July 2021, Volume 27, Number 3
US Ag, Trade
US corn and soybean prices reached their highest levels since 2012 in summer 2021, reflecting Chinese purchases to feed hog herds that were decimated by African swine fever and droughts in Argentina and Brazil that reduced corn exports. China’s hog herd returned to its pre-swine fever levels of 420 million in summer 2021, which required more animal feed.
US farmers finished planting corn and soybeans by mid-June, and worried about heat and drought in summer 2021. Corn requires nitrogen while soybeans fix nitrogen in the soil, so the crops are often rotated. Argentina, Brazil and the US produce 80 percent of the world’s soybeans, while the US produces a third of the world’s corn, China a quarter and Brazil a tenth. About 40 percent of US corn is used to make ethanol.
Three-fourths of US commercial farmers reported receiving almost $15 billion in 2019 according to USDA’s ARMS survey, an average $85,000 each; commercial farms have gross cash farm income (GCFI) of $350,000 or more. Intermediate farms have GCFI of less than $350,000 but a principal operator whose primary occupation is farming, while residential farms have GCFI of less than $350,000 and a principal operator who is retired or has a primary nonfarm occupation.
Potatoes are the largest acreage vegetable, with almost a million acres planted each year, led by a third in Idaho and a sixth in Washington.
Fair Trade USA and Chobani announced a program in May 2021 to provide certified US dairy farms that are in compliance with economic, environmental and social standards with a $0.45 premium for each 100 pounds of milk, which is about two percent of the $20 price. Fair Trade’s 100-page Agricultural Production Standard includes 200 items grouped into six modules that cover topics that range from wages and fundamental worker rights to sustainability and management systems, and the standards may vary between small (less than 25 employees), medium (25 to 100 employees), and large farms. The standards are further divided into critical, in-progress and best practices.
President Biden’s $1.9 billion Covid relief plan, the American Rescue Plan, included $4 billion to forgive the loans of up to 13,000 Black, Hispanic or Native American “socially disadvantaged farmers.” About five percent of the two million US farms are operated by nonwhites, and 16,000 farms operated by minorities were expected to have their loans forgiven. However, some white farmers alleged that the loan-forgiveness program discriminated against them and sued, winning an injunction that halted loan forgiveness for minority farmers.
The US Supreme Court has ruled that programs based on race must be “narrowly tailored” to accomplish a “compelling governmental interest.” Democrats say that prioritizing minorities in federal assistance programs corrects historic wrongs, while Republicans say that affirmative action programs assume all whites are racists. A pandemic recovery program to prioritize aid to restaurants owned by minorities was also blocked by a court injunction.
The EU and US imposed tariffs against a range of goods, including farm commodities, because of government aid to Airbus and Boeing. These tariffs were suspended in March 2021, and are expected to be lifted by December 2021.
The US Supreme Court ruled in June 2021 that Nestlé USA and Cargill could not be sued in US courts by Malians who alleged they were enslaved as children to produce cocoa in Ivory Coast that was bought by the US firms. The Malians argued that the companies should have known that the farms from which they bought cocoa had enslaved workers. The USSC said that the 1789 Alien Tort Statute does not allow suits by foreigners in US courts unless the US firm aided and abetted the unlawful foreign conduct.
Peru exported $1.2 billion worth of table grapes in 2021 from about 21,000 hectares, including 41 percent to the US. Peru exported another $1.1 billion worth of blueberries.
Bonn-based Fairtrade International says that 24,000 workers are employed on banana farms that are covered by its certification program. Beginning July 1, 2021, all Fairtrade-certified banana workers must be paid at least 70 percent of the living wage that is set for their country of employment by the Global Living Wage Coalition https://globallivingwage.org). For example, the monthly living wage in Ghana is $250 and in the Dominican Republic $335 a month. Fairtrade-certified bananas earn a $1 per box premium, half of which can be paid to workers to supplement their wages.
India (29 million tons) and China (11 million tons) produce a third of the world’s 115 million tons of bananas each year, followed by the Philippines, Ecuador, and Brazil. There are 5.6 million hectares devoted to banana production, and yields range from 40 to 60 tons a hectare. The leading banana exporter is Ecuador, accounting for a third of banana experts, followed by the Philippines, Costa Rica, Guatemala and Colombia, each accounting for an eighth of banana exports.
Mexico produces bananas in 16 states, but 60 percent are from Chiapas, Veracruz and Tabasco. The GLWC living wage for Michoacán is $625 a month.