Infrastructure

Trade Associations Urge Biden Administration To Act Now To End Port Strike

Thu, 03 Oct 2024 18:11:33 GMT

A coalition of over 270 local, state and federal trade associations have signed a letter urging President Biden and his administration to use all of its authorities to end the port strike, get the ports open and get the parties back to the negotiating table.

Click here to read the full letter.

The associations involved represent:

American manufacturers
Farmers and agribusinesses
Wholesalers
Retailers
Restaurants
Importers
Exporters
Distributors
Transportation and logistics providers
Additional supply chain stakeholders

The Ag Retailers Association (ARA) is among the groups who sent the letter and is encouraging members to let them know how the strike will impact their businesses.

Background:
A port strike along the East and Gulf coasts began on Oct. 1 and will halt the flow of a wide range of goods, potentially leading to shortages and higher costs. According to an estimate from the Anderson Economic Group, a one week strike would cost the U.S. economy about $2.1 billion.

Your Next Read: East and Gulf Coast Dockworkers Now on Strike Over Wage Demands, Halting Key U.S. Cargo Shipments

East and Gulf Coast Dockworkers Now on Strike Over Wage Demands, Halting Key U.S. Cargo Shipments

Tue, 01 Oct 2024 12:53:50 GMT

A disruptive strike at ports along the East and Gulf Coasts began today as the International Longshoremen’s Association (ILA) walked out, affecting 14 port authorities and key cargo shipments. The first strike since 1977, it halts the flow of goods ranging from bananas to beef, pork and poultry, to industrial materials, leading to potential shortages and price hikes.

The ILA is demanding a significant 77% wage increase over six years, while the United States Maritime Alliance (USMX) late Monday offered last-ditch effort of a nearly 50% raise over six years, triple employer contributions to employee retirement plans, strengthen health care options, and retain the current contract language around automation and semi-automation. It hoped that offer would lead to resumption of collective bargaining.

The ILA rejected the offer and stated that its wage demands were still not being met. The union said in a statement sent on Monday morning that USMX “continues to block the path toward a settlement on a new Master Contract by refusing ILA’s demands for a fair and decent contract and seems intent on causing a strike at all ports from Maine to Texas.”

The Biden administration is urging both sides to reach an agreement, but federal intervention under the Taft-Hartley Act is unlikely. The Taft-Hartley Act grants a U.S. president the power to suspend a strike for an 80-day “cooling off period” in cases where “national health or safety” are at risk. ILA President Harold Daggett threatened an intentional worker slowdown in moving containers if the Biden administration forces the union workers back to the docks using the Taft-Hartley Act. “You’re better off sitting down and let’s get a contract and let’s move on with this,” he said.

Bargaining for a new six-year contract between dockworkers, represented by the ILA, and shipping companies and operators are represented USMX, started in February 2023. According to a 2020 report by the Waterfront Commission, the regulator that oversees New York Harbor, more than half of the longshoremen based there made $150,000 or more. The ILA is asking for a $5-an-hour raise for each of the six years of the new contract, which means the hourly rate could reach $69 by 2030, a 77% pay increase. The union is also asking for better benefits and opposing the use of automated technologies at ports.

Murky member figure. While the union says there are about 45,000 members covered by the contract, the USMX puts the number of port jobs closer to 25,000, with not enough jobs for all the workers in the union to work every day.

Impacts: For the week ended last Friday, nearly $14 billion in trade arrived at these ports, including New York/New Jersey, Baltimore, Norfolk, Virginia, Savannah, Georgia, Miami, New Orleans and Houston, with $2.7 billion in trade arriving on Friday alone. On average, it takes one week to clear out one day of a port closure. As much as 43% to 49% of total containerized goods entering the U.S are processed through ports on the East Coast and Gulf Coast.

A one-week strike would cost the U.S. economy about $2.1 billion according to an estimate Monday from the Anderson Economic Group (AEG), a Michigan research firm with expertise in estimating the cost of strikes and other disruptions. Most of that would be a $1.5 billion loss in value of some of the goods that wouldn’t be delivered on time, such as perishable goods. Transportation companies, including ship lines and ports, would lose $400 million, while striking workers and those who might be temporarily laid off, would lose $200 million in wages. Losses would start to accelerate the longer the strike continued, said Patrick Anderson, the president of AEG. “A strike lasting longer than a week will begin to impact retailers and manufacturers as supply chain movement grinds to a halt.” But he said estimates of $1 billion a day in losses are exaggerated, especially considering the preparations many shippers had made in advance of the strike deadline. To hit those numbers “you’d have to sink the ships… A strike at the port delays trade, but does not destroy it,” he said.

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Your Next Read: Expect Significant Impact on Pork and Beef Industries if East and Gulf Ports Strike

Port Employers Exchange New Contract Offers with Longshore Union in Bid to Avert Strike

Port Employers Exchange New Contract Offers with Longshore Union in Bid to Avert Strike

Tue, 01 Oct 2024 01:31:43 GMT

Port employers said they have exchanged new contract offers with the International Longshoremen’s Association, just hours before a strike deadline takes effect that would shut down container handling at East and Gulf Coast ports.

“In the last 24 hours, the United States Maritime Alliance and ILA have traded counter offers related to wages,” the employers said in a statement posted to their website. “The USMX increased our offer and has also requested an extension of the current Master Contract, now that both sides have moved off their previous positions. We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues — to reach an agreement.”

The group of terminal operators and ocean container lines said their new offer would increase wages by nearly 50%, triple employer contributions to union retirement plans, strengthen health care options, and retain the current language around automation and semi-automation. No further details were disclosed.

The ILA earlier rejected the employers’ offer, but with negotiations said that the union has lowered slightly its demand for a 77% wage increase over six years of the master contract, and that the USMX has increased their initial offer.

Your Next Read: Chances of a Strike at East Coast and West Coast Ports are Growing; Here’s How it Could Impact Farmers

As a Potential Strike at East Coast and Gulf Coast Ports Looms, Here's What You Need to Know

Wed, 18 Sep 2024 00:11:59 GMT

Supply chain issues continue to raise concerns, and it’s now a possible strike along East Coast and Gulf Coast ports that could cause disruptions in the weeks and months ahead.

The contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) is set to expire on Sept. 30. Negotiations between the two parties have stalled, raising concerns about a possible strike starting Oct. 1.

The main points of contention are wage increases and limits on port automation. Negotiations broke down in July after the ILA learned that APM Terminals and Maersk were using automated technology to process trucks without union labor.

43% of U.S. Imports at Risk

A strike would affect East Coast and Gulf Coast ports, which handle 43% of U.S. imports. It could disrupt $3.7 billion worth of trade per day. The strike would impact retailers, manufacturers, and farmers by delaying shipments and potentially shutting down production lines.

Many companies have been redirecting shipments to West Coast ports. Some businesses have brought in products earlier to frontload the peak shipping season. Air freight is being considered as an alternative for time-sensitive or high-value goods.

Outlook:
As of mid-September, the two sides appear far apart in negotiations. The ILA has voted unanimously to support a strike if their demands are not met. There are calls for both parties to return to the negotiating table to avoid disruption.

The parties could resume negotiations and potentially extend the current contract. President Biden could use his influence to encourage negotiations or appoint a federal mediator. As a last resort, the President could invoke the Taft-Hartley Act to implement an 80-day cooling-off period.

Your Next Read: Lower Mississippi River Levels to Remain Low Post-Francine

11 Key Takeaways From Biden's State Of The Union Address

Fri, 08 Mar 2024 19:58:42 GMT

President Joe Biden delivered a defiant argument for a second term in his State of the Union speech Thursday night. Biden fired multiple broadsides at Trump without ever mentioning him by name.

From the economy to Biden’s thoughts on infrastructure, the border and climate, there were several key takeaways from Biden’s State of the Union address. He led his address with Ukraine, Jan. 6, abortion and the state of the U.S. economy.

Ukraine. Biden accused “my predecessor” of “bowing down” to Russian President Vladimir Putin, saying it is “outrageous, it is dangerous and it is unacceptable.” Biden called for funding Ukraine in its war against Russia. Biden warned that Russia’s aggression would “not stop at Ukraine.”
The U.S. will build a pier on the Gaza coast to receive humanitarian aid, including food. “Tonight, I’m directing the U.S. military to lead an emergency mission to establish a temporary pier in the Mediterranean on the Gaza coast that can receive large ships carrying food, water, medicine and temporary shelters,” Biden said. “No U.S. boots will be on the ground. This temporary pier would enable a massive increase in the amount of humanitarian assistance getting into Gaza every day.” Biden added, “But Israel must also do its part. Israel must allow more aid into Gaza and ensure that humanitarian workers aren’t caught in the crossfire. …Humanitarian assistance cannot be a secondary consideration or a bargaining chip.” The Biden administration has said Israel Prime Minister Benjamin Netanyahu isn’t doing enough to allow the flow of humanitarian assistance into Gaza. Biden stressed the need for a temporary cease-fire and called for hostages to be released.
Shrinkflation. Called on Congress to pass a bill sponsored by Sen. Bob Casey (D-Pa.) to stop “shrinkflation” in food packages. “Too many corporations raise their prices to pad their profits charging you more and more for less and less. That’s why we’re cracking down on corporations that engage in price gouging or deceptive pricing from food to health care to housing,” Biden said. “In fact, snack companies think you won’t notice when they charge you just as much for the same size bag but with fewer chips in it,” he added.
High-speed affordable internet. Biden said his policies are “providing affordable high-speed internet for every American no matter where you live. Urban, suburban, and rural communities — in red states and blue states. Record investments in tribal communities.”
Farm sector. Biden said: “Because of my investments, family farms are better able to stay in the family and children and grandchildren won’t have to leave home to make a living. It’s transformative.” He added, “Because of my investments in the family farm led by my secretary of Agriculture who knows more about this than anybody I know, we’re better able to stay on those farms so their children and grandchildren won’t have to leave home, leave home to make a living. It’s transformative.”
Border. Biden said he “will not demonize immigrants saying they ‘poison the blood of our country’ as he said in his own words,” referencing his “predecessor” without naming Donald Trump. Biden continued, “Unlike my predecessor, on my first day in office I introduced a comprehensive plan to fix our immigration system, secure the border, and provide a pathway to citizenship for Dreamers and so much more… We can fight about the border, or we can fix it. I’m ready to fix it. Send me the border bill now!” Biden rebuked Republicans for opposing a bipartisan border agreement in the Senate. Trump has opposed the measure, calling it a “gift” to Democrats in an election year. Biden called on Republicans to work with him. “We can fight about fixing the border, or we can fix it,” he said. Biden has been weighing executive action on immigration, but has yet to make such a move.
Climate. Biden said, “We are also making history by confronting the climate crisis, not denying it… I’m taking the most significant action on climate ever in the history of the world. I am cutting our carbon emissions in half by 2030,” he said.
Infrastructure. Biden knocked Republicans for touting the flood of cash that has been funneled into their districts from bills that they opposed, such as the infrastructure law. “If any of you don’t want that money in your district, just let me know,” Biden said.
China. Biden said, “Our trade deficit with China is down to the lowest point in over a decade. We’re standing up against China’s unfair economic practices. We want competition with China, but not conflict.”
Manufacturing. “Where is it written that we can’t be the manufacturing capital of the world? We are. We will. Instead of importing foreign products and exporting American jobs, we’re exporting American products and creating American jobs - right here in America where they belong. And thanks to our CHIPS and Science Act, the United States is investing more in research and development than ever before. It takes time, but the American people are beginning to feel it.”
Taxes. Biden said he wants to raise the minimum tax for multinational corporations to 21%, as well as lift the corporate tax rate to 28% from the current 21%. The president also hopes to:

Stop letting corporations get tax deductions for all employee salaries over $1 million (the current rule applies only to C-suite pay) and make it harder for companies to write off executives’ private jet travel.
Raise the tax on corporate stock buybacks from 1% to 4% to encourage companies to spend more of their revenue on salaries and improving productivity.
Make billionaires pay a minimum of 25% income tax.

Bottom line:

Biden’s SOTU address was clearly his effort to begin the national presidential re-election campaign. He directly referenced his age at times. “I’ve been told I’m too old,” he said as he concluded his speech. “Whether young or old, I’ve always known what endures… The issue facing our nation isn’t how old we are,” he said. “It’s how old are our ideas.”

Reaction:

As with most things related to our nation’s capital, responses primarily fell across political lines. Biden proponents and much of the media characterized the speech as “feisty.” The speech amounted to a general election preview, referring to former President Donald Trump 13 times only as “my predecessor.” Biden opponents thought his address was “angry” with no real message of bipartisanship. Trump responded to the speech in real time on his Truth Social site, defending himself and blasting Biden for what he said “may be the Angriest, Least Compassionate, and Worst State of the Union Speech ever made.”

Cornett: We Were Wrong on ‘Cheap Food’ Policy

Thu, 29 Feb 2024 17:59:17 GMT

This column

https://www.nytimes.com/2024/02/26/opinion/white-rural-voters.html

from the New York Times’ Paul Krugman cites the similarities between social decay in the inner cities and—whoa—rural America. It’s very uncomfortable to read. But…

Krugman blames it--the unemployment, the drugs, the high rate of food stamp recipients and other welfare-- on the loss of jobs. Says we’re being supported by the affluent urban areas. And, he has a point. But…

Look at your small town. Look at the empty businesses, gone to flea markets or antique stores if you’re close enough to a city. When I was a kid, about every town had at least one tractor or implement dealer, two or more car dealers, a locally owned grocery, a clothing store or two, a locally owned bank, a movie show. Maybe a small manufacturing plant. A whole environment right there.

There were good jobs and bad jobs. Business owners and working people. Big houses. Little houses. Rich kids, poor kids on the same playgrounds.

And what kept them in business was, largely, agriculture. My little ranch has no fewer than 4 old homesteads on it. Each of them supported by a family that needed all that stuff the local businesses provided.

But at that time, a trip to the city to shop was a bit of an undertaking. Two lane roads, cars that lasted 50,000 miles. And, before Walmart and consolidation among other retailers, there wasn’t that much difference in prices. We went to the city for selection or big buys, like back-to-school sales.

But the big killer of small-town America has been farm consolidation spurred by federal farm policy. The older I get and the more history I live through, the more I think we’ve been on the wrong track my whole life—which began at the end of WWII.

We in ag have called it a “cheap food” policy. But I’m not sure how much consumers benefit from a policy that promotes exports of grain over the production of vegetables and fruits and beans—the stuff we think of as “food.”

For me, a son of the Ogallala Aquifer, the transition in thought began with how we’ve used up this precious resource growing subsidized cotton and grains for export. I accept my share of the blame. I’ve been there from the time my dad drilled some of the earliest wells to today when I have a piece of irrigated land. Pumping, pumping away a resource that has been building for millennia. Our grandchildren are going to regret that.

I don’t think it’s just nostalgia to think all this progress—much of it driven by government decisions—has cost us dearly. I think there was value beyond economics to the agriculture of my youth, with chicken houses to be scooped and cows to be milked and gardens to be tended. And the small-town ecosystems that lifestyle supported.

Don’t get me wrong. I was right there with “get big or get out” Earl Butz. But in retrospect, I think we were wrong.

Steve Cornett is a former editor for several national livestock publications including Farm Journal. He’s now out to pasture on his ranch in the Texas Panhandle. You can tell him what you think at Scornett9163@yahoo.com

New Legislation Looks To Connect Farmland And Ranchland To Broadband

Fri, 10 Nov 2023 15:39:11 GMT

U.S. growers and livestock producers increasingly rely on the internet across the farm and ranch, yet many still don’t have access to it. A report USDA released this past August, “ Technology Use, Farm Computer Usage and Ownership, ” found that 15 percent of farms and ranches have no access to the internet today.

New legislation announced Nov. 1 looks to change that by expanding high-speed broadband internet access across rural America.

Two members of the House Agriculture Committee, Congressman Brad Finstad (MN-R) and Congresswoman Yadira Caraveo (CO-D), introduced the legislation called “Linking Access to Spur Technology for Agriculture Connectivity in Rural Environments (Last Acre) Act,” within the

USDA’s Office of Rural Development.
The Last Acre Act would create a new competitive grant and loan program at USDA to expand high-speed broadband internet access across eligible farmland, ranchland, and farm sites.

The Federal Communications Commission (FCC) currently defines minimum broadband internet service as internet access with a minimum of 25 megabits per second (Mbps) download speed and upload speeds of 3 Mbps or more.

One generally accepted rule of thumb is that anything above 100 Mbps is considered “fast” internet because it can connect multiple devices at once.

How Farmers Connect
In its Technology Use research, USDA found 51 percent of internet-connected farms utilize a broadband connection while 75 percent of internet-connected farms have access through a cellular data plan. Additionally, 69 percent of farms have a desktop or laptop computer while 82 percent of farms had a smart phone.

(Farm Journal)

The Last Acre Act is among the latest moves by legislators to address the digital divide between urban and rural America.

“As a farmer, I understand the important role precision ag technology plays in increasing production and maximizing efficiency. Yet, many rural areas of southern Minnesota and across the country don’t have reliable access to the wireless connectivity needed in order to utilize these techniques,” said Rep. Finstad, in a news release.

“The Last Acre Act will help drive agricultural innovation into the 21st century by bringing the latest farming technology and tools to every corner of farm country, giving farmers and ranchers – in even the most remote areas – greater ability to adopt precision ag applications and ensure optimal efficiency in their operations,” added Finstad.

The USDA Technology Use report released in August shows that 32 percent of farms used the internet to purchase agricultural inputs this year, which was an increase of 3 percent from 2021.

“Additionally, 23 percent of farms used the internet to market agricultural activities, which was an increase of 2 percent from 2021,” the USDA said. “Farms which conducted business with non-agricultural websites in 2023 increased by 2 percent to 49 percent.”

Precision Agriculture Needs
Increasingly, legislators and broadband providers have fine-tuned how they look at the internet needs of rural America, according to Mitchell Bailey, CEO for GRM Networks, a member-owned cooperative that supplies broadband and other communication services to residents in parts of northern Missouri and southern Iowa.

“The terminology used has changed from ‘fiber to the premise,’ which focused on connecting homes to more of a focus on ‘fiber to the acre,’ because we understand the need to make sure we’re connecting every acre of farmland to advanced technology,” Bailey told Farm Journal.

“In an ever-changing marketplace, it is imperative that corn farmers use the latest in precision agriculture technology to remain competitive and sustainable, and this is only possible through access to high-speed broadband,” added Harold Wolle, National Corn Growers Association president.

The Last Acre Act is endorsed by the American Farm Bureau Federation, Association of Equipment Manufacturers, Competitive Carriers Association, National Corn Growers Association, National Milk Producers Federation, National Cattlemen’s Beef Association, National Farmers Union, John Deere, Ethos Connected, and Wireless Internet Service Providers Association.

Monthly Average Costs
As part of its Bipartisan Infrastructure Law passed in 2021, the Biden administration committed $65 billion to help ensure that every American has access to affordable internet service.

The price of internet service ranges widely across the U.S., from $20 to well over $100 a month.

The price consumers pay depends on a range of factors, including internet speed, the type of connection, and what’s available in a specific area.

A Forbes survey of 37 internet service provides (ISPs) across the U.S. earlier this year found consumers paid an average cost of $65 a month. That’s in line with recent findings by Consumer Reports , which found in 2022 the median monthly internet cost was $74.99.

How States Stack Up
A February report from BroadbandNow Research , a firm that conducts comparisons on internet companies using data from the FCC and internet providers, identified what it calls the “best and worst states” for broadband internet service in the U.S. Its considerations were based on two factors – overall coverage and quality of connections.

The report ranked Maryland as the best overall state for broadband internet, followed by New Jersey, New York, Delaware and Washington. The rankings considered overall access to broadband, access to low-cost broadband, download and upload speeds, and access to fiber-optic service.

At the other end of the spectrum, in the worst category, West Virginia came in last.

West Virginia was followed in the report by Alaska, Mississippi, Arkansas and Vermont. All five states at the bottom scored a zero on internet quality, or latency, which is the time it takes information to go from one source to another.

There were 16 states in the report that scored a zero in the quality category, including North and South Dakota, Nebraska, Michigan, Iowa, Ohio and Wisconsin.

The state with the slowest average download speed was Kansas, followed by Alaska and South Carolina.

John Phipps: Is Broadband the Secret to Reviving Rural America?

Texas Farmer’s Top Five Technologies

“Technical Debt” Continues To Grow Rapidly In The Agriculture Industry

U.S. States Reach Colorado River Water Conservation Deal

Mon, 22 May 2023 20:28:33 GMT

Seven U.S. states along the drought-starved Colorado River have reached a deal with the Biden administration to conserve water in a “historic consensus” to prevent supply problems for big cities like Los Angeles and Phoenix as well as farmers.

In the agreement, Arizona, California and Nevada will take 3 million-acre-feet less water from the river through the end of 2026, the U.S. Department of the Interior said on Monday.

In return for using about 13% less water over three years, the three states will get around $1.2 billion in federal compensation, the Washington Post reported, citing people familiar with the talks.

After nearly a year of negotiations, the temporary deal is aimed at preventing water levels from dropping below critical levels in Lake Powell and Lake Mead: the United States’ largest reservoirs.

Some 40 million people and 30 tribal nations depend on the Colorado River Basin for drinking water and electricity.

Mexico also uses Colorado River water. Farmers who rely on the Colorado River water supply national and even international food supply systems.

The new operating guidelines, set to be advanced next month by the Department of the Interior, replace a 2007 agreement.

Wyoming, Colorado, Utah and New Mexico in the Upper Basin and California, Arizona and Nevada in the Lower Basin, which share Colorado River waters under the compact, had been struggling for months to come up with an agreement on cuts after federal officials asked for reduced usage of 2 million to 4 million acre-feet of water per year, an unprecedented reduction of 15% to 30% in the coming year.

(Reporting by Rami Ayyub; Editing by Mark Porter, Donna Bryson and Jonathan Oatis)

What's in it for Ag in the New Spending Bill?

Wed, 28 Dec 2022 03:26:54 GMT

The House on Friday averted a government shutdown by voting 225 to 201 in favor of the Consolidated Appropriations Act of 2023. The $1.7 trillion omnibus bill includes 12 separate bills that cover everything from natural disasters to military pay to foreign aid.

Sanford Bishop Jr., ag, rural development and food and drug administration subcommittee chairman, says the bill is “crucial” to America’s economic success.

“These federal programs make our country a world leader in agriculture, ensure that we have safe, abundant food and medicine to lead healthy lives, support America’s farmers and ranchers, and provide Americans with the materials that clothe us and build our communities,” Bishop says.

Here are highlights of the key ag-sector funding from the omnibus:

Insurance

• Directs USDA to index all administrative and operating expense in the crop insurance program for inflation.

Research

• Agricultural research: Ag research funding will increase by $175 million to $3.45 billion in 2023, including monies for Agricultural Research Service, National Institute of Food and Agriculture, Agriculture and Food Research Initiative, and Sustainable Agriculture Research and Education program.

Conservation

• Includes the SUSTAINS Act, which allows corporations and other private entities to contribute funding for conservation projects and authorize USDA to match the donations.

• Reauthorizes the Pesticide Registration Improvement Act, which imposes fees for maintenance and registration of active ingredients. It boosts registration and maintenance fees 30% and allows EPA to raise fees by 5% in 2024 and 2026.

Infrastructure

• $1.48 billion is included on top of annual appropriations funding for the Army Corps of Engineers to make emergency repairs and navigation improvements needed after extreme weather events, including low water on the Mississippi River.

“One of the best returns on investment is when we pump money into our infrastructure, especially the great waterway system,” Jim Wiesemeyer, ProFarmer policy analyst told AgriTalk Host Chip Flory. “This town [Washington, D.C.] has had a mindset change on pumping more money, not only in the new projects, but restoring some of the water transportation endeavors of the past. It’s good news.”

Relief Aid

• $3.7 billion in farm disaster aid, to cover eligible 2022 crop and livestock losses, with $494.5 million to be used for livestock losses due to drought or wildfires, as part of overall $40.6 billion for disasters.

• Requires USDA to make a one-time payment to each rice producer on a U.S. farm in the 2022 crop year. USDA will determine payment rates based on yield history and acreage.

• Authorizes $100 million for the USDA to make pandemic assistance payments to cotton merchandisers that purchased cotton from a U.S. producer from March 1, 2020, through the measure’s enactment date.

• $25 million for specialty crop equitable relief.

Broadband

• USDA’s ReConnect loan and grant program for rural broadband will get $348 million for fiscal 2023.

Food Assistance

• Make permanent a summer EBT (food stamp) program to provide up to $40 a month per child. It allows grab-and-go or home delivery of meals to kids in rural areas as an alternative to meals in group settings Any summer meals benefits issued to a household in the summer of 2023 couldn’t exceed $120 per child. USDA will be required to establish a program beginning in the summer of 2024 and annually thereafter to issue EBT benefits to eligible households to ensure continued access to food when school isn’t in session in the summer.

• Aid for Food for Peace ($1.8 billion) and McGovern-Dole International Food for Education ($248 million) programs.

Carbon

• Includes the Growing Climate Solutions Act, which authorizes USDA to oversee the registration of farm technical advisers and carbon-credit verification services

Wiesemeyer says the swift passage of the spending package signals the coming farm bill might be easier to pass than some had previously thought, despite the new congress moving in next week.

“Congress put more than a few dollars in this for farm bill-related topics, especially food stamps and some of the climate change funding,” he says. “I think this really increases the odds that both the Senate and the house should get a new farm bill done in 2023.”

The bill will now move to President Biden’s desk, where he is expected to sign it this week.

More on policy :

4 Ways to Advocate for Ag in the New Farm Bill
U.S. Defense Spending Bill Leads to China Taking Aim at Taiwan

Water Resources Bill Reauthorized with a Component that Will Impact Producers

Tue, 20 Dec 2022 15:00:00 GMT

In an 83–11 vote in the Senate on Thursday, the Water Resources Development Act (WRDA) was reauthorized.

The WRDA is a biennial bill that was first set in stone in 2014 to allow U.S. Army Corps of Engineers (Corps) to implement water infrastructure projects and programs across the nation. By way of the WRDA, the Corps constructs and maintain ports, inland waterways, locks and dams.

WRDA 2022 includes funding for 94 new feasibility studies and 21 projects, as well as instruction for the Corps to “expedite several ongoing studies and projects that are critical to addressing our nation’s water resources needs,” according to the Senate Committee on Environmental and Public Works release.

However, different from other years, WRDA 2022 cements a cost-share system for inland waterway projects in which 65% of funding stems from general treasury while the remaining 35% comes from the Inland Waterways Trust Fund.

The Fertilizer Institute (TFI) applauded the passage of the legislation in a release , which it dubbed an “integral” component of the fertilizer distribution system.

“On a ton-mile basis, approximately one-fourth of fertilizer moves on the inland barge system and these projects are absolutely critical to the safe and efficient distribution of fertilizers,” said Corey Rosenbusch, TFI president and CEO. “Making the cost-share permanent will…provide confidence to industry that much needed maintenance and modernization of our inland waterway system.”

According to Rosenbusch, repairs of locks and dams have increased 700% and further hindered production. He adds that these locks and dams—built nearly 100 years ago—were only designed to last 50 years.

“These delays are not only disastrous for the farmers who receive much of the almost 70 million tons of fertilizer each year via our nation’s waterways, they can also raise the prices of everyday goods and food for consumers,” Rosenbusch noted.

The bill will now move to President Biden’s desk, where he will likely sign it in coming weeks.

More on policy:

Expect New WOTUS Testing Rules by the End of 2022, According to Government Lawyer
5 Conservation Needs to be Met in Farm Bill 2023

Rail Strike Derailed as Biden Signs Labor Bill

Mon, 05 Dec 2022 14:09:51 GMT

The Senate swiftly moved to pass a tentative rail agreement on Thursday with a landslide 80-15. This move followed the House’s favorable vote of 290 to 137 on Wednesday. President Biden signed the bill Friday morning, further derailing the looming labor strike.

Congress also voted on a paid sick leave bill, which the House moved to pass but the Senate chose to deny. The odds were close, however, with a vote of 52-43 .

Zippy Duvall, Farm Bureau president, says producers’ reliance on rail is what pushed AFBF to support and celebrate averting the rail strike.

“High diesel prices, a truck driver shortage, and low water levels on the Mississippi River have already made shipping conditions difficult,” Duvall said in an AFBF press release . “A rail strike would have had a devastating effect on the American economy, especially as families grapple with higher prices caused by inflation.”

“There was an industry-wide sigh of relief today after both Congressional chambers voted in favor of implementing the September TAs,” said The Fertilizer Institute’s Corey Rosenbusch. “Rail is critical to the movement of fertilizer year-round. Averting embargoes and production delays were crucial to not only ensuring we’re able to provide the fertilizers our nation’s farmers need, but also avoiding additional disruptions to a global market already constrained by geopolitical events and volatile energy prices.”

While some groups are applauding the outcomes, others are outraged.

The Brotherhood of Railroad Signalmen (BRS) spoke out on the votes in a press release :

“What took place in the United States Senate today is a symptom, and further illustration, of a larger issue in our country. Almost every elected member of Congress campaigns on being “for the working class”; the actions of many today demonstrated they are for the corporate class,” BRS said. “The dereliction of duty and inability to hold corporations accountable for a lack of good faith to their employees will not be forgotten.”

BRS says their work on the matter will continue, and they will “not be silenced.”

Tom Vilsack, USDA secretary, echoed each response, saying the rail system and workers both deserve protections.

“Our work doesn’t stop here. This Administration will continue to make progress on fostering economic growth and strengthening supply chains, and supporting workers who deserve protections in the workplace.”

According to Biden’s economic advisors, as many as 765,000 Americans — many union workers themselves — would have been put out of work in the first two weeks of shutdowns.

More on rail:

Congress “Likely” to Pass a Rail Deal this Week, According to Soy Transportation Coalition’s Steenhoek
Rail Strike Averted Until Dec. 4, Saving U.S. $2 Billion Per Day

Rail Strike Averted Until Dec. 4, Saving U.S. $2 Billion Per Day

Thu, 10 Nov 2022 22:05:45 GMT

A tentative rail labor deal showed promise at the beginning of October, but was rejected by the third largest rail union, amplifying concerns of a strike. However, the strike threat has been held off until Dec. 4.

The National Carriers’ Conference Committee (NCCC) and the Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters (BMWED) have agreed to extend the current cooling off period until at least Dec. 4, according to an announcement Wednesday.

The current period had been set to expire Nov. 19, and the statement issued indicated it “is subject to further extension to maintain alignment, if necessary, with other labor organizations. This extension eliminates the threat of a near-term freight rail service disruption.”

Union leaders are arguing the railroads haven’t done enough to address worker concerns, largely surrounding working conditions and paid time off. Specifically, in the last attempted deal, unions opposed a potential five-year contract that already included:

A 24% raise in wages
$5,000 in bonuses

The Association of American Railroads (AAR) has issued analysis that indicated a rail strike and nationwide freight railroad shutdown could cost $2 billion per day.

Seven of nine unions have ratified the proposed pact and two, including the BMWED and the Brotherhood of Railroad Signalmen, have not. The next votes are scheduled for Nov. 14 and Nov. 21.

More on rail:

Possible U.S. Rail Strike Now Back On the Table
New Demands by One Labor Union Renews Concerns about Possible Railroad Strike in November

Is the U.S. Now Officially in a Recession?

Fri, 28 Oct 2022 20:19:07 GMT

Friday brought mixed news for the economy. While data from the Commerce Department inflation pressures remained high last month, the Labor Department’s Employment Cost Index indicated a slowdown in private-sector wage growth for the third quarter.

Even with a glimmer of hope, the Federal Reserve is still widely expected to bump interest rates another 75 basis points as the Fed works to get inflation under control. And with a recession looming, consumers are already adjusting their spending habits at the meat counter.

“The short answer is yes, we’re seeing consumer behavior change,” says Glynn Tonsor, professor of Ag Economics at Kansas State University who also tracks consumers buying habits through the Meat Demand Monitor.

So, are we in a recession? Tonsor says that’s something you can continue to debate, but it’s more important to watch changes in behaviors versus debating the definition.

“It’s easy to get caught up in the discussion and definition of a recession,” says Tonsor. “I encourage us to hone in on his consumer behavior changing the way you phrase the question and it gets the right way. And price sensitivity, consumers are responding to price stronger than they were a year or two ago. And I think that’s because real wages have declined, and when I say real wages, the cost of living has gone up more than what people are making. So there’s a price squeeze or the financial belt has been tightened in a lot of households.”

Tonsor says meat protein is one of several categories there’s evidence consumers are tightening their belt in their buying decisions.

“We’re seeing some trading down within the protein complex,” adds Tonsor. “Think about going from a bacon product to a ham product, or from a ribeye steaks to a sirloin steak. There’s a lot of examples like that. But the meat demand monitor project at K-State gives us a lot of points on that. And the short answer is yes.”

There’s also a debate on what’s fueling inflation, a factor in the recession debate. The supply chain issues are one, but some also think excessive government spending is fueling the higher prices consumer are seeing.

While the debate on why inflation is so high will continue, Lonnie Hobbs, Jr., a PhD candidate in Ag Economics at Kansas State University says it’s not just one thing aiding the higher costs.

“In terms of the supply chain, we’re seeing these rise in prices because of a variety of factors such as rising transportation costs, rising cost of ingredients, rising costs of the processing that goes along with a lot of these products,” says Hobbs. “We are seeing rising prices in all areas that can at times be good for the farmer [prices they receive], but in terms of consumers, it may alter some of their purchasing decisions.”

The transportation issues aren’t going away either. Low river levels and a looming rail strike in mid-November are two transportation issues that could fuel higher transportation costs. So, will the supply chain transportation issues go away anytime soon?

“In the short term? I will say no, I would see this going on into the next year,” says Hobbs. “I think over time, things will get better, especially as the labor force begins to pick up. But I do think that this is something that farmers should be aware of moving into the new year.”

Possible U.S. Rail Strike Now Back On the Table

Tue, 11 Oct 2022 13:54:35 GMT

A labor strike along U.S. railroads is still a possibility after the third-largest railroad union rejected a tentative labor agreement this week. The agreement had the support of the White House, but without all unions voting in favor of the agreement, a labor strike could still occur in mid-November.

Union leaders are arguing the railroads didn’t do enough to address worker concerns, largely surrounding working conditions and paid time off. Now, both sides will need to return to the bargaining table to avoid a possible strike once again.

The last close call happened just before the September 16th deadline, when a last-minute tentative agreement was struck, preventing a rail strike from taking place on that same date. Now, those labor conversations are back on as the Brotherhood of Maintenance of Way Employes Division Union opposed a potential five-year contract that already included a 24% raise in wages, as well as $5,000 in bonuses.

“The majority of the BMWED membership rejected the tentative national agreement and we recognize and understand that result,” said BMWED president Tony D. Cardwell in a statement. “I trust that railroad management understands that sentiment as well. Railroaders are discouraged and upset with working conditions and compensation and hold their employer in low regard. Railroaders do not feel valued. They resent the fact that management holds no regard for their quality of life, illustrated by their stubborn reluctance to provide a higher quantity of paid time off, especially for sickness. The result of this vote indicates that there is a lot of work to do to establish goodwill and improve the morale that has been broken by the railroads’ executives and Wall Street hedge fund managers.”

Transportation Nightmare

Strike or no strike, one veteran market analyst says rail issues are still severe, and now backlogs on the nation’s rivers due to low river levels mean even more emphasis will be placed on rail at a time when transportation logistics have been dubbed a “nightmare.”

“Well, even if we don’t have a rail strike, the rail is so congested and so problematic,” says Dan Basse of AgResource Company. “Today, it’s not going to make much difference. Rail prices are rising. If you look at the barge market heading to the Mississippi today, it costs one-and-a-half times to get beans to the Gulf as it would to load it and get it to China. It’s crazy what’s going on.”

Sourcing feed was already a problem for livestock producers and grain buyers in the western U.S. Issues nationwide mean everyone is paying more to get the essential grain.

“If you’re in Kansas or the Western Plains, you’re paying $2-over-plus for corn, if you can find it. It’s a problem,” says Basse.

While the third-largest rail labor union rejected the tentative agreement, all 12 unions, which represent nearly 115,000 workers, must ratify their contracts to prevent a rail strike. Four other rail unions approved their agreements with freight railroads.

By Monday midafternoon, the U.S. rail industry had yet to comment on the latest union development.

History of Ongoing Rail Strike Threat

As AgWeb first reported in July, a possible strike has been brewing all summer , with NGFA fearful a strike would occur in the middle of harvest. Fisher says even though a strike is prohibited by law ahead of Friday’s deadline, rail companies are shutting down shipments in advance in order to mitigate potential damages.

“The railroads don’t want to have the cars and equipment out in areas of the country where they can’t protect them very well,” Fisher adds. “So, they’re taking steps to mitigate damages. For our members, they’re looking at essentially not receiving their grain on time and not being able to then ship out the finished products such as ethanol, flour, things of that nature.”

Impact on Farmers

What will it mean for farmers? Max Fisher, NGFA chief economist, says a potential rail strike will have a severe economic impact on agriculture.

“From what I’m being told, we really cannot have the railroad stop even for a minute,” Fisher says. “With the railroads, there’s so much planning involved in every shipment that if we get them off plan, like have all the workers at home and so forth, it’s very hard to get things started again.”

Another potential problem is grain processing facilities and the backlog it could create. Fisher fears some NGFA members will be forced to shut down.

“I think there’s a very good chance we’re going to have shutdowns in the grain industry and at our processing facilities, not to mention the impact on our exports also,” Fisher says.

Railroad Strike Days Away? Here’s What it Means for Agriculture

Thu, 22 Sep 2022 02:56:19 GMT

Nearly 60,000 union rail workers could go on strike starting Friday. The looming strike is despite the majority of unions reaching tentative agreement with the rail companies, but the unions not on board are essential to the operation of the nation’s rail system.

The impending rail strike has been a possibility for months and would be the first in nearly three decades. Despite the Presidential Executive Board (PEB) releasing recommendations as part of the ongoing collective bargaining process, the cooling off period will end Friday, opening the door for a strike to take place.

“As we’re sitting here, nine unions and the railroads have come to agreement on terms. A ninth one is tentative, but it looks like it’s very promising,” says Ken Erikson with S&P Global Commodity Insights. “That leaves us with three unions that need to finish negotiations with the railroads. And those three are the largest ones, representing roughly 50 to 60,000 employees. So, three outstanding, where the clock is ticking very fast. And there’s a lot of concern about you know, what are the final details is going to be the pays understood and a few other things. But it’s a matter about requirements of working on the job and such like that.”

As first reported on Monday , rail companies were already preparing for a possible strike and putting a halt to grain shipments as early as today, according to National Grain and Feed Association (NGFA).

“The railroads don’t want to have the cars and equipment out in areas of the country where they can’t protect them very well,” says Max Fisher, NGFA chief economist. “So, they’re taking steps to mitigate damages. For our members, they’re looking at essentially not receiving their grain on time and not being able to then ship out the finished products such as ethanol, flour, things of that nature.”

The rhetoric between unions and the railroads is also heating up ahead of Friday’s deadline. While the remaining unions say the negotiating process is still ongoing and they are committed to reaching a deal, rail companies say the some are creating false narratives about pay raises and paid time off. One group even accused the nation’s largest railroads of trying to further abuse shippers and gridlock the supply chain in order to extort a contract settlement from rail unions.

“Our Unions remain at the bargaining table and have given the rail carriers a proposal that we would be willing to submit to our members for ratification, but it is the rail carriers that refuse to reach an acceptable agreement,” Jeremy Ferguson, president of SMART Transportation Division and Dennis Pierce, president of Brotherhood Locomotive Engineers and Trainmen said in joint statement. In fact, it was abundantly clear from our negotiations over the past few days that the railroads show no intentions of reaching an agreement with our Unions, but they cannot legally lock out our members until the end of the cooling-off period. Instead, they are locking out their customers beginning on Monday and further harming the supply chain in an effort to provoke congressional action.”

The Association of American Railroads (AAR) claims coverage of the strike in recent days has included false information, specifically that laborers get no sick days or paid time off.

“Moreover, the matters at hand were dealt with summarily by the Biden administration’s hand-picked arbitrators through the ‘Presidential Emergency Board.’ A reminder that the White House has stood by those recommendations, which have served as the basis for nine tentative agreements with labor unions and endorsed by broad swaths of the U.S. economy. The majority of these industry groups have called on Congress to enact the framework by law should parties fail to reach agreements by midnight Thursday,” AAR said in a statement.

What’s the likelihood a strike happens? There are a lot of moving parts, but Erikson says a last-minute deal is still possible.

“I can see where you may get one, maybe two unions that can come together on terms and I think he could get to a point where you have a high percentage over 50%, maybe closer to 60%, if not more, where this is an opportunity to make it known just how important labor is to the railroads, how important labor is to the country, and that there are important things that the unions want to demonstrate that they have as having proper wages, proper respect and proper benefits,” says Erikson. “It’s just maybe an attention getter to make a point.”

The Biden administration on Monday urged railroads and unions to reach a deal to avoid a shutdown of the rail system, saying it would pose “an unacceptable outcome” to the U.S. economy.

Tuesday’s release of inflation data showed core inflation was up not down and CPI did not go down as much as analysts predicted. Erikson points out even if a strike lasts one or two days, it will have a severe economic impact, but rising wages will also be passed on to those not at the negotiating table.

“Today’s inflation numbers are terrible,” says Erikson. “And this would be making the point that look, we got to preserve these wages somehow. And that could be backfire, because if you get higher wages, and someone’s going to pay that freight, and that’s the consumer for farmers, its basis, it’s just weaken basis for the consumer and retail goods, it’s higher prices somewhere along the line. And that may be the adverse effect to this is that Be careful what you read what you request, it may come back to hurt everybody and that’s the risk that’s being run here.”

Agricultural Impact of Railroad Strike

NGFA says some processors will be forced to temporarily shut down, no matter how long a rail strike lasts, and Erikson says it will be weeks to get the system back up and running, a system already facing severe backlogs. .

Farm Journal Washington Correspondent Jim Wiesemeyer is also looking into the impact it could have on farmers. In his daily report, Wiesemeyer focused on the possible rail strike, breaking down the impact by commodity:

Cotton: “There is a lot of old crop that needs to ship via rail,” said Jordan Lea, senior trader at Deca Global LLC, a textile supplier and former president of the American Cotton Shippers Association. “The whole logistical system is still too fragile from backlogs and Covid. We do not need this hiccup right now.”

Livestock and poultry: “A shutdown would quickly cause additional problems and force producers to make difficult decisions regarding the viability of their animals,” said NGFA.

Biofuels: “Processing and biofuels plants may have to scale back production due to an inability to both move in commodities for processing and move out finished products for consumption,” the NGFA noted.

Food industry: “Failure to finalize an agreement before the Sept. 16 deadline will hurt U.S. consumers and imperil the availability, affordability and accessibility of everyday essential products,” the Consumer Brands Association, which represents manufacturers of food, beverage, household and personal care products, said in a letter (link) to President Biden last week.

Congress Can Step In

While Congress can intervene, NGFA says that is a last resort, as that could become complicated. Yet, NGFA was on Capitol Hill this week talking to legislators about the importance of stepping in if a strike does take place.

“This is a political football, you know, and I’m sure that Congress really doesn’t want to be in the middle of this, no doubt, they want the two parties to come to an agreement,” says Fisher. “we’re trying to convince the rail carriers and the rail labor for the last two unions to come to an agreement, we don’t want to have to depend on Congress to solve this. That’s kind of our, our last, last line of defense, so to speak.”

Shipping Container Rates Down 63%, But We're a Long Way From Back to Normal Operations

Thu, 22 Sep 2022 02:56:19 GMT

Of the many supply chain headaches brought on by the COVID-19 pandemic in 2020, shipping container backlogs were arguably one of the worst.

A record 109 bottlenecked ships were documented by the Marine Exchange of Southern California & Vessel Traffic Service Los Angeles and Long Beach in January 2022.

As of last Monday, that ship count sat at eight—an all-time low.

L.A. Port officials are now asking for ships that diverted around the congestion to return.

But has the bottleneck issue been resolved, or moved somewhere else? The East Coast may now be carrying the burden.

East and South Coast Ports Status

Josh Brazil, vice president of supply chain insights at Project44, says the Port of Savannah, the Gulf Coast Port of Houston and the Port Authority of New York and New Jersey have taken on the west coast’s port congestion due to two reasons:

1. Strong demand
2. Potential for a labor strike

“There’s a lot to lose in the west, but the ports have mitigated a bit of that risk by pushing shipments towards the East Coast,” Brazil says. “When you combine that slight shift with some of the ground factors like the Port of Savannah’s closed births due to ongoing construction, or overall lack of capacity to hand incoming ships, it’s puts at least Savannah, Houston and New York on their heels.”

USDA announced pop-up ports along the Pacific coastline in February to ease port overflow. Brazil says the pop-up sites did work to ease port congestion and may be necessary in the East and South because “it’s not only the infrastructure, but also the port space” that’s available.

Not only have port congestion issues evolved, so have container shipment costs.

Container Costs Plummet

During the COVID-19 pandemic, container shipping companies were notorious for coming into U.S. ports with goods and leaving with empty containers, namely, in the highly profitable trade lanes like the Trans-Pacific trade lane from China to the U.S.

Numerous congressmen felt the empty container trend wouldn’t stop until legislation was put into place, but policy was already on its way when Sen. Amy Klobuchar introduced the Ocean Shipping Reform Act in December 2021.

The bill passed through Congress on June 13, 2022, putting an end to empty shippers while driving the extremely high cost of containers down.

“From China to the U.S. West Coast, if we compare the beginning of January 2022 to now, the container cost rate has come down 63 percent,” says Brazil. “It used to be about $14,000 and now sits at $5,250. On the East Coast, it’s come down 42 percent from a high of $16,000 in January to $9215 today.”

U.S. shipment and supply chain issues don’t stop short of coastlines. A U.S. rail union strike looked to hit the tracks this week, breaking the supply chain just before the busy harvest hour. However, some hope came this month.

Container Ships Run into Rail Roadblocks

In early September, a tentative labor deal was reached by three of the 12 rail unions and large U.S. freight railroads. These unions represent more than 15,000 workers, or 11% of the 140,000 strong rail workforces.

Class one railroads and its worker struck a five-year labor contract that will provide:

• Wage increases
• Expanded health coverage

Mike Steenhoek, Soy Transportation Coalition executive director, says his team hopes the new deal will push rail labor full steam ahead.

“Our hope is that, moving forward, this will provide some real momentum for the other remaining unions to come to an agreement,” he says. “Ultimately we want to make sure that rail service is improving, not taking a step back.”

As for the remaining 9 rail unions and large freight railroads, an agreement wasn’t struck until Thursday —only a day before the potential strike on September 16.

The deal, impacting 115,000 rail workers, will provide:

• A 24% wage increase for the remaining life of the contract—2020 to 2024
• Provide improved working conditions

The last widespread rail strike occurred in the 1990s and only lasted one -to-two days. The effects, however, went on much longer. Industry professionals say the case will likely be the same in 2022.

Rail Labor Trouble Ahead

Max Fischer, National Grain and Feed Association’s chief economist, says the settlement won’t solder the rail supply chain back together over night.

“I think we’ll still have problems with winter,” he says. “It may be a year before we start to have more normal rail service.”

According to the Association of American Railroads, any nationwide rail service interruption would “dramatically” disrupt economic output, costing an estimated $2 billion each day.

More on shipping:
Rail Strike Averted: Tentative Agreement Reached Between Railroads and Unions Comes on the Eve of Harvest
Will The USDA Pop-Up Site Solve The Clogged Ports Issue?
Ocean Shipping Reform Bill on its Way to the President

The U.S. is Now 30 Days Away From a Possible Railroad Labor Strike

Thu, 18 Aug 2022 01:50:01 GMT

Delays on U.S. railroads have been a growing problem for shipping agricultural goods all year. Labor discussions are ongoing and with the grain industry concerned about a possible labor stoppage in mid-September , which would be the height of Midwest harvest.

Just this week, the White House-appointed Presidential Emergency Board (PEB) released a recommendation as part of the ongoing collective bargaining process. Both sides have 30 days to accept those recommendations. If the two parties don’t agree, then rail workers are allowed to go on strike as of Sept. 16.

Max Fisher, Chief Economist, National Grain and Feed Association (NGFA) has been watching the situation closely. He says the biggest takeaway from the Emergency Board’s recommendation is a 24% wage increase over five years for rail labor.

“You may be asking, ‘Where does that stand with respect to where the two sides were at?’ The rail carriers were at 17% for what they were offering, and rail labor, what they were requesting, was 31%. So, 24% is right in between those two figures,” says Fisher.

Congress Holds the Power to Intervene

While workers can legally go on strike starting Sept. 16 if they don’t choose to adopt the board’s recommendations, Congress can intervene if workers decide to strike Sept. 16.

“If history repeats itself, the last time we had a stoppage was in the early 1990s,” he says. “And I believe it lasted one day, maybe two days, before Congress passed a bill prohibiting a lockout or strike. Essentially, the two sides had to then go back to work on reaching agreement. So, Congress has a lot of power here. We would like to think they’re going to exercise it, and we’re certainly going to encourage them to exercise it because stopping the railroads would be very, very bad for the agricultural economy.”

Fisher says the railroads have been working to hire more workers, but considering the current labor shortage and shipping delays, he expects rail delays to last another year. The rail delays have been so bad, some feed users report being just days away from running out of feed . Those delays could be inevitable even if a strike is averted in September.

Trouble Shipping Grain And Feed Via Rail Far From Over, Concerns Now Growing About Possible Worker Strike At Harvest

“Obviously, it could get worse if the trains were just to completely stop. But the service right now, even without a stop, is just not the best,” says Fisher. “There’s still a lot of delays as far as bringing rail cars to facilities, pulling them and delivering them. So, now the grain industry is still not in a good spot with respect to rail transportation.”

Tense Labor Negotiations

The April hearing in front of the STB gave a hint to how tense those labor negotiations could continue to be. Rail carriers pointed out how severely impacted they’ve been from what’s been dubbed the “Great Resignation,” and the issues getting labor back up to speed. Certain rail carriers also outlined the plans in place to get labor back to necessary levels to operate efficiently and smoothly.

However, rail workers place blame on the railroads, saying there’s more to the story. Mark Wallace, locomotive engineer, and vice president of Brotherhood of Locomotive Engineers and Trainmen (BLET), North America’s oldest rail labor union, testified during the STB hearing in April.

“Since 1984, 40 railroads have been reduced to seven class one carriers, now largely controlled by speculators and hedge fund investors,” he stated. “This culture of profits over safety, customer service and the lives of railroad workers, is now exposed as this network fails on a daily basis.”

Union Pacific, which is also part of the labor negotiations between rail workers and freight railroads over a new labor contract, signaled in July that the two sides were still far from reaching an agreement.

“I wish we could have gotten an agreement earlier in the process,” Union Pacific’s Lance Fritz said. “But the railroads and the union leadership are pretty far apart right now in terms of what we think is an appropriate settlement on wages.”

The talks involve nearly 115,000 union rail workers and more than 30 railroads and started in 2020.

BNSF Train Derails This Week

A BNSF train derailed between Hereford, Texas, and Dawn, Texas, early Wednesday morning. While the cause is still unknown, on-the-ground reports say pieces of the track were scattered around where the rail cars derailed and piled up.

Photos showed the aftermath of the accident. Sources from around the Hereford area describe that part of the rail line as extremely busy, with a train passing through that spot nearly every 15 minutes.

“BNSF can confirm that at approximately 5 a.m. CT, an eastbound intermodal freight train derailed 17 cars northeast of Hereford, Texas,” a BNSF communications spokesperson told Farm Journal. “There were no injuries to the train crew. Our teams are on site with equipment to clear the area and restore the track. The estimated time to reopen our first main train is mid-afternoon. The cause of the derailment is under investigation.”

@tyne_agtv Train derailment outside of Hereford, Texas early this morning. BNSF confirmed 17 cars derailed and says cause is under investigation. #train #derailment #railroad #agriculture #supplychainissues ♬ Oh No - Kreepa

Maps of BNSF routes shows that specific line runs as far west as California, evening leading the Port of Los Angeles, a port known as one of the world’s busiest seaports and a leading gateway for international trade in the Western Hemisphere.

Derailments have been a concern for grain shipping industry experts, especially considering the high heat in the South and Southwest this year. The triple digit heat could cause railways to buckle.

Trouble Shipping Grain And Feed Via Rail Far From Over, Concerns Now Growing About Possible Worker Strike At Harvest

Mon, 18 Jul 2022 20:00:15 GMT

Rail retains a vital role in the transportation of goods across the U.S., but this year, the 140,000- miles worth of railroad tracks across the country haven’t been immune to the supply chain chaos plaguing U.S. transportation sectors.

Now, a potential stoppage on the nation’s railways this fall is spurring concern, even after President Joe Biden signed an executive order Sunday to keep the nation’s rail traffic on track.

“What I’m hearing from our members is fewer equipment issues,” says Mike Seyfert, president and CEO of the National Feed and Grain Association (NFGA) . “The equipment and engines don’t seem to be breaking down, but the amount of time it’s taken to get the trains and the reliability of receiving them have.”

With more than 1,000 members today, NFGA represents everything from grain buyers and handlers to transportation companies who ship the grain.

“It seems to be most severe right now in the West, or for those who are trying to ship west on those lines that are going into the western part of the country,” says Seyfert. “Either for feed purposes, processing purposes, or export purposes to the western side.”

What’s Driving the Issues Shipping Via Rail?

Today’s rail issue centers around labor and the amount of time it’s taking to receive shipments via rail.

“The velocity to deliver trains is getting more and more difficult. You’re having challenges with having enough locomotives in different locations,” says Ken Erikson, senior vice president at S&P Global Fuels, Chemicals and Resource Solutions Group . “You have challenges with crews who may have been hit by weather, who may be hit by diversions, some of the rail crews timeout or they don’t have enough locomotive engineers in the right position.”

Eric Wilkey of Arizona Grain, Inc . is seeing the issue firsthand. Area farmers were in the middle of harvest, and Wilkey still hadn’t received the rail cars he needed.

“We’ve got a whole harvest that’s basically been received, and we haven’t been able to ship anything,” Wilkey told U.S. Farm Report at the end of June.

Wilkey says rail cars that were supposed to arrive in early May started to finally trickle in during the first part of July, but that was two months behind schedule.

“We never stopped the farmers from harvesting, so we have created some really large inventories and that has significant cash-flow impacts on us,” adds Wilkey.

Hearing Hints at Complexity of Issue

In April, the Surface Transportation Board (STB) stepped in, holding a hearing to get to the root of the rail issues. The hearing was full of differing opinions and pointed questions.

Just prior to the hearing, Landus Coop, which represents 7,000 farmer-owners in Iowa, submitted testimony saying rail issues meant they were only able to load half the number of shipments necessary, and the backlog meant farmers trying to haul grain to the coop were being turned away. The letter stated:

Landus is only able to load half the rate of shipments necessary today. With 450,000 bushels loaded in each train, this impact multiplies daily.
Farmers trying to haul grain to us today are getting turned away because we cannot make the inventory space for them. This is an important and optimal window of time when farmers must haul remaining old-crop inventory in preparation for harvest.
Disruption to inventory flow has led to increased handling costs and reduced customer service throughout Landus. We are experiencing lost business daily due to the disruption.
Grain bushels are getting “trapped” in pockets of surplus supply, while shipping destinations are experiencing a growing deficit in access to supply.
Our soy processing facility has experienced a 10% decrease in production over the past six months due to rail performance alone. This is in turn further impacting profitability and our ability to access markets where soybean meal is in highest demand.
Trucking is not a viable alternative transportation mode today due to labor shortages.

The letter went on to say “If this situation is not resolved quickly, we risk the potential for livestock producers in California and other states potentially running out of feed.”

Concerns About Labor Issues Growing Worse at Harvest

Rail carriers and unions are in the middle of labor negotiations right now. The collective bargaining process made headlines last week, as Biden had until Sunday, July 17, to create a Presidential Emergency Board (PEB). The move was an essential step in keeping the collective bargaining process on track, as well as keeping the nation’s railways operating.

“We are pleased that President Biden has taken an important step by creating a PEB to help all parties find a reasonable path forward,” says Association of American Railroads (AAR) president and CEO Ian Jefferies. “An agreement that allows both our hardworking employees and the industry to thrive into the future remains possible.”

AAR points out the Railway Labor Act governs collective bargaining for the rail industry, which aims to help parties reach an agreement without work stoppages or disruptions to U.S. freight rail movements.

While a crisis was averted with the president’s executive order, the collective bargaining process is far from over. Now, there are fresh concerns the ongoing labor dispute could come to a head just as harvest arrives in the Midwest this fall.

“Once we get into mid-September, there’s also a risk of some labor issues, even labor stoppage on some of the rail lines,” says Seyfert. “And so getting these things addressed now, and all of us working together before we get particularly into that fall harvest timeframe is essential. We’ve really never been in a situation where a reliable and resilient rail service is more important than it is now.”

Tense Labor Negotiations?

The April hearing in front of the STB gave a hint to just how tense those labor negotiations could continue to be. Rail carriers pointed out just how severely impacted they’ve been from what’s been dubbed the “Great Resignation,” and the issues getting labor back up to speed. Certain rail carriers also outlined the plans in place to get labor back to necessary levels to operate efficiently and smoothly.

However, rail workers place blame on the railroads, saying there’s more to the story. Mark Wallace, locomotive engineer, and vice president of Brotherhood Of Locomotive Engineers and Trainmen (BLET), which is North America’s oldest rail labor union, testified during the STB hearing in April.

“Since 1984, 40 railroads have been reduced to seven class one carriers, now largely controlled by speculators and hedge fund investors,” he stated. “This culture of profits over safety, customer service and the lives of railroad workers is now exposed as this industry is network fails on a daily basis.”

“Now, they signaled to us in meetings publicly and otherwise they are having some success in hiring again and getting crews successfully through training,” says Wilkey. “For the Midwest, there’s a little bit of time, but for us, there’s no time. We’re in harvest right now. And I don’t have time to wait another three months for crews to be trained.”

It’s not just the hearing that hinted toward prolonged trouble with train transportation. Grain handlers like Wilkey says current rail bids point to problems persisting into fall.

“These car values would be somewhere north of $1,000 per car this fall,” says Wilkey. “And so that’s the market sending signals that there’s going to be tightness, there’s going to be concerns.”

Typically, Wilkey says those bids would be around $100 per car.

Congress Urges STB to Take Action

In late June, 51 members of the U.S. House of Representatives signed a letter and sent to the STB regarding issues with the rail system in the U.S.. The letter asked STB to continue to work through the current rail issues with all stakeholders in order to address short-term challenges and find a resolution.

“On behalf of our constituents and farmers around the country, we write regarding poor rail service, which has limited fertilizer shipments, among other essential agricultural inputs and commodities, including grain and feed,” the letter stated.

“At a time when global fertilizer supplies and global crop production are highly disrupted, imposing shipping curtailments on fertilizer inputs and grain, as recently proposed by Union Pacific, will cause major supply chain disruptions, hurt American farmers, and exacerbate the food crisis considerably. We must ensure critical commodities reach essential industries and workers, such as America’s farmers, who are essential to feeding our nation and the world. Food is a national security issue, and we must treat it as such,” the 51 members wrote in the letter.

The Senate sent a similar letter to the STB in May.

Wait Times Cause Economic Pain

As the labor battle plays out, the short-term issues are causing grain handlers economic pain.

“There have been significant economic impacts,” says Wikley. “I would estimate since the first of the year, today, there’s been in the order of $100 million paid out by the industry to solve this logistics problem that’s developed. And that’s just outside of the bounds of normal.”

The battle over labor seems to have a long tail, as those in the grain industry try to work together to make sure this major shipping vein doesn’t buckle.

Could Rail Workers Now Strike Starting Monday As Concerns Of a Feed Shortage Continue In the West?

Thu, 14 Jul 2022 20:42:19 GMT

Continued issues shipping feed and other products via rail are growing more severe. Feed users already report being just days away from running out of feed, and as labor negotiations continue between the railroads and unions, a weekend deadline looms to keep the collective bargaining process on track.

President Joe Biden has until Sunday, July 17, to appoint a Presidential Emergency Board (PEB) to investigate and make recommendations for settlement. If the Sunday deadline isn’t met, rail labor has already voted to go on strike. However, the Association of American Railroads told AgWeb on Wednesday that it’s widely expected there will be an appointment of a PEB by the deadline.

As first reported last month, rail bottlenecks in the U.S. are not improving for those in need of grain in the West. Feed users in California and the Southwest are having issues sourcing grain, with some reporting they are paying $3 over the CBOT price to secure grain by truck. Not only are feed users on the brink of running out of grain, but there are also concerns the rail issues could grow worse during harvest this fall.

Looming Rail Strike?

The labor negotiations, which cover 115,000 workers according to Reuters, has been in what they call a 30-day cooling off period. The White House has until Sunday, July 17, to appoint a PEB.

Sources in the grain industry say if President Biden doesn’t appoint the PEB, then railroad labor is authorized to strike. The decision to go on strike is already in motion, as rail labor already voted to strike on Monday in the event Biden does not appoint a PEB.

A White House official is quoted as saying the administration “is going through the standard process that has been used in the past when considering a PEB.”

A strike isn’t inevitable, as the AAR says it is widely expected that there will be an appointment of a PEB. The AAR says it’s important to note there there are a number of steps left before a work stoppage would even be possible under the law.

The Issue in Storing and Transporting Grain

Eric Wilkey, president of Arizona Grain, Inc., saw the issues starting firsthand this spring. Rail cars that were scheduled to arrive in May, as area wheat harvest was gearing up, didn’t actually start arriving until early July. As a result, wheat supplies piled up at their facilities.

“Now, they’ve [railroads] signaled to us in meetings publicly and otherwise, that they are having some success in hiring again and getting crews successfully through training,” he says. “For us, there’s no time as we’re in harvest right now. And I don’t have time to wait another three months for crews to be trained.”

Just prior to the STB hearing in April, Landus Coop, representing 7,000 farmer owners in Iowa, submitted written testimony saying rail issues meant they were only able to load half the rate of shipments necessary, and the backlog meant farmers trying to haul grain to the coop were being turned away.

“If this slow down continues at this rate we risk not having space for the 2022 harvest for our 7,000 farmer members by an estimated total bushels of 15,750,000! The market impact of the additional cost of other freight shortages and an inverse grain market add considerable risk and uncertainty in our business. This comes at a time when we are also experiencing the strain of trucking shortages. The impact of these delays is compounding and causing increasing concern the closer we get to harvest season,” the letter stated.

Landus also said if the situation is not resolved quickly, the industry risks:

- The potential for livestock producers in California and other states potentially running out of feed.

- Ethanol plants and soybean crush facilities potentially not having the ability to ship product.

- Farmers unable to deliver old crop grain to elevators or ethanol plants, which will place enormous pressure on harvest success this fall, further disrupting the food and fuel supply chains in the months ahead.

- U.S. grain exporters will be not be positioned favorably to compete in global marketplace.

Foster Farms, the largest chicken producer in the western U.S., asked federal regulators to issue an emergency service order last week that would direct Union Pacific to prioritize corn shipments that thousands of dairy cattle and millions of chickens and turkeys depend upon.

”The point has been reached when millions of chickens will be killed and other livestock will suffer because of UP’s service failures,” Foster Farms wrote in its request to the Surface Transportation Board in June.

Livestock Producers Report Being Just Days Away From Running Out of Feed Due to Shipping Rail Issues

Tue, 12 Jul 2022 20:46:53 GMT

Rail bottlenecks in the U.S. are not improving, and in some cases, growing more severe. Feed users in California and the Southwest are having issues sourcing grain, with some reporting they are paying $3 over the CBOT price to secure grain by truck. Not only are feed users on the brink of running out of grain, but there are also concerns the rail issues could grow worse during harvest this fall.

The National Grain and Feed Association (NGFA) says their members have been seeing issues since late winter and early spring, which then caused the Surface Transportation Board (STB) to hold a hearing in August. While the industry thought the issues would improve by summer, labor issues are not getting better.

“What I’m hearing from our members is fewer equipment issues and that the equipment and engines seem to be not breaking down, but the train times - the amount of time it’s taking to get the trains - and the reliability of receiving them is still quite a problem in in quite a few areas of the country,” says Mike Seyfert, President and CEO of NGFA.

Fears of Running Out of Feed

According to Trains.com , Foster Farms, the largest chicken producer in the western U.S., asked federal regulators to issue an emergency service order last week that would direct Union Pacific to prioritize corn shipments that thousands of dairy cattle and millions of chickens and turkeys depend upon.

”The point has been reached when millions of chickens will be killed and other livestock will suffer because of UP’s service failures,” Foster Farms wrote in its request to the Surface Transportation Board this week .

Seyfert says the emergency order shows the seriousness of the issue.

“At times in in the past several months, we have heard from more than one member that has had severe difficulty getting feed, sometimes being within several hours of being short,” says Seyfert.

While a combination of weather, supply chain issues and other factors are creating the severe scenario, the main issue seems to revolve around labor. According to NGFA, railroads were already down about 25% in staffing prior to the COVID-19 pandemic. Then, problems during the pandemic only exacerbated the labor issue.

Ken Erikson, senior vice president at S&P Global Fuels, Chemicals and Resource Solutions Group, says the training required to bring employees back on the railroad is something that takes time, similar to what airlines are experiencing with pilots and other staff.

“The railroads had on a mandated requirement, instituted position railroad systems out there for precision scheduled railroads, part of the requirements to meet for the federal government,” says Erkison. “So, they thought they didn’t need as much crews if they can automate some things or be able to have greater visibility and trains. Well, the reality is they got so far behind they had furloughed a lot of crew members. And you just can’t bring crews back overnight without adequate training and to bring equipment back that’s offline to get a condition again. These things take long lead times.”

Congress Urges STB to Take Action

This week, 51 members of the U.S. House of Representatives signed a letter and sent to the STB regarding issues with the rail system in the U.S.. The letter asked STB to continue to work through the current rail issues with all stakeholders in order to address short-term challenges and find a resolution.

“On behalf of our constituents and farmers around the country, we write regarding poor rail service, which has limited fertilizer shipments, among other essential agricultural inputs and commodities, including grain and feed,” the letter stated.

“At a time when global fertilizer supplies and global crop production are highly disrupted, imposing shipping curtailments on fertilizer inputs and grain, as recently proposed by Union Pacific, will cause major supply chain disruptions, hurt American farmers, and exacerbate the food crisis considerably. We must ensure critical commodities reach essential industries and workers, such as America’s farmers, who are essential to feeding our nation and the world. Food is a national security issue, and we must treat it as such,” the 51 members wrote in the letter.

The Senate sent a similar letter to the STB in May.

More Issues Due to Labor Discussions/Disputes?

Another issue with labor are union and other labor discussions and disputes. Erikson points out the International Longshore and Warehouse Contract with Pacific Maritime Association expires Friday, July 1. Erikson says the two parties have been negotiating and committed to stay working, there could be other ripple effects.

“They’ve committed to stay working, but what we’ve seen as the diversion of cargo moving to the West Coast or to the U.S. Center Gulf, areas that move a lot of cargo, but also you have requirements and equipment demand to other regions that hasn’t been there. So now you move the problem elsewhere,” says Erikson.

Ahead of Friday’s expiration, the L.A. port chief sees no disruptions on eve of contract lapsing. Farm Journal Washington correspondent Jim Wiesemeyer reports the head of the US’ busiest port said he doesn’t foresee strikes at about 30 West Coast maritime hubs even as the labor contract for 22,000 dockworkers is about to lapse without a new deal. “Anything’s possible, but it will not happen,” Port of Los Angeles Executive Director Gene Seroka said Wednesday.

The labor issues could be far from over, as the four major rail lines are in the middle of a labor dispute with the unions. With the timeline on the table today, there are concerns those issue could grow more severe and possibly cause even more rail issues during the fall months, which is a busy time with harvest.

“They’re currently in a 30 day cooling off period, where they’re no longer working on arbitration,” Seyfert explains. “There’s some actions the President can take in mid-July to appoint a board, which can then make some recommendations that can be acted on. There’s 30 days there. Then, there’s 30 days for the railroads and in the labor to work together to determine to accept or not accept that.

Once we get into mid-September, there’s also a risk of some labor issues, even labor stoppage on some of the rail lines. And so getting these things addressed now and all of us working together before we get particularly into that fall harvest, where we’ve really never been in a situation where a reliable and resilient rail service is more important than it is.”

Seyfert says there have been recommendations made to the Surface Transportation Board (STB) regarding more transparent reporting by the railroad, as well as a request for railroads to submit service plans. There are also additional steps Congress could take to help resolve a portion of the rail bottlenecks.

Biden to Call on Congress to Suspend Gas and Diesel Tax This Summer

Wed, 22 Jun 2022 14:04:50 GMT

President Biden is expected to call on Congress to suspend the federal gas and diesel taxes for the next three months, the latest effort by the White House to provide relief to Americans struggling with record-high gasoline and diesel prices. The move is contingent on legislative action, which would temporarily lift the 18.3 cents tax per gallon on gasoline and 24 cents tax per gallon on diesel during the summer months.

The three-month timeframe was specifically to address the surging gas demand during the summer months when travel increases. In the longer term, however, a Biden administration official acknowledged the revenues from the tax are a vital source of infrastructure funding.

Biden will lay out the proposal in a speech from the White House this afternoon when he will also call on states to suspend their gas taxes or provide rebates or other forms of relief, the official said. Additionally, Biden is expected to call on oil refinery companies to take steps to boost production.

Biden will also ask Congress to replenish the Highway Trust Fund, which is supported by gas taxes, with other revenue to make it “whole” amid a gas tax suspension. The White House estimates it would take about $10 billion to do so. That may be a way to garner some additional Democratic votes for the gas and diesel tax suspension.

Energy Secretary Jennifer Granholm is separately holding a meeting with oil executives on Thursday to discuss ways to reduce gasoline and diesel prices, after Biden sent a letter to seven major companies demanding they take action to help lower costs for consumers. Executives from Exxon Mobil, Shell, Valero, Marathon, Phillips 66, BP and Chevron are slated to attend the meeting, the White House said.

Impact: When some states opted to suspend their own fuel taxes in the past, sometimes prices came back higher, according to a study released last week from the Wharton School at the University of Pennsylvania.

American drivers are starting to buy less gasoline as they feel the economic burden of record prices that continue to hover near $5 a gallon. In the first full week of June, gasoline sales at U.S. stations were down about 8.2% compared with the same week last year — the 14th consecutive week that sales have lagged behind 2021 levels, according to surveys by energy-data provider OPIS. In the week ended June 10, the Energy Information Administration’s measure of implied demand — an estimate of products supplied to consumers — declined by roughly 110,000 barrels a day from the prior week, to about 9.1 million barrels a day. That figure is down from about 9.4 million barrels a day the same time last year.

The WSJreports ( link ) that drivers have begun consolidating trips or filling up their tanks with only as much fuel as they need to get by for a few days. Some are carpooling or taking mass transit, while others are working from the office for fewer days each week.

John Phipps: Can the Push for More Solar Energy and Farmland Coexist?

Fri, 20 May 2022 11:40:51 GMT

From Kody Light in Gaston, Indiana concerning farmland loss:

“What about all the Industrial Scale Solar Projects being built and proposed? We have not even begun to count farmland (900 acre + tracts) that has been or will be lost to Industrial Scale Solar! That land we all know will NEVER be farmed again. Want to say it will be farmed again? Show me a fully successful decommissioned project in the US that is being farmed! What will the math look like in the next 5 to 10 years with vast tracts of land being destroyed by industrial solar so a few large companies and landowners can profit huge!”

This is another common misperception about size. There have been multiple calculations for exactly this problem. The most conservative estimate of the area needed in 22,000 square miles or 14 million acres to provide 100% of our electricity.

This is for 14% efficient panels, but current panels are already over 20% which would sharply reduce the number. Generating all power from only farmland would use 1.5% of farmland, or about 4% of cropland.

For perspective, we have 22 million acres in CRP. My guess is less than a few percent will be on farmland for several reasons. First, the most optimistic projection is 50% by 2050. Our major crop production areas are not the best place to put industrial solar – the Southwest is, by far. Installations need to be reasonably close to hi-voltage transmission lines and substations, normally less than 2 miles. About 20% of solar installation are residential – roofs. It is easier and cheaper to site solar arrays on non-farmland, like deserts.

There is no government involvement in acquiring energy sites. It is done by agreement with landowners and energy developers, not imminent domain, or government seizure. Consequently, much of the outrage felt by farmers arises from not owning the land.

As for ground never being farmed again, I could not find an industrial farmland array that has been decommissioned, but we learned from nuclear power those expenses must be set aside at construction. Virtually all decommissioned solar installations have been industrial rooftops and residences.

Finally, while a tiny number of landowners do profit handsomely, it is a right of ownership. The area involved cannot be remotely described as “vast”. It’s a large country; there’s room for solar.

President Biden likely to address War, Food and Fuel Costs, Ocean Shipping Reform

Tue, 01 Mar 2022 22:26:27 GMT

President Joe Biden will give his first State of the Union address Tuesday evening, and it likely won’t be the speech he and his staff had anticipated giving even a week ago.

USDA Secretary Tom Vilsack said it will be a difficult address for Biden to give because of Russia’s invasion of Ukraine.

“Our thoughts and prayers are extended to those brave people (in Ukraine) who are fighting fiercely against the bully that’s trying to take over their country,” Vilsack said during a discussion with AgriTalk Host Chip Flory on Tuesday afternoon.

Earlier on Tuesday, Biden authorized a decision to release 30 million barrels of oil from the Strategic Petroleum Reserve. Much of that decision, Vilsack said, was in response to the war in the Ukraine. However, the decision also was made in part to try and address the prices Americans are paying for fuel.

“There’s no question the president is cognizant of the higher prices American farmers and families are paying right now at the pump,” Vilsack said.

He also referenced Biden’s decision to authorize the USDA to provide assistance to the biofuel industry and expand the infrastructure for higher blends as an effort to stem higher fuel prices.

“Remember, we’re putting $100 million dollars on the table for E15 expansion and higher blends in the country,” Vilsack said. “It’s why (Biden) basically signed off on the EPA providing record levels of biofuels in 2022. Whether it’s in the speech tonight or not, let’s just make sure we look at the entire picture here, because it’s a pretty significant one.”

When Flory asked whether the president would address the Department of Justice’s investigation into the meatpacking industry and cattle market prices tonight, Vilsack demurred.

“You know, that’s being pretty closely held, as all investigations are,” he told Flory.

Broad-Ranging Topics

Additional topics Biden is likely to address in the State of the Union range from climate change to infrastructure improvements, health care, and child-care costs.

Vilsack reminded AgriTalk listeners that the U.S. has had a growing economy in the past year. “We’ve had the fastest job growth in history; we’ve had the fastest economic growth of the country in 40 years. Let’s not forget that,” he said.

When Flory asked whether there will be any surprises in the speech, Vilsack replied, “Well, see if the president mentions anything about ocean shipments and references actions by the Department of Justice, the Maritime Commission, directed at ocean shippers.

“That may not be something that people would normally think about,” Vilsack continued. “But given the fact that we’ve had so much difficulty in terms of getting things to and from the United States, that has exacerbated the supply chain challenges that often result in higher costs.”

President Biden’s address is slated for 9 p.m. Eastern on Tuesday.

To hear the complete discussion between Secretary Vilsack and Flory on AgriTalk, listen here:

Will The USDA Pop-Up Site Solve The Clogged Ports Issue?

Wed, 02 Feb 2022 20:52:54 GMT

Clogged ports amassed with shipping container vessels have captured news headlines since COVID-19 slammed the global supply chain.

Earlier this week, USDA announced a partnership with the Port of Oakland to ease congested ports and supply chain issues through a 25-acre pop-up site dedicated to agricultural companies for container filling purposes.

Following the pop-up announcement, various politicians have debated whether it will add further headache or relief.

Empty Opportunities

Rep. John Garamendi (D-Calif.) says the USDA partnership with the Port of Oakland “isn’t going to solve the problem” because shippers deliver product to the U.S. and leave ports with empty containers. He says ocean carriers currently have an exemption from antitrust laws that will continue to allow them to leave ports with empty containers “until there is a law in place that says you can’t do it.”

USDA Secretary Tom Vilsack responded saying his department’s efforts in the partnership are “not the only solution, but an important first step.” He says his work in communicating with ocean carriers has brought three major shipping companies back to the Port of Oakland, and he plans the same for the Ports of L.A. and Long Beach.

Pete Buttigieg, U.S. transportation secretary says the partnership will help American farmers and agricultural producers move their product to market “while also making better use of empty containers that are causing congestion at the ports.”

Ownership

According to White House Ports Czar John Porcari, only 2% of the global shipping market is U.S. flagged vessels. The three largest shipping companies running through California ports hail from China, Taiwan and Korea.

Garamendi sees the congested ports as international trade issue that requires the U.S. to put pressure on foreign countries. He says the U.S. Department of State has been in contact with these foreign countries, yet the port congestion has only expanded from 40% congestion to 70%.

Vilsack says his administration wants to do more for the port but hasn’t received a budget from the government to carry out further action. Regarding the pop-up, his team plans to use $5 million in funds from the Commodity Credit Corporation to:

• Pay 60% of the startup cost
• Provide pre-cool refrigerated shipping containers for perishables
• Offer $125 subsidy to offset logistic costs of moving containers to the pop-up

Weighing the Cost

Adjustments to truck-carrying capacity has been heavily debated as a solution to ports. Truck size and weight are established at the state level, with federal oversight.

Porcari says he has an ongoing discussion with the Federal Motor Carrier Safety Administration about increasing truck carrying capacity.

“This is not just a short-term issue related to the difficulties in exporting right now,” says Porcari. “This is a perennial issue that has be tackled in our infrastructure to accommodate those larger weights.”

Vilsack echoed Porcari saying ports and truck capacity are an “interesting” issue when considering the bipartisan infrastructure bill. He says as bridges and roads are repaired across the U.S., they can be strengthened to handle more weight and offer “greater resilience and efficiency in the long term.”

Read more:

Dissecting Congress' $1.2T Infrastructure Plan, What's In It For Agriculture?

Wed, 10 Nov 2021 15:45:03 GMT

After months of infrastructure debate and setbacks, compromise spurred the House of Representatives to pass the Senate’s infrastructure bill . With a key vote of 228-206, the “ Infrastructure, Investment and Jobs Act” heads to President Biden’s desk for his signature.

The bill was passed by the Senate nearly three months prior, with the Senate cast a 69-30 vote on August 10, 2021.

According to Pro Farmer Washington Correspondent Jim Wiesemeyer, the bill contains $550 billion in new spending that will take place over the next five years. Part of that funding will be dedicated to roads, bridges and rail, as well as expanding electric vehicle charging stations. Another big piece of the legislation that could impact rural America is the broadband piece of the package.

Solving Supply Chain Challenges?

But for one transportation guru within agriculture, this could also help ease some of the supply chain constraints crippling agriculture.

“The supply chain challenges over the past year have highlighted the reality that we can get supply right, and we can get demand right, but if we do not get infrastructure right, we, as an industry and as a broader economy, will not flourish,” says Mike Steenhoek, Executive Director of the Soy Transportation Coalition (STC). “In addition to the overall stress confronting our global supply chain, a number of specific disruptions – Hurricane Ida, the Suez Canal, the I-40 bridge near Memphis, the Colonial Pipeline, etc. – have provided a vivid reminder that if one of our critical junctures goes awry for any number of reasons, the consequences to the broader economy can be profound.”

According to the American Soybean Association (ASA) , the legislation includes provisions to address truck driver shortages, including hours-of-service changes.

While the topline items in the bill sound packed with funds to help the United States’ infrastructure, what’s in it for agriculture?

Steenhoek says the biggest piece will be mending a problem that was apparent even before the supply chain challenges. He says crumbling infrastructure within agriculture, including dated locks and dams, could become an even bigger issue for getting exports loaded and shipped.

“A number of the key provisions of the bill – specifically the $110 billion in funding for roads and bridges and the $17 billion for ports and waterways – will clearly enhance the competitiveness of U.S. agriculture,” adds Steenhoek.

According to the Soy Transportation Coalition, the $548 in additional spending will be combined with existing baseline and will amount to $944 billion over five years. But when you extend that over eight years, he says the tally becomes $1.2 trillion.

STC broke down the funding that will impact agriculture as:

Transportation Categories ($284 billion; 52% of new spending):

Roads, bridges, and major projects: $110 billion
- Includes $40 billion for bridge repair, replacement, and rehabilitation
Passenger & freight rail: $66 billion

Public transit: $39 billion
Airports: $25 billion
Ports and waterways: $17 billion
Safety: $11 billion
Electric vehicle infrastructure: $7.5 billion
Electric/zero emission buses: $5 billion
Electric/zero emission ferries: $2.5 billion
Reconnecting communities: $1 billion

Other Categories ($256 billion; 48% of new spending)

Electric and power infrastructure: $65 billion
High-speed internet: $65 billion
Clean drinking water: $55 billion
Resilience and western water infrastructure: $50 billion
Environmental remediation: $21 billion

Additionally, Steenhoek says there’s a pilot program introduced by Sen. Mike Rounds (R-SD) that could help fuel the use of soybeans in construction and other projects.

Another element Washington watchers are bringing to light–a foreign freight car ban.

Wiesemeyer reported on Monday that buried in the plan is a foreign freight car ban that will likely catch China’s attention.

“The ban would effectively apply to freight cars manufactured by China,” reported Wiesemeyer. “Freight cars couldn’t have more than 20% of such content one year after the department issues the new regulations. The maximum would drop to 15% three years after regulations are issued.”

Wiesemeyer says manufacturers could be fined between $100,000 to $250,000 for each freight car that’s in violation. The Transportation Department could prohibit repeat violators from providing additional freight cars for operation on the U.S. freight railroad system. Manufacturers would also have to certify that they meet the requirements annually.

How will the federal government pay for the new plan?

Wiesemeyer says it will come from several different areas.

“The five-year spending package will be paid for by tapping $210 billion in unspent Covid-19 relief and $53 billion in unemployment insurance aid, which some states have halted, along with an array of smaller pots of money, like petroleum reserve sales and spectrum auctions for 5G services,” reports Wiesemeyer. “However, it will add $256 billion in projected deficits over 10 years, according to the Congressional Budget Office.”

What’s Next?

While the House Democrats scored a victory with the passage of the long-awaited infrastructure plan, there are still some major ticket that remain as unfinished business for the administration. The largest may be the highly debated Build Back Better (BBB) plan.

Just last week, the Biden administration unveiled a scaled down version of the original plan. The BBB now has a price tag of $1.75 trillion. And with a key procedural vote early Saturday, the House of Representatives moved the plan another step closer.

Wiesemeyer reports House Majority Leader Steny Hoyer (D-Md.) said the legislation would be passed before the Nov. 25 Thanksgiving holiday. In their statement, moderates said they would allow for a vote no later than the week of Nov. 15. But that could delay final action into December, when Congress must grapple with a Dec. 3 gov’t funding deadline and raising the debt ceiling, both of which will spark conflict with Republicans.

While many agricultural groups came out in support of infrastructure, the BBB plan isn’t striking the same chord of support. Agricultural Retailers Association ARA sent a statement following the infrastructure vote, applauding what the group called a “critical piece of legislation,” however, the group had the opposite direction of BBB moving another step closer to passage yet this year.

“ARA is strongly opposed to the House’s Build Back Better bill. The tax increases included in this plan would not only counteract any economic recovery but also result in steep cost increases for consumers,” said ARA.

U.S. Democrats Pass $1 Trln Infrastructure Bill, Ending Daylong Standoff

Sat, 06 Nov 2021 15:34:26 GMT

After a daylong standoff, Democrats set aside divisions between progressives and centrists to pass a $1 trillion package of highway, broadband and other infrastructure improvement, sending it on to President Joe Biden to sign into law.

The 228-to-206 vote late on Friday is a substantial triumph for Biden’s Democrats, who have bickered for months over the ambitious spending bills that make up the bulk of his domestic agenda.

Biden’s administration will now oversee the biggest upgrade of America’s roads, railways and other transportation infrastructure https://www.reuters.com/world/us/roads-bridges-airports-details-bidens-1-trillion-infrastructure-bill-2021-11-05 in a generation, which he has promised will create jobs and boost U.S. competitiveness.

Democrats still have much work to do on the second pillar of Biden’s domestic program: a sweeping expansion of the social safety net and programs to fight climate change. At a price tag of $1.75 trillion, that package https://www.reuters.com/business/cop/whats-bidens-175-trillion-build-back-better-package-2021-11-05 would be the biggest expansion of the U.S. safety net since the 1960s, but the party has struggled to unite behind it.

Democratic leaders had hoped to pass both bills out of the House on Friday, but postponed action after centrists demanded a nonpartisan accounting of its costs - a process that could take weeks.

After hours of closed-door meetings, a group of centrists promised to vote for the bill by Nov. 20 - as long as the nonpartisan Congressional Budget Office found that its costs lined up with White House estimates.

“Welcome to my world. This is the Democratic Party,” House Speaker Nancy Pelosi told reporters earlier in the day. “We are not a lockstep party.”

The $1.75 trillion bill cleared a procedural hurdle by a vote of 221 to 213 early on Saturday, which will enable Democratic leaders to quickly schedule a final vote when the time comes.

The standoff came just days after Democrats suffered losses in closely watched state elections, raising concerns that they may lose control of Congress next year.

The infrastructure bill passed with the support of 13 Republicans, fulfilling Biden’s promise of passing some bipartisan legislation. The phrase “infrastructure week” had become a Washington punch line during his predecessor Donald Trump’s four years in the White House, when plans to focus on those investments were repeatedly derailed by scandals.

“Generations from now, people will look back and know this is when America won the economic competition for the 21st Century,” Biden said in a statement.

AIM TO MOVE FORWARD

The party is eager to show it can move forward on the president’s agenda and fend off challenges in the 2022 midterm elections in which Republicans will seek to regain control of both chambers of Congress, which they lost to the Democrats under Trump.

Congress also faces looming Dec. 3 deadlines to avert a politically embarrassing government shutdown and an economically catastrophic default on the federal government’s debt.

With razor-thin majorities in Congress and a united Republican opposition, Democrats need unity to pass legislation.

The infrastructure bill, which passed the Senate https://www.reuters.com/article/usa-biden-infrastructure-idTRNIL1N2PH1MA in August with 19 Republican votes, would fund a massive upgrade of America’s roads, bridges, airports, seaports and rail systems, while also expanding broadband internet service.

The “Build Back Better” package includes provisions on child care and preschool, eldercare, healthcare, prescription drug pricing and immigration.

It would bolster the credibility of Biden’s pledge to halve U.S. greenhouse gas emissions from 2005 levels by 2030 during the U.N. climate conference https://www.reuters.com/business/cop taking place in Glasgow, Scotland.

Republicans uniformly oppose that legislation, casting it as a dramatic expansion of government that would hurt businesses.

“This is potentially a very black day for America,” said Republican Representative Glenn Grothman, who characterized the legislation’s child-care and preschool provisions as a “Marxist” effort to have the federal government raise children.

The nonpartisan U.S. Joint Committee on Taxation estimates the social-spending bill would raise $1.48 trillion in new tax revenue over the next decade, short of its $1.75 trillion cost.

Pelosi and other top Democrats have said that fails to account for increased tax enforcement and savings from lower prescription drug prices.

(Reporting by David Morgan, Susan Cornwell and Makini Brice, additional reporting by Steve Holland, Trevor Hunnitcutt and Alexandra Alper; Writing by Andy Sullivan; Editing by Scott Malone, Will Dunham, Jonathan Oatis and William Mallard)

Newest Tax Proposal in Washington Won’t Impact Most Farmers Today, But Tax Expert Warns it Could Be a Trojan Horse for Higher Taxes

Tue, 26 Oct 2021 18:08:47 GMT

Senate Democrats are pushing for a new tax proposal this week in order to help fund two impending spending bills in Washington D.C. What’s being proposed is called The Billionaires Income Tax, and it will do just that: impose a tax on billionaires. One farm tax expert thinks the proposed tax changes tied to the plans could turn into a trojan horse for farmers.

As Democratic leaders in the House work to secure a vote on the $1 trillion bipartisan infrastructure plan yet this week, legislators are also hoping to reach an agreement on Biden’s Build Back Better Act. In total, the spending package comes with a price tag of $2 trillion and includes everything from climate initiatives to social safety nets the Biden administration is trying to pass.

“In a package that’s supposed to be about giving everybody a shot to get ahead, it would be a big mistake, from both a policy and political perspective, not to ask billionaires to pay a fair share,” said Senate Finance Committee Chairman Ron Wyden, D-Ore.

Newest Tax Proposal Wouldn’t Impact Most Farmers

Since spring, the issue with the massive spending plan is how to pay for it. The new proposal would impose a tax on unrealized capital gains and also hit the step up in basis.

“I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals, and right now escape taxation until they’re realized, and often they’re unrealized in the death benefit from so-called step Up of basis. So, it’s not a wealth tax but a tax on unrealized capital gains of exceptionally wealthy individuals,” says Treasury Secretary Janet Yellen

Eliminating the step up in basis is an idea many farmers have worried about since the Biden administration started floating around possible tax changes.

Farm CPA Paul Neiffer says as the tax proposal sits today, the majority of farmers won’t be hit with the tax change since they have to bring in at least $100 million dollars of net farm income, for at least three consecutive years.

“I’m not saying I think there’s lots of things that will probably be in there would affect farmers, but strictly based on this proposal that Janet Yellen outlined, this proposal won’t impact the majority of farmers,” says Neiffer.

The Farm CPA says at this point, only farmers who are already billionaires would be included in the newest tax proposal.

“There might be a couple billionaires out there that are doing a lot of farming,” says Neiffer with CLA. “We know that there are some billionaires that have farm operations. So yes, it would impact those farmers. But for the rank and file farmers, as it’s currently proposed, it would really not affect them, because they have to have at least $100 million in net income for at least three consecutive years, or they have to be worth at least a billion dollars.”

A Trojan Horse for Higher Taxes?

Neiffer says even though the proposal would impose capital gains tax on liquid assets, it’s only triggered when they sell those assets. However, he thinks it’s a proposal that opens the door for changes down the road that could end up impacting farm families.

“The issue is if they get this in place, it starts at $1 billion, and then suddenly, it’s going to drop to $500 million. Then it’s going to drop to $100 million, then it’s going to drop to $50 million, and eventually, it’s going to drop to $10 million. And then that’s when it’s really going to affect our farmers, especially if the income is going to drop down to $1 million or less. So, this is just sort of like the Trojan Horse. Let’s get that Trojan horse into the gates, so to speak, and then we’ll let the lower amounts drop, not in the next year or two, but within 10 years, and that’s when it will definitely affect farmers.”

AgDay reported Tuesday that The Wall Street Journal’s estimates show the proposal would likely only affect less than 1,000 of the nation’s wealthiest citizens. Democrats are also eyeing a 15 percent corporate minimum tax. If progress is made this week, it puts the plan on track to be passed before surface transportation funding runs out on Oct. 31.

The Biden administration’s tax changes originally proposed earlier this year showed those tax changes could be costly for family farms. The report from Texas A&M University’s Agricultural & Food Policy Center (AFPC) showed the original proposal from the White House would have produced a significant tax liability across all the U.S. farms. In fact, the only farms that wouldn’t have seen impacts would have been ones that rent 100% of their ground.

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Newest Tax Proposal in Washington Won’t Impact Most Farmers Today, But Tax Expert Warns it Could Be a Trojan Horse for Higher Taxes

Newest Tax Proposal Wouldn’t Impact Most Farmers

A Trojan Horse for Higher Taxes?