FYI: POLITICO’s Morning Agriculture: Inside USDA’s organic data gap — EPA gives thumbs up to dicamba — Tariffs could offset farmer gains under NAFTA 2.0 — Trade turmoil in battleground Florida

 

2018 Newsletter Logo: Morning Agriculture
11/01/2018 10:00 AM EDT

By RYAN MCCRIMMON (rmccrimmon@politico.com@RyanMcCrimmon)

With help from Liz Crampton, Catherine Boudreau, Sarah Zimmerman and John Lauinger

Editor’s Note: This edition of Free Morning Agriculture is published weekdays at 10 a.m. POLITICO Pro Agriculture subscribers hold exclusive early access to the newsletter each morning at 6 a.m. To learn more about POLITICO Pro’s comprehensive policy intelligence coverage, policy tools and services, click here.

IN THE HOPPER: USDA has an organic problem. The department wants to clamp down on fraudulent products, but needs to tackle inaccurate government data on organic farmland acreage.

— The dicamba decision is in: EPA gave farmers a green-light to keep using the herbicide, with some tighter spraying limits.

— China’s feeling the burn from the tit-for-tat tariffs, according to the nation’s first official gauge of the trade war’s impact. New analysis also shows President Donald Trump’s trade feuds could wipe out any U.S. agricultural gains from the North American trade pact, and then some.

— Stumpin’ in the Sunshine State Wednesday night, Trump touted his new deal with Canada and Mexico. But trade isn’t a clear winner for Trump and Republicans in the battleground state where business and agricultural groups are dealing with the fallout.

INSIDE USDA’S DATA GAP ON ORGANIC ACREAGE: How many acres of organic farmland are there in the U.S.? Don’t ask the Agriculture Department. The government’s data on organic acreage is wildly inaccurate, our Helena Bottemiller Evich and Sarah Zimmerman report today, and USDA is now considering new reporting requirements to help it develop a better nationwide accounting of organic acreage.

Something doesn’t add up: One USDA database reports 121 million acres of organic farmland across the country. But the same database lists a global total of 13.5 million acres.

— Why it matters: Getting the numbers right isn’t just about proper bookkeeping — it’s part of an effort to crack down on fraudulent organic products.

The data problem is unique to the organics sector, which has battled for decades to share an equal footing at USDA with conventional agriculture. Responsibility for collecting organic acreage stats has passed from agency to agency in recent years. It’s now handled by the National Organic Program, which certifies products as “USDA Organic.” (You know the green seal.)

Mark your calendars: USDA plans to release a proposed rule in early 2019 aimed at shoring up organic integrity. An increase in mandatory reporting to boost USDA’s data collection efforts could be part of the rulemaking process.

Pros, grab some (organic?) coffee and catch up with Helena and Sarah’s story.

HAPPY THURSDAY, NOV. 1! Welcome to Morning Ag, where your host loved the farm shots in this short-and-sweet documentary. Have any news or tips? Send them to rmccrimmon@politico.com and @ryanmccrimmon, and follow the whole team @Morning_Ag.

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EPA GIVES THUMBS UP TO DICAMBA: Farmers are clear to continue using the herbicide for the next two years, now that the agency has renewed its license. EPA did, however, set some dicamba spraying limits, Pro Ag’s Liz Crampton reports.

Drift from the chemical has caused unintended damage to millions of acres of crops across the South and Midwest. On Wednesday, the agency set new restrictions on its use, like a 57-foot buffer for endangered species habitats, and a sort of curfew (spraying is permitted from one hour after sunrise to two hours before sunset). A cap on “over-the-top” applications was lowered from four to two, as well.

Bayer, which inherited the dicamba license when it bought Monsanto, said after the EPA decision that it plans to train certified pesticide applicators on the label requirement changes. The company was set to provide further details today on what the decision means for growers.

TARIFFS COULD OFFSET FARMER GAINS UNDER NAFTA 2.0: U.S. agriculture, particularly the dairy and poultry sectors, could reap an estimated $450 million from additional exports to Canada and Mexico under the new trade pact. But the gains would be more than negated by those two countries’ retaliatory tariffs on American farm goods, according a new economic analysispublished Tuesday.

The analysis from Farm Foundation and Purdue University estimates that U.S. farmers and ranchers could lose nearly $1.8 billion in exports if counter-tariffs continue long-term. Purdue also analyzed the combined impact of retaliatory tariffs from major trading partners like Canada, Mexico, China and the European Union, and determined that ag exports could shrink by nearly $8 billion over time.

— The biggest drops will be in oilseeds like soybeans, due to Chinese retaliatory duties, followed by meat products. Pro Ag’s Catherine Boudreau has the details.

So how’s China doing? Not so hot, our South China Morning Post partners report. Economic growth is slowing quicker than expected, business sentiment is down and export demand dipped sharply, according to a Chinese government index.

Next year could be more brutal, as U.S. tariffs on $200 billion worth of Chinese goods are set to ratchet up from 10 percent to 25 percent in January.

— The White House wants China to feel the heat from the trade war, so that Beijing is more likely to come to the table or bend to some of Trump’s trade demands. Trump has said tariffs on another $267 billion in Chinese goods will be ready if his meeting with Chinese President Xi Jinping later this month doesn’t go well.

— However: Longtime China observers warn not to underestimate the country’s ability to stomach economic hardship in pursuit of national gain. And the government is likely to spur growth with some monetary or fiscal stimulus.

TRADE TURMOIL IN BATTLEGROUND FLORIDA: Indiana, North Dakota … and Florida? The Sunshine State could be another battleground where Trump’s trade war could affect close, critical races in next week’s elections.

The president stumped Wednesday night in Fort Myers for Republicans in Florida’s tight Senate and governor races, where he touted the new North American trade pact and claimed the U.S. was “winning very big” in negotiations with China.

Trade is likely to be on some voters’ minds in key contests across the Midwest, where Trump’s steel and aluminum tariffs, and the retaliatory duties on U.S. ag products, are cutting into the bottom lines of ag and manufacturing operations. Florida’s agriculture sector has been roiled, too, by trade challenges and severe weather in recent months.

Florida tomato growers, for example, warn they could be wiped out by cheaper Mexican imports — a topic that wasn’t resolved in the new North American trade pact. (Produce growers in the state wanted the updated NAFTA to give them a mechanism to mount seasonal challenges to Mexico’s practice of selling fruit and vegetables in the same season and at much lower prices than U.S. growers.) Retaliatory tariffs are hitting the state’s prominent orange industry and other ag sectors, while Trump’s duties are also weighing on U.S. companies.

By the numbers: New data from the Trade Partnership and Tariffs Hurt the Heartland — a joint project of Farmers for Free Trade and Americans for Free Trade — show Florida businesses in August paid $122 million in tariffs, a nearly 50 percent increase compared with August 2017. The monthly import tax totals have jumped steadily since April.

All eyes on Florida: Republicans and Democrats are bringing in the heavy hitters all week. Sen.Bernie Sanders (I-Vt.) held a rally Wednesday for Andrew Gillum, the Democratic candidate for governor, and former President Barack Obama will campaign for Democrats on Friday in Miami. Oh, and Trump is headed back to Pensacola on Saturday.

TRADE TALK ON THE TRAIL: Here’s a snapshot of what candidates are saying about trade in Midwest battleground states. For a glimpse at how different regions have fared under globalized trade, here’s a map of U.S. job losses linked to the trade deficit with China. Want to add DataPointto your Pro account? Learn more.

ROW CROPS

— USDA ag trade mission to South Korea: U.S. officials and businesses have already planned 700 meetings next week when they visit South Korea as part of a trade delegation led by Ken Isley, administrator of USDA’s Foreign Agricultural Service. Your host has more.

— The next Interior secretary? There’s a clear heir apparent on deck if Interior Secretary Ryan Zinke is forced to step down due to scandal. Deputy Secretary David Bernhardt, a longtime oil and gas lobbyist, is well versed in the world of bureaucratic infighting, Pro Energy’s Ben Lefebvre and Zack Colman write.

— Are the midterms a lose-lose situation for budget compromise? Congress will be back in action for only a month before the next major spending deadline, and the sentiment on both sides of the aisle is that the end-of-year fiscal fight could get nasty under either electoral scenario: Democrats win the House, or the GOP keeps it. Pro Budget’s Sarah Ferris has a good read for Pros here.

— EPA sends biofuel blending rule to White House: The proposed rule would add 330 million more gallons of biodiesel in 2020 and calls for refiners to blend nearly 20 billion gallons of biofuel into the nation’s fuel system next year. It’s part of the Trump administration’s push to allow fuel with 15 percent ethanol, known as E15, to be sold year-round. Pro Energy’s Eric Wolff has thestory.

— Price hikes coming to parts of the food industry? U.S. companies are passing along higher costs to consumers, sensing that the consumer environment remains strong, The Wall Street Journal reports. Mondelez International, for instance, plans to raise prices in North America next year, citing rising costs for ingredients and transportation, among other factors.

— Women (farmers) rule: Women make up 30 percent of farm operators in the U.S., but in 2017, female farmers out-earned their male counterparts. That makes farming one of just 10 occupations in which women earn more than men. More from CNBC.

— Brazil to merge ag, environment ministries: President-elect Jair Bolsonaro plans to combine Brazil’s agriculture and environment departments into a “super ministry,” according to an advisor. Critics warn the move would benefit agribusiness at the expense of the environment. Here’s BBC’stake.

— Coconut oil solves everything: USDA’s Agricultural Research Service found that compounds derived from coconut oil do a better job than DEET at repelling mosquitos, ticks, biting flies and bed bugs. Check out the release.

— Correction: The Oct. 31 edition of Morning Agriculture misidentified which federal entity oversees regulation of genetically engineered plants. The USDA holds that responsibility.

THAT’S ALL FOR MA! Same time, same place tomorrow. In the meantime, drop us a line: cboudreau@politico.com and @ceboudreaurmccrimmon@politico.com and @ryanmccrimmonhbottemiller@politico.com and @hbottemillerlcrampton@politico.com and @liz_cramptonjlauinger@politico.com and @jmlauinger; and pjoshi@politico.com and @pjoshiny.

You can also follow @POLITICOPro and @Morning_Ag on Twitter.

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