May 31, 2017 Volume 13, Number 22

FDA’s tough new task: Explain biotech’s safety, benefits

The Food and Drug Administration has a tough job ahead of it, a job that the food and agriculture sectors have struggled to accomplish: Convince the public that biotech crops are safe to eat and can offer a variety of benefits to the public and the environment.

The fiscal 2017 spending bill enacted at the end of April includes $3 million earmarked for FDA to coordinate with the Agriculture Department on a consumer outreach and education effort. The stated goal under the legislation is to educate consumers “on the environmental, nutritional, food safety, economic, and humanitarian impacts of such biotechnology, food products, and feed.”

The provision first surfaced in 2016 as Congress was debating legislation to block state GMO labeling laws. “There was an obvious need for Senate Ag Committee Chair Pat Roberts, R-Kan. more consumer-facing information and science facts to be available. You can’t get everything you need on a food label,” said Karen Batra, a spokeswoman for the Biotechnology Innovation Organization, or BIO.

The Grocery Manufacturers Association said in a statement that the FDA program would be an “invaluable tool” in countering misinformation about GMOs. BIO and GMA were among nearly 70 food and agriculture groups, universities and professional societies that sent a letter to lawmakers last year in support of the FDA program.

The GMO law enacted in July 2016 will require companies to disclose the presence of biotech ingredients through a digital code that can be read by smartphones. But consumers still won’t have enough knowledge about biotechnology itself, and that is where the FDA program will come in, said Brian Rell, a spokesman for House Agriculture Appropriations Subcommittee Chairman Robert Aderholt, an Alabama Republican who originally put the provision in the House version of the FY17 bill.

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“Up until now, consumer activists, biotech seed companies, and organic companies have tried to fill the void in trying to educate the public. However, each of these segments has an ulterior motive. FDA is a neutral source and the public generally accepts FDA’s word on most scientific issues,” Rell said.

Senate Agriculture Chairman Pat Roberts, who got the GMO bill through the Senate over intense opposition from most Democrats, is skeptical that the government can have much impact on public attitudes toward biotechnology. “Anybody within the food industry knows that right now the rage is all about organic. All we were trying to say (with the labeling preemption law) is don’t put a label on other products that we produce and that people use in the grocery store and say that’s bad.”

But some experts believe the right kind of messages from federal regulators could have an impact on public attitudes toward biotechnology. It’s not clear that past communications by federal agencies have had much effect on the public, said Jayson Lusk, an economist at Oklahoma State University who studies what foods people eat and why. But most consumers are uninformed or misinformed about genetic engineered crops, so “subtle changes in working, descriptions of benefits of the technology etc. can be persuasive,” he said. He notes that voter support for state ballot initiatives on GMO labeling dropped considerably after the industry began campaigning against them.

Lusk said it will be important for the FDA to maintain its credibility by being honest about possible downsides of the technology, acknowledging the tradeoffs involved in using it, and not overselling its benefits. The agency also needs to ensure that the information is scientifically accurate and addresses the perspectives of consumers and farmers.

Charlie Arnot, who is founder of Look East, a public relations consulting firm that specializes in food and agriculture, also believes an FDA education effort could be effective, based on digital ethnography research that allows the communicator to reach the targeted groups with information that they need.

The $3 million budgeted for the program could pay for the research and provide a roadmap for engaging the targeted audience, he said. “That should be enough funding to achieve a measurable improvement in the attitudes, beliefs and feelings of your targeted audience, but only if you can concentrate the $3 million in a well-orchestrated effort (not allowing it to be diluted) and your goal is opinion evolution, not opinion transformation,” he said.

An FDA spokesperson told Agri-Pulse that "the FDA is currently working to get the funds obligated, so it would be premature to speculate how and when the agency will allocate these funds."

NAFTA renegotiation – the sooner the better?

Farm groups and farm-state lawmakers are increasingly looking at the renegotiation of the North American Free Trade Agreement as if you were removing a big bandage. If it has to be done – and the Trump administration has made clear that it does – then it’s far better to accept the pain and get it done quickly.

Mexico, which spends about $19 billion per year to buy U.S. corn, soybeans, beef, pork, rice, milk, sorghum and other commodities, is becoming increasingly jittery about the viability of 2

U.S. exports. The sooner the countries can close the books on a new NAFTA, the better it will be for the markets, say lawmakers, including House Agriculture Chairman Mike Conaway.

“Even the idea of renegotiating NAFTA is unsettling because no one likes change,” Conaway told reporters last week after an hour-long, closed-door meeting between committee members and U.S. Trade Representative Robert Lighthizer and USDA Secretary Sonny Perdue. “Under the best of circumstances, it would make folks nervous or unsettled until we get it done. Time is of the essence and the quicker we get it done, the better all of our exports will be.”

But circumstances are not the best. President Donald Trump’s insistence that a new border wall be built, his demands that Mexico pay for it, and the recent increase of rhetoric and actions to deport undocumented residents has created tensions between the U.S. and Mexico.

That “sooner, the better” sentiment is one that is shared by both U.S. and Mexican ag sectors, Conaway said in an interview with Agri-Pulse after he met last week with Gerónimo Gutiérrez, the recently appointed Mexican ambassador to the U.S. U.S. Trade Rep. Robert Lighthizer, House Ag Committee Chair Mike Conaway, and Ag Secretary Sonny Perdue address reporters. “He’s concerned about the unsettling nature of renegotiation – everyone not knowing,” Conaway said about Gutiérrez. “The quicker we can get this done, the better. … All the uncertainty associated with any kind of renegotiation – I think he sees that as a big deal. I do as well.”

As to how quick NAFTA can be renegotiated, that’s still unclear. It takes years for major trade pacts to be completed, but in this case, much of the work has already been done, Conaway said. There is already a base deal in place and some new provisions were previously worked out under the Trans-Pacific Partnership (TPP).

The U.S., Mexico and Canada were all members of the 12-country TPP agreement. Trump pulled the U.S. out of the treaty in January, but Lighthizer, Conaway and others have said that some of the work involving the U.S., Canada and Mexico will likely transfer into the new NAFTA.

The biggest potential problem with renegotiating NAFTA, Conaway said, is that there is a huge push by the Trump administration to increase the exports of non-agriculture products to Mexico, and the farm sectors in both countries fear that there could be collateral damage to agricultural trade.

“The concern that U.S. (agricultural) producers have is that there is a manufacturing trade deficit of staggering proportions,” Conaway said. “As they try to find solutions to that, they do something with ag. And ag folks are going to be at the table to try to make sure that doesn’t happen.”

At present, thanks to NAFTA, there are virtually no Mexican tariffs on U.S. farm commodities, which has boosted U.S. agricultural exports to record highs over its 23-year lifespan.

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Lighthizer continues to say he will protect that status when negotiations begin.

“That’s got to be our objective,” Lighthizer said after the meeting with House Agriculture Committee members. “There are a number people who are winners. … Ag’s a big winner with NAFTA … and we have to maintain that position.”

One farm group dedicated to keeping the gains already achieved under NAFTA is the U.S. Grains Council (USGC).

“Our top priority in the modernization of NAFTA is to maintain this market access and keep in place what we and our customers have built,” said USGC Chairman Chip Councell. “For instance, all corn products currently go into Mexico and Canada duty-free, with sales last marketing year of $2.7 billion in commodity corn alone. That demand is an essential part of ensuring farmers can continue to farm in this economy.”

But there’s a long list of agreements the U.S. wants in a new NAFTA that deal with digital trade, services, intellectual property rights, labor laws, environment, customs procedures and more. And that means more opportunities for the agricultural trade relationship to be altered.

That’s one reason why groups like the American Farm Bureau Federation say they support the Trade Priorities and Accountability Act that was passed by Congress in 2015. The TPA, among other things, requires the White House to give Congress and the public notice that it intends to negotiate trade pacts. It also gives the public the opportunity to weigh in on priorities.

On May 8, the Trump administration gave that notification concerning NAFTA.

“The (TPA) gives farmers, ranchers, the agriculture community and other stakeholders the opportunity to provide input and share our significant expertise with U.S. negotiators,” said Farm Bureau President Zippy Duvall. “Our ability to be part of these negotiations is important to our members and will help ensure the outcome improves trade relationships with our neighboring countries.

“Mexico and Canada are two of our largest export markets for the commodities and Farm Bureau President Zippy Duvall products raised on U.S. farms and ranches,” Duvall said. “America’s farmers and ranchers value them as customers and trade partners. We will work to ensure the renegotiation strengthens that critical relationship.”

The 90-day notification was a welcome development, Conaway said, but he said he has to wait on the details of the administration’s plans for renegotiation until he can act.

“We have 90 days for the administration to tell us what their goals are,” he said. “Then we’ll be able to react, but right now I’ve got nothing to react to.”

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Lawmakers worry demands on Mexico will increase sugar prices

There’s a growing concern among some U.S. lawmakers and food manufacturers that they’ll see the price of sugar – and the food it’s made with – go up if the sugar refining industry gets what it is demanding from Mexico.

A group of 51 House members has signed onto a letter to Commerce Secretary Wilbur Ross not to go through with some proposals to regulate Mexican sugar imports. The letter, spearheaded by Reps. Danny Davis, D-Ill., and Charles Dent, D-Pa., urges Ross not to consider raising the floor price for raw and refined sugar and funneling some raw sugar imports directly to specific refiners.

“Our candy makers, food processors and soft drink makers – all these people use great quantities of sugar,” Davis told Agri-Pulse. “Their products – some of it – is practically all sugar. For us and our constituents, if sugar prices are too high to use these products, that’s going to have a negative effect on their businesses. I’ve had candy makers go out of business or move away, which has resulted in a loss of jobs in the area.”

Ten senators, in a separate letter, also urged Ross not to push up prices through a new sugar trade deal with Mexico.

“The suspension agreements between the United States and Mexico impose a price floor on imported sugar that is significantly higher than the guaranteed price for domestic sugar,” the senators wrote. “While this policy benefits U.S. sugar growers and refiners, it harms American consumers, who are forced to pay higher prices at the grocery store.”

The U.S. and Mexico have been in talks for months, trying to renegotiate a “suspension agreement” that limits Mexican sugar exports to the U.S. in return for the U.S. not imposing steep antidumping and countervailing duties on Mexican sugar.

Under the current suspension agreement, Mexico is allowed to export up to 53 percent of its sugar as refined product, but U.S. refiners have accused the country of going beyond that limit. So, the U.S. is now demanding that the limit on refined sugar be lowered to just 15 percent, with the remaining 85 percent mandated to be raw.

On May 1, U.S. Commerce Secretary Wilbur Ross announced that the talks had failed and the two countries were at an impasse. He also said that if an agreement was not reached by June 5, the U.S. would activate the duties, essentially cutting off sugar trade with Mexico.

That would be a big mistake, the lawmakers and food industry argue, but so would a new suspension agreement that only takes into account the needs of the U.S. sugar sector and not the food industry. Commerce Secretary Wilbur Ross

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U.S. sugar refiners, most of whom are represented by the American Sugar Alliance, have not released details of their proposals for what they would like to see in the new suspension agreement, but representatives of the U.S. sugar-using companies say that they and the lawmakers who wrote the letter have seen the details.

The lawmakers stressed that while they understand the desire of refiners to see more imports be in the form of raw sugar as opposed to refined, they are strongly opposed to other proposals.

“While a higher level of raw sugar should be required in the agreements, this must be done without the government picking winners and losers among private companies, so an improved set of agreements should ensure fair competition and not effectively limit shipments to only certain cane refineries,” they said in the letter. “The 2014 farm bill established price support levels for both raw and refined sugar, and Congress has taken no action to authorize the Administration to increase these support levels, so improved suspension agreements should avoid any reference prices that effectively support U.S. sugar prices significantly above levels debated and approved by Congress, and in no case should reference prices be increased from their levels in the existing suspension agreements.”

The proposals the lawmakers are talking about in the letter originated from U.S. refiners, according to food and candy processing sources. A spokesperson for the American Sugar Alliance said the group was unable to comment. A spokesman for the U.S. Commerce Department declined to discuss details.

“The details of the discussions between Commerce and the Mexican government and industry are not public, but Secretary Ross remains hopeful that a negotiated solution can be reached,” the spokesman said.

Davis and the other lawmakers told Ross that they strongly urge him to “consult with, and take into account the interests of, the companies that make food products and beverages using sugar. … These bilateral negotiations should not be an excuse for the U.S. sugar lobby to extract yet more benefits from its customers through market manipulation that flies in the face of open and fair competition.”

Separately, food industry sources say they are worried that Commerce is considering a proposal to decrease the mandatory polarity (or purity) level of sugar imports from Mexico. That level is now set at 99.5 percent, but if it were lowered to a proposed 99.2 percent, that would make it hard for Mexico to comply with.

What it would do is assure that the sugar coming in from Mexico would need to be refined and thus provide business for U.S. refiners. Sugar that is already refined or even partially refined can often bypass refineries and go straight to food manufacturers.

“The reason the (suspension agreement) came to renegotiation was that the traditional sugar refiners were getting insufficient raw sugar to operate their plants sufficiently,” a food and candy industry representative said. “It is the belief of the lawmakers who signed that letter that much of what’s on the (negotiating) table has nothing to do with the original problem.”

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Looking for regulatory reform? Here’s why it may take a bit longer

USDA is moving decisively but cautiously to fulfill President Trump’s challenging directive to eliminate two regulations for every new one it issues. The methodical approach also seeks to take advantage of the expertise and cooperation of the career employees who in many cases may have had a hand in developing and promulgating the regulations now on the books.

The first regulatory decisions offer clues about how Agriculture Secretary Sonny Perdue intends to carry out Trump’s admonition to lighten the impact of government regulations on the economy. Examples are his relaxation of whole grain and sodium requirements on school feeding programs, postponement of a final rule on organic livestock and poultry, and delay of the interim final rule governing contracts between processors and livestock and poultry growers (known as the GIPSA rule). Those actions are likely to be the most significant in USDA’s contribution to the Trump administration’s first comprehensive, government- wide look at regulation, due soon with release of the spring Unified Agenda of Regulatory and Deregulatory Actions. No date for its publication has been announced, but the Office of Management and Budget published last year’s on May 18. From left, Panelists Rebeckah Adcock, Mike Strain, Mark Scholl

“There are not too many new things that we inserted in the spring agenda” because of the delay in the secretary’s nomination and confirmation, according to Rebeckah Adcock, senior adviser to the secretary and USDA’s regulatory reform officer. “We kept it small and tight and really timely.” However, she said last week at a forum on agricultural regulation, “You can expect that what you will see from us in the fall will be a much longer list. Some will be regulatory, some will be deregulatory. The possibilities are not endless,” but extensive nonetheless.

The fall edition of the Unified Agenda – which was published last year in mid-November – includes an agency-by-agency regulatory plan that identifies priorities and additional detail about the most significant regulatory actions that agencies expect to take in the coming year.

Adcock, an attorney who brings to the job extensive experience with Washington’s regulatory process from senior positions at CropLife America and the American Farm Bureau Federation, described an internal regulatory task force made up of representatives of USDA agencies. “Each mission area has been tasked with identifying what’s appropriate for deregulation. If we issue new regulations that have a cost, we, have to find some regulations to get off the books.”

She said she has not encountered resistance from career employees to the idea of reducing regulations. Instead, she’s seen “very productive and very frank” reactions to what she called “a new path of opportunity for USDA, (figuring out) how to do it better, faster and more

7 effectively.” She has found USDA employees realize there are better ways to do what they are doing, “even in non-ideal budget times.”

Task force members will be asked to quantify the impact of old regulations as well as proposals for new rules. “Performance measurement will be primary,” Adcock said. Among the questions to be asked: “How does it affect jobs? Does it make sense? Is it outdated? Is it necessary any more? Is it ineffective? Lastly, and pretty important, is there a better way? Is this something inconsistent with another agency? Can states or localities do it better? Is this a role for the federal government? Those are questions that, quite frankly, we don’t ask all that often, very publicly, very loudly, in Washington” – something that frustrates people outside the Beltway, she said.

“Everything we do will be measured, with both qualitative and quantitative measurements, when we fill out our regulatory plan for the fall. This will very much affect next year’s budget, which,” she insisted, “will originate with USDA rather than with OMB.”

Asked about criticism that the administration’s regulatory relaxation would weaken food safety, Adcock pointed out that the department must comply with statutory requirements for food inspection. “I have never heard anyone suggest we'll back off on food safety,” she said. “There is absolutely zero chance that food safety or other protection will be compromised.”

While Adcock said she has not encountered bureaucratic resistance so far, Mike Strain, commissioner of the Louisiana Department of Agriculture and Forestry, told the Farm Foundation-sponsored forum last week that he did face a “culture clash” when he embarked on a similar process of weeding out old regulations at the state level. “We found things on the books from the 1880s. We found a lot that was outdated.”

Strain, who is president of the National Association of State Departments of Agriculture, welcomed the Trump Administration regulatory policy because federal actions often affect what state agencies do. “State agriculture departments also are major regulatory agencies,” he said. “We are co-regulators. Many of our laws and regulations reflect federal laws and regulations.”

The regulatory review should entail a “renewed focus on sound science,” he said. “We must embrace all aspects of sound science. I’m real excited about this. There are great opportunities and great challenges.”

Strain also applauded USDA for postponing implementation of a regulation that would have required organic poultry producers to allow birds greater access to outdoors where, he said, they would be vulnerable to disease. “We are only two years since the largest outbreak of avian influenza in history, and here we are doing exactly what we said we shouldn’t do.”

Recently added regulatory constraints have increased the cost of new agricultural inputs such as agricultural chemicals and new crop varieties, Illinois farmer Mark Scholl, chairman of the Farm Foundation board, told the forum. Not only do longer lead times for new products add to their cost, but also hamper innovation, he said. “What bothers me the most is the lack of innovation.” Nevertheless, Scholl sees the future of crop agriculture as cause for optimism. With precision agriculture techniques and a U.S. infrastructure “unlike anything else,” agriculture has “the ability to make products we couldn’t do in the past,” he said. “Human capital is much better. People are much smarter. There are lots of talented young people in agriculture today.”

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NAP enrollment grows with farm bill changes

Farmers who don’t have access to conventional crop insurance are showing increasing interest in the Noninsured Crop Disaster Assistance Program (NAP), which was expanded by the 2014 farm bill. Before 2014, farmers could only buy catastrophic NAP coverage, which protected producers against yield losses of more than 50 percent at 55 percent of the average market price. Now, producers can also get buy-up NAP policies, which cover up to 65 percent of the approved yield at 100 percent of the average market price.

Interest in NAP doubled the first year, going from 66,000 applications in 2014 to 138,000 in 2015, according to a report by USDA’s Economic Research Service. Sixteen percent of the NAP policies, or about 23,000, provided buy-up coverage, which requires payment of a premium.

NAP enrollment also doubled among beginning and socially disadvantaged farmers, who don’t have to pay the normal service fee for basic coverage. (The service fee for basic coverage varies depending on the number of crops and the number of counties in which a farmer operates. The premium is a percentage of the value of the covered crop and coverage level selected.)

Grass producers accounted for 41 percent of NAP applications in the program, and there also is demand for vegetables, salad greens, fruit and tree nuts. Enrollment for greens increased from 1,027 applications to 6,360 from 2014 to 2015.

The program also is proving popular with cherry growers, according to the ERS report. Nearly two-thirds of the NAP applications for cherries in 2015 were for buy-up coverage, for example. Federal crop insurance is only available in select counties in eight states for cherries.

Most pecan producers in Texas and Oklahoma can’t buy crop insurance either, even though many counties in those states have at least 500 acres of pecan trees, and NAP enrollment increased in both states. The number of policies went from 26 in 2014 to 167 in 2015 in Oklahoma and 56 to 84 in Texas.

The ERS analysts also tried to gauge how much impact buy-up coverage could have on farmers, regardless of their crop, so they assessed the difference between basic and buy-up coverage on feed corn, a crop for which there is extensive historical data on both prices and yields.

The analysts found that expected payments for buy-up coverage on feed corn in Bell County, Texas, a relatively high-risk area for the crop, would be 63 percent higher than for basic coverage. The lowest likely revenue for a farmer in that county in 2015 without NAP would have been $113 an acre, the report said. With NAP buy-up coverage, the revenue floor would have been $267 an acre, including the NAP payment.

Bee colony losses down, survey says, but experts voice caution

The results of the latest survey of U.S. beekeepers by the Bee Informed Partnership offer hope for the industry and for growers who depend on the tiny pollinators, but experts also caution not to read too much into the numbers.

That’s because the colony losses reported are still higher than desired and the survey, to which 4,963 beekeepers responded, only captures about 13 percent of the estimated 2.78 million honey

9 bee colonies in the U.S., according to the partnership, a nonprofit that conducted the survey with the Apiary Inspectors of America.

Beekeepers reported losing 21.1 percent of their colonies over the 2016-17 winter, down from 26.9 percent the previous winter and the smallest percentage loss since 2006-07, when the survey began. Overall, for the year starting April 1, 2016, the loss rate was about 33 percent – a decrease from the 40.5 percent of colonies lost in the 2015-16 year, and the lowest rate since 2011-12.

The federal government’s Pollinator Health Strategy, released in 2015, has a goal of reducing colony losses to 15 percent, and the nonprofit Pollinator Stewardship Council says the “acceptable and ‘sustainable’ loss rate of bee colonies is 10-15 percent.”

The council’s Michele Colopy said “the survey is representative of those who voluntarily submit their information” and that the numbers “must be understood based on the respondents: backyard beekeepers who live east of the Mississippi, and with only 1.4 percent of commercial beekeepers participating.” The council’s mission “is to defend managed and native pollinators vital to a sustainable and affordable food supply from the adverse impacts of pesticides.”

But Dick Rogers, the principal scientist and beekeeper for the Bayer Bee Care Program in North America, called the results “terrific news for everyone who cares about bee health. We are not out of the woods, but there is a reason for optimism, given the industry’s commitment to protect these vital pollinators.”

Bayer is a major manufacturer of neonicotinoid insecticides that coat corn and soybean seeds planted on about 90 million acres annually. Some studies have blamed neonics that exit the fields in dust during planting for harming and killing bees, but Bayer says that its products do not harm pollinators if used according to label directions. The company is working to reduce the generation and emission of seed treatment dust.

The decrease in colony losses stems from the lower level of varroa mites in colonies, according to the Bee Informed Partnership, a factor attributed to “increased vigilance on the part of beekeepers, a greater availability of mite control products and environmental conditions that favored the use of timely and effective mite control measures,” according to a news release from the University of Maryland. “For example, some mite control products contain essential oils that break down at high temperatures, but many parts of the country experienced relatively mild temperatures in the spring and early summer of 2016.”

“Beekeepers are pleased varroa mite levels have decreased per these survey results, but this also points out that this one pest is not the sole issue with honey bee health,” the Pollinator Stewardship Council said. “The ecosystem which honey bees sample daily includes exposure to pesticides, acutely toxic pesticides as well as sublethal effects of pesticides, pesticides drifting onto pollinator forage and water, and an overall lack of diverse pollinator forage due to weed eradication programs, climate change, development, and land use changes.” 10

Rogers, however, said that in general, exposure to pesticides is not a significant factor affecting bee health. Although there are “mistakes or misapplication” that can harm or kill bees, that does not happen often, he said. More important, he said, are varroa mites and a host of issues related to management of bee colonies.

“Management is one of the key contributors, management is one of the key solutions,” he said.

In a blog post written before the BIP survey results were released, Rogers said that after last year’s high losses, he was “pleased to see the industry’s emphasis on monitoring and treatment. Efforts by the BIP, the Honey Bee Health Coalition, Bayer and university extension offices seem to be making real inroads in helping beekeepers better manage varroa.”

Rogers added, however, that beekeepers need to remain vigilant. “Many beekeepers drop their guard when bees are doing well,” he said in an interview. “I’m afraid that’s what’s going to happen here. The moment we get overconfident and drop our guard we’re back in the chaos of previous decades,” he said.

Rogers said there are “multiple factors” involved in assessing bee health, what he calls the “six p’s” – parasites, predators, pathogens, provisions (nutrition), people and pesticides.

Bayer is conducting research to try to determine what conditions are essential for a healthy hive “and developing a very pragmatic system where beekeepers can identify when conditions are deficient and take actions to fix them,” Rogers said. The company also has a Feed a Bee initiative to encourage planting of forage for bees, as well as a Healthy Hives 2020 program that funds bee research.

“Pollinators, most often honey bees, are responsible for one in every three bites of food we take, and increase our nation’s crop values each year by more than $15 billion,” the government’s Pollinator Health Strategy said. The Pollinator Stewardship Council, citing a 2012 Cornell study, says honeybees and other pollinators contributed $29 billion to farm income in 2010.

Sorghum may be poised for a rally and shift to more food uses

The economics of sorghum production aren’t nearly as dismal as some aggregate data may suggest.

In fact, Jennifer Blackburn, external affairs director for the National Sorghum Producers (NSP), points out that grain sorghum prices at Louisiana and Texas port terminals have recently leapt to more than $4.60 a bushel, besting corn by more than 50 cents at those ports. Grain sorghum, which competes with the much larger U.S. corn crop, almost always sells for less than corn, and does now in most places. But, “farmers in that area can and will deliver straight to the port to take advantage” of the current premium prices there, she said.

The port prices are the kind of treatment sorghum growers have been striving for since creating the United Sorghum Checkoff Program nine years ago to pay for crop research, product

11 development and market expansion for grain sorghum, also called milo, and other sorghum crops.

In recent years, however, all grains have been swamped in the same production glut. Corn makes up nearly 95 percent of the U.S. feed grains supply (sorghum, 3 percent), and it “is just overwhelming,” says Tom Capehart, senior economist for the USDA Economic Research Service. “We’re in just an incredible global glut, and it’s very hard for sorghum to compete with the very cheap corn,” he said.

So, sorghum prices, in the range of $5-$6 a bushel when corn prices were high, will average just $2.60 to $2.80 to farmers this marketing year, USDA projects. While soft prices have dimmed incentives for planting, invasions of sugar cane aphids in the past two years in the crop’s prime region – the southern and central Great Plains – have slashed yields and raised production costs, thus piling on more disincentives to sorghum. It was no surprise that, in March, U.S. farmers told USDA they expected to seed less than 5.8 million acres of sorghum, a third less than the nearly 8.5 million just two years ago.

However, Tim Lust, NSP chief executive, thinks a rally has started. After a couple of intense years of aphid research, “we have many more aphid-tolerant hybrids out this year. I think that has given growers new confidence.” Most of the sorghum crop is seeded from late April to early June and, this spring, soil moisture is favorable as well across the whole sorghum growing region. “I think we feel good, particularly . . . in Kansas (the top producing state), about getting the crop off to a good start,” he said.

Total planted acreage is hard to predict, Lust said, because so NSP CEO Tim Lust much acreage is planted late -- often by replanting failed acres of cotton or corn. “It’s safe to say, it’s not going to be 8 and a half million acres,” he said. But, on the other hand, the acceleration of crop improvement research is paying off, and farmers are getting bigger yields. “We’ve broken national yield records in the past two years,” he notes. The 2016 average was 77.9 bushels per acre, and the average U.S. yield of the past three seasons – 73.8 bushels – is up 36 percent from the previous three years.

“I think the really exciting part of our industry is the demand story,” Lust declares. “We are basically selling the entire sorghum crop every year.”

For sorghum, demand starts in foreign markets. The primary uses for the country’s grain sorghum are the same as corn: animal feed, exports, and ethanol plants. But the proportions are far different. Exports typically account for about 15 percent of corn use, while the export share for sorghum is trending upward, and foreign sales have claimed more than 75 percent of sorghum in some recent years. USDA projects about 60 percent of the 2017 harvest will be sold abroad. Meanwhile, about a third of both corn and sorghum become ethanol and distillers’ grains. Grain sorghum used as wild bird seed remains quite steady at just 1 percent of domestic use.

But Lust says the share of sorghum used for animal feed is slipping overall while that going into food products, including pet foods, is rising. “Food has not been a key component of the U.S. sorghum market. Twenty years ago, we had one professor at Texas A&M (University), Dr. 12

Lloyd Rooney, who was basically the entire sorghum food industry in the United States,” Lust said. But now, he said, countless researchers in private and university food labs work on sorghum food products. “We’ve come a long way in a few short years,” he said.

The type of new sorghum products is changing as well: “Back in 2013-2014, almost all of our new food launches were tied to gluten free or tied to non-GMO,” Lust said. But that share is way down, “and we are moving now into more mainstream products.” For example, “Papa John’s started into five regional markets with an ancient grain pizza crust made out of sorghum,” he said.

Lust says NSP has been delighted to see recent attention by food publications, such as the James Beard Foundation’s 2017 food trends designation of sorghum as a “food trend crop of the year.” That’s unusual for a bulk commodity, he said.

China recently suspended orders for U.S. sorghum, perhaps to reduce excess stocks, Capehart suggests. But consumption there of baijiu, a distilled sorghum liquor, and feeding of grain sorghum to ducks, will continue to increase. China, which usually accounts for three- fourths of U.S. sorghum exports, will probably be buying American again soon, Lust and Capehart say.

Livestock production driving organic corn, soybean imports

A lack of domestic organic feed production is forcing organic livestock producers to source corn and soybeans from foreign markets, which U.S. organic advocates say signals opportunities for more U.S. growers looking to produce higher dollar crops.

A recent study from the Organic Trade Association shows that between 2013 and 2016 organic corn experienced an annual growth rate of just over 111 percent, the highest rate among more than a dozen organic products. Imports of the corn, mostly used for organic livestock feed, quadrupled from $36.6 million in 2013 to $160 million in 2016.

Organic soybean imports have also experienced substantial growth, jumping from $110.2 million in 2013 to $250.5 million in 2016 for an annual growth rate of about 40 percent.

OTA officials point to the need for organic livestock feed as the main driver behind the increase.

“Proteins are really starting to find their stride in the organic market,” said Laura Batcha, OTA’s CEO and executive director, citing a 17 percent growth rate over “center of the plate proteins” in the last year. “There’s a lot more availability of poultry and meats in the market.” 13

Growth in organic protein consumption mirrors the growth in the organic foods segment of the market. Just last year, organic food purchases by consumers topped $40 billion for the first time. OTA was in Washington last week touting new statistics, and the combination of sales and import figures show the possibility for increased domestic production to meet demand.

At a trade policy breakout session during last week’s conference, a participant suggested that his projections showed 1 million acres of domestic corn and soybean production could be used to offset imports. Monique Marez, OTA’s director of international trade, presented the data and acknowledged Laura Batcha, OTA that while there’s potential for increased domestic organic corn and soybean production, some issues with organic trade will be much more difficult to resolve.

“For some of these things, it will never even out,” Marez said, specifically referencing the $313.1 million in organic coffee imports in 2016.

Overall, the total trade imbalance remains steep despite some improvements. In 2016, U.S. organic exports – primarily produce – totaled $548 million, and imports – a more diverse range of products – came in at $1.7 billion.

Importing organic product also runs into the issue of equivalency standards and issues of product reliability. A recent article from the Washington Post detailed a shipment of soybeans that a broker said was erroneously labeled as organic. The shipment originated in Ukraine before a stop in Turkey and arrived in Stockton, California, in December.

News Briefs…

Shakeup at JBS amid bribery scandal. Tarek Farahat, global president of marketing and innovation at JBS SA, has been elected chairman of the Brazilian-based meat giant’s board of directors. He replaces Joesley Batista, who resigned in the aftermath of a meat inspection and bribery scandal. Farahat, who worked for Procter & Gamble for 26 years and was an officer of P&G’s executive board, promised to “work hard to restore trust with the market and protect the more than 235,000 families that are part of JBS.” The board also ratified the creation of a Governance Committee, which will be led by Farahat and whose main objective will be to implement global best practices in corporate governance and compliance at JBS. Company owners and brothers Joesley and Wesley Batista entered into a plea bargain deal that accused Brazil’s President Michel Temer of endorsing the bribing of a witness in the scandal. The brothers’ testimony, released last week, unleashed a political crisis, alleging that they bribed hundreds of politicians, according to Reuters. Both brothers resigned from their senior posts effective immediately.

Dow pays Bayer $469M in patent dispute. Dow AgroSciences has paid Bayer CropScience $469.4 million to resolve a patent dispute over a gene conferring glufosinate resistance. The payment was revealed in a Bayer court filing on Tuesday in federal court in Virginia. Bayer uses the gene in its LibertyLink line of products. Dow uses it in its Enlist cotton 14 and soybean seeds. An international arbitration panel awarded Bayer more than $455 million plus interest in 2015 and the federal court in Virginia affirmed the award in January 2016. Dow then appealed to the Federal Circuit Court of Appeals, which ruled for Bayer. Finally, Dow asked for review by the full Federal Circuit, which rejected the request earlier this month. When Dow then “indicated an intention” to petition the Supreme Court, Bayer asked the federal court in Virginia to enforce its order upholding the arbitration award. At the time the Federal Circuit ruled against Dow in March, the company said the decision would have no impact on its plans for Enlist™, or its soybean or cotton businesses. A spokesperson told Agri-Pulse that “Dow AgroSciences is continuing to pursue our legal options with respect to the matter. The arbitration decision and related payment do not impact our commercializations plans.”

Third-graders win Miss America visit in ‘Peas’ contest. Mary Tomlin’s third-grade class at Fayette Academy in Somerville, Tennessee, is getting ready for a very special visitor – Miss America 2017 Savvy Shields. The visit is the grand prize in the American Farm Bureau Foundation for Agriculture’s “First Peas to the Table” contest, a national competition that encourages children to plant, raise and harvest peas. Ten schools competed to see who could grow the most peas in a three-month period using just 20 seeds. Tomlin’s class came out on top, harvesting eight cups of peas. “I’m confident that students will enjoy hearing from Miss America 2017 Savvy Shields about her platform of ‘Eat Better, Live Better,’ which aims to educate people on how the foods we eat make an impact on our lives as a whole,” said Julia Recko, the Foundation’s education outreach director. The contest highlights the Foundation’s 2016 Book of the Year, “First Peas to the Table,” by Susan Grigsby. The contest was created to help students understand the importance of healthy foods and agriculture in their everyday lives and to increase their understanding of how plants grow.

Farm Hands on the Potomac…

Val Dolcini, until recently the administrator of USDA’s Farm Service Agency, will be taking over as CEO and president of the Pollinator Partnership effective June 1. He’s replacing Laurie Davies Adams, who is stepping down after 21 years of leadership at the non-profit.

The U.S. Meat Export Federation says Dan Halstrom, the current senior vice president of marketing, will take over as president on Sept. 1 and add the CEO title Dec. 1. Philip Seng, who has held the two leadership position since 1990, will remain as USMEF CEO emeritus through July 2018.

Shawna Newsome is going to work for Sen. Mike Enzi, R-Wyo., after more than three and a half years with the National Cattlemen’s Beef Association, where she was associate director of communications… Andrew Forbes is back on Capitol Hill, this time as legislative director to Sen. Jim Inhofe, R-Okla. He’d been working for the lobbying firm Cassidy & Associates for the past seven years. Previously, the Lafayette College alum was on the staff of former Rep. Ric Keller, R-Fla., and with the House Transportation and Infrastructure Committee.

Tony Eberhard, the former deputy chief of staff and legislative director for Sen. John Hoeven, R-N.D., has joined the International Dairy Foods Association as vice president of legislative affairs. Before joining Hoeven’s staff in 2011, Eberhard was a senior principal responsible for legislative affairs at the National Rural Electric Cooperative Association.

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Luke Tomanelli has signed on with Bayer as deputy director of federal relations and policy. Tomanelli previously worked for former Sen. David Vitter, R-La., and the Small Business and Entrepreneurship Committee, which Vitter chaired until his retirement at the end of last term. Tomanelli’s portfolio with Bayer includes energy, environmental and agricultural policy.

The Environmental Defense Fund hired Josette Lewis as associate vice president for ecosystems and sustainable agriculture. For the past four years, Lewis has led the World Food Center at the University of California, Davis. She has also held various leadership roles on agriculture and food security within the U.S. Agency for International Development.

Geoff Whaling has been elected to serve as board chairman of the National Hemp Association. An NHA board member since 2016, Whaling is president of the Pennsylvania Hemp Industry Council and a member of the Pennsylvania Farmers Union Board of Directors.

Rodale Institute named Jeff Tkach as its chief growth officer. Tkach has served on the development committee of Rodale’s board of directors in 2016. He’ll resign from the board when he takes the new job on July 1. Prior to joining the Rodale Institute, he worked with Rodale Inc., serving as managing director of Rodale’s Organic Life and Prevention.

Good luck to Max Starbuck, who retired from the National Corn Growers Association after 13 years of service to the organization, most recently as director of market development. During his tenure, he also managed mycotoxin research efforts and the National Corn Yield Contest.

Michael Cosh, a research hydrologist with the Agricultural Research Service Hydrology and Remote Sensing lab in Beltsville, Md., has been honored with an Arthur S. Flemming Award for using satellites to improve soil moisture measurements. The award honors outstanding federal employees with three to 15 years of federal service for their exceptional contributions.

Members of the Agricultural and Applied Economics Association elected David Zilberman as their next president. Zilberman is a professor in the Agricultural Resource Economics Department at the University of California, Berkeley. Members also elected two new board members: Katherine Baylis is an associate professor of Agricultural and Consumer Economics at the University of Illinois, and Norbert Wilson is a professor of Food Policy at the Tufts University Friedman School of Nutrition Science and Policy. The trio will assume their new roles following AAEA’s annual meeting, July 30-Aug. 1 in Chicago.

Best Regards,

Sara Wyant

Editor

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