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“A future Trans-Atlantic Trade and Investment Partnership (T-TIP) agreement between the world’s two most important economic powers will give a strong boost to our economies and create jobs on both sides of the Atlantic,” stated European Commissioner for Agriculture and Rural Development Phil Hogan.

Hogan spoke at the 2015 USDA Agricultural Outlook Forum in Virginia on Feb. 19, encouraging a positive trade partnership between the European Union (EU) and United States.

Partnership

“In Europe, we have a common agricultural policy,” he noted.

The policy covers 28 member states of the EU and 500 million citizens.

“I have to listen to a lot of views,” Hogan said.

He complimented the United States’ commitment to maximizing the contribution of agriculture to economic growth and jobs in rural communities. He also praised the innovation and generational renewal that the U.S. emphasizes in agriculture.

“I have the same commitment,” he stated. “We stand for the value of agriculture, and we passionately care about its future.”

Market-oriented model

Europe is driving its agriculture toward a market orientation, sharing products as exports with the rest of the world.

“I am here today to tell the story of a competitive, vibrant and American-oriented agri-food model, a model that produces high quality products for consumers the world over,” Hogan remarked. 

The model, he added, stands shoulder-to-shoulder in a complimentary and harmonious relationship with American agriculture.

Compatability

“Our objective should be to work towards ensuring the compatibility of our respective approaches and regulatory standards,” Hogan commented.

Regulatory compatibility, streamlined procedures and minimal red tape were some of the objectives that Hogan outlined in his support for a partnership.

“Trade facilitation should inspire our work on both sides of the Atlantic for jobs, growth and mutual benefits that trade can bring,” he continued.

European income and population dynamics currently indicate stagnant and declining food demand, yet the world population continues to grow.

“The EU has some key assets that could permit us to benefit from an increasing and more diversified food demand,” noted Hogan.

These assets, he said, include good climatic conditions, a resilient and competitive primary sector, a highly innovative agri-food sector and a skilled labor force.

Healthy market

“The EU agri-foods sector enjoys a healthy trade surplus with the rest of the world,” Hogan explained. “We exported over 120 billion euro in 2013 or about $135 billion.”

In the same year, the U.S. exported approximately $140 billion in similar products.

“We are really shoulder-to-shoulder in the global marketplace,” stated Hogan.

European production standards place high value on environmental conditions, animal welfare, social health and labor standards, and Hogan noted that consumers are responding to those value-added products.

Geographic value

“Part of this quality approach is EU geographic indications (GI),” he explained.

GIs are distinctive signs that identify the origin of a product, creating value based on tradition, culture and geography. Examples include Cognac and Roquefort cheese.

“GIs are about rewarding quality in rural areas. These products represent 30 percent of the EU agri-food exports to the United States,” he continued.

Comparing this value system to the U.S., Hogan described Napa Valley wine and Idaho potatoes.

“American and European consumers love the high quality of GI products, if the numbers enjoying Irish or Scotch whiskey, Italian wine or Spanish olive oil are anything to go by,” he stated.

By working together, Hogan noted that the United States and Europe can capitalize on the global demand for these products.

Building relations

“T-TIP offers a historic opportunity to deepen our bilateral relations, including the agricultural sector, at a time of unprecedented tension in our trans-Atlantic neighborhood,” Hogan commented.

Europe has lowered tariffs that would affect T-TIP agreements, and Hogan believes that this strategy will benefit the United States as well.

“It’s a signal, and a clear signal, to American farmers that Europe is open and wishes to be open for business,” he stated.

The EU-U.S. trade relationship is currently the largest in the world, with goods and services accounting for more than 2 billion euro every day.

“The moment is now ripe to create a trade super-highway across the Atlantic, built also upon the experience of free trade agreements with other partners,” he added.

By the year 2050, experts believe that global population will reach 9 billion people.

“We have much to talk about in terms of innovation, biotech and big data,” noted Hogan.

He also said that it is important to encourage young people to take up farming and drive innovation on the farm.

Commonalities

“We have common moral, commercial and geo-political interest in working together to tackle the global challenge of food security in an environmentally sustainable way for growing a world population,” explained Hogan.

He also highlighted the common history, culture and interests between Europe and the United States.

“We need to stand strong and united together in solidarity across the Atlantic. I think we can make great progress in advancing our countries’ common interests. True T-TIP will see jobs, growth and prosperity flow to our rural areas and beyond,” Hogan said.

Natasha Wheeler is editor of the Wyoming Livestock Roundup and can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..

Washington, D.C. – Right now there’s much competition with the U.S. for beef imports in the Asian markets from Australia and the European Union (EU), and Senator Enzi’s Legislative Assistant Travis Jordan says that’s accompanied by great potential for market access.
“The EU just finished up an agreement with Korea that will be finalized over the next year, and the U.S. is in that process, and there’s potential for Europe to get ahead of us,” says Jordan.
“One thing we’ve learned from market access for products, especially beef, is that as soon as there is some market access it’s a lot tougher to push somebody else out of the market. We want to get there first, and be there with a strong presence, otherwise it will be tough to regain market share,” he explains.
Jordan notes that the new Congress presents a better opportunity for increasing beef exports overseas. “Perhaps they will be more accommodating in expanding free trade,” he says, adding there are also some changes in the Senate Finance Committee, with members who have historically been supportive of sending beef overseas.
The rising incomes of citizens in southeast Asia, Vietnam and even China have created an accompanying rise in demand for protein, including U.S. beef.
“There’s a lot of potential for market access,” says Jordan. “They don’t have the beef production to support their population’s growing taste, and it’s a question of whether the U.S. or another market gets in those places.”
Jordan says the biggest free trade agreement that’s currently pending is the Korean Free Trade Agreement (FTA).
“That’s the biggest one of concern, and it will most likely move in the next few months,” he says. “The last few months we’ve been hearing some news on it, and in early December the President announced it had some momentum.”
The Korean FTA has two outstanding issues – automobile access and beef trade.
“They’re strict on what they allow U.S. auto makers to take into Korea, mostly because of the tariffs. The Korean market in the U.S. is strong, because we don’t have the same tariffs. That issue was resolved a week-and-a-half ago, saying the Koreans will allow additional market access,” comments Jordan.
However he says there was no announcement on beef at that time. “The only announcement by trade representatives was that there will be something on beef in the future, and it will move,” he says.
Even though the beef announcement has been absent to date, Jordan says he sees the momentum on the Korean FTA continuing.
“U.S. beef is a very sensitive issue in Korea. The last time there was additional market share, there were protests in the streets,” he reminds. “We need to recognize that, and that’s why it hasn’t moved in the last couple of months.”
Jordan says the Korean FTA is the most likely FTA to be considered by Congress next year. “A lot of the labor and environmental issues the Democrats have pursued have been agreed to by Korea, as well as the auto issue,” he says.
In addition to the major agreement with Korea, Jordan says Columbia and Panama also have pending FTAs.
“The Columbian imports are an advantage because they’ll be for prime cuts of beef. Panama doesn’t have as much significance in terms of economics, but it helps to lower some of the tariffs on U.S. products,” he explains.
In regard to other Asian markets, Jordan says the U.S./Taiwan Beef Protocal was signed in 2009, shortly before the Taiwanese congressional elections.
“They backed away from the agreement they signed with the U.S., and since that time our exporters and the industry have worked to get as much of that agreement back as we can,” says Jordan.
“That’s a setback we communicated as Congress to the Taiwanese government, and they seem committed to at least pursuing additional market share in the future,” he says. “We’ve made it clear that if they want to pursue trade frameworks they’ll have to take beef as well.”
China has always been a tough market, without much access for U.S. products in general. Jordan says in late December the U.S. and China will talk once again at the Joint Commission on Commerce and Trade that’s been an annual event since the 1980s. Jordan says a priority this year will be market access for U.S. beef.
Jordan names Vietnam as another Asian market that’s experiencing significant growth and higher incomes, which has led to a higher demand for beef products.
“Beef cows don’t do very well in southeast Asia. It’s a little too hot and the vegetation isn’t right. Talks to include Vietnam in the Transpacific Partnership would help us pursue some additional FTAs with that country, and beef would be a part, as well as some dairy, and even hay,” says Jordan. “Vietnam imports a lot of hay for their dairy industry, because they can’t grow hay, so quite a few exporters in California ship their hay across the ocean to Vietnam.”
Jordan concludes that Korea is the key to opening many of the other markets across the Pacific Ocean, including Japan and China.
Travis Jordan presented his information to the Wyoming Stock Growers Association Winter Roundup in Casper Dec. 12-14. Christy Martinez is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Arlington, Va. – Despite the fact that drought has gripped the nation for the past several years, USDA Chief Economist Joseph Glauber remains optimistic about the agriculture industry in the U.S.

“The U.S. agricultural economy is strong and, in aggregate, farm incomes are near record highs. U.S. agricultural exports are expected to break records again this fiscal year, and the financial outlook for the sector remains solid, with debt measures low relative to assets and equity, and asset values at record levels,” Glauber said.

Outlook perspectives

Looking forward into 2013, he noted that the outlook predicts a rebound in crop yields and lower prices for grains and oilseeds moving into the second half of the year.

“Lower crop prices should lead to lower feed costs and improved profitability for the livestock, dairy and poultry sectors,” he added.

However, Glauber cautions producers to remember last year’s outlook.

“Listening to the forecast for 2012, one may have a sense of déjà vu, for the forecast is similar to the last year’s forecast for record corn and soybean crops made at last year’s Outlook forum,” he said, “so while the outlook for 2013 remains bright, there are many uncertainties.”

Export outlook

Glauber noted that U.S. agricultural exports are projected at $3 billon below the November 2012 forecast, but still remaining above the fiscal year 2012 forecasts by over $6 billon.

“The pace of exports this year has been impressive,” he said. “In the first three months of the fiscal year, the United States exported $43 billion of agricultural products – greater than what we exported annually in the early 1990s.”

Exports to China are forecast at $22 billion, a figure $1.4 billion from last year’s numbers, but still above exports to Canada. The primary products exported to China include soybeans and cotton, though Glauber mentions that red meats, coarse grains, feeds and fodder have shown growth.

He also noted that imports are forecast at a record-breaking $112.5 billon.

Global grain

Looking at the current supply and demand outlook for major field crops, Glauber noted that global grain stocks will tighten in 2012-13, as global drought reduced wheat stocks.

“Global wheat stocks for 2012-13 are projected to be at their lowest level as a percent of use since 2008-09,” he said, adding, “Global corn stocks as a percent of use are projected to be the lowest since 1973-74.”

The resulting high prices will encourage large plantings for wheat, corn and soybeans, added Glauber.

“Combined acreage for those crops topped 230 million acres in 2012 – the highest since 1982,” he said, “and will likely approach similar levels for 2013.”

Wheat acres are also predicted to increase by approximately 300,000 acres to 56 million acres. Though hard red wheat seeding is expected to be down, he noted that increased planting of soft red winter wheat would offset it.

“A return to more normal spring weather should result in more soybeans and slightly less corn planted in 2013,” Glauber commented. “Corn planted acreage is projected at 96.5 million acres, down slightly from last year’s 75-year high.”

Focus on weather

While forecasts are currently up, Glauber noted that producers across the nation will maintain a strong focus on the weather going into the planting season.

“As of Feb. 12, about 56 percent of the United States continued to be in drought conditions,” he remarked. “While the percentage of area in drought has declined about 5.4 percentage points since Jan. 1, forecasts point to continued dryness in the central and southern Great Plains.”

Provided that normal weather conditions occur, the USDA, however, again projects record yields for both corn and soybeans. 

“There has been much discussion about the effects of last year’s drought on corn and soybean yields in 2013,” Glauber explained. “A number of factors suggest that corn and soybean yields will likely return to trend.”

Improvement in weather in the Corn Belt has provided a positive outlook, as does the fact that little evidence suggests that low preseason moisture levels have significant impacts on corn and soybean yields.

With a return to trend yields for corn, however, Glauber noted that farm prices will be lower, reflecting larger domestic and world supplies.

“Corn prices are forecast to average about $4.80 per bushel in 2013-14, down 33 percent from 2012-13’s record levels,” he said.

Livestock outlook

For the livestock sector, Glauber said producers will continue to face high feed costs until new crops become available this fall.

“Feed ratios, which have generally been tight since 2007, tightened further in 2012 as feed costs rose relative to meat and dairy prices,” he noted.

Though productivity offset some of the concern, margins remained tight. 

Cattle producers have additionally seen poor pasture conditions and a lacking hay crop to add insult to injury.

“Almost two-thirds of the nation’s pasture and hay crops were in drought conditions with almost 60 percent of pasture condition rated poor or very poor for most of July, August and September 2012,” he noted. “As was mentioned previously, dryness in the Southern Plains has persisted for over two years and resulted in large liquidation in cattle numbers.”

“A key uncertainty is whether the historic drought of 2012 persists through 2013,” Glauber remarked. “Another year of drought would likely result in large liquidation and hardship for livestock producers. Historical odds favor a rebound in crop yields, however, which should bring significantly lower prices in 2013.”

To read the rest of Glauber’s comments, visit usda.gov/oce/forum/presentations/Glauber.pdf

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Washington, D.C. – During the 90th Agriculture Outlook Forum, hosted by USDA, Chief Economist Joe Glauber noted that good news can be seen for agriculture in a variety of places.

“Frankly, we see some similarities from last year,” Glauber said. “Some of the transitions we have seen in the last several years are still in place today.”

USDA’s Agriculture Outlook Forum was held Feb. 20-21 in Washington, D.C. It was also broadcast live over the internet.

Inflation’s impact

Glauber noted that agriculture has seen a long-term downward trend in terms of cost prices, after removing inflation.

“With the effects of inflation taken out, we can see a long downward trend from World War II down to 2000 or so, with the exception of the spike in prices we saw in the 70s. We have seen a march of productivity in growth that causes prices to fall,” Glauber said.

He further added that this trend marks the success story that agriculture has seen over the last 50 years.

“In the last 10 years, we have seen prices for most major field crops double,” he continued. “Agriculture trade has doubled since then, and we have seen that farm income has doubled.”

Additionally, since 2006, the U.S. has added $1 trillion to farm equity, and in 2012, global record crop yields were seen for grains, which resulted in a decrease in prices.

“We know one thing – one way or another, the next 10 years will look more variable than they do in our projections,” Glauber said. “There is a lot of strength amid the variables in our underlying economy, despite the drop in prices.”

Global records

Coming out of 2013, Glauber said record global production was seen in corn, wheat, rice, other grains, soybeans and sunflowers.

“High prices will bring in more production,” he commented of the global market. 

At the same time, grain production has grown at two percent per year, some of which can be attributed to increased demand for livestock feeding.

Glauber said, “As we move forward, demand will continue to grow.”

“Projections for global trade are expected to increase again, reflecting the strong growth we anticipated in these markets,” he added.

International markets

For 2014, Glauber noted that USDA’s projection team estimates exports at $142.6 billion – another record.

“There are increased volumes across the board,” he said, adding, “Imports are up, as well, to $110 billion.”

Regardless of increasing import levels, Glauber explained that a healthy trade balance of almost $3 billion is maintained.”

“I have made this point several times in the past few years, and the fact remains – China remains our number one market,” Glauber said. “Most of the $25 billion that goes to China is soybeans and cotton, but there’s a whole host of other products – like sour gum and lifestyle products, which we also export.”

China, he predicted, will remain an important market.

Drought conditions

Glauber also addressed drought conditions that linger across the country.

“We know what impact drought has had on crops over the last few years,” he said. “Livestock has also seen some big losses.”

More recently, Glauber remarked, California’s extreme water shortages concern the U.S. because the state is the number one agricultural state in the nation.

“There is a lot of concern and focus on what availability of products will look like,” he said.

Drought in California influences the likelihood of high prices for fruit and nuts.

“One-third of the vegetables grown in the country are produced in California, and two-third of fruits and nuts – almost 80 percent – are found there,” he continued. “Producers there are going to have to make tough decisions in terms of how to allocate water in California.”

The future

“The fact we entered this year after global record production, and we still have a tight stock situation has been an interesting story,” Glauber commented. “Despite relative production and high prices, global stocks have not been increasing all that much.”

This year, he says price spikes similar to those seen in 2010 and 2011 are expected, and he predicts larger production and continued rebuilding of stocks around the world.

“I know a lot of people are interested in the numbers,” Glauber continued. “We are expecting the total area planted to be down marginally for the major crops, but it will remain fairly close to last year’s levels.”

“With strong planting and a return to normal weather, we should see close to record crops,” Glauber summarized. “We anticipate, with better production, that prices will come down, and we will see lower prices in 2014-15.”

Price prediction

High wheat and soybean prices are forecasted for the coming year, and rice prices remain strong. 

With price incentives, Glauber said that producers will be faced with many choices.

“I think the more interesting decisions we will see are in the Midwest, with producers making the choice between corn and soybeans,” Glauber said, mentioning that data favors soybean production. “We will see some increase in production for rice because we have very strong prices, and rice looks very attractive relative to other alternatives.”

He further noted that producers will be faced with decisions of whether or not to sell water rights, particularly in California. 

“However long-term these challenges are, we have very positive aspects of what is going on in the agricultural sector, and I think we should expect some positive times as we move forward and look out at U.S. agriculture,” Glauber finished.

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..


SIDEBAR:
Animal agriculture

In the livestock sector, USDA’s Chief Economist Joe Glauber commented that animal agriculture is in better shape than it has been over the past several years.

“Profitability, as measured by crude ratios, is significantly improved this year,” he mentioned. “We are seeing higher prices for poultry and pork being driven by the strength we have seen in export markets.”

While assumptions of expansion in the livestock market have been hampered by drought, Glauber said producers are reluctant to expand until they are assured that conditions are sufficient to handle increased livestock numbers.

“There has been a reduction in inventory since 2011 and significant reduction in the Southern Plains,” he continued. “We will start to see expansion, but this will take a little longer.”

Ethanol impacts

USDA’s Chief Economist Joe Glauber looked at proposed regulations from the Environmental Protection Agency and their impact on the future of ethanol production.

“I think we will see growth in dried grain and ethanol use, though it has been fairly flat over the last few years,” he commented. “A lot of the growth will depend on penetration of higher blends for ethanol.”

As the Renewable Fuel Standard requirements moving forward continue to be uncertain, productions levels also remain unknown.

“The other important thing in the world of ethanol is that in 2011, we exported 1 billion gallons of ethanol, and this will increase in the long-run,” he said.

 

 

San Diego, Calif. – “In the course of the last few years, our business has become more global,” said CattleFax Analyst Mike Murphy during the National Cattlemen’s Beef Association Cattle Industry Convention and Trade Show at the end of January.

  In 2008, when recession hit the global economy, markets contracted.

“We started to see the globe come together to try to stimulate business in our own countries around the world,” he said. “When that occurred, we had a big influx of commodities and values were supported.”

However, cattle aren’t as flexible as other commodities in terms of ability to recover quickly. The reproductive cycle of cattle can be prohibitive as compared to hogs or even crop markets, he noted.

“When we look at these changes in terms of crude oil or hogs, we have seen a significant correction to their values,” Murphy said. “That is driven by supply. We were having increased production, which was affected by demand. Then we saw a slowdown in global demand.”

Global demand

Global demand declines led producers to assess their situations in terms of long-term price trends.

“We lowered interest rates to try to stimulate the economy,” Murphy said. “We were able to achieve some success, but we are now in a situation where interest rates can’t get lower.”

Some European countries are even encouraging their citizens to not deposit their money in banks now.

“There isn’t much more we can do to stimulate the economy,” he said. “At some point interest rates are going to go back up, but in the short-term, we expect them to stay fairly low.”

The impact seen from lowering interest rates was positive, but it has begun to wear off.

“We are seeing countries trying to devalue their currency in hopes of stimulating export growth. Some are in more difficult shape than others,” Murphy commented.

Key countries

Key countries around the world are seeing a slowing of growth, including Brazil, Russia and China.

“Brazil and Russia, in particular, have seen contraction from an economic standpoint,” Murphy explained. “Countries like China stand out as solid but with slowing growth.”

For example, in Russia, a 56 percent decline was seen in their currency over the last 18 months.

“Some of that is related to what is going on in the energy sector and the deflationary concept,” Murphy said.   

Murphy also noted that, despite slowdowns and cheaper beef coming from Brazil, many countries are still seeking U.S. beef because it is a high-quality, grain-fed product.

“Brazil has a grass-fed product,” he said.

Economic stimulation

While economic stimulation is still a concern, Murphy also added that slowdown around the world is starting to impact the U.S. economy more significantly.

“This is a reflection of where we are from an economic standpoint,” he continued. “In the U.S., we know we are in really good shape compared to the rest of the world, and that is the expectation as we look forward. We see no concerns looking at 2016 to be any sort of recessionary year.”

However, beyond the borders of the U.S., the picture is less clear, and Murphy noted that it continues to be important to pay attention to the global marketplace.

“We know how important global demand is for proteins – and in particular beef,” he said. “We have to make sure we are always analyzing and assessing what is going on around the globe.”

“The challenge in the U.S. is we are a stable economy,” Murphy added. “There is no fear of seeing our decline, at least in the short-term, over the course of the next one to two years.”

With a stable economy and other countries devaluing their currency to stimulate growth, Murphy explained that the U.S. is at a competitive disadvantage. 

Positive signs

“There are some positive things from a global standpoint,” Murphy commented. 

First and foremost, he noted that it is also important to consider supplies.

“We have had a small increase as we look at beef production, but when we look at the last several years, we have a tight, tight supply,” Murphy said. “Australia will contract their beef industry from a production standpoint because they are going to begin expansion as they receive more moisture. To expand, they have to contract first.”

Canada will experience a similar situation, comparable to what was seen from 2013-15 in the U.S.

“We don’t have a huge increase in terms of overall global beef supply,” he said.

Beef forecasts

Looking forward, beef imports are expected to decline about eight percent as Australia contracts their supply.

At the same time, the value of the 90% lean beef market has gone from three dollars a pound to $2.20.

“From an export standpoint, over the last four to five years, we have exported about 2.5 million pounds, which is what we expect to export on a consistent basis,” Murphy said. “That is roughly nine to 10 percent of our production.”

The ability to continue exporting beef is a “big positive for the industry,” he added.

Any increase in global beef production will also come from the U.S., considering expansion of the beef cattle herd, which puts the beef industry in a position to prosper.

“That puts us in a position where we should be able to command better demand from a global standpoint so we can export more product,” Murphy said.

He added, “There are some trade winds we will have to face, but we feel like, overall, the global market will be more positive.”

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..