International Trade Commision Says TPP Would Be Gain For US Dairy Industry

The International Trade Commission (ITC) reported this week the Trans Pacific Partnership (TPP) would be a $1.5 billion net gain for the U.S. dairy industry by 2032, with total U.S. dairy output growing 1.3%.

The report estimates dairy exports to TPP countries would grow by some $1.846 billion while imports would increase by roughly $350 million.  In percentage terms, dairy exports to TPP countries would grow 18% while imports would grow 10%.

The ITC says the greatest export opportunities offered by TPP are to Canada, Japan and Vietnam. “But U.S. exporters would still face restrictive  tariff rate quotas (TRQ) for certain products in large TPP markets such as Japan and Canada that would limit the growth of U.S. exports even after full TPP implementation,” states the report.

On the import side, trade partners would be granted additional access. But the ITC says many of the additional TRQ volumes granted under the agreement would likely not be filled. That’s because countries such as Canada and Peru are already net importers of dairy products, and would have limited products to export.

The ITC also does not see a threat from New Zealand, even though it would be granted more access, especially as the agreement progresses 15 and 20 years down the road. “Exporters such as New Zealand produce dairy products more suited to China and other Asian markets, such as whole milk powder, a product not demanded in high volumes in the United States,” says the report. Plus, the U.S. dairy industry is highly competitive in other products New Zealand might want to export.

For their part, TPP is a historic pact, say Tom Suber, president of the the U.S. Dairy Export Council and Jim Mulhern, president and CEO of the National Milk Producers Federation, in a joint statement issued this morning. They add: "Included in the deal are ground breaking new commitments on sanitary and phytosanitary issues and significant improvements in how geographical indications (generic trade names) are handled.

"But the benefits of the TPP can only be realized is the United States assures that signatories live up to their commitments under the agreement as well as their prior trade agreement." 

Lawmakers Introduce Legislation For National Date Labeling System

Lawmakers on Wednesday introduced legislation to establish a uniform national date labeling system to simplify regulatory compliance for companies and reduce food waste.

Sen. Richard Blumenthal (D-Conn.) and Rep. Chellie Pingree (D-Maine) called the variety of labels — such as “sell by,” “use by” and “expires on” — confusing to consumers, adding that the confusion contributes to 90 percent of Americans prematurely tossing perfectly safe food.

“Items at the grocery store are stamped with a jumble of arbitrary food date labels that that are not based on safety or science. This dizzying patchwork confuses consumers, results in food waste, and prevents good food from being donated to those who need it most,” Blumenthal said in a news release.

The Food Date Labeling Act would establish a uniform national system for date labeling that clearly distinguishes between foods that bear a label indicating peak quality from foods that bear a label indicating they may become unsafe to consume past the date. The bill would also ensure that food is allowed to be sold or donated after its quality date and educate consumers about the meaning of new labels so that they can make better economic and safety decisions.

The announcement comes on the heels of a report by the Harvard Food Law and Policy Clinic and other groups that concluded that consumer confusion over date labels is a significant factor contributing to food waste.

About 40 percent of the food produced in the United States goes uneaten, resulting in 62.5 million tons of wasted food each year, the groups said. Consumers interpret date labels to mean that the food is no longer safe to eat.

“Without uniformity in the system, consumers are tossing out millions of pounds of perfectly healthy and safe food because a mishmash of labeling practices are telling them it's the right thing to do,” added Sally Greenberg, executive director of the National Consumer League. “America's food waste — throwing out 25 percent of the food we buy — has environmental, financial, and moral consequences, and the food waste epidemic is at a tipping point.”

USW Ready to Help Customers Adjust to Columbia Snake River System Upgrade

U.S. wheat importers are likely aware that the Columbia Snake River System (CSRS) will close for extended maintenance beginning Dec. 12, 2016, and ending March 20, 2017. This will allow the U.S. Army Corps of Engineers to make essential renovations to all the navigation locks on the Columbia River and the Snake River. No barge traffic will be able to pass during this time. 

USW welcomes this investment as a critical need that will underpin the United States as the world’s most reliable wheat supplier to our customers for years to come. However, importers may be concerned about supply, cost impact and logistical options because of the closure. We take those concerns seriously and want to help you minimize any possible impact before, during and after the river system closure. 

Such extended closures are unusual, but as our overseas customers learned during the last extended closure in 2010/11, the entire PNW system is fully capable of ensuring an uninterrupted supply of wheat to export terminals. 

USW believes the industry will consider every logistical option to keep wheat — especially SW wheat — flowing to export elevators. Significant changes will help make this closure more manageable. For example, total export terminal storage capacity on the Columbia River has grown substantially since 2011. The addition of a brand new terminal, plus the construction of new storage at several others, has increased storage capacity from 564,000 MT to 866,000 MT today. The PNW’s total up-country grain storage capacity has also grown to 17.3 MMT from 16.4 MMT. 
Rail shipments made up 54 percent of SW wheat sourced by rail during the outage in 2010/11. Rail shipping will likely make up most of the barge capacity shortfall during this closure as well. PNW exporters already source an estimated 80 percent of their HRW and 90 percent of their HRS supplies by rail. For SW to move west, rail sourcing will have to increase as much as 25 percent (see chart below). Fortunately, railroads have been investing in capacity, and there are now four shuttle train-loading terminals in eastern Washington, compared to two that were operational in 2010/11. The system is even better prepared to meet demand in 2016/17.   

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How U.S. Wheat Normally Moves to PNW Export Terminals 

Wheat Class        Barge Delivery            Rail Delivery 
SW/Club        75%                    25% 
HRW                20%                    80% 
HRS                10%                    90%   

Source: USDA 

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Given advanced notice of the closure, exporters, grain originators, barge operators, railroads and trucking lines are already planning to minimize interruptions and costs. Alternatives include: 
·        Pre-positioning the maximum number of barges to load SW before the closing (the Bonneville Lock and Dam should re-open after 8 weeks, which would open facilities up river to The Dalles, about 307 km east of Portland); 
·        Moving more rail cars and locomotives into the region to handle increased demand from rail-loading interior elevators; 
·        Coordinating truck and rail delivery from the Willamette Valley, south of Portland. 

Buyers can help themselves by preparing for the maintenance period. USW believes there will be sufficient volume of all U.S. wheat classes normally available from the PNW. Buyers can also help lower the risk of interruption and minimize potential costs by taking a longer view of their purchase needs. 

USW advises its customers to consider: 
·        Consulting with PNW exporters as early as possible to help give exporters more time to respond to your needs and to manage their logistical challenges. 
·        Scheduling a meeting soon with the local USW representative to identify buying strategies that fit specific needs and capabilities; 
·        Analyzing inventory needs and logistical capabilities; 
·        Increasing SW purchases now through harvest (export prices generally are at their lowest in June; see U.S. Wheat Export Price Cycle in Buyers’ Favor above) 
·        Increasing SW wheat and/or flour storage; 
·        Deferring as an offset some HRW and HRS shipments from the immediate post-harvest period into the maintenance period. 

As an objective voice for U.S. wheat producers, USW greatly values the trust customers have in our products and service. Our focus remains fixed on helping buyers, millers and wheat food processors learn how to grow their enterprises using our wheat. Working together, we believe we can help ease any concerns related to the closure and even strengthen our partnership. We look forward to assisting you now, as always. 

About the Columbia Snake River System. The CSRS is a vital transportation link for wheat producers in the states of Idaho, Montana, Oregon and Washington. The economies of these four states rely heavily on the commerce that flows up and down this system. The CSRS is the #1 U.S. wheat export gateway. The deep draft channel supports 46 million tons of cargo each year, valued at $20 billion. The inland system supports more than 9 million tons of cargo. 

For more information, visit the Pacific Northwest Waterways Association online at http://www.pnwa.net/.  

Healthy Waterways Infrastructure Crucial for a Healthy Farm Economy

The National Corn Growers Association joins with others across the country this Infrastructure Week to highlight the critical role our Nation's inland waterway system plays in agriculture and the incredible importance of maintaining the operational capacity of this system.

 

With more than 60 percent of the nation's grain exports being transported by barge, the U.S. inland waterway system is vital for U.S. farmers. Farmers depend on the inland waterway system to deliver their crops to the global marketplace and to businesses which rely on the system to move their raw materials and products. As the waterway system ages and infrastructure-related delays increase, farmers will find it increasingly difficult to meet demand in the timely fashion needed to grow markets.

 

60 percent of the 12,000 miles of waterways across 38 states serving the heartland of America via the Mississippi River and its major tributaries have outlived their 50-year economic design period.Most of America's locks and dams were built in the 1920s and 1930s, yet are used to transport 21st century cargoes that fuel our modern economy.

 

The good news is that infrastructure investment for our aging locks and dams offers a great return: Every $1 invested in our inland waterway system returns $10 to our Nation's economy. And proper investment means sustaining 541,000 jobs and more than $1 billion in new job income annually.

 

The waterways are the safest, most environmentally sound transportation mode for bulk cargoes. Waterways have the best fuel efficiency record, relieve highway traffic congestion, and have the most capacity for freight that can facilitate increased productivity. 

An Alternative Take on ITC’s Mixed Score for Wheat under TPP

Following is a Joint Statement from U.S. Wheat Associates and the National Association of Wheat Growers.

WASHINGTON, DC - On Wednesday, the International Trade Commission (ITC) released its highly anticipated report on the economic impacts expected to accrue from the adoption of the Trans-Pacific Partnership (TPP). For the entire agriculture and food sector, the report forecasts a $7.2 billion increase in exports or a growth of about 2.6 percent by 2032 compared to the same time frame without TPP. 

The report recognized that the U.S. wheat industry would see substantial gains in market access and subsequent exports to Vietnam where the United States currently competes at a tariff disadvantage to Australian suppliers. Specifically, the ITC notes that U.S. wheat and other grain exports to Vietnam would increase by a healthy 25.3 percent by 2032 under TPP. However, ITC also concludes that U.S. wheat exports to Japan would decline by 17 percent under TPP. Given our industry’s 60 years of experience in the unique Japanese market, we respectfully believe that ITC got this one wrong. 

There are two distinct markets for wheat in Japan: one for high quality food grade wheat and one for lower quality, lower priced livestock feed wheat. Japan has consistently imported about 60 percent of its annual milling wheat needs from the United States, with Canada and Australia making up the balance. Because access to Japan’s milling wheat market would remain equal among the three suppliers under TPP and because Japan requires different types of wheat for distinct uses, we see no reason why U.S. sales would decline. 

Regarding the feed wheat market, ITC notes that Canada would see higher feed wheat sales under TPP because it is a “low-cost producer.” If Canada has such an advantage over U.S. wheat producers, then why has U.S. wheat made up 45 percent of Japan’s feed wheat imports on average since 2013 while only 20 percent has been imported from Canada? The relative cost of feed wheat compared to alternative feed grain has far more to do with Japan’s feed import decisions than cost of production. As long as corn and other feed grain alternatives remain inexpensive Japan does not buy much feed wheat from any origin. 

ITC’s statement that Canada is positioned to out compete the U.S. in either milling or feed wheat sales to Japan is out of touch with the reality of Japan’s preferences for U.S. wheat. It also fails to recognize that Canada’s competitive position with respect to the United States would be unchanged under TPP.

Modeling policy impacts to individual countries 16 years in the future is inherently difficult theoretical work. The reality is that TPP reduces barriers facing U.S. wheat farmers and keeps us on a level playing field with two of our largest competitors. That is particularly important because Canada and Australia continue to seek tariff advantages by negotiating and signing free trade agreements in competitive markets at a much more rapid pace than the United States. 

“The assumptions made in the ITC report are disappointing and misleading,” said NAWG President Gordon Stoner. “U.S. wheat farmers stand to benefit from a lower MAFF (Ministry of Agriculture, Forestry, and Fisheries) markup and new market access in Japan and from being able to compete on a level playing field in Vietnam. Congress should act quickly to enable farmers to take full advantage of the potential economic opportunities at stake under TPP.”  

What really sets TPP apart from past agreements is it creates a platform for future growth. Not only does it target one of the fastest growing regions in the world, but once enacted it becomes a forum for other countries to join. Countries in line to join TPP include Indonesia, the world’s second largest wheat importer, the Philippines and Thailand, also significant importers. Each country already signed FTA’s with Australia. 
That is why U.S. wheat farmers remain convinced that we need swift consideration and approval of TPP.

“Every day that TPP implementation is delayed, our ability to compete on a level playing field in established and new markets erodes that much more. Wheat farmers need TPP, but so do our customers around the world,” said USW Chairman Brian O’Toole, a wheat farmer from Crystal, ND. 

Seed Treatment Lawsuit Moves Forward

         
Earlier this year, NAWG joined a coalition of agriculture groups, agricultural retailers and Crop Life America in requesting to intervene in a lawsuit brought against the EPA by environmental activists and others. The lawsuit is Anderson v. EPA, filed in the U.S. District Court for the Northern District of California on Jan. 6, 2016. The plaintiffs want the court to order the U.S. Environmental Protection Agency (EPA) to regulate seeds treated with pesticides as if the seeds were the pesticides. In an Order dated May 13, the court rejected EPA’s motion to dismiss the case, but also issued an Order that granted the Motion to Intervene. NAWG will be working with the agriculture coalition on next steps for the lawsuit to defend EPA’s current regulation of neonicotinoid and other seed treatment pesticides and to ensure that the court and EPA understand the vital importance of treated seeds to American agriculture. 

USDA Issues Notice On Scholarship Program

USDA’s Food Safety and Inspection Service (FSIS) today issued a notice providing instructions to agency personnel for administering a scholarship program seeking to recruit veterinarians amid an ongoing shortage of them at the federal level.

The Adel A. Malak Scholarship specifically seeks to recruit students enrolled in veterinary medicine to “critical” Public Health Veterinarian positions in FSIS’s Office of Field Operations, the agency said.

The scholarship program is structured as a 2-year pilot with the first group of scholars to be selected this summer. FSIS will reevaluate the pilot program in 2018.

FSIS has named this scholarship after Dr. Malak to honor his service in FSIS. Malak started his professional career with FSIS in 1985 as an in-plant PHV in Phoenix and moved up the ranks into managment positions. The agency said Malak was instrumental in recruiting and mentoring many students from the University of Fresno and the California Polytechnic State University.