NATIONAL AG NEWS SPONSORED BY THE AMERICAN FARM BUREAU FEDERATION

National Ag News for May 19, 2022

Study: Agricultural Export Programs Offer Excellent Returns

A recent economic study indicates public-private U.S. agricultural export market development programs remain highly effective and generate a substantial return on investment. The study, welcomed by the Coalition to Promote U.S. Agricultura Exports, was conducted by IHS Markit and Texas A&M University. The researchers say MAP and FMD have accounted for 13.7 percent, or almost $648 billion, of all the revenue generated by U.S. agricultural exports between 1977 and 2019. In letters sent last month, members of the Coalition and additional organizations asked U.S. House and Senate agricultural appropriations subcommittee leadership to maintain funding of at least $200 million for the Market Access Program and $34.5 million for the Foreign Market Development program in fiscal year 2023. Citing strong competition for growing global food demand, the organizations said, “these modest investments are invaluable as we race to reclaim global export markets shut off during the pandemic and diversify markets amid war and geopolitical unrest.”

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NCBA Condemns Meat and Poultry Special Investigator Act

The National Cattlemen’s Beef Association Wednesday condemned the Meat and Poultry Special Investigator Act of 2022, approved by the House Agriculture Committee. NCBA Vice President of Government Affairs Ethan Lane says the legislation was rushed through the legislative process “without consideration of the confusing bureaucratic mess it would create.” The special investigator bill would create a new position in the Department of Agriculture with prosecutorial and subpoena power. The North American Meat Institute agrees in a statement, adding, “USDA and the Department of Justice already have the authorities this bill would grant making this expansion of government bureaucracy.” However, National Farmers Union says the bill would increase enforcement of competition laws and boost USDA’s resources to investigate abusive market practices. NFU President Rob Larew says, “Greater enforcement of competition laws by USDA will better ensure America’s independent family farmers and ranchers have a chance to succeed in today’s marketplace, now dominated by monopolies.”

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Spanberger, Gonzalez, Introduce American Food Supply Chain Resiliency Act

House lawmakers Abigail Spanberger, a Virginia Democrat, and Anthony Gonzalez, An Ohio Republican, introduced the American Food Supply Chain Resiliency Act this week. The bipartisan legislation seeks to strengthen supply chains across the agriculture industry and lower food costs for consumers. The bill would establish Supply Chain Regional Resource Centers through cooperative agreements with the Department of Agriculture. The centers would offer locally tailored coordination, technical assistance, and grants — leading to more resilient, diverse, and connected supply chains. USDA recently announced its intention through the Agricultural Marketing Service to create Regional Food Business Centers. The Spanberger-Gonzalez legislation would codify the centers, renaming them Supply Chain Regional Resource Centers. Under their legislation, these Centers would support supply chain coordination in their region, fund technical assistance providers to offer guidance to food businesses and farms, and provide small grants to entities looking to expand or start their operations in a certain region.

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Food Away From Home Spending Dropped During Pandemic

The first year of the COVID-19 pandemic saw the temporary closures of restaurants in the United States, prompting a decline in Food Away From Home Spending. Spending decreased at each of the nine types of food-away-from-home outlets measured in the USDA Economic Research Service’s Food Expenditure Series from 2019 to 2020. Although existing infrastructure, such as drive-through services, enabled limited-service restaurants to comply with pandemic safety measures, these establishments still saw a 6.7-percent decline in annual spending. Full-service restaurants, which accounted for more Food Away From Home spending than all other outlets from 1997 to 2019, experienced a decrease in spending of 31.7 percent in 2020. This was partly due to pandemic-related closures during some of the year. Hotels and motels, recreational places, and drinking establishments also experienced closures and capacity restrictions throughout much of 2020. Food spending fell 42.9 percent at hotels and motels, 37.7 percent at recreational places, and 40.7 percent at drinking places.

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Wholesale Prices Show Another Big Increase

The Consumer Brands Association cautioned that rising costs on manufacturers have not slowed and show no signs of doing so. Citing data from the Bureau of Labor Statistics last week, The April Producer Price Index showed an 11 percent year-over-year rise. For food specifically, wholesale prices rose 14.5 percent, showing the outsized impact consumer packaged goods companies are feeling. Consumer Brands President and CEO Geoff Freeman says, “This is the 14th straight month that we’ve seen wholesale prices push above the historical trend line.” Freeman adds, “The percentages may fluctuate month-to-month, but the story has remained the same — the cost to make and ship goods is out of control.” Since the pre-pandemic era, wholesale costs for the industry have increased 35 percent. The spike significantly impacts industry operations, as approximately 70 percent of CPG companies’ costs come from ingredients and energy. Further, key commodities showed sharp increases over last April, along with freight and fuel.

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Proposed Fertilizer Policies Could Protect Farmer Profits, Environment

A new University of Illinois study explores potential policy solutions to reduce nitrogen loss while still protecting farmers’ bottom lines. Federal and state governments have shied away from regulating nitrogen fertilizer use, but voluntary and incentives-based programs have not been particularly successful, according to the researchers. University of Illinois assistant professor Nicolas Martin says, “We want to generate discussions on such policies, rather than provide definitive answers on which policy will be the best.” The first policy would modify price ratios, imposing a tax on nitrogen at a set ratio relative to the corn price. The second policy would charge farmers a fee for excess nitrogen leaching from fields above baseline levels. The third would subtract nitrogen removed in grain at harvest from nitrogen applied as fertilizer and would charge a fee for the balance. The final policy reflected a voluntary nitrogen reduction program like current programs in the Midwest. Among the four policies, the nitrogen leaching fee showed the best outcome.

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By Tucker Allmer - The BARN

Tucker Allmer & the BARN are members of the National Association of Farm Broadcasting (NAFB), the Colorado FFA Foundation, the Colorado 4H Foundation, the Colorado Farm Show Marketing Committee, 1867 Club Board Member, Denver Ag & Livestock Club Member, the Weld County Fair Board, the Briggsdale FFA Advisory Council, Briggsdale 4H Club Beef Leader & Founder / Coordinator of the Briggsdale Classic Open Jackpot Show.

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