hite House officials conceded Friday that the president’s hard-fought-for Trans-Pacific Partnership (TPP) trade deal would not pass Congress in light of the election of Donald Trump, who campaigned on anti-global trade policies. Desmond O’Rourke, publisher of the World Apple Report, noted that several weeks ago Senate Majority Leader Mitch McConnell told reporters he would not allow debate on the TPP to be raised in the lame duck session. The White House announcement confirms that.
According to the latest survey of agricultural bankers in the Eighth Federal Reserve District, a solid majority reported that farm income declined in the third quarter of 2016 relative to a year ago. Consistent with previous surveys, proportionately more bankers continue to report that falling farm income is pressuring farmers to trim their household expenditures and farming- and ranching-related capital outlays. Given the difficulties in the farm sector, it is perhaps surprising that our survey results showed that quality farmland values were unchanged and ranch or pastureland values were up slightly from a year earlier in the third quarter. Nonetheless, cash rents for both quality farmland and ranch or pastureland declined modestly in the third quarter. Our survey results also revealed that demand for loans in the third quarter was a bit stronger than what was expected three months earlier, while the availability of funds mostly met expectations. Loan repayment rates were slower in the third quarter, but consistent with bankers’ expectations from three months earlier. Our two special questions focused on those farmers who are experiencing loan repayment issues. According to our lender survey, the largest increase in repayment problems is for operating lines of credit. A majority of bankers believe that, in response, unpaid portions of operating lines of credit will require additional collateral to roll over this debt.
If a fruit or vegetable isn’t grown in dirt, can it be organic? That is the question roiling the world of organic farming, and the answer could redefine what it means to farm organically. At issue is whether produce that relies solely on irrigation to deliver nutrients to plants — through what is known as hydroponic and aquaponic systems — can be certified organic. And the National Organic Standards Board, an advisory group that makes recommendations to the federal secretary of agriculture, will get an earful on the topic at its meeting in St. Louis this week. On one side are the growing number of big and small growers raising fruits and vegetables in these soil-free systems. They say their production methods are no different from those of farmers who grow plants in dirt — and, they add, they make organic farming more sustainable by, for instance, reducing water use. “Soil to me as a farmer means a nutrient-rich medium that contains biological processes, and that doesn’t have to be dirt,” said Marianne Cufone, an aquaponic farmer and the executive director of the Recirculating Farms Coalition, which lobbies for aquaculture. Not so, say the farmers who have spent years tending their soil so that it produces the nutrients plants need. They argue that organic production is first and foremost about caring for the soil, which produces environmental benefits that go beyond growing plants.
When a recent gathering of Southern Illinois farmers revealed that 7 out of 10 of them had serious concerns about the viability of their farming operation over the next three years, one might think they were being overly dramatic. But late last week, three of the Federal Reserve Banks that serve the Corn Belt confirmed the seriousness of the financial struggle farmers are having. Federal Reserve Bank economists frequently survey the commercial lenders in their respective districts about the agricultural economy, asking questions about land values and credit conditions with answers uploaded into the Fed’s Open Market Committee which sets interest rates. And whether or not the rate will be raised at the next FOMC meeting as once expected, farmers across the Midwest will have a greater interest burden to bear. In the Chicago Fed region, which includes all of Iowa, and parts of Illinois, Wisconsin, Indiana and Michigan, the bankers reported, “agricultural credit conditions were more negative than those of a year ago. In addition to repayment rates for non-real-estate farm loans being down in the third quarter of 2016 relative to the same quarter last year, loan renewals and extensions were up.”
The number of midsize growers in the U.S. has dropped slightly but the category hasn’t experienced as much change as other farm sizes, according to USDA. Farms in the midsize category, with roughly $350,000 to $1 million in annual revenue, declined in number by 5 percent between 1992 and 2012, according to a recent USDA study. To compare, large farms with more than $1 million in revenue more than doubled in number, while small commercial farms — those with revenues between $10,000 and $350,000 — declined in number by 22 percent. Midsize farms also had smaller net exit rates from the industry than large or small commercial farms between 2007 and 2012, the study found. “They do stick around,” said Chris Burns, an economist for USDA’s Economic Research Service who co-wrote the report, “The Changing Organization and Well-being of Midsize U.S. Farms, 1992-2014.”
The US Dept. of Agriculture announced several meetings to gather feedback from industry on the Livestock Mandatory Reporting (LMR) program in addition to current livestock and meat marketing practices. The first meeting is scheduled for Nov. 15-16 in Washington. The first informational meeting will include several activities. The Agriculture Marketing Service (AMS) will provide an overview of current LMR reporting and audit processes. Industry stakeholders also will be able to participate in “interest-based problem-solving and training” and identify dates for future meetings. Organizations that agreed to participate in the process include the American Farm Bureau Federation; American Sheep Industry; CME Group; Livestock Marketing Association; Livestock Marketing Information Center; Meat Importers Council of America; National Cattlemen’s Beef Association; National Farmers Union; National Pork Producers Council; North American Meat Institute; R-CALF USA; Southwest Meat Association; Texas Cattle Feeders Association; and US Cattlemen.
Philip Seng, USMEF president and chief executive officer said the U.S. eclipsed $13 billion in meat exports. “That’s quite an accomplishment when you consider some of the challenges we’ve had over all these years,” he said, adding that the goal is for $20 billion in meat exports in the near future. If there was any doubt that trade is important, Seng pointed out that 80% of the world’s buying power lies outside of the U.S., so “the more we can have this export mentality, (and) the more we can challenge ourselves to do better, the better it is going to be for all of us.” "Trade is no longer rising around the world," Seng explained. "Actually, this is the first time since World War II that trade has declined during a period of economic growth. That's why what we are doing in the meat industry — whether it's the beef complex, the pork complex, the lamb complex — the fact that we are increasing our exports (means) we're really going against the grain right now, because most industries are not enjoying robust export sales."
Montana Attorney General Tim Fox, along with 25 other state attorneys general sent a letter criticizing the Environmental Protection Agency this week, alleging the agency is ignoring the U.S. Supreme Court’s stay of the Clean Power Plan. Earlier this year Fox joined with other states in challenging the EPA’s carbon regulations, which would require Montana to reduce carbon emissions by more than 40 percent. That lawsuit resulted in the U.S. Supreme Court issuing an injunction on implementation of the Clean Power Plan until legal challenges have concluded. A press release from Fox's office Wednesday said that the EPA is moving forward with a rulemaking process for the Clean Energy Incentive Program, a component of the larger plan, in direct violation of the Supreme Court’s stay.
The head of the world's leading trade body says that hostility toward trade agreements witnessed in the United States and other countries is misplaced and that protectionist measures can hurt the poorest most. World Trade Organization chief Roberto Azevedo says protectionism "is the wrong response" to voter concerns about job losses and economic uncertainty. He says the introduction of new technology is a much bigger threat to jobs. Azevedo declined to comment specifically on the U.S. presidential candidates. However, he said Monday that "the major question is ... is a restrictive trade policy the answer to the kind of sentiments that you see in the electorate today, and I don't think it would be."
Agriculture and food policy have not become even small issues in the 2016 presidential campaign, but on Friday, TV host Bill Maher asked President Barack Obama about “food purity” and “torturing animals on factory farms” and got answers. Obama did not say anything that deviated from his previous statements, but it was a rare, three-minute exchange with the president on the subject. Maher asked if food should not be put “more at the top of the agenda” on health care. Obama replied, “We’ve got a disease care system; we should have a health care system,” which would include nutrition and exercise. Obama also noted that “for a long time, agribusiness has had an obviously prominent seat at the table in Congress, and it is bipartisan.”