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Thursday, April 30, 2020
Agriculture Responds to Meatpacking Executive Order
President Donald Trump’s executive order to open meatpacking plants helps ensure the food supply chain but poses risks to workers. A statement by the National Farmers Union says the organization shares the president's concerns around maintaining food system infrastructure. However, the organization is equally concerned with the health and wellbeing of meat plant employees. NFU President Rob Larew says, “These workers work in close quarters and often lack access to appropriate protective equipment or paid sick leave, making them among the most vulnerable to coronavirus.” However, ordering the facilities to stay open ensures that producers of meat have a market for their product. National Pork Producers Council President Howard AV Roth says, "We must safely stabilize the current plant capacity challenge." Pork and poultry producers face the tough decision to depopulate because there is no room for animals in the current supply chain. American Farm Bureau Federation President Zippy Duvall, in a statement, says he is "hopeful" the executive order will protect workers while ensuring the supply chain for farmers and ranchers.
Senators Seek Open Antitrust Investigation into Meatpackers Amid Plant Closures
Two U.S. Senators seek an antitrust investigation into the meatpacking industry. Senators Tammy Baldwin, a Wisconsin Democrat, and Josh Hawley, a Missouri Republican, asked the Federal Trade Commission to open the antitrust investigation Wednesday. They say the industry is currently dominated by just a handful of large, multinational firms that have concentrated meat processing into fewer and fewer facilities, leaving America’s food supply chain vulnerable to disruptions. In the bipartisan letter, the Senators note that the closing of three pork plants because of COVID-19 has resulted in the shutdown of 15 percent of America’s pork production “at a time when stable supply chains have become more critical than ever.” The Senators say the FTC has the power to “shed light on these growing competition and security problems.” Baldwin and Hawley say the FTC should ask probing questions about major meatpacking firms’ conduct, pricing, and contracting, as well as how their commitments to overseas interests impact the U.S. market and national security.
Expanding Overseas Markets Key to Dairy Post-COVID-19
Expanding export markets oversees is key to helping the dairy industry recover after the COVID-19 pandemic. National Milk Producers Federation vice president for trade, Shawna Morris, says work continues on "what needs to happen over the next year or two" to help the industry recover. Despite the disruptions, Morris says trade officials need to keep long-range goals of open commerce essential to returning dairy to prosperity in mind. Morris says NMPF and others are working with the federal government and others to outline the dairy industry's priorities for upcoming trade agreements, notably with the UK and Kenya. Additionally, NMPF is focusing on issues and policy barriers that had existed before COVID-19 and are still in place and hindering dairy trade. With the drop in demand due to the COVID-19 pandemic, dairy farmers are forced to dump milk, and some experts have warned the industry needs to retract production by ten percent. However, strong export demand following the COVID-19 pandemic could help the industry quickly recover.
COVID-19 Impacting Ag Equipment Demand, Supply Chains
More than half of U.S. equipment manufacturers believe the COVID-19 pandemic has had a very negative impact on the industry, according to a survey released by the Association of Equipment Manufacturers. In addition, eight out of ten executives say the federal government should prioritize a significant investment in the nation's infrastructure to help equipment manufacturers weather the crisis and help rebuild the economy. The survey was in the field from April 16 to 27, 2020. Seven out of ten surveyed experienced a moderately negative impact on their supply chain, while a quarter said the impact has been very negative. Four out of ten said they expect the outlook for the next 30 days to get worse and said they plan to lower their financial outlook for the same period by more than 30 percent. Finally, nine out of ten cited a decline in demand for equipment as the primary impact of the COVID-19 pandemic on their business.
Organic Outlook: Corn and Wheat Face Glut, Soy Demand Strong
Larger-than-expected beginning stocks and more harvested acres have placed organic corn and wheat on a bearish trend over the 2019/20 market year, according to the new Mercaris (Meh-CAR-us) Organic Commodity Outlook. Meanwhile, strong demand and lower imports have provided support to organic soybeans markets. Mercaris, the nation's leading market data service and online trading platform for organic, non-GMO and certified agricultural commodities, this week released its spring outlook. Despite poor planting and harvest conditions in 2019, additional certified corn and wheat farms helped push harvests above previous estimates. In addition, corn imports rose sharply at the end of the 2018/19 market year, 12 percent above projections. For organic soybeans, a collapse in imports from China and a reduction from Canada and the Black Sea Region point to supply constraints and higher prices. Meanwhile, organic corn production is estimated at 39.7 million bushels for 2019/20, up nine percent from the previous outlook but still down four percent year-over-year.
Midwest Dairy Donated $500,000 to Food Banks
Midwest Dairy this week announced a $500,000 donation to food banks in the Midwest to purchase dairy products for those in need. The contributions will be spread across the ten states Midwest Dairy represents to help meet the increased demand for dairy products during the COVID-19 pandemic. Food banks across the region have been seeing an unprecedented need in recent weeks, setting records of daily and weekly food distribution and showcasing the urgency of finding resourceful ways to provide more food to those experiencing food insecurity. With unemployment numbers still climbing and schools - where many children receive most of their daily meals - continuing to be closed, the demand is expected to continue growing. Though dairy checkoff funds cannot typically be used to purchase dairy products, the USDA has granted a one-time exception at the request of Midwest Dairy. The program also offers processors an opportunity to keep their supply chains active while navigating changes in demand.
Washington Insider: Tracer Army Mobilized
In addition to financial support, the national anti-virus effort is mobilizing a large group, perhaps 300,000 workers, to trace past contacts of infected people, Bloomberg is reporting this week. The effort is seen as crucial for coast-to-coast reopening, though controversial.
However, Bloomberg also notes that it is so far resulting in a “far smaller ragtag army that’s many weeks, if not months, from full deployment.”
Bloomberg also comments that the tracing effort has uncertain purposes in many cases. For example, West Virginia wants tracers to go unpaid while Texas, which is advertising jobs at $17 to $22 an hour, calls the gig a “simple” matter of telling people to stay home. New York City is seeking 1,000 hires with public-health backgrounds.
North Carolina, which is targeting unemployed people with high-school educations, received about 1,500 applications for 250 positions in just 24 hours.
“That shows you that there are a lot of people out of work,” said Paul Mahoney, a spokesperson for the program’s coordinator, Community Care of North Carolina. Five weeks into the pandemic, a record 26 million Americans had filed for unemployment benefits, more than 875,000 in North Carolina.
That wave of “desperation explains why Texas, Georgia and other states are stirring to life this week,” Bloomberg notes. Utah Gov. Gary Herbert said his state will reopen in a limited capacity Friday, including gyms, salons and dine-in restaurants so long as they “exercise extreme precautions.” Wyoming is doing likewise, while California’s Gov. Gavin Newsom is considering opening schools as early as July to make up for lost class time.
The main reason for the needed “army” is the belief by experts that long-term stability won’t come without a way to quickly spot COVID-19 outbreaks and stop them. As a result, the US with its “flagging public-health system,” is asking trainees to press total strangers about details: Where have you been, for how long and who else was there? And their phone numbers, please?
So, the “army” may include 300,000 tracers and specialists, according to Tom Frieden, a former US Centers for Disease Control and Prevention director and New York City health commissioner.
“Early in the outbreak, many health departments began systematic contact tracing but rapidly were overwhelmed,” Frieden said. “Now that cases are coming down in some areas, we have to trace contacts in a simple, more scalable way.”
In the meantime, House Oversight and Reform Chairwoman Carolyn Maloney, D-N.Y., said that officials from the Federal Emergency Management Agency and Department of Health and Human Services told lawmakers recently that states face shortages of testing supplies as well as personal protective equipment such as masks and medical gowns.
This acknowledgment came in spite of President Donald Trump's recent comment that governors have sufficient testing equipment. He commented on Wednesday that “the only reason the U.S. has reported one million cases of coronavirus is that our testing is “so much better” than any other country in the World.”
Still, Bloomberg points out that the virus crisis is thrusting governments on both sides of the Atlantic into a fiscal emergency along with the medical one. It reports that the EU and the US both are grappling with questions regarding how to assist their hardest-hit members without being dragged down by them. In Europe, indebted Italy is “in need” while in the US “it’s big states like New York and Illinois. “The geography and political systems may differ, but the problem is the same,” the report argues.
Both economies boast central powers that want to avoid getting on the hook for the debts of the under-performers. Republicans in Washington grumble about taking on Illinois’ problems while Berlin fears Rome’s.
In addition, there other unusual approaches to virus-related problems being undertaken. For example, the president signed an executive order Wednesday that “compels slaughterhouses to remain open, setting up a showdown between the giant companies that produce meat and the unions and activists who want to protect workers in a pandemic.” Meat processing plants around the U.S. have shut down because of the coronavirus but the president said that “such closures threaten the continued functioning of the national meat and poultry supply chain, undermining critical infrastructure during the national emergency.”
Using the Defense Production Act, he is ordering plants to stay open as part of the critical infrastructure needed to keep people fed amid growing supply disruptions from the outbreak. The government is expected to provide additional protective gear for employees as well as guidance.
So, we will see. Clearly, the federal and state governments are convinced of the need to take important, often extreme steps to offset the impacts of the outbreak. These are leading to widespread charges of unfairness and inequity across the nation even as they raise questions of overall effectiveness — charges and concerns that should be watched closely by producers as they emerge, Washington Insider believes.
However, Bloomberg also notes that it is so far resulting in a “far smaller ragtag army that’s many weeks, if not months, from full deployment.”
Bloomberg also comments that the tracing effort has uncertain purposes in many cases. For example, West Virginia wants tracers to go unpaid while Texas, which is advertising jobs at $17 to $22 an hour, calls the gig a “simple” matter of telling people to stay home. New York City is seeking 1,000 hires with public-health backgrounds.
North Carolina, which is targeting unemployed people with high-school educations, received about 1,500 applications for 250 positions in just 24 hours.
“That shows you that there are a lot of people out of work,” said Paul Mahoney, a spokesperson for the program’s coordinator, Community Care of North Carolina. Five weeks into the pandemic, a record 26 million Americans had filed for unemployment benefits, more than 875,000 in North Carolina.
That wave of “desperation explains why Texas, Georgia and other states are stirring to life this week,” Bloomberg notes. Utah Gov. Gary Herbert said his state will reopen in a limited capacity Friday, including gyms, salons and dine-in restaurants so long as they “exercise extreme precautions.” Wyoming is doing likewise, while California’s Gov. Gavin Newsom is considering opening schools as early as July to make up for lost class time.
The main reason for the needed “army” is the belief by experts that long-term stability won’t come without a way to quickly spot COVID-19 outbreaks and stop them. As a result, the US with its “flagging public-health system,” is asking trainees to press total strangers about details: Where have you been, for how long and who else was there? And their phone numbers, please?
So, the “army” may include 300,000 tracers and specialists, according to Tom Frieden, a former US Centers for Disease Control and Prevention director and New York City health commissioner.
“Early in the outbreak, many health departments began systematic contact tracing but rapidly were overwhelmed,” Frieden said. “Now that cases are coming down in some areas, we have to trace contacts in a simple, more scalable way.”
In the meantime, House Oversight and Reform Chairwoman Carolyn Maloney, D-N.Y., said that officials from the Federal Emergency Management Agency and Department of Health and Human Services told lawmakers recently that states face shortages of testing supplies as well as personal protective equipment such as masks and medical gowns.
This acknowledgment came in spite of President Donald Trump's recent comment that governors have sufficient testing equipment. He commented on Wednesday that “the only reason the U.S. has reported one million cases of coronavirus is that our testing is “so much better” than any other country in the World.”
Still, Bloomberg points out that the virus crisis is thrusting governments on both sides of the Atlantic into a fiscal emergency along with the medical one. It reports that the EU and the US both are grappling with questions regarding how to assist their hardest-hit members without being dragged down by them. In Europe, indebted Italy is “in need” while in the US “it’s big states like New York and Illinois. “The geography and political systems may differ, but the problem is the same,” the report argues.
Both economies boast central powers that want to avoid getting on the hook for the debts of the under-performers. Republicans in Washington grumble about taking on Illinois’ problems while Berlin fears Rome’s.
In addition, there other unusual approaches to virus-related problems being undertaken. For example, the president signed an executive order Wednesday that “compels slaughterhouses to remain open, setting up a showdown between the giant companies that produce meat and the unions and activists who want to protect workers in a pandemic.” Meat processing plants around the U.S. have shut down because of the coronavirus but the president said that “such closures threaten the continued functioning of the national meat and poultry supply chain, undermining critical infrastructure during the national emergency.”
Using the Defense Production Act, he is ordering plants to stay open as part of the critical infrastructure needed to keep people fed amid growing supply disruptions from the outbreak. The government is expected to provide additional protective gear for employees as well as guidance.
So, we will see. Clearly, the federal and state governments are convinced of the need to take important, often extreme steps to offset the impacts of the outbreak. These are leading to widespread charges of unfairness and inequity across the nation even as they raise questions of overall effectiveness — charges and concerns that should be watched closely by producers as they emerge, Washington Insider believes.
Legislation to Boost Ethanol Use Offered
Legislation to provide funding to build out additional ethanol infrastructure has been offered in the US House of Representatives.
The Clean Fuels Deployment Act of 2020 was introduced Tuesday by Rep. Abby Finkenauer, D-Iowa., and would authorize funding for installing and converting fuel pump infrastructure to deliver higher blends of ethanol and biodiesel.
The Department of Transportation (DOT) would set up a grant program for eligible entities that will be used cover costs related to the deployment of fueling infrastructure; converting existing pump infrastructure to deliver ethanol blends of greater than 10% and biodiesel blends of greater than 20%; and the installation of fuel pumps and related infrastructure dedicated to the distribution of higher ethanol blends and higher biodiesel blends at fueling locations. The measure would also authorize funding to help build and retrofit traditional and pipeline terminals, including rail lines, to blend biodiesel, and to build and retrofit pipelines to carry ethanol and biodiesel.
The measure would require the Underwriters Laboratory certify the equipment involved as being able to distribute blends with an ethanol content of 25% or greater.
The bill authorizes $100 million annually would be authorized under for Fiscal Year (FY) 2021 through 2026 for the effort.
The Clean Fuels Deployment Act of 2020 was introduced Tuesday by Rep. Abby Finkenauer, D-Iowa., and would authorize funding for installing and converting fuel pump infrastructure to deliver higher blends of ethanol and biodiesel.
The Department of Transportation (DOT) would set up a grant program for eligible entities that will be used cover costs related to the deployment of fueling infrastructure; converting existing pump infrastructure to deliver ethanol blends of greater than 10% and biodiesel blends of greater than 20%; and the installation of fuel pumps and related infrastructure dedicated to the distribution of higher ethanol blends and higher biodiesel blends at fueling locations. The measure would also authorize funding to help build and retrofit traditional and pipeline terminals, including rail lines, to blend biodiesel, and to build and retrofit pipelines to carry ethanol and biodiesel.
The measure would require the Underwriters Laboratory certify the equipment involved as being able to distribute blends with an ethanol content of 25% or greater.
The bill authorizes $100 million annually would be authorized under for Fiscal Year (FY) 2021 through 2026 for the effort.
House Ag Chairman Peterson Supports Boost In CCC Borrowing, But Wants Conditions
Raising the Commodity Credit Corporation (CCC) borrowing authority to $68 billion from a current $30 billion each fiscal year is supported by House Ag Committee Chairman Collin Peterson, D-Minn., but he wants conditions on any such increase.
The American Farm Bureau Federation has advocated boosting CCC authority to $68 billion, a level which reflects what the level should be if it were adjusted for inflation.
Among conditions he wants, Peterson told reporters he wants any CCC spending to be signed off by the leaders of the House and Senate Ag panels.
"Going forward, it would not be like it was in the past," he said. “The CCC and the appropriators have become the farm bill; they are doing farm policy and they are not the experts on farm policy,” he said. “It should not be that way. If the farm bill is going to be kind of an afterthought, which is what it is at this point, then we might as well abolish the Ag committee.”
The American Farm Bureau Federation has advocated boosting CCC authority to $68 billion, a level which reflects what the level should be if it were adjusted for inflation.
Among conditions he wants, Peterson told reporters he wants any CCC spending to be signed off by the leaders of the House and Senate Ag panels.
"Going forward, it would not be like it was in the past," he said. “The CCC and the appropriators have become the farm bill; they are doing farm policy and they are not the experts on farm policy,” he said. “It should not be that way. If the farm bill is going to be kind of an afterthought, which is what it is at this point, then we might as well abolish the Ag committee.”
Thursday Watch List
Markets
Thursday is first notice day for U.S. grain futures and it will be interesting to see if corn deliveries are lighter than usual at these cheap prices or if supplies are being let go. Weekly grain export sales, U.S. jobless claims, U.S. personal incomes and an update of the U.S. Drought Monitor are all set for 7:30 a.m. CDT. U.S. natural gas inventory is at 9:30 a.m. Traders also remain interested in the latest news about coronavirus, meat processing plants and weather forecasts.
Weather
Thursday will be dry and warm across the primary crop areas. This will favor field drying and planting progress. Winter wheat conditions are still less than desired in the Southern Plains.
Thursday is first notice day for U.S. grain futures and it will be interesting to see if corn deliveries are lighter than usual at these cheap prices or if supplies are being let go. Weekly grain export sales, U.S. jobless claims, U.S. personal incomes and an update of the U.S. Drought Monitor are all set for 7:30 a.m. CDT. U.S. natural gas inventory is at 9:30 a.m. Traders also remain interested in the latest news about coronavirus, meat processing plants and weather forecasts.
Weather
Thursday will be dry and warm across the primary crop areas. This will favor field drying and planting progress. Winter wheat conditions are still less than desired in the Southern Plains.
Wednesday, April 29, 2020
Trump Using Defense Production Act to Keep Meatpackers Open
President Donald Trump Tuesday announced an executive order to keep meatpacking plants open during the COVID-19 pandemic. The President will use the Defense Production Act to order companies to stay open as critical infrastructure, as meatpacking plants over the past couple of weeks closed with spikes in coronavirus cases among employees. The plan allows the federal government to supply additional personal protective equipment to meat processing facilities, according to Bloomberg News. The supply chain slowdown presents dire factors for farmers, with poultry and pork producers left with no alternative other than euthanizing animals. The order will affect processing plants for beef, chicken, eggs and pork. Republican U.S. Senators from Iowa, Chuck Grassley and Joni Ernst, this week, urged the administration to invoke the Defense Production Act. The Senators asked for assistance for processing plants, assistance for euthanizing animals, indemnity payments for depopulation costs and mental health assistance for all affected.
Growth Energy Praises House Bill to Boost Biofuel Infrastructure
Growth Energy Tuesday announced the association's support of the Clean Fuels Deployment Act. The legislation authorizes $500 million over five years for the Department of Transportation to provide grants that incentivize the deployment of fueling infrastructure for ethanol and biodiesel. The bill specifically focuses on ethanol blends greater than ten percent, and biodiesel blends greater than 20 percent. The bill was introduced by U.S. House Democrats Abby Finkenaur of Iowa, Angie Craig of Illinois, and Republicans Roger Marshall of Kansas and Don Bacon of Nebraska. Growth Energy CEO Emily Skor says the legislation “offers a roadmap for the next wave of growth that will revitalize rural communities.” The program could also be used to enhance pipelines and terminals to blend and carry ethanol and biodiesel. Funding from the clean fuels grant program could be used to incentivize the deployment of biofuels infrastructure and convert existing infrastructure to deliver the higher blends.
Think Tank Outlines Steps to Help Rural America
A progressive Washington, D.C. think tank recently issued a policy brief on ways lawmakers can help rural communities during and after the COVID-19 pandemic. The Center for American Progress is self-described as a progressive, independent, nonpartisan policy institute dedicated to improving the lives of all Americans. The brief released this week finds that many rural communities are less prepared than their urban counterparts to handle an influx of virus cases because they have fewer health care facilities, their populations tend to have more chronic health issues, and residents face transportation challenges. The organization suggests rural communities would benefit from Medicaid expansion, a national stay at home order, and dedicated funding for communities with a population under 50,000. An economist with the organization says, “Rural communities have been left behind by the government’s coronavirus response,” adding, policymakers should recognize “those communities are, in many ways, less equipped than big cities to manage the crisis.”
New Guidelines to Keep Poultry Processing Employees Safe and Protein Available
New guidance from the Centers for Disease Control will help keep poultry processing workers safe and ensure the supply chain, according to the National Chicken Council. Responding to the new guidance this week, NCC President Mike Brown says, “We appreciate the administration’s new guidance in an effort to further keep our workers safe and keep food on the shelves.” CDC recommends facilities take measures to reduce COVID-19 risks. Specifically, the new guidance reiterates many already identified mitigation measures, including social distancing, engineering controls to minimize potential contact, protective gear and face coverings, shift staggering, health screenings, training and awareness, and financial incentives not to report to work sick. Brown says the biggest problem processors face is inconsistencies among state and local health departments and government officials who, in many circumstances, are developing their own criteria for maintaining operations. NCC says there must be a uniform approach across all states. NCC is urging states to adopt guidelines by the CDC and other federal agencies immediately.
House Members Request Swift and Fair Implementation of Relief for Farmers
More than 100 members of the U.S. House of Representatives want COVID-19 related relief for farmers as effective and as immediately as possible. A letter this week to the Trump administration led by Republican Representative Rick Crawford or Arkansas, Austin Scott of Georgia, Rodney Davis of Illinois and Tom Emmer of Minnesota outlined the request. Specifically, the letter highlights concern that there will be a severe gap between producers' losses and Department of Agriculture aid. The letter implores USDA to include all producers and to not limit payments simply based on income, risk management practices, or past USDA payments. Further, the letter notes Congress's $14 billion replenishment of the Credit Commodity Corporation and requests USDA to include the funds in the relief package. Representative Davis says, "Protecting our nation’s food supply is critical during this pandemic to ensure food is available now and in the future." Representative Crawford adds, "Our nation's agricultural producers are fighting new challenges every day due to the current pandemic, and obtaining assistance shouldn't be added to their plate."
NCBA Applauds Effort to Provide Flexibility to Livestock Haulers
The National Cattlemen’s Beef Association this week applauded Senators seeking flexibility for livestock haulers. A bipartisan letter from 24 Senators outlined the need to the leadership of the Senate Committee on Commerce, Science and Transportation. NCBA Government Affairs Director Allison Rivera says, “Hauling livestock is inherently different than hauling typical consumer goods, and we continue to look for flexibilities within Hours of Service to safely haul livestock around this country.” The letter says that as the Senate Commerce Committee has jurisdictional oversight over Hours of Service regulations applicable to commercial motor vehicles, “we respectfully request that your committee work with us to provide greater flexibility for haulers of agricultural products.” The unique circumstances involved in the transport of perishable and live goods warrant flexible laws and regulations to ensure a safe environment, the lawmakers say, for animals and drivers. The letter states, “It is important that Hours of Service regulations provide for a commonsense framework for drivers, rather than a one-size-fits-all model.”
Washington Insider: Taking Aim at the Tariffs
At this moment when broad efforts are underway to reduce the impacts of the coronavirus, lobbyists are pushing hard on many areas, and are especially scrambling to expand relief on more tariffs. Bloomberg says. It notes that tariff payments for U.S. companies are coming due soon on everything from imported Chinese fabrics to Italian cheeses and Scotch whisky.
And, the administration gave some importers a three-month postponement on duties for select goods imported in March and April but excluded from the announced deferral billions of dollars in other tariffs, including those imposed on goods from China, imported steel and aluminum, and a number of products from Europe. The report said that the decision was seen as a “blow to industries pushing for more comprehensive duty relief.”
“We are going to push very, very hard on Congress to say, ‘OK, thanks for the beautifully wrapped box, but can we put something in it now?’” said Nicole Bivens Collinson, the head of the international trade and government relations practice at Sandler, Travis & Rosenberg. The former official in the office of the U.S. Trade Representative is lobbying for an informal coalition of companies seeking to defer most other tariffs.
Advocates say such a policy wouldn’t have a lasting impact on government revenues because they are simply seeking to make the payments at a later date.
The new tariff deferral policy, announced on April 19, also doesn’t refund any duties already paid, even in the period covered by the deferral, thus limiting its impact to select products imported in April. Tariff invoices for May will begin to arrive soon.
Collinson said the new rule’s limited scope and eligibility criteria are problematic during the economic collapse. One of her clients in the apparel industry, she said, is only seeing $56,000 of its $190,000 in duty payments deferred under the new rule.
“My thing is, why is the government taking the money out of their hands, only to turn around and then give them a stimulus package to put it back in?” Collinson said.
The policy shift came after weeks of denials by the administration that it would make such a move. Industry groups and lobbyists are now urging officials and lawmakers to go further.
Steve Lamar, the leader of the American Apparel & Footwear Association said. “Still, there is more that can and should be done.” He is among those arguing to include in the deferral the so-called Section 301 tariffs on items imported from China which impact many retail and apparel companies.
Brian Dodge, the president of the Retail Industry Leaders Association (RILA), is pushing for a 180-day deferral on all tariff payments.
“The limited duty deferral is a start and it is appreciated. We hope the administration will be open to doing more,” RILA spokeswoman Melissa Murdock said, and added that “a suspension or full repeal of the 301 tariffs remains the ultimate goal and would do the most to help retailers.”
Prior to the change, Treasury Secretary Steven Mnuchin twice phoned into CEO calls held by RILA, during which executives advocated to defer the duties on Chinese items, according to Jo-Ann Stores, Inc., CEO Wade Miquelon. He said total tariff payments were “far more” than the company’s operating profit and have left retailers caught up in a trade war with China and hurt by tariffs that were sparked by intellectual property theft allegations.
“It’s not China or anybody else paying the tariffs. It’s U.S. companies that are paying,” said Americans for Free Trade coalition spokesman Jonathan Gold, who is vice president of supply chain and customs policy at the National Retail Federation.
U.S. steel companies and other domestic producers are pushing back against the effort to expand the deferral. For example, the Coalition for a Prosperous America represents a group of unions and domestic manufacturing and agricultural interests wrote to the president on Wednesday urging the administration not to expand the deferral. The letter stated it would “simply increase imports and make it harder for our members to avoid laying off employees.”
The president was adamant he wouldn’t delay any tariffs before doing so this month. While limited that initial reversal gives Collinson hope the administration will go even further if companies can illustrate how the initial deferral was helpful and explain why it should be more inclusive. She’s hoping to leverage congressional support on the issue to have it included in future relief legislation.
“We’ve written language that will accentuate the change,” Collinson said. “It’s three sentences, it’s very easy. It’s one of those things where if you have the right support it can become part of a piece of legislation pretty easily.”
So, we will see. Certainly, the coronavirus and its impacts raise new questions about trade issues â?? and, especially about the administration’s “get tough” tariff policies. Amid efforts to provide new supports to industries, the basis for the earlier tariff fights should be reconsidered â?? a process producers should watch closely as it expands, Washington Insider believes.
And, the administration gave some importers a three-month postponement on duties for select goods imported in March and April but excluded from the announced deferral billions of dollars in other tariffs, including those imposed on goods from China, imported steel and aluminum, and a number of products from Europe. The report said that the decision was seen as a “blow to industries pushing for more comprehensive duty relief.”
“We are going to push very, very hard on Congress to say, ‘OK, thanks for the beautifully wrapped box, but can we put something in it now?’” said Nicole Bivens Collinson, the head of the international trade and government relations practice at Sandler, Travis & Rosenberg. The former official in the office of the U.S. Trade Representative is lobbying for an informal coalition of companies seeking to defer most other tariffs.
Advocates say such a policy wouldn’t have a lasting impact on government revenues because they are simply seeking to make the payments at a later date.
The new tariff deferral policy, announced on April 19, also doesn’t refund any duties already paid, even in the period covered by the deferral, thus limiting its impact to select products imported in April. Tariff invoices for May will begin to arrive soon.
Collinson said the new rule’s limited scope and eligibility criteria are problematic during the economic collapse. One of her clients in the apparel industry, she said, is only seeing $56,000 of its $190,000 in duty payments deferred under the new rule.
“My thing is, why is the government taking the money out of their hands, only to turn around and then give them a stimulus package to put it back in?” Collinson said.
The policy shift came after weeks of denials by the administration that it would make such a move. Industry groups and lobbyists are now urging officials and lawmakers to go further.
Steve Lamar, the leader of the American Apparel & Footwear Association said. “Still, there is more that can and should be done.” He is among those arguing to include in the deferral the so-called Section 301 tariffs on items imported from China which impact many retail and apparel companies.
Brian Dodge, the president of the Retail Industry Leaders Association (RILA), is pushing for a 180-day deferral on all tariff payments.
“The limited duty deferral is a start and it is appreciated. We hope the administration will be open to doing more,” RILA spokeswoman Melissa Murdock said, and added that “a suspension or full repeal of the 301 tariffs remains the ultimate goal and would do the most to help retailers.”
Prior to the change, Treasury Secretary Steven Mnuchin twice phoned into CEO calls held by RILA, during which executives advocated to defer the duties on Chinese items, according to Jo-Ann Stores, Inc., CEO Wade Miquelon. He said total tariff payments were “far more” than the company’s operating profit and have left retailers caught up in a trade war with China and hurt by tariffs that were sparked by intellectual property theft allegations.
“It’s not China or anybody else paying the tariffs. It’s U.S. companies that are paying,” said Americans for Free Trade coalition spokesman Jonathan Gold, who is vice president of supply chain and customs policy at the National Retail Federation.
U.S. steel companies and other domestic producers are pushing back against the effort to expand the deferral. For example, the Coalition for a Prosperous America represents a group of unions and domestic manufacturing and agricultural interests wrote to the president on Wednesday urging the administration not to expand the deferral. The letter stated it would “simply increase imports and make it harder for our members to avoid laying off employees.”
The president was adamant he wouldn’t delay any tariffs before doing so this month. While limited that initial reversal gives Collinson hope the administration will go even further if companies can illustrate how the initial deferral was helpful and explain why it should be more inclusive. She’s hoping to leverage congressional support on the issue to have it included in future relief legislation.
“We’ve written language that will accentuate the change,” Collinson said. “It’s three sentences, it’s very easy. It’s one of those things where if you have the right support it can become part of a piece of legislation pretty easily.”
So, we will see. Certainly, the coronavirus and its impacts raise new questions about trade issues â?? and, especially about the administration’s “get tough” tariff policies. Amid efforts to provide new supports to industries, the basis for the earlier tariff fights should be reconsidered â?? a process producers should watch closely as it expands, Washington Insider believes.
Ethanol Industry Continues Push For Aid
Help for the U.S. ethanol sector will benefit both farmers and the renewable fuels industry, according to American Coalition for Ethanol (ACE) CEO Brian Jennings.
“More than half of U.S. ethanol production capacity is already offline, high-skill jobs are being shed, livestock and food processing customers are facing supply disruptions, and our members’ working capital is vanishing. Ethanol use could fall by more than three billion gallons in 2020, eliminating the market for at least one billion bushels of U.S. corn,” Jennings wrote in a letter to President Donald Trump. “As you did on April 21, when you directed the Secretaries of Energy and Treasury to formulate a plan to provide funds to the oil and gas industry, we urge similar action for our sector.”
Noting the group has sought out help from EPA relative to the 2020 biofuel requirements under the Renewable Fuel Standard (RFS), Jennings said the situation has “exposed a shortcoming in the agency’s rulemaking, and failure to increase the RFS this year will result in a waiver of promised gallons.”
“More than half of U.S. ethanol production capacity is already offline, high-skill jobs are being shed, livestock and food processing customers are facing supply disruptions, and our members’ working capital is vanishing. Ethanol use could fall by more than three billion gallons in 2020, eliminating the market for at least one billion bushels of U.S. corn,” Jennings wrote in a letter to President Donald Trump. “As you did on April 21, when you directed the Secretaries of Energy and Treasury to formulate a plan to provide funds to the oil and gas industry, we urge similar action for our sector.”
Noting the group has sought out help from EPA relative to the 2020 biofuel requirements under the Renewable Fuel Standard (RFS), Jennings said the situation has “exposed a shortcoming in the agency’s rulemaking, and failure to increase the RFS this year will result in a waiver of promised gallons.”
Euthanizing Hogs Brings COVID-19 Actions
Around 3,000 healthy hogs were euthanized in Minnesota last week, according to the Minnesota Pork Producers Association, and around 200,000 or more could soon follow.
House Ag Committee Chairman Collin Peterson, D-Minn., said Tuesday that the JBS hog plant in Worthington, Minnesota, is reopening today (Wednesday), but will be euthanizing hogs and not processing them into meat to reach consumers. The action will take a small crew that can practice social distancing, he noted.
And, President Donald Trump Tuesday said he would sign an executive order that would invoke
Meanwhile, Iowa Republican lawmakers, including the state’s governor and ag commissioner, are calling on USDA to compensate hog producers for animals they have to euthanize.
“At current capacity levels, there are 700,000 pigs across the nation that cannot be processed each week and must be humanely euthanized. Iowa produces one-third of the nation’s pork supply and one-fourth of the nation’s pork processing capacity. Simply put, Iowa pork producers cannot operate if they cannot send their pigs to market,” the letter said.
A group of Minnesota state lawmakers also penned a letter to President Donald Trump, asking for him to direct the Centers for Disease Control and Prevention (CDC) to coordinate efforts to develop plans to reopen processing plants, to work with small processors to get license exemptions to ensure as many hogs as possible can be processed, work with regional governors and mobilize the National Guard to assist where needed and coordinate any hog destruction to take place at processing plants rather than on-farm.
House Ag Committee Chairman Collin Peterson, D-Minn., said Tuesday that the JBS hog plant in Worthington, Minnesota, is reopening today (Wednesday), but will be euthanizing hogs and not processing them into meat to reach consumers. The action will take a small crew that can practice social distancing, he noted.
And, President Donald Trump Tuesday said he would sign an executive order that would invoke
Meanwhile, Iowa Republican lawmakers, including the state’s governor and ag commissioner, are calling on USDA to compensate hog producers for animals they have to euthanize.
“At current capacity levels, there are 700,000 pigs across the nation that cannot be processed each week and must be humanely euthanized. Iowa produces one-third of the nation’s pork supply and one-fourth of the nation’s pork processing capacity. Simply put, Iowa pork producers cannot operate if they cannot send their pigs to market,” the letter said.
A group of Minnesota state lawmakers also penned a letter to President Donald Trump, asking for him to direct the Centers for Disease Control and Prevention (CDC) to coordinate efforts to develop plans to reopen processing plants, to work with small processors to get license exemptions to ensure as many hogs as possible can be processed, work with regional governors and mobilize the National Guard to assist where needed and coordinate any hog destruction to take place at processing plants rather than on-farm.
Wednesday Watch List
Markets
Traders will be poring over the details of Tuesday's executive order to keep meat processing plants open. The Department of Energy's weekly report of energy inventories includes ethanol production and will be important for Wednesday's grain markets. A report of first quarter U.S. GDP is due out at 7:30 a.m. CDT, followed by U.S. pending home sales at 9 a.m. and an announcement from the Federal Reserve at 1 p.m. CDT. News updates on coronavirus, weather and trade all remain topics of interest.
Weather
Light to moderate rain is in store for the eastern Midwest and Delta Wednesday, interrupting planting. Drier conditions elsewhere will favor progress. Strong winds through northern and central areas will cause additional topsoil drying and will stress winter wheat in the western and southwestern Plains.
Traders will be poring over the details of Tuesday's executive order to keep meat processing plants open. The Department of Energy's weekly report of energy inventories includes ethanol production and will be important for Wednesday's grain markets. A report of first quarter U.S. GDP is due out at 7:30 a.m. CDT, followed by U.S. pending home sales at 9 a.m. and an announcement from the Federal Reserve at 1 p.m. CDT. News updates on coronavirus, weather and trade all remain topics of interest.
Weather
Light to moderate rain is in store for the eastern Midwest and Delta Wednesday, interrupting planting. Drier conditions elsewhere will favor progress. Strong winds through northern and central areas will cause additional topsoil drying and will stress winter wheat in the western and southwestern Plains.
Tuesday, April 28, 2020
CDC Issues Updated Guidance for Meatpackers
New guidance by the Centers for Disease Control seeks to protect meatpacking workers from COVID-19. The meat and poultry processing workers are not exposed to the virus through the meat products they handle. However, their work environments—processing lines and others where they have close contact with coworkers and supervisors—may contribute substantially to their potential exposures. Many meatpacking facilities across the nation have closed for short periods due to infection rates of workers at the facilities. The CDC says meatpackers should configure work environments so that workers are spaced at least six feet apart, if possible. Additionally, facilities should use physical barriers, such as strip curtains, plexiglass or similar materials, or other dividers or partitions, to separate meat and poultry processing workers from each other, if feasible. Further, facilities should consider consulting with a ventilation engineer to ensure adequate ventilation in work areas to minimize workers' potential exposures. The National Cattlemen’s Beef Association welcomed the response, saying the guidance protects workers, and supports the operation of beef processing plants.
USDA Launches Coordination Center for Livestock Producers Impacted by Reduced Demand
The Department of Agriculture announced a coordination center to assist producers impacted by meat processing plant closures late last week. USDA says livestock and poultry producers face an unprecedented emergency due to COVID-19, particularly with the closing of meat processing plants in several states. The USDA Animal and Plant Health Inspection Service is establishing a National Incident Coordination Center to provide direct support to producers whose animals cannot move to market as a result of processing plant closures due to COVID-19. Going forward, APHIS' Coordination Center, State Veterinarians, and other state officials will assist in identifying potential alternative markets if a producer is unable to move animals, and, if necessary, advise and assist on depopulation and disposal methods. Additionally, APHIS will mobilize and deploy assets of the National Veterinary Stockpile as needed and secure the services of contractors that can supply additional equipment, personnel, and services, much as it did during the large-scale Highly Pathogenic Avian Influenza emergency in 2015.
AEM: Additional Relief Promising, But More Needed
The Association of Equipment Manufacturers says additional aid authorized by Congress last week is encouraging, but lawmakers need to do more. Late last week, Congress passed new legislation to provide $484 billion in additional relief for Americans enduring hardships due to the COVID-19 pandemic. This includes $310 billion for the Small Business Administration’s Paycheck Protection Program, which AEM says many equipment manufacturers are relying on to keep their operations going. However, AEM President Dennis Slater says,” too many equipment manufacturers are still struggling to stay open and on the job.” The Paycheck Protection Program is helpful for many small equipment manufacturers. Still, Slater says Congress must now turn their attention to a large number of manufacturers who do not qualify for this program but still desperately need support. AEM is the North American-based international trade group representing off-road equipment manufacturers and suppliers, with more than 1,000 companies and more than 200 product lines in the agriculture and construction-related industry sectors worldwide.
USTR: USMCA Effective July 1
The U.S.-Mexico-Canada-Agreement enters effect July 1, according to U.S. Trade Representative Robert Lighthizer. The July 1 date represents a one-month delay from the original timeline, following the signing of the agreement by the U.S., Canada and Mexico. In a statement last week, Lighthizer says the agreement supports more balanced, reciprocal trade, leading to freer markets, fairer trade, and robust economic growth in North America. The agreement contains significant improvements and modernized approaches to rules of origin, agricultural market access, intellectual property, digital trade, financial services, labor, and numerous other sectors. Lighthizer says, “The crisis and recovery from the COVID-19 pandemic demonstrates that now, more than ever, the United States should strive to increase manufacturing capacity and investment in North America.” Lighthizer calls the start of USMCA a “landmark achievement in that effort.” The trade agreement ensures most agriculture tariffs will remain at zero, and expands dairy market access to Canada for the U.S., among other benefits.
Senators Seek Support for Rural Broadcasters
A large group of U.S. Senators wants relief for local and rural broadcasters and newspapers. More than 70 Senators signed a letter to the Trump administration regarding local media, following a similar letter last week. The lawmakers say that in many rural areas, broadcast stations are the predominant or only form of local information. The letter says it is critical local and rural media can continue to operate to help Americans stay up to date with the latest news and information. The Senators requested the White House Office of Management and Budget to work with federal agencies to increase advertising with local media outlets. The request will help local media outlets, "ensure they are able to continue to operate throughout the COVID-19 pandemic.” Many federal agencies maintain advertising accounts to provide notices and information to the public. The recent passage of the CARES Act, according to the lawmakers, provides opportunity for the federal government to relay essential information to the public through local advertisements.
Farm Foundation Accepting Nominations for Young Agri-Food Leaders Network
Farm Foundation is seeking nominations for its Young Agri-Food Leaders Network, a new program created to actively engage emerging leaders in food and agribusiness. The young agri-food leaders will participate in a year-long series of interactive learning and networking experiences, focused on gaining a deeper understanding of the food and agriculture value chain. The program also hopes to help young professionals build a strong, enduring network of peers and mentors in business, farming and government. Up to ten participants will be sponsored to attend events, engage in virtual conversations and participate in exclusive learning and networking opportunities. To be eligible for this program, individuals must be a U.S. citizen, between the ages of 25 and 40, be employed in the agri-food industry, and show significant leadership potential. Nominators may be colleagues, business partners, or any other person familiar with the Young Agri-Food Leader nominee's career. The deadline to nominate a young agri-food leader is May 15, 2020. Visit farmfoundation.org for more information.
Washington Insider: Protecting Food Plant Workers
As businesses struggle to craft strategies to reopen following the anti-virus shutdown, The Hill is reporting that calls are growing for more protections for meat-plant workers, and that the challenge is daunting.
Recently, Smithfield Foods, the world's largest pork producer, shut down a pork processing plant in South Dakota that accounts for up to 5 percent of production after more than 700 of its workers were infected and one died from COVID-19. Tysons Food, Cargill and JBS, have also been forced to close plants after workers were infected.
A USDA spokesperson told The Hill that 137 of its food inspectors have tested positive for the virus. Federal inspectors were directed to find or make their own masks and face coverings on April 9.
Rep. Jim Costa, D-Calif., a member of the House Agriculture Committee, called the USDA directive “troubling" in a letter sent Friday to USDA Secretary Sonny Perdue. “Shortages of personal protective equipment are well known and given the Vice President’s April 16th public pledge to ensure every frontline food worker has a mask, I hope this directive is no longer needed,” Costa wrote.
In a letter to Vice President Pence, the United Food and Commercial Workers International Union told the administration to “prioritize the safety and protection of all grocery workers and workers in meatpacking and food processing plants.”
The UFCW told the administration to deploy protective equipment to meat packing plants and mandate social distancing at their workplaces. The union is also asking Vice President Pence to deem its workers eligible for prioritized testing.
“Given the contagious nature of this pandemic and the significant number of workers in these meatpacking plants and processing facilities, the above-mentioned recommendations are among the critical steps that we believe must be adopted as soon as humanly possible,” the letter read.
According to UFCW, more than 5,000 workers have been diagnosed or exposed. The union also requested a halt to line speed waivers, which it says further endanger employees working on slaughter lines. USDA's Food and Safety Inspection Service approved 11 regulatory waivers in the first two weeks of April for poultry plants to increase their maximum line speed.
The pressure to increase line speed has come as the pandemic threatens to create food shortages, The Hill said. Ben Lilliston, interim co-executive director at the Institute for Agriculture and Trade Policy, told The Hill that most of the meat on the market right now was produced in March and most meat producers that experienced closures, are international. He said if these processing plants are closed for an extended period of time and if other meat processing plants in Mexico, Canada and elsewhere also experience shutdowns, consumers could see changes on supermarket shelves.
“These highly-profitable global meat companies need to take a series of protective measures for their workers. That includes slowing down the lines to allow for more social distancing,” he said. “This will ultimately allow the plants to re-open and keep them open. In the longer-term we need to address the vulnerability of this very concentrated system with huge animal operations feeding into huge meat processing plants.”
The UFCW claims 250,000 members who are meat and food-processing workers and represent about 80% of U.S. beef and pork production and 40% of poultry production. Plant workers on a recent conference call organized by the union said they are afraid of falling ill although meat processors have been bleaching hallways and doorways for safety and installing dividers to separate employees. "As far as social distancing, it's almost impossible," said Margarita Heredia, who works in a JBS pork plant in Marshalltown, Iowa. "There's no room."
"We’re working hard to protect our team members during this ever-changing situation, while also ensuring we continue fulfilling our critical role of helping feed people," Tyson spokeswoman Liz Croston said.
The reports from plants and workers across the industry indicate the difficulty of maintaining the distance and other protections necessary to protect workers â?? and the risks have grown both for plant workers and federal employees responsible for protection services, threats that seem to be intensifying.
USDA should increase its attention to these problems as this especially the virulent virus attack intensifies. Washington Insider believes.
Recently, Smithfield Foods, the world's largest pork producer, shut down a pork processing plant in South Dakota that accounts for up to 5 percent of production after more than 700 of its workers were infected and one died from COVID-19. Tysons Food, Cargill and JBS, have also been forced to close plants after workers were infected.
A USDA spokesperson told The Hill that 137 of its food inspectors have tested positive for the virus. Federal inspectors were directed to find or make their own masks and face coverings on April 9.
Rep. Jim Costa, D-Calif., a member of the House Agriculture Committee, called the USDA directive “troubling" in a letter sent Friday to USDA Secretary Sonny Perdue. “Shortages of personal protective equipment are well known and given the Vice President’s April 16th public pledge to ensure every frontline food worker has a mask, I hope this directive is no longer needed,” Costa wrote.
In a letter to Vice President Pence, the United Food and Commercial Workers International Union told the administration to “prioritize the safety and protection of all grocery workers and workers in meatpacking and food processing plants.”
The UFCW told the administration to deploy protective equipment to meat packing plants and mandate social distancing at their workplaces. The union is also asking Vice President Pence to deem its workers eligible for prioritized testing.
“Given the contagious nature of this pandemic and the significant number of workers in these meatpacking plants and processing facilities, the above-mentioned recommendations are among the critical steps that we believe must be adopted as soon as humanly possible,” the letter read.
According to UFCW, more than 5,000 workers have been diagnosed or exposed. The union also requested a halt to line speed waivers, which it says further endanger employees working on slaughter lines. USDA's Food and Safety Inspection Service approved 11 regulatory waivers in the first two weeks of April for poultry plants to increase their maximum line speed.
The pressure to increase line speed has come as the pandemic threatens to create food shortages, The Hill said. Ben Lilliston, interim co-executive director at the Institute for Agriculture and Trade Policy, told The Hill that most of the meat on the market right now was produced in March and most meat producers that experienced closures, are international. He said if these processing plants are closed for an extended period of time and if other meat processing plants in Mexico, Canada and elsewhere also experience shutdowns, consumers could see changes on supermarket shelves.
“These highly-profitable global meat companies need to take a series of protective measures for their workers. That includes slowing down the lines to allow for more social distancing,” he said. “This will ultimately allow the plants to re-open and keep them open. In the longer-term we need to address the vulnerability of this very concentrated system with huge animal operations feeding into huge meat processing plants.”
The UFCW claims 250,000 members who are meat and food-processing workers and represent about 80% of U.S. beef and pork production and 40% of poultry production. Plant workers on a recent conference call organized by the union said they are afraid of falling ill although meat processors have been bleaching hallways and doorways for safety and installing dividers to separate employees. "As far as social distancing, it's almost impossible," said Margarita Heredia, who works in a JBS pork plant in Marshalltown, Iowa. "There's no room."
"We’re working hard to protect our team members during this ever-changing situation, while also ensuring we continue fulfilling our critical role of helping feed people," Tyson spokeswoman Liz Croston said.
The reports from plants and workers across the industry indicate the difficulty of maintaining the distance and other protections necessary to protect workers â?? and the risks have grown both for plant workers and federal employees responsible for protection services, threats that seem to be intensifying.
USDA should increase its attention to these problems as this especially the virulent virus attack intensifies. Washington Insider believes.
SBA Issues Guidance On Ag Eligibility For PPP
Agricultural producers, farmers, and ranchers are eligible for small business rescue loans provided they meet certain requirements, according to new Payroll Protection Program (PPP) guidance from the U.S. Treasury Dept. and Small Business Administration (SBA).
Qualifications include having 500 or fewer workers or if the business fits within the revenue-based sized standard, which is average annual receipts of $1 million. Producers, farmers, and ranchers can also qualify if their business meets SBA’s “alternative size standard,” which is defined as having maximum net worth not more than $15 million, and average net income after federal income taxes, excluding any carry-over losses, for two full fiscal years before the application date of not more than $5 million.
Guidance also says agricultural and other forms of cooperatives are eligible to get PPP funds if other requirements are met.
Qualifications include having 500 or fewer workers or if the business fits within the revenue-based sized standard, which is average annual receipts of $1 million. Producers, farmers, and ranchers can also qualify if their business meets SBA’s “alternative size standard,” which is defined as having maximum net worth not more than $15 million, and average net income after federal income taxes, excluding any carry-over losses, for two full fiscal years before the application date of not more than $5 million.
Guidance also says agricultural and other forms of cooperatives are eligible to get PPP funds if other requirements are met.
Pressure Continues From Lawmakers On Ag Aid Effort
Some 121 lawmakers penned a letter to President Donald Trump on the ag aid plan being drawn up by USDA, with the letter signed by key lawmakers like House Minority Leader Kevin McCarthy, R-Calif., House Republican Whip Steve Scalise, R-La., and ranking member of the House Ag Committee Mike Conaway, R-Texas.
The lawmakers pointed out the losses being faced by cattlemen and others in the ag sector and it raised a familiar theme: Relief should not be further reduced by payment limitations “that would harm real family farmers (of both specialty and row crops), ranchers, livestock and dairy producers.” Pay limits “may have a place in Farm Bill debates,” the letter said, “and may even be necessary in the context of trade aid, but if the goal of this emergency package is to support critical infrastructure and industry, it needs to flow in proportion to production, risk, and losses.”
The lawmakers said USDA needs to come up with a payment effort that does “not discriminate against producers who marketed their crop or used risk management practices, including hedging and forward contracts. These are crucial to producers managing enormous risks.”
Plus, the help should not exclude producers of any crop. As for the Commodity Credit Corporation (CCC) $14 billion borrowing authority that comes available in July, the lawmakers said USDA should “include this amount in this relief package in order to address the concerns we have outlined and offer relief in phases as you did so successfully under the Market Facilitation Program (MFP).”
The lawmakers pointed out the losses being faced by cattlemen and others in the ag sector and it raised a familiar theme: Relief should not be further reduced by payment limitations “that would harm real family farmers (of both specialty and row crops), ranchers, livestock and dairy producers.” Pay limits “may have a place in Farm Bill debates,” the letter said, “and may even be necessary in the context of trade aid, but if the goal of this emergency package is to support critical infrastructure and industry, it needs to flow in proportion to production, risk, and losses.”
The lawmakers said USDA needs to come up with a payment effort that does “not discriminate against producers who marketed their crop or used risk management practices, including hedging and forward contracts. These are crucial to producers managing enormous risks.”
Plus, the help should not exclude producers of any crop. As for the Commodity Credit Corporation (CCC) $14 billion borrowing authority that comes available in July, the lawmakers said USDA should “include this amount in this relief package in order to address the concerns we have outlined and offer relief in phases as you did so successfully under the Market Facilitation Program (MFP).”
Tuesday Watch List
Markets
The Federal Reserve begins a two-day meeting Tuesday and expectations are low for a major change in policy, but comments will be watched on Wednesday. An index of consumer confidence is Tuesday's only official report, due out at 9 a.m. CDT. U.S. coronavirus statistics remain crucially important and have looked more optimistic lately. Weather forecasts, trade news and meat plant updates are all of interest.
Weather
Showers with light to moderate rain totals will cross the northern and western Midwest along with portions of the Delta Tuesday. Areas with rain will have some fieldwork and planting interruptions. Drier conditions elsewhere will offer progress, notably in the Plains. Heavy rains in some eastern Midwest areas during the past weekend mean extensive interruptions in fieldwork. Western and northern Plains wheat will be stressed by very dry, windy and hot conditions, which also bring high wildfire potential.
The Federal Reserve begins a two-day meeting Tuesday and expectations are low for a major change in policy, but comments will be watched on Wednesday. An index of consumer confidence is Tuesday's only official report, due out at 9 a.m. CDT. U.S. coronavirus statistics remain crucially important and have looked more optimistic lately. Weather forecasts, trade news and meat plant updates are all of interest.
Weather
Showers with light to moderate rain totals will cross the northern and western Midwest along with portions of the Delta Tuesday. Areas with rain will have some fieldwork and planting interruptions. Drier conditions elsewhere will offer progress, notably in the Plains. Heavy rains in some eastern Midwest areas during the past weekend mean extensive interruptions in fieldwork. Western and northern Plains wheat will be stressed by very dry, windy and hot conditions, which also bring high wildfire potential.
Monday, April 27, 2020
Senators Want Farm Payment Caps Removed
A bipartisan group of senators wants the Trump Administration to remove the caps on the amount of direct coronavirus relief farmers can get under USDA’s new aid package. Politico says the $19 billion plan for relief, put together by President Trump and Ag Secretary Sonny Perdue, includes $16 billion in direct payments, which are capped at $125,000 per commodity and $250,000 per person. That’s in line with payment limits from the 2018 Farm Bill. In a letter to the president, 28 senators pointed out that the limits could disproportionately hurt some of the hardest-hit corners of agriculture. Perdue is hoping to launch the aid program in May, and the senators want the payment limits scrapped before USDA puts the finishing touches on the aid program. For example, fresh produce growers have higher production costs than other farmers. Strawberry growers can spend up to $30,000 an acre. The senators say that means the current payment limitations will be “too restrictive to meaningfully address the losses” they’re facing. Purdue has already said there won’t be enough money to help all sectors of agriculture, adding that getting rid of payment limitations will likely mean running out of money that much quicker.
China Studying How to Expedite U.S. Purchases Despite Opposition
Bloomberg says China is looking at possible ways to speed up its purchases of American farm goods to meet its Phase One Trade Agreement commitments. However, it appears not everyone is happy with the idea. The government is looking at speeding up the process because the coronavirus delayed some imports. Proposals include potentially buying 10 million tons of U.S. soybeans for Chinese state reserves if demand from private buyers isn’t enough. China could also fulfill its annual import quota of corn, which is currently at 7.2 million tons, with grain from America. The Asian nation could also consider buying more than its quota, potentially reaching as high as 20 million tons of U.S. corn imports. China is also looking at buying one million tons of U.S. cotton for government reserves. However, Bloomberg points out that there is some opposition to the planned buys. Some officials are questioning whether the government should be trying to expedite U.S. purchases given the downturn in the Chinese economy after the coronavirus outbreak. The current round of discussions on the purchases is reported to be at the lower levels of the Chinese government, with no final decision made yet.
PPP Relief Act Passed by Congress Expected to Help Agriculture
Congress passed the Paycheck Protection Program Increase Act and President Trump signed in on Friday. National Cattlemen’s Beef Association Vice President of Government Affairs Ethan Lane says his organization is pleased with congress passing more money for PPP. “America’s cattle producers are working hard every day to keep feeding America, even as they face more than $13 billion in financial losses while also tending to the health of their families during the pandemic,” Lane says. “We hope the swift passage of the PPP Act means more aid will be available to cattle producers.” Lane added that the NCBA is also grateful that Congress explicitly authorized producer eligibility for Economic Injury Disaster Loans and emergency grants administered by the Small Business Administration. Todd Van Hoose, President and CEO of the Farm Credit Council, says, “We will do everything in our power to get farmers and ranchers access to funding through the Paycheck Protection Program.” Public Lands Council President Bob Skinner says, “Federal lands ranchers play a major role in American agriculture, raising 60 percent of our nation’s sheep herd and 40 percent of the nation’s cattle herd. The expanded relief will help to make sure that the cattle and sheep industries can keep producing food and fiber.”
Growth Energy Calls for Relief for U.S. Ethanol
Two more of the country’s ethanol plants are going offline amid the COVID-19 pandemic. Growth Energy CEO Emily Skor says that underscores the industry’s need for help. “We just went through the third week in a row that ethanol production hit a record-breaking low, even as stockpiles hit a new record-breaking high,” Skor says. “The evaporation of fuel demand due to COVID-19 has been a knock-out blow to biofuel plants across the heartland, who were already fighting an uphill battle against trade barriers, regulatory threats, and a flood of foreign oil.” She says while half the industry is already offline, two more ADM plants, one in Iowa and the other in Nebraska, have been added to the growing list of plants impacted. “Ethanol producers represent the heart of the rural economy, and when they’re forced offline, the ripple effect can be felt across the agricultural supply chain, including farmers who are without a market for their crops, as well as meatpackers and ranchers who rely on local ethanol plants for animal feed and carbon dioxide,” she adds. “With plans to support the oil and gas industries already in place, it’s vital that policymakers give the same consideration to biofuel workers and farmers equally impacted by the disruptions to the motor fuel market.”
Senate Democrats Release COVID-19 Impact Report
Senate Ag Committee Ranking Member Debbie Stabenow of Michigan led a group of fellow Democrats in releasing a report on the impact of COVID-19 in rural America. The report was put together by the Democratic Policy and Communications Committee, which Stabenow chairs. The Hagstrom Report says senators from Minnesota, West Virginia, and Montana joined Stabenow on a conference call, and they pointed out that the coronavirus is later in coming to rural America but is now spreading rapidly. The senators repeatedly brought up the issue of broadband internet access during the conference call. “Tele-health is a wonderful thing if you have internet service,” says Joe Manchin of West Virginia, “but worthless for those people who don’t have access to the internet.” Some of the highlights from the Democratic plan for responding to COVID-19 include widespread, rapid testing to save lives, contain the spread, and reopen the economy. It also includes immediate high-speed internet funding to close the digital divide and deploy high-speed internet across the country. They also want protections for the food supply and food industry workers, as well as expedited support for farmers, ranchers, and small businesses to help them weather the crisis.
Farmer Pessimism Hits Historic Level
With everything going on right now, it’s probably not surprising that farmers aren’t optimistic. DTN found that farmer attitudes have hit historic lows because of poor commodity prices and falling economic conditions due to COVID-19. The DTN Agriculture Confidence Index dropped a staggering 97 points from December 2019, with the index currently at 67. It’s a 43-point drop from the spring of 2019. The previous record-low index level was 71.9 in August of 2016, as falling crop prices hit during a divisive presidential election. In the latest survey, record or near-record pessimism was found across the entire agricultural spectrum, and it didn’t matter what crops farmers were growing, what they’re income level was, or where they were located. Numbers above 100 indicate optimism, while numbers below 100 show pessimism. The current survey produced a current expectation score of 55, with a future expectation index at a still-pessimistic 73. DTN says it is significant that the record lows come during a spring survey as optimism tends to be at its highest as farmers get ready to plant. Midwest farmers showed the most pessimism for current conditions, yet they also showed the most optimism for the future.
Washington Insider: The New Supply Chains
Much of the press is in an introspective mode this week, attempting to assess what is happening to the global economy and what is likely to follow. For example, Bloomberg says that when the timeline of the pandemic of 2020 is complete, March 24 will stand out as a day to remember.
On that day CEO of Coca-Cola Co. described the supply chain as “creaking around the world,” James Quincey said, clearly worried about the need to adjust.
Now, a month later, many supply chain continue to face pressures and some shifts are worsening, particularly in the pipelines for fresh food and medical goods. But Quincey said his plant shutdowns were confined to “just a couple of places” and he even congratulated employees for keeping “everything” running.
A “great strength” during the disruptions, he said on April 21, has been local production of Coke’s soft drinks and juices -- we’ve had some issues on timing of ingredients but even those are much better than they were a few weeks ago, he said.”
Quincy noted that the same can’t be said of American meatpacking companies that have closed processing plants to contain outbreaks among their workers, or auto companies with supplier networks sprawling from southeast Asia to eastern Europe that are at least another week away from restarting assembly lines. Industrial giants like Alcoa Corp. have to reckon with weak global demand for several more months or perhaps longer.
The article notes that Unilever, with more than 200 factories around the world, has been running at about 85% capacity, reflecting “heroic work by people on the front lines of our supply chain, adjusting to new patterns of demand and securing new supply routes for ingredients,” Chief Executive Officer Alan Jope told Bloomberg.
Like many companies, the Anglo-Dutch maker of Lipton tea, Breyers ice cream and Dove soap has been trying to ensure it has enough workers who face both government restrictions on travel and time off needed when the virus strikes them. When Northern Italy shut down, the company got approval within hours to keep producing a line of food products in the region. In India, a similar request took four to five days. When an outbreak hit a facility in the Middle East where many workers live in dorms, Unilever booked hotel rooms so those who tested positive could stay isolated and the others could go to work, according to Jope.
“Most of our supply chain is local, it’s very flexible, and generally speaking the vast majority of the products we sell in a country we supply in that country,” Unilever Chief Financial Officer Graeme Pitkethly said on a conference call with reporters on Thursday.
For Danone, the French food processing company, flexibility became one of its biggest challenges in adjusting to “significant changes in consumers’ buying behaviors, with unprecedented swings in weekly demand accentuated by stocking patterns in the first weeks, the shift from out-of-home to at-home food consumption, as well as shifting preferences to larger pack sizes."
The tech industry continues to wrestle with uncertainty around the pandemic, Bloomberg says. This month, Broadcom Inc. warned customers they’ll need to place orders for parts at least six months ahead of time, a surprisingly long lead time that points to wider than anticipated disruptions to the global supply chain.
Taiwan Semiconductor Manufacturing Co., supplier of advanced silicon to most every major name from Apple Inc. to Huawei Technologies Co. and Qualcomm Inc., acknowledged the potential for supply-chain disruption in its annual report released April 21. CFO Wendell Huang however stressed that deft adjustments could mitigate the fallout. Signaling confidence in a gradual recovery, TSMC is setting aside $16 billion for technology upgrades and capacity this year.
“We did not see any disruption from the material supply or any supply-chain activity that has been in disruption mode. Although I did say that because of shelter-in-home that some of the tool delivery has been delayed from two weeks to about one month,” investor relations chief Jeff Su told reporters on a post-earnings conference call. “We continue to work with tool vendors and minimize the impact on the capacity building. So for the whole year, we don’t expect it to have a big impact.”
For companies in the U.S. and Europe, ultimately what may happen is a broad reassessment about whether key supplies ought to be manufactured closer to home, even at higher cost for smaller markets.
“For the first time we're seeing not just one or two countries closing down, we have three countries closing down,” said David Farr, CEO of Emerson Electric Co., which supplies automation equipment to the oil and gas industries and produces consumer goods, such as garbage disposals and shop vacuums. “So what we're going to have to do here is evaluate this from an economic standpoint and enterprise-risk standpoint.”
So, we will see. It is clear that global supply chains will need to change and likely will increase production costs. How much the competitive position of many now competitive firms shifts and where the impacts turn out to be are changes that should be watched closely as the global landscape adjusts—changes likely to affect the overall patterns of trade, Washington Insider believes.
On that day CEO of Coca-Cola Co. described the supply chain as “creaking around the world,” James Quincey said, clearly worried about the need to adjust.
Now, a month later, many supply chain continue to face pressures and some shifts are worsening, particularly in the pipelines for fresh food and medical goods. But Quincey said his plant shutdowns were confined to “just a couple of places” and he even congratulated employees for keeping “everything” running.
A “great strength” during the disruptions, he said on April 21, has been local production of Coke’s soft drinks and juices -- we’ve had some issues on timing of ingredients but even those are much better than they were a few weeks ago, he said.”
Quincy noted that the same can’t be said of American meatpacking companies that have closed processing plants to contain outbreaks among their workers, or auto companies with supplier networks sprawling from southeast Asia to eastern Europe that are at least another week away from restarting assembly lines. Industrial giants like Alcoa Corp. have to reckon with weak global demand for several more months or perhaps longer.
The article notes that Unilever, with more than 200 factories around the world, has been running at about 85% capacity, reflecting “heroic work by people on the front lines of our supply chain, adjusting to new patterns of demand and securing new supply routes for ingredients,” Chief Executive Officer Alan Jope told Bloomberg.
Like many companies, the Anglo-Dutch maker of Lipton tea, Breyers ice cream and Dove soap has been trying to ensure it has enough workers who face both government restrictions on travel and time off needed when the virus strikes them. When Northern Italy shut down, the company got approval within hours to keep producing a line of food products in the region. In India, a similar request took four to five days. When an outbreak hit a facility in the Middle East where many workers live in dorms, Unilever booked hotel rooms so those who tested positive could stay isolated and the others could go to work, according to Jope.
“Most of our supply chain is local, it’s very flexible, and generally speaking the vast majority of the products we sell in a country we supply in that country,” Unilever Chief Financial Officer Graeme Pitkethly said on a conference call with reporters on Thursday.
For Danone, the French food processing company, flexibility became one of its biggest challenges in adjusting to “significant changes in consumers’ buying behaviors, with unprecedented swings in weekly demand accentuated by stocking patterns in the first weeks, the shift from out-of-home to at-home food consumption, as well as shifting preferences to larger pack sizes."
The tech industry continues to wrestle with uncertainty around the pandemic, Bloomberg says. This month, Broadcom Inc. warned customers they’ll need to place orders for parts at least six months ahead of time, a surprisingly long lead time that points to wider than anticipated disruptions to the global supply chain.
Taiwan Semiconductor Manufacturing Co., supplier of advanced silicon to most every major name from Apple Inc. to Huawei Technologies Co. and Qualcomm Inc., acknowledged the potential for supply-chain disruption in its annual report released April 21. CFO Wendell Huang however stressed that deft adjustments could mitigate the fallout. Signaling confidence in a gradual recovery, TSMC is setting aside $16 billion for technology upgrades and capacity this year.
“We did not see any disruption from the material supply or any supply-chain activity that has been in disruption mode. Although I did say that because of shelter-in-home that some of the tool delivery has been delayed from two weeks to about one month,” investor relations chief Jeff Su told reporters on a post-earnings conference call. “We continue to work with tool vendors and minimize the impact on the capacity building. So for the whole year, we don’t expect it to have a big impact.”
For companies in the U.S. and Europe, ultimately what may happen is a broad reassessment about whether key supplies ought to be manufactured closer to home, even at higher cost for smaller markets.
“For the first time we're seeing not just one or two countries closing down, we have three countries closing down,” said David Farr, CEO of Emerson Electric Co., which supplies automation equipment to the oil and gas industries and produces consumer goods, such as garbage disposals and shop vacuums. “So what we're going to have to do here is evaluate this from an economic standpoint and enterprise-risk standpoint.”
So, we will see. It is clear that global supply chains will need to change and likely will increase production costs. How much the competitive position of many now competitive firms shifts and where the impacts turn out to be are changes that should be watched closely as the global landscape adjusts—changes likely to affect the overall patterns of trade, Washington Insider believes.
Push To Alter Or Remove Pay Caps On USDA Aid
Lawmakers from both the House and Senate have fired off letters to USDA and the White House urging changes to the ag aid to be doled out by USDA.
Much of the attention focuses on the payment limit USDA announced of $125,000 per commodity and a total of $250,000 per person or entity. Lawmakers argue some growers will quickly hit those limits – like cattle, dairy and specialty crop producers – and that will deny them much-needed assistance as those operations will quickly hit the limit.
Action to help the U.S. hog industry is being pushed by House Ag Committee Chairman Collin Peterson, D-Minn., and others, including steps to deal with any potential euthanizing of animals that cannot be shipped off to market. Pressure is mounting on USDA to make changes to its aid package as the details are being finalized, but some provisions are not seen changing.
The American Farm Bureau Federation (AFBF) said that it has learned USDA could shift funds between the various commodities, some self-certification of losses may take place by producers, govern program payments will not factor into the aid and there still will not be any ethanol aid in the initial effort.
Much of the attention focuses on the payment limit USDA announced of $125,000 per commodity and a total of $250,000 per person or entity. Lawmakers argue some growers will quickly hit those limits – like cattle, dairy and specialty crop producers – and that will deny them much-needed assistance as those operations will quickly hit the limit.
Action to help the U.S. hog industry is being pushed by House Ag Committee Chairman Collin Peterson, D-Minn., and others, including steps to deal with any potential euthanizing of animals that cannot be shipped off to market. Pressure is mounting on USDA to make changes to its aid package as the details are being finalized, but some provisions are not seen changing.
The American Farm Bureau Federation (AFBF) said that it has learned USDA could shift funds between the various commodities, some self-certification of losses may take place by producers, govern program payments will not factor into the aid and there still will not be any ethanol aid in the initial effort.
Union Warns US Food Supply At Risk From COVID-19
The United Food and Commercial Workers (UFCW) International Union said the U.S. food supply is at risk from the COVID-19 situation, reporting that over 5,000 of its members have been sick or have been exposed to the virus.
The union represents about 40% of all food processing workers. About 10% of beef production and 25% of pork production has been affected by either plant closures or slowing of facilities.
The union called for national safety standards for all food and meatpacking workers and said that those workers need adequate personal protective equipment (PPE). Plus, they said that testing for these workers needs to be increased.
The union also said that USDA should reverse the 11 regulatory waivers that have allowed some poultry plants to increase line speeds, arguing the increased speed makes social distancing difficult.
While warning of potential food shortages due to the differing food supply chains with retail and food service channels, UFCW President Marc Perrone said, “How they are able to shift those lines is very important about whether or not we are going to see some of the shortages.”
The union said it does not want plants shut down, but said workers need protective equipment and adequate testing.
The union represents about 40% of all food processing workers. About 10% of beef production and 25% of pork production has been affected by either plant closures or slowing of facilities.
The union called for national safety standards for all food and meatpacking workers and said that those workers need adequate personal protective equipment (PPE). Plus, they said that testing for these workers needs to be increased.
The union also said that USDA should reverse the 11 regulatory waivers that have allowed some poultry plants to increase line speeds, arguing the increased speed makes social distancing difficult.
While warning of potential food shortages due to the differing food supply chains with retail and food service channels, UFCW President Marc Perrone said, “How they are able to shift those lines is very important about whether or not we are going to see some of the shortages.”
The union said it does not want plants shut down, but said workers need protective equipment and adequate testing.
Monday Watch List
Markets
Coronavirus new updates and the latest weather forecasts are apt to be at the top of list for Monday's market topics. USDA's weekly report of grain export inspections is set for 10 a.m. CDT, followed by the Crop Progress report at 3 p.m. In Monday's report, corn and spring wheat planting along with winter wheat conditions are apt to get the most attention.
Weather
Rain showers with mostly light amounts will cross the Midwest Monday, bringing some interruptions to fieldwork and planting. A few showers are also indicated in the interior Northwest. Temperatures will be seasonal to above normal in the Midwest and above to much above normal in the Plains, a sharp contrast to last year's cold and wet pattern.
Coronavirus new updates and the latest weather forecasts are apt to be at the top of list for Monday's market topics. USDA's weekly report of grain export inspections is set for 10 a.m. CDT, followed by the Crop Progress report at 3 p.m. In Monday's report, corn and spring wheat planting along with winter wheat conditions are apt to get the most attention.
Weather
Rain showers with mostly light amounts will cross the Midwest Monday, bringing some interruptions to fieldwork and planting. A few showers are also indicated in the interior Northwest. Temperatures will be seasonal to above normal in the Midwest and above to much above normal in the Plains, a sharp contrast to last year's cold and wet pattern.
Friday, April 24, 2020
China Expected to Rebuild Commodity Reserves with U.S. Buys
Three sources have told Reuters that China is looking to purchase up to 30 million tons of crops from the U.S. to help rebuild state stockpiles. The Asian nation is looking to protect itself from further supply chain disruptions brought on by the COVID-19 outbreak. It would also help China make good on its Phase One Trade Agreement promises to buy more U.S. crops. China is planning to buy approximately 10 million tons of soybeans, 20 million tons of corn, and one million tons of cotton and add them to its state reserves. Reuters says those numbers come from two of the sources who were briefed on the government’s plan. The bulk of the crops are expected to come from the United States. “The main message from Beijing is to help secure people’s livelihoods,” one of the sources tells Reuters. “It’s a good time to build up reserves, especially when the prices of the goods are at quite low levels.” Beijing is also planning to buy one million tons of sugar and two million tons of soybean oil to add to its reserves. The sources aren’t clear on where those supplies would be coming from.
Another Meatpacking Plant Suspends Operations
Tyson Foods announced it will be indefinitely suspending operations at its plant in Waterloo, Iowa, which is its largest U.S. pork plant. That plant shutting down operations means approximately 15 percent of pork processing capacity across the country has gone offline. More than 150 of the country’s largest meat plants are in counties where the rate of COVID-19 infections is already relatively high. That’s according to a new investigation by USA Today and the Midwest Center for Investigative Reporting. The investigation found a rash of coronavirus outbreaks at dozens of meatpacking plants across the nation that’s far more extensive than first thought. An extensive review of the cases shows that it could get worse. The rate of infection around those 150 plants is higher than the rates of infection in 75 percent of the other counties across the country. Experts say the industry has maintained a sufficient level of production despite infections in more than 2,200 workers at 48 plants. Gary Anthone, the chief medical officer in Nebraska, says long-term care facilities were among the biggest initial concerns. “If there’s one thing that’s keeping me up nights right now, it’s the meat processing and manufacturing plants,” he says.
Major WTO Countries Pledge to Keep Food Exports Flowing
Major countries involved in the World Trade Organization, including China and the U.S., pledged to keep from imposing restrictions on the free flow of food. Although a few countries have imposed such export restrictions, trade experts fear more food export bans could be on the horizon, which also happened during a global spike in the price of food in 2007. David Beasley is head of the World Food Program at the United Nations. He says famines of “biblical proportions” could take place because of the coronavirus pandemic if urgent steps aren’t taken. In a possible worst-case scenario, Beasley says famines could take hold in about “three dozen countries.” Ten of those countries already have more than one million people on the edge of starvation. A CNN report says Beasley appealed to UN member states to act now. “There are no famines yet,” he says. “But I must warn you, if we don’t act now to secure access, avoid funding shortfalls, and avoid disruptions to trade, we could be facing multiple famines of biblical proportions within only a few months.”
Groups Ask Treasury Secretary to Guard Against Further Ag Consolidation
A coalition consisting of 68 farmer, environmental, and antitrust groups across the country sent a letter to Treasury Secretary Steven Mnuchin (Muh-NOO-chin) on consolidation. They’re asking him to ensure that pandemic relief funds do not lead to the further consolidation of the food and agriculture industry. The letter asks Mnuchin to invest the stimulus funds in farming systems that lift farmers and rural communities while providing opportunities for diverse, sustainable agriculture systems to thrive. The letter says the current food system that’s under the control of a few major corporate players isn’t sustainable, a reality brought forth by the COVID-19 outbreak. The letter says “While farmers and advocates of rural communities are closely watching how USDA will distribute the $9.5 billion allocated through the CARES Act, little discussion or oversight is being given to this other, much-larger pot of money with few strings attached.” The groups want Mnuchin to make sure that money doesn’t go straight from the Treasury Department into the pockets of larger corporations. “During this crisis, relief must be prioritized for the frontline workers and farmers who are the backbone of America’s food supply,” the letter adds. “Consolidation in food and agriculture has already taken a toll on the security of our food system.”
ASF Could Cost the U.S. Up To $50 billion
Iowa State University economists put together a study on the economic impact an outbreak of African Swine Fever would have on U.S. hog herds. The researchers calculated the grim figure by determining that 140,000 jobs would be lost as a result of a downsized domestic pork industry devastated by uncontrolled ASF. The lead study author, Dermot Hayes, professor of economics and finance, says researchers looked at two scenarios. One assumes the disease spreads to feral swine and that the U.S. is unable to eliminate the disease over the 10-year projection period, called the all-years scenario. The second assumes that the U.S. gets the disease under control and reenters the export markets within two years. The immediate impact of both scenarios is a 40-to-50 percent reduction in domestic live hog prices, which would be needed to clear the market of surplus pork that would otherwise be exported. The pork industry would lose a total of $15 billion in the two-year scenario and just over $50 billion in the all-years scenario. “This study underscores the need for ASF preparedness by everyone in the U.S. pork industry,” says David Newman, National Pork Board President. “It’s why we continue to encourage producers to participate in the voluntary Secure Pork Supply Plan.”
A decision on Holding the World Dairy Expo Coming on July 1
Staff at the World Dairy Expo in Madison, Wisconsin, are still in the process of planning for the event this year. However, a final decision hasn’t been made yet on whether it will take place. The staff members are keeping an eye on conditions surrounding COVID-19 and its potential impact on the show. While they are still moving forward with planning the event, future health declarations, and the well-being and safety of Expo exhibitors, attendees, and volunteers are of the utmost importance and will guide their future decision-making. Out of respect to the heightened economic hardships the industry faces, a final decision to hold or cancel the 2020 edition of the World Dairy Expo will be made by the executive committee on July 1. Whether they cancel the event or hold it as scheduled, the decision will be communicated extensively. World Dairy Expo says it’s proud to be the gathering place of a resilient, united, global dairy community, and looks forward to continuing this tradition in Madison, Wisconsin, for the 54th year, scheduled for September 29 – October 3 of this year.
Washington Insider: USDA and Food Safety
The Hill reported recently that USDA is facing growing pressure to ensure the safety of the nation's food supply during the coronavirus outbreak. The report cited a number of experts who believe that the food supply is safe now, but that this is a period of growing challenges for the USDA as food industry workers fall sick and inspectors scramble for limited resources.
The report noted that USDA's Food Safety and Inspection Service has recalled only one product over the last two months. On Feb. 8, a product from Family Traditions Meat Company was recalled due to misbranding, it said – but focused on the fact that “there has been a sharp reduction in recalls during the period before April 10, when it recalled chicken bowls from Conagra Brands over possible foreign matter contamination and pork products from Jowett Farms for missing some inspections.”
The report noted that recalls were “flowing in regularly before February,” with five in January, four in December, four in November and three in October. And, while there were no specific signs food safety has been compromised during the pandemic, they urged vigilance and “found the gap in recalls puzzling.”
“I do think that it is unusual that there were no recalls during that time frame,” said Donald Schaffner, a professor of food microbiology at Rutgers University.
"COVID-19 has been a distraction," Schaffner added, but he cautioned that the pandemic "has probably not directly impacted food safety yet."
Benjamin Chapman, food safety extension specialist at North Carolina State University, agreed that the outbreak could be a “distraction” with people off work or at home and more resources being devoted to the immediate pandemic response.
"Since COVID-19 is such a huge focus for everyone, not just the food industry, I can see how we all might be a bit distracted from the normal day-to-day operations of the system," Chapman said. "But I would say that in the short term the distractions are likely not leading to changes in food safety."
Still, the lack of recalls comes at a troubling time as concerns about food safety grow, The Hill said. Those worries have gained attention in recent days with the closing of meat processing plants where workers have contracted the coronavirus. Pork processor Smithfield Foods closed two more plants, one in Cudahy, Wis., and one in Martin City, Mo., this week and a worker from its closed Sioux Falls, S.D., facility died. Two employees of Tyson Foods’s Columbus Junction, Iowa, pork processing plant have also died.
The coronavirus will make it harder for USDA inspectors to continue their work even at operating processing plants, the experts said. As the coronavirus outbreak intensified in the U.S. in March, the agency pledged that it would "ensure that grading and inspection personnel are available."
USDA officials wrote to stakeholders recently that it "remains committed to working closely with industry to fulfill our mission of ensuring the safety of the U.S. food supply and protecting agricultural health."
Another food safety agency, the Food and Drug Administration has also seen its resources stretched with the outbreak and scaled back some routine inspection work to protect inspectors.
USDA told The Hill that its Food Safety Inspection workers are on the front line, day in and day out, to make sure our food is safe.”
The spotlight on the agency and its work likely will intensify, particularly if more food service workers fall ill, The Hill said--and it argued that experts had not sounded any specific alarms on the nearly two-month gap in recalls, noting the many factors go into determining food recalls. However, they acknowledged the challenges facing the USDA.
Food recalls in the U.S. have become more common in recent years. The total number of recalls increased by 10 percent between 2013 and 2018, and there were 905 recalls in 2016.
“Consumers have to make sure that they’re practicing safe food handling at home, safety experts say. They recommend washing their hands and separating fresh product from raw product, minimizing their risk as much as possible.”
So, we will see. The decline in recalls is a statistic that USDA should examine closely since it could indicate growing pressures on the inspection process. And, given threats from the virus and its impacts, the decline in recalls is a development USDA should make sure consumers understand in this period of tension and uncertainty, Washington Insider believes.
The report noted that USDA's Food Safety and Inspection Service has recalled only one product over the last two months. On Feb. 8, a product from Family Traditions Meat Company was recalled due to misbranding, it said – but focused on the fact that “there has been a sharp reduction in recalls during the period before April 10, when it recalled chicken bowls from Conagra Brands over possible foreign matter contamination and pork products from Jowett Farms for missing some inspections.”
The report noted that recalls were “flowing in regularly before February,” with five in January, four in December, four in November and three in October. And, while there were no specific signs food safety has been compromised during the pandemic, they urged vigilance and “found the gap in recalls puzzling.”
“I do think that it is unusual that there were no recalls during that time frame,” said Donald Schaffner, a professor of food microbiology at Rutgers University.
"COVID-19 has been a distraction," Schaffner added, but he cautioned that the pandemic "has probably not directly impacted food safety yet."
Benjamin Chapman, food safety extension specialist at North Carolina State University, agreed that the outbreak could be a “distraction” with people off work or at home and more resources being devoted to the immediate pandemic response.
"Since COVID-19 is such a huge focus for everyone, not just the food industry, I can see how we all might be a bit distracted from the normal day-to-day operations of the system," Chapman said. "But I would say that in the short term the distractions are likely not leading to changes in food safety."
Still, the lack of recalls comes at a troubling time as concerns about food safety grow, The Hill said. Those worries have gained attention in recent days with the closing of meat processing plants where workers have contracted the coronavirus. Pork processor Smithfield Foods closed two more plants, one in Cudahy, Wis., and one in Martin City, Mo., this week and a worker from its closed Sioux Falls, S.D., facility died. Two employees of Tyson Foods’s Columbus Junction, Iowa, pork processing plant have also died.
The coronavirus will make it harder for USDA inspectors to continue their work even at operating processing plants, the experts said. As the coronavirus outbreak intensified in the U.S. in March, the agency pledged that it would "ensure that grading and inspection personnel are available."
USDA officials wrote to stakeholders recently that it "remains committed to working closely with industry to fulfill our mission of ensuring the safety of the U.S. food supply and protecting agricultural health."
Another food safety agency, the Food and Drug Administration has also seen its resources stretched with the outbreak and scaled back some routine inspection work to protect inspectors.
USDA told The Hill that its Food Safety Inspection workers are on the front line, day in and day out, to make sure our food is safe.”
The spotlight on the agency and its work likely will intensify, particularly if more food service workers fall ill, The Hill said--and it argued that experts had not sounded any specific alarms on the nearly two-month gap in recalls, noting the many factors go into determining food recalls. However, they acknowledged the challenges facing the USDA.
Food recalls in the U.S. have become more common in recent years. The total number of recalls increased by 10 percent between 2013 and 2018, and there were 905 recalls in 2016.
“Consumers have to make sure that they’re practicing safe food handling at home, safety experts say. They recommend washing their hands and separating fresh product from raw product, minimizing their risk as much as possible.”
So, we will see. The decline in recalls is a statistic that USDA should examine closely since it could indicate growing pressures on the inspection process. And, given threats from the virus and its impacts, the decline in recalls is a development USDA should make sure consumers understand in this period of tension and uncertainty, Washington Insider believes.
China Looking to Increase Stockpiles
More reporting on China aiming to buy more crops for state reserves. China is looking to buy more than 30 million metric tons of crops for state stockpiles in a bid to avoid supply chain disruptions from COVID-19 and to meet its pledge buy more U.S. farm commodities, according to sources quoted by Reuters.
This follows reports Wednesday from JC Intelligence on the planned purchases for state stockpiles which also made reference to current prices as a factor in the apparent decision. The country plans to add 20 million metric tons of corn, 10 mmt of soybeans and 1 mmt of cotton to state reserves, with the bulk of those purchases coming from the U.S. as China strives to meet the terms of the Phase One agreement with the U.S. The report also said the country would seek to add 1 mmt of sugar and 2 mmt of soyoil to reserves, but did not indicate the likely source for those products. No indication on timing of the buys was given, with the report saying that would “depend on how the market evolves.”
This follows reports Wednesday from JC Intelligence on the planned purchases for state stockpiles which also made reference to current prices as a factor in the apparent decision. The country plans to add 20 million metric tons of corn, 10 mmt of soybeans and 1 mmt of cotton to state reserves, with the bulk of those purchases coming from the U.S. as China strives to meet the terms of the Phase One agreement with the U.S. The report also said the country would seek to add 1 mmt of sugar and 2 mmt of soyoil to reserves, but did not indicate the likely source for those products. No indication on timing of the buys was given, with the report saying that would “depend on how the market evolves.”
USDA, CFTC Comment On Livestock Market Investigations
The Commodity Futures Trading Commission (CFTC) Ag Advisory Committee meeting by teleconference Wednesday focused on COVID-19 impacts, with the livestock market situation also discussed. USDA Secretary Sonny Perdue addressed the meeting, reminding that USDA’s cattle market investigation now includes volatility linked to the COVID-19 pandemic.
“As part of this ongoing investigation, [USDA’s] Packers and Stockyards division will determine if there's any evidence of price manipulation, collusion, restrictions on competition, or any unfair practices or unfair advantages,” Perdue commented. He said he would could not share any details of the ongoing investigation.
But USDA Senior Advisor Dudley Hoskins later said that there was no deadline for the conclusion of the investigation. He noted Perdue has been “clear he does not anticipate putting any kind of fictional or manmade timelines on how far that investigation will go or how long it will last.”
The CFTC’s Livestock Market Taskforce is also looking at the situation, and CFTC Chairman Heath Tarbert said the regulator is “putting all of our efforts into making sure that we understand during this period of immense volatility, exactly what's going on in our markets.” As part of the effort, “we are talking to the exchanges, we're talking to market participants, we're talking to the clearing houses, just to make sure that we get a sense of basically any indication that prices are moving in an uneconomic manner relative to the underlying commodity cash price,” he explained.
But he also cautioned little public information is offered on the taskforce’s efforts unless the regulator opts to “take a concrete action on the enforcement side.” As for the surveillance effort, Tarbert said, “you should know that we are doing it, but we cannot reveal the details prematurely.”
“As part of this ongoing investigation, [USDA’s] Packers and Stockyards division will determine if there's any evidence of price manipulation, collusion, restrictions on competition, or any unfair practices or unfair advantages,” Perdue commented. He said he would could not share any details of the ongoing investigation.
But USDA Senior Advisor Dudley Hoskins later said that there was no deadline for the conclusion of the investigation. He noted Perdue has been “clear he does not anticipate putting any kind of fictional or manmade timelines on how far that investigation will go or how long it will last.”
The CFTC’s Livestock Market Taskforce is also looking at the situation, and CFTC Chairman Heath Tarbert said the regulator is “putting all of our efforts into making sure that we understand during this period of immense volatility, exactly what's going on in our markets.” As part of the effort, “we are talking to the exchanges, we're talking to market participants, we're talking to the clearing houses, just to make sure that we get a sense of basically any indication that prices are moving in an uneconomic manner relative to the underlying commodity cash price,” he explained.
But he also cautioned little public information is offered on the taskforce’s efforts unless the regulator opts to “take a concrete action on the enforcement side.” As for the surveillance effort, Tarbert said, “you should know that we are doing it, but we cannot reveal the details prematurely.”
Friday Watch List
Markets
Friday starts with a report of March U.S. durable goods orders at 7:30 a.m. CDT, followed by an index of consumer sentiment at 9 a.m. USDA's monthly cattle on-feed report is due out at 2 p.m. CDT and a large drop in March placements is expected. Coronavirus statistics remain the primary market focus as we all continue to watch for signs of improvement. Weather forecasts, trade news and updates on the status of meat processing plants also get attention.
Weather
Showers and thunderstorms will cross the central Plains and western Midwest Friday, interrupting fieldwork and planting. Precipitation will be light to moderate, with locally heavy in eastern Iowa. Drier conditions are in store elsewhere. Eastern Midwest activity is interrupted by light to moderate rain. Temperatures will be seasonal to above normal in most areas, with hot conditions in southern Texas.
Friday starts with a report of March U.S. durable goods orders at 7:30 a.m. CDT, followed by an index of consumer sentiment at 9 a.m. USDA's monthly cattle on-feed report is due out at 2 p.m. CDT and a large drop in March placements is expected. Coronavirus statistics remain the primary market focus as we all continue to watch for signs of improvement. Weather forecasts, trade news and updates on the status of meat processing plants also get attention.
Weather
Showers and thunderstorms will cross the central Plains and western Midwest Friday, interrupting fieldwork and planting. Precipitation will be light to moderate, with locally heavy in eastern Iowa. Drier conditions are in store elsewhere. Eastern Midwest activity is interrupted by light to moderate rain. Temperatures will be seasonal to above normal in most areas, with hot conditions in southern Texas.
Thursday, April 23, 2020
NCGA Analysis Shows $50 Per Acre Revenue Declines for Corn Due to COVID-19
An analysis released by the National Corn Growers Association shows cash corn prices have declined by 16 percent on average. Several regions are experiencing declines of more than 20 percent, since March 1, as a result of the COVID-19 pandemic. The analysis projects a $50 per acre revenue decline for the 2019 corn crop. NCGA commissioned the economic analysis, conducted by Dr. Gary Schnitkey of the University of Illinois, to better understand the economic impact of the global pandemic on the corn industry. Schnitkey writes in the study, “Corn will be one of the most impacted crops as its two largest uses – livestock feed and ethanol – are under pressure.” NCGA will use the data to create solutions to help corn farmers and their customers recover. The analysis was based on cash corn prices as of mid-April and estimated losses would likely increase through the rest of the marketing year. Further analysis is already underway for the 2020 crop year, with losses anticipated to be higher than those in 2019.
USDA Reports Record Enrollment in Key Farm Safety-Net Programs
Producers signed a record 1.77 million contracts for the Department of Agriculture’s Agriculture Risk Coverage and Price Loss Coverage programs for the 2019 crop year. The signup total represents more than 107 percent of the total contracts signed compared with a five-year average. Farm Service Agency Administrator Richard Fordyce says farmers are using the programs to mitigate risks, and “recognize that ARC and PLC provide the financial protections they need to weather substantial drops in crop prices or revenues.” Producers interested in enrolling for 2020 should contact their FSA county office. Producers must enroll by June 30 and make their one-time update to PLC payment yields by September 30. FSA attributes the significant participation in the 2019 crop year ARC and PLC programs to increased producer interest in the programs under the 2018 Farm Bill. FSA says the growth also comes from an increase in eligible farms because of the selling and buying of farms and new opportunities for beginning farmers and military veterans with farms having ten or fewer base acres.
USDA Increases Monthly SNAP Benefits by 40 Percent
Agriculture Secretary Sonny Perdue Wednesday announced emergency benefit increases have reached $2.0 billion per month for the Supplemental Nutrition Assistance Program. The benefits represent a 40 percent increase in overall monthly SNAP benefits, significantly increasing food purchasing power for American families during the COVID-19 pandemic. Currently, a household with two adults, three children, and no income can receive the maximum benefit of $768. However, due to reportable income and other factors, the average five-person household receives significantly less, $528. These emergency benefits would provide the average five-person household an additional $240 monthly in food purchasing power, bringing the average household up to the same benefit level as households already receiving the maximum. The Families First Coronavirus Response Act provided for the issuance of emergency allotments in response to COVID-19. Across the United States, emergency allotments total nearly $2 billion per month, which is in addition to approximately $4.5 billion in benefits already provided to SNAP households each month.
Bunge Selling 35 U.S. Grain Elevators to Japan-based Buyer
Bunge announced this week the company is selling 35 grain elevators to Japan-based Zen-Noh Grain Corporation. The elevators are located along the Mississippi River. ZGC's affiliate, CGB Enterprises, Inc., will operate the acquired facilities through its wholly-owned subsidiary, Consolidated Grain and Barge Company. CGB currently operates more than 100 grain origination facilities in the United States. The company says it serves a vital role as a direct connection to the U.S. farmer by providing an array of services from buying, storing, selling and shipping crops, to financing and risk management. The acquisition, according to the company, contributes to its ability to adequately source a stable supply of grains, oilseeds and feed ingredients for Japan and other destinations by strengthening its origination across a broader footprint in the United States. Meanwhile, Bunge’s storage network will decrease, but the company says, “certain supply agreements" with ZGC will result in a "larger and stronger origination and distribution network."
Pork Board Develops Educational Resources for Parents
Parents nationwide now have access to new ways to keep children learning and engaged during the coronavirus crisis, thanks to free materials developed in conjunction with the Pork Checkoff. With many working and learning from home during the global pandemic, parents are looking for ways to keep their students occupied and informed. Angie Krieger of Pork Checkoff, says, "We have a wealth of fun and educational resources parents can use to teach their children about food, nutrition, farming and the environment." Working with curriculum specialists at Young Minds Inspired, the Pork Checkoff created a series of educational activities that support healthy eating and teaches children about pork and sustainability. The Pork Checkoff has worked with Young Minds Inspired since 2008 to develop and approve standards-based content for classroom use. Just as new materials were about to be shared with classroom teachers this spring, the coronavirus pandemic altered those plans. With minor adjustments, the content was modified to fit the needs of parents now looking for educational materials. The lesson plans and activity information can be found at http://ymiclassroom.com.
Dairy Farmers of American Donating to Needy Families
The Dairy Farmers of America cooperative is providing dairy products to needy families. The organization announced this week the launch of its Farmers Feeding Families Fund, which hopes to raise $500,000 for community food banks across the country. Initial seed money of $200,000 has already been raised through the Cooperative's DFA Cares Foundation. DFA is already holding events such as drive-by milk giveaways at schools and donating fluid milk directly to food banks. Randy Mooney, DFA board chairman, says, “we are proud of the role we play in feeding families, and in times like these when so many are struggling, we feel passionately about doing all we can to help.” As demand for food assistance rises with the COVID-19 outbreak, Feeding America, with its more than 200 affiliates across the country, has projected a $1.4 billion shortfall in the next six months alone. DFA has identified 30 communities across the country whose local food banks will receive funds to purchase needed dairy products.
Washington Insider: More Immigration Uncertainty
President Donald Trump announced a new policy that halts the issuance of green cards for two months. The move stops short of a sweeping immigration ban but also includes hints regarding additional restrictions that could complicate planning for businesses and workers looking to rebound from the coronavirus.
The new order will affect thousands of would-be immigrants seeking to move permanently to the U.S., Bloomberg says, and “further delays a green card process that is already notoriously cumbersome for those seeking to work in this country.”
Temporary workers in agriculture and other fields are the country’s biggest source of immigration and will not be affected, the report says.
Nevertheless, the president’s comments regarding an even more restrictive executive order now under consideration adds to the confusion over the outlook, Bloomberg thinks. Companies may prove less likely to seek and hire foreign workers or proceed with projects dependent on non-American labor, especially if they fear new restrictions from the White House.
“It would be wrong and unjust for Americans laid off by the virus to be replaced by new immigrant labor flown in from abroad,” the president said at a White House briefing on Tuesday evening. “We must first take care of the American worker.”
The president also described the new policy as “prohibiting immigration into our Country,” without alluding to its exemptions.
Bloomberg explained the uncertainty regarding the order on the grounds that it was “still being drafted.” It is expected to contain exemptions and would not apply to health care or medical research professionals, Bloomberg said.
Technology industry workers living in the U.S. on H-1B visas, however, would have to provide updated certifications to the government that they are not displacing American workers. Refugees and asylum seekers would not be affected by the order, nor would spouses and children of U.S. citizens or permanent residents.
Still, the president hinted that additional restrictions could be on the horizon, particularly if the economy struggles to bounce back from the prolonged coronavirus shutdown. “We have a secondary order that, if I want to do that, we’ll make that determination,” the president said.
He also said he could extend the green card ban if the economy hadn’t sufficiently improved within two months—since he has “determined that we cannot jump start the domestic economy if Americans are forced to compete against an artificially enlarged labor pool caused by the introduction of foreign workers.”
He noted in his remarks that he has determined that the entry of most aliens as “permanent or temporary workers in the immediate term would have adverse impacts on the national interest.”
The immediate practical effect of the order remains unclear, Bloomberg said. Immigration agencies and embassies have largely stopped processing visas, meaning many of those seeking to immigrate to or visit the U.S. cannot do so. Refugee admissions have been suspended since March 19 after the United Nations and International Organizations for Migration temporarily halted refugee travel. The U.S. suspension has been extended to May 15.
The president’s Monday tweet apparently caught immigration officials off guard, Bloomberg thinks, and noted that he “looks to contain the health, economic and political fallout from the pandemic that has killed more than 42,000 Americans in an election year, while shuttering the economy whose strength had been the base of his campaign only two months ago.”
National Security Advisor Robert O’Brien, told reporters on Tuesday at the White House that the suspension is “a temporary issue” but said he didn’t know how long it would last.
Lawmakers had yet to receive any details from the administration as late as midday Tuesday, one Republican official told Bloomberg.
Republican Senator Chuck Grassley of Iowa said he didn’t know if President Trump’s pause on for legal immigration makes sense. “We’ve been a welcoming nation and we need people,” he said. However, Republican Senator Ted Cruz of Texas welcomed the decision. “I think this is a reasonable short-term measure, a reasonable emergency measure,” Cruz said.
So, we will see. The new policy has attracted intense scrutiny and will generate more as additional details emerge. Clearly, immigration is a hot, hot topic and the uncertainty regarding the new rules will be debated, along with the opaque process that appears to be in use, a fight producers should watch closely as it proceeds, Washington Insider believes.
The new order will affect thousands of would-be immigrants seeking to move permanently to the U.S., Bloomberg says, and “further delays a green card process that is already notoriously cumbersome for those seeking to work in this country.”
Temporary workers in agriculture and other fields are the country’s biggest source of immigration and will not be affected, the report says.
Nevertheless, the president’s comments regarding an even more restrictive executive order now under consideration adds to the confusion over the outlook, Bloomberg thinks. Companies may prove less likely to seek and hire foreign workers or proceed with projects dependent on non-American labor, especially if they fear new restrictions from the White House.
“It would be wrong and unjust for Americans laid off by the virus to be replaced by new immigrant labor flown in from abroad,” the president said at a White House briefing on Tuesday evening. “We must first take care of the American worker.”
The president also described the new policy as “prohibiting immigration into our Country,” without alluding to its exemptions.
Bloomberg explained the uncertainty regarding the order on the grounds that it was “still being drafted.” It is expected to contain exemptions and would not apply to health care or medical research professionals, Bloomberg said.
Technology industry workers living in the U.S. on H-1B visas, however, would have to provide updated certifications to the government that they are not displacing American workers. Refugees and asylum seekers would not be affected by the order, nor would spouses and children of U.S. citizens or permanent residents.
Still, the president hinted that additional restrictions could be on the horizon, particularly if the economy struggles to bounce back from the prolonged coronavirus shutdown. “We have a secondary order that, if I want to do that, we’ll make that determination,” the president said.
He also said he could extend the green card ban if the economy hadn’t sufficiently improved within two months—since he has “determined that we cannot jump start the domestic economy if Americans are forced to compete against an artificially enlarged labor pool caused by the introduction of foreign workers.”
He noted in his remarks that he has determined that the entry of most aliens as “permanent or temporary workers in the immediate term would have adverse impacts on the national interest.”
The immediate practical effect of the order remains unclear, Bloomberg said. Immigration agencies and embassies have largely stopped processing visas, meaning many of those seeking to immigrate to or visit the U.S. cannot do so. Refugee admissions have been suspended since March 19 after the United Nations and International Organizations for Migration temporarily halted refugee travel. The U.S. suspension has been extended to May 15.
The president’s Monday tweet apparently caught immigration officials off guard, Bloomberg thinks, and noted that he “looks to contain the health, economic and political fallout from the pandemic that has killed more than 42,000 Americans in an election year, while shuttering the economy whose strength had been the base of his campaign only two months ago.”
National Security Advisor Robert O’Brien, told reporters on Tuesday at the White House that the suspension is “a temporary issue” but said he didn’t know how long it would last.
Lawmakers had yet to receive any details from the administration as late as midday Tuesday, one Republican official told Bloomberg.
Republican Senator Chuck Grassley of Iowa said he didn’t know if President Trump’s pause on for legal immigration makes sense. “We’ve been a welcoming nation and we need people,” he said. However, Republican Senator Ted Cruz of Texas welcomed the decision. “I think this is a reasonable short-term measure, a reasonable emergency measure,” Cruz said.
So, we will see. The new policy has attracted intense scrutiny and will generate more as additional details emerge. Clearly, immigration is a hot, hot topic and the uncertainty regarding the new rules will be debated, along with the opaque process that appears to be in use, a fight producers should watch closely as it proceeds, Washington Insider believes.
NCBA Says They Have Not Asked For Beef Buys
While the head of the National Cattlemen’s Beef Association (NCBA) says the group is thankful beef producers will be getting more than half of the COVID-19 relief funds from the USDA, NCBA head Colin Woodall told Brownfield Ag News the industry does not want anything for commodity purchases.
“Given what we are seeing with the packing plants that have shut down or have scaled down we need to make sure all of that product is going directly to retail,” Woodhall said. “So, that is our preference right now. So, NCBA will not be asking for a beef buy by the U.S. government nor have we asked for a beef buy.”
“Given what we are seeing with the packing plants that have shut down or have scaled down we need to make sure all of that product is going directly to retail,” Woodhall said. “So, that is our preference right now. So, NCBA will not be asking for a beef buy by the U.S. government nor have we asked for a beef buy.”
Producers to Sen. Hoeven: USDA Calculations Key for COVID Aid
North Dakota producers signaled that how USDA calculates the price losses relative to payments it will issue under the Coronavirus Food Assistance Program (CFAP) program will be key. Farmer made those views known in a call with Sen. John Hoeven, R-N.D., on Tuesday.
USDA wants to get the aid out quickly, but Hoeven said he is pushing on the agency to make sure the assistance matches the impacts the sector has seen. Producers told Hoeven those calculations by USDA are key for livestock and crop farmers. Hoeven said his involvement will be to push USDA on the details as those will be a crucial part of the regulation that USDA will use to put the aid together and that may go to the Office of Management and Budget (OMB) yet this week.
The payment limit set by USDA -- $125,000 per crop and a total of $250,000 per person or entity -- have been raised as a key issue that could dramatically impact the level of help that dairy producers and others may be able to receive via CFAP.
USDA wants to get the aid out quickly, but Hoeven said he is pushing on the agency to make sure the assistance matches the impacts the sector has seen. Producers told Hoeven those calculations by USDA are key for livestock and crop farmers. Hoeven said his involvement will be to push USDA on the details as those will be a crucial part of the regulation that USDA will use to put the aid together and that may go to the Office of Management and Budget (OMB) yet this week.
The payment limit set by USDA -- $125,000 per crop and a total of $250,000 per person or entity -- have been raised as a key issue that could dramatically impact the level of help that dairy producers and others may be able to receive via CFAP.
Thursday Watch List
Markets
As usual, Thursday morning begins with weekly grain export sales, U.S. jobless claims and an update of the U.S. Drought Monitor at 7:30 a.m. CDT, joined by a report of U.S. new home sales in March. Coronavirus statistics are still of interest, as are the latest weather forecasts and updates of meat processing operations.
Weather
Moderate rain is in store for the Ohio Valley Thursday, interrupting fieldwork. Light rain elsewhere in the eastern Midwest will bring some interruptions in activity. Farther south, strong to severe thunderstorms in the Mid-South and Deep South will hinder fieldwork, with some flooding possible. Drier conditions elsewhere will allow for progress, notably in the northwestern Midwest and Northern Plains.
As usual, Thursday morning begins with weekly grain export sales, U.S. jobless claims and an update of the U.S. Drought Monitor at 7:30 a.m. CDT, joined by a report of U.S. new home sales in March. Coronavirus statistics are still of interest, as are the latest weather forecasts and updates of meat processing operations.
Weather
Moderate rain is in store for the Ohio Valley Thursday, interrupting fieldwork. Light rain elsewhere in the eastern Midwest will bring some interruptions in activity. Farther south, strong to severe thunderstorms in the Mid-South and Deep South will hinder fieldwork, with some flooding possible. Drier conditions elsewhere will allow for progress, notably in the northwestern Midwest and Northern Plains.
Wednesday, April 22, 2020
Agreement Reached on Expanding Coronavirus Aid, Ag Eligibility in EIDL
Lawmakers reached an agreement Tuesday to allow agriculture to participate in the Small Business Administration’s Economic Injury Disaster Loan program. The agreement is part of a larger deal, a $484 billion coronavirus package to extend the Paycheck Protection Program. The agreement also includes funds for small lenders and community banks, funds for national coronavirus testing and funding for hospitals. The bill includes an additional $60 billion for the Economic Injury Disaster Loan program. Senator John Hoeven, a Republican from North Dakota, told the Hagstrom Report, “farmers and ranchers are working hard to continue providing our nation with food, fuel and fiber, and this is one way we can help support them during this pandemic.” The provision means ag businesses can now apply for low-interest loans through the program and may also qualify for the $10,000 emergency grants. To be eligible, ag businesses will have to show that they have been hurt by the economic downturn caused by coronavirus.
Farm Groups Defend Glyphosate Reregistration
A coalition of commodity groups seeks to block a challenge that would toss out the Environmental Protection Agency's plans to reregister glyphosate. The group filed a joint motion to intervene on April 20 in the case to support EPA's decision. The Natural Resources Defense Council is challenging the reregistration approval. Glyphosate is one of the most widely used herbicides worldwide. Growers and others depend on it for effective weed control and to minimize tillage farming practices, reduce greenhouse gas emissions, and preserve more land for native habitats. EPA on January 22, published its interim decision for the 15-year registration review of glyphosate, as required by the Federal Insecticide, Fungicide and Rodenticide Act. It included a variety of determinations about glyphosate, including revision of requirements for drift management, off-target effects, herbicide resistance management practices, and a human health risk assessment in which EPA found glyphosate posed no significant cancer or non-cancer human health risks. The coalition of farm groups includes the American Farm Bureau Federation, American Soybean Association, National Corn Growers Association, and eight others.
Farmer Co-ops Urge Attention to Farmer Mental Health Issues
The National Council of Farmer Cooperatives urges the Department of Agriculture to focus on the impact the COVID-19 pandemic has on farmers' mental health. In a letter to Agriculture Secretary Sonny Perdue this week, the organization says, "for some, mental health may become as or more important than financial health." Farmers have reached the point of decisions to destroy or abandon their produce, dump their milk, and even destroy livestock. The letter states, “The frustration of seeing the value of your hard work going for naught can compound feelings of depression.” The letter notes that USDA, together with the Department of Health and Human Services’ Federal Office of Rural Health Policy, has been active for several years to help producers struggling with farm stress. The organization says USDA could leverage this experience at this time to provide a lifeline to farmers and ranchers struggling with the impacts of this crisis. The letter suggests that USDA convey to producers that they are not alone, this is not their fault, and they will get through this pandemic and its impact on agriculture.
Senate Democrats Seek Production for Food Supply Chain Workers
A group of 36 Democratic Senators led by U.S. Senator Debbie Stabenow from Michigan urges the Trump administration to protect essential workers in the food supply chain. There have been numerous reports of essential workers in meatpacking plants, processing facilities, farms, grocery stores, and markets falling ill from COVID-19. Some workers have reportedly felt pressured to go to work even when feeling sick. There are also serious concerns about the health of farmworkers who often work, live, and travel in close proximity, making social distancing very difficult. A letter to the Trump administration from the Senators states, “It is vital that we do everything we can to protect food supply workers.” The Senators say breakdowns in the food supply chain could have significant economic impacts for both consumers and agricultural producers. The Senators urged the White House and federal agencies to coordinate with state and local governments and the private sector to take aggressive action to protect essential workers and the food supply from further damage.
USDA to Host Virtual Career Fair in Kansas City
The Department of Agriculture will hold a virtual job fair for positions at the Economic Research Service and the National Institute of Food and Agriculture in Kansas City, Missouri. USDA is partnering with the University of Missouri to host a joint Virtual Career Expo on April 28, 2020, building on an event last year that attracted more than 400 attendees. Both agencies relocated most of their operations to the Kansas City region last fall and are continuing to grow their workforces. Deputy Under Secretary Scott Hutchins says, “This is a unique time for our nation and USDA continues to build the ERS and NIFA workforce using innovative techniques.” The COVID-19 pandemic forced many event cancellations, or a pivot to virtual events, such as the virtual job fair. Representatives from ERS, NIFA, and the Office of Personnel and Management will conduct information sessions during the Virtual Expo about the agencies and available positions, how to apply for federal jobs and benefits of working for the federal government.
Lawmakers Seek Support for Local Media
More than 200 lawmakers seek federal assistance for local news and media outlets suffering from the lack of advertising funds during the COVID-19 pandemic. The lawmakers say that in times of emergency and disaster, the public turns to their local media, and advertising plays an incredible role in funding those outlets. A letter to the Trump administration says the importance of advertising to the "sustainability of local broadcast stations and newspapers cannot be overstated." National Association of Farm Broadcasting President Rita Frazer says, "When local businesses hurt, local radio stations hurt," adding, "our members are feeling the pain, with local advertising dollars shifting and declining." The lawmakers urge the administration to review any resources provided by the CARES Act and other recent bills intended for advertising campaigns, and expedite those activities with local media outlets. The lawmakers also seek federal outreach through advertising of new programs, and incentives for recovering businesses to advertise with local media.
Washington Insider: Administration to Defer Tariff Payments
Bloomberg is reporting this week that, amid the intense debate over federal virus relief measures, the administration will allow “deferral of duty payments in hardship cases.” Larry Kudlow, White House economic adviser said that the U.S. will temporarily suspend certain tariff payments in an effort to help industries such as “retail” that are facing liquidity issues because of the coronavirus crisis.
“In some cases the customs duties--the excise tax you pay on the import – will be lifted if there are hardship cases,” Kudlow said. “In particular, there’s a lot of concern about retailers and related supply chains getting into the United States.”
The three-month deferral of payments, which was first debated inside the White House a month ago, only covers so-called most-favored nation tariffs and doesn’t apply to any of President Trump’s enforcement actions, including tariffs he’s imposed on roughly $360 billion in Chinese goods or steel and aluminum imports from around the globe, Bloomberg said.
“It’s a significant action. We want to help folks, it’s a way of helping out certain industries,” Kudlow said, but added that it was “not an enormous action” and doesn’t change the president’s trade policies.
Kudlow had noted earlier that a deferral for certain duty payments was ruled out because it was too complicated to administer.
White House deliberations on whether to defer payments and for which tariffs would be reduced were influenced by “outside voices on both sides of the debate,” Bloomberg noted somewhat cryptically.
Domestic manufacturers have argued for weeks that any relief for importers would create an unequal playing field at a time when industries in the U.S. are facing difficult times as well.
“The administration should not have tried to hide this decision by announcing it on a Sunday evening,” said Thomas Conway, president of United Steelworkers International. “Instead, the president should have made the announcement himself, during the light of day, so he could explain why he would do something that runs so antithetical to his claimed priority to Buy American, Hire American.”
Retail groups, on the other hand, said the action was helpful – but doesn’t go far enough to address the problem and ensure that jobs can be saved during this crisis.
“While the deferral of select duty payments is helpful and warranted, the deferral of all duty payments for at least 180 days would do even more to assist retailers as they navigate this unprecedented pandemic,” said Brian Dodge, president of the Retail Industry Leaders Association. “Millions of jobs are on the line, and we urge the administration to consider further duty relief to help retailers put workers back on the payroll when this crisis abates.”
Kudlow on Monday also conceded that the duties for imported goods are paid by American companies and not China, as President Trump often claims. “Yes, tariffs are paid by the companies importing, yes U.S. companies, with a minimum impact, frankly, on consumers.” He said the economic benefits of the phase-one trade deal between America and China “far outweigh” the economic cost of tariffs Trump has imposed.
The recently announced shift in tariff payment policy has been under consideration for some time, the New York Times said recently.
Also, tariff relief is supported by a number of groups, the NYT said. For example, in a statement last week, Myron Brilliant, the head of international affairs at the U.S. Chamber of Commerce, said tariff relief would provide some welcome breathing room for American businesses and consumers. “Liquidity has emerged as one of the top challenges for businesses of all sizes, and tariff relief would alleviate some of that strain.”
However, groups that supported the administration’s levies from the beginning continue to insist that any removal would be ruinous for industries like steel that depend on the protection.
So, we will see. The administration’s “get tough” trade policies continue to have both political supporters and opponents, but the large-scale economic interventions likely will lead to growing questions about policies that are accused of increasing consumer prices and dampening demand, debates producers should watch closely as they intensify, Washington Insider believes.
“In some cases the customs duties--the excise tax you pay on the import – will be lifted if there are hardship cases,” Kudlow said. “In particular, there’s a lot of concern about retailers and related supply chains getting into the United States.”
The three-month deferral of payments, which was first debated inside the White House a month ago, only covers so-called most-favored nation tariffs and doesn’t apply to any of President Trump’s enforcement actions, including tariffs he’s imposed on roughly $360 billion in Chinese goods or steel and aluminum imports from around the globe, Bloomberg said.
“It’s a significant action. We want to help folks, it’s a way of helping out certain industries,” Kudlow said, but added that it was “not an enormous action” and doesn’t change the president’s trade policies.
Kudlow had noted earlier that a deferral for certain duty payments was ruled out because it was too complicated to administer.
White House deliberations on whether to defer payments and for which tariffs would be reduced were influenced by “outside voices on both sides of the debate,” Bloomberg noted somewhat cryptically.
Domestic manufacturers have argued for weeks that any relief for importers would create an unequal playing field at a time when industries in the U.S. are facing difficult times as well.
“The administration should not have tried to hide this decision by announcing it on a Sunday evening,” said Thomas Conway, president of United Steelworkers International. “Instead, the president should have made the announcement himself, during the light of day, so he could explain why he would do something that runs so antithetical to his claimed priority to Buy American, Hire American.”
Retail groups, on the other hand, said the action was helpful – but doesn’t go far enough to address the problem and ensure that jobs can be saved during this crisis.
“While the deferral of select duty payments is helpful and warranted, the deferral of all duty payments for at least 180 days would do even more to assist retailers as they navigate this unprecedented pandemic,” said Brian Dodge, president of the Retail Industry Leaders Association. “Millions of jobs are on the line, and we urge the administration to consider further duty relief to help retailers put workers back on the payroll when this crisis abates.”
Kudlow on Monday also conceded that the duties for imported goods are paid by American companies and not China, as President Trump often claims. “Yes, tariffs are paid by the companies importing, yes U.S. companies, with a minimum impact, frankly, on consumers.” He said the economic benefits of the phase-one trade deal between America and China “far outweigh” the economic cost of tariffs Trump has imposed.
The recently announced shift in tariff payment policy has been under consideration for some time, the New York Times said recently.
Also, tariff relief is supported by a number of groups, the NYT said. For example, in a statement last week, Myron Brilliant, the head of international affairs at the U.S. Chamber of Commerce, said tariff relief would provide some welcome breathing room for American businesses and consumers. “Liquidity has emerged as one of the top challenges for businesses of all sizes, and tariff relief would alleviate some of that strain.”
However, groups that supported the administration’s levies from the beginning continue to insist that any removal would be ruinous for industries like steel that depend on the protection.
So, we will see. The administration’s “get tough” trade policies continue to have both political supporters and opponents, but the large-scale economic interventions likely will lead to growing questions about policies that are accused of increasing consumer prices and dampening demand, debates producers should watch closely as they intensify, Washington Insider believes.
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