U.S. dairy exporters are losing money as they try to maintain their hard-won footholds in the Chinese market amid the rising tariffs resulting from President Donald Trump’s trade war. Some U.S. exporters – sellers of relatively low-cost nonfat dry milk powder – have already had to give up, but many who depend on China to buy whey, cheese and other pricier products are hanging on for now, says U.S. Dairy Export Council (USDEC) President and CEO Tom Vilsack.It’s a tough situation that’s only degrading as U.S. companies lose ground to competitors in Australia, Europe and New Zealand.
The attorneys general of 15 states are waiting to see if the U.S. Supreme Court will take up a pair of cases by Missouri and Indiana against California and Massachusetts over what they see as a violation of interstate commerce by trying to regulate agricultural production in other states. Missouri and Indiana both led court challenges against laws in California and Massachusetts that seek to stop the sale of livestock and poultry products from other states based on farm standards set within their own state lines.California's law involves standards for egg-laying hens on eggs to be sold within the state. Massachusetts law blocks the sale of eggs, pork and veal in the state based on confinement standards set by Massachusetts law.Whatever way the nation's high court treats the cases, the two cases and state laws will help determine whether the federal government has final say on food and animal-welfare standards and whether states have authority to regulate the treatment of animals outside their borders when it comes to food sold in their states.
Agriculture amounts to a small part of NAFTA trade volume but it is a major sticking point for U.S. and Canadian negotiators who are scheduled to resume negotiations on the new NAFTA on Wednesday. The second-largest U.S. farm group said the White House ought to adopt the dairy supply management system that it reportedly is trying to eliminate in Canada and reinstate country-of-origin labeling on beef. Canada is unlikely to yield on supply management, which has broad domestic political support, wrote associate professor Michael von Massow of the University of Guelph. “If a concession is made, it is likely to be in increased access. Canada had already provided an increase in access in the TPP negotiations. This would seem to be an area of potential concession that would provide Trump with a ‘win’ for farmers and allow the Canadians to sustain their domestic program. It would not be without pain for the Canadian industry, but may be the path to an agreement.” President Trump withdrew the United States from the Trans-Pacific Partnership trade pact within days of taking office.The National Farmers Union, after blaming NAFTA for favoring corporations, called for updates that would strengthen the rural economy. “However, improvements on behalf of American farmers and ranchers should not occur at the expense of farmers across the border,” said the NFU. “Indeed, the United States should take a page from Canada’s book and establish similar (supply management) policies to support American dairy farmers, who have been enduring chronic oversupply and critically low prices for a number of years.”
The Maine wild blueberry industry harvests one of the most beloved fruit crops in New England, but it’s locked in a downward skid in a time when other nutrition-packed foods, from acai to quinoa, dominate the conversation about how to eat. And questions linger about when, and if, the berry will be able to make a comeback. The little blueberries are touted by health food bloggers and natural food stores because of their hefty dose of antioxidants. They’re also deeply ingrained in the culture of New England, and they were the inspiration for the beloved 1948 children’s book “Blueberries for Sal.” But the industry that picks and sells them is dealing with a long-term price drop, drought, freezes, diseases and foreign competition, and farmers are looking at a second consecutive year of reduced crop size.At Beech Hill Blueberry Farm in Rockport, this year’s harvest was off by about 50 percent, said Ian Stewart, who runs the land trust that manages the farm.North America’s wild blueberry industry exists only in Maine and Atlantic Canada, and an oversupply of berries in both places caused prices to harvesters to plummet around 2015. Recent years have brought new challenges, such as particularly bad spells of mummy berry disease, a fungal pathogen, and difficulty in opening up new markets.
Cranberry farmers buried under a glut of the tart fruit are seeking permission for a radical way to dig themselves out: destroying millions of pounds of their crops. After struggling with an oversupply of the berries for nearly two decades, growers around the country are asking the Department of Agriculture for authorization to sell 75 percent of the supply and discard the rest.With only a few weeks left before the Massachusetts harvest, the Cranberry Marketing Committee, made up of growers and handlers, is waiting for a USDA decision on whether the industry can cap the amount of berries produced.“It’s been tough. Overproduction is the bane and has been for cranberries in the last few years, and consequently we’re not getting much money for our crops,” said Jack Angley, owner of Flax Pond Farms in Carver, which is a member of the Ocean Spray growers’ cooperative. Angley is one of more than 300 growers in Massachusetts, which trails only Wisconsin in cranberry production. He and the rest of the industry are trying to reverse the painful cycle of rising inventories, lower prices, and disappearing profits.If the government approves their request, farmers would hold back 25 percent of the berries grown, or roughly 100 million pounds.
Despite another bin-busting U.S. corn-belt production year, trade tensions and the plunging Brazilian real, grain prices are relatively stalwart. For prices to sustain lower, it appears the near-perfect bear-market storm conditions need to endure — that’s unlikely. Led by wheat, the Bloomberg Grains Spot Index is up almost 2% in 2018 to Aug. 28. Broad agriculture is down almost 5% on the back of a 20% slump in the softs and real. Total returns are lower due to steep contangos but indicating improvement. The wheat one-year future curve leads major commodities moving toward backwardation. Even with the best U.S. corn yields ever, prices are down only slightly from a year ago, and the annual average price is higher. Soybeans are the sore spot, but global trade should adjust. The worst appears near for softs with record shorts.Is this as bad as it gets for corn, soybeans and wheat prices?Grain prices may be indicating the worst is over, showing resilience despite another U.S. bumper crop, trade tensions and the plunging Brazilian real. Some adverse weather is supporting wheat, offsetting weak soybeans on trade tensions, yet netting out to a Bloomberg Grain Spot Index up almost 3% in 2018.
“Today’s announcement by the U.S. Department of Agriculture (USDA) on its tariff mitigation plan falls far short of addressing the losses dairy producers are experiencing due to trade retaliation resulting from the Trump Administration’s imposition of steel and aluminum tariffs. “The dairy-specific financial assistance package provided by USDA – centered on an estimated $127 million in direct payments – represents less than 10 percent of American dairy farmers’ losses caused by the retaliatory tariffs imposed by both Mexico and China.“The price drop resulting from these tariffs has not been gradual – it’s hurting U.S. dairy producers right now and will continue to do so. Since the retaliatory tariffs were announced in late May, milk futures prices have lost over $1.2 billion through December 2018. Milk prices for the balance of the year are now expected to be $1.10-per-hundredweight lower than were estimated just prior to the imposition of the tariffs on U.S. dairy exports.“In addition, a new study by Informa Economics on the impact of the retaliatory dairy tariffs projects dairy farmer income will take a hit of $1.5 billion this year if the tariffs remain in place through the end of 2018. This loss compounds to $16.6 billion if the tariffs are left in place long term over the next five years, through 2023. The impact of lost sales to China account for most of that harm, accounting for 73 percent of the total. That sizable decline in farmer incomes will compound the low prices and financial losses that dairies have already felt.
The last couple of weeks have seen some news out of Russia that have resulted in dramatic price swings. To catch up, a few Fridays ago rumors begin to circulate that the Russian Agriculture Ministry intended to curb wheat export demand by placing limits on shipments once exporters hit 30 million metric tons of exports. This hit the news not by an official announcement from the Russian government, but from a word-of-mouth exchange with one of the exporters allegedly present during a discussion about this potential policy. Prices climbed immediately on this news, as the total wheat supply situation is contracting this year due to poor crops in the European Union and Eastern Australia. If another top exporting country (Russia) is pulling itself out of the market, it puts more demand on the U.S. and Canada to fill global demand.
The challenges of rural America and Russian political interference seem on opposite spectrums of connectedness, until one stops to examine how Russia is poised to benefit from the current turbulence in global trade policy. Is the Trump administration truly crafting new trade frameworks, or is the Russian agriculture sector building its future on the bankruptcies of America's breadbasket? The current deck is undeniably stacked against U.S. soybean producers: global supply glut, a strong dollar, newly effective tariffs in the only important export market, and the uncertainty of previously enjoyed sales contracts due to hanging trade negotiations. While Brazil remains the lead competitor this year in the global soybean market, are we paying close enough attention to how Russia is capitalizing on this instability? Specifically, consider Russia's recent focus on highlighting partnership opportunities with neighboring China.Russia offered 2.5 million acres of land to Chinese investors for agriculture-specific purposes. Whether this offer will become planted acres remains unseen, but the two countries have also further invested together, opening borders for the purchase of agriculture chemicals and farm machinery from China. With additional logistical benefits of geographic proximity and an apparent Kremlin commitment to fostering a proactive relationship with the world's pre-eminent agriculture import market, can the U.S. recover lost market share in the long term?In stark contrast, United States leadership has failed to provide measurable action to stop the hemorrhaging in certain key markets. It is hard to argue that the White House has meddled in markets where the causality will ultimately be devastating to some of President Trump's most loyal voting base.
A recent letter describing the detrimental effects of animal agriculture on the environment contains, as usual, incorrect statistics and facts. The writer states that animal agriculture can be blamed for 19 percent of greenhouse gas emissions. The global figure is 10 percent, with most leading scientists and the Environmental Protection Agency putting U.S. animal agriculture emissions at about 3 percent to 4 percent.This is in comparison to GHG emissions of electricity, transportation and industry at 33.28 percent and 20 percent respectively. Animal agriculture does not use 70 percent of fresh water globally. This figure is for all of agriculture, with the majority of it being crop irrigation. The same can be said for land use. Worldwide agriculture as a whole accounts for about 37 percent. Deforestation is mentioned in order to create pastures. Most of the time, if this is done, the land is being used for row crop or grain production. Livestock transportation emissions are minimal compared with transporting fruit and vegetables from California, Florida, Mexico, etc., to your local supermarket.I would like to mention some other facts. One-third of all the food produced in this country is lost or wasted. Lost being left in field, rejected at market, etc., and waste being uneaten, spoiled, thrown out, etc., food.This food generates 3.3 million metric tons of carbon dioxide in landfills or wherever it ends up. This is equivalent to the emission of 70,000 cars per year. Globally, the GHG emissions from this food is triple that of animal agriculture GHG emissions in our country.