- Associated Press - Monday, January 8, 2018

Omaha World Herald. January 5, 2018

China offers opportunities to Midlands agriculture

China opened its market to U.S. beef last year for the first time since 2003, and Nebraska provided the first shipment of American-grown beef.

New analysis by Wendong Zhang, an Iowa State University expert on China’s economy and agricultural sector, points to potential opportunities for various Midwest ag products such as beef and corn, complementing already robust export opportunities for soybeans and distillers grains.

International competition for the Chinese agricultural market is strong, especially from Brazil. But Zhang’s analysis indicates that the United States should be able to realize trade gains, long term, through smart marketing and by tailoring products to the Chinese market, plus diplomatic pressure for China to reduce trade barriers.

China provides a huge market for several of Nebraska’s main agricultural products. That Asian nation buys 43 percent of Nebraska’s exported soybeans and soybean products; 93 percent of sorghum, 54 percent of distillers grains and 57 percent of hides and skins.

The surge in China’s demand for soybean and soybean-product imports has been spectacular, going from $5.5 billion in 2005 to almost $25 billion by 2016.

The growing Chinese demand for beef is also striking, as that country sees major increases in middle-class living standards.

Zhang notes that since 2008, Chinese per-capita beef consumption has increased by about 27 percent, from about 10 pounds per person in 2008 to about 12.7 pounds now.

Although that’s modest when compared to the U.S. figure of 79 pounds per capita, the important thing is that beef demand in China - a nation of 1.3 billion people - is increasing significantly. And that’s fueling a tremendous surge in China’s beef imports. In 2012, they totaled 87,000 metric tons. The figure for 2017: some 950,000 metric tons.

A large portion of the increased imports are from live cattle from Australia and New Zealand, where Chinese investors have made major investments in cattle operations.

Zhang’s analysis also showed that the U.S. overall market share in China for all meat exports (including pork, chicken and beef as a whole) has fallen greatly in the past three years as China seeks to diversify its meat imports. That foreign competition, plus China’s technical requirements for beef imports, present challenges for U.S. producers.

Nonetheless, U.S. producers have significant long-term opportunities, given the immense size of China’s market and the growing demand of its middle class for meat products.

U.S. corn producers also have the potential for long-term export opportunities, though our country’s corn sales to China are far smaller than U.S. exports of, say, soybeans. Nebraska’s $820 million in 2015 soybean- related exports to China in far exceeded our $20 million in corn exports.

Zhang writes: “As the Chinese people demand more pork and beef with rising per-capita income, China will likely need more corn and corn substitutes in the future… . The United States, along with Ukraine and Brazil, would likely be a major player if that were to happen.”

China offers promising opportunities for U.S. producers, if we pursue well-chosen marketing and diplomatic strategies.

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The Grand Island Independent. January 4, 2018.

Legislature has full slate

Property taxes and a state budget shortfall, two familiar issues, are likely to dominate the 2018 session of the Nebraska Legislature, which got under way on Wednesday.

Senators wrestled with both of those issues last year. They approved a two-year budget, but tax revenue has fallen behind projections, leaving a $173.3 million shortfall.

Gov. Pete Ricketts last year made the smart move of ordering state departments to watch spending. A hiring freeze that was put in place a year ago has been continued. The governor said the number of people working in state agencies has been reduced by almost 500.

However, spending restraint can only go so far. The Legislature will likely have to make budget cuts in some areas. Revenue increases may be sought, but raising taxes, fees or eliminating exemptions is difficult to do. Many would argue that it would hurt the state’s economy more than it would help.

What is really needed is a turnaround in the farm economy. There are signs that is happening. While figures are expected to show farm income was down in 2017, projections are estimating an increase this year and in 2019. Farm income is projected to rise nearly 4 percent in 2018 and more than 7 percent in 2019, mostly as a result of improved productivity.

The Legislature, though, will be forced to deal with the financial condition as it looks in the early part of this year. Places to cut are limited. The University of Nebraska system absorbed a big cut last year. Reducing funding for K-12 education only puts more pressure on property taxes. In addition, funding for the state prison system has been increased to try to retain and attract more corrections officers to reduce staff turnover and lessen violent incidents.

Finding a solution to high property taxes has proved elusive over the years for legislators. The issue, though, has reaching a boiling point for ag producers. High property tax bills have become such a burden on ag producers that if the Legislature doesn’t act, an initiative petition drive to put the issue on the ballot is likely.

The governor is expected to introduce a tax package that will include a mix of income tax and property tax cuts. Details of the plan haven’t been released. The governor’s plan last year stalled as farm groups said that it didn’t do enough to reduce property taxes.

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To make a significant dent in property taxes, the state must find another revenue source for education. Some have suggested eliminating some sales tax exemptions and putting that revenue toward property tax relief. That, however, has been a difficult proposal to advance as many view it as a tax increase.

Senators will have only a limited time to attack both of these issues as this is a 60-day session. Speaker Jim Scheer will have to be vigilant about keeping senators from getting bogged down on procedural issues.

There seems to be a determination among senators to get something significant done on property taxes. Many taxpayers, especially farmers and ranchers, have been waiting on that for years. Time will tell if 2018 will be the year that it actually gets done.

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Lincoln Journal Star. January 3, 2018

Too much at stake for legislative infighting

Today, 49 senators from every corner of Nebraska return to the Capitol to perform the heavy lifting required to run state government.

The work is far from easy. The hours are long. The paycheck, at $12,000, is minimal. But the duty of the men and women representing their corners of the state in the chamber is one that is too critical to be derailed by infighting this year.

After a bruising long session, one marred by an inexcusably prolonged paralysis over rules, in 2017, the 60-day version follows. In this case, with half the legislative seats up for election this year, we hope shorter means sweeter. Senators face too many topics of vital importance to be slowed down by sparring.

As soon as the gavel falls, lawmakers must close a $173 million budget gap to fulfill their constitutional responsibilities. Balancing the ledgers is made more challenging by the fact previous years’ shortfalls resulted in several state agencies being forced to make bone-deep cuts.

Complicating matters is the need to reform taxes. Two schools of thought exist, with Gov. Pete Ricketts and some urban senators pushing a plan that includes income tax reductions, with a coalition of primarily rural senators backing a credit to lower property taxes.

The former was trapped in a filibuster; the latter is being pitched as a legislative solution before a ballot initiative is put before voters. Both, however, have stoked passions among elected officials.

And taxes represent only one of several such critical debates awaiting senators. The Nebraska Department of Correctional Services, University of Nebraska, K-12 education, Department of Health and Human Services and many others are at various crossroads that require legislative action.

The consequences of inaction are too great to Nebraskans to allow needed outcomes to fall victim to squabbling and political games.

With re-election bids looming for roughly a third of all senators, the motivations to hold some ideologically pure line are no doubt present. This is magnified with a governor who’s financially supported a handful of challengers to incumbents whose votes have run counter to his own beliefs.

Expecting complete harmony in a political body is pure fantasy and naïveté. We know that there will be discord. The key is harnessing those points of disagreement and passions into hammering out an accord - or, more appropriately, many deals - that benefits all Nebraskans in this short, but momentous, legislative session.

Discourse that advances the common good is admirable, one we hope transcends all divisions in the officially nonpartisan Unicameral and keeps Washington-style gridlock out of Lincoln.

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McCook Daily Gazette. January 3, 2018

New laws in effect, more on the way as lawmakers meet

Nebraska’s unique one-house Legislature is back in session today, with dealing with a projected $173 million deficit the top order of business.

Budgetary issues were the major topic at last year’s session, but lawmakers did pass some bills that went into effect Monday.

(asterisk) LB18 created a license for dental assistant and expanded the functions that dental assistants and hygienists can do under state law.

(asterisk) LB20 allows veterans totally disabled by a nonservice-connected accident or illness to forgo a yearly certification process for a homestead certification.

(asterisk) LB45 creates Nebraska license plates for military reservists, for $5 plus the renewal fee. Proceeds will go to the Nebraska Veteran Cemetery System Operation Fund.

(asterisk) LB172 simplifies language in the Employment Security Law.

(asterisk) LB481 allows pharmacists to dispense drugs that are not identical to what’s prescribed but have been deemed interchangeable by the Food and Drug Administration. They must notify the patient, and, within three business days, the prescriber electronically.

(asterisk) LB624 will allow county assessors and register of deeds to withhold the home address of law enforcement officers who apply from the public.

Related to the revenue shortfall, which Ricketts and supporters hope to resolve without raising taxes, a new tax proposal from the governor is something to watch this year.

Observers warn that more gridlock is in the offing since a 33-vote supermajority is needed to pass disputed bills, making filibusters more effective.

That’s what sank income and property tax cut legislation, as well as an effort to drop the state’s motorcycle requirement and a gun-rights proposal last session.

While we’re flooded with multiple sources of news, we also have unprecedented access to the goings-on in our state capital.

It’s important that we use that access to perform our duty as responsible citizens.

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