By Christine Haughney | 12/06/2017 10:00 AM EDT

With Catherine Boudreau, Helena Bottemiller Evich, Sabrina Rodriguez, Adam Behsudi and Maya Parthasarathy

TRUMP AND SENATORS TALK TRADE AMID NEW STATS: Several pro-trade Republican senators met with President Donald Trump on Tuesday to impress to him the importance of staying the course on NAFTA. U.S. officials have taken a hard line in the latest round of talks that just wrapped up in Mexico, raising fresh concerns that the negotiations could collapse and Trump could pull out.

Ahead of his meeting with GOP senators, Trump emphasized the "tremendous losses" the U.S. has experienced with Mexico and Canada, citing faulty numbers - $71 billion in the trade deficit with Mexico and $17 billion with Canada. In actuality, the U.S. ran a $63.2 billion trade deficit with Mexico and $10.9 billion one with Canada last year.

After they dined on a lunch of steak and chocolate cake, the senators said they felt as if they had made progress. Iowa Sen. Joni Ernst said she made a strong case to the president and U.S. Trade Representative Robert Lighthizer about the importance of NAFTA and its duty-free access for her state's agricultural economy, Pro Trade's Adam Behsudi reports. "I will continue working to ensure that any changes made to NAFTA do not hurt our crop and livestock producers," said Ernst.

Sen. Deb Fischer of Nebraska said that she "highlighted the significance of NAFTA to agriculture exports and related manufacturing jobs" and "stressed the need to safeguard the competitive advantage our agriculture producers and manufacturers have worked so hard to build."

But the optimism could not mask the statistics also released on Tuesday showing just how much U.S. agriculture depends on trade deals like NAFTA. Data from the Business Roundtable, whose members are CEOs, shows that:

- U.S. food manufacturers exported $25 billion in food products to Canada and Mexico in 2015. Without NAFTA, those exports could have faced up to $3.8 billion in extra tariffs - including tariffs averaging 28.3% on meat products and 22% on dairy products.

- U.S. farmers and ranchers exported $15 billion in farm products to Canada and Mexico in 2015. Without NAFTA, those products would have had $657 million in extra tariffs - including those averaging 6.6% on oilseeds and grains.

Meanwhile, more than 14 national commodity associations and their state-level affiliates are taking to the phones and to Twitter today for a grassroots campaign day to emphasize the benefits of NAFTA and the importance of staying in the pact. Some of the groups involved in the effort include the American Farm Bureau Federation, National Pork Producers Council and USA Rice, Adam reports.

HAPPY WEDNESDAY, DEC. 6! Welcome to Morning Ag, where your host is humbled by the work demands of our associates at NASA. Writing a newsletter seems like a piece of cake compared to trying to eradicate germs from the International Space Station. Have any tireless government workers to highlight, news tips to pass on or birthday shoutouts? Send them to chaughney@politico.com and @chaughney. Follow the team at @Morning_Ag.

HOLA FROM ARGENTINA: Readers, stay tuned for special coverage from the World Trade Organization's 11th Ministerial Conference. POLITICO reporters Hans von der Burchard and Megan Cassella will be on the ground in Buenos Aires, Argentina, bringing you up-to-the-minute news and a special midday newsletter, Buenos Aires Briefing. It will publish each day of the conference, from December 10-13. If you have specific questions about the events in South America, please reach out to hvdburchard@politico.eu and mcassella@politico.com

ARE WELFARE CHANGES NEXT? With the tax overhaul well underway, the GOP's next big target may be cutting back on government assistance programs. Late Tuesday, the USDA said it would give states "greater flexibility" over how they administer SNAP, Pro Ag's Helena Bottemiller Evich reports.

The $70 billion program "was not intended to be a permanent lifestyle," Agriculture Secretary Sonny Perdue said in a statement. Anti-hunger groups are still wondering what the shift will mean for the 1 in 8 Americans receiving SNAP benefits.

Already, Wisconsin Gov. Scott Walker is pushing to move ahead with drug testing on able-bodied adults applying for food stamps - something the Obama administration had successfully blocked. USDA said the specifics of the new "flexibility" would be announced in the coming weeks. A spokesman said the agency looked "forward to reviewing Wisconsin's plans in light of our reform principles and the requirements of the law."

GRASSLEY SEES NO FARM BILL PROGRESS IN SENATE: Sen. Chuck Grassley isn't gearing up for a swift farm bill process. He told reporters Tuesday that the Senate Agriculture Committee had not yet started drafting the 2018 farm bill - and didn't elaborate on a potential timeline.

Subsidies in check? Grassley said that he would renew his push to limit eligibility for farm payments by cutting off family members who aren't "actively engaged" in the business - a term recently redefined by the USDA. "I do believe that at some point, farms are big enough and shouldn't be able to have unlimited subsidies," Grassley, who chairs the Judiciary Committee, told reporters during a conference call.

Bigger and bigger: The Iowa Republican referenced a USDA Economic Research Service report published last week that analyzed how a growing portion of subsidies were flowing to the largest and wealthiest operations as a result of consolidation in agricultural production. Grassley recounted how top agriculture lawmakers in the House and Senate, when conferencing the 2014 farm bill, watered down his original amendment by exempting family farms from USDA rules tightening the definition of "actively engaged." About 97 percent of farms in the country are family owned.

BRUSHING OFF CRUZ'S WHITE HOUSE MEETING: Grassley is playing down the significance of the meeting that Sen. Ted Cruz (R-Texas) will have with Trump and several Cabinet members on Thursday to discuss biofuels and vehicle fuel-efficiency policy. The White House is trying to broker a compromise between Cruz -- who is holding up Bill Northey's nomination to lead USDA's farm and conservation mission areas -- and Iowa lawmakers who pressured EPA to back down from changing to the Renewable Fuel Standard.

"The president keeps doing what he told the voters of Iowa, as well as me and Senator Ernst, which is supporting ethanol," Grassley told reporters Tuesday, adding that it was not unusual for the president to accept meeting requests from senators. The Iowa Republican also said he believed that Cruz's leverage had diminished since the EPA last week released the rule setting 2018 blending requirements for biofuels -- which kept flat the levels for corn ethanol.

Is Grassley underestimating the stakes? It's no secret that EPA Administrator Scott Pruitt, during his tenure as Oklahoma attorney general, had very close ties to the oil industry, which seeks to undermine the Renewable Fuel Standard at every turn. While the agency is maintaining ethanol blending levels for 2018, it took playing defense by Grassley and other farm-state lawmakers, which may be needed throughout the Trump administration.

MYTH BUSTERS, JUNK FOOD EDITION: Tamar Haspel, a food columnist who appears in the The Washington Post, has created quite a tizzy with her latest piece that debunks the oft-repeated idea that unhealthy processed foods are cheap because of farm subsidies. In short, it's simply not true that subsidies are to blame for why a Twinkie costs less than carrots, she argues. Fruits and veggies cost more at the grocery store largely because they are inordinately harder to grow.

Twitterverse thumbs up: The chatter on Twitter about the piece was almost universally approving: Tamara Hinton, a longtime ag pol and founder of Comunicado PR, summed it up: "The idea that wholesome foods are expensive & junk foods are cheap because of the system of subsidies in the #farmbill is FALSE via .@TamarHaspel who calls out .@michaelpollan" (Pollan has so far not responded to the piece).

One more factor: Subsidies aside, it's worth noting that specialty crop research has lagged behind corn, soy, et al. We had a deep dive on this dynamic earlier this year. As Haspel pointed out on Twitter, it makes sense that commodities have received more research dollars since they represent the vast majority of acreage.

ROW CROPS:

- Tax extenders coming: Leading GOP senators expect that legislation in the coming weeks will extend expired tax provisions. The extenders would revive short-term tax benefits to promote renewable energy sources like biodiesel and solar power, as well as rail lines crucial to farming communities. More from Aaron Lorenzo and Bernie Becker here.

- EU beefs with Mercosur: Without deals on wine, pasta and olive oil, there is "absolutely no intention of any beef concession" between the European Commission and the Mercosur region of South American countries, an official said. More from POLITICO Europe's Simon Marks here.

- More imports in U.S.: Newly released Department of Commerce data shows the U.S. trade deficit jumped 8.6 percent in October. For agriculture, the imports of foods, feeds and beverages were the highest on record at $11.88 billion. Exports of foods, feeds, and beverages decreased $1.3 billion, and soybean exports fell $1.4 billion, Pro Trade's Doug Palmer reports.

- Senate confirms Smith to Farm Credit Administration. The Senate approved by voice vote the nomination of Glen Smith to be a member of the Farm Credit Administration Board. Smith, an Iowa corn and soybean grower and owner of a farmland appraisal business, will join a three-person FCA board that oversees the network of agricultural banks known as the Farm Credit System.

- Calls to delay truck monitoring: Twenty Senators wrote a letter to Senate leaders asking them to follow a provision that the House passed in its Transportation, Housing and Urban Development appropriations bill that delays the mandate of electronic monitoring devices on trucks - a major issue for the shipment of cattle and bees - until further research is done.

- Do pesticides hurt the hive? The EU will vote as soon as next week on whether to extend a ban on three neonicotinoids - chemicals suspected of causing collapse of bee colonies. Draft findings from the European Food Safety Authority show that imidacloprid, which is manufactured by Germany's Bayer, could negatively impact the health of honeybees. More from Simon here.

- Fish farming flourishes: Production from fish farms has overtaken wild fish catches, according to a study of the world's largest fishing nations by the Organization for Economic Cooperation and Development. While the number of fish raised on farms has grown by 2.1 percent each year since 2011, the amount of fish caught in the wild is 40 percent lower than during its 1980s peak. More from POLITICO Europe's Kait Bolongaro here.

- Ignoring the dates: The East of England Co-op has begun selling items that are up to a month past their best-by dates for 10 pence (13 cents) in an effort to reduce food waste. Most foods are actually safe to eat after stamped dates, NPR reports.

-Fat in the picture: Food companies are cutting salt and sugar but adding fat to their products, The Washington Post finds.

THAT'S ALL FOR MA! See you again soon! In the meantime, drop your host and the rest of the team a line: cboudreau@politico.com and @ceboudreau; jhopkinson@politico.com and @jennyhops; hbottemiller@politico.com and @hbottemiller; chaughney@politico.com and @chaughney; jlauinger@politico.com and @jmlauinger; and pjoshi@politico.com and @pjoshiny. You can also follow @POLITICOPro and @Morning_Ag on Twitter.

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