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Tuesday, June 30, 2020
Governors Want EPA to Reject Retroactive Refinery Exemptions
South Dakota Governor Kristi Noem (gnome) and Minnesota Governor Tim Walz sent a letter to Andrew Wheeler, Environmental Protection Agency Administrator regarding small refinery exemptions. They’re asking the agency to reject all of the 52 applications for retroactive small refinery exemptions from the Renewable Fuels Standard for past compliance years. Governor Noem and Governor Walz are the chair and vice-chair of the Governors’ Biofuels Coalition. “We are concerned that EPA is considering exemptions for prior years that were specifically submitted to evade the court of appeal’s decision by allowing refineries with lapsed SREs to establish a continuous chain of exemptions,” the governors say. “Approving prior-year SREs in this manner ignores the court’s decision and congressional intent, and it will severely impact farmers and rural communities that support the biofuels industry. Since 2017, the EPA has granted 85 SREs, undermining farmers and biofuel producers throughout the nation.” In January, the U.S. Court of Appeals in the Tenth Circuit ruled that the EPA could not legally award exemptions to refiners that didn’t receive any waivers in previous years and had failed to demonstrate hardship in any way related to the RFS. If all 52 applications get approved, the coalition says it will cost the market more than two billion gallons worth of demand.
ASA Names Brian Vaught as Temporary CEO
The American Soybean Association announced late last week that Chief Financial Officer Brian Vaught will replace Ryan Findlay as a temporary CEO of the organization. In a statement, the ASA says the group’s board of directors is “appreciative of Ryan Findlay’s hard work and dedication to the soybean industry.” With the organization now in transition mode, ASA says it remains confident in its staff members, both in St. Louis and in Washington, D.C., as well as in the value that they bring to the soybean industry. ASA’s governing body continues to support the organization’s growth, including in the independent policy office in D.C., and the internal management structure established throughout the organization by the now-former CEO. Findlay joined the organization in 2018. He was named to the top post after Steven Censky, who held the post for more than 20 years, headed to D.C. to become the Deputy Secretary of Agriculture. Findlay is a veteran of U.S. agriculture, holding jobs at Syngenta, Michigan Farm Bureau, and as a staff member in the Michigan legislature.
Food Exporters Unhappy with China Clampdown on Imports
China’s General Administration on Customs is asking some exporters to sign forms guaranteeing their products are free from COVID-19 contamination. Politico says that’s not sitting well with many U.S. food producers, who say they’re hesitant to sign off on the new safety protocols when they say it’s highly unlikely their food can even carry the virus. Western Growers CEO Dave Puglia (POO-glee-ah) says the new requirements from Beijing “are not based on any legitimate food safety concern,” citing international food safety guidelines that have found no evidence of the virus being transmitted through food or packaging. The pushback follows a rare joint statement from the USDA and the Food and Drug Administration that says, “Efforts by some countries to restrict global food exports related to COVID-19 transmission are not consistent with the known science of transmission.” Instead of signing the form issued from the Chinese government, some exporters are sending their own “commitment statements” with their cargo. The Ag Transportation Coalition sent its members three examples of statements they could use. “While China Customs hasn’t confirmed these statements are acceptable substitutes for the official form, we are hearing that exporters sending these statements have not encountered any issues so far with their customers clearing cargo in China,” the group says in an email.
Not All “Meatless” Meats Good for Health/Environment
A Forbes article says science-backed claims that plant-based meats are healthier for both humans and the environment have sparked a wave of veganism. However, all may not be as it appears. Sarah Galetti, the founder of vegan frozen food brand Tattooed Chef, says that many of the vegetarian meat products aren’t as clean as consumers think. Some of the brands that make an effort to mimic meat using scientifically engineered textures, smells, and flavors. Among those ingredients is soy hemoglobin, which is made from genetically modified yeast, which is used in the product to look like blood. The Burger King Whopper only has 30 more calories than the Impossible Whopper, the company’s “meatless” alternative. The Whopper also as one more gram of saturated fat and is 270 milligrams lower in salt than the Impossible Whopper. Research from the Federation of American Societies for Experimental Biology indicates that “Among meat substitutes, veggie burgers are associated with the highest carbon dioxide emissions, coming in at 4.1 kilograms per kilogram of the product.”
Court Says No to Reversal on Dicamba
Late last week, a panel of judges in the Ninth Circuit Court said no to a BASF motion to stay and recall their June 3rd ruling that vacated three dicamba registrations. The move puts dicamba registrations and product users back where they started the month: with three or four over-the-top dicamba herbicides no longer federally approved for use. For now, farmers and applicators can still apply any existing stocks that were in their possession on June 3rd, according to the cancellation order issued by the Environmental Protection Agency on June 8th. They have to follow directions on the former labels, as well as any state rules that are already in effect, including state cutoff dates that may have already taken place. Looking past 2020, a DTN article says the future of three dicamba registrations is in limbo. BASF had asked the judges to recall their mandate based on several reasons. For example, BASF says it wasn’t made aware that its Engenia herbicide was at stake in the case before the June 3rd decision. That meant they didn’t get a proper opportunity to defend the product in court.
No Farm Progress Show and Husker Harvest Days in 2020
The Farm Progress Show and Husker Harvest Days have been going strong for 65 years as a place that farmers can go to find out about new products and tools to boost productivity. But, for the first time ever the shows won’t happen. Farm Progress made the difficult decision to cancel both shows due to the rapidly changing conditions related to COVID-19. Show management had initially said the shows would go on with different health and safety requirements in place. State and local officials had come out in support for both shows taking place. But Farm Progress officials said it became apparent in a very short time that the situation across the U.S. is changing. While state and local officials had expressed support for the shows, Farm Progress said it became apparent in a very short time that the situation in the U.S. is changing. “We have been working with officials in Iowa and Nebraska for our shows, and we appreciate the support they expressed for us to hold the events,” says Senior Vice President Don Tourte. “They are critical partners to us, and we are all disappointed to not host the events this year but feel confident this is the right decision for our community.”
Washington Insider: Following the US, China Feud
Bloomberg is reporting this week that the U.S.-China feud is “getting nasty with red tape as a stealth weapon.” The article says the countries are “moving beyond trade threats to exchanging regulatory punches that threaten a wide range of industries including technology, energy and air travel.”
The two have blacklisted each other's companies, barred flights and expelled journalists -- to the point that the unfolding skirmish is starting to make companies nervous that the trading landscape could shift out from under them. “There are many industries where U.S. companies have made long-term bets on China's future,” said Myron Brilliant, the U.S. Chamber of Commerce's head of international affairs. Now, they're “recognizing the risk.”
China will look to avoid measures that could backfire, said Shi Yinhong, an adviser to the nation's cabinet and a professor of international relations at Renmin University in Beijing. Any sanctions on U.S. companies would be a “last resort” because China “is in desperate need of foreign investment from rich countries for both economic and political reasons.”
Still, pressure is only expected to intensify ahead of the U.S. elections in November, as President Trump and presumptive Democratic nominee Joe Biden joust over who will take a tougher line on China, Bloomberg said.
Trump has blamed China for covering up the coronavirus pandemic and accused Beijing of “illicit espionage to steal our industrial secrets.” Biden, likewise, has described President Xi Jinping as a thug, labeled mass detention of Uighur Muslims as unconscionable and accused China of predatory trade practices.
And, on Capitol Hill, Republicans and Democrats have found rare unity in their opposition to China, with lawmakers eager to take action against Beijing for its handling of COVID-19, forced technology transfers, human rights abuses and its tightening grip on Hong Kong.
China has repeatedly rejected U.S. accusations over its handling of the pandemic, Uighurs, Hong Kong and trade. China also has fired back at the Trump administration for undermining global cooperation and seeking to start a “new cold war.” Foreign Minister Wang Yi last month said China had no interest in replacing the U.S. as a hegemonic power, while adding that the U.S. should give up its “wishful thinking” of changing the country.
Both sides have already taken a series of regulatory moves aimed at protecting market shares. For example, the U.S. is citing security concerns in blocking China Mobile Ltd., the world's largest mobile operator, from entering the U.S. market. It's culling Chinese-made drones from government fleets and discouraging the deployment of Chinese transformers on the power grid. The administration has also tried to constrain the global reach of China's Huawei Technologies Co., the world's largest telecommunications equipment manufacturer.
Meanwhile, China prevented U.S. airline flights into the country for more than two months and, after the U.S. imposed visa restrictions on Chinese journalists, it expelled American journalists. It has stepped up its scrutiny of U.S. companies, with China's state news agency casting one probe as a warning to the White House. China also has long made it difficult for U.S. telecommunications companies to enter its market, requiring overseas operators to co-invest with local firms and requiring authorization by the central government.
One of the most combustible flash points has been the administration's campaign to contain Huawei by seeking to limit the company's business in the U.S. and push allies to shun its gear in their networks.
After suppliers found work-arounds, Commerce in May tightened rules to bar any chipmaker using American equipment from selling to Huawei without U.S. approval, a step that could constrain virtually the entire contract chipmaking industry. Although Huawei can buy off-the-shelf or commodity mobile chips from a third party, such as Samsung Electronics Co. or MediaTek Inc., going that route could force it to make costly compromises on performance in basic products.
Bloomberg thinks that both the U.S. and China have ample opportunities to ratchet up regulatory pressure. A bill passed by the Senate last month could prompt the delisting of Chinese companies from U.S. stock exchanges if American officials aren't allowed to review their financial audits.
And last week, as the U.S. State Department imposed visa bans on Chinese Communist Party officials accused of infringing the freedom of Hong Kong citizens, a senior official made clear the move was just an opening salvo in a campaign to force Beijing to back off new restrictions on the city.
Companies are still lured to China and its massive local market – and tensions with the U.S. don't overcome the Asian superpower's appeal. Just one-fifth of companies surveyed by the American Chamber of Commerce in China late last year said they had moved or were considering moving some operations outside of the country, part of a three-year downward trend.
However, China is no longer the lowest-cost manufacturer and companies are increasingly reluctant to invest there, said James Lewis, director of the Technology Policy Program at the Center for Strategic and International Studies in Washington. “Everyone would like to be in the China market – everyone wants it to be like 2010-- but things are changing.”
So, we will see. Certainly, the pre-election tensions amplify trade uncertainties, large and small. And, they boost the stakes involved – a making it essential for producers, as well as others, to watch this policy “dance” closely as changes and shifts emerge, Washington Insider believes.
The two have blacklisted each other's companies, barred flights and expelled journalists -- to the point that the unfolding skirmish is starting to make companies nervous that the trading landscape could shift out from under them. “There are many industries where U.S. companies have made long-term bets on China's future,” said Myron Brilliant, the U.S. Chamber of Commerce's head of international affairs. Now, they're “recognizing the risk.”
China will look to avoid measures that could backfire, said Shi Yinhong, an adviser to the nation's cabinet and a professor of international relations at Renmin University in Beijing. Any sanctions on U.S. companies would be a “last resort” because China “is in desperate need of foreign investment from rich countries for both economic and political reasons.”
Still, pressure is only expected to intensify ahead of the U.S. elections in November, as President Trump and presumptive Democratic nominee Joe Biden joust over who will take a tougher line on China, Bloomberg said.
Trump has blamed China for covering up the coronavirus pandemic and accused Beijing of “illicit espionage to steal our industrial secrets.” Biden, likewise, has described President Xi Jinping as a thug, labeled mass detention of Uighur Muslims as unconscionable and accused China of predatory trade practices.
And, on Capitol Hill, Republicans and Democrats have found rare unity in their opposition to China, with lawmakers eager to take action against Beijing for its handling of COVID-19, forced technology transfers, human rights abuses and its tightening grip on Hong Kong.
China has repeatedly rejected U.S. accusations over its handling of the pandemic, Uighurs, Hong Kong and trade. China also has fired back at the Trump administration for undermining global cooperation and seeking to start a “new cold war.” Foreign Minister Wang Yi last month said China had no interest in replacing the U.S. as a hegemonic power, while adding that the U.S. should give up its “wishful thinking” of changing the country.
Both sides have already taken a series of regulatory moves aimed at protecting market shares. For example, the U.S. is citing security concerns in blocking China Mobile Ltd., the world's largest mobile operator, from entering the U.S. market. It's culling Chinese-made drones from government fleets and discouraging the deployment of Chinese transformers on the power grid. The administration has also tried to constrain the global reach of China's Huawei Technologies Co., the world's largest telecommunications equipment manufacturer.
Meanwhile, China prevented U.S. airline flights into the country for more than two months and, after the U.S. imposed visa restrictions on Chinese journalists, it expelled American journalists. It has stepped up its scrutiny of U.S. companies, with China's state news agency casting one probe as a warning to the White House. China also has long made it difficult for U.S. telecommunications companies to enter its market, requiring overseas operators to co-invest with local firms and requiring authorization by the central government.
One of the most combustible flash points has been the administration's campaign to contain Huawei by seeking to limit the company's business in the U.S. and push allies to shun its gear in their networks.
After suppliers found work-arounds, Commerce in May tightened rules to bar any chipmaker using American equipment from selling to Huawei without U.S. approval, a step that could constrain virtually the entire contract chipmaking industry. Although Huawei can buy off-the-shelf or commodity mobile chips from a third party, such as Samsung Electronics Co. or MediaTek Inc., going that route could force it to make costly compromises on performance in basic products.
Bloomberg thinks that both the U.S. and China have ample opportunities to ratchet up regulatory pressure. A bill passed by the Senate last month could prompt the delisting of Chinese companies from U.S. stock exchanges if American officials aren't allowed to review their financial audits.
And last week, as the U.S. State Department imposed visa bans on Chinese Communist Party officials accused of infringing the freedom of Hong Kong citizens, a senior official made clear the move was just an opening salvo in a campaign to force Beijing to back off new restrictions on the city.
Companies are still lured to China and its massive local market – and tensions with the U.S. don't overcome the Asian superpower's appeal. Just one-fifth of companies surveyed by the American Chamber of Commerce in China late last year said they had moved or were considering moving some operations outside of the country, part of a three-year downward trend.
However, China is no longer the lowest-cost manufacturer and companies are increasingly reluctant to invest there, said James Lewis, director of the Technology Policy Program at the Center for Strategic and International Studies in Washington. “Everyone would like to be in the China market – everyone wants it to be like 2010-- but things are changing.”
So, we will see. Certainly, the pre-election tensions amplify trade uncertainties, large and small. And, they boost the stakes involved – a making it essential for producers, as well as others, to watch this policy “dance” closely as changes and shifts emerge, Washington Insider believes.
US Rice Industry Calls For End To Duty-Free Treatment Of Rice Under GSP
The U.S. rice industry is calling on the Trump administration to eliminate duty-free treatment for all rice imports under the Generalized System of Preferences (GSP) program. The USA Rice Federation filed a petition in March asking for the action.
But the U.S. Trade Representative's office, in a set of questions to the rice group and countries that would be affected by the action, noted the U.S. rice industry was still a “significant rice exporter,” with foreign shipments of $1.9 billion last year.
USTR is asking, “Could you please advise whether increased rice imports have harmed U.S. rice production or exports, and if so, how specifically?” Further, they also sought an explanation of the U.S. parboiling industry, its employment levels and locations, and the “degree to which it might be injured by imports.”
But the U.S. Trade Representative's office, in a set of questions to the rice group and countries that would be affected by the action, noted the U.S. rice industry was still a “significant rice exporter,” with foreign shipments of $1.9 billion last year.
USTR is asking, “Could you please advise whether increased rice imports have harmed U.S. rice production or exports, and if so, how specifically?” Further, they also sought an explanation of the U.S. parboiling industry, its employment levels and locations, and the “degree to which it might be injured by imports.”
Ernst Holding Up EPA Nominee
Sen. Joni Ernst, R-Iowa, said she will block President Donald Trump's nomination of Doug Benevento to be EPA's Deputy Administrator from advancing until the agency reveals how it plans to handle the dozens of new requests from refineries for exemptions from their biofuel requirements.
“Until EPA tells us exactly what they plan to do with the 'gap year' waivers, Mr. Benevento does not have my vote,” Ernst said in a statement. “Iowa's hardworking ethanol and biodiesel producers are sick of being yanked around by Andrew Wheeler and the EPA. Our producers need certainty; until we get that, no EPA nominee is getting my vote.”
Benevento is currently EPA associate deputy administrator and was nominated in February to take the number two post at the agency.
Holds are not new in the world of Congress, and EPA nominations have been a target previously, with Sen. Ted Cruz, R-Texas, previously holding up an EPA nomination over biofuel policy.
EPA's proposed 2021 biofuel and 2022 biodiesel levels under the Renewable Fuel Standard (RFS) has been under review at the at the Office of Management Budget (OMB) and is normally issued in the late-June/early July timeframe.
“Until EPA tells us exactly what they plan to do with the 'gap year' waivers, Mr. Benevento does not have my vote,” Ernst said in a statement. “Iowa's hardworking ethanol and biodiesel producers are sick of being yanked around by Andrew Wheeler and the EPA. Our producers need certainty; until we get that, no EPA nominee is getting my vote.”
Benevento is currently EPA associate deputy administrator and was nominated in February to take the number two post at the agency.
Holds are not new in the world of Congress, and EPA nominations have been a target previously, with Sen. Ted Cruz, R-Texas, previously holding up an EPA nomination over biofuel policy.
EPA's proposed 2021 biofuel and 2022 biodiesel levels under the Renewable Fuel Standard (RFS) has been under review at the at the Office of Management Budget (OMB) and is normally issued in the late-June/early July timeframe.
Tuesday Watch List
Markets
After a report on consumer confidence at 9 a.m. CDT Tuesday, grain traders will brace themselves for USDA's Acreage and June 1 Grain Stocks reports at 11 a.m. CDT. Ongoing interests in weather and export news will round out the day's attention.
Weather
Thunderstorms with locally heavy rain and severe potential are in store for the Northern Plains and southern Midwest Tuesday. Flood potential is widespread in the southern Midwest due to the prospect of heavy rain. Some flooding is also possible in the far Northern Plains. Other crop areas will be dry. Hot and dry conditions in the Southern Plains will favor wheat harvest but will continue to stress row crops and livestock. Irrigation demand in drier areas is extensive.
After a report on consumer confidence at 9 a.m. CDT Tuesday, grain traders will brace themselves for USDA's Acreage and June 1 Grain Stocks reports at 11 a.m. CDT. Ongoing interests in weather and export news will round out the day's attention.
Weather
Thunderstorms with locally heavy rain and severe potential are in store for the Northern Plains and southern Midwest Tuesday. Flood potential is widespread in the southern Midwest due to the prospect of heavy rain. Some flooding is also possible in the far Northern Plains. Other crop areas will be dry. Hot and dry conditions in the Southern Plains will favor wheat harvest but will continue to stress row crops and livestock. Irrigation demand in drier areas is extensive.
Monday, June 29, 2020
FFA National Convention and Expo Goes Digital in October
The National FFA Organization announced last week that the 2020 National FFA Convention and Expo will be held virtually. “We wanted to ensure that our members and guests had the full convention experience,” says Mark Peoschl (PESH-uhl), National FFA CEO. “After a discussion with the Board of Directors, the decision was made to move forward with a virtual experience in 2020.” He says as they continued to plan for the national convention, it became clear that travel restrictions and public health concerns, among many other challenges, made hosting their in-person event impossible this year. This year’s event will still be hosted by the 2019-2020 National FFA Officer Team and continue the tradition of celebrating and inspiring hundreds of thousands of FFA members who will become the next generation of leaders. “While the convention will look, a little different this year than what we’re used to, FFA members around the country have proven their willingness to not only adapt but create meaningful experiences while celebrating FFA and agricultural education,” says Kolesen McCoy, National FFA President. The organization looks forward to returning to Indianapolis with an in-person convention in 2021 as part of its long-term partnership that now runs through 2033. The organization and its board of directors also decided last week to extend the city of Indianapolis’s contract for two more years.
Senators Urge EPA to Reject Biofuel Blending Waivers
Senators Chuck Grassley and Joni Ernst of Iowa, along with Amy Klobuchar of Minnesota and Tammy Duckworth of Illinois, sent a letter to the Environmental Protection Agency on blending waivers. They’re asking the EPA to reject petitions for Small Refinery Exemptions (SREs) under the Renewable Fuels Standard for past compliance years. In the letter, the senators warn that by granting any or all of the petitions, the agency would only worsen the economic challenges facing the biofuels industry. They also want the EPA to apply the Tenth Circuit Court decision nationally. “We urge you to reject these petitions outright and respond in writing to our questions about recent use of SREs under the RFS,” the senators say in the letter. “These petitions should not even be looked at because they are inconsistent with the Tenth Circuit Decision, Congressional intent, as well as the EPA’s own guidance.” Most importantly, they say it goes against the best interests of farmers and rural communities who rely on the biofuel industry. “The approval of the SREs for past compliance years will only worsen the already unprecedented challenges facing the biofuels industry and the rural communities that it supports,” the Senators added.
Groups Appreciate Biofuel Support in Senate
The National Biodiesel Board is grateful to a bipartisan group of senators who asked the Environmental Protection Agency to reject 52 RFS exemption requests. Those petitions are for past compliance years. The Senators expressed frustration and alarm in the letter that Administrator Andrew Wheeler is considering exemptions for refineries that either did not submit petitions or weren’t granted waivers in the past. NBB Vice President of Federal Affairs, Kurt Kovarik, says, “A brand new flood of unlawful small refinery exemptions is guaranteed to compound the damage done to rural America over the last several years.” Growth Energy CEO Emily Skor says the sole purpose of the retroactive exemptions is to circumvent the law at the expense of rural families struggling to get back on their feet. “There is no justification for allowing these petitions to hang over the market, injecting uncertainty into America’s agricultural recovery,” Skor says. “EPA needs to dismiss the oil industry’s latest attempt to destroy demand for biofuels and restore the integrity to the RFS.” Growth Energy is grateful to the senators for standing up to this attempt to “rewrite history, skirt the courts, and torpedo efforts to rebuild America’s agricultural supply chain.”
Mexican President to Meet This Week with Trump
Mexican President Andres Manuel (Man-WELL) Lopez Obrador will be in Washington this week to celebrate the U.S.-Mexico-Canada Agreement on trade going into full effect. The Washington Trade Daily says Obrador will meet with President Trump and may also meet with Canadian Prime Minister Justin Trudeau. As the agreement between the three North American countries enters into force, Obrador is making the trip to signal Mexico’s commitment to the USMCA and that it’s a reliable partner in the agreement. Mexico’s Secretary of the Economy spoke recently during a webinar sponsored by the Atlantic Council, noting that implementation of the USMCA is even more important as the countries try to recover from COVID-19. The trade pact was negotiated before the coronavirus outbreak took off, but it can also be a model for trade in the post-pandemic world. The Hagstrom Report says officials in Mexico also believe that in the wake of COVID-19, most countries will be looking to bring their supply chains closer to home.
U.S. Hog Industry is Up by Five Percent
As of June first, U.S. farms contained 79.6 million hogs and pigs, up five percent from June of 2019. That’s also three percent higher than March first of this year. The Quarterly Hogs and Pigs report came out last week from USDA’s National Ag Statistics Service. Out of the total of 79.6 million hogs, 73.3 million are market hogs, while 6.3 million will be kept for breeding. Between March and May of this year, U.S. farms weaned 34.9 million pigs, up one percent from the same time a year ago. Also, from March to May 2020, U.S. hog and pig farmers weaned an average of 11 pigs per litter. U.S. hog producers intend to have 3.12 million sows farrow between June and August of 2020, and 3.09 million sows will farrow between September and November. The largest herd inventory is located in Iowa, where the total number is 25.2 million head. Minnesota was second at 9.6 million head and North Carolina was third with 9.4 million head of hogs and pigs.
McDonald’s in Canada Says No to More Beyond Meat Burgers
Shares of Beyond Meat fell seven percent last week after the CBC report that said McDonald’s stopped testing a burger made with its patties in Canada. McDonald’s’ in Canada says the test ended on April sixth, mentioning on Twitter that they “have no plans to bring it back to our menu at the current time.” A Beyond Meat spokesperson tells CNBC that, “We can only comment generally and share that we were pleased with the test.” The company’s CEO Ethan Brown said in early May that the test concluded for no negative reason at all. “We feel very good about our relationship with McDonald’s,” Brown says. “We feel good about what’s going to be happening, both there and potentially elsewhere.” Back in September of 2019, McDonald’s joined the push for more meat alternatives in North America when it began testing the meat-free PLT burger in southwestern Ontario. McDonald’s says there has been no change in its relationship with Beyond Meat, noting that they’re evaluating learnings from their recent test to inform future menu options.
Washington Insider: Decoupling US Trade From China Will be Hard
While President Donald Trump is urging American companies to “ditch China,” many of them can’t get more goods fast enough. There are several reasons, Bloomberg reports.
As an example, Bloomberg follows the container ship Melina, which set sail Wednesday from a Chinese port near Shenzhen with products bound for U.S. households. The report calls the ship a hulking “symbol of how the flow of goods is adapting in a global economy crippled by a pandemic.”
Capable of carrying almost 4,300 containers, she’s “downright petite” in an industry where the biggest ships can handle more than 20,000. However, the Melina is part of a budding fleet of smaller vessels that COVID-19 has thrust into service. These tend to compete on the basis of speed and it will dock in Los Angeles on July 6 after a 12-day journey, which is a week ahead of a larger ship doing the same route, Bloomberg says.
However, speed is costly -- as much as double the cost of standard transpacific service -- which is already rising as the world’s biggest shipping companies scale back capacity perhaps by 25% this quarter and another 10% in the third quarter. The industry expects U.S. retail demand to recover only slowly amid “plenty of fog on the global economic horizon.”
But for now, “shipping demand from some companies remains brisk,” justifying the added import cost of fast delivery from online shoppers for everything “from protective medical gear to baby pools for the backyard.”
Melina is among lines offering express service between China and the U.S., the kind of links that show the difficulty President Trump faces in pushing for a “complete decoupling” of the world’s largest economies and bringing production back home.
“We expect the need for this expedited service to be permanent and actually grow as the share of e-commerce in global trade will continue to grow,” Nissim Yochai, the company’s executive vice president in the Pacific, said from Hong Kong. “This abnormal period will continue as long as the world continues to search for tools to offset the COVID-19 pandemic and to assist people attempting to get out to work and socialize and, of course, consume.”
Striking a balance between global supply and demand is what shipping companies are trying to do constantly, looking months and even years in advance. The pandemic has made that job much harder. One way to do it is to cancel sailings, which they’ve been doing a lot lately. At the adjoining ports of Los Angeles and Long Beach, the main gateway for Chinese imports, 45 trips have been scrapped this quarter, more than four times the number in the second quarter of 2019.
For some U.S. companies on the receiving end of goods, shipping disruptions are starting to subside. For others, they’re just beginning, Bloomberg says.
“We’re not at the point right now where we’ve rebalanced supply to the demand because the demand signals are jumping all over the board,” said Abe Eshkenazi, CEO of the Association for Supply Chain Management.
About 80% of the world’s trade crosses an ocean by ship, and the industry typically has two busy seasons tied to Chinese holidays, the New Year and Golden Week in October. With normal shipping rates double what they were three months ago and air cargo rates still elevated because of a dearth of commercial flights, importers are facing the strains of a peak season now.
A general merchandiser in small-town America that offers free coffee and a bag of popcorn, Rural King is little different than other traditional retailers that experienced recent shortages of toilet paper, paper towels and hand sanitizer, Bloomberg said.
But thanks to a flexible supply chain and close relationships with vendors in China and elsewhere in Asia, the firm has managed to keep most items stocked and is having a good year.
Who knew squirrel feeders would be big sellers in a global health crisis, or plastic pools, Rural King manager told Bloomberg. “And, we just got another shipment of trampolines,” he said, adding that Rural King stores sold 300 in one day recently. Good thing for him he has 100 to 200 suppliers in China, and in Vietnam whom he talks to daily and who are scrambling to help meet the rush. “They are unbelievable with these orders.”
So, we will see. The online retail services system is huge and driven by powerful economic forces that make it extremely difficult to realign, as the Trump administration appears to be finding out. However the changes being proposed are important and should be watched closely by producers as the nation struggles to overcome the coronavirus, Washington Insider believes.
As an example, Bloomberg follows the container ship Melina, which set sail Wednesday from a Chinese port near Shenzhen with products bound for U.S. households. The report calls the ship a hulking “symbol of how the flow of goods is adapting in a global economy crippled by a pandemic.”
Capable of carrying almost 4,300 containers, she’s “downright petite” in an industry where the biggest ships can handle more than 20,000. However, the Melina is part of a budding fleet of smaller vessels that COVID-19 has thrust into service. These tend to compete on the basis of speed and it will dock in Los Angeles on July 6 after a 12-day journey, which is a week ahead of a larger ship doing the same route, Bloomberg says.
However, speed is costly -- as much as double the cost of standard transpacific service -- which is already rising as the world’s biggest shipping companies scale back capacity perhaps by 25% this quarter and another 10% in the third quarter. The industry expects U.S. retail demand to recover only slowly amid “plenty of fog on the global economic horizon.”
But for now, “shipping demand from some companies remains brisk,” justifying the added import cost of fast delivery from online shoppers for everything “from protective medical gear to baby pools for the backyard.”
Melina is among lines offering express service between China and the U.S., the kind of links that show the difficulty President Trump faces in pushing for a “complete decoupling” of the world’s largest economies and bringing production back home.
“We expect the need for this expedited service to be permanent and actually grow as the share of e-commerce in global trade will continue to grow,” Nissim Yochai, the company’s executive vice president in the Pacific, said from Hong Kong. “This abnormal period will continue as long as the world continues to search for tools to offset the COVID-19 pandemic and to assist people attempting to get out to work and socialize and, of course, consume.”
Striking a balance between global supply and demand is what shipping companies are trying to do constantly, looking months and even years in advance. The pandemic has made that job much harder. One way to do it is to cancel sailings, which they’ve been doing a lot lately. At the adjoining ports of Los Angeles and Long Beach, the main gateway for Chinese imports, 45 trips have been scrapped this quarter, more than four times the number in the second quarter of 2019.
For some U.S. companies on the receiving end of goods, shipping disruptions are starting to subside. For others, they’re just beginning, Bloomberg says.
“We’re not at the point right now where we’ve rebalanced supply to the demand because the demand signals are jumping all over the board,” said Abe Eshkenazi, CEO of the Association for Supply Chain Management.
About 80% of the world’s trade crosses an ocean by ship, and the industry typically has two busy seasons tied to Chinese holidays, the New Year and Golden Week in October. With normal shipping rates double what they were three months ago and air cargo rates still elevated because of a dearth of commercial flights, importers are facing the strains of a peak season now.
A general merchandiser in small-town America that offers free coffee and a bag of popcorn, Rural King is little different than other traditional retailers that experienced recent shortages of toilet paper, paper towels and hand sanitizer, Bloomberg said.
But thanks to a flexible supply chain and close relationships with vendors in China and elsewhere in Asia, the firm has managed to keep most items stocked and is having a good year.
Who knew squirrel feeders would be big sellers in a global health crisis, or plastic pools, Rural King manager told Bloomberg. “And, we just got another shipment of trampolines,” he said, adding that Rural King stores sold 300 in one day recently. Good thing for him he has 100 to 200 suppliers in China, and in Vietnam whom he talks to daily and who are scrambling to help meet the rush. “They are unbelievable with these orders.”
So, we will see. The online retail services system is huge and driven by powerful economic forces that make it extremely difficult to realign, as the Trump administration appears to be finding out. However the changes being proposed are important and should be watched closely by producers as the nation struggles to overcome the coronavirus, Washington Insider believes.
USDA to Allow Online Applications for CFAP
Applications for the Coronavirus Food Assistance Program (CFAP) will now be accepted by USDA’s Farm Service Agency (FSA) via an online portal and the agency said it would now be “leveraging commercial document storage and e-signature solutions” to allow for the completion of applications from home.
Through the online portal, producers can use eAuthentication -- secure USDA login credentials -- to certify eligible commodities online, digitally sign applications and submit directly to the local USDA Service Center. Currently, the digital application is only available to sole proprietors or single-member business entities, FSA noted.
The agency also said that offices can “work with producers to complete and securely transmit digitally signed applications through two commercially available tools: Box and OneSpan.”
As of June 22, USDA has paid out $4.006 billion in CFAP payments to 252,489 producers.
Through the online portal, producers can use eAuthentication -- secure USDA login credentials -- to certify eligible commodities online, digitally sign applications and submit directly to the local USDA Service Center. Currently, the digital application is only available to sole proprietors or single-member business entities, FSA noted.
The agency also said that offices can “work with producers to complete and securely transmit digitally signed applications through two commercially available tools: Box and OneSpan.”
As of June 22, USDA has paid out $4.006 billion in CFAP payments to 252,489 producers.
Lawmakers Call on EPA to Reject Retroactive Small Refinery Exemptions
EPA should deny 52 retroactive small refinery exemption (SRE) requests it has received going back to the 2011 compliance year, according to a bipartisan group of 16 senators led by Sens. Amy Klobuchar, D-Minn., and Joni Ernst, R-Iowa.
“These petitions should not even be entertained because they are inconsistent with the Tenth Circuit decision, Congressional intent, the EPA’s own guidance, and -- most importantly -- the interests of farmers and rural communities who rely on the biofuel industry,” the letter noted.
Retroactive waivers “would only worsen the unprecedented economic challenges facing the biofuels industry and the rural communities that it supports,” the letter added.
The lawmakers also want EPA to explain exemptions for refineries owned by Chevron and Exxon Mobil.
“These petitions should not even be entertained because they are inconsistent with the Tenth Circuit decision, Congressional intent, the EPA’s own guidance, and -- most importantly -- the interests of farmers and rural communities who rely on the biofuel industry,” the letter noted.
Retroactive waivers “would only worsen the unprecedented economic challenges facing the biofuels industry and the rural communities that it supports,” the letter added.
The lawmakers also want EPA to explain exemptions for refineries owned by Chevron and Exxon Mobil.
Monday Watch List
Markets
Back from another summer weekend, traders will be checking the latest weather forecasts with corn pollination approaching. A May index of pending home sales is due out at 9 a.mCDT, followed by USDA's weekly export inspections at 10 a.m. USDA's Crop Progress report is set for 3 p.m. CDT with plenty of interest in USDA's latest crop ratings.
Weather
Thunderstorms with locally heavy rain and the potential for high winds and hail are in store for portions of the Northern Plains and Midwest Monday. Areas bypassed by the storms will have very warm to hot conditions with heat stress likely. Haze due in part to the huge dust cloud from the Sahara Desert will produce air quality issues in addition to the heat stress. Hot and dry conditions in the Southern Plains will favor wheat harvest
Back from another summer weekend, traders will be checking the latest weather forecasts with corn pollination approaching. A May index of pending home sales is due out at 9 a.mCDT, followed by USDA's weekly export inspections at 10 a.m. USDA's Crop Progress report is set for 3 p.m. CDT with plenty of interest in USDA's latest crop ratings.
Weather
Thunderstorms with locally heavy rain and the potential for high winds and hail are in store for portions of the Northern Plains and Midwest Monday. Areas bypassed by the storms will have very warm to hot conditions with heat stress likely. Haze due in part to the huge dust cloud from the Sahara Desert will produce air quality issues in addition to the heat stress. Hot and dry conditions in the Southern Plains will favor wheat harvest
Friday, June 26, 2020
Ag Equipment Manufacturers Still Struggling with COVID-19
The Association of Equipment Manufacturers continues to struggle with COVID-19. AEM represents 12 percent of the U.S. manufacturing sector, which is still adjusting to challenging and changing economic conditions. Roughly 75 percent of U.S. equipment manufacturers say the impact of COVID-19 on the overall economy is still very negative. As many as 60 percent of industry executives say that the federal government hasn’t done enough to support the industry as it continues to face a decline in demand and supply chain disruptions. “COVID-19 continues to negatively impact equipment manufacturers and the 2.8 million men and women in our industry,” says Dennis Slater, President of AEM. “We have seen some improvements to the operations and financial outlook for our member companies. However, the industry still faces a long road back to normal.” Slater says even as the industry continues to build, feed, and power the country, there are far too many of the member companies running out of time. Many equipment executives say they’re still struggling to keep workers on the job, with 80 percent of them admitting they won’t be able to rehire workers laid off earlier in the year.
U.S. Fires Back at China Linking COVID Concerns and Food Imports
U.S. health and agricultural authorities issued thinly-veiled criticism of new Chinese demands placed on food-exporting companies. Beijing is asking those companies to sign documents stating that they comply with Chinese safety standards to prevent COVID transmission. “Efforts by some countries to restrict global food exports related to COVID-19 transmission are not consistent with the known science of transmission,” says Ag Secretary Sonny Perdue and Food and Drug Administration Commissioner Stephen Hahn in a joint statement. The two officials both say there is “no evidence that people can contract COVID-19 from food or packaging.” Bloomberg says that’s in line with expert advice saying that food poses little risk of spreading the coronavirus. China recently warned global exporters dealing with outbreaks among employees by placing bans on a plant owned by Tyson Foods, which reported infections at a site in Arkansas. China’s customs authorities say companies in the United Kingdom, Germany, and Brazil, have voluntarily halted shipments due to a rise in the number of positive COVID cases within their borders. Tyson was the first major U.S. company to sign the Chinese certificate, while others have been more reluctant to sign an affidavit due to liability concerns.
USDA Adds Digital Options for CFAP Applications
USDA’s Farm Service Agency will take applications for the Coronavirus Food Assistance Program through an online portal. The agency’s goal is to expand the options available to producers to apply for the program, which helps offset price declines and additional marketing costs because of the coronavirus pandemic. FSA is also leveraging commercial document storage and e-signature solutions to enable producers to work with local service center staff to complete their applications from home. “We’re doing everything we can to serve our customers and make sure agricultural producers impacted by COVID-19 can quickly and securely apply for this relief program,” says FSA Administrator Richard Fordyce. “In addition to working with FSA staff through the phone, email, and scheduled in-person appointments, we can now also take applications through the farmers.gov portal, which saves time for both our staff and producers.” Those producers who already have secure USDA login credentials can certify eligible commodities online, digitally sign applications and submit them directly to the local USDA Service Center. Producers who don’t have a secure login can begin the signup process at www.farmers.gov/sign-in.
NFU: EPA is a “Barrier” for Emission Reduction in Biofuels
The head of the National Farmers Union blasted the Environmental Protection Agency, calling it a “barrier” for reducing greenhouse gasses in biofuels. “The EPA has been the primary barrier to a lot of additional success that we can have in reducing greenhouse gasses in ethanol technology,” says Rob Larew, President of the National Farmers Union. “The story for grain-based ethanol, in general is the EPA continues to be a barrier, not only because of the waivers they’ve issued but also for barriers against higher blends.” Larew’s comments during a Senate hearing took place days after the EPA said it had received 52 new petitions from oil refiners asking for retroactive exemptions to requirements that they blend biofuels into their products. A court overturned three agency-issued waivers in January, which the EPA did not appeal. Biofuels are a complex issue as the Trump Administration struggles to balance the conflicting interests of farmers and the oil industry, two demographics that are key parts of President Trump’s base. The NFU President appeared during a Senate Ag Committee hearing on a new bipartisan bill designed to help farmers get carbon credits in exchange for sustainable farming practices.
Senators Question Meatpackers About Chinese Exports, Meat Shortages
Two Democrats in the U.S. Senate are questioning top American meatpackers about past shipments to China while America went through meat shortages in grocery stores across the country. Senators Elizabeth Warren and Cory Booker want to know by the end of this month how much pork, beef, and chicken those companies shipped to China during the coronavirus outbreak while warning of possible domestic meat shortages. Reuters says the inquiry increases the scrutiny on companies like Tyson Foods, JBS USA, and Smithfield Foods, after thousands of meatpacking workers were infected with COVID-19. USDA data says those companies exported 112,327 tons of U.S. pork to China in April, more than any other month before and up 257 percent from a year earlier. Those export numbers raise questions about why U.S. meat prices soared, and President Trump had to order the nation’s slaughterhouses to stay open to protect the nation’s food supply. In a letter outlining their request for information, Booker and Warren said, “This pattern of behavior raises questions about whether you are living up to your commitments to the workers who produce your pork and beef, the communities in which you operate, and the nation’s consumers that rely on your products to feed their families.”
Largest Meatpacking Union Confirms Growing COVID-19 Impact on Workers
The United Food and Commercial Workers International Union held a press conference highlighting the impact and growing danger of COVID-19 on frontline workers. The union represents 1.3 million employees. The UFCW says that during the last 100 days, 238 UFCW frontline workers have died from COVID-19 and nearly 29,000 workers have been infected or exposed. UFCW International President Marc Perrone (Per-RONE) announced three new initiatives the union wants in effect. The first is establishing hazard pay and a $15 per hour wage for all frontline workers. Second is establishing a public mask mandate in all 50 states. Third, they want a new national public registry to track COVID-19 infections in frontline workers. That would require companies with more than 1,000 employees to submit monthly reports on their worker deaths, infections, and exposures. Perrone says, “100 days into COVID-19 and American frontline workers still face many of the same dangers they faced on day one. Frontline workers in grocery stores, meatpacking plants, and healthcare facilities, are still getting sick and dying.” He also says it’s high time for America’s CEOs and elected leaders to “pull their head out of the sand” and take strong action needed to protect America’s brave workers.
Washington Insider: IMF Warning on Coronavirus Impacts
The International Monetary Fund emphasized on Wednesday that the global economy faces an even deeper downturn than previously projected, and that the pandemic “continues to sow uncertainty” as businesses around the world struggle to recover.
Even at this stage, it is increasingly evident that the recovery will be uneven and protracted “as cases continue to surge and consumers remain wary of resuming normal activity,” the New York Times reported.
In an update to its World Economic Outlook, the IMF said it expects the global economy to shrink 4.9% this year -- a sharper contraction than the 3% predicted in April.
The fund noted that, even as businesses began to reopen, voluntary social distancing and enhanced workplace safety standards were weighing on economic activity and that the “scarring” of the labor force from job cuts and business closures will slow global recovery. It now projects 5.4% global growth in 2021, far below its pre-pandemic projections.
Overall, the IMF expects that the cumulative loss of total output for the global economy this year and next year will top $12 trillion.
NYT says the IMF forecast is “more grim” than global projections outlined earlier this month by the Organization for Economic Cooperation and Development. And its U.S. forecast for 2020 is less optimistic than that the Congressional Budget Office and the Federal Reserve have projected. The IMF now projects that the U.S. economy will shrink 8% this year before expanding 4.5% next year.
The Fed in June projected a particularly sharp U.S. economic hit in 2020 with output contracting 6.5% at the end of this year compared to the final quarter of 2019, before rebounding by 5% in 2021. A May report from the Congressional Budget Office forecast a 5.6% contraction in the United States this year.
Charles Evans, president of the Federal Reserve Bank of Chicago, said on Wednesday that he expects a “broad recovery will take some time” in the United States, adding that “the future is more uncertain now than at any other time” in his professional career.
“My forecast assumes growth is held back by responses to intermittent localized outbreaks -- which might be made worse by the faster-than-expected re-openings,” Evans said. “Usually, we are able to look to the past for guidance on what is in store for the future. But in this situation, there is simply no relevant benchmark.”
The pandemic has not spared advanced or developing economies. Economies in the eurozone are projected to shrink 10.2% this year and expand 6% next year. In China, where the virus originated and which imposed draconian containment measures, the economy is expected to expand 1% this year and 8.2% in 2021.
Nonetheless, the Trump administration continues to suggest a more bullish outlook, the Times said. Larry Kudlow, the director of the National Economic Council, said Tuesday that he expected a V-shaped recovery, with a “sharp, steady economic uptick on the heels of recession.” Treasury Secretary Steven Mnuchin said that he could foresee the recession being over in the United States by the end of the year.
Prolonged economic pain means increased pressure on the administration and U.S. lawmakers to move forward with another round of stimulus measures. House Democrats want a $3 trillion economic support package but Republicans are increasingly wary of the long-term impacts of such spending. Treasury Secretary Steve Mnuchin said this week that future measures should be more targeted to help industries that have been hit hardest by the pandemic. President Trump has suggested he would be open to another round of stimulus checks, which could land in peoples’ bank accounts just ahead of the November election.
The IMF notes that, even in countries where infection rates are declining, major obstacles to the resumption of normal activity persist and that the pandemic has curtailed the flow of global trade, which the fund estimated had contracted 3.5% in the first quarter from a year earlier. That is in line with an estimate by the WTO, the Times said, which reported on Tuesday that global trade had fallen sharply in the first half of the year. On the brighter side, that trajectory did not seem quite as bad as the group had previously projected.
Trade in goods shrank 3% year on year in the first quarter while initial estimates indicate that it fell 18.5% in the second quarter, the steepest decline on record. But those declines could have been much worse, the organization said. Trade needs to grow only modestly for the rest of the year to meet the organization’s outlook for a 13% contraction in 2020, versus a more pessimistic potential decline of 32%.
Roberto Azevedo, the director general of the WTO called the development a “silver lining” but said governments need to be on guard and continue to stimulate the economy. “This is genuinely positive news, but we cannot afford to be complacent,” he said.
So, we will see. The virus certainly is continuing to be a threat on many fronts and economic recovery appears to be a greater challenge than once expected -- prospects producers should watch closely as the season progresses, Washington Insider believes.
Even at this stage, it is increasingly evident that the recovery will be uneven and protracted “as cases continue to surge and consumers remain wary of resuming normal activity,” the New York Times reported.
In an update to its World Economic Outlook, the IMF said it expects the global economy to shrink 4.9% this year -- a sharper contraction than the 3% predicted in April.
The fund noted that, even as businesses began to reopen, voluntary social distancing and enhanced workplace safety standards were weighing on economic activity and that the “scarring” of the labor force from job cuts and business closures will slow global recovery. It now projects 5.4% global growth in 2021, far below its pre-pandemic projections.
Overall, the IMF expects that the cumulative loss of total output for the global economy this year and next year will top $12 trillion.
NYT says the IMF forecast is “more grim” than global projections outlined earlier this month by the Organization for Economic Cooperation and Development. And its U.S. forecast for 2020 is less optimistic than that the Congressional Budget Office and the Federal Reserve have projected. The IMF now projects that the U.S. economy will shrink 8% this year before expanding 4.5% next year.
The Fed in June projected a particularly sharp U.S. economic hit in 2020 with output contracting 6.5% at the end of this year compared to the final quarter of 2019, before rebounding by 5% in 2021. A May report from the Congressional Budget Office forecast a 5.6% contraction in the United States this year.
Charles Evans, president of the Federal Reserve Bank of Chicago, said on Wednesday that he expects a “broad recovery will take some time” in the United States, adding that “the future is more uncertain now than at any other time” in his professional career.
“My forecast assumes growth is held back by responses to intermittent localized outbreaks -- which might be made worse by the faster-than-expected re-openings,” Evans said. “Usually, we are able to look to the past for guidance on what is in store for the future. But in this situation, there is simply no relevant benchmark.”
The pandemic has not spared advanced or developing economies. Economies in the eurozone are projected to shrink 10.2% this year and expand 6% next year. In China, where the virus originated and which imposed draconian containment measures, the economy is expected to expand 1% this year and 8.2% in 2021.
Nonetheless, the Trump administration continues to suggest a more bullish outlook, the Times said. Larry Kudlow, the director of the National Economic Council, said Tuesday that he expected a V-shaped recovery, with a “sharp, steady economic uptick on the heels of recession.” Treasury Secretary Steven Mnuchin said that he could foresee the recession being over in the United States by the end of the year.
Prolonged economic pain means increased pressure on the administration and U.S. lawmakers to move forward with another round of stimulus measures. House Democrats want a $3 trillion economic support package but Republicans are increasingly wary of the long-term impacts of such spending. Treasury Secretary Steve Mnuchin said this week that future measures should be more targeted to help industries that have been hit hardest by the pandemic. President Trump has suggested he would be open to another round of stimulus checks, which could land in peoples’ bank accounts just ahead of the November election.
The IMF notes that, even in countries where infection rates are declining, major obstacles to the resumption of normal activity persist and that the pandemic has curtailed the flow of global trade, which the fund estimated had contracted 3.5% in the first quarter from a year earlier. That is in line with an estimate by the WTO, the Times said, which reported on Tuesday that global trade had fallen sharply in the first half of the year. On the brighter side, that trajectory did not seem quite as bad as the group had previously projected.
Trade in goods shrank 3% year on year in the first quarter while initial estimates indicate that it fell 18.5% in the second quarter, the steepest decline on record. But those declines could have been much worse, the organization said. Trade needs to grow only modestly for the rest of the year to meet the organization’s outlook for a 13% contraction in 2020, versus a more pessimistic potential decline of 32%.
Roberto Azevedo, the director general of the WTO called the development a “silver lining” but said governments need to be on guard and continue to stimulate the economy. “This is genuinely positive news, but we cannot afford to be complacent,” he said.
So, we will see. The virus certainly is continuing to be a threat on many fronts and economic recovery appears to be a greater challenge than once expected -- prospects producers should watch closely as the season progresses, Washington Insider believes.
USDA OIG Criticizes FSIS In Swine Inspection Rule
USDA did not comply with data quality guidelines when writing a controversial rule to overhaul safety inspections at pork slaughterhouses, according to a report from the USDA Office of the Inspector General (OIG).
The OIG report detailed several shortfalls in how the department formulated the regulation that allows meatpackers to accelerate their pork processing lines to high speeds that labor advocates have warned are dangerous for plant workers.
USDA’s Food Safety and Inspection Service (FSIS) did not fully adhere to requirements for data quality and transparency, and specifically “did not take adequate steps” to determine whether the worker safety analysis in question was reliable.
FSIS said that OIG put a “distorted emphasis” on minor errors and omissions in preliminary rulemaking documents.
The OIG report detailed several shortfalls in how the department formulated the regulation that allows meatpackers to accelerate their pork processing lines to high speeds that labor advocates have warned are dangerous for plant workers.
USDA’s Food Safety and Inspection Service (FSIS) did not fully adhere to requirements for data quality and transparency, and specifically “did not take adequate steps” to determine whether the worker safety analysis in question was reliable.
FSIS said that OIG put a “distorted emphasis” on minor errors and omissions in preliminary rulemaking documents.
USDA, FDA Reiterate Stance That Food Not A Transmission Route For COVID-19
USDA Secretary Sonny Perdue and FDA Commissioner Stephen Hahn issued a joint statement Wednesday on food export restrictions by some countries relative to COVID-19.
“The United States understands the concerns of consumers here domestically and around the world who want to know that producers, processors and regulators are taking every necessary precaution to prioritize food safety especially during these challenging times. However, efforts by some countries to restrict global food exports related to COVID-19 transmission are not consistent with the known science of transmission,” the statement said.
“There is no evidence that people can contract COVID-19 from food or from food packaging. The U.S. food safety system, overseen by our agencies, is the global leader in ensuring the safety of our food products, including product for export.”
The statement does not specify a country, but appears to clearly be a reference to China blocking imports of poultry from a U.S. plant and from some plants in other countries.
“The United States understands the concerns of consumers here domestically and around the world who want to know that producers, processors and regulators are taking every necessary precaution to prioritize food safety especially during these challenging times. However, efforts by some countries to restrict global food exports related to COVID-19 transmission are not consistent with the known science of transmission,” the statement said.
“There is no evidence that people can contract COVID-19 from food or from food packaging. The U.S. food safety system, overseen by our agencies, is the global leader in ensuring the safety of our food products, including product for export.”
The statement does not specify a country, but appears to clearly be a reference to China blocking imports of poultry from a U.S. plant and from some plants in other countries.
Friday Watch List
Markets
U.S. personal incomes and consumer spending are due out at 7:30 a.m. CDT Friday, followed by the University of Michigan's consumer sentiment index at 9 a.m. Weather forecasts remain a top interest for traders as well as any export news that might emerge.
Weather
Light to moderate rain is in store for portions of the western and northern Midwest along with the Gulf Coastal Bend and southern Delta Friday. Other crop areas will be dry. Temperatures will be seasonal to above normal, with hot conditions noted in dry areas of the southwestern Plains. The general impact is favorable for row crop development and winter wheat harvest.
U.S. personal incomes and consumer spending are due out at 7:30 a.m. CDT Friday, followed by the University of Michigan's consumer sentiment index at 9 a.m. Weather forecasts remain a top interest for traders as well as any export news that might emerge.
Weather
Light to moderate rain is in store for portions of the western and northern Midwest along with the Gulf Coastal Bend and southern Delta Friday. Other crop areas will be dry. Temperatures will be seasonal to above normal, with hot conditions noted in dry areas of the southwestern Plains. The general impact is favorable for row crop development and winter wheat harvest.
Thursday, June 25, 2020
Senate Ag Committee Passes Grain Standards Reauthorization
The Senate Agriculture Committee Wednesday passed the United States Grain Standards Reauthorization Act of 2020 by a voice vote. The bill extends the authorization for the Federal Grain Inspection Service of the Department of Agriculture to continue providing inspection services and to maintain an official marketing standard for certain grains and oilseeds. The bill now heads to the full Senate to consider the five-year reauthorization. Senate Agriculture Committee Chairman Pat Roberts, a Kansas Republican, says, "the entire federal grain inspection system needs the certainty, predictability, and transparency” the reauthorization bill provides. Debbie Stabenow of Michigan, the top Democrat on the Committee, says the bill “protects the interests of American farmers and ensures our credibility as a reliable producer of high-quality crops.” Roberts says the bill has wide industry support. The National Association of Wheat Growers voiced its support of the reauthorization, stating, “Our overseas customers value the independent system in place through the Grain Standards Act.”
Farm Groups Support Carbon Market Bill
Farm groups offered their support for a climate bill that would give farmers access to carbon offset markets during a Senate Agriculture Committee hearing Wednesday. The Growing Climate Solutions Act would create a certification program at the Department of Agriculture to help solve technical barriers to participation in carbon credit markets for farmers and forest landowners. The bill would also provide the Agriculture Secretary with an advisory council of agriculture experts, scientists, producers, and others, to ensure the certification program works for all participants. American Farm Bureau Federation President Zippy Duvall says the bill “builds upon American agriculture’s strong foundation of environmental stewardship and innovation.” National Farmers Union President Rob Larew suggested several additions to strengthen the bill, including mechanisms to prevent farm-level consolidation, robust funding for public climate research, and protections for farmers from bad actors or faulty market efforts. The National Pork Producers Council says the bill rewards contributions by pork producers and other sectors of agriculture to reduce greenhouse gas emissions.
Federal Agents Seize Almost 10 Tons of Illegal Meat at California Port
Officials with the U.S. Customs and Border Protection reports it has intercepted 19,500 pounds of prohibited pork, chicken, beef and duck products arriving from China. The products were intercepted at the ports of Los Angeles and Long Beach. According to an official statement, most of the animal products were mixed in boxes of headphones, door locks, kitchenware, LCD tablets, trash bags, swim fins, cell phone covers, plastic cases and household goods. Border protection agriculture specialists identified, examined and seized 12 shipments containing a total of 834 cartons that lacked the required USDA entry documentation. The National Pork Board says that in the first five months of fiscal year 2020, the interception of prohibited meats from China at the LA/Long Beach Seaport has increased 70 percent compared with the same period a year ago. The work by border patrol is critical to maintain secure borders from foreign animal diseases, including African swine fever.
Bayer Announces Roundup and Dicamba Litigation Settlements
Bayer Wednesday announced a series of agreements that will substantially resolve major outstanding Monsanto litigation. The announcement includes a settlement on U.S. Roundup product liability litigation, dicamba drift litigation and PCB water litigation. According to Bayer, the main feature is the U.S. Roundup resolution that will bring closure to approximately 75 percent of the current Roundup litigation involving approximately 125,000 filed and unfiled claims overall. The company will make a payment of $8.8 billion to $9.6 billion to resolve the current Roundup litigation, including an allowance expected to cover unresolved claims, and $1.25 billion to support a separate class agreement to address potential future litigation. Bayer also resolved dicamba drift litigation for payment of up to $400 million and most PCB water litigation exposure for payment of approximately $820 million. Bayer CEO Werner Baumann adds, “As we work to put this major litigation behind us, Bayer can set a course for the future and tackle the global challenges we face in both health and nutrition.”
Apple Growers Seek Access to Pandemic Relief
Apple producers in the United States seek access to federal aid included in the Coronavirus Food Assistance Program. Washington State U.S. Representative, Republican Dan Newhouse, led an effort in asking the Department of Agriculture to include apple growers in the CFAP. The group of 25 lawmakers in a letter to Agriculture Secretary Sonny Perdue wrote, “Steep price declines clearly makes apple growers eligible for CFAP payments.” CFAP provides financial assistance to producers who have suffered a five-percent-or-greater price decline or who had losses due to market supply chain disruptions due to COVID-19. The losses must have occurred between mid-January and mid-April because of the COVID-19 pandemic to be eligible for CFAP funds. The lawmakers are demanding USDA reverse its decision based on data from the apple industry, showing that apple price losses ranged from 6.5 percent to as much as 24.9 percent due to the COVID-19 pandemic. According to USDA data there are approximately 5,000 commercial apple growers in 32 states.
Environmental Working Group Says Farm Nitrate Runoff Increasing
The Environmental Working Group says nitrate pollution from crop fields is getting worse in farm country. Wednesday, the group released a new report and interactive map detailing nitrate levels in water supply systems. EWG obtained water testing data under public records laws between 2003 and 2017. The tests detected elevated levels of nitrate in the tap water supplies of more than 4,000 community water systems in the states with the most widespread contamination, California, Illinois, Iowa, Kansas, Maryland, Nebraska, Oklahoma, Pennsylvania, Texas and Wisconsin. The data, EWG says, includes tap water supply systems for more than 45 million Americans. Each of the systems was contaminated with nitrate at or above three milligrams per liter, at least once in those 15 years. The Environmental Protection Agency considers three milligrams per liter in groundwater used for drinking water an indication of contamination above naturally occurring levels. The interactive map is available on the Environmental Working Group website, ewg.org.
Washington Insider: Business Groups to Fight Visa Limits
The Hill is reporting this week that business groups are pushing back on the president’s new limits on work visas and are hinting at possible legal action against the recent executive order they see as an attack on legal immigration.
The backlash follows President Trump’s Monday executive order that slapped new limits on foreign workers, a “hard line immigration move seen as an appeal to his base as the presidential election draws near,” The Hill says.
The U.S. Chamber of Commerce, which had lobbied the White House against imposing the order, said it “is likely to stifle job gains at a time when the economy needs fewer restrictions, not more.” The Chamber’s CEO, Thomas Donohue told the press that the president’s proclamation is a “severe and sweeping attempt to restrict legal immigration. Putting up a ‘not welcome’ sign for engineers, executives, IT experts, doctors, nurses and other workers won’t help our country, it will hold us back.”
Donohue had called on the president to not impose the visa policies. The Chamber’s top lobbyist, Neil Bradley, also pressed National Economic Council Director Larry Kudlow and White House senior adviser Jared Kushner on the issue in a letter last month.
The order now could trigger a flurry of lawsuits, something the Chamber and others haven’t ruled out, The Hill said. It says it is “considering all available options” to ensure our immigration system allows employers to meet their workforce needs, Jon Baselice, executive director of immigration at the Chamber, told The Hill.
In addition, a National Association of Manufacturers spokesperson told The Hill on Tuesday that litigation isn’t off the table for them either.
The executive order suspends the issuance of temporary work visas, including H-1B visas, H-2B visas, H-4 visas, L-1 visas and certain J-1 visas, through the end of 2020. H-2A visas for agriculture are not affected by the order.
H-1B visas are set aside for skilled workers, especially in the technology industry, and H-4 visas are given to their spouses. H-2B visas apply to seasonal workers; J-1 visas are for researchers, scholars and au pairs; and L-1 visas are for executives who transfer to the U.S. after working for the same employer abroad.
Google, Apple, Amazon, Twitter and Uber are among technology companies that have spoken out against the president’s proclamation.
In addition to the legal ramifications, experts argue that the president’s order is bad for the economy, especially at a time when it’s trying to climb out of the coronavirus hole. “If you really care about the U.S. economy, U.S. competitiveness and opportunity for U.S. citizens, cutting back on skilled immigration has very much the unintended consequence of being harmful in those domains,” said Bill Boulding, dean of Duke University Fuqua School of Business.
Alexander Arnon, a senior analyst at Penn Wharton Budget Model working on immigration issues, said business groups have study after study to back up their opposition to the administration’s action. “The arguments made in the proclamation are not sound and there is a lot of reason to believe this will hurt the economic recovery,” he said.
The administration claims the order will help the unemployment rate, which more than tripled after the pandemic took hold. It argues that during “extraordinary circumstances” these visas “pose an unusual threat” to American workers seeking employment.
“I understand the instinct to protect American workers, to give them opportunity in light of what is really a terrifying economic crisis,” Boulding said. “Having said that, the evidence is clear that this is not the way to do it. What we know in terms of the economic impact of skilled immigration, skilled immigration is actually job-creating for Americans.”
Even Sen. Lindsey Graham, R-S.C., a staunch Trump ally, said that suspending the temporary work visas will have a “chilling effect” on the economic recovery. And, the head of the National Association of Manufacturers, Jay Timmons, said in a blunt statement that the president’s action weakens the manufacturing industry, “a sector the president has long courted with his criticism of previous trade agreements.”
Like Donohue, Timmons sent a letter to the President earlier this month about how immigrants’ contributions often create opportunities for American workers and strengthen the overall economy.
The effect of the order will likely take months to show up in any measurable way in the economy but major companies are already warning of immediate, drastic effects for their workers.
The Business Roundtable, which is made up of CEOs from leading U.S. companies with Walmart president and CEO Doug McMillon serving as chairman, said its members are worried about the effect of the executive order and “fear that it will disrupt business operations, the lives of our employees and ultimately harm our ability to do our part to rebuild the economy,” the group said in a statement.
So, we will see. Access to overseas sources of labor has long been valuable to U.S. firms, so the new order has come as something of a surprise to a number of large operations. However, whether they succeed in softening the administration’s stance is an issue producers should watch closely as the season advances, Washington Insider believes.
The backlash follows President Trump’s Monday executive order that slapped new limits on foreign workers, a “hard line immigration move seen as an appeal to his base as the presidential election draws near,” The Hill says.
The U.S. Chamber of Commerce, which had lobbied the White House against imposing the order, said it “is likely to stifle job gains at a time when the economy needs fewer restrictions, not more.” The Chamber’s CEO, Thomas Donohue told the press that the president’s proclamation is a “severe and sweeping attempt to restrict legal immigration. Putting up a ‘not welcome’ sign for engineers, executives, IT experts, doctors, nurses and other workers won’t help our country, it will hold us back.”
Donohue had called on the president to not impose the visa policies. The Chamber’s top lobbyist, Neil Bradley, also pressed National Economic Council Director Larry Kudlow and White House senior adviser Jared Kushner on the issue in a letter last month.
The order now could trigger a flurry of lawsuits, something the Chamber and others haven’t ruled out, The Hill said. It says it is “considering all available options” to ensure our immigration system allows employers to meet their workforce needs, Jon Baselice, executive director of immigration at the Chamber, told The Hill.
In addition, a National Association of Manufacturers spokesperson told The Hill on Tuesday that litigation isn’t off the table for them either.
The executive order suspends the issuance of temporary work visas, including H-1B visas, H-2B visas, H-4 visas, L-1 visas and certain J-1 visas, through the end of 2020. H-2A visas for agriculture are not affected by the order.
H-1B visas are set aside for skilled workers, especially in the technology industry, and H-4 visas are given to their spouses. H-2B visas apply to seasonal workers; J-1 visas are for researchers, scholars and au pairs; and L-1 visas are for executives who transfer to the U.S. after working for the same employer abroad.
Google, Apple, Amazon, Twitter and Uber are among technology companies that have spoken out against the president’s proclamation.
In addition to the legal ramifications, experts argue that the president’s order is bad for the economy, especially at a time when it’s trying to climb out of the coronavirus hole. “If you really care about the U.S. economy, U.S. competitiveness and opportunity for U.S. citizens, cutting back on skilled immigration has very much the unintended consequence of being harmful in those domains,” said Bill Boulding, dean of Duke University Fuqua School of Business.
Alexander Arnon, a senior analyst at Penn Wharton Budget Model working on immigration issues, said business groups have study after study to back up their opposition to the administration’s action. “The arguments made in the proclamation are not sound and there is a lot of reason to believe this will hurt the economic recovery,” he said.
The administration claims the order will help the unemployment rate, which more than tripled after the pandemic took hold. It argues that during “extraordinary circumstances” these visas “pose an unusual threat” to American workers seeking employment.
“I understand the instinct to protect American workers, to give them opportunity in light of what is really a terrifying economic crisis,” Boulding said. “Having said that, the evidence is clear that this is not the way to do it. What we know in terms of the economic impact of skilled immigration, skilled immigration is actually job-creating for Americans.”
Even Sen. Lindsey Graham, R-S.C., a staunch Trump ally, said that suspending the temporary work visas will have a “chilling effect” on the economic recovery. And, the head of the National Association of Manufacturers, Jay Timmons, said in a blunt statement that the president’s action weakens the manufacturing industry, “a sector the president has long courted with his criticism of previous trade agreements.”
Like Donohue, Timmons sent a letter to the President earlier this month about how immigrants’ contributions often create opportunities for American workers and strengthen the overall economy.
The effect of the order will likely take months to show up in any measurable way in the economy but major companies are already warning of immediate, drastic effects for their workers.
The Business Roundtable, which is made up of CEOs from leading U.S. companies with Walmart president and CEO Doug McMillon serving as chairman, said its members are worried about the effect of the executive order and “fear that it will disrupt business operations, the lives of our employees and ultimately harm our ability to do our part to rebuild the economy,” the group said in a statement.
So, we will see. Access to overseas sources of labor has long been valuable to U.S. firms, so the new order has come as something of a surprise to a number of large operations. However, whether they succeed in softening the administration’s stance is an issue producers should watch closely as the season advances, Washington Insider believes.
Lawmakers Focus On Major Meat Packers, Worker Protections and Exports
Sens. Elizabeth Warren, D-Mass., and Cory Booker, D-N.J., want information from four major U.S. meat companies on the actions they took to protect workers from COVID-19 and on the level of meat they produced during March-May, their level of exports to China and to other countries, the average increase in wholesale prices, average change in prices paid to producers and whether they increased their imports of livestock from outside the U.S.
The letter was sent to Tyson Foods, JBS USA, Cargill and Smithfield Foods.
The lawmakers express alarm at exports of U.S. pork, beef and poultry to China and other destinations over the period, stating that exports of beef and pork totaling 1.3 billion pounds from March 20 through early June “actually exceeded the amount of lost production” from issues related to COVID-19. “Indeed, your companies manipulated this crisis to achieve substantial deregulatory measures that placed your workers at even greater risk,” the letter stated.
The lawmakers requested the companies provide the information by June 30.
The letter was sent to Tyson Foods, JBS USA, Cargill and Smithfield Foods.
The lawmakers express alarm at exports of U.S. pork, beef and poultry to China and other destinations over the period, stating that exports of beef and pork totaling 1.3 billion pounds from March 20 through early June “actually exceeded the amount of lost production” from issues related to COVID-19. “Indeed, your companies manipulated this crisis to achieve substantial deregulatory measures that placed your workers at even greater risk,” the letter stated.
The lawmakers requested the companies provide the information by June 30.
USDA Sent Requests On Apples, Potatoes Relative To CFAP Program
A group of House lawmakers and the National Potato Council (NPC) have sent USDA Secretary Sonny Perdue letters calling for apples to be made eligible for payments under the Coronavirus Food Assistance Program (CFAP) and for expanded payments to potato producers.
The lawmakers argue that apples prices fell from 6.5% to 24.9% over the period covered by CFAP and shipping volumes of the product have declined 24%. “This steep price decline clearly makes apple growers eligible for CFAP payments, based on the USDA’s requirement of a 5 percent-or-greater price decline between mid-January and mid-April as a result of the COVID-19 pandemic,” the lawmakers said.
NPC said data shows that potatoes have seen a price decline of 20.51% over the period covered by CFAP, well above the price threshold of a 5% decline in prices set by USDA. NPC calls on USDA to make potatoes eligible for category one payments, to expand the category two payment level from the current four cents per pound and the category three payment level of one cent per pound. Both requests were sent to USDA via letters dated June 22.
NPC is also holding their virtual summer meeting today with a focus on the COVID-19 impacts on the industry.
USDA has paid out over $4 billion in the program as of June 22.
The lawmakers argue that apples prices fell from 6.5% to 24.9% over the period covered by CFAP and shipping volumes of the product have declined 24%. “This steep price decline clearly makes apple growers eligible for CFAP payments, based on the USDA’s requirement of a 5 percent-or-greater price decline between mid-January and mid-April as a result of the COVID-19 pandemic,” the lawmakers said.
NPC said data shows that potatoes have seen a price decline of 20.51% over the period covered by CFAP, well above the price threshold of a 5% decline in prices set by USDA. NPC calls on USDA to make potatoes eligible for category one payments, to expand the category two payment level from the current four cents per pound and the category three payment level of one cent per pound. Both requests were sent to USDA via letters dated June 22.
NPC is also holding their virtual summer meeting today with a focus on the COVID-19 impacts on the industry.
USDA has paid out over $4 billion in the program as of June 22.
Thursday Watch List
Markets
Thursday is a busy day for reports. At 7:30 a.m. CDT, USDA's weekly export sales, U.S. jobless claims, May durable goods orders and an estimate of first-quarter U.S. GDP are released along with an update of the U.S. Drought Monitor. USDA's Hogs and Pigs report is due out at 2 p.m. CDT, the first inventory estimate since meat plants were closed due to coronavirus concerns.
Weather
Thursday will be dry with very warm to hot conditions across all primary crop areas. Rain will be confined to light showers on the Gulf Coast and in isolated areas of the Plains. This combination will favor crop growth and wheat harvest.
Thursday is a busy day for reports. At 7:30 a.m. CDT, USDA's weekly export sales, U.S. jobless claims, May durable goods orders and an estimate of first-quarter U.S. GDP are released along with an update of the U.S. Drought Monitor. USDA's Hogs and Pigs report is due out at 2 p.m. CDT, the first inventory estimate since meat plants were closed due to coronavirus concerns.
Weather
Thursday will be dry with very warm to hot conditions across all primary crop areas. Rain will be confined to light showers on the Gulf Coast and in isolated areas of the Plains. This combination will favor crop growth and wheat harvest.
Wednesday, June 24, 2020
USDA: Food Box Program Reaches 20 Million Boxes Distributed
The Department of Agriculture says the Farmers to Families Food Box program has distributed more than 20 million food boxes to families affected by the COVID-19 pandemic. In the announcement Tuesday, Agriculture Secretary Sonny Perdue stated, “This milestone is a testament that the program is accomplishing what we intended, supporting U.S. farmers and distributors and getting food to those who need it most.” In April, Secretary Perdue announced the food box effort as part of the Coronavirus Food Assistance Program developed to help farmers, ranchers and consumers in response to the COVID-19 national emergency. In under 30 days, the program contracted for $1.2 billion in food products including $461 million in fresh fruits and vegetables, $317 million in a variety of dairy products, $258 million in meat products and $175 million in a combination box of fresh produce, dairy or meat products. Distribution of the food boxes across the United States began on May 15, 2020.
Judge Rules Glyphosate Doesn’t Require Cancer Warning
A federal judge this week sided with an agriculture coalition issuing a permanent injunction against the California warning requirement of Proposition 65 for glyphosate. The ruling removes the cancer warning on glyphosate. The judge in the case says providing misleading or false labels to consumers “undermines California’s interest in accurately informing its citizens of health risks.” Two years ago, the same judge ruled government agencies and health organizations that have reviewed studies on glyphosate have found there was no evidence that it caused cancer. The ruling says it would be "misleading at best” to force parties to state on glyphosate-containing products that the products were "known to the state to cause cancer." The judge says developments since then "do not change the court's conclusion.” Lead plaintiff in the case, the National Association of Wheat Growers, welcomed the injunction. The association stated, “this is a great win for wheat growers and farmers across the United States.”
Farm Households Report Off-Farm Jobs offer More Stable Income
New data from the Department of Agriculture shows nearly half of all family farmers and their spouses reported having a job off the farm in 2018. USDA’s Economic Research Service reports the majority of households, regardless of farm size, say they work off the farm because it is more lucrative than farm work, provides more reliable income, and may offer health and retirement benefits. Among small family farms, those with annual gross cash farm income under $350,000, about 88 percent reported working off the farm because it was more reliable and 75 percent because it was more lucrative. Among large-scale farm households, those with annual gross cash farm income of $1 million or more, about 72 percent reported working off the farm because it was more reliable and 51 percent because it was more lucrative. About 40 percent of all principal operators or their spouses who work off the farm listed farm-related financial stress as a reason for having a job off the farm.
Senate Candidate Calls on EPA’s Wheeler to Resign
An Iowa candidate for the U.S. Senate is calling on Environmental Protection Agency Administrator Andrew Wheeler to resign. Theresa Greenfield, a Democratic challenger to Republican Senator Joni Ernst, says, “Wheeler must step down immediately.” Greenfield says Iowa farmers “deserve answers for why Senator Ernst voted for a fossil fuel lobbyist to run the EPA in the first place.” Last year, Ernst did suggest she would call for Wheeler’s resignation if his biofuels promises are not fulfilled. Last week, Ernst co-sponsored a bill that would "approve certain advanced biofuel registrations that have languished before the EPA.” Recent polling by the Des Moines Register found 46 percent of likely Iowa voters say they would back Greenfield if the election were held today, and 43 percent say they would support Ernst. Iowa is the top state for biofuels production, with 43 ethanol plants capable of producing over 4.5 billion gallons annually, according to the Iowa Renewable Fuels Association.
Center for American Progress Pitches Conservation Easement Expansion
The Center for American Progress calls on lawmakers to pass broad conservation efforts. The thinktank launched “The Race for Nature” Tuesday, its plan to stem nature loss through conservation easements. The organization says private landowners are going out of their way to protect wildlife habitat, but "the coronavirus-induced economic collapse will likely deal a catastrophic blow to families who make their living off their lands." By definition, conservation easements are voluntary, legal agreements that permanently limit uses of the land to protect its conservation values. The two-phased proposal calls on lawmakers to pass the first phase by September of this year. The first phase of the plan would increase funding for existing conservation easement programs, help landowners gain access to easements more quickly, and pilot new emergency conservation easement programs. The second phase targets the 2023 farm bill, saying lawmakers should codify reforms that further simplify and accelerate the implementation of conservation easement programs.
Farm Groups Launch Free Stress Management Course
A group of farm organizations just launched free online training focusing on farm stress. The training course is funded by Farm Credit, with partnership from the American Farm Bureau Federation and National Farmers Union. The groups say the course will help farmers, their families and neighbors identify and cope with stress. It provides participants the skills to understand the sources of stress, manage their own stress, learn the warning signs of stress and suicide, identify effective communication strategies, and connect farmers and ranchers with appropriate mental health and other resources. The challenges of ongoing low commodity prices, trade wars and extreme weather events have dramatically affected farmers and ranchers for years. Add the COVID-19 pandemic and its economic disruptions and that stress multiplies. The groups say stress among farmers and ranchers is felt throughout farm operations and seeps into cities and towns across the country. Anyone can register for the free online training course. Visit FarmCredit.com to learn more.
Washington Insider: USTR Policy Cure-All, More Tariffs
Bloomberg is reporting this week that with COVID-19 cases spiking in nearly a dozen U.S. states, this may seem like a strange time to constrain America’s ability to obtain critical medical supplies and drugs. However, “new tariffs are exactly the strategy that America’s top trade official says is the best way to combat the coronavirus pandemic.”
The report cites Robert Lighthizer, the U.S. Trade Representative, who says he is a “firm believer that the things we need to fight the pandemic should be made in America,” The U.S. official was addressing members of the House Ways and Means Committee last week.
“I’m not in favor of reducing tariffs on the things we need. I would be far more in favor of increasing tariffs on the things we need.”
Lighthizer’s comments come at a pivotal moment in the health crisis as fresh outbreaks spark fears that a second wave may cross the globe and force governments into a dilemma where they must consider whether it is better to hoard critical medical supplies while redoubling their ability to produce them domestically, or help expand global access to medical goods so all nations can collectively fight the pandemic.
Bloomberg says Lighthizer is in the first camp while the European Union, Canada, Japan, Brazil and nearly a dozen others are in the second, “working to lower trade barriers that harm other nations’ ability to fight the virus.”
The emerging alliance, which calls itself the “Ottawa Group,” is discussing an EU-led initiative to eliminate tariffs on pharmaceuticals and medical supplies in order to “help ensure that the world is better prepared to deal with similar future crises."
The U.S. administration’s preference for protectionism remains clear, Bloomberg says.
In his testimony, Lighthizer flatly rejected the idea of joining the EU’s medical goods deal and blamed the World Trade Organization for hindering America's access to essential medicines,"casting specific ire on a 1994 agreement that eliminated tariffs on pharmaceutical goods.”
“Countries got together and said we will all agree to have zero tariffs on a certain list of pharmaceutical products and then we will just give that benefit to the rest of the world, which struck me as really, really crazy,” Lighthizer said.
Also, in yet another trade policy action, the administration says it is considering re-imposing tariffs on aluminum imports from Canada. Bloomberg says it expects an announcement by the end of the week.
Bloomberg says the U.S. is threatening Canada with new tariffs if it “refuses to impose export restrictions on aluminum.” It expects those to be 10% tariffs on Canadian aluminum, to be implemented by July 1 – just days before the new U.S.-Mexico-Canada trade deal enters into force. It follows Lighthizer’s expressions of concern about recent struggles by American aluminum producers as demand evaporated amid the global pandemic.
Lighthizer told the Senate Finance Committee in a hearing last week that recent surges in metal imports from North American neighbors are “of genuine concern to us now,” and that his office was looking at the issue.
“I would say there have been surges on steel and aluminum, substantially from Canada, some from Mexico, and it is something that we’re looking at and talking to both Mexico and Canada about,” he told the panel’s top Republican, Senator Chuck Grassley, R-Iowa.
Under the May 2019 agreement, which resulted in initial tariffs being lifted, Canada has to limit its retaliation to the U.S. metals sector and cannot hit American agriculture, Lighthizer told Grassley.
Ironically, the only three U.S. aluminum producers -- Alcoa Corp., Century Aluminum Co. and Magnitude 7 Metals LLC -- disagree whether tariffs should be re-imposed, Bloomberg said.
The American Primary Aluminum Association, which represents Century Aluminum Co. and Magnitude 7 Metals LLC., has asked Lighthizer to reimpose a 10% tariff on imports of Canadian aluminum, saying a rise in metal coming from the country has caused the price to collapse.
However, the Aluminum Association of the U.S., which represents Alcoa Corp., Rio Tinto Group and dozens of other aluminum parts makers, argues that imports are virtually unchanged since 2017.
Alcoa CFO William Oplinger said at a virtual bank conference in June that China’s overcapacity subsidized by the government is the real problem, and that he supports free trade with “those who trade freely, especially the Canadians.”
So, we will see. Clearly, the administration is continuing to rely on “get tough tariff policies” which likely will continue to lead to retaliation from trading partners, as well as higher prices for domestic products. These strategies are continuing to be debated in the U.S. even amid anti-coronavirus strategies and should be watched closely by producers as they intensify, Washington Insider believes.
The report cites Robert Lighthizer, the U.S. Trade Representative, who says he is a “firm believer that the things we need to fight the pandemic should be made in America,” The U.S. official was addressing members of the House Ways and Means Committee last week.
“I’m not in favor of reducing tariffs on the things we need. I would be far more in favor of increasing tariffs on the things we need.”
Lighthizer’s comments come at a pivotal moment in the health crisis as fresh outbreaks spark fears that a second wave may cross the globe and force governments into a dilemma where they must consider whether it is better to hoard critical medical supplies while redoubling their ability to produce them domestically, or help expand global access to medical goods so all nations can collectively fight the pandemic.
Bloomberg says Lighthizer is in the first camp while the European Union, Canada, Japan, Brazil and nearly a dozen others are in the second, “working to lower trade barriers that harm other nations’ ability to fight the virus.”
The emerging alliance, which calls itself the “Ottawa Group,” is discussing an EU-led initiative to eliminate tariffs on pharmaceuticals and medical supplies in order to “help ensure that the world is better prepared to deal with similar future crises."
The U.S. administration’s preference for protectionism remains clear, Bloomberg says.
In his testimony, Lighthizer flatly rejected the idea of joining the EU’s medical goods deal and blamed the World Trade Organization for hindering America's access to essential medicines,"casting specific ire on a 1994 agreement that eliminated tariffs on pharmaceutical goods.”
“Countries got together and said we will all agree to have zero tariffs on a certain list of pharmaceutical products and then we will just give that benefit to the rest of the world, which struck me as really, really crazy,” Lighthizer said.
Also, in yet another trade policy action, the administration says it is considering re-imposing tariffs on aluminum imports from Canada. Bloomberg says it expects an announcement by the end of the week.
Bloomberg says the U.S. is threatening Canada with new tariffs if it “refuses to impose export restrictions on aluminum.” It expects those to be 10% tariffs on Canadian aluminum, to be implemented by July 1 – just days before the new U.S.-Mexico-Canada trade deal enters into force. It follows Lighthizer’s expressions of concern about recent struggles by American aluminum producers as demand evaporated amid the global pandemic.
Lighthizer told the Senate Finance Committee in a hearing last week that recent surges in metal imports from North American neighbors are “of genuine concern to us now,” and that his office was looking at the issue.
“I would say there have been surges on steel and aluminum, substantially from Canada, some from Mexico, and it is something that we’re looking at and talking to both Mexico and Canada about,” he told the panel’s top Republican, Senator Chuck Grassley, R-Iowa.
Under the May 2019 agreement, which resulted in initial tariffs being lifted, Canada has to limit its retaliation to the U.S. metals sector and cannot hit American agriculture, Lighthizer told Grassley.
Ironically, the only three U.S. aluminum producers -- Alcoa Corp., Century Aluminum Co. and Magnitude 7 Metals LLC -- disagree whether tariffs should be re-imposed, Bloomberg said.
The American Primary Aluminum Association, which represents Century Aluminum Co. and Magnitude 7 Metals LLC., has asked Lighthizer to reimpose a 10% tariff on imports of Canadian aluminum, saying a rise in metal coming from the country has caused the price to collapse.
However, the Aluminum Association of the U.S., which represents Alcoa Corp., Rio Tinto Group and dozens of other aluminum parts makers, argues that imports are virtually unchanged since 2017.
Alcoa CFO William Oplinger said at a virtual bank conference in June that China’s overcapacity subsidized by the government is the real problem, and that he supports free trade with “those who trade freely, especially the Canadians.”
So, we will see. Clearly, the administration is continuing to rely on “get tough tariff policies” which likely will continue to lead to retaliation from trading partners, as well as higher prices for domestic products. These strategies are continuing to be debated in the U.S. even amid anti-coronavirus strategies and should be watched closely by producers as they intensify, Washington Insider believes.
US Meat Industry Mulls China’s Ban On Imports From One Tyson Foods Plant
China’s action to bar imports of poultry from the Springdale, Arkansas, Tyson Foods plant continues as a discussion point in the U.S. meat industry, with most agreeing that it will not have a significant impact unless it is expanded.
"Hopefully it's not going to mean anything," said Jim Sumner, president of the USA Poultry & Egg Export Council. "If it remains at just one plant, it will not have any meaningful impact, but we don't know what's going to happen."
He also noted that the product is frozen and spends some 30 days in a container traveling to China. “So there is zero possibility of a live virus from the U.S. showing up in frozen poultry as it has been shipped by ocean carrier halfway around the world.”
A spokesman for Tyson said their products are safe and hoped the issue can be resolved in talks between the two countries.
"Hopefully it's not going to mean anything," said Jim Sumner, president of the USA Poultry & Egg Export Council. "If it remains at just one plant, it will not have any meaningful impact, but we don't know what's going to happen."
He also noted that the product is frozen and spends some 30 days in a container traveling to China. “So there is zero possibility of a live virus from the U.S. showing up in frozen poultry as it has been shipped by ocean carrier halfway around the world.”
A spokesman for Tyson said their products are safe and hoped the issue can be resolved in talks between the two countries.
Phase One Trade Deal Intact, Says Trump
Financial and commodity markets swooned Monday evening after reports of White House trade adviser Peter Navarro saying the phase-one agreement with China was “over.”
Navarro made the comments in a Fox News interview that focused heavily on the coming book by John Bolton, with the interviewer throwing a “last question” at Navarro asking him if the deal was over. He responded that “it is,” adding he thought a turning point on the matter came after the COVID-19 news came out almost immediately after the phase-one agreement was signed.
As financial and commodity markets reacted, Navarro sought to pull his remarks back.
And, President Donald Trump tweeted, “The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!”
From China, Foreign Ministry spokesman Zhao Lijian said of Navarro, "He consistently lies and has no honesty and trustworthiness.” As for the phase one agreement, Zhao told reporters at a briefing, "China's stance on the issue has been consistent and clear."
Navarro made the comments in a Fox News interview that focused heavily on the coming book by John Bolton, with the interviewer throwing a “last question” at Navarro asking him if the deal was over. He responded that “it is,” adding he thought a turning point on the matter came after the COVID-19 news came out almost immediately after the phase-one agreement was signed.
As financial and commodity markets reacted, Navarro sought to pull his remarks back.
And, President Donald Trump tweeted, “The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!”
From China, Foreign Ministry spokesman Zhao Lijian said of Navarro, "He consistently lies and has no honesty and trustworthiness.” As for the phase one agreement, Zhao told reporters at a briefing, "China's stance on the issue has been consistent and clear."
Wednesday Watch List
Markets
The latest weather forecasts continue to earn the attention of traders as well as any export news that surfaces. The U.S. Energy Department will have its weekly report of energy inventories, including ethanol at 9:30 a.m. CDT.
Weather
Wednesday features shower and thunderstorm activity in the Delta and Deep South. Other primary crop areas will be dry with seasonally warm temperatures. This combination will favor row crop progress and Southern Plains wheat harvest.
The latest weather forecasts continue to earn the attention of traders as well as any export news that surfaces. The U.S. Energy Department will have its weekly report of energy inventories, including ethanol at 9:30 a.m. CDT.
Weather
Wednesday features shower and thunderstorm activity in the Delta and Deep South. Other primary crop areas will be dry with seasonally warm temperatures. This combination will favor row crop progress and Southern Plains wheat harvest.
Tuesday, June 23, 2020
China Suspends Exports from Tyson Foods Plant
China Sunday suspended poultry exports from an Arkansas Tyson Food's processing plant where workers tested positive for COVID-19. China’s General Administration of Customs announced the suspension after Tyson Foods confirmed a cluster of COVID-19 cases at its facility in Springdale, Arkansas. A Tyson spokesperson told Reuters the company is investigating the matter, adding, “It is important to note that the World Health Organization, the Centers for Disease Control and Prevention, USDA and the U.S. Food and Drug Administration agree that there is no evidence to support transmission of COVID-19 associated with food." China also halted exports from a pork processing facility in Germany following an outbreak of COVID-19 at the plant. China has stepped up food inspections for the novel coronavirus in recent weeks. Reuters says Beijing began testing meat, seafood and fresh produce for the coronavirus last week, and some ports were opening all containers of meat to carry out coronavirus tests.
New WOTUS Rule Becomes Law
The Trump Administration's new and scaled-back Waters of the U.S. rule became law Monday after last-minute attempts to block the rule. A federal judge late last week denied an effort to prevent implementation of the new regulation, called the Navigable Waters Protection Rule. The challengers claim the new rule removes protection from many U.S. waterways. WOTUS, now NWPR, has been the subject of multiple lawsuits, including some examined by the Supreme Court. In the order denying the motion for temporary relief, the Judge writes, “In the prior cases, the issue was always whether the agencies had gone too far in extending the scope of federal regulation. Now, the question is whether the agencies have not gone far enough.” That judge ultimately sided with the EPA. However, a federal judge in Colorado rejected the Section 404 permit process included in the new rule, which refers to the Corps of Engineers' authority to issue permits for the discharge of dredged or fill material into navigable waters.
Court Allows Dicamba use this Season
A late Friday court decision confirms farmers may use existing stocks of dicamba herbicides this growing season. The Ninth Circuit appeals court, which vacated the registrations of three dicamba herbicides earlier this month, denied a petition to stop use of the products already purchased by farmers and applicators. The ruling applies to Bayer’s XtendiMax, BASF’s Engenia and Corteva’s FeXapan herbicides. Additionally, during its series of late evening orders on June 19, the Court granted both CropLife America's and a grower coalition's requests to file an amicus brief. The brief supports the Environmental Protection Agency’s order to allow use of the products. That brief highlighted the devastating consequences that would result if the NGO's request were granted and growers could not use existing stocks. The request counters EPA guidance that allows existing stocks use when registrations are vacated, in accordance with the Federal Insecticide, Fungicide, and Rodenticide Act. The American Soybean Association says, “American growers and the public are fortunate that a proper administrative and judicial-review framework exists.”
Senate Ag Committee Urges USDA to Extend WIC Flexibilities
The Senate Agriculture Committee Monday sent a request to Agriculture Secretary Sonny Perdue to extend existing flexibilities for the Special Supplemental Nutrition Program for Women, Infants and Children. The Senators seek the extension through September 30, 2020, as authorized by the Families First Coronavirus Response Act. In a letter to Secretary Perdue, the Senators wrote the extension would “provide certainty and availability to WIC participants, providers and vendors navigating variable phased re-opening procedures across public, private, and health sectors.” WIC program flexibilities granted by the Department of Agriculture for the COVID-19 pandemic emergency, through state agencies, have helped eligible pregnant women, mothers, and their infants and young children to access and use food benefits while navigating social-distancing protocols. The Senators say month to month extensions, as followed currently, are challenging for states to plan effectively and increase administrative burden. The bipartisan letter was signed by several members of the Senate Agriculture Committee.
Missouri Farm Bureau Survey Finds Broad COVID-19 Impacts
A Missouri Farm Bureau survey brings to life many of the hidden effects of COVID-19 on farmers and rural communities. While the on-farm impacts have been dramatic, the personal effects are even more painful to read, according to Missouri Farm Bureau. Farmers in the survey report: “I have not seen my first grandchild yet.” “My daughter didn’t get to get married like she planned.” “I’m lonely and miss my friends.” Many respondents expressed feelings of isolation, loneliness and even depression. Inability to attend church and fellowship with friends has had a big impact on rural life. Although there were many differing opinions, over 63 percent of respondents agreed or strongly agreed that they take COVID-19 seriously. The agricultural effects have been severe as well. Nearly one-quarter of livestock farmers surveyed have had a meat processor reduce the normal schedule of animals they deliver for processing. The same percentage have had to locate an alternate processing facility for animals. The survey was completed by 377 people in Missouri.
Virginia Attorneys Plead Guilty in RoundUp Extortion Scheme
Two Virginia attorneys pled guilty last week for a scheme to extort Monsanto out of $200 million last year. Timothy Litzenburg and Daniel Kincheloe each pleaded guilty to one count of transmitting interstate communications with the intent to extort. The U.S. Department of Justice says the two admitted they approached Monsanto and threatened to make public statements alleging the company had significant civil liability for manufacturing a purportedly harmful chemical used in RoundUp. They proposed reaching a “consulting agreement" with the company for $200 million, which would bar the attorneys from representing their clients as plaintiffs in litigation against Monsanto, which is now Bayer Crop Science. The fees were proposed to help their clients. However, the pair planned to split the funds among themselves and their associates. The attorneys threatened that if Monsanto did not accept their consulting plan, “they and others would commence litigation that would become an ongoing exponentially growing problem” for the company, according to the Justice Department. The pair will be sentenced in September.
Washington Insider: Pace of Virus Testing Criticized
While there is modest agreement that more virus testing is essential to control the pandemic, the Washington Post says the administration has yet to “distribute nearly one-third of the funds provided by Congress for testing and contact tracing.” The report cites Senate Democratic leadership as the source of the information.
The Department of Health and Human Services has neither spent nor detailed how it plans to spend $8 billion out of a $25 billion pot to be used for stemming the virus’s spread through diagnostic and antibody testing and contact tracing, Senate Minority Leader Charles Schumer, D-N.Y., and Sen. Patty Murray, D-Wash., told the Post.
The funds were provided as part of the fourth pandemic relief bill passed by Congress at the end of April. “While it has been months since these funds were appropriated, the administration has failed to disburse significant amounts of these funds, leaving communities without the resources they need to address the significant challenges presented by the virus,” according to a letter the pair wrote to HHS Secretary Alex Azar last week.
HHS responded that it has distributed $14 billion of the $25 billion authorized, mostly to states and localities, as directed in the legislative text.
An agency spokeswoman noted that Congress “largely didn’t provide specific directions for where the rest of the money should go,” Michael Caputo, assistant secretary for public affairs, said. Congress has failed to give the agency “clear direction in law” for how to spend the money.
“Now members [of Congress] are contacting HHS with their individual priorities and complaining the dollars are not spent to their wishes,” Caputo said. “Regardless, HHS is committed to working with Congress to ensure the healthcare delivery system gets the support needed at this time.”
The U.S. has now conducted more than 26 million coronavirus tests, equivalent to about 8% of the nation’s population. The administration has largely met testing goals Azar laid out in May, after an initial slow response that won it heavy criticism.
Still, the ramped-up testing now reveals a troubling reality, the Post says: Coronavirus cases are on the rise in many states, as lockdowns ease and Americans start mingling more.
While part of the rise may be due to increased testing capturing more cases, that doesn’t fully explain the spikes, experts say.
President Trump appeared to mock the situation at his campaign rally in Tulsa Saturday night, calling widespread testing a “double-edged sword.” “Here’s the bad part,” Trump said. “When you do testing to that extent, you’re going to find more people, you’re going to find more cases. So I said to my people, ‘Slow the testing down, please!’”
A White House official quickly downplayed the remarks as “joking,” and White House trade adviser Peter Navarro told CNN Sunday the comment was intended as a “light moment,” and was “tongue-in-cheek.”
But the U.S. did lag behind other countries in ramping up testing for COVID-19, the Post said. The tests are now more widely available, but are not necessarily being used by everyone who might need them.
In addition, the U.S. was beset by “denial and dysfunction” as the coronavirus raged, the Post said. Of the $25 billion Congress designated for the testing and contact tracing effort, $11 billion was for states and localities to help develop, purchase and process COVID-19 tests and carrying out contact tracing -- a procedure in which people who may have had contact with an infected person are asked to self-isolate for a period of time.
Smaller amounts are earmarked for sub-agencies and offices within HHS, including the National Institutes of Health, the Centers for Disease Control and Prevention and the Biomedical Advanced Research and Development Authority.
However, the Democratic senators said that about one-third of the money provided by Congress has yet to be disbursed by HHS, or even designated for anything specific.
Schumer and Murray, who is the top Democrat on the Senate Appropriations subcommittee that handles HHS spending, wrote they’re concerned about the agency’s lack of speed as the country grapples with the virus. They urged that the testing funds “should be disbursed immediately with emphasis on addressing two major unmet needs: contact tracing and collecting data on COVID-19 racial and ethnic disparities.”
They’re also concerned about the pace at which HHS is awarding another $2 billion to help cover testing costs for uninsured Americans.
“This administration will put our country at grave risk if it tries to declare an early victory, leave lifesaving work undone, and leave resources our communities desperately need sitting untouched,” the letter says.
So, the basic disagreement over how the nation should respond to the pandemic continues, especially as the virus continues to spread. This is a debate producers should watch closely as it intensifies especially if the disagreement continues to deepen as now appears likely, Washington Insider believes.
The Department of Health and Human Services has neither spent nor detailed how it plans to spend $8 billion out of a $25 billion pot to be used for stemming the virus’s spread through diagnostic and antibody testing and contact tracing, Senate Minority Leader Charles Schumer, D-N.Y., and Sen. Patty Murray, D-Wash., told the Post.
The funds were provided as part of the fourth pandemic relief bill passed by Congress at the end of April. “While it has been months since these funds were appropriated, the administration has failed to disburse significant amounts of these funds, leaving communities without the resources they need to address the significant challenges presented by the virus,” according to a letter the pair wrote to HHS Secretary Alex Azar last week.
HHS responded that it has distributed $14 billion of the $25 billion authorized, mostly to states and localities, as directed in the legislative text.
An agency spokeswoman noted that Congress “largely didn’t provide specific directions for where the rest of the money should go,” Michael Caputo, assistant secretary for public affairs, said. Congress has failed to give the agency “clear direction in law” for how to spend the money.
“Now members [of Congress] are contacting HHS with their individual priorities and complaining the dollars are not spent to their wishes,” Caputo said. “Regardless, HHS is committed to working with Congress to ensure the healthcare delivery system gets the support needed at this time.”
The U.S. has now conducted more than 26 million coronavirus tests, equivalent to about 8% of the nation’s population. The administration has largely met testing goals Azar laid out in May, after an initial slow response that won it heavy criticism.
Still, the ramped-up testing now reveals a troubling reality, the Post says: Coronavirus cases are on the rise in many states, as lockdowns ease and Americans start mingling more.
While part of the rise may be due to increased testing capturing more cases, that doesn’t fully explain the spikes, experts say.
President Trump appeared to mock the situation at his campaign rally in Tulsa Saturday night, calling widespread testing a “double-edged sword.” “Here’s the bad part,” Trump said. “When you do testing to that extent, you’re going to find more people, you’re going to find more cases. So I said to my people, ‘Slow the testing down, please!’”
A White House official quickly downplayed the remarks as “joking,” and White House trade adviser Peter Navarro told CNN Sunday the comment was intended as a “light moment,” and was “tongue-in-cheek.”
But the U.S. did lag behind other countries in ramping up testing for COVID-19, the Post said. The tests are now more widely available, but are not necessarily being used by everyone who might need them.
In addition, the U.S. was beset by “denial and dysfunction” as the coronavirus raged, the Post said. Of the $25 billion Congress designated for the testing and contact tracing effort, $11 billion was for states and localities to help develop, purchase and process COVID-19 tests and carrying out contact tracing -- a procedure in which people who may have had contact with an infected person are asked to self-isolate for a period of time.
Smaller amounts are earmarked for sub-agencies and offices within HHS, including the National Institutes of Health, the Centers for Disease Control and Prevention and the Biomedical Advanced Research and Development Authority.
However, the Democratic senators said that about one-third of the money provided by Congress has yet to be disbursed by HHS, or even designated for anything specific.
Schumer and Murray, who is the top Democrat on the Senate Appropriations subcommittee that handles HHS spending, wrote they’re concerned about the agency’s lack of speed as the country grapples with the virus. They urged that the testing funds “should be disbursed immediately with emphasis on addressing two major unmet needs: contact tracing and collecting data on COVID-19 racial and ethnic disparities.”
They’re also concerned about the pace at which HHS is awarding another $2 billion to help cover testing costs for uninsured Americans.
“This administration will put our country at grave risk if it tries to declare an early victory, leave lifesaving work undone, and leave resources our communities desperately need sitting untouched,” the letter says.
So, the basic disagreement over how the nation should respond to the pandemic continues, especially as the virus continues to spread. This is a debate producers should watch closely as it intensifies especially if the disagreement continues to deepen as now appears likely, Washington Insider believes.
Trump Administration WOTUS Rule Survives One Initial Court Test
The Waters of the U.S. (WOTUS) rule put forth by the Trump administration to replace the Obama-era version will go into effect today after a federal judge in San Francisco denied a motion to block implementation of the plan.
More than 12 states sought to suspend implementation of the rule. This decision has some expecting that other court challenges of the plan may not be successful.
However, a federal court in Colorado granted the state’s request to freeze implementation of the rule., The court ruled the state was likely to succeed in challenging the administration’s version of the rule. To put the rule into effect in Colorado, only to have it struck down, “would likely create unnecessary confusion among the regulated community about what standard really applies,” the judge wrote.
More than 12 states sought to suspend implementation of the rule. This decision has some expecting that other court challenges of the plan may not be successful.
However, a federal court in Colorado granted the state’s request to freeze implementation of the rule., The court ruled the state was likely to succeed in challenging the administration’s version of the rule. To put the rule into effect in Colorado, only to have it struck down, “would likely create unnecessary confusion among the regulated community about what standard really applies,” the judge wrote.
China Halts Imports From Tyson Plant As Workers Test Positive For COVID-19
China suspended poultry imports from a Tyson Foods plant in Arkansas where hundreds of employees tested positive for COVID-19.
The suspension issued Sunday covered products that have arrived in China or are about to arrive there, according to China’s General Administration of Customs, but there was no indication given on the number of shipments or tonnage potentially involved.
Tyson Foods said it was looking into the situation.
U.S. officials from the Food and Drug Administration (FDA) have insisted there is no sign that food is a transmission method for COVID-19. Tyson on Friday said it had tested 3,748 of its employees at seven of its Arkansas facilities from June 4-13 and 481 tested positive for COVID-19. About 95% showed no signs of infection when they were tested.
China has stepped up testing of imported products and has asked firms exporting products to the country to declare their products do not contain COVID-19 in the wake of an outbreak at a major wholesale market in China.
The suspension issued Sunday covered products that have arrived in China or are about to arrive there, according to China’s General Administration of Customs, but there was no indication given on the number of shipments or tonnage potentially involved.
Tyson Foods said it was looking into the situation.
U.S. officials from the Food and Drug Administration (FDA) have insisted there is no sign that food is a transmission method for COVID-19. Tyson on Friday said it had tested 3,748 of its employees at seven of its Arkansas facilities from June 4-13 and 481 tested positive for COVID-19. About 95% showed no signs of infection when they were tested.
China has stepped up testing of imported products and has asked firms exporting products to the country to declare their products do not contain COVID-19 in the wake of an outbreak at a major wholesale market in China.
Tuesday Watch List
Markets
Tuesday morning grain markets are trying to shake off Monday evening confusion about the status of the trade deal with China. President Donald Trump tweeted the agreement is "fully intact." The latest weather forecasts continue to captivate trader attention with any export news a close second. Early Tuesday, trade will likely respond to Monday afternoon's Crop Progress report. The only official report of the day is new home sales in May, set for 9 a.m. CDT.
Weather
Tuesday features light to locally moderate showers in the eastern Midwest and the Southeast, offering some easing of recent drier conditions. Meanwhile, moderate to heavy rain will occur in portions of the far Southern Plains with some flood and severe weather threat. Other crop areas will be dry. Temperatures will be seasonally warm in most areas, favorable for crops and livestock.
Tuesday morning grain markets are trying to shake off Monday evening confusion about the status of the trade deal with China. President Donald Trump tweeted the agreement is "fully intact." The latest weather forecasts continue to captivate trader attention with any export news a close second. Early Tuesday, trade will likely respond to Monday afternoon's Crop Progress report. The only official report of the day is new home sales in May, set for 9 a.m. CDT.
Weather
Tuesday features light to locally moderate showers in the eastern Midwest and the Southeast, offering some easing of recent drier conditions. Meanwhile, moderate to heavy rain will occur in portions of the far Southern Plains with some flood and severe weather threat. Other crop areas will be dry. Temperatures will be seasonally warm in most areas, favorable for crops and livestock.
Monday, June 22, 2020
Farmers Still Battling Hog Backlogs
The backlog of hogs in states hit hardest by the meatpacking industry crisis is just now easing up somewhat. Hundreds of thousands of hogs were killed by producers who had nowhere to send the animals for processing. While that number is short of the initial slaughter estimates of millions of hogs, the pork industry still needs financial assistance to cover the cost of euthanizing animals as well as for the price losses from COVID-19. They’re also asking for help getting mental health resources for farmers who were understandably disturbed by having to kill their animals for disposal. “The drain on equity and the financial and emotional crisis that farmers are facing is not resolved,” says Dave Preisler (PRICE-lehr), CEO of the Minnesota Pork Producers Association. Producers have gone to great lengths to reduce the backlog and avoid on-farm slaughter. Some have been shipping hogs to processors out of state or selling directly to individuals looking to stockpile meat. Others have started contracting with smaller processors, who’ve seen an unprecedented rise in their business. Still, Politico says those measures haven’t fully solved the large pileup of excess hogs.
EPA: 52 “Gap Year” SRE Petitions Filed
The Environmental Protection Agency released an updated list of small refinery exemptions that shows smaller refiners have filed 52 “gap year” SRE petitions. Those petitions cover Renewable Fuels Standard Compliance from 2011 through 2018. Biomass Magazine says the filing is to circumvent a recent ruling from the Tenth Circuit Court that struck down three SREs approved by the EPA. The ruling also determined that the agency cannot extend exemptions to any small refinery whose earlier temporary exemptions had lapsed. A challenge to the court’s decision was rejected in early April. If the ruling is eventually applied nationally, it will limit eligibility for future SRE petitions to a handful of the nation’s small refiners. However, reports recently began to surface that several small refiners were filing “gap-year” SRE petitions to maintain eligibility for future SREs. The gap-year petitions are designed to provide impacted refineries with a continuous chain of SRE approvals, allowing the affected refineries to continue to be eligible for SREs in the future. Several biofuel groups have strongly condemned the gap-year filings as an effort to get around the Tenth Circuit Court ruling.
Renewable Fuel Groups React to 52 “Gap-Year” SRE Petitions
Two of the nation’s key renewable fuel groups reacted to the Environmental Protection Agency’s announcement that 52 new small refinery exemption petitions have been filed. The National Biodiesel Board is asking EPA Administrator Andrew Wheeler to immediately reject the petitions that cover compliance years from 2011-2018. Kurt Kovarik is the NBB Vice President of Federal Affairs. He says, “EPA’s consideration of small refinery exemption petitions going back to 2011 flies in the face of the recent 10th Circuit Court decision. By rolling the clock back, there appears to be no length the EPA won’t go to help refiners undermine the Renewable Fuels Standard.” Kovarik says the handouts would come at the expense of ethanol and biodiesel. Growth Energy says the “gap filings” are designed to reconstitute a continuous string of exemptions to circumvent court limits on new oil industry handouts. “This absurd maneuver is a blatant attempt to dodge the law at the expense of rural communities,” says Growth Energy CEO Emily Skor. “EPA’s dashboard confirms that the refiners hope to rewrite years of history just to bypass the 10th Circuit Court and push more biofuels out of the marketplace.”
CoBank: Ethanol Industry Needs to Transform Itself
A new report from CoBank’s Knowledge Exchange says the ethanol industry may have to diversify itself in the future. The report says excess production capacity and reduced demand will force the U.S. ethanol industry to “transform its business model to create more value and improve its operational efficiency.” CoBank predicts that consolidation within the industry will lead to larger and more financially stable companies with diversified ethanol co-product offerings by 2025. “While ethanol remains an attractive business with long-term potential, the industry will need to evolve and diversify beyond fuel ethanol,” says Kenneth Zuckerberg, CoBank lead grain and farm supply economist. “That diversity will need to include higher-margin co-products like high protein distillers’ grains for animal feed, liquid carbon dioxide for refrigeration, beverage grade alcohol, and other industrial products. COVID-19 led to businesses shutting down and people staying at home, causing significant ethanol demand destruction. The industry had one billion gallons of excess capacity at the start of 2020, with that number projected to rise to 3.9 billion at the end of this year before it settles to 2.4 billion at the end of 2021. Strong export growth would help reduce the excess, but current projections don’t support such an outcome.
Dairy Safety Net Signup Begins October 12 for 2021 Coverage
The USDA’s Farm Service Agency says safety-net signup for 2021 Dairy Margin Coverage begins on October 12th and runs through December 11th of this year. DMC has already triggered payments for two months for those producers who signed up for 2020 coverage. “If we’ve learned anything in the past six months, it’s to expect the unexpected,” says FSA Administrator Richard Fordyce. “Nobody would have imagined the significant impact that current, unforeseen circumstances have had on an already fragile dairy market.” Fordyce says it’s during unprecedented times like these that the importance of offering agricultural producers support through the delivery of farm bill safety-net programs like DMC becomes readily apparent. As of June 15th, FSA has issued more than $100 million in much-needed program benefits to dairy producers who purchased DMC coverage for 2020. The DMC offers protection to dairy producers when the difference between the all-milk price and the average feed price (the margin) falls below a certain dollar amount selected by the producer. More than 13,000 operations enrolled in the program for the 2020 calendar year.
Americans Support COVID-19 Aid for Farmers
Trust in America’s farmers and ranchers remains high amid the devastating blow delivered this year by COVID-19. A new poll conducted by the American Farm Bureau shows that 84 percent of Americans trust the nation’s farmers. That same number also supports financial assistance from the government for farmers struggling to keep from going under because of the pandemic. “The results of the survey indicate a growing understanding of how important a stable food supply is to the health and well-being of our nation,” says AFB President Zippy Duvall. “Shortages at grocery stores and other food supply chain shockwaves caused by the pandemic gave many people a new understanding of the crucial role America’s farmers and ranchers play in their survival through COVID-19.” Duvall says it’s “heartening” to know that through it all, the American people’s trust in farmers is unwavering. Even more broadly, 59 percent of Americans also think that the federal government should classify U.S. agriculture as a matter of national security to ensure a stable food supply. USDA estimates suggest the decline in commodity value alone for 2019, 2020, and 2021 production totals almost $50 billion.
Washington Insider: Problems With US Trade Policy
The Hill this week is carrying an article by Robert Scott, who is a senior economist with the Economic Policy Institute. He notes that U.S. Trade Representative Robert Lighthizer once again reported to Congress that “the era of U.S. offshoring is over.” This is essentially the same message President Trump’s new "American Comeback" campaign ads carry, the article said.
Scott charges that the Trump administration often touts returning trends in industries and jobs. In actuality, its policies are “actually failing to curb most of this offshoring.” They simply haven’t addressed the root causes of America’s growing trade deficits,” he said.
The article pointed to “the reality” in which COVID-19 has wiped out much of the job gains seen in recent years. And, he warns that unless steps are taken now to curb dollar overvaluation, which makes imports artificially cheap in the U.S. market, along with tax incentives for offshoring, there won’t be a comeback.
Scott also says that the administration has ignored the linkage between its policies and the rising trade deficit as it continues its “rosy pronouncements.”
In his testimony last week, Lighthizer praised several companies that have scrapped offshoring efforts or have “announced” plans to move production to the U.S. And he praised both the U.S.-Mexico-Canada Agreement (USMCA), which takes effect July 1, and the current "phase one” China trade deal.
Scott argues that increased domestic purchasing spurred by tax cuts and an expanded federal budget pushed average employment per manufacturing plant up between 2016 and 2019 -- but that offshoring continued throughout. Overall, the U.S. has lost more than 91,000 manufacturing plants and nearly 5 million manufacturing jobs since 1997 -- including nearly 1,800 factories that disappeared under the current administration between 2016 and 2018, Scott says. And, he thinks that any recent manufacturing gains were abruptly wiped out by the COVID-19 lockdown -- with a staggering 1.2 million manufacturing jobs lost this year.
But U.S. manufacturing was struggling even before COVID-19, Scott says. Starting in 2014, the U.S. dollar has appreciated in fits and starts, climbing nearly 28 percent. “More than half of that rise has come since the administration’s tariffs were first imposed in March 2018.”
Equally problematic, the 2017 Trump tax cuts on corporate profits incentivized offshoring for certain types of production while also raising after-tax profits, he says. This has attracted foreign capital to U.S. stock markets, spurring the dollar even higher.
If the administration’s trade policy really encouraged “reshoring,” America’s trade balance would have improved. But the U.S. trade deficit in manufactured goods rose significantly between 2016 and 2019. “In fact, the real U.S. trade deficit has increased every year since 2016, reducing GDP growth by roughly one-quarter of one percent annually over the past three years,” Scott says.
As for the USMCA, it is unlikely to resolve longstanding U.S.-Mexico trade issues, Scott charges. And, the “Phase One” China trade deal is a bust, too, Scott charges. China promised to increase purchases of U.S. goods and services by $200 billion over 2017 imports but is unlikely to meet these targets.
Beijing has also strategically adjusted to the Trump tariffs. China is simply exporting more goods elsewhere, and the U.S. trade deficit with China’s trading partners rose rapidly in 2019. In fact, China’s overall trade surplus with the world climbed significantly in 2019. China also reduced the value of its currency by 11.4% against the U.S. dollar since March 2018, helping to offset the tariffs.
The tariffs are a signature element of the administration trade agenda, and have helped sectors like steel and aluminum. But “increasing tariffs without taking steps to prevent the dollar’s appreciation, the overall benefits are simply neutralized,” Scott says.
These problems have been compounded by mistakes on tax policy, Scott thinks. U.S. multinationals continually engage in massive, international tax avoidance, with some paying no income tax. The pharmaceuticals industry has reaped major rewards, and moved plants to countries with the lowest possible corporate tax rate. As a result, the U.S. now has a massive trade deficit in pharmaceuticals.
The U.S. trade deficit is likely to shrink during COVID-19. But unless steps are taken to address dollar overvaluation and tax incentives for offshoring, these deficits will simply reemerge when recovery occurs. Washington must embark on major investments in infrastructure, R&D, training, renewable energy and other industrial policies.
In 2016, President Donald Trump campaigned against globalization and failed trade deals that have hurt U.S. manufacturing. That strategy worked, Scott says, but the administration has since failed to deliver for working Americans. “Now the wheels are coming off,” Scott says and it is time for a meaningful rewrite of failed U.S. trade and economic policies.
So, we will see. It is true that trade policy pressures abound, but also seems likely that since the administration and the Congress are tightly focused on alleviating impact of the virus concerns about trade deficits are unlikely to command new priorities. However, these are high stakes debates that should be watched closely as the election season advances, Washington Insider believes.
Scott charges that the Trump administration often touts returning trends in industries and jobs. In actuality, its policies are “actually failing to curb most of this offshoring.” They simply haven’t addressed the root causes of America’s growing trade deficits,” he said.
The article pointed to “the reality” in which COVID-19 has wiped out much of the job gains seen in recent years. And, he warns that unless steps are taken now to curb dollar overvaluation, which makes imports artificially cheap in the U.S. market, along with tax incentives for offshoring, there won’t be a comeback.
Scott also says that the administration has ignored the linkage between its policies and the rising trade deficit as it continues its “rosy pronouncements.”
In his testimony last week, Lighthizer praised several companies that have scrapped offshoring efforts or have “announced” plans to move production to the U.S. And he praised both the U.S.-Mexico-Canada Agreement (USMCA), which takes effect July 1, and the current "phase one” China trade deal.
Scott argues that increased domestic purchasing spurred by tax cuts and an expanded federal budget pushed average employment per manufacturing plant up between 2016 and 2019 -- but that offshoring continued throughout. Overall, the U.S. has lost more than 91,000 manufacturing plants and nearly 5 million manufacturing jobs since 1997 -- including nearly 1,800 factories that disappeared under the current administration between 2016 and 2018, Scott says. And, he thinks that any recent manufacturing gains were abruptly wiped out by the COVID-19 lockdown -- with a staggering 1.2 million manufacturing jobs lost this year.
But U.S. manufacturing was struggling even before COVID-19, Scott says. Starting in 2014, the U.S. dollar has appreciated in fits and starts, climbing nearly 28 percent. “More than half of that rise has come since the administration’s tariffs were first imposed in March 2018.”
Equally problematic, the 2017 Trump tax cuts on corporate profits incentivized offshoring for certain types of production while also raising after-tax profits, he says. This has attracted foreign capital to U.S. stock markets, spurring the dollar even higher.
If the administration’s trade policy really encouraged “reshoring,” America’s trade balance would have improved. But the U.S. trade deficit in manufactured goods rose significantly between 2016 and 2019. “In fact, the real U.S. trade deficit has increased every year since 2016, reducing GDP growth by roughly one-quarter of one percent annually over the past three years,” Scott says.
As for the USMCA, it is unlikely to resolve longstanding U.S.-Mexico trade issues, Scott charges. And, the “Phase One” China trade deal is a bust, too, Scott charges. China promised to increase purchases of U.S. goods and services by $200 billion over 2017 imports but is unlikely to meet these targets.
Beijing has also strategically adjusted to the Trump tariffs. China is simply exporting more goods elsewhere, and the U.S. trade deficit with China’s trading partners rose rapidly in 2019. In fact, China’s overall trade surplus with the world climbed significantly in 2019. China also reduced the value of its currency by 11.4% against the U.S. dollar since March 2018, helping to offset the tariffs.
The tariffs are a signature element of the administration trade agenda, and have helped sectors like steel and aluminum. But “increasing tariffs without taking steps to prevent the dollar’s appreciation, the overall benefits are simply neutralized,” Scott says.
These problems have been compounded by mistakes on tax policy, Scott thinks. U.S. multinationals continually engage in massive, international tax avoidance, with some paying no income tax. The pharmaceuticals industry has reaped major rewards, and moved plants to countries with the lowest possible corporate tax rate. As a result, the U.S. now has a massive trade deficit in pharmaceuticals.
The U.S. trade deficit is likely to shrink during COVID-19. But unless steps are taken to address dollar overvaluation and tax incentives for offshoring, these deficits will simply reemerge when recovery occurs. Washington must embark on major investments in infrastructure, R&D, training, renewable energy and other industrial policies.
In 2016, President Donald Trump campaigned against globalization and failed trade deals that have hurt U.S. manufacturing. That strategy worked, Scott says, but the administration has since failed to deliver for working Americans. “Now the wheels are coming off,” Scott says and it is time for a meaningful rewrite of failed U.S. trade and economic policies.
So, we will see. It is true that trade policy pressures abound, but also seems likely that since the administration and the Congress are tightly focused on alleviating impact of the virus concerns about trade deficits are unlikely to command new priorities. However, these are high stakes debates that should be watched closely as the election season advances, Washington Insider believes.
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