Farm Bill; Ag Economy; Biotech; and, Regulations- Wednesday Posted By Keith Good On October 1, 2014 Farm Bill Reuters writer Alonso Soto reported yesterday morning that, “The United States and Brazil are close to settling a decade-old trade dispute over cotton subsidies, three Brazilian sources close to the talks told Reuters, in what would be the first concrete step to repair ties hurt by an espionage scandal. “Washington is within hours of reaching an agreement with Brazilian cotton producers demanding compensation for cotton subsidies enjoyed by U.S. growers, a senior Brazilian government official said. He asked not to be named because negotiations are ongoing.” The article explained that, “In 2004, Brazil won a challenge against U.S. cotton subsidies at the World Trade Organization, giving it the right to impose $830 million in sanctions against U.S. products. Brazil agreed to suspend the penalty if the United States paid into an assistance fund for Brazilian cotton farmers [related background here and here]. “The United States stopped paying the monthly compensation in October due to budget disagreements in Congress, prompting the Brazilian government to threaten to slap higher tariffs on U.S. products. The retaliation would have deepened diplomatic tensions between both countries, officials and experts said at the time.” Leslie Josephs and William Mauldin reported last night at The Wall Street Journal Online that, “Brazil and the U.S. have reached an agreement to settle a more than decade-old dispute over U.S. cotton subsidies, people familiar with the negotiations said Tuesday. “U.S. Agriculture Secretary Tom Vilsack and U.S. Trade Representative Michael Froman will sign the agreement with their Brazilian counterparts on Wednesday, a person familiar with the agreement said.” The Journal writers pointed out that, “The U.S. had agreed to pay Brazil about $150 million a year for its cotton sector. The U.S. stopped paying during the sequester last year, however. “Under the new agreement, the U.S. would make a one-time, $300 million payment to the Brazilian Cotton Institute, which provides technical assistance to growers, according to a person familiar with the negotiations. In return, Brazil no longer would have the right to retaliatory measures against U.S. trade and won’t launch new complaints.” And AP writer Martin Crutsinger reported last night that, “The United States and Brazil have resolved a decade-long trade battle over subsidies Washington provided to American cotton growers, an official close to the negotiations said late Tuesday. “The agreement would resolve a bitter trade fight that had strained relations between the two countries since 2002 when Brazil brought a case against the United States charging that the subsidies Washington paid American cotton farmers were a violation of global trade rules. The World Trade Organization ruled in Brazil’s favor and the United States had been forced to make annual payments to Brazil.” The AP article stated that, “The agreement resolving the dispute was to be signed Wednesday in Washington by U.S. Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack and their Brazilian counterparts. “The official, who spoke on condition of anonymity because the two countries had not yet announced the deal, said the agreement would allow the Obama administration to fully implement the farm bill passed by Congress in February. That measure included a new insurance program for cotton growers that was crafted to comply with the WTO ruling that the previous cotton support payments violated WTO rules against subsidies.” Meanwhile, Carl Zulauf (Ohio State University), Gary Schnitkey, Jonathan Coppess, and Nick Paulson (University of Illinois) indicated yesterday at the farmdoc daily blog (“Farm Bill Decision Deadlines and the Farm Bill Toolbox”) that, “In an interview with the Red River Farm Network, Secretary of Agriculture Tom Vilsack announced the following time frame for making the three sets of decisions for each Farm Service Agency (FSA) farm: “ 1. September 29 to February 28th. During this period, paperwork dealing with the program yield updating and program acre reallocation decisions can be completed for each FSA farm. “ 2. November 17 to March 31. During this period, paperwork dealing with program choice (Agricultural Risk Coverage – County (ARC-CO), Price Loss Coverage (PLC), and Agricultural Risk Coverage – Individual Coverage (ARC-IC)) can be completed for each FSA farm.” The farmdoc update noted that, “We have developed a seven step process for making the above three decision which is available in the Farm Bill Toolbox at ‘Making the ARC-PLC Decision’ (farmbilltoolbox.farmdoc.illinois.edu/arc-plc-decision-steps.html).” Note also that the farmdoc team will be hosting a free Farm Bill Decision Aids and Programs webinar on Friday- sign up available here. Also yesterday, a tweet from Texas Wheat stated that, “Wheat growers sign up for insurance policies today without the APH adjustment in the #farmbill. Hope RMA can find a way to move forward ASAP” Agricultural Economy Tennille Tracy reported yesterday at The Wall Street Journal Online that, “U.S. corn stockpiles spiked to 1.236 billion bushels Sept. 1, the Agriculture Department said Tuesday, reflecting a sharp increase in output last year. “Corn in storage bins rose 51% from the year earlier, when farmers had just 821.2 million bushels of grain in storage. Market watchers surveyed by The Wall Street Journal anticipated stockpiles of 1.181 billion bushels.” The article stated that, “Soybean inventories totaled 92 million bushels, down 35% from year-ago levels at 140.6 million bushels. Analysts expected 130 million bushels. “USDA also revised its 2013 soybean production to 3.36 billion bushels, up 69.2 million bushels from the previous estimate. “Soybean inventories are at historic lows because of strong demand even though U.S. farmers harvested the third-largest soybean crop last year. Farmers also harvested the largest corn crop in history.” And the Journal article also noted that, “In a separate report Tuesday, the USDA estimated wheat output for 2014. It predicted total wheat production of 2.035 billion bushels, up slightly from last month’s forecast of 2.03 billion. “Production of hard-red winter wheat, the type used to bake bread, totaled 737.9 million bushels while soft-red winter wheat, used in cookies and cakes, is pegged at 455.3 million bushels. Growers will harvest 172.8 million bushels of soft-white winter wheat and 11.5 million bushels of hard-white winter wheat, the USDA said.” Gregory Meyer reported yesterday at The Financial Times Online that, “A report revealing the lowest US soyabean stockpiles in more than four decades failed to arrest a steep price slide for the oilseed as markets looked ahead to a record global harvest…[I]n past years, such a data point might have triggered a price spike. However, this year US farmers have begun to harvest what is expected to be their largest crop ever. Forecasts from Brazil, the US’s nearest rival as a grower, also point to record soyabean production from the crop now being sown.” The FT article indicated that, “Prospects for a rebound in world grain stocks have helped reduce food inflation pressure. The World Bank said on Tuesday that international food prices were at a four-year low, 21 per cent below their peak in August 2012 when an extreme drought in the US damaged harvests. A ‘certain optimism appears to be settling in’, it said.” “‘Does the recent sharp decline in international global prices and the relatively optimistic outlook justify decreased attention on food prices? The answer is a categorical no,’ the bank said in its Food Price Watch.” Jesse Newman reported in today’s Wall Street Journal that, “Corn futures slumped to a fresh five-year low Tuesday after the U.S. Department of Agriculture reported larger-than-expected stockpiles of the grain. “Wheat and soybean prices also fell.” Ms. Newman stated that, “Corn futures for December delivery at the Chicago Board of Trade fell 5 cents, or 1.5%, to $3.20 3/4 a bushel, the lowest price since Sept. 21, 2009. Prices for the grain fell 24% in the quarter ended today…[S]oybeans for November delivery shed 10 1/4 cents, or 1.1%, to $9.13 1/4 a bushel. Prices fell 35% this quarter.” Leslie Josephs reported yesterday at The Wall Street Journal Online that, “Raw-sugar futures fell Tuesday as the front-month contract expired, while cotton prices fell to the lowest level in almost five years…[C]otton futures ended at a nearly five-year low, with the December contract falling 0.2%, to 61.37 cents a pound. Prices tumbled 17% in the quarter after the U.S. Department of Agriculture said U.S. growers would increase production by 28% this year and top cotton importer China revealed it would significantly decrease its purchases of the fiber next year.” In other news, Ramsey Cox reported yesterday at The Hill Online that, “Sen. Heidi Heitkamp (D-N.D.) said she would create ‘buzz’ to get Congress to invest in protecting bees. “‘I’ll keep fighting to protect our bees, and with a colony of help, a little national buzz, and a big sweet tooth, the results can be as sweet as honey,’ Heitkamp wrote in an op-ed on Monday. “Her opinion piece, ‘How Bee Deaths Will Actually Make Your Life Worse,’ came at the end of National Honey Month.” Reuters writer Maggie Fick reported yesterday (“Special Report: Islamic State uses grain to tighten grip in Iraq”) that, “Other fleeing farmers recount similar stories, and point to a little-discussed element of the threat Islamic State poses to Iraq and the region. “The group now controls a large chunk of Iraq’s wheat supplies. The United Nations estimates land under IS control accounts for as much as 40 percent of Iraq’s annual production of wheat, one of the country’s most important food staples alongside barley and rice. The militants seem intent not just on grabbing more land but also on managing resources and governing in their self-proclaimed caliphate.” Also yesterday, USDA’s Economic Research Service (ERS) released a report titled, “Climate Change, Heat Stress, and U.S. Dairy Production;” and ERS summary of the report stated that, “In the United States, climate change is likely to increase average daily temperatures and the frequency of heat waves. Dairy cows are particularly sensitive to heat stress, and the dairy sector has been estimated to bear over half of the costs of current heat stress to the livestock industry. Greater heat stress may lower U.S. milk production 0.6-1.3 percent by 2030.” In trade related news, Reuters writer Robin Emmott reported yesterday that, “The EU’s nominee for health chief pledged on Tuesday to oppose the import of some U.S. foodstuffs such as chemically-treated meat that Washington hopes to be able to sell to Europe under a planned multi-billion-dollar transatlantic trade deal. “In comments at his confirmation hearing in the European Parliament that will delight EU heavyweights France and Germany, Vytenis Andriukaitis also said genetically modified crops posed a ‘philosophical problem’ that threatened Europe’s biodiversity.” The article indicated that, “‘I cannot make any compromises on this issue, whether it is hormones in meat or chlorine baths for poultry,’ Andriukaitis told EU lawmakers in the hearing on his nomination to be head of health and food safety policy in the next European Commission. “Asked repeatedly by EU lawmakers from across the political spectrum where he stood on GM crops, which are widely grown in the Americas and Asia, the Lithuanian nominee urged caution.” Adam Behsudi and Doug Palmer reported yesterday at Politico that, “Australian Minister for Trade and Investment Andrew Robb is also in Washington this week and spent part of Monday in a meeting with Froman to discuss how to conclude TPP negotiations. “‘Australia is committed to concluding an ambitious, commercially meaningful TPP, including high quality market access outcomes. I will be discussing with my U.S. counterpart, Ambassador Mike Froman, how to move the TPP towards successful conclusion,’ Robb said in a press release.” The Washington Post editorial board indicated today that, “The Trans-Pacific Partnership is a proposed free-trade agreement that will knit the United States and 11 nations of South America, North America and Asia more closely together, while providing a geopolitical counterweight to a rising China. The pact would be especially valuable because Japan is willing to join, which would require a long-overdue opening and restructuring of its protected but lackluster economy. Indeed, without Japan, the world’s third-largest economy, the TPP loses much of its strategic significance. “So it was disappointing to learn that a Sept. 24 meeting between American and Japanese trade negotiators in Washington broke up after only an hour over the same old issue, Japanese resistance to U.S. farm exports, that has plagued the two nations’ dealings for decades. The Japanese departed without touching a sandwich buffet that had been laid out in anticipation of an extended working session, according to the Wall Street Journal.” The Post noted that, “Vice President Biden tried to patch things up with [Japanese Prime Minister Shinzo Abe] in a meeting on Friday, which produced a boilerplate pledge to seek an agreement. It will take more than that to revive the momentum for the TPP and close a deal. Back home, Mr. Abe needs to keep the pressure on special interests. Congress could reciprocate by moving ahead promptly with fast-track authority during the post-election lame-duck period — which will take political courage on its part, too.” An update this week from the International Dairy Foods Association indicated that, “The text of the European Union-Canada Comprehensive Economic and Trade Agreement (CETA) released at the end of last week contains provisions on geographical indications (GIs) and reallocates a portion of the World Trade Organization tariff rate quota for cheese to the EU. The U.S. dairy industry expressed concern today that these provisions would raise artificial trade barriers restricting market access for American cheeses to the Canadian market. In addition, CETA provides very limited access to many EU dairy products as a result of the agreement’s prioritization of the GI goals of a few “squeaky wheels,” at the expense of broader gains across the full EU dairy industry, according to U.S. dairy industry trade groups.” Biotech Reuters writer Dominique Patton reported yesterday that, “China’s government has kicked off a media campaign in support of genetically modified crops, as it battles a wave of negative publicity over a technology it hopes will play a major role in boosting its food security. “The agriculture ministry earlier this week announced it would try to educate the public on GMO via TV, newspapers and the Internet.” The article stated that, “Beijing has been a long-time proponent of GMOs, which it sees as broadly safe and as potentially key in helping feed the world’s largest population.” “China has imported millions of tonnes of GMO soybeans each year for the past decade to feed the world’s largest stock of farmed pigs and to produce around 40 percent of the county’s vegetable oil needs. China consumes around a third of the world’s soybeans, and snaps up roughly 65 percent of all imports each year,” the article said. Regulations Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “A coalition of 63 business groups representing everything from farm organizations to oil and natural gas groups, as well as homebuilders, mining, manufacturing and even golf-course trade groups all joined towrite federal regulators on Monday again asking them to withdraw the proposed rule redefining waters of the United States. “The Waters Advocacy Coalition laid out several arguments in a nine-page letter to EPA chief Gina McCarthy and John McHugh, secretary of the Army, who oversees the U.S. Army Corps of Engineers. The Waters Advocacy Coalition raised what the broad mix of trade associations consider as ‘serious concerns’ with the way EPA and the Corps have operated during the public comment period for the proposed rule.” Mr. Clayton stated that, “The coalition of some of the country’s biggest lobby groups argues that new information, some controversial maps and efforts by the agencies to voice their views through blogs and speeches have all undermined rulemaking requirements under the Administrative Procedure Act. The business groups effectively argue EPA and the Corps are ‘creating a moving target for public comment.’” -- Keith Good President FarmPolicy, Inc. Champaign, IL FarmPolicy is a FREE newsletter and is underwritten and made possible by the generous support of McLeod, Watkinson & Miller- Attorneys at Law. Office accommodations for FarmPolicy are provided by Bartell Powell LLP- Attorneys at Law, located in downtown Champaign, Il. To subscribe to the FarmPolicy Email, send a note to, [email protected]. To unsubscribe, send a note to, [email protected]. FarmPolicy is also on: Twitter, Instagram, YouTube and Google+
Posted on: Wed, 01 Oct 2014 10:18:03 +0000
Trending Topics
Recently Viewed Topics
© 2015