Randy Gordon, president of the US National Grain and Feed Association (NGFA), said the development of guidance documents for the human and animal food and feed rules under the Food Safety Modernization Act (FSMA) tops a list of 2016 initiatives for that trade group.
The flexibility included in the final rules is welcome, said the NGFA president, but producers are interested to see how the rules will be applied.
“We’re going to be doing a lot of training with industry as these begin to phase in, so that will be a big emphasis of the first sic to eight months of next year,” he said. The work is going to involve a long-term educational effort, he added.
TPP deal
The NGFA is also hoping to see the Trans-Pacific Partnership (TPP) agreement approved and enacted, he said.
“Congressional action on the TPP will be a big deal,” said Gordon. “That’s a very positive trade agreement for the grain industry given the consumption of grain and oilseeds by the animal [production] sector.”
The biotechnology arena is one the NGFA is training its eyes on as well for several reasons, he said. The association is supporting federal legislation on the labeling of GM ingredients to prevent a ‘patchwork’ of labels being designed by multiple states.
The first state labeling law takes effect in July in Vermont, he said. If no federal legislative change is made, companies would need to start work to meet the requirements in early 2016.
Additionally, work is continuing to develop an improved process for the release or domestic segregation of crops with genetically modified traits, said Gordon.
“The desires of foreign countries regarding biotech products needs to be addressed,” he said. And review processes to evaluate modified crops that are robust, timely and scientific should be encouraged, he added.
Countries approving the import of crops with engineered traits at different times have created concern about the marketability of some products, he said. “It tends to be a bit of a struggle, or balance, for innovation and the need to preserve our markets,” he added.
As part of that work, the NGFA will continue to advocate for a “low-level presence policy,” said Gordon. It would seek to address the zero tolerance policy that countries have now and avoid trade disruption.
“If a trait has been found to be safe, if it is found in a country where it hasn’t been approved, that there would be a certain tolerance,” he said. “We haven’t settled on a percentage on what that would be.”
Hedges in agriculture
Additionally, the NGFA anticipates the development of new rules regarding the use of hedges in agriculture, he said.
“We’re hopeful that there will be some final rules issued that would clarify that these bonafide hedges, that have existed in a long time in agriculture, would be recognized as not speculation, but legitimate tools used to manage market risk,” he said.
Internationally, the NGFA is watching for regulation changes on export taxes coming out of South America, said Gordon, and to see what happens with China.
“It’s obviously a huge influence and a very important market for the US,” he said. "We saw that as early as 2010; how big it will become will be anybody’s guess.”
Feed prices
For those anticipating the price of feed ingredients, 2016 is going to be about the US corn crop and weather, said Darrel Good, professor emeritus in the department of agricultural and consumer economics with the University of Illinois.
“We’ve had two, maybe three years of exceptional production conditions and good crops,” he said. “And with the strong El Nino in place, there’s interest in what that’s going to bring for summer weather conditions.”
However, prices aren’t expected to increase unless there is a reduction in US crop yields, said Good.
“Before we get that far in the calendar, we’ll be watching what happens with the Southern hemisphere crops – dryness in South America and parts of Brazil, with their large second crop of corn, that could become an issue,” he said.
Good said producers will also be keeping tabs on biofuel market developments in 2016.
“The EPA [Environmental Protection Agency] just released their rulemaking for the biofuel mandates, and on the surface, those seem to point to the potential for an increase in biodiesel production that would substantially increase the demand for those feedstocks – soybean oil, and other vegetable oil and animal fats,” he said.
Additionally, the reinstatement of a tax credit also could contribute to increased biodiesel production, he said, which could mean a greater availability of protein meal and slightly lower prices.
“A third factor that is a constant, is what goes on in China in terms of commodity demand,” he said. “People are concerned about a slower rate of economic growth there, and what it might mean for food consumption and crop demand.”
At this point, there hasn’t been significant weakness from a slowdown in demand from China, he said. But there are some questions about what will happen in the coming year.
Other challenges for the upcoming year likely will include the continued downturn in feed sector exports and producers will look to ways to lower production costs, especially farmers who lease land, he said.
'Natural' additives
For Iowa-based manufacturer Diamond V, much of 2016 is going to be about addressing the growing global need for natural nutritional health ingredients, said Jeff Cannon, company president and CEO.
“We can anticipate the need for Diamond V customers in the US to meet known challenges, such as the FSMA and the Veterinary Feed Directive (VFD),” he said.
The company will continue its research work in immune health and to make use of its new fermentation technologies to help customers meet current and future challenges, he said.