Summary

On Friday February 19th, Senator Pat Roberts (R-Kansas) introduced a federal bill that would set up a voluntary Genetically Modified Organisms (GMO)/Genetically Engineered (GE) food labeling system. For now the bill appears to be garnering the approval of the American Feed Industry Association (AFIA), the International Dairy Foods Association (IDFA) and the American Soybean Association (ASA). According to the proposal states would be prohibited from establishing their own GMO labeling laws. The rules would be developed by the USDA within two years of the bill’s ratification and would include an educational component that would “educate” consumers about the “safety” of AG biotech. For some customer advocacy groups this is perhaps a step in the right direction but the educational component may be perceived as an effort by biotech industry to drive the narrative. A genetically engineered food is a plant or meat product that has had its DNA artificially altered in a laboratory by genes from other plants, animals, viruses, or bacteria, in order to produce foreign compounds in that food. This type of genetic alteration is experimental. There have been no long-term studies conducted on the safety of genetically engineered foods on humans. The argument for sustainability is the primary rational offered by the biotech industry for moving forward without adequate long term testing. Currently 64 countries with over 40% of the world’s population already label genetically engineered foods, including the entire European Union. Even China labels genetically engineered foods.

Also announced on Friday, farming and construction equipment conglomerate John Deere announced that it expected equipment sales to fall 10%, down from a previous forecast of a 7% drop. It expects net income to total $1.3 billion, down from $1.4 billion in a previous forecast. Deere beat analysts' expectations of $0.71 a share for profits in its fiscal first quarter but at $1.12 a share profit were down 80% from the prior year. The farming industry has been feeling the pinch of shrinking incomes because oversupply had weakened prices. Samuel Allen, John Deere CEO, cited the downturn in the global farm economy along with weakness in the construction equipment market as factors in the 1st quarter results.

Saudi Arabia and Russia have proposed a tentative agreement to curb Crude Oil production but there has not been any traction with the other OPEC members. Iran has not committed to any production reductions and it is not likely that they will participate. The industry continues to suffer from massive oversupply as evidenced in the Baker Hughes rig count dropping to 413 last week, down from 1009 this time last year. March Crude was gained 20 cents on the week but it is coming off the board soon. The April contract lost 16 cents but that is a far cry from the weekly losses that Crude had been suffering. It does appear that Crude prices might be trying to stabilize. Corn, Wheat and Soybean futures all finished higher on the week. The US Dollar Index gain 66 points on the week.