Ag News for America
Monsanto says the drought tolerance trait in its Genuity DroughtGard corn hybrids has received final import approval from China.
With that approval, Monsanto says it will remove the grain stewardship requirements from the DroughtGard products that have been planted in 2013, meaning grain will no longer be required to remain in the domestic market.
In a statement, Monsanto says China’s approval of the trait represents “a significant step forward for technology approvals in China”.
The chair of the Senate Ag Committee has several concerns with the proposed sale of Smithfield Foods to a Chinese company.
Debbie Stabenow says food safety is a big one—and she says Shaunghui International has a “spotty track record” in that area.
“They’ve give banned chemicals to their hogs,” Stabenow says, “and there have been stories about hogs that were dumped in the river in China—that were diseased—and this came from the same company.”
Asked about the Smithfield purchase, Ag Secretary Tom Vilsack also cited food safety concerns.
“Companies, in the past, have had issues—particularly in China,” Vilsack says. “That raises an awareness and a sensitivity to the need for us to make sure that we continue to do our food safety job as well as we possibly can.”
The other big concern expressed by both Vilsack and Stabenow is the food security of the United States.
The following comments on the Smithfield deal come from Stabenow’s recent appearance on C-SPAN’s Newsmakers program.
Senate Agriculture Committee Chair Debbie Stabenow says she has many concerns with the proposed sale of Smithfield Foods to a Chinese firm.
In a recent interview on C-SPANS’s Newsmakers program, Stabenow said the sale could have implications for U.S. consumers and other export markets like Japan. She says food security and food safety are two of her biggest concerns, which is why she plans to get her committee involved in the government’s evaluation of whether the sale should move forward.
A Thailand man reaped more than $3.2 million in profit from trading shares of Smithfield Foods before last week’s announcement that they would be acquired by a Chinese firm. According to USA Today securities regulators are calling the trades “highly suspicious”.
Securities and Exchange investigators believe he was possibly tipped off about the acquisition. One possible source is reportedly a former coworker who is now employed at a Thai investment bank advising another firm that was considering acquiring Smithfield.
In a statement, director of the SEC’s Chicago office said, “As alleged in our complaint, not only did the defendant trade out of the money Smithfield call options, he further pumped up his profits by purchasing single-stock futures, thereby reaping a total unrealized return on his investment of 3,400% in the span of eight days.”
Following the announcement, the price of Smithfield shares opened nearly 25 percent higher than the previous day’s closing price.
Like many pork producers attending World Pork Expo, Larry Sailer of Iowa Falls, Iowa has questions and some concerns about the proposed sale of Smithfield Foods to a Chinese company.
“My biggest concern is just what kinds of regulations and stipulations a foreign company can put on us as far as producers here in this country,” Sailer says. “Are some of us going to get left out? Are they going to have their own producers—just how it’s all going to work?”
Iowa Senator Chuck Grassley, one of the leaders in Congress to keep agricultural markets competitive for market participants and consumers, is calling on the Department of Justice to thoroughly examine the proposed purchase of Smithfield Foods by China-based Shuanghui International.
Following last week’s announcement of the proposed deal, Grassley issued the following statement.
“I share the concerns of many family farmers and independent producers that the agriculture industry has consolidated to the point where many smaller market participants do not have equal access to fair and competitive markets. Today’s announcement by Smithfield and Shuanghui do not alleviate those concerns. In fact, the two companies pointed out in their statements that the vertical integration employed by Smithfield was a major attribute to the acquisition. The fact of the matter is that vertical integration leaves the independent producer with even fewer choices of who to buy from and sell to and hurts a farmer’s ability to get a fair price for his products. Concentration also leads to consumers having fewer choices and higher costs at the grocery store. The Justice Department should take a close look at this agreement.”
In his Tuesday morning conference call with ag reporters, Grassley discussed his concerns with the Smithfield deal and the continuing trend toward concentration in the hog industry.
A Chinese meat producer has agreed to purchase Smithfield Foods. According to the Wall Street Journal, if the acquisition is approved it would be the largest takeover of a US company by a Chinese buyer. The deal comes after a large Smithfield shareholder, Continental Grain Co. urged the company to split itself up.
Shuanghui International Holdings also known as Shineway, agreed to pay $34 per share for Smithfield, a 31% premium to Smithfield’s closing price on Tuesday.
Brazil is harvesting a record soybean crop, but its exports of new crop soybeans are being hampered by severe port congestion in the South American nation.
Reuters reports that China’s leading soybean trader, the Sunrise Group, has cancelled almost two million tons of Brazilian soybean cargoes because of shipping delays. Reportedly, some ships are waiting 40 to 50 days to load at Brazilian ports.
Iowa Soybean Association CEO Kirk Leeds, who is traveling with a trade delegation in China this week, says timely and reliable delivery gives the U.S. a leg up in the world market.
“Not wanting to take advantage of our friends in South America, but the continued difficulties they’re having—not only with infrastructure, but with government unrest and labor unrest—is certainly beneficial to the U.S. soybean industry,” says Leeds, “because when you buy soybeans from the U.S., they’re shipped on time and you get what you pay for—that’s certainly a huge advantage to have in this market.”
Iowa Secretary of Agriculture Bill Northey, who is also part of that Chinese trade mission, says it’s also a good reminder that the U.S. needs to maintain its infrastructure.
“We need to be able to be very dependable—very predictable,” Northey says. “You know, we are—but we need to continue to invest in that infrastructure in the U.S.”
ISA director of development Grant Kimberley says Brazil’s shipping issues may force China to purchase more soybeans from other sources. “So I think they are having to come back to the U.S.—and also Argentina and other areas—to continue to purchase soybeans longer into the marketing year than maybe they would have planned to do.”
AUDIO: Comments from Kimberley, Leeds and Northey (3:31 MP3)
Iowa Soybean Association leaders met with officials of Chinatex, a major soybean importer in China.
Several members of the Iowa Soybean Association (ISA) are traveling throughout China this week to strengthen existing relationships and explore new markets and opportunities.
Participants include Mark Jackson, ISA president and farmer from Rose Hill; Brian Kemp, ISA president-elect and farmer from Sibley; Kirk Leeds, ISA chief executive officer; and Grant Kimberley, ISA director of development. Also attending is Bill Northey, Iowa Agriculture Secretary.
On Thursday morning, the group provided the ag media with a report on their trade mission.
AUDIO: ISA conference call with ag media 3/21/13 (21:15 MP3)
Several members of the Iowa Soybean Association are traveling throughout China this week.
ISA president Mark Jackson, a farmer from Rose Hill, says soybean exports to China represent a major component of Iowa’s agricultural economic power. Jackson says the purpose of the ISA mission is to strengthen existing relationships and explore new markets and opportunities.
One of those growing markets, according to Jackson, is aquaculture.
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