LSP Land Line: Organic Acreage Up, Local Meat Production, Price Fixing

Sept. 30: An LSP Round-up of News Covering Land, People & Communities

Mercaris: Organic Production Continues to Grow

(9/28/20) The U.S. harvested organic field crop area will exceed 3.4 million acres over the 2020-2021 marketing year, which is an increase of 4% over the previous marketing year, according to the market data service Mercaris. The Hagstrom Report quotes a Mercaris economist as saying the demand for organic livestock products such as turkey has helped drive up the demand for organic feed crops. Highlights:

  • The number of certified organic operations in the U.S. will reach 19,888 over 2020-2021, a 4% increase.
  • Organic corn for livestock feed use is projected to increase 6%, as organic poultry production continues to boost demand for U.S. organic feed grain.
  • U.S. organic soybean crush is projected to increase 13% as organic soybean meal imports plateau, and livestock feed demand continues to expand.
  • U.S. non-GMO soybean planted area expanded 19% during 2020.
  • U.S. non-GMO corn planted area increased 8% .

For resources on how to grow organic and conventional crops utilizing methods that build soil health profitably, see LSP's Soil Builders web page.

Farmers face new levels of uncertainty, from relying on markets to living on ad hoc pay

(9/28/20) Ag Week reports on concerns expressed by economists over the fact that farmers are more reliant on ad hoc payments from the government. Farmers in North Dakota, South Dakota, Minnesota, and Montana in particular are now reliant on the kind of emergency payments that were normally reserved for weather disasters, for example. Recently, the federal government has been providing ad hoc payments to compensate farmers for harm caused by the trade war, as well as the COVID-19 pandemic. Highlights:

  • In 2015 and 2016, about 85% to 90% of farm revenue came from selling crops and livestock, with 10% from government support programs, mostly crop insurance.
  • In 2019, 30% to 40% of net income on farms came from federal ad hoc programs, particularly the Market Facilitation Program. Another 10% came from traditional programs, and about 50% from the marketplace.
  • Now, over 100% of the net income comes from ad hoc programs, according to one North Dakota State University economist.
  • “We’re getting revenue now from unpredictable points. These are [from] temporary, ad hoc legislation. We don’t know if they’re going to be reinitiated or if we’re going to have another round of them later on,” said NDSU economist Frayne Olson, adding that farmers have “shifted from traditional uncertainty, unknowns about yield and prices, to a new level of political uncertainty."

Check out LSP's Farm Crisis Resources web page for help in dealing with economic, emotional, and weather related problems.

Federal watchdog finds Trump administration’s trade relief program unevenly compensated farmers in some states

(9/15/20) The multibillion-dollar Market Facilitation Program compensated farmers unequally for losses incurred due to the ongoing trade wars, according to a report from the Government Accountability Office, a nonpartisan federal watchdog. In an article on the report, The Counter describes how when the ad hoc program gave out $14 billion in payments in 2019, some farms received "extraordinarily high" payments and some commodities benefited more than others. Highlights:

  • The average MFP payment per farming operation for 2019 was $22,312 but varied by county, ranging from $44 to $295,299.
  • Payments ranged widely by region and state as well. Growers in Georgia—Secretary of Agriculture Sonny Perdue’s home state, where he is the former governor—received the highest payments, which were an average of $42,545 per person. Other Southern states including Mississippi, South Carolina, Alabama, North Carolina, and Texas all ranked in the top 10 for average highest compensation levels.
  • The report found that the top 25 recipients of Market Facilitation Funds received a total of $37 million, with many receiving well above the on-paper maximum payment of $250,000 because of loopholes in the rules that allow farms to claim payments on behalf of multiple owner-operators.
  • Some commodities fared better than others. Cotton growers were repaid for about 40% of the price of their crop while milk producers received just 1.1% of the value of their production.

In a commentary for the Minnesota Reformer, LSP farmer-member Darrel Mosel describes the unfair nature of how ag support payments are distributed.

House Bill Aims for More Local Meat Production

(9/30/20) Small, localized meat processing could receive a shot in the arm if a bill recently proposed in the U.S. House of Representatives is passed, according to Chuck Abbott, writing in Agriculture.com. The bill, authored by Representatives Chellie Pingree and Jeff Fortenberry, would increase funding for state meat inspection programs and offer grants so small plants could expand their facilities. Highlights:

  • It would increase the federal share of funding for state meat inspectors, who usually are responsible for meat safety at small processing plants.
  • It would create a competitive grants program for small-scale facilities for activities related to COVID-19 recovery.
  • It would set up a $10 million grant program for training programs at colleges, and a $10 million grant program for small operations to offset the cost of training new meat processors.

A recent LSP blog describes the key role local meat processing could play in creating a more resilient food system. In another blog, LSP member-farmers Jim and LeeAnn VanDerPol proposed the creation of community owned meat processing in Minnesota.

Cattle Price Conspiracy Suit Dismissed

(9/29/20) A federal judge in Minnesota has dismissed an antitrust class-action lawsuit alleging the nation's largest meatpackers conspired to fix cattle prices. According to DTN, in 2019 a number of lawsuits were brought by cattle interest groups and traders against Tyson Foods Inc., Tyson Fresh Meats Inc., JBS S.A., JBS USA Food Company, Swift Beef Company, JBS Packerland Inc., Cargill Inc., Cargill Meat Solutions Corp., Marfrig Global Foods S.A., and National Beef Packing Company LLC, alleging the companies conspired to bring down the price of fed cattle in 2015. By the end of 2015, the price fell from $170 per hundredweight to $120 per hundredweight. Collectively, the companies named in the lawsuits process more than 80% of fed cattle in the U.S. All of the cases were later consolidated into one antitrust case in the U.S. District Court in Minnesota. Highlights:

  • Plaintiffs alleged the companies engaged in fed-cattle price fixing; unjustly enriched their businesses; manipulated the prices of fed cattle and, as a result, the Chicago Mercantile Exchange live-cattle futures and options; and committed a number of violations of the Commodity Exchange Act, among other allegations.
  • "Because plaintiffs have not pleaded their direct evidence with sufficient detail and because they have not pleaded parallel conduct sufficient to support an inference of a price-fixing conspiracy, the court will grant defendants' motions to dismiss," Judge John Tunheim said in the order handed down on Monday.

In February, LSP members from across Minnesota met with Agriculture Commissioner Thom Petersen and Attorney General Keith Ellison to discuss the importance of, among other things, antitrust enforcement. If you have information on antitrust activities or other efforts to limit farmers' access to markets, contact someone in LSP's Policy and Organizing Program.

Brian DeVore is the editor of the Land Stewardship Letter.