LIGHTHIZER WARNING: BUY GMOs OR EXPECT A FIGHT.

The Trump administration will attack overseas regulations that restrict the export of GMO crops and other products resulting from American technological innovation, said U.S. Trade Representative Robert Lighthizer at the first meeting of a newly created interdepartmental task force on rural America. “We are going to bring cases at the WTO and other venues, we’re going to insist that any barrier be science-based, and the United States will increase exports,” he said.

For decades, U.S. policy has called for international trade rules to be based on fact rather than prejudice. The agribusiness community often points to science-based regulation as a way of removing obstacles to the export of genetically engineered crops. While dozens of reviews have maintained that GE crops are safe to eat, they still face significant public opposition in Europe and other places.

President Trump’s executive order creating the task force directed it to look for legislative, regulatory, and policy changes that promote agriculture, including those that “advance the adoption of innovations and technology for agricultural production and long-term, sustainable rural development.” The order identified 13 areas for examination. First on the list is removing “barriers to economic prosperity and quality of life in rural America.” Second is the advancement of agricultural technology.

Lighthizer said one of the top priorities for his office is the removal of trade barriers that cannot be defended scientifically. Exports generate 20¢ of each dollar of U.S. farm income. If other countries unfairly block U.S. exports because of the technology behind them, he said, “there is a reluctance to incorporate that technology into our own production at home.”

U.S. officials routinely urge other nations to approve commercial sales of biotech crops. In the past couple of years, China has been accused of dragging its feet on the approval of new U.S. GE strains. Corn prices in this country fell when China rejected more than 1 million tonnes of U.S. corn earlier this decade because the cargoes included an unapproved GMO variety from Syngenta. In a class-action lawsuit currently under way in Kansas City, farmers have blamed Syngenta for selling the seed, approved by U.S. regulators, before it was cleared by China for import.

Agriculture Secretary Sonny Perdue, who chairs the task force, said rural America lags urban areas in recovering from the 2008–2009 recession. One in four rural children lives in poverty, the highest rate in three decades, he said. “The president understands that prosperity and recovery have not been uniform. … We’ve got technology issues, we’ve got infrastructure issues, we’ve got health issues.”
One in seven Americans lives in rural areas. “We understand that rural development is not urbanization,” said White House agriculture adviser Ray Starling. The task force, he said, will focus on “taking what we have in rural areas and making it more prosperous.”

Perdue announced that the task force will have four working groups and that its members will represent 22 federal departments and agencies. He gave the task force an October 22 deadline for a report. “It will be an operational plan,” he said, with proposals that can be put to work. “The president is very expectant of action.”

The task force plan “can be informative and consultative with going forward in the [2018] farm bill,” Perdue told reporters afterward. Energy Secretary Rick Perry, Housing Secretary Ben Carson, White House Budget Director Mick Mulvaney, and Lighthizer sat with Perdue at the head table for the task force’s first meeting, which took place in the glass-roofed “patio” of the USDA administration building. Deregulation was a common theme in their remarks. BY CHUCK ABBOTT.

PERDUE NAMES LEADERSHIP IN ACTING ROLES AS USDA REORGANIZATION TAKES SHAPE.

(Washington, DC, June 16, 2017) – Secretary of Agriculture Sonny Perdue today named three individuals who will take on leadership roles as the U.S. Department of Agriculture (USDA) continues the reorganization announced on May 11, 2017.  In accordance with a directive in the 2014 Farm Bill, USDA created a new Under Secretary of Trade and Foreign Agricultural Affairs as part of a realignment of several mission areas.  The reorganization also included a reconstituted mission area reporting to a newly-named Under Secretary for Farm Production and Conservation.  The U.S. Forest Service, given its size and importance, will be the only agency to report to the Under Secretary for National Resources and Environment.  For these three mission areas, Perdue has named Acting Deputy Under Secretaries, who will serve in their roles until the Senate confirms permanent presidentially-nominated appointees.

“Today we continue our progress of making USDA the most effective, the most efficient, and the best managed department in the U.S. government,” Perdue said.  “These three career USDA employees have already shown the leadership and expertise needed to deliver the highest quality service to our customers – the people of American agriculture.  I welcome them to the leadership team and I thank them for their dedication to agriculture.”

Trade and Foreign Agricultural Affairs

Jason Hafemeister, until now serving as the Acting Deputy Under Secretary for Farm and Foreign Agricultural Services, will now be Acting Deputy Under Secretary for Trade and Foreign Agricultural Affairs.  He has been involved in agricultural farm and trade policy for over 25 years, including almost 20 at USDA and with the Office of the U.S. Trade Representative.  Hafemeister’s responsibilities have included serving as the lead U.S. negotiator on agriculture in the World Trade Organization’s (WTO) Doha Round negotiations, the Central America Free Trade Agreement, and China’s accession to the WTO.  He was instrumental in finalizing the recent agreement to allow the importing of U.S. beef to China.  Hafemeister received a bachelor’s degree from the University of California at Berkeley, a master’s degree from the University of California at San Diego, and a law degree from Georgetown University.

Agricultural trade is critical for the U.S. farm sector and the American economy as a whole.  U.S. agricultural and food exports account for 20 percent of the value of production, and every dollar of these exports creates another $1.27 in business activity.  Additionally, every $1 billion in U.S. agricultural exports supports approximately 8,000 American jobs across the entire American economy.  As the global marketplace becomes even more competitive every day, the United States must position itself in the best way possible to retain its standing as a world leader.

Farm Production and Conservation

Dr. Robert Johansson will serve as the Acting Deputy Under Secretary for Farm Production and Conservation, while also concurrently remaining USDA’s Chief Economist, a position he has held since July 2015.  Since 2001, he has worked as an economist at USDA, in the Office of Information and Regulatory Affairs at the Office of Management and Budget, and at the Congressional Budget Office.  In 2011 he was appointed senior economist for energy, environment, and agriculture on the President’s Council of Economic Advisers where he also participated in the White House Rural Council and the President’s Council on Jobs and Competitiveness. Dr. Johansson served as Deputy Chief Economist at the USDA from 2012 to 2014.  He received B.A. in economics from Northwestern University and then served with the U.S. Peace Corps as an extension agent in several African countries from 1990 to 1995.  After returning to his home State of Minnesota, he entered the graduate program in Agricultural Economics at the University of Minnesota and received his M.S. in 1997 and Ph.D. in 2000. His research has spanned a wide range of issues, including biofuels policy, water quality and quantity policies, regulatory economics, food security, and regional modeling of agricultural systems.

The Farm Production and Conservation mission area will focus on domestic agricultural issues.  Locating the Farm Service Agency, the Risk Management Agency, and the Natural Resources Conservation Service under this domestically-oriented under secretary will provide a simplified one-stop shop for USDA’s primary customers, the men and women farming, ranching, and foresting across America.

Natural Resources and Environment

Dan Jiron will fill the role of Acting Deputy Under Secretary for Natural Resources and Environment.  With more than 29 years of public service and natural resources management, Jiron was appointed Associate Chief of the Forest Service in July 2016.  Prior to this appointment, Jiron served in many leadership positions, including Regional Forester of the Rocky Mountain Region; Deputy Regional Forester in the Pacific Southwest Region; Forest Supervisor of the Santa Fe National Forest; District Ranger on the Salt Lake Ranger District of the Uinta-Wasatch-Cache National Forest; District Ranger on the South Park Ranger District of the Pike and San Isabel National Forest, Comanche, and Cimarron National Grasslands; Director of Communications and Legislative Affairs of the Intermountain Region, National Press Officer in Washington, D.C.; and aide to United States Senator Ben Nighthorse Campbell of Colorado.  Jiron earned a bachelor’s degree from Colorado State University and a Master’s degree from Regis University of Denver.
Under the reorganization plan, the Under Secretary for Natural Resources and Environment will retain supervision of the U.S. Forest Service.

Rural Development

As previously announced, Perdue has named Anne Hazlett to lead the Rural Development agencies at the U.S. Department of Agriculture (USDA).  Hazlett, whose title will be Assistant to the Secretary for Rural Development, will oversee the Rural Utilities Service, the Rural Business Service, and the Rural Housing Service.  She most recently served as Chief Counsel to the Majority on the U.S. Senate Committee on Agriculture, Nutrition, and Forestry.

Hazlett’s position represents an elevation of Rural Development, which had previously been in the portfolio of an under secretary, who in turn reported to the deputy secretary of agriculture.  Instead, Rural Development will now report directly to the Secretary of Agriculture. BY SUCCESSFUL FARMING STAFF.

SOYROY: MY DADS FARM REMAINS SUSTAINABLE.

My parents bought the farm, where I now live, in the late 1940s.

Having just survived the Great Depression and the greatest drought in 100 years, my dad was understandably conservative in many ways.

The farm he bought was quite hilly with many erosion problems that made farming difficult. However, my dad was anxious to make improvements as soon as the finances would allow. It was not long before government programs started, so it was possible for my dad and others in his situation to get cost-sharing on erosive land to implement needed improvements.

I jokingly tell people that I farm in a place where 7% slope is considered flat. That is not too far from the truth.

Dad was aggressive in getting his conservation practices under way. He was the first in the area to install terraces on the hilly fields. He did the work himself with a borrowed disk plow behind his Oliver 70.

It was not many years until neighboring farmers saw the advantage of terraces drained by grass waterways. Ditches disappeared. Runoff from fields was virtually reduced to an acceptable level. The improvements worked notwithstanding the cost of installation and upkeep. Distances between terraces were not enough to be an issue when farming the odd-shape fields.

The first fields were planted using two-row equipment. That machinery was gradually replaced with four-row planters and cultivators.

Finally, a switch was made to six-row, 30-inch production equipment. This worked well for a long time, because there was just enough room between terraces to plant two rounds or 12 rows between the shortest terrace channels.

Some time later, there was a major switch to no-till, which also changed the row-spacing issue. For a long time, most farmers were content with the old planting patterns.

This changed in the decade 2000. Planting equipment, several times as large, made it possible to cover considerably more land in the same amount of time.

By this time, tillage equipment had almost disappeared from the scene in many locales. However, the environment in the fields did not necessarily mature along with the other crop inputs and production machinery. The larger machinery made it possible to cover up the erosion damage caused by the farmers who were planting and spraying erodible land. Modern application equipment made it possible to replace nutrients lost to erosion.

Sadly, many of the recent innovations have been neutralized by planting too much too fast. At some point, the farming business is going to pay for being in too much of a hurry.

But for now, when a quick thunderstorm went through Cass County, Nebraksa, on Thursday and dropped 1.3 inches of rain, the value of conservation structures and practices was again illustrated in a big way. BY ROY SMITH.

RECENT CATTLE MARKET MOVES SUPPORT TAKING ACTION, ANALYST SAYS.

The cattle market has been entrenched in an uptrend since last October, accelerating upward in recent months.

Cash prices remain active and demand strong. The U.S. dollar is trending lower, and there is renewed optimism that export activity will stay strong. This is due, in part, to exports to China (something that has not occurred since 2003). At the same time, recent technical activity suggests futures may have topped.

Chart activity shows upward price acceleration and a key reversal. A bearish key reversal is when the market trades to a new high, exceeds the previous day’s trading range, and finishes below the previous day’s close. In other words, a wider trading range and a negative finish.

August live cattle futures recently posted a very prominent bearish key reversal. In addition, a double-top is also in place. A double-top is when a market establishes a contract high, corrects downward, rallies back to the previous high, and then fails.

August futures peaked at $127.50 on May 4, dropped to under $117.00 by late May, only to rally back to $127.65 on June 6, the day prices peaked and posted the bearish key reversal. Since then, August futures has dropped and is trading under $118.00.

It may be difficult to execute strategy with current future prices well below the current cash market. Current cash prices may be as much as $15.00 or $20.00 higher than deferred futures.

Keep in mind that futures contracts reflect future price expectations, and not today’s cash market. Price charts can often aid in the decision to move forward with strategy. The recent signals are really nothing more than the reflection of market participants anticipating future price expectations. Heed the chart warnings.

Two strategies come to mind: Sell futures and purchase a call option. Or, purchase a put, which provides a price-flooring mechanism and leaves the upside open for price appreciation. These two strategies accomplish the same basic task of shifting risk, should prices move lower.

While no strategy is perfect, doing nothing works extremely well as long as prices trend higher. However, when prices trend lower, doing nothing can be an extreme strategy that allows for the absolute worst outcome.

The key is a balanced approach, shifting risk with the right tools at the right time. Recent technical signals in the cattle market suggest it is time to take action.
 
Futures trading is not for everyone. The risk of loss in trading is substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results.
 
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