Ag concentration continues to consume market; other news
(Friday, March 4, 2005 -- CropChoice news) -- 1. Agriculture concentration continues to consume market 1. Agriculture concentration continues to consume market By Robert Pore, Grand Island (Neb.) Independent, 03/03/05 With Smithfield Foods looking to expand its beef business with possible
acquisitions of rivals such as Swift & Co., a new report shows that the
trend of consolidation and concentration in agriculture continues to
grow. Swift & Co.'s Grand Island plant is the community's largest employer,
with more than 2,000 workers. A recent National Farmers Union-commissioned study by the University of
Missouri department of rural sociology outlines the increased
concentration in domestic agricultural markets. The study shows that the
concentration ratio for the top four firms has increased in all
commodity sectors except ethanol production. During the recent National Farmers Union convention in Lexington, Ky.,
delegates passed policy initiatives in hopes of ensuring that all
agricultural markets are competitive, accessible, transparent and fair,
NFU President Dave Frederickson said. "We need comprehensive agricultural competition and concentration
policies to restore balance in the marketplace," he said. "Independent
producers cannot succeed in the absence of protection from unfair and
anticompetitive practices." According to the report, prepared by Mary Hendrickson and William
Heffernan, the nation's top four beef packers -- Tyson, Cargill (Excel),
Swift & Co. and National Beef Packing Co. -- control 83.5 percent of the beef packing industry. Smithfield Foods became the fifth largest beef packer after a series of
recent acquisitions. Smithfield, which is already the largest U.S. hog and pork producer,
recently agreed to merge its cattle-feedlot business into a joint
venture with ContiGroup Cos. to create the largest U.S. supplier of
livestock to beef producers. The merger between the six ContiGroup feedlots and four owned by
Smithfield's MF Cattle Feeding will be able to feed 811,000 head of
cattle, or about 7 percent of the U.S. feedlot herd. The combined
group's feedlots are in Kansas, Colorado, Oklahoma, Idaho and Texas. Smithfield bought MF Cattle Feeding's three feedlots in Colorado and
Idaho from ConAgra Foods Inc. last year and has been acquiring beef
processors since 2001, including Moyer Packing Co. and Packerland
Holdings. Smithfield said its joint venture with New York-based ContiGroup will
create the largest U.S. cattle feedlot company. Amarillo, Texas-based
Cactus Feeders Inc. had been the largest. The nation's four largest pork packers -- Smithfield, Tyson, Swift and
Hormel Foods -- control 64 percent of the pork packing market. Along with being the largest pork packer, Smithfield also leads the
nation in pork production with 825,000 sows, followed by Premium
Standard Farms at 225,000 sows, Seaboard Corps. at 213,600 sows and
Prestage Farms with 129,000 sows. Those four pork producers control 49
percent of the nation's pork production market. According to the report, the one notable exception to continued
consolidation and concentration in the agriculture industry was ethanol
production. The report said that four companies control 41 percent of the nation's
ethanol production, while farmer-owned ethanol plants accounted for 1.28
billion gallons per year, or 37.3 percent of the total capacity. The four largest ethanol producers were ADM, 1.07 billion gallons;
Cargill, 128 million gallons; Aventine Renewable Energy Inc., 100 million gallons; and VeraSun Energy Corp., 100 million gallons. "The ethanol industry's decreased concentration demonstrates that
proactive public policy can restore competition in the marketplace,"
Frederickson said. "It is time for Congress to pass legislation that
restores true competition in the marketplace for U.S. farmers and
ranchers so that they have the opportunity to receive fair prices for
their production." With two new Wal-Mart Supercenters scheduled to open in Grand Island
this year, the report also shows that Wal-Mart was not only the nation's
top food retailer but also the world's top grocery retailer. According to the report, the top five U.S. food retailers are Wal-Mart,
$66.47 billion; Kroger Co., $46.32 billion; Albertsons, $31.96 billion;
Safeway, $29.57 billion; and Ahold USA Inc. at $25.12 billion. Those
five controlled 46 percent of the market. Total supermarket sales in
2003 were $432.8 billion. Wal-Mart worldwide grocery sales in 2004 were $244.5 billion, followed
by Carrefour of France at $64.7 billion. 2. Economist urging caution with trade
(Friday, March 4, 2005 -- CropChoice news) --
1. Agriculture concentration continues to consume market
1. Agriculture concentration continues to consume market
By Robert Pore, Grand Island (Neb.) Independent, 03/03/05
With Smithfield Foods looking to expand its beef business with possible acquisitions of rivals such as Swift & Co., a new report shows that the trend of consolidation and concentration in agriculture continues to grow.
Swift & Co.'s Grand Island plant is the community's largest employer, with more than 2,000 workers.
A recent National Farmers Union-commissioned study by the University of Missouri department of rural sociology outlines the increased concentration in domestic agricultural markets. The study shows that the concentration ratio for the top four firms has increased in all commodity sectors except ethanol production.
During the recent National Farmers Union convention in Lexington, Ky., delegates passed policy initiatives in hopes of ensuring that all agricultural markets are competitive, accessible, transparent and fair, NFU President Dave Frederickson said.
"We need comprehensive agricultural competition and concentration policies to restore balance in the marketplace," he said. "Independent producers cannot succeed in the absence of protection from unfair and anticompetitive practices."
According to the report, prepared by Mary Hendrickson and William Heffernan, the nation's top four beef packers -- Tyson, Cargill (Excel), Swift & Co. and National Beef Packing Co. -- control 83.5 percent of the beef packing industry.
Smithfield Foods became the fifth largest beef packer after a series of recent acquisitions.
Smithfield, which is already the largest U.S. hog and pork producer, recently agreed to merge its cattle-feedlot business into a joint venture with ContiGroup Cos. to create the largest U.S. supplier of livestock to beef producers.
The merger between the six ContiGroup feedlots and four owned by Smithfield's MF Cattle Feeding will be able to feed 811,000 head of cattle, or about 7 percent of the U.S. feedlot herd. The combined group's feedlots are in Kansas, Colorado, Oklahoma, Idaho and Texas.
Smithfield bought MF Cattle Feeding's three feedlots in Colorado and Idaho from ConAgra Foods Inc. last year and has been acquiring beef processors since 2001, including Moyer Packing Co. and Packerland Holdings.
Smithfield said its joint venture with New York-based ContiGroup will create the largest U.S. cattle feedlot company. Amarillo, Texas-based Cactus Feeders Inc. had been the largest.
The nation's four largest pork packers -- Smithfield, Tyson, Swift and Hormel Foods -- control 64 percent of the pork packing market.
Along with being the largest pork packer, Smithfield also leads the nation in pork production with 825,000 sows, followed by Premium Standard Farms at 225,000 sows, Seaboard Corps. at 213,600 sows and Prestage Farms with 129,000 sows. Those four pork producers control 49 percent of the nation's pork production market.
According to the report, the one notable exception to continued consolidation and concentration in the agriculture industry was ethanol production.
The report said that four companies control 41 percent of the nation's ethanol production, while farmer-owned ethanol plants accounted for 1.28 billion gallons per year, or 37.3 percent of the total capacity.
The four largest ethanol producers were ADM, 1.07 billion gallons; Cargill, 128 million gallons; Aventine Renewable Energy Inc., 100 million gallons; and VeraSun Energy Corp., 100 million gallons.
"The ethanol industry's decreased concentration demonstrates that proactive public policy can restore competition in the marketplace," Frederickson said. "It is time for Congress to pass legislation that restores true competition in the marketplace for U.S. farmers and ranchers so that they have the opportunity to receive fair prices for their production."
With two new Wal-Mart Supercenters scheduled to open in Grand Island this year, the report also shows that Wal-Mart was not only the nation's top food retailer but also the world's top grocery retailer.
According to the report, the top five U.S. food retailers are Wal-Mart, $66.47 billion; Kroger Co., $46.32 billion; Albertsons, $31.96 billion; Safeway, $29.57 billion; and Ahold USA Inc. at $25.12 billion. Those five controlled 46 percent of the market. Total supermarket sales in 2003 were $432.8 billion.
Wal-Mart worldwide grocery sales in 2004 were $244.5 billion, followed by Carrefour of France at $64.7 billion.
2. Economist urging caution with tradeBy LEE MORRISON, T-R Business Editor
Agriculture remains a key part of the global marketplace for the United States, according to a national trade expert.
"For decades, the U.S. agricultural sector has been one of the most competitive and widely acknowledged world leaders in efficiency, productivity and technological advancements," said Alan Tonelson, an economist with the U.S. Business and Industry Council at Washington, D.C.
However, the longstanding American trade surplus in agriculture apparently is wilting. Earlier this month, the U.S. Commerce Department reported that the nation’s annual trade deficit soared to a record $617.7 billion last year.
U.S. farmers sold a record $56.3 billion in food products to foreign customers, but food imports exceeded that by $5.9 billion. It marked the third straight year that Americans posted a deficit in food trade.
"There’s no reason to think that the American farmer has become less productive or less efficient," Tonelson said in a telephone interview. "Yet, our long standing trade surplus in this sector has vanished and now turned into a modest deficit.
"This is a genuinely historic development — not only in the history of U.S. agricultural trade policy, but the whole U.S. economy. If agriculture is no longer making a positive net contribution to American competitiveness, then you wonder where the future of the American economy will be.
"Already, there’s a huge trade deficit in manufacturing — that’s growing rapidly — and also in high-tech manufacturing. And, our trade surplus in services has been shrinking rapidly. In fact, it has shrunk by more than 20 percent since 2002 and these, in my view, are all strong signals that U.S. trade policy is failing us." Tonelson said too much production or service provisions are outsourced from America and the development of rival sectors in many regions around the world is being encouraged.
"It’s critically important to understand that these rival sectors have developed largely because of the transfer of technology and management skills that’s been engineered by multinational companies," Tonelson said. "They have actively created foreign rivals for U.S.-based producers, and agriculture is no exception. The big U.S. agri-businesses don’t care where their products are coming from, and they’ve been effective in spreading technology all around the world."
Tonelson said that a dramatic drop of about 15 percent in beef exports due to a Mad Cow Disease scare hurt, but added that the meat sector is not enough to dominate agriculture trade figures overall.
"That certainly helped to drag the overall U.S. trade deficit into negative territory, but we’ve seen deteriorating competitiveness throughout the agriculture sector," he said. "Once again, this is a trend that didn’t begin just yesterday." The economist also said that the North American Free Trade Agreement was supported by the agriculture lobbyists backing the idea that more markets worldwide would be opened to American exports.
"But what’s happened is that our agricultural trade has become high-jacked by big agri-businesses that have used these trade agreements, largely not to promote U.S. products, but for these businesses to trade for lower cost foreign items. The promise of these trade agreements made to U.S.-based farmers and ranchers has been completely broken.
"Their main result has not been to open new markets abroad, but to increase the level of competition the U.S. farmer faces at home. That will be a major influence on the future of U.S. trade policy. You’ll see growing splits within the agricultural community, like we have seen in the manufacturing community, because domestic producers have interests that differ greatly from those of multinational agri-businesses."
Copyright ©2005 The Times Reporter, firstname.lastname@example.org
3. Gulf Between the Classes is Widening
by Curt Arens
NORFOLK - Rural America is getting the shaft, politically speaking. That's the word from best selling author, Thomas Frank. The Prairie Village, Kansas native recently penned the book, "What's the Matter with Kansas?" about the societal implications for rural states as the gulf between economic classes widens.
Frank was the keynote speaker for a capacity crowd at the Center for Rural Affairs annual gathering held here Saturday, Feb. 26.
In speaking about the whole "red state-blue state" election concept, he picks satirically on conservatism in the U.S. as heartily promoting an ever-widening economic gulf between Wall Street elite and rural residents.
But Frank said the Democrats pander to the same billionaires as Republicans for campaign funding. That leaves only cultural issues for voters to ponder between the parties, because on the economic front, both parties are beholden to the same big money that got them elected, said Frank.
In the last election, the poorest counties in America voted heavily for Bush. "It's not that people have become satisfied (with the Republicans)," he said. They are mad, but because of the Republicans' successful campaign of what Frank calls "backlash politics", they are mad at liberals.
Accompanying all of this is the intrusion of corporate power in our life," said Frank. "Workers have less power than at any time in the last 50 years." But voters somehow excuse the corporate world, which is at the center of it all, he said.
"The world of business is sometimes becoming the world itself," he said. "And individual farmers find themselves facing off against corporate power."
Frank said the idea that America is a classless society is a myth. "We have profound class differences in the U.S.," he said.
In 1980, the richest owned 28 percent of national wealth. Today they own 40 percent, according to Frank. Average CEO's once made 42 times more than their workers, but today make 500 times more. There is just a tolerance for the growing economic differences.
"Farmers know about consolidation, but they believe it is unchangeable," he said. Yet he insists that it hasn't always been that way.
Nebraska's William Jennings Bryan was at the center of prairie populism in the Democratic Party in the 1890's. That movement turned many issues around for the people, said Frank. But when the Supreme Court ruled in 1976 that campaign contributions were equivalent to free speech, the ability of third parties and grassroots movements to change mainstream politics was severely hindered.
4. Bush vows "all appropriate steps" to reopen Japan's beef market
Kyodo News, Wednesday March 2, 2005
(Kyodo) _ U.S. President George W. Bush promised Congress in a trade report Tuesday that his administration will take "all appropriate steps" to ensure that Japan quickly lift its 15-month-old ban on American beef due to mad cow disease.
"At the highest levels of government, the administration is pressing Japan to expeditiously reopen this critical market for U.S. beef," according to the 2005 Trade Policy Agenda and 2004 Annual Report of the President on the Trade Agreements Programs submitted to Congress.
Calling it a "top priority" among many other issues related to Japan ranging from postal privatization to regulatory reforms, the report said the Bush administration "will take all appropriate steps to ensure that this occurs."
The annual report, prepared by the Office of the U.S. Trade Representative, comes amid increasing pressure from lawmakers and the beef industry.
Twenty U.S. senators from major farm producing states recently sent a joint letter to Japanese Ambassador to the United States Ryozo Kato, threatening retaliatory economic actions if Japan fails to quickly reopen the market to American beef.
Agriculture Secretary Mike Johanns, who handed the letter to Kato last week, expressed concern to lawmakers Tuesday that the issue "could further complicate" the bilateral relations if Japan continues to further delay its lifting of the import ban.
Johanns also told a House of Representatives Agriculture Committee hearing that he sent a letter last week to his Japanese counterpart Agriculture, Forestry and Fisheries Minister Yoshinobu Shimamura.
Japan was the largest importer of U.S. beef before it imposed the ban in December 2003 when the United States discovered its first case of mad cow disease.
The report also vowed to deal with the same ban imposed by South Korea, the second largest importer, as a "top priority."
The Japanese government has repeatedly told the United States that it is waiting for a conclusion of the ongoing deliberations by the Food Safety Commission over whether to stop the current domestic blanket testing of slaughtered cattle and exclude animals aged 20 months or younger so as to partially lift the import ban.
A governmental expert panel agreed last month to accept a U.S.-proposed method for verifying cattle ages. The two nations had remained at odds over the verification method although they reached an agreement in October to resume imports of beef from animals aged up to 20 months. Japan had demanded testing all slaughtered cattle.
Among other issues, the report reiterated concerns about "the unequal competitive conditions" between "kampo" postal life insurance, which Japan is set to privatize, and its private sector competitors.
Washington has been calling for a "standstill" on new products offerings until kampo's advantages over the private sector are eliminated, the report said.
The report otherwise highlighted its "deepening...economic and trade ties" with Tokyo, saying the United States is continuing to "update our bilateral engagement with Japan on key issues such as the privatization of government entities and to increase our joint cooperation on regional issues, including protection of intellectual property rights."
In contrast, the Bush administration pledged to continue "relentless" efforts to ensure China's full compliance with its World Trade Organization commitments, with particular emphasis on ensuring effective protection of U.S. patents, trademarks and copyrights as "the highest priority...throughout 2005."
The report also said Washington will "strictly enforce its trade laws to ensure that U.S. interests are not harmed by unfair trade practices" in China.
Overall, the report said the Bush administration will focus on concluding the Doha round of WTO multilateral trade negotiations, and promoting bilateral and regional free trade agreements, including those with Southeast Asian countries.
"In the president's second term, concluding the Doha agenda of multilateral trade negotiations will be a top priority for the administration," former USTR Robert Zoellick said in the report.
Bush has yet to nominate a successor to Zoellick, who was USTR when the report was prepared. He became deputy secretary of state last month.
"Without the WTO, other countries could impose higher duties on American exports," he said. "And without the WTO, the United States would not have the leverage it needs to address trade barriers that disadvantage American farmers, ranchers, workers, and businesses, including discriminatory tax policies and customs procedures, subsidies, unjustified antidumping actions and weak intellectual property protections."
5. White House Budget Slashes Clean Enegy: A Look at the Administration's Budget Request for Sustainable Energy Programs in FY2006
by Ken Bossong, February 28, 2005
In his most recent State of the Union address, President Bush stated that the United States needed "reliable supplies of affordable, environmentally responsible energy," and urged Congress to "pass legislation that makes America more secure and less dependent on foreign energy." However, there is a marked disconnect between the President's words and the funding priorities he laid out in the Fiscal Year 2006 (FY06) budget request he recently submitted to the U.S. Congress.
"Taken together, the cuts or anemic funding levels proposed for many federal sustainable energy programs reflect a continuation of the policy of slowly bleeding support for renewable energy and energy efficiency."
The President's proposed budget calls for significant cuts in renewable energy, energy efficiency, clean air, and climate change related-programs at the U.S. Department of Energy, U.S. Department of Agriculture, U.S. Department of Transportation, U.S. Environmental Protection Agency, and other agencies.
Swinging the Budget Axe
The FY06 budget request for the U.S. Department of Energy's (DOE) energy efficiency and renewable energy (EE/RE) programs envisions reductions totaling nearly $50 million - an overall cut of roughly 4 percent. This includes a 6 percent cut in Distributed Energy programs ($60,416 to $56,629); an 8 percent cut in the Geothermal Energy program ($25,270 to $23,299); an 18 percent cut in the Biomass/Biofuels program ($88,099 to $72,164); and a 90 percent cut in the Hydropower program ($4,862 to $500).
In fact, the Bush budget proposes to phase out DOE's hydropower program altogether and all support for the Advanced Hydropower Turbine, a joint program between DOE and the hydropower industry exploring fish-friendlier turbines, just at the time when full scale testing is about to begin at multiple locales.
Adding insult to injury for at least some of these programs, the cuts come on top of earlier reductions. The geothermal program, for example, had been funded at $28.4 million in FY03 and steadily reduced since then.
Less severely impacted is DOE's solar R&D budget which faces a reduction of only 1.3 percent, from $85.07 million in FY 05 to $83.95 million in FY 06. The solar industry has sought to put a positive spin on its reduction calling the budget request "essentially status quo funding" while applauding a "promising new initiative to advance the development of crystalline silicon solar power."
Overall, among DOE's core renewable energy programs, only wind energy is proposed for an increase - 3.4 million (from $40.8 million to $44.2 million), a relatively large expansion of nearly 9 percent.
In addition, funding for the Renewable Energy Production Incentive (REPI) program (which provides public power systems and rural electric cooperatives with a counterpart to the tax incentives that are available to for-profit utilities for renewable generation) would be just $5 million - an increase of $1 million but well below the cumulative $70+ million estimated as needed to fully fund past obligations under the program.
On the energy efficiency side of the ledger, DOE's funding would be cut back by nearly $21 million. Moreover, this decrease comes on top of earlier reductions. Since FY02, DOE research and development spending on efficiency has fallen by $50 million. Corrected for inflation, this represents a 15 percent drop in federal support for energy efficiency even though studies suggest that every dollar invested in DOE-administered energy-efficiency R&D returns $20 to the nation's economy.
The bottom-line reduction in DOE's EE/RE programs appears less drastic primarily because of significant increases for the hydrogen program (5%: $94,066 to 99,094) and the fuel cells program (12%: $74,944 to $83,600). And the hydrogen program, which has grown from $38,113 in FY03, is not a truly renewable energy program inasmuch as a portion of the budget supports hydrogen production from fossil fuel and nuclear sources.
On the tax side, the Bush Administration budget proposal for 2006 calls for extending the wind energy production tax credit (PTC) for two years, through the end of 2007. The two-year PTC for wind, biomass (other than agricultural livestock waste nutrients), and landfill gas would continue at 1.8 cents/kWh and would be adjusted annually for inflation. However, the proposal appears to not include geothermal energy in the extension even though it was incorporated into the program last year -- arguably one of the few advances made in federal support for renewables in 2004.
Even if broadened to include geothermal and other renewables, a mere two-year extension would continue the stop-and-go unpredictability of the PTC which has hampered renewable energy development over the past decade - a problem not faced by fossil fuel technologies which are granted long-term incentives.
Widening the Swath
Elsewhere the pattern is the same. At the U.S. Department of Agriculture (USDA), funding for the Federal Procurement of Biobased Products program and the Biodiesel Fuel Education program held steady at $1 million each. However, the RBS Renewable and Energy Efficiency Grant/Loan Guarantee Program would be scaled back to $10 million from $23 million in FY05, the NRCS Biomass Research and Development Program would be cut by $2 million to $12 million, and the CCC Bioenergy Program would be slashed $40 million from $100 million in FY05 to $60 million in FY06 - and down from $150 million in FY04.
For the U.S. Environmental Protection Agency, the President's budget calls for an overall cut of $517 million (a 6.4 percent reduction from FY05 appropriations). The cut includes a $42 million cut in the Clean Air and Global Climate Change Program (a 4.2% cut from the FY 05 President's budget). Funding for EPA's Energy Star program would be essentially level with FY05 but even this may be considered penny-wise and pound-foolish inasmuch as every dollar invested in the program cuts energy costs by $75 and sparks $15 of investment in new efficiency technologies, according to the Alliance to Save Energy.
At the U.S. Department of Transportation, the Urbanized Area Formula Program and the Fixed Guideway Modernization Program will see a $300 million cut in funding from $5.3 billion in FY _05 to $5.0 billion. These programs help promote clean bus deployment through the funding of innovative technologies and, capital projects to replace, rehabilitate, and purchase buses and related equipment. These cuts would be on top of the elimination of $1.2 billion in subsidies for Amtrak which would essentially eliminate the rail service.
Policy of Slowly Bleeding Support
Taken together, the cuts or anemic funding levels proposed for many federal sustainable energy programs reflect a continuation of the policy of slowly bleeding support for renewable energy and energy efficiency. - a policy correctly characterized by the Alliance to Save Energy as being the 'wrong approach at the wrong time.'
The United States is now facing rising oil and natural gas prices and imports with negative consequences for the economy, the national trade deficit and national security, rapidly worsening climate change plus other energy-related environmental problems, and increasing evidence of the public health impacts of fossil energy use.
For all of these reasons, the White House's policy of steadily chipping away at the cross-section of federal sustainable energy programs reflects misplaced priorities and is bad for jobs, the economy, national security, and the environment.
Recognizing this, the member groups of the Sustainable Energy Coalition more than a year ago called for reversing the downward spiral of federal support for renewable energy and energy efficiency programs and instead doubling funding levels for them over the next five years.
However, given the size of the federal budget deficit, which is placing ever-greater stresses on all discretionary funding programs, the likelihood of seeing significant budget increases in the near future appear remote - even if the political environment becomes more friendly.
More likely, sustainable energy advocates will be forced to compete with supporters of many other social programs for a piece of an ever-diminishing pie. But no matter how many different ways one tries to divide and reallocate crumbs, one still ends up with crumbs.
Some Budgetary Solutions
Other than hoping that the economy will somehow rebound or that the nation's tax policies or military expenditures will be revised, the only likely long-term prospect for expanding the fiscal resources available for renewable energy and energy efficiency programs may be through developing a new, independent revenue stream.
One option is to revisit proposals that have been considered but set aside due to strong political opposition. These would include some form of a carbon and/or other pollution-based tax or oil import fee. Similarly, higher royalty fees on federal lands leased for oil and natural gas drilling might be an option. Another would be a revolving fund that reinvests savings from federal energy efficiency programs (e.g., the Federal Energy Management Program) back into sustainable energy R&D programs. And yet another is to reprogram back into renewable energy and energy efficiency a portion of the nearly $6 billion from a variety of programs such as "clean coal," advanced nuclear power generation, non-renewable hydrogen, and carbon sequestration that the White House has cobbled together and euphemistically labeled as its "Climate Change Initiative."
Barring some such policy change, however, the prospects for sustaining, if not expanding, the funding levels for federal energy efficiency and renewable energy programs in FY06 and beyond appear daunting.
About the Author...
Ken Bossong is the coordinator of the Sustainable Energy Coalition, a coalition of more than 80 national and state business, environmental, and energy policy organizations advocating increased support for energy efficiency and renewable energy technologies. The views expressed in this article, however, are solely those of the author and do not necessarily reflect the position of the Sustainable Energy Coalition or its member groups.
The information and views expressed in this article are those of the author and not necessarily those of RenewableEnergyAccess.com or the companies that advertise on its Web site and other publications.
6. California Rice farmers see record demand, so why are prices lagging?
Wednesday, March 2, 2005, Greg Massa (530) 519-8628
California rice farmers are realizing record demand for their 2004 crop. Export numbers released this week from the US Department of Agriculture show that export demand for medium grain milled rice is 45% ahead of one year ago. Total demand for all classes of the 2004 medium grain rice crop (milled, brown and paddy) is 37% ahead of 2003. A total of 26.4 million cwt. (hundredweight, or 100 pounds) of paddy rice have been sold to export markets thus far, as compared with 19.3 million cwt. one year ago.
"These numbers are good news for California rice farmers," said Steven Jones of Rice Producers of California. "We grew a big crop in 2004, but these export numbers show that we should easily move the entire crop."
California’s rice production for 2004 is estimated at 52 million cwt., and when added to medium grain produced in the Southern US, total US production comes to 60.8 million cwt. Carryover from the 2003 crop is 12.4 million cwt, giving a total supply of 73.2 million cwt.
US domestic use is projected to consume 35 million cwt, leaving 38.2 million cwt for the export market and carryover supplies. "We’ve already hit 26 million cwt. in export sales, so now we’re eating into that 12 million cwt. carryover supply," noted Mr. Jones. "We’ve already exceeded anticipated export sales for the entire year, and we’re only four months into the marketing year."
These new numbers are causing some growers to ask tough questions of rice marketers. "If traders have already marketed basically the entire crop, with almost 8 months to go before new supply becomes available, why are prices so low?" asked Scott West, a rice farmer from Colusa. "If demand is exceeding supply, prices should rise."
Indeed, prices on the export market are at record low levels. Recent sales of rice to Japan, formerly a lucrative market for California rice farmers, were made at prices estimated to be 38% below the farmer’s cost of production. Unfortunately, rice farmers aren’t the ones doing the actual selling of the crop.
"It’s ridiculous," said Greg Massa, communications director for Rice Producers of California, a farmer organization that has been examining the low prices. "Farmers can’t make a living at these prices, which are so low that even full subsidy payments don’t make up the shortfall. The rural counties of the Sacramento Valley could lose more than $100 million in taxable income this year due to overly-aggressive marketing."
RPC interim leader Kelly Ornbaun expanded on the issue of lost tax revenue. "Rural areas in California are hurting. When farmers don’t get paid fairly for their crop, it ripples through the community. Ultimately, county and state governments become affected, and we’re already seeing that here."
Mr. Ornbaun continued, "The only way out is for farmers and community leaders to stand up and make themselves heard. Anyone can sell a crop at these prices. What we’d like to see is someone actually sell our crop at a profit."
The Rice Producers of California is the only organization solely representing the views of the California rice farmer.
# # # # #
7. Judge postpones reopening of border to Canadian cattle
By JIM GRANSBERY, Billings Gazette
A federal district judge Wednesday issued a preliminary injunction prohibiting the U.S. Department of Agriculture from opening the U.S. border on Monday to Canadian live cattle under 30 months of age.
Federal District Judge Richard Cebull ruled from the bench after a three-hour hearing that pitted attorneys for a national cattleman's group against lawyers representing the USDA and U.S. Justice Department. He ordered attorneys to agree to a scheduling of a full trial with testimony from experts and cross-examination on the cattlemen's request for a permanent injunction against USDA's planned resumption of live cattle trade with Canada.
Whether attorneys for USDA could or would appeal the injunction to the Ninth Circuit Court of Appeals in San Francisco was unclear at midday. One government official said the judge's order could be appealed.
The Billings-based Ranchers Cattlemen Action Legal Fund United Stockgrowers of America had asked the court to bar USDA from implementing its "final rule" issued in December that found the threat of bovine spongiform encephalopathy -- "mad cow disease" -- in the Canadian herd was a "minimal risk" and would reopen the border to live cattle imports which were halted in May 2003 when a BSE-infected cow was identified in Alberta. In January, two other cases of BSE in Canada were reported.
R-CALF contends in its lawsuit there are volumes of scientific data that suggest Canada's risk status should not be considered minimal. USDA's only risk assessment of importing BSE or having BSE spread in the U.S. herd because of trade with Canada is ?low and USDA has not defined low, R-CALF argues. Additionally, the final rule contains substantial changes from the preliminary rule and these changes have not been subject to public or industry comment.
In December 2003, a cow in Washington state was found with BSE. That cow came from an Alberta dairy herd. Nevertheless, foreign buyers of U.S. beef closed their borders to imports from the United States. Japan, the largest buyer of U.S. beef, has said it will open its borders to U.S. beef from cattle between 12 and 17 months, but has set no date for resumption of trade.
Bovine spongiform encephalopathy is a brain wasting disease that causes the animal to lose its neuromuscular control. It is caused by deformed proteins in the brain and central nervous system of the infected animal and is always fatal.
A human form for BSE called variant Creutzfeldt-Jakob disease was identified in Great Britain in 1995 and since then about 150 people in the United Kingdom have died from vCJD. Another 11 people have died in Europe. There has been one reported death in the United States from vCJD. The BSE transferred to humans who consumed tissues - brain and spinal cord - from cattle infected with BSE, which scientists believed developed from feeding rendered animal parts from ruminants such as sheep, cattle and goats.
8. Statement of Agriculture Commissioner Roger Johnson on the Postponement of the Border Opening to Canadian Cattle
FOR IMMEDIATE RELEASE, March 2, 2005
JOHNSON CALLS DECISION GREAT NEWS
BISMARCK Agriculture Commissioner Roger Johnson said that today’s court ruling approving R-CALF’s request for an injunction was great news for North Dakota ranchers.
"I have felt that the administration’s decision to reopen the border was not based on either sound science or sound legal footing," Johnson said. "Today’s ruling reaffirms that feeling and my belief in America’s system of checks and balances. It’s a shame that American ranchers had to foot the bill to force the Administration to do what it should have done in the first place."
U.S. District Judge Richard Cebull granted a temporary order stopping USDA from reopening the border to cattle and beef imports on March 7 as planned.
Johnson indicated that the primary issue is to maintain consumer confidence in our beef supply and to ensure that USDA follows sound science in determining how and when the Canadian border opens.
MEDIA: For more information, please call Roger Johnson at (701) 328-4754.
9. US COTTON SUBSIDIES DECLARED ILLEGAL BY WTO… AGAIN: Oxfam says US must now comply to Make Trade Fair for poor country farmers
Geneva, March 3, 2005—International agency Oxfam calls on the US to implement swiftly today’s final World Trade Organization (WTO) ruling against its illegal cotton payment programs and agree to new global trade rules that would stop the dumping of cheap commodities.
Eliminating cotton subsidies is necessary to fulfill WTO obligations and bring relief to the millions of struggling farmers in poor countries. It is crucial that the US signals its readiness to reform its farm subsidies within current WTO negotiations to successfully negotiate a new global trade agreement.
"The case against US cotton dumping is overwhelming and now confirmed yet again by the WTO," said Celine Charveriat, spokesperson for Oxfam’s Make Trade Fair campaign. "The debate is over. The US must now move quickly to reform its programs and stop dumping cheap cotton onto world markets that undermines the livelihoods of poor farmers in the developing world."
In September 2004, a WTO dispute panel found that $3.2 billion in annual cotton subsidies and $1.6 billion in export credits paid by the US in cotton and other commodities were illegal under WTO rules. The case, brought by Brazil and supported by some West African cotton-producing countries (Benin and Chad), was appealed by the US in October. Today’s appeal decision is final and the US has until July 1 this year to comply or face possible trade sanctions by Brazil.
"The US must become aware that small developing countries also have rights in the global trade system, otherwise they risk a new wave of resistance from African countries and farmers," said Soloba Mady Keita, president of the cotton producers association in Kita, Western Mali.
Oxfam estimates that US dumping caused losses of almost $400 million between 2001 and 2003 for poor African cotton-producing countries, where more than 10 million people depend directly on the crop. A typical small-scale West African cotton producer makes less than $400 a year on his crop. Two million cotton farmers in Mali were recently pressured to accept a further price drop of 25% - many of them will not now be able to cover their production costs.
The majority (78%) of US cotton subsidies benefit the largest 10% of cotton producers. Loopholes in the subsidy rules allow industrial-sized farms to collect payments in excess of $1 million, while smaller farmers in the U.S. and abroad are driven out of farming by low commodity prices and high land costs.
The case has implications beyond cotton. "This case raises deep questions about the entire US subsidy system. US subsidies have distorted global markets, failed to save small US farmers, and promoted environmental damage. The US should see this ruling as an opportunity for reform," Charveriat said.
"If the US fails to implement this WTO decision, the prospects for a new global trade deal on agriculture will be severely damaged," said Charveriat. "If recent calls by the US to conclude the negotiation round by the end of 2006 are to be taken seriously, cotton subsidies need to be reformed before the next WTO Ministerial in Hong Kong."
Note to editors:
Oxfam’s short briefing note on the ruling is available at: http://www.oxfamamerica.org/newsandpublications/press_releases/wto_cotton_ruling
10. Three Companies Penalized for Pesticide Violations on Yakama Reservation
Scott Downey, 206/553-0682
The U.S. Environmental Protection Agency announced today administrative complaints filed against JSH Farms, Inc., Ag-Air Flying Services, Inc. and Yakama Land Enterprise for violations of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). The complaints alleged violations in 2004 on the Yakama Indian Reservation in Washington State with proposed penalties totaling $12,480.
"These violations are particularly disturbing because in two separate instances the pesticides landed on people," said Mike Bussell, Director of the EPA’s Regional Compliance and Enforcement Office. "Pesticide regulations are there to ensure proper use and prevent injury. Applicators need to be trained and follow the instructions on the label."
The EPA has jurisdiction over federal pesticide laws on Indian reservations. Elsewhere in the state, the primary responsibility lies with the Washington Department of Agriculture.
Mr. Bussell goes on to state that "EPA considers compliance with pesticide regulations within the Reservation to be a high priority during the coming growing season. We will be working closely with the Yakama Tribal Pesticides Program to ensure proper pesticide use."
The alleged violations for the three companies included:
JSH Farms, Inc. (Wapato, Washington): With proposed penalties of $1,680, the complaint alleges that JSH Farms:
Ag-Air Flying Services, Inc. (Granger, Washington): With proposed penalties of $3,120, the complaint alleges that Ag Air:
Yakama Land Enterprise (YLE), (Toppenish,Washington): With proposed penalties of $7,680 the complaint alleges that YLE:
Each company has 30 days after receiving the complaint to request a formal hearing to contest any fact or the appropriateness of the proposed penalty.
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