Beyond Meat Developing So-called Bacon Product

Plant-based food company Beyond Meat is developing a “bacon alternative.” The effort from the growing company, already mastering plant-based burger and sausage alternatives, is part of Beyond Meat's recent focus on the breakfast table. There's no launch date for the fake bacon, but company CEO Ethan Brown told Bloomberg news the product is improving as it goes through development. Doughnut shop Tim Hortons now serves plant-based sausage on breakfast sandwiches from Beyond Meat in nearly 4,000 locations. Beyond Meat also announced a breakfast sandwich partnership with Dunkin' Donuts earlier this week. The company is also developing plant-based steak alternatives. Since the public stock offering of Beyond Meat in May, company stock has soared almost 700 percent. The company is continuing to expand its reach as its products are now sold in more than 30,000 supermarkets and restaurants around the world. The company claims it's providing a solution to four "growing issues" in livestock production, being human health, climate change, constraints on natural resources and animal welfare.

Washington Insider: Coffee, Industry Crises and Immigration

There’s another side to the new fight between the administration and Guatemala, Bloomberg says this week—it thinks that the threats against Guatemala could “worsen the income outlook for 125,000 farm families.”

The main point is that the coffee producers in Central America are already facing a crisis from “rock-bottom commodity prices and depressed incomes,” which sanctions from the U.S. could make worse as the administration threatens tariffs against the country.

The President this week said his administration is examining tariffs, remittance fees, and other sanctions after he claimed that Guatemala backed out of an agreement to become a “safe third country” to slow the flow of undocumented migrants. U.S. companies, including Starbucks Corp., are the main buyers of coffee beans from the Latin American nation, according to data from Guatemala’s National Coffee Association, Anacafe. It’s the country’s second most important agricultural export after bananas.

And while the administration threat comes amid its battle to reduce immigration, taking the action against Guatemala could end up producing the opposite result, Bloomberg says.

It says that the “coffee crisis” has already forced many of the nation’s small growers to leave the country and take the risky trip through Mexico to cross the U.S. border. Tariffs would likely further beat down the commodity market in the Central American country and possibly exacerbate the flow of migrants.

While there’s no official information on the possible tariffs, “we are analyzing the possible scenarios,” Bernardo Solano, president of Anacafe, said. “As the United States is our main trading partner, if tariffs were increased, it would affect the competitiveness of our country.”

Coffee futures traded in New York have tumbled almost 25% in the past two years as supplies boomed in Brazil, the world’s top producer and exporter. Competition has gotten so fierce and prices so low that coffee farming has become untenable for many small growers--leading their adult children to shun the business in many cases.

Guatemala has one of the highest inequality rates in Latin America, with some of the worst poverty, malnutrition and maternal-child mortality rates in the region, especially in rural and indigenous areas, according to the World Bank.

If the President follows through on this threat, it would “aggravate the international price crisis that we are going through, further complicating the economy of the 125,000 Guatemalan coffee-producing families, who will be in need of finding other alternatives to generate income--among these, is migration," Solano said.

Overall, it seems that the U.S. border security problems are likely much more complex than is generally understood and will continue to be highly controversial. The United States has traditionally sponsored development programs across Central America in continuing efforts to reduce immigration pressures, extending back to the Reagan Administration’s Caribbean Basin Initiative that worked to expand U.S. imports and stimulate exports from the region, but which has fallen out of favor more recently.

So, we will see. It seems increasingly that the administration’s heavy reliance on tariffs as a main trade policy tool is being questioned by front line industries in a growing number of industrial sectors—-and opposed by major and minor trading partners. A key test appears to be coming soon as the Congress debates approval of the new NAFTA agreement, amid the resumption of tariff talks with China and administration threats of new European duties on automobiles. Each of these is yet another issue producers should watch closely as the debates intensify, Washington Insider believes.

Multiple House Ag Leaders Critical of Second Trade Aid Package

The Democratic chairs of four House Agriculture Subcommittees voiced criticism of USDA's second trade aid package, after the department unveiled payment rates and other details about the effort Thursday (July 25).

The joint statement was issued Reps. Jim Costa, D-Calif., chair of the Subcommittee on Livestock and Foreign Agriculture, Marcia Fudge, D-Ohio, chair of the Subcommittee on Nutrition, Oversight, and Department Operations, Filemon Vela, D-Texas, chair of the Subcommittee on General Farm Commodities and Risk Management and Stacey Plaskett, D-V.I., chair of the Subcommittee on Biotechnology, Horticulture and Research.

"While these second Market Facilitation Program payments will undoubtedly help farmers in tough economic conditions, they continue to tell us loudly and clearly they want fair access to global markets, not one-off handouts from the Federal government," the lawmakers wrote.

Of particular concern, is the " fairness and the equity of payments across crops and commodities, including specialty crops, dairy, and livestock products," the lawmakers said. Also a worry, is how the aid package "will affect our World Trade Organization commitments, especially given concerns raised by our trading partners after the first round of trade aid," they noted.

The lawmakers reiterated calls for President Donald Trump to end the trade war, arguing it "isn’t accomplishing anything but added pain for our farmers."

House Passes Two-Year Spending Agreement, Senate to Vote Next Week

The House passed a two-year spending package, which increases government spending by $320 billion and suspends the debt limit through the end of July 2021.

The legislation, which has the support of President Donald Trump, passed 284-149 – though a majority of Republicans opposed it amid concerns about growing deficits. “This is not the bill that we would write, we’re not in the majority,” said House Minority Leader Kevin McCarthy, R-Calif. “We are where we are. We put a plan together that had to have compromise.”

The legislation now heads to the Senate, where Majority Leader Mitch McConnell, R-Ky., plans to bring it to a vote next week before the chamber leaves for its August recess. The bill is expected to clear the GOP-controlled Senate easily.

Meanwhile, Trump tweeted he was "pleased the House has passed our budget deal," calling the legislation "Great for our Military and our Vets."

Market Facilitation Program Payments Will Range From $15 to $150 Per Acre

MOUNT JULIET, Tenn. (DTN) -- UDSA's Market Facilitation Program payment rates will range from $15 and $150 per acre and will be made in three parts, with the first and largest payment expected in mid-August.

Sign-up for the program begins on Monday, July 29, and ends on Dec. 6, USDA leadership said on a press call.

USDA Undersecretary for Farm Production and Conservation Bill Northey said the agency most likely already has the data it needs from producers since the payments are based on certified acreage of qualifying crops.

"This should be a fairly simple process," he said. "We want signup to be easy for producers, straightforward and want it to be such that it doesn't take a lot of time for them, and we can get these payments to them so they can address the challenges they have due to these tariffs that have been placed on our agricultural products."

Rates will be based on county-level estimates of damages, with the first payment being either a minimum of $15 or half of the county rate, whichever is higher. For instance, if a county rate is $40 per acre, a grower will receive $20 in the first payment. But if the county rate is only $25 per acre, the grower will receive $15.

County rates are available at: www.farmers.gov/mfp

Farmers who plant an eligible cover crop on prevented planting acres will receive a $15-per-acre payment.

Hog and dairy producers are also eligible for payments. Hog producers will receive $11 per head, based on inventory between April 1 and May 15, 2019. Payments to dairy producers will be based on historical production with a rate of 20 cents per hundredweight.

There are several key differences between this year's program and last year's, USDA Chief Economist Rob Johannson said. Last year's program was based on trade damages compared to 2017. This year, USDA looked at trade over the past 10 years and used estimates from the year with the highest level of exports to determine damages.

This addresses one of the top concerns of corn growers, who didn't sell much corn to China in 2017 due to non-tariff barriers the Chinese had put in place.

"When we looked back over 10 years, we can see that, in previous years, China did import quite a bit of corn from the United States," he said. "This modelling effort reflects that if China does come to the table and makes an agreement with negotiators, that it will incorporate some of these other issues that we've been working on for a number of years, not just the 2017 and 2018 tariff measures."

Johannson said the 2019 payment rates also take into account the resolutions of trade issues with Canada and Mexico, new tariffs from India and higher Chinese tariffs on some products.

Another change is higher payment limitations. The MFP payments are being made in three categories: non-specialty crops (includes row crops like corn and soybeans), specialty crops such as nuts and fruit, and hogs and dairy producers.

Farmers are eligible for up to $250,000 of payments per category with a $500,000 limit across all categories.

There is also an adjusted gross income limitation of $900,000; however, that limit can be waived if 75% or more of that income comes from farming and ranching.

Perdue said there will be instances of "misalignment." For instance, a cotton producer in a county that primarily grows wheat may see a lower payment, while a wheat grower in a county with high levels of cotton production may see a larger payment.

"There will be some disparities that are just impossible to overcome aside from doing an individual program for every producer," he said, adding that USDA spent hours trying to smooth out the disparities where they could.

The second and third payments will most likely be made in November and January if they're still needed, Northey said, with half of the remaining county payment being made each time.

"Hopefully we'll have a situation where we're back to a full trading arrangement, and we have some folks working hard to try to make that happen," Northey said. "If that's the case ... we will not need those payments."

USDA expects payments to farmers to total $14.5 billion if all three sets of payments are made. The agency will also spend $1.4 billion on purchases of food products and give $100 million to trade promotion groups.

"While we are grateful for the continuing support for American agriculture from President [Donald] Trump and Secretary [Sonny] Perdue, America's farmers ultimately want trade more than aid," American Farm Bureau Federation President Zippy Duvall said in a news release. "It is critically important to restore agricultural markets and mutually beneficial relationships with our trading partners around the world.

National Association of Wheat Growers President and Lavon, Texas, farmer Ben Scholz, said MFP payments provide necessary assistance to growers affected by lower prices resulting in part from tariffs. "However, this is a Band-Aid when we really need a long-term fix," Scholz said. "NAWG understands holding China accountable for its WTO violations and unfair trade practices, but a trade war is not the solution, especially when farmers are the casualties."

More than 25% of U.S. pork is sold in foreign markets, and producers want to compete on a level playing field, the National Pork Producers Council stated in a news release.

"Our top priorities are an end to the trade dispute with China, where retaliatory tariffs are preventing U.S. pork from fully capitalizing on a historic sales opportunity created by the outbreak of African swine fever in the world's largest pork-consuming nation, and a trade agreement with Japan, where U.S. pork is losing market share due to trade agreements Japan has recently formed with the EU and other international competitors," NPPC President David Herring said.

National Farmers Union President Roger Johnson said that he had concerns about some of the county-to-county disparities as well as the fact the plan doesn't include any incentives to reduce production.

"This assistance is desperately needed, but the ad-hoc rollout and convoluted structure of these programs has caused significant confusion among producers," he said in a news release. "Until more predictable, longer-term solutions are made available, that sense of confusion and insecurity will likely persist. In the future, we urge the administration to work more closely with Congress to build on the existing safety net and provide certainty and stability in farm country."

Washington Insider: The Administration Aims at Food Stamps, Yet Again

Much of the urban press is reporting a new effort this week by the administration to reduce access to the federal nutrition programs, in this case the long-standing “food stamp” program now called Supplemental Nutrition Assistance Program, or SNAP. For example, the New York Times says that more than three million people would no longer be eligible for benefits under a rule proposed Tuesday by USDA.

Agriculture officials say they are “fixing a loophole” that some states use to provide food stamps to people who have a certain amount of savings and other assets. Critics say the rule will punish the working poor and stymie their ability to accumulate assets. SNAP now provides benefits to more than 38 million low-income Americans, the Times says.

Under the current law, 39 states, the District of Columbia, Guam and the Virgin Islands ease some administrative restrictions for participants if they already qualify for another federal aid program, Temporary Assistance for Needy Families. The new rule would greatly reduce the ability of those jurisdictions to use that approach.

Republican advocates of the change say it would limit abuses by people who do not need the benefits. For example, a Minnesota critic of the program, Rob Undersander, claims he received food stamps for 19 months even though he had significant assets.

Representative Mark Meadows, R-N.C., told the press, “As a member who personally met with a millionaire that took advantage of the food stamp program to prove a point, I can tell you: Reform is certainly needed.”

Robert Rector, a research fellow at the conservative Heritage Foundation, said the proposed rule “removes an obvious abuse of the system by state governments and it basically would restore confidence in the food stamp program.”

Democrats were outraged. “The administration’s latest act of staggering callousness would steal food off the table of working families and hungry children and dismantle proven pathways out of poverty for millions,” Speaker Nancy Pelosi, D-Calif., said in a statement. “The administration’s proposal is both cruel and counterproductive.’’

Senator Chuck Schumer, D-N.Y., the Democratic minority leader, called the proposed rule “cruel, ideological and inhumane,” and told reporters that Democrats would work to beat back this effort to restrict food stamps, as they had in the past.

To qualify for food stamps, a family’s assets and income must fall below certain limits—those with an elderly or disabled family member must have assets of $3,500 or less. Incomes must be at or below 130% of the federal poverty level.

But those requirements are sometimes waived by states who see modest amounts of assets as a buffer against food insecurity. Some allow food stamps for people with incomes as high as 200% of the poverty line, the Times said. The proposed rule would make it much harder for people above the basic asset limits and income levels to qualify.

The proposal would still allow some families with assets or incomes above the limits to be eligible for food stamps in cases where they have been receiving help under the Temporary Assistance for Needy Families program for more than six months. It would also restrict the kind of noncash assistance received under the program that qualifies families for food stamps and limit eligibility to those who are receiving aid like job training and child care help.

The idea behind the requirement, agriculture officials said, was that it would help demonstrate which families were truly in need of help and weed out fraud.

Program advocates counter that the new rule would cut off families most in need of support. “It’s exactly the kinds of households that the administration is interested in supporting,” said Elaine Waxman, a senior fellow at the Urban Institute.

Democrats view the proposed rule as another attempt to dismantle the food stamp program. In 2018, the House tried and failed, despite support from President Trump, to impose work requirements on able-bodied adults seeking food stamps. Conservatives had also hoped to close a loophole that allows states to waive the requirements in areas with high unemployment.

“This proposal is yet another attempt by this administration to circumvent Congress and make harmful changes to nutrition assistance that have been repeatedly rejected on a bipartisan basis,” Senator Debbie Stabenow, D-Mich., the top Democrat on the Committee on Agriculture, Nutrition and Forestry, said.

There will be a 60-day public comment period before the Agriculture Department can move forward with the rule, the Times noted.

So, we will see. While budget hawks frequently oppose the nutrition programs because of their cost, many producers traditionally have seen them as part of the “three-legged farm policy foundation” that has successfully supported expensive programs for decades, including those that provide food assistance, especially in urban areas; conservation programs that protect the soil; and the farm programs themselves.

This promises to be another of a long series of fights against those programs that will be both highly controversial and long lasting and which producers should watch closely as it proceeds, Washington Insider believes.

Farm Bureau's Duvall Stresses Importance of USMCA Ratification

Ratification of the U.S.-Mexico-Canada Agreement (USMCA) remains a key issue for the U.S. ag sector, American Farm Bureau Federation President Zippy Duvall stressed in a July 24 column.

Approval of the trade pact, which updates the 1994 North American Free Trade Agreement (NAFTA), would be an important signal to other trade partners, Duvall wrote. "Approval would set off a positive domino effect of successful trade negotiations and agreements around the world," he argued, noting the continued push to ink new trade deals with partners like "China, Japan, the European Union, Great Britain and potentially other nations and regions."

Duvall suggested that ratifying USMCA would push those other partners "to belly up to the negotiating table, and go back to their farmers, industries and legislative bodies with a message of determination to make the compromises necessary to secure a deal with the world’s largest economy."

As lawmakers return to their districts for the August recess, Duvall urged producers to make their views on USMCA clear. "We have the opportunity ??? the imperative ??? to send those members of Congress back to Washington in early September with the backbone to do the right thing for agriculture and the economy," he argued.