DOJ Proposes No Changes to The Bayer-Monsanto Merger

OMAHA (DTN) -- The U.S. Department of Justice has proposed no changes to the Bayer and Monsanto mega merger, in a court document filed on Tuesday in the U.S. District Court for the District of Columbia. The DOJ filed a 46-page response to more than one million public comments on the merger, announcing it will not recommend additional changes to the agreement. In May 2018, DOJ ordered Bayer and Monsanto to divest $9 billion in assets, before the Trump administration would approve the estimated $62.5-billion merger. Early in 2018 Bayer had made divestments including selling portions of its crop science division to BASF, totaling about $7 billion. The response filed by DOJ on Tuesday indicates the companies have met all the demands. "This remedy is a victory for American farmers and consumers," DOJ said in its filing. "It fully addresses the competitive threat posed by the merger by vesting the divestiture buyer, BASF, with the full complement of assets, personnel, and rights needed to preserve competition in each of the 17 affected markets. It requires divestitures that go beyond what would be needed to address the current horizontal overlaps or vertical concerns in order to ensure that BASF can step into Bayer's shoes, thereby preserving the competition that otherwise would be lost through the merger." Included in the divestiture, Bayer will transfer more than 4,000 employees to BASF so the company "will have the necessary expertise to run these divested businesses." The agreement also allows BASF to acquire additional assets and personnel, if needed, during the first year of operating the businesses. "In short, the United States has gone to extraordinary lengths to ensure that BASF will seamlessly and successfully replace Bayer as an independent and vigorous competitor in each of the affected markets," according to the DOJ document. The $9 billion divestiture "exceeds the value of most mergers reviewed by the United States and far exceeds the value of most merger remedies," DOJ said. FINAL JUDGEMENT COMING The DOJ will be publishing comments and its response filed Tuesday on the Antitrust Division website and submitting them to the Federal Register. After publication, DOJ will ask the D.C. court to enter a proposed final judgement. Under the proposed final judgment Bayer is divesting businesses that compete head-to-head with Monsanto. Bayer also is divesting the seed treatment businesses that, when combined with Monsanto's seed business, would have given the combined company the incentive and ability to "harm competition by raising the prices it charges rival seed companies," according to the proposed judgement. Bayer and Monsanto also are divesting associated intellectual property and research capabilities, including pipeline projects, to enable BASF to replace Bayer as a leading innovator in the relevant markets. The judgement also lays out the divestiture of additional assets that will "give BASF the scale and scope to compete effectively today and in the future." COMMENTS FILED Even one of Bayer's primary competitors, Syngenta, acknowledged in public comments that the judgement "remedies many of the most complex and difficult anticompetitive aspects of the transaction." However, Syngenta asked DOJ for modifications to provisions that require Bayer to supply BASF with seed treatments and proposed restrictions on BASF's ability to sell divested seed treatments to Bayer. "In addition, the Sustainable Food Center proposes that all of Bayer's neonicotinoid seed treatments be divested to BASF," the DOJ said. The Sustainable Food Center is a non-profit group focused on strengthening local food systems. The proposed judgement requires Bayer to supply certain seed treatments products to BASF at variable cost for a limited time, to maintain continuity of seed treatment supply for the divested businesses. "The seed treatment supply provisions aim to place BASF in the same cost position as Bayer before the merger," DOJ said in the judgement. "By doing so, the remedy preserves competition during the transition period since BASF's pricing decisions will be based on the same underlying cost structure as Bayer prior to the merger." Some public commenters, including the Natural Resources Defense Council, expressed concern BASF would lack incentive to compete against the merged company due to the number of post-divestiture agreements between BASF and Bayer as well as BASF's interest in dicamba production. "These concerns do not cast doubt on the strength of the proposed remedy," DOJ said. "The proposed final judgment incentivizes BASF to compete aggressively against Bayer and other competitors, and encourages BASF to become independent from Bayer as soon as is reasonably possible." A number of groups opposed to the merger condemned DOJ's approval, despite the record divestiture. National Farmers Union, for instance, weighed in by noting the level of related mergers, including Dow-DuPont and Syngenta-ChemChina that have brought the seed and chemical industry down to fewer global competitors. In a statement to DTN, Tiffany Finck-Haynes, pesticides and pollinators program manager with Friends of the Earth, called the merger a "disaster" for American farmers and families. "Our agricultural economy has become a game of corporate Russian roulette, eliminating consumer choice and decimating family farms," she said. "These woefully inadequate concessions are a blatant sign that the Department of Justice cares more about protecting corporate profits than defending the interests of the American public."

U.S., China Begin Two Days of Talks

Wednesday was the first of two days that the U.S. and China would be face-to-face for high-level talks aimed at ending the trade war between the two countries. A Bloomberg article says the dispute is starting to cast a growing shadow over the two largest economies in the world. Treasury Secretary Steven Mnuchin (Muh-NOO-chin) tells the Fox Business Network that he expects significant progress in the talks this week. Bloomberg says administration officials and others close to the talks say there are still several big issues that the countries remain far apart on. Sources also tell Bloomberg that U.S. officials are still working through an internal debate on how to proceed from this point forward and are ill-prepared for the talks. This week’s negotiations come after a period of turmoil in markets that has left both governments wanting to be able to point out progress and settle the nerves of worried investors. U.S. demands still include structural reforms in Chinese economic policy and America still wants concessions on issues like intellectual property. The talks will also cover Beijing’s recent pledge to buy more American goods, including large amounts of agricultural products. Sources familiar with the discussions say that President Donald Trump appears to want to strike a deal soon.

Peterson Says Farm Bill “Is What It Is”

House Ag Committee Chair Collin Peterson says he’s worried the new farm bill won’t be able to provide adequate benefits to U.S. agriculture. While he admitted to those worries on Monday, he also said, “It is what it is.” The Hagstrom Report says Peterson first expressed those same concerns in December, just before the bill passed through Congress. At that time, Peterson said his specific concern was that the benefits wouldn’t be generous enough for farmers during a period of low commodity prices compounded by trade conflicts. Peterson also says bankers are telling him they are also “concerned,” but he also said agriculture is “going to have to live with it.” While farmers were able to overcome the problem of low prices thanks to big crops, Peterson said that farmers in part of his district weren’t able to do that because of poor crops. The House Ag Chair says he believes the new dairy provisions in the bill are “adequate.” Peterson also discussed climate change this week, saying he would consider the issue “if anyone comes up with effective ideas.” He also discussed biofuels policy, noting that agriculture had allied with environmentalists to write legislation on biofuels and ethanol. However, because cellulosic ethanol hasn’t taken off, environmental support for biofuels has diminished.

U.S. Dairy Fears Losing Japanese Market

The U.S. dairy sector is worried about access to the lucrative Japan market. Dairy groups and officials are sending a brand-new, industry-funded study to President Donald Trump, administration officials, and to members of Congress. Politico says the study stresses the need for expanding market access overseas. The report points out that the U.S. is the only major dairy-exporting country not included in one of two new trade deals with Japan. The report was commissioned by the U.S. Dairy Export Council and conducted by a Tokyo-based consulting company. The new report projects export losses for the U.S. dairy sector of up to $1.3 billion within 10 years because countries like Australia, New Zealand, and Germany all have better terms under the Trans-Pacific Partnership, as well as a new economic partnership with the European Union. The Dairy Export Council is also concerned that a potential trade agreement with Japan may get lost in the shuffle of other trade agreements. The White House is placing a higher priority on getting the U.S.-Mexico-Canada Free Trade Agreement through Congress, where it’s expected to face opposition by members of both major political parties.

Global Feed Production Climbs Three Percent in 2018

The Alltech Global Feed Survey came out this week and showed that international feed tonnage grew by three percent in 2018. The total of 1.103 billion metric tons topped the 1 billion-mark for a third-straight year. The eighth annual survey covers 144 countries and 30,000 feed mills. The global feed industry is 14 percent larger than it was five years ago. The eight biggest producers include China, the United States, Brazil, Russia, India, Mexico, Spain, and Turkey. Together, these eight produce more than half of the world’s feed production and contain 59 percent of the world’s feed mills. Predominant growth came from the layer, broiler, and dairy feed sectors. Specific region results show that North America saw steady growth of more than two percent last year, with beef and broilers leading the growth at three percent each. The U.S. remained the second-largest feed producer in the world, behind only China. North America has the lowest feed prices in the world across all species. Elsewhere, Latin America was relatively stagnant last year while the European Union grew four percent. Africa continued a strong growth pattern with a five percent increase in feed production.

Pork Producers Readying for Possible African Swine Fever in the U.S.

Many industry experts say it’s a “when not if situation” in terms of African Swine Fever reaching U.S. soil. Pork producers at the recent Illinois Pork Expo all agreed that ASF hitting the U.S. would be a disaster. Mike Haag is the current past president of the National Pork Producers Council who says the U.S. pork industry is being proactive on keeping the virus out of American pork herds. “At this point, ASF in other countries has benefitted our industry from a demand standpoint,” he says. “However, if it does come to America it’ll be just the opposite. It will be devastating.” Illinois pig farmer Dereke Dunkirk says he doesn’t think ASF in America is inevitable because America does a pretty good job with biosecurity. The Illinois Pork Producers message to their members at the Illinois Expo included preparedness. While it’s important to implement solid biosecurity protocols, Haag told producers it’s also vital to make sure their premise ID numbers are correct. “Make sure your addresses and barn locations are correct,” Haag says. “If the industry does ever get shut down by a foreign animal disease, it’s vital to have the correct information because that’s how all livestock will move through a state.”

Extreme cold could cause a winterkill

The extreme cold conditions could cause a winterkill. Globe Newswire reports the main areas of concern are central Missouri, central Illinois, central Indiana, and central and southwestern Ohio. “Temperatures will likely drop to -2 to -12 F in these areas Wednesday and Thursday mornings, and with very little snow cover, some damage is likely to wheat,” said Don Keeney, Senior Agricultural Meteorologist for Radiant Solutions. “Areas across the far southern Midwest along the Ohio River should escape damage, as lows in these areas should remain above winterkill thresholds.” Experts say snow cover should remain deep enough to prevent damage in the northwestern Midwest, where lows will likely drop to at least -35 F.

Meat processing industry will likely come out of this polar vortex with little more than short-term disruptions

While schools, restaurants, stores and at least a few meat processing plants shut their doors due to unfathomably cold temperatures across much of the nation and particularly in the Midwest, the meat processing industry will likely come out of this polar vortex with little more than short-term disruptions that can be made up for as soon as the temperatures rise. "Due to the cold weather and concerns about worker and animal safety, six of our plants in the upper Midwest are not operating today," a Tyson Foods spokesman told Meatingplace on Wednesday. "We hope to resume production at these locations Thursday." In Minnesota, a Hormel Foods supplier also shuttered its doors due to weather. “Due to animal welfare and transportation concerns, our third-party supplier, QPP, did not operate on Wednesday and will start a bit later Thursday morning,” Hormel Foods spokesman Rick Williamson told Meatingplace. Production lost from these types of closures, however, can easily be recouped by adding Saturday shifts, according to Mizuho Securities research analyst Jeremy Scott. As for the rest of this week, Sterling Marketing Principal John Nalivka told Meatingplace he expects to see the typical disruptions caused by trucks dealing with highway conditions and fighting severe weather to bring cattle to the plant and beef product out of it. Plant labor issues are also possible as employees struggle to get to work. Smithfield Foods issued a statement saying while the company’s facilities and farms remain operational, the company is taking necessary precautions to ensure the comfort and safety of its employees and animals and implementing additional safety measures as-needed. In terms of meat processors’ customers, the temporary demand decline from restaurants, hundreds of which closed their doors in Chicago on Wednesday, could be at least somewhat counter-balanced by increased retail demand from consumers stocking up to ride out the week at home, Scott told Meatingplace. Restaurants may temporarily lose some of their growing meal delivery business, as transportation firms like GrubHub considered some pauses in service to ensure driver safety in the coldest cities this week. Livestock impact Looking at the supply side of meat processors’ business, cold temperatures mean that food animals need more calories to put on weight, decreasing feed efficiencies and possibly resulting in lighter weight animals coming to market. “The biggest impact is on cattle on feed, as that feed goes toward maintenance rather than gain, which in turn lengthens their time on feed to a market weight. So, this will push closeouts for cattle on feed in those severely affected areas further out,” said Nalivka. There could be a higher calf death rate if arctic air persists in areas where calving occurs on the range, where there is little protection from the cold, he said. But Nalivka noted that in the Midwest, where the severe cold is centered, this may not be as much of a problem, as most calving occurs in fairly smaller areas and likely near a barn where cows and their calves could be sheltered. This week did see some disruption in the commerce of cattle coming to market, with some livestock auction houses closed midweek. “Prices may not be well tested due to likely limited sales receipts the last couple of days,” predicted Lee Shulz, associate professor of economics at Iowa State University, noting some auction markets closed in Iowa and Wisconsin this week. “Receipts are expected to rebound by week's end and next week as auction markets get back to their normal schedules with warmer temperatures.”

Markets Expected to Continue Strong; Leverage Shift on the Horizon

NEW ORLEANS, LA (Jan. 31, 2019) – During the first half of 2019, the United States will see a shift away from El Niño conditions as equatorial ocean currents begin to cool into the summer, Art Douglas, Ph. D., professor emeritus at Creighton University, told the audience during the popular 2019 CattleFax Outlook Seminar today. The session, held as part of the 2019 Cattle Industry Convention and NCBA Trade Show in New Orleans, La., saw a capacity crowd as cattlemen and women gathered to hear expert market and weather analysis. Douglas explained the developing trend will turn the eastern third of the United States drier, as the jet stream pushes moisture from the Gulf of Mexico across the southern tier of the nation. “After a cooler February, the United States will mostly enjoy a relatively mild spring with a reduced threat of delayed planting,” said Douglas. He pointed out that summer weather will be dependent on how quickly El Niño conditions fade. “La Niña conditions are unlikely in the next eight months as the equatorial current shows only slow cooling,” said Douglas. “The residual warmth along the equator will lead to a wetter summer in the southern half of the U.S., while warm waters off the coast of Mexico will favor an active monsoon season in the Southwest.” Turning to the market outlook, CattleFax analyst Kevin Good said he expects prices will remain strong, with demand and the economy expected to remain solid. “We’ve been on one heck of a good run for a few years and I expect that to continue into 2019,” said Good. “However, we expect to see margins begin to compress and leverage to shift from the cow-calf and stocker sectors to the feeder as we expand the supply of cattle.” He said price risk remains over the next few years in response to the last five years of expansion. The beef cowherd expansion cycle is believed to be within 1-2 years of being complete. “Cattle producers, on average, will receive a smaller percentage of the retail beef dollar as larger cattle supplies increase price pressure across all segments of the industry,” said Good. “Retail beef prices will likely see some inflation in 2019, but larger beef, pork and poultry production will be price limiting.” However, domestic demand remains robust and higher wages and job growth are supportive of prices. CattleFax projects the all-fresh retail beef price to average $5.73/lb., up $.06 from year ago levels, while the composite cutout will rise $4 to average $216/hundredweight (cwt.) during 2019. Going forward into 2020, economists see the potential for an economic slowdown, Good noted. “This may slow the benefits of recently strong consumer incomes and spending,” he said. Fed cattle prices are expected to be steady during 2019, averaging $117/cwt., with market resistance at the $130-level and downside risk to $100/cwt. at the low end of the trading range, according to Good. He said a larger supply of cattle outside of feedyards coupled with limited profitability in the feeding sector will hinder demand and pressure feeder cattle prices. CattleFax projects 750 lb. steer prices will range from $130-$160/cwt., with an average at $147/cwt. for the year ahead. “The relatively strong calf market we saw in 2018 will be under pressure this year,” said Good. “However, values in the spring should have the potential to reach the mid-$180s. On the other hand, a larger calf crop and softer demand have the potential to erode prices to the $140-level next fall, so there is certainly more price risk in feeder cattle and calves than in the fed cattle markets in 2019.” Feed and grain prices are expected to remain stable during the year ahead, with corn acreage increasing an expected 2 million acres to total 91 million acres and soybeans declining 2.2 million acres to 87 million and wheat gaining 1 million acres to total 49 million. “Corn is expected to trade in a range of $3.60 to $4.10 per bushel during the first half of the year,” said CattleFax analyst Mike Murphy, who also pointed out that hay acreage isn’t expected to change significantly from 2018, but better winter precipitation across much of the United States should help provide a strong start to the 2019 hay crop. Good explained that cull cow prices will have additional downside risk during the year ahead. “Years of expansion and poor operating margins in the dairy sector are generating more cull cows, which weighs on the markets,” he told the audience. “The additional supply and the limited packing capacity for non-fed cattle will result in a market which averages approximately $55/cwt. during 2019, with a spring high near $60/cwt. and a fall low in the lower $40s.” CattleFax analysts said the global trade outlook is currently supportive for the U.S. beef industry, with strong demand in many overseas markets. However, they note that trade disruptions could have significant impacts on the market outlook. Ratification of the pending U.S./Mexico/Canada (USMCA) agreement will be crucial to markets this spring. Likewise, the possibility of a bilateral trade agreement with Japan could create a positive upside to the market this year. CattleFax CEO Randy Blach closed the session with a reminder about the importance of international markets to the beef industry. “Long-term, the profitability of our industry is tied to trade,” he said. “We must have open markets and science-based trade standards for our products if we’re going to continue the run of profitability we’ve experienced in recent years.”

Washington Insider: Debating Border Protections

Almost everyone has at least one eye on the negotiations in Congress that aim to craft a compromise over border security. Bloomberg notes that the lawmakers involved are more used to cutting deals than taking hard-edged positions on immigration and takes that as a “sign that leaders of both parties are in no mood for another shutdown.” Still, President Donald Trump will need to sign off on any final agreement and, at least in public, his pronouncements indicate he’s insisting on the proposed $5.7 billion for a wall at the U.S.-Mexico border. House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Mitch McConnell, R-Ky., who’ll be directing negotiations behind the scenes, picked 17 spending panel members well versed in the art of compromise, Bloomberg thinks. The House-Senate conference committee will convene today to start negotiating a Homeland Security spending bill for the rest of fiscal 2019. They aim to draft a compromise on border security that can get Trump’s signature and clear the way for Congress to pass six other spending bills to fund the rest of the departments and agencies affected by the shutdown until Oct. 1. Leaders in both parties are setting early sights on a pared-down deal that probably won’t include big immigration law changes such as future citizenship for undocumented immigrants. It also is expected to focus on fencing rather than a wall, Bloomberg says. In the meantime, the President has accepted speaker Pelosi’s invitation to deliver this year’s State of the Union address on Feb. 5, after the speech was delayed a week because of the government shutdown battle. “We have a great story to tell and yet, great goals to achieve!” Trump wrote Pelosi earlier this week. “I look forward to seeing you on the 5th.” There is a great deal of other business underway now, as well. For example, the Senate advanced legislation 74-19 that would impose sanctions on Syria more than a month after president Trump said he would withdraw American forces from the conflict there. Democrats voted three times to block the measure during the five-week partial government shutdown, saying they wouldn’t agree to consider it until the agencies reopened. The measure would direct the administration to impose sanctions on entities that do business with the government of Syrian President Bashar al-Assad, such as selling petroleum products or aircraft parts. House Foreign Affairs Chairman Eliot Engel, D-N.Y., introduced a stand-alone Syria sanctions bill in the House that was passed by voice vote last week. The Senate measure also would let state and local governments refuse to do business with anyone who boycotts Israel. Sen. Dianne Feinstein, D-Calif., has said that while she supports Israel, she opposes the anti-boycott measure as a violation of the Constitution’s protection of free speech. In the area of ag policy, Senate Agriculture Committee Chair Pat Roberts, R-Kan., announced on Monday that he is in the beginning stages of crafting a new Child Nutrition Act, which governs the National School Lunch Program. “If Congress is to pass a new child nutrition bill this year, we’ll need to have all parties come to the table with solutions to these challenges…not just politics and rhetoric,” Roberts said at the National School Boards Association Advocacy Institute. A Senate child nutrition bill won committee approval in January 2016 but advanced no further. Roberts and Senate Agriculture Committee ranking member Debbie Stabenow, D-Mich., have signaled interest in getting the measure passed. Bloomberg also noted that the deadline for the U.S. escalation of tariffs on $200 billion of Chinese goods if no breakthrough deal on trade relations is reached is nearing. Following a round of negotiations in Beijing in early January, Chinese Vice Premier Liu He has arrived in Washington for what the White House is describing as “very, very important” talks this week. President Trump is expected to meet Liu, according to Treasury Secretary Steven Mnuchin, who is also going to take part in the negotiations this week. A delegation of Chinese officials including central bank governor Yi Gang, the deputy chief of the nation’s top economic planner Ning Jizhe and the deputy ministers from the government departments that oversee industrial policy, agriculture and treasury, are accompanying Liu. Even as the U.S.-China negotiations get underway, the U.S. moved forward with criminal charges against Huawei, China’s largest technology company, alleging it stole trade secrets from an American rival and committed bank fraud by violating sanctions against doing business with Iran. Huawei has been the target of a broad U.S. crackdown, including allegations it sold telecommunications equipment that could be used by China’s Communist Party for spying. The charges filed this week also mark an escalation of tensions between the world’s two largest economies, which are mired in a trade war that has roiled markets, Bloomberg noted. The talks in the budget committee conference likely will top the news agenda for the time being since the long recent shutdown has left a dramatic impression on the US political consciousness. Certainly, these efforts at compromise are of key importance to producers and should be watched closely as they proceed, Washington Insider believes.

Peterson Preparing for Possible Second Shutdown

House Agriculture Committee Chair Collin Peterson is trying to get out in front of another possible government shutdown. The first government shutdown temporarily shuttered Farm Service Agency offices across the country. Politico says Peterson, a Minnesota Democrat, is exploring possible ways to keep the FSA running in case government leaders can’t come to a budget agreement. Peterson says he didn’t know that agency staff in charge of getting the mandatory farm bill programs up and running didn’t get to continue working on that during the funding lapse. Peterson is also trying to figure out if it’s possible to get arrangements in place for certain FSA workers to remain on the job during a potential shutdown. Peterson says farmers were asking him, “What’s going on? NRCS offices are open but FSA isn’t?” He was referring to the Natural Resources Conservation Service, which was able to keep full staffing during the partial government shutdown, thanks to leftover money from fiscal 2018. “That’s hard to explain,” says Peterson.

EU Biodiesel Market Now Open to U.S. Soybeans

The European Commission made a couple of announcements important to U.S. soybean farmers. Conservation practices required for U.S. soybean production now meet European Union standards. Also, biodiesel produced from U.S. soybeans can now be used in the EU. The European Union requires biofuels to meet a set of sustainability criteria outlined in its Renewable Energy Directive. The U.S. soy industry has its own sustainability guideline called the Soybean Sustainability Assurance Protocol. With this week’s announcement, the EU formally acknowledges that the SSAP meets its rigorous sustainability requirements. Davie Stephens, a Kentucky soybean grower and American Soybean Association President, says, “U.S. farmers have long prided themselves on adopting newer and better methods for producing high-quality soybeans that are grown responsibly and sustainably. We’re pleased that the EU Commission has recognized our efforts by opening the door for SSAP-certified soybeans to be used in EU biodiesel.” The United States is the leading soybean supplier to the EU. While this announcement only applies to soybeans exported specifically for biodiesel production, the ASA sees this as a positive step toward enhancing its share in the EU marketplace. The EU’s decision will be in place until at least July 1 of 2021.

Critical Dairy Insurance Policy Now Available

Sales are once again underway for the Dairy Revenue Protection policy, offered through the federal crop insurance program. The policy, which is managed by the U.S. Department of Agriculture’s Risk Management Agency, had been put on hold during the partial government shutdown. Dairy Revenue Protection is designed to insure against unexpected declines in the quarterly revenue from milk sales relative to a guaranteed coverage level. The potential revenue is based on the futures prices for milk and dairy commodities and the amount of covered milk production that’s chosen by the producer. The covered milk production is then indexed to the state or region where the dairy producer is located. Producers can find more information on the Risk Management Agency’s website. Sales of the Livestock Risk Protection Policy has also resumed. It’s designed to insure against declining market prices. Producers have a variety of coverage options and insurance time periods to choose from.

NPPC Urges U.S., China to Resolve Differences

As Chinese officials are in Washington, D.C. this week for trade negotiations, the National Pork Producers Council is urging the two countries to resolve their differences quickly. A Farm Journal’s Ag Web Dot Com article says the NPPC is also asking China to purchase a minimum of $3.5 billion in pork products over the next five years. China is the world’s number one pork consumer. That fact has made it a top destination for U.S. pork exports for the last several years. In 2017, the U.S. pork industry shipped $1.1 billion worth of product there, which made it number three on the list of the top pork export destinations. Industry experts say pork represents approximately 15 percent of China’s Consumer Price Index and could almost singlehandedly make a large dent in the U.S.-China trade imbalance. NPPC President Jim Heimerl says China has been a “tremendous market” for U.S. pork. “Without numerous trade barriers, they would likely be our number one export market,” Heimerl says. “Even without the preexisting barriers on U.S. pork, the 50-percent punitive tariffs have slowed our exports to a trickle.” U.S. pork producers now face tariffs of 62 percent on exports to China. An Iowa State University report says producers have lost $8 per hog, or more than $1 billion on an annualized basis, because of the 50 percent punitive tariffs.

EU Biodiesel Market Now Open to U.S. Soybeans

The European Commission made a couple of announcements important to U.S. soybean farmers. Conservation practices required for U.S. soybean production now meet European Union standards. Also, biodiesel produced from U.S. soybeans can now be used in the EU. The European Union requires biofuels to meet a set of sustainability criteria outlined in its Renewable Energy Directive. The U.S. soy industry has its own sustainability guideline called the Soybean Sustainability Assurance Protocol. With this week’s announcement, the EU formally acknowledges that the SSAP meets its rigorous sustainability requirements. Davie Stephens, a Kentucky soybean grower and American Soybean Association President, says, “U.S. farmers have long prided themselves on adopting newer and better methods for producing high-quality soybeans that are grown responsibly and sustainably. We’re pleased that the EU Commission has recognized our efforts by opening the door for SSAP-certified soybeans to be used in EU biodiesel.” The United States is the leading soybean supplier to the EU. While this announcement only applies to soybeans exported specifically for biodiesel production, the ASA sees this as a positive step toward enhancing its share in the EU marketplace. The EU’s decision will be in place until at least July 1 of 2021.

Judge Allows Controversial Evidence in Roundup Trials

A federal judge in San Francisco overseeing lawsuits against Bayer AG’s Roundup weed killer tentatively allowed controversial pieces of evidence in the first phase of the latest trials. A Reuters article says the U.S. District Judge called his decision “probably most disappointing for Monsanto,” the Bayer subsidiary that manufactures Roundup. The company continues to deny the allegations that glyphosate, the key ingredient in Roundup, causes cancer. Monsanto also says decades of independent studies have shown the chemical is safe for human use. With the judge’s decision, plaintiffs can now introduce some evidence of Monsanto’s alleged attempts to ghostwrite studies and influence the findings of scientists and regulators. In his decision, the judge said, “documents showing the company taking a position on the science or a study introduced during the first phase were super-relevant.” Monsanto had argued that much of the evidence was a “sideshow” that would distract jurors from the scientific evidence. Plaintiff’s lawyers contend that some evidence of corporate misconduct was without a doubt linked to their scientific claims of product safety. On Monday, the judge appeared to agree, saying it was difficult to draw the line between scientific evidence and allegations of corporate misconduct. He also questioned whether it would be fair if the jury didn’t get to hear about the company’s alleged attempts to influence scientists.

Dairy Producers To Receive Refund Up To 75% Of MPP Under New Farm Bill

Under the 2018 farm bill, dairy producers will receive a refund up to 75% of Margin Protection Program (MPP) premiums paid from 2014 to 2017, excluding administrative fees. “Due to the low frequency of program payments, total program payments made to dairy farmers during this time are estimated at less than $12 million – resulting in an aggregate loss ratio of less than one-sixth of 1%,” says John Newton, chief economist at American Farm Bureau Federation. He adds that farmers will receive a refund of up to 75% of premiums. “Based on estimates of premiums paid into the program and program payments, up to $60 million dollars are likely eligible for premium refunds. Premiums paid for 2018 coverage – post-Bipartisan Budget Act improvements – are nonrefundable. The premium repayments will be distributed in one of two ways: a farmer can receive 50% of the repayment as a direct cash repayment, or a farmer can receive 75% of the repayment as a credit toward Dairy Margin Coverage for the 2019 to 2023 coverage years, Newton explains. He encourages producers to consider the total amount of the potential refund compared to the cost of DMC coverage over the five-year life of the farm bill.

WTO Grants China Request for Panel on US Tariffs

U.S. Section 301 tariffs on Chinese goods, retaliation over U.S. Section 232 metals duties and continued disagreements over Appellate Body appointments highlighted a Jan. 28 meeting of the World Trade Organization's (WTO) Dispute Settlement Body (DSB). China's second request for a dispute panel to rule on U.S. Section 301 duties imposed on Chinese imports was granted. The issue gets at the heart of the ongoing U.S.-China trade war as the U.S. Section 301 report faulting Chinese practices on intellectual property and technology transfer kicked off the now heated dispute between the two nations. The U.S. "unilateral determination" under Section 301 of the Trade Act of 1974 to collect "25% additional duties on approximately $34 billion of Chinese imports" and "10% additional duties on approximately $200 billion of Chinese imports" is "a blatant breach" of its WTO obligations, China said. The U.S. move "is posing a systemic challenge to the multilateral trading system," it added. China stressed the "urgency" of addressing the dispute, saying the U.S. actions continue "to damage China's legitimate economic and trade interests." China rejected U.S. allegations it routinely flaunts international trade rules. "China's action Monday by resorting this dispute to the WTO dispute settlement system reaffirms our strong support to the rules-based international trading system and is helping to strengthen the viability of the system," China remarked. The U.S. slammed China's move and alleged "China intends to do, and is doing, great damage to the international trading system" through its use of "grossly unfair and trade-distorting forced technology transfer policies and practices and through this unfounded" dispute panel request. "China seeks to use the WTO dispute settlement system as a shield for a broad range" of its policies and practices "not covered by WTO rules," and in doing so "is threatening the overall viability of the WTO system," the U.S. said. Meanwhile, the U.S. dismissed China's argument that the U.S. tariffs were "unilateral" and "WTO-inconsistent," noting China responded in kind with "discriminatory duties on over $100 billion in U.S. exports." China's actions and self-contradictory arguments suggest it "is not serious about addressing the legitimate concerns of its trading partners over Chinese technology transfer practices that no one could describe or defend as fair," the U.S. concluded.

EU to Request Consultation With US at WTO on the Spanish Olives' Case

The European Commission has announced that it will send a request for consultation with the U.S. Jan. 29 to try to settle the dispute about the tariffs imposed on Spanish black olives, the EU trade chief has said. EU Trade Commissioner Cecilia Malmström announced Monday that the EU is finally ready to initiate a consultation request process within the World Trade Organization with the United States. "The duties imposed by the United States on ripe olives from Spain are unjustified, unwarranted and go against the rules of the World Trade Organization," she said in a tweet Monday. In June last year, the U.S. Department of Commerce announced the need for tariffs ranging from 7.52% to 27.02% to counteract Spanish olive prices, after it found that EU subsidies allow the fruits to be sold on the U.S. market for 16.88% to 25.5% below their production value. The U.S. feels Spanish black table olives have been exported to the U.S. at dumping prices and that the product receives European and Spanish subsidies that give it an unfair advantage over similar products by American competitors. The U.S. tariffs followed a Department of Commerce and the International Trade Commission investigation, launched after Californian olive enterprises filed a petition asking for an assessment of Spanish olive imports.

Washington Insider: Post-Shutdown Tensions in Washington

Well, the tensions in Washington are not really over, it seems. Administration officials are describing their determination to construct their wall, come what may, while the media are busy describing efforts to prevent future shutdowns. For example, The Hill said this week that as the federal government kicks back into gear after a 35-day partial shutdown, Congress is turning to its next deadline: "Preventing another funding lapse." The continuing resolution signed by President Trump funds roughly a quarter of the government through Feb. 15, giving Congress 19 days to reach a deal on the months-long border wall fight. A bipartisan conference committee, which includes appropriations committee members from both chambers, is slated to get to work on hashing out a plan to fund the Department of Homeland Security. Sen. Richard Shelby, R., Ala., the Senate Appropriations chairman and a member of the conference committee, told the press, "The Democrats have stated that once the government was reopened, they would be willing to negotiate in good faith on significant investments in border security, including a physical barrier. I hope that this continuing resolution will provide us the time to work out our differences in a fair and thoughtful manner and reach a bipartisan consensus on border security." However, the president warned Congress even as he signed the temporary funding authorization that the government could shut back down "should they fail to strike a deal that includes ample funding for his signature campaign issue." Other officials took a similar stance. In addition, President Trump appeared skeptical that Congress would be able to reach a deal, telling The Wall Street Journal that another partial shutdown is "certainly an option." The president has requested $5.7 billion for the wall, an amount that can't clear House Democrats or get 60 votes in the Senate. Democrats have previously indicated they could support funding for fencing, but not a concrete wall. Lawmakers are hoping the conference committee will be able to come up with a deal to fund roughly a quarter of the government through the end of the 2019 fiscal year, taking another shutdown off the table until October. The best agreement that we can get is an agreement on border security that funds federal spending through the end of the fiscal year. "We cannot have the threat of a government shutdown hanging over our people and our economy," Sen. Susan Collins, R., Maine, told CBS. Senators have floated taking up legislation that would prevent future shutdowns by automatically creating a continuing resolution, though there are competing proposals on the idea. President Trump said he also "hasn't ruled out the possibility of circumventing Congress by using a mechanism such as declaring a national emergency in order to build the wall," The Hill said. Declaring a national emergency to construct the wall would spark fierce backlash from Congress, including Republicans who have publicly warned Trump against taking the dramatic step, The Hill said. There also is still some uncertainty about timing for the State of the Union address. It was initially scheduled for Tuesday evening. House Speaker Nancy Pelosi, D., Calif., was asked Friday if the joint session would continue as "planned," and responded that "the State of the Union is not planned now." "What I said to the president is, when the government is open, we will discuss a mutually agreeable date and I'll look forward to doing that and welcoming the president to the House of Representatives when we mutually agree on that date," she continued. Trump initially indicated that he wanted to go forward with the Jan. 29 speech. But after Pelosi said the House would not pass the joint resolution required to green light the speech, he said he looks forward to addressing Congress "in the near future." Pelosi has given no hints about when she is considering rescheduling the speech, but press speculation now is focusing on Feb. 5, The Hill said. So, we will have to see what happens next. While the idea of an extension of the border barrier fight seems quite unpopular, the administration still seems deeply dug in. It is possible that the bipartisan conference committee will come up with some new ideas that will convince the President to support a new approach. At the same time, there remains significant potential for another confrontation involving additional restrictions on the government -- a fight producers should watch closely as it proceeds, Washington Insider believes.

Opening of Government Brings Much Needed USDA Reports

The Department of Agriculture did not supply more than 60 reports during the government shutdown and will supply much of that data next month. USDA announced Monday many reports, including final production reports for 2018 will be published on February 8th, the same date of the February World Agriculture Supply and Demand report. However, American Farm Bureau Federation Economist Veronica Nigh says some of the data “will never be available.” For example, the January World Agriculture Supply and Demand report will never be published, but some of the data will be rolled into the February report. Many market analysts warn to watch for a glut of data from USDA that could shock the market over the next few weeks as markets had previously relied on privately reported data during the shutdown, but USDA reports are often considered a benchmark in reporting.

EPA Will Complete E15 Rule by Summer

The Environmental Protection Agency says the now-ended government shutdown will not delay rules to allow year-round E15 sales. The EPA intends to finalize the rules in time for the summer driving season. An EPA official told Reuters, "I still think we can get the rule done in time and what I mean by that is get the rule in place by start of the summertime.” The government shutdown prompted worry that the rule may not be finished in time for the summer driving season. The Renewable Fuels Association this month called similar comments made by Acting EPA Administrator Andrew Wheeler encouraging. However, RFA President and CEO Geoff Cooper says the EPA “would greatly improve its chances of getting the regulatory fix done before summer” if the agency separated the year-round E15 provisions from so-called ‘RIN reform’ provisions also being considered as part of the rulemaking package.

China Officials in D.C. for Trade Talks

The U.S. and China are holding trade talks in Washington, D.C. this week as the two nations work to end a trade war. Chinese officials will meet with U.S. Trade Representative Robert Lighthizer for two days of talks starting Wednesday. Bloomberg News reports the talks will build on discussions that have focused on everything from how many U.S. soybeans China buys to the subsidies Beijing gives its state-owned companies. There is little expectation of a final deal being announced this week, but the talks seem likely to yield a package of proposals that inch closer to a final agreement. There is a little more than a month to work out the details, as President Trump gave China until March 1 to work out a deal on “structural changes.” If the talks fail, Trump has threatened to raise the tariff rate on $200 billion of Chinese imports if the talks don’t succeed.

Secretary Perdue Selects Three Senior Leaders at USDA

Agriculture Secretary Sonny Perdue Monday named three appointments to Department leadership positions. Perdue named Dr. Mindy Brashears as deputy undersecretary for Food Safety, Naomi Earp as deputy assistant secretary for civil rights, and Dr. Scott Hutchins as deputy undersecretary for research, education, and economics. These positions do not require Senate confirmation. The trio was nominated for Senate-confirmed USDA positions by President Trump, but the nominations expired without receiving confirmation votes by the end of the 115th Congress. Perdue notes all three received bipartisan support from the Senate Agriculture Committee and that President Trump has resubmitted their nominations to the Senate in the 116th Congress. The three have been re-nominated for more senior roles than the ones Perdue selected them to fill in their respective mission areas at USDA. Dr. Brashears was nominated for undersecretary for food safety; Earp was nominated for assistant secretary for civil rights; and Dr. Hutchins was nominated for undersecretary for research, education, and economics.

Secretary Perdue to Address NCBA Friday

Agriculture Secretary Sonny Perdue will speak at the 2019 Cattle Industry Convention and NCBA Trade Show February 1, 2019. Perdue will give his remarks at the Closing General Session of the event, being held this week at the New Orleans Convention Center. He will address the farm bill, trade and other issues affecting U.S. agriculture. The convention is the largest gathering of cattle industry professionals in the country, and the NCBA Trade Show will feature more than 350 exhibitors. NCBA President and California cattleman Kevin Kester says the industry is honored to host Secretary Perdue at the convention. Noting the many issues facing agriculture today, Kester says “It’s great that Secretary Perdue will share his thoughts and his agency’s plans with us.” The annual meetings of the National Cattlemen’s Beef Association, the Cattlemen’s Beef Board, American National CattleWomen, CattleFax and National Cattlemen’s Foundation will also be held during the event this week.

AEM Celebrating 125 Years

The Association of Equipment Manufacturers officially kicked off its year-long 125th anniversary celebration. AEM chair John Laegmann of John Deere says that for now 125 years, member companies of AEM “take off their proverbial competitive hats and work together on key issues for the betterment of the industry.”AEM, the North American-based international trade group representing off-road equipment manufacturers and suppliers, provides business development resources to advance the industry in the global marketplace. Its member companies manufacture and market a wide variety of equipment, from large earthmovers and agricultural equipment to smaller hand-held, portable and walk-behind machinery. Through the celebration, each month, AEM will feature an interview with one of its volunteer leaders, culminating at the AEM annual conference in November. AEM’s roots began in 1894, when the precursor of the Equipment Manufacturers Institute formed with three members, John Deere, CNHi and AGCO/Massey-Ferguson.

Ranching Industry Praises Department of Interior After Agency Reissues Hammond Ranches' Grazing Permit

WASHINGTON (January 28, 2019) – Public Lands Council (PLC) President Bob Skinner and National Cattlemen's Beef Association (NCBA) President Kevin Kester today issued the following statement in response to the reissuance of Bureau of Land Management (BLM) grazing permits to Hammond Ranches: "In light of a full and unconditional presidential pardon, the reissuance of the Hammond Ranches' grazing permits is the final step in righting the egregious injustices the Hammonds faced. This is the culmination of years of effort on behalf of this industry to restore a family's livelihood. We speak on behalf of the livestock producers nationwide in saying thank you to Acting Interior Secretary David Bernhardt and his team who worked to correct the hardships this family faced." Additionally, Ethan Lane, Senior Executive Director of PLC and NCBA Federal Lands, issued the following statement on behalf of Hammond Ranches: "The Hammonds have asked me to convey their appreciation to Acting Secretary Bernhardt and the Bureau of Land Management for reissuing their grazing permits. They are looking forward to digging into the specifics of the reinstatement and, finally, getting back to the business of ranching."

Secretary of Agriculture names three candidates to leadership positions

U.S. Secretary of Agriculture Sonny Perdue named three candidates to leadership positions held up by lack of Senate approval by shifting their titles to those that do not require Senate confirmation, including naming Dr. Mindy Brashears to lead the agency’s food safety efforts. In May 2018, President Donald Trump nominated Brashears as USDA’s under secretary for food safety, a position unfilled since Elisabeth Hagen left the job in December 2013 during the Obama Administration. The Senate has yet to confirm the appointment. On Monday, Perdue named Brashears as deputy under secretary for food safety, along with two other unconfirmed appointees -- Naomi Earp as deputy assistant secretary for civil rights, and Dr. Scott Hutchins as deputy under secretary for research, education, and economics, in a statement that pointedly said, “These positions do not require Senate confirmation.” All three had been confirmed by the Senate Agriculture Committee to more senior roles, but their nominations expired without receiving confirmation votes by the end of the 115th Congress in early January. The President has resubmitted their nominations to the Senate in the 116th Congress.

Business Economists Foresee No US Recession In The Next 12 Months

WASHINGTON (AP) -- A majority of business economists foresee no recession in the United States within the next 12 months but do predict a slowdown in growth this year. A survey by the National Association for Business Economics finds that nearly two-thirds of respondents think the economy will keep growing this year in what would become the longest expansion on record in U.S. history at more than 10 years. Still, the survey results being released Monday reflect a collective belief that some of the economy's momentum is fading. Compared with the NABE's previous survey in October, for example, a smaller proportion of economists said their companies' sales were rising. And fewer expect profit growth to increase. Corporate investments in new equipment has also cooled. Most of the economists say President Donald Trump's economic policies have done little to affect their businesses' plans. An overwhelming majority — 84 percent — say Trump's 2017 tax cuts, which sharply reduced the burden on corporations, failed to influence their companies' hiring or investment outlooks. A nearly equal proportion of respondents (77 percent) indicated that Trump's trade policies haven't affected their companies' plans for hiring, pricing or investment. The results fit a broader pattern. The economy appears to be slowing as a dose of stimulus from Trump's tax cuts has been fading. Job growth has been steady, but the stock market has stumbled and global growth has deteriorated. Home sales have weakened, and 2019 began with a blast of nervous uncertainty as the federal government endured what became a 35-day partial shutdown. The NABE survey, which has been conducted quarterly since 1982, was based on responses from 106 economists who are employed by companies or industry trade associations.

USDA Announces Several Deadline Extensions For Various FSA Programs

The reopening of county Farm Service Agency (FSA) offices nationwide for some activities January 24 saw USDA announce that signup for the Market Facilitation Program (MFP) payments would be extended to Feb. 14. USDA has now announced several other shutdown-related deadline extensions for several programs. Many of the changes announced have a reference date in them covering information that would have been due to be submitted to USDA offices between Dec. 31, 2018, and Jan. 23, 2019, unless otherwise noted. Final Acreage Reporting Date (ARD): If the final ARD would have fallen between Dec. 31, 2018, and Jan. 23, 2019, the report will be considered to be timely filed and there is no late fee if it submitted and filed with FSA by Feb. 14. However, this does not move the ARD and all other provisions to comply with acreage reports have not been changed. Emergency Conservation Program (ECP): If the deadline for reporting performance was between Dec. 31 and Jan. 23, it will be considered timely filed if submitted and filed by the later of Feb. 14 or a date granted by the FSA State Committee representative. Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish (ELAP): If the deadline for notice of loss fell between Dec. 31 and Jan. 23, it will be considered timely filed if done by February 14. Livestock Forage Program (LFP): For the 2017 program year, eligible livestock owners or contract growers with a producer interest in grazed forage crop acreage must submit their completed form (CCC-853) and supporting documentation by Feb. 28. Livestock Indemnity Program (LIP): If the deadline to file notice of loss was between Dec. 31 and Jan. 23, it must be submitted and filed by February 14. Marketing Assistance Loans (MAL): If loan maturity was in December 2018, it can be repaid, forfeited or settled through Feb. 14. Requests for peanut loans or Loan Deficiency Payments (LDPs) will be considered timely filed by the loan availability date of Jan. 31 if filed by Feb. 28.

Washington Insider: China Tariffs Likely to be Investigated by WTO

Bloomberg is reporting this weekend that China is charging that the Trump Administration’s tariffs violate WTO’s most favored nation rules. The result, Bloomberg says, is that current complicated tensions between the U.S. and China are about to get more complicated. The WTO is poised to begin an investigation into President Donald Trump’s tariffs on $250 billion of Chinese goods. This week, the WTO, the Geneva-based arbiter of trade disputes will likely launch an inquiry into whether the U.S. duties run afoul of a requirement that all WTO members give each other the same tariff treatment, as China asserts. The investigation comes at a delicate moment between the world’s two largest economies. A new round of trade talks is scheduled to begin on Jan. 30, and if a deal isn’t reached by March 1, the Trump administration has threatened to raise the tariff rate on $200 billion in Chinese goods to 25% from 10%. “This WTO case is especially significant because it deals with the central international legal issue in the U.S. conduct of its trade war with China -- whether the U.S. can impose trade restrictions on China in response to alleged Chinese WTO violations without first seeking dispute settlement in the WTO,” James Bacchus, a former Democratic congressman and onetime head of the WTO’s appellate body, said. “I believe these U.S. tariffs are inconsistent with WTO obligations, but it will be left to my successors on the WTO appellate body to decide.” The WTO is already facing an existential threat over a hold the U.S. has placed on new appellate judge nominations. Absent any reforms, the decision-making wing of the organization will have too few judges to rule on cases by the end of the year. This new investigation could further antagonize the U.S., which sees the WTO as overstepping its authority. This is China’s second request for an inquiry on the matter, the first one last month was vetoed by the U.S. The investigation is likely to move ahead this week because WTO rules prevent members from blocking a dispute inquiry a second time. But China won’t be expecting a resolution to the investigation any time soon due to a backlog in the WTO dispute settlement system. So far, 23 disputes have been brought against the current U.S. administration, including an EU inquiry into tariffs levied against aluminum and steel imports. “These trade tensions are not only a threat to the system, they are a threat to the entire international community,” Roberto Azevedo, the director-general of the WTO, said on a panel in Davos on Jan. 24. “The risks are very real and there will be economic impacts.” The case cuts to the heart of the U.S.-China trade conflict because the administration says the tariffs are necessary to counter an alleged Chinese campaign to steal American intellectual property. China’s dispute alleges the U.S. tariffs violate the WTO’s most favored nation provision because the measures fail to provide the same tariff treatment that the U.S. offers to imports of all other WTO members. The U.S. counters that the tariffs fall outside the WTO’s remit because they address trade issues that are not specifically covered under WTO rules. In addition, now that the government shutdown is at least temporarily lifted, the media is working to describe what the conflict meant. The Washington Post argues that the administration has inadvertently “revealed how much America depends on government.” The President has “repeatedly proposed gutting the federal bureaucracy, privatizing the air traffic control system and shrinking the federal workforce, the Post says. But by leading the country through the longest government shutdown in American history, he inadvertently revealed how intertwined the government is with millions of households, businesses and the entire U.S. economy. “The sharp rebuke he received from the public,” the Post says, and his decision Friday to reopen the government without winning concessions, could refresh a debate about the size and scale of government that has begun to frame the 2020 election. “We cannot mess with people’s lives this way,” Sen. Lisa Murkowski, R-Alaska, said. The Post ticked off the damages, “the air travel system bogged down.” It said. Tax refunds appeared in jeopardy. Parts of the federal court system were preparing to close. Food stamp benefits neared expiration, and the government was running out of money to pay rent for its own agencies, let alone low-income families who receive housing benefits. The U.S. government is projected to spend roughly $4.5 trillion this year, a figure that represents 21 percent of the overall economy. The funding lapse affected just a small segment of that budget. Even though it was record-long, broke the previous record for a funding lapse, it still only lasted for 35 days. The President signed into law a three-week spending bill and raised the prospect on Friday of another shutdown in mid-February, an idea that many Republican lawmakers detest. And that’s in part because key parts of the government that hadn’t elicited much thought until the shutdown were thrust into the spotlight in the past month. They could stay there for a while. So, we will see. Clearly, producers are on the front lines in any ongoing trade fights—and, were affected seriously by other aspects of the shutdown—and could be so once again if yet another shutdown emerges, that likely will be “a fight producers should watch closely,” Washington Insider believes.

Trump Announces Temporary End to Partial Government Shutdown

President Donald Trump announced Friday that he has reached an agreement to reopen the federal government for three weeks. That three-week continuing resolution will allow furloughed federal employees to return to work. Trump also promised to get them their back-pay, “As soon as possible. It will be quick.” The remarks come on the 35th day of the shutdown. Members of the Senate from both parties have recently pushed Trump to temporarily reopen the government and restart serious negotiations on a wider-reaching immigration deal. Trump did mention the importance of allowing immigrants to legally enter the country to work, something very important to agriculture. The three-week resolution will allow the government to reopen nine unfunded departments, which includes the U.S. Department of Agriculture. Two bills to reopen the government were shot down in the Senate on Thursday. That got serious negotiations going for the first time in weeks. Trump had asked for a “down payment” on funding for a border wall in exchange for reopening the government, but it’s still unclear if he got what he asked for. Trump said he has other options that would allow him to build the southern border wall. Right now, It’s unclear if he’ll take any steps if lawmakers temporarily fund the government but don’t reach a solution on immigration.

Energy Report Proves Need for Higher Ethanol Blends

The U.S. Energy Information Administration recently released its Annual Energy Outlook for 2019 report. It’s a federal forecast for anticipated energy needs in the future. Chris Bliley, vice president of regulatory affairs for Growth Energy, says this report underscores the importance of providing lower-cost options at the fuel pump. “America’s thirst for clean, affordable fuel options is set to remain strong for decades to come,” he says. “Consumers deserve a cleaner, more affordable options, and that’s exactly what higher ethanol blends like E15 can deliver. Regulators at the Environmental Protection Agency must act quickly on the president’s promise and open the door to competition at the fuel pump year-round.” The new EIA report predicts that “motor gasoline and diesel fuel retail prices will increase by 76 cents per gallon and 82 cents per gallon, respectively, between 2018 and 2050. The jump in fuel prices over that time frame will come because of rising crude oil prices. Additionally, the report also concludes that light-duty vehicle miles traveled will jump by 20 percent, going from 2.9 trillion miles in 2018 to 3.5 trillion in 2050. The rise in miles traveled comes as a result of rising incomes and a growing population.

U.S. Cancels Preliminary Meeting With China Ahead of Talks

A CNBC report says the White House turned down a planning meeting with China last week over disagreements on enforcing intellectual property rules. U.S. Trade Representative officials were set to meet with two Chinese Vice Ministers to try to help resolve trade differences before a March 1st deadline. A source close to the situation told CNBC that the meeting was called off. President Trump has said if no agreement is in place by March 1st, he’ll reinforce punitive tariffs on about half of all the goods China sends to America. The White House told CNBC that “teams from both countries remain in touch ahead of the visit by the Chinese Vice Premiere this week.” The Treasury Department and the U.S. Trade Representative’s Office both didn’t answer requests for comment by CNBC. White House Economic Adviser Larry Kudlow told CNBC that no meetings were canceled last week and that the only one on the schedule is when the vice premiere comes to Washington, D.C., for official negotiations. Joseph Lupton, a global economist for J.P. Morgan, says, ”I would characterize things as going in the right direction. Last week, China offered an olive branch, saying it would lower tariff rates and would pledge to import up to $1 trillion of U.S. goods by 2024.”

Tariff Mitigation Payments May Not Be What Was Expected

A senior USDA official says the amount of money sent to farmers to help mitigate the financial damage from the trade war may not be as much as expected. An Agriculture Dot Com article quotes USDA Under Secretary Bill Northey as saying up to two-thirds of the Trump trade aid payments were made by early January. Northey says, “up to $5 billion of the $8 billion we expect to make in mitigation payments” has already gone out to farmers. Northey didn’t give any additional information as to why the figure didn’t quite measure up to the initial $9.6 billion in payments that were estimated to go to producers of almonds, cotton, corn, dairy, pork, soybeans, sorghum, sweet cherries, and wheat. USDA is also aiding growers by purchasing $1.2 billion worth of food to give away and providing $200 million to ag export groups for trade promotion work. Also, the temporary agreement to reopen the government on Friday was good news for recipients in the Supplemental Nutrition Assistance Program. The agreement is expected to allow nine unfunded agencies to reopen, including USDA. There were a lot of questions about how the USDA would make SNAP payments in March. The program’s reserve fund was too small to pay out March benefits in full.

Plant-Based Protein Shipment Numbers Are Climbing

The NPD Group, a market research company, says shipments of plant-based proteins to foodservice providers have jumped 20 percent last year, compared with 2017. The NPD Group says consumers are seeking out “options they perceive as better for them.” Every region around the country saw double-digit growth through the year that ended in November of 2018. The most plant-based volume and shipment growth took place in the western United States, followed closely by the southern U.S. The firm says up to a quarter of the national population, many of whom say they aren’t vegetarian or vegan, eat and drink plant-based foods and beverages, as well as consume regular animal protein. The NPD Group says one of the main reasons that plant-based foods have become more accepted nationally is animal-welfare concerns. They also want to know more about how products are brought to market. Burger substitutes are the biggest plant-based foodservice category, seeing double-digit year-over-year growth in pounds that are shipped to operators. The group also said smaller, more affluent homes earning at least $100,000 a year are the biggest consumers of the plant-based burgers.

Feeding America Doors Open for Federal Employees

Feeding America issued a statement in support of federal workers who are coming to its food banks to help make ends meet because of the recent government shutdown. The statement came about as a reaction to comments from Commerce Secretary Wilbur Ross. On Thursday, Ross was quoted as saying he couldn’t understand why unpaid federal employees were going to food banks. The Feeding America statement says “Feeding America and our network of 200-member food banks know that just one missed paycheck can be the difference between making ends meet and needing our help.” The Hagstrom Report quotes Feeding America as saying it’s growing increasingly concerned about the hardships federal employees went through as approximately 800,000 workers were due to miss a second paycheck on Friday. President Trump announced a temporary agreement to reopen the government on Friday, but the shutdown is a perfect illustration of what Feeding America knows all-too-well; millions of hard-working Americans are living paycheck-to-paycheck and never are far from becoming food insecure. Because of the very real danger that the shutdown posed to so many affected workers, the Feeding America network of food banks and 60,000 partner agencies have extended their hours, hosted mobile food distributions, and increased their supplies to meet more needs.

Ag Groups Call For End to Government Shutdown

It is critical to farmers already grappling with other economic challenges that the ongoing partial government shutdown of USDA and other government agencies is resolved as soon as possible, the nation's top agriculture groups said. The American Farm Bureau Federation and National Farmers Union (NFU) are both urging the Trump administration and Congress to resolve their disagreements and promptly reopen the federal government. The groups noted the negative impacts the shutdown is having on farmers already dealing with low commodity prices and trade turbulence. "Like the rest of the country, though, farmers and ranchers are ready for this shutdown finally to end," Farm Bureau President Zippy Duvall wrote in his column this week. He noted that "Farm Bureau’s closing order of business at our delegate session this year was to pass a statement urging Congress and the Administration to work together to do just that and bring an end to this shutdown as soon as possible." Duvall pointed to the bipartisan passage of the 2018 Farm Bill as "a prime example of the work our lawmakers can get done for rural America when they find common ground." Both organizations cited the need for USDA to begin work implementing the 2018 Farm Bill, currently on hold due to the shutdown, as a top priority. "Farm bill programs and updates, signed into law just a day before the shutdown, are very important to family farmers and ranchers of all sizes and operation types," the NFU Board of Directors wrote in a resolution adopted late last week.

North Dakota Considers Plan to Label Cell-Based Meat

Add North Dakota to the growing list of states keen to regulate labeling of cell-based meat products. Legislation introduced in the North Dakota House of Representatives would define meat as "flesh of an animal born, nurtured and processed for the purpose of human consumption" and would bar food companies from advertising cell-based meat as a "meat food product." The text of the bill says a “nonmeat” product must be labeled as a “cultured food product” and may not contain the word “beef” on the label. The legislation has strong backing from North Dakota’s beef industry and will be considered this week by the state House Agriculture Committee. Dwight Keller, president of the Independent Beef Association of North Dakota, says the bill needed to help inform consumers by defining “traditional meat” such as beef. “Deceptive labeling could mislead reasonable people to believe cultured or lab-grown meat is produced in the traditional manner and it is not,” he added. “This is about truth in advertising." The measure is similar to proposals under consideration in several other states, including Montana, Nebraska, Tennessee, Virginia and Wyoming, and shows a growing trend of state legislatures wading into the regulatory debate over cell-based meat.

Washington Insider: After the Shutdown

Most people are worried that the government shutdown won’t end as soon as they would like — and Bloomberg notes that it risks putting a dent in both the dollar and Treasuries if it drags on. However, it also thinks a “quick resolution could do the same.” Bloomberg is pointing out this week that a drawn-out spending battle may collide with the looming debate over America’s borrowing limit, potentially raising the odds of a U.S. credit rating downgrade, as occurred in 2011. In addition, some observers reckon the market reaction this time around would be different: Instead of driving a haven trade into Treasuries, concerns about the growing U.S. debt burden could reverse that flow, pushing sovereign yields higher and the dollar lower. And the consequences of a near-term fix may be much the same, if it enables even more federal spending, Bloomberg thinks. The government has been partially closed for more than a month, it notes, but U.S. stocks are up around 9 percent over that period, while the greenback has softened only slightly. The 10-year Treasury yield reversed a dip from early in the new year and is around 2.72%. However, as the political deadlock stretches into a record fifth week with no clear sign of resolution, growth concerns are mounting and investors are starting to draw lines in the sand. “The more this lingers on, the more that investors are losing patience with their dollar positions,” said Mark McCormick, North American head of foreign-exchange strategy at TD Securities. “There’s risk of a downgrade, there’s room for people to cut exposure to U.S. Treasuries.” He’s describing a scenario in which the shutdown drags into March, inflaming the debate over the country’s debt ceiling. For some, that prospect is reminiscent of the market upheaval surrounding the debt-limit impasse under the administration of President Barack Obama, when S&P Global Ratings cut the U.S. AAA score. That action fueled a global sell-off in stocks, widened credit spreads and, ironically, spurred a flight-to-quality trade into U.S. debt. While S&P, Moody’s Investors Service and Fitch Ratings have each flagged risks of the current shutdown, none says that a downgrade is imminent. But the “brutal brinkmanship” of another debt-ceiling standoff could drive volatility in government bond markets similar to that of 2011, according to David Woo, head of global interest rates and economic research at Bank of America Corp. Except this time rates could rise, he said, given the “very large funding requirements of the U.S. government" and waning demand among foreign official buyers. The situation doesn’t have to get that bad to worry investors, who are already concerned about how the public sector’s pain may ripple across the economy. For example, White House Council of Economic Advisers Chairman Kevin Hassett said that if the partial government shutdown extends through March, the economy could flatline this quarter. “The longer it lasts the bigger the impact it has on growth for the U.S. overall, in an environment where you’re already seeing slower growth,’’ said Chuck Tomes, a portfolio strategist at Manulife Asset Management. If the shutdown were to start hitting consumer or business confidence, that would be a signal to cut back on credit exposure, he said. In this event, Tomes expects that Treasuries could still benefit from flight-to-quality trades. But Tomes says even if the shutdown is resolved this month, he doubts it would be “a significant positive that would unlock another leg higher in risk assets overall.” Moreover, in his view, a near-term solution may be detrimental for Treasuries and the dollar if it unleashes more government spending. “To get foreign investors to continue to purchase that issuance then you’d either need higher yields or lower valuations for the dollar,” he said. For his part, TD’s McCormick sees potential for a “knee-jerk dollar bounce” on a shutdown resolution but he expects the U.S. currency to weaken in 2019 as the market focus shifts to other political challenges. The debt ceiling is only one concern in a list ranging from Special Counsel Robert Mueller’s investigation of President Donald Trump, to the U.S.-China trade war, the ratification of the new North American trade deal and a weaker growth environment. That said, the shutdown has allayed at least one problem for markets—strangely--according to Gautam Khanna, senior portfolio manager at Insight Investments in New York. Certain economic indicators are delayed, and a lack of new data may give the Federal Reserve cover to skip an interest-rate hike in March. It “could be a good reason for them to pause without spooking the market regarding growth.” These bitter battles over government policies are likely to be damaging to most of those involved, including investors in agriculture. Thus, they need to be watched closely as they intensify, Washington Insider believes.

Mexico Ambassador Predicts Quick Mexico USMCA Passage

Mexico’s new ambassador to the United States recently predicted Mexico could quickly approve the U.S.-Mexico-Canada Trade Agreement that replaces the North American Free Trade Agreement. Pro Farmer reports the ambassador said, “Our process will be faster than your process," at a conference of city mayors in Washington, adding "now the USMCA needs to move forward." The agreement only needs to pass one chamber, the Senate, of Mexico’s legislature. The agreement is also expected to easily gain approval in Canada once considered. The U.S. timeline, however, is uncertain as the necessary steps to move forward, economic impact reports from the U.S. International Trade Commission, could be delayed by the federal government shutdown. Those are due in March, if the process is to stay on-time. Then, the administration must submit to Congress a draft bill, and ultimately an implementing bill for consideration.

Groups Urge Administration to Lift Metals Tariff

A diverse group of more than 45 organizations is calling for an end to U.S. tariffs on Canadian and Mexican aluminum and steel imports so that America can take advantage of the U.S.-Mexico-Canada Agreement. Farm groups, including the National Pork Producers Council, took part in a letter sent to the Trump Administration urging the administration to lift the tariffs so Canada and Mexico will rescind their duties on U.S. goods. The Trump administration on June 1, 2018, imposed a 25 percent tariff on steel and a ten percent duty on aluminum imports from Canada and Mexico. Both countries subsequently retaliated against a host of U.S. products. The groups want the metals dispute resolved soon so they can turn their undivided attention to generating congressional support for the USMCA. Farmers and food companies have been particularly hard hit by the Canadian and Mexican retaliation. Mexico’s 20 percent punitive tariff on U.S. pork, for example, has inflicted severe financial harm on America’s pork producers, according to NPPC.

CoBank Releases 2019 Year Ahead Report

The U.S. economy is still performing well by most key measures. However, Global and U.S. economic prospects are weakening, and the agricultural economy shows few signs of an imminent comeback, according to a comprehensive 2019 outlook report from CoBank's Knowledge Exchange Division. A CoBank spokesperson says trade uncertainty, rising debt levels and market volatility are “threatening to derail the global economy and creating difficult operating environments for U.S. agriculture.” The CoBank outlook report examines ten key factors that will shape agriculture and market sectors that serve rural communities throughout the United States. With agricultural commodity markets depressed by global supply abundance and ongoing trade disputes, farmers and ranchers face the difficult task of cutting production costs. However, continually rising costs in agriculture are expected to squeeze producers, causing further margin erosion and financial stress in 2019. Further, the report says farmers should not bank on a fourth consecutive year of above-trend crop yields to make up for low commodity prices and rising costs.

Farm Futures Survey Shows Planting Intentions

A survey by Farm Futures finds growers said they want to boost corn and cotton acreage, while cutting back on crops affected by China's import tariffs on soybeans and sorghum. Farm Futures surveyed 626 farmers in December and January and reported soybean planting intentions of 84.6 million acres, down 5.5 percent from 2018, but more than the 82.5 million projected in estimates USDA released in November. Farmers intend to plant 90.3 million corn acres. While that would be up 1.3 percent from 2018 it was below the 92 million USDA projected in November. USDA doesn’t release its first survey of prospective plantings until March 29, though it will update the statistical guess at its annual outlook conference in February. The survey found spring wheat intentions of 12.5 million, down 5.3 percent from 2018. Only durum seedings could rise, moving to 2.5 million after a significant cutback in 2018. Meanwhile, cotton acreage could be up 4.1 percent this spring to 14.6 million thanks to better prices and soil moisture across the growing region.

Farmer Registrations for 2019 Commodity Classic Outpacing Past Two Years

Farmer registrations for the 2019 Commodity Classic in Orlando, Florida, are trending well ahead of the past two years. As of January 23rd, farmer registrations were 17 percent ahead of the same period in 2018-and 23 percent ahead of 2017. Commodity Classic will be held February 28 through March 2 at the Orange County Convention Center in Orlando. Wesley Spurlock, a Texas corn farmer and co-chair of the 2019 Commodity Classic, says “We're extremely pleased with the response and excitement being generated for the 2019 Commodity Classic.” Those interested in attending Commodity Classic can avoid late registration fees by registering online by Thursday, January 28, 2019. To register, visit CommodityClassic.com. A complete schedule of events is also available on the website. Established in 1996, the event features a robust schedule of educational sessions, a large trade show, unique tours and the opportunity to network with thousands of farmers from across the nation.

Farm Simulator Game Popularity Rising, Tournaments in Europe

The farming simulator community in Europe is growing in popularity to now include a competitive pro league with a €250,000 prize pool, according to PCGamer magazine. The Farming Simulator League from Giants Software, maker of the game, will host tournament games that will run on the latest game, Farming Simulator 19, and will expand from bale stacking, to a competitive mode where teams will challenge each other to determine who is the best on the field. The new endeavor will be "a full-fledged esports league” with ten tournaments across Europe. A spokesperson for Giants Software says, "We have lots of enthusiasts in our company who can’t wait to show the world that farming can indeed be fun and competitive at the same time.” Each event in the tournament series will offer prizes and circuit points that will take the best teams into a €100,000 grand finale. The game series is also available in the United States, though there are no known competitive leagues in the U.S. at this time.

New Canadian Dietary Guidelines Emphasize Healthy Habits

New dietary guidelines released in Canada this week emphasize healthy habits, cooking more often and eating more plant-based proteins. The new Food Guide also recommends eating plenty of vegetables and fruits and choosing whole grains and water. The guidelines encourage cooking more often, being mindful of eating habits and eating meals with others. Protein Canadians are encouraged to eat a variety of protein and specifically to choose foods that come from plants more often. “Plant-based protein foods can provide more fibre and less saturated fat than other types of protein foods. This can be beneficial for your heart health,” according to the Guide. To meet nutritional needs, large amounts of protein foods are not necessary, the Guide says. It recommends eggs, lean cuts of beef, pork and wild game, and turkey and chicken, along with nuts and seeds, fish and shellfish, lower fat dairy products, beans, peas and lentils, and soy product. The guidelines also advise limiting highly processed foods and preparing meals and snacks using ingredients that have little to no added sodium, sugars or saturated fat.

Plant-Based Protein Shipments Climb

Case shipments of plant-based proteins from broadline distributors to foodservice operators climbed 20 percent last year, compared with the year before, as consumers seek out both protein and perceived “better for you” options, NPD Group said. All regions of the country saw double-digit growth in the year ended November 2018, with the West representing the most plant-based volume and case shipment growth, followed closely by the South, according to NPD. About a quarter of the U.S. population, many of whom aren’t vegan or vegetarian, say they consume plant-based beverages and foods as well as animal protein on a regular basis, the firm said. Among the reasons plant-based proteins have moved into the mainstream are that consumers have concerns about animal welfare, and they want to know how products are brought to market. Burger substitutes represent the largest plant-based foodservice category and have seen year-over-year double-digit growth in pounds shipped to operators, NPD said. The group’s receipt mining service shows that smaller, more affluent households earnings $100,000 and up are the top buyers of plant-based burgers. “Plant-based proteins are no longer just a meat replacement, it’s now its own category,” David Portalatin, NPD food industry adviser, said in a press release. “It’s possible that protein overall is evolving into a category, whether animal meat, beans, nuts, soy, wild game or other proteins, in forms ranging from beverage to center of plate.”

Coalition Urges Lifting of Section 232 Tariffs On Canada, Mexico

Lifting of Section 232 steel and aluminum tariffs on Canada and Mexico is being urged by a coalition of agriculture, manufacturing and business groups who maintain the actions have created difficulties for the ag sector. "In full recognition of the importance of U.S.-Mexico-Canada Agreement (USMCA) ratification to the economic interests of all three countries, wish to underscore the importance of lifting tariffs on steel and aluminum imports and the removal of all retaliatory tariffs on trade among the parties," a coalition of farm and agriculture groups said in a letter to Trump administration officials. The letter was addressed to Commerce Secretary Wilbur Ross and U.S. Trade Representative (USTR) Robert Lighthizer. Among groups signing it were the Grocery Manufacturers Association (GMA), National Corn Growers Association (NCGA), National Pork Producers Council (NPPC), North American Meat Institute (NAMI), U.S. Chamber of Commerce, U.S. Grains Council, U.S. Meat Export Federation (USMEF), United Egg Producers and United Fresh Produce Association. USMCA benefits could fail to materialize if the metals tariffs stay in place, something a Farm Foundation analysis warned last year. The coalition reiterated those concerns, writing "For many farmers, ranchers and manufacturers, the damage from the reciprocal trade actions in the steel dispute far outweighs any benefit that may accrue to them from the USMCA." Last year, there was talk that the metals duties would be lifted on Canada and Mexico following a successful conclusion to USMCA negotiations, but that did not prove to be the case. Meanwhile, lawmakers are pressing the administration to lift the duties, including new Senate Finance Committee Chairman Chuck Grassley (R-Iowa). Upon taking the committee gavel, Grassley said he would use his perch to work towards approval of USMCA but added, "lingering Section 232 tariffs on steel and aluminum imports from Canada and Mexico" must be addressed.

NPPC Slams EU Negotiating Mandates For US Trade Talks

The European Union's (EU) exclusion of agriculture from its draft negotiating mandates for trade talks with the U.S. drew sharp criticism from the National Pork Producers Council (NPPC). The U.S. included many ag and food issues in its own negotiating objectives released earlier this month. But, the European Commission left agriculture out its mandates "because of the sensitivity of the sector and the difficulty of finding agreement on geographical indications and intellectual property," according to EU Trade Commissioner Cecilia Malmstrom. The EU decision to exclude agriculture did not come as a surprise. Following a meeting with U.S. Trade Representative (USTR) Robert Lighthizer earlier this month, Malmstrom tweeted that EU negotiators have been "clear" that they would not "discuss agriculture" during trade talks with the U.S. The omission of ag from the EU mandates did not sit well with the top U.S. pork group. "We are infuriated," said NPPC President Jim Heimerl. "The EU is one of the most protected markets in the world for a lot of agricultural products, including pork. We are pleased that the Trump administration has been resolute in its demand that agriculture be included in the talks."

Washington Insider: Congressional Earmarks Reconsidered

The Hill is reporting an unusual development in Congress – with Democrats back in control of the House, The Hill reports “strong support” for reviving Congressional earmarks, the power to direct money for pet projects. “Earmarking” had fallen into disfavor in earlier administrations and has been widely considered to be a corrupt practice. Still, The Hill claims that Senate and House lawmakers from both parties predict there will be a serious push to bring back earmarks once the government shutdown is finally over — with at least one difference. They likely will have a new name – “congressionally directed spending.” Support for bringing back earmarks is not unanimous, but is growing as both parties work to counter the shift of power to the presidency. “When you discontinue earmarks, you’re saying the administration can better spend the money in my district. They know best what we need,” said Rep. Emanuel Cleaver, D-Mo. He said it is “not just some, it is the majority” in the House Democratic Caucus that back ending the earmark ban. “Based on what I’m hearing, on the other side, they too believe it was a mistake to discontinue earmarks,” he said of his GOP colleagues. Rep. Jan Schakowsky, D-Ill., a longtime ally of Speaker Nancy Pelosi, D-Calif., also said, “It’s definitely worth a review. I know that I was always proud to have press conferences and press releases on all the things I did,” she said. Sen. Lisa Murkowski, R-Alaska, chair of the Energy and Natural Resources Committee, is one of the most outspoken proponents for bringing back earmarks and has discussed it with Senate Majority Leader Mitch McConnell, R-Ky., and other colleagues. Congressional earmarks reached their peak in the middle of Bush’s administration, when the fiscal 2005 defense spending bill included 2,506 earmarks worth $9 billion and the energy and water development bill included 2,313 earmarks worth $4.9 billion, according to the Congressional Research Service. The proliferation of earmarks fueled the Jack Abramoff lobbying scandal and led to the downfall of former Rep. Randy “Duke” Cunningham, R-Calif., who was sentenced to eight years in prison after pleading guilty to directing federal spending after receiving bribes from lobbyists. The explosion in earmarks prompted a backlash that helped Democrats win control of the House in 2006, The Hill said. Yet the practice continued under then-President Barack Obama and a Democratic Congress and the fiscal 2009 omnibus spending package included 9,000 earmarks totaling $5 billion. The practice was ended in 2010, after Republicans took control of the House in the Tea Party revolution and then-Speaker John Boehner, R-Ohio, imposed a ban. Obama declared in his January 2011 State of the Union that “if a bill comes to my desk with earmarks in it, I will veto it. I will veto it.” But the ensuing six years of Obama’s presidency was one of the most legislatively unproductive stretches in recent years, marked by stalemates over what had previously been considered routine business, such as raising the nation’s debt limit and funding the government. Opponents such as Boehner and the late Sen. John McCain, R-Ariz., who died last year, are no longer in Congress to fight the return of earmarks. Other senior Republicans such as Senate Appropriations Committee Chairman Richard Shelby of Alabama, and Senate Rules Committee Chairman Roy Blunt of Missouri, have voiced support for allowing Congress to earmark funds again. They think that if individual members of Congress have more power to direct federal resources back to their home states and districts, they are more likely to agree to bipartisan compromises and pass bills. A spokeswoman for Shelby noted that the rules package passed by the new House Democratic majority did not include a prohibition on congressionally directed spending. “I think it’s not coincidental that the appropriations system and other legislative [process] dramatically deteriorated in their ability to produce a result at the same time that the Congress stopped directing the administration as to how money should be spent,” said Blunt, who also chairs the Senate Republican Policy Committee. One of the strongest proponents of earmarks is House Majority Leader Steny Hoyer, D-Md., who like Pelosi served as a member of the House Appropriations Committee. Hoyer says earmarks or congressionally directed spending should be allowed, albeit with reforms to make it tougher to secure shady deals for lobbyists or lawmakers’ personal gain, he told The Hill. Hoyer noted that when Democrats controlled the House from 2007 to 2010, they adopted reforms included prohibitions on funding for-profit entities, requiring members to certify that they had no financial interest in their requests and ensuring that members post all of their requests along with a justification for each project on their congressional websites,” he said. The practice has strong political appeal, but also has been misused in the past and would require strong oversight to avoid repeats of former embarrassments, Washington Insider believes.

Senate Shutdown Votes Expected to Fail

The U.S. Senate Thursday will consider two proposals to end the government shutdown, but both are expected to fail. Still, many say the move is an opening of negotiations in Congress to reach an agreement. It also marks a shift from Senate Leader Mitch McConnell who previously said the Senate would not consider bills that are destined fail. In December, he said the Senate would only consider bills that would produce a solution to all parties and be supported before a vote. The Senate will consider a Republican backed proposal to reopen the government, along with the Democratic-backed and House passed proposal. The votes come on the same day the Department of Agriculture is reopening Farm Service Agency offices after recalling more 9,000 workers to provide services to farmers, which farmers have lacked during the shutdown.