READ the NAFB’s National Ag News for Friday, September 16th…

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Sponsored by the American Farm Bureau Federation

Analysts Questions Bayer-Monsanto Merger

A Bloomberg report says anti-trust officials have their hands full as they review several pending mergers and acquisitions in agribusiness, with the newest being Bayer’s acquisition of Monsanto. The $66 billion deal consolidates the biggest seed and chemical producers in the industry. Elai Katz is an antitrust attorney at a major New York City law firm, and he said antitrust reviewers around the world have to look at how all the deals would impact the world instead of considering them on a case-by-case basis. “It’s always about the future,” Katz said. “You have to imagine what the world will look like after these mergers, and that complicates things.” According to Jonas Oxgaard, a Sanford Berstein analyst, seed and crop chemicals are major expenses for producers and this combination of Bayer and Monsanto could have some political backlash. “There’s a political angle that will make this deal hard to get past regulators,” said Oxgaard. With four other major consolidation deals in the works, economists are questioning whether there’s too much consolidation in agriculture. “Have there been too many mergers, are companies getting too big, is there not enough competition,” asked Keith Fugle, a U.S. Department of Agriculture economist. “Experts have been asking questions like this in other sectors of the economy and now this trend is happening in agriculture.”

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Ag Groups Push for Cuban Trade

The House Agriculture Committee held a hearing on potential trade opportunities with Cuba and several major ag groups, including the U.S. Agriculture Coalition for Cuba, weighed in on the possibilities. The National Association of Wheat Growers supports the elimination of trade barriers with Cuba, which represents a potentially large export market for wheat. Current financing restrictions don’t permit Cuba to buy on credit, but instead require cash up front, and the Wheat Growers say that puts them at a competitive disadvantage to other countries in the Cuban market. The American Farm Bureau has long pushed for trade with our neighbors 90 miles to the south. The Farm Bureau said, “Real opportunities of increased sales exist in Cuba for American agricultural products because of demand driven by a population of 11 million people. There’s no better time to provide American farmers and ranchers with the tools they need to expand exports and survive a difficult economic time.”

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TPP Biggest Priority During Pork Producers Fly-In

The National Pork Producers Council held its annual fly-in this week in Washington D.C., and TPP was at the top of their conversations with their senators and representatives. Over 130 producers from 20 states pressed their congressional lawmakers to push for a vote on the Trans-Pacific Partnership this year. They also want funding for a Foot-and-Mouth Vaccine Bank included in the next farm bill. Farm families also asked their congressional representatives to oppose a U.S. Department of Agriculture regulation, the GIPSA rule, that would restrict the buying and selling of livestock. NPPC President John Dyer of Iowa said those three issues are very important to pork producers but getting TPP passed in the lame-duck session of Congress is the primary issue they’re working on. During the Capitol Hill visit, producers are stressing just how much of a negative impact not passing TPP would have on their bottom line. “We cannot just walk away from this deal,” said Weber. “The entire economy would lose access to one of the fastest-growing regions in the world, but we also lose market share in the 11 other TPP countries, and that means lost jobs and a devastating impact on the economy.”

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House Ag Committee Modernizes Packers and Stockyards Act

The House Ag Committee passed a bill on Wednesday that will change the Packers and Stockyards Act with regards to electronic transactions. H.R. 5883 clarifies the duties related to services offered in connection with buying and selling livestock through online, video, and other electronic methods. The Meating Place Dot Com website says the bill also updates acceptable payment methods, including electronic fund transfers, as well as gives the Secretary of Agriculture the ability to approve other payment methods in the future as needed. A release from the committee said the Packers and Stockyards Act was written almost 100 years ago and needed to be updated because of electronic technologies and the way they’ve changed the marketplace. This helps to ensure producers receive the law’s financial protections, regardless of whether they sell at a fixed-facility location or through an online video auction.

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Trump Adviser Talks Agriculture

Republican Presidential nominee Donald Trump’s senior adviser Sam Clovis spoke with reporters after an agriculture round-table discussion this week and said crop insurance needs to be protected as a “matter of national security.” He told reporters “You can pay for 100 percent of a natural disaster, or you can go out and pay 50 percent to either make sure it doesn’t happen or protect the people from it happening.” He thinks crop insurance would be an important part of any farm bill they would approach if Trump wins the election. Some conservative groups like the Heritage Foundation aren’t happy to hear that. Josh Sewell helped author the Heritage Foundation report calling for an end to crop insurance and commodity price supports. He said, “For someone who’s gained support running against Washington insiders, the ag interests are some of the most Washington insiders there are.” Regarding Trump’s hardline stance on immigration? Clovis said “Ag groups will have a seat at the table to help us go forward with these issues, but we will enforce the laws of this country.”

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Beef Production Up Five Percent in 2016.

The beef cow herd and beef production continue to increase. Ag Web Dot Com said with three-quarters of 2016 done, beef production is up five percent over last year, and will continue to post monthly gains for the rest of this year and into 2017. Not only are the numbers of cattle growing, but they’re getting bigger as well. Weight data is showing steers are four pounds heavier than last year and heifers are eight pounds larger than a year ago. There’s no question an increase in beef production will weigh on market prices. The good news is beef exports continue to improve, with July exports up eight percent, and Sterling Marketing is forecasting an eight percent gain on the year. Another six percent gain in exports is in the forecast for 2017. This goes hand in hand with lower beef imports into the U.S. Imports should drop 13 percent this year and another 11 percent in 2017.

SOURCE: NAFB News Service

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