READ the NAFB’s National Ag News for Monday, April 5th
Sponsored by the American Farm Bureau Federation
Biden Announces Infrastructure Plan
President Biden released a $2 trillion infrastructure plan that will address needs in rural America that agricultural stakeholders have been asking Washington to address. The Hagstrom Report says the proposal will cover many traditional infrastructure projects like roads, bridges, and inland waterways. The plan will also attempt to reduce greenhouse gas emissions. But the big benefit to rural America will include trying to bring high-speed broadband service to the most remote parts of rural America. Ag Secretary Tom Vilsack says, “The plan promises to close the broadband gap in rural America for millions of Americans, something that’s vital for health care, education, and employment in the digital age.” The package would be partly financed by increasing the corporate income tax rate from 21 to 28 percent. The rate increase has already generated growing opposition in the business world and among many lawmakers on Capitol Hill. The U.S. Chamber of Commerce and the Business Roundtable have already rejected the idea of raising the corporate tax rate. The Chamber says the plan will slow the country’s economic recovery from COVID-19 and reduce global competitiveness.
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Hog Slaughter Line Speed Rule Tossed Out
A federal court invalidated a Trump-era rule that allowed hog slaughter plants to run without line speed limits. The United Food and Commercial Workers Union filed a lawsuit against the USDA challenging a 2019 rule change that allowed faster slaughter speeds. The union said in its lawsuit that the change made working conditions unsafe for line employees. Reuters says the ruling from a Minnesota federal judge won’t be received well by the U.S. pork industry, which is trying to rebuild supplies of meat after COVID-19 closed slaughterhouses last year. Workers at Seaboard Foods, the second-largest pig producer in the country, told Reuters that faster line speeds increased worker injuries at the plant. The Biden Administration, which promised to make worker safety a priority, withdrew a Trump proposal to allow all poultry plants to work at faster-than-established line speed limits. The pork rule was going to be more difficult to reverse because it was already in effect. Food & Water Watch, a U.S.-based environmental group, calls the ruling “a resounding victory for the safety of plant workers.” Senior staff attorney Zach Corrigan adds that “This decision should send a signal to the Biden administration that it should reverse course and consider every aspect of those rules.”
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Weekly Ethanol Production Rises While Inventories Drop
The Energy Information Administration says ethanol output surged before last week while inventories shrank. Ethanol production increased to an average of 965,000 barrels a day in the week ending on March 26. That’s up from the 922,000 barrels produced daily during the previous week. The Midwest, by far the largest producing region, averaged 917,000 barrels per day, up from 876,000 a week earlier. Gulf Coast production jumped to an average of 18,000 barrels per day from 14,000 barrels. The East Coast ethanol output didn’t change from week to week, staying at an average of 12,000 barrels a day. Government data also shows West Coast production staying at 9,000 barrels. The Rocky Mountain region was the only one that saw its production drop, averaging around 9,000 barrels a day. In the meantime, U.S. stockpiles of ethanol dropped to 21.14 million barrels in the week ending on March 26. The Energy Information Administration says that’s down from 21.809 million a week earlier and the lowest since the seven days that ended on November 20.
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AFIA Applauds Vilsack Enthusiasm for TPA
The American Feed Industry Association commends Ag Secretary Tom Vilsack for his leadership in asking Congress to renew Trade Promotion Authority legislation. AFIA’s President and CEO Constance Cullman says the animal feed and pet food industries are encouraged by Secretary Vilsack’s recognition of the importance of renewing TPA and is hopeful that the Biden administration intends to take an active and supportive position in renewing it. “As trade in the animal food sector continues to grow, we applaud Secretary Vilsack for standing behind U.S. agriculture and being the first within the administration to express both the need and support for TPA renewal.” The Trade Promotion Authority allows the U.S. trade representative to enter trade discussions with negotiating positions and priorities already agreed upon by Congress, which provides potential trading partners with the confidence that Congress will likely ratify any final agreement. TPA is not a new idea; it’s been utilized during presidential administrations going back to 1974 and has only been authorized four times. As the administration focuses on domestic issues, it’s not clear if it will request TPA renewal before the deadline this summer.
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CFTC Charges Washington State Rancher and Feedyard in $233 Million Scheme
The Commodity Futures Trading Commission filed a civil enforcement action in the U.S. District Court in eastern Washington state. The action charges Easterday Ranches, Incorporated, a Pasco, Washington-based cattle feedyard, and Cody Easterday, the co-owner and former president of Easterday Ranches, for engaging in cattle fraud in connection with the sale of more than 200,000 non-existent head of cattle to a beef processor. Easterday is also charged with making false statements to an exchange and violating exchange-set position limits. The CFTC complaint seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans to Easterday, and a permanent injunction against further violations of the Commodity Exchange Act and the CFTC. According to the complaint, Easterday accumulated more than $200 million in losses over a decade from speculative trading in the cattle futures market. To meet margin calls, Easterday came up with a scheme to defraud one of his biggest business partners, a South Dakota-based beef producer. Easterday Ranches submitted fake invoices and reimbursement requests relating to more than 200,000 head of cattle it never actually purchased or raised on the producer’s behalf. Easterday received more than $233 million to which it wasn’t entitled.
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20 States Support NAMI Against Prop 12
A total of 20 states filed a brief with the Supreme Court supporting the North American Meat Institute’s petition challenging the constitutionality of Proposition 12 in California. “The governments of nearly half the states agree that if California is allowed to apply its laws of conduct in other states, a single state will dictate policies in all others,” says Meat Institute President and CEO Julie Anna Potts. “That will encourage a patchwork of regulations and threaten the free flow of interstate commerce.” The brief before the Supreme Court says, “If Prop 12 freely permits California to impose regulations directly on out-of-state commercial conduct and thereby fosters inconsistent state regulatory obligations, it enables tit-for-tat regulatory conflict.” They say the ultimate result may be a transformation of America’s current integrated national market into a patchwork of regulatory regions. The main question in the case is whether the U.S. Constitution permits California to extend its police power beyond its territorial borders by banning the sale of wholesome pork and veal products sold into California unless out-of-state farmers restructure their facilities to meet animal-confinement standards dictated by California.
