Emiko Terazono reported yesterday at The Financial Times Online that, “The wheat market has rallied since the start of the month, with prices up almost 7 per cent. The buying has been backed by a confluence of factors, including concerns about the quality and low protein levels.”
Bloomberg writer Jeff Wilson reported yesterday that, “Wheat futures jumped the most since April on concern that adverse weather will hurt crops in South America and Australia… . [A]bout 20 percent of the maturing wheat crop may be at risk of damage from wet weather in the next 10 days in Argentina, and dry conditions in Australia will increase stress on 25 percent of plants as grain develops, Commodity Weather Group LLC in Bethesda, Maryland, said today in a report. Rain may delay the corn and soybean harvest and sowing of winter wheat from Louisiana to Ohio in the next 10 days, the forecaster said.”
And Bloomberg writer Ranjeetha Pakiam reported today that, “The U.S. may gather 14.54 billion bushels [of corn], topping a government forecast of a record 14.395 billion bushels, a Bloomberg survey showed. The U.S. Department of Agriculture is scheduled to release its projections, based on surveys of farmers and field estimates, at noon in Washington on Oct. 10.”
Jacob Bunge reported yesterday at The Wall Street Journal Online that, “Cargill Inc. said earnings dropped 26% in the latest quarter as the U.S. agribusiness giant’s core grain-trading business grappled with falling crop prices that made farmers reluctant to sell their crops.”
The article noted that, “Sliding corn, wheat and soybean prices, with muted market swings, made it tougher for the company to earn trading profits, which weighed on the results of its biggest revenue-generating unit, Cargill said.
“Farmers in some countries chose to sell less grain the normal, it added. Strong demand for ethanol, however, bolstered the company’s corn-processing business.”
Meanwhile, an update yesterday at The Wall Street Journal Online indicated that, “Recent strong prices paired with low feed costs for Canadian farmers are increasing profitability for hog farmers and helping revive the pork industry.
“‘We are seeing some of the idle barns that were taken out of production three years ago starting to come back into production,’ said Brad Marceniuk, livestock economist with the Saskatchewan Ministry of Agriculture. ‘So we’re seeing some of the barns in Saskatchewan get re-populated.'”
Also, Bloomberg writer Shruti Date Singh reported yesterday that, “Cargill Inc. is working to prevent the return of a disease that has killed about 8 million U.S. pigs in a little over a year, or to minimize its effect as winter approaches.
“The fourth-largest U.S. pork producer hasn’t had any cases of the porcine epidemic diarrhea virus, or PEDv, since March 2014, Mike Martin, a Cargill spokesman, said in an e-mail today. After assessing the risk of PEDv in the summer of 2013, Cargill took steps to better clean its sow barns and hog transport trailers, Martin said.”
In news regarding the California drought, Jim Carlton reported in today’s Wall Street Journal that, “Someday, when California’s persistent drought is finally over, wine lovers may lift a glass to its memory, toasting the extraordinary 2014 vintage it made possible.
“While the three-year dry spell has inflicted widespread economic damage on the Golden State, especially to its giant agriculture industry, an exception is the heart of its famed Wine Country–Napa and Sonoma counties north of San Francisco. Here the warm days, cool nights and dry weather have produced grapes of taste and quality that many vintners say they haven’t seen since the last drought in 2007-2009, and perhaps even better.”
Bloomberg writer Michael B. Marois reported yesterday that, “Californians living in the state’s urban areas cut their water use by 11.5 percent in August as conservation efforts expanded to meet a record drought.”
In other news, Stephanie Strom reported in yesterday’s New York Times that, “Walmart announced on Monday an initiative to reduce the environmental impact of the food it sells and to help customers improve the nutrition in their diets.
“The retailer is the United States’ largest grocer, and food is its biggest business. So it has enormous clout with food producers and food processing companies — influence that it can use, for example, to sway how much water is used to produce a crop, or to shorten the distance a load of strawberries is shipped.”
The Times article pointed out that, “Walmart’s effort to enhance sustainability has four legs: reducing the overall cost of food, including its environmental footprint; increasing access to more nutritious food; making it easier for its customers to eat healthier foods; and improving food safety, with greater transparency about where food comes from and how it is produced.”
And Julie Jargon reported in today’s Wall Street Journal that, “Amid growing pressure for healthier food choices, big restaurant chains have been introducing new lower-calorie menu items that could make a dent in the country’s obesity epidemic, according to a new study.
“The study of 66 large chains, by the Johns Hopkins Bloomberg School of Public Health, found that menu items introduced in 2013 contained 12% fewer calories, on average, than items on the menu only in the prior year. The average 60-calorie reduction could have an impact on how many calories Americans consume on a daily basis, considering 36% of adults eat at a fast-food restaurant each day with a mean caloric intake of 315 calories, the authors said.”
Adam Nagourney reported in today’s New York Times that, “Never mind the battle for governor or the struggle by Democrats to regain their veto-proof majority in the State Legislature. The most contested fight in California this fall may well be here on San Francisco Bay, pitting every elected official from Berkeley against the soft drink industry.
“At issue is a 1-cent tax per ounce on sugary drinks going before voters in November, the latest attempt by states and local governments to curb sugar consumption in the name of improving public health.”
Adam Behsudi, Doug Palmer, Matthew Korade and Alex Guillén reported yesterday at Politico that, “Japanese Prime Minister Shinzo Abe made clear to the country’s lawmakers that he’s still fully behind Japan’s participation in the Trans-Pacific Partnership.
“‘We will create free and large economic zones at the global level,’ Abe said in a Sept. 29 policy speech to the Japanese Diet, according to the English translation posted Monday to the prime minister’s website. ‘We will continue to press forward with economic partnerships strategically, including negotiations for the Trans-Pacific Partnership (TPP) Agreement and negotiations for Economic Partnership Agreements (EPAs) with the EU and East Asia. We will bring about the early entry into force of our EPA with Australia, deepening our economic bonds still further.’
“Abe framed the trade deals as important for the diplomatic and strategic interests of Japan rather than arguing their economic benefits. In the TPP negotiations, the U.S. and Japan are still at odds over Tokyo’s reluctance to lower tariffs on sensitive agricultural goods. Read the full speech here.”
More specifically with respect to Japan, Bloomberg writer Aya Takada reported today that, “Aeon Co., Japan’s largest supermarket chain that sells everything from fresh food to bicycles across 424 stores, plans to become the nation’s largest rice grower.
“Starting with 11 hectares (27 acres) of rice paddies leased from local farmers, its Aeon Agri Create Co. farming subsidiary will start producing the grain north of Tokyo next year, said Aeon spokesman Norihito Ikkai. Chiba-based Aeon aims to lease 100 hectares — almost 50 times the average farmer’s plot — by 2020. That would make it the biggest rice-producing company in the country, according to Arihiro Muroya, chief economist at Norinchukin Research Institute.”
Policy Issues- Farm Bill
New York Times political correspondent Nicholas Confessore penned an article that was posted yesterday at the paper’s webpage titled, “How School Lunch Became the Latest Political Battleground” (the article is from the October 12 edition of the Sunday Magazine).
A twitter generated summary of the lengthy and detailed article provided this general overview: “Inside the Obama administration’s standoff with Republicans, the food industry and the nation’s lunch ladies over the future of the cafeteria.”
Meanwhile, Gary Schnitkey, Jonathan Coppess, Nick Paulson (University of Illinois) and Carl Zulauf (Ohio State University) indicated yesterday at the farmdocDaily blog (“Information for 2014 Farm Bill Decisions“) that, “Deadlines for making commodity program decisions for each Farm Service Agency farm are well into the future. February 27, 2015 is the deadline for yield updating and acre reallocation decisions. March 31, 2015 is the deadline for program choice decisions. Market outlook and projected program payments will be clearer as deadlines approach. As a result, there is no need to rush these decisions. However, obtaining the necessary information to make decisions for each farm is a good task for now. FSA sent a letter in August containing current base acres, program yields, and acres planted from 2009 through 2012. In addition, yields from 2009 through 2013 will be needed when making commodity program decisions.
“In August, the FSA sent a letter to each landowner and farm operator having an interest in an FSA farm (click here for a video describing the letter). Following the letter, there was a series of data sheets giving current base acres, program yields, and planted acres for each FSA farm.”
Yesterday’s farmdoc update added that, “More detail on information needs is provided in Step 1 of the ARC-PLC Decision Steps. Currently, efforts focused on two areas will have value. First, make sure that FSA documents are available and have the correct information.Second, determine and document 2009 through 2013 yields for each FSA farm.”
Note also that the farmdoc team will be hosting a free webinar Friday on Farm Bill Decision Aids and Programs.
Rebecca Shabad reported yesterday at The Hill Online that, “Starting next month, new and existing family farmers will be able to borrow more money from the federal government, the Agriculture Department (USDA) announced Tuesday.
“Starting Nov. 7, farmers will be able to take out microloans up to $50,000, up from the previous limit of $35,000.”
And, a news release yesterday from Sen. Tim Johnson (D., S.D.) stated that, “[Sen. Johnson] joined with 31 of his Senate colleagues from both sides of the aisle in sending a letter to Senate Appropriations Committee Chairwoman Barbara Mikulski (D-MD) and Ranking Member Richard Shelby (R-AL) urging them to reject any efforts that would undermine, weaken, or suspend Country of Origin Labeling (COOL) through the appropriations process for the remainder of Fiscal Year 2015.”
The Washington Post editorial board opined in today’s paper that, “When is a victory for the United States not exactly a victory for the American taxpayer? When it’s an international agreement like the one the Obama administration has just reached to settle a long-running dispute with Brazil over cotton subsidies [more details on the settlement here].”
Policy- Egg Production
Reid Wilson reported yesterday at The Washington Post Online that, “An interstate feud over chicken coops ended with a federal judge last week siding with a California law that seeks to force producers to provide humane living spaces for egg-laying hens [additional details here].”
The Post update explained that, “Producers in other states don’t actually have to build new facilities, but they would be barred from selling their wares in California if they don’t. That’s a huge risk for the industry, though: Californians import about 4 billion eggs a year, according to Humane Society statistics.
“And the law does not apply to all egg producers; it only applies to shell eggs, like the ones in 12-packs at grocery stores. Producers who make egg products, like egg whites or liquid products, don’t face the same restrictions.”
Mr. Wilson added that, “The Missouri suit is the latest in a string of litigation against the California law. Rep. Steve King (R-Iowa) has tried to insert an amendment into the Farm Bill and other legislation that would prohibit states from imposing standards on agricultural products from out of state if the standards are stricter than those imposed by the federal government. Three other lawsuits have been filed against California, all of which have failed.”
Ken Anderson reported yesterday at Brownfield that, “Iowa 4th District Representative Steve King, a vocal critic of California’s egg law and the animal rights groups that support it, says the battle is far from over.
“‘There’s another litigation path and I’m confident we’ll put together the resources and the plaintiffs–and this time, a list of plaintiffs that there’s no question about their standing to be able to take this thing further through the courts,’ King says.”
Mr. Anderson noted that, “And King tells Brownfield he is prepared to revive his legislation that would prohibit any state from enacting laws dictating how agricultural goods will be produced in another state.
“‘So we’ve got two avenues–litigate and legislate. I want to be involved in both of them,’ King says. ‘And I’m not going to take my foot off the throttle until we get this completed and save the commerce clause of the Constitution–and livestock.'”
A news release yesterday from Sen. Joe Donnelly (D., Ind.) indicated that, “[Sen. Donnelly] today requested that the Environmental Protection Agency (EPA) and Army Corps of Engineers clarify and revise the jointly proposed rule defining ‘Waters of the United States’ within the Clean Water Act (CWA) and the interpretive rule regarding exemptions for certain agricultural conservation practices. Donnelly expressed concern about the impact of the proposed rule and interpretive rule. He urged the EPA and Army Corps to do their due diligence as they aim to clearly define the rule, while engaging with stakeholders to ensure the rule is effective.”
“In the letter to EPA Administrator Gina McCarthy and Army Secretary John McHugh, Donnelly wrote, ‘Clean water is essential to our local communities and economy, and I support efforts to clearly define CWA protections. An unworkable rule will likely halt ongoing water quality improvements and create further bureaucratic confusion; therefore, it is important for the agencies to take the time to ensure the rule avoids unintended negative consequences to existing environmentally-friendly practices in agriculture or property development. The rule should also avoid the negative economic impacts of excessive permitting, especially on small businesses.'”
An update yesterday from Sen. John Hoeven (R., N.D.) stated in part that, “[Sen. Hoeven] today issued the following statement in response to the administration’s decision to extend the comment period for its proposed Waters of the United States rule: ‘While extending the comment period to allow for more input is fine, the fact is that the EPA needs to rescind the rule. The agency is asserting jurisdiction beyond that which has been granted to it by Congress…I will continue my efforts to either de-authorize the rule or defund it as a member of the Senate Appropriations Committee.'”
And an update yesterday from the American Farm Bureau Federation (AFBF) indicated that, “The [AFBF] is urging the Senate to tell the Environmental Protection Agency to withdraw its proposed Waters of the U.S. Rule and restore the integrity of the rulemaking process.
“In a letter sent to all members of the Senate, AFBF cited a recent letter sent by the Small Business Administration’s Office of Advocacy to the EPA. After a thorough evaluation, the SBA office’s letter called on the EPA and the Corps of Engineers to withdraw the WOTUS rule.”