WASHINGTON, April 26, 2016 - With all the press releases and letters coming out from farm groups is support of the Trans-Pacific Partnership (TPP), it can be hard to remember that there is a substantial agricultural voice opposed to the 12-country trade pact. But the National Farmers Union remains steadfast in its opposition and announced Monday that Rep. Rick Nolan and NFU President Roger Johnson will lead a teleconference Wednesday to explain why they think TPP isn’t as good as much of the ag sector believes.

“United States trade officials are promoting the Trans-Pacific Partnership … as an export boon for agriculture, but National Farmers Union … continues to stand strong in their defense of the independent farmers and ranchers who will see little benefit if Congress were to pass the trade agreement,” the group said Monday.

The NFU also is expected to release a TPP letter on Wednesday that will be signed by 160 food, farm, faith and rural groups. 

And for the rebuttal … Darci Vetter, the chief agricultural negotiator for the U.S. Trade Representative, reacted to NFU’s plans by saying the group doesn’t have much of an argument because the trade pact between the U.S., Japan, Canada, Mexico, Vietnam, Australia, New Zealand, Peru, Singapore, Chile, Brunei and Malaysia will result in increased exports in agriculture commodities and much more revenue for American farms, regardless of how big they are.

“Family farmers, large farmers – whatever your scale may be – you’re going to benefit if your commodity prices are higher,” she said in a briefing for members of the North American Agriculture Journalists.

Furthermore, Vetter told the gathering of farm reporters from around the country that she sees the “lame duck” session of Congress after the elections in November as the best opportunity to get TPP passed by Congress.

Beef and Poultry will be tough issues to resolve with EU. U.S. and EU negotiators are busy this week in New York City going over how far tariffs can be reduced as part of the Transatlantic Trade and Investment Partnership (T-TIP). But getting increased access for U.S. beef exports to Europe and persuading the Europeans to accept the antimicrobial washes that U.S. chicken processors use to prevent contamination may be two of the most difficult tasks.

“Those are very difficult issues,” Vetter said. “We want to see increased, predictable access for U.S. beef. We have high-quality product to sell. Years ago when we first had the case on hormone-treated beef against Europe, Europe was largely self-sufficient in that product. If you look at their population now, they’re really in need of imports and we’d like to fill that demand. On the poultry side, we really are unable to ship if they don’t recognize our processing methods, and so seeing some recognition of those pathogen reduction treatments is critical for us to be able to take advantage of any tariff cuts they might offer.”

Consumers seeing relief on food prices. USDA has lowered its forecast for consumer food costs this year amid downward pressure on meat, poultry and egg prices. In its monthly food price outlook, USDA economists are now projecting that food prices will be up just 1.5 percent to 2.5 percent this year. That’s below the 20-year average inflation of 2.6 percent, and it’s down from last month’s forecast for this year of 2 to 3 percent. 

USDA says there could be further declines in food prices this year if oil prices remain low, which cuts production and transportation costs, and because of the strong U.S. dollar, which is discouraging U.S. exports. 

Egg prices fell by 5.8 percent from February to March and are expected to be down by as much as 10 percent this year over 2015, when Midwest poultry production was hard hit by the avian flu outbreak.  Beef prices rose about 1 percent in March but they are still down 5.1 percent last year, because of declining exports that have boosted domestic supplies. Pork prices are down 5.6 percent year over year. 

Troubling farm finance data from the Kansas City Fed. In more bad news for the farm sector, repayment rates of farm loans dropped in the first quarter of 2016 even as new bank loans to farmers remained strong, according to a reportpublished Monday by the Federal Reserve Bank of Kansas City. A driving factor, said the report’s authors, was depressed prices.

“Large loans used to finance operating expenses remained the primary driver of demand for non-real estate loans,” the report concluded. “Although returns at agricultural banks generally remained strong, delinquency rates on farm loans ticked up, and loan repayment rates dipped, as persistently weak profit margins in the farm sector continued to intensify the challenge of maintaining adequate cash flow.”

Catfish is a big topic for Vilsack in Vietnam. Vietnam’s prime minister and the ministers of agriculture, trade, and commerce have all met with USDA Secretary Tom Vilsack to discuss the country’s attempt to meet USDA’s food safety standards as the department takes over inspection authority for imports from the FDA.

Vietnam will be required to show that its food safety systems are generally equivalent to those in the U.S. by Sept. 1, 2017, for the country to be allowed to continue to export to the U.S., and Vietnam has reached out for help, Vilsack told reporters in a teleconference Monday.

“They have recently provided to us a number of issues or areas that they think they will need technical assistance in, and we reached an agreement to provide help and assistance in all five of the areas they have identified.”

ICYMI:  The North American Agricultural Journalists presented Agri-Pulse with the Audrey Mackiewicz Special Award last night at the group’s annual banquet at the National Press Club. The award honors the association’s first woman president and long-time Executive Secretary-Treasurer and is given to publications who have expanded their coverage of agriculture. Agri-Pulse now has the largest group of editors devoted to covering agriculture, food and rural issues on Capitol Hill.

She said it: “Anything is possible and that is our goal.” That was USTR Chief Agricultural Negotiator Darci Vetter responding to the question of whether or not the U.S. and EU could wrap up T-TIP negotiations this year. She did, however, stress that it would be up to the next presidential administration to get it through Congress.

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