Washington Insider -- Tuesday

Mobilizing to Meet New, Dangerous Food Safety Threats

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

Trump Injects Uncertainty Into US-China Trade With Tariff Comments

President Donald Trump Friday said he has not agreed to the rollbacks of U.S. tariffs sought by China, sparking fresh doubts about when the world's two largest economies may end a 16-month trade war that has slowed global growth. Trump also remarked he has not yet approved the phase one deal negotiators are working on.

"I have not agreed to anything," Trump said. "China would like to get somewhat of a rollback, [but] not a complete rollback because they know I will not do it." The Financial Times reported last week the White House was considering rolling back levies on $112 billion of Chinese goods.

Meanwhile, there continue to be different views expressed by White House officials on the topic. National Economic Council Director Larry Kudlow told Bloomberg that any phase one deal would include "tariff agreements and concessions." However, Peter Navarro, a White House trade adviser, slammed the media for reporting that the tariff removal was in the cards. Navarro said the media was relying on sources "without direct knowledge of the negotiations" -- even though Kudlow publicly mentioned the possibility of concessions.

Navarro also reprised his view that some reporters were being duped by "propagandists within the Chinese government." He also said China was trying to "negotiate in public" and said if the U.S. gave up any existing tariffs, Washington would not have leverage ahead of further phases of the talks.

Alabama, Florida, Georgia Get Disaster Aid Block Grants

Alabama, Florida and Georgia will receive a combined $800 million in block grants from USDA to help their agriculture industries recover from 2018 hurricanes, USDA announced Friday.

Florida will get $380.7 million, Georgia $347 million and Alabama $24.9 million.

Florida officials said the funds will compensate timber producers for lost value of their crop damaged by Hurricane Michael, helping them clear downed trees and replant. Block grant funding will also help producers repair and replace irrigation infrastructure damaged by Hurricane Michael. Officials say an estimated 550 million trees, weighing 72 million tons, were damaged or destroyed by the massive Category 5 hurricane.

The funding in Georgia is expected to reach pecan growers, timberland owners and poultry and cattle farmers who suffered heavy damage but had some operations that weren't covered by an earlier federal disaster aid program.

USDA is aiming to wrap everything up and disburse the funds by Thanksgiving. But that is not likely the timeframe for when the money will reach farmers.

Washington Insider: Mobilizing to Meet New, Dangerous Food Safety Threats

The Hill is highlighting continuing focus on what it sees as new and dangerous food safety threats, citing a paper by Thomas Grumbly, president of Supporters of The Agricultural Research Foundation, who has held several senior policy roles in USDA, OMB and FDA.

Grumbly argues there are severe dangers from neglecting agricultural research and thinks "the one bright spot in the U.S. ag sector" is now increasingly at risk -- and "that the entire sector is poised to fall off a cliff deeper than anyone can imagine."

He is warning about what he calls a lethal trifecta of "adverse weather, weak commodity prices and trade disruptions." His outlook was initially prepared for the Federal Reserve Bank of Cleveland.

Grumbly notes farm bankruptcies are up 24% over last year and pork production has been doing OK, for now. USDA is expecting a 10.8% increase in hog prices in 2019 compared to 2018. In the first nine months of 2018, U.S. pork exports to China exceeded 142,200 metric tons (mt) despite the trade war.

At the same time, hog farmers across the U.S. "are holding their breath" because this outlook depends on African swine fever (ASF) not arriving on U.S. soil.

Despite the name, ASF is an international threat, appearing in more than 50 countries. In China, which normally produces more pork than every other country combined, an estimated 300 million pigs have been killed by either the incurable viral infection or by mass culling on an inconceivable scale.

In the U.S., which produced approximately 130 million hogs for meat last year, USDA says it is working with state officials and industry representatives to prepare for a potential outbreak, running drills to isolate farms with infections and identify how the virus could enter production systems.

But developing effective contact tracing responses doesn't even close the barn door after all the animals leave, Grumbly thinks.

It just helps us figure out which way they went. The real imperative, since a decade ago when an ASF viral outbreak in Eastern Europe spiraled out of control, has been to find a way to prevent transmission or cure the infection before it spreads. Right now, we have no answers except to slaughter hundreds of millions of animals. And finding the funding for such critical research needs has gotten harder and harder every year.

With world-class laboratories, the U.S. once led the world in agricultural innovation. But now we are practically standing in place, despite all the threats from viral diseases like ASF to extreme weather conditions to food poisoning outbreaks.

The last time an outbreak of this magnitude hit U.S. farms was the avian influenza outbreak of 2015, in which more than 50 million chickens and turkeys were culled to stop the spread of the disease.

This year Chinese farmers have had to kill five times that number of livestock, Grumbly says. In the earlier outbreak, the tens of millions of bird corpses became a public health threat when they could not be buried fast enough so U.S. farmers shudder to think of how to dispose of much larger hog corpses in that scale of slaughter if it were necessary in the U.S.

Despite the paltry funding, researchers still have made strides in determining how viruses like ASF are propagated. For example, a team of scientists at Kansas State University determined threshold levels of contamination for the virus to be transmitted through animal feed. Previous research at the university, which determined how to remove another contagious virus from pig feed, tapped grants from two other sources.

Eleven years ago, in an effort to revamp how USDA provides research grants, Congress established the Agriculture and Food Research Initiative. The program provides funding through a competitive process in which proposals are rigorously peer-reviewed.

AFRI research was "authorized" with a $700 million budget in the 2008, 2014 and 2018 farm bills. But this level has never been reached amid the horse trading that takes place during the annual federal budget negotiations. Too many other priorities pushed this important effort aside.

As a result, the program typically provides funding to less than a quarter of the science that the program's expert panels deem necessary. And researchers tackling critically important problems first have to tackle the question of how to get funded.

Science can solve many of our problems but often falls short without steady funding. Producing food has become increasingly difficult as farmers struggle to solve increasingly difficult challenges before new crises arise to challenge their operations. Agriculture cannot evolve without new breakthroughs -- an increasing challenge, Grumbly said.

Industry experts are increasingly mobilizing to meet this new threat, which will be intensified if the U.S. and China rebuild closer trade relationships. Clearly, dealing with this threat will increasingly challenge the U.S. scientific community, and should be watched closely by producers as the mobilization process proceeds, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@dtn.com