Editorial

Supreme Court Ruling on Tariffs will not Dampen White House Policy

The February 20th Supreme Court of the United States (SCOTUS) ruling on tariffs was clear in its 6-3 majority decision to restrain the Administration from imposing tariffs. The Court concluded that the President was not empowered to apply the International Emergency Economic Powers Act of 1997 to impose tariffs. It was the decision of the majority that tariffs were effectively taxes and therefore the purview of Congress. The erratic imposition of tariffs on trading partners without any clear indication of a comprehensive strategy has impacted farmers and the U.S. agricultural economy. Tariffs especially if capricious result in retaliation and specifically impede exports of agricultural commodities where the U.S. is vulnerable.

 

The National Farmers Union stated, “Over the past year, tariffs have raised input costs, disrupted export markets and incurred retaliation against U.S. agricultural goods.  In an already fragile farm economy, uncertainty has hit family operations hardest.”

 

Rep. Angie Craig (D-MN) the Ranking Member of the House Agriculture Committee welcomed the SCOTUS ruling although emphasizing the damage to farmers from reduced exports of agricultural commodities in the current season. She observed “Losses will take years to recover since markets have been handed to competitors like Argentine and Brazil.”

 

Scott Metzger, president of the American Soybean Association pointed to the double jeopardy of increased costs to farmers for imported fertilizer, seeds and pesticides coupled with declining export volume that has depressed unit prices. He stated “Moving forward, certainty and dependable market access will be essential for U.S. soy to remain competitive globally.” He added “We urge the President to refrain from imposing tariffs on agricultural imports using other authorities”

 

Despite the clear decision by SCOTUS, the Administration is pursuing alternative strategies to retain tariffs, the legality of which have yet to be tested.  Congress has been remiss in imposing its constitutionally accorded authority over trade, encouraging the White House to adopt policies unhindered by restraint. Despite the SCOTUS ruling, it is anticipated that the issue with consequential and collateral damage will persist through prolonged litigation or until Congress exerts its authority.

 

Farmers have been placed at a competitive disadvantage with respect to their counterparts in Brazil, Argentina and other Latin American Nations with respect to supplying available markets.  It appears that the Administration intends to reimburse farmers in tranches of public funding with an initial “bridging” amount of $12 billion to be followed by $25 billion. This will be at the expense of the national debt.

 

A fresh approach to tariffs is urgently required since White House policy has clashed with the law of unintended consequences.  An “Eye-for-Eye” succession of tariffs will end up blinding all parties and generating hardship within the U.S. agricultural and industrial sectors.

 

Poultry Industry News

USDA to Erect Screwworm Fly Irradiation Facility

According to Brooke Rollins, Secretary of the USDA, the irradiation plant to propagate sterile male New World screwworm Cochliomyia hominivorax (NWS) flies will be located once again on the Moore Airbase with a projected ultimate completion date in November 2027.  Initially, the plant will produce 100 million sterile flies each week. The capacity will subsequently be expanded to achieve an output of 300 million sterile flies weekly.  USDA produces 100 million sterile flies per week at a facility in Panama for dispersal in affected areas in Mexico.  In the short term, USDA will provide $21 million to renovate and convert an existing irradiation facility designed to suppress fruit flies to NWS and to double production. This facility will be operated by the Commission for the Eradication and Prevention of Screwworm (COPEG)  and will commence production during the summer of 2026.

 

The Moore Airbase plant will be designed and erected by the Army Corp of Engineers and will allow the U.S. to be independent of supplies of sterile male screw worm flies from Central America and Mexico.

Although screw worm infestation was suppressed to the point of eradication in the U.S. by 1966 through dispersal of sterile male flies and from North America extending from the Panama Canal to the Southern U.S. border by the late 1990s.

Nature is resilient and infestation emerged in Guatemala in 2024 and spread to Mexico. This represents a threat to U.S. livestock and wildlife. The USDA-ERS estimate that the emergence of NWS in Texas would have cost the beef industry $1.9 billion in 2024.

 

The reemergence of New World screwworm indicates the need for widescale deployment of sterile male NWS flies. This will require close cooperation with neighboring nations to detect and eradicate the pest. Reintroduction into “cleared” regions is inevitable requiring surveillance and control over movement of livestock. Collectively regulators in Guatemala and Mexico missed the infestation and allowed spread by both movement of cattle and migration of flies

 


 

Conagra Brands to Extend Arkansas Plant

Conagra brands will commit $200 million to expand their manufacturing facility in Fayetteville, AR. The Arkansas Economic Development Commission announced the project on March 6th with construction to begin in the fourth quarter.  The plant produces ready-to-eat products under the Hungry-Man, Banquet, Healthy Choice brands.  The expansion will take place over a number of years and will create over 100 new positions.

 

Craig Weiss, Senior Vice-President of Supply Chain at Conagra Brands stated, “This significant investment in our Fayetteville facility will allow us to continue to grow our leading frozen foods business.”

 

Clint O’ Neal, Executive Director of the Arkansas Economic Development Commission, stated, “Conagra has been a valued member of the Arkansas business community for years and the company is doubling down on our state with the expansion in Fayetteville.



 

Concern Over Oklahoma Environmental Litigation

The two decades-long litigation over alleged pollution by major broiler integrators in the Illinois River watershed has led to preliminary settlements that have yet to be approved.  To date, Peterson Farms, George’s, Inc., Tyson Foods, Inc. and Cargill, Inc. have agreed to settle with the State Attorney General, Gentner Drummond. Oklahoma has yet to negotiate a settlement with Cal-Maine Foods, an egg producer and Simmons Foods, a broiler integrator.

 

U.S. Federal District Judge Gregory. Frizzell has raised issues with the proposed settlement relating to Oklahoma v. Tyson Foods, Inc. over long-term implications for disposal of waste. Litter application by existing contractors would be subject to declining increments down to 20 percent of present volume over five succeeding years. The possibility of additional contractors and increased volumes of production in the watershed could negate the beneficial environmental effects of the settlement. If Judge Frizzell refuses to sanction the settlement agreements the co-defendants have signaled their intention to resort to the 10th Circuit Court of Appeals

 

Blayne Arthur the Secretary of the Oklahoma State Department of Agriculture and Jeff Starling Secretary of the Department of Energy and Environment have questioned the proposed settlement. Negotiations were initiated in 2005 by then Attorney General Drew Edmonds after a federal judge ruled that the eleven poultry companies were responsible for phosphorus pollution in the Illinois river watershed.  The Secretaries have urged scrutiny of the proposed settlements they characterize as “imbalanced”.  In their comments, the Secretaries consider that the settlement would result in a “fragmented regulatory landscape in which companies competing in the same market operate under dramatically different rules”.  The proposed settlement also allows the Oklahoma Attorney General, to decide on payments without recourse to the Legislature.

 

Disposal of poultry waste previously applied to agricultural land will be subject to increased regulation given the potential for eutrophication from phosphorus runoff into waterways suggesting alternative methods of disposal or pre-treatment before application.

 

Expedient resolution of the impasse is important since Tyson Foods will not place chicks with contractors operating in the Illinois River watershed until a settlement is finalized.


 

Conflict Over EID Tags for Livestock Continues

Groups representing ranchers including the New Civil Liberties Alliance and R-Calf USA are embroiled in litigation with the USDA over electronic identification (EID) ear tags for cattle to be transported over state lines.  Resistance to adoption has persisted for a number of years since USDA required EID ear tags in place of less expensive visual tags. The argument that EID tags are a financial burden should be viewed against the 2026 estimated margin of $1,123 per head   accruing to cow/calf ranchers as estimated by the Beef Industry Profit Tracker.

 

The USDA maintains that the EID tags are necessary to reduce errors in livestock tracking, critical to control of disease.  This is especially important given the emergence of New World screwworm infestation in Mexico. Without a durable ID and tracking system the export market might be placed in jeopardy in the event of an extensive disease outbreak.

 

Essentially EID tags reflect progress in the control of livestock disease and are superior in preventing fraud and illegality that could occur with the visual-only tags.

 

The ear tag issue has become a question of “rights” representing opposition to state and federal mandates and regulations that are intended to improve livestock and human health.  The growing “rights” movement is exemplified by passage of hastily enacted state laws and local ordinances allowing the distribution of raw milk, parental involvement in school curriculums and vaccination.


 

Impact of Closure of Tyson Foods Beef Plant in Lexington, NE.

In a move to reduce losses and facing the reality of a prolonged shortage of slaughter stock, Tyson Foods commenced layoffs in January 2026 at the Lexington, NE. beef plant that has been shuttered.

 

The University of Nebraska-Lincoln has calculated that closing the Lexington plant would have an annual state-wide impact of $3.3 billion.  The plant had a nominal capacity of 5,000 head per day, representing close to five percent of total throughput.  The plant closure will result in a loss of 3,000 jobs in a community of 11,000 suggesting a serious disruption in the affected town and surrounding Dawson County.

 

Over the past three years, beef packers have experienced losses extending from $75 per head in 2024 to $205 per head predicted for 2026. It is a matter of record that Tyson Foods is attempting to rationalize their beef business by ‘right-sizing” a euphemism for terminating unprofitable plants and facilities. For Q1 FY 2026 their Beef Segment posted a GAAP loss of $319 million on sales of $5,771. In contrast the Chicken Segment generated an operating profit of $450 on sales of $4,212 million.

 

The U.S. Department of Labor announced in mid-March that $1.6 million would be awarded to the Nebraska Department of Labor for training services and expenses involved in reemployment for displaced workers. Funding was provided through the Workforce Innovation and Opportunity Act of 2014.

 

Tyson had every opportunity to predict the decrease in the number of animals available and could have initiated contingency plans dictated by the adverse operating environment. It is not unreasonable to expect that Tyson Foods should be responsible for relocation of employees, retraining and other direct expenses incurred by terminated employees and the State of Nebraska. 

 

Given the beef cycle and the reduction in the cow-calf herd, it will be three years before there is any increase in availability of slaughter stock and the impact of the multi-year progressive decline in the breeding herd due to drought, competition from imports and inflation


 

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