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  • What is Preemption and How Might it Affect Glyphosate Litigation

    What is Preemption and How Might it Affect Glyphosate Litigation

    Lawsuits involving plaintiffs who have alleged that exposure to glyphosate caused their non-Hodgkin’s lymphoma continue to make their way through the court system. Over the past year, the issue of preemption has become a focus of these lawsuits. Preemption occurs when a “higher” level of government reduces the authority of a “lower” level of government and may occur when a federal law and a state law conflict. In glyphosate lawsuits, the defendant Bayer has argued that the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), the federal law governing pesticide regulation, preempts the state law failure-to-warn claims raised by most glyphosate plaintiffs.

    FIFRA regulates the labeling of pesticides. A pesticide may not be distributed or sold in the United States until it has a label approved under FIFRA. Additionally, states may not impose any labeling or packaging requirements that are “in addition to or different from” those required by FIFRA. Plaintiffs bringing state law failure-to-warn claims are arguing that had the label included adequate warnings about the risks of glyphosate, then their injuries would not have occurred. So far, juries have found in favor of plaintiffs on these claims.

    Bayer has appealed these jury findings, arguing that FIFRA’s prohibition on states imposing additional or different pesticide labeling requirements preempts failure-to-warn claims. If the state law claims are preempted by FIFRA, then Bayer argues that those claims should never have been raised in court.

    Courts have split on the issue. A state court in California dismissed a plaintiff’s failure-to-warm claims, finding that the claims were preempted because the approved label for glyphosate does not require a carcinogen warning. However, both a California state appellate court and the Ninth Circuit have ruled the opposite. Those courts found that the failure-to-warn claims were not preempted because FIFRA prohibits pesticides from being “misbranded.” A pesticide is misbranded if its label does not contain a warning which may be necessary to protect human health. The Ninth Circuit concluded that FIFRA’s prohibition on misbranding was broader than the state law failure-to-warn and that such claims were therefore not preempted.

    Bayer has appealed the Ninth Circuit’s decision to the Supreme Court. If the Court takes up the case, a ruling could impact not just glyphosate lawsuits, but any pesticide lawsuit where a plaintiff raises a state law failure-to-warn claim.


    Recommended citation format: Rollins, Brigit. “What is Preemption and How Might it Affect Glyphosate Litigation.” Southern Ag Today 1(51.5). December 17, 2021. Permalink

  • The Rise in Shipping Costs and U.S. Agricultural Exports

    The Rise in Shipping Costs and U.S. Agricultural Exports

    The recent spikes in freight costs are having a significant impact on global trade. The average cost of shipping a standard large container (a 40-foot-equivalent unit) has surpassed $10,000 in recent months, more than four times higher than prices a year ago. Most of this is due to higher freight rates for routes out of China. For instance, container rates for shipments from Shanghai to New York increased from $2,500 to more than $20,000 in September 2021 (Freightos Data, 2021). To put this in context, an east coast buyer that spent $100,000 last year in freight costs when importing goods from China is now paying almost $1,000,000 in freight costs to import the same items. Given the high demand for containers out of China, there has been a shortage of containers at U.S. ports affecting exports. What does all of this mean for U.S. agricultural exports? Once consequence is that the bulk shipping rates have also increased from $1,000 to over $5,000 in October (now around $3,400) (Trading Economics, 2021), which affects commodities like soybeans and corn. 

    As we begin our research on the effects of shipping rates on U.S. agricultural exports, it is important to first understand the importance of different modes of shipping for U.S. agriculture. The figure shows the share (volume) of U.S. exports across product categories by different shipping modes (bulk, container, and air). To be expected, bulk commodities like wheat, corn, sorghum, and soybeans are most reliant on bulk carriers (more than 90% of all shipments by volume), whereas many products rely on both container and bulk shipping (e.g., poultry). U.S. exports of livestock products like beef, pork, and cheese are heavily reliant on container shipping (90% of all shipments). These products are likely to be the most affected by the recent spike in container rates and shipping costs.

    Share of Commodity Export Volume by Shipping Mode: 2003-2021

    Source: U.S. Department of Commerce, USA Trade Online

    Sources: 

    Freightos Data (2021) FBX Routes. https://fbx.freightos.com/freight-index/FBX03

    Trading Economics (2021) Baltic Exchange Dry Index. https://tradingeconomics.com/commodity/baltic

    U.S. Department of Commerce (2021). USA Trade® Online. U.S. Census Bureau. https://usatrade.census.gov/


    Recommended citation format: Muhammad, Andrew, and Michael Adjemian. “The Rise in Shipping Costs and U.S. Agricultural Exports.” Southern Ag Today 1(51.4). December 16, 2021. Permalink

  • Coping with Delayed H-2A Worker Arrivals During the Pandemic

    Coping with Delayed H-2A Worker Arrivals During the Pandemic

    During the pandemic, the farm sector’s real concern has not been a decline in demand, but rather supply chain disruptions.  Among these potentially disruptive factors was the mobility and availability of foreign contractual workers needed to sustain business operations.  In the early days of the pandemic, the government promptly released regulations to ensure that the supply of H-2A workers would not be hampered.  Indeed, H-2A labor petition approvals remained high during that time. However, border entry restrictions and strict screening procedures disrupted the flow of worker arrivals.  A survey was conducted among farms with approved H-2A petitions in three southern states (Georgia, Florida, and North Carolina) consistently among the top 5 states patronizing the H-2A program in recent years.  Results indicate that more than half of the expected H-2A workers were actually 3 to 5 weeks late in arrival.  In order to mitigate such conditions, the popular coping strategies employed by farmers include maximizing family labor contributions (62.5 percent), reducing off-farm employment hours (52.9 percent), and adjusting production methods to less labor-intensive alternatives (47.1 percent).  Reliance on domestic worker replacements was considered by 30% of the respondents, but this alternative was costly as farmers contend that labor productivity and efficiency differentials between domestic and H-2A workers led to about 52 percent decline in outputs during the interim period.  

    H-2A Workers’ Actual Arrival Status during 2021 Planting Season, Survey on Georgia, Florida, and North Carolina Farms

    Source:

    Cowart, W.L., C.L. Escalante, and V. Shonkwiler. “Agribusiness Employers’ Coping Strategies and Business Effects of Pandemic-Induced Delays in H-2A Worker Arrivals.” Outreach Bulletin, Department of Agricultural and Applied Economics, University of Georgia.  August 2021. (Project is funded by the Georgia Farm Bureau)


    Recommended citation format: Escalante, Cesar. “Coping with Delayed H-2A Worker Arrivals During the Pandemic.” Southern Ag Today 1(51.3). December 15, 2021. Permalink

  • Meat Prices and CPI

    Meat Prices and CPI

    The November estimates of retail meat prices were released last week by the USDA Economic Research Service (ERS). This dataset sheds light on average retail meat prices using data from the Bureau of Labor Statistics (BLS). Retail prices for beef, poultry, and pork were all up sharply from year ago levels. The all-fresh beef retail price was reported at $7.52 per pound during November. This was a few cents below the October level but still about 21 percent above the same month a year ago. Pork and chicken retail prices were also higher as compared to a year ago.  Retail pork prices were up about 18 percent and chicken prices were up about 10 percent compared to November 2020.

    The monthly BLS Consumer Price Index summary was also released last week and showed the all-items price index has increased 6.8 percent over the past 12 months. This is the largest 12 month increase since 1982. Higher energy prices were a contributor to the CPI increase. The energy price index was up 33 percent over the past 12 months. The food price index was up 6.1 percent over the past 12 months with meat price increases being a key factor. 


    Recommended citation format: Maples, Josh. “Meat Prices and CPI.” Southern Ag Today 1(51.2). December 14, 2021. Permalink

  • U.S. Sorghum, An International Commodity

    U.S. Sorghum, An International Commodity

    In the past marketing year, the U.S. exported a total of 7.19 million MT of sorghum (milo) with an estimated value of $1,991 million, according to USDA Foreign Agricultural Service. Sorghum exports in 2020/21 are among the highest export levels in history and only surpassed by the exports observed in 1989/90, 2014/15, and 2015/16. The U.S. is the world’s leading sorghum exporter, followed by Argentina. Last year, about 87% of total U.S. production was exported. For instance, 2020/21 U.S. sorghum exports represented 65% of world exports. Moreover, in the last 30 years, U.S. sorghum accounted for about 73% of all international exports. Recent increases in export demand improved the local sorghum/corn price ratio from 0.93 in 2017-19 to 1.03 in the last two marketing years.

    Historically, Mexico, Japan, and Sub-Saharan African countries have been the principal importers of U.S. sorghum. Since 2013/14, China has become the primary buyer, compensating for the loss of traditional market destinations. Specifically, China imported 94% of total U.S. sorghum exports during 2020/21, and about 81% of the total U.S. sorghum exports since 2013/14. Exports to China have increased by 1,029% from 2018/19, and nearly doubled from 2019/20. The US-China Phase One Trade agreement (i.e., compared to corn and wheat, U.S. sorghum exports are not subject to tariff-rate quotas), the recovery of the Chinese swine sector severely affected by the African swine fever, and relatively higher corn prices have supported high exports of U.S. sorghum to China during the last two years. 


    Recommended citation format: Abello, Pancho, and Samuel Zapata. “U.S. Sorghum, An International Commodity.” Southern Ag Today 1(51.1). December 13, 2021. Permalink