Greatest Collapse of Hog Prices Ever – From Purdue
Purdue University agricultural economist Chris Hurt indicted yesterday from the farmdoc daily blog, Hogs: Price Collapse – ‘Buy the Rumor. Sell the Fact’ – Podcast,that “A year-ago in March, the new PED virus was the talk in the livestock media. Baby pig death losses of nearly 100 percent were the reality for some herds. The disease was not well understood and was spreading rapidly.”
Yesterday’s update added that, “The inability to refute the rumors of massive death losses a year-ago contributed to prices overshooting to the upside. The reality that pork production was only down two percent in 2014 and is now moving up rapidly in 2015 helped create what may be the greatest collapse of hog prices ever[related graph].”
Dr. Hurt explained that, “Fortunately for pork producers, costs of production are expected to be at five year lows in 2015. Total costs are estimated at $52.25 per live hundredweight, compared with $57 in 2014. The biggest decrease in feed costs in 2015 is expected to come from soybean meal which may be $120 a ton lower ($360 per ton this year versus $478 in 2014 based on Decatur high-protein prices). Corn costs are expected to be $3.83 per bushel this calendar year compared to $4.09 in 2014. Corn costs are based on U.S. farm prices.
“Record high profits in 2014 are expected to come back to earth in 2015. Last year’s estimated profits were $53 per head, beating the previous annual record of $39 in 2005. Given current anticipated hog prices and costs, modest losses are expected in the first and fourth quarters this year with about $19 per head of profits in the second and third quarters. For the year, a modest profit of $8 per head is anticipated.”
In other news, Jeffrey T. Lewis reported yesterday at The Wall Street Journal Online that, “Brazil’s state of Sao Paulo has developed a plan to ration water for its farmers, but is waiting until the end of March to decide whether to implement it, according to Arnaldo Jardim, the state’s top agriculture official.”
And Reuters writer Mayank Bhardwaj reported yesterday that, “Heavy and untimely rain in northern and central India’s wheat bowl over the past two days could trim output from the new season crop, but government scientists said the absence of hailstorms meant there should not be any significant damage.”
European Union Giving Members Power to Ban GMO
The Associated Press reported yesterday that, “The European Union is giving member states the power to ban the cultivation of genetically-modified crops even if they have been approved by the bloc’s food safety authority.
“The 28 EU member states on Monday approved the rule that national governments can have the final say in the matter — a move that goes counter to many EU initiatives, which traditionally seek a common stance on EU policies.
“Mute Schimpf of Friends of the Earth Europe says the new law ‘is a massive opportunity for national governments to shut the door on biotech crops in Europe.'”
Feeding the Hungry
In a speech yesterday at the 2015 National Anti-Hunger Policy Conference in Washington, D.C., Secretary of Agriculture Tom Vilsack discussed the SNAP program and announced “more than $27 million in grants to fund innovative projects designed help end childhood hunger.”
Also yesterday, at the School Nutrition Association’s 2015 Legislative Action Conference, a separate venue in Washington, D.C., Sen. John Hoeven (R., N.D.) announced “that he plans to introduce the Healthy School Meals Flexibility Act later this week or early next week. The legislation would provide permanent flexibility to school districts in complying with the U.S. Department of Agriculture’s new school nutrition requirements.”
Additional details on these federal nutrition policy issues from yesterday, and on Sec. Vilsack’s remarks regarding the SNAP program, can be found here, at FarmPolicy.com.
On Monday, USDA’s Economic Research Service (ERS) updated its monthlyAmber Waves publication; the March edition contained two particularly interesting articles on nutrition related policy. The first looked at the number of school districts serving “local” food, while the second addressed the potential of restricting sweetened beverages purchases through the SNAP program- an especially timely article considering the House Ag Committee’s ongoing top-to-bottom overview of the program (Committee SNAP hearing summaries here and here).
A summary overview of the two ERS articles is available here.
Nutrition Cuts on the Way? Agriculture caught in the middle. Here we go again.
Arthur Delaney reported yesterday at the Huffington Post that, “The Republican Party’s new point man on food stamps, Rep. Mike Conaway (R-Texas), insists that he doesn’t want to cut nutrition assistance benefits. Instead, Conaway is leading a multiyear review of the program, just to make sure it’s the best it can be.
“But it might not be up to Conaway. Republicans could push food stamp cuts this year through a parliamentary process known as ‘reconciliation.’
“The GOP has discussed using reconciliation as a way to repeal Obamacare or to do tax reform. Now, some Democrats and food stamp advocates are warning that the Republican-controlled Congress could use the obscure budget maneuver to reduce food stamp assistance.”
Recall that last month, in a letter to Senate and House Budget Committee leaders, a large number of food, agriculture and policy organizations indicated that, “The undersigned 392 organizations, representing America’s agriculture, nutrition, conservation, rural development, finance, forestry, energy, trade, labor, equipment manufactures and crop insurance sectors, strongly urge you to reject calls for additional cuts to programs within the jurisdiction of the Senate and House Agriculture Committees.”
Mr. Delaney noted in his article yesterday that, “For Republicans, the advantage of the reconciliation process is that it could get through the Senate with a simple majority, meaning Democrats would be unable to filibuster. But it is extremely unlikely that a budget bill dismantling Obamacare would be able to avoid the president’s veto, so cuts to food stamps are entirely theoretical at this point.
“Still, the possibility of a reconciliation bill is on the radar. Last month, Conaway, who recently became chairman of the House Committee on Agriculture, and the committee’s top Democrat asked in a joint letter to House Budget Committee Chairman Tom Price (R-Ga.), that programs reauthorized in the farm bill be left alone. The request suggested that the agriculture committee is worried that the budget committee might mandate further cuts through a reconciliation directive.
“A spokesman for Price told The Huffington Post only that Republicans are working on their budget bill.”
Yesterday’s article indicated that, “‘You can see a scenario where SNAP gets the disproportionate amount of cuts in any kind of reconciliation,’ Rep. Jim McGovern (D-Mass.), the agriculture committee’s most vocal defender of food stamps, said in an interview. ‘There are members in the majority here who do not like the program, do not understand the program, and are trying to find ways to get rid of it.'”
Concluding, the Huffington Post article noted that, “‘I think there’s a good chance that the Republican budget resolution that’s adopted in April will have reconciliation instructions to the agriculture committee with the assumption that there’s cuts in SNAP,’ [Bob Greenstein, president of the Center on Budget and Policy Priorities ] said.
“‘I think the chances are better than 50-50,’ Farm Bureau lobbyist Mary Kay Thatcher agreed.”
And, Now for the Legislation of Antibiotics…
In other policy news, an update yesterday from Sen. Dianne Feinstein(D., Calif.) stated that, “Senators [Feinstein] and Susan Collins (R-Maine) today introduced the Prevention of Antibiotic Resistance Act to combat the overuse of medically-important antibiotics in agriculture. The bill is cosponsored by Senators Kirsten Gillibrand (D-N.Y.) and Elizabeth Warren (D-Mass.).
“The bill would require the Food and Drug Administration (FDA) to withdraw its approval of medically-important antibiotics used for disease prevention or control that are at high risk of abuse, unless the producer of the drug can demonstrate that its use in agriculture does not pose a risk to human health. Antibiotics that meet the standard for prevention and control uses would be issued a revised label that supports prudent antibiotic use.
“The bill addresses a gap in the guidelines issued by FDA in December 2013, which called on the industry to eliminate the use of antibiotics for the purpose of making animals gain weight.”
Meanwhile, the House Appropriations Subcommittee on Agriculture continues its review of the USDA budget, as well as a look at the FDA budget,with hearings scheduled for today, tomorrow and Thursday.
D.C. – Everyone Appears to be Visiting Cuba
Reuters writers Marc Frank and Daniel Trotta reported yesterday that, “The most important U.S. agricultural delegation to visit Cuba in more than a decade began three days of meetings on Monday, hoping to find potential business partners, while urging the U.S. Congress to lift the U.S. embargo on trade with the island.
“Two former agriculture secretaries, a number of state agriculture officials and representatives of various state farm bureaus are among the 95 people making the trip, which was organized by the U.S. Agriculture Coalition for Cuba. That group was formed after the Dec. 17 announcement the United States and Communist-run Cuba would restore diplomatic relations.
“‘The message we hope will get back to Washington is that we are a unifying voice that would like to see Congress act in 2015 and end the embargo,’ Cargill executive Devry Boughner Vorwerk, chairwoman of the coalition, said in an interview.”
The trip follows three separate delegations to Cuba that have included: Senate Ag Committee ranking member Debbie Stabenow (D., Mich.), Sen. Amy Klobuchar (D., Minn.) and House Ag Committee ranking member Collin Peterson (D., Minn.).
Pacific Trade Pact – Keep Talking
In addition to other agricultural groups calling on Congress to pass Trade Promotion Authority, a news update yesterday stated that, “The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) today jointly urged Congress to enact new Trade Promotion Authority (TPA) legislation, saying it is crucial to securing well-negotiated trade agreements, including a Pacific Rim pact that must open key markets to more U.S. dairy products. ”
William Mauldin reported in today’s Wall Street Journal that, “Opponents of the White House’s trade ambitions have seized on an obscure dispute-resolution provision to warn that a Pacific trade pact could expand the ability of foreign firms to challenge U.S. laws and regulations.
“Led by Sen. Elizabeth Warren (D., Mass.), the criticism brings together liberal critics of President Barack Obama’s trade policies and libertarians and conservatives who worry that the language in international deals could undermine American sovereignty.”
And as a side note, Bloomberg writers Isabel ReynoldsTakashi Hirokawa reported yesterday that, “Just a week after the resignation of his farm minister, Prime Minister Shinzo Abe has become the latest Japanese politician to be tainted by allegations of financial impropriety.
“Abe will look into accusations in a Sankei newspaper report that a local chapter — headed by the prime minister — of the ruling Liberal Democratic Party broke funding laws, Chief Cabinet Secretary Yoshihide Suga told reporters in Tokyo on Tuesday. The newspaper reported that the chapter got a 500,000 yen ($4,170) donation from a company in line to receive government subsidies.”
Homeland Security – Terrorists, Anyone?
Ashley Parker reported in today’s New York Times that, “Senate Democrats on Monday blocked a House attempt to force joint negotiations over legislation to fund the Department of Homeland Security through the fiscal year.
“The vote, 47 to 43, again pushes the matter back to the House, where Speaker John A. Boehner confronts a likely choice between persuading an unruly group of conservative lawmakers to pass the funding, without any restrictions on President Obama’s executive actions on immigration, orbuilding a majority on the backs of Democratic votes to avert a partial shutdown of the department before it runs out of money Friday at midnight.”
Sean Sullivan reported in today’s Washington Post that, “Few issues have animated the conservative base like Obama’s immigration actions, leaving Boehner in a tough spot. A combination of frustration over the substance of Obama’s directives, which include stemming the deportations of millions of undocumented immigrants, and anger over how they were carried out — executive maneuvers that conservatives say overstepped Obama’s authority — has been swirling on the right for months.
“Rep. Steve King (R-Iowa), a hard-line opponent of immigration reform, expressed worry that Democrats would try to use an arcane procedural maneuver to bring up the Senate’s DHS funding bill. He offered a resolutionto prevent them from doing do.
“Opening the Senate’s business Monday afternoon, McConnell criticized Democrats for opposing a conference committee on DHS funding.”
Lastly today, the Beyond Bylines Blog, published by PR Newswire, recently highlighted agricultural related blogs in its Blog Profile series.
FarmPolicy.com, which was described as “a really fascinating blog,” was one of the blogs highlighted in the PR Newswire update.