NFU News Clips May 2, 2012 PLEASE NOTE - Contents in the NFU News Clips are presented from their original sources. California Dairy Campaign & National Farmers Union does not have editorial control over the content. CDC & NFU does not endorse the views and issues contained in these articles and they do not necessarily represent CDC nor NFU's official policy and positions. The News Clips are intended to provide news stories as they are presented by the media.
Click on the title of the story to read the full story In this edition: CME Group Fires at ICE with 22-hour Grains TradeMay 1, 2012 ReutersJonathan LeffCME Group (CME.O) on Tuesday told Iowa farmers, Chicago brokers and huge global hedge funds to brace for a longer, more intense trading day, as it announced plans for nearly round-the-clock grains trading to fend off pressure from arch-rival IntercontinentalExchange (ICE.N). The CME's Chicago Board of Trade, a bastion of trading tradition and center of the global grain world, will move all of its grain and soybean complex futures and options contracts to a 22-hour trading day starting May 14, it said, confirming a Reuters report and trade rumors that circulated on Monday. With electronic trading now to run continuously from 6 p.m. to 4 p.m. central time the next day, Monday to Friday, dealers will for the first time have the opportunity to trade immediately after some of the market's most important data: U.S. Agriculture Department export figures and monthly fundamental reports. "Customers are looking to manage their price risk in our deep, liquid markets during market-moving events like USDA crop reports," Tim Andriesen, managing director of CME's Agricultural Commodities and Alternative Investments, said in a statement. Until now, CME had abided by the long-standing desire among many of the industry's veterans to keep the market shut during the early morning hours, giving traders the opportunity to consider the often complex reports at some leisure. But many of the market's newer entrants, such as hedge funds, have quietly pressed to end some of those traditions, anxious for more trading opportunities, while even some large commercial users have rued the fact that late-day cargo deals cannot be hedged. An over-the-counter swaps market offered limited access. Archer Daniels Midland Co (ADM.N), one of the world's largest grain traders and processors, welcomed the longer trading day. "We trade in cash markets all over the world, all hours of the day, so the extension will allow us additional opportunity to manage our risk," ADM spokeswoman Jackie Anderson said. ICE PUSH Atlanta-based ICE may have provided the final push to CME last month, when it announced plans to challenge Chicago's iron grip on grains markets by listing look-alike wheat, corn and soy contracts -- on a 22-hour basis. Most other major commodity exchanges, including the CME's New York Mercantile Exchange (NYMEX), had already shifted to near 24-hour trading cycles as China's rise spurred demand for Asia-hours activity, while hedge funds and high-frequency traders clamored for greater access. But denizens of CME's hallowed CBOT trading floor -- which will continue to trade during the same open outcry hours of 9:30 a.m. to 1:15 p.m. central time -- had resisted the move. They said it will give a leg-up to large, speculative traders off the floor who have deep pockets to trade and advanced computer systems to rapidly place orders. "I don't think it's a win for anybody," said Roy Huckabay, a veteran of the Chicago markets and analyst for the Linn Group, about the longer hours. "It's a defensive move by the CME. That's all it is." ICE has declined to comment on CME's plan for expanded hours. The overhaul comes as CME is approaching the end of a five-year period during which five people, including three CBOT directors, had veto rights over rule changes at the exchange. The group was given the veto power in 2007 as part of revised terms for the CME-CBOT merger agreement to provide additional value to all CBOT Holdings shareholders. S. Korea Delegation to Review of US Mad-Cow SafeguardsMay 1, 2012 ReutersCharles AbbottA South Korean delegation will conduct a week-long review this week of U.S. mad-cow safeguards and will meet with the top U.S. animal health official on Tuesday in the wake of a new U.S. case of the brain-wasting disease. A USDA spokesman said it is routine for trading partners to seek details about animal disease outbreaks. Agriculture Secretary Tom Vilsack wrote to 28 countries, including major importers, last week to assure them U.S. beef is safe to eat. "The Republic of Korea is an important partner and we welcome the opportunity to share information about the effective system we have in place for safeguarding against the risks posed by BSE," said USDA spokesman Matt Herrick, using the abbreviation for mad cow's formal name, bovine spongiform encephalopathy. Canada, Mexico, Japan and South Korea, in that order, were the largest markets for U.S. beef in 2011, accounting for 90 percent of beef exports. Ten percent of U.S. beef is exported. Some 380 million lbs, worth $661 million, were shipped to South Korea in 2011, says USDA. The latest U.S. case of mad cow disease, the fourth since 2003 but the first in six years, was reported a week ago in an elderly dairy cow in Tulare County about 175 miles (210 km) north of Los Angeles. The cow was killed after it became unable to walk or stand. Its carcass was selected at a rendering plant for tests under USDA's mad cow surveillance program. The nine-member delegation was to meet USDA chief veterinarian John Clifford on Tuesday. It also will visit USDA laboratories in Ames, Iowa, that confirm mad cow cases and visit farms, ranches and rendering plants in California. While the group was not slated to visit the farm where the infected cow lived, the trip was expected to help the delegation understand how U.S. safeguards work. Government officials, academics and consumer group representatives are members of the delegation, scheduled to return home on May 9. South Korea allows imports of beef from U.S. cattle under 30 months of age if high-risk materials are removed. Seoul banned U.S. beef after the first U.S. case in 2003 and re-opened its market in 2008. This time, it said it would strengthen its import inspections of U.S. beef until it got more information about U.S. practices to prevent mad cow. The primary U.S. safeguards against mad cow are a ban on using cattle parts in cattle feed and a requirement for slaughterhouses to remove brains, spinal cords, nervous tissue and other materials that are at the highest risk of carrying mad cow disease. USDA says the surveillance testing can detect prevalence of the fatal disease at levels of less than one in a million head. Scientists say mad cow is caused by malformed proteins called prions and can be spread when cattle eat infected feed. It has an incubation period of several years. People can contract a human version by eating contaminated beef. There are no known U.S. cases. Co-ops Have Healthy ReturnsMay 2, 2012FarmFutures
While the data is a year old, the analysis is newsworthy as USDA Rural Development releases its report on the nation's 100 largest 100 ag cooperatives. The top 100 recorded near-record revenue of $118 billion in 2010 - a 4% increase over 2009. Net income, according to the report released by Rural Development Under Secretary Dallas Tonsager, rose more than 10% in the same period, reach $2.39 billion, up from $2.16 billion in 2009.
In the statement announcing the new data, Tonsager notes that these farmer and rancher-owned cooperatives not only help members market and process their crops, milk and livestock; but they create jobs and help producer keep more of their earnings at home. "The end result is a huge benefit for producers, their communities and the overall rural economy. Farmer co-ops also account for significant numbers of jobs and economic activity in many cities." Top earning cooperative in 2010 was CHS Inc. The farm supply, grain and foods cooperative, based in St. Paul, Minn., had revenue of $25.3 billion. Land O' Lakes, a dairy foods and farm supply co-op, also based in St. Paul, ranked second, with $11.1 billion in revenue. And in third, Dairy Farmers of America, based in Kansas City, Mo., with $9.8 billion in revenue. USDA's top 100 ag co-op list shows that 23 co-ops had 2010 revenue of more than $1 billion. Another 47 co-ops had revenue between $506 million and $1 billion. The 100th ranked co-op had sales of $276 million. Leading the revenue increase from 2009 to 2010 were dairy cooperatives, which saw 2010 revenue climb more than 14.5 percent from the previous year, to $29.5 billion. Dairy cooperatives accounted for more than half of the revenue increase recorded by the top 100 ag co-ops in 2010. Gross margins, as a percent of total sales, were up slightly, from 9 percent to 9.2 percent. The increase in gross margins partially covered higher expenses. Gross margins plus service revenue climbed to $684 million. No Middle Ground on Youth Farm LaborMay 1, 2012Agriculture OnlineCheryl TevisGovernment, farm organizations, safety advocates, and legislators share blame for failure to update safeguards for young teens hired to work on farms. Many farm groups and farmers welcomed the news last week that the U.S. Dept. of Labor had withdrawn proposed child ag labor rules. The proposed rules would have tightened hired work roles on farms for 12- to 15-year-olds, restricting machinery operation and work in and around silos and for 16- and 17-yearolds, working in commercial grain handling facilities. The comment period for the proposed rules drew thousands of written comments. The proposed federal rules maintained an exemption for youth working on their parents’ farm. But critics pointed out that the language could have prevented youth from working on a family farm that was incorporated, or structured as an LLC. The U.S. Dept. of Labor (DOL) had announced that it was reworking the parental exemption language. But the entire proposal was withdrawn late last week in an announcement that concluded, “Instead the Departments of Labor and Agriculture will work with rural stakeholders – such as the American Farm Bureau Federation, the National Farmers Union, the Future Farmers of America, and 4-H – to develop an educational program to reduce accidents to young workers and promote safer agricultural working practices.” “The work toward this rule-making process had been going on for years,” says Mary Miller, who works as a child labor and young worker specialist at the Washington State Department of Labor & Industries. “But we did not even get to see the DOL’s response to public comments. People were reacting before they even saw possible revisions.” Proposed changes in the 51-page DOL document withdrawn from consideration also included: - Youth enrolled in tractor-safety training would have completed 90 hours of training, up from the current 20-hour training. (Enrolled youth could work and operate farm machinery while taking the training to earn certification.)
- Youth would not have been allowed to work at heights of over 6 ft.
- Youth would have been banned from work at grain elevators.
- Youth would not be allowed to operate tractors that lacked rollover protection and a seat belt
The penalty for employers who knowingly violated the law, resulting in the injury or death of a hired youth, would have been substantial. However, the proposed revisions did not include any increased means of legal enforcement. Need for Update The original Hazardous Occupations Orders for Agricultural Employment were adopted 45 years ago as part of the Fair Labor Standards Act. The most recent update to the Agricultural Child Labor Hazardous Occupations Orders (Ag H.O.) was made in 1970. According to the DOL, 41,476 youth ages 14 or 15 years were directly hired by farm operators in 2006. Of that number, 7,565 reported operating a tractor as part of their employment. “Even though there were significant concerns with many proposed rule changes, there’s a need to review and revise current rules to reflect changes in agricultural production and technology,” says Bill Field, Purdue University Extension safety specialist. “We’ve been recommending it for a long time. But these rules were not well-vetted by farm groups. They went too far.” Child safety and labor advocates argued that the revisions were necessary to protect vulnerable youth. “There was no dialogue about the real issues or the individual merits of the proposed rules,” Miller says. “Misinformation was perpetuated during this process.” Build on Current Education Efforts For decades, 4-H and Extension and FFA provided training for youth at least 14 years of age to obtain certification to operate tractors. Because of federal and state funding cutbacks, these programs have dwindled, leaving an increasing number of eligible youth lacking access. In 2000, USDA/CSREES established the Hazardous Occupations Safety Training in Agriculture Program (HOSTA) to support development of new training resources and delivery strategies, including web-based instruction, to ensure broader access to training. Purdue University and Pennsylvania State University have taken the lead in this effort. Many Extension safety specialists criticized the proposal to significantly expand the number of hours for tractor-safety certification. “The current rule calls for 20 hours, and this would have been increased to 90 hours,” Field says. “ It wasn’t realistic. Little to no effort was made to discuss these revisions in training and education with the current providers, including 4-H, FFA, or Extension.” Miller says the expanded hours were an effort to make training comparable to training required for 16 and 17-year-olds hired for nonfarm jobs. “The current certification program could have been incorporated into it,” she says. “After public comments, the process would have included dialogue and discussion of strategies with stakeholders. But people did not give it a chance. This issue won’t go away entirely. But it was the best opportunity in my lifetime.” Although the proposed rules were perceived as overreaching, there’s no dispute that youth ages 14-16 who are hired to perform farm work lack comparable protections provided to youth employed in non-farm jobs. The National Institute for Occupational Safety and Health reports that ag workers ages 15 to 17 have a 4.4 times greater than average risk of dying, compared to other 15-to 17-year-old workers. “A number of opponents do not seem to know what is age appropriate or safe work for hired children to do,” Miller says. “The children of the farm owners would not have been affected. But somehow this concern dominated the entire conversation.” Legislators scheduled Congressional subcommittee hearings on the issue, citing worst case scenarios. In Tennessee, the House passed a bill stating that it would not enforce the proposed federal rules. Most of the opposition focused on the importance of kids learning a work ethic and acquiring skills, a perceived threat to a future generation of farmers. Farmers were quoted saying that they were in the best position to determine what types of farm activities are safe for youth. Now that the rules have been withdrawn, it appears that it is up to farmers and farm organizations to walk the talk. The administration also has pledged to work with farm organizations to develop farm safety programs for 14 and 15-year-olds hired to work on farms. “First, we need to see how big the problem is,” Field says. “What are the unsafe practices, and how can we reduce these? Then we need to work at enhanced training and certification, and look at alternatives avenues to providing it to these youth.” But the incentive to move forward has been reduced. “The withdrawal of the proposal limits the opportunity for further discussion,” Miller says. California Heads for Vote on Modified Food LabelingMay 2, 2012BloombergJack KaskeyCalifornians are on course to vote whether genetically modified food must be labeled following a campaign that has targeted Monsanto Co. (MON) and other biotech-crop companies. Proponents of the measure collected 971,126 signatures, 75 percent more than the minimum needed for a statewide referendum concurrent with the Nov. 6 general election, the Oakland-based California Right to Know campaign said today in a statement. State certification of the signatures followed by approval from 50 percent of voters would make the proposal law. “The right to know is as American as apple pie,” Gary Ruskin, an Oakland-based manager for the campaign, said in an April 30 interview. “Monsanto and some other chemical and agricultural biotech companies are desperate to keep the public in the dark about what is really in their food.” The California movement is mobilizing consumer unease over modified ingredients, which are found in about 80 percent of processed foods in the U.S. according to the Grocery Manufacturers Association. The campaign is the best chance for biotech labeling in the U.S. after the failure of similar bills in 19 states and the rejection of a petition to the Food and Drug Administration last month, Ruskin said. Monsanto opposes labeling modified ingredients because the move risks “misleading consumers into thinking products are not safe when in fact they are,” Sara E. Miller, a spokeswoman for St. Louis-based Monsanto, said in an e-mail. ‘Back Door’ The initiative is a “back door” way to hurt the $13.3 billion biotech crop industry, according to Richard Lobb, managing director for the Council for Biotechnology Information. “They basically are trying to scare consumers through labeling,” Lobb, whose Washington-based group represents developers of biotech seeds including Monsanto and DuPont Co. (DD), said in a telephone interview. “The obvious objective is to push biotechnology out of the market altogether.” Biotech labeling, which has been adopted in more than 40 countries, has never been endorsed by the FDA. The agency says crops engineered to tolerate herbicides or produce insecticide pose no greater health risks than conventional foods. Modified foods have been in U.S. grocery stores since 1994. Ninety-three percent of Americans say genetically engineered foods should be labeled, according to an October 2010 poll conducted by Thompson Reuters Corp. and National Public Radio. Seventy-nine percent have doubts about the safety of such foods, according to the poll. Label Exemptions Food labels should be reserved for “critically important food safety and nutritional information,” said Brian Kennedy, a spokesman for the Grocery Manufacturers Association, which opposes the California initiative. His group donated $375,000 to fight the ballot proposal, matching the amount provided by the Council for Biotechnology Information, according to public disclosures. Should it be approved, the measure would require labels of foods made with biotech ingredients to state that they were “produced with genetic engineering.” Labels would be phased in over 18 months. Exemptions include restaurant food, alcohol and meat from animals fed with modified grains. The label “would be the equivalent of a skull and crossbones” that would drive away customers and force food producers to stop using engineered ingredients, Joseph Mercola, the inititive’s leading funder with $800,000 in donations, said in an April 1 Web posting. Mercola is an osteopath who promotes natural remedies at his clinic in Hoffman Estates, Illinois. Chris Shaw, a New York-based analyst at Monness Crespi Hardt & Co. who recommends selling Monsanto shares, said labels identifying genetically modified organisms, or GMOs, won’t change most consumers’ buying decisions. “People who are buying Oreos aren’t going to care if there is GMO soybean oil in there,” Shaw said. “It’s going to be a marginal group of people that will care.”
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