NATIONAL AG NEWS SPONSORED BY THE AMERICAN FARM BUREAU FEDERATION
National Ag News for February 22, 2023
USDA: Ethanol Production Rebounds from Pandemic Lows
Production and consumption of ethanol as a transportation fuel grew significantly over the last three decades in the United States before plateauing in recent years. The ethanol share of finished motor gasoline has moved concurrently with consumption, leveling off near ten percent in 2022. Steps taken in the spring of 2020 to combat the spread of COVID-19, such as increased remote work and school, and other social distancing efforts, resulted in sharp declines in a variety of ethanol market metrics. For example, from 2017–19, U.S. ethanol production averaged 1.33 billion gallons per month, while consumption averaged 1.18 billion gallons per month. During the pandemic lows, these values fell by 46 percent and nearly 40 percent, respectively, causing the ethanol share of finished motor gasoline to decline to nine percent. More recently, estimates for all three figures have largely recovered and leveled off. However, adoption of hybrid and electric vehicles is expected to put downward pressure on gasoline consumption and dampen prospects for renewed growth in fuel ethanol demand.
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USDA Invests More than $48.6 Million to Combat Climate Change
The Department of Agriculture will invest more than $48.6 million this year through the Joint Chiefs’ Landscape Restoration Partnership. The projects mitigate wildfire risk, improve water quality, restore forest ecosystems, and ultimately contribute to USDA’s efforts to combat climate change. This year, the Forest Service and Natural Resources Conservation Service will invest in projects. Forest Service Chief Randy Moore says, “The need for cross-boundary wildfire risk reduction work as part of our Wildfire Crisis Strategy is more urgent than ever.” The partnership enables the Forest Service and NRCS to collaborate with agricultural producers and forest landowners to invest in conservation and restoration at a large enough scale to make a difference. Working in partnership, and at this scale, helps reduce wildfire threats to communities and critical infrastructure, protect water quality and supply, and improve wildlife habitat for at-risk species. USDA is investing $31.2 million in 25 existing projects and more than $17 million in 14 new projects.
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Ocean Freight Rates Revert to Pandemic Lows
Since the highs of 2021, freight prices have dropped to lows not seen since June 2020, according to a recent analysis by U.S. Wheat Associates. Coupled with a recent break in wheat prices, decreased ocean freight costs have helped turn the tides back in the importers’ favor. The Baltic Index price chart of dry bulk freight rates shows the impact on rates from the Russian invasion of Ukraine. On February 6, the Baltic Dry Index hit 621, a level not seen since June 2020. The index has fallen 88 percent from its peak in October 2021. In recent years, dry bulk freight and Chinese economic growth have become interconnected. Vessel supply and demand, port congestion, oil prices, and the ongoing supply chain disruptions will continue to impact the market as economies normalize post-COVID. However, China remains in the driver’s seat of global freight, according to U.S. Wheat Associates. The resilience of the Chinese economy will be put to the test as economic activity increases post-COVID.
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Growth in Organic Market Slowing
The organic market has seen continued growth in retail sales in the past decade. However, the pace of growth has slowed, according to USD’s Economic Research Service. U.S. organic retail sales increased by an average of eight percent per year and surpassed $53 billion in 2020. In 2021, sales were $52 billion, which was a six percent annual decline when adjusted for inflation, but a slight increase when not inflation-adjusted. Additionally, the number of certified organic acres operated increased gradually from 3.6 million in 2011 to 4.9 million acres in 2021. The number of certified farms with operating organic acres in the United States nearly doubled over the past decade to 17,400 from about 8,900. Between 2019 and 2021, the number of certified organic farms in the United States increased five percent, while total organic land decreased by 11 percent, driven by a 36 percent decrease in pasture and rangeland.
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FMI Encourages FDA to Refine Healthy Definition
The Food Industry Association recently submitted comments to the Food and Drug Administration regarding the agency’s proposed rule to update the definition of the term “healthy.” The FDA is seeking the update when the term is used as a nutrient content claim in labeling. FMI Chief Public Policy Officer Jennifer Hatcher says. “We are concerned the proposal is too restrictive in scope and could inadvertently lead to consumers avoiding certain foods that are otherwise part of a healthy eating pattern.” The comments submitted to FDA explain some FMI members found that their portfolios have gone from 80-95 percent “healthy”-eligible foods, to between three and seven percent healthy eligible foods under the proposed rule. FMI predicts that when taking into account the entire food supply, fewer than five percent of products would qualify. Hatcher adds, “A definition that only allows an exceedingly small number of foods to bear a healthy claim would be counter-productive to the agency’s goal of improving public health.”
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Swine Health Center Develops Standard Outbreak Investigation Instrument
The Swine Health Information Center this week announced a standardized outbreak investigation instrument. The new instrument is available for download and use from the SHIC website, and a web-based version will be launched this spring. The downloadable version is a fillable form that, upon completion, could be submitted to a program administrator at Iowa State University, the developer of the tool. Or the form could be used for farm/system outbreak investigations without submitting, but every submission will strengthen the confidential database that can help researchers find industry trends. The new, standardized outbreak investigation instrument was built from an existing investigation tool. Expert input and conversation led to changing some terms and creating additions. Dr. Derald Holtkamp of Iowa State University led the development of the instrument. Holtkamp says, “The reason for doing this remains trying to be better prepared to respond to the introduction of transboundary disease.” Visit swinehealth.org to learn more.
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