EPA Issues E15 Waiver in 12 States as Harvey Response Continues

The sale of gasoline with up to 15 percent ethanol (E15) will be allowed in 12 states and Washington, DC, under a temporary waiver issued by the Environmental Protection Agency (EPA) in response to the impacts from Hurricane Harvey."The shut-down of nearly a dozen refineries and extreme weather prohibiting fuel barge movement in the Gulf-area, with several other refineries operating at reduced capacity, has continued to limit the production and availability of fuel to areas both within and outside of the Gulf area," EPA Administrator Scott Pruitt said in a letter to officials in the states and Washington, DC. The Colonial Pipeline that provides fuel to the U.S. East Coast has also been impacted, operating a reduced capacity, he noted.Under provisions of the Clean Air Act (CAA), the use of low volatility gasoline is required during summer months, situation which has prevented the sale of E15 in summer months. The temporary action is in effect through September 15, 2017, but effectively ends the summer driving season restrictions in the states and Washington, DC, covered by the announcement."I have determined that an 'extreme and unusual fuel supply circumstance' exists that will prevent the distribution of an adequate supply of gasoline to consumers," Pruitt said. "This extreme and unusual fuel circumstance is the result of a hurricane, an event that could not reasonably have been foreseen or prevented, and is not attributable to a lack of prudent planning on the part of suppliers of the fuel to these areas."The waiver of federal Reid vapor pressure (RVP) requirements in designated states is to "minimize or prevent problems with the supply of gasoline to these areas," Pruitt said. While stating the waiver is only effective through September 15, he said, "Should conditions warrant, this waiver may be modified, terminated or extended, as appropriate."The waiver applies to Alabama, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Texas, Virginia and the District of Columbia

Top Mexican Trade Officials in US for Talks

Mexican Foreign Minister Luis Videgaray and Economy Minister Ildefonso Guajardo are meeting with top officials in the Trump administration on trade and other matters, with sessions between Videgaray and Secretary of State Rex Tillerson and National Security Adviser H.R. McMaster on tap.Plus, Videgaray and Guajardo will meet with Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer. The meetings come just ahead of the second round of NAFTA 2.0 talks set for September 1-5 in Mexico.Meanwhile, Guajardo told lawmakers in Mexico City that trade between U.S. and Mexico would continue without NAFTA. “No one sits down to trade talks without a plan B,” Guajardo said. "This is not going to be easy," Guajardo told senators in Mexico City."The start of the talks is like a roller coaster." He said Mexico would not accept a NAFTA 2.0 deal that comes at too high a cost, and that Mexico can pass laws to reassure foreign investors that they are protected even without NAFTA. Some Mexican products would face high tariffs without NAFTA. Responding to the comments, Canadian Prime Minister Justin Trudeau said his government would continue to work "seriously" to improve the trade agreement.

Washington Insider: Hurricane Aid Adds to GOP’s Dreadful September

Bloomberg is reporting this week that, as House Speaker Paul Ryan’s office noted, the onus is on the Trump administration to first detail a disaster relief request.In fact, House Speaker Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky., already face a daunting September, with deadlines looming to avoid a government shutdown and debt default.Now they’ll likely have to add a multibillion-dollar aid package to the list to address the devastation from Hurricane Harvey.“I think you’re going to see very rapid action from Congress, certainly from the president. You’re going to get your funding,” Trump said at a news conference. “I’ve already spoken to Congress, and everybody feels for you.”For their part, GOP congressional leaders aren’t yet giving concrete signs on how they might swoop in with assistance, but they could attach an emergency spending package to a continuing resolution needed to fund the government.Still, it won’t be especially easy and some conservative Republicans are likely to balk at any increased spending, as they have after previous natural disasters — which could further inflame the conflict between the likes of the hard-line House Freedom Caucus and GOP leadership.“There’s a huge amount of political pressure. You can’t vote against this,” says David Inserra, a policy analyst at the conservative Heritage Foundation. “So there’s going to be pressure to put money out there, whether it’s in a supplemental or a CR (Continuing Resolution).”The thinking is that the extra element of Harvey funding could actually be a boon for GOP leaders who were already planning to ditch their most conservative flank on key fiscal votes and who have long been resigned to needing Democrats to get must-pass spending legislation to the president, Bloomberg says.“The wise thing to do would be to attach it to the CR. It avoids the shutdown fight,” said a defense lobbyist who works on appropriations, adding that bundling Harvey funds with the typically toxic vote to raise the debt limit could also be advantageous.Besides solidifying support from the minority party, the disaster money could guarantee support from the Texas delegation — the largest GOP contingent in Congress, with 25 Republicans. For Trump, decades of political precedent suggest the commander in chief show unwavering support for recovery efforts — or risk the kind of criticism George H.W. Bush fielded after Hurricane Andrew struck Florida in 1992 and the heat George W. Bush took in the aftermath of Hurricane Katrina.As Ryan’s office noted, the onus is on the Trump administration to first detail a disaster relief request, as President Barack Obama did in asking for $60.4 billion in supplemental funding nine days after Hurricane Sandy decimated much of the country’s Eastern Seaboard in 2012.Whether Republican leaders decide to pair such a request with a bill to keep the government funded beyond Sept. 30 or a broader funding package expected in December could put Trump in a tough spot.The president has threatened to shut down the government if Congress doesn’t begin to fund a wall along the U.S.-Mexico border, but Democrats are resisting and could effectively dare him to veto a spending bill with Harvey aid.“I’m interested to see whether the administration will put its money where its mouth is in terms of making sure that we’re putting the resources into FEMA and those other federal agencies that have the responsibility for the cleanup when the cameras are gone,” Sen. Kamala Harris, D-Calif., told reporters Monday.Harris took aim at Trump’s budget proposal to slash FEMA funding by $667 million in the coming fiscal year. The president shrugged off similar critiques Monday, saying “FEMA money is relatively small compared to the rebuilding” and that he expects Congress to “very quickly” deliver on “many billions of dollars.”Determining the total cost of recovery will take “months more than weeks,” said Tim Frazier, faculty director for the emergency and disaster management program at Georgetown University.Frazier added that money will be wasted over the long haul if there is a rush to rebuild without improving infrastructure to lessen the blow of future disasters. “Are we just going to dump a bunch of money to rebuild and recover? We obviously weren’t ready for the event,” he said.Meanwhile, current recovery funding will be spent quickly, said Nick Crossley, vice president of the International Association of Emergency Managers. And any emergency spending Congress provides may have to last communities for a while.“You could very well have to ask for a supplemental by the end of the fiscal year,” Crossley said. “And then, that supplemental may have to carry.”So, it will be interesting to watch how the administration deals with these new political realities amid all the festering political issues now before it. Certainly, producers should watch these debates very closely as they emerge, and as almost every issue faces new and changing political and budget realities, Washington Insider believes. 

USDA Forecasts Increase in Farm Income

The Department of Agriculture Wednesday predicted a slight increase in farm income for 2017, reversing three years of major decline. The August update of the farm income forecast predicts net cash farm income for 2017 at $100.4 billion, up $11.2 billion, or 12.6 percent, from 2016. Net farm income, a broader measure of profits, is forecasted at $63.4 billion, up $1.9 billion, or 3.1 percent, relative to 2016. USDA says the stronger forecast growth in net cash income is largely due to an additional $9.7 billion in cash receipts from the sale of crop inventories. The net cash farm income measure counts those sales as part of current-year income while the net farm income measure counted the value of those inventories as part of prior-year income. However, that predicted increase is still lower than every year from 2010 to 2015. During that period, net farm income peaked in 2013 $131.3 billion.

Perdue Offers Support to Trump Tax Plan

In a statement Wednesday afternoon, Agriculture Secretary Sonny Perdue offered support to President Trump’s tax reform agenda. Trump announced his plans for tax reform during a stop in Springfield, Missouri, Wednesday. Perdue says: “The president’s tax reform package will be of great benefit to agriculture and help improve rural prosperity.” Trump did not offer many details on reforms, but offered broad outlines that he said would offer economic benefits to main street America. Trump says the plan includes cutting taxes for individuals and business. Perdue mentioned that farms are small businesses, and that “time and costs associated with merely complying with the tax code are impeding American prosperity.” Secretary also mentioned the Estate Tax, or death tax, saying “too many family farms have had to be broken up or sold off to pay the tax bill.”

Most U.S. Farmers Will Feel Impact from Hurricane Harvey

Hurricane Harvey stands to harm virtually all of U.S. agriculture, in some way. Many ports that ship agricultural commodities are in the path of the storm, from Texas to Louisiana, where the majority of corn and soybeans destined for other nations leave the United States. Texas produces high volumes of cotton, wheat, rice and soy and is a large exporter of crops from around the country. Some of the regions impacted by the storm are expected to see about a years-worth of rainfall this week, causing flooding and stressing infrastructure. Mike Steenhoek of the Soy Transportation Coalition says that until the storm passes, they will not be able to assess the structural integrity of railroad tracks or bridges. And because of these transportation issues, grain elevator operators, which will have reached capacity, will discourage farmers from delivering crops by lowering the commodity prices that farmers are usually paid. Steenhoek told DTN: "From a soybean and corn logistics perspective, the larger concern occurs if the consequences of Harvey extend farther east to the 230-mile stretch of the Mississippi River from Baton Rouge, Louisiana, to the Gulf of Mexico."

Officials from Mexico Visited Washington After NAFTA Threats

Two government officials from Mexico were in Washington D.C. earlier this week, following threats by President Donald Trump to terminate the North American Free Trade Agreement. While Canada and Mexico have both dismissed Trump’s threats as a negotiating tactic, two officials traveled to Washington on what the Mexican Government called a "pre-planned" trip. A source in the foreign ministry of Mexico told Reuters the trip was organized before Trump's latest warnings that he would prefer to scrap NAFTA than negotiate. Mexico also said earlier this week that it would not negotiate the trade deal through social media, referring to the Twitter post by Trump calling Mexico and Canada "difficult" in the ongoing negotiations. The second round of talks to renegotiate the 23-year-old agreement ais due to start in Mexico next week.

Secretary Perdue Embarking on Second RV Tour

Agriculture Secretary Sonny Perdue is visiting states in the Northeast U.S. Thursday and Friday as part of his second installment of the “Back to Our Roots” RV tour and gathering input on the 2018 farm bill. Perdue will make stops in Connecticut, Massachusetts and New Hampshire. Friday, Perdue will visit Albany, New Hampshire, will he will also swear in Forrest Service Chief Tony Tooke. The tour schedule Thursday includes a listening session with 40 farmers at a farm near Lebanon, Connecticut, and hold another listening session at a farm near Northborough, Massachusetts. Perdue held the first installment of the RV tour at the beginning of August, visiting Wisconsin, Minnesota, Iowa, Illinois and Indiana.

Goodyear Introduces Soybean Tires

Goodyear will introduce a tire made with soy-based rubber this fall. The assurance WeatherReady tires for passenger vehicles features a soy-based rubber compound that remains soft at lower temperatures, leading to enhanced traction in dry, wet and winter conditions. The United Soybean Board says the tires offer another market opportunity for U.S. soybean farmers. Goodyear's interest in soybean oil included a look at sustainability, a priority for many corporations throughout the United States. However, what they found was a competitive advantage, according to USB. The United Soybean Board worked with Goodyear in creating the rubber compound, a move that USB board members say helps increase demand for soybeans and increase profit opportunities for farmers. Goodyear's Assurance WeatherReady tire will be widely available in September 2017, offered in a wide range of sizes, covering 77 percent of cars, minivans and SUVs on the road today. 

National Milk Producers Federation wants a petition filed by a vegan advocacy group to be rejected by the U.S. Food and Drug Administration

The National Milk Producers Federation (NMP) wants a petition filed by a vegan advocacy group to be rejected by the U.S. Food and Drug Administration (FDA).The Good Food Institute (GFI) submitted a petition to the FDA in the spring requesting that manufactures of plant-based products could use “milk” on labeling. NMPF believes the requests by GFI are inconsistent with laws and regulations already established by FDA that state food labeled “milk” must come from an animal.“GFI’s petition flies in the face of established law and common sense,” says NMPF President and CEO Jim Mulhern. “Nothing has happened in the last 20 years that makes it OK to combine plant or nut powders with water, sugar, emulsifiers, stabilizers, and other chemicals, and call it ‘milk.’ This request is wrong on its merits and is designed to further mislead consumers.”Comments were filed with the FDA on Aug. 29 auguring that plant-based beverages using standardized dairy terms is an act to imitate milk and other dairy products. NMPF believes these non-dairy, plant-based products are trying to capitalize on milk and other real dairy products’ reputation as a healthy source of nutrition.“Consumers do not understand that plant-based imitation ‘milks’ are not suitable replacements for the natural, nutrient-packed goodness of real milk,” says Dr. Beth Briczinski, NMPF’s vice president for dairy foods and nutrition. “GFI’s request would only exacerbate this misconception.”In the comments NMPF points out that labeling non-dairy products with dairy terminology is misleading to consumers.“Congress mandated standards of identity for milk and other dairy products more than 80 years ago.  GFI’s argument that it is now suddenly unconstitutional for FDA to enforce laws that have been on the books for eight decades makes no sense,” Mulhern says.  “In fact, the Supreme Court specifically affirmed in the Central Hudson case that the government may regulate commercial speech in a way that protects the public interest. Congress long ago determined that there is an important government interest in avoiding mislabeling of food products and misleading the public.”NMPF shares in the comments to FDA that countries have resolved the problem with incorrect labeling. There are brands of “almondmilk” in the United States that do not use that term on their products sold in Canada or Europe.“We have the same standard as the European Union, the United Kingdom and Canada when it comes to labeling plant-based dairy imitators,” Mulhern says.  “The only difference is that the FDA does not enforce that standard, while regulators in other nations do.” 

Cattle industry is expected to face a number of challenges beyond loss of animals on the road to recovery from Harvey

Even as flood waters from Hurricane Harvey continue to wreak havoc in southeast Texas, the cattle industry is expected to face a number of challenges beyond loss of animals on the road to recovery, according to analysts and industry observers.USDA estimates that about 1.2 million beef cattle were in the 54 Texas counties already declared disaster areas, and unless ranchers were able to move their herds before Harvey made landfall, the storm’s toll will take some time to assess.The National Cattlemen’s Beef Association pointed out that Texas is the nation’s largest cattle and calf producer and has the largest feedlot herd at 2.42 million head. Processors are facing their own struggles beyond the scenarios ranchers are dealing with thanks to Harvey.“This event was extremely disruptive, and no one will begin to know the total (industry) impact until the water clears out,” John Nalivka, president of Sterling Marketing Inc., a Vale, Ore.-based consulting firm that provides services to the livestock and meat industry, told Meatingplace. “We’re not at the point to consider an assessment of how this will affect the industry there because it was such a regional event and cattle not grazing (for a period of time) will be an issue.”Nalivka added that he’s heard some estimates that the floodwater may not fully recede until October, adding that he believes that 30 days seems like a reasonable estimate. “With reservoirs full, levees being challenged and rivers swollen, it doesn’t matter whether it’s cattle or humans, this was a catastrophe,” he said.Altin Kalo, agriculture economist with Steiner Consulting Group in Manchester, N.H., agrees with that assessment, adding ranchers are likely to face other issues they may not have predicted as they prepared for Harvey’s arrival late last week.“It’s probably going to take weeks to normalize the flow of operations as the industry tries to resolve such issues as reopening shipping ports and moving cattle,” Kalo told Meatingplace in an interview. He also raised the issue of the fall calving season and the flooding’s effect on calves born in the spring that were still with their mothers when Harvey made landfall and dumped record levels of rain.“The (USDA) 1.2 million estimate may be too low” since the agency may not have had a full accounting in all of the counties, Kalo said. He added that moving cattle will be challenging as trucks are being used to get supplies to humans affected by the flooding rather than for moving cattle and beef.“The availability of refrigerated trucks is a big issue as they are now a valuable commodity,” he said. “We’ve seen this before (following natural disasters) because first responders uses these to transport goods for human residents before they can be used to get meat where it needs to go. A lot remains up in the air,” he added. 

Food Companies Urge Tariff Exemption of Steel to Make Food Cans

Steel imports used for canned foods should be exempt from any duties that the Trump administration may put on steel imports via a Section 232 investigation, several food companies told President Donald Trump in a letter."Since tinplate steel makes up approximately 60% of the cost of a can, a tariff as low as 5% would result in increased can costs of approximately $1 billion/year," a coalition of major food companies and can makers said in a letter. "Given the industry's thin margins, manufacturers cannot absorb this cost and will be forced to pass it on to consumers." The companies, including Conagra, Del Monte and other canned food manufacturers, warned that it will costs consumers more if the tariffs were imposed.The Commerce Department has not yet given Trump two reports on the investigation — one on steel and one on aluminum — even though two weeks ago they indicated the reports were in the final stages of review at that point.

US Delays Ruling On Canada Lumber Duties

The U.S. Department of Commerce will postpone its final determination for antidumping and countervailing duties on Canadian softwood lumber until November 14, the department said. The decision was initially expected in the first week of September.“I remain hopeful that we can reach a negotiated solution that satisfies the concerns of all parties,” Commerce Secretary Wilbur Ross said in a statement. “This extension could provide the time needed to address the complex issues at hand and to reach an equitable and durable suspension agreement.”Tensions escalated in April when the Trump administration imposed preliminary countervailing duties of as much as 24% on Canadian imports. Additional duties of as much as 7.7% followed in June. Last week, Canada’s Ambassador to the U.S., David MacNaughton, said the country is prepared to sue the U.S. if trade negotiations fail.

Washington Insider: Renewed Talk of Resilient Infrastructure

There seems to be a growing expectation for yet another debate regarding recovery after Hurricane Harvey in spite of the already crowded agenda. Bloomberg says there is a renewed appreciation for impacts of global warming, stated or not, and for built in “resilience.”As a result, advocates are urging Congress and government leaders to “require that federal recovery monies for Hurricane Harvey damage go to reconstruction projects that can withstand future extreme weather,” Bloomberg says.Experts in the “intersection between climate change and infrastructure” want congressional leaders to invest wisely to prevent tax dollars from rebuilding a house only to see it flooded with the next major storm and rebuilt once more, Bloomberg says.“Congress has to take this issue seriously if they want to ensure that we constantly do not rebuild the same properties over and over again because we failed to factor in future flooding and resilience to that flooding,” Natural Resources Defense Council Project Attorney Joel Scata, told Bloomberg.While congressional leaders expect to face pressure to act quickly with dedicated funding, resilient infrastructure proponents hope the government will do its homework before doling out monies.“Harvey should really serve as a wake-up call. Major flood disasters have been increasing over recent years and that trend does not look like it's about to abate,” Scata said.Once the flood waters recede, the pressure will be “less about airlifting grandmothers from rooftops and more about getting money out to communities quickly” John Williams, chairman and CEO of Impact Infrastructure, told Bloomberg.“Our federal government is going to get tons and tons of requests for enormous amounts of money and there will be lots of pressure to provide that money rapidly with minimal vetting or consideration as to whether or not dollars are spent on the most appropriate tactics or strategies,” Williams said.Federal and state leaders need to pause long enough to make sure money being spent will help prevent future damage, Williams said. “The impression I get from the administration is that they are looking to expedite infrastructure projects as quickly as possible, and trying to do that does not bode well for making those same projects resilient,” Scata told Bloomberg.President Barack Obama in 2015 ordered infrastructure projects using federal dollars to be resilient to climate change. However, President Trump recently rescinded that order, much to the frustration of industry groups like NRDC.In the absence of any regulatory requirements, Congress can impose restrictions on how recovery dollars are spent, Scata said. The Disaster Relief Appropriations Act of 2013, which provided about $50 billion in recovery funds in the wake of Hurricane Sandy, set aside a portion of funds intended for disaster resilience and hazard mitigation. Congress should do that again, Scata thinks.“If we were really serious about making sure that infrastructure lasts as long as intended and the American public is getting their dollar's worth out of federally-funded projects, then it really has to be done in a manner that is resilient to the future of more extreme flooding,” Scata said.Rep. Matt Cartwright, D-Pa., wants the federal government to apply the same principle of safeguarding investments to federal assets. The Democrat says he will introduce legislation calling on the federal government to implement government-wide resilience and risk management priorities.“It's a zero-cost bill that compels the federal government to prepare for the threats posed by extreme weather events. Preparedness reduces costs, safeguards our economy and, most importantly, saves lives,” Cartwright said in a statement to Bloomberg.This fall Congress will have to tackle both a debt ceiling and the annual budget process in addition to several expiring authorizations. Now there will likely be a special appropriation to cover recovery from Hurricane Harvey.“I would like to think that those dollars will be made available, but time will tell. I have no reason to believe that they won't, but we are living in unpredictable times,” said Williams.The question of whether global warming was responsible for Hurricane Harvey, or where the fault lies for the storm and the damage it caused is only beginning to be discussed. And, the issue of returning to requirements for future investments that have recently been rejected would certainly be controversial.Still, Harvey almost certainly will mean shocks to each of the many systems involved, and could mean some permanent changes. The coming debate over cleanup and repair spending will be intense, and should be watched carefully by producers as it proceeds, Washington Insider believes. 

Crop Insurance Industry Responds to GOA Report

The crop insurance industry is calling a report by the Government Accountability Office "disheartening." The GAO last week recommended to Congress that it considers directing the Department of Agriculture to adjust the expected rate of return for crop insurance. In 2010, USDA negotiated with insurance companies to set a 14.5 percent target rate. According to GAO's analysis, the reasonable rate of return declined, averaging 9.6 percent. However, the Crop Insurance Industry says the GAO “glossed over” key facts. An industry news release says providers of crop insurance are not achieving the returns targeted, and says the GAO did not consider full business expenses by insurers for the report. The industry points out that a 2017 study by economists from the University of Illinois and Cornell University noted that net returns for crop insurance providers were just 1.5 percent from 2011-2015.

Hurricane Harvey Hit’s Texas livestock Operations

Cattle ranchers in the path of Hurricane Harvey in Texas have been forced to move cattle to higher ground, but much of the impact won't be assessed until later this week. Flooding remains a threat to much of the storm area, leaving many farmers and ranchers unable to reach their fields or livestock, though some ranchers are reporting that their cattle are safe. The Texas and Southwestern Cattle Raisers Association says the organization is working with state agencies to coordinate relief and support efforts for ranchers. The hurricane follows the recovery efforts by the Texas cattle industry from years-long drought. Those who want to help are being urged to donate to the State of Texas Agriculture Relief, or STAR Fund, managed by the Texas Department of Agriculture. More flooding is expected in Texas, along with Louisiana, as the storm moves on.

Dow Chemical Company Pledges $1 Million for Hurricane Relief

Dow Chemical Company and the Dow Chemical Foundation will donate $1 million to support immediate relief and long-term recovery and rebuilding efforts associated with Hurricane Harvey. Dow will donate $100,000 to the American Red Cross Disaster Relief Fund, $100,000 to Team Rubicon, and $200,000 to other local nonprofit organizations assisting the region. Texas is home to approximately 12,000 Dow employees and contractors. Dow has safely accounted for each of its employees, however, many are personally impacted by the storm. The company says it will also nmatch employee and retiree donations up to $100,000 to the American Red Cross Disaster Relief Fund.

Monsanto Has Big Supply of RR2E Soybeans for 2018

Monsanto says it has enough supply of Roundup Ready 2 Xtend soybeans for up to half of all U.S. soybean acres for the 2018 season. The supply doubles the planted area for Roundup Ready 2 Xtend beans from this season. Monsanto Chief Technology Officer Robb Fraley said at the Farm Progress Show Tuesday that the company has seen great demand for the crop system, which features a low-volatility dicamba herbicide, XtendiMax. While dicamba drift is a big concern for farmers moving forward, Fraley said that for the vast majority of situations, the company has “identified issues that are addressable through training and following the label instructions.” He said Monsanto has directly worked with nearly 50,000 farmers and applicators at XtendiMax herbicide learning events across the country and will continue to evolve and tailor trainings to continue to help growers.

University of Missouri Studying Tick-Borne Diseases

A $460,000 grant will help the University of Missouri research an infectious blood disease in cattle caused by bacteria transmitted by ticks worldwide. The University recently received the grant from the U.S. Department of Agriculture to study a new approach to interfering with the pathogen in the tick vector. A team of researchers at the university are working to develop immunizations with extracts from tick tissues to fight the disease. It has been estimated that more than 80 percent of beef cattle are affected by ticks. The targeted disease infects the red blood cells and causes severe anemia, fever and weight loss in cattle, sometimes can be fatal. Researchers say the overall goal is to develop sustainable ways to treat the disease to keep cattle and herds healthy.

Chicken-Wings Face Tough Season

Wholesale prices of chicken wings are hitting record highs, leaving restaurants to choose between raising prices, or cutting portions. The Wall Street Journal reports that Americans ate more than one billion restaurant orders of chicken wings in the 12 months that ended in June, and that’s not even counting the wings eaten at home. America’s appetite for chicken wings has been a bright spot for casual-dining restaurants, but wholesale prices for chicken wings have climbed by almost 20 percent, to a record $2.09 a pound in August for jumbo whole wings. Buffalo Wild Wings says costs are at a “historic high” and the company’s earnings have dropped 60 percent while menu prices remain steady. Demand for chicken wings usually takes off in fall and doesn’t let up until spring, after college basketball’s March Madness ends. Restaurants like Buffalo Wild Wings are encouraging consumers to opt for cheaper boneless wings, because they are actually made from chicken breast. 

A Transatlantic Dialogue on Smart Farming Technologies

The Montana Wheat and Barley Committee is excited to announce it has partnered with the German American Chamber of Commerce to host a roundtable discussion of agricultural technologies in Bozeman on September 14th at the GranTree Inn.  The roundtable will focus on the current state and future of “smart farming” and precision agriculture in the US and Germany. The event will include presentations by farmers and researchers from both Montana and Germany. Attendees will learn more about precision agriculture tools and other technologies that may be implemented on the farm today, as well as what the future may hold for on-farm technological advancements.  Please share with any who may be interested and register for the event soon so we can anticipate the number of attendees. REGISTER HERE: http://www.gaccmidwest.org/en/smartfarm See you in Bozeman!
Collin Watters, Executive Vice President, MWBC 

Hurricane Harvey Hit Counties That Have 1.2 Million Beef Cows

While Hurricane Harvey’s path hit largely populated areas (more than 2.3 million people live in Houston alone), more than 1.2 million beef cows also call the 54 counties that were declared a disaster area home.  “That’s 27% of the state’s cowherd,” said David Anderson, Texas A&M AgriLife Extension Service livestock economist in College Station. Since the numbers are from January’s USDA-National Agricultural Statistics Service inventory report, “that’s a conservative estimate of beef cow numbers because 14 of those counties only have cattle inventory estimates.” Flooding has severely hampered rescue efforts by ranchers. Thomas Swafford, public information officer with Texas Animal Health Commission (TAHC) said the first teams have just started to conduct animal assessments. Members of the TAHC teams have various types of animal expertise, both large and small animal, so a wide variety of emergency/disaster response animal issues can be addressed. Its a committee that works all year around together to plan for such events, he adds. This includes pets, as well as livestock and horses. This time of year many calves were close to being ready to market.   This month, cattle prices had trended lower, a pattern that usually happens earlier in the summer. Bloomberg reports cattle futures on the Chicago Mercantile Exchange rose as much as 2.6% on Monday, reaching the highest price in almost three weeks. The disaster area also includes several livestock auction markets and Sam Kane meat processing. Sanderson Farms Inc., the third-largest U.S. chicken processor, shut down its plant in Bryan, Texas, on Monday.  Dean Foods Co. also closed an area factory, which makes fluid milk products, juices and teas, according to the company. Want to help those affected by Hurricane Harvey? AgWeb shares five ways to help. Social media continues to be the primary way to show the devestation. If you have photos, video or stories related to Hurricane Harvey, contact a Drovers editor to share your story.  

USDA Sued Over Missed Deadline on GMO Labeling Report

USDA is being sued for missing a deadline to issue a report on digital and electronic disclosures under the GMO labeling law. The suit was filed August 25 in U.S. District Court for the Northern District of California by the Center for Food Safety.Under the GE Labeling Act, USDA was to have issued a report on using electronic means or something other than actual product label to convey the information to consumers. That report was to have been issued by July 29, 2016, according to the suit."In court, statutory directives matter — not tweets," said George Kimbrell, legal director of the Center for Food Safety. "We won't let the Trump administration get away with ignoring the law."USDA is required under law to have its final regulations in place implementing the law two years from its enactment – or by July 29, 2018."Because the results of the electronic/digital link study are a necessary precursor to the development of the final rules, further delay of this process is likely to delay the rules themselves, causing still more harm to the public and the stakeholders, who have already waited many years," the groups said in the suit.

Trump Again Threatens NAFTA Exit to Pressure Canada, Mexico in Talks

President Donald Trump again threatened to pull the U.S. out of the North American Free Trade Agreement (NAFTA) as the NAFTA 2.0 talks have just started, making that threat over the weekend and repeating it Monday."I believe you will probably have to at least start the termination process before a fair deal can be arrived at," Trump told reporters during a joint press conference with the president of Finland at the White House. "Because it's been a one-side deal for Canada and for Mexico. ... It's been unfair for too long."The U.S., Canada and Mexico are to start round two of the talks in Mexico City Friday and they are scheduled to run through September 5.Trump repeated his claim that Mexico was being "very difficult" in the talks, saying that was expected since they had a "sweetheart deal" via the agreement.One issue of contention that surfaced in the first round of talks held in Washington was on a U.S. stance that they want to see the domestic content for automobiles raised, a proposal that Mexico has rejected.Trump also reiterated his view that Mexico would pay for the wall that Trump is seeking to build along the southern U.S. border with Mexico. "We need the wall. It's imperative. We may fund it through the United States, but ultimately Mexico will pay for the wall," Trump said. He also said he hoped it would not be necessary to threaten a government shutdown to get Democrats in Congress to go along with funding the wall, a threat he made last week. 

Ethanol industry group is asking the federal government to expand a waiver

OMAHA (DTN) -- An ethanol industry group is asking the federal government to expand a waiver issued this weekend to allow for the temporary use of E15 nationwide to help alleviate potential fuel shortages resulting from Hurricane Harvey.In a letter to U.S. Environmental Protection Agency Administrator Scott Pruitt on Monday, the Renewable Fuels Association asked the agency to relax the Reid vapor pressure, or RVP, limits to 10 pounds per square inch for all finished gasoline blended with ethanol in conventional and reformulated gasoline areas nationwide through Sept. 15.In response to the hurricane, EPA issued a waiver on Aug. 26 of certain reformulated gasoline and RVP requirements."While EPA's Aug. 26 waiver of certain reformulated gasoline (RFG) and Reid Vapor Pressure (RVP) requirements was a welcome step, it is not delivering meaningful relief from escalating gasoline prices in Texas and across the rest of the country," RFA President and CEO Bob Dinneen wrote in the letter."The action we are requesting would significantly enhance flexibility for blenders and refiners, and help alleviate the logistical challenges and shortfalls that are causing gas prices to spike."Relaxing RVP requirements to 10 psi nationwide would allow gasoline blenders to produce fuel that complies with EPA regulations using any available gasoline blendstock on the market, including E15.The U.S. ethanol industry has been pushing the EPA to issue a waiver on E15 for some time, holding out hope the agency would be able to take action that would allow for year-round sales.Dinneen said issuing at least a temporary waiver now would help to provide "a badly needed source of additional supply and helping to offset gasoline shortfalls resulting from refinery and terminal outages."Ethanol is priced roughly 20 cents per gallon below gasoline blendstock today, and supplies are ample in all regions of the country," he said in a statement about the request."We are simply asking EPA to take action that would allow gasoline blenders to maximize their use of low-cost, locally available ethanol supplies to help alleviate gas price spikes resulting from Hurricane Harvey. In effect, we are requesting that EPA end the summer RVP control season a few weeks early so that ethanol can more effectively help with the current fuel supply emergency."Dinneen said in the letter that, in the days since EPA issued the Aug. 26 fuel waiver, "market conditions have worsened and supply shortages are expected to be more severe than previously thought. Gasoline futures prices have surged nearly 10% since Aug. 24, the day before Hurricane Harvey made landfall."So far, it is estimated the storm has caused at least 10% of the nation's refining capacity to shut down, "and analysts now expect further price surges in the wake of hurricane-related refinery and terminal outages," Dinneen said in the letter."In addition, both offshore and onshore drilling rigs have been idled, leading to lower crude oil production and tighter supplies for refineries in the weeks ahead."The EPA waiver issued on Aug. 26, allows gasoline with less than 9% ethanol by volume to qualify for special provisions for alcohol blends requirement. That waiver, however, did not allow for blends up to 15% ethanol."Extending this temporary waiver to 15% ethanol blends would greatly assist in alleviating current price spikes and supply crunches," Dinneen writes in the letter."EPA has taken similar actions in the past to provide immediate relief to gasoline markets in the wake of natural disasters. We urge the agency to act immediately on this request to help alleviate the economic impacts of Hurricane Harvey on American consumers." 

Mexico Won’t Negotiate NAFTA Via Twitter

Mexico declared over the weekend the nation would not negotiate the North American Free Trade Agreement via social media. The announcement followed another post on Twitter by President Donald Trump calling NAFTA the "worst deal ever made." Trump wrote on Twitter that Canada and Mexico were being "very difficult" and suggested he "may have to terminate" the trade agreement. Many dismissed Trump's latest Twitter barrage as a negotiating ploy in advance of the second round of NAFTA talks, which are scheduled to take place in Mexico City next week, according to the Los Angeles Times. Agriculture is among several industries that benefit from NAFA and have expressed concerns about the prospect of terminating the trade deal.

Harvey Impact on Texas Agriculture

Hurricane Harvey arrived on the Texas coast as the state’s cotton harvest of an expected bumper crop was getting underway. The Texas cotton harvest is around 10 percent complete, with bales in the field and high storage levels. The storm came at what one cotton gin operator called “the worst possible time.” Southeast Texas agriculture has extensive damage from the storm. However, quantifying the damage will take some time, according to DTN. A Texas A&M AgriLife spokesperson says the storm is still in progress and it’s impossible to evaluate damages. For livestock producers, the state has set up animal supply points and shelters. Key agriculture areas hit by the hurricane could receive more than 40 inches of rain before the storm leaves the area. A DTN meteorologist says the worst of the storm is what comes after landfall, the destructive rainfall, adding: “It will be a top-5 costliest tropical system of all time, and likely the worst flooding event in U.S. history.”

Harvey Forces Shutdown of Texas Ports, Threatens Others

Two major ports along the Gulf of Mexico in Texas are closed following the flooding and damage from Hurricane Harvey. Ports at the Texas Gulf account for about 24 percent of U.S. wheat exports, three percent of corn shipments and two percent of soybeans. In 2011, the Port of Corpus Christi ranked 13th in the Nation for total waterborne agricultural exports, moving about four million metric tons of cargo. The same year, the Port of Houston ranked sixth in the Nation for total waterborne agricultural exports and ninth for containerized exports, according to data compiled by the U.S. Department of Agriculture. Mike Steenhook of the Soy Transportation Coalition told Bloomberg News that the bigger threat to shipments of corn and soybeans comes from Harvey’s potential impact in Louisiana and the Gulf of Mexico. About 60 percent of American soybean exports depart from the region, as do 59 percent of corn shipments

WOTUS Public Meetings Scheduled

The Environmental Protection Agency and the Army Corps of Engineers Monday announced a series of teleconferences regarding the repeal and revision of the Waters of the U.S. rule. Nine of the conferences will focus on a specific sector, including agriculture, conservation, small entities, construction and others. The teleconferences will run throughout the fall on Tuesdays beginning September 19, 2017. The teleconference for agriculture is scheduled for Tuesday, October 17, 2017. Registration information can be found on the EPA website (https://www.epa.gov/wotus-rule/outreach-meetings). The EPA is following an executive order by President Donald Trump in repealing and replacing the WOTUS rule. Earlier this year, EPA administrator Scott Pruitt said the change would offer certainty for agriculture.

China, India, Call for End of Farm Subsidies by U.S., Others

China and India are calling for an end to farm subsidies by others, including the European Union and the United States. India-based newspaper Live Mint, a collaboration with the Wall Street Journal, reports China and India have jointly proposed the elimination of $160 billion of farm subsidies in the U.S., European Union and other wealthy nations. The move comes months before the World Trade Organization is set for annual ministerial meetings in December. At issue is the Aggregate Measurement of Support, which China and India call the "most trade distorting element in the global trade in agriculture," referring to allowable domestic support measures

Brazil Bank Investor Seeks Removal of JBS CEO

A state development bank in Brazil is seeking to remove JBS SA CEO Wesley Batista following an investigation into a meat inspection corruption scheme. Reuters reports that the BNDES Bank is blaming Batista’s conduct for a 28 percent plunge in the company’s stock this year. A May plea-bargain deal exposed the Batista family’s bribing of politicians. Additionally, an investigation led Brazil to indict 63 people for their role in a corruption scheme within the nation's Ministry of Agriculture. The charges alleged federal auditors at meat processing facilities took bribes for years in exchange for fraudulent sanitary permits. JBS, which grew through a series of self-financed local takeovers, began leaning heavily on the bank in 2005, when the Batista family pitched bank officials on making the company a dominant global player. The company received more than $3 billion and used the money to buy rivals in the United States and elsewhere over the past decade.  

U.S. and Mexican dairy industries releases a unified list of priorities

The U.S. and Mexican dairy industries released a unified list of priorities today that includes modernizing the North American Free Trade Agreement (NAFTA) to solidify their strong dairy market partnership, and addressing concerns about Canadian and European dairy policies.A list of nine shared priorities was agreed upon Thursday at a second annual summit meeting in Guadalajara, Mexico between leaders of the two nations’ dairy industries, collectively called the United States-Mexico Dairy Alliance. The written list of priorities was released today.The U.S. dairy industry was represented by the U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF). Mexican dairy producer organizations included the Confederación Nacional de Organizaciones Ganaderas, Gremio de Productores Lechero de la República Mexicana, and the Asociación Nacional de Ganaderos Lecheros, along with Mexican processor organization Camara Nacional de Industriales de la Leche.The summit occurred on the heels of the first round of NAFTA renegotiation talks. As NAFTA talks continue, the European Union (EU) is seeking, through direct negotiations with Mexico, to impose new barriers to dairy trade through the abuse of geographical indications. This is a significant concern to U.S. and Mexican cheesemakers because it would give the EU exclusive use of common cheese names like asiago, gorgonzola and feta.Canada is also disrupting dairy trade in North America and beyond as its new Class 6/7 pricing scheme dumps artificially low-cost milk powder in global markets, displacing U.S. exports from the Canadian market.“We want to strengthen our relationship as Mexico’s most trusted dairy trading partner so we can continue to work together for the benefit of dairy sectors on both sides of the border,” said USDEC President and CEO Tom Vilsack. “That goal is all the more essential given other nations’ efforts to pursue harmful and disruptive approaches to dairy trade with Mexico through practices that hurt Mexican and U.S. dairy farmers and workers in the process.”Jim Mulhern, president and CEO of NMPF, said, “We are very pleased that our friends in Mexico have joined us in expressing opposition to the abusive attempts of the European Union to confiscate common food names, as well as the trade distorting practices of Canada, at a time when we are working to facilitate new opportunities throughout North America. This meeting provided an opportunity to explore how we can deepen those efforts.”Last year, representatives from the two nations’ dairy sectors held a two-day summit in Denver, Colo., that created a United States-Mexico Dairy Alliance. This year in Guadalajara, the focus was on expanding areas of collaboration while preserving current trade. The NAFTA renegotiation talks emerged as an important topic because the agreement is the foundation of the industries’ mutually beneficial free-trade relationship.Enacted in 1992, NAFTA removed barriers to trade, and has led to more than a six-fold increase in U.S. dairy exports to Mexico, to $1.2 billion in 2016. Round one of NAFTA modernization talks ended Aug. 20 in Washington, with a second round scheduled Sept. 1-5 in Mexico City, and a third round in Canada in late September.Vilsack and Mulhern noted that, in contrast to Mexico’s open trade approach, Canada has retained sky-high dairy tariffs and implemented policies that hinder free trade between North American neighbors. Canada’s new Class 6/7 pricing policy has drawn strong concerns of both the United States and Mexico, and was a significant point of discussion at the meeting here.Mulhern noted that the new Canadian pricing scheme “intentionally undercuts U.S. dairy protein exports to other world markets, and at the same time, hurts dairy farmers in the U.S., Mexico and around the world by artificially lowering world market prices.”The U.S.-Mexico Dairy Alliance members agreed to continue to maintain an open communications channel between the industry organizations as they analyze and seek mutually beneficial solutions to problems affecting the dairy industries of both countries.Vilsack said the meeting “illustrates how our industries are committed to seeing our relationship continue to flourish and to jointly rejecting unjustified barriers to dairy trade.” 

Crop Insurers Respond to GAO Calls for Additional Budget Cuts

The farm economy is struggling, with depressed prices and falling farm incomes reminiscent of the farm crisis in the 1980s. Back then, the Government Accountability Office (GAO) studied the best way to help farmers through tough times and noted, "crop insurance is a more equitable and efficient way to provide disaster assistance" than both taxpayer funded disaster payments and emergency loans.GAO then recommended strengthening the country's crop insurance program, which Congress did. Now, crop insurance is a cornerstone of America's farm policy, farmers call it their top Farm Bill priority, and taxpayers are saving money because farmers and private-sector crop insurers help fund farm policy.Given crop insurance's success and popularity, it is disheartening that GAO recently recommended weakening farmers' primary risk management tool. It's even more troubling that GAO would gloss over important facts about the returns crop insurance providers receive for delivering America's farm safety net. For example:Insurance providers are not even achieving the returns targeted in the Standard Reinsurance Agreement with the USDA – GAO buried deep within its report the fact that actual returns have been 5 percentage points lower than USDA's target from 2011-2015.
 GAO's data do not take insurers' full business expenses into account – essentially, they are confusing gross and net returns.

 A 2017 study by economists from the University of Illinois and Cornell University noted that net returns for crop insurance providers were just 1.5% from 2011-2015.Farmers all across the country are depending on crop insurance to help them weather the current economic crisis. And private-sector crop insurers are delivering that assistance in an efficient manner that has come in billions under budget.Clearly the system is working and does not need to be weakened when it is needed most. Luckily, most lawmakers recognize crop insurance's value and are dedicated to keeping it affordable, widely available, and economically viable in the next Farm Bill. 

USDA reports cattle and calves on feed in the United States totaled 10.6 million head

USDA reported cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.6 million head on Aug. 1, 2017, up 4 percent from Aug. 1, 2016.The total was the largest headcount on Aug. 1 since 2012, according to the analysts in the Daily Livestock Report, published by Steiner Consulting Group.“More animals are on feed than a year ago, but that does not imply any cattle feeders have not marketed animals when ready, as happened in 2015,” the DLR noted.Placements in feedlots during July totaled 1.62 million head, 3 percent above 2016. Analysts were all over the map on placements ahead of Friday’s Cattle on Feed report, with predictions ranging from 0.8 percent to 14.5 percent. Oklahoma State University Extension Livestock Marketing Specialist Derrell Peel noted that while placements were at the low end of the range of analysts’ expectations, placements had been rising by double-digit percentages for the previous four months. “The very surprising 16 percent year over year increase in placements in June included increased lightweight placements. These were likely placed early, in June, rather than July and contributed to the rather modest year over year increase in July placements,” Peel wrote in the Cow/Calf Corner newsletter.Analysts were also expecting the drought in the Northern Plains to contribute to increased lightweight feedlot placements with about 12 percent of the total cattle herd in regions experiencing at least some drought.During July, placements of cattle and calves weighing less than 600 pounds were 360,000 head, 600-699 pounds were 235,000 head, 700-799 pounds were 385,000 head, 800-899 pounds were 370,000 head, 900-999 pounds were 190,000 head, and 1,000 pounds and greater were 75,000 head.Marketings of fed cattle during July totaled 1.78 million head, 4 percent above 2016. This number came in near analysts’ expectations, but “remained rather aggressive compared to the last two years, “ the DLR noted. 

MT AGRICULTURAL SUMMARY

Extremely dry weather persisted across much of the State last week, according to the Mountain Regional Field Office of the National Agricultural Statistics Service, USDA. High temperatures ranged from 82 to 100 degrees. Low temperatures ranged from 28 degrees to the low 50s. The highest amount of precipitation was recorded in Biddle with only 0.36 inches of moisture. Other stations recorded between zero and 0.28 of an inch of moisture, with 41 stations recording no precipitation and 59 stations receiving between 0.01 and 0.25 of an inch. Crop conditions continued to deteriorate due to lack of moisture. Soil moisture conditions were recorded with 97 percent of topsoil rated very short to short and 89 percent of subsoil rated very short to short, compared with 43 percent of topsoil last year rated very short to short and 46 percent of subsoil last year rated very short to short. Reporters noted pasture fires due to dry conditions, which combined with wildfires, contributed to poor air quality. Low yields were reported on winter wheat, but with good protein levels. 

Judge rules in favor of Alliance for the Wild Rockies

A judge has ruled in favor of Alliance for the Wild Rockies, an activist group that brought a lawsuit to preserve the Cabinet Yaak grizzly population.  The judgement ruled that the bears in Idaho and Montana near the Canadian border can be considered endangered, despite the population stabilizing to what should be 'threatened' status.

FEMA allows access to federal disaster assistance for Idaho Counties

After Idaho's request for disaster assistance to five counties hit particularly hard by winter storms, the Federal Emergency Management Agency (FEMA) has allowed access to federal disaster assistance to Blaine, Camas, Custer, Elmore, and Gooding counties following severe spring flooding.

Organic grocery chain Whole Foods Market Inc slashes prices on popular items

On its first day as part of Amazon.com, organic grocery chain Whole Foods Market Inc slashed prices on popular items like avocados and apples on Monday by a third as it bid to shake off its “Whole Paycheck” reputation for high prices.In another sign of changes to come, a display offering Amazon’s Echo and smaller Echo Dot hands-free smart speakers for $99.99 and $44.99, respectively, was nestled amid the colorful produce at the Whole Foods in downtown Los Angeles. Those gadgets sell for the same price on Amazon.com.The companies signaled last week that they would selectively cut Whole Foods prices starting on Monday, with further discounts in the works.Signs posted around the Los Angeles store announced the reductions. The price of Hass avocados was slashed by 33 percent to $1.99 each, down from $2.99. Fuji apples sell for $1.99 a pound, from $2.99 previously.Meat and fish prices were also cut.New York strip steak and boneless rib eye prices dropped to $13.99 per pound from $16.99, a reduction of nearly 18 percent, while the price for “responsibly farmed” Atlantic salmon filets fell to $9.99 per pound from $13.99, down almost 29 percent.The new Whole Foods prices, in some cases, were lower than those at a nearby Ralphs grocery store. Ralphs is owned by Kroger Co (KR.N), which has a reputation for competing aggressively on price.The downtown Los Angeles Ralphs was selling conventional avocados for $1.99, versus $1.49 at Whole Foods. Conventionally grown bananas were also priced higher at Ralphs: 59 cents a pound, against 49 cents at Whole Foods.Ralphs’ prices on Rib Eye steaks appeared to match the new Whole Foods prices.The companies displayed promotions for Amazon’s Echo speaker in tongue-in-cheek fashion in the produce section of the downtown Los Angeles store, with signs reading “Farm Fresh” and “Pick of the Season.”The Echo plays a critical role in Amazon’s burgeoning ambitions to popularize and dominate the market for voice-controlled computing.Echo speakers are equipped with Amazon's voice-controlled assistant Alexa, which competes with Apple Inc's Siri. Users can direct Alexa to set timers, play music, read cooking recipes, order deliveries or car rides, and perform a host of other activities, hands-free.Whole Foods has 470 stores around the world, including nearly 450 in the United States.Shares of Amazon were up 0.2 percent at $946.65 in midday trading. 

Will the premiums that cattlemen have realized over the last three or four years continue as the herd grows and beef production expands?

Will the premiums that cattlemen have realized over the last three or four years continue as the herd grows and beef production expands?  I have been asked this question repeatedly this year in conversations about branded and/or niche programs.  The topic definitely deserves consideration by everyone. There are two sides to the question of market premiums.  I think the most important aspect is the question of demand for a product that commands a premium.  Secondly, the topic of premiums wouldn’t enter the picture unless there was insufficient supply to meet that demand.  There are several examples of this demand – supply imbalance in the last few years.  The demand for age and source verified cattle as a requirement to rebuild U.S. beef export markets following the discovery of BSE was notable.   The supply of cattle that could meet that criteria were, for the most part, non-existent.  To build the supply, there had to be an economic incentive – how much will I be paid? - a valid question.   Age and source verification programs were an important beginning for the industry with regard to premiums.   As new niche programs for grass fed, organic, natural, and others were created to meet growing U.S. consumer demand, premiums became fairly well established, even in the midst of record prices driven by tight supplies for all beef and cattle.   USDA’s recent (Aug. 21) report indicates the carcass premium paid by packers for “All Natural” ranged from $24 to $28 per cwt. while “NHTC” premiums ranged from $16-$20 per cwt. and “CAB” $3 to $4 per cwt.   In contrast, a year ago, the “All Natural” premium ranged from $25 to $32, “NHTC” at $13 to $25, and CAB was $3 to $6 per cwt.  In addition to the actual premium, carcass weights also play a role in the total premium value paid. This year carcass weights, while steadily increasing as the summer progresses, have been well under a year ago. The top end of premiums is already down from the prior year as shown in the above report and the market is definitely under pressure as cattle supplies and beef production increase.   Beef production will continue to increase into 2018 and 2019 as herd expansion continues.  The question of premiums largely rests with the willingness and ability of consumers to pay a premium for niche beef products.  On the supply side of the equation, will producers continue to expand the supply of these niche products?  Once again, it rests with the premium.  While the industry has seen many changes over the last five years, ranchers still want to be paid for that extra investment – it’s just matter of how much the market will bear.   Premiums are declining, but the real question is how much decline will cattlemen be willing to accept? 

Average industry cattle feeding profits on a cash basis dip below $100 per head

For the first time in 37 weeks (Dec. 10, 2016) average industry cattle feeding profits on a cash basis dipped below $100 per head. Feedyards sold cattle last week at $107 per cwt., $3 lower than the previous week, and $10 per cwt. lower than a month ago. The result was a $57 decline in margins to last week’s average of $83 per head, according to the Sterling Beef Profit Tracker. Packer margins climbed $19 per head to $139.The beef cutout price declined $5 per cwt., settling at $191.90, now $12 lower than a month ago. Break even prices for steers sold last week averaged $101 per cwt., $2 higher than the previous week. However, cattle placed on feed last week have a projected breakeven of $107.45 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.The cost of finishing a steer last week was calculated at $1,407 per head, which is $235 less than the $1,642 a year ago. A month ago cattle feeders were earning $273 per head, while a year ago losses were calculated at $4 per head. Feeder cattle represent 73% of the cost of finishing a steer, compared to 75% last year.Farrow-to-finish pork producers earned $28 profit per hog last week, a $14 per head decrease from the previous week. A month ago farrow-to-finish pork producers showed a profit of $57 per head.Pork packers saw their margins increase $5 per cwt. to $25 per head. Negotiated prices for lean hogs were $71.80 per cwt., a $7 decline. Cash prices for fed cattle are $11 lower than last year, and prices for lean hogs are about $7 per cwt. higher.Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $126 per cow. That would be $51 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 $230 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $100 per head in 2017, down from $114 in 2016.For farrow-to-finish pork producers, Nalivka projects 2017 profit margins to average $29 per head, compared to $5 per head last year. Pork packers are projected to earn $19 per head in 2017, down slightly from $24 profit per head in 2016. 

DROUGHT DISASTER INCREASED TO 31 COUNTIES, 6 RESERVATIONS

From the Great Falls Tribune:
Gov. Steve Bullock issued an executive order on Friday declaring 31 counties and six Indian Reservations are in drought disaster.The counties are: Blaine, Big Horn, Carter, Chouteau, Custer, Daniels, Dawson, Fallon, Fergus, Garfield, Golden Valley, Hill, Judith Basin, Lake, Lincoln, McCone, Musselshell, Petroleum, Phillips, Powder River, Prairie, Richland, Roosevelt, Rosebud, Sanders, Sheridan, Treasure, Valley, Yellowstone, Wheatland and Wibaux.Also included are the Fort Peck Indian Reservation, Fort Belknap Indian Reservation, Rocky Boy’s Indian Reservation, Crow Indian Reservation, Northern Cheyenne Indian Reservation and the Flathead Indian Reservation.On July 19, Bullock declared a drought disaster for 28 of Montana’s 56 counties and five Indian reservations.The newest drought disaster declaration continues the temporary suspension of “hours of service” regulations and waives temporary registration, temporary fuel permits and over-dimensional permit requirements for commercial vehicles providing support for the drought, state officials said.The declaration also compels maximum employee assistance and cooperation with the United States Departments’ of Agriculture and Commerce to secure timely economic assistance.As of July 10 small nonfarm businesses in 16 Montana counties are eligible to apply for low-interest federal disaster loans from the U.S. Small Business Administration after Bullock sent a letter to U.S. Department of Agriculture Secretary Sonny Perdue requesting a Secretarial Drought Disaster Designation. Affected counties and reservations are also eligible for the Livestock Forage Program.Bullock said high temperatures, extreme drought and worsening fire conditions are affecting Montanans in many corners of our state.“We’re doing everything we can to minimize the economic impact of these hot and dry conditions and help folks get back on their feet using all resources available,” he said.For more information visit www.drought.mt.gov.

AGRICULTURE SECRETARY PERDUE DETAILS RESPONSE TO RECENT WILDFIRESFORESTS AND GRASSLANDS IN PACIFIC NORTHWEST AND NORTHERN ROCKIES AFFECTED

U.S. Secretary of Agriculture Sonny Perdue today outlined the U.S. Forest Service’s assets and responses to a recent outbreak of extreme wildfires over large parts of the Pacific Northwest and Northern Rockies.  The fires, affecting forests and grasslands, are burning across Western Montana, Idaho, Northern California, Oregon, and Washington.“Our courageous USFS firefighters do an outstanding job and are able to catch 98 percent of all fires before they become large fires,” Perdue said.  “To help them, we will make sure firefighters have all the necessary tools at their disposal in order to save lives, property, and our forests.  We will also work hand-in-hand with our federal partners, particularly the Department of Interior, during this aggressive fire season.”Many different types of equipment and firefighting resources are available to fire managers. As of August 21, 2017, the resources available for wildland fire suppression included:18,300 total personnel, across all jurisdictions, assigned to fires.412 crews, 833 engines, and 146 helicopters across all jurisdictions assigned to fires nationally.27 air tankers assigned to fires nationally.Five military aircraft (three MAFFS and two RC-26s) supporting wildland fire operations.Ten Type 1 Incident Management Teams assigned.22 Type 2 Incident Management Teams assigned.The National Preparedness Level raised to 5, the highest level, on August 10.Wildland firefighting is a partnership among federal agencies, state agencies, and local fire departments, with the U.S. Forest Service taking on an important leadership and coordination role. Federal resources are provided for fires across the country, whether fires are on federal, state, tribal, or private lands. So far this season, firefighting agencies have responded to about 42,809 fires across about 6.4 million acres.  The Forest Service, in partnership with state and local agencies, will continue to vigorously respond to wildfires with an array of assets.  The National Interagency Fire Center is constantly reviewing fire conditions in order to position available resources to ensure the fastest response possible.Perdue has announced that long-time Forest Service employee Tony Tooke will become the new Chief of the agency on September 1, 2017. Tooke replaces Tom Tidwell, whose time as Forest Service Chief capped a 40-year career with the agency.  The selection of Tooke will ensure that there is continuity of leadership as the Forest Service continues its vital mission.

Canada May Sue US If Softwood Lumber Talks Collapse

Canada’s Ambassador to the U.S., David MacNaughton, said last week there's a willingness in Canada to sue the U.S. if trade talks over softwood lumber fail to reach an agreement.The U.S. has “mischaracterized” what Canada has proposed in terms of defined market share, MacNaughton said. The only qualification Canada wants for defined market share is that the country can supply excess lumber to the U.S. in the event that American suppliers cannot meet domestic demand fully, he argued."What we can’t understand is why is it that some elements of the U.S. lumber industry would rather see imports from countries like Russia rather than their closest ally and friend, Canada,' MacNaughton said. "We’re going to try really hard in the next little while to get a fair and balanced agreement. If that is not possible, we have all agreed that we will take all necessary steps to litigate this matter."The U.S. is importing more softwood lumber after imposing tariffs on Canadian supplies, making them more expensive. Russian shipments are 42% higher in 2017, according to U.S. government data. In October, Chrystia Freeland, Canada’s trade minister, said the country will bring the U.S. tariffs before the World Trade Organization (WTO) if negotiations fail.The U.S. is Canada’s top buyer of softwood lumber. The industry provides jobs in many Canadian communities, and often the sawmill is the only company in many of those towns, MacNaughton noted.

Washington Insider: Why Some Farmers Hate NAFTA

It is often said that ag producers’ concerns about trade negotiation focus on protecting trade deals now in place under NAFTA. However, Bloomberg is reporting this week that as U.S. trade representatives begin to renegotiate NAFTA, fruit and vegetable farmers in the Southeast have emerged as a staunch component of the anti-free-trade movement.That’s put them at odds with much of U.S. agriculture, which has long been one of the biggest advocates of NAFTA. Since 1994, the year the agreement went into effect, exports of staple crops such as corn, soybeans, and wheat have more than quadrupled.At the same time, outside the Midwestern Grain Belt, NAFTA sometimes means increased competition, especially for seasonal producers, such as fruit and vegetable farmers. So, Florida has emerged as the epicenter of anti-NAFTA sentiment in U.S. agriculture.Located farther south than California, which is the main U.S. source of fresh produce, Florida made year-round fruits and vegetables possible in U.S. grocery stores. “There were times of the year when Florida vegetables fed the whole nation,” claims Reggie Brown, executive vice president of the Florida Tomato Exchange, a grower group. “Everyone else has a frost. We can still produce.”Increasingly, though, the fruits and vegetables Americans buy come from Mexico, not Florida. While annual U.S. tomato consumption has risen 61% since 1994, to 6.9 billion pounds, domestic production has fallen 11%, to 3.2 billion pounds.Meanwhile, tomato imports from Mexico have quadrupled, to 3.57 billion pounds, and strawberry imports have risen sixfold, to 568 million pounds. This competition is being accused of causing a “rash of fruit and vegetable farm bankruptcies across Florida,” Bloomberg says.Mexico’s lower labor costs are seen as a major concern for Florida producers. Unlike an Illinois corn farmer with a mechanized operation, some 500 fieldworkers are needed to pick 600 acres of tomatoes by hand. Says Brown: “I understand that people will say if Mexico can grow it cheaper, let them produce it. But there are small towns depending on this, and as an American, that is my first and foremost concern.”It’s not only labor costs that make it cheaper to grow fruit in Mexico. Pesticide rules also differ, and some say that provides another competitive disadvantage for Florida farmers. When people think of farming, they think of corn and soybeans. “People have no idea what it takes to get a tomato on a grocery shelf. [Corn] farmers have a whole different set of interests, and that’s why we end up on the outside of this debate,” tomato growers argue.Florida growers have a list of demands they’d like a new trade deal to address, including quotas on Mexican imports, aligning Mexico’s food safety and environmental rules with the U.S., raising wages for Mexican workers, and demanding the country cut its farm subsidies.Mexico’s government says wages are off the table and that the nation has always cooperated with the U.S. on food safety issues. “Attempting to restrict Mexican imports to the U.S. market through managed trade schemes [is] totally rejected by Mexico,” said Raul Urteaga Trani, general coordinator of international affairs for Mexico’s agriculture ministry.Still, the last thing U.S. farm lobbyists want is for Florida’s problems to hold up a NAFTA renegotiation or to change the status quo too much, Bloomberg says. Mexico has become the top buyer of U.S. corn, by far the most valuable crop in the U.S.Although farm groups would like any new trade deal to be reached quickly, they acknowledge the concerns of Florida growers. “We do have a problem in Florida,” says Zippy Duvall, president of the American Farm Bureau Federation, the biggest U.S. farmer group. But he says the state’s issues have to be balanced with the interests of the rest of the country.Florida farmers’ strongest ally may be President Trump. As NAFTA negotiations kicked off on Aug. 16, U.S. Trade Representative Robert Lighthizer said Trump isn’t looking for “a mere tweaking of a few provisions” and that “NAFTA has fundamentally failed many Americans and needs major improvements.”The President’s NAFTA focus has been on American manufacturing jobs, largely in the U.S. Rust Belt, but Florida’s status as a crucial swing state may help its farmers get his attention. Their plight has taken on more political importance in the state, particularly as Florida’s agriculture commissioner, Adam Putnam, has emerged as the front-runner for Florida’s Republican nomination for governor in 2018. Putnam, who advised Mitt Romney on trade and agriculture issues during his 2012 presidential campaign, has taken Mexico to task for the alleged dumping of fruits and vegetables in the U.S.Now, Florida growers are watching the NAFTA debates as closely as the weather forecast. They claim Florida is “tomato country” and that they will keep fighting NAFTA as hard as we can until we can’t do it anymore.So, it will be important to see how the need for balance among issues is defined as the talks proceed. To date, the debate has most frequently been defined in terms of politics, with relatively little attention to specific changes in rules that are needed. It will be important for producers to watch this process very closely as it proceeds, Washington Insider believes.

Business Groups Urge Preservation of ISDS System in NAFTA Talks

North American Free Trade Agreement (NAFTA) renegotiations should keep investor-state dispute settlement (ISDS) provisions or risk undermining business support, three major business groups said.The Business Roundtable, National Association of Manufacturers, and U.S. Chamber of Commerce sent the August 23 letter against the backdrop of the Office of the U.S. Trade Representative (USTR) discussing a mechanism that would allow NAFTA countries to “opt-in” or “opt-out” of the ISDS system.The ISDS proposal is in the concept stage and the U.S. did not offer any language on ISDS at the August 16-20 inaugural NAFTA round, a business community source told Bloomberg BNA on background August 24. "This is a moving target," a source said, speculating that the U.S. would not be offering investment language at the next NAFTA round starting Sept. 1."Attempts to eliminate or weaken ISDS will harm American businesses and workers and, as a consequence, will serve to undermine business community support for the NAFTA modernization negotiations," the business groups wrote in a letter to top administration officials, including USTR Robert Lighthizer and Commerce Secretary Wilbur Ross.Under ISDS, companies can bring governments before arbitration panels and get damage awards if the arbitrators find that the government breached investment guarantees. ISDS provisions are contained in NAFTA Chapter 11.

NAFTA Nations Sign Non-Disclosure Agreement

The U.S., Canada and Mexico signed non-disclosure agreements before negotiations of the North American Free Trade Agreement got underway. Officials from Mexico last week confirmed the non-disclosure agreements to Reuters, which reports that the first round of talks this month concluded with signs of deep division on key issues. Per the non-disclosure agreements, each government is barred from distributing texts, emails, proposals and presentations gathered from the other countries. However, information may be distributed between internal government offices and marked with “confidential.” The agreement, which the three nations call standard in trade negotiations, expires four years after negotiations conclude. Further negotiations on revamping NAFTA are due to start in Mexico City September first.

GAO Recommends Lowering Crop Insurance Expected Rate of Return

The Government Accountability Office is recommending that Congress considers directing the Department of Agriculture to adjust the expected rate of return for crop insurance. In 2010, USDA negotiated a set rate of return with crop insurance providers. The return is how much companies can profit from insurance policies. In a report released last week, the GAO found that the expected rate of return was too high compared with market conditions. In 2010, USDA negotiated with insurance companies to set a 14.5 percent target rate. According to GAO's analysis, which updated information in the study for 2009 through 2015, the reasonable rate of return declined, averaging 9.6 percent. By reducing the expected rate of return, GAO says the federal crop insurance program could save hundreds of millions of dollars a year.

Urban Agriculturalists Hoping for Beneficial Legislation

Proponents of urban agriculture are hoping two bills will be reintroduced this year in time to be added to the 2018 Farm Bill. Bloomberg reports the bills have very different initiatives but similar goals, with hopes to create economic opportunity and show support for farmers and ranchers in urban areas. The Urban Agriculture Act of 2016 outlines a plan to establish an Office of Urban Agriculture within the Department of Agriculture and make urban agriculture activities eligible for funding from USDA programs. The bill, introduced by Democrat Debbie Stabenow, was referred to the Senate Agriculture Committee. Meanwhile, the Urban Agriculture Production Act of 2016 aims to establish an outreach program to award grants to support urban farm outreach activities. The bill was referred to the House Agriculture Committee. Lawmakers plan to reintroduce the bill next month in the U.S. House. There are currently no plans, however, to reintroduce Stabenow’s bill.

Stabenow Concerned with Monument Review

The top Democrat on the Senate Agriculture Committee says she is "deeply concerned" with the Trump administration review of national monuments. Interior Secretary Ryan Zinke submitted findings to the White House last week as part of a review of 27 national monuments, which includes thousands of acres of U.S. Forest Service land, managed by the U.S. Department of Agriculture. The Trump administration has refused to release the report while the White House reviews the findings. Debbie Stabenow of Michigan last week stated failing to release the report is "totally unacceptable." She says proceeding with the recommendations is "irresponsible and betrays our duty as stewards of our public lands.” However, livestock groups were encouraged by the report. Leadership with the Public Lands Council and the National Cattlemen’s Beef Association say past presidents “have repeatedly abused their authority under the Antiquities Act” by locking up more than 240 million acres without economic analysis.

Low Education Rural Counties Worse Off than Higher Education Rural Counties

New data announced by the Department of Agriculture shows that rural counties with low education levels have worse economic outcomes than other rural counties. USDA’s Economic Research Service classifies 467 counties as “low education” counties, where at least 20 percent of working-age adults, ages 25 to 64, do not have a high school diploma or equivalent. Nearly 80 percent of those counties are rural. A rural non-metro county, as considered by USDA, consists of either open countryside, rural towns with fewer than 2,500 people and urban areas with populations under 50,000 that are not part of larger labor markets, or metro areas. About 40 percent of low education rural counties are also persistent poverty counties, with poverty rates of 20 percent or higher since 1980. Low education rural counties also had a higher average child poverty rate on average than for all other rural counties. Additionally, the unemployment rate of low education rural counties was about a percentage point higher.

Culver’s Restaurants Celebrating Farmers with Corn Mazes

Culver's Restaurants Thank You Farmers campaign is celebrating farmers through 12 corn mazes this fall. The company announced last week that to date, 33 corn mazes in 19 states have joined together to show support for farmers and the future of farming over the past few years, with 12 corn mazes announced this year. The idea for growing messages of thanks into corn mazes came in 2014 when Culver's worked with a student agricultural group in Tracy, Minnesota, to bring the first Thank You Farmers corn maze to life. The restaurant chain has continued the fall maze tradition each year, working with corn mazes from Arizona to South Carolina to Michigan. Each maze design includes the Thank You Farmers message, as well as a variety of farm scene elements like cows and tractors.

A legislative bill creating a new visa category will be introduced shortly after Labor Day

A legislative bill creating a new visa category will be introduced shortly after Labor Day. The bill, called “The Agriculture Guestworker Act of 2017 (AG Act)” will create a new visa category called H-2C. This would replace the existing H-2A program and provide more streamlined access to guestworkers by dairies and other farmers who utilize immigrant labor.The bill will be introduced by Rep Bob Goodlatte (R-Va), chairman of the House Judiciary Committee.“We have waited 20 years for a realistic solution to our industry’s labor shortages,” says Laurie Fischer, CEO of the American Dairy Coalition, supporter of the bill. “We must make this bill work. We can no longer wait for reform.”The bill must first pass through the House Judiciary Committee before being introduced to Congress. In the meantime, Fischer encourages producers to send letters of support for the AG Act to Chairman Goodlatte. For more information on how to support this effort, visit www.americandairycoalitioninc.com. 

Ranchers are assessing damage and trying to evacuate livestock after Hurricane Harvey

Ranchers are assessing damage and trying to evacuate livestock after Hurricane Harvey invaded the Texas coast, bringing torrential rains, tornadoes and high winds.Texas A&M University’s AgriLife Extension Service is coordinating animal sheltering sites across the state in case ranchers need to relocated cattle or other animals, says Andy Vestal, TAMU Extension specialist. Some livestock owners closest to the coast have already been working to move animals to higher ground via trailers, away from low-lying areas and tributaries.For Texas ranchers needing information about animal shelters and livestock holding facilities in their area, should call 2-1-1 for emergency details."Our thoughts and prayers go out to all those impacted by Hurricane Harvey and the catastrophic flooding now occurring in its aftermath,” says Russell Boening, president, Texas Farm Bureau.Prior to Hurricane Harvey's arrival, many farm and ranch families worked around the clock to harvest crops and move livestock and equipment out of Harvey's reach, he adds. “Some crops remain in the field, though, and it's too early to estimate the amount of crops that have been lost to the storm.”

Brazil’s beef exports are expected to rise to 1.5 million tons in 2017

Brazil’s beef exports are expected to rise to 1.5 million tons in 2017, up 10 percent from a year ago, according to new estimates from consultancy Agroconsult presented on Thursday.Agroconsult initially expected beef exports to rise by 20 percent in 2017 when it began its three-month survey of the industry, analyst Maurício Nogueira said after visiting cattle ranchers and collecting market data in 11 Brazilian states.However, a series of setbacks, including a food safety scandal in March, lowered export forecasts and disrupted the industry as a whole, he said.The revised estimates show Brazil failing to rebound from the scandal that led to key markets temporarily banning imports of the country’s beef and poultry. Currently, Brazil’s main meat buyers are Hong Kong, China, Russia and the European Union, according to industry group Abiec.Other factors, including a corruption case implicating the family that controls Brazil-based JBS SA, the world’s largest meatpacker, also weighed on the industry, said Agroconsult’s Nogueira.“The plea deal signed by the Batista brothers had a more lasting effect than the food safety scandal, which went away relatively quickly,” he said.After the corruption case broke, it emerged JBS had stopped buying cattle for cash and many producers were reluctant to sell on credit.Cattle ranchers scrambled to find alternative buyers to sell their animals to after the case became public, Nogueira said.“Given the size of JBS, this affected the entire chain of production,” he added.The Batistas’ testimony, unveiled in May, led to a corruption charge against President Michel Temer after the brothers confessed to bribing nearly 1,900 politicians to win business in the last decade.Weak demand in the domestic market is adding pressure on meat processors, said Nogueira, who revised downward total slaughter estimates this year to 39.5 million head of cattle from 40.4 million head in April.Agroconsult also sees domestic beef prices falling by 8 percent in 2017, more than was anticipated in April, as consumer demand remains weak.

Feedlots in the U.S. added 439,000 more head of cattle on Aug. 1

Feedlots in the U.S. added 439,000 more head of cattle on Aug. 1 compared to the same time last year, an increase of 4%. According to the monthly U.S. Department of Agriculture Cattle on Feed Report, 10.6 million head of cattle were on feed in yards with 1,000-plus head capacity on Aug. 1, 2017. Texas currently has the most cattle on feed at 2.65 million head, followed by Kansas at 2.18 million head and Nebraska at 2.16 million head. States seeing the largest increase in cattle on feed were spread throughout the country. Colorado and Idaho saw the largest jumps with 9% more cattle than last year. Iowa and Washington were next with 8% more cattle on feed. Texas, Oklahoma and California all had 5% gains in cattle feeding. Kansas and Nebraska saw modest 3% gains from last August. Minnesota (2% decrease) and Arizona (13% decrease) were the only states to report fewer feedlot cattle in the major feedlot states. No states showed an increase month over month in cattle on feed. Nationally there were 217,000 were cattle on feed in August compared to July 1, 2017. Feedlot placements were up 3% for July 2017 with 1.62 million head added last month. There were 1.57 million cattle placed in feedlots last July. Calves weighing 600 lb. or less accounted for 360,000 head of placements. Cattle weighing 600-699 lb. totaled 235,000 head of placements. The next weight class of 700-799 lb. had the highest placement total at 385,000 head. Cattle weighing 800-899 lb. had the next highest total at 370,000 head of placements. Heavier weight cattle made up fewer placements with 900-999 lb. having 190,000 head of placements and 1,000 lb. and greater cattle totaling 75,000 head. Kansas brought in the most placements at 430,000 head, followed by Nebraska at 385,000 head and Texas at 380,000 head. Marketings of fed cattle to packers in July totaled 1.78 million head, a 4% increase from last year. Nebraska marketed the most cattle at 445,000 head, followed by Kansas at 430,000 head and Texas at 390,000 head. 

Washington Insider: President Doubts New NAFTA Deal Can Be Made

President Trump’s negotiation strategies often include bearish assessments of the outlook and it seems the current NAFTA talks are no exception, Politico is reporting this week. He has threatened many times to pull out of NAFTA if he doesn’t get a deal to his liking.Still, his first comments on the NAFTA talks since the renegotiation began last week were surprising to some. At a rally of supporters in Arizona earlier this week, he upped the ante, Politico says. He told that group “that he doubts a deal can be reached.”“Personally I don’t think we can make a deal because we have been so badly taken advantage of,” he said. “They have made such great deals, both of the countries but in particular Mexico that I don’t think we can make a deal.”He went further, concluding, “So I think we’ll end up probably terminating NAFTA at some point, OK, probably. But I’ve told you from the first day that we will renegotiate NAFTA or we will terminate NAFTA. I personally don’t think you can make a deal without a termination but we’re going to see what happens. You’re in good hands, I can tell you.”It will be interesting to see if ag groups, especially those who have been telling negotiators that one of their main objectives is not to undercut what they continue to see as favorable opportunities under NAFTA, agree.Politico points out that NAFTA has facilitated a massive increase in agricultural trade among the three countries, making the free trade deal popular across much of the industry. It also commented that Secretary Sonny Perdue may want to dust off his map—the one that was said to have convinced the White House to pull back in an earlier push against NAFTA by showing where negative impacts would be felt if the trade deal were abandoned. So, Politico says “there’s likely to be a whole lot of anxiety from ag groups this morning.”In addition, Politico thinks “the renewed threat could serve to harden Canadian and Mexican positions at the negotiating table. When Trump threatened to withdraw from the deal in April, Mexican officials said the government would not negotiate “with a gun to its head.”There were other comments on NAFTA this week. Mexico’s 32 governors sent a message for the chief negotiators. That group argues that “We know what our citizens and economies need better than you do.” So, Mexico’s National Conference of Mexican Governors, CONAGO, has written to the top trade officials from Mexico, Canada and the U.S. urging that they have a chance to participate in the ongoing talks.The governors are most focused on promoting an integrated North America, improving labor practices, and addressing new issues like immigration, CONAGO President Miguel Angel Mancera Espinosa wrote. On labor, especially, CONAGO would like to see a guarantee of better conditions for workers and an increase in the minimum wage, an issue the Mexican government seems reluctant to broach. The letter was sent to U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Secretary Ildefonso Guajardo amid last week’s opening round.It would be very interesting to know what particular information about the talks President Trump is responding to, but there seems to be very little indication that the talks will provide the assurances against the type of trade deficits the administration tends to focus on. Then, the key question is whether the U.S. negotiators will simply ignore the broad success and strong growth in economic activity ag exporters have enjoyed over the years and would like to expand.If these interests are simply ignored, in pursuit of broader changes, ag leaders—including Congressional Committee major and minority leaders, whose sensitivities are already somewhat bruised over the glacial pace of the nominating process for secretary, are likely to be much more aggrieved. That condition could significantly affect the design of the next farm bill as that process gets underway, Washington Insider believes.

Canada and Mexico Maintain NAFTA Focus amid Trump Comments

Canadian and Mexican officials have stated they will continue to stay focused on the negotiations under the North American Free Trade Agreement (NAFTA) comments from U.S. President Donald Trump that he still sees potential to exit the pact.“We're going to stay focused on what we've always known and what we've always said,” Canadian Prime Minister Justin Trudeau said at a news conference. NAFTA benefits both Canadians and Americans, and Canada is “focused on the hard work we have ahead of us at the negotiating table,” he said.Mexico's Foreign Minister Luis Videgaray said in a tweet that there were “no surprises” in Trump's renewed threat to scrap NAFTA. “We are already in a negotiation. Mexico will remain at the table with serenity and firmness and national interest ahead.” Mexico could have the most to lose if the pact unravels, as the country has been Trump's prime target. If Trump really wanted to break up NAFTA he would have done so already, Videgaray said.Trump said at a Phoenix rally August 22 that he “personally” did not believe “we can make a deal,” on NAFTA. “So I think we'll end up probably terminating NAFTA at some point,” Trump said. Trump's remarks came just days after negotiators from the three countries met in Washington August 16-20 for the inaugural round of talks to revamp the deal. The next round will begin September 1 in Mexico.

Global Biofuel Battles Intensify With Brazil Hitting Ethanol Imports with Duties

Brazil's foreign trade chamber Camex finally approved putting an import duty on ethanol imports that surpass 600 million liters (159 million gallons). Camex has repeatedly held off imposing the duties until their session Wednesday in which they approved a 20-percent tax on imports above that 600 million liter mark.The duties will be in place for two years, and will then be reevaluated. The measures enter into force after publication in the official gazette, which is expected in the coming days.Brazil imports the first half of 2017 have totaled 1.29 billion liters, primarily from the U.S., up 330% compared to the same period in 2016. A coalition of U.S. groups responded with dismay at the move since both the U.S. and Brazil had essentially agreed to keep the ethanol market free of trade-related limits. "We are disappointed and discouraged to see the ruling out of Brazil today," the Renewable Fuels Association (RFA), U.S. Grains Council (USGC) and Growth Energy said in a joint statement. "This action goes against Brazil's longstanding view that ethanol tariffs are inappropriate and will effectively close off an open and bilateral trading relationship that benefits all sides."Meanwhile, Brazil's top sugar industry group, Unica, hailed the move – virtually all ethanol produced domestically in Brazil is made from sugar cane. "The decision will give us some short-term relief," said director Eduardo Leao. He argued there is a "structural surplus" of ethanol in the U.S. due to restrictions in traditional export markets for the country, including China and Europe. "Brazil became the destiny of that surplus," he concluded.

Brazil Slaps Tariff on U.S. Ethanol

The Brazilian Agriculture Minister announced on Wednesday that the country’s Chamber on Foreign Trade approved a recommendation to impose a 20 percent tariff on U.S. ethanol imports after a 600 million liter tariff rate quota. Brazilian media are reporting the tariff will be in effect for two years. This will make it much more difficult for U.S. ethanol to access a large and growing market. The U.S. Grains Council, Renewable Fuels Association, and Growth Energy issued a joint statement saying they were disappointed and discouraged to see the ruling in Brazil. The statement says, “Given the tremendous volume of information we provided to Brazil that demonstrated how misguided a tariff would be, it seems politics prevailed today and Brazilian consumers lost.” They say imposing a tariff on U.S. ethanol will only hurt Brazil’s consumers by driving up costs when they fill up at the pump. The action also goes against one of Brazil’s own longstanding beliefs that tariffs are inappropriate and will effectively close off an open and bilateral trade relationship that benefits all parties involved. The groups will work through all of the channels available to encourage that this idea is reversed immediately.