News Update
April 7, 2011

Magnitude of Japan Earthquake on Global Food and Agriculture

A special report just issued by the Rabobank Food & Agribusiness Research and Advisory (FAR) group indicates the consequences of the earthquake and tsunami to Japan’s agricultural and food industry could be dire. While the full impact of the earthquake and radiation are not yet understood, the report — which estimates the potential impact on six major sectors of Japan’s agricultural industry — projects that food safety concerns and supply shortages will limit exports and cause imports to rise.

The findings are based on the Rabobank FAR report entitled “Japan Earthquake: Magnitude of Impact on Food and Agriculture.” As the leading provider of financial services for the global food and agriculture industry, Rabobank created and maintains the FAR unit to conduct ongoing research and analysis on issues of importance to agriculture around the world.

“While the situation is still evolving, the domino effect of the disaster will likely result in more imports from trade partners, such as the U.S., Australia and China,” notes Jean-Yves Chow, Rabobank senior industry analyst North East Asia and lead author of the report. “The radiation issues at the Fukushima plant have heightened food safety concerns at a time when Japanese food self-sufficiency is already low. Japan may need to revise its food security strategy to manage the country’s risk.”

The report notes more than a quarter of Japan’s domestic pork production, 18% of its beef production and 22% of its poultry production comes from areas impacted by the earthquake, tsunami or radiation from the Fukushima nuclear plant. In addition, cold storage has been compromised by electricity loss, which could lead to the need for additional imports.

“Based on the current weakness of the U.S. dollar compared with the Australian dollar, the U.S. would be a competitive source for additional beef exports,” says Sterling Liddell, vice president, FAR. Liddell continues to note that the milk production season in Australia and New Zealand is winding down, making the U.S., along with other parts of the Northern Hemisphere, a possible source for additional dairy imports. 

The full report, which is available upon request, provides an overview analysis of each food sector. Highlights will be included in the April Angus Beef Bulletin EXTRA “Marketing” page. To subscribe, click here.

— Release by Rabo Agrifinance.

Peterson Comments on House Passage of Energy Tax Prevention Act

U.S. House Agriculture Committee Ranking Member Collin Peterson (D-Minn.) made the following statement after the House of Representatives approved the Energy Tax Prevention Act (H.R. 910).”

“This bill hits the pause button on EPA’s current efforts to regulate greenhouse gases. America’s farmers and ranchers are committed to preserving our natural resources for the next generation, but what we’re seeing from EPA could potentially interfere with conservation efforts already underway. EPA’s regulations would not only make it harder for agriculture producers to meet increased demand but raise costs on all consumers. If Congress fails to act the economic effects could be devastating. I urge the Senate to quickly consider this legislation.”

Peterson is an original co-sponsor of H.R. 910.

— Release by House Committee on Agriculture–Democrats.

GIPSA Cases Resolved

The USDA Grain Inspection, Packers and Stockyards Administration (GIPSA) enforcement rules provide a mechanism to quickly resolve violations of the Packers and Stockyards (P&S) Act.

• On March 28, 2011, GIPSA entered into a consent decision with Gailal Sbeta and Mohammad Mesallem, doing business as Islamic Meat and Poultry, Stockton, Calif. Sbeta and Mesallem have been ordered to cease and desist from failing to pay for livestock purchases within the time period required by the P&S Act. They have also been assessed a civil penalty in the amount of $4,000.

GIPSA may offer an alleged violator the option of waiving their right to a hearing and entering into a stipulation agreement to quickly resolve alleged violations. GIPSA recently settled two cases resulting in $2,000 in civil penalties.

• Elden Hale Ginn, Aberdeen, Ohio, waived his right to a hearing, entered into a stipulation agreement, and paid a penalty of $500 after GIPSA found that he had failed to pay within the time period required by the P&S Act for livestock.
• Clinton Wayne Langley, Hugo, Okla., waived his right to a hearing, entered into a stipulation agreement, and paid a penalty of $1,500 after GIPSA found that he had failed to pay within the time period required by the P&S Act for livestock.

The P&S Act is a fair trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat and poultry industries.

— Release by GIPSA.

— Compiled by Shauna Rose Hermel, editor, Angus Productions Inc.