READ the NAFB’s National Ag News for Thursday, November 8th
Sponsored by the American Farm Bureau Federation
Now What Happens with the Farm Bill?
House Ag Chair Michael Conaway and the GOP conference committee members have to decide whether or not they’ll give some ground on some of the biggest sticking points of the farm bill debate in order to get a bill passed this year. Those disputes include conservation, commodity policy, and work requirements for SNAP program recipients. Politico says reaching a deal while they still hold the majority in the House of Representatives would help Republicans reach some of their goals before they lose their leverage. House Democrats could choose to start from scratch next year when they assume control, which Politico says the industry might not want to see. It’s possible that Democrats may pull the farm bill to the left with amendments to rein in subsidies on wealthy farmers or adjust federal crop insurance. Ranking member Collin Peterson of Minnesota won a close race on election day and is expected to retake the gavel as chair of the House Ag Committee. Peterson has said he would prefer to not start over and write a new farm bill.
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California Passes Ban on Caging Farm Animals
Californians overwhelmingly passed a ban on confining farm animals in cages during Tuesday’s election. The Hagstrom Report says Proposition 12 sets space requirements for laying hens, breeding pigs, and calves raised for veal. Prop 12 also bans the sale in California of meat and eggs not raised according to state standards. It even bans the sale of products from out of state that also doesn’t meet those same California standards. Kitty Block, the Acting President of the Humane Society of the U.S., says, “California voters sent a loud and clear message that they reject the cruel cage confinement in the meat and egg industries.” Animal protection, environmental, food safety, and sustainable farming groups all spearheaded the development and eventual passage of Prop 12. More than 600 California veterinarians, over 100 California family farmers, and thousands of volunteers all came out in support of the measure. Now that California has passed Prop 12, a dozen states have laws against extreme animal confinement. Some of the nation’s largest food retailers like Walmart, Costco, Burger King, and hundreds of others all require their meat and egg suppliers to eliminate cages.
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Mississippi Senate Seat Heads to Runoff Election
Mississippi will find its next Senator during a runoff election later this month. Current Senator Cindy Hyde-Smith, appointed to fill the seat when Thad Cochran retired, will face former Clinton-era Secretary of Agriculture Mike Espy. Hyde-Smith is the first woman to hold a Senate seat from Mississippi and served as the state’s Commissioner of Agriculture. She also was a member of the Mississippi State Senate for 12 years and chaired the state Agriculture Committee for eight of those years. Hyde-Smith held a seat on the much-coveted Senate Agriculture Appropriations Subcommittee in D.C. Espy is a Democrat and the first African-American to ever hold the Secretary of Agriculture position at the USDA. Espy held the job from 1997-1998 when he resigned after being acquitted of charges for receiving improper benefits. He’s been working as a lawyer in Mississippi since then. Neither Hyde-Smith or Espy got 50 percent of the votes, the necessary threshold for an outright win. They’ll run against each other in a special election on November 27th.
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World Wheat Production Forecast Drops
As the international price of wheat firms up, global supply and demand balance is going to tighten in 2018-2019. That forecast comes from the Food Outlook, a biannual report published by the Food and Agricultural Organization of the United Nations. The global wheat production forecast is set to drop by 4.3 percent from the record level of last year. Total production is now predicted to add up to 727.9 million tons. Australia, China, the Russian Federation, and the EU are the primary causes of the year-over-year contraction. Those nations are also the primary reason for the overall lowering of the global production outlook. Production is expected to expand in both North and South America. Wheat utilization around the world will slightly increase in 2018-2019, with the minimal gain held in check by lower use rates in the Russian Federation and Ukraine. However, global wheat use for food production is expected to rise one percent higher. Because world production is expected to fall below usage level, global wheat stocks in 2019 will drop 4.5 percent lower than the record-high opening level.
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R-CALF Checkoff Lawsuit Expands to 13 Additional States
R-CALF has filed a lawsuit in Montana against the USDA over its beef checkoff program. A Montana federal district court granted an R-CALF motion allowing the suit to expand to 13 additional states. The district court recently granted R-CALF an injunction that stopped the USDA from “violating the U.S. Constitution” by forcing producers to fund the private speech of the private Montana Beef Council. The preliminary injunction was recently upheld by an appellate court. The ruling doesn’t apply the Montana temporary injunction to those other states. What it does do is allow R-CALF to proceed with its case looking for a permanent injunction against the USDA in Montana. If that permanent injunction is granted, it will likely apply to those other states. Thanks to the injunction, Montana producers can now decide where they want half the mandatory assessments collected from them spent. They can either choose to have half that money spent by the Montana Beef Council or all of it spent by the checkoff program’s Cattlemen’s Beef Board, which is subject to government fiscal controls. CEO Bill Bullard says on the R-CALF website that, “By redirecting money to the Cattlemen’s Beef Board, rather than to their state beef councils, cattle producers can reduce the amount of money going into the NCBA under their ‘pay-to-play’ scheme, which we believe is a form of money laundering.”
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Tariffs Spur Demand for Brazil Tractors
One of the biggest U.S. tractor companies has decided to drop China as a product supplier. Bloomberg says that should be good news for the Trump Administration, but AGCO Corporation is turning to Brazil to replace those products. The reason is the company wants to avoid the 25 percent U.S. tariffs on Chinese imports. AGCO Chief Executive Martin Richenhagen expects that tractor exports will grow to a total of 4,000-to-5,000 units next year. Bloomberg says this is another unintended consequence of the trade war between China and the U.S. that has turned the global economy upside-down and put a damper on expectations. AGCO, based in Duluth, Georgia, and its biggest rival Deere and Co., have both said there will be negative impacts from a trade war between the world’s two largest economies. AGCO is concerned about the trade war putting a lot of pressure on the nation’s farmers, while Deere and Co. stressed it supports and wants open markets and free trade. AGCO’s tractor sales in Brazil could get a boost as China continues to move away from American soybeans and replaces them with Brazil soybeans.
