Southern Crop

Southern Crop

Developments in Trade, WOTUS, and Budget Cuts

Developments in Policy published by The Fertilizer Institute 


The investment firm Blackstone has set up a $40-billion infrastructure mega fund, with Saudi Arabia committing $20 billion of the initial capital. Another $20 billion will be raised from other limited partners, which could lead to $100 billion in total infrastructure investments on a leveraged basis. President Donald Trump’s budget proposals also include a call for $200 billion in federal funds over 10 years for infrastructure projects. These would include rural and urban initiatives for $800 billion of infrastructure investments by the private sector and state and local governments. Federal grants and loans as well as other vehicles to spur investments are being studied. The biggest hurdle will likely be getting timely cooperation from Congress. All this would be good for agribusiness. Railroads, inland waterways, locks & dams and highways all need billions for upkeep and new projects. The White House knows the importance of inland waterways and high-speed internet service to rural areas says USDA Sec. Sonny Perdue. Perdue was at the White House for a meeting on the administration’s infrastructure plan and said waterway needs were “right at the top.”


Mississippi and Tennessee are tangled in a legal fight over groundwater rights, and the Supreme Court of the United States (SCOTUS) has bucked predictions by taking the case. U.S. agriculture has a tremendous amount of skin in the game because with no jurisprudence to draw from regarding groundwater that traverses state lines, an eventual decision will set benchmark precedent and affect water policy at federal, state and private levels. SCOTUS is tackling a slippery Solomonic question: Who owns groundwater shared by multiple states? At issue is the city of Memphis, Tennessee and its surging usage of groundwater from the Memphis Sand Aquifer. Withdrawals jumped from 10 million gallons per day in 1886 to 187 million in 2005 and are still rising. Mississippi took Memphis, and later the state of Tennessee, to court, losing repeatedly; but the case has now reached the Supreme Court. The case will set precedent for how the law views transboundary groundwater flowing under multiple state borders. Conventional wisdom says a court decision in favor of Mississippi would result in a major upheaval in water law and trigger a legal stampede of interstate and private groundwater cases.


Will President Trump’s proposed spending cuts impact farm and food program spending the way most headlines and articles suggest? The short answer is no. The White House proposals are just that, proposals. Congress will have its own say. But the president has to eventually sign or veto the final product, which implies lots of deal-making ahead. Some agriculture and food spending cuts are coming. The White House and some GOP lawmakers say welfare reform can come via budgets. Farm-state lawmakers will try to insist cuts wait until the new farm bill is written, but that may not hold sway this time. That means cuts ahead for food stamps and some farm program entitlements, which translates to mandatory spending. While crop insurance lobbyists could escape again, the odds of no cuts are not as high as last year when a push for multibillion-dollar cuts eventually failed.


USDA has signaled that a deal with China on beef could be in place by early June. Talks on resuming U.S. beef exports to China are reportedly moving quickly. Getting details done by early June would allow U.S. companies to start inking deals for shipments. China has accepted a U.S. plan in principle that would have producers document locations where cattle were born and slaughtered, and the cattle would have to be raised without beta-agonists (and likely sans implants) and be from animals under 30 months of age. China only imports “natural” beef free of feed additive ractopamine, which is only a small part of cattle slaughter in U.S., Andre Nogueira, head of JBS SA’s U.S. unit, said in a conference call with investors. He sees no dramatic impact from the deal relative to export volumes.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *