Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.
US, China Hold Discussions on Phase One Agreement Progress
U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steve Mnuchin and Chinese Vice Premier Liu He held a conference call late Thursday, discussing economic and trade issues and the phase-one agreement between the two countries.
“The parties shared updates on COVID-19 and their assessments of its effects on economic growth as well as the measures their countries are taking to provide support to their economies,” Lighthizer and Mnuchin said in a statement. On the phase-one deal, “Both sides agreed that good progress is being made on creating the governmental infrastructures necessary to make the agreement a success,” the statement said. “They also agreed that in spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner.”
The statement also indicated that the “meetings required by the agreement have been conducted via conference call and will continue on a regular basis.”
A similarly brief recap of the discussion was reported in China, with the Xinhua News Agency reporting, “The two sides agreed that they should enhance macroeconomic and public health cooperation, create a favorable atmosphere and conditions for the implementation of the China-U.S. Phase-One trade deal, and strive for positive outcomes. They also agreed to maintain communication and coordination.”
The session and statements came as President Donald Trump earlier this week indicated the U.S. could end the agreement if China did not live up to its purchase comments. Wednesday, Trump indicated that in the next week or two he would be able to comment on the implementation of the trade deal.
USDA’s Perdue signals Increase in CFAP Payment Limits
As expected, USDA Secretary Sonny Perdue has responded to the high level of complaints that the initial payment caps under the coming Coronavirus Food Assistance Program (CFAP) were not enough. Perdue now says they will be higher than initial suggestions.
Perdue made the comments in interview with Brownfield Ag News. “We have adjusted those payment limits and we will see those when the rules come out,” he said.
The agency sent the final rule for CFAP to the Office of Management Budget (OMB) for their review May 5.
Washington Insider: Meat Industry Under Attack
Livestock and poultry production have long been key components of the U.S. ag industries. The combination of efficient grain feeds production and sophisticated high carbohydrate finishing operations have made U.S. meats the envy of much of the worldâ??as well as a valued source of revenue for U.S. producers.
Still, pockets of vegetarianism long have persisted especially among elite, urban “foodies,” largely in developed countries. These have become increasingly active, of late.
The cause is mainly threatened shortages of meat products that are prompting many Americans to give plant-based alternatives a “try”, The Hill says. It thinks this trend might allow “a previously marginalized industry to quickly expand.”
The report focuses on virus outbreaks at meatpacking plants “where workers have tested positive and several have died” forcing facilities to close. It also notes concerns about meat shortages at grocery stores and fast food chains.
That’s created an opening for companies like Beyond Meat, Impossible Foods and Tofurky, the report says. “We knew that people were turning towards plant-based for a number of reasons including health reasons. And now, to avoid meat shortages,” said Michele Simon, executive director at Plant Based Foods Association.
Simon said all of the association’s 175 members have been feeling the increase in demand right now, building on growth from before the outbreak.
Beyond Meat this week reported first quarter net revenues up 141% from the same period in 2019, to more than $97 million compared with $40 million last year. The company’s stock surged 26%.
CEO Ethan Brown said on TV, “I think we are reaching a tipping point for plant-based foods due to the COVID-19 impact on the U.S. meat supply.” These threats also have allowed other firms to accelerate their growth, The Hill thinks. For example, Impossible Foods, which makes the Impossible Burger, has increased its outlets from 150 grocery stores nationwide to 2,700 in April alone. It plans to have its products sold in more than 10,000 stores by the end of the year.
But with restaurants either closed or slowly opening, companies are looking to grocery store sales to pick up the slack since almost all of them have stayed open during the pandemic.
Plant-based competitor Tofurky claims 40% growth in grocery stores in the past 12 weeks compared to the same period in 2019, said Jaime Athos, CEO of Tofurky.
Plant-based brands also are looking to big K Street firms to help with their growth. Impossible Foods has BGR Group on retainer, including lobbyists Remy Brim, former senior health policy adviser to Sen. Elizabeth Warren, D-Mass., and Robb Walton, who held the same position under Sen. Bill Cassidy, R-La. The company spent $170,000 on lobbying in 2019 and $60,000 so far this year.
Meanwhile, major meatpacking companies JBS, Smithfield Foods and Tyson Foods are being questioned by lawmakers about working conditions following coronavirus outbreaks at their plants.
However, it’s not clear whether the surge in sales will last beyond the pandemic or the current meat shortage, The Hill says. The administration ordered meat plants to stay open last month in an attempt to head off future disruptions and Agriculture Secretary Sonny Perdue on Wednesday predicted that U.S. meatpacking plants will fully reopen in the next seven to 10 days.
“That certainly has focused attention on the problems meat causes in the food system: factory farming, concentration in the meat industry, brutal working conditions for meatpacking employees, and meat industry control of USDA policy,” said Marion Nestle, professor of food studies at New York University.
Still, the plant-based industry has also been caught up in legislative fights over whether their products can use the term meat. Mississippi restricted the use of the term for these companies, in 2018, but the Plant Based Foods Association thinks that the policy fight has “quieted down with governments otherwise occupied with more important matters” during the pandemic, The Hill says.
But one thing meatpacking companies and their plant-based competitors have in common is the need to ensure workplaces are revamped to prevent the spread of COVID-19. Benjamin Chapman, food safety specialist at North Carolina State University, said food production plants overall, regardless of the product, create a difficult setting for social distancing.
“What we’re seeing right now with these clusters isn’t about the meat operations but is much more about plants in general and essential food workers being close to each other because of the process and the challenges to implement social distancing. That can happen in many food settings, not just meat,” he said.
Impossible Foods and Tofurky are among those who say they have implemented strict rules and practices regarding social distancing and disinfecting. “The long-term trend is unquestionably moving towards a plant-based food system,” an industry observer said. “This is happening no matter what. Does the current glimpse into the sausage factory accelerate that?”
So, we will see. The current threat to conventional meat consumption seems more serious than most, and better funded. However, the conventional meat and poultry producers have enormous resources that can be used in this fight, even though the new virus is raising far reaching threats that should be taken seriously across the industry, Washington Insider believes.
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