In an article posted to FCC’s website Wednesday, senior economists Justin Shepherd and Graeme Crosbie, questioned the extent to which U.S. consumers will demand “made in the USA” beef and pork once rules when voluntary country of origin labeling (vCOOL) rules kick on January 1, 2026.

This spring, the USDA ruled that meat processors claiming their product as a “Product of USA” must only use animals born and raised in the U.S. For example, under vCOOL, the four million piglets Canada sends to the U.S. annually would not qualify for a “Product of USA” label.

Canadian hog producers, who already face reduced domestic processing capacity, may face greater risks under this policy, especially with insiders reporting that some U.S. processors intend to enforce vCOOL rules as early as mid-2025, FCC said. Labeling requirements may also reroute trade flows and add costs.

Biofuel tax credit

U.S. tax credits for biofuel production are changing January 25, 2025. This may challenge Canada’s biodiesel industry and domestic canola and soy oil production just as new Canadian crush capacity is coming online, FCC said.

Under current U.S. policy, blenders mixing biodiesel (or renewable diesel) with conventional diesel are eligible for a dollar-per-gallon tax credit. Other policies add further incentives. Historically, almost all Canadian-produced biodiesel has been exported to the U.S. to qualify for these credits.

Under new policy, credit will shift from blenders to producers. This means only U.S.-produced biodiesel will be eligible, although inputs can still come from abroad. Unless a similar credit is introduced in Canada, experts suggest the construction of biofuel plants in Canada will face an upward battle.

The U.S. farm bill

The U.S. is overdue for a new farm bill which sets parameters like commodity insurance programs and price supports for U.S. producers. These bills usually expire after five years but the current bill was given a one-year extension in 2023 that has since run out.

Canadian producers may want to monitor the farm bill for potential impacts, Crosbie and Shepherd said.

“Changes in support prices or insurance programs could alter crop decisions of U.S. producers,” they wrote.

“For instance, better insurance for corn might lead to more corn planting in the U.S., pushing prices down. Ultimately, choices made on U.S. farms significantly affect futures markets and, consequently, Canadian prices for both grain and livestock.”

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North America’s hog industry is grappling with multiple issues these days, but is presently feeling better than some of the other livestock industries. That doesn’t mean that everything’s great, but not yet having to deal with avian flu infections is keeping hog farmers in a cautiously optimistic mood about their challenges.

Top of the challenges this year, as it was last year, is the impact of Proposition 12, the California law that tightly restricts how much room each gestating sow is required to have in a barn, an amount that only a minority of the North American sow herd can satisfy. According to the National Pork Producer Council’s Brian Humphreys, California pork consumption has fallen 20 per cent while prices have risen 20 per cent.

“This is hitting people back in the state of California,” said Humphreys.

It isn’t just a California situation. Numerous states are considering their own laws to control the gestation spaces for pigs that end up on their states’ grocery store shelves.

Humphreys said farmers aren’t sure what to do. Some states have no set requirements. California has its specific rules. Other states might producer a hodgepodge of rules and regulations.

“How do you separate (pigs) within a barn?” posed Humphreys.

Producers are anxious about the outbreak of H5N1 in poultry and dairy herds, worried that they could see the same species jump that has afflicted dairy herds.

Farm Bill expectations are also top of mind for American producers, but since I get very confused by all the complexities of the Farm Bill, I’m not going to say anything at all about it until I figure it out.

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In 2023,  failed in 2023 to pass a new farm bill, an omnibus legislative package that affects a range of farm and food programa. It’s passed every five years.

Further delay of a new farm bill could create uncertainty for farmers and people relying on food aid, Agriculture Secretary Tom Vilsack warned on a Wednesday press call.

Federal hunger aid for the poor like the Supplemental Nutrition Assistance Program (SNAP) and farm programs are currently operating under a one-year extension of the 2018 farm bill passed last September.

The House bill would have to be reconciled with a Senate bill led by Democrats and without strong bipartisan support, the House version has a slim chance of becoming law.

“Despite areas of common ground, it is now clear that key parts of the House bill split the Farm Bill coalition in a way that makes it impossible to achieve the votes to become law,” said Senate Agriculture Committee chair Debbie Stabenow, a Democrat, in a statement on the bill’s passage.

The House bill – which passed out of the committee 33-21 with 4 Democratic votes – expands farm commodity supports, shrinks SNAP funding, and reallocates nearly $20 billion from the Inflation Reduction Act intended for climate-smart farm practices.

House Agriculture Committee chair Glenn “GT” Thompson said at the Thursday committee meeting that the bill “bolsters every aspect of American agriculture.”

Democrats in the House and Senate have said cuts to food aid and reallocating the climate funds are red lines in negotiations.

“This bill is misguided, and in some aspects, it is mean-spirited,” said the committee’s top Democrat, David Scott.

Farm commodity groups have expressed support for the House bill, while environmental and hunger groups have opposed it.

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Glacier FarmMedia — Day one of the 2024 Commodity Classic is in the books and a few interesting themes emerged from the annual gathering of U.S. corn, soybean, wheat and sorghum growers.

U.S. farmers are clearly annoyed about a number of new pesticide regulations.

Growers felt blindsided by a federal district court ruling in Arizona vacating the 2020 registrations for a variety of dicamba products used on 50 million acres of U.S. corn and soybeans.

The ruling meant growers couldn’t use the product for the 2024 growing season.

However, the U.S. Environmental Protection Agency (EPA) has since ruled that growers can use existing stocks of the product that were packaged, labeled and shipped prior to the Feb. 6 court ruling.

That is a big relief to the country’s soybean and cotton growers, but they wonder what’s in store for 2025 and beyond.

Farmers are also concerned about the EPA’s response to numerous other court rulings that determined the regulator has continually failed to meet its Endangered Species Act obligations.

Farm groups say the EPA’s proposed Herbicide Strategy, which will bring registrations into compliance with the act, is going to cost them a fortune.

A survey conducted by the American Soybean Association (ASA) indicates 80 percent of producers would not comply with the EPA’s proposal and would face “moderate to extreme” costs to become compliant.

“The proposal would likely require billions of dollars for farmers across the country to implement and could prevent some farmers from using certain herbicides entirely,” the ASA stated in a press release.

A petition it circulated collected 1,500 signatures from growers, applicators and other agricultural stakeholders calling for withdrawal of the proposal.

Soy growers were pleased that the EPA recently announced it has extended the deadline to finalize the strategy by three months to August 30, giving it more time to consider their criticism of the strategy.

Another big topic of conversation at the convention is the 2024 Farm Bill, an omnibus package of legislation that covers everything from school nutrition programs to farm safety nets.

Grower groups are lobbying hard for a bill that “does no harm” to crop insurance programs and sets higher reference prices for crops that will trigger direct payments sooner under today’s falling price environment.

The U.S. Congress is still debating and designing the bill, which was originally supposed to be in place for 2023.

There was plenty of talk about markets at the conference as well.

Al Kluis, with Kluis Commodity Advisors, had good news and bad news for farmers.

The good news is that he thinks corn and soybean futures prices have bottomed out, at least temporarily.

The bad news is that if the U.S. Department of Agriculture’s yield and acreage forecasts for 2024-25 are correct, it doesn’t bode well for prices, especially for corn.

“We could see extremely low prices in the fall,” he said.

The soybean outlook doesn’t look nearly as bad, and he is extremely excited about the long-term future for that crop due to looming demand from the sustainable aviation fuel industry.

PepsiCo and Walmart talked about their US$120 million joint venture to support sustainable agriculture in the U.S. and Canada.

The program aims to accelerate the adoption of regenerative agriculture practices on more than two million acres of farmland in the U.S. and Canada, reducing greenhouse gas emissions by four million tonnes by 2030.

Monitor the pages of The Western Producer and other Glacier FarmMedia publications for full stories on these and other topics from the 2024 Commodity Classic.

––Sean Pratt writes for the Western Producer. 

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Though Democrats retained control of the House and therefore will again chair the committee, Peterson’s exit could shift U.S. spending away from a region hammered by U.S. President Donald Trump’s trade war with China, they said.

Ruling parties take seniority into account when selecting committee chairs, providing an opening for senior House Democrats such as Reps. Jim Costa of California, David Scott of Georgia and Marcia Fudge of Ohio to lead the agriculture committee.

Midwest farmers raise pigs and grow the bulk of soybeans and corn in the U.S., while California is known for fruit and vegetable crops and southern states like Georgia produce chickens.

For Minnesotans, “the clout that he had on the ag committee is lost to us,” said Laura Lemke, executive director of the Minnesota Grain and Feed Association.

The House agriculture committee has jurisdiction over a vast range of agriculture and rural issues, including the Farm Bill, renewable energy, disaster assistance, nutrition and crop insurance. The latest Farm Bill, passed once every five years, expires in 2023 and mandates spending of about US$428 billion.

Discussion of the bill starts years in advance.

Former U.S. Senator Heidi Heitkamp, a North Dakota Democrat, said Peterson’s defeat was “devastating” because he understood intricacies of the legislation. He has long worked with Republicans, who will likely retain control of the Senate.

“Colin knew more about the Farm Bill than anyone else in Congress,” Heitkamp said.

Republican Michelle Fischbach beat Peterson and will seek a seat on the committee, her campaign said.

The next job for Peterson, age 76, could be at the U.S. Department of Agriculture, said Joseph Glauber, senior research fellow at the International Food Policy Research Institute and a former USDA chief economist.

“I would think that if Biden wins, Peterson would go right to the top of the list for USDA secretary,” Glauber said.

Peterson did not respond to requests for comment.

— Reporting for Reuters by PJ Huffstutter and Tom Polansek in Chicago.

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Britain currently abides by the EU’s Common Agricultural Policy but is set to leave the European Union at the end of this month. There will be a seven-year transition period for farmers in England to adjust to some subsidies being phased out.

“This is one of the most important environmental reforms for many years, rewarding farmers for the work they do to safeguard our environment and helping us meet crucial goals on climate change and protecting nature and biodiversity,” farming and environment minister Theresa Villiers said in a statement.

The changes will link payments to providing “public goods.”

Public goods include actions to mitigate climate change, measures to support wildlife and improving the health and welfare of livestock.

Under the EU’s farm policy, British farmers currently receive about three billion pounds (C$5.1 billion) a year in public funds.

Some of the money is already linked to participating in environmental schemes, but there are also annual payments based on ownership of agricultural land.

For some farmers such payments can represent up to 70 per cent of their income.

Policies may differ in Scotland and Wales, where devolved administrations control farm spending.

— Reporting for Reuters by Nigel Hunt in London.

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The Republican president’s budget requested $20.8 billion for the USDA, a cut of $3.6 billion, or 15 per cent, from the 2019 estimate, according to the proposed budget text (all figures US$). It proposes reducing premium subsidies for crop insurance, limiting the number of producers who would be eligible and tightening commodity payment limits.

“The budget also proposes that USDA responsibly and efficiently use taxpayer resources by making targeted reforms to duplicative programs and overly generous subsidy programs,” the document said.

Democrats slammed the move as “short-sighted,” while the crop insurance industry, which will see the deepest cut, said it would undermine a key financial safety net for farmers at a time when they need it the most.

Trump’s budget is expected to be rejected by Congress, where Democrats control the House of Representatives.

The U.S. rural heartland helped carry Trump to victory in 2016 and remains largely supportive of his hard line on trade, but is urgently calling for a deal with China to end the trade dispute with that country.

“The President’s budget request is a road map for how to make things worse for farmers, ranchers and those who live in rural communities,” Collin Peterson, Democratic chairman of the House agriculture committee, said in a statement. He added that the cuts to crop insurance totaled $26 billion.

Democratic Senator Debbie Stabenow said the budget cut would jeopardize the USDA’s ability to implement the farm bill at a time when farmers are struggling with economic instability and trade uncertainty.

Weakening policies

The farm bill, crop insurance and commodity programs serve as a safety net for farmers, shielding them from the financial damage of unforeseen natural disasters and helping them manage their risk. A new farm bill was passed at the end of 2018.

The budget proposes to reduce the average premium subsidy for crop insurance to 48 per cent from 62 per cent and limit subsidies to producers that posted an adjusted gross income of half a million dollars or less.

“In the midst of a prolonged rural recession and crop damage from devastating weather events, we should be having a conversation about how to strengthen and improve crop insurance, not weaken the policies that so many of America’s farmers rely on,” a coalition of seven crop insurance groups said.

The proposal also requests tightening commodity payment limits, including eliminating an “unnecessary and separate” payment limit for peanut producers and limiting eligibility for commodity subsidies to one manager per farm.

The budget also proposes tightening around the Supplemental Nutrition Assistance Program (SNAP), which feeds roughly 40 million Americans and is administered by the Agriculture Department. The budget text said it included proposals to help able-bodied adults enter the job market.

Food stamps were at the heart of a bitter partisan debate last year. The administration unveiled plans to curb them through a proposed rule after Republican efforts to do so failed in the Congress.

— Humeyra Pamuk is a Reuters correspondent covering U.S. agriculture and energy policy from Washington, D.C.; additional reporting by Mark Weinraub.

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Even the passage of the U.S. 2018 Farm Bill, which would legalize hemp in that country, shouldn’t have much of an impact on prices.

The new bill is expected to be signed by U.S. President Donald Trump before the end of this month.

Hemp is bought and sold by direct contracts, Shwaluk said. Currently, conventionally-grown hemp has been selling in the mid-50-cents/lb. range and organically-grown hemp has been around $1.30/lb.

“There’s not a whole lot of price discovery going on throughout the year. There might be the odd load that gets bought that might vary a little from the price, but for the most part when we go out to the market, it’s a consistent price. There’s not a whole lot of fluctuation,” he said, adding increased U.S. production may keep a lid on how far prices can go up in Canada.

Shwaluk stressed the need for any producer to sign a contract before growing hemp.

“Hemp, in the big scheme of things, is a relatively small crop, in terms of the number of acres,” he said. “There’s not a real effective price discovery model like you would have with commonly traded crops.”

Under the previous U.S. Farm Bill, passed in 2014, each of the 50 states had the authority to permit hemp crops for experimental and research purposes, Shwaluk said. With the excitement over legalization of hemp he expects U.S. production to increase dramatically in the coming years.

Another good thing Shwaluk saw in the new U.S. Farm Bill will be hemp getting more public attention as a food product, which would help the industry in general, including Canada’s.

“We could get more food companies and retail distributors looking at hemp as a serious food option,” he stated.

Along with food products, hemp is used for a number of other products including medicinal, personal care and building materials, according to Health Canada. Unlike cannabis, which contains tetrahydrocannabinol (THC), hemp has only a trace amount of the drug and cannot produce a high.

Of Canada’s 41,200 acres of hemp seeded in 2018, almost 90 per cent were planted on the Prairies, according to Statistics Canada. Much of the rest was grown in Ontario and New Brunswick.

— Glen Hallick writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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One such legislative change was the legalization of hemp in the 2018 U.S. Farm Bill. The bill passed this week in both the U.S. Senate and House of Representatives and awaits the signature of President Donald Trump, expected before the New Year.

The driving force behind legalizing hemp in the U.S. was the country’s tobacco industry, seeking an alternative crop to grow.

“Canadians will benefit by virtue of there being a bigger pie and we will continue to compete. I’m sure we can with our 20 years of experience,” said Russ Crawford, president of the Canadian Hemp Trade Alliance, adding the new Farm Bill has legitimized hemp around the world.

“As much as we’re looking at another competitor on the production side, we’re looking at a great and massive demand on the consumption side, as a whole product, as a food ingredient and as a processed product,” he continued.

Crawford said Hempco Canada is about to commission its large hemp facility near Leduc, Alta. Other companies are also looking to build food processing and cannabinoid extraction facilities in Canada, he said.

“But we still don’t know what that’s going to look like in terms of contracts with the farmers or how they will harvest and process (hemp). I think we are going to see a more diverse processing industry.”

Another major development in the Canadian hemp industry to come in 2019, Crawford said, will be the recommendation from the Farm Products Council of Canada, which will consider a levy structure for hemp producers.

Crawford wants to see a Canadian Industrial Hemp Promotion and Research Agency created to handle the levies. The deadline for interested parties to appear in front of the FPCC’s two-person committee or to send a submission is Jan. 11.

More research is needed to further develop extraction processes, he said, and to achieve this, more collaboration is needed from hemp processors and university-based researchers.

Besides hemp for human consumption and use, the CHTA president said he wants to see it approved for livestock feed.

“It’s OK right now for companion animals, but not for animals in the food chain,” Crawford explained.

Lower-quality hemp materials, those not ideal for human consumption, should be used for feed rather than left as a waste product, he said. “We’re working with the Canadian Food Inspection Agency and Agriculture Canada to get the required approvals in place.”

The most recent data on hemp production in Canada, from Statistics Canada in 2018, shows more than 41,200 acres of hemp grown. The federal agency will begin to collect data on hemp starting next year.

According to Health Canada, hemp contains less than 0.3 per cent of tetrahydrocannabinol (THC), far too small of amount to produce the high cannabis users seek.

Rather, hemp is used for a wide variety of food and medical products, as well as in fibre for clothing, personal care products and building materials.

— Glen Hallick writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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The bill, which passed by a vote of 369 to 47, will be submitted to President Donald Trump for his signature into law following its approval in the U.S. Senate on Tuesday.

The final agreement on the bill came after Republicans in the lame duck Congress walked back some of their demands, including a proposal to tighten criteria for receiving food stamps that had been championed by Trump. Democrats will take control of the House in January.

Some provisions regarding forestry management, backed by Trump’s Agriculture and Interior Secretaries have also been largely excluded from the final legislation.

“While I feel there were missed opportunities in forest management and in improving work requirements for certain SNAP recipients, this bill does include several helpful provisions,” Agriculture Secretary Sonny Perdue said in a statement, referring to the Supplemental Nutrition Assistance Program.

“I commend Congress for bringing the farm bill across the finish line and am encouraging President Trump to sign it.”

Passage of the bill has been hailed in a largely bipartisan manner as it provides some financial certainty for farmers, a key Trump constituency that has been hurt by the U.S. trade war with China, a key buyer of U.S. soy beans and other farm produce.

On Tuesday Trump, who had previously accused Democrats of stalling the bill, said the progress on it was bipartisan and that “farmers were well taken care of.”

More than 40 million Americans, or about 12 per cent of the U.S. population, depend on the SNAP food stamps program to keep from going hungry.

The Republican-led move to tighten eligibility for food stamps triggered a bitter partisan debate, delaying the bill beyond the most recent version’s expiration in September. It was finalized only after Democrats won a majority in the House of Representatives in the November elections.

— Reporting for Reuters by Humeyra Pamuk.

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