USDA Economist Challenged on GIPSA Rule

The Senate Agriculture Committee hearing on the state of the livestock industry was dominated by a discussion of the proposed Grain Inspection and Packers and Stockyards Administration (GIPSA) rule. Senators Pat Roberts (R-KS) and Mike Johanns (R-NE) took direct aim at USDA regarding the proposal and its disregard for congressional intent. There was a great deal of discussion on the provision of lowering the legal threshold and how this would result in “frivolous” lawsuits and cause companies to reduce the use of marketing arrangements. USDA Chief Economist Joe Glauber said he and his team are reviewing earlier economic studies on the industry and would take them into account when completing USDA’s economic analysis of the proposal. Glauber indicated that the proposed rule would now be considered economically significant (costing over $100 million). This places a higher threshold on the rule.

FTAs on Hold – Again! – Senate Republicans boycotted the Senate Finance Committee’s “mock” mark-up of the three pending free trade agreements (FTAs) with South Korea, Colombia, and Panama over objections to the inclusion of the Trade Adjustment Assistance (TAA) provision. This markup would have started the process of Senate approval of the FTAs. Earlier this week, the administration and the chairmen of the Senate Finance Committee and the House Ways and Means Committee reached an agreement on how to move forward on the three pending FTAs. The agreement included Congress considering the three FTAs and renewal of the TAA benefits for workers harmed by international competition. Now with Senate Republican leaders objecting to the inclusion of the TAA provision, the FTAs are on hold. Many agricultural organizations, including the American Farm Bureau Federation, American Soybean Association, National Cattlemen’s Beef Association, National Corn Growers Association and the National Pork Producers Council are urging Congress to pass the FTAs prior to the August recess. At the Senate Agriculture Committee’s hearing on the state of the livestock industry, many of the witnesses urged Congress to move forward on the trade agreements. Steve Hunt, CEO of U.S. Premium Beef, said, “Without an FTA, our share of that 49 million consumer market will decline as South Korea increases trade with countries that it has FTAs with.”

More Corn Acres – USDA’s Acreage report shows that farmers planted 92.3 million acres of corn this year, which is 4.6% higher than last year. This increase of 4.1 million acres is driven by the higher commodity prices, according to USDA. Farmers planted 2.2 million fewer acres of soybeans compared to last year. A total of 75.2 million acres have been planted to soybeans in 2011, the lowest since 2007. Overall, farmers planted 319.2 million acres to major crops this year. This is 4.63 million acres less than indicated in USDA’s March 2011 Prospective Plantings report, but it is a 2.45-million acres increase from 2010.

Food Safe Families – USDA, Health & Human Services and the Ad Council are launching a new public service advertising campaign, “Food Safe Families,” that encourages parents and caregivers to help protect their families from food poisoning by checking their food safety steps. The campaign will feature specific safe food handling steps and communicate the risk of food poisoning. The campaign will include television, radio, print and digital public service advertisements.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.