READ the NAFB’s National Ag News for Friday, August 10th

READ the NAFB’s National Ag News for Friday, August 10th

Sponsored by the American Farm Bureau Federation

Midwest Farm Economy Dips in Second Quarter

The farm economy in seven Midwestern states dipped in the second quarter of 2018, alongside a sharp drop in prices of key commodities and weakened agricultural credit conditions. The Kansas City Federal Reserve Bank’s Agricultural Credit Survey released Thursday shows that despite challenges in the farm economy, farmland values have remained relatively steady and provided ongoing support to agricultural credit markets. A decline in farm income accelerated slightly in the second quarter as crop prices plummeted in June. Farm income was expected to remain subdued in the coming months, especially in states more heavily concentrated in commodities, such as soybeans, that have been targeted by retaliatory tariffs. The report says that ongoing weakness in the farm economy continued to dampen spending throughout the sector, and bankers indicated they expect borrowers to continue to reduce spending in coming months. Agricultural credit conditions also weakened at a slightly faster pace in the second quarter, and bankers continued to report a modest increase in problems with loan repayment.

USDA Announces Further Reorganization

The Department of Agriculture Thursday announced it would move some jobs out of Washington, D.C. under a realignment plan. The agency says the moves are intended to “improve customer service, strengthen offices and programs, and save taxpayer dollars.” As per the announcement, The Economic Research Service, currently under USDA’s Research, Education, and Economics mission area, will realign with the Office of the Chief Economist under the Office of the Secretary. Additionally, most employees of ERS and the National Institute of Food and Agriculture will be relocated outside of Washington, DC. The movement of the employees is expected to be completed by the end of 2019. New locations have yet to be determined, and it is possible that the two may be co-located when their new homes are found.  The movement of the Economic Research Service under the Office of Chief Economist, according to USDA “simply makes sense because the two have similar missions.” Agriculture Secretary Sonny Perdue says the changes “are more steps down the path to better service to our customers.”

FDA to Consider Organic Labeling Claims

The Food and Drug Administration will apparently investigate labeling claims of organic products. FDA Commissioner Scott Gottlieb (Got-leeb) took to Twitter this week, responding to a critical Wall Street Journal editorial, which a former FDA official argued under the headline “The Organic Industry is Lying to You,” that the agency has been lax in allowing the use of non-GMO and pesticide-free claims in the food industry. The editorial squared off at Whole Foods, saying the grocer makes claims that organic farms do not use “toxic or persistent pesticides,” while many pesticides are allowed in organic production, and allowing non-GMO labels on products with no GMO counterparts. Politico reports there will be more to come, as Gottlieb suggested the FDA plans to do more to help consumers “make sense of food labels.” While the Department of Agriculture has jurisdiction over the term organic, Gottlieb says FDA oversees “general food labeling compliance and safety issues.”

Coalition Pushing for COOL in NAFTA

The Coalition for a Prosperous America is urging the U.S. to include Country-of-Origin Labeling for beef and pork in the North American Free Trade Agreement Negotiations. Coalition member, R-CALF, says in a news release that reinstatement of COOL labeling will help U.S. consumers “to find safer food alternatives and will also help to boost domestic agriculture.” R-CALF points out in its reasoning for COOL that the U.S. cattle industry is the single largest segment of U.S. agriculture and includes roughly 750,000 cattle farm and ranch operations. Currently, U.S. agriculture is prohibited from distinguishing between domestic and imported beef due to objections raised by Canada and Mexico at the World Trade Organization. The coalition believes U.S. Trade Representative Robert Lighthizer has “an opportunity to address this issue.” The coalition claims: “Unless we address the food labeling issue, the effectiveness of renegotiating NAFTA to strengthen America’s overall economy will be diminished.”

Weekly Drought Monitor Update

The weekly U.S. Drought Monitor released Thursday shows a continuation and expansion of prolonged drought in the Midwest and Southwestern United States. Drought conditions now extend from Washington State down the coast and along the U.S.-Mexico border to Louisiana and Mississippi, and north across Missouri to Colorado. The weekly measure notes that livestock production has been seriously impaired by the drought, particularly in southern Oregon and part of northeastern Utah. In the Midwest, livestock and crops are suffering, especially in Missouri, where 42 percent of the state is considered in severe drought, while 20 percent of the state is in extreme drought. The Drought Monitor specifically pointed out that the lake level for a city reservoir for Hamilton, Missouri has been dropping about two inches per week, and is now 70 inches below the spillway. If the trend continues, water would drop below the minimum intake level in three months. Meanwhile, across Texas, mandatory water use restrictions have been imposed by 665 public water supply authorities, according to the Texas Drought Preparedness Council, with a few mandating moderate to severe restrictions.

Grains in All Forms Exports on Track To Set New Record

U.S. exports of grain in all forms are on track to set a new record in 2017/2018, with two months of sales left to report, according to data from the U.S. Department of Agriculture and analysis by the U.S. Grains Council. During the first ten months of the marketing year, September 2017 to June 2018, the United States exported 98.3 million metric tons, or 38.7 billion bushels, of grain in all forms, up two percent year-over-year from last year’s record-setting pace. The feed grains in all forms calculation helps capture how much of U.S. coarse grain production is actually used in the world market by including the corn equivalent of co-products like ethanol and distiller’s dried grains with solubles, as well as beef, pork and poultry meat exports. Mike Dwyer, Grains Council chief economist, predicts grains in all forms exports could top 116 million metric tons, or 4.57 billion bushels, by the end of the marketing year. USGC says that achievement would come “despite a tumultuous trade environment, serving as a reminder of the resiliency” of U.S. exports and of the quality and price competitiveness of U.S. coarse grains and co-products.

SOURCE: NAFB News Service