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The Farm Bill Stalemate, Part 2: The SNAP Question

Farm Doc Daily | Posted on October 7, 2018

The September 30th expiration date for the Agricultural Act of 2014 has passed and conference negotiations appear no closer to completion; a period of uncertainty likely to last through at least a lame-duck session after the November elections.  Part 1 of this series on the farm bill stalemate reviewed the economic situation for the major supported commodities, as well as the level of assistance they are likely to receive for the 2018 crop.  In Part 2, we explore the issues concerning the Supplemental Nutrition Assistance Program (SNAP) and how they are contributing to the stalemate.  The issues surrounding SNAP offer an important contrast to those discussed in Part 1 for covered commodities.SNAP is considered an automatic stabilizer; a program that is counter-cyclical to the economy at large because it responds to downturns, particularly in the labor market (Edmiston 2018; Ganong and Liebman 2013).  SNAP benefits are for the purchase of food.  By helping with shortfalls between needs and resources, research finds that SNAP can help alleviate food insecurity for adults and children, improve health outcomes and lift some families out of poverty (Ziliak 2016).  Most SNAP households (84%) have monthly incomes below the Federal poverty guidelines and nearly half (43%) have monthly income that is less than or equal to 50% of poverty (Oliveria et al., 2018).  In 2014, SNAP benefits have been estimated to have raised 4.7 million people out of poverty, including 2.1 million children (Oliveira et al., 2018).  Nearly two-thirds of SNAP participants are children or elderly and non-elderly adults with disabilities; they receive 60% of SNAP benefits.  More than 30% of all SNAP households had earned income and are considered “working poor” (Oliveira et al., 2018).

Devin Nunes Isn’t the Only Dairy Farmer Souring On California

Bloomberg | Posted on October 7, 2018

You may notice a dip in California milk production since 2014, though. It’s not a fluke! Earlier this week came the news, for example, that the family of Tulare County’s most famous dairy farmer, U.S. Representative Devin Nunes, had quietly moved its operations to northwestern Iowa a decade ago. But while traveling through Iowa and South Dakota last month, I heard enough about the recruiting and arrival of California dairy farmers beset by drought and other hassles to know that it is of agricultural and economic significance.It is also of technological significance, given that new and improved ways of ventilating dairy barns have been among the biggest drivers of the move. 

Court denies USDA motion to dismiss organic lawsuit

Capital Press | Posted on October 7, 2018

A ruling by the U.S. District Court for the District of Columbia will allow a lawsuit by the Organic Trade Association against USDA over its withdrawal of the Organic Livestock and Poultry Practices rule to proceed. U.S. District Judge Rosemary M. Collyer on Thursday denied USDA’s petition to dismiss the lawsuit and granted OTA’s request for oral arguments at a date and time to be determined.The rule, finalized in the waning days of the Obama administration, included new standards for raising, transporting and slaughtering organic animals.USDA withdrew the rule in March, stating the rule exceeds the agency’s statutory authority under the National Organic Program and could have a negative effect on voluntary participation in the program.

Hemp, on the Brink of Being Legal, Still Faces Challenges

Pew Trust | Posted on October 4, 2018

It’s a giddy time for the U.S. hemp industry. Farmers are planting more acres. Businesses are selling more products. And with Congress on the brink of fully legalizing hemp, industry insiders are eagerly anticipating a boom. But even if the legalization provisions in the 2018 farm bill pass, hemp will remain a tightly regulated crop facing plenty of regulatory and legal challenges. As the more than 30 states that operate hemp pilot programs have discovered, it’s not easy to oversee a plant that’s used to make everything from car parts to hand cream and that, except for the chemical that produces a high, is identical to marijuana — which the federal government still classifies as a dangerous drug.It could take one or two years for federal officials to craft regulations for hemp, said Tim Gordon, president of the Colorado Hemp Industries Association. “Just because the farm bill passes doesn’t mean hemp is suddenly legal and everything’s great.”

Statement from FDA Commissioner Scott Gottlieb, M.D., on modernizing standards of identity and the use of dairy names for plant-based substitutes

FDA | Posted on October 4, 2018

The wide variety of plant-based foods that are being positioned in the marketplace as substitutes for standardized dairy products has been the subject of much discussion in our initial work on the Nutrition Innovation Strategy. The rising demand for plant-based products, like soy-based alternatives to cheese and nut-based alternatives to milk, has created a growing number of new food choices in supermarket aisles. However, these products are not foods that have been standardized under names like “milk” and “cheese.” The FDA has concerns that the labeling of some plant-based products may lead consumers to believe that those products have the same key nutritional attributes as dairy products, even though these products can vary widely in their nutritional content. It is important that we better understand consumers’ expectations of these plant-based products compared to dairy products. Many dairy products, such as milk, yogurt and certain cheeses, have standards of identity established by regulation, which require certain components and ingredients in these foods. Names such as “milk”, “yogurt” and “cheddar cheese” have long been recognized by the American public as identifying the dairy foods described in the standards. More recently, these names have appeared in the labeling of plant-based products as part of the name of the product. Some examples include “soy milk” or “almond milk” and “vegan mozzarella cheese.” These plant-based products are sometimes packaged very similarly to those used for milk or yogurt, for example, and sold in the dairy section of grocery stores. However, these plant-based products may not be satisfactory substitutes for all uses of dairy. And some may not be nutritionally equivalent.

Immigrant farm workers forced off Hermon dairy farm

Watertown Daily Times | Posted on October 4, 2018

Eight days ago, Gebarten Acres, a large dairy farm on East DeKalb Road, was forced to lay off 17 farm workers from Guatemala and Mexico after an investigation by federal officials showed the immigrant farm workers lacked documentation to legally work in the United States. Greg J. Coller, co-owner of the 2,800-cow farm, said Friday that three other immigrant workers were allowed to stay, but they decided to leave with the other 17. Some had worked and lived at the farm for the past seven years, handling milking and other chores.“They gave us a few days warning so we had time to contact family and friends to help us out,” Mr. Coller said. “Many of us have been working 17-hour days to get the cows milked.”He said he believes many of his former farmhands are already working at other farms, creating a situation where the dairy farm owners suffer the most harm.“I guarantee they’re working. To make them leave is crazy, as we’re the only ones who suffer,” Mr. Coller said.Echoing a problem faced by many other north country dairy farmers, Mr. Coller said it’s increasingly difficult to find Americans who are willing to put in the hard work to keep a farm running.

Canadian Farmers Lose Under Nafta Update That Opens Up Milk Trade

Bloomberg | Posted on October 4, 2018

“This doesn’t fix the problems of American oversupply,” said Holtmann, a third generation dairy farmer in Rosser, Manitoba, who will spend the winter reviewing the impact of the deal and whether his expansion plans still make sense. “It’s a slap in the face to Canadian producers who work very hard at managing supply.”Canadian dairy farmers say they’re on the losing end of the new deal, which will give the U.S. greater access to Canada’s protected dairy market and eliminate its new milk pricing system, one that’s been repeatedly attacked by President Donald Trump. Dairy was one of the core remaining hurdles to striking a renewed North American Free Trade Agreement and Prime Minister Justin Trudeau had vowed to defend the nation’s restricted sector. On Monday, Trudeau pledged to compensate farmers to cushion the blow.As part of the deal, Canada will eliminate its Class 7 milk policy that makes it cheaper for processors to buy domestic supplies of ultra-filtered milk, a concentrated ingredient used to boost protein content in cheese and yogurt. While the system helped support a wave of new processing capacity that’s being built across Canada, U.S. farmers complained it effectively blocked imports and dragged down world prices.The U.S. is grappling with an oversupply of milk and Trump said in April that Canada has made business for American dairy farmers “very difficult.” 

Uninhabitable ‘critical habitat’ debated before Supreme Court

Capital Press | Posted on October 4, 2018

An endangered frog has raised the issue before the U.S. Supreme Court of whether an area that is uninhabitable for a species can nonetheless be considered its “critical habitat.”Justices from the U.S. Supreme Court appeared to have differing opinions on whether “critical habitat” for an endangered species can be designated in an area it can’t inhabit without significant changes.The oral arguments held on Oct. 1 centered on potential dusky gopher frog habitat in a Louisiana forest, but agriculture and property rights advocates believe the case may have broader Endangered Species Act implications for landowners.In 2012, the U.S. Fish and Wildlife Service designated critical habitat for the amphibian on 1,500 acres of forest owned by Weyerhaeuser and other landowners, which they fear reduces property values and inhibits housing development.“The immediate effect of this overlay of a critical habitat on this 1,500 acres is a diminution in value of tens of millions of dollars. That is what it says in the agency’s economic analysis, that there is an immediate loss in value,” said Timothy Bishop, attorney for Weyerhaeuser.

U.S. agriculture applauds NAFTA replacement

Capital Press | Posted on October 4, 2018

Some U.S. commodities will gain additional access to Canadian markets, and others will retain existing zero-tariff access to Canada and Mexico. The trilateral agreement barely came in under a midnight deadline imposed by the U.S., at which point the U.S. would have moved forward with the trade deal reached with Mexico a month earlier.The renegotiated North American Free Trade Agreement will move ahead as the U.S.-Mexico-Canada Agreement, or USMCA.A major sticking point with Canada was granting more access to U.S. dairy products and the elimination of Canada’s Class 7 milk-ingredient pricing program implemented last year.That program artificially lowered prices for Canada’s domestic milk ingredients for domestic processors to discourage the purchase of U.S. ingredients. It also undercut competitors’ dairy product prices in the international market, according to the U.S. and other dairy-exporting countries.The agreement also gives additional access to Canadian markets to U.S. poultry and eggs and addresses issues with Canada’s grain-grading system. For other commodities, it was a matter of safeguarding existing market access.“However, the true measure of success will be when U.S. markets regain full trading status, and that is why FFT will continue to urge the immediate removal of tariffs, she said.Americans for Farmers and Families said the significance of the agreement cannot be overstated.NAFTA “has brought unprecedented economic success to the U.S. — not only through strong job growth, higher wages and low consumer prices — but also by allowing America’s food and agricultural industry to thrive,” Casey Guemsey, an AFF spokesman, said.

USDA’s Trade Aid Package

Farm Policy News | Posted on October 4, 2018

Recent news articles have discussed USDA’s trade aid package, as well as the potential impacts of ongoing trade tariffs on U.S. farm goods.  Today’s update provides an overview of several of these articles. Wall Street Journal writer Jesse Newman reported late last week that, “The Trump administration has started compensating U.S. farmers for damage tariffs are doing to their business.“Many farmers say the payments won’t make up for lost sales to China and other foreign markets they were counting on to buy the huge amounts of crops and meat being produced across the Farm Belt.“Bumper corn and soybean harvests and record pork production have pushed down prices for agricultural commodities. U.S. farm income is expected to drop 13% this year to $66 billion, according to the Department of Agriculture, extending a yearslong slump in the agricultural economy.” Beth Ford, chief executive officer of Minnesota-based agriculture cooperative Land O’Lakes Inc.] said the Trump administration’s compensation package falls short of the losses being incurred by producers, many of whom can’t simply wait for tariffs to be lifted.