Innovation in an Interconnected World Chairman s Address National Grain and Feed Association 119 th Annual Convention March 16, 2015 San Antonio, TX
Welcome to San Antonio! 2
Million Metric Tons U.S. Grain and Oilseed Production 600 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3
Billion Gallons U.S. Ethanol Production 14 12 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 4
Bu./Acre U.S. Corn and Soybean Yield 180 160 140 120 100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Corn Soybeans 5
Million Metric Tons Feed, Seed, Industrial and Food Demand for U.S. Grains and Oilseeds 600 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Domestic Consumption Exports 6
Trillion Dollars 1980 Gross Domestic Product Based on Purchasing-Power-Parity 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 $160 $140 $120 $100 $80 $60 $40 $20 $0 World China United States India Japan 7
World Population Growth 8
Capital Investment in Ag 9
Capital Investment in Ag
Agriculture Sexy Again! 11
Plugging into Renaissance 12
Innovation in Interconnected World 13
NGFA Mission and Purpose Promotion of Free Markets Abundant and Safe Food Supply Serving the Industry for More than 118 Years!!
Protecting Access to Markets 15
With Great Innovation Comes Great Responsibility 16
The Challenge: Managing Ag Biotech Commercialization without Market Disruption
Challenge: Managing Ag Biotech Commercialization without Market Disruption U.S. Biotech Crops Alliance Launched by ASA, NCGA, NGFA, NAEGA, BIO, ASTA in 2013; Now 15 national groups; including wheat, sorghum Goal: Develop Industry Standards/Best Practices to Prevent: Export, Domestic Market Disruptions Market-related disruptions caused by presence in general commodity stream of biotech traits: Commercialized before export market approvals Having functionally different output traits
Challenge: Managing Ag Biotech Commercialization without Market Disruption U.S. Biotech Crops Alliance Market Risk Responsibility The Fourth Pillar Biotech Companies: Stewardship plans proprietary; competitive advantage No path forward on group basis
Challenge: Managing Ag Biotech Commercialization without Market Disruption NGFA, Other Groups Recalibrating Can Productive Discussions Occur with Individual Biotech Companies on Fourth Pillar of Risk Responsibility? Dangerous Mindset: Market access of secondary importance to access to technology!
NGFA Leadership Role on Other Major Policy Issues 21
NGFA Leadership Transportation 22
Rail Service Reporting Metrics Make Permanent 23
Rail Service Performance Metrics STB Adopted NGFA Proposal to Require Reporting of Service Performance by RRs 1. Velocity and Cycle Times by Corridor: Grain, coal, crude, other non-ag movements 2. Car Loadings by Product, State: Ag and non-ag products 3. Dwell Times: Including estimated time of arrival for trains to be placed 4. Track Capacity Utilization, by Corridor: Number of trains transiting specific corridors 5. Train Sets Moved 6. Reasons Service Improved/ Deteriorated
Senate Rail Bill Key Provisions 1. Authorize Surface Transportation Board (STB) to initiate investigations of rail practices (except rail rates) on own initiative (rather than only in response to the filing of formal shipper complaint) 2. Require STB to report quarterly to Congress (and, in most cases, to the public) on: Status of ongoing STB proceedings Status of complaints filed and how resolved Service complaints received and how resolved Status of unfinished STB proceedings 3. Enable STB members to communicate with one another on proceedings, issues without calling public meeting
Inland Waterways, Ports 26
Waterways and Ports Water Resources, Reform and Development Act and Congressional Increase in Barge Diesel User Fee Pursue Successful Implementation Secure Sufficient Congressional Appropriations for Matching Funds for Waterway Infrastructure Projects Pursue Approval of New Inland Waterway Renovation, Port Projects by U.S. Army Corps of Engineers
Trucking Issues Increase Truck Weight Limits during Congressional Consideration of Highway Bill 28
NGFA Leadership Food and Feed Safety 2011 1938 Food, Drug, and Cosmetic Act 1906 Pure Food and Drug Act FSMA Implementation: NGFA seeking common-sense, science-based outcomes
FSMA Court-Established Deadlines Subject of Rulemaking Produce Rule ** CGMPs and Preventive Controls - Human Food ** Foreign Supplier Verification Programs ** Accreditation of Third-Party Auditors CGMPs and Preventive Controls - Animal Feed ** Food Defense/ Intentional Adulteration Sanitary Transportation of Food/Feed Court-Imposed FSMA Final Rule Deadlines Proposed Rule Published Jan. 16, 2013 Published Jan. 16, 2013 Published July 29, 2013 Published Oct. 29, 2013 Published Dec. 24, 2013 Published Feb. 5, 2014 Comment Period Close Final Rule Due Nov. 22, 2013 Oct. 31, 2015 Nov. 22, 2013 Aug. 30, 2015 Jan. 27, 2014 Oct. 31, 2015 March 31, 2014 Aug. 30, 2015 June 30, 2014 May 31, 2016 May 31, 2014 March 31, 2016 ** Supplemental proposals issued Sept. 29, 2014; Comment deadline Dec. 15, 2014
NGFA s Priorities with FDA on FSMA Rulemakings 1. Grain Elevators: Exempt from FSMA CGMPs, Hazard Analysis, Preventive Controls 2. Make CGMPS, Preventive Controls Realistic, Practical, for Feed Industry CGMPs need to be appropriate, reasonable for full range, scope of feed facilities Limit scope to feed safety issues truly meriting rigorous management oversight NGFA submitted complete redraft of CGMPs to FDA 31
FSMA Next Steps for NGFA NGFA Developing Compliance Guidance for Industry To Be Released After Final Rules Issued Provide Leadership in Food Safety Preventive Control Alliance NGFA Chairs Animal Food Section Members consists of subject matter experts from government, academia, industry Goal: Develop FDA-recognized: Standardized hazard analysis, preventive controls training and distance education modules for food/feed industry and regulatory personnel Commodity/industry sector-specific guidelines for hazards to be addressed and menu of acceptable preventive controls 32
NGFA Leadership Restore Reliable, Official Grain Inspection System 33
Restore Reliable, Official Grain Inspection System Disruption in Performance of Official Grain Inspection in PNW in 2014 Politicized by labor negotiations between company, longshoremen s union Reforms Being Considered by NGFA/NAEGA Make USDA s delegation of export inspection more transparent, less subjective, open to comment Mandate FGIS immediately intervene if service interruptions at export ports occur Extend designation of entities to perform domestic inspections to 5 years (currently 3 years).
NGFA Leadership Grow Market Demand through Trade Secure Passage of Trade Promotion Authority (TPA) Legislation Pursue Successful Completion of Trans-Pacific Partnership Trade Negotiations Incorporate Rapid-Response Mechanism to Resolve Shipment Disruptions Continue Pursuit of Trans-Atlantic Trade and Investment Partnership (T-TIP) Negotiations Participating in Cuba Agriculture Trade Coalition
NGFA Leadership Preserve Industry s Ability to Efficiently Hedge 36
CFTC Customer Protection Rules Speculative Position Limit Proposal Redefine What Constitutes Bona Fide Hedge Greatly limit commonly used hedging transactions considered appropriate by CFTC Pre-hedging purchases of farmer grain outside of futures exchange trading hours Pre-setting futures carrying charges to manage spread risk (e.g., before harvest) Anticipatory hedging prior to export tenders Progress made in communicating concerns with new CFTC commissioners
NGFA Leadership Safety Focus on Preventing Engulfments Continuing Successful Regional Safety Seminars in Partnership with State, Regional Affiliates
NGFA Leadership Education, Training, Professional Development Developing Interactive, Web-Based Program on Contracting Principles, Trade Rules, Arbitration Supplement Biannual Trading, Trade Rules, Arbitration Seminar
NGFA Leadership Education, Training, Professional Development NGFA NextGen Program Designed for those starting or in mid-point of industry careers Virtual events through webinars, other electronic platforms Relationship building, networking opportunities
NGFA Committee Apprentice Program 41
A Couple Challenges for Us Membership Recruitment Lifeblood of NGFA! Get Involved in Policies Affecting Commerce and Trade Lifeblood of Our Businesses! Get in the Trenches Early, Vigorously Don t want an Alamo Moment Let s commit to getting involved, locally and nationally!
Innovation in an Interconnected World