The economic consequences of Mexico following through on a presidential decree to ban genetically modified corn in 2024 would have severe economic ramifications for the U.S. and Mexican economies, resulting in billions of dollars in losses for U.S. farmers and much higher food prices for Mexican consumers, according to a study by World Perspectives Inc.
Mexican officials have said the decree would only impact corn for food, downplaying the impact on U.S. exports of corn that primarily goes into animal feed. But the report’s authors say the decree is too vague to make that assumption and their research is based on a complete ban.
The U.S. corn sector would see an economic loss of $3.56 billion in the first year of the ban, rising to $5.56 billion in the second year, according to the study. In Mexico, the average price of tortillas would rise by 16% and the cost of meat would increase as production declined in response to less available feed.
“The U.S.-Mexico trading partnership has contributed greatly to the food security and economic vitality of both countries,” said National Corn Growers Association President Chris Edgington. “That’s why we should do everything possible to ensure that the relationship continues in a fair and mutually beneficial way.”
Report: Global ag productivity slowing
Global agricultural productivity continues to slow, falling farther behind the pace needed to meet the needs of projected population growth. That’s the finding of the latest annual Global Agricultural Productivity Report.
Agricultural productivity, which is tracked by a measure known as “total factor productivity,” or TFP, increased by an average of 1.12% from 2011 to 2022, according to the new GAP report. An annual growth rate of 1.73% is needed to produce the food needed for more than 9 billion people in 2050.
The report, which is produced at Virginia Tech using data from USDA’s Economic Research Service, warns that the slow pace of productivity growth can lead to the “widespread use of unsustainable agricultural practices, including the conversion of wild and marginal lands to agricultural production.”
Take note: In sub-Saharan Africa, total agricultural production grew by nearly 3% from 2011-2020, but that was only because farmers put more land into cultivation and pasture. Productivity actually declined over the period, the report said.
One bright spot: In South Asia, agricultural productivity grew at 2.28% over the period, about the same rate as the previous decade.
Keep in mind: The report doesn’t account for the full impact of the COVID-19 pandemic or for Russia’s war in Ukraine.
Southern Plains hit by weaker conditions, Dallas Fed survey says
Ag bankers responding to the latest survey by the Dallas Fed“reported overall weaker conditions across most regions” of the area covered by the bank – Texas, southern Louisiana and southern New Mexico.
“Extreme dry conditions are putting a strain on agricultural production, particularly for cotton and pasture,” the bank said, quoting one banker in the Southern High Plains who said, “The South Plains cotton crop is a disaster. Almost all dryland crop has already been abandoned from drought, and the irrigated crop still standing is pitiful.”
But the banker also noted that “our producers’ financial condition has never been better. For the most part, crop expenditures were negligible and crop insurance payouts were outsized due to high price guarantees.” The result is “growers are sitting on piles of cash.”
Loan demand decreased for the third straight quarter, and loan renewals or extensions fell for the seventh quarter in a row. The rate of loan repayment also was up.
Rains slow Brazil soy planting, but bring needed moisture
Heavy precipitation throughout much of Brazil’s soy-growing regions slowed planting in key areas last week, but also brought needed moisture in the country’s largest producing state, according to the Brazilian consulting firm AgRural.
Overall, Brazilian farmers had planted 3.8% of this year’s soy crop by Thursday of last week. That’s roughly on track with the 4.1% planted at the same time a year ago.
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“The progress during the week was not bad, but it could have been faster if it weren't for the constant rains in Paraná, Mato Grosso do Sul and São Paulo,” says AgRural. “In Mato Grosso, on the other hand, the rainfall recorded last week was very welcome to improve soil moisture and give more rhythm to sowing.”
Russia exempts ag from trucking ban
Russia is banning truckers from the European Union, UK and other “unfriendly countries” that have similar bans on Russia, according to consulting firm and publisher Dezan Shira & Associates. The new ban will exempt shipments of food, farm commodities and fertilizer, but it’s still expected to further complicate already congested border crossings by forcing companies to transfer products into Russian trucks with Russian drivers.
Modified corn, potato plants gain APHIS approval
The Animal and Plant Health Inspection Service has exempted a genetically modified corn plant and a genetically modified potato plant from regulation after finding both are “unlikely to pose an increased plant pest risk compared to other cultivated corn and potato.”
The corn was developed by Agrivida Inc., and modified to alter animal feed quality to improve digestion. The potato, developed by Toolgen Inc., was modified to reduce browning.
Alcohol labeling lawsuit filed in D.C.
Consumer groups are suing to force a response to a 2003 petition seeking mandatory alcohol labeling.
The Center for Science in the Public Interest, the Consumer Federation of America, and the National Consumers League filed the lawsuit in Washington, D.C.
“Alcohol labeling is a commonsense and popular step that would allow consumers to make informed choices about the alcoholic products they purchase,” they said in a press release.
"After nearly 20 years of delay, it’s time for the Treasury Department to bring some order to this uneven marketplace,” CSPI President Peter Lurie said.
He said it: “A third of Pakistan flooded. Europe’s hottest summer in 500 years. The Philippines hammered. The whole of Cuba in black-out. And here, in the United States, Hurricane Ian has delivered a brutal reminder that no country and no economy is immune from the climate crisis” – United Nations Secretary-General António Guterres, speaking to reporters as preparations are made for the COP27 climate change summit next month in Egypt.
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