NFU News Clips April 25, 2012
PLEASE NOTE - Contents in the NFU News Clips are presented from their original sources. National Farmers Union and California Dairy Campaign does not have editorial control over the content. NFU does not endorse the views and issues contained in these articles and they do not necessarily represent NFU's official policy and positions. The News Clips are intended to provide news stories as they are presented by the media.
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In this edition:
Action on Farm Bill Postponed
April 24, 2012
After a steady drumbeat of Southern grumbling, the Senate Agriculture Committee abruptly announced Tuesday night that it was postponing action on its new draft farm bill, a 900-page giant promising $26.4 billion in savings over the next decade, largely by ending the current system of direct cash payments and reinvesting in new forms of crop insurance.
Aides to Chairwoman Debbie Stabenow (D-Mich.) had earlier insisted that the scheduled markup Wednesday morning would go ahead as planned, but Tuesday evening, this decision was reversed.
“The Agriculture Committee has made significant progress and have bipartisan agreement on the bulk of the Farm Bill,” Stabenow said in a statement.
“We are committed to continuing to work together in a bipartisan way as we come to agreement on a few outstanding issues. This is a bill that impacts 16 million jobs and a huge sector of America’s economy, and it is important that we move prudently to create the best possible product.”
Among Southern crops, cotton is promised its own income protection program, costing $3.1 billion, but producers of peanuts and rice remain unhappy with the proposed tradeoffs. Dozens of Southern commodity groups weighed in this week with a letter asking for the postponement.
The sudden change in signals from Stabenow testifies to the power still of these commodity lobbies but the Michigan Democrat has her own vested interest in finding a solution.
Senate Majority Leader Harry Reid (D-Nev.) has signaled that he is prepared to devote Senate floor time to the bill once it is out of committee, but Stabenow would be in a much stronger position if she can first hold the farm coalition together.
Within the commodity title itself, about $50.2 billion would be saved by repealing current subsidies, chiefly the cash payments. From these savings, $28.8 billion would then be invested in a novel revenue insurance program that would give farmers added protection against “shallow losses” — not covered now by traditional crop insurance.
The new approach is most popular in the Midwest Corn Belt, and Sen. Pat Roberts (R-Kan.), who is close to wheat and crop insurance interests, is supportive as well. But Southern crops, which typically benefit more from the current cash payments, have more to lose. And in the case of rice and peanuts, these growers are less enamored with various revenue insurance products.
“They are not going to satisfy peanuts and rice. … It’s just not a safety net,” Sen. Saxby Chambliss (R-Ga.) told POLITICO. “A producer who lost all his crop will get a minimal payment, while the folks in the Midwest are going to be getting a significant return on their investment.”
“To get my support,” said Sen. John Boozman (R-Ark.) , “there’s going to have to be some compromise.”
The National Cotton Council moved early to secure its protection in the bill. But there is still Southern regional sympathy with rice and peanut growers, who had been banking on some relief through a more traditional system of target prices and supports.
Former Texas Rep. Larry Combest, the former House Agriculture Committee chairman and longtime champion of cotton, helped organize the commodity letter, for example. And Chambliss is no small player, having once chaired the Senate panel himself.
“In regard to substance, our first blush impression is that the mark raises serious equity issues and grave concerns over planting distortions,” reads a draft copy of the letter. “We share in the Committee’s strong desire to produce an equitable bill that avoids the scenario in which the farm bill is driving planting decisions.”
Because of its high capital costs, for example, rice relied most heavily of the direct cash subsidies and will lose as much as $3 billion from the proposed change in commodity payments. At the same time, rice has been reluctant to jump into crop insurance, since the crop is grown in flooded paddies not vulnerable to drought.
Indeed, an earlier draft farm bill embraced by top House and Senate lawmakers last November had included targeted prices — to help rice initially. But when other crops jumped in with demands of their own, lawmakers became concerned about distortions disrupting markets and crop-growing decisions. The new draft rolled out last Friday by Stabenow and Roberts included no target price language.
If ever there were an example of elections having consequences, this is one. Prior to 2010, when she lost her seat, Sen. Blanche Lincoln (D-Ark.) chaired the same Senate Agriculture panel and as a rice farmer’s daughter, she would never have permitted the current situation.
Both the White House and House GOP leadership want still more savings from farm programs, and one battleground will be the level of premium subsidies provided for crop insurance.
The Congressional Budget Office’s baseline cost projections already assume some increase, reflecting the higher value of commodity prices. And the draft bill would add $3.2 billion in spending for crop insurance, chiefly for a new program tailored to cotton.Conservation programs account for $6.4 billion in savings and just $4.3 billion would come from nutrition programs. Put another way, if the commodity and crop insurance titles of the bill are treated together, their net savings are $16.2 billion — or more than 60 percent of the reductions altogether.
Mad Cow Reported
April 24, 2012
In a press call this afternoon, USDA talked through a reported find of an animal infected with bovine spongiform encephalopathy - or mad cow - in the United States. Found in a pre-rendering inspection, the animal was found in California.
The animal is a dairy cow from Central California and it is expressing what USDA is calling an "atypical" case of the disease, which means it may not have come from the typical means of transmission. The animal was found in a pre-rendering test at a rendering facility. Its meat did not enter the food chain and the carcass will be destroyed. USDA Chief Veterinarian John Clifford did not have information about whether the animal was alive when collected by the renderer.
USDA is conducting an investigation into the incident and notes that notification of trading partners has begun. However, officials note that this case "should not" impact trade given the current U.S. status under OIE for BSE. However, the United States is in delicate negotiations with the Japanese to raise the acceptable age of animals harvested for export to that country. How this news will impact those talks remains to be seen.
Little detail is available on the dairy cow. The investigation will look into the age of the animal, whether it was dead when collected by the renderer and other details.
Domestic market impact, however, over the rumor has been deeper. Prices fell $3 per hundredweight from the morning nearby contract price for live cattle at $119.90. Markets locked limit down the $3 daily limit in the final 25 minutes of trade.
Adds Farm Futures Market Analyst Arlan Suderman: "The markets were very vulnerable due to a large ownership of live cattle futures by speculative fund managers, who quickly headed to the sideline with the rumor hit."
Feedgrain prices slipped as well, with corn dropping 10 cents and soybeans sliding modestly off multi-year highs set late in the session of $14.67-1/2.
This is the fourth confirmed case of BSE in the United States since the famous "Christmas surprise" of 2003, when an infected cow was found in a Washington dairy, in an animal that had come from Canada.
Chief Clifford's statement follows:
Statement by USDA Chief Veterinary Officer John Clifford Regarding a Detection of Bovine Spongiform Encephalopathy (BSE) in the United States Assures Consumers That Existing Safeguards Protected Food Supply; Reiterates Safety of Consuming Beef Products
WASHINGTON, April 24, 2012 – USDA Chief Veterinary Officer John Clifford today released the following statement on the detection of BSE in the United States:
"As part of our targeted surveillance system, the U.S. Department of Agriculture's (USDA) Animal and Plant Health Inspection Service (APHIS) has confirmed the nation's fourth case of bovine spongiform encephalopathy (BSE) in a dairy cow from central California. The carcass of the animal is being held under State authority at a rendering facility in California and will be destroyed. It was never presented for slaughter for human consumption, so at no time presented a risk to the food supply or human health. Additionally, milk does not transmit BSE.
"The United States has had longstanding interlocking safeguards to protect human and animal health against BSE. For public health, these measures include the USDA ban on specified risk materials, or SRMs, from the food supply. SRMs are parts of the animal that are most likely to contain the BSE agent if it is present in an animal. USDA also bans all nonambulatory (sometimes called "downer") cattle from entering the human food chain. For animal health, the Food and Drug Administration (FDA) ban on ruminant material in cattle feed prevents the spread of the disease in the cattle herd.
"Evidence shows that our systems and safeguards to prevent BSE are working, as are similar actions taken by countries around the world. In 2011, there were only 29 worldwide cases of BSE, a dramatic decline and 99% reduction since the peak in 1992 of 37,311 cases. This is directly attributable to the impact and effectiveness of feed bans as a primary control measure for the disease.
"Samples from the animal in question were tested at USDA's National Veterinary Services Laboratories in Ames, Iowa. Confirmatory results using immunohistochemistry and western blot tests confirmed the animal was positive for atypical BSE, a very rare form of the disease not generally associated with an animal consuming infected feed.
"We are sharing our laboratory results with international animal health reference laboratories in Canada and England, which have official World Animal Health (OIE) reference labs. These labs have extensive experience diagnosing atypical BSE and will review our confirmation of this form of the disease. In addition, we will be conducting a comprehensive epidemiological investigation in conjunction with California animal and public health officials and the FDA.
"BSE is a progressive neurological disease among cattle that is always fatal. It belongs to a family of diseases known as transmissible spongiform encephalopathies. Affected animals may display nervousness or aggression, abnormal posture, difficulty in coordination and rising, decreased milk production, or loss of body weight despite continued appetite.
"This detection in no way affects the United States' BSE status as determined by the OIE. The United States has in place all of the elements of a system that OIE has determined ensures that beef and beef products are safe for human consumption: a mammalian feed ban, removal of specified risk materials, and vigorous surveillance. Consequently, this detection should not affect U.S. trade. "USDA remains confident in the health of the national herd and the safety of beef and dairy products. As the epidemiological investigation progresses, USDA will continue to communicate findings in a timely and transparent manner."
NFU’s Roger Johnson Sees Positives and
Negatives of Chairwoman’s Mark of Farm Bill
April 24, 2012
Oklahoma Farm Report
Roger Johnson of the National Farmers Union has been following the developments surrounding the farm bill mark that has come out of the Senate Agriculture Committee. He says he sees positives and negatives in the progress so far.
“I think if you look at the bright side of this, having the mark released by the chair and the ranking member is a pretty strong signal there’s serious effort behind this and that there’s been a lot of work done behind the scenes to try and put some of the deals together to accommodate the various interests.”
He says he sees two areas of disappointment with the mark so far. One deals with the area of energy which has been dramatically cut back, the other deals with crop price protection.
“You know, as far as rural America, rural development in the last two or three decades has largely been a function of what’s happened with renewable energy. So that seems to be something we would want to pay attention to, to keep a focus on.
“The other area I would say we are disappointed in, and maybe it’s just not possible to get it done given the political atmosphere, but we need some sort of long term protection from price collapse. Maybe a better way to put it would be protection from a long-term price collapse.
“The best that they’re able to do is a sort of a five-year Olympic average of following the market down. If we get back to a period like the late 90s or early 2000s where we had seven, eight years in a row of very low commodity prices, I worry what’s going to happen by not having some sort of safety net that’s price based at a higher level.”
Johnson said he was also surprised that there’s no livestock title in the farm bill even though livestock comprises roughly half of U.S. agricultural production. He said there are several items scattered throughout the bill, however, dealing with important programs for livestock producers.
Push to Give Midsize New York Farms a Hub at the
Hunts Point Market
April 24, 2012
The New York Times
Decades after the slow-food movement began championing the benefits of locally grown fruits and vegetables, pressure is mounting for New York City to stand up to big vendors and make room for the region’s midsize farms at the Hunts Point wholesale produce market in the South Bronx.
The region has no big wholesale hub for local produce, and advocates of local food and farmers argue that this is the logical time to make it happen. The city is deep in lease negotiations with the cooperative that owns the 45-year-old market, which stretches across 105 acres of city land, and is exploring how to pay for much-needed renovations there.
Complicating matters, New Jersey is hoping to lure the cooperative and its 3,000 jobs across the Hudson River, which gives the city less leverage in pushing for change. And the cooperative’s owners are wary of competition from the smaller farmers, whose costs do not include expensive labor contracts.
Proponents of adding a wholesale farmers’ market at Hunts Point say that even as the Bloomberg administration supports sustainability, only 4 percent of the $2.3 billion worth of food sold annually at Hunts Point comes from New York State, and only 8 percent from New Jersey. The rest is brought in from 49 states and an estimated 55 countries, according to the cooperative.
“It is critical that state and city officials seize this opportunity,” said Mark A. Izeman, a senior lawyer with the Natural Resources Defense Council, which advocates for farmland preservation in New York State and the environmental benefits of growing food locally. He said it was “crazy” that New York had not created a central wholesale hub for local food as cities like Paris and Toronto have.
In an interview in his office at the terminal, the co-op’s co-president, Matthew D’Arrigo, said the issue of including midsize regional growers had not come up in negotiations with the city, but “it’s there.”
Mr. D’Arrigo said he was concerned that oversupply problems could worsen if midsize farmers were admitted. And New York State’s limited growing season, about five months of the year, might not make the hub as successful as its supporters predict in any case, he added.
The city and the cooperative, which pays about $4.5 million a year in rent, are in exclusive negotiations on a new lease with the goal of reaching an accord by June 29. If they do not, New Jersey officials say, they are ready to reopen talks.
Local farm supporters want the city to insist that a new lease include year-round indoor space for New York growers that are modest in size yet too large to profit from the small green markets in the New York area’s parks and streets. Such farms are typically under 300 acres in the Hudson Valley, on Long Island and in the upstate areas that can supply the city, according to studies.
Pressed on the issue, city officials would say only that their first priority is reaching an accord on the lease and on resolving nagging storage, refrigeration and traffic issues.
“Our current focus is on securing a long-term lease with the market co-op and creating a larger, modernized market,” said Julie Wood, a spokeswoman for Mayor Michael R. Bloomberg’s office. So far, the city and state have committed to shouldering $137 million of an anticipated $350 million in renovation costs.
Advocates of a local presence say that a local wholesale hub would help keep struggling farms afloat while helping to satisfy the demand from New York institutions and grocery stores for fresh local food.
Andrew Rigie, an executive vice president of the New York State Restaurant Association, pointed out that more restaurants were promoting the freshness of their ingredients and local sourcing. Creating an attractive, convenient hub to buy those ingredients in bulk, he said, would give restaurants access to more quantity and variety of produce.
Other potential buyers, like Rhys W. Powell, president of Red Rabbit, a farm-fresh and organic food provider that serves about 10,000 meals a day in New York City schools, said that such an outlet would simplify his currently frenzied buying routine. “It’s like shopping at 12 different grocery stores,” he said.
The 150 or so New York farmers selling through Hunts Point now, state agricultural experts said, are mostly large-scale growers of state staples like onions and apples that sell enough volume to absorb the 12 percent to 15 percent commissions set by the cooperative’s wholesalers.
At the other end of the growing spectrum are small-scale farmers that can profitably sell directly to customers at retail farmers’ markets like the one in Union Square.
But most upstate farmers fall into the middle, and they say they are falling through the cracks in the distribution system.
GrowNYC, the agency that runs a network of 57 retail green markets with 240 small-scale farmers, has proposed a $12 million center at or near the Hunts Point terminal. It would have indoor space providing refrigeration and storage for 80 farmers and space for complementary businesses like makers of local cheeses and preserves. The plan also envisions an outdoor site for an additional 50 farmers.
Marcel Van Ooyen, the agency’s executive director, said that such a hub would allow farmers to set their own prices, sell directly to wholesale customers and keep more money in their pockets, just as the small farmers do. “We think this is a huge game changer,” he said.
Frank Dagele Jr., a fourth-generation farmer with Dagele Brothers Produce, 60 miles north of the city in the Orange County village of Florida, said his dream was to introduce his family’s artichokes to the Hunts Point market. “When people think of artichokes,” he said with regret, “they think of California.”
Mr. Dagele, 53, sells 5 percent of his 40 varieties of vegetables in the New York metropolitan area through various channels, including direct purchases by Whole Foods and sales to a Hunts Point wholesaler under the commission system. The bulk of his production goes to upstate supermarkets.
If he could sell directly from a year-round wholesale market, he said, he could plant an extra 50 acres on his farm, ramp up his fledgling greenhouse production and quadruple his sales in New York City.
The idea for the local hub has long been talked up by officials from the New York State Department of Agriculture and Markets. More recently, it has drawn support from Christine C. Quinn, the City Council speaker, who has said that her office is pushing for it, and from Gov. Andrew M. Cuomo, who last year outlined how it could benefit the upstate economy.
Whether the tight-knit cooperative of 38 companies at Hunts Point will ever agree to it remains unclear.
Mr. D’Arrigo, the co-op’s president, said some members were worried about being outflanked by farmers with advantages like potential city subsidies and not being required to hire unionized labor. If the midsize farms are to sell there, he added, he would agree only to their selling outdoors.
But that would fall short of what advocates of local food have in mind.
“We call New York the restaurant capital of the world,” Mr. Rigie said of the industry association, “and we should have the most cutting-edge, accessible market in the world for local produce.”
Burger King Makes Cage-Free Promise
April 25, 2012
The movement by U.S. food corporations toward more humane treatment of animals experienced a whopper of a shift Wednesday when Burger King announced that all of its eggs and pork will come from cage-free chickens and pigs by 2017.
The decision by the world's second-biggest fast-food restaurant raises the bar for other companies seeking to appeal to the rising consumer demand for more humanely produced fare.
"So many tens of thousands of animals will now be in better living conditions," said Wayne Pacelle, president of the Humane Society of the United States, which has been pushing Burger King and other corporations to consider animal welfare in purchasing policies. "Numerically this is significant because Burger King is such a big purchaser of these products."
The decision by Burger King, which uses hundreds of millions of eggs and tens of millions of pounds of pork annually, could represent a game-change in the egg and pork supply business as a huge new market has opened up for humanely raised food animals. Already 9 percent of the company's eggs and 20 percent of its pork are cage-free.
The Miami-based company steadily has been increasing its use of cage-free eggs and pork as the industry has become better able to meet demand, said Jonathan Fitzpatrick, chief brand and operations officer. He said the decision is part of the company's social responsibility policy.
"We believe this decision will allow us to leverage our purchasing power to ensure the appropriate and proper treatment of animals by our vendors and suppliers," he said.
Earlier this year, McDonalds and Wendy's announced that they have asked their pork suppliers to outline their plans for elimination of gestation crates without setting a timetable.
The issue of the treatment of pigs raised for pork has recently developed. This year, Smithfield Farms and Hormel committed to ending the use of gestation crates by 2017.
"This is an issue that just four to five months ago was not on the food industry's radar," said Paul Shapiro, vice president for farm animal protection at the humane society. "Now it's firmly cemented into the mainstream in a way that I think few people would have imagined."
Last month, the pork industry's trade magazine editorialized for an end to the practice saying "on the issue of gestation-sow stalls, at least, it's increasingly apparent that you will lose the battle."
HSUS has been pushing for more than a decade for large-scale purchasers of animal products to ensure that they are raised humanely. The organization owns stock in 52 companies that use animal products so that it can attend shareholder meetings and submit proposals for improved animal welfare policy.
It also has used undercover operations to show the conditions some food animals endure.
Conventionally raised eggs come from hens confined in battery cages that give them roughly the same footprint as a sheet of standard notebook paper. Most pork comes from sows that are confined during their four-month pregnancies in narrow crates.
"For every cage-free egg or piece of bacon from a gestation-free pork system that Burger King sells, animals have been spared lifelong confinement in a cage so small they can barely even move," said Matthew Prescott, the HSUS food policy director.
In 2007, Burger King became the first major fast-food restaurant chain to incorporate animal welfare issues into its purchasing policies when it began sourcing at least some of its pork and eggs from cage-free suppliers. The hens are still housed in a barn, but they have room to roam, and perches and nesting boxes.
While some companies have been responding to consumer demand by incorporating some percentages of cage-free eggs into their purchase orders, the landslide passage by voters in 2008 of California's Proposition 2, which will ban chicken cages and gestation crates by 2015, caused buyers and suppliers nationwide to take notice. Since then, studies have shown that shoppers are willing to pay more for products they believe are produced to higher animal protection standards.
Since then, Wal-Mart and Costco have transitioned their private-label eggs to 100 percent cage-free. Unilever, which uses 350 million eggs a year in its Hellmann's mayonnaise brand, is switching to 100 percent cage-free, and others such as Sonic, Subway, Ruby Tuesday chain restaurants, and manufacturers such as Kraft Food and ConAgra Foods are incorporating some percentage of cage-free eggs in their products.
Egg and pork producers have argued that easing confinement standards for animals raises production costs and makes those who adjust their practices less competitive. That prompted the egg industry's largest trade association, the United Egg Producers, to team with HSUS in seeking federal legislation this year that would double the size of the cages in which 90 percent of the nation's 280 million laying hens are confined.
Industry officials who have argued against cage-free eggs say hens are safer and eggs are less likely to be diseased in a cage system of hen housing.
"Our attitude is our producers believe in consumer choice and if that's what their consumers want to buy, they'll produce cage-free eggs for the marketplace provided the customer is willing to pay the additional cost," said Gene Gregory, president of the United Egg Producers.
Some studies have shown that raising hens cage-free adds 1 cent to the cost of each egg. It's unclear how much more it will cost to raise pork outside of gestation cages.