A Senate committee has struck down a bill to rescind last November’s update to the Low Carbon Fuel Standard.
Senate Republican Leader Brian Jones maintained his party’s criticism against the rulemaking, warning it would raise gas prices. The owner of a Marin County lumber and hardware store backed the bill, arguing the high costs from the state’s environmental mandates are driving more residents to leave and making it hard for businesses to compete with counterparts in states like Texas.
The ag industry stood in opposition to the measure. Michael Boccadoro, executive director of the Ag Energy Consumers Association, sympathized with the “exorbitant” prices at the pump, saying “there's no question in our mind they are, in part, caused by the climate and environmental policies.”
But the LCFS is not the root cause of the problem, since the market-based mechanism helps ag to be compliant with CARB’s climate policies. Boccadoro expanded that argument to the cap-and-trade program as well.
Why ag? Boccadoro, who also advocates for dairies, defended the LCFS for incentivizing digesters to help the industry meet the state’s methane mandate. The renewable natural gas derived from dairies helps the state transition to cleaner fuels for heavy-duty trucks, he added.
Bioenergy and hydrogen producers opposed SB 2 as well. Senate Ag Chair Melissa Hurtado was the only Democratic vote in favor.
California wine supply will rely on vineyard removals
A Terrain report looking at 2024’s historically low grape crush suggests that California’s oversupply of winegrapes will not be corrected by demand growth but by the pace of vineyard removals.
The report suggests that vineyard removals will continue into this year, but growers may face longer term concerns with the cost of replanting and a lack of alternative land uses. Senior wine and grape analyst Chris Bitter noted that remaining acreage will be more productive since most tear-outs to date have been aged or diseased vineyards.
Bitter also predicts that wine consumption will remain down into the foreseeable future. While premium wines may stabilize this year, he thinks inflation and consumer attitudes are less likely to improve given general market uncertainty. He also acknowledged a trend of wineries using foreign bulk imports to reduce costs and subsequently reduce demand for California grapes.
Cammack: Reconciliation farm bill ‘absolutely feasible’
It’s likely going to be as tough as ever to pass a new farm bill this year. One option under consideration is to put parts of the bill in a budget reconciliation measure. A Republican on the House Agriculture Committee, Florida Rep. Kat Cammack, says it’s “absolutely feasible” to do that, but she tells Agri-Pulse Newsmakers it probably wouldn’t happen until fiscal 2026, when Republicans may try to move the second of two reconciliation measures.
And Cammack says it wouldn’t be easy to do even then. “At that point you’re getting into the politics of do we have the firepower to stick together in order to pass this all the way through the process, because reconciliation … is a beast. It is an arduous process from start to finish.”
She also warns that using the reconciliation process to pass a farm bill will make it more partisan.
This week’s Newsmakers will be available today at Agri-Pulse.com.
U.S. shipbuilding proposals could add $1B to ag export costs
The American Farm Bureau Federation warns that proposals designed to spur U.S. shipbuilding could add between $372 to $930 million in annual shipping costs for bulk ag exporters.
The Office of the U.S. Trade Representative has proposed a menu of measures to revive domestic shipbuilding. Among them are proposals to apply a $1 million surcharge to Chinese-operated vessels docking at U.S. ports and a $1.5 million fee on Chinese-made vessels.
If one of these measures, or both, are implemented, U.S. soybeans, for example, could face higher costs of 9.5 to 27.75 cents per bushel.
Containerized shipping is also set to feel the crunch. The World Shipping Council estimates the proposed fees could add costs of $600 to $800 per container. But importers would likely bear the brunt of these costs, AFBF says.
Former EU trade official: Anti-China tool could be part of EU’s tariff response
A former top European Union trade official says if U.S.-EU trade tensions escalate, the bloc could deploy a novel tool to fight economic coercion that was originally developed to counter China.
The tool allows the bloc to swiftly push back against countries using their economic might to coerce member states. The EU crafted it after Lithuania sparked China’s anger — and economic countermeasures — when it allowed Taiwan to open a de facto embassy in its capital.
The tool has never been deployed. But former EU Trade Commissioner Cecilia Malmström said during a webinar Thursday that could soon change if the U.S.-EU trade conflict “becomes really nasty.”
“The first time it might be used might be with the U.S.” Malmström added. “It’s very sad.”
Why it matters: The EU can use the tool to restrict market access for agricultural products and limit exports, among other things.
Take note: On Thursday, the EU postponed retaliatory duties that were supposed to go into effect at the end of the month to give officials more time to negotiate over tariffs.
Delay of traceability rule enforcement draws criticism
Consumer groups are criticizing FDA’s decision to extend the compliance date for the food traceability rule. The supply chain had expected to comply with the new traceability requirements by Jan. 20, 2026. However, FDA announced Thursday it plans to push that deadline by 30 months.
Grocery and food industry groups welcomed the decision. They say it will help ensure the supply chain can adapt without pushing additional costs on consumers. However, consumer advocates say the move is a step backward for food safety.
FDA compiles list of action levels, tolerances for food chemicals
FDA has posted a consolidated list of contaminant levels in food for pesticides and other chemicals that the agency says “have the potential to cause harm.”
The Chemical Contaminants Transparency Tool is an example of what Health and Human Services Secretary Robert F. Kennedy Jr. calls “radical transparency.” It includes action levels and tolerances, which “represent limits at or above which FDA will take legal action to remove products from the market,” the agency says.
“Because many of the most nutritious foods can also contain contaminants, consumers should eat a variety of nutrient-dense foods across and within the main food groups of vegetables, fruits, grains, dairy and protein to help protect from possible exposure effects,” Acting FDA Commissioner Sara Brenner says.
Final word
“Our grocery prices here in California are 30 to 40% higher than other states, even though we are the breadbasket.” — Michael Boccadoro, executive director of the Agricultural Energy Consumers Association, blasting high transportation costs, namely the price of diesel, that are hitting the food supply chain.
