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READ the NAFB’s National Ag News for Wednesday, April 10th
Canada Prepping Tariff list as U.S. Section 232 Tariffs Remain
Canada is refreshing a list of tariffs on the U.S. as section 232 steel and aluminum tariffs remain against Canada. Politico reports the effort is part of Canada pressuring President Donald Trump to remove the tariffs he imposed last year. Removing the tariffs, though separate, were thought to be part of reaching an agreement on the U.S.-Mexico-Canada Agreement that will replace the North American Free Trade Agreement. Trump has yet to remove the tariffs that Agriculture Secretary Sonny Perdue has previously said would negate any benefits on the updated trade agreement. Canada has also stated it would not implement the agreement if the tariffs are not removed. David MacNaughton, Canada’s ambassador to the United States, said this week the refreshed list of tariffs is not yet complete, and he expects “a significant number” of agricultural products to be on the new list. While it’s too early to name specific products, he noted some in Canada have called for including apples, pork and ethanol.
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Flooding Harms Ethanol Production, Drives Gas Prices Higher
March flooding throughout the Midwest caused shortages of ethanol as production was reduced, with threats of more flooding on the way. The decreased ethanol production is also fueling the increase seen in gas prices, according to Reuters, as ethanol prices on the coasts spiked due to shortages. Midwest producers have been unable to take advantage of the price increase because of washed-out rail lines. In Southern California, including Los Angeles, the ethanol shortages are one of the factors that are pushing gas prices towards $4 a gallon, a level not seen since 2014. The multi-billion dollar damages in March impacted farms, homes and infrastructure, as well as cutting ethanol production by 13 percent. The biggest problem facing the industry, getting ethanol to market, will continue as repairs are made to railways and U.S. ethanol inventories rise to near record levels. Additionally, storms across the Midwest and Great Plains threaten further flooding, further impacting plants and the transportation systems they rely on.
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USDA WASDE Lowers Corn Use, Soybean Imports
The latest World Agricultural Supply and Demand Estimates released Tuesday by the Department of Agriculture reduces projected corn use and calls for lower soybean imports. This month’s 2018/19 corn outlook projects lower feed and residual use, reductions in corn used for ethanol and exports, and larger stocks. The season-average corn price received by producers is unchanged at a midpoint of $3.55 per bushel. Meanwhile, soybean supply and use changes for 2018/19 include lower imports, higher seed use, and lower ending stocks. Soybean imports are also reduced in line with reported trade through January. The season-average soybean price is forecast at $8.35 to $8.85, unchanged at the midpoint. The outlook for wheat this month is for unchanged supplies but reduced exports and domestic use. The season-average farm price is raised $0.05 per bushel at the midpoint to $5.20. The cotton supply and demand forecasts show lower consumption and higher ending stocks relative to last month. The season-average farm price is unchanged with a midpoint of 70 cents per pound. Finally, the 2019 forecast for total red meat and poultry production is lowered from last month on lower expected beef, pork and broiler production.
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House Approves Colorado River Drought Plan
The U.S. House has passed a drought contingency plan for the Colorado River aimed at improving water conservation. Led by Representative Raúl M. Grijalva (Ra-ull- Gree-al-vah) a Democrat from Arizona, the Colorado River Drought Contingency Plan Authorization Act implements the Drought Contingency Plan. The plan is a water-sharing agreement between Arizona, Colorado, Wyoming, Utah, California, New Mexico and Nevada that accounts for ongoing water shortages and regional climate change throughout the Southwest. The House passed the bill on a voice vote, and once transmitted to the Senate, “it will be considered approved and will be sent directly to the White House.” The agreement establishes new water conservation measures to protect reservoir levels at Lake Mead and Lake Powell, using voluntary water reductions and management strategies to avoid historic lows in Colorado River reservoirs, which would trigger dramatic water delivery cuts to the seven states. Utah Democratic Representative Ben McAdams called the Colorado River the “lifeblood for farmers and ranchers in Eastern Utah,” adding Lake Powell and Lake Mead are operating as designed, but both “at uncomfortably low levels.” McAdams says Congress needed to act quickly so “the new agreement can be implemented, and water conservation efforts can begin.”
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Bayer Releases 107 Studies on Safety of Glyphosate
Amidst lawsuits claiming the product causes cancer, Bayer has released more than 100 studies on the safety profile of glyphosate. Bayer sent 107 reports to the European Food Safety Authority and has made the reports available on its dedicated transparency platform. The files reports include crop protection safety studies as part of being more transparent following the acquisition of Monsanto. Many of the studies were submitted to and evaluated by the U.S. Environmental Protection Agency during its own risk assessment of glyphosate. The new addition to the Bayer Transparency platform follows last December’s publication of more than 300 glyphosate safety study summaries submitted under the EU substance authorization process for plant protection products. In a statement, Bayer called transparency a “catalyst for trust,” adding Bayer stands behind the safety of glyphosate and will continue to vigorously defend its glyphosate-based products. Bayer says the information comes from a “strong body of science that confirms glyphosate and glyphosate-based products are safe when used as directed and that glyphosate does not cause cancer.”
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Largest Plant-Based Food Operation Planned in Indiana
A $310 million investment will create North America’s largest plant-based food facility in Shelbyville, Indiana. The planned facility is slated to become operational in late 2020 and could create more than 400 jobs. Greenleaf Foods, SPC, a subsidiary of Canada-based Maple Leaf Foods Inc., will construct and equip a 230,000-square-foot facility on 57 acres in Shelbyville, some 30 miles southeast of Indianapolis. The facility will more than double the company’s production capacity to meet what it calls surging consumer demand for its portfolio of brands, including, the top two brands in the refrigerated alternative protein category. Fresh refrigerated products represent approximately 24 percent of the total market and delivered 40 percent sales growth in 2018. While burgers are fueling category growth, all refrigerated products are forecasted to deliver double-digit growth for the next 20 years. Dan Curtin, president of Greenleaf Foods, says the new facility “will be a center of plant-based protein excellence.” The Indiana Economic Development Corporation offered Greenleaf Foods, SPC up to $5 million in performance-based, conditional tax credits and up to $1 million in training grants based on the company’s job creation plans.
