6 years, 10 months ago American Farm Bureau Federation
Dow/DuPont Merger Gets Conditional U.S. Approval
DuPont and Dow Chemical announced on Thursday that their proposed merger has been approved by the U.S. Department of Justice. Dow Chair and CEO Andrew Liveris (Liv-eh-ris) says he’s very pleased the DOJ approved the transaction. “With today’s DOJ clearance, we’ve taken a significant step forward in bringing together these two iconic enterprises,” he says. Ed Breen, Chair and CEO of DuPont says, “We are on track to close our merger, with the subsequent spinoffs expected to unlock significant value for shareholders.” Part of the proposed agreement with the U.S Justice Department will require DuPont to sell off certain parts of its crop protection portfolio. Dow will also be required to divest itself of two petrochemical products in order for the merger to proceed. Those requirements are similar to those imposed by the European Union and other jurisdictions that have given conditional approval to the merger. The proposed agreement with the Justice Department is still subject to court approval. This agreement means there will be no further requirements in the U.S. for this deal to close. The companies expect the merger to finish in August of 2017, with the required spin-offs to take place within 18 months later.
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Pork Industry Expanding in Response to Strong Demand
A new report out from CoBank says rising global demand for pork and stronger profitability will create a strong incentive for American pork processors to expand their capacity. Increased competition among processors may lead to a tightening of packer margins and give producers much more favorable prices in the months ahead. CoBank economist Trevor Amen says, “U.S. pork processing capacity will increase as much as 8-10 percent by 2019, when five processing facility construction projects are complete and fully operational.” He expects hog production to rise between two and four percent over the next two years to help meet the increasing demand. Small to mid-sized pork producers in the Midwest will likely account for the bulk of the increased production numbers. Three state of the art processing facilities are currently under construction, with two in Iowa and one in Michigan. Those facilities are expected to be able to process more than 10,000 hogs per day. Two smaller facilities in Missouri and Minnesota are currently being renovated. Amen says the traditional market response to increased capacity is price volatility in the short term, but bargaining leverage will eventually shift in favor of producers.
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Trump’s Cuba Policy a Lost Opportunity for Agriculture
President Donald Trump’s Friday announcement on reinstating limits on travel to and business with Cuba may result in lost economic opportunities for corporations, small businesses, and farmers. The new policy will keep U.S. companies from doing direct financial transactions with companies controlled by the Cuban military. Politico’s Morning Agriculture Report says the opportunity for American agriculture to export more products to Cuba may suffer under the new policy. The only buyer of U.S. agricultural goods in Cuba is called Alimport, a state-run entity that isn’t connected to the business arm of the Cuban Revolutionary Armed Forces, known as GAESA (Gay’-sah). Paul Johnson of the U.S. Agriculture Coalition for Cuba, says agriculture will largely not have to worry about that. “However,” he says, “if you look closer at GAESA, they do have companies in distribution, logistics, and housing, so the paths are going to cross.” GAESA also controls the Port of Mariel, which is where most American goods coming into Cuba are received. Cuba has been limiting American agricultural imports while Latin American countries and the European Union have been making recent inroads into the Cuban market.
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U.S. and China Reach Agreement to Boost Dairy Trade
The U.S. Dairy Export Council says the agreement reached this week between the U.S. and China will make it possible to significantly expand American dairy exports. An Agri-Pulse report says 80 U.S. processors are now officially cleared to immediately begin exporting to China, thanks to the Memorandum of Understanding between the countries. The agreement will also make it possible for another 200 processors to officially get that same clearance to ship dairy products to China. After two years of working on the deal, the countries have agreed on a system that will allow third-party certification companies to make sure that U.S. dairy facilities are in compliance with Chinese food safety requirements. It was three years ago that China put strict requirements in place that foreign dairy suppliers be registered and certified by their regulatory agencies. Now that the complex hurdle has been overcome, Dairy Export Council CEO Tom Vilsack said this represents a tremendous opportunity for U.S. dairy producers. “China is already the world’s largest dairy importer,” Vilsack says, “and the potential to increase exports there is tremendous.” China is the third-largest importer of American dairy products, behind only Mexico and Canada.
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Chicken Company Turning to Body Cameras
Elite Farm Services of British Columbia, Canada, is turning to body cameras to make sure its workers are following the required best management practices regarding animal handling. Elite came under fire this week after a Mercy for Animals undercover video showed workers hitting, throwing, and kicking chickens. Six workers have been fired and investigation into the matter is continuing. A Meating Place Dot Com article says the chicken catching operation plans to have at least one supervisor and two different workers wearing body cameras at all times while they work in the chicken barns. The cameras will record all activity inside the barns, with the video to be monitored and then archived for 30 days in case further evaluation is needed. The company will also be updating its employee orientation requirements and workplace procedures. The goal of making the changes is to improve the levels of animal care at Elite and be a catalyst for change throughout the industry.
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U.S. Sugar Producers Applaud Deal to Stop Mexican Dumping
American sugar farmers and processors gave their verbal approval to the Department of Commerce in support of the deal to bring Mexican sugar producers into compliance with U.S. trade laws. The approval was given after the commerce department tightened up some of the requirements. Phillip Hayes of the American Sugar Alliance says his group has had productive conversations with Commerce Secretary Wilbur Ross. Hayes says, “We recognize that Ross is 100 percent dedicated to ending the job loss and injury caused by Mexico’s predatory sugar practices. American sugar farmers applaud his efforts to address Mexico’s violation of U.S trade law.” Sugar farmers and producers also spoke with Ag Secretary Sonny Perdue, who Hayes says also recognizes the damage caused by Mexican trade practices, and is confident Perdue will manage U.S. sugar policy effectively. The U.S. government found Mexico guilty of violating America’s anti-dumping and countervailing duty laws when it flooded the American market with subsidized sugar in 2013 and 2014. The two countries reached an agreement to stop the practice late in 2014, but the agreement didn’t work. That cost American sugar producers billions of additional dollars.
