WTO strikes down COOL for meat • Rural stocks are roaring in 2012 • A U.S. federal appeals court finds evidence of price-fixing in the fertilizer markets • Was the transportation bill a good deal?
Rural stocks continue to climb in 2012.
The chart above shows the performance of the Daily Yonder 40 in the first six months of 2012. The DY 40 is an index of 40 publicly traded stocks of companies that do much of their business in rural America — Walmart, Peabody Energy, Family Dollar, Deere. You can see that the 40 is easily beating the Dow Industrials and the S&P 500 this year.
The DY 40 is up 13.5 percent this year. The Dow is up only 5.4 percent and the S&P is up 8.3%.
The DY 40 has continued to excel even with the decline in commodity prices and the collapse of the eastern coal business.
• We love these stories.
The AP reports from Minneola, Kansas, where the owner of the only grocery store in town had decided to close. The 745 residents got together and sold $50 shares in a new grocery, raising more than $200,000.
The new community-owned store — double the size of the one that closed — opened in March. The town expects the store to do $1 million in sales in the first year.
It really is a community store. Residents restored the 100-year-old building. They unload trucks and stock the shelves.
• The World Trade Organization has found that a U.S. rule requiring meat to be labeled with its country of origin discriminates against Mexico and Canada. The U.S. country of origin labeling (COOL) rules gave less favorable treatment to those two countries, which brought the case to the WTO.
Other parts of the ruling affirmed the right to labeling laws. “We are pleased with today’s ruling, which affirmed the United States’ right to adopt labeling requirements that provide information to American consumers about the meat they buy,” said U.S. Trade Ambassador Ron Kirk. Meanwhile, Canadian officials told Reuters that they were pleased with the ruling.
The U.S. could have as much as 15 months to comply with the WTO ruling.
•A U.S. federal appeals court has revived an antitrust suit brought by fertilizer buyers against Potash Corporation of Saskatchewan and six other producers.
The buyers sued in 2008, claiming the producers were fixing prices. The buyers described a “tight-knit global cartel” that restricted the production of potash so that prices would remain high.
The appeals court found evidence of such price-fixing. “The alleged effect was substantial,” the appeals court said. “The inference from these allegations is not just plausible but compelling that the cartel meant to, and did in fact, keep prices artificially high in the U.S.”
• The Denver Post writes that once the fires are over, the threat will be erosion and water pollution — and the job of restoration will be enormous.
• Midwestern farms are baking and they are dry. Corn is stunted, soybeans are “struggling to emerge” and dairy cattle have stopped producing milk, reports the St. Louis Post-Dispatch.
“I’ve seen tough times. I’ve seen floods, I’ve seen droughts, I’ve seen diseases in crops. Pretty much everything,” said Tim Johnson, a salesman at Wm. Nobbe & Co., a John Deere dealership in Scott City, where drought conditions are among the worst in Missouri. “But as far as drought, I’ve never seen one this early, and I’ve never seen it this bad.”
• The fact is, no test of students internationally has ever found U.S. elementary or high school kids leading the world. We’ve always been laggards in these kinds of comparisons.
• Ag Secretary Tom Vilsack is getting nervous that the House will stall the Farm Bill. He told DTN’s Jerry Hagstrom that he has “a growing concern that the House Republican leadership is not prioritizing the food, farm and jobs bill to the point we can get this work done before Sept. 30.”
Vilsack said there is no disaster program available for livestock operators hammered by drought or those affected by fires in the West. An extension of the current Farm Bill would not put disaster programs back in place, according to Vilsack.
• The New York Times reports that rural students in China have next to zero chance of attending the nation’s top university, Peking University.
The country has a quota system based on residency, making it easier for applicants in cities such as Beijing and Shanghai to get into local universities. A student from a rural province has a one in 7,826 chance of getting in Peking University while a student from Beijing has a one in 190 chance.
• The National Journal isn’t so sure about the new transportation bill:
The 599-page bill reduces the number of highway programs by two thirds. The controversial coal ash and Keystone XL provisions House Republicans pushed for were dropped, but the streamlining provisions they wanted made it in, including exempting from environmental review certain emergency infrastructure replacements and programs that receive less than $5 million in federal funds. The cuts aren’t as deep as many conservatives wanted and the concessions went too far for some Democrats.
Transportation enhancement funding–for things such as bike paths–remains, but a compromise split the funding between localities and states, which have an opt-out. The bill reduces the deficit by $16.3 billion over the next decade, according to the nonpartisan Congressional Budget Office. The Highway Transit Fund, the key funding source for highway projects, will be exhausted some time in fiscal year 2015.
What do the changes to the transportation enhancement program mean for bike paths and alternate transit? Is the program consolidation going to work? Will the streamlining really help to speed up products? What more could the bill have done to accelerate project delivery? What critical provisions is the deal missing? Is this bill an early Christmas present or a lump of coal?