Washington Insider -- Wednesday

By DTN's Washington Insider

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

U.S. Cellulosic Ethanol Producers Threaten to Emigrate

Major U.S. cellulosic biofuel makers say they will take their business overseas if the Environmental Protection Agency follows through on a proposal to reduce required volume obligations in the Renewable Fuels Standard for 2014.

"There are other countries that are out there that are clamoring for us to bring cellulosic to them," said Rob Walther, director of federal affairs for cellulosic ethanol producer Poet. "The question is: Do we keep going in this country? If we have a strong RFS, we do."

EPA's proposed 3 billion gallon cut for the total RFS for 2014 currently is under review at the White House Office of Management and Budget. The proposal would reduce requirements for cellulosic biofuels by 99%, from 1.75 billion gallons stipulated in the Energy Independence and Security Act (EISA) of 2007 to 17 million gallons. To date, the U.S. cellulosic ethanol industry has never produced more than that in a year.

Since enactment of EISA cellulosic ethanol manufacturers have ramped up production from zero to 17 million gallons. The law set a target of 16 billion gallons by 2022, a lofty goal that may prove difficult to achieve, even if EPA mandates greater cellulosic use in its annual Renewable Fuels Standard.

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Vilsack Steps Into Beef Checkoff Disagreement

The nation's beef producers have been unable over the past three years to arrive at a consensus regarding how their industry's checkoff program should be structured, so Agriculture Secretary Tom Vilsack said he would create a parallel program unless beef producers quickly close ranks and find an acceptable alternative.

As has been reported elsewhere by DTN, the secretary made his plans known to members of the Beef Checkoff Enhancement Working Group during a Sept. 30 meeting. The working group was to develop changes to the current system which was established to provide funding for research, education and promotion activities related to U.S. beef.

A USDA spokesman told the press: "After three years in which industry organizations were not able to make progress, USDA is stepping up its involvement to support beef producers and help ensure that the checkoff program can finally move forward. USDA will continue to seek input and work with beef producers and industry representatives so that producers will soon have a program that provides them expanded markets, research investments, and other critical support."

Whether Vilsack's threat to enter the fray will help warring sides come to an acceptable agreement remains to be seen. But it may provide the impetus needed to get the reform process back on track.

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Washington Insider: CR Study Adds Little Clarity to Food Label Fight

More than a few ag reporters were chortling this week as the noted Consumer Report product evaluation service took a fresh look at food product labels -- and, found that at least some that carried "natural" and at least one product labeled "non-GMO" contain quite a bit of GMO ingredients.

The study acknowledged the vast majority of processed foods being offered at retail include GMO ingredients. CR said it tested some companies' marketing claims. It also said it wanted to underscore the "need for labels on GMO foods" -- although it is not clear just how it thought that testing for label accuracy would emphasize the need for the labels themselves.

CR began by citing its own survey that said more than 60% of people believed "'natural' means 'No GMOs.'" CR was not clear why consumers believed that, given how widespread GMO use is.

When reporting its findings, the group concluded the belief it ascribed to consumers was not validated. "Virtually all of the samples CR tested of products that made only a 'natural' claim did have a substantial amount of genetically modified organisms."

The group bought 80 processed foods containing corn or soy, the two most widely grown GMO crops, and had them tested for GMOs. The products were conventional, "natural," organic or "non-GMO," including those bearing a label from the Non-GMO Project, a third-party certification organization. The analysis found all products certified by the Non-GMO Project included GMO corn or soy. But here they moved the goal posts a little. In this case, "no GMO" was taken to mean that GMO material did not exceed an arbitrary 0.9% threshold which it validated by noting that this is the threshold used in the European Union.

Products certified as organic under USDA's standards didn't exceed that threshold, CR said, which is a remarkably weak finding since USDA rules exclude GMOs from its "organic" standards.

To nobody's surprise, products making no claims about GMOs including cereals, veggie burgers and soy-based infant formulas contained as much as 100% GMO ingredients, the analysis found reflecting the wide use of GMO products in the general food supply.

One product, Xochitl Totopos de Maiz corn chips, claimed its chips included "No GMO" but the CR analysis found that the amount of genetically modified corn exceeded 75% in six samples.

The CR test comes as voters in Colorado and Oregon are scheduled to vote this fall on ballot initiatives that would require labels. Vermont passed a labeling law earlier this year which is still being challenged by the food industry. Similar laws in Connecticut and Maine have also passed but are contingent on passage of similar laws in adjacent states and likely face challenges as well, observers note.

In summary, the CR study makes the difficult issue of food labels even more confusing by suggesting the labels themselves are likely to fall far short of telling consumers meaningful facts about their food products -- or, even believable facts. As observers have noted repeatedly during the long campaign for better food product information, deciding just what labels should say and how claims should be tested and what the costs of this information would be are all extremely uncertain -- and, may make labels an unwelcome retail tool if they significantly raise costs.

Labels in California and Washington were rejected by voters after heated debates over these issues, and they are being raised forcefully in this fall's debates, as well.

Now, this study, intended to bolster the case for labels, seems to be suggesting those being used to date have not served any purpose very well -- and, may be providing tools for unscrupulous marketers in spite of the food advocates' best intentions, suggesting Consumer Reports actually may have weakened the case for legal requirements.

In any event, the stakes of this fight remain high and the issues should be watched carefully by producers as they emerge, Washington Insider believes.

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GH

(GH/CZ)

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