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Ag Insight

Anti-tariff companies, groups oppose proposed levies

The national campaign against tariffs has sent a letter signed by 661 American companies and associations urging the administration to avoid additional tariffs and reach a resolution with China.
The letter was sent as the Office of the United States Trade Representative was beginning hearings considering 25 percent tariffs on $300 billion in goods, 60 percent of which are consumer products.
According to the group, Tariffs Hurt the Heartland, 520 companies signed the letter, including some of the nation’s most recognizable brands, and 141 trade associations at the national and state level.
In recently released estimates prepared by Trade Partnership Worldwide, imposing new tariffs on an additional $300 billion in goods (combined with the impact of previously implemented tariffs and retaliation) would result in the loss of more than 2 million U.S. jobs, add more than $2,000 in costs for the average American family of four and reduce the value of U.S. GDP by 1 percent.

Food store proximity varies considerably

Distance from a person’s home to the nearest food store (supermarket, supercenter or large grocery store) indicates the ease of access to a major source of a variety of healthful foods.
However, this measure does not indicate whether other sources of healthful food are just beyond the nearest store or if that store is the only store for miles.
A food store with no close-by competitors may not offer the best prices or quality. If several food stores are relatively nearby, competition on price, quality, selection of products and other store attributes is likely to be greater, which could benefit consumers.
Economic Research Service experts used a variety of data to calculate distances between households and the nearest and third-nearest food stores. The distance to the third-nearest store gives a sense of the amount of choice consumers have and the amount of competition the nearest store faces.
The researchers found that in 2015, the most recent year providing comparable data, the median distance to the nearest food store for the overall U.S. population was 0.9 miles, with 40 percent of the U.S. population living more than one mile from a food store. The median distance to the third-nearest food store for the overall population was 1.7 miles.
When looking at rural food store access, researchers found the median distance to the nearest and the third-nearest food store was 3.1 miles and 6.1 miles, respectively.

World cotton stocks predicted lower

The latest USDA cotton projections for 2019/20 indicate world cotton ending stocks are forecast at their lowest in eight years.
Global stocks are projected at 77.3 million bales for 2019/20, marginally below 2018/19, but 29.5 million bales below the record set just five years ago.
World stocks totaled 106.7 million bales at the end of 2014/15, with China accounting for 62 percent of the total. Government policies in China resulted in surplus stock accumulations in their national reserve, but subsequent policies reduced these supplies and have led to lower global stocks.
For 2019/20, cotton stocks in China are forecast lower at 31.5 million bales – 41 percent of the world total.
Outside of China, cotton stocks are expected to rise 6 percent to nearly 46 million bales, with stock increases in Brazil and the United States largely accounting for the gain. For Brazil, stocks are projected to reach a record 12.5 million bales (16 percent of the total) in 2019/20, resulting from an estimated record crop for 2018/19 and another large crop projected for 2019/20.
For the United States, cotton stocks are forecast at 6.4 million bales, the highest since 2007/08.

Farm exports boost economy, job creation

Federal economists estimate that, in 2017, each dollar of agricultural exports stimulated another $1.30 in business activity. Thus, the $138 billion of agricultural products exported by the United States in 2017 produced an additional $179 billion in economic activity, for a total economic output of $317 billion.
Every $1 billion of U.S. agricultural exports in 2017 required approximately 8,400 American jobs throughout the economy. At $138 billion in 2017, agricultural exports required about 1.2 million full-time civilian jobs. These included 795,000 jobs in the nonfarm sector.
In terms of employment growth, sectors outside of farming were the major beneficiaries of U.S. agricultural exports during the 2004-17 time period.


USDA relocation, realignment decisions announced

The USDA will relocate the Economic Research Service (ERS) and National Institute of Food and Agriculture (NIFA) to the Kansas City Region.
“Following a rigorous site-selection process, the Kansas City Region provides a win-win – maximizing our mission function by putting taxpayer savings into programmatic outputs and providing affordability, easy commutes, and extraordinary living for our employees,” said Secretary of Agriculture Sonny Perdue.
“The Kansas City Region has proven itself to be hub for all things agriculture and is a booming city in America’s heartland. There is already a significant presence of USDA and federal government employees in the region, including the Kansas City ‘Ag Bank’ Federal Reserve. This agriculture talent pool, in addition to
multiple land-grant and research universities within driving distance, provides access to a stable labor force for the future. The Kansas City Region will allow ERS and NIFA to increase efficiencies and effectiveness and bring important resources and manpower closer to all of our customers.”
In addition, USDA announced that a proposed realignment of the agency’s Economic Research Service under the Office of the Chief Economist will not be made.
While it’s believed there are considerable synergies and benefits to a realignment, after hearing feedback from stakeholders and members of Congress, USDA decided not to move forward with those plans and ERS will remain under the Research, Education and Economics mission area.

Impact of generic animal drug development uncertain

The ability to market generics represents a shift in animal drug development, with uncertain effects.
Because firms can market generic products, the increased competition for specific drug types may yield greater innovation so firms maintain a competitive advantage. Conversely, more generic competition may lead to less innovation, because generic competition may hurt firms’ ability to recapture their large initial investments.
The first generic animal drug was marketed in 1992, and 52 percent of all animal product approvals were generics by 2015.
Another factor putting pressure on the R&D dollars for new food-animal drugs is the rise of companion-animal ownership and spending. The share of new animal drugs approved for companion animals grew between 1992 and 2015.
This trend suggests the overall decline in the number of new animal drugs approved largely reflects a reduction in the number of new food-animal drugs approved.

New dairy program signup underway

USDA has launched signups for the new Dairy Margin Coverage (DMC) program, part of the dairy safety net that helps dairy producers manage the volatility of milk and feed prices.
Operated by the USDA’s Farm Service Agency (FSA), the new provisions are part of the 2018 Farm Bill and offer protections to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.
Signups for the DMC that replaces the Margin Protection Program for Dairy (MPP-Dairy) began in June.
“With an environment of low milk prices, high economic stress and a new safety net program with higher coverage levels and lower premiums, it is the right time for dairy producers to seriously consider enrolling,” Perdue said.
Perdue said for many smaller dairy operations, the choice is probably “a no-brainer” as the retroactive coverage through January has already assured them that the 2019 payments will exceed these required premiums.
The program provides coverage retroactive to Jan. 1, 2019, with applicable payments following soon after enrollment. At the time of signup, dairy producers can choose between the $4 to $9.50 coverage levels.
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