U.S. House pauses vote on bill to fund government and avoid shutdown

WASHINGTON (Reuters) – The U.S. House of Representatives put on hold an expected Tuesday vote on a bill to fund the government through Dec. 11, while bipartisan congressional leaders discussed whether to include farm aid sought by President Donald Trump, lawmakers and aides said.

The delay “relates to numerous agriculture provisions” in the bill, one Democratic aide said. With government funding lapsing on Sept. 30, House Democrats announced Monday they had filed the stopgap funding legislation, but they angered Republicans by leaving out some farm money that Trump wanted.

The bill generally continues current spending levels, avoiding a government shutdown when funding runs out on Sept. 30. It would give lawmakers more time to work out spending through September 2021, including budgets for military operations, healthcare, national parks, space programs, and airport and border security.

“At some point in the next day or two, we expect that there will be a continuing resolution on the floor that will continue the current spending agreement until December,” said Representative Hakeem Jeffries, chairman of the House Democratic caucus, who have the majority. He said he hoped it would be “bipartisan in nature.”

The version that House Democrats filed on Monday did not include $21.1 billion that the White House sought to replenish the Commodity Credit Corporation, a program to stabilize farm incomes, because Democrats considered it a blank check for political favors. Trump had promised more farm aid during a rally in Wisconsin last week.

Republicans protested the omission, with Senate Majority Leader Mitch McConnell arguing that farmers need the help.

“The talks continue, and hopefully we’ll reach an agreement,” McConnell told reporters on Tuesday.

A House Republican aide said Democrats had earlier walked away from an agreement that included the farm aid.

“Republicans will continue to fight for these provisions to be included,” he said.

Leaders of both parties say they are not interested in a standoff that could lead to a government shutdown, amid a pandemic and just weeks before the Nov. 3 elections.

(Reporting by Susan Cornwell; additional reporting by Richard Cowan and David Morgan; Editing by Steve Orlofsky and Bernadette Baum)

Iowa says derecho storm destroyed grain storage bins as Trump heads to state

CHICAGO (Reuters) – A severe windstorm last week destroyed or seriously damaged more than 57 million bushels of commercial grain storage capacity in Iowa and a similar amount on farms, the state’s agriculture department estimated on Tuesday, raising concerns ahead of the autumn harvest.

Fresh estimates of the damage from the Aug. 10 derecho emerged as U.S. President Donald Trump prepared to visit Iowa, the top U.S. corn producing state, the day after approving disaster aid for the state.

The storm crumpled steel storage bins, flattened corn fields, caused widespread damage in towns and left thousands of people without power.

The destruction compounded troubles for a U.S. agricultural economy already battered by extreme weather, the U.S.-China trade war and disruptions to labor and food consumption from the COVID-19 pandemic.

Iowa’s agriculture department said it will cost more than $300 million to remove, replace or repair the damaged grain storage bins.

(Reporting by Tom Polansek; Editing by Chizu Nomiyama and Grant McCool)

Major grain traders face one-two punch from U.S. floods, trade war

Water stands next to a field of crops near Putnam County, Illinois, U.S. July 5, 2019. Picture taken July 5, 2019. REUTERS/Stephanie Kelly

By Karl Plume

CHICAGO (Reuters) – Severe U.S. weather likely dented earnings for large grain companies including Archer Daniels Midland Co and Bunge Ltd for a second straight quarter, adding to headwinds from a still-unresolved U.S.-China trade war, analysts and economists said.

ADM and Bunge, as well as peers Cargill Inc and Louis Dreyfus Co, known as the ABCD quartet of global grain trading giants, faced processing-plant downtime, rail, and barge shipping delays and other supply uncertainty this spring as historic floods ravaged the central United States.

The weather woes are heaping more pain on the battered U.S. agricultural sector already hard-hit by a years-long crop supply glut and the U.S.-China trade war now entering its second year. The tariffs China imposed on soybean exports from the United States in retaliation for U.S. duties on Chinese goods curbed shipments of the most valuable U.S. export crop.

The excessive rains and flooding could also have a lasting impact on the grain merchants, whose latest round of quarterly earnings will start this week. ADM and Cargill are viewed as particularly vulnerable due to their outsized U.S. footprints. Reduced U.S. corn and soybean plantings will likely cut available crop supplies in the United States, potentially driving up raw material costs and squeezing margins.

“They thrive on volumes and margins and both of those are going to be depressed in the coming year with the bushels being smaller and the margins likely not being there,” said Kevin McNew, chief economist with Farmers Business Network. “Export business is just going to fall off the cliff, especially for corn.”

The U.S. corn crop was more affected by floods than soybeans because soy can be planted later in the season.

FILE PHOTO: A flooded parcel of land along the Platte River is pictured in this aerial photograph at La Platte, south of Omaha, Nebraska, U.S. March 19, 2019. REUTERS/Drone Base/File Photo

FILE PHOTO: A flooded parcel of land along the Platte River is pictured in this aerial photograph at La Platte, south of Omaha, Nebraska, U.S. March 19, 2019. REUTERS/Drone Base/File Photo

WEAKER RESULTS

The first of the companies scheduled to report is privately held Cargill, which announces fiscal fourth-quarter earnings on Thursday.

The results will cover the March-to-May period, when flooding disrupted grain movement, including export shipments, and the year’s second “bomb cyclone” blizzard temporarily shuttered at least six Cargill grain handling facilities and a beef processing plant.

Cargill and ADM both own barge companies that haul grain and other products on the Mississippi River and its tributaries. Grain barge movement so far this year is down about 37% from a year ago, according to U.S. Army Corps of Engineers data, due largely to prolonged river closures triggered by floods.

Cargill is expected to report weaker results compared with the very strong earnings of the year-ago quarter, due partly to expected lower profit in its origination and processing unit, said Bill Densmore, senior director of corporate ratings at Fitch Ratings.

Bunge and ADM will follow, with second-quarter results covering April, May and June scheduled for release on July 31 and Aug. 1, respectively. Privately held Louis Dreyfus is expected to issue interim first-half results in the autumn.

Shares of publicly traded ADM and Bunge are hovering just above three-year lows notched this spring as mounting concerns about U.S. plantings and trade fueled investor nervousness.

FILE PHOTO: Flooded farm fields are seen from an aerial photo taken while Nebraska Army National Guard Soldiers used a CH-47 Chinook helicopter to deliver multiple bales of hay to cattle isolated by historic flooding in Richland, Nebraska, U.S., March 20, 2019. Picture taken on March 20, 2019. Courtesy Lisa Crawford/Nebraska National Guard/Handout via REUTERS

FILE PHOTO: Flooded farm fields are seen from an aerial photo taken while Nebraska Army National Guard Soldiers used a CH-47 Chinook helicopter to deliver multiple bales of hay to cattle isolated by historic flooding in Richland, Nebraska, U.S., March 20, 2019. Picture taken on March 20, 2019. Courtesy Lisa Crawford/Nebraska National Guard/Handout via REUTERS

UNEVEN IMPACTS

With its concentration of assets in the United States and its large U.S. ethanol business, ADM was likely hit harder by adverse U.S. weather than Bunge, analysts said.

ADM cited poor U.S. weather for a nearly $60 million drop in operating profit in its first quarter and warned in April that lingering weather impacts would cut second-quarter earnings by $20 million to $30 million. Some analysts expect ADM to post as large a hit to second-quarter earnings as in the first quarter as adverse weather stretched through the spring season.

“ADM’s first-quarter estimate of $50-60 million seems like a good starting point” for the second-quarter impact, said Seth Goldstein, analyst with Morningstar.

ADM’s soy processing, ethanol and sweeteners and starches units may post lower margins, and smaller corn and soybean crops will hurt its grain origination business, said Heather Jones, founder and senior analyst with Heather Jones Research LLC.

The price of corn, the most common feedstock for U.S. ethanol makers, has surged as U.S. farmers struggled to plant the 2019 crop due to a historically soggy spring. Cash corn premiums in parts of the eastern Midwest, where planting delays were most acute, are at a six-year high. Soybean prices hit a one-year top last week.

“Bunge is less exposed, but higher bean costs would squeeze soy crush margins in the U.S.,” Jones said. Bunge is the world’s largest soybean processor.

(Reporting by Karl Plume in Chicago; Editing by Caroline Stauffer and Matthew Lewis)

‘We need it now’: U.S. farm country pins hopes on China trade deal

FILE PHOTO: A tattered U.S. flag flies on an old tractor in a farm field outside Sutherland Springs,Texas, U.S. November 8, 2017. REUTERS/Rick Wilking

By Humeyra Pamuk

(Reuters) – Corn and soybean farmer Lorenda Overman from North Carolina has been selling her crops at a loss and delaying paychecks to her workers since the U.S. trade war with China tanked agriculture prices, and her farm’s debt recently topped $2 million.

If the Trump administration fails to clinch a deal with Beijing soon to end the trade dispute, she says, her operation may have a hard time staying afloat.

“We need some stability, we need some action and we need it now,” Overman, who farms in Goldsboro, said via telephone.

Her desperation reflects the mounting urgency across U.S. farm country over ongoing talks aimed at ending Washington’s trade dispute with China and pulling the U.S. agriculture industry out of its worst crisis since the 1980s.”

U.S. trade negotiators currently locked in talks with their Chinese counterparts are demanding Beijing change the way it does business with the United States, providing more access for U.S. companies, enforcement of intellectual property protection and an end to industrial subsidies.

While the talks mark the closest point yet to an end to the nine-month trade war, the two sides are yet to agree on the core issues which are essential for a deal that would reopen a critical market for U.S. farm goods like soybeans, sorghum and corn-based ethanol.

So far, the American rural heartland that helped carry President Donald Trump to victory in 2016 remains largely supportive of his hard line on trade, saying unfair Chinese practices had to be addressed for longer-term economic gain.

But it has also taken the brunt of the dispute, losing a massive export market. With credit conditions eroding in the agrarian economy and total debt hitting levels unseen for decades, the pain has deepened and patience is wearing thin.

“I voted for Trump and I have no regrets. I still feel like he has a handle on what needs to be done but I am frustrated that we are still sitting here with no deal,” Overman said.

Beijing imposed tariffs last year on imports of U.S. agricultural goods, including soybeans, grain sorghum and pork as retribution for U.S. levies. Soybean exports to China have plummeted over 90 percent due to the trade dispute and sales of U.S. soybeans elsewhere failed to make up for the loss.

Trump last week delayed plans to deepen tariffs on China, citing progress in the current talks.

PLANTING AMID UNCERTAINTY

Agriculture Secretary Sonny Perdue last week said the current debt levels in farm country have rapidly risen to levels seen in the 1980s, when thousands of farm operations financially collapsed after producers dealing with low crop prices fell behind on high-interest land and equipment loans.

Meanwhile, Chapter 12 bankruptcy filings have hit the highest level in a decade in parts of the U.S. Midwest and Great Plains states, according to federal data, though stable farmland prices and low-interest rates have helped.

The administration sought to protect farmers from some of the impacts of the trade war with an aid package of up to $12 billion last year. But it has said it will not provide additional support in 2019 even if the dispute continues.

That heaps pressure on farmers, who must decide what to plant this spring without guarantees they will have a market for it, and without any safety net if they make the wrong choice. U.S. farmers planted 89.1 million acres of soybeans in 2018, the second most ever, but without a market, much of it ended up plowed under, rotting in piles, or in storage.

“If we get a trade deal done and soybeans are worth 20 percent more over the next six months, but we decided to plant all corn because we didn’t know – that’s something that worries a lot of people,” said farmer Derek Sawyer, 38, from Kansas.

He said his debt has risen into the millions of dollars.

“Bankers so far have been OK to work with us as far as restructuring some debt,” he said. “But that rope keeps getting shorter.”

Delays to a trade deal have also kindled worries over the permanent loss of market share, as other suppliers such as Argentina and Brazil replace the tariff-blocked U.S. supply.

“It’s going to be a long time before we gain some of those markets back,” said Bill Tentinger, a 69-year-old third-generation corn, soybean and hog farmer from Le Mars, Iowa.

“If we could have settled this with China in a month or two, we would have seen more excitement in the market,” he said.

He said he borrowed $500,000 to plant this year’s crop, after an “absolutely brutal” 2018.

Chris Pollack, a dairy farmer from Wisconsin which saw hundreds of milk producers go out of business last year, says it is getting harder for the industry to embrace the administration’s focus on long-term gains targeted from the China trade standoff.

His farm has suffered from Chinese tariffs on U.S. cheese and other dairy products, and has been further hurt by Trump’s trade disputes with Canada and Mexico.

“Agriculture didn’t have a whole lot to gain but we had a whole lot to lose,” he said. “Certainly, we want to get stuff straightened out… but right now it’s a real tough sell to a hurting agriculture industry,” he said.

(Reporting by Humeyra Pamuk in Washington; editing by Richard Valdmanis and Lisa Shumaker)

U.S. farmers scramble to harvest crops as hurricane looms

FILE PHOTO: Lester "Buddy" Stroud, a farm hand at Shelley Farms, walks through a field of tobacco ready to be harvested in the Pleasant View community of Horry County, South Carolina, U.S., July 26, 2013. REUTERS/Randall Hill/File Photo

By Tom Polansek and P.J. Huffstutter

(Reuters) – As powerful Hurricane Florence crept closer to the southeastern United States on Tuesday, farmers in North Carolina rushed to harvest corn and tobacco and stock up on pig rations, while the danger of deadly flooding threatened a state where millions of farm animals are housed.

The forecasts for devastating rain and winds also had WH Group’s Smithfield Foods [SFII.UL], the largest U.S. pork processor, planning to shut two of its North Carolina plants – including the world’s biggest hog slaughterhouse.

Meanwhile, pig farmers across the state were lowering levels of liquid manure in outdoor storage pits in an effort to avoid a repeat of Hurricane Floyd. The 1999 storm flooded manure pits and contaminated waterways with animal carcasses and waste.

FILE PHOTO: Farm workers place harvested tobacco on a conveyor at Shelly Farms in the Pleasant View community of Horry County, South Carolina, U.S., July 26, 2013. REUTERS/Randall Hill/File Photo

FILE PHOTO: Farm workers place harvested tobacco on a conveyor at Shelly Farms in the Pleasant View community of Horry County, South Carolina, U.S., July 26, 2013. REUTERS/Randall Hill/File Photo

North Carolina is the country’s leading producer of tobacco, second-biggest producer of hogs and a major poultry producer. Its crops include corn, soy and cotton, making agriculture the state’s No. 1 industry, valued at $87 billion.

“The governor said that North Carolina is the bull’s eye of this hurricane,” Larry Wooten, president of the North Carolina Farm Bureau, said in an interview. “I’ll tell you, agriculture is in the heart of that bull’s eye.”

Florence, a Category 4 storm with winds of 130 miles per hour (210 kph), was expected to make landfall on Friday, bringing heavy, sustained rain and potentially deadly flooding to the U.S. Southeast coast. Some 1 million people have been ordered to evacuate.

Two-thirds of North Carolina’s farm income comes from poultry and livestock, including hogs and dairy cattle, according to Wooten. The state has 8.9 million swine, 12 percent of the U.S. herd, U.S. Agriculture Department data showed.

In 2017, its farmers raised 830.8 million chickens for meat, 9 percent of the U.S. flock, and 32.5 million turkeys, or 13 percent of the U.S. total, according to USDA data.

It is unclear how many farm animals are in the storm’s path, according to both Wooten and the North Carolina Poultry Federation.

Two years ago, more than a million poultry birds died when floodwaters from Hurricane Matthew covered areas across central and eastern North Carolina. Carcasses were composted inside the houses where the birds were being raised.

More than 20 inches (51 cm) of rainfall are possible across eastern North Carolina, said Don Keeney, senior agricultural meteorologist for weather forecaster Radiant Solutions.

The approaching storm also prompted commodity handler Cargill Inc [CARG.UL] to make plans to close meat processing plants in West Columbia, South Carolina, and Dayton, Virginia, on Friday. Both Cargill and Smithfield said the plant closures were due to safety concerns.

CORN ‘ROUND THE CLOCK

Bo Stone, who raises corn and hogs in Rowland, North Carolina, said he worked into the night to harvest his crop to avoid damage from high winds. On Tuesday, rain halted his progress. “We’ve been running as hard as we can go,” he said.

Stone said relocating animals in the storm zone was not an option for many farmers. “Nobody would have the capacity to handle your animals,” he said.

Tall corn and tobacco crops are most vulnerable to wind damage and difficult to harvest if knocked down, said Rhonda Garrison, executive director of the Corn Growers Association of North Carolina.

“They’re around the clock on corn,” said Andy Curliss, chief executive officer for the NC Pork Council, an industry group.

North Carolina’s corn crop was 43 percent harvested as of Sunday, while the type of tobacco most commonly grown in the state was 67 percent harvested, according to USDA data.

North Carolina has waived transportation rules to help farmers move crops and livestock ahead of the most severe storm to threaten the U.S. mainland this year. “During harvest, time is of the essence,” Governor Roy Cooper said in announcing a state of emergency.

Altria Group Inc, the parent of Philip Morris USA, said the storm could potentially affect tobacco fields, and is exploring its crop-buying options to offset any losses. British American Tobacco’s Reynolds American, parent of R.J. Reynolds Tobacco, declined to comment.

North Carolina hog farmers have been spraying hog manure on farmland to lower the levels of waste in storage pits, known as lagoons, said Andrea Ashby, spokeswoman for the state’s Department of Agriculture and Consumer Services.

“The levels are in pretty good shape to handle the rain, but it all depends on how much rain we get,” Ashby said.

Most manure pits could handle up to 25 inches of rain, Curliss said.

Smithfield Foods said in a statement it has been lowering waste levels as necessary on its farms and encouraging farmers from whom it buys hogs to do the same.

(Reporting by Tom Polansek and P.J. Huffstutter in Chicago; Additional reporting by Julie Ingwersen in Chicago; Editing by Toni Reinhold and Matthew Lewis)

Guatemala warns of falling ash as volcanic activity picks up

Residents pause during a search at an area affected by the eruption of Fuego volcano in San Miguel Los Lotes in Escuintla, Guatemala, June 7, 2018. REUTERS/Carlos Jasso

By Sofia Menchu

SAN MIGUEL LOS LOTES, Guatemala (Reuters) – Guatemalan officials warned of falling ash from the Fuego volcano late on Thursday and urged caution with flights as the Central American country recovers from devastating eruptions that have killed at least 109 people.

The seismological, volcanic and meteorological institute Insivumeh advised the civil aviation authority to take precautions with flights amid renewed activity from the peak, which produced a massive eruption on Sunday.

Relatives of victims of the eruption of the Fuego volcano receive food from volunteers outside the morgue of Escuintla, Guatemala 7 June, 2018. REUTERS/Luis Echeverria

Relatives of victims of the eruption of the Fuego volcano receive food from volunteers outside the morgue of Escuintla, Guatemala 7 June, 2018. REUTERS/Luis Echeverria

The death toll from Fuego’s most violent eruption in four decades has been gradually rising and now stands at 109, the Guatemala’s disaster and forensic agency Inacif said earlier on Thursday.

Authorities have said a communication breakdown between CONRED and volcanologists in Guatemala delayed evacuations from the surrounding area.

Guatemala’s public prosecutor said on Thursday it would open an investigation into whether protocols were followed to inform proper decision-making in the handling of the disaster.

Rescue teams have been searching frantically for survivors and victims in the ravaged landscape, which is covered in ash and lava.

The eruptions have showered volcanic ash over a vast area and spewed deadly, fast-moving pyroclastic flows through nearby towns.

The U.S. government expressed its “deepest condolences” to the victims on Thursday and said it was sending emergency aid at Guatemala’s request, including an unspecified amount of financial resources to help with food, water, and sanitation.

Residents wait in line to receive aid at an area affected by the eruption of Fuego volcano at the village of Sangre de Cristo in Chimaltenango, Guatemala, June 7, 2018. REUTERS/Jose Cabezas

Residents wait in line to receive aid at an area affected by the eruption of Fuego volcano at the village of Sangre de Cristo in Chimaltenango, Guatemala, June 7, 2018. REUTERS/Jose Cabezas

The White House said in a statement it was also dispatching aircraft to transport burn victims for treatment in Florida.

The International Federation of Red Cross and Red Crescent Societies (IFRC) raised concerns about the economic cost of the disaster in the poor country.

“We should not underestimate the scale of this disaster. Critical, emergency needs are still enormous, and affected communities will need sustained and long-term support,” IFRC President Francesco Rocca said in a statement on Thursday.

Rocca noted that ash had fallen across more than half of Guatemala, covering areas where agriculture is crucial.

“We hope it will not mean a secondary disaster,” he said.

The IFRC has pledged more than 250,000 Swiss francs ($253,000) to support rescue efforts and said those worst hit would need at least a year to recover.

The suspension of rescue efforts around the volcano may be lifted if conditions on the ground improve, CONRED said.

Volcan de Fuego, which means “Volcano of Fire” in Spanish, lies about 25 miles (40 km) southwest of the capital, Guatemala City.

(Reporting by Sofia Menchu; Editing by Rosalba O’Brien, Sandra Maler and Paul Tait)

Big Ag turns to peas to meet soaring global protein demand

FILE PHOTO: A box of Cheerios cereal, fortified with soy and pea protein, is seen in this photo illustration in Wilmette, Illinois, U.S., September 12, 2014. REUTERS/Jim Young/File Photo

By Rod Nickel and P.J. Huffstutter

(Reuters) – Cargill, the global grains trader, sees the future of protein in the humble pea.

In a joint venture at a Wisconsin plant, flour milled from Iowa yellow peas is mixed with water and spun at high speed through stainless steel drums, separating the protein from starch and fiber.

The resulting powder ends up blended into waffle mixes, sports drinks, nutrition bars and protein shakes – small examples of a much larger push by the world’s biggest agriculture firms to find alternative plant-based proteins to feed people and livestock worldwide.

“When we looked at where is the future going, the pea is the up-and-coming thing,” said David Henstrom, Cargill Inc’s vice-president of starches, sweeteners and texturizers.

Pea plants are shown at a PURIS seed plot in Oskaloosa, Iowa, in this June 2017 handout photo obtained by Reuters March 16, 2018. Bill Phelps/Puris/Handout via REUTERS

Pea plants are shown at a PURIS seed plot in Oskaloosa, Iowa, in this June 2017 handout photo obtained by Reuters March 16, 2018. Bill Phelps/Puris/Handout via REUTERS

Peas are in many ways the ideal modern American food: protein-rich, plant-based and gluten-free. While the market remains relatively small, the demand for pea powder and other emerging protein sources is soaring, from the middle classes in China and the health-conscious in California to livestock producers and fish farmers who need to fatten animals on ever-tighter budgets.

Cargill and its competitors – such as Archer Daniels Midland and Richardson International, the biggest Canadian grain handler – are investing in specialty ingredients in search of higher profit margins than they can extract from bigger commodity crops such as soybeans, corn and wheat.

Cargill invested an undisclosed sum in January in a joint venture with PURIS, a family-run company that started in Iowa as a seed company and now owns the Wisconsin pea-powder plant. The two firms are also working to boost the protein content in peas through cross-breeding, which has not been previously reported.

Cargill rival ADM is building its own pea processing plant in North Dakota and signing contracts with farmers to buy and grow yellow peas, Ken Campbell, ADM’s president of specialty ingredients, said in a statement to Reuters. Company researchers are also studying another 30 types of protein options, including nuts and seeds.

Other firms are trying draw more protein from canola, oats and many other so-called emerging proteins, and Cargill has explored insect-based feed for fish and poultry.

Seed and chemical firm DowDuPont Inc told Reuters it plans to launch a canola seed supercharged with protein through traditional cross-breeding as soon as next year.

Richardson International started construction in April of a C$30-million ($23 million) laboratory in Winnipeg to study proteins and other food ingredients. The firm is exploring a move into pea and oat protein concentrates that could start next year, senior vice-president of technology Chuck Cohen said in an interview. France-based food ingredient company Roquette is building plant in Manitoba to produce pea proteins in North America, which currently imports from Europe.

SOARING DEMAND

Projections for soaring sales from alternative plant proteins have enticed large grain traders that make money by buying, selling, storing, shipping and trading crops. Years of oversupplied grain markets and thin margins have squeezed the trading operations of ADM, Bunge Ltd , Cargill and Louis Dreyfus Co – known collectively as the “ABCDs” – although conditions have improved recently.

Global demand for protein – whether from meat, aquaculture or plant sources – is booming in part due to rising incomes in emerging markets in Asia and Africa, industry analysts say. In North America, consumers are shifting their diet preferences to include more protein, and 35 percent of U.S. households last year said they follow a specific protein-focused diet, such as Paleo or low-carbohydrate, according to research conducted by Nielsen.

The trend is driving a shift in grocery shopping. In the year ended July 8, 2017, sales of plant-based food and beverages in the U.S. increased 14.7 percent over the previous period, according to Nielsen. Sales of meat alternatives are growing especially within prepared foods, an indication that consumers are trying options once only available in niche stores.

Global pea protein sales amounted to $73.4 million in 2016, according to research firm Grand View Research, but are forecast to quadruple by 2025, reaching $313.5 million in sales, helped by popular diets free of gluten and lactose and an expanding middle class in developing nations.

Even with such explosive growth, pea proteins would have high potential upside because they would account for a fraction of the projected $48.77 billion global animal and plant protein ingredients market by 2025, which is led by meat, according to Grand View.

POWERING UP THE PEA

Cargill’s partnership with PURIS includes breeding pea crops for higher protein content. Standard peas contain 18 to 22 percent protein, but PURIS this year will start selling peas packed with 28 percent protein for planting by farmers in the northern Plains and Midwest, said PURIS president Tyler Lorenzen. Once processed, pea powders can contain about 80 percent protein.

Creating new varieties of protein-packed peas, however, can take seven years or more because it is done through conventional breeding rather than genetic modification, Lorenzen said. The lack of genetic modification, however, also attracts many consumers who prefer more organic foods, said Pascal Leroy, head of Roquette’s pea and new protein business line.

In Canada, one of the world’s biggest pea exporters, at least three pea protein plants are planned or increasing production, including Verdient Foods in Saskatchewan, whose investors include Titanic director James Cameron. That gives farmers an incentive to vary plantings that are now dominated by wheat and canola.

Roquette is building what it says will be the world’s biggest pea plant in Manitoba, on the belief the vegetable has unique consumer appeal. German company Canadian Protein Innovation plans a plant in Moose Jaw, Saskatchewan.

Illinois-based ADM told Reuters it is building a new pea protein processing plant at the site of one of its soybean processing complexes in Enderlin, North Dakota. The location gives the company proximity to yellow pea producers and transportation to domestic and international customers, according to ADM’s Campbell.

ADM will launch its line of pea powders as an ingredient for food manufacturers early next year and introduce other plant-based protein product lines in the following two years, the company said, declining to give further details.

Unlike Cargill, ADM is seeking to boost pea protein levels in the processing plant – rather than through crop breeding – and is buying most of its supplies from nearby North Dakota farmers, the company said. ADM officials declined to detail how it can boost protein in a factory, citing competitive concerns.

(Reporting by Rod Nickel and P.J. Huffstutter; Editing by Brian Thevenot)

Monsanto, BASF weed killers strain U.S. states with crop damage complaints

Monsanto's research farm is pictured near Carman, Manitoba, Canada on August 3, 2017.

By Tom Polansek

CHICAGO (Reuters) – U.S. farmers have overwhelmed state governments with thousands of complaints about crop damage linked to new versions of weed killers, threatening future sales by manufacturers Monsanto Co and BASF.

Monsanto is banking on weed killers using a chemical known as dicamba – and seeds engineered to resist it – to dominate soybean production in the United States, the world’s second-largest exporter.

The United States has faced a weed-killer crisis this year caused by the new formulations of dicamba-based herbicides, which farmers and weed experts say have harmed crops because they evaporate and drift away from where they are applied.

Monsanto and BASF say the herbicides are safe when properly applied. They need to convince regulators after the flood of complaints to state agriculture departments.

The U.S. Environmental Protection Agency (EPA) last year approved use of the weed killers on dicamba-resistant crops during the summer growing season. Previously, farmers used dicamba to kill weeds before they planted seeds, and not while the crops were growing.

However, the EPA approved such use only until Nov. 9, 2018, because “extraordinary precautions” are needed to prevent dicamba products from tainting vulnerable crops, a spokesman told Reuters in a statement last week. The agency wanted to be able to step in if there were problems, he said.

Next year, the EPA will determine whether to extend its approval by reviewing damage complaints and consulting with state and industry experts. States are separately considering new restrictions on usage for 2018.

Major soybean-growing states, including Arkansas, Missouri and Illinois, each received roughly four years’ worth of complaints about possible pesticide damage to crops this year due to dicamba use, state regulators said.

Now agriculture officials face long backlogs of cases to investigate, which are driving up costs for lab tests and overtime. Several states had to reassign employees to handle the load.

“We don’t have the staff to be able to handle 400 investigations in a year plus do all the other required work,” said Paul Bailey, director of the Plant Industries division of the Missouri Department of Agriculture.

In Missouri, farmers filed about 310 complaints over suspected dicamba damage, on top of the roughly 80 complaints about pesticides the state receives in a typical year, he said.

Nationwide, states launched 2,708 investigations into dicamba-related plant injury by Oct. 15, according to data compiled by the University of Missouri.

States investigate such complaints to determine whether applicators followed the rules for using chemicals. Those found to have violated regulations can be fined.

Monsanto has said that U.S. farmers spraying this past summer failed to follow detailed instructions of up to 4,550 words printed on labels.

The companies will change usage instructions in hopes of avoiding a repeat of the past summer’s problems.

“With significant adoption and a lot of interest in this new technology, we recognize that many states have received a number of reports of potential off-target application of dicamba in 2017,” Monsanto spokeswoman Charla Lord said last month.

 

PHOTOGRAPHING DAMAGED SOYBEANS

State investigators try to visit fields within days after farmers report possible damage to take photos before signs of injury, such as cupped leaves on soybean plants hit by dicamba, disappear. They question farmers and the people who applied the herbicide, and often gather samples from plants to test.

In Arkansas, farmers filed about 985 complaints associated with dicamba, the most of any state. Investigators are probing about 1,200 total complaints involving pesticide use, which includes weed killers, said Terry Walker, director of the Arkansas State Plant Board.

Arkansas delayed inspections of animal feed and allowed overtime to handle the dicamba cases, which is not normal practice, Walker said. He was unable to provide a cost estimate for dealing with the complaints.

Among the farmers who reported damage was Reed Storey, who said he wanted to ensure state officials knew dicamba caused damage even when users follow the instructions.

“I’m calling strictly to let y’all know that we have an issue with this product,” Storey, who spoke last month, said he told Arkansas regulators.

Illinois received about 421 total pesticide complaints, the most since at least 1989, said Warren Goetsch, acting chief of the Bureau of Environmental Programs at the Illinois Department of Agriculture. That includes at least 245 complaints associated with dicamba, which could take until next year to finish investigating, he said.

“It’s frustrating I think for us that we’re as behind as we are,” Goetsch said.

 

MONSANTO’S BIG BET

Monsanto is betting on dicamba-tolerant soybeans to replace those that withstand glyphosate, an herbicide used for decades but which is becoming less effective as weeds develop resistance. The company aims for its dicamba-resistant seeds to account for half the U.S. soybeans planted by 2019.

Monsanto, which is in the process of being acquired by Bayer AG  for $63.5 billion, said it plans to open a call center to help customers use dicamba next year and is talking with states about the product.

Monsanto’s net sales increased $1.1 billion, or 8 percent, in fiscal year 2017 due partly to increased sales of its dicamba-resistant soybean seeds.

The company and BASF already face several lawsuits from farmers alleging damage to plants from dicamba used by neighbors.

 

ANALYZING PLANT SAMPLES

The EPA provides grants to states that help fund investigations into pesticide damage and this year offered 35 states extra assistance analyzing plant samples for dicamba, according to the agency.

Minnesota and Illinois turned to the EPA for help, with the latter saying the federal agency has better equipment to detect low levels of dicamba.

In Iowa, the state’s laboratory bureau received 515 samples to test this year, up 35 percent, as dicamba use helped drive up the total number of pesticide complaints to 270 from a typical range of 70 to 120, according to the state. Each test costs up to $9.

“We are really anxious to flip the page and look ahead to 2018 and try to figure out the things that can be done to improve the situation,” said Mike Naig, deputy secretary of the Iowa Department of Agriculture and Land Stewardship.

 

(Reporting by Tom Polansek; Editing by Jo Winterbottom and Matthew Lewis)

 

Trump reassures farmers immigration crackdown not aimed at their workers

Migrant farmworkers with H-2A visas walk to take a break after harvesting romaine lettuce in King City, California, U.S

By Mica Rosenberg and Kristina Cooke

WASHINGTON/SAN FRANCISCO (Reuters) – President Donald Trump said he would seek to keep his tough immigration enforcement policies from harming the U.S. farm industry and its largely immigrant workforce, according to farmers and officials who met with him.

At a roundtable on farm labor at the White House last month, Trump said he did not want to create labor problems for farmers and would look into improving a program that brings in temporary agricultural workers on legal visas.

“He assured us we would have plenty of access to workers,” said Zippy Duvall, president of the American Farm Bureau Federation, one of 14 participants at the April 25 meeting with Trump and Agriculture Secretary Sonny Perdue.

During the roundtable conversation about agriculture, farmers and representatives of the sector brought up labor and immigration, the details of which have not been previously reported. Some farmers told Trump they often cannot find Americans willing to do the difficult farm jobs, according to interviews with nine of the 14 participants.

They said they were worried about stricter immigration enforcement and described frustrations with the H-2A visa program, the one legal way to bring in temporary seasonal agricultural workers.

The White House declined to comment on the specifics of the discussion, but described the meeting as “very productive.” The U.S. Department of Agriculture did not respond to a request for comment on the April meeting.

About half of U.S. crop workers are in the country illegally and more than two-thirds are foreign born, according to the most recent figures from the U.S. Department of Labor’s National Agriculture Workers’ Survey.

During the roundtable, Luke Brubaker, a dairy farmer from Pennsylvania, described how immigration agents had recently picked up half a dozen chicken catchers working for a poultry transportation company in his county.

The employer tried to replace them with local hires, but within three hours all but one had quit, Brubaker told the gathering at the White House.

Trump said he wanted to help and asked Secretary Perdue to look into the issues and come back with recommendations, according to the accounts.

While other issues such as trade, infrastructure and technology were also discussed, participants were more positive after the meeting about the conversation on foreign labor “than about anything else we talked about,”  said Bill Northey, a farmer and Iowa’s secretary of agriculture.

RED TAPE

Tom Demaline, president of Willoway Nurseries in Ohio, said he told the president about his struggles with the H-2A guestworker program, which he has used for 18 years.

He told Trump the program works in concept, but not in practice. “I brought up the bureaucracy and red tape,” he said. “If the guys show up a week or two late, it puts crops in jeopardy. You are on pins and needles all year to make sure you get the workers and do everything right.”

While use of the program has steadily increased over the past decade, it still accounts for only about 10 percent of the estimated 1.3 million farmworkers in the country, according to government data. In 2016, the government granted 134,000 H-2A visas

Employers who import workers with H-2A visas must provide free transportation to and from the United States as well as housing and food for workers once they arrive. Wage minimums are set by the government and are often higher than farmers are used to paying.

Steve Scaroni, whose company Fresh Harvest brings in thousands of foreign H-2A workers for growers in California’s Central valley, says, however, that he could find work for even more people if he had more places to house them.

Trump recently signed another executive order titled “Buy American, Hire American,” calling for changes to a program granting temporary visas for the tech industry, but not to visas used by farmers and other seasonal businesses, including Trump’s own resorts.

FARMER CONCERNS

Trump also signed two executive orders, just days after taking office, focused on border security that called for arresting more people in the United States illegally and speeding up deportations.

Roundtable participants said that many farmers have worried about the effect of the stepped up enforcement on their workforce, but Trump told them his administration was focused on deporting criminals, not farmworkers.

“He has a much better understanding about this than some of the rhetoric we have seen,” said meeting attendee Steve Troxler, North Carolina’s agriculture commissioner and a farmer himself.

The farmers at the meeting said they stressed to the president the need for both short-term and permanent workers. They said there should be a program to help long-time farmworkers without criminal records, but who are in the country illegally, to become legal residents.

Last Tuesday, Democrats in the House and Senate said they would introduce a bill to give farmworkers who have worked illegally in the country for two consecutive years a “blue card” to protect them from deportation.

Brubaker, the Pennsylvania farmer, said he liked what he had heard about the bill and hoped it would get the president’s support to make it a bipartisan effort.

“The administration has got something started here,” he said of the meeting with farm leaders. “It’s about time something happens.”

(Reporting by Kristina Cooke in San Francisco and Mica Rosenberg in Washington; Additional reporting by Julia Love in Salinas, California; Editing by Sue Horton and Mary Milliken)

Spanish lettuce shortage likely to continue into March, say farmers

iceberg lettuce farm

By Emma Pinedo and Francisco Bonilla

LOS ALCAZARES, Spain (Reuters) – A shortage of iceberg lettuce is likely to continue into March, Spanish farmers say, because freak weather conditions in the south of the country early in the agricultural year prevented the planting of seedlings to replace ruined crops.

The southern region of Murcia, where most Spanish lettuce grown for export is cultivated, suffered the worst floods in two decades followed by its first snow storm in over 30 years in December and January.

“This has been extraordinary, it’s not normal to have so many problems at once,” said Jose Antonio Canovas, a farmer and salesman in Murcia for Kernel Export, which grows, packages and delivers a range of vegetables from cauliflower to broccoli.

The ruined harvest and subsequent shortage of produce has led some British supermarkets like Tesco <TSCO.L> and Sainsbury <SBRY.L> to ration iceberg lettuces to three per visit. The limited supply follows a shortage of courgettes in Britain and supplies of broccoli and aubergines have also been affected.

Vegetable production in the European Union has fallen to 60 percent of normal levels in recent weeks due to bad weather affecting producers across the Mediterranean, from Greece to Spain, Spanish exporters say. Spain accounts for around half of EU vegetable exports.

Not only did floods and snow ruin crops, leaving lettuces ready for harvest withered and battered in the fields, but the bad weather prevented the planting of polytunnel-grown seedlings which meant more delays to the next harvest of Spain’s biggest fruit and vegetable export after tomatoes.

“We have notified our customers that there may be production delays in March because the planting of seedlings has been delayed and in the rush to supply the market some crops were picked ahead of time,” said Fernando Gomez, general manager of The Murcian Federation of Producers and Exporters of Fruit and Vegetables (Proexport).

The production of lettuces, one of the most badly affected crops, has fallen by up to a third in the peak winter months of production when Spain harvests over 100,000 tonnes of the 700,000 tonnes it exports annually.

Production is likely to return to normal by the end of March or the beginning of April, Proexport’s Gomez said.

Many farmers in the area do not insure their crops. In a sector with very slim profit margins of between 1.5 and 4 percent, profit relies on big volumes. Higher prices have not made up for the losses farmers have suffered.

Alongside the hit from ruined crops, the hiring of specialized labor to work the flooded and frozen fields has also eaten into profit margins at farms.

(Writing by Sonya Dowsett; Editing by Angus Berwick and Adrian Croft)