March 2018
Ag Insight

Ag Insight


U.S. Exports Show Shift in Destinations

A marked shift in the destinations for U.S. agricultural exports has accompanied the increased participation of developing economies in global agricultural trade.

Elimination of agricultural trade barriers within North America initially boosted exports to Canada and Mexico, partners with the United States in the North American Free Trade Agreement. Later, rising household incomes and changing trade policies in developing East Asia (China and Southeast Asia, less Singapore) led to a near tripling in that region’s share of U.S. agricultural exports.

China’s share of U.S. agricultural exports swelled from 3 percent on average during 1995-99 to 16 percent during 2011-15. A single product, soybeans, accounts for half of this increase.

However, the strong growth in demand for U.S. agricultural exports in East Asia and North America has been offset by a sharp decline in the share going to Europe and high-income economies in East Asia, particularly Japan. In the EU, a number of barriers, including concerns over genetically modified products, continue to hamper U.S. agricultural trade.


Peanut Board Appointments For Two From Alabama

Two Alabama producers have been appointed to serve three-year terms on the National Peanut Board.

Named by Agriculture Secretary Sonny Perdue to serve as a board member was Tom Corcoran of Eufaula. Thomas Adams of Newville was appointed as an alternate board member.

The terms of both appointees began the first of this year and will end Dec. 31, 2020.

The board is composed of 12 producer/members and their alternates. Eleven members and alternates are from the primary peanut producing states of Alabama, Arkansas, Florida, Georgia, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Texas and Virginia. An at-large member and alternate represent the minor peanut-producing states.



Egg, Turkey Output Rebounds After Avian Influenza Outbreak

The 2014-15 highly pathogenic avian influenza outbreak was the largest poultry-health disaster in U.S. history, but egg and turkey productions have rebounded since that period.

Over 50 million birds were lost to the disease itself or to depopulation, overshadowing bird losses during any previous U.S. outbreak. HPAI resulted in lower commodity production when supplies had previously been growing.

HPAI did not affect broiler output, with production growth continuing through 2015 and aligning with prior forecasts.

However, egg production declined for about nine months, with the sharpest reduction occurring from May to December 2015, as production remained 10 percent below 2014 levels.

The impact of HPAI on turkey production was initially similar to its impact on egg output, but it rebounded faster. While 2015 monthly production for June-July averaged 10 percent below the prior year, monthly production in August-December averaged only 5 percent lower.


New Egg Products Inspection System Proposed

The U.S. Department of Agriculture’s Food Safety and Inspection Service has announced a proposal to make egg products safer for Americans to eat.

FSIS is proposing to amend inspection regulations by requiring official plants that process egg products to develop Hazard Analysis and Critical Control Points systems and Sanitation Standard Operating Procedures, and to meet other sanitation requirements consistent with the meat and poultry regulations.

The FSIS proposal says official plants will be required to produce egg products free of detectable pathogens. The regulatory amendment also is designed to use the agency’s resources more efficiently and to remove unnecessary regulatory obstacles to innovation.

Under the proposed plan, FSIS would eliminate those current regulatory provisions not consistent with the meat and poultry regulations.

With the HACCP system, plants will be able to tailor a food-safety system best fitting their particular facility and equipment. Furthermore, by removing prescriptive regulations, egg-products plants will have the flexibility and the incentive to innovate new means to achieve enhanced food safety, FSIS says.

The impact cost for the proposed rule is mitigated by the fact 93 percent of egg-products plants already use a written HACCP plan addressing at least one production step in their process, while also alleviating the costs associated with the current prescriptive regulations.

The proposal calls for a 120-day period for public comment after the rule’s publication in the "Federal Register."



Off-farm Income Percentage Varies
by Size of Operation

Most farm households rely on off-farm income such as wages from a job outside the farm. But the percentage of that income to the total varies dramatically by farm size.

Typically, only commercial-farm households receive a substantial share of their income from the farm. For example, in 2016, the median farm income was negative $2,008 for households operating residence farms (where the operator primarily works off-farm or is retired from farming), while median off-farm income was $83,400.

Households operating intermediate farms (smaller farms where the operator’s occupation is farming) also earn the bulk of their income from off-farm sources. In contrast, households operating commercial farms – where gross cash income is $350,000 or more – derive most of their income from the farm (nearly $144,000 in 2016). Changes to their total household income follow profits from farming.

Most agricultural production takes place on commercial farms. In 2016, residential and intermediate farms together accounted for over 90 percent of U.S. family farms and one-quarter of the value of production. By comparison, commercial farms accounted for 9 percent of family farms and three-quarters of production.


5 Appointed to FSA State Committee

U.S. Secretary of Agriculture Sonny Perdue has named five Alabamians to a slate of Farm Service Agency State Committee appointees.

State committees are selected by the Secretary, serve at the pleasure of the Secretary and are responsible for carrying out FSA’s farm programs within delegated authorities.

"The State Committees will help to ensure USDA is providing our farmers, ranchers, foresters and agricultural producers with the best customer service," Perdue said. "The committees are made up mostly of active farmers and ranchers, representing their peers and ensuring USDA’s programs are supporting the American harvest."

Those named are Committee Chair Monica Carroll of Ozark, Andy Lavender of Brundidge, Rodney Moon of Harvest, Steve Penry of Daphne and Doug Trantham of Alexandria.



Large Grocery Chains Increase Market Share

The share of U.S. grocery sales held by the fourth- and eighth-largest food retailers rose in 2016 for the fourth consecutive year.

Sales by the 20 largest food retailers was $515.3 billion in 2016 and accounted for nearly two-thirds of U.S. grocery sales.

The shares of food-industry retail sales recorded by the fourth-, eighth- and 20th-largest supermarket and supercenter retailers resumed their long-term trend of increased sales concentration in 2013 after decreasing slightly after the 2007-09 recession. Publix lost its spot in the top four food retailers in 2016 to Ahold Delhaize that joined Wal-Mart, Kroger and Albertson’s.

Much of the change in industry structure during the last few years was largely due to the impact of two big mergers – the acquisitions of Safeway by Albertson’s in 2015 and of Delhaize by Ahold the following year.

Kroger has maintained its ranking, in part, by acquiring a number of smaller retailers such as Harris Teeter and Roundy’s during the last few years.

Since 2013, three regional food retailers have joined the ranks of the top 20 due to mergers and A&P exiting the industry.