Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.Caution: USDA Forecasts Ahead
USDA’s Annual Outlook Forum will take place the next two days near Washington, D.C., and a lot of attention will be placed on a series of USDA forecasts that will come out today.
The updates include the 2020 acreage expectations and price forecasts that will be delivered this morning by USDA Chief Economist Rob Johansson. Those will frame the supply picture for the 2020/21 marketing year, with those outlooks due Friday morning.
The other important update will be the Outlook for U.S. Agriculture Exports which will provide USDA’s latest look for the dollar value of U.S. ag exports and imports for Fiscal Year (FY) 2020.
The attention point will be on the how much USDA chalks up to the Phase One trade deal between the U.S. and China. USDA will have to acknowledge the deal in their forecast, particularly now that the deal is in effect.
Then, USDA analysts on Friday morning will release their first run at the 2020/21 marketing year U.S. balance sheets.
But the key to keep in mind on these forecasts relative to the Phase One deal is that the agreement is on a calendar-year basis, while the forecasts due over the next two days will be a mix. The trade forecast is on a FY basis – an October-September year – while the U.S. commodity balance sheets are on a mix of marketing years.
Still, the data will provide some additional perspective on what USDA analysts expect to be a result of the Phase One deal with China.
Hormel to Stop Using Hogs That Are Fed With Ractopamine
Hormel Foods announced it will no longer accept hogs that have been fed or exposed to ractopamine after April 1 as the company seeks to expand its ability to sell products to China.
"We have been actively monitoring the changing global market dynamics for several years and believe this decision will further position us to meet growing international demand," Hormel said.
Hormel uses third-party suppliers for its pork and does not have slaughter operations.
Tyson Foods and JBS USA announced last year they would eliminate ractopamine from their supply chains for the same reason – they sought to boost exports to China which prevents the use of ractopamine for livestock.
The move comes even as the phase-one trade agreement between the U.S. and China calls for China to undergo a risk assessment of ractopamine in cattle and hogs “as soon as possible without undue delay.” The risk assessment is to be done in consultation with the U.S. and “verifiable data and the approved conditions of ractopamine use in the United States.”
Washington Insider: Growing Obesity Threat
The New York Times science section recently featured a report that argued that climate change “is not the only source of dire projections for the coming decade.” The article was responding to “a predicted continued rise in obesity among American adults.”
It featured projections from a prestigious team of medical scientists who conclude that “by 2030, nearly one in two U.S. adults will be obese, and nearly one in four will be severely obese.” The estimates are thought to be particularly reliable, NYT says because the team corrected for current underestimates of weight given by individuals in national surveys.
In as many as 29 states, the prevalence of obesity will exceed 50%, with no state having less than 35% of residents who are obese, the team said.
Likewise, it expects that in 25 states the prevalence of severe obesity will be higher than one adult in four and could become the most common weight category among women, non-Hispanic black adults and low-income adults nationally.
Given the role obesity plays in fostering of many chronic, disabling and often fatal diseases, these are dire predictions indeed, the Times said. Yet it notes that “the powers that be” in the U.S. are doing very little to head off these potentially disastrous results.
Well-intentioned efforts like limiting access to huge portions of sugar-sweetened soda, the scientists note, have been “effectively thwarted” by well-heeled industries able to dwarf the impact of efforts by health departments that have minuscule budgets by comparison.
Claims that such taxes are regressive “and unfairly target low-income people” are shortsighted, according to Zachary Ward, public health specialist at Harvard and the lead author of the new report published in The New England Journal of Medicine in December.
“What people would save in health care costs would dwarf the extra money paid as taxes on sugar-sweetened beverages,” he said told the press.
Still, in “a city like Philadelphia,” where a soda tax of 1.5 cents an ounce took effect three years ago, total purchases declined by 38% even after accounting for beverages people bought outside the city, the report’s authors said.
However, the report downplayed piecemeal policy changes like this as too small to make a significant difference in the obesity forecast for the country. Rather, nationwide changes are needed as the “food environment” has fostered a steady climb toward a weight-and-health “disaster”.
NYT says that this health threat is relatively new and that since 1990, the prevalence of obesity in this country has doubled.
This change is not from genetics, which have “not changed in the last decade,” Dr. Sara Bleich said. Rather, what has changed is the environment in which our genes now function. Food is super easy to access, said Bleich, a professor of public health at the Harvard T.H. Chan School of Public Health. “We eat out more, consuming more foods that are high in fat, sugar and salt, and our portion sizes are bigger.”
“It doesn’t take that many extra calories to result in weight gain,” Dr. Bleich said. “Through marketing, we’re constantly being sold on foods we didn’t even know we wanted.”
Unless something is done to reverse current trends, Ward said, “Obesity will be the new normal.”
In addition, the study authors think that there is “no one thing to throw at the problem.” However, they point out that policies that reduce added sugars have reduced weight gains and health problems and that “when people drink their calories, they don’t feel as full as when they consume solid food, so they end up eating more.”
With a third of meals now being eaten out, Dr. Bleich suggested that prompting restaurants to gradually reduce the amount of fat, sugar and calories in the meals they serve could help dampen societal weight gain. “Menus could make healthier, lower-calorie meals the default option,” she said.
Controlling portion sizes is another critically important step. “Big portions are especially motivating for low-income people who reasonably want to get more calories for their dollar,” she said. Low-income groups already have the highest rates of obesity and, the new projections show, they are the groups most likely to experience a rising prevalence of obesity and severe obesity.
“From a policy perspective,” Ward said, “prevention is the way to go. Children aren’t born obese, but we can already see excessive weight gain as early as age 2. Changes in the food environment are needed at every level, local, state and federal. It’s hard for individuals to voluntarily change their behavior.”
So, we will see. Taxes are unpopular and face an uphill fight for acceptance, so education likely is the most acceptable policy choice. Whether or not warnings and nutrition education can effectively derail this trend remains to be seen, but it is a growing industry wide threat with potential implications for the food industry that should be watched closely by producers, Washington Insider believes.
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