Pacific Port Dispute Risks Whole U.S. Economy
Labor related disputes at some West Coast ports continue to hamper container product movement, with one consequence being negative implications for the agricultural sector. The port issue was front-page news in Sunday’s Los Angeles Times as well as Tuesday’s Wall Street Journal.
Mickey Kantor, a former U.S. trade representative and secretary of Commerce, noted in Tuesday’s Los Angeles Times that, “If the West Coast’s 29 ports are not returned to full operation soon, it will create a shock wave that reverberates across the economy, derailing a promising economic recovery that is creating jobs and restoring a sense of economic security for the nation…[F]or American farmers, the cost of a shutdown is equally crippling, as orders for many agricultural products are already taking a hit because of the uncertainty over whether they can be delivered in time.
“The Washington, D.C.-based Agriculture Transportation Coalition, which tracks ocean shipping issues, estimated in December that nationwide the lost sales for fruits, vegetables and meats totaled more than $400 million per week. In California,citrus growers are being hit especially hard. Their trade association reckons reductions in sales to Asian markets are already down 25%, costing growers an estimated $125 million.”
Amb. Kantor added that, “President Obama has directed Labor Secretary Thomas Perez to engage in the dispute to revive negotiations, which is a welcome sign. He is scheduled to meet Tuesday with the employer group, the Pacific Maritime Assn., and with the International Longshore and Warehouse Union. But the president must be prepared to use his bully pulpit — and all other means at his disposal — to ensure that our nation remains open for business.”
Pacific Trade Agreement Near Completion
An update on Tuesday at The Japan News Online indicated that, “Prime Minister Shinzo Abe expressed on Tuesday his desire for an early conclusion of the Trans-Pacific Partnership free trade agreement.
“‘[The negotiations] are in their final phase. I’ll seek the road that best serves the nation’s interests by protecting what needs to be protected and pushing for what we want,’ Abe said about the TPP negotiations during a question-and-answer session at the plenary session of the House of Councillors.”
Adam Behsudi reported at the Tuesday Politico Morning Trade newsletter that, “The Senate is likely to be the first chamber to consider key legislation for getting the landmark Trans-Pacific Partnership agreement and other trade deals easily passed in Congress, House Ways and Means Chairman Paul Ryan said Friday. ‘Our calendar is pretty crowded, and they, I believe, have reserved calendar space to do that, so I literally think it’s a legislative calendar issue,’ the Wisconsin Republican said in a briefing with reporters.
“The introduction of a ‘trade promotion authority’ bill could come as soon as next week following the Presidents Day recess. But if the Senate passes the legislation first, a new procedural step would have to be added to the process.”
For a more detailed look at the political play regarding TPA, TPP and currency related issues among lawmakers, and between the executive and legislative branch, see “Currency Battle Is Tethered to Obama Trade Agenda,” by Jonathan Weisman, which was published on the front page of the Business Section in Monday’s New York Times.
Crop Prices – What’s the Future Look Like?
Recent reports of a growing U.S. hog herd have been noted, while simultaneously, anecdotally
With respect to market information, in mid-December, the University of Illinois held an agricultural outlook meeting that included a detailed Agricultural Commodity Price Outlook by Darrel Good, as well as a presentation by Scott Irwin titled, “Can One Monster Crop End the New Era of Grain Prices?”
Darrel Good also took a closer look at soybean market variables in a brief report on Monday.
Drones Get the Go Ahead for Farm Use
Meanwhile, new FAA rules regarding drone use were noted on the front page of Tuesday’s Des Moines Register, it appears that at least for now, one primary use of drones in the ag sector is for detailed and efficient crop scouting.
Jack Nicas and Andy Pasztor reported on the front page of the new “Business and Tech” section of Tuesday’s The Wall Street Journal that, “Long-awaited federal rules proposed for commercial drones should pave the way for thousands of U.S. businesses to fly the devices in industries like filmmaking, farming and construction, but drone proponents worried that limits in the regulations would stifle other possible uses like package delivery.”
The Journal writers added that, “Ted Ellett, a former FAA chief counsel who represents companies that want to use drones, said the proposal ‘seems to be close to a home run’ for many of his clients and their peers.
“Drones for farming would likely thrive under the proposal, he said, but the FAA’s proposed limits still would allow the agency to block drone flights if they pass ‘over a single farmer on his tractor in the middle of a 100-acre field in Iowa.'”
And, Katy Burne reported in Tuesday’s Wall Street Journal that, “U.S. regulators are poised to introduce measures that would ensure anonymity for traders in the $700 trillion market for swaps, said people familiar with the discussions, a flip-flop that would hand a victory to hedge funds and speedy trading firms while dealing a blow to banks.
“The planned action from the Commodity Futures Trading Commission would encourage trading among any and all market participants, mirroring futures markets that the agency also oversees, and would raise the chance of traders dealing directly with one another, potentially bypassing banks that have historically been major providers for these complex transactions, the people said.
“The CFTC measures could be unveiled as soon as next month and may come as a rule change or as staff guidance, the people familiar said. The Wall Street Journal reported in November that the CFTC was scrutinizing identity disclosures in swaps. A spokesman for the agency declined to comment.”
Texas Judge Blocks Immigration Order
Fred Barbash reported on Tuesday at The Washington Post Online that, “A federal judge in Texas last night temporarily blocked the Obama administration’s executive actions on immigration. The judge, responding to a suit filed by 26 Republican-run states, did not rule on the legality of immigration orders but said there was sufficient merit to the challenge to warrant a suspension while the case goes forward.”
Issues regarding immigration and the budget for the Department of Homeland Security also continue to percolate.