existing registrations and set aside up to $1 million for farmworker safety training. The legislation passed the House March 20. The latest version of the law expires September 30.The bill also would set aside up to $1 million for farmworker safety training. Besides the roughly 12% fee increase for existing registrations, the bill would instate two scheduled 5% fee increases — one in 2019 and the second in 2021 for product-registration service fees. The measure also would provide a $500,000 set-aside to combat bedbugs and crawling and flying insects, and require the EPA to track changes to product labels that are triggered by a safety review.

International Dairy Groups Also Protesting Canada Policy

Dairy industry organizations from the U.S., New Zealand, Australia, the European Union, Mexico and Argentina are urging their top trade officials to "pursue all avenues available" to challenge a new Canadian pricing policy they say breaches commitments on export subsidies."Canada's increasingly protectionist policies are diverting trade with attendant global price-depressing impacts, and are in conflict with the principles of free markets and fair and transparent trade," the groups wrote in a letter sent Tuesday.The Canadian dairy industry created a new pricing program that allowed Canadian cheese makers and dairy processors to buy at the lowest world price milk protein products created as a byproduct of manufacturing of butter and other milkfat. There has been an excess supply of those milk protein products because of increased demand for butter and other milkfats.The new policy priced out most U.S. exports of ultra-filtered milk, one of the few dairy products U.S. producers could ship duty free to Canada without being subject to the country's strict supply management program. Dairy producers in some countries have noted that Canada's excess milk protein is now showing up on the world market, threatening to suppress prices.

A continuing surge of biodiesel imports from Argentina into the United States since March has industry officials in the U.S. considering their legal options

(DTN) -- Back in April, the U.S. Department of Commerce initiated anti-dumping and countervailing duty investigations aimed at biodiesel imports from Argentina and Indonesia in response to a petition filed by U.S. biodiesel industry interests.In a news release on Wednesday, the National Biodiesel Board said Argentina has continued to ramp up those exports despite the launching of the investigation.Citing information from "a business intelligence company," the NBB said biodiesel exports from Argentina in April reached a five-month high, "all of which was shipped to the United States.""Shipment-tracking information shows that significant volumes are expected in June," the NBB said. "These reports indicate much higher volumes than were seen in January through March, which ranged from 6 million to 23 million gallons (according to the U.S. Energy Information Administration).According to the NBB, after the U.S. industry filed its petition, "Argentina substantially reduced its export taxes on biodiesel, and then lifted those taxes this month, contributing to the increase in shipments and exacerbating already challenging circumstances for U.S. producers."Anne Steckel, vice president of federal affairs for the NBB, said in a statement to DTN on behalf of the NBB Fair Trade Coalition, that the industry will consider all options in response."We've received information of potentially 75 million gallons of biodiesel flooding our ports soon; a significant increase from the import levels we saw in January, February and March," she said."We filed the petition to level the playing field for U.S. producers and the NBB Fair Trade Coalition will use every legal tool available to address these unfairly traded imports."The NBB said it may make a request with federal officials for what is called a finding of critical circumstances. That would allow the government to impose duties retroactively on imports reaching U.S. shores up to 90 days prior to the department of commerce's preliminary determinations on the claims in the petitions.It is expected that the DOC will announce preliminary determinations on estimated rates of subsidization and dumping by this summer and fall.As part of the investigation, U.S. biodiesel industry representatives gave testimony to the department's International Trade Commission this spring, making a case that biodiesel produced in Argentina and Indonesia has been flooding the United States market since 2014.The allegations are that the countries' subsidized biodiesel essentially nudged U.S. producers out of their home market.In its notice of initiation, the Department of Commerce said based on information provided by the U.S. biodiesel industry, there is reason to believe that Argentine and Indonesian biodiesel companies were selling into the U.S. "at less-than-fair value." The DOC estimates Argentina's dumping margin could be as high as nearly 27% and Indonesia's at about 28% from 2014 to 2016.In written comments to the commission, the Argentine government said the petition was based on "extremely limited" information and actually shows the U.S. industry was hardly harmed. Argentina makes the case that U.S. producers never made a claim that imported biodiesel actually hurt profits. In addition, the government argues U.S. producers alone were unable to fulfill the Renewable Fuel Standard volume requirements from 2014 to 2016.The National Biodiesel Board said imports from Argentina and Indonesia increased by more than 460% from 2014 to 2016, gaining about 18% in U.S. market share during that time.U.S. producers claim the two nations gained the market share illegally when the market expanded more than 58% in 2014 to 2016.It isn't the first time Argentina and Indonesia have been challenged on their fuel export practices.In May 2013, the European Commission announced provisional anti-dumping duties against those countries. Peru imposed both anti-dumping and countervailing duties on biodiesel from Argentina last year.

Senators Want Ag Focus in NAFTA Talks

The Office of the U.S. Trade Representative wrapped up public comment hearings this week on the upcoming North American Free Trade Agreement negotiations. Ag groups representing American farmers and ranchers had a chance to weigh in on what they’d like to see in the talks. A group of Senators also weighed in on what they’d like to see emphasized in the discussions and their number one topic to address is agricultural exports. 17 lawmakers wrote a letter to U.S. Trade Representative Robert Lighthizer expressing appreciation for the administration’s careful approach to strengthening the NAFTA agreement while ensuring that no changes are made that could be harmful to agriculture. Politico’s Morning Agriculture Report says each of the Senators that signed the letter represents states that have significant agricultural exports to Canada and Mexico. Those countries are two of the top five destinations for American agricultural goods since the deal was signed in 1993. Canada and Mexico take in over one-quarter of the value of goods shipped from the U.S. The letter says, “We request that you avoid any revisions to NAFTA and other previously negotiated agreements that would diminish the opportunities for farmers and ranchers to export their goods, especially given the current state of the farm economy"

European Union Close to Trade Deal with Japan

European Union and Japanese officials both say they’re close to signing what would be a major free trade deal, which could potentially jump-start other free trade deals. A European Union negotiator says a deal between the two would let the rest of the world know that two of the largest economies are resisting protectionism in favor of openness and investment. The website U.S. News Dot Com says the E.U. and Japan make up more than a quarter of the world’s economy. They traded more than $140 billion worth of goods last year and a new agreement would boost that number considerably higher. The head of the Japan Foreign Exchange Research Department at JP Morgan says a deal between the E.U. and Japan would make it much harder for American agriculture to compete in those markets. Europe would be able to export agricultural products like cheese and pork with lower tariffs in Japan, which would make it much harder for America to compete in the Japanese marketplace. The U.S. has shown an interest in a free trade deal with Japan, even conducting negotiations in April, but that idea has recently been overshadowed by the upcoming North American Free Trade Agreement negotiations

Better Beef Access in China Will Take Time

The U.S. beef industry was understandably excited when China agreed to resume importing product from the U.S. An Ag Web Dot Com article notes that supplies eligible for exports remain few and far between. Derrell Peel, an Ag Economist at Oklahoma State University, says it’s a long-term project to build up beef export numbers to China. “There are some restrictions in place that limit the available supply in the short run,” Peel says, “but we now have access and we know the details so the beef market can start to work.” He says it will take some time but American beef producers will figure out what the restrictions are and how they work. American beef imports have to meet several qualifications, including coming from American born, raised, and slaughtered cattle with traceability going all the way back to birth. It must also come from cattle less than 30 months of age and raised with no growth promoters, feed additives, or chemical compounds. China will test all beef imports at the port of entry. Only a small percentage of American beef meets those specs, so American Farm Bureau Economist Katelyn McCullock said product would have to be raised at the cow/calf level to meet those specifications

USDA Authorizes Addition Grazing Benefits in Northern Plains

It was back on June 23rd that Secretary of Agriculture Sonny Perdue authorized emergency grazing of Conservation Reserve Program Acres during the primary nesting season in North Dakota, South Dakota, and Montana. The authorization was good for counties suffering through a severe drought that rated D2 on the U.S. Drought Monitor. However, the drought hasn’t let up, with hot and dry weather forecast to continue through the upcoming week in the northern plains. With the continuation of severe drought conditions, Secretary Perdue is authorizing emergency grazing of CRP acres for any county in which any part of its border lies within 150 miles of a county that’s already been approved for emergency grazing of CRP acres. Eligible CRP participants may graze their own cattle or allow another livestock farmer to use the acreage. Producers won’t see any reduction in their CRP payments because of grazing. Emergency haying is not authorized for now but officials will keep an eye on the situation.

Seventeen ag-state senators have signed a letter to U.S. Trade Representative about the boon the North American Free Trade Agreement has been

Seventeen ag-state senators have signed a letter to U.S. Trade Representative Robert Lighthizer, reminding him of the boon the North American Free Trade Agreement has been to the agricultural sector, and asking him to ensure that “no changes are made that could result in harm to U.S. agriculture.” The letter points out that Canada and Mexico together accounted for 28 percent of the total value of ag exports from the United States in 2016. “[P]articularly given the current depressed state of the agriculture economy,” the letter said, “[t]he longstanding trade agreement between the three countries has proven to be an important success within the agriculture industry.” Public hearings on NAFTA and goals for a renegotiation are being held in Washington, D.C., this week.

World Wheat Production to Decline in 2017/18

By Stephanie Bryant-Erdmann, USW Market Analyst

With wheat harvest underway in the Northern Hemisphere and wheat planting underway or complete in the Southern Hemisphere, wheat buyers are beginning to see a downward trend in production numbers. As discussed in the June 15 Wheat Letter, the high quality, high protein wheat supply is shrinking and supporting prices. USDA expects global output to decrease for the first time in five years to 739 million metric tons (MMT) (27.2 billion bushels), down 14.6 MMT (535 million bushels) from the 2016/17 record of 754 MMT (27.7 billion bushels). If realized, production would be 3 percent above the five-year average.  United States. USDA forecast U.S. 2017/18 wheat production at 49.6 MMT (1.82 billion bushels), down 21 percent year over year and 15 percent below the five-year average due to an anticipated 10 percent decline in average yield and the lowest number of planted acres since USDA records began in 1919. USDA expects the average yield to be (3.18 MT/ha) compared to the five-year average of (3.14 MT/ha). In the March 31 Prospective Plantings report, USDA reported U.S. farmers intended to plant 46.1 million acres (18.7 million hectares) of wheat for 2017/18.  Canada. Agriculture and Agri-Food Canada (AAFC) expects wheat production of 29.5 MMT (1.08 billion bushels) in 2017/18. That is down 7 percent year over year because average yield is expected to decline to 47.6 bu/acre (3.20 MT/ha) in 2017/18. Slightly higher planted area will partially offset expected yield declines. StatsCan put planted area at 22.4 million acres (9.07 million hectares) of wheat in 2017/18. Spring wheat planted area rose 2 percent to 15.8 million acres (6.39 million hectares) due to low carry-in stocks and increased price competitiveness with alternative crops. Durum planted area decreased 16 percent year over year to 5.2 million acres (2.11 million hectares) due to high carry-in stocks and lower prices. Canada’s winter wheat seeding decreased 16 percent year over year from a shift to spring wheat. Crop conditions this year are variable with excessive moisture in northern areas while southern areas remain dry. As of June 23, topsoil moisture in Saskatchewan was rated 18 percent short or very short compared to 40 percent short or very short last week. In Alberta, 84 percent of spring wheat is rated in good to excellent condition compared to 83 percent last year. Surface soil moisture is rated 79 percent good to excellent; 14 percent of surface soil moisture is rated excessive. Saskatchewan and Alberta account for roughly 82 percent of 2017/18 planted wheat acres. 

Coalition of 17 farm groups ask President Trump to appoint more officials at the Agriculture Department.

A coalition of 17 farm groups asked President Donald Trump in a letter Wednesday to appoint more officials at the Agriculture Department.Agriculture Secretary Sonny Perdue, the only Senate-confirmed appointee at USDA, has said he does not believe any more nominations will go forward for Senate consideration until September."As you approach the 200-day mark of your administration, we write to encourage you to move quickly to fill key appointments within the United States Department of Agriculture (USDA)," the groups wrote.The groups pointed out USDA is one of the largest federal departments, with more than 100,000 employees across the country. "USDA is responsible for developing and executing federal laws related to agriculture, farming, forestry and food. With a struggling rural economy—which has seen a 55% decrease in income over the last three years—we need leaders and decision makers in place to serve farmers, ranchers and consumers."In a letter, the coalition wrote, “We applaud you for picking such a strong Secretary of Agriculture in Sonny Perdue. We have the utmost faith that he will continue to do an outstanding job serving your administration and our nation. But he can’t do it alone. The absence of high-ranking officials at USDA puts our farmers and ranchers at a disadvantage. It is impossible to pilot such a large and complex agency without a team of powerful and talented people at the helm.”The coalition includes the National Corn Growers Association, the American Soybean Association, the American Farm Bureau Federation and the National Farmers Union and other groups. 

Washington Insider: Agriculture and the Budget

Informa Economics is reporting today that ag spending is at the center of what has become a protracted effort by House Republicans to produce the budget resolution that could kick off the “reconciliation” process that can pass legislation with only a simple majority vote.The main issue concerns proposed cuts totaling $50 billion from mandatory programs like the Supplemental Nutrition Assistance Program that the ag committees oversee. In the House, committee chair Mike Conaway, R-Texas, has repeatedly argued his panel needs to be exempt from the potential $50 billion nutrition program reduction. The overall cuts in the budget would total $200 billion over 10 years, Informa says, but even that figure is in question, according to some.The situation has already resulted in House Budget Committee Chairwoman Diane Black, R-Tenn., holding up the introduction to the budget resolution in the committee this week for a vote Thursday. Resistance from Conaway and House Energy and Commerce Committee Chairman Greg Walden R-Ore., are preventing Black from sealing a deal to move the resolution ahead.Informa says committee contacts say that Black has the votes to move forward but that she is unwilling to proceed until she can convince committee chairs to come up with the spending reductions being proposed.In the meantime, Conaway, whose committee is beginning the process of writing the next farm bill, argues his panel can “ill afford to make $50 billion in reductions at this stage. I've been making our case as to why leaving us alone ... makes the most sense for the struggles that we face during the farm bill and ... the horrible circumstances that production agriculture finds itself in right now,” Conaway recently stated.Still, the committee’s move to fend off proposed cuts may not succeed, Informa says. In fact, the current proposal for $200 billion in cuts may not be enough, according to House Freedom Caucus Chairman Mark Meadows, R-N.C., He has proposed $295 billion in cuts over 10 years that he insists moderates will agree to or be comfortable with. He wants changes to welfare beyond that level that would push the total close to $400 billion in reductions."There was never agreement on $200 billion," Meadows told reporters. "That was an offer put out there."Later this week, the Congressional Budget Office is scheduled to release updated 10-year government spending projections, including the baseline cost of farm programs and food stamps. The updated estimates are expected to play a role in the debate and program costs of a new farm bill, Informa says.Current weak prices and farm income, Conaway believes, provide a good case for keeping his panel from facing additional cuts before completing the farm bill. He knows his panel will be under pressure to produce savings, and even to remove its jurisdiction over the nutrition programs when it writes the plan under a still-to-be-determined baseline. The outlook is that Congressional rules almost certainly will not allow the same level of funding as the current legislation does, Informa says.During the last farm bill debate, the sector was in better financial shape than other parts of the economy and a number of proposals were criticized on that basis. This time around, that problem has gone away although political pressure against expensive farm programs likely has intensified, suggesting the outlook for a long and bitter debate and one producers need to watch closely as it proceeds, Washington Insider believes. 

The size of corn and soybean quarterly stocks should matter greatly to the markets

If the two sets of USDA numbers scheduled for release Friday, June 30, the size of corn and soybean quarterly stocks should matter greatly to the markets.USDA will release its June Acreage and quarterly Grain Stocks reports at 11 a.m. CDT Friday.
QUARTERLY STOCKS
While most in the industry are preparing for the hubbub surrounding USDA's latest acreage update, I'm looking forward to the quarterly stocks data. To me, these numbers are key to market direction, acting as signposts passed, telling us the strength of demand. These numbers aren't the guesses that monthly crop production and supply and demand estimates are, but rather data-backed numbers of how much grain is actually being held in storage. The easiest measure of bullishness or bearishness is the sheer size of reported stocks.In corn, the average pre-report estimate of 5.16 billion bushels would easily be the largest June 1 figure on record, more than 400 million bushels larger than in 2016. Doing a little more math, using the average pre-report estimate and the 10-year average 80.5% of total demand through the third quarter puts total marketing-year demand at 14.463 bb, resulting in ending stocks of 2.477 bb. USDA's June estimates came in with total demand of 14.645 bb and ending stocks of 2.295 bb. If there is a surprise coming in corn, it could be bullish based on export shipments far outdistancing USDA's projected pace through the end of May.As usual, soybean quarterly stocks could prove to be the most interesting number of the day. The average pre-report estimate came in at 981 mb, a figure that would rate as third all-time high for June 1 behind the 1.092 bb from 2007 and 991 mb the previous year. Using similar calculations as corn, though factoring the 10-year average 86.4% of total demand through Q3, puts expected total demand at 4.105 bb and ending stocks estimated at 423 mb. This is up considerably from DTN's estimated 270 mb following the March 31 Quarterly Stocks report. Also, as with corn, export demand could prove to be a bullish surprise, as shipments ran well ahead of USDA's projected pace through the end of May.The all-wheat June 1 stocks number is the de-facto 2016-2017 ending stocks figure, with the average pre-report estimate coming in at 1.154 bb as compared to USDA's June estimate of 1.161 bb. There really isn't anything new to see here given the market has priced in record old-crop ending stocks for quite some time. The only shock in the wheat complex could come if USDA releases a number significantly different than its recent ending stocks estimates. DTN analysis following the March 31 Quarterly Stocks report put June 1 stocks at 1.232 bb based on 80.5% total demand through wheat's Q3. 

BPI Settles With ABC over Pink Slime Lawsuit

Beef Products Inc. and ABC News have reached a settlement in a lawsuit over ABC’s use of the term pink slime. Meat industry publication Meatingplace reports that no terms of the settlement have been disclosed, but BPI announced Wednesday morning that the company was “extraordinarily pleased” to have reached a settlement. ABC also released a statement, saying, "ABC has reached an amicable resolution of its dispute with the makers of lean finely textured beef.” BPI was suing the network and a lead reporter in a $1.9 billion case over ABC’s series of reports in spring 2012 that raised questions about lean finely textured beef’s suitability for human consumption. BPI closed three of four processing plants and laid off some 700 people in March 2012 after demand for lean finely textured beef plummeted.

House Ag Budget Not Aligned with Trump Proposal

The House Agriculture Appropriations Subcommittee budget discussed Wednesday does not align with the budget proposal for agriculture by President Donald Trump. The bill totals $20 billion in discretionary funding, which is $876 million lower than the fiscal year 2017 enacted level and $4.64 billion above the president’s budget request, according to the Hagstrom Report. The bill allows for a total of $144.9 billion in both discretionary and mandatory funding, that’s $4.6 billion above the president’s request and $8.5 billion below the fiscal year 2017 level. In releasing the bill this week, the Committee said it “focuses funding on programs that bolster U.S. agriculture, support rural communities, maintain and promote food and drug safety, and provide nutrition for those in need.” The bill provides for $73.6 billion in required mandatory spending for the Supplemental Nutrition Assistance Program, which is outside the discretionary funding jurisdiction of the Appropriations Committee for SNAP. That level is $4.87 billion below last year’s level and $2.6 million below the President’s budget request.

USDA Seeking Public Input on GMO Labeling

The Department of Agriculture is seeking public input on GMO labeling. The USDA Agricultural Marketing Service posted 30 questions for the public this week regarding labeling food items containing genetically modified ingredients. The feedback, according to Politico, will help the agency develop a proposed rule governing how food manufacturers disclose when products contain genetically engineered ingredients. Questions include: What terms should be interchangeable with “bioengineering”; whether AMS should require disclosures for foods containing highly refined products, such as oils or sugars derived from bioengineered crops; and the amount of a bioengineered substance needed to deem it bioengineered. The GMO Labeling legislation passed by Congress last year gave USDA two years to finalize the regulation. USDA says it is preparing to release the rule later this year

Ag Industry Urges Trump to Appoint Full USDA Leadership Team

As President Donald Trump approaches the 200-day mark of his administration, more than a dozen agriculture organizations are urging him to move quickly to fill vacancies within the U.S. Department of Agriculture. A letter sent to the White House Wednesday by the National Corn Growers Association and other groups told the President that agriculture needs decision makers in place to serve farmers, ranchers and consumers. The groups noted the 55 percent decrease in farm income over the last three years. The organizations praised the selection of Sonny Perdue to lead USDA, but noted that the agency has more than 100,000 employees and needs a full leadership team. As the letters states: “The absence of high-ranking officials at USDA puts our farmers and ranchers at a disadvantage.” NCGA President Wesley Spurlock complimented Agriculture Secretary Sonny Perdue’s leadership, but says “It's time to get a full leadership team in place."

Brazil Cattle Prices Stumble Following Meat Inspection Scandal

Cattle prices in Brazil are posting the biggest losses in a decade to start a year following this springs investigation into a meat inspection scandal. Bloomberg News reports that since the scandal, JBS SA, Brazil's largest cattle buyer, is purchasing fewer cattle due to a financial squeeze on the company. Even worse, JBS no longer offers cash upon delivery of animals and instead asks to pay ranchers as much as 30 days later. The move has forced Brazil’s cattle futures to drop 17 percent this year. Producers fear they will not be paid for delivering cattle to JBS, and the meatpacker is using about 80 percent of its slaughtering capacity. However, volumes are improving, according to the company. JBS told Bloomberg News the downturn “has been predicted by several analysts since last year.” But further complicating the market is the U.S. ban on beef imported from Brazil. The nation is vowing to fight and end the ban, but the U.S. Department of Agriculture says the ban will not be lifted until food safety standards are met. 

Bill designed to heighten preparedness of the nation’s food, agriculture and veterinary systems has been sent to President Trump

A bill designed to heighten preparedness of the nation’s food, agriculture and veterinary systems has been sent to President Trump’s desk for his signature. The U.S. Senate passed the Securing our Agriculture and Food Act unanimously on May 24, and the U.S. House voted last week to send this legislation to the president to be enacted into law. Sponsored by Rep. David Young (R-Iowa), the legislation addresses concerns highlighted by the 2015 avian influenza outbreak that wiped out millions of layer hens, turkeys and backyard flocks. Response efforts revealed problematic breaks in the federal government’s ability to communicate with stakeholders and react quickly to large-scale animal disease outbreaks. The disaster also raised concerns among farmers and producers about how well the country would be able to share information and respond to agro-terrorism threats and attacks. Young’s Securing our Agriculture and Food Act takes steps to protect America from high-risk events that pose serious threats to the food, agriculture and livestock industries by requiring the secretary of the U.S. Department of Homeland Security (DHS), through the assistant secretary for health affairs, to collaborate with the Department of Agriculture and Department of Health and Human Services to ensure food, agriculture, and animal and human health sectors are integrated into the DHS domestic preparedness policy initiatives. 

USDA’s Agricultural Marketing Service (AMS) has posted a list of 30 questions

USDA’s Agricultural Marketing Service (AMS) has posted a list of 30 questions it is asking stakeholders to consider as it collects public input for drafting a rule to implement the GMO labeling law signed nearly a year ago. Meat and poultry are subject to a bioengineered disclosure only if they are the predominant ingredient, or the second most predominant ingredient when the first is broth or a similar solution. AMS seeks input on how it should determine predominance of ingredients. AMS also asks how it should craft language acknowledging that animals consuming bioengineered feed are exempt from the disclosure requirements as bioengineered solely because they fed on bioengineered feed. Stakeholders also are asked to respond to questions such as: What terms should AMS consider interchangeable with bioengineering, and what amount of a bioengineered substance present in a food should make it be considered bioengineered? The National Bioengineered Food Disclosure Standard for foods containing genetically modified organisms was enacted on July 29, 2016. AMS has two years to establish a national standard and the procedures necessary for implementation. 

House Agriculture Appropriations Subcommittee on Tuesday released its fiscal year 2018 Agriculture and related agencies bill

The House Agriculture Appropriations Subcommittee on Tuesday released its fiscal year 2018 Agriculture and related agencies bill in preparation for a markup on Wednesday.The content of the bill signaled that appropriators were not taking direction from President Donald Trump’s budget proposal, which contained big cuts to farm and food aid programs.The bill totals $20 billion in discretionary funding, which is $876 million lower than the fiscal year 2017 enacted level, but also $4.64 billion more than the president’s budget request.In total, the bill allows for $144.9 billion in both discretionary and mandatory funding – $4.6 billion above the president’s request and $8.5 billion below the fiscal year 2017 enacted level. Discretionary funding alone provided by the bill is $20 billion – $876 million below the fiscal year 2017 enacted level. 

EPA, Army Corps of Engineers Seek to Rescind WOTUS Rule

Rescinding the waters of the United States, or WOTUS, rule is being proposed by the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers.The new proposed rule would rescind the WOTUS rule, also known as the Clean Water Rule, and "re-codify the regulatory text" that was in place before the WOTUS rule was adopted in 2015. "We are taking significant action to return power to the states and provide regulatory certainty to our nation's farmers and businesses," EPA Administrator Scott Pruitt said. "This is the first step in the two-step process to redefine 'waters of the U.S.' and we are committed to moving through this re-evaluation to quickly provide regulatory certainty, in a way that is thoughtful, transparent and collaborative with other agencies and the public."EPA and the Corps have been reaching out to stakeholders to discuss what a revised rule might look like. In mid-April, EPA met with state and local officials in Washington, D.C., to outline plans for replacing the rule.EPA has completed the proposed rule to rescind WOTUS and it will be published in the Federal Register with a 30-day comment period.Reaction has been largely predictable, with farm-state lawmakers welcoming the move and environmentalists critical of the plan."WOTUS has never been about clean water, it was about feeding the Obama EPA's insatiable appetite for power. Well that ends now," House Agriculture Committee Chairman Mike Conaway, R-Texas, said.However, Conaway said lawmakers still need to keep focused on the issue to make certain agriculture interests are not continuing to be affected by the WOTUS rule, urging the Corps and the U.S. Department of Justice to "re-evaluate and revise their enforcement of the Clean Water Act and WOTUS to ensure we protect our farmers and ranchers from onerous fines and penalties that threaten their way of life." He added he expected the Trump administration will "get it right" when it comes up with the new rule.From the environmentalist side, Howard Learner, executive director of the Environmental Law and Policy Center said, "This foolish rollback of clean water standards rejects years of work building stakeholder input and scientific data support, and it imperils the progress for safe clean drinking water in the Midwest."Key will be what the administration's proposal to replace WOTUS and that is still a work in progress. Easy forecast is that it will be less stringent than the current WOTUS rule. But this, like the WOTUS rule itself, will likely end up in court. But even before that, a finalization of the rule to rescind WOTUS will also be a legal target. Bottom line: The battle over WOTUS is not over, but at least one potential action is at hand

Agriculture at Center of Latest Budget Situation

Agriculture spending is at the center of what has become a protracted effort by House Republicans to produce a budget resolution that would aid the party in being able to use reconciliation to move major legislative efforts forward with only a simple majority vote.At issue is cuts totaling $50 billion from mandatory programs under the purview of the House Agriculture Committee. Chairman Mike Conaway, R-Texas, has repeatedly argued his panel needs to exempt from finding savings under that potential $50 billion reduction. The overall cuts in the budget would total $200 billion over 10 years, but even that figure is in question, according to some.The situation has already resulted in House Budget Committee Chairwoman Diane Black, R-Tenn., shelving introducing the budget resolution in the committee this week for a vote Thursday. Resistance from Conaway and House Energy and Commerce Committee Chairman Greg Walden, R-Ore., have kept Black from being able to seal a deal to move the resolution ahead.While contacts indicate Black insists she has the votes, she is unwilling to move ahead until she can convince committee chairs to come up with the extra $50 billion in spending reductions.But Conaway, whose committee is in the process of writing the next farm bill, argues his panel can ill afford to make any reductions at this stage. "I've been making our case as to why leaving us alone ... makes the most sense for the struggles that we face during the farm bill and ... the horrible circumstances that production agriculture finds itself in right now," Conaway recently stated.But even the $200 billion may not be enough, according to House Freedom Caucus Chairman Mark Meadows, R-N.C. He has proposed $295 billion in cuts over 10 years that he insists moderates will agree to or be comfortable with. "There was never agreement on $200 billion," Meadows told reporters. "That was an offer put out there."Given the financial woes facing U.S. agriculture in the form of low prices for commodities and the prospect of hefty production for corn and soybeans, Conaway said he believes he has a good case for keeping his panel from taking additional cuts before completing the farm bill. He knows his panel will be under pressure to produce savings when it writes the plan under a still-to-be-determined baseline that will most certainly not provide him with the same level of funding.

Washington Insider: US-South Korean Summit, Trade

Bloomberg is reporting while North Korean threats may top the agenda when South Korean President Moon Jae-in meets President Donald Trump later this week, the President's call to renegotiate the "job-killing" Korea-U.S. Free Trade Agreement will be difficult to ignore.That is especially true since the U.S. Commerce Department and the Office of the U.S. Trade Representative are due to submit their omnibus report on trade deficits by June 29, coinciding with the two leaders' meeting.Bilateral trade and U.S. exports of goods and services increased from 2011-2015, but the administration has focused on the $27.7 billion trade deficit in goods that the U.S. has with South Korea.It also will be President Moon's first summit with a foreign leader and he is planning to have more than 50 business leaders in tow. Whether trade issues are officially on the table or not, those business leaders will be meeting with their U.S. counterparts and plan to make investment pledges during the trip, analysts say.South Korean officials are tight-lipped about whether the issue of the free trade agreement will surface. But if it does, South Korea won't be the one to advance it, Kim Hyung-joo, research fellow at the Seoul-based LG Economic Research Institute, said.He added that, "Korea won't act rashly. Since the U.S. is the one applying pressure, the important thing is to play defense rather than bring up the items (to renegotiate in the FTA)," Kim told Bloomberg, suggesting that the discussion might take place after the North American Free Trade Agreement and U.S.-China trade talks unfold.He said he thinks Korea's Cabinet may wait and act cautiously, with the prime minister urging preparations in the event of a renegotiation. "Korea is not as good at negotiations as the U.S. is," Prime Minister Lee Nak-yeon said during his confirmation hearing last month. "If we enter a situation in which the U.S. leads the renegotiation, there's a possibility to be attacked where we are weak."Whenever the issue does surface, Moon may agree with Trump to rehash parts of the agreement, since both countries' economies have been restructured in the past 10 years. During his election campaign this spring, Moon said KORUS could be updated to correct "toxic" clauses disadvantageous to South Korea, but he still hasn't detailed how those clauses should be addressed.In a phone call last week, South Korean Finance Minister and Deputy Prime Minister Kim Dong-yeon told U.S. Treasury Secretary Steven Mnuchin that the Korean government would work to mitigate trade imbalances and hold consultations on pending issues, according to the finance ministry.A public-private group of trade experts said South Korea should brace for bad news from the omnibus report. Last week, they urged Korea to persuade the Trump administration that KORUS had a limited negative effect on the trade deficit and jobs in the U.S., adding that 70% of South Korea's exports to the U.S. are components and intermediate products, not consumer goods.The Korea Economic Research Institute estimates that South Korea could see export losses of up to $17 billion over five years under a renegotiated trade pact. However, U.S. exporters would be hit harder than their Korean counterparts if tariffs were raised, said Kim Ba-woo, senior researcher at the Korea Institute for Industrial Economics and Trade. "For Korea, even the nullification of KORUS would be beneficial in the short run, and the effect of a renegotiation will be limited," he told Bloomberg. Most tariffs are already lowered, and Korea's pre-FTA tariffs were higher than those of the U.S. The institute urged South Korean industries with large trade imbalances to prepare for possible new trade barriers.Whether trade reaches the Moon-Trump table, the numerous business leaders accompanying Moon to meet with U.S. counterparts intend to make their priorities known. The companies will make investment pledges during the trip, which may assuage Trump, who wants to create more jobs for Americans, according to the Korea Chamber of Commerce and Industry.It's also a tricky moment for Samsung and LG, which U.S. home appliance maker Whirlpool Corp. accused of illegally undercutting the prices of their washing machines. The U.S. International Trade Commission is investigating the case, with both companies denying the claims.So, the initial fight that was expected to be with Mexico but may have moved to South Korea, where geopolitical problems abound and the United is working to shore up local defenses, especially aimed at North Korea. Thus, the upcoming Korean talks will assume an enhanced importance and should be watched closely by producers as they proceed, Washington Insider believes.

Testimony from agricultural industries Tuesday on the future of the North American Free Trade Agreement

WASHINGTON (DTN) -- Early testimony from agricultural industries Tuesday on the future of the North American Free Trade Agreement reflected an array of views on the impact of the trade deal and the Trump administration's move to renegotiate NAFTA.Fruit and vegetable farmers say their industry is being decimated by a growing flood of cheap Mexican imports, while the grain industry sees uncertainty potentially hurting demand. The cattle industry, meanwhile, remains bitterly divided over country-of-origin labeling for meat, which Canada and Mexico worked to defeat.Farm groups were among the first to testify on NAFTA before the U.S. Trade Representative's staff and other federal agencies, which scheduled three days of hearings on the trade deal.While industry groups pushed for a more rapid response to settle disputes over specific shipments, grain and commodity groups stressed almost as a mantra that any changes to NAFTA should "do no harm."KEEP GRAIN FLOWINGChip Councell, a Maryland farmer representing the U.S. Grains Council, testified that he hedged nearly 100% of his expected 2017 corn crop because of worries about talk earlier this spring that the U.S. could pull out of NAFTA, which would destabilize the flow of corn to Mexico."When the talk of pulling out of NAFTA came about, prices were at about $4, which is close to our cost of production," Councell told DTN after testifying. "In our minds, with Mexico as our top customer, if that market gets disrupted, other markets around the world will get disrupted. So we thought the smart thing for us to do was to cover our bases. So through forward contracting, hedges and options, we covered just about 100% of our anticipated production.Councell has gone to Mexico twice this spring to meet with feed millers and livestock producers who buy as much as 80% of the corn exported there. These industries expanded over the past two decades in Mexico by relying on just-in-time grain shipments from the U.S. Now, Mexico is diversifying its corn imports. Councell said he understands Mexico will import corn in August and September from South America."This may sound minor, but it is a sea-change happening in our industry now," Councell said. He later added, "Quite honestly, as a businessman, I don't blame them. They referred to it as Plan B."U.S. corn has duty-free access to both Canada and Mexico. The two countries accounted for $2.6 billion in U.S. corn exports last year. Kevin Skunes, a North Dakota farmer and a vice president of the National Corn Growers Association, said it is important to maintain that duty-free access and expand the sale of corn in all forms."We must not jeopardize the existing market access," Skunes said.Skunes added that Mexico also is increasing blended ethanol to 10% levels, or E10, which could be a boon for U.S. ethanol exports down the line as well.Regarding wheat, U.S. wheat leaders said the biggest ongoing NAFTA-related problem is with Canada and its grading system that dubs imported wheat as "feed-grade" even though the wheat may be the same as Canadian grain. Chandler Goule, chief executive officer of the National Association of Wheat Growers, said farmers in several Northern Plains states lose value on a crop that could be the same quality as a wheat crop grown just across the border in Canada."This is a clear violation of the WTO obligations," Goule said.Goule said the Canadian wheat industry supports fixing this grading problem, but clarity could be added to a trade deal.Goule also noted Mexico is also diversifying its supplies of wheat. While Mexico imported more than 100 million bushels of U.S. wheat last year, as much as 25% of Mexico's imported wheat came from Europe or the Black Sea region as well.FRUIT AND VEGGIE TAKERepresentatives from the Florida fruit and vegetable industry said several changes are needed or Mexico will eventually control the supply of produce in the U.S.Richard Bowman, director of farming for J&J Family of Farms, told federal representatives that much more needs to be done to stop the dumping of cheap Mexican fruits and vegetables into the U.S. market. J&J has more than 14,000 acres across several states, Canada and Mexico, and has roughly $70 million in sales. Bowman said U.S. producers face higher land, capital and regulatory costs than Mexico while labor can be 10 times cheaper there."The American produce grower will cease to exist unless current laws are enforced," Bowman said, adding that produce is now coming into the U.S. cheaper than it takes to grow it. "This practice has been going on for years and must be stopped to protect the U.S. farmers."Mexico's explosive growth in ag shipments to the U.S. has had a profound impact on Florida growers. U.S. tomato acreage, for instance, has been cut by 25% under NAFTA while Mexico's production has increased 230%. Mexico is heavily subsidizing its fruit and vegetable production. Mike Stuart, president of the Florida Fruit & Vegetable Association, called on U.S. officials to dig into the details of those support levels.Further, standard trade rules don't work in a perishable and seasonable industry such as fruits and vegetables, industry leaders noted. Changes are needed to put quotas on Mexico during times when U.S. fruits and vegetables are in season.Before NAFTA, Bowman said, a vegetable farmer could count on making good money at least once every four years. "Under this new model, we can't survive," he said. "When we are dumped on like we are, we are going to go broke, and the American consumer is going to have to rely on Mexican imports for produce."Kenneth Parker, executive director of the Florida Strawberry Grower Association, said increases in strawberry imports from Mexico "present a clear and present danger" to the domestic industry. Mexican farmers have subsidies to help them expand. Strawberry imports from Mexico have increased four-fold in the past decade.Richard Owen, vice president of the Produce Marketing Association, countered the Mexico-dump arguments by saying fruit, vegetable and tree nut production has grown in the U.S. since NAFTA went into effect. Consumers also are buying cheaper products. Further, consumers are able to get more access to fresh fruits and vegetables year-round."A lot of the imports are driven by consumer demand and having produce year-round in the marketplace," Owen said.IT'S COOL AGAIN, OR NOTFarm Bureau's Shawcroft first brought up country-of-origin labeling -- COOL -- by stating that Farm Bureau opposes "erecting new barriers to trade such as mandatory country of origin for meat products."That wasn't the last time the topic came up. In a hearing panel built around the beef industry, William Westman of the North American Meat Institute said, "The NAFTA market for our industry is essentially integrated." Westman also suggested trade negotiators should avoid any new talk of COOL.Westman added that the meat industry would like to see duty-free poultry exports to Canada, as well as maintaining other existing duty-free tariffs on beef and pork.Westman also said a joint organization is needed under NAFTA to review food-safety threats and validate best-management practices. Further, meat inspection equivalency in NAFTA also could avoid the need for re-inspection at port of entry.Kevin Kester, a California rancher representing the National Cattlemen's Beef Association, cautioned against revising COOL. Kester argued Canada and Mexico already won a ruling at the World Trade Organization and implied the two countries still have the ability to retaliate against the U.S.Bill Bullard, president and CEO of R-CALF USA, countered, arguing that NAFTA has weakened the live cattle industry. The four major packers get great benefits from NAFTA, including importing Canadian and Mexican cattle, which brings down prices offered to U.S. cattle producers. NAFTA doesn't allow U.S. consumers to distinguish domestic from imported beef. Given that meat still has a USDA sticker, "The rule of origin allows U.S. beef packers to deceive consumers," Bullard said.Kenny Graner, president of the U.S. Cattlemen's Association and a rancher from Mandan, North Dakota, added that, "The U.S. imports far more cattle from Canada and Mexico than we send to them." He said remedies are needed to deal with that trade imbalance. Graner also added that both producers and consumers want accurate origin labels.The Trump administration is seeking to push public comment, hearings and congressional consultation through the summer to begin potential renegotiation talks as quickly Aug. 16.The hearings will continue through Thursday. 

EPA Sends WOTUS Repeal to Federal Register

Environmental Protection Agency Administrator Scott Pruitt told lawmakers Tuesday that the EPA has sent its repeal of the Waters of the U.S. rule to the federal register, beginning the process of ending the regulation. During a Senate budget hearing Tuesday, Pruitt told lawmakers the measure was being sent to the federal register the same day. The formal withdraw of the Obama-era rule follows through on a campaign promise by President Donald Trump, who signed an executive order requiring an EPA review of the rule. While the regulation went into effect in August of 2015, a federal court put the rule on hold. EPA intends to follow the federal rulemaking process in repealing the rule, meaning the process should take at least a year to repeal and replace. The notice of repeal by the EPA was met by celebration from agriculture groups, including the National Cattlemen's Beef Association. NCBA President Craig Uden called the move a "step in the right direction," while noting that the rule "isn't dead yet.” NCBA and others have vowed to submit comments during the rulemaking process to rescind the rule.

USDA Launches Reorganization Commission

The U.S. Department of Agriculture is kicking off efforts to reorganize the department. Politico reports that the department has launched a commission to reorganize, modernize and trim the department. The commission will form a plan to reform USDA, which will be based on Agriculture Secretary Sonny Perdue’s reorganization plan announced in May. The commission is part of a Trump Administration effort to reorganize federal agencies to “improve the efficiency, effectiveness, and accountability” of the executive branch. The commission for USDA includes officials from Secretary Perdue’s office and others within USDA serving as acting deputy undersecretaries. The effort is being coordinated by Donald Bice, the associate director of the Office of Budget and Program Analysis. A former USDA official told Politico that USDA has been working on the plans for weeks, since President Trump announced his budget proposal, saying “this is going to be a tough year at USDA.”

Farm Groups Give NAFTA Testimony to USTR

Farm groups including the National Corn Growers Association, the American Farm Bureau and the U.S. Grains Council gave testimony Tuesday during hearings on the North American Free Trade Agreement. The farm groups told the U.S. Trade Representative’s office that concerns over the renegotiation effort have disrupted relationships with U.S. agriculture customers, and that a new NAFTA should protect the market gains agriculture has developed. U.S. Grains Council Chairman Chip Councell says buyers’ concerns in Mexico are translating into dollars lost in farm country. He says that the last several months have highlighted how important it is to maintain ta strong, stable relationship with U.S. trading partners. A representative of the American Farm Bureau Federation says a new NAFTA agreement must not only protect market gains, but build upon them. Colorado Farm Bureau President Don Shawcroft says: "A modernized NAFTA should at best eliminate, at worst reduce, barriers to trade that keep our farmers and ranchers from having a level playing field with our neighbors.” AFBF says that NAFTA renegotiations present a prime opportunity to address challenges fruit and vegetable farmers have faced with Mexico, as well as a chance for dairy, row crop and wheat farmers to settle issues with Canada.

California to List Glyphosate as Cancer-Causing

Monsanto is vowing to continue its legal fight against California as the state will list glyphosate as a cancer-causing chemical. California will add glyphosate to its list of chemicals known to cause cancer on July 7th. The designation of glyphosate follows an unsuccessful attempt by Monsanto to block the listing in trial court and after requests for a stay were denied by a state appellate court and California's Supreme Court, according to Reuters. Glyphosate is the main ingredient in Monsanto’s Roundup herbicide. The move by California follows a similar act by the World Health Organization's International Agency for Research on Cancer that said glyphosate is "probably carcinogenic" in a controversial ruling in 2015. Listing glyphosate as a known carcinogen in California requires companies selling the chemical in the state to add warning labels to packaging. A spokesperson from Monsanto says “this is not the final step,” adding that Monsanto will “continue to aggressively challenge this improper decision.”

Perdue, Branstad, to Celebrate U.S. Beef in China

Agriculture Secretary Sonny Perdue and U.S. Ambassador to China Terry Branstad will mark the return of U.S. beef to China this week. Friday, the duo will celebrate U.S. beef exports returning to China by traveling to the nation and ceremonially cut a prime rib that originated from Nebraska. Perdue and Branstad will attend events and meet with officials in China Friday and Saturday, in what marks the return of U.S. beef to China, banned from the nation since 2003. China has emerged as a major beef buyer in recent years, with imports increasing from $275 million in 2012 to $2.5 billion in 2016. The United States is the world’s largest beef producer and in 2016 was the world’s fourth-largest exporter, with global sales of more than $5.4 billion.

Syngenta Announces Goals Following Merger

Syngenta is striving to strengthen its leadership position in crop protection and to become an ambitious number three in the agriculture seeds sector. In a news release this week, the company announced its priorities now that the takeover deal by ChemChina is complete. The company aims to profitably grow market share through organic growth and collaborations, and is considering targeted acquisitions with a focus on seeds. Syngenta CEO Erik Frywald calls ChemChina a stable owner who will help Syngenta achieve its ambition. Syngenta officials also said that Syngenta remains a standalone company. Syngenta and the state-owned ChemChina agreed to terms of the takeover in February of last year, valuing Syngenta at $43 billion. 

Wholesale beef prices have dropped sharply the past ten days

With July 4 beef purchases complete, wholesale beef prices have dropped sharply the past ten days.  Beef and cattle markets, have defied gravity by staying stronger, longer than most expected this spring.  However, with seasonal pressure prevailing, beef and cattle markets have weakened and will likely struggle seasonally for the next six plus weeks.  Beef markets often weaken during the summer doldrums, that period of summer heat between Independence Day and Labor Day.  The summer slump may be mitigated somewhat if July 4 beef sales are strong prompting follow-up beef sales.  Wholesale markets will likely struggle until August when Labor Day purchases will pick up to support beef features for Labor Day, the last big grilling holiday of the summer.  Cash fed cattle prices have correspondingly dropped over $10/cwt. in the past ten days or so.  Feeder cattle prices have dropped $10-$12/cwt. in the past week.  Domestic and international beef demand will continue to be a key as beef supplies will undoubtedly continue to increase year over year in the second half of the year.  Recently released retail meat prices show that Choice and All-Fresh retail beef prices increased from April to May. Choice retail beef prices in May were up 1.0 percent from last year while the All-Fresh retail beef price was down 3.9 percent year over year.Beef production for the year to date in 2017 is up 3.8 percent, with cattle slaughter up 5.7 percent but being offset by sharply lower carcass weights so far this year.  At the current time, steer and heifer carcass weights are down 17 pounds from the same time last year.  Steer and heifer carcass weights bottomed seasonally in early May and are expected to increase seasonally into the fourth quarter.  However, a normal seasonal increase from current levels would still have carcass weight down significantly year over year and will continue to moderate larger slaughter numbers.The June USDA Cattle on Feed report showed another month of large year over year increases in May placements pushing June 1 on-feed inventories to 102.7 percent of one year ago.  May placements were 112.2 percent of last year.  May marketings were 108.8 percent of last year, a continuation of strong marketings that began in mid-2016.  For the year to date, January-May, feedlot placements are up 9.2 percent while marketings have been up 7.0 percent year over year.  Most of the increase in May placements were cattle under 700 pounds which means that those cattle will be marketed towards the end of 2017.Strong beef demand has helped make the first half of 2017 a pleasant surprise to all cattle industry sectors.  Strong demand in the third and fourth quarters may help significantly but supply pressures are likely to weigh a bit more heavily on cattle and beef markets in the second half of the year holding markets generally to a sideways pattern for the remainder of the year. 

Profit margins shifted dramatically from feeders to packers last week

Profit margins shifted dramatically from feeders to packers last week after an $8 per cwt. decline in cash fed cattle prices. Feedyard margins dropped $155 per head to $285, which helped boost packer margins $51 per head, according to the Sterling Beef Profit Tracker.Cattle prices have plunged $15 per cwt over the past two weeks, yet the beef cutout price has declined just $5 per cwt., with the balance boosting processing margins. Feedyards, however, were profitable for the 30th consecutive week, according to Sterling Marketing’s weekly analysis. The beef cutout closed the week at $240 per cwt.The cost of finishing a steer last week was calculated at $1,403 per head, which is $172 less than the $1,575 a year ago. A month ago cattle feeders were earning $498 per head, while a year ago profits were calculated at $54 per head. Feeder cattle represent 73% of the cost of finishing a steer, compared to 74% last year.Farrow-to-finish pork producers earned $61 profit per hog last week, a $9 per head increase from the previous week. A month ago farrow-to-finish pork producers showed a profit of $28 per head.Pork packers saw their margins steady at $18 per head. Negotiated prices for lean hogs were $88.97 per cwt last week, $5 per cwt higher. Cash prices for fed cattle are $4 per cwt. higher than last year and prices for lean hogs are about $5 per cwt. higher.Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $111 per cow. That would be $66 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 $260 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $105 per head in 2017, down from $114 in 2016.For farrow-to-finish pork producers, Nalivka projects 2017 profit margins to average $19 per head, compared to $5 per head last year. Pork packers are projected to earn $22 per head in 2017, down slightly from $24 profit per head in 2016. 

Canada Disputing U.S. Claims Regarding Poultry Trade

Canada’s Ambassador to the United States is firing back at claims that Canada is hindering the trade of poultry with the United States. Canadian Ambassador to the United States David MacNaughton told a group of senators who say Canada has denied access to U.S. poultry and eggs that their claims are “inaccurate.” McNaughton cited statistics on Canadian imports of U.S. poultry and eggs, saying Canada will continue to "stand up" for Canada's farmers and their supply management system for dairy, poultry and eggs, according to the Hagstrom Report. The comments were responding to a separate letter sent to U.S. Trade Representative Robert Lighthizer, which asked the Trump administration to address poultry trade during renegotiations of the North American Free Trade Agreement. The group, led by Delaware Democrat Tom Carper, claims trade barriers by Canada have harmed the U.S. poultry industry for 20 years.

Brazil Hopes to Reverse U.S. Ban on Brazilian Beef

Brazil is seeking to reverse a ban on Brazilian beef imports enacted by the U.S. Department of Agriculture last week. The Associated Press reports Brazil’s agriculture minister will travel to the U.S. to address officials regarding the ban. While the U.S. says the ban will remain in place until Brazil takes corrective action to safety concerns, Brazil says it will fight to end the ban. Agriculture Secretary Sonny Perdue's decision was announced three months after a major scandal into allegations of bribed meat inspectors that were allowing tainted meat to pass inspection. Perdue says that since USDA started inspecting 100 percent of beef imports from Brazil, U.S. inspectors have refused entry to 11 percent of Brazilian fresh beef products, about 1.9 million pounds. Brazil’s agriculture minister attributed USDA's safety concerns to the lumps some steers develop as a result of an allergic reaction to a vaccine against foot-and-mouth disease. He claims the lumps did not represent a public health hazard.

Farmers Union Applauds Emergency Grazing Declaration

Following Friday’s announcement by the Department of Agriculture to authorize emergency grazing in drought-stricken states, farm groups offered praise to the move. USDA authorized emergency grazing for Conservation Reserve Program lands in Montana, North Dakota and South Dakota. The announcement came just days after elected officials, the National Farmers Union, and several Farmers Union state divisions urged USDA to address severe drought conditions in the region. NFU President Roger Johnson says many producers in the area are having to downsize their herd because of dwindling feed supplies, and that without relief, many more would make the same decision. Emergency grazing is authorized to begin immediately and extends through September 30th, unless conditions improve.

Managed Honeybee Colony Numbers Increasing

The Department of Agriculture says the number of managed honey bee colonies has increased over the last decade. While recent public attention has focused largely on colony mortality trends, overall colony numbers have increased since 2006. USDA says the number of managed colonies has increased from roughly two million in 2006 to near 2.8 million in 2016. However, honeybee mortality, as measured by the loss of a honeybee colony, has remained high over the last decade. In the 2006-2007 counting period, approximately 30 percent of honeybee colonies were lost during the over-winter period. The over-winter loss rate has since diminished to 22 percent in 2014-2015, but over-summer losses have grown. The net result is that about 44 percent of colonies perished in 2015-2016, compared with 36 percent in 2010-2011.

R-CALF Claims Win Over Montana Beef Checkoff

R-CALF is claiming a win stemming from last week's federal court ruling against the beef checkoff program. The organization alleges that the involuntary collections of beef checkoff funds from producers in Montana were in violation of the U.S. Constitution. The United States District Court for the District of Montana put in place a preliminary injunction prohibiting the private Montana Beef Council from retaining beef checkoff funds without the payers' consent. J. Dudley Butler of the Farm and Ranch Law Group says of the ruling that: "For too long the big meat packers and the National Cattlemen’s Beef Association have used their allies in Washington to squelch the voices of rural America,” adding that the group hopes the court ruling is a “step towards fairer treatment of farmers and ranchers and a more accountable food system.” 

District Court for the District of Montana has supported a lower court order preventing the involuntary collection of funds to support USDA’s Beef Checkoff program by the Montana Beef Council

The U.S. District Court for the District of Montana has supported a lower court order preventing the involuntary collection of funds to support USDA’s Beef Checkoff program by the Montana Beef Council (MBC). The court affirmed a ruling from December that suspended fund collections that was filed by the Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA). The group’s lawsuit claimed that the involuntary collection without the payers’ consent violated the First Amendment of the Constitution, according to a news release from R-CALF USA. That original challenge asserted that the MBC needed to obtain permission from those who pay the $1-per-head fee before the money could be spent for beef advertising or promotions. “For well over a decade R-CALF USA members fought to reform what we considered a terribly mismanaged national beef checkoff program,” R-CALF USA CEO Bill Bullard said in a statement after the most recent ruling. “Yesterday, after a meaningful, law-based evaluation of our concerns, we won. We hope this will be just the first step of correcting over a decade’s worth of beef checkoff program mismanagement.” 

Agriculture Secretary Sonny Perdue will travel to China this week

Agriculture Secretary Sonny Perdue will travel to China this week, joining U.S. Ambassador to China Terry Branstad, to formally mark the return of U.S. beef to the Chinese market after a 13-year hiatus. In events in Beijing and Shanghai on Friday and Saturday, Perdue will meet with Chinese government officials to celebrate the return of American beef products to the enormous market after shipments were halted at the end of 2003. On Friday in Beijing, Perdue and Branstad will ceremonially cut prime rib that originated in Nebraska and was shipped by Greater Omaha Packing Company. “We will once again have access to the enormous Chinese market, with a strong and growing middle class, which had been closed to our ranchers for a long, long time.  There’s no doubt in my mind that when the Chinese people taste our high-quality U.S. beef, they’ll want more of it,” Perdue said in a news release. President Trump, Commerce Secretary Wilbur Ross, Treasury Secretary Steven T. Mnuchin, officials with the U.S. Trade Representative's office and Secretary Perdue announced the deal brokered to allow the return of U.S. beef to China on May 11 as part of the U.S.-China 100-Day Action Plan. The first shipment of U.S. beef arrived in China on June 19. China has emerged as a major beef buyer in recent years, with imports increasing from $275 million in 2012 to $2.5 billion in 2016. The United States is the world’s largest beef producer and in 2016 was the world’s fourth-largest exporter, with global sales of more than $5.4 billion.  While in China, Perdue will meet with China’s Minister of Agriculture Han Changfu to discuss additional market access goals. He will meet with Chinese Vice Premier Wang Yang to discuss expanding U.S. trade with China. Perdue will also tour a Chinese supermarket and participate in a cooking demonstration. 

Yellowstone wants brucellosis quarantine facility for bison

BOZEMAN, MONT. 

Yellowstone National Park is taking steps toward turning part of its bison trap at the northern edge of the park into a certified brucellosis quarantine facility.

Park officials have been talking since at least April with the U.S. Department of Agriculture and state livestock officials about upgrades they could make to the Stephens Creek Facility, as well as testing requirements needed to certify bison as brucellosis-free, The Bozeman Daily Chronicle reported (https://goo.gl/uncnTU ) Sunday.

The move is meant to eventually get the 24 male bison at the trap to the Fort Peck Indian Reservation without first transferring them to quarantine corrals at Corwin Springs.

Male bison must be quarantined for a year before they can be deemed free of the disease, which is feared by the livestock industry because it causes cattle to abort their offspring.

Yellowstone Superintendent Dan Wenk said sending bison to Corwin Springs would cost more than quarantining them at Stephens Creek, even with the facility upgrades it will require.

"I don't think the cost is going to be that high," he said. "We feel like we're in a better place in terms of doing the research we want to do on these animals."

Work on the facility has not started because the park is waiting for the Montana Department of Livestock and the federal agriculture department to provide specific requirements. Marty Zaluski, Montana's state veterinarian, said he is working on finalizing the rules.

More than half of Yellowstone bison are believed to have been exposed to the disease. There has been no documented case of bison transmitting the disease to cattle in the wild but that fear has driven efforts to control the Yellowstone population and limit where bison are allowed.

A 17-year-old management plan calls for the population to be culled to about 3,000 bison in the park, and the numbers are managed through hunting and shipping the animals to slaughter.

Quarantining bison is seen as a way to reduce the number slaughtered each year and to establish more bison herds around the U.S.

Judge rules Montana beef checkoff unconstitutional

District court's preliminary injunction prohibits collecting beef checkoff funds without payers’ consent.

The U.S. District Court for the District of Montana affirmed a ruling that the U.S. Department of Agriculture's beef checkoff program, as currently administered, violates the First Amendment. The court put in place a preliminary injunction prohibiting the private Montana Beef Council from retaining beef checkoff funds without the payers' consent.

The court took action after a magistrate previously recommended the injunction in December 2016, agreeing with plaintiff in the suit -- the Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA) -- that the checkoff was being run unconstitutionally.

"The government violates the First Amendment when it compels a citizen to subsidize the private speech of a private entity without first obtaining the citizen's 'affirmative consent'," the court wrote in its decision, adding, "What distinguishes unconstitutional subsidies for private speech from constitutional subsidies of government speech is not the content of the speech but, rather, that the latter is 'democratic(ally) accountab(le).' ... The USDA does not control how the Montana Beef Council spends the money that it obtains from the federal beef checkoff program."

The beef checkoff is a federal tax that compels producers to pay $1 per head every time cattle are sold, half of which is used to fund the advertisements of private state beef councils, like the Montana Beef Council.

R-CALF USA chief executive officer Bill Bullard said, "For well over a decade, R-CALF USA members fought to reform what we considered a terribly mismanaged national beef checkoff program, and for well over a decade, we faced an impenetrable wall of top-ranking USDA officials whose connections to the multinational meat packers' lobby caused them to steadfastly oppose every single reform proposal we advanced. After a meaningful, law-based evaluation of our concerns, we won. We hope this will be just the first step of correcting over a decade's worth of beef checkoff program mismanagement."

Sens. Cory Booker (D., N.J.) and Mike Lee (R., Utah) have put forth bipartisan legislation that would reform the checkoff programs to make them more transparent and accountable to producers.

David Muraskin of Public Justice, lead counsel for the plaintiff in the case, said the district court's decision will "finally provide Montana ranchers leverage to control how their money is spent and their goods are advertised. Without government accountability and control, the checkoffs amount to nothing more than a massive transfer of wealth from farmers and ranchers to multinational corporations, which is against our values and laws."

Chaley Harney, Montana Beef Council executive director, said although the council was not party to the lawsuit, it is aware that the order was issued and is "working to understand the implications with the limited information we have at this time."

State, Local Officials Urge Inclusive Approach to WOTUS Rewrite

Any rewrite of the Environmental Protection Agency's (EPA) Waters of the U.S. (WOTUS) regulation – which clarifies the waters and wetlands that fall under federal protection – should reflect differences in regional climate, geology and hydrology, state and local officials urged in comments to EPA on the matter.EPA is reviewing the Obama-era WOTUS rule under an executive order issued by President Donald Trump. A rewrite of the regulation should include an analysis of impacts on local governments, and clear definitions that outline Clean Water Act (CWA) jurisdiction, state and local officials said, aspects that were missing in the original WOTUS rule.EPA sought feedback on how state, local and federal governments all three levels of government can display cooperation in rewriting the regulation based on the direction provided in the February executive order. States' views mostly focused on how the rulemaking should proceed, but did not get overly specific as they do not know the direction EPA plans to take, according to Julia Anastasio, executive director of the Association of Clean Water Administrators – which represents state water officials.“If you give states the opportunity to understand enough of the direction that a proposed rule may be heading then we think we can really assist and avoid some of the pitfalls from the last go around,” Anastasio told Bloomberg BNA June 21, adding that states do not want “a parent-child relationship” with EPA, but rather one of equals.Arizona, Kentucky and South Dakota are among 31 states challenging the WOTUS rule on grounds the federal government was taking over regulation of waters that fell under state authority. Many of those states offered their comments on how the Trump administration should approach its rewrite of the regulation.New York is among the seven states involved in defending WOTUS court. To provide a level playing field among states and a strong and consistent regulatory floor, New York wants the agencies to develop a sound national rule and inventory of federal protected waters, Basil Seggos, New York's commissioner of environmental conservation, told EPA.The process of defining the terms that late Justice Scalia used in his opinion, such as “relatively permanent” or “continuous surface connection,” will present different challenges in every region, acknowledged the Environmental Council of the States.

Syngenta Ordered to Pay Farmers Over $200 Million

A federal jury has ordered Swiss giant Syngenta to pay $217.7 million to Kansas farmers after a verdict was announced this week at a trial in Kansas City. The class action lawsuit was brought because of the Viptera line of corn seed Syngenta began selling to farmers in 2011. At the time, Sygenta hadn’t received Chinese approval of the trait (MIR162) within the seed that gave it insect resistance. China began rejecting U.S. grain shipments in 2013 because it detected the unapproved trait in corn. China would go on to approve the trait in 2014 but farmers contended the damage had been done because of lower corn prices and lost sales. The plaintiffs contend that the China rejection led to grower losses of more than $5 billion. The trial featured four Kansas farmers representing more than 7,000 across the state. Syngenta issued a statement saying they were disappointed with the verdict “because it will only serve to deny American farmers access to future technologies, even when they’re approved in the U.S.” The release said the case is without merit and Syngenta will be moving forward with an appeal. Class action lawsuits have been approved in several other states, including Arkansas, Missouri, Illinois, Iowa, Nebraska, Ohio, and South Dakota.

Groups React to Brazil Beef Announcement

Ag groups are weighing in on Secretary of Agriculture Sonny Perdue’s announcement that the U.S. has suspended all fresh beef imports from Brazil due to safety concerns. National Cattlemen’s Beef Association President Craig Uden supports the move to suspend Brazilian imports because it’s a result of USDA’s science-based testing protocol of imported beef. “This proves our food safety system works effectively,” Uden says. “NCBA supports science-based trade and keeping our food supply safe.” Leo McDonnell, U.S. Cattlemen’s Association Trade Committee Chair, says his group also supports the decision to suspend the imports. “Since March, the Food Safety and Inspection Service has refused entry on 11 percent of Brazilian beef imports,” McDonnell says. “It’s for that reason the USCA remains adamantly opposed to the imports of Brazilian beef products.” House Ag Committee Chair Mike Conaway says halting imports from Brazil is an appropriate and necessary measure as Brazilian officials work to correct the situation. National Farmers Union President Roger Johnson says his group has had concerns about Brazilian beef imports for a long time. Johnson says overseas beef scandals can undermine consumer confidence in the entire beef industry, risking American producers’ bottom lines.

Sanderson Farms Sued Over Drugs in Poultry

Three of the bigger activist groups filed suit against Sanderson Farms, a major poultry-producing company. Politico’s Morning Ag Report says the Organic Consumers Association, Friends of the Earth, and Center for Food Safety all allege that the company is guilty of false advertising. Sanderson Farms’ chicken is marketed as 100 percent natural. The groups say the chicken contains a range of unnatural and even banned substances. The groups point to recent testing by USDA as proof of their accusations, saying the tests found 49 instances in which samples of the company’s products tested positive for synthetic drug residue. The groups say in their lawsuit, “33 percent of 69 FSIS inspections, conducted in five states, found residues that no consumer would consider natural.” The groups highlighted a number of the study’s findings, including 11 instances of antibiotics that are also used in human medicine, as well as some that are prohibited for use in animals. The groups say some of the products also tested positive for a steroid as well as growth promoters, all of which shouldn’t be in ‘100 percent natural’ products.

Maine Takes Lead in Food Sovereignty Movement

Maine Governor Paul LePage recently signed a bill into law that affirms the rights of cities and towns to regulate local food production in their areas. A Press Herald Dot Com report says that makes Maine the second state in the U.S. to allow consumers to buy products directly from farmers and food producers that haven’t been inspected or licensed by state or federal regulators. The ‘food sovereignty movement’ aims to promote freedom in food choices for consumers who are willing to forgo food safety regulations. The law means a neighbor can stop by a dairy farm and by a gallon of unprocessed milk, even if the farmer doesn’t have the milk inspected or licensed by the state. If that neighbor trusts the farmer and is willing to take the risk of buying unprocessed products, they’re free to do so. However, some groups say it’s going to put consumers at risk. The Maine Cheese Guild opposed the bill, with former president Eric Rector testifying against it. The group is worried that someone runs the risk of getting sick from Maine cheese, thereby tainting the entire cheese industry, which is currently thriving in Maine.

Minnesota Still Engaging With Cuba Despite Setback

Minnesota’s government and businesses are actively engaging in Cuba in areas like agricultural trade. This is despite a rollback in trade relations by U.S. President Donald Trump. Reuters reports that Minnesota Lieutenant Governor Tina Smith is leading a trade delegation to the country as the first state representative to make a trip since Trump undid an Obama-era move to normalize trade relations between the countries. Smith feels there’s no question the move by Trump was a setback, saying, “The important thing for me is support remains at the federal level for normalizing and modernizing the relationship.” Minnesota is one of the biggest farming states in the U.S. and Smith hopes the trip will improve ties with Cuba and promote Minnesota exports. U.S. ag groups have criticized Trump’s move to restrict travel to and business dealings with Cuba, saying it could derail a huge growth in agricultural exports that totaled $221 million last year. While ag exports aren’t prevented by U.S. law, rules on how to do transactions have made it extremely difficult and expensive. Cuba invited the Minnesota delegation to a trade show later in the year, Smith said, while Minnesota invited Cuban officials to visit. 

Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.1 million head on June 1, 2017

Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.1 million head on June 1, 2017. The inventory was 3 percent above June 1, 2016. Analysts, on average, were expecting about a 2 percent rise, according to a pre-report survey by Urner Barry. Placements in feedlots during May totaled 2.12 million head, 12 percent above 2016 and above the 10 percent increase analysts were expecting. Net placements were 2.05 million head. During May, placements of cattle and calves weighing less than 600 pounds were 400,000 head, 600-699 pounds were 315,000 head, 700-799 pounds were 529,000 head, 800-899 pounds were550,000 head, 900-999 pounds were 235,000 head, and 1,000 pounds and greater were 90,000 head. Marketings of fed cattle during May totaled 1.95 million head, 9 percent above 2016 and in line with market expectations.    Other disappearance totaled 70,000 head during May, which was 5 percent below 2016. 

Cattle markets ended the week desperately searching for any signs of support

Fed cattle markets traded $119 to $123 per cwt., $5 to $11 lower than last week, and roughly $20 lower than two weeks ago.It was just as ugly in the calf and feeder markets. Steers and heifers sold $2 to $8 per cwt. lower, which followed the previous week’s decline of $5 to $10 per cwt.Agricultural Marketing Service reporters said yearlings and heavy weight steers were “steady to weak with lower undertones noted.  The supply of feeder cattle is fairly tight as there is competition in the marketplace with farmers trying to buy cattle at lower prices, especially farmer feeders with old crop corn to feed.”USDA released its monthly Cattle on Feed report, with the June 1 total of 11 million head (103%), placements of 2.1 million head (112%), and marketings of 1.95 million head (109%). The 12% year-over-year increase in placements will be considered bearish, as will the total number of cattle on feed. Both number suggest a growing supply of cattle in the months ahead, with negative implications for prices.Friday’s Choice beef cutout value dropped $3.13 per cwt to $239.75, with Select at $216.72. The Choice/Select spread was $23.03.  

USDA AUTHORIZES EMERGENCY GRAZING IN DROUGHT-STRICKEN MONTANA, NORTH DAKOTA AND SOUTH DAKOTA WASHINGTON

June 23, 2017 – Secretary of Agriculture Sonny Perdue today authorized emergency grazing on Conservation Reserve Program (CRP) lands in Montana, North Dakota and South Dakota.  All or parts of these states are experiencing severe or extreme drought conditions – indicated as categories D2 and D3 on the U.S. Drought Monitor.“Due to reduced availability of forage, ranchers in the hardest hit locations have already been culling their herds,” said Perdue. “Without alternative forage options like grazing CRP lands, livestock producers are faced with the economically devastating potential of herd liquidation.”CRP is a voluntary program administered by USDA’s Farm Service Agency (FSA) available to agricultural producers to help them safeguard environmentally sensitive land and, when needed, provide emergency relief to livestock producers suffering the impacts of certain natural disasters.Emergency grazing is authorized to begin immediately and extends through Sept. 30, unless conditions improve.  Producers must work with the Natural Resources Conservation Service (NRCS) to develop a modified conservation plan that is site specific, including the authorized grazing duration to reflect local wildlife needs.  FSA State Committees will monitor emergency grazing implementation at the local level to mitigate the adverse impact on nesting areas and established CRP vegetation.“If the drought continues and pasture recovery becomes less likely, feed supplies will decline, the quality and quantity of hay is reduced and stock water becomes scarce – considerable stressors for both the livestock and our producers,” said Perdue. “If opening up grazing lands reduces even some of these stressors for these ranchers, then it’s the right thing for us to do.”Eligible CRP participants can use the acreage for grazing their own livestock or may grant another livestock producer use of the CRP acreage. There will be no CRP annual rental payment reductions assessed for acres grazed.To take advantage of the emergency grazing provisions, producers should contact their local USDA Service Center.  To find your local USDA Service Center visit http://offices.usda.gov. 

Washington Insider: Tracking Emerging US Trade Policy

While there seems to be less pressure on the future of NAFTA these days, there is still uncertainty regarding the outcome of the talks with Canada and Mexico, Informa Economics is reporting today. Now that more officials of the administration’s trade policy team are on board U.S. Trade Representative Robert Lighthizer is helping key congressional committees dig deeper into administration positions.For example, Informa noted that the stance outlined by Lighthizer in his appearance before the Senate Finance Committee on Wednesday differed from the earlier views of Commerce Secretary Wilbur Ross and others in the administration “who have signaled they want to wrap up the talks as quickly as possible.” However, even Ross has admitted that getting them completed yet in 2017 is not likely.Should the discussions get bogged down and reach a "total stalemate," Lighthizer said he would come back to the Senate panel for discussions. However, he said he would not accept a situation where the agreement stays in place without changes that address U.S. concerns.Lighthizer was urged by Senate Finance Committee Chairman Orrin Hatch, R-Utah, to use the talks to “improve” North American integration in order to make the region a “more attractive investment and manufacturing hub and serve as a counterweight to China."The coming weeks will be active on the U.S. trade policy front relative to NAFTA, Informa noted. USTR plans to publish detailed negotiating objectives July 17, following more consultations with Congress. Plus, there are three days of hearings set by USTR next week and already some 130 witnesses are scheduled to appear.The administration plans to push for stronger labor and environmental provisions in the agreement, as well as a digital trade chapter and strong intellectual property provisions, Lighthizer said.He also called on Japan should make unilateral changes to cut the U.S. trade deficit, including reducing high tariffs on U.S. beef, and outlined hopes to reach bilateral trade deals with many of the countries that were part of the 12-nation Trans-Pacific Partnership agreement. However, he admitted, "some of the TPP countries don't want to do bilaterals," apparently including Japan, at least for the time being, Lighthizer said.He told the committee that the controversial mechanism for resolving investment disputes may not be removed from NAFTA, as he would have preferred. At issue is the so-called investor-state dispute settlement provision, which creates a forum for companies to challenge government laws or regulation they believe have negatively impacted their business investments. "I really look forward to working with committee on that issue," Lighthizer said.Improving the functionality of the WTO is also a Lighthizer commitment, along with seeking “reforms to the WTO dispute settlement system.” "We expect to see meaningful changes in order to maintain the relevance of the system," he said.In addition, he noted that the pending WTO fight on China's market-economy status is "without question" the most serious litigation the global trading body is handling right now—and, concluded that a ruling in Beijing's favor would be "cataclysmic." While he cautioned, "Who knows how the WTO rules?" He reiterated the U.S. believes its position to be correct – that China is not a market economy.China insists it should have been treated as a market economy starting in December 2016, the 15th anniversary of its accession to the WTO. The change in treatment would likely affect how the U.S. calculates antidumping duties, resulting in lower margins for U.S. industry petitioners.Following Lighthizer’s testimony, Informa noted that it “should help ease concerns in U.S. agriculture circles about the administration's trade policy direction” following worries generated during the campaign.At the same time, Lighthizer’s testimony revealed remaining schisms among administration trade policy officials that could potentially raise new issues as groups try to determine which views will prevail in the various trade negotiations. As has been seen, these frequently involve very important issues that producers should watch closely as they emerge, Washington Insider believes.