Week of August 6-10 Archive
9 8 7 6
August 9
AFBF MARKET UPDATE - AUGUST 2007---There continues to be a heightened sense of concern surrounding the nation’s overall economy. Meanwhile, in farm country, ethanol production continues to boom, with AFBF estimating that about 3.5 billion bushels of corn will be used for ethanol in 2007/08 -- a number slightly higher than the Agriculture Department projection. In spite of increased corn demand, however, farmers continue to feel the pinch of higher production expenses and higher land values.
Farmland value, production expenses, ethanol production and a snapshot of the nation’s overall economy are the featured topics in this month’s issue of the American Farm Bureau Federation's Ag Market Update.
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TOUGHER FEDERAL LABOR RULES ON TAP---The federal government is poised to issue new rules that would require employers to fire people they hire who use false Social Security numbers. Federal officials have indicated they also plan to step up raids on workplaces around the country where illegal immigrants are employed.
The Department of Homeland Security proposed the new rules last year, but it did not finish them in anticipation of Congress’ debate of immigration reform legislation. When the immigration reform bill died in the Senate in June, DHS officials began finalizing plans to tighten up the enforcement system.
The new regulations are expected to give employers a fixed time period, possibly up to 90 days, to resolve any discrepancies between identity information employees provide and Social Security Administration records. If workers’ documentation cannot be verified, employers will be required to fire them or face $10,000 fines for knowingly hiring illegal immigrants. According to an SSA spokesperson, only certain employers will be affected by the new rule – those with more than 10 workers whose numbers do not match when the workers make up at least one-half of 1 percent of a company’s workforce.
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U.S. TO REQUEST ARBITRATION WITH CANADA---United States Trade Representative Susan C. Schwab announced this week that the United States will initiate arbitration proceedings under the 2006 Softwood Lumber Agreement, and she is working with the United States Department of Commerce to take additional measures to monitor Canadian compliance with the SLA.
“When the governments of Canada and the United States signed the Softwood Lumber Agreement last year, we celebrated the end of over 20 years of litigation,” Schwab said. “It is truly regrettable that, just 10 months after the agreement entered into force, the United States has no choice but to initiate arbitration proceedings to compel Canada to live up to its SLA obligations relating to export volume caps, proper application of the import surge mechanism, and anti-circumvention. Our efforts to resolve these matters through consultations have not been successful. Therefore, we are initiating arbitration proceedings as provided under the SLA.”
In addition, Schwab said USTR is working with the Commerce Department to take steps to monitor implementation of the agreement and collect information on compliance with its terms. This information will allow U.S. officials to consider any future steps necessary to ensure that the SLA is fully implemented.
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August 8
JOHANNS PUSHES JAPAN’S FARM MINISTER ON AGE LIMIT FOR BEEF---According to news reports, Agriculture Secretary Mike Johanns told Japan’s new farm minister in a telephone call that his country should stop accepting U.S. beef only from cattle aged 20 months or younger. Johanns cited the World Animal Health Organization’s (OIE) recent certification of the U.S. as a “controlled risk” country in his discussion with Masaatoshi Wakabayashi.
Wakabayashi reportedly told Johanns his country’s Agriculture, Forestry and Fisheries, and Health, Labor and Welfare ministries are “making preparations” to respond to the U.S. request for a change to the age restrictions on beef imports.
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---USDA ISSUES PROPOSED MANDATORY LIVESTOCK REPORTING RULE---The Agriculture Department has issued a proposed regulation re-establishing its Mandatory Livestock Reporting program. Statutory authority for the program lapsed in 2005. Last fall, Congress approved legislation re-authorizing it through the end of September 2010. The rule-making process is necessary to re-establish regulatory authority and amend some provisions related to swine reporting.
AFBF supports mandatory price reporting for the livestock industry.
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FUNDING ANNOUNCED TO IMPLEMENT CSP---Agriculture Secretary Mike Johanns has announced the availability of additional funding to implement the Conservation Security Program. The funding was made possible through a supplemental appropriations bill approved by Congress in May.
Funds will be made available for both the completion of payments on fiscal year 2007 CSP contracts as well as for a future program signup. According to USDA, $35 million has been made available to complete payments to producers who received only partial funding for fiscal year 2007.
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August 7
JAPANESE CONSUMERS LEARN ABOUT NEW BEEF IMPORT RULES---Japanese news outlets are reporting that age limits on U.S. beef imports will be eased during the next year. A Japan Times article quotes an official from the Ministry of Agriculture, Forestry and Fisheries as saying decreased bovine spongiform encephalopathy (BSE) risk in the United States has been proven.
Earlier news reports this week that U.S. officials had agreed to ship beef from cattle no older than 30 months were based on statements from Japanese officials. U.S. officials have been asking Tokyo to ease import conditions since the World Organization for Animal Health (OIE) gave the green light in May for the U.S. to export beef regardless of the age of the cattle. The internationally recognized, standard-setting body grants controlled-risk status only to countries with science-based mitigation measures in place to protect animal health and food safety.
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---FOOT-AND-MOUTH DISEASE SPREADING IN ENGLAND---A second occurrence of foot-and-mouth disease has been confirmed by British officials. Entire herds of cattle have been culled to contain the outbreak. Britain has banned all exports of livestock and movement of farm animals nationwide. Investigators are still looking into how the outbreak began.
Foot-and-mouth disease effects cloven-hoofed animals and can be spread through wind. The disease can be deadly in livestock but does not affect humans.
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CHINA TIGHTENS PORK REGULATIONS---Due to soaring pork prices, China has issued strict pricing controls on the nation’s most popular meat. The price for pork in July was 75 percent higher than one year ago. The price increase led government officials to suspect butchers of selling meat from diseased pigs or injecting water into the product to increase the sale weight.
In an effort to tighten restrictions and surveillance over the country’s food and drug industries following international concern over its exports, the government also issued a warning forbidding the addition of illegal additives to pig feed. Anyone in the country found selling tainted meat or using banned chemicals will be punished.
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---AGRICULTURAL LAND VALUES RISING ACROSS THE U.S.---Farm real estate values, a measurement of the value of all land and buildings on farms, averaged $2,160 per acre on Jan. 1, 2007, up 14 percent from 2006. The $2,160 per-acre is a record high and $260 more than a year earlier.
Both cropland and pasture values for 2007 are record highs. Cropland values rose by 13 percent to $2,700 per acre, up from the previous high of $2,390 in 2006. Pasture value rose by 16 percent to $1,160 per acre.
The increase in farm real estate values continues to be driven by a combination of many factors, including strong commodity prices and farm programs, outside investments, favorable interest rates and tax incentives, and continued commercial and residential development. Livestock prices and recreational use remain the predominant influences that increase pasture land values.
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August 6
HOUSE APPROVES ENERGY BILL---The House on Saturday approved its version of the energy bill, H.R. 3221, The New Direction for Energy Independence, National Security, and Consumer Protection Act. The House also approved a companion tax package that will be combined with the energy bill and sent to the Senate, which approved its version of the legislation in June.
The bill includes several provisions that will increase the availability and accessibility of domestic biofuels. AFBF-supported provisions in the bill include directing the Energy Department to establish a grant program that will provide $200 million annually to assist fuel retailers with installation of pumps for alternative energy fuels; a ban on franchise agreements that restricts the sale of alternative fuels; authorization of $1 billion in grants for cellulosic ethanol production; and directing federal agencies to study the use of pipelines for transporting ethanol.
The bill does not include an increase to the renewable fuels standard (RFS) or corporate average fuel economy (CAFE) standards that were included in the bill approved by the Senate. Unlike the Senate bill, it does include a provision requiring retail electricity suppliers to produce specified percentages of energy using renewable sources. A protracted House-Senate conference to hammer out the final version of the bill is expected.
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---JAPAN MAY ACCEPT CATTLE UP TO 30 MONTHS OF AGE---Japanese officials have indicated to their U.S. counterparts that they are willing to start accepting imports of beef from cattle up to 30 months of age, rather than up to 20 months. The concession is a major move by the Japanese and would result in a dramatic jump in U.S. beef shipments.
Word on the age concession came during the second day of a three-day technical meeting in Tokyo. Japanese officials continue to insist that “risky parts” of cattle, that is brains and spinal cords, be removed from all beef shipped to their country. According to news reports, U.S. officials would be willing to go along with that condition.
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FOOT-AND-MOUTH OUTBREAK REPORTED IN UNITED KINGDOM---British authorities are rushing to prevent an outbreak of foot-and-mouth disease from becoming an epidemic. Thus far, 60 cattle from an infected farm near London have been slaughtered, authorities report.
Prime Minister Gordon Brown has called an emergency meeting of a government crisis committee charged with ensuring the outbreak does not escalate and mirror the situation that occurred in 2001, when the country’s farming and tourism industries were crippled. Britain has banned the export of livestock, meat and milk in an effort to contain the outbreak. Foot-and-mouth disease affects animals with cloven hooves and can be deadly in livestock, but it poses no risk to humans.
The Agriculture Department has banned the import of swine products from Britain. Cattle and sheep imports from Britain have been banned for some time due to the risk of bovine spongiform encephalopathy.
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---GMO CONSUMPTION DOES NOT HARM HUMANS---A report by the European Food Safety Authority has found no evidence that genetically modified animal feed has a harmful effect on meat. The research was announced following a petition filed in Europe to label any milk, meat or eggs produced by animals fed biotech feed.
The study found humans do not absorb DNA from biotech foods and that DNA and other proteins are unlikely to be absorbed into the milk, muscle or eggs of animals from the feed that they eat. Scientists believe the digestion process in animals and humans plays a role but additional research is needed.
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