A lawsuit filed last week accuses Monsanto sales representatives of secretly giving farmers assurances of using “off label” methods for a dicamba herbicide formulation. The St Louis Post-Dispatch reports the lawsuit claims: “This was Monsanto’s real plan: publicly appear as if it were complying, while allowing its seed representatives to tell farmers the opposite in person.” A Tennessee weed management expert, Larry Steckel, says in the suit that “it’s almost impossible” to follow label directions for dicamba-based herbicides, given the recent changes that have surfaced over drift allegations. Formulations were changed to dicamba-based herbicides following an outbreak of drift incidents last year to reduce volatility and drift. However, those changes have not seemed to slow reports of drifts problems in 2017. The suit says the defendants “actually benefit” from rampant drift, because it pressures farmers to adopt dicamba-tolerant seed to avoid damage. Monsanto and BASF indicated to the Post-Dispatch that they were aware of the suit but declined to comment on specific allegations. Both companies cited their efforts to educate growers about correct application of dicamba.
As expected, U.S. trade officials confirmed this week that North American Free Trade Agreement renegotiations would begin August 16th, the first day allowed by U.S. law. The office of U.S. Trade Representative Robert Lighthizer announced this week that the talks would kick off in Washington, D.C. on August 16th, and the initial rounds of negotiations are scheduled to wrap up on Sunday, August 20th. Earlier this week, the White House released its goals for NAFTA, which includes maintaining duty-free status on agricultural exports to Mexico and Canada. The 18-page Summary of Objectives also includes the need to eliminate non-tariff barriers to U.S. agricultural exports. The new plan stresses the administration's goal of updating and strengthening the rules of origin laws. However, it doesn't ask for a reinstatement of Country of Origin Labeling on beef and pork imports from Mexico and Canada.
An atypical case of Bovine Spongiform Encephalopathy (BSE) was found Tuesday in an 11-year old cow in Alabama. The USDA’s Animal and Plant Health Inspection Service (APHIS) says the animal never entered the slaughter process and was no danger to the food supply or to human health. APHIS has determined that the cow was positive for atypical BSE, a kind typically found in cows at least eight years old. It’s different from the more well-known classical BSE that was found in the United Kingdom back in the late 1980s. The most common source of classical BSE is typically contaminated feed. The cow showed signs of the disease when it was discovered via routine surveillance in a livestock market. Barry Carpenter, CEO of the North American Meat Institute, says the fact that the animal was found before it entered a processing plant should reassure Americans that the U.S. animal health surveillance system and safety protocols are working to protect the public’s health. Carpenter says, “The U.S. surveillance system for sampling and testing cattle far exceeds recommended international standards.”
A report by a Farm Credit Administration economist told the Administration’s board members last week that the current downturn in the farm economy is not likely to reach a 1980s-style crisis. Farm Credit chief economist Stephen Gabriel said the “likelihood of this is very low,” adding that a confluence of adverse factors led to the crisis that occurred in the 1980s. He says it would take a similar combination of adverse developments to create another crisis in the farm economy. While the two periods are similar in some respects, Gabriel points out that interest rates were very high in the 1980s, and today’s interest rates are historically low. The price of oil is another major difference, according to his report. In 1979 and 1980, the price surged, while today it is declining. Also, the general economy is in better shape today than it was in the 1980s. The country experienced two recessions during the 1980s' crisis whereas today we're in an "extended, if lackluster, economic expansion," according to Gabriel.
The Environmental Protection Agency will hold a public hearing on its Renewable Fuel Standard volume obligations August first. The hearing, to be held in Washington, D.C., will take public comment on the 2018 renewable volume obligations, along with the 2019 RVO for biomass-based diesel, according to Ethanol Producer magazine. The agency released a prepublication version of the proposed rule earlier this month. The proposal calls for approximately 19.24 billion gallons of renewable fuels to be blended into the national fuel supply next year, including 238 million gallons of cellulosic biofuel, 2.1 billion gallons of biomass-based diesel, and 4.24 billion gallons of advanced biofuel. For 2019, the new proposal calls for the biomass-based diesel RVO to be maintained at 2.1 billion gallons. In a notice posted to its website, the EPA said the hearing aims to provide interested parties the opportunity to present data, views, or arguments concerning the proposal. The agency may ask clarifying questions during the hearing, but will not respond to presentations at that time.
Matt Bennett Commentary - 7-17-17
47 Illinois Farm Bureau Young Leaders toured Canada this week as part of an Ag Industry Tour through the IFB. Local Farm Broadcaster Jared White had a chance to talk with the following attendees from central Illinois....
Kim May - Christian County
John Klemm - DeWitt County
Andy Lawhead - Piatt County
Tucker Muse - Piatt County
Alec Huisinga - Piatt County
These interviews will be featured in upcoming editions of our local Farm Shows on WHOW & WTIM, as well as in special reports all next week on WHOW.
The Tennessee Department of Agriculture announced new limits on the use of dicamba-based herbicides this week. The move follows practical bans issued by Arkansas and Missouri for using dicamba for row crop applications, as concerns and drift damages mount. Missouri, however, released its “stop sale, use or removal” order Thursday on dicamba-based herbicides. The new rule in Tennessee restricts application to certified private applicators or licensed pest control operators, certified by the state. The rule also prohibits the use of older formulations of dicamba products for the rest of this growing season and restricts application hours to between 9 a.m. and 4 p.m. The new rules, according to the state’s Department of Agriculture, is in response to farmer-to-farmer complaints of suspected dicamba drift damage to crops. The measures are in effect until October first of this year, and violators could be fined up to $1,500 per violation. With removal of its ban, Missouri announced similar limits on dicamba use Thursday, which includes wind, time and applicator restrictions, as well as required notification of planned dicamba applications online.
The recent World Agriculture Supply and Demand report by the Department of Agriculture projects corn and soybean farmers will grow more crop than previously anticipated. USDA on Wednesday increased 2017-18 corn production to an estimated 14.255 billion bushels and soybean production to 4.26 billion bushels. Corn production came in slightly above the highest pre-report estimates while soybean production came in higher than the pre-report average estimate as well, according to DTN-The Progressive Farmer. The farm price for the 2017-18 soybean crop was pegged at an average of $9.40 a bushel, a 10-cent bump from last month's estimate. For corn, USDA estimated an average of $3.30 a bushel, down 10 cents from earlier estimates. USDA also raised All-Winter Wheat production to 1.279 billion bushels, up 29 million bushels from the June report estimate.
18 agriculture groups representing the majority of production agriculture sent a letter to the Trump administration recommending it avoid placing restrictions on steel and aluminum imports. The groups are worried that such a move would negatively impact U.S. food and agriculture exports. The groups said in the letter that, “the aftermath of those restrictions could be disastrous for the global trading system and U.S. agriculture in particular.” The letter points out that many of those countries exporting steel and aluminum are also the same countries that import a large amount of U.S. agricultural goods. The letter stresses that “potential retaliation from those trading partners is very real.” The 1994 General Agreement on Tariffs and Trade says national security can be a reason to restrict trade but is rarely done. The organizations point out that no other country can dictate what another’s national security needs are. “Now, every country with a sensitive industry would know it could follow the example of America and find a national security reason to circumvent trade agreements, no matter how flimsy the reason,” they said. The farm groups urged the administration to “avoid igniting a trade war” through the imposition of restrictions on steel and aluminum imports.
Ag Secretary Sonny Perdue authorized the release of Conservation Reserve Program land in Montana, North Dakota, and South Dakota, for emergency haying. The announcement comes after agriculture groups and state legislators made urgent requests to the agency to address the severe drought conditions in the Upper Great Plains region. National Farmers Union President Roger Johnson says the conditions are forcing many farmers and ranchers across the drought-scorched region to make tough decisions about downsizing their herd or even keeping their farms. “Given that they’re also dealing with a severely depressed farm economy, the secretary’s action will go a long way toward alleviating some of the concerns currently facing farmers and ranchers,” Johnson said. The U.S. Cattleman’s Association says the announcement will help provide cattle operations with the tools they need to take care of livestock through an especially difficult time.
Syngenta has reached a confidential settlement with a Nebraska farmer who claims the company mishandled marketing of its genetically modified seed, which in turn caused corn prices to plummet. Bloomberg says a settlement heads off a trial that was to start this week. Terms of the settlement were not made public. It was just two weeks ago that Syngenta lost a jury verdict worth $218 million dollars because of a class action suit brought by Kansas farmers alleging similar claims against the company. Syngenta will next face a class action suit, which starts in August, up in Minnesota. Farmers there are seeking more than $600 million dollars. The farmers allege that Syngenta rushed its seed into the marketplace before getting approval from China to export the grain over there. China stopped bringing in shipments of corn in 2013, calling the grain shipments contaminated by the GMO seed. The farmers say that set off a five-year depression in corn prices. They also say Syngenta misled them on when China would approve the seed for import. Syngenta disputes the damage claims, saying it did nothing wrong. The company says it didn’t sell the seed until approved in the U.S. and didn’t need China’s approval to do so.
The Missouri and Arkansas Agriculture Departments both halted the sale and usage of dicamba in their respective states. Those two states have been in the middle of hundreds of misuse complaints. The Arkansas ban is effective for 120 days while the Missouri Ag Department would like to reinstate product usage this growing season after their investigation is concluded. The Missouri Soybean Association issued a statement saying over 200,000 acres of soybeans show at least some level of dicamba damage. The state’s soybean checkoff issued a statement saying it’s clear some type of action is necessary. Missouri Ag Director Chris Chinn said in a statement on the department’s YouTube channel that they’re actively working on the issue. “I’ve asked the makers of these approved, post emergent products and farmers to work with us to determine how we can expeditiously allow applications to resume this growing season,” she said in the video. Monsanto released a statement saying they’re complying with the order and they encourage all growers to do the same. The 120-day ban goes into effect at midnight on Tuesday, July 11th. Arkansas farmers have filed nearly 600 complaints in which dicamba is the suspected pesticide.
U.S. corn shipments to Mexico have slipped in recent months and Mexico in no longer the number one buyer of American corn. A Bloomberg article says it may be a sign that trade tensions are forcing the country to look elsewhere for corn in case the U.S. is no longer a reliable supplier. Sales through May of this year were down almost seven percent from last year, coming in at $1.04 billion. Japan has become the biggest importer of U.S. corn after boosting its purchases by 53 percent, totaling $1.19 billion. Mexico began looking for other corn suppliers after President Donald Trump’s criticism, which began on the campaign trail when he said Mexico has taken advantage of the U.S. through the North American Free Trade Agreement. Mexican corn purchases are picking up as the peso rebounds from a record low against the dollar in January. Lesly McNitt, Public Policy Director for the National Corn Growers Association, says the sluggish pace of U.S. corn shipments to Mexico shows the trade relationship may be at risk. “They’re preparing a Plan B,” she said to Bloomberg. Mexico has initiated discussions with suppliers in Argentina and Brazil.
The Purdue/CME Group’s June survey shows producers are a little more optimistic about their financial position than they were last year. The shift is why the June index reading of 131 was unchanged from the May survey. The index has held steady for three straight months and remains well above the low levels of last November. The shift in producer expectations is a long-term trend. At this time last year, just three percent of the producers who responded felt their operation was better off financially than the previous year. That number jumped to 10 percent last fall, dropped a bit in winter, and rebounded to its current level of 13 percent, the highest reading since the survey began in 2015. The shift is likely based on several factors, including farm revenues, which increased after large yields in 2016. Production costs also dropped from the previous year, as did many farmland rental rates.
The last few years have been a challenge in the precision farming industry. Precision Farming Dealer reports that dealers all over the country have been navigating the instability in commodity prices and cautious buying habits of their customers. The fifth annual Precision Dealers Benchmark Study has a more optimistic tone to it than recent years. Retailers are more optimistic about revenue expectations and business objectives. Dealer responses from 28 states and Canada showed 23 percent of dealers showing growth of eight percent or more, more than doubling the 10 percent of dealers projected a year earlier. On the other end of the spectrum, eight percent of dealers reported revenue dips of eight percent or more. It’s the first time in three years that the percentage of dealers experiencing revenue drops was in single digits. Looking ahead, 59 percent of all dealers forecast at least a two percent gain in revenues this year. Only 11 percent of dealers in the study are predicting a revenue drop of at least two percent, the lowest number of dealers in the study’s history.
The Farmers National Company recently released a semi-annual market update on farmland prices and it’s hard to nail down just what the trend is. A Pro Farmer report says the best description may be “steady, with exceptions.” The report says the reason trends are hard to figure out is some farmland sells at better prices than expected while other farmland shows a price decline from previous selling prices. Ag land values in most areas should be expected to continue gradually declining over the next several years if commodity prices and farm incomes remain bottomed-out. Interest rate increases, small tax law changes, and world economic challenges will likely keep the pressure on farmland prices over the next year. The report says there are potential positives ahead for farm and ranch incomes in the future. If the stress on land prices slows and there are no other shocks to the market, land values should move to stabilize over the next few years.
It looks like lawmakers will have $130 billion less to write the upcoming farm bill than they did for the past one. The Congressional Budget Office made that announcement when it published its 10-year baseline projections. The C.B.O. predicts that both farm and nutrition programs would cost roughly $822 billion over the next ten years. That breaks down to $679 billion for the SNAP program and $143 billion for ag programs like crop insurance, commodity subsidies, conservation, and other programs. However, the money lawmakers have available could go even lower if Congress passes a budget resolution. House Budget Committee Chair Diane Black, a Tennessee Republican, along with the House Freedom Caucus, had been asking for massive farm bill spending cuts over the next ten years. House Ag Committee Chair Mike Conaway and Black came to an agreement on a spending number that Conaway says will allow him to write a farm bill. Politico’s Morning Ag Report took a look at costs in the 2014 Farm Bill and found lower numbers than expected. The SNAP program, crop insurance, and conservation programs all cost less than budgeted for, with commodity subsidies the only area that cost more than budgeted for in 2014.
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