December 3, 2016

The Changing Winds on Trade Deals – a South Dakota Perspective

It’s not breaking news that the Trans Pacific Partnership trade deal is pretty much toast as far as U.S. approval is concerned – following promises on the presidential campaign trail and the election of Donald Trump.

That’s the message that National Cattlemen’s Beef Association President Elect Craig Uden shared with producers cattle buyers at the South Dakota Cattlemen’s Association’s annual convention in Watertown, yesterday. sdca-16

We spoke Wednesday with South Dakota Cattlemen’s Association President Elect Larry Stomprud, of Mud Butte.

Larry on TPP

larryLarry recently returned from four days in cattle country in the northern Everglades of central Florida. He toured several successful working ranches – and he was there during Hurricane Matthew.

Larry on Hurricane Matthew

After learning about the unique challenges and management practices of the Everglades region, Larry has said he wouldn’t trade “our South Dakota cattle for theirs, but he admits that they’ve learned to breed the cattle that best fit their environment — such as Cracker cattle.

 

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Cost Of Thanksgiving Falls, But Should Farmers Be Thankful?

thanksgiving-dinnerThis Thanksgiving, shoppers are set to appreciate a lower grocery bill for their feast.  In fact, a study done by the American Farm Bureau Federation found the price of a traditional meal for 10 people, including a 16 pound turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a veggie tray, ingredients for pumpkin pie with whipped cream, and coffee and milk, will average $49.87 or just $4.97 per person.  This is a 24 cent decrease from last year, and the lowest cost since 2010 after adjusting for inflation.

A total of 148 volunteer shoppers checked prices at grocery stores in 40 states for this year’s survey. Farm Bureau volunteer shoppers are asked to look for the best possible prices, without taking advantage of special promotional coupons or purchase deals, such as spending $50 and receiving a free turkey.

Shoppers with an eye for bargains in all areas of the country should be able to purchase individual menu items at prices comparable to the Farm Bureau survey averages. Another option for busy families without a lot of time to cook is ready-to-eat Thanksgiving meals for up to 10 people, with all the trimmings, which are available at many supermarkets and take-out restaurants for around $50 to $75.  AFBF concedes this isn’t a scientific study, but they do say the survey is an informal measure of trends in food price

 

The trend does seem to be backed up by more widely published data.  The Consumer Price index, which is compiled by the U.S. Bureau of Labor statistics, shows food prices have declined by roughly 2% so far this year. While that’s good news for consumers, it hasn’t been good news for farmers. Even as retail food prices fluctuate, the farmer’s share of each dollar spent has remained consistently low, says Rob Larew, the Senior Vice President of Public Policy and Communications at National Farmers Union…

Larew – Farm Share 1

On average, farmers receive 17.4 cents of every food dollar consumers spend, while more than 80 percent of food costs cover marketing, processing, wholesaling, distribution and retailing. For the 15 items NFU tracks for the Thanksgiving version, farmers received 19.4 cents of the retail food dollar.

Turkey growers, who raise the staple Thanksgiving dish, receive about 89 cents per pound retailing at $1.59. Wheat farmers averaged a meager 4 cents on 12 dinner rolls that retail for $3.29. And dairy producers received only $1.44 for the $4.49 gallon of fat free milk.

NFU President Roger Johnson says, “Thanksgiving presents an opportunity to raise awareness about food production, including misconceptions about food costs . . .Farmers and ranchers play the most valuable role in actually producing the food that is served at holiday dinners, yet they make just pennies on the dollar for their products.”

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Playing the Trump Card in the First 100 Days

In a two minute video posted to YouTube on Monday, President-elect Donald Trump made it clear that he will withdraw the U.S. from the Trans-Pacific Partnership deal as one of his first presidential actions in January.

Trump on TPP

Most commodity and agricultural groups have aggressively supported TPP. Still, Trump made ending the trade pact a major part of his campaign.

At least six countries included in the Trans-Pacific Partnership aim to complete the trade deal with or without the United States. News reports indicate that Mexico, Japan, Australia, Malaysia, New Zealand and Singapore are all pledging to continue forward with TPP if the United States does not.

Meanwhile, Trump also ran on a platform that included scaling backing government regulation. He addressed that topic in his video.

Trump on Regulations

 Trump has said he would appoint a new head to the EPA who is farmer-friendly.

Regarding regulations – Iowa’s congressional delegation has already sent a letter to Trump, asking him to use his power as chief executive to eliminate the Waters of the U.S. rule – which is currently hung up in federal court.

The letter described WOTUS as a “misguided rule” that assaults “small businesses, manufacturing and agriculture.” The letter went on to say, “the election results signaled that Americans are ready for the last eight years of EPA’s power grabbing mentality to come to an end.”

 

 

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