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Conveyor Currents April 11, 2014
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| Upcoming Dates |
2014
April 23-26, 2014 CGFA Annual Convention ~ The Sheraton Resort, Maui, HI *** Information Click Here ***
May 14-15, 2014 California Animal Nutrition Conference, Fresno Hotel in Fresno, CA *** Information Click Here ***
2015
January 14-15, 2015 Grain & Feed Industry Conference - Embassy Suites on Monterey Bay
April 22-25, 2015 CGFA Annual Convention - The Monterey Plaza Hotel on Cannery Row.
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| Quick Links |
California Dept. of Food & Ag
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| Bill Providing Urban Farms Ability to sell to Restaurants Passes Committee |
Legislation that would allow urban and community farms to sell uncut vegetables and unrefrigerated eggs passed assembly agriculture committee this week. However, the bill only passed when objections by the Association of California Egg Farmers were addressed by the author committing to address the industry's concerns. The bill allows for unrefrigerated shelled eggs raised on an urban or community farm to be sold directly to restaurants and other establishments as long as they meet all health and safety requirements.
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| Raw Milk Bill Fails Assembly Ag Committee |
Citing overwhelming evidence of the health risks, lawmakers on Wednesday rejected a bill that would allow small farms to sell or give to friends, portions of raw dairy products. Assembly Bill 2505 by Assemblywoman Mariko Yamada, D-Davis, would have allowed farms with three or less cows or 15 goats to sell or give raw milk without complying with some of the standards that apply to larger dairies.
Yamada said it is unfair to hold "home dairies" to the same standards that govern commercial dairy distributors, effectively barring small farmers from a long-running tradition of sharing or selling their milk. While some raw milk advocates tout the superior taste and health benefits of consuming unadulterated dairy, much of the testimony on Wednesday stressed unburdening small-scale farmers of needless regulation.
"If we continue to undermine and criminalize farmers, who produce food directly farm-to-consumer, California will continue the trend of declining family farms," dairy rancher Doniga Markegard testified.
"If you want to drink unpasteurized milk, buy a cow, milk the cow and drink the milk," said Assemblyman Brian Dahle, R-Bieber. "We don't like to get into what people do at home - that's your business - but when you start selling it, that's our business."
But medical professionals warn about the risk of spreading illnesses that can hospitalize and in some cases kill. A Centers for Disease Control study found the incidence of outbreaks soaring for raw milk, with unpasteurized dairy products causing outbreaks at 150 times the rate of treated milk products.
The California Grain and Feed Association joined a coalition of agriculture and public health groups opposing the legislation.
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| FSMA Update |
FDA's Taylor says FSMA Implementation Plan Details Coming
The specifics of "principles and our current thinking" on how FDA will move forward to implement the Food Safety Modernization Act (FSMA) should be public in the next several weeks, FDA's Deputy Commissioner for Food & Veterinary Services Michael Taylor this week told the Food Safety Summit in Baltimore, MD. Those details should cover the produce safety proposed rule, the preventative controls proposed rules for human and animal foods, and processes affecting the import system.
"This is for the purposes of stimulating dialogue with the community," Taylor said, adding the "operational document" will be posted to the FDA website, not published in the Federal Register.
Taylor told reporters at the conference that later this month or early in May, he hopes to release "an operational strategy," according to Politico, a Capitol Hill newspaper. He said the agency is shifting how it operates internally to achieve good FSMA implementation, "in terms of how our inspectors approach inspection, how we work with the states, how we focus on technical assistance and guidance for industry to get greater voluntary compliance, and how to use administrative enforcement powers efficiently "where there is a public health need to do so."
FSMA Feed Rule Drawing Calls for Exemptions
The complexity and deficiencies identified in the 400-plus-page FDA proposed rule on performance standards for feed and pet food under the Food Safety Modernization Act (FSMA) has birthed requests from ingredient segments for outright exemption from the rule.
The big push - and the effort exhibiting the most political investment - comes from beer makers and liquor distillers. The industries contend the spent grains from the malting and distilling processes that are "given away or sold at low cost" to farmers are risk-free and the companies are not feed or ingredient companies within the meaning of FSMA, and therefore the beer and liquor firms should not be covered by the FSMA feed rule and its requirements of feed ingredient suppliers and manufacturers.
Over the last 10 days, half a dozen Senators sitting on various committees before which FDA Commissioner Margaret Hamburg appeared, pushed her to exempt the alcohol makers from the rulemaking. She said the feed rule is under review and a modified version will be published sometime in late May or early June, and that she'll ensure the request for exemption is examined.
Rep. Steve Womack (R, AR) introduced a bill to amend FSMA "to ensure certain facilities continue to be treated as alcohol-related facilities, notwithstanding the distribution of spent grains (for use as food for animals) resulting from the production of alcoholic beverages." The bill will be referred to the House Committee on Energy & Commerce, but is not likely to see action.
The National Turkey Federation (NTF) is seeking to exempt turkey growers who make their own feed for their own birds. This bid is unlikely to prevail as FDA would then have to look at all integrated poultry producers and on-farm feed mixers in the same context. Exempting more than half the nation's feed production is highly unlikely, said one feed industry expert close to the rulemaking.
For its part, the American Feed Industry Assn. (AFIA) does not support any exemptions from FSMA feed rule coverage. To exempt only certain practices or processes dilutes the intent of the rule, is not fair to commercial companies, and exposes vast segments of the industry to risk, it said.
NGFA, NRA Tell Grocers FDA "Vastly Underestimates" Cost of FSMA Feed Rule
The National Grain & Feed Assn. (NGFA) and the National Renderers Assn. (NRA) this week told a science forum sponsored by the Grocery Manufacturers Assn. (GMA) that FDA has vastly underestimated how much the industry will have to pay to comply with new rules on feed safety under the Food Safety Modernization Act (FSMA).
Randy Gordon, NGFA president, told the group "FDA's estimate was that the cost across the entire industry would be $128 million...(while) our estimate shows it would easily cost $500 million, maybe closer to a $1 billion." Gordon says NGFA's analysis pegs the per-facility cost at nearly $65,000.
NRA's Senior Vice President David Meeker said "if FDA would back down a bit" and allow for practices already legal, common and effective in the industry, costs could be manageable. To meet the FDA proposed standards going forward will cost each rendering company $250,000 per plant on average. If FDA goes forward with finished product testing, as expected in the May-June republish of the proposed rule, the cost jumps to $1 million per facility, Meeker added.
Next Up, FSMA Transportation Proposed Rule; AFIA Wants Industry Input
With comments filed by all major feed and grain industry players on the Food Safety Modernization Act (FSMA) feed performance standards proposed rule, attention now turns to comments on the proposed FSMA rulemaking to ensure food transportation - from farm through processing - is "sanitized" and does not contribute to contamination.
The rulemaking - "Sanitary Transportation of Human and Animal Food" - requires human food and animal feed companies registered under FSMA to develop practices to ensure carriers using auto (truck) or rail, as well as receivers providing "transport' do not jeopardize food safety. The proposed rule was published last month and comments are due May 31.
"Transportation" is defined as "any movement of food in commerce by motor vehicle or rail vehicle," and the rule sets requirements for vehicles and transport equipment; transportation operations; training; recordkeeping, and qualifying for waivers.
The American Feed Industry Assn. (AFIA) is looking for input on where the proposed requirements are suitable for feed and ingredient companies. The questions AFIA seeks input on include current clean-out procedures for truck and rail, how the term "adequately cleanable" applies to the feed and pet food industries; what resources are needed to implement the rule, including financial investment and new staff; is it practicable for all carriers - company owned and contract - to provide identification of the previous three loads carried by a vehicle and descriptions of how the vehicles are cleaned; do contract carriers have written procedures on cleaning and inspecting transport vehicles, and are the provisions appropriate for ingredients, feed and pet food?
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| Senate Agriculture Panel Approves CFTC Nominees | |
President Obama's nominations to bring the Commodity Futures Trading Commission (CFTC) back to its full complement of commissioners, including a new chair, were approved unanimously this week by the Senate Agriculture Committee. The three nominees are expected to receive full Senate confirmation quickly.
The nominees approved are Treasury Department Assistant Secretary Timothy Massad to be CFTC chair; Sharon Y. Bowen, a New York City attorney at Lambath & Watkins, to be a Democrat commissioner, and J. Christopher Giancarlo, executive vice president of GFI Group in New York City, to take the Republican slot on the commission.
While none of the agriculture panel members dissented, Sen. David Vitter (R, LA) released a statement after the committee approval opposing the Bowen nomination over his allegation her actions as acting chair of the Securities Investor Protection Corp. (SIPC) failed to protect investors in the Stanford ponzi scheme. Public Citizen has previously opposed Massad.
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| Lucas to Surrender Ag Committee Chair, Potential Successor Campaigns | |
Come January, 2015 and the 114th Congress, the House Agriculture Committee will have a new chair as current chair Rep. Frank Lucas (R, OK) says he won't seek a waiver from House rules term limiting committee chairmanships after six years. Speaking to the North American Agriculture Journalists meeting in Washington, DC, Lucas said "I will never leave the ag committee."
Making noise about wanting the ag chair is Rep. Michael Conaway (R, TX), while Rep. Steve King (R, IA) said he's not decided whether he'll campaign for the chair, but the possibility is "under consideration." Conaway says his chairmanship of the House Ethics Committee demonstrates his ability to lead and that he began campaigning with the House GOP Steering Committee for the ag panel slot a year ago.
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| Pompeo Introduces Bipartisan Bill to Preempt States on GM Labeling |
Federal legislation to shield food, feed, pet food and other producers from genetically modified (GM) food labeling laws pending in 27 statesby making the federal government the ultimate arbiter of labeling requirements was introduced this week by Rep. Mike Pompeo (R, KS) and five bipartisan House colleagues. Joining Pompeo in a news teleconference this week were Reps. G.K. Butterfield (D, NC), Jim Matheson (D, UT), Marsha Blackburn (R, TN) and Ed Whitfield (R, KY). The bill is strongly supported by the Coalition for Safe & Affordable Foods (CSAF), an ad hoc group formed by the Grocery Manufacturers Assn. (GMA), with 35 biotech, farm, grain, feed, food, ingredients association members. The members include the American Feed Industry Assn. (AFIA), the National Grain & Feed Assn. (NGFA) and the Pet Food Institute (PFI). The bill has been referred to the House Energy & Commerce Committee where chair Rep. Fred Upton (R, MI) is supportive, but no schedule of hearings has been set. The bill is not likely to see floor action this year, and absent a Senate companion bill, the issue of GM labeling will resurface in 2015 during the 114th Congress. In addition to federally preempting state labeling laws, the bill requires companies seeking to use a GM ingredient to submit the USDA-deregulated ingredient to FDA for review before the product goes to market, with FDA either accepting or rejecting, or in some cases, requiring labeling. The bill instructs FDA to develop a consistent federal definition of the term "natural" when used in labeling, provide guidance on voluntary labeling for the presence or absence of GM ingredients, and to require labeling if a GM ingredient poses a safety or allergenicity problem. Identical legislation to mandate federal labeling of foods containing GM ingredients has been introduced in the House and Senate by Rep. Peter DeFazio (D, OR) and Sen. Barbara Boxer (D, CA); the Alaska delegation wants labeling of genetically modified Atlantic salmon when FDA approves it out of fear the fish will compete with wild caught Pacific salmon. All attempts to label the GM salmon have failed, as did two attempts by Sen. Bernie Sanders (I, VT) to amend the Farm Bill on the Senate floor to give states explicit authority to set GM labeling standards. |
| EPA Notes |
McCarthy Says RFS Final Numbers will be "Different" - EPA Administrator Gina McCarthy this week told a meeting of the North American Agricultural Journalists (NAAJ) that the agency's final declaration on 2015 biofuel blend rates under the Renewable Fuels Standard (RFS) will be "different" than blend levels proposed by EPA several months ago. McCarthy said her agency is paying attention to statements by Secretary of Agriculture Tom Vilsack that gasoline sales have risen since the agency made its initial proposal.
The 2015 RFS levels proposed by EPA showed across-the-board reductions - in the case of corn ethanol, a dramatic decrease - in RFS blend rates. The agency cited at the time the gasoline industry's contention that fewer miles driven and more fuel efficient cars and trucks had led to an ethanol "blend wall," the point at which the gasoline industry can't blend enough mandated biofuels without exceeding the 10% blend rate authorized for gasoline.
McCarthy says volumetric numbers often change between proposal and final requirements, and that the RFS 2015 volumetric numbers will reflect "current numbers" in the gasoline industry.
The Advanced Ethanol Council this week in a related development told a Senate Agriculture Committee hearing on advanced biofuels that the EPA proposal has created such uncertainty about RFS levels it has frozen private investment in the biofuels sector. At the end of the hearing, Sen. Debbie Stabenow (D, MI) said her committee would submit all hearing testimony to EPA for consideration as it finalizes the RFS 2015 levels.
In another RFS-related development, a federal appeals court judge wants to know why it's taking so long for EPA to make a final RFS determination, calling the agency's delays "egregious." He made the statement in the context of a suit brought by American Petroleum Institute and the American Fuel & Petrochemical Manufacturers seeking to throw out 2013 RFS mandates because the agency didn't issue the mandates until nine months after the legislative deadline.
Ag Told to Remain "Calm" over EPA CWA Authority Proposal - The agriculture community should stay "calm" and "take a deep breath" in its reaction to EPA's proposed rule under the Clean Water Act (CWA) to expand its authority, said EPA Administrator Gina McCarthy again this week. Allegations the proposal is a "power grab" or a "land grab" are not true, she said.
The American Farm Bureau Federation (AFBF) and the National Cattlemen's Beef Assn. (NCBA) contend the proposed authority expansion raises more questions than it answers about what is protected and what will require permits. McCarthy said she's open to suggestions on how to clarify the language, and has already set up meetings with ag interests to discuss the rulemaking.
McCarthy reiterated in a series of public appearances throughout the week that the proposed rule to reinterpret EPA's authority under the CWA "waters of the U.S." language keeps in place all current agricultural exemptions and exceptions.
16 Senators Tell EPA, USDA: Don't Tax Livestock Emissions - Don't even think about taxing farmers, ranchers and feedlots over methane emissions was the hard message sent to EPA, USDA and the Department of Energy (DOE) by 16 GOP Senators this week, as the three cabinet members seek to implement the President's climate action plan.
"If this plan leads to heavy-handed regulations or mandatory guidelines, farmers and ranchers would likely face a steep increase in production costs," said Sen. John Thune (R, SD), organizer of the Senate letter.
Thune reminded the administration that EPA cannot regulate greenhouse gas emissions from farms and ranchers based on language included annually in appropriations bills. He also pointed out methane emissions associated with farming have been reduced 11% since 1990.
Under the White House "Strategy to Reduce Methane Emissions," the plan calls for the federal government to come up with ways to reduce methane emissions from livestock sources by 25% by 2020. The dairy industry is working with the three departments to come up with a "Biogas Roadmap" for release in June that would list a number of voluntary actions dairy producers can take, including adoption of technologies such as use of anaerobic digesters to convert methane to electricity.
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| House Agriculture Approves CFTC Reauthorization, Protects End Users, Hedgers | |
The House Agriculture Committee approved by voice vote and with no changes a broad bipartisan bill to reauthorize the Commodity Futures Trading Commission (CFTC), and provide futures market end-users and legitimate risk hedgers insulation from derivatives rules aimed at financial institutions. The full House is expected to approve the bill soon.
"The Customer Protection & End-User Relief Act" puts the CFTC back on firm legal standing as its authorization technically expired at the end of September, 2013, but was extended when the 2008 Farm Bill was extended while lawmakers battled over the new Farm Bill.
The committee opted to roll the reauthorization and protections from Dodd-Frank regulations into a single bill after several hearings demonstrated "these new rules (on derivatives) have had the consequences of negatively impacting end-users, like farmers...which use derivatives to manage risks." In previous legislation approved by the committee, end-users were to be exempted from "some of the most costly new regulations," but the CFTC's interpretation of the Dodd-Frank requirements has been too narrow, said committee chair Rep. Frank Lucas (R, OK).
Senate Agriculture Committee Chair Debbie Stabenow (D, MI) said her committee is pursuing with a "comprehensive" bill, but whether its approach will be as broad the House ag panel's action is not known. She is confident no matter what direction the Senate takes, the two bills can be reconciled.
The House bill takes language from several previously approved committee bills to exempt from margin requirements swaps where non-financial participants are hedging risk; to exclude from the swap definition any agreement, contract or trade between affiliated entities under the control of one company; repeal indemnification requirements for regulators to get swap data from swap players; allow utility companies to trade energy swaps with government-owned utilities without having to register as a swap dealer, and require the Securities & Exchange Commission (SEC) and the CFTC to issue rules on the application of U.S. swaps requirements to swaps between U.S and foreign entities.
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