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Jan 19

TSTA Weekly Update for 01/19/2023


Weekly Update from the Texas Seed Trade Association

Member News

Membership renewals were mailed several weeks ago. A big Thank You to those companies who have already renewed for 2023! Please check the mail for your membership renewal and member certificate and renew your support for the Texas Seed Trade as soon as you are able.

2023 Annual Membership Meeting Registration & Hotel Reservations

 

We are excited to return to Horseshoe Bay Resort for the 2023 Texas Seed Trade Association Annual Meeting, February 12th through February 14th. Join us for the 2nd Annual Scholarship Corn Hole Tournament and annual Super Bowl Party Sunday afternoon. Monday’s General Session will feature officer and board elections, a report on the state of the association, industry speakers and topics important to our business. The president for 2023 will host a dinner and auction that evening. The TSTA board will meet Tuesday morning and is open to all members in good standing.



We look forward to seeing you!

 

Please Click Here for the draft agenda

 

Participants & Sponsors Meeting Registration & Sponsorship

 

Hotel Room BlockTexas Seed Trade Assoc. Annual Conference 2023

Dow Jones reports:

 

Germany's BASF SE expects to post a net loss for 2022 after booking impairments worth 7.3 billion euros ($7.90 billion) from the deconsolidation of Russian exploration and production activities after Moscow's invasion of Ukraine.

 

The German chemicals giant said Tuesday that it expects to book EUR5.4 billion of the total impairment in the fourth quarter of 2022, swinging to a net loss of EUR1.38 billion from a 2021 profit of EUR5.52 billion. BASF's forecast, based on preliminary figures, is considerably below analysts' forecast of a EUR4.77 billion profit, the company said.

 

"These impairments result in particular from the deconsolidation of the Russian exploration and production activities of Wintershall Dea due to the extensive loss of actual influence and economic expropriation. Wintershall Dea intends to fully exit Russia in an orderly manner complying with all applicable legal obligations. Accordingly, the Russian participations of Wintershall Dea have been re-evaluated and write-downs on the European gas transportation business have been made, including a complete write-down on the participation in Nord Stream AG," BASF said.

 

Earnings before interest and taxes before special items for the year fell to EUR6.88 billion from EUR7.77 billion, while sales climbed 11% in 2022 to EUR87.33 billion, BASF said.

 

Editor's Note: BASF is a valued member of the Texas Seed Trade Association

In an effort to update and maintain our membership records we request you take a few moments and fill out the very brief info request at the following link.

 

https://forms.gle/SC6QDSgqUVixUqAo8

 

The link is secure and the information will be used internally by the Texas Seed Trade Association and never shared without your permission. This request is on behalf of your association's board of directors and officers and we greatly appreciate your cooperation. Thank you!

 

1/19/2023 - If you have not updated your information please take a moment and do so now. We appreciate it! We continue to update this database and need your input!

News Bits

 

American Farm Bureau Federation news release

 

WASHINGTON - American Farm Bureau Federation President Zippy Duvall commented today on AFBF's legal challenge to the new Waters of the United States rule. AFBF joined 17 other organizations representing agriculture, infrastructure and housing, as well as county and state Farm Bureaus in filing suit.

 

"Farmers and ranchers share the goal of protecting the resources we're entrusted with. Clean water is important to all of us. Unfortunately, the new WOTUS rule once again gives the federal government sweeping authority over private lands. This isn't what clean water regulations were intended to do.

 

"Farmers and ranchers should not have to hire a team of lawyers and consultants to determine how we can farm our land.

"The new rule is vague and creates uncertainty for America's farmers, even if they're miles from the nearest navigable water.

 

"We believe a judge will recognize these regulations exceed the scope of the Clean Water Act, and direct EPA to develop rules that enable farmers to protect natural resources while ensuring they can continue stocking America's pantries."

 

Read the lawsuit here.

 

AgriPulse reports:

 

The legal battle is on over the Biden administration's new "waters of the U.S." rule. Some major farm groups joined with the oil, real estate and construction sectors to file a lawsuit Thursday evening seeking to block implementation of the rule that redefines the jurisdiction of the Clean Water Act.

 

The lawsuit, filed in the Southern District of Texas, alleges the rule extends federal jurisdiction to a "staggering range of dry land and water features-whether large or small; permanent, intermittent, or ephemeral; flowing or stagnant; natural or manmade; interstate or intrastate; and no matter how remote from or lacking in a physical connection to actual navigable waters."

 

The plaintiffs include the American Farm Bureau Federation, National Cattlemen's Beef Association, National Corn Growers Association, American Petroleum Institute, Associated General Contractors of America and the National Association of Realtors.

 

Keep in mind: The Supreme Court is currently considering a case that could force the Biden administration to modify the new WOTUS rule.

 

Today, the House Republican Steering Committee selected the Republican members who will serve on the House Committee on Agriculture for the 118th Congress. Following the announcement, Rep. Glenn "GT" Thompson, Chairman of the House Committee on Agriculture, issued the following statement:

 

"I welcome this diverse group of legislators to the House Committee on Agriculture for the 118th Congress. It's imperative we hit the ground running through a rigorous hearing schedule, listening sessions, and aggressive oversight. I look forward to working closely with my colleagues as we put forward commonsense solutions that provide certainty for rural America."

 

Returning Members

 

Rep. Glenn "GT" Thompson (PA-15), Chairman

Rep. Austin Scott (GA-08)

Rep. Rick Crawford (AR-01)

Rep. Scott DesJarlais (TN-04)

Rep. Doug LaMalfa (CA-01)

Rep. David Rouzer (NC-07)

Rep. Trent Kelly (MS-01)

Rep. Don Bacon (NE-02)

Rep. Dusty Johnson (SD-AL)

Rep. Jim Baird (IN-04)

Rep. Tracey Mann (KS-01)

Rep. Mary Miller (IL-15)

Rep. Barry Moore (AL-02)

Rep. Kat Cammack (FL-03)

Rep. Brad Finstad (MN-01)

 

New Members

 

Rep. Frank Lucas (OK-03)

Rep. John Rose (TN-06)

Rep. Ronny Jackson (TX-13)

Rep. Mark Alford (MO-04)

Rep. Lori Chavez-DeRemer (OR-05)

Rep. Monica De La Cruz (TX-15)

Rep. John Duarte (CA-13)

Rep. Nick Langworthy (NY-23)

Rep. Max Miller (OH-07)

Rep. Marc Molinaro (NY-19)

Rep. Zach Nunn (IA-03)

Rep. Derrick Van Orden (WI-03)

 

Editor's Note: Accustomed to "senior" members on this committee, we are happy Texas has two "new" members of House Ag.

Seed Prices Have Soared-Is intellectual Property the Problem?

How Intellectual Property, Regulation, and Research Can Make Agriculture More Competitive

sourced from The Breakthrough Institute

 

Agricultural seed prices have soared over the last 20 years. Conventional seed prices have risen 200%, while genetically modified ones have gone up a dramatically higher 700%.

 

This is a problem for farmers, consumers, and the government. High seed prices contribute to tight margins for farmers, and can contribute to high food prices, which consumers must bear. These problems aren’t theoretical. Last year, high fertilizer prices were contributing to such a steep rise in food prices that the federal government took action in May to try to tamp them down.

 

High seed prices may likewise demand action. Already, over the summer, the USDA released a request for comment on the impact of intellectual property rights on prices for seeds and other agricultural inputs like herbicides. It says it will use the comments to inform strategies to ensure that the intellectual property system incentivizes innovation without unnecessarily reducing competition in agricultural input markets. In May, the Breakthrough Institute submitted a comment, which can be accessed here.

 

Many proposals to reduce prices focus on halting further industry consolidation; for instance, stopping mergers and more closely regulating company practices. Indeed, the agricultural seed industry has seen dramatic consolidation over the past three decades, leading to the “big six” companies, which with mergers and acquisitions completed in 2017 and 2018, became the “big four” (Bayer-Monsanto, DowDuPont/Corteva, ChemChina-Syngenta, and BASF); however, the evidence for the impact on competition and prices is mixed. A wider set of associated systems, including intellectual property, regulation, and research, can also stimulate competition and innovation. And although intellectual property does have an impact on prices for genetically modified seeds, these two other factors also play hugely important roles — regulation and public research funding. For genetically modified seeds, IP, regulation, and funding have an even greater impact on prices, contributing to the larger historical price increases compared to those for conventional seeds.

 

Improvements to all three of these systems can help provide quality seeds for farmers at reasonable prices, and thereby help produce more and better food with lower environmental impacts.

 

So how do IP protections increase seed prices?

 

Since the 1980s, scientists have been able to use genetic modification—a type of biotechnology— to insert a gene into a plant from either a plant of the same species, a plant of a closely related species, or a more distantly related organism of a different species. Gene editing—or genome editing, a process for which CRISPR is the most well-known tool—is another type of biotechnology that allows scientists to make precise changes to a plant’s existing DNA, either by changing or deleting one or more letters of the DNA code. In contrast, conventional breeding involves crossing plants, mainly of the same or closely-related species, and using chemicals or radiation to create random mutations.

 

For genetically modified seeds, both the genetically modified traits they contain and the methods used to make them are usually patented, and patent protection allows developers to charge licensing fees for anyone who uses either the methods or the genetic material. In contrast, conventional seed varieties usually fall under Plant Variety Protection, which protects the seeds (or vegetative material) but not the genetic material, meaning that other developers can freely improve upon it to make similar and often competing varieties. These differences mean that genetically modified seeds come with higher licensing fees from the start.

 

To be sure, those protections and fees have their benefits; the U.S. intellectual property system was designed to encourage innovation by granting inventors a patent for their inventions. In agriculture, the benefit of this system can provide stronger protection for the massive investment that goes into developing a new crop variety.

 

But the costs it adds are non-trivial. For genetically modified crop seeds, added expenses can come through various mechanisms. First, if intellectual property for an important tool for genetic modification or gene editing is held by a single organization, they can either license it widely for a low price, or impose high prices and license the tool to only few other organizations in order to monopolize the technology. The latter could result in higher prices due to reduced competition and lock some developers out of using important technologies.

 

Second, licensing agreements and prices usually aren’t publicly available, which makes it hard for developers to find out how much licenses cost, negotiate a price, or compare prices among patent holders.

 

Third, with hundreds of different patents on CRISPR components already in existence—and more filed every day—it can be difficult for new developers to determine from how many and from which patent holders they must license technology, and licensing from multiple patent holders can be expensive. All three mechanisms can create barriers to entry for smaller developers and new developers, and reduce competition in the industry, potentially increasing prices. To help ease the burden, the federal government, mainly the USDA, can take several approaches to mediate the role of the intellectual property system in raising crop seed prices while also protecting the incentives to innovate.

In order to support broad technology access and innovation, USDA and other agencies could launch an initiative to define fair licensing practices, using input from stakeholders to define and operationalize technology access and access to intellectual property.

 

USDA and other agencies could also create funding initiatives for projects that develop technology-sharing systems like the existing Open Science Initiative at the Montreal Neurological Institute, the BioBricks OpenMTA, and the World Health Organization’s Global Influenza Surveillance and Response System. Finally, USDA could expand access to affordable seeds by encouraging companies to develop generic versions of genetically modified seeds when the patents on their traits expire, similar to the FDA’s support for generic versions of drugs via the Drug Competition Action Plan.

 

While the recent USDA request for comment on intellectual property is on the right track, the IP system is not the only factor in discouraging innovation or preventing public access to new and improved crop varieties at a reasonable cost. Rather, an extensive regulatory process and insufficient public research funding can also contribute to high prices.

 

What role does regulation play?

 

Genetically modified crops undergo much more extensive regulation than conventionally-bred seed varieties. And the length, cost, and reliability of the regulatory process for genetically modified crops can create a massive barrier to commercialization. The process thereby decreases the number of companies and crops entering the market.

 

For biotech crops submitted to the USDA regulatory system between 2008 and 2012, the entire process took an average of $136 million and 20 years, with $35 million and 7 years devoted solely to meeting regulatory requirements. In 2020, the regulatory system was revised to reduce the regulatory burden for some types of gene-edited plants — those that could theoretically have been produced using conventional breeding (this does not include genetically modified plants that contain genes from different species) — and to streamline the regulatory process for genetically modified plants. The extent to which the new system achieves these goals remains to be seen.

 

Although the new regulatory regime went into full effect in early 2021, some of the first submissions of genetically modified crops under the new rule were only provided with final decisions in the second half of 2022, having substantially overrun the promised timeframe for completion.

 

Five decisions have been released since the new rule went into effect, with the time to decision ranging from 332–448 days (regulations state that USDA must complete the review within 180 days of receiving a request). It remains to be seen whether subsequent rounds of submissions will receive decisions within the established timeframe as USDA gains experience with the new regulations.

 

Long regulatory timelines present many issues for companies, particularly for new developers without large financial reserves or existing products that provide revenue — but unreliable regulatory timeframes are equally if not more problematic because they’re difficult to plan around. USDA should ensure that decisions under the new rule follow a predictable and reasonable timetable. In addition, USDA should safely reduce the regulatory burden for as many types of genetically modified crops as possible by using existing provisions within the regulation, including the system of petitions for new exemptions.

 

How can public research funding help?

 

Government funding for agricultural research and development is also critical to driving innovation and stimulating competition. As a 2018 OECD report noted, public sector efforts to develop and release high-quality and affordable varieties can limit large firms’ power in situations where industry concentration has led to reduced competition. However, public sector crop breeding may be even more impactful in areas with little interest from large firms, like crops that are less widely grown and are therefore often associated with a smaller market and lower potential for profit.

Even when there is sufficient competition, public sector funding of fundamental research plays an important role. By putting techniques—such as gene editing methods—in the public domain, governments can ensure that no firm has a monopoly on a technique and is able to prevent others from using it.

 

Nevertheless, federal agricultural R&D remains underfunded. Inflation-adjusted federal funding levels for agricultural R&D are approximately the same as in 2002. In contrast, the Department of Energy’s budget for energy research, development, and deployment doubled from the early 2000s to over $8 billion in 2021.

 

To support innovation in the seed sector, USDA could increase R&D funding, particularly for fundamental research, but also for more applied plant breeding efforts in markets where competition is low. Although the private sector invests heavily in seed development, the massive historical increases in seed prices indicate that it alone can’t address the challenge of developing varieties that help farmers adapt to climate change while also keeping prices affordable.

 

Seed prices matter because when they’re high, they can contribute to narrow profit margins for farmers and high food prices for consumers. To help bring costs back down, Washington needs to address three factors: intellectual property protections, complicated regulation, and public research funding. The USDA is well-placed to take action in all three areas, and improvements will help strengthen U.S. agriculture and provide high-quality and affordable food with less environmental impacts.

 

Editor's Note: This article is a good primer for a discussion we'll be having at our annual meeting next month. Please check the agenda link above.

SEED COMPANIES URGE USDA TO MAKE BIOTECH REGULATIONS MORE EFFICIENT

Agri-Pulse reports:

 

U.S. biotech regulations are making it harder for plant breeders to bring new gene-edited products to market, putting the country at a competitive disadvantage internationally, speakers representing researchers and seed and technology companies said at a federal listening session Thursday.

 

"Inconsistencies and delays at USDA for gene-edited products threaten to hamper U.S. competitiveness even at the field trial testing stage," said Jerry Hjelle of Hjelle Advisors in St. Louis. He said biotech approvals in Brazil, which are done by a single agency, "are now consistently much faster than U.S. approvals."

 

Jim Radtke, a senior vice president of biotech company Cibus, said USDA needs to streamline its review process for crops that result from multiple but simple gene edits. He was speaking on behalf of the American Seed Trade Association.

 

USDA REPORT SHOWS TOTAL HOUSEHOLD INCOME HAS RISEN FOR COMMERCIAL FARMS

USDA release

From 2015 to 2021, the median total household income for commercial U.S. farms rose an estimated 16 percent, to $278,339 from $238,994. Commercial farms earn more than $350,000 gross cash farm income regardless of the principal operator's occupation.

 

In 2021, the median total household income for commercial farms remained above the median income of $75,201 for all U.S. households. Farm households rely on a combination of on-farm and off-farm sources of income. On-farm income is determined by farm costs and returns that vary from year to year, and in any given year a majority of farm households report negative farm income.

 

Off-farm sources-including wages, nonfarm business earnings, dividends, and transfers-are the main contributor to household income for most farm households. Because households operating commercial farms rely mostly on on-farm sources of income, they experience the largest shocks in household income when farm sector income rises or falls.

USDA REPORTS AG IMPORTS BY PRODUCT, HORTICULTURE IS BY FAR THE LEADER

USDA release

The value of U.S. agricultural imports (adjusted for inflation) grew an average of 4 percent a year between fiscal years 2012 and 2022 (October to September). Over that time, total U.S. agricultural imports rose from $139 billion to $194 billion, with growth concentrated in select commodity groups. Horticultural products grew at a rate of 6 percent a year during the period and, at $97.2 billion in value in 2022, accounted for 65 percent of the total growth in imports.

 

Within the broad horticultural products group, fresh fruits were the largest contributor at $17.9 billion, growing at an annual rate of 9 percent over the period and accounting for 15 percent of total import growth. Key commodities in the fresh fruit group include avocados, berries, and citrus, which the United States imports mostly from Latin American countries such as Mexico, Chile, and Peru.

 

Growth in demand for horticultural products, including fresh fruits, largely has been driven by consumer desire for year-round supply, changing consumer preferences, and foreign production that is increasingly competitive with domestically grown produce.

 

Imports of the commodity groups livestock and meats, grains and feeds, and oilseeds and products, which together were about 60 percent of the value of horticultural product imports in 2012, each also grew at about 6 percent per year, contributing to a total of about 40 percent of the growth from 2012 to 2022. Sugar and tropical products, dairy and products, and other categories had below average growth rates and contributed less to agricultural import growth.

 

Editor's Note: We do not disagree that "Growth in demand for horticultural products, including fresh fruits, largely has been driven by consumer desire for year-round supply, changing consumer preferences, and foreign production that is increasingly competitive with domestically grown produce." However, we believe other factors are at play here as well. The West and desert Southwest of the U.S. has traditionally been a major source of fruits and vegetables for U.S. consumption. The lack of water, or more correctly, the reallocation of water, has been a compelling reason we are importing more ag commodities typically thought of as "horticultural." Landowners, farmers, and others who control water rights on desert, or near-desert lands, have long been aware that the water may be worth more than the result of irrigated crop production. Surely it is helpful if it rains, and that rainwater is captured and utilized intelligently, but poor water capture policy in certain states is responsible for a share of this increased food importation. It's important because it affects our food security, our food availability, food safety, and food cost.

Texas Seed Trade Association | www.texasseedtrade.com
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The articles, views, and opinions expressed in the Weekly Update do not necessarily reflect the policies of the Texas Seed Trade Association or the opinions of its members.