March 2017
Ag Insight

Ag Insight

New certification cost-share plan for organic producers

The U.S. Department of Agriculture has announced that starting March 20 organic producers and handlers will be able to visit over 2,100 USDA Farm Service Agency offices around the country to apply for federal reimbursement to assist with the cost of receiving and maintaining organic or transitional certification.

Under the new approach, producers will be able to visit local FSA offices to learn how to obtain cost-share reimbursements for up to 75 percent of the expense of organic certification. Officials say producers will have a more uniform, streamlined process nationwide.

The changes are an effort to encourage increased participation in the National Organic Certification Cost Share Program and the Agricultural Management Assistance Organic Certification Cost Share Program, and, at the same time, provide more opportunities for organic producers to access a full range of USDA programs.

In the past, state departments of agriculture administered the cost-share programs. States still wanting to administer the program had the opportunity to do so by applying for funding by mid-February.

Eligible producers include any certified producers or handlers who have paid organic or transitional certification fees to a USDA-accredited certifying agent. Application fees, inspection costs, fees related to equivalency agreement/arrangement requirements, travel/per diem for inspectors, user fees, sales assessments and postage are all eligible for cost share reimbursement.

Once certified, producers and handlers are eligible to receive reimbursement for up to 75 percent of certification costs each year up to a maximum of $750 per certification scope.

Those wanting to learn more about organic certification cost share should visit www.fsa.usda.gov/organic or contact a local FSA office by visiting http://offices.usda.gov.

 

Canned fruit consumption down, fresh fruit’s market share up

 

The availability of canned fruit per capita for consumption by U.S. consumers has fallen considerably, but that news may sound worse than it is.

A recent study by USDA’s Economic Research Service shows canned fruit availability has fallen from 25.1 pounds per capita in 1970-74 to 14.2 pounds in the most recent consumption study. At the same time, average consumption of fresh fruit has increased substantially. Fresh fruit availability grew by 34.5 pounds per person and boosted fresh fruit’s market share from 41 to 52 percent.

Canned apple and applesauce availability was 4.1 pounds per person in 2010-14, leading the way in canned fruit. Canned pineapple availability – the second highest – was 3.9 pounds per person. With the exception of olives, per person availability fell for all canned fruit during the study period.

 

WTO rules for United States in Indonesian dispute

A World Trade Organization dispute settlement panel has found in favor of the United States’ challenge to Indonesia’s wide-ranging restrictions and prohibitions on horticultural products, animals and animal products.

Working closely with New Zealand as co-complainant, the United States filed the dispute to address Indonesian trade barriers restricting the importation of American fruits and vegetables (such as apples, grapes and potatoes), animal products (such as beef and poultry) and other agricultural products.

The WTO Panel agreed with the United States on 18 of 18 claims that Indonesia is applying import restrictions and prohibitions inconsistent with WTO rules.

 

Educational attainment shows disparities in rural areas

 

While educational attainment in rural America has improved over time, rural areas still lag behind urban areas in educational attainment. Moreover, within rural areas, educational attainment varies across racial and ethnic categories.

In general, minority populations within rural areas have relatively less education. About a quarter of adults age 25 and over in the rural black population, 20 percent of Native Americans/Alaska Natives, and almost 40 percent of rural Hispanics had not completed high school or the equivalent in 2015.

These percentages are considerably higher than for rural whites, with 13 percent lacking a high school diploma. Lower attainment levels for minorities may both reflect and contribute to high rates of poverty. Childhood poverty is highly correlated with lower academic success and graduation rates, while lower educational attainment is strongly associated with lower earnings in adulthood.

 

Report shows increased benefits of ethanol in
greenhouse gas measurements

A new report studying the lifecycle greenhouse gas, or GHG, balance of corn ethanol has found that GHG emissions associated with corn-based ethanol in the United States are about 43 percent lower than gasoline when measured on an energy equivalent basis.

Unlike other studies of GHG benefits that relied on forecasts of future ethanol production systems and expected impacts on the farm sector, the latest research reviewed how the industry and farm sectors performed over the past decade in assessing the current GHG profile of corn-based ethanol.

In general, the report provides evidence that corn ethanol can be a GHG-friendly alternative to fossil fuels, while boosting farm economies. The greater lifecycle GHG benefits from corn ethanol are driven by a variety of improvements in ethanol production, from the cornfield to the ethanol refinery.

Farmers are producing corn more efficiently and using conservation practices that reduce GHG emissions, including reduced tillage, cover crops and improved nitrogen management. Corn yields are also improving – a 10 percent increase from 2005 to 2015.

From 2005 to 2015, ethanol production in the United States also increased significantly – from 3.9 billion to 14.8 billion gallons per year. At the same time, advances in ethanol production technologies such as the use of combined heat and power, using landfill gas for energy and co-producing biodiesel helped reduce GHG emissions at ethanol refinery plants.

By 2022, given current trends, the GHG profile of corn-based ethanol is expected to be almost 50 percent lower than gasoline, primarily due to improvements in corn yields, process fuel switching and transportation efficiency.

 

Wholesale beef prices falling more rapidly than at retail

It’s not news to beef producers but recent data confirm that wholesale beef prices are declining more rapidly than at the retail level.

 

According to a recent USDA review, the price of choice beef in wholesale and retail markets moved upward in 2014 and most of 2015. Wholesale prices increased from roughly $3 per pound to nearly $4 per pound by mid-2015, while retail prices moved from just over $5 per pound in January 2014 to a peak of $6.41 in June 2015.

Both prices decreased in 2016, with the wholesale price falling below $3 in late 2016. Retail prices also dropped, but at a slower rate. As a result, the ratio of retail to wholesale prices has increased to more than 2:1, 20 percent higher than the ratio in June 2015 when both prices were at their highest.

 

Eating out spurs growth in chicken consumption

Per person chicken consumption in the United States has more than doubled over the past four decades, and it comes as no surprise that Colonel Sanders, McDonalds and other segments of the away-from-home market have driven much of the increase.

The away-from-home market includes not only fast food operations but also school cafeterias, restaurants with wait staff and other eating-out locations.

The share of total chicken consumption prepared by away-from-home eating-out places rose from 41.9 to 46.4 percent during a recent 15-year period. Loss-adjusted chicken availability per person in the away-from-home market went from 16.8 pounds to the 22.5- to 24.8-pound range during the same period.

In contrast, chicken obtained at grocery stores (the food-at-home market) grew by just 2.6 pounds per person from 23.3 to 25.9 pounds.

The greater growth in chicken consumption away from home is consistent with the introduction of chicken nuggets, chicken strips and grilled chicken sandwiches, and their rising popularity in fast-food and other eating-out places.