NATIONAL AG NEWS SPONSORED BY THE AMERICAN FARM BUREAU FEDERATION

National Ag News for May 27, 2022

Administration Steps to Strengthen Food Supply Chains

Ag Secretary Tom Vilsack announced more support, resources, and new rules designed to strengthen the American food supply chains. The new actions will promote fair and competitive agricultural markets, prevent abuse of farmers by poultry processors, and make prices fairer for farmers and American consumers. One of those actions is a proposed rule under the Packers and Stockyards Act intended to protect poultry growers from unfair and deceptive practices in the meat and poultry industry. “Growers say the ‘tournament system’ of payment is ripe for abuse,” Vilsack says. USDA will also make $200 million available to provide financing to independent meat and poultry processors to start up or expand operations. Vilsack also announced another $25 million in investments for workforce training designed to create and expand upon good-paying jobs that can strengthen the meatpacking industry by attracting and retaining employees. USDA is also planning a complete review of its programs to ensure they promote competition.

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New Chicken Regulations Are a “Solution Searching for a Problem”

The USDA announced new regulations for the poultry industry that the National Chicken Council isn’t supporting. “This is a solution looking for a problem,” says Mike Brown, NCC President. “The last thing the administration should be doing is pushing increased regulations, red tape, and costs onto businesses at a time of record inflation and input costs.” The organization says this will do nothing to lower food prices, increase competition, or reduce inflation. “This will raise grocery bills for Americans and increase food insecurity,” Brown adds. The NCC says raising chickens under contract is one of the most reliable sources of income to help keep families on the farm. The contract provides income and insulation from market risks like feed costs, floods, and droughts. “It’s ironic that these regulations are getting proposed under the guise of promoting competition,” Brown says. “The performance-based structure of raising chickens is literally the definition of competition.”

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Producers Can Request Voluntary CRP Termination

The USDA will allow participants in the Conservation Reserve Program to request voluntary termination if they are in the final year of a CRP contract. They can make that request following the end of the primary nesting season for the fiscal year 2022. Participants approved for this one-time, voluntary termination don’t have to repay rental payments. It’s flexibility implemented this year to help mitigate the global food supply challenges caused by Russia’s invasion of Ukraine and other factors. “We’ve heard from many producers who want to better understand their options to help respond to global food needs,” says FSA Administrator Zach Ducheneaux. Producers will be able to hay, graze, begin land-preparation activities, and plant a fall-seeded crop before October 1, 2022. In colder climates, this flexibility may allow for better establishing a winter wheat crop or better prepare the land for spring planting. FSA will mail letters explaining options to producers with expiring contracts.

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Over 40 Groups Ask USTR for Tariff Relief

A diverse group of more than 40 American food and agriculture leaders sent a letter to U.S. Trade Representative Katherine Tai on tariffs. The groups are asking for the suspension, reduction, or elimination of tariffs to ease the burden of retaliatory tariffs on rural America. The letter was led by Farmers for Free Trade and came as the administration is working on a mandatory review of recently increased tariffs. Tariff changes are under review as part of the White House’s efforts to address inflation. “Tariff relief could not come at a more important time,” the letter says. “Rural America and small businesses are facing significant challenges due to the lingering impacts of COVID-19, logistical and supply chain disruptions, record inflation, and the increasing impact of the war in Ukraine.” The groups say removing tariffs on food and agriculture inputs and subsequent removal of burdensome retaliatory tariffs would provide immediate relief to U.S. food producers.

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Strong Global Demand for Beef Facing Inflation Pressures

The U.S. Meat Export Federation began its spring conference this week in San Antonio, Texas. USMEF President and CEO Dan Halstrom gave attendees a report on first-quarter red meat exports, which were impressive despite mounting economic and logistical challenges. He’s optimistic that 2022 results will be strong but cautioned that inflation pressures around the world are constricting consumer spending power. “To date, demand for U.S. red meat has been as strong as I’ve ever seen in all my years in the meat business and remarkably resilient,” Halstrom says. “But the question is at what point do these inflationary pressures start to constrict disposable income for the global consumer, and we see a crack in demand?” Red meat exports could potentially approach the $20 billion milestone this year. He also highlighted foodservice and retail trends that exploded during COVID-19 and are likely here to stay, such as grocery sales through e-commerce platforms.

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Diary Industry Supports USDA Container Program for Ag Exports

The National Milk Producers Federation and the U.S. Dairy Export Council welcome the USDA plan to offer additional support to agricultural exporters through the Commodity Container Assistance Program. The initiative will provide funding from the Farm Service Agency to exporters to reduce the costs of sourcing containers at the Oakland and Seattle-Tacoma “pop-up” port locations. “We’ve been asking for relief from these ocean shipping challenges for two years,” says NMPF president and CEO Jim Mulhern. “While we continue to seek solutions from carriers and Congress, these steps demonstrate USDA understands the challenges. This should offer immediate relief for exporters.” The pop-up sites are intended to offer off-terminal locations for empty container storage, increase access for agricultural shippers to use them, and free up port terminal space for freight operations. The FSA payments will help cover the costs of moving the containers between ports and pop-up yards, as well as storage at the pop-up sites.

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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.