# Agribusiness

Update on the Leopold Center's director search

Last month I posted about the controversy surrounding the search for a new director of Iowa State University’s Leopold Center for Sustainable Agriculture. University officials offered the job to Frank Louws, a plant pathologist in North Carolina, although the search committee preferred Ricardo Salvador, the program director for the Kellogg Foundation’s Food, Health and Wellbeing program. Salvador is a corn expert and displayed a more “holistic perspective” about sustainable agriculture, which is probably why the Iowa Farm Bureau had expressed a preference for Louws. ISU’s Dean of Agriculture Wendy Wintersteen informed Salvador that he would not get the position before Louws had accepted the job. Typically, employers wait until they have a deal with their top candidate before telling other finalists that they didn’t get the job.

For about two months, Louws neither accepted nor declined the offer to head the Leopold Center. Meanwhile, ISU President Greg Geoffroy denied that he had been influenced by the Farm Bureau, saying he had followed “very strong advice” from Wintersteen and ISU’s Executive Vice President and Provost Elizabeth Hoffman. In the sustainable agriculture community, many people believe industrial agriculture interests influenced Wintersteen’s and Hoffman’s recommendation.

In any event, Louws has declined ISU’s job offer, the Ames Tribune reported yesterday. Wintersteen said North Carolina State University made him “a generous counter offer,” and Louws decided not to uproot his family.

According to the Ames Tribune, Geoffroy “advised [Wintersteen] to call Salvador back for a second interview” after Louws turned down the Leopold Center job. That interview has not yet been scheduled.

Thicke warns of excessive concentration in agriculture

The Justice Department and U.S. Department of Agriculture have been accepting public comments in advance of a series of workshops on “competition and regulatory issues in the agriculture industry.” The first workshop is scheduled for March 12 in Ankeny.

Francis Thicke, a dairy farmer and Democratic candidate for Iowa secretary of agriculture, submitted this comment to the DOJ’s Antitrust Division. Excerpt:

Economists tell us that when four firms control 40% or more of a market, that market loses its competitive nature. Currently, four firms control 83.5% of the beef packer market; four firms control 66% of the pork packer market; four firms control 58.5% of the broiler market. The turkey, flour milling, seed, and other agricultural markets are similarly concentrated.

The anticompetitive effects of market concentration is further compounded by the fact that some of the top four firms in each market category are also among the top four in other markets. For example, Tyson is number one in beef packing, number two in pork packing, and number two in broilers. This kind of horizontal integration encourages firms that dominate in several markets to manipulate prices in order to increase their market share. For example, when beef and broiler prices are profitable, a firm with dominant market share in beef, broilers, and pork can take measures to prolong the unprofitability of the pork market in order to force out firms that deal only in pork-while maintaining its own firm’s overall profitability through the beef and broiler market sectors.

A good current example of the farm-level effects of market concentration is the milk market. Recently, dairy farmers have been experiencing record losses due to low farm-gate milk prices. At the same time, the largest dairy processor, Dean Foods-that is purported to control 40% of U.S. dairy processing-has posted record profits over the past two quarters. Clearly, Dean Foods has found a modus operandi that enables it to isolate itself from the market forces bearing on dairy farmers.

I am glad to see Thicke raise this issue, which affects the well-being of so many family farmers. I do not recall Iowa’s current Secretary of Agriculture Bill Northey or his predecessor Patty Judge sounding the alarm about excessive concentration in the agriculture industry. Someone please correct me if I am wrong.

Last month the Farmer to Farmer Campaign on Genetic Engineering released a report on consolidation in the seed industry, which has left farmers with “fewer choices and significantly higher prices in seed.” You can read more about that report at La Vida Locavore and Iowa Independent.

Blog for Iowa recently published a lengthy interview with Thicke that is worth reading. Here are the links to part 1, part 2, part 3 and part 4.

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Department of odd omissions

I wasn’t surprised in November when the Des Moines Register failed to report on opposition to former Iowa Governor Tom Vilsack’s possible appointment as secretary of agriculture.

I wasn’t surprised in December when the newspaper omitted the same perspective from its piece on reaction to the news that President-elect Barack Obama was picking Vilsack for the job.

But I find this January 12 Des Moines Register article by Chase Davis quite odd. The subject is how Vilsack has relatively few ties to agribusiness. Excerpt:

Secretary of Agriculture nominee Tom Vilsack raised only a small portion of his campaign cash from farmers, grocers and others with direct ties to the agriculture industry, despite serving eight years as governor in one of the country’s most emblematic farming states, documents and fundraising data show.

From his first run for governor in 1998 to his short-lived presidential bid in 2006, Vilsack raised almost $15.8 million through contributions to his campaign and political action committees. Only about 2.3 percent, or $364,000, came directly from interests connected to agriculture.

Political observers said the small share of industry donations Vilsack received could earn him credibility and a perception of independence as he prepares for his confirmation hearing Wednesday. Others note the agricultural industry has long exerted its political influence through connections, not money.

“(Agriculture businesses) are much more human than a lot of other businesses. They have a very tight network,” said Edwin Bender, executive director of the National Institute on Money in State Politics. “Money is maybe not the prime indicator there.”

To the extent that influence follows money, Vilsack can make a convincing case that he is not beholden to the agribusiness industry – which could serve him well in the position, local experts said.

Agribusiness “will have more trouble getting everything they want, and they know it,” said Arthur Sanders, chairman of the Politics and International Relations Department at Drake University.

But if companies do convince Vilsack to support their policies within the U.S. Department of Agriculture, Vilsack “will have more credibility if he pushes for them,” Sanders said.

The article baffles me on two levels. It ranks Vilsack’s “top political donors associated with agribusiness interests,” and number one on the list is the philanthropist Doris Jean Newlin, whose husband was a vice president of Pioneer Hi-Bred International before he retired.

Newlin has made significant gifts to quite a few Democratic politicians, the Iowa Democratic Party, and the Democratic Senatorial Campaign Committee. It’s a stretch to consider her donations to Vilsack’s campaigns the most noteworthy link between Vilsack and agribusiness, just because Newlin is married to a retired vice-president of Pioneer.

What makes the article even more strange is that it does not mention biotech companies. Vilsack was an outspoken and persistent advocate for growing more genetically-engineered crops in Iowa and elsewhere. The Biotechnology Industry Organization named him governor of the year in 2001. He even used to fly on the Monsanto corporate jet. What opposition there was to Vilsack’s appointment as secretary of agriculture stemmed primarily from his many ties to biotechnology companies like Monsanto.  

Vilsack may well have fewer connections to agribusiness than others who have headed the USDA. I think the Senate should confirm him, given that he is the president’s choice, and he is certainly qualified for the job.

But it was quite a strange editorial decision by the Register to publish a whole article about Vilsack not having strong ties to corporate agriculture, while failing to mention any of his connections to the biotechnology industry. If you’re going to report a story, at least report the whole story.

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Renewable Is Not a Synonym for Sustainable

Cross-posted from the blog — cman.

This is a good mantra for the times.  Keep reciting it to yourself… Renewable  is not a synonym for sustainable. Letter to the Editor of the Des Moines Register from Dale Shires of Iowa City.

One of my dad’s maxims was “never buy or sell hay.” Buying hay might bring in the seeds of weeds we had spent years trying to control; selling hay removed tons of nutrients without replacing it with commensurate manure.Thousands of years of unharvested prairie had built the rich silt loam. The first 75 years of diversified, value-added farming saw mainly livestock and livestock products leave a nearly-level farm, using no commercial fertilizer, yet with ever-increasing yields.

We began raising soybeans during World War II, rotating and covering about one-fifth of the acreage each year. By 1954, soil tests showed a need for phosphate fertilizer. (The southwest Iowa soils were high in potassium and we inoculated the beans for nitrogen fixation.)

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