News Clips July 2, 2015

 

 

1. Trade chief: Congress could get Pacific deal by year's end

2. JBS to purchase U.S. Cargill pork assets for $1.45 billion

3. Senators encourage unified federal policy on biomass

4. Ag coalition sees opportunity in renewed U.S.-Cuban relationship

5. Meat and dairy to eclipse biofuel in agriculture demand - FAO/OECD

 

1. Trade chief: Congress could get Pacific deal by year’s end

The Hill

Vicki Needham

July 1, 2015

 

U.S. Trade Representative Michael Froman said Wednesday he is confident Congress will approve a massive trans-Pacific trade agreement, possibly by year’s end. 

 

Froman said the “likelihood is very high that Congress will pass” the Trans-Pacific Partnership (TPP), because it will be a strong agreement reflecting the “enormous input by Congress.”

 

“This process, going through the [trade promotion authority] process, has been enormously useful from the perspective of making absolutely clear what Congress expects from us in terms of bringing back high-standard agreements,” Froman said at a Politico Playbook breakfast.

 

With trade promotion authority (TPA), or fast-track, in the books, Froman said the first order of business is to complete the TPP negotiations and bring that agreement to Congress for approval.

 

Negotiators are still working out a final batch of tricky issues, Froman said, but he predicted Congress could pass the Asia-Pacific pact by the end of the year.

 

Negotiators of the developing 12-nation agreement are aiming to complete a deal this summer. A key meeting between the countries’ leaders could happen by the end of the month. 

 

Froman said he is taking lessons from the fast-track fight to pave the way for passage.

 

“I think the main lesson I learned over the past couple of years of working on this is just how proactive we need to be in addressing concerns. There’s a lot of myths, a lot of misinformation out there about trade and there are legitimate concerns underneath some of those myths and misinformation,” he said. 

 

“We need to recognize those concerns and at the same time make sure we get the facts out there about how we’re addressing those concerns, and that’s what we’ll be doing over the course of the next several months with regard to the TPP.”

 

Froman said the United States and the 11 other nations are in the final stages of negotiating the TPP down to a reasonable number of outstanding issues but “by definition those issues tend to be the most difficult.” 

 

The outstanding issues are centered on opening markets in Japan and Canada as well as working through concerns over intellectual property protections and state-owned enterprises. 

 

He also hopes to complete the Transatlantic Trade and Investment Partnership deal before Obama leaves office in January 2017 and expects to make very good progress on three ongoing negotiations in Geneva — the World Trade Organization’s Information Technology Agreement, the Environmental Goods Agreement and the 24-party Trade in International Services Agreement.

 

Even though she bucked the White House, Froman praised House Minority Leader Nancy Pelosi (D-Calif.) for setting up in-depth meetings with her members and trade officials to discuss the deal. 

 

“I think that was enormously useful in terms of giving an opportunity both for the critics and our opponents to express their point of view, to be heard, to have input, to give us real feedback, which helped us shape our negotiating positions," he said.  

 

"But also for those who were undecided and wanted to learn more about TPP and what we were negotiating to get a better understanding as well,” he added. 

 

Despite overwhelming Democratic opposition to fast-track, Froman said he doesn’t believe he underestimated the strength of Democratic opposition. 

 

“Trade issues always been very tough," he said, citing debates since the implementation of the North American Free Trade Agreement more than 20 years ago. 

 

"Trade legislation in the past has largely passed with Republican support and a critical mass of Democrats, and it was no different this time," he said.

 

Froman also gave props to pro-trade Democrats who “rolled up their sleeves" and dug into the TPP negotiations in great detail and "asked us very challenging questions" in repeated trips to Capitol Hill.

 

In the end, 28 House Democrats and 13 in the Senate backed fast-track. 

 

And they made it clear while that they supporting TPA they would be “holding our feet to the fire” to get their vote on the TPP, he said. 

 

Overall, the trade fight, "underscored that we live in a global economy, we can’t afford not to show leadership, we can’t afford not be to be engaged and let someone else define the rules of the road that might lead to a race to the bottom,” Froman said. 

 

“And we can’t afford not to use trade agreements to shape globalization.”

 

To view this story at its original source, follow this link: http://thehill.com/policy/finance/trade/246655-trade-chief-congress-could-get-pacific-trade-deal-by-years-end

 

2. JBS to purchase U.S. Cargill pork assets for $1.45 billion

Reuters

Caroline Stauffer, Guillermo Parra Bernal, Tom Polansek, Michael Hirtzer and P.J. Huffstutter

July 1, 2015

 

JBS SA, the world's largest meat packer, is buying Cargill Inc's U.S. pork business for $1.45 billion, free of debt, it said in a statement on Wednesday, a deal that would make it one of the largest and most powerful meat companies in the United States.

 

The bid by the company's JBS USA subsidiary comes just over a week after Brazil-based JBS (JBSS3.SA) said it would buy Moy Park Ltd, the British unit of rival Marfrig Global Foods SA (MRFG3.SA) and marks the latest sign of consolidation in the U.S. protein sector.

 

Last month, dairy cooperative Land O'Lakes Inc. and United Suppliers Inc. said they would merge their crops inputs units, spawning a business ­group with more than $7 billion in annual sales. In 2013, U.S. pork powerhouse Smithfield Foods Inc merged with Shuanghui International of China in a $4.7 billion deal.

 

Like the Shuanghui-Smithfield deal, approval of the Cargill sale could hinge on whether U.S. federal regulators look at just the pork unit, or JBS' entire meat business, said Jim Robb, analyst at the Livestock Marketing Information Center.

 

Industry data puts JBS USA as controlling about 22 percent of the U.S. beef market, and about 18 percent of the U.S. poultry market, the second largest player in both sectors behind Tyson Foods Inc. (TSN.N).

 

The deal announced on Wednesday includes two meat processing plants in Iowa and Illinois, as well as five feed mills in Missouri, Arkansas, Iowa and Texas and four hog farms in Arkansas, Oklahoma and Texas.

 

If all protein sectors are included, the U.S. Department of Justice could find that the company would have too large a slice of the U.S. meat market: JBS USA touts itself as a leading processor of beef, pork and lamb, in addition to being a majority shareholder in chicken processor Pilgrim's Pride Corp.

 

"It depends on how (the U.S. government) cuts it up," Robb said. "JBS has relatively small holdings on the hog side, but Cargill has relatively large holdings."

 

STRATEGIC GROWTH

 

JBS said its latest purchase was in line with its strategy to "grow its portfolio of prepared and value-added products, expanding the company's customer base."

 

JBS, which grew from a family-run butcher to become Brazil's largest company by revenue, purchased Australian processed foods maker Primo Smallgoods in November in order to increase sales to Asia.

 

Cargill had not been looking to sell its pork business but "JBS approached us with an offer that we had to consider," said spokesman Mike Martin, adding the company was sticking with its other animal protein businesses globally and would "evaluate opportunities that could provide long-term, profitable growth."

 

News of the deal came a surprise to some industry watchers and U.S. farmers.

 

Cargill Meat Solutions, headquartered in Wichita, Kansas, had seemed to be trying to increase the ranks of farmers who produce hogs for the company, said Mike Paustian, an independent hog producer in Scott County, Iowa. He said he saw Cargill advertisements looking for pig growers.

 

"The impression that I had is they were looking for places to put pigs," he said.

 

Still, the takeover should not impact independent producers much because a lot of Cargill's supply comes from contract growers, said Paustian, who usually sells his hogs to Tyson Foods.

 

"A lot of what they were processing were their own hogs. They were pretty integrated. It's not like you're potentially losing a big market for us to sell our hogs to," he said.

 

To view this story at its original source, follow this link: http://www.reuters.com/article/2015/07/01/us-jbs-m-a-cargill-idUSKCN0PB63720150701

 

3. Senators encourage unified federal policy on biomass

Agri-Pulse

Staff

July 1, 2015

 

A bipartisan group of senators led by Susan Collins, R-Maine, and Jeff Merkley, D-Ore.,  are urging the USDA, EPA and the Department of Energy (DOE) to uniformly recognize and support biomass energy as a sustainable and economically significant energy source.

 

In a letter, the 46 senators emphasize that many states rely on biomass to meet their energy goals, and that the agencies should ensure federal policies are consistent. Additionally, there should be no question about the carbon neutrality of biomass derived from residuals of forest products in manufacturing and agriculture, they said.

 

Any policies that add “unnecessary costs and complexity” will discourage investment in biomass utilization as an energy solution, the senators said.

 

“Federal policies across all departments and agencies must remove any uncertainties and contradictions through a clear, unambiguous message that forest bioenergy is part of the nation's energy future,” the letter states. The letter was addressed to Agriculture Secretary Tom Vilsack, EPA chief Gina McCarthy and Energy Secretary Ernest Moniz.

 

Sen. Thad Cochran, R-Miss., one of the letter's signatories, said in a statement that federal agencies need to remove regulatory barriers “that hinder forest biofuel production, which could be more widespread throughout the Southern states.”

 

According to the Environmental and Energy Study Institute, there are currently varying definitions of renewable biomass in energy and agriculture policies and in the tax code.

 

Distinctions between what is and what isn't considered “renewable biomass” cause confusion and frustrate the development of biomass markets, the institute says.

 

“What is needed is a universal definition that is flexible and functional and promotes feedstock diversification, ensures access for local and small-scale producers, and encourages improved land stewardship on all productive lands,” notes the institute.

 

To view this story at its original source, follow this link: http://www.agri-pulse.com/Senators-encourage-unified-federal-policy-biomass-712015.asp

 

4. Ag coalition sees opportunity in renewed U.S.-Cuban relationship

DTN Progressive Farmer

Chris Clayton

July 1, 2015

 

The U.S. Agriculture Coalition for Cuba praised the announcement Wednesday by President Barack Obama that the U.S. and Cuba will officially re-establish diplomatic relations on July 20 with the re-opening of respective embassies.

 

The Obama administration has changed policies to make it easier to do business in Cuba, but some changes, such as loosening travel restrictions or credit for trade, require Congress to pass legislation. That will be difficult because GOP presidential candidates in general oppose making any changes in relations between the two countries.

 

Agricultural groups see opportunities to boost exports to the island country of about 11 million people as the U.S. and Cuba work to formally end a 54-year-old embargo.

 

Devry Boughner Vorwerk, chair of the U.S. Agriculture Coalition for Cuba (USACC) made the following statement this morning on the announcement that the United States and Cuba will open embassies in Washington and Havana:

 

“Farmers, ranchers and agribusinesses across the nation welcome this continued progress toward normalized relations with Cuba," said Devry Boughner Vorwerk, a Cargill executive who chairs the ag coalition. "Not only are embassies critical to strengthening commercial ties – affording diplomatic status suggests a willingness to engage constructively on many important matters. We’re hopeful today’s announcement will ultimately lead to an end to the embargo and increased economic opportunity for agriculture in both our nations. USACC will continue our work with members of Congress from both sides of the aisle who have expressed support for ending the embargo.”

 

Cuba exports about 80% of its food. USDA reports Cuba imported $415 million in agricultural products from the U.S. in 2013, but that number fell to $300 million last year. In a report released last week, USDA's Foreign Agricultural Service stated meat and poultry products make up about half of all U.S. exports to Cuba; soybeans and soybean meal account for 35% of exports. Corn takes up another 9% and all other ag exports account for 7%.

 

The U.S. market share in Cuba has fallen since peaking in 2008. The FAS report highlighted that U.S. ag exports to Cuba have substantial room for growth. http://www.fas.usda.gov/…

 

To view this story at its original source, follow this link: http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=policy&blogEntryId=8a82c0bc4c9a7d96014e4b24c5810eed&showCommentsOverride=false

 

5. Meat and dairy to eclipse biofuel in agriculture demand

Reuters

Gus Trompiz

July 1, 2015

 

Changing diets in emerging countries will boost global demand for meat and dairy products in the next 10 years, shifting grain supply towards livestock feed as use of crop-based biofuel is curbed by lower oil prices, the FAO and OECD said.

 

In their annual Agricultural Outlook report released on Wednesday, the United Nations Food and Agriculture Organization and the Organisation for Economic Cooperation and Development confirmed a broad trend set out last year of moderate food prices due to production gains and less vigorous demand.

 

Prices of all major agricultural products are set to decline in real terms over 2015-2024, although they will remain above levels seen before a surge in 2007-2008 that heralded a period of high volatility, the institutions said.

 

Within the overall picture of more restrained markets, partly due to tepid economic growth, a dietary shift towards animal protein would be a major feature.

 

"We see consumption of staples reaching saturation in many countries including many emerging economies," Jonathan Brooks, an economist at the OECD's trade and agriculture directorate and one of the report's authors, told a news conference.

 

"At the same time we see meat and dairy demand increasing relative to demand for crops, and that will push up meat and dairy prices relative to crop prices."

 

MORE MERCOSUR SUPPLY

 

Animal protein consumption would in turn boost use of grains and oilseeds for livestock feed.

 

Animal feed demand would account for 70 percent of growth in world consumption of coarse grains - mainly corn (maize) - in the next 10 years, double its share in the previous decade when it lagged the near 40 percent contribution of biofuels, the report said.

 

Biofuel demand would be capped by lower oil prices, which have made it unprofitable, and ceilings in government blending targets, with the notable exception of Brazil which is supporting further use of ethanol made with sugar cane.

 

The FAO and OECD, among critics of subsidised biofuel schemes blamed for contributing to tensions in food supply and prices, said technology was now available to use various plants, which could offer a more sustainable outlet for farmers.

 

South America and Brazil in particular would benefit from rising demand for protein products, given their potential to raise output of meat and soybeans for livestock meal.

 

Brazil, already the world's second-largest largest agricultural exporter after the United States, was expected to be the biggest supplier of additional global demand, the FAO and OECD said.

 

Overall exports will remain dominated by a small group of countries, the report said, noting that a Russian embargo on Western food products had altered some flows by generating more South American shipments to Russia and more EU and U.S. exports to Asia.

 

To view this story at its original source, follow this link: http://www.reuters.com/article/2015/07/01/agriculture-fao-oecd-idUSL8N0ZH3DF20150701

 

 

 

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