The latest edition of the OECD’s annual report entitled Agricultural Policy Monitoring and Evaluation highlights an important problem but undermines the solution. The report notes that 54 countries provide over a half billion dollars annually in subsidies to farmers. It correctly asserts that the subsidies are market distorting, though it overstates some of the specific harms. For example, it concurrently states that the subsidies increase the income gap between smaller farmers and larger ones, and yet it reduces the competitiveness of the food industry overall. This argument flies in the face of the principle of economies of scale. However, the greatest harm done by the report is its failure to include border measures in its calcula...
Communicating importance of value-added products
Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.
What You Need to Know Today: Russia rejected calls for a ceasefire in the Black Sea, including a proposal to halt attacks on civilian shipping that could help restore grain flows from Ukrainian ports. Tyson Foods announced plans to permanently close its Joslin, Illinois, beef processing facili...
The big news in the cattle markets yesterday was Tyson Foods’ move to close two more beef plants. One of them, the Joslin, Illinois, plant was shuttered immediately after the announcement. The other, in Eagle Mountain, Utah, is a case-ready plant that does not slaughter cattle. Tyson also...
The Bureau of Labor Statistics (BLS) released the Consumer Price Index (CPI) on Wednesday. In July, the CPI rose 0.1 percent, seasonally adjusted, and rose 3.4 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy, or the “core” infla...