Feds shine spotlight on ag competition issues

In Ankeny, Iowa Friday, the Department of Justice (DOJ) and U.S. Department of Agriculture (USDA) held the first-ever joint public workshop on competition and regulatory issues in the agriculture industry. 

The workshop, led by U.S. Agriculture Secretary Tom Vilsack and U.S. Attorney General Eric Holder, featured panel discussions on a variety of topics, including competitive dynamics in the seed industry, trends in contracting, transparency and buyer power, and concluded with public testimony. 

“Today’s workshop provided the Department with an important opportunity to hear from a variety of perspectives and individuals about competition in the agriculture sector,” said Attorney General Eric Holder.  “We appreciate the importance of this industry to our economy and are committed to enforcing the antitrust laws effectively to ensure fair and open competition that protects both consumers and farmers.”

“In my travels across the country, I hear a consistent theme: producers are worried whether there is a future for them or their children in agriculture, and a viable market is an important factor in what that future looks like,” said Vilsack. “These issues are difficult and complex, which is why this workshop today is so important and long overdue.”

Friday’s meeting was the first in a series of workshops that will be held over the next several months. 

Holder, Varney serve notice to large agribusiness companies

The nation’s largest agribusiness firms received a stern warning from the Obama administration during Friday’s ag competition workshop in Ankeny, Iowa:  There’s a new sheriff in town and anti-competitive practices won’t be tolerated.

Attorney general Eric Holder set the tone for the session. “We know that a growing number of American farmers find it increasingly difficult to survive by doing what they have been doing for decades,” Holder said, “and we’ve learned that some them believe that the competitive environment may be, at least in part, to blame.”

Both Holder and Christine Varney, the assistant attorney general for antitrust, said that while big isn’t necessarily bad, it can be bad if the power that comes with being big is misused.  “With big comes an awful lot of responsibility,” said Varney.  “When you have a tremendous amount of market share, you have the responsibility to behave in ways that keep the competitive playing field open.  You cannot engage in acts that are designed to protect or extend your monopoly.”

Varney said her office will vigorously enforce antitrust law.  When pressed on what actions might be forthcoming, and when, Varney responded that it’s already happening.  She pointed to last year’s blockage of JBS SA’s attempt to purchase National Beef and a recent Justice Department lawsuit seeking to block milk processor Dean Foods’ acquisition of a competitor.   Her message was that future acquisitions and mergers will be getting much more scrutiny than they have in the past.

The following audio clips feature some of the opening comments made at the workshop.

AUDIO: Secretary of Agriculture Tom Vilsack (2 min MP3)

AUDIO: Attorney General Eric Holder (3 min MP3)

AUDIO: Christine Varney, head of DOJ Antitrust Division (3 min MP3)

AUDIO: Iowa Senator Chuck Grassley (3 min MP3)

 

Farmers have their say

The workshop agenda included a panel of six farmers conveying their thoughts on competition issues in agriculture.  Eric Nelson, a grain and cattle farmer from Moville, Iowa argued that the government needs to do a better job of enforcing the anti-competition and antitrust laws already in place.   Pam Johnson, a farmer from Floyd, Iowa, talked about the innovations that have made American agriculture the envy of the world.

AUDIO: Eric Nelson (7 min MP3)

AUDIO: Pam Johnson (6 min MP3)

 

Competitive Dynamics of the Seed Industry

Much of the focus of Friday’s workshop was the competitive dynamics of the seed industry–specifically Monsanto’s dominance in seed traits and whether the company is using that dominance unfairly.  At the heart of the discussion is the battle between rivals Monsanto and Dupont, which owns Pioneer Hi-Bred. 

One of the more interesting exchanges took place between Diana Moss with the American Antitrust Institute and Jim Tobin of Monsanto, both part of a panel discussing seed price, choice and innovation.   Dermot Hayes, Iowa State University professor of economics and finance, also weighed in.

AUDIO: Diana Moss (2 min MP3)

AUDIO: Jim Tobin (2 min MP3)

AUDIO: Dermot Hayes (2 min MP3)

Strong support for lifting Cuban ag trade sanctions

A number of ag interests speaking before the House Agriculture Committee on Thursday in support of the Travel Reform and Export Enhancement Act (HR 4645). This is the bill from Ag Committee Chair Collin Peterson of Minnesota and Kansas Congressman Jerry Moran which would lift some U.S. trade restrictions on Cuba including the cash-in-advance requirement, the need for a third-country bank and travel restrictions.

American Farm Bureau president Bob Stallman told the committee, “We have seen the promise this market holds…unfortunately, because of restrictions on U.S exports to Cuba, U.S. farmers have not been able to benefit from the full potential of the market.” Stallman says our competitors have an advantage right now but eliminating the restrictions would give U.S. farmers the advantage.

National Farmers Union president Roger Johnson, who has led eight trade missions to Cuba, noted current U.S. policy hampers our ability to be reliable suppliers. “Agricultural producers in the United States are well positioned to benefit from additional trade in Cuba,” said Johnson. “This will also assure Cubans a source for sustainable, high-quality food for its people.”

American Soybean Association Board member Scott Fritz of Indiana told the committee the sanctions have cost U.S. farmers and businesses billions of dollars in exports. “We can no longer sit on the sidelines and watch our competitors supply a market where we have a natural advantage.”

National Association of Wheat Growers president, Jerry McReynolds testified, “U.S. wheat producers and the industries that support them stand to gain up to $100 million in sales each year if trade and travel restrictions with Cuba are eased.”

John Wilson, senior vice president of marketing and industry affairs for Dairy Farmers of America (DFA) said lifting the restrictions would help the U.S. dairy industry regain some of the ground lost in 2009. He cited a June, 2009 International Trade Commission study which found “that fully eliminating financing and travel restrictions on U.S. exports to Cuba would have boosted 2008 dairy sales to Cuba from $13 million to between $39 and $87 million.”

Most commented that increased travel to Cuba would mean increased income for the country and more money to spend on U.S. goods.

Senate passes biodiesel extender, disaster aid

A one year retroactive extension of the biodiesel tax incentive passed the Senate Wednesday, part of the jobs bill.

National Biodiesel Board Federal Affairs Vice President Manning Feraci says the lapse in the tax credit at the end of 2009 has been disruptive to the biodiesel industry.

The incentive is designed to make biodiesel price competitive with conventional diesel fuel. Since its lapse, the US biodiesel industry has seen a dramatic drop in demand and production.

The House and Senate now have to reconcile differences between the two versions. Both provide for a one year retroactive extension of the biodiesel tax incentive.

Senate Ag Committee and Ranking Finance Committee chair Charles Grassley of Iowa voted against final passage of the Senate Tax Extenders Act on Wednesday. In a statement following the passage of the bill, which restores the biodiesel tax incentive, Grassley said he opposes the contingency to include more deficit spending to fund it. Grassley faults congressional leaders for what he calls “irresponsible and even offensive” actions. The bill, which also extends unemployment benefits, passed 62 to 36.

The American Soybean Association applauds the passage of the legislation and is urging quick reconciliation and retroactive restoration of the dollar per gallon tax credit on biodiesel which Congress allowed to lapse on December 31st.

The bill also includes Senate Ag Chairman Blanche Lincoln’s 1.5 Billion dollar disaster aid for Arkansas farmers affected by weather related disasters. Counties that received a primary disaster declaration in 2009 are eligible.  Producers in Lincoln’s home state of Arkansas, as well as Mississippi, were especially hard hit.

Brownfield’s Tom Steever contributed to this report

USDA slightly lowers 2009 corn, soybean production estimates

USDA has slightly lowered its 2009 corn and soybean production estimates following resurveys of farmers in a number of states where harvest was delayed.

USDA’s new corn production estimate is 13.131 billion bushels, compared to January’s projection of 13.151 billion bushels with an average yield of 164.9 bushels per acre, compared to 165.2 in the previous report.

Soybeans came out at 3.359 billion bushels, compared to 3.361 billion in January with an average yield of 44.0 bushels per acre, unchanged from January.

The resurvey includes corn in Illinois and Wisconsin and soybeans in South Carolina.

USDA will do another survey of corn in North and South Dakota later in the year.

Selected resurveyed states:

Illinois: Corn: 2.053 billion bushels with an average yield of 174.0 bushels per acre; planted area of 12.000 million acres and harvested area of 11.800 million acres.

South Carolina: Soybeans: 13.843 million bushels with an average yield of 24.5 bushels per acre; planted area of 590,000 acres and harvested area of 565,000 acres.

Wisconsin: Corn: 448.290 million bushels with an average yield of 153.0 bushels per acre; planted area of 3.850 million acres and harvested area of 2.930 million acres.

Alan Brugler discusses USDA’s revisions to production and supply and demand estimates (3 Minutes 15 Seconds MP3)

ASA urging quick passage after Tuesday’s vote

The U.S. Senate voted to end debate on the tax extenders bill today and the American Soybean Association is urging quick passage by the full Senate to restore vital jobs lost in the biodiesel industry. ASA is urging the Senate to find agreement with the House on a final bill that can be passed and signed into law as quickly as possible.

ASA President Rob Joslin of Ohio says the extension is desperately needed to save the 23-thousand jobs in the biodiesel industry because layoffs have already begun and most biodiesel plants are at a standstill since the credit was allowed to expire at the end of last year, “The major ones, the ones that actually contribute and produce a lot of biodiesel, virtually, I’m pretty sure, about all of them have shut down. So, the vast majority of the production capability has shut down and idled.”

ASA communications director Bob Callanan says remaining biodiesel production varies a lot by state, “You know, some states where there’s a mandate, they still have to produce the fuel to meet their in-state mandate so there’s still SOME production going on.”

Joslin told reporters that restoring the biodiesel tax credit retroactively is the number-one issue among many issues for the ASA. Joslin and Callanan made their comments at the ASA news conference at Commodity Classic in California last Friday.

Vilsack refutes Johanns’ remarks on Japan

Ag Secretary Tom Vilsack says it’s partly the former administration’s fault for the difficulty his administration is having in getting Japan to lift its partial ban on U.S. beef. Last Friday, Republican U.S. Senator and previous Ag Secretary Mike Johanns, told AgriTalk that the current administration has not done enough, as the Bush administration had, in trying to reopen those markets. At a news conference hours later at Commodity Classic in California, Vilsack was asked about Johanns’ remark and reacted with mock surprise, “Really? He said that? Nah, he didn’t really say that, did he? Nah, he couldn’t possibly have said that.”

Vilsack said Johanns surely is aware that Vilsack will be going to Japan in April, and, “He would obviously know that we’ve had ongoing discussions with the Japanese. He would obviously know that we were dealing with the previous administration’s approach to Japan which was a non-starter which was that they had to reopen the entire market. And, it’s very apparent they’re not willing to do that.”

Vilsack says the Bush administration agreed with the Koreans that the U.S. would not offer any better deal to any other country in order to reopen markets, “Not only do we have to take a different approach than the previous administration under Secretary Johanns, in terms of Japanese beef, but we also have to think about how it relates to the Korean beef agreement which complicates things very, very much. So, I just can’t believe Senator Johanns would say that because if he knew all that he wouldn’t have said it.”

Johanns’ comment followed his remarks last week at a Senate committee hearing that it might be time to tell the Japanese to drop their beef restrictions or expect to have Japanese-produced Toyotas treated the same way.

Pork producers concerned with traceability

At the recent Pork Industry Forum in Kansas City, pork producers expressed concern about USDA’s decision to abandon efforts to establish a National Animal Identification System (NAIS). 

The USDA announced in February that NAIS would be replaced by a new animal disease traceability network in which all states and tribes would develop their own traceability programs.   Elk Creek, Nebraska pork producer Dennis Beethe, immediate past president of the Nebraska Pork Producers Association, says it leaves Nebraska in a somewhat precarious position. 

“With Nebraska being such a packing state—with the beef and pork—we have a lot of pigs farrowed in the state, moved out and coming back for harvest purposes,” Beethe explains. “This could be a great detriment to our state—so this is a very important issue to us.” 

The Nebraska delegation was successful in introducing and gaining passage of a resolution encouraging producers and states to continue to use nationally standardized premises ID numbers as part of animal ID methods and movement records.  Beethe says having that consistency among states is important. 

“The consequences of this—without getting something in place that’s uniform around the states—could be a USDA quarantine of a state, which would paralyze our industry,” he says. 

A separate resolution passed by NPPC delegates urges USDA to require all states to develop species specific systems within the new disease traceability network.  It says each species group should be permitted to develop its own ID system and that USDA should permit species groups to have mandatory systems if producers within a group approve such a plan. 

The National Swine Identification Plan has succeeded in registering more than 85 percent of swine premises in the U.S.  Delegates urged its adoption to ensure compatibility and consistency among states. 

Brownfield’s Cyndi Young contributed to this story.

AUDIO: Dennis Beethe (1:30 MP3)

Approval process for pork exports to begin

The USDA says it will likely begin approving U.S. pork production facilities for exports to Russia this week. 

U.S. negotiators announced late last week that a deal had been reached to end Russia’s ban on U.S. pork imports.   It includes a new export verification program requiring producers to prove their pork is free of the antibiotics that Russia has prohibited. 

The National Pork Producers Council applauds the re-opening of the Russian market.  Even though they did not see the need for an export verification program—U.S. pork already meets U.S. and international standards—NPPC president Don Butler says it was a concession that had to be made to get back in the market.  

According to USDA, six percent of all U.S. pork exports in 2009 were shipped to Russia.

Russia reopens to U.S. pork

It is official; USDA says Russia has agreed to reopen its market to U.S. pork. Products from thirteen U.S. pork plants have been banned since last December due to a dispute over standards. The two sides have negotiated a new veterinary certificate which “ensures that pork exports from the United States meet specific Russian microbiological and tetracycline-group antibiotic residue requirements.”

USDA says the next step is for U.S. plants that want to export to Russia to apply for approval with the Agricultural Marketing Service (AMS). AMS, in collaboration with the Food Safety and Inspection Service (FSIS), has developed an Export Verification (EV) program for pork to Russia to address specific product requirements. Products produced under an approved EV Program are eligible to be issued an FSIS Export certificate. AMS is expected to approve the first plants as early as next week. FSIS will then provide Russian authorities with a list of approved U.S. pork facilities.

A U.S. negotiation team remains in Russia trying to resolve the poultry trade dispute as well. The Ag Department says those talks have been “constructive”.

Purdue honors Distinguished Ag Alumni

Nine Purdue University graduates are being recognized as Distinguished Agricultural Alumni during a ceremony Friday, March 5.

“These nine people represent who we are and what we do so well,” Akridge said. “They are businesspeople, educators, farmer/ranchers, entrepreneurs and researchers – and they are all leaders. We take great pride in our alumni, and these are nine of our best.”

This year’s honorees include:

* David D. Anderson of Carmel, Ind., global director of seeds operations for Dow AgroSciences in Indianapolis. Anderson leads a company team responsible for developing and producing parent and hybrid seed for alfalfa, canola, corn, sorghum, soybeans and sunflowers. Anderson earned a bachelor’s degree in agricultural economics from Purdue in 1986.

* Gregory W. Deason of West Lafayette, Ind., vice president of real estate and research park development and director of Purdue Research Parks, Purdue Research Foundation. Deason leads the foundation’s efforts to maintain a progressive and vibrant environment at Purdue’s four research park facilities in order to recruit and retain high-tech companies. Deason earned a bachelor’s degree in agricultural economics from Purdue in 1986.

* Eric Jon Gustafson of Rhinelander, Wis., research ecologist, project leader and director of the Institute for Applied Ecosystem Studies, U.S. Department of Agriculture’s Forest Service Northern Research Station. Gustafson’s research focuses on the ecological implications of historic and projected changes in the composition and structure of landscapes. Gustafson earned a doctoral degree in landscape ecology from Purdue in 1992.

* Douglas E. Hoerr of Chicago, a senior partner with Hoerr Schaudt Landscape Architects LLC. Hoerr has designed more than 500 private gardens across the country. His firm created the design guidelines for the Michigan Avenue streetscape along Chicago’s bustling Magnificent Mile and the streetscapes of Des Moines, Iowa, and St. Joseph, Mich. Hoerr earned a bachelor’s degree in landscape architecture from Purdue in 1979.

* Patricia L. “Patsy” Houghton of McCook, Neb., founder, owner, general manager and president of the McCook-based Heartland Cattle Co. Heartland is a professional heifer development and research center, where beef producers retain ownership of their replacement heifers as the animals are synchronized and artificially bred according to customer specifications. She earned a doctoral degree in ruminant nutrition from Purdue in 1986.

* Janis E. McFarland of Chapel Hill, N.C., head of North American regulatory affairs for Syngenta Crop Protection. McFarland leads Syngenta’s NAFTA Regulatory Affairs Department, which is responsible for all agricultural chemical registrations in the United States, Canada and Mexico. She earned a master’s degree in plant pathology-molecular virology from Purdue in 1982 and a doctoral degree in plant physiology-herbicide modes of action from Purdue in 1986.

* Craig S. Pikaard of Bloomington, Ind., the Carlos O. Miller Professor of Plant Growth and Development in the departments of Biology and Molecular and Cellular Biochemistry at Indiana University. Pikaard is a noted researcher whose work has advanced the understanding of the regulation of ribosomal RNA transcription, epigenetic mechanisms of gene silencing and the discovery of a new kind of RNA polymerase. Pikaard earned a doctoral degree in plant physiology from Purdue in 1985.

* Edward P. Vondell of Mexico City, Mexico, director of project engineering and quality for Chrysler in Mexico and Latin America. Vondell leads a team of more than 150 engineers that designs the corporation’s car and truck platforms. Vondell earned a bachelor’s degree in agricultural engineering from Purdue in 1985.

* Mona Baker Wolf of Cincinnati, founder and president of The Wolf Group, which provides sensory testing of products for such companies as Burger King, ConAgra and Procter & Gamble. Sensory testing services help manufacturers determine the consumer acceptance and market viability of new and existing products. Wolf earned a bachelor’s degree in food science from Purdue in 1972.

A list of previous Distinguished Agriculture Alumni honorees is available here.

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