Farm Bill; Biotech; Ag Economy; and, Climate Change- Tuesday
Posted By Keith Good On
March 11, 2014
Ag Policy Editor Chris Clayton reported yesterday (link
requires subscription) that, “USDA
is emphasizing some of its programs to help smaller and
mid-sized farmers and ranchers.
Secretary Tom Vilsack announced the support initiative Monday
after speaking to members of the National Farmers Union at the group’s annual
meeting being held in Santa Fe, N.M. USDA rolled out the programs without
characterizing what defines a small to mid-sized farmer or rancher.”
Clayton noted that, “Following a boost in the loan cap in the new farm bill,
USDA will expand microloan opportunities to $50,000. Last
year, USDA issued 4,900 such loans.
Farm Storage and Facility Loan program also has been broadened to
help fruit and vegetable producers with cold storage. Some of those producers
also will be eligible to get a waiver from the crop-insurance
requirement traditionally required for such storage loans.
department also will be working with farmers who sell food products to
achieve Good Agricultural Practices (GAP) certification. Such
certification could also help those farmers meet FDA obligations under
the Food Safety Modernization Act.”
the USDA’s Economic Research Service (ERS) provided an
overview of the new Farm Bill yesterday at an ERS webpage titled, “Agricultural
Act of 2014: Highlights and Implications.”
Agricultural Act of 2014 was signed into law on
February 7. On the following web pages ERS presents highlights and some
economic implications of the new programs and provisions,” ERS noted.
stated that, “The Congressional Budget Office (CBO) projects that 80
percent of outlays under the 2014 Farm Act will fund nutrition programs, 8 percent
will fund crop insurance programs, 6 percent
will fund conservation programs, 5 percent will
fundcommodity programs, and the
remaining 1 percent will fund all other programs, including trade, credit,
rural development, research and extension, forestry, energy, horticulture, and
miscellaneous programs [see
related pie chart].”
Musico reported yesterday at the Lubbock
Avalanche-Journal (Tex.) Online that, “Hello, crop insurance; goodbye,
what’s in the new farm bill, panelists explained at the Lamesa Cotton Growers’ annual membership meeting on Monday
morning, March 10.”
article pointed out that at the meeting, Rep. Mike Conaway (R.,
Tex.) “noted 80 percent of the funds in
the farm bill are actually used for nutrition programs such as food stamps.
the new farm bill cuts food stamp spending by about 1 percent, the congressman
said he would like to see more reform. He said about 10 percent of
food stamp recipients are healthy adults with no dependents and should not rely
indefinitely on government assistance.
on food stamps without a work requirement, and that’s a moral hazard,’ he said.
‘We all have hard times and the safety net should be there, but it should be a
temporary fix — it shouldn’t be a permanent way of life.’”
Courtney of the Yakima Herald-Republic (Wash.) reported earlier this
week that, “The U.S. farm bill, passed last month after years of
negotiating, will help ensure the Yakima Valley fruit industry
remains free of disease, competitive in the global economy and on the cutting
edge of science.
what Sen. Maria Cantwell, D-Wash., said as she traveled the state
touting the newly signed legislation that helps fund everything from food
stamps to milk price insurance.”
article noted that, “An important provision of the farm bill for local growers
is the Market Access Program, which provides $200 million per year
in competitive matching grants to help agricultural associations pitch products
30 percent of the state’s apples, cherries and pears are exported,
a number officials expect to reach 50 percent in the coming years.”
the farm bill also creates a permanent budget home for the Specialty
Crop Research Program, which helps pay university researchers to pioneer
new techniques in harvesting and pest management,” the article said.
Politico writer David
Rogers penned an interesting article yesterday about the
new Farm Bill titled, “For
tribes, new farm bill revives old wounds.”
other policy news, The Wall Street Journal editorial
board noted today that, “In partnership with green activists,
the Department of Interior may attempt one of the largest
federal land grabs in modern times, using a familiar vehicle—the Endangered
Species Act(ESA). A
record 757 new species could be added to the protected list by 2018. The
two species with the greatest impact on private development are range
birds—the greater sage grouse and the lesser
prairie chicken, both about the size of a barnyard chicken. The
economic stakes are high because of the birds’ vast habitat.
expected to decide sometime this month whether to list the lesser prairie
chicken, which inhabits five western prairie states, as ‘threatened’ under the
Endangered Species Act. Meantime, the Bureau of Land Management and
U.S. Forest Service are considering land-use amendments to protect the
greater sage grouse, which would lay the groundwork for an ESA listing next
Journal stated that, “However, much of the prairie chicken population
and some sage grouse are on private property that could become subject to some
of the most invasive private land-use rules and property acquisitions in the
history of the protected-species law. The birds’ habitat includes an
estimated 50 million to 100 million acres of federal and private land,
according to the federal Natural Resources Conservation Service.
groups have won victories by using a strategy called ‘sue and settle’
under which groups propose species for protected status and then sue the
federal government, which settles the lawsuit on terms favorable to the greens
rather than fight. These settlements typically bypass a thorough review
of the scientific evidence and exclude affected parties, such as industry and
last week, Reuters writer Tom
Polansek reported that, “Syngenta AG will require U.S.
farmers who plant a new and controversial type of genetically modified corn
this spring to pledge in writing not to ship it China or the European
Union, a trade association said on Friday.
mandate is the latest step by the world’s largest crop chemicals company
to calm concerns among global grain exporters about corn seed
containing the Agrisure Duracade trait, which is available for planting for the
first time this year.”
Polansek stated that, “Growers who plant Duracade crops must sign a ‘Syngenta Stewardship Agreement’
that requires them to feed the harvest to livestock or poultry on the
farm or to deliver it to a grain facility that does not export it to China or
the EU, the National Grain and Feed Association (NGFA) said in a
Polansek reported that, “Syngenta AG said
on Monday it had halted commercial sales in Canada of corn
seed containing a new and controversial genetically modified trait because
major importers had not approved the product.
from the Canadian market seed containing the Agrisure
Duracade trait, which was available for
planting for the first time this year, according to a Syngenta notice that was
sent to seed dealers and obtained by Reuters.”
Meyer reported yesterday at The Financial Times Online that, “In a
video advert for Syngenta’s new genetically modified seeds, the camera
pans across a row of immature corn stalks, then cuts to dozens of pallid worms
gnawing on a root. ‘There’s a ticking time bomb in your fields,’ it warns farmers.
‘It can eat into your profits and sink your entire operation.’
is not a new message: the fight against corn rootworm, a common pest, is
perennial in agriculture. But Syngenta’s latest attempt to protect
crops from the larval creature, by adding a new genetically modified ‘trait’,
has triggered a new battle – involving biotechnology companies, the grain
trading industry and the government of China.
the US corn belt prepares for its planting season next
month, Syngenta’s Agrisure Duracade seeds have been approved inside the US
– but not yet in China. As one of the world’s emerging corn
import heavyweights, however, China’s stance on genetic modification has
the potential to transform agricultural markets.”
FT article stated that, “Late last year, China’s decision to reject
imports containing another unapproved corn trait caused losses of hundreds of
millions of dollars at commodities trading houses globally,
including Archer Daniels Midland and Louis Dreyfus
Commodities, industry executives say. Now, traders are alarmed that
Duracade corn will leak into their export stream,
making it unsaleable in China.
impasse highlights the risk to agricultural traders as the world’s growing
dependence on agricultural imports collides with national policies.
China’s timeline for approving biotech grain imports lags behind months or
years that of the US.”
Meyer explained that, “Associations of US grain exporters and silo operators
have demanded that Syngenta halt commercial sales of Duracade as well as Viptera –
the corn variety already rejected by China – until Beijing and some other
foreign markets have given their approval, warning of ‘serious economic harm to
exporters, grain handlers and, ultimately, agricultural producers’”.
FT article added that, “China’s vice-agriculture minister Niu Din told Reuters last week its process
to approve Viptera corn is under way after
Syngenta submitted additional information.
Glauber, the US Department of Agriculture’s chief
economist, is hoping a resolution can be reached quickly. ‘China needs
calories. They need corn. This hopefully is a temporary situation,’ he says.”
Agricultural Outlook Board (WAOB) released its monthly World
Agricultural Supply and Demand Estimates (WASDE), which stated in part
that, “Projected corn ending stocks are lowered 25 million bushels…[T]he season-average
farm price for corn is narrowed 5 cents on both ends of the
projected range to $4.25 to $4.75 per bushel.”
WAOB also noted yesterday that, “U.S. soybean supply and use
projections for 2013/14 include higher imports and exports, reduced crush, and reduced
ending stocks compared with last month’s report. Soybean exports
are raised 20 million bushels to a record 1.53 billion reflecting continued
strong sales and shipments through February…[S]oybean
stocks are projected at 145 million bushels, down 5 million from last month.”
season-average price range forecast for soybeans is raised 25
cents on both ends of the range to $12.20 to $13.70 per bushel,”
yesterday’s report said.
view the complete supply and demand variables for U.S. corn and soybeans,
table and this
table from yesterday’s WASDE report.
C. Dreibus reported yesterday at The Wall
Street Journal Online that, “Soybean futures dropped the most since late
January on Monday after federal forecasters projected higher-than-expected U.S.
supplies ahead of this year’s harvest.
also declined, hurt by estimates for greater global stockpiles of the
grain. Wheat futures fell.
a closely watched monthly crop report, the U.S. Department of Agriculture
estimated that domestic soybean stockpiles would total 145 million bushels on
Aug. 31, down from its forecast of 150 million last month. The
government cut the figure because export demand for U.S. inventories has been
strong, but analysts had expected a steeper cut, to about 141 million bushels.”
Journal article added that, “The government cut its estimate for U.S. corn
inventories before this fall’s harvest to 1.456 billion bushels from last
month’s reading of 1.481 billion, due to expectations for higher corn
exports. The estimate surprised analysts, who had forecast an increase to
1.487 billion bushels.”
Durisin reported yesterday that, “World
wheat stockpiles before next year’s harvest will be larger than the U.S.
government forecast in February on bigger crops abroad…[E]scalating turmoil in Ukraine, the sixth-largest
wheat exporter, may boost American shipments, according to the U.S. Grains
Council. U.S. wheat exports in the year that began June 1 rose 23 percent
through Feb. 27, compared with the same period a year earlier. China, Brazil
and Mexico have been the largest buyers.”
USDA forecast prices at the farm will average $6.75 to $6.95 a
bushel in the 12 months that began June 1, compared with $6.65 to $6.95
estimated in February,” the Bloomberg article said.
of Illinois Agricultural Economist Darrel Good noted in part
yesterday at the farmdoc daily blog
for March 1 Corn Stocks Estimate”) that, “The USDA will release an
estimate of March 1, 2014 corn stocks on March 31 with potentially important
implications for old crop corn prices. It has been difficult to
correctly anticipate quarterly stocks estimates in recent years, with large
surprises reflected in some estimates. The estimate of December 1, 2013
stocks, for example, was surprisingly small and implied a record 2.426 billion
bushels of feed and residual use of corn during the first quarter of the
2013-14 marketing year. That estimate started a price rally that was
subsequently augmented by surprisingly large export sales of corn. March
2014 corn futures increased about $0.70 from January 9 through March 7.
it has become difficult to anticipate the quarterly stocks estimate, it is
useful to calculate the magnitude of stocks that might be considered neutral
for corn prices.”
release yesterday from Purdue
University stated that, “Uncertainty surrounding total
swine herd losses to porcine epidemic diarrhea virus has sent lean hog futures
for spring and summer contracts to record-high levels, but it’s possible
the markets have overreacted, a Purdue Extension agricultural
update noted that, “While PEDv can be devastating to
individual swine herds, Chris Hurt said it remains to
be seen whether slaughter supplies will fall enough to warrant the $10 to
$14 per-hundredweight surge in spring and summer futures prices over the past
far this year the number of animals coming to market has been very close to the
numbers indicated in the U.S. Department of Agriculture’s December Hogs and
Pigs report,’ he wrote in a weekly outlook report. ‘When adjusted for the
number of slaughter days compared to last year, the slaughter count so far is
down 0.5 percent. However, market weights have been higher by about 2.5
percent, thus causing total pork production to be up by about 2 percent.’”
a recent update from Iowa
State University (“Iowa
Farmland Value Survey Shows Historic High Statewide Average”) indicated
that, “The Iowa State University land value survey reported an average
increase of 5.1 percent in Iowa farmland values—the ninth time in the past 10
years land values have increased. The statewide average value of an acre of
farmland is now estimated to be $8,716. Scott County in eastern
Iowa saw the largest estimated increase over last year’s value at 12.45
percent, the highest increase in value at $1,374, and now has the highest
estimated total value per acre at $12,413.
the average value increasing again, 2013 marked the second time in the past 10
years where some counties reported lower land values than the previous
update pointed out that, “The single biggest factor to assess land value
movement is gross farm income, and a majority of survey respondents were
concerned about income. Over three-fourths, 76 percent, of respondents
cited lower commodity prices as a negative factor affecting
land markets. Data show the rate of increase in land values slowed and
commodity prices started dropping after June 2013.”
In trade related
Obe reported yesterday at The Wall Street
Journal Online that, “Hajime Kobayashi, a farmer in the northern part of
Japan’s main Honshu island, thinks Tokyo should end its decadeslong
protection of the agricultural sector.
Kobayashi’s position is somewhat unusual: He’s the local head of a branch of
Japan Agricultural Group in Akita prefecture. JA, as it is known, is a powerful
cooperative of farmers that for years has stymied efforts to bring more
competition to agriculture.
a growing number of Japanese, even those inside the system like Mr. Kobayashi,
are starting to question the wisdom of these protections, which include
tariffs that near nine times the import price, caps on production and a complex
web of subsidies.”
Journal article stated that, “The U.S., too, wants Tokyo to open up its farm
sector, permitting American farmers to export more to Japan. For
now, Japan’s government isn’t budging. Trade talks involving the U.S.,
Japan and 10 other Asia-Pacific nations are currently stalled, in part due to
Japan’s unwillingness to strip back its farm tariffs.
Minister Shinzo Abe has
pledged to shake up the sector in the next few years by phasing out subsidies
and output caps. His administration has promised to consolidate Japan’s tiny
plots into bigger areas to boost productivity. The government says it
will outline more overhauls in June as part of a broader economic-growth
many in Japan, especially small farmers, continue to oppose change, forcing
the government to tread carefully. Akira Amari, Japan’s trade
minister, has told U.S. trade negotiators that Japan isn’t willing
to slash farm tariffs as part of the continuing talks.”
Needham reported yesterday at The Hill’s On the Money Blog that, “A
top world trade official said it is time to take a more aggressive tack in
completing an overhaul of international trade rules.
Azevêdo, director-general World Trade
Organization (WTO), said Monday that he will push more heartily toward
completion of the long-delayed Doha Development
Hill update added that, “Azevêdo met
with President Obama on Monday to discuss global trade and
economic issues and he said that the president emphasized that it is important
to avoid ‘repeating the bad habit of not going anywhere.’
that end, he argued that wrapping up work on Doha will require creating a new
framework for negotiations by the end of this year with the aim of concluding
discussions ‘as quickly as possible.’”
Bloomberg writer Andrew
Mayeda reported today that, “Canada concluded
negotiations on a free-trade deal with South Korea that it
says will give more access to Canadian beef producers and phase out
tariffs on cars made by Korean companies such as Hyundai Motor Co.
agreement will boost Canadian exports to South Korea by one-third, adding
an annual C$1.7 billion ($1.5 billion) to Canada’s economic output once the
deal is fully implemented, said a Canadian official familiar with the contents
of the agreement who spoke to reporters in Seoul, asking not to be named
because he’s not authorized to speak publicly.”
Davenport reported in today’s New York Times that, “In the summer of
2010, it was Harry Reid, the Senate’s Democratic leader, who
squelched his party’s efforts to pass a climate change bill, declaring it could
never attract enough votes to pass. In the years since, he has rarely spoken
publicly about the issue.
on Monday night, an impassioned Mr. Reid took to the Senate floor to kick off a
nearly 15-hour climate-change talkathon by about 30
Senate Democrats, part of a campaign by a new Senate ‘climate caucus’ to make
it a politically urgent issue.
change is real. It’s here,’ Mr. Reid said, adding that it was time to stop
acting as if those who ignore it ‘have a valid point of view.’”
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