Month: April 2017

With the U.S. saturated with milk and Wisconsin dairy farmers desperately seeking buyers, a new state-led dairy trade mission to Mexico announced Thursday comes at a critical time.

Ben Brancel, secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection, will lead a delegation of state officials and representatives from nine dairy and agricultural companies to Aguascalientes, Mexico, May 4-7 where they will attend Expo Leche, Mexico’s largest annual dairy industry conference. State officials say the goal is to strengthen Wisconsin’s relations with its existing dairy customers but also to find new opportunities for the state’s dairy businesses.

Brancel said the trade mission to Mexico was in planning long before the recent situation that was created when Grassland Dairy Products Inc. of Greenwood informed several dozen Wisconsin dairy farms it no longer would accept milk from them after May 1. Grassland lost its Canadian customers, who each day purchased more than 1 million pounds of ultra-filtered milk, a product with elevated protein content that’s typically used in cheese production, so Grassland had to reduce its milk intake.

With U.S.-Mexico relations strained from recent actions by the Trump administration over construction of a border wall and a pledge to reopen negotiations for the North American Free Trade Agreement, Brancel wants Mexico to know Wisconsin values its trade partnership. About $3 billion in Wisconsin exports went to Mexico in 2016, making it the state’s second-largest trading partner behind Canada.

“But we also are trying to identify new distributorships so we can market (Wisconsin dairy) products,” he said. A significant player and potential major customer could be the Domino’s Pizza operation in Mexico, Brancel said.

“We want to encourage them to use Wisconsin cheese on their pizza,” Brancel said. “Another aspect of this trip is to make sure our customers in Mexico are getting what they need, payments are coming to (Wisconsin) and products from Wisconsin are arriving in good quality with no problems.”

Brancel also has meetings scheduled with Mexico’s minister of agriculture and other government officials to discuss potential opportunities for Wisconsin dairy products. Wisconsin sends a lot of finished products to Mexico, including cheese, but there could be opportunities for whey protein and other milk products as well as ingredients used in food production, he said.

Mexico purchased about $247 million in dairy products from Wisconsin last year, according to state estimates.

“One of the reasons we have to focus on Mexico is that they are one of our biggest trading partners,” Stephenson said. He said other dairy producing nations, including New Zealand, also may see opportunity in Mexico, but the U.S. has the advantage of proximity.

“The strong dollar, I’d categorize that more as headwinds and shouldn’t impact sales too much, but we may have to discount prices to make our products more competitive on the global market,” Stephenson said.

The Wisconsin Department of Transportation (WisDOT) has realized let savings over the course of the state fiscal year. “Today, I am directing WisDOT to advance $65 million in projects statewide (see map) into state fiscal year 2017,” Governor Scott Walker said. “In addition, WisDOT is projecting an additional $38 million in revenues, which the Legislature can allocate into the 2017-19 biennial budget. In total, these actions free up more than $100 million in funds for additional transportation projects due to new revenues and savings.”

“Savings on the highway projects we planned for this year allows us to do more projects with existing funds. This June, WisDOT will fund 21 additional projects around the state,” noted Wisconsin Department of Transportation Secretary Dave Ross.

Lower fuel prices and more competitive bids on projects have resulted in increased savings on road projects. Using these savings now means WisDOT will accomplish more road work in the current fiscal year and provide additional resources to the Legislature in planning the next budget. Improving more roadways and bridges now, before inflation reduces purchasing power, and taking advantage of the savings will help preserve our assets and maintain infrastructure.

“We are also generating more revenue for transportation without raising the gas tax or registration fees,” noted Secretary Ross.

WisDOT just completed an updated revenue forecast and is projecting an additional $38 million in available revenues. This amount will be added to the Transportation Fund’s FY18 opening balance:

“The redirected let savings and increased revenue forecasts are great news for the state,” said Governor Walker. “We’ll do more projects and bond $44.8 million less than planned. We are working and winning for Wisconsin.”

President Donald Trump has scrapped the tax plan he campaigned on and is going back to the drawing board in a search for Republican consensus behind legislation to overhaul the U.S. tax system. Administration officials say it’s now unlikely that a tax overhaul will meet the August deadline set by Treasury Secretary Steve Mnuchin.

White House aides say the goal is to cut tax rates sharply enough to improve the economic picture in depressed rural and industrial pockets of the country where many Trump voters live. But the administration so far has swatted down alternative ways for raising revenues, such as a carbon tax, to offset lower rates.

Trump, who brands himself as a deal-maker, has not said which trade-offs he might accept and he has remained noncommittal on the leading blueprint, from Rep. Kevin Brady, chairman of the Ways and Means Committee. Brady, R-Texas, has proposed a border adjustment system, which would eliminate corporate deductions on imports, to raise $1 trillion over 10 years that could fund lower corporate tax rates.

But that possibility has rankled retailers who say it would lead to higher prices and threaten millions of jobs, while some lawmakers have worried that the system would violate World Trade Organization rules. Brady has said he intends to amend the blueprint but has not spelled out how he would do so.

Other options are being shopped on Capitol Hill. One circulating this past week would change the House Republican plan to eliminate much of the payroll tax and cut corporate tax rates. This would require a new dedicated funding source for Social Security.

Sen. Rob Portman, R-Ohio, a member of the Senate Finance Committee, said that all of the trial balloons surfacing in public don’t represent the work that’s being done behind the scenes. “It’s not really what’s going on,” Portman said. “What’s going on is they’re working with on various ideas.”

A group of state lawmakers is asking University of Wisconsin System leaders to come up with creative and alternative uses for milk, as an oversupply is driving prices down.

Two dozen Assembly Republicans sent a letter to UW System President Ray Cross this week asking schools to start researching the issue. The letter points out how the development of ethanol helped Iowa corn farmers.

The news coincides with Grassland Dairy announcing this week it will stop buying milk from 75 farmers, mostly in Wisconsin, because it can no longer sell dairy products to Canada. Grassland blames new dairy regulations in Canada. Grassland is ending their deal May 1st, giving farmers less than 30 days to find a new buyer for their milk.

Gov. Scott Walker weighed in on Wednesday, describing the steps he’s taking to remedy the problem.

“This is a direct correlation to what has happened in Ontario and what’s happened in a larger context in Canada itself. Now, they overall are our largest trading partners, so we want to have… continue to have good trading relationships with them, but when it comes to the dairy industry we think they’re just plain wrong on this and we expect that the World Trade Organization will help,” the governor said.

U.S. Senator Ron Johnson (R-Wisconsin) is urging the White House to work with Canada on this trade issue.

“Our state’s dairy farmers are some of the best in the world, and they should not be the victims of a trade dispute they didn’t start. I urge the administration to work with the Canadian government and swiftly find a way to resolve this matter before hardworking Wisconsin farm families are hurt,” Johnson said.

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The EPA launched its first strike on the Obama administration’s carbon dioxide standards for power plants by quashing proposals that would have aided states in implementing the rule and rewarded early compliance.

Following President Donald Trump’s March 28 executive order directing the Environmental Protection Agency to review its various climate change regulations, the agency canceled proposed guidance to states and model emissions trading rules for implementing the Clean Power Plan and an accompanying proposal that would reward states for taking early steps to curb carbon dioxide emissions before the rule was to take effect, according to a notice to be published in the Federal Register April 3.

“The EPA believes it should use this time to re-evaluate these [Clean Power Plan]-related proposals and, if appropriate, put out re-proposals or new proposals to ensure that the public is commenting on EPA’s most up-to-date thinking on these issues,” the agency said.

The U.S. Supreme Court has halted implementation of the Clean Power Plan,which set carbon dioxide emissions limits on the power sector in each state, while the legality over the rule is under review. The U.S. Court of Appeals for the District of Columbia Circuit heard a full day of arguments on the rule in 2016 but has not yet issued its opinion.

The EPA has asked that the lawsuits be halted while it reviews the Clean Power Plan. Likewise, the D.C. Circuit has canceled argument over comparable emissions limits for new and modified power plants while it evaluates an agency request to halt that litigation as well.

EPA Administrator Scott Pruitt was one of the leading challengers to the rules when he served as Oklahoma attorney general. In a March 30 letter, Pruitt told states they have “no obligation to spend resources” to comply with the rule because it has been stayed by the Supreme Court.

Anthem’s reported plan to withdraw from many of the ObamaCare markets where it does business is the clearest sign that the exchanges face a near-term crisis. Yet even before Thursday’s news about the for-profit operator of Blue Cross and Blue Shield plans, there was plenty of reason to expect a white-knuckled, high-stakes showdown over ObamaCare’s future.

The official exchange sign-up data for the 2017 open enrollment period that ended Jan. 31 tell part of the story. The exchange population this year is smaller and tilts older than it did last year, both bad signs for the overall health of the risk pool and 2018 premiums. As the number of people signing up for exchange coverage unexpectedly fell by 463,000, or 4%, from 2016, the number of young adults (18 to 34) shrank by 230,000, while enrollees 55-and-up rose by about 19,000, an IBD analysis finds.

What happens in the ObamaCare-compliant off-exchange market is almost as important as what happens on the exchanges. The Congressional Budget Office says there are about 8 million individuals with unsubsidized off-exchange coverage, and most of those are lumped in the same risk pool as those why buy on the exchange. (Those who have grandfathered policies or buy from carriers that don’t offer exchange policies are in a separate pool.)