Farm News 6/9/2020

EPA Cancels Dicamba Registrations

The Environmental Protection Agency late Monday canceled the registrations for three dicamba herbicides. The move follows a Ninth Circuit Court of Appeals ruling vacating the registrations of Bayer’s XtendiMax with vapor grip technology, BASF’s Engenia, and Corteva’s FeXapan. The EPA says growers and commercial applicators may use existing stocks that were in their possession on June 3, 2020, the effective date of the Court decision. Such use must be consistent with the product’s previously-approved label, and may not continue after July 31, 2020. EPA Administrator Andrew Wheeler calls the  action “consistent with EPA’s standard practice following registration invalidation.” He adds the court decision “has threatened the livelihood of our nation’s farmers and the global food supply.” Distribution or sale by any person is generally prohibited except for ensuring proper disposal or return to the registrant. The court decision and EPA action does not include Syngenta’s dicamba herbicide, called Tavium.

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EPA Disappointed in Court Ruling, Retailers Call for Immediate Stay

Environmental Protection Agency Administrator Andrew Wheeler voiced disappointment in a court decision to vacate registrations for three dicamba herbicides. Wheeler says of the ruling, “The 2020 growing season is well underway, and this creates an undue burden for our first conservationists – farmers.” An appeals court last week vacated the registration for dicamba herbicides produced by Bayer, BASF and Corteva. The ruling does not affect a dicamba product from Syngenta. Several states have allowed farmers and applicators to continue to use dicamba products. Still, as Wheeler points out, the ruling implicates millions of acres of crops, and millions of dollars already spent by farmers. Wheeler says the EPA is “assessing all avenues to mitigate the impact of the Court’s decision on farmers.”  The Ag Retailers Association urged Wheeler and the EPA to appeal the federal court ruling “using all legal avenues available.” The American Farm Bureau Federation said Monday in a letter to the EPA, “It’s imperative that the EPA quickly provide clarity to farmers.”

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Away From Home Eating Drops 51 Percent in March

The COVID-19 pandemic and resulting stay-at-home orders have dramatically impacted Americans’ food spending, according to the Department of Agriculture. USDA’s Economic Research Service says, unlike previous economic shocks, the COVID-19 shock has led to a pronounced substitution from food away from home towards food at home. Inflation-adjusted expenditures at grocery stores and other retailers, described as food at home, were 6.5 percent higher in February 2020 compared with February 2019. The same spending was 18.8 percent higher in March 2020 compared with March 2019. Comparing spending for the same month accounts for seasonal food spending patterns. Inflation-adjusted February 2020 expenditures at eating-out establishments, restaurants, school cafeterias, sports venues and other places, were 39.3 percent lower than February 2019 expenditures. March 2020 food-away-from-home spending was 51 percent lower than March 2019 spending. During the Great Recession of 2007-09, expenditures on both food at home and food away from home decreased, with the largest decrease in February 2009.

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Restaurant Coronavirus Recovery Underway

The restaurant industry recovery from the COVID-19 pandemic is underway. New data shows the industry brought back 1.37 million workers last month, and consumers are eating out again. More restaurants, and particularly large chain restaurants, have seen a resurgence in sales in recent weeks. However, Restaurant Business Online reports the industry remains far below employment levels from before the coronavirus pandemic, suggesting that it could be years before the number of workers lost over that six-week period are fully regained. The restaurant industry employed 7.6 million workers in May, up 22 percent from April’s decades-long low of 6.3 million. It is still 37 percent below February levels, or about 4.4 million employees. The Independent Restaurant Coalition told the publication, “Congress needs to pass a relief package specifically designed to protect our industry,” noting that restaurant workers continue to make up the largest share of jobless Americans. Many restaurants were forced to close when the pandemic began.

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April Red Meat Exports Weather Production Challenges, Economic Headwinds

April proved to be a solid month for U.S. beef and pork exports despite COVID-19 related interruptions in production and trade. U.S. Meat Export Federation President and CEO Dan Halstrom says, “despite these significant headwinds, global demand for U.S. beef and pork remained strong.” Beef exports were below last April’s large totals but still topped $600 million in value. Pork exports remained well above year-ago levels but slowed from the record pace established in the first quarter.  While May export results will likely reflect similar obstacles, Halstrom noted that red meat production continues to recover, setting the stage for a strong second half of 2020. April beef exports were down six percent from a year ago to 98,600 metric tons, with value falling 11 percent to $600.9 million. For pork, April volume reached 264,000 metric tons, up 22 percent from a year ago but the lowest since November 2019. Export value was $682.8 million, up 28 percent year-over-year but the lowest since October 2019.

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Lawmakers Seek Wheat Classes Included in CFAP

Lawmakers from Washington state want the Department of Agriculture to include three classes of wheat for coverage under the Coronavirus Food Assistance Program, or CFAP. Republican Representatives Dan Newhouse and Cathy McMorris Rodgers presented the request in a letter to Agriculture Secretary Sonny Perdue late last week. The letter seeks the inclusion of soft white, hard red winter and soft red winter wheat classes for coverage in the CFAP. The lawmakers say, “These classes of wheat, like so many other commodities, have been negatively impacted by the COVID-19 pandemic and need assistance under this program.” From January to April, the market for soft white wheat dropped more than 8.5 percent. Soft red winter wheat futures contracts range from $5.77 a bushel to $4.98. And, hard red winter wheat ranged from $5.07 in a bushel in January to $4.23 a bushel in March. CFAP was created as a result of the CARES Act relief package to provide direct relief to farmers and ranchers impacted by the COVID-19 pandemic.

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Gas Price Continue March Higher

The national average gas price continues to march higher for the sixth conservative week, gaining 4.3 centers per gallon to $2.02, according to GasBuddy. The average price of diesel rose 0.1 cents to $2.41 per gallon over the same period. Patrick De Haan of GasBuddy attributes the trend to increased demand as Americans return to the roadways, and OPEC extending its large oil production cuts until at least July.  De Haan says, “The anxiety pushing oil prices up is coming from the fact that the economy may be recovering quicker than most anticipated.” Crude oil prices continued to rally over the last week on positive economic data. Optimism has played a key role in boosting oil prices. OPEC has extended production cuts for now while demand continues to rally globally. However, Saudi Arabia reminded the market it may not hold its most severe production cuts beyond June to keep oil’s rally in check and likely in hopes of holding off a return of U.S. oil production.