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Food imports surge, add to trade gap; industrialized organics; other stories

(Monday, Nov. 8, 2004 -- CropChoice news) -- Four articles below on U.S. agriculture/agribusiness trade and policy, including industrialization of organic farming:

1. Surging food imports threaten wider trade gap
2. Beyond organic:Making wise food choices
3. Nebraska state farm leaders identify crucial ag issues for the next four years
4. First off, rural areas must be people friendly

1. Surging food imports threaten wider trade gap:
U.S. Agriculture Exports, Relied on to Ease Deficit, Feel Heat of Competition

November 8, 2004; Page A1

America's appetite for imported food is creating problems for the U.S. economy.

Agriculture, one of the few big sectors of the economy that could be counted on to produce trade surpluses, has recently generated monthly deficits -- a development that could worsen the nation's already significant trade imbalance.

According to the U.S. Department of Agriculture, the U.S. imported more agricultural goods than it exported in June and August, the first monthly trade deficits since 1986, when the Farm Belt was mired in a depression.

"It's very worrisome," said Sung Won Sohn, chief economist of banking giant Wells Fargo & Co. "We need agricultural trade surpluses more than ever because the nonagricultural deficit is ballooning."

What's happening is partly a trade-off for the free-trade agreements signed by Washington. While those pacts, such as the 1994 North American Free Trade Agreement, lowered barriers to U.S. farm exports, they also eased the entry of imported foods.

The availability of imported food clearly benefits consumers, giving them variety as well as new sources of competition that help keep their food costs under control.

But the problem with the widening overall trade deficit is that it is sustainable only as long as foreigners are willing to lend the U.S. large amounts of money. Many economists warn that this isn't likely to continue, and if they're correct, the risks are growing for a market-rattling crash in the value of the dollar.

The overall trade deficit widened to $54 billion in August, the most recent monthly figure available. That was the second-biggest gap on record after June's $55 billion.

During the 1990s, the agriculture sector's ability to single-handedly cut the trade deficit by as much as 16% some years gave it political capital in Washington, helping justify billions of dollars in annual farm subsidies. Now, agriculture's shrinking impact on the trade scene, plus the swelling federal budget deficit, could make it harder for the farm lobby to protect those subsidies.

The U.S. is still the world's biggest agricultural exporter. But the agricultural-trade surplus is evaporating so quickly that some economists in the Bush administration are quietly speculating that the sector might generate an annual trade deficit as soon as the fiscal year ending Sept. 30, 2005. That would be the first since 1959, when postwar Europe re-emerged as a major farm power.

"The way things are going, we could see it cross over in a year or two," said Philip Abbott, an agricultural economist at Purdue University in West Lafayette, Ind. Mr. Abbott and a fellow professor created a stir in farm circles last year with their warning that full-year farm trade deficits could materialize late this decade.

Speculation about the U.S. agricultural trade balance will grow over the next couple of weeks because the USDA is slated to update its forecast on Nov. 22. Currently, the government is projecting a farm trade surplus of $2.5 billion for fiscal 2005. That would be a nearly 75% drop from an estimated trade surplus of $9.5 billion for fiscal 2004.

The farm sector's trade surplus peaked in fiscal 1996 at $27.31 billion, the result of $59.75 billion of exports and $32.44 billion of imports. Since that time, the value of U.S. agricultural imports has climbed 62% to an estimated $52.5 billion in fiscal 2004. The value of U.S. agricultural exports is up only 4% from 1996.

The evaporating farm trade surplus reflects both growing competitive pressure on U.S. farmers and the changing tastes of American consumers.

U.S. agricultural exports have been stagnant for eight years in part because new farm powers are emerging around the world in places where land is cheaper and governments are pumping money into infrastructure such as roads and ports. Brazilian soybean farmers are winning customers away from the U.S., for example, and Russia has transformed itself from a huge customer of U.S. wheat into a wheat-exporting rival. India, which once depended on American aid to fight famine, is an emerging food exporter. China, long a big buyer of U.S. crops, is pushing for food self-sufficiency. Canada is a major exporter of hogs and beef to the U.S. The upshot: The U.S., which controlled half of the world's trade in wheat in the 1980s, now has just one-quarter of the world market.

At the same time, Europe has raised barriers to the import of some U.S. foods containing genetically modified ingredients. Most recently, the discovery of the first U.S. case of "mad cow" disease in December prompted scores of countries to ban billions of dollars of U.S. beef.

On the other side of the trade coin, imported food is one of the fastest-growing categories in many supermarkets. The biggest factor behind it is that more and more American shoppers want crops and food they can't get -- or can't get in sufficient volume -- from U.S. producers.

Even the weakening dollar, which makes foreign goods more expensive, isn't slowing the flood of imported agricultural goods. In August, the value of agricultural imports rose 24% from a year earlier to $4.37 billion, which was $156 million more than August exports.

Many supermarket executives learned about importing during the 1990s, when they turned to Chile, Mexico and Argentina for grapes, tomatoes, asparagus and apples to keep their aisles stocked with fresh produce through the dead of the U.S. winter. Now retail executives are trying their hand at more exotic fare, such as Irish marmalade, Scottish cookies and Japanese horseradish powder.

According to the USDA, 78% of the fish and shellfish consumed in the U.S. are imported, up 10 percentage points from 2000. Imported wine had 27% of the U.S. market last year compared with 21% in 2000. Everything from lamb and avocados to spices, beer, flowers and bell peppers increasingly is imported.

"Shoppers want more and more choices," said Monte Wiese, president of the specialty-foods unit of Hy-Vee Inc., a Midwest supermarket chain.

Hy-Vee is putting olive bars in its stores. As at a salad bar, shoppers can pick from 14 varieties of fresh olives from Greece, Italy and Turkey. Hy-Vee is also importing, among other things, canned coconut milk, cheese from Switzerland and canned artichoke hearts from Spain.

Even U.S. farmers are getting into the act. Sunkist Growers Inc., a citrus cooperative owned by growers in California and Arizona, is making plans to import navel oranges from South Africa for sale under its brand when U.S. oranges are out of season. "We either provide consumers with what they want or we are out of the market," said Jeffrey Gargiulo, Sunkist chief executive.

The growing immigrant population is creating demand for imported foods. General Mills Inc., for example, is beginning to import from India the frozen flat breads roti and nan. U.S. food companies are also using more foreign ingredients in their products. Much of the Pepsi-Cola sold in the U.S. is made with concentrate imported from places such as Ireland, where PepsiCo Inc. says manufacturing costs are cheaper than in the U.S.

About 20% of the beef used by McDonald's Corp. restaurants in the U.S. now is from foreign cattle. A McDonald's spokeswoman said a shortage of lean beef in the U.S. is forcing the company's hamburger suppliers to turn to cattle from Australia and New Zealand.

The import boom is causing a backlash among some U.S. agricultural groups, such as Florida produce farmers. These groups successfully lobbied Congress for a country-of-origin regulation requiring supermarkets to label the birthplace of produce and meat, among other commodities. Opposition from retailers, however, has stalled implementation of the labels.

Write to Scott Kilman at scott.kilman@wsj.com1

URL for this article: http://online.wsj.com/article/0,,SB109987062938867100,00.html

2. Beyond organic:Making wise food choices

By Jim Minick
Prairie Writers Circle

Imagine you're standing in the produce section of your local grocery faced with a variety of apples. You want to make the best choice, for the good of your family, farm workers and the environment. Do you buy the organic Galas shipped from across the country or the Granny Smiths grown conventionally but locally?

The decision is not easy.

First, consider organic. Organic farming, because it shuns synthetic fertilizers and pesticides, is friendlier to the environment than conventional practices. And evidence is increasing that organic food is better for you.

Organic produce on average contains about twice the essential minerals of conventionally grown food, according to a study published in the Journal of Applied Nutrition. And a University of Washington study found that children eating conventional food had six to nine times the pesticide exposure of children who ate an organic diet.

It is no wonder that consumers have made organic food the fastest growing sector of agriculture. Sales of organic food are rising by 20 percent annually.

But organic is not without problems. As organic sales have grown, organic farming has moved away from its small family-farm roots and is becoming industrialized. The organic carrots I buy at Wal-Mart were probably grown on a large scale, a system dependent on fossil-fuel mechanization, underpaid farm labor and imported organic fertilizers. How sustainable over the long run is the diesel tractor plowing up the soil? How fair are the labor practices? And the chicken litter fertilizer might be organic, but how far was it shipped before it was spread on the field?

This distance question highlights a problem of our entire food system, including organic: our love affair with airlifted, railroaded, tractor-trailored grapes in December or tomatoes in February. Often this produce comes from Mexico or Chile or some other faraway place, and its cheap price belies the waste of energy used to transport it to our tables.

"Eaters might begin to question the sanity of eating food more traveled than they are," quips Joan Dye Gussow, author of "This Organic Life." Noting that a calorie is a unit of energy, she says: "It costs 435 fossil fuel calories to fly a 5-calorie strawberry from California to New York."

The burning of fossil fuel to move food means more globe-warming greenhouse gases. My organic carrots from Wal-Mart might do my body good, but in eating them, I'm harming the larger body of our earth, and that ultimately circles back to everyone's health.

Now consider locally grown food. It solves the problem of shipping food long distances. The Granny Smith from your nearby orchard only has to travel a few miles, in contrast with the 1,000 to 2,000 miles that most of our food travels from field to plate. And because of this short commute, local food -- organic or conventional -- is naturally fresher and tastier.

Another advantage of buying locally is food security. Today's centralized system processes food in huge factories and moves products in large quantities, creating attractive targets for terrorists looking to contaminate as much food as possible. A decentralized system of small local farms and processors would be much harder to disrupt on a large scale.

Finally, buying local food means keeping our dollars circulating in our own communities.

So next time you are in the supermarket pondering the organic Gala or the local Granny Smith, consider how you might help create a food system that is both organic and local. Seek out a local farmers market or vegetable subscription service that provides a weekly bag of produce. Meet your local farmers this way. Encourage them to use organic methods and local sources of compost and other soil amendments. And seek out the small growers, who don't have to exploit labor to gather their harvests.

If you enjoy quality food and a healthy planet, consider what you eat, where it was grown and how. Let's choose both organic and local if possible, so we can begin moving our food economy in ways that benefit our health and the earth's.


Jim Minick teaches at Radford University in Virginia and also farms. A poet and essayist, his latest work, "Finding a Clear Path," will be published in 2005. Minick is a member of the Land Institute's Prairie Writers Circle, Salina, Kan.

3. State farm leaders identify crucial ag issues for the next four years

By Robert Pore, Grand Island (Neb.) Independent, 11/06/04

With the Bush administration ready to settle in for another four years in the White House, the key for future prosperity of rural family farmers and ranchers will be continued profitability, said John Hansen, president of the Nebraska Farmers Union.

For Hansen, there are a number of issues directly impacting profitability, including trade policy, foreign policy and ag market competitiveness.

"Those are the things that have the most to do with profitability," he said. "We have a national trade policy which will continue to hack away at all the income supports that agriculture has."

And Hansen said Bush's re-election will empower his administration to continue to move forward in eliminating income support mechanisms for family farmers and ranchers "...without doing anything whatsoever to do away with the need for the subsidies."

Keith Olsen, president of the Nebraska Farm Bureau, said he feels that when the new Congress convenes in January, there may be an attempt to change the current farm bill.

"That's something we are going to stay very much on top of and make sure that if it does get changed, it isn't negative toward agriculture," he said. "With the big deficit in the government right now, they are going to look for places to get money. That is a real concern."

Another issue that is a concern, Olsen said, is the future of the various commodity self-help checkoff programs. In December, the constitutionality of the national beef checkoff will be argued before the U.S. Supreme Court.

"These checkoffs are federal programs and it's going to be a challenge to maintain a viable checkoff program if the current checkoff programs are ruled unconstitutional," he said.

Another priority is reopening U.S. beef exports to the more than 40 nations that banned U.S. beef products after a dairy cow tested positive for bovine spongiform encephalopathy (BSE), also known as mad cow disease, last December in Washington state, along with developing a national animal identification program.

"We are slowly but surely heading that way and if we are going to meet the Japanese requirement that we prove that the meat we are sending over there is from animals less than 20 months old, an ID program can do that," Olsen said.

The big challenge, he said, once beef trade is re-established regaining those markets back that have been lost because the ban is going to take time, but could be even more difficult if the U.S. Supreme Court rules the beef checkoff is unconstitutional.

"We are going to have to go back into those countries and get people convinced that American beef is what they have to buy," Olsen said.

Especially important for Nebraska is getting a national energy policy that has a renewable fuels standard to help the domestic ethanol and biodiesel industries to grow.

"We need to make sure that the renewable fuels standard gets implemented," he said.

Other issues identified by Farm Bureau officials include repeal of the estate tax, common-sense regulations and environmental policy, along with tax reform.

For Hansen, one of the ironies of Bush's re-election was that the president's strongest support came from America's rural areas, where his agricultural policy continues to encourage further consolidation of rural farms and ranches that will eventually lead to continued depopulation of those areas.

"The frustrating part of the political equation is that we don't think that the vote President Bush got from rural America was because they are happy or in support of his economic, foreign and rural development policies," he said. "We think that the vote came because of social issues and their perception of the need to support the commander in chief during a time of war."

But the problem, Hansen said, is rural residents "...get the rest of the package with that."

"They didn't put economic issues on the front burner or decision making, and as a result, all of the policies that are in place will, we fear, continue to make it increasingly difficult for farmers and ranchers to stay in business and it will dry up rural communities."

Also, the new farm bill will be written by Congress during the next four years of the Bush administration.

The key, Hansen said, is that the majority party sets the policy and controls the process. And the Bush administration has been more "friendly" with the agribusiness community than with family farmers and ranchers.

"We are going to have an agribusiness-friendly House and Senate ag committee and an agribusiness-friendly administration," he said. "Agribusiness will have policies more clearly in place that will suck more capital money out of rural America."

With the nation facing a huge budget deficit, Hansen said lawmakers will probably target agriculture and rural development policies when making cuts.

"They will be feeding agricultural issues to the fish and that's the way it's going to play out, and I'll be remarkably surprised and pleased if it is otherwise," he said.

Source: http://www.theindependent.com/stories/110604/new_agissues06.shtml

4. First off, rural areas must be people friendly

Grand Island Indepenent, 10/29/04:

So who's in charge?

That's a question being asked all across the Heartland, in counties from Central Nebraska to northern Michigan to eastern Oklahoma.

The issue is large livestock feedlots, and it's opened a Pandora's box of legal and legislative battles dealing with local control, state jurisdiction, permits, regulations, liability and enforcement.

While lawmakers, agribusiness and some farm organizations bang their heads trying to figure out how to make Nebraska (or whatever state) more livestock friendly, a significant number of other people are approaching it from another angle:

What can we do to ensure that our rural areas remain people friendly? After all, isn't quality of rural life the primary objective here? And who's most qualified to make those quality-of-life decisions?

The people who live right there, in the rural counties and communities, right?

Not so, said the Iowa Supreme Court earlier this month. The court struck down five county ordinances, preventing them from regulating large amounts of livestock waste that may pose dangers to clean water, clean air and, most importantly, the health of rural residents.

Not so, says the Environmental Protection Agency. The EPA has chosen a voluntary air pollution control program for factory farms, which create 1.3 billion tons of waste every year and which, the EPA itself reported, poison America's waterways more than anything else.

Not so, claims large agribusinesses, which want to expand their corporate farms in rural America and increase their market share and profits, usually at the expense of struggling family farmers.

Not so, says governors and/or state legislatures in Wisconsin, Michigan, Colorado, Oklahoma, Missouri and elsewhere, who have already weakened or would like to weaken local controls of confined animal feeding operations (CAFOs). (Indeed, at a June press conference, Minnesota Gov. Tim Pawlenty decried the "dangerous levels of political power" that Minnesota townships have accumulated.)

And finally, not so (or so it seems), says the Nebraska Department of Environmental Quality (DEQ), which recently granted a six-month exemption to feedlot owners to trace pollutants that are showing up in nearby wells.

That was a bit disturbing, considering that water was contaminated at 30 of 65 feedlot sites where wells were monitored.

"At some sites the contamination was two to three times the drinking water standards," said Kate Allen, legislative aide to State Sen. Don Preister, who is one of the most environmentally-conscious lawmakers in Nebraska.

Merrick Countians may have felt a bit queasy after the DEQ sent out notices of the well contamination. Three of the 30 are located in Merrick County, which finished in a tie for second in the Nebraska water pollution sweepstakes. Cuming County had four and Phelps County also had three. Two were located in Polk County, which tied for fourth with Dawson, Holt and Seward counties.

Needless to say, the actions of Nebraska's DEQ haven't enhanced the reputation of state agencies nationwide. They are often viewed as being lax on industrial and agricultural polluters at the expense of local residents, their health, their rural lifestyles and the viability of their rural communities.

In some cases, it is likely, local or county regulations might constrain some of these sprawling factory farms and the resulting water and air contamination, thus protecting the quality of life for the people who live there.

It's ironic that we also hear the anti-local spiel from some farm groups who, curiously, are gung-ho for local control when it comes to land, water and wildlife decisions, but make a 180-degree turn when it comes to CAFO decisions.

One such Nebraska farm group says on its Web site that "local control has become another bona fide threat to agricultural production."

For decades, our leaders and teachers have urged Americans of all ages to get involved in their communities and the political process, to make government more accountable. Now, however, they are being told to back off.

The future of rural America and rural Nebraska is not about making the countryside more "livestock friendly." It's not about rolling out the red carpet for large feedlots in every corner of every county.

Rather, it seems, the sensible pursuit is rather simple: Make our rural areas as people friendly as possible.