Update on Key Issues: June 21, 2017

Elections | ‘Sue and settle’ | Trump in Iowa | Dicamba | Saudi Arabia | China | Logistics | Data mining

— Most polls and analysts again missed calling election, this time in Georgia House race. Final results for the House seat vacated by Health and Human Services Secretary Tom Price saw Karen Handel (R) defeating Jon Ossoff (D), with Handel receiving 51.9% of the votes to 48.1% for Ossoff. The most expensive House race in history was a toss-up coming into election day, although most polls showed a slight lead for Ossoff. Democrats said the race was a referendum on President Trump and pulled out all the stops, but still fell short. Elsewhere, Republican Ralph Norman beat Democrat Archie Parnell in the race for Budget Director Mick Mulvaney’s South Carolina House seat — but by a much closer than expected 3.2%.

The Georgia race is a potential bellwether for the 2018 midterm elections because many battlegrounds in the fight for control of the House are likely to be suburban, affluent GOP districts like Georgia’s Sixth. Trump struggled in many of these districts in 2016.

Impacts: The Republican victory could help advance President Trump’s legislative agenda in Congress. Ossoff had made a major issue of his opposition to GOP legislation to repeal and replace the Affordable Care Act. Also, the Georgia results could make it easier for Republicans to recruit candidates for the House, as well as keep incumbents from retiring. However, the party holding the White House typically loses seats in a midterm election.

— ‘Sue and settle’ legislation ahead... The House is expected to start moving as early as this summer to pass legislation that would add new public comment requirements to “sue-and-settle” citizen lawsuits, addressing many Republicans’ issues over certain types of environmental litigation where EPA has taken this approach to settle contentious issues.

Legislative outlook is murky. The outlook for the Sunshine for Regulatory Decrees and Settlements Act of 2017 (S 119, HR 469) is less clear in the Senate. The Senate version was introduced in January by Senate Judiciary Chairman Chuck Grassley (R-Iowa). “It’s a very important bill that I’d like to get passed,” Grassley told Bloomberg BNA June 20 of his legislation. When asked if the bill would likely be passed out of Congress in 2017, he said, “I can’t predict. I don’t know.” The legislation would bar federal agencies from filing complaints and pre-negotiated consent decrees and settlement agreements on the same day if those cases are aimed at requiring the agency to act. It would require that interested parties can intervene before any consent decrees or settlement agreements are filed, among other stipulations.

— President Trump and some of his top officials visit Cedar Rapids, Iowa today. Precision agriculture and other farm tech today will be the focus during a visit to Kirkwood Community College in Cedar Rapids, Iowa. Trump will announce a commitment to include rural broadband development in his promised infrastructure package. USDA Secretary Sonny Perdue and Commerce Secretary Wilbur Ross will join the president to highlight the need to expand rural broadband to give farmers access to new tools and to reiterate his “commitment to agriculture and rural America,” said Ray Starling, special assistant to the president for agriculture, trade and food assistance.

Branstad and Northey to join the Trump event. U.S. Ambassador to China Terry Branstad, the former longtime Iowa governor, and Iowa Agriculture Secretary Bill Northey, Perdue’s likely pick for a key USDA undersecretary post, will also be on hand. Branstad leaves Sunday for his new job in Beijing.

This evening Trump holds a make America great again rally in Iowa before returning to the White House.

— Arkansas dicamba ban fails. The Arkansas Plant Board late Tuesday rejected a ban on the spraying of the pesticide dicamba in the state, AgWatch Network reports. It agreed to limit the chemical’s use to sprayers that feature a hood, which prevents drift, and required a one-mile downwind buffer between the next farm.

— Oil powerhouse Saudi Arabia announces next in line to throne... Saudi Arabia’s Deputy Crown Prince Mohammed Bin Salman has replaced his cousin as the next in line to the country’s throne, a move that consolidates the 31-year-old leader’s growing power. King Salman, 81, also retroactively reinstated all allowances and bonuses that were canceled or suspended to civil servants and military personnel. The prince has led a complete overhaul of the Saudi economy, diversifying the kingdom beyond oil under Vision 30 and a planned IPO for Saudi Aramco. He has also frequently praised the country’s relationship with the U.S.

Impact: Bloomberg reports he “will need higher crude prices to push ahead with his plans to reform the kingdom’s economy, making an about-face in oil policy unlikely in the short term.”

— Health and tax reform timelines. Gary Cohn, director of the National Economic Council, doesn’t expect the White House to get a tax bill in front of Congress until September. But in a speech on Tuesday, House Speaker Paul Ryan (R-Wis.) said a tax cut and reform bill is coming this year and it will include getting rid of the estate tax.

Senate Majority Leader Mitch McConnell said a draft of the Senate’s healthcare bill will be released Thursday. A vote would happen after the Congressional Budget Office (CBO) releases its analysis, possibly before the July 4 recess.

— Data mining. Agribusiness has clearly joined the big and bigger data sector, along with an increasing use of “agbots” or robots for the agriculture and food industries. Dairy operations which have gone to 24/7 robots say understanding the reams of data generating from robots and big data is key.

“If I had to pick one word that IBM’s reinventing around, it’s ‘data,’” CEO Ginni Rometty told Mad Money host Jim Cramer. “The cloud is in its early stages and it’s changing,” she declared, emphasizing IBM’s current focus on collecting data. “20% of the world’s data is searchable... But 80% of the world’s data, which is where I think the real gold is — that is all with our clients.”

— U.S. relations with China could turn contentious... The Trump administration is mulling the next steps in dealing with North Korea. Options include sanctions on a much larger number of Chinese firms, including Chinese banks, as well as individuals who are breaking the United Nations sanctions on North Korea. The New York Times reported “renewed activity at a North Korean nuclear site added to the sense of urgency, and underlined how China had failed to curb the provocative actions.”

President Trump said Tuesday that Chinese efforts to persuade North Korea to rein in its nuclear program have failed, ratcheting up the rhetoric over the death of American student Otto Warmbier who had been detained in Pyongyang. Trump’s tweet: “While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!” The development comes as a U.S.-China Diplomatic and Security Dialogue takes place today.

— China has replaced the U.S. as the second-largest foreign owner of agricultural land in Australia... The U.K. is No. 1. Two years ago, Dakang, a private Chinese agricultural company, offered to buy Australia’s largest cattle ranch. The Kidman ranch makes up 2% of Australia’s farmland – it’s the size of South Carolina. NPR reports that in the past year alone, Chinese investment in Australia’s overall agricultural sector has skyrocketed threefold, from $300 million to $1 billion — an unprecedented investment boom.

Australian ports and housing interest as well. NPR also notes that last year, Chinese home-buyers bought up to a quarter of the new housing stock in New South Wales. In the past few years, Chinese companies have either purchased outright or bought significant shares of the Australian ports of Darwin, Melbourne and Newcastle.

— U.S. logistics spending declined 1.5% last year, the first drop since 2009, and dipped to 7.5% of GDP, according to the annual State of Logistics Report. The annual report, published by consultancy A.T. Kearney Inc. and the Council of Supply Chain Management Professionals (CSCMP), and presented by third-party logistics (3PL) provider Penske Logistics, found that spending last year was constrained by uneven economic growth, overcapacity across virtually all modes, and corresponding rate weakness. Total logistics expenditures fell 1.5 percent year over year, to $1.392 trillion. There was a 4.6% increase in spending, compounded annually, from 2010 to 2015, as the U.S. economy and the logistics businesses supporting it emerged from their worst downturn in more than 70 years.

Meanwhile, Rural Minnesota communities are at risk of losing freight-rail access, transportation vital to their economies, Twin Cities Business reports (link). This is a must-read that shows the importance of transportation and logistics to the business of agriculture.