BOCA RATON, FLORIDA, US — Intensifying policymaker interest in agricultural sustainability necessitates a close watch by the milling community, said Jane DeMarchi, president of the North American Millers’ Association.
While wheat and oats are considered carbon friendly relative to other food sources, NAMA is concerned legislation or regulations encouraging or mandating a shrinkage of carbon emissions could result in less of the food grains being planted.
In an interview Oct. 9 with Milling & Baking News, a sister publication of World Grain, at the NAMA annual meeting, DeMarchi said sustainability was a major topic of discussion during the group’s board of directors meeting a day earlier. The annual meeting was held Oct. 7-9 at the Boca Raton Beach Club hotel in Boca Raton.
“Uncertainty” was the byword at the 2021 annual meeting with a wide range of issues currently in flux that could adversely affect millers and others in the agricultural industry, DeMarchi said. Other issues of concern at the NAMA board and divisional meetings ranged from supply chain challenges to a rising threat to trade of US corn and corn products with Mexico.
A history of conservation programs that sometimes disadvantage growers who already have adopted sustainable practices is one of the reasons NAMA is concerned about the possibility of government action aimed at reducing the carbon footprint of the agricultural sector, DeMarchi said.
“There is lots of conversation in Washington, and no one is settled on what will work,” she said. “As things progress, our focus is on what we can do to do no harm. One of the perverse things about the carbon market is that it often benefits people who begin new practices.”
She said such an approach could disadvantage wheat and oats both because so many growers already are engaging in environmentally responsible cultivation and because the grains’ carbon footprint is so small to begin with. Rewarding only new activity poses the threat of disincentivizing production, DeMarchi said. NAMA also is sharing information with members about commercial (non-governmental) programs related to sustainability.
“There is a lot going on between members and providers of those programs,” DeMarchi said.
A host of topics related to supply chain and transportation were addressed by the NAMA board as millers continue to navigate pandemic-related challenges, she said.
For many years, NAMA and other shippers have been concerned about an inability to definitively know what was transported in a rail car in previous loads (including possible allergens). Following years of dialogue with the millers and others, the Association of American Railroads in early 2021 committed to a web-based platform that allows shippers to obtain information in the earlier loads. The information would be provided to shippers at no cost.
A working group on the topic was established that included rail carriers and members of NAMA, the National Grain and Feed Association and the National Oilseed Processors Association. Completion of the project is expected by the end of 2021.
Also of concern have been transportation rates — both rail and ocean vessel. The Surface Transportation Board currently is seeking public comments on issues related to first-mile/last-mile of service — the area between a railroad yard and the shipper/receiver. Meanwhile, ocean freight demurrage issues have been a problem for many years but have been compounded in 2020-21, DeMarchi said. Because of surging US sales of imported products bought online, shipping companies have been returning containers to Asia empty rather than filling them in the United States. This past summer, Representative John Garamendi of California, a Democrat, and Representative Dusty Johnson of South Dakota, a Republican, introduced the Ocean Shipping Reform Act, which would require ocean carriers to adhere to minimum service standards that meet the public interest and certify that demurrage charges comply with federal regulations.
Other regulatory relief sought by the millers includes an increase in axle tolerance for trucks. Specifically, grain shippers are disadvantaged by a limit of 34,000 pounds per axle in combination with a total 80,000 pounds per truck limit. Because grain slides forward when a truck goes downhill and does not immediately level out, more than 34,000 pounds are at times carried by the forward axle, resulting in fines at weigh stations (bulk trucks carrying fluids do not have such problems). The millers are seeking a 10% increase in the axle restriction for dry-bulk goods, so long as the 80,000-pound rule for the truck is honored. Such a shift could be effected without “causing any damage to roadways,” NAMA said.
Labor issues are of concern to millers, as is the case with the entire business sector, DeMarchi said. No specific position has been taken on a White House Executive Order mandating workforce vaccination at larger companies. NAMA remains actively engaged in Washington, DC, US, to keep its members updated on guidance from the administration.
“There is a great deal of uncertainty over what regulations will look like, when they will come out or whether they will be stopped with lawsuits,” she said.
Among topics addressed at NAMA division meetings, none was more pressing than the precarious outlook for exports of corn and corn products to Mexico, DeMarchi said.
The grain, commercial seed and corn milling industries were caught off guard last Dec. 31 when Mexico’s president Andres Manuel Obrador issued a decree indicating the country would phase out the use of glyphosate and genetically modified corn for food use by January 2024.
“There are a couple different issues,” DeMarchi said. “They also have stopped approving biotech traits in Mexico. The concern from the grower perspective is a potential massive loss of market. Then you have new variety releases and new technology releases in the US that could be delayed because they are waiting on Mexican approval.”
Mexico has been the largest buyer of US corn each of the last five years, importing an average of 14.7 million tonnes per year through 2019-20, according to the US Department of Agriculture.
“For our milled products going to Mexico, there would potentially be an outright ban,” DeMarchi said. “There isn’t enough non-GMO corn in the US to serve that market. It would be so detrimental to the Mexican consumers. “
Describing the situation as “highly political,” DeMarchi said negotiations have involved the highest level of engagement in Washington. To date, no substantive progress is thought to have been made. The Mexican government has not been forthcoming with details and timelines for implementation, beyond the January 2024 compliance date.
Numerous food safety issues have hit the NAMA radar screen in recent years, including the presence of heavy metals in the food supply. DeMarchi said Congress is taking a close look at the matter while the Food and Drug Administration has “laid out a methodical process to look at mechanical contamination.”
She said there is a possibility Congress will seek to preempt the FDA and try to move more quickly.
She noted that rice cereal, previously a baby food mainstay, has largely disappeared from store shelves because of anxiety about arsenic. With concerns emerging about heavy metals and other grains, the FDA or congressional actions could have adverse effects on oats and other grains, she said.
Having completed the first in-person NAMA annual meeting since she joined the association in 2020 as president, DeMarchi said attendance was lower than past annual meetings due to ongoing corporate travel restrictions but still exceeded staff and board expectations. Total attendance topped 100.“We were pleasantly surprised by registration numbers,” she said. “We had no idea what was going to happen. While we have been glad to offer virtual participation in past NAMA events, the annual meeting allowed the industry to reconnect after two years apart.”