READ the NAFB’s National Ag News for Wednesday, November 27th
Sponsored by the American Farm Bureau Federation
2019 Trade Aid May Violate WTO Commitments
A recent independent report suggests U.S. trade aid in 2019 for farmers may surpass limits set in World Trade Organization commitments. The report for the American Enterprise Institute by Joe Glauber, a former Department of Agriculture Chief Economist, suggests the size of payments made to producers in 2019 may encourage other WTO members to challenge the payments. Glauber writes, a long-term concern is “how trade compensation comports with U.S. obligations in the WTO and, more generally, how it will affect future U.S. efforts to seek further reforms in the WTO.” President Donald Trump and his administration have approved the payments, roughly $28 billion, to offset any harm by other countries retaliating against the Trump trade agenda. Glauber says current WTO rules require that annual U.S. domestic supports that distort trade flows not exceed a maximum of $19.1 billion. Since the WTO disciplines went into effect in 1995, United States levels of support have remained in that annual limit.
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NPPC: Improved Pork Trade with China can Lower Trade Deficit
Securing zero-tariff access to China for U.S. pork would be an economic boon for American agriculture, according to the National Pork Producers Council. Based on an analysis by Iowa State University Economist Dermot (Der-Muht) Hayes, NPPC says unrestricted access to the Chinese chilled and frozen market would reduce the overall trade deficit with China by nearly six percent, and generate 184,000 new U.S. jobs in the next decade. NPPC Tuesday launched a digital campaign to spotlight the importance of opening the Chinese market to U.S. pork as trade negotiations continue. According to Dr. Hayes’ analysis, U.S. pork would generate $24.5 billion in sales if U.S. pork gained unrestricted access to the world’s largest pork-producing nation over ten years. NPPC President David Herring says the analysis shows, “The U.S. pork industry is missing out on an unprecedented sales opportunity in China when it most needs an affordable, safe and reliable supply of its favored protein.”
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Canada Rail Strike Prompts Potash Mine Shutdown
Nutrien Ag Solutions says it will be forced to curtail production at its largest potash mine in Canada due to the CN rail strike. Employees were sent notices this week, indicating the mine will be shut down for two weeks starting on December 2. The company says, “It is extremely disappointing that in a year when the agricultural sector has been severely impacted by poor weather and trade disputes, the CN strike will add further hardship to the Canadian agriculture industry.” Nutrien is the world’s largest provider of crop inputs and services, producing and distributing 27 million metric tons of potash, nitrogen and phosphate products worldwide. More than 3,000 CN rail employees are on strike, impacting agricultural shipments of grains, fertilizers and even propane for grain drying. A Fertilizer Canada official says an estimated $200 million to $300 million worth of fertilizer shipments will be impacted by the strike, calling on workers and the company to “find common ground” on labor disputes.
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Organic Valley Unaffected by Dean Foods Bankruptcy
When Dean Foods filed for bankruptcy this month, questions surfaced regarding the status of partnerships with the company and the health of the dairy industry. However, Organic Valley, a Wisconsin-based organic cooperative, says it’s Organic Valley Fresh LLC joint venture, which represents a small fraction of its milk processing and distribution, falls outside of the Dean Foods filing. The cooperative says its members are “disheartened by Dean Foods’ bankruptcy as it represents the many challenges dairy farmers face in getting their products to market.” Organic Valley officials say the cooperative remains strong and innovations have bolstered the business overall. Dean Foods this month announced the chapter 11 bankruptcy filing, adding the company was in advanced talks with Dairy Farmers of America regarding a potential sale. The National Milk Producers Federation says Dean’s bankruptcy is creating uncertainty for some producers, but “seen from another angle, it’s just another disruption this sector will be able to withstand,” due to the strength of cooperatives and their dairy farmer-owners.
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Ag Innovation Necessary to Address Climate Change
The American Seed Trade Association says agriculture innovation will help combat and mitigate the impacts of climate change. In comments submitted to the House Select Committee on the Climate Crisis, ASTA says, “The development and commercialization of innovative plant products is already playing a significant role in helping U.S. agriculture reduce greenhouse gas emissions. For U.S. agriculture to maximize its potential to reduce greenhouse gas emissions and increase carbon sequestration, several things are needed, according to ASTA, including additional private and public sector investment in agriculture research. The organization says agriculture also needs rational government policies regarding evolving innovation in the agriculture space, and programs that incentivize farmers to adopt conservation practices. The comments note plant breeders are helping through developing better and higher-yielding crop varieties. ASTA says, “It’s critical we continue moving forward, through robust investment in agriculture research and development, to drive forward the next generation of innovative solutions to meet the new and emerging challenges of tomorrow.”
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USDA Announces Broadband Investments in Wyoming, Kansas
The Department of Agriculture this week announced two more investments as part of its new rural broadband effort. Natural Resources Conservation Service chief Matthew Lohr announced the $5.2 million investment for broadband infrastructure in Kansas as part of the Reconnect Pilot Program, while USDA also announced a $4.79 million investment in Wyoming. In Kansas, Wave Wireless, LLC will use the funding to deploy a fiber broadband network servicing more than 1,300 households. In Wyoming, the funds will improve and create broadband connections in the county of Sweetwater, benefiting roughly 320 homes. USDA received 146 applications this year requesting $1.4 billion in funding through the ReConnect Program. The funds enable the federal government to partner with the private sector and rural communities to build modern broadband infrastructure in areas with insufficient Internet service. Insufficient service is defined as connection speeds of less than ten Megabit download and one Megabit per second upload speeds. Additional investments will be made in the coming weeks.
