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Commodity Communicator Weekly

August 2, 2013

The recent breakup of a world potash cartel which is expected to significantly reduce the cost of potash fertilizer...see article for full details.

Potash sector rocked.pdf

A federal judge in Albuquerque is expected to decide today  whether companies in New Mexico and Iowa can begin legally slaughtering horses, for the first time in the country since it was effectively banned in 2006.

A hearing is scheduled on a request by The Humane Society of the United States and others for a restraining order to block Valley Meat Co. of Roswell, N.M., and Responsible Transportation in Sigourney, Iowa, from opening their slaughterhouses as planned on Monday.

The groups sued the Department of Agriculture in June after it issued permits to the companies. The ban was lifted in 2011, renewing an emotional and divisive national debate over whether horses are livestock or domestic companions, and how best to deal with untold thousands of unwanted, abandoned and often starving horses.

Valley Meat Co. of Roswell, N.M., owner Rick De Los Santos says he, his company and family have  become the target of numerous violent threats. Last weekend arsonists hit the plant, damaging its refrigeration unit. His attorney advised him to stay away from today’s hearing.

After more than a year of delays and a lawsuit by Valley Meat, the Department of Agriculture in June gave the company the go-ahead to begin slaughtering horses. USDA officials said they were legally obligated to issue the permits, even though the Obama administration opposes horse slaughter and is seeking to reinstate the congressional ban.

Another permit has been approved for Responsible Transportation, an Iowa based-company.  Both planned to open on Monday according to their attorney.

These developments have further divided horse rescue and animal welfare groups, ranchers, politicians and Indian tribes about what is the most humane way to deal with the country's horse overpopulation.

Senators from the Mid-Atlantic States are wading into a debate over a controversial biofuels standard.  Senator Ben Cardin (MD) is working on legislation to reform the renewable-fuels standard, while Senators from neighboring states, including Delaware and Pennsylvania, may urge the administration to temporarily waive sections of the law that require increasing amounts of biofuels, mainly corn-produced, to be blended with gasoline each year.  Since last summer’s historic drought that sent corn prices soaring, the eight-year-old renewable-fuels standard has come under attack for adding to the pressure on corn supplies.  Mid-Atlantic lawmakers, in particular, are hearing from the poultry industry, which is concerned about rising feedstock prices, and from oil refineries, which are facing increased costs for blending ethanol with gasoline.  Congress created the RFS in 2005 and strengthened it in 2007 to help reduce U.S. oil consumption and increase the use of renewable fuel sources.  Virtually all of the Mid-Atlantic Senators support advanced biofuels made from other products besides corn, but those have not been developed as quickly as Congress initially envisioned.  Senator Christopher Coons (DE), like some of his senate colleagues in the region, said he would not support a full repeal of the policy, as livestock producers and the oil industry are urging.  Another legislative proposal introduced by Senators Toomey (PA), Pryor (AR), and Barrasso (WY) would repeal the standard.  It remains unclear when Senator Cardin will introduce his bill or who will cosponsor it.  It’s different than legislation he introduced last fall that would link the mandate’s corn-ethanol requirement with the size and availability of U.S. corn supplies.  Conversely, Senator Toomey is planning to send a letter to the administration requesting some sort of relief from the mandate within the next few days.  Per Senator Casey (PA)’s staff, we are strongly considering signing a similar letter.  Finally, Senators Hagan (NC), Carper (DE), and Schumer (NY) have claimed that they may sign the letter.  

. . ..By Bob Gray
Buried deep inside the Senate Farm Bill (S.954) is a provision that would require USDA to hold a prehearing procedure to consider alternative formulas for the pricing of Class III milk.  It would also require USDA to analyze and report to Congress the possibility of replacing the use of end-product pricing formulas with other pricing alternatives.  It would also give USDA the option of establishing a Federal Milk Marketing Order Review Commission which was established in the 2008 Farm Bill but never implemented by USDA.  The Commission, if established, would conduct a comprehensive review and evaluation of FMMO’s as well as non-FMMO systems.  The House passed Farm Bill does not include the Senate provision and it in fact repeals the authority to establish a Federal Milk Marketing Order Review Commission.

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