October 28, 2016 CapitalPress.com 15 Dairy/Livestock Subscribe to our weekly dairy or livestock email newsletter at CapitalPress.com/newsletters USDA predicts TPP would be net positive for U.S. dairy Changes in U.S. dairy annual balance sheet with TPP participation By CAROL RYAN DUMAS Capital Press A new USDA analysis shows the Trans-Pacific Part- nership would initially in- crease U.S. dairy exports by up to $275 million annually and by as much as $1.8 billion when fully implemented. Full implementation of TPP — a trade treaty involv- ing the U.S. and 11 other Pa- cific Rim countries — would come in 2032. USDA economists ana- lyzed four models aimed at determining the outcome for U.S. dairy producers if Con- gress adopts TPP. The U.S. International Trade Commission’s long- term model includes high- er-value processed dairy products, such as ice cream and infant formula, and econ- omy-wide and cross-com- modity effects not included (Millions of dollars) U.S. U.S. exports imports Economic model University of Missouri, (2024) all countries* Virginia Tech, (2026) TPP countries only** Virginia Tech, (2026) all countries American Farm Bureau Federation (2032 – full implementation, net exports) U.S. International Trade Commission (2032 – full implementation) *Does not include bilateral trade flows. $150.4 275.3 262.5 131.2 $97.3 38 42.3 N/A 1,845.5 348.6 **Includes bilateral trade flows. To view the entire report from the Office of the Chief Economist, go to: www.fas.usda.gov/data/why-trade-agreements-matter-case-us-dairy Source: USDA Office of the Chief Economist in the other economic models analyzed by USDA. All four models — by Vir- ginia Tech, the University of Missouri, American Farm Bu- reau and the trade commission — show a net increase in U.S. dairy exports that underscores Capital Press graphic the importance of TPP, accord- ing to USDA’s office of the chief economist in its report, “Why Trade Agreements Mat- ter: The Case for U.S. Dairy.” If the U.S. rejects TPP, Virginia Tech’s Center for Agricultural Trade projects an annual loss of nearly $31 million in U.S. dairy exports and $11.5 million in producer welfare, reflecting the prefer- ential access competitors such as New Zealand and Australia would gain in TPP countries. USDA’s analysis points out U.S. dairy exports have grown more than fivefold during the last 15 years, reaching a re- cord $7.1 billion in 2014 and tripling the share of domestic milk production exported to as much as 15 percent. It also found that continued growth of the U.S. dairy sector is largely contingent on trade. “The U.S. market is fairly mature and per-capita con- sumption is not expected to expand significantly, which makes overseas markets in- creasingly important to pro- ducers’ returns,” the econo- mists stated. Free trade agreements have contributed to export growth and have helped address tariff and nontariff barriers, accord- ing to the report. U.S. dairy exports to FTA partners grew from $690 million before the agreements to $2.8 billion in 2015. The International Dairy Foods Association, U.S. Dairy Export Council and Nation- al Milk Producers Federation all support TPP, said Beth Hughes, IDFA director of in- ternational affairs. “We think it’s critical for our industry and for our export markets,” she said. Exports are part of IDFA’s processing members’ long- term plans for growing their businesses, and the Asian Pa- cific region is a natural place for the U.S. to increase ex- ports, she said. Other countries are already looking at trade agreements, and some are underway. If Congress doesn’t implement TPP, the U.S. will give the up- per hand to other countries and be subject to higher tariffs that will make the U.S. unable to compete, she said. “We’ll be pushed out and lose market share,” she said. The U.S. share of global dairy markets has grown from 4 percent in 2000 to 14 percent in 2014. Asia offers new opportu- nities due to a substantial in- crease in per-capita income, which is expected to far sur- pass the world rate, USDA reported. In addition to providing market-access gains to key countries — such as Japan, Malaysia, Vietnam and Can- ada — TPP also breaks new ground with rules on nontariff barriers, including sanitary and phytosanitary measures, geographic indicators, bio- technology and organics, USDA reported. USDA moves ahead with new GIPSA rules Cash dairy prices continue mixed By CAROL RYAN DUMAS By LEE MIELKE Capital Press For the Capital Press USDA’s advancement of its rules regarding competi- tive injury and undue prefer- ence under the Grain Inspec- tion, Packers and Stockyards Act has met with renewed op- position from some livestock groups and renewed enthusi- asm from others. The Farmer Fair Practices Rules are a product of flawed 2010 rulemaking that was finalized in 2011 and repeat- edly defunded in congressio- nal appropriations bills, said Colin Woodall, National Cat- tlemen’s Beef Association’s vice president of governmen- tal affairs. The rules have not yet seen the light of day, but NCBA suspects not much will change in USDA’s newest attempt to address “fairness” with a subjective definition that will open the door to litigation and limit producers’ marketing options, he said. The rules would not re- quire a showing of injury (to overall market competition) to claim a violation under GIPSA. That means if a producer thinks his price is unfair, he can report it and sue the pack- er, the feedlot and even other producers, Woodall said. For instance, if a producer thinks it is unfair for another producer to receive a premium based on genetics and that he should have the same oppor- tunity even though he didn’t invest in genetics, he can sue that producer claiming he was complicit in the arrangement, Woodall said. It’s going to threaten mar- keting arrangements and val- ue-added programs and push the industry back toward more commodity cattle, he said. Agriculture Secretary Tom Vilsack has said the agency is C Capital Press file ash cheese prices strengthened last week but then backed down. Block cheddar jumped to $1.68 per pound on Tuesday but closed Friday at $1.65, up a dime on the week and 3 3/4-cents above a year ago. The barrels got to $1.61 but ended at $1.57, up 11 cents on the week and 2 cents above a year ago. Monday’s trading took the blocks down a penny and they lost a quarter-cent Tuesday, slipping to $1.6375. The barrels also lost a Dairy Markets Lee Mielke penny Monday but were un- changed Tuesday, holding at $1.56. Midwest cheesemakers tell Dairy Market News that cheese production has in- creased slightly. Milk is read- ily available and components are on the rise, but so are or- ders. Butter continued the melt- down that started in August, slipping to $1.7550 per pound last Wednesday, the lowest price since April 2015, but it inched up a half-cent Fri- day to close at $1.76, down 2 1/2-cents on the week and 71 cents below a year ago. It added 2 cents Monday and in heavy trading Tuesday — 20 cars — jumped a nickel to $1.83. Butter output is active as moderate to heavy cream supplies continue clearing to churns. Grade A nonfat dry milk closed last week at 88 cents per pound, up a penny, and 3 1/2-cents above a year ago. The powder inched a quarter-cent lower Monday and three-quarters Tues- day, slipping to 87 cents per pound. Cattlemen’s groups differ in their reaction to new marketing rules under consideration by the USDA. considering excluding certain provisions from the earlier rules, including marketing arrangements, but that’s no guarantee, Woodall said. National Pork Produc- ers Council is also con- cerned by the resurrected rules, saying they will cre- ate legal uncertainty in the industry. The concern is that pro- ducers will no longer need to prove that a meatpacker’s action injured or diminished competition in a “market- place.” They will only need to show that a practice was “unfair” to them or that an “undue” or “unreasonable” preference or advantage was given to another producer or producers, NPPC stated in a press release. The organization points out the Senate rejected a “no competitive injury” provision in the 2008 Farm Bill and eight federal appeals courts have held that an action must have harmed marketplace competition to be a violation of GIPSA. R-CALF USA and the U.S. Cattlemen’s Association are in full support of USDA moving forward with the rules, saying producers would no longer have to show harm or compet- itive injury to the entire indus- try to file a complaint. “The rules will facilitate competition by defining the legal framework within which our markets can begin to func- tion properly,” said Bill Bull- ard, R-CALF’s CEO. “With clear delinea- tions between which market practices are allowed and which are not, producers can self-monitor and self-enforce industry competition without having to wait on the govern- ment to act on their behalf,” he said. In a statement commend- ing USDA, USCA President Kenny Graner said, “These common sense clarifications protect U.S. ranchers and feeders from anti-competitive buying practices and help to advance true price discov- ery in a competitive market- place.” WE SPECIALIZE IN BULK BAG S! 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