COOL response is due today

Today (Thursday) is the deadline as set by the World Trade Organization (WTO) for the U.S. to respond on Country of Origin Labeling (COOL).

But Colin Woodall of the National Cattlemen’s Beef Association says it’s unclear what USDA is actually going to propose to the WTO.

“We had initially thought that they would move forward with the proposed rule that they put out in March that changed to a three-tier labeling structure,” Woodall says, “where you have to put where the animal was born, raised and processed.

But Woodall says a recent development has clouded the picture even more.

“Just last week that rule went back over to OMB and has been changed,” he says. “It’s now been considered ‘economically significant’—that means that they expect it to have over a hundred-million dollar impact on our industry.

“So we don’t know whether or not that will delay the opportunity to get this submitted tomorrow (Thursday).”

So, Woodall says, one of two things could happen—neither one of them positive, from NCBA’s perspective.

“We either submit something and we go through a dispute process to determine whether or not it actually meets the criteria of the WTO—or if we don’t submit something, then we set up a situation where Canada and Mexico could accelerate their retaliation against us.

“I think in either scenario we expect Canada and Mexico to retaliate against the United States.”

Woodall says that retaliation could include retaliatory tariffs against beef, pork and other commodities.

Iowa soybean profitability summits are in mid-November

“Soybean Profitability in a Global Marketplace” will be the focus of two November 15th events in Iowa.

The Iowa Soybean Association (ISA) and Rabo AgriFinance are sponsoring the soybean profitability summits.  The first session, in Cedar Falls, starts at 10 a.m.  The second summit, in Ames, begins at 4:00 p.m.

According to ISA’s Aaron Putze, the meetings will feature expert analysis of international demand and supply trends and their impact on domestic prices and soybean grower profitability.

“When you figure that 60 percent of Iowa’s soybean crop is exported, it’s critical that we maintain those exports—that we build on those opportunities and understand what is taking place in China and South America—Mexico—and other export destinations for our soybeans.”

Keynote speakers include Sterling Liddell, vice president for Rabo AgriFinance and Rabobank International and Renault Quach with Dongling Grain and Oil Co., Ltd. China.

For more information, visit the Iowa Soybean web  site.

AUDIO: Aaron Putze (3:54 MP3)

 

Ohio Farm Bureau takes delegation to D.C.

A delegation of County Farm Bureau Presidents from Ohio spent three days in Washington, D.C. this week, March 5-7 and on Monday, some of them visited the Embassy of Mexico, where they heard firsthand how important Mexico is to U.S. farmers, ranking number two behind Canada.

Hector Cortes, Mexico’s Agricultural Attache tells Brownfield that while there are issues, they are nothing that can’t be resolved.

“Exactly, we compare the amount of trade and volume we’ve been doing, it is minimal,” Cortes said. “We have a really good relation with you guys and have been working and hopefully this will keep trade moving forward.”

Audio: Hector Cortes, Agricultural Attache, Mexican_Embassy (1:50 MP3)

Keith Truckor, who serves as Ohio Farm Bureau District 1 Trustee representing Fulton, Williams, Henry and Defiance Counties is Northwest Ohio is on the County Presidents trip and says it’s an important part of the organizations political process.

“This is the 66th year that we have been coming to Washington, D.C.” Truckor said. “We invite all of the county presidents on this trip, so we’ve got anywhere from 80 to 85 county presidents here and our main focus is to talk to our representatives here in the nation’s Capital about our policies that we set as far as the Federation is concerned.”

Audio: Keith Truckor, District 1 Trustee, Ohio Farm Bureau Federation (3:20 MP3)

Stronger dollar could impact meat exports

The U.S. dollar has recently strengthened against most foreign currencies, which makes for a tougher pricing environment for U.S. beef and pork exports.

That’s according to U.S. Meat Export Federation economist Erin Daley Borror. 

“Today, if we compare currencies back to one year ago, we’ve seen an actual appreciation in the Japanese yen and the Chinese renminbi, but recent devaluations in most other import markets—especially Mexico, Korea and Russia, with purchasing power dropping as much as 10 percent for Mexico and smaller devaluations in the other countries,” Daley Borror says.

Daley Borror says that can affect U.S. beef and pork exports both in terms of customer purchasing power, and when priced against the currencies of major competitors such as Brazil, Australia and Canada.

“The Brazilian real has had the most significant drop, trading off about 13 percent from its July values,” she says. “The Australian and Canadian dollars are also weaker than they were during much of this year—but they’re basically steady to higher than they were exactly one year ago.”

But Daley Borror remains confident that U.S. meat exports will post a solid performance through year’s end because global demand remains strong.

Trucking dispute with Mexico resolved

The U.S. and Mexico have apparently resolved their cross-border trucking dispute.

In Mexico City today, U.S. Department of Transportation Secretary Ray LaHood has signed a memorandum of understanding (MOU) establishing safety guidelines for trucks from Mexico to be allowed on U.S. roads.

In addition to establishing safety guidelines, the MOU also lifts half of the retaliatory tariffs imposed by Mexico. The remaining Mexican tariffs will be lifted when the first Mexican truck is authorized to drive on U.S. roads. Officials say that should happen later this summer.

The dispute has resulted in Mexico levying more than two-point-four billion dollars worth of retaliatory tariffs on U.S. products, including a five percent duty on most U.S. pork.  The National Pork Producers Council (NPPC) called the announcement “a good first step” toward resolving the trucking dispute.

“Now we need the U.S. government to follow through by allowing Mexican trucks into the country so that tariffs on our products will be suspended,” said NPPC president Doug Wolf.

The National Cattlemen’s Beef Association also issued statement saying “cattlemen are relieved the dispute has been resolved before U.S. beef joined the ranks of U.S. commodities that were hit with tariffs.”

Agriculture Secretary Tom Vilsack called the agreement “a major win for U.S. agriculture.”  For U.S. farm exports to Mexico, Vilsack says exports of affected commodities were reduced by 27 percent because of the dispute.

NPPC welcomes news on trucking dispute

The National Pork Producers Council says it is pleased to hear that progress is being made on resolving the trucking dispute with Mexico.

The U.S. Department of Transportation has developed a preliminary plan to allow Mexican trucks freer access into the U.S.  The dispute caused Mexico to place retaliatory tariffs on many American goods, including pork and fresh produce items.  NPPC says U.S. pork exports to Mexico have dropped by 11 percent since the tariffs were imposed last August.

The National Cattlemen’s Beef Association has also weighed in on the news, calling it “a step in the right direction” and urging the Obama administration to resolve the dispute as quickly as possible.

DOT says what they are proposing would meet U.S. obligations under NAFTA while maintaining safety on U.S. roadways.  It would set up inspections of Mexican trucking companies and their drivers for safety records, driving qualifications, vehicle maintenance and insurance.  It would also equip the trucks with electronic monitoring to make sure they are adhering to hours of work laws. 

Mexican officials say they want to resolve the situation and will take a close look at the plan.

Retaliatory tariff slows pork exports to Mexico

U.S. pork exports to Mexico appear to be headed for another record in 2010. But export activity slowed in September, when total pork exports to Mexico were down 12 percent from August.

One major factor may have been the five percent tariff imposed by Mexico as a result of the NAFTA trucking dispute.  U.S. Meat Export Federation head Phil Seng says while it’s difficult to draw solid conclusions based on only one month’s results, those who downplayed the significance of the tariff may have underestimated its impact.

“You’re talking about a market that’s very price-sensitive—and obviously anything that would raise our prices vis-à-vis Canada would be a setback,” Seng says, “and so we’re seeing that—basically, that five percent nullifies the freight advantage that we have in dealing with Mexico.  So in many ways this is a disadvantage to the U.S. industry.”

The United States’ main pork competitor in Mexico is Canada—and Canada’s exports to Mexico rose sharply in September.  Seng points out that came at a time when the Canadian dollar actually gained strength compared to the U.S. dollar.

NPPC asks President to resolve trucking issue

The National Pork Producers Council is once again calling on President Obama to resolve that trucking issue with Mexico.

The dispute is over allowing Mexican trucks to haul goods into the United States.  Last month, Mexico added pork to the list of U.S. products against which it is retaliating for what it considers the U.S. failure to live up to its obligations under NAFTA on the trucking issue.

NPPC and 36 state pork producer organizations have sent a letter to President Obama, urging him to work with Congress and the Mexican government to resolve the dispute as quickly as possible.  NPPC says that, with the Mexican tariff in place, U.S. pork is now at a price disadvantage compared to imports from Canada and Chile, nations that have zero tariffs in Mexico under their own free trade agreements.

What I did on my summer vacation

Commentary

When someone asks, “What did you do on your summer vacation?” I chuckle to myself and think, “What summer vacation??” I was very busy at home and at Brownfield Ag News.

As many of you know, the older we get, the more quickly our summers pass by, and this one flew by with such fury that I’m sure I can see Christmas just over the horizon.

Most of the schools in my neck of the woods held their first days of class last week. State Fairs in the “I” states are over and my neighbors are hiding beets and mammoth zucchini in the backseat of my car.

Summer is waning, but the memories of what I learned and experienced this summer is not. One experience of my summer that I wish every of the 589,182 U.S. soybean farmers could experience is the United Soybean Board See for Yourself program. This was the third year that ten farmers with limited knowledge of the soybean checkoff were selected to participate and see first-hand a variety of projects funded by soybean check-off dollars both in the United States and in Mexico. Participants are asked to evaluate what they see and assess for themselves the types of programs their investments are funding.

As a person who has spent the past 25 years telling the story of agriculture, the opportunity to travel with this program and document my experience is one I will not soon forget. Why? Many reasons, not the least of which is the opportunity I had to witness U.S. farmers in that defining moment when they see how the soybeans they grow are being utilized by others. Loren Hylton, a farmer from central Indiana put it best when he said that as he combines his soybean crop this fall, he’ll be thinking about where that crop goes once it leaves his field and the local elevator.

In the state of Jalisco, Mexico, we visited one of the largest livestock farms in Latin America; one that uses soybeans from the U.S. in feed rations. With 22 million hens, 45 thousand sows and 5,000 dairy cows, this family operation has its own feed mill, box factory and railroad terminal where they can unload a unit train of 110 cars in 12 hours – it was a picture of efficiency, productivity and bio-security in animal agriculture.

Perspective on sophistication of agriculture in Mexico changed for everyone on the trip. Kentucky farmer Barry Alexander told me that the world is much more advanced than he realized before he took part in the SFY Program.

To see the vast array of U.S. soy-based foods available to consumers in Mexico through school lunch programs, at the Mom and Pop shops and at Wal-Mart was an eye-opening experience for every one of us. The fast-growing aquaculture industry in Jalisco is hungry for fish feed containing U.S. soybean meal.

It’s not only what I learned, but the enthusiasm and passion these farmers – USB Directors and participants – have for the industry, along with the commitment of staff in the U.S. and in Mexico – that impresses me so and gives me great hope for the future.

Soybeans! Mexico!

I spent several days traveling through Mexico with the United Soybean Board See for Yourself Program.  Documentation of the journey is on the Brownfield Ag News website.