A confidential interim report circulated this week indicating that the WTO dispute panel has sided with Mexico and Canada against the U.S. Country of Origin Labeling law (COOL). The ruling is preliminary and the final ruling won’t be released until summer, but the decisions will probably not be changed. Canada and Mexico contend that the COOL law acts as a protectionist barrier, unfairly distorting competition between imported and domestic cattle and hogs. With the higher costs of processing foreign animals, imports of cattle and hogs from Mexico and Canada have declined since the law was implemented. The dispute panel ruling will be made public in September and the U.S. will have 60 days to appeal the ruling.

The House Agriculture Appropriations Committee approved a bill that would fund the Department of Agriculture for fiscal 2012. As expected, the proposed budget would cut spending and take steps to prevent USDA from implementing the GIPSA rule reforming livestock marketing. Discretionary spending would be set at $17.3 billion for next year, down 13% from the level for fiscal 2011.Mandatory spending would be set at $108.2 billion, slightly above the current year level. Spending cuts include a 12.4% reduction for the Women, Infants, and Children (WIC) program, a 30% cut for the Food for Peace program and a 13% cut for agriculture research, to highlight a few. Cuts made now for fiscal 2012 would reduce the budget baseline for the 2012 Farm Bill.

The Obama administration says it will not withdraw the proposed Grain Inspection, Packers and Stockyards Administration (GIPSA) rule reforming the marketing of livestock and poultry. The rule was published last June and the proposal has been very controversial. Recently a bipartisan group of 147 House members sent a letter to Agriculture Secretary Vilsack urging that the proposed rule be rewritten. So far, USDA has received more than 60,000 comments about the proposed rule and USDA is working to improve the proposal incorporating these comments. The House Agriculture Appropriations fiscal 2012 budget includes wording that would prevent USDA from implementing the proposed rule.

The Senate has not developed a budget for fiscal 2012, but this week the body rejected the budget passed by the House a few weeks ago. Senate Budget Committee Chairman Kent Conrad (D-ND) said his committee will not put forward a budget at this point because the bipartisan negotiations headed by Vice President Biden are reported to be making progress. However, so far the group has agreed on only about $200 billion in cuts, far short of the amount needed to get the bill passed in the House of Representatives. With no Senate budget in place, funding bills for fiscal 2012 will be delayed, probably at least until fall.

Decision time is fast approaching for farmers in some states that have been unable to get their spring crops planted. Deadlines to file for prevent planting insurance are in early June in many areas. Wet conditions remain in several areas, especially in Ohio, Indiana and North Dakota. Several million acres of corn and spring wheat remained to be planted at the beginning of this week, and weather conditions were far from ideal in states where planting progress lags the most. A majority of analysts expect 2011 corn and spring wheat acreage to fall below levels indicated in the March Prospective Plantings report. Basic prevent planting coverage can be an attractive alternative for growers that can’t get their crops planted by the end of next week.