READ the NAFB’s National Ag News for Monday, February 12th

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READ the NAFB’s National Ag News for Monday, February 12th

Ag Committee Leaders Praise Bipartisan Budget Act

Senate Ag Committee Chair Pat Roberts says the Bipartisan Budget Act passed in both chambers of Congress benefits Americans in many ways. It avoids a government shutdown, raises military funding, contains disaster assistance for several states that were hit hard by natural disasters, and improves livestock assistance programs. Roberts says, “In addition to disaster assistance for states hit hard by hurricanes, we’ve also improved livestock disaster programs to help producers recover from wildfires and other disasters.” More funds are available under the Emergency Assistance Livestock, Honey Bees, and Farm-Raised Fish Program. There’s also more money available under the Livestock Indemnity Program. There’s also a revision of the LIP program that lets producers who had livestock injured during a natural disaster and sold for a diminished value can qualify for a payment. House Ag Committee Chair Michael Conaway says delegations from the two hardest-hit states of Florida and Texas worked very hard to get something put together to help their producers. Conaway adds, “The relief includes vital improvements to standing disaster programs and addresses significant gaps in the safety net for cotton and dairy farmers.” He says they have more work to do on behalf of America’s farmers during the development of the 2018 farm bill.

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What the Budget Bill Means for Farmers and Ranchers

The disaster assistance spending measure has been watched carefully by producers who were hit hard by natural disasters. Producers in California, Florida, Texas, and even Puerto Rico lost crops and livestock because of wildfires and hurricanes last year. Politico says America’s dairy and cotton producers also have been looking for subsidy increases because of a serious economic downturn. The bill contains a total of $89 billion in disaster aid, $3.5 billion of which is intended for the agriculture industry. The majority of that money is ad hoc disaster assistance. A smaller portion of that money is intended to expand emergency USDA programs, such as those for livestock, conserving watersheds, and repairing the department’s facilities. House and Senate leaders were hoping to get a deduction that incentivizes farmers to sell their products to agricultural cooperatives rather than private companies would make the cut. It wasn’t written into the Republican tax overhaul and didn’t make it into the bipartisan budget bill. Lawmakers say they will continue working with the grain industry to find a solution.

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Farm Bureau Asks Court to Block WOTUS Rule

The American Farm Bureau Federation and a broad coalition of ag industry groups asked a federal district court in Texas to issue a nationwide stay on the “Waters of the U.S.” rule. The stay would block the rule from going into effect on farms and ranches across the nation. The request for a stay became necessary after the U.S. Supreme Court’s recent decision that the U.S. Court of Appeals lacked jurisdiction over legal challenges to the 2015 Obama-era rule. That resulted in the immediate lifting of a nationwide court order that’s blocked the rule since 2015. The filing comes after the publication of the Environmental Protection Agency and Army Corps of Engineers’ “applicability date” rule, which delays WOTUS implementation for two years. A handful of states and environmental groups are eager to get the rule implemented. They’ve already challenged the applicability date rule and promised to pursue court orders allowing the WOTUS rule to go into effect immediately. Farm Bureau’s court filing says, “farmers and ranchers across the country won’t know whether dry ditches, drains, and low spots on their farm fields will be ‘dry land’ one day and a ‘water’ the next.”  

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Foreign Competitors Increasing Spending on Ag Exports

Foreign countries that compete with the U.S. for world market share are increasing their spending on promoting ag exports. Several countries, as well as the European Union, spent close to $1 billion in public funds on ag export promotion in 2016. Studies are showing those countries outspent the U.S. 4 to 1. That’s a 70 percent increase in competitive public spending since 2011. U.S. public funding for its two largest export promotion programs is about $235 million per year, with the real value declining by 12 percent since 2011. A study commissioned by the Wine Institute and other ag groups shows that public investment from the EU and four European countries will exceed $550 million in 2019. “That’s more than twice what the U.S. authorizes for agricultural export development under the farm bill,” says Mark Powers, Chair of the Coalition to Promote U.S. Ag Exports. Canada and Italy have doubled their spending on ag export promotion while China and Brazil have tripled their investment. Tom Sleight, U.S. Grains Council CEO, says increasing competition is one reason why organizations that participate in USDA cost-share export programs are calling for more funding of the U.S. program.

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Canada Says Serious Challenges Remain in NAFTA Talks

Some serious challenges remain to be overcome before Canada will ever sign off on a renegotiated North American Free Trade Agreement. Canada’s Foreign Minister, Chrystia Freeland, says hardline demands for reforms from the U.S. are the biggest of those challenges. Freeland told the House of Commons foreign affairs committee that Canada will only accept a deal that’s in their nation’s best interests. Talks on modernizing the 1994 NAFTA agreement have slowed, with Canada and Mexico struggling to address some of the proposed changes from the U.S. Freeland says, “serious issues remain, particularly in terms of unconventional U.S. proposals. Canada will only accept an agreement that’s in our best interests and respects Canadian values.” Canada’s Prime Minister weighed on the discussion last Wednesday, saying Canada “might be better off” not signing an updated NAFTA deal rather than signing a bad one. A couple of the more contentious proposals from the U.S. include more American content in autos, as well as a sunset clause that would allow any of the three parties to walk away from the deal after five years.

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Tyson: Higher Freight Costs Will Push Up Consumer Prices

Tyson said the rising cost of freight is starting to put pressure on all of its businesses. That means consumers will eventually feel that pressure in the form of higher prices for all its products. The company says the tight trucking market will add more than $200 million to its cost structure this year. Chief Executive Tom Hayes says, “Freight costs have escalated as trucking capacity has tightened nationwide. We expect these costs will continue to rise as companies compete for new truckers and new federal regulations come into play.” Hayes’ announcement was made public with the release of a strong first-quarter earnings report for Tyson. At the same time as freight costs are rising, dynamics in the marketplace are driving wages higher, pushing up the cost of labor. Hayes adds,” These higher costs are included in our overall outlook. We’re assuming we’ll recover the majority of these costs through higher pricing.” Hayes says passing the cost through is something they have to do and ultimately, the consumer is going to pay for it at some point.

SOURCE: NAFB News Service

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