Glickman Rejects Grain Embargo Agriculture Secretary Says Government Won’t Intervene In Grain Market

The Clinton administration Friday said there are no plans to limit grain prices or restrict exports, cooling speculation that the government would intervene to reduce diminishing grain supplies and the threat of food price inflation.

A grain embargo “isn’t going to be imposed,” Agriculture Secretary Dan Glickman told reporters after attending a food-for-the-elderly event with President Bill Clinton at a Washington church. “The president feels exactly the same way I do.”

Speculation swept grain markets Wednesday that the administration may be considering plans to restrict grain exports, control prices or dampen demand by some other means in response to surging grain prices.

“For the first time in years we see strengthening in the markets,” Glickman said, in his first public remarks on the subject. “Why would we want to do anything to disrupt that?”

The administration’s actions are closely watched by Pacific Northwest wheat farmers who export up to 90 percent of their annual crop.

Corn, wheat and soybean prices were trading lower Friday after Glickman’s announcement.

Portland grain traders offered $5.39 cash per bushel of Inland Northwest soft white wheat, down from $5.53 Wednesday. Farmers, however, receive 30 cents to 50 cents less than that after paying shipping and handling costs.

Nationwide, the price of corn is up about 60 percent from a year ago; wheat, 21 percent.

In addition, USDA’s projections for the tightest U.S. corn supply in 21 years and the smallest wheat supply in 22 years has prompted concerns over rising grain prices, and their possible effect on livestock feeding costs and food prices.

Glickman acknowledged conferring with Laura Tyson, who heads President Clinton’s National Economic Council, on the tight grain supply, but only as a routine and “logical” step as government tries to forecast supply and demand, and fashion policy.

“What I’ve told the National Economic Council is what I’ve generally stated: Supplies are tighter than they’ve been for some time, but we are not in any way in any kind of danger situation or in any kind of serious shortage situation,” Glickman said.

The Clinton administration opposes a tax on grain exports, and has no plans to jawbone major grain buyers to pace their U.S. grain purchases, he said. “There’s been a healthy bullishness in farm prices, and we’re delighted to see it,” Glickman said.

Rising grain prices aren’t likely to lead to accelerated inflation, in part because a meat glut is offsetting the effect of higher grain prices, the USDA said.

“We’re still showing food inflation running around 2.5 percent to 3 percent” for 1996, said Joseph Glauber, assistant chief economist at the Agriculture Department. That compares with a 2.8 percent increase in retail food prices for all of 1995.

, DataTimes