September 1

Disaster Aid- Farm Bill John Lyon reported earlier this week at the Arkansas News Online that, “A recent spate of editorials in the national press knocking U.S. Sen. Blanche Lincoln’s efforts to secure $1.5 billion in disaster aid for farmers [Washington Post, New York Times, Wall Street Journal] shows how the East Coast media misunderstands the importance of agriculture, Lincoln said today. “‘It’s certainly nothing new for the East Coast newspapers to be extremely critical of agricultural support, that’s for sure,’ Lincoln said in an interview with the Arkansas News Bureau. ‘I think it’s just another example of how those folks truly, I don’t think, understand production agriculture and how important it is to our economy and how important is to feeding the world.’ “Lincoln, who chairs the Senate Agriculture Committee, won a fight in July to include $1.5 billion in agricultural disaster aid in a bill to aid small businesses, but Republican senators voted to block the bill. The Obama administration, which supported the small-business bill, promised to provide the disaster aid administratively in exchange for Lincoln agreeing to drop the provision from the bill.” Mr. Lyon explained that, “Critics say the aid package is an end run around the Supplemental Revenue Assistance Payments, or SURE, program, which was included in the 2008 Farm Bill. The program sought to reform farm subsidies by offering formula-based payments to farmers who signed up for federally subsidized crop insurance. “‘We’ve not had a single farmer sign up for this program in Arkansas because it’s not effective for the crops that we grow and how we grow them,’ Lincoln said. ‘It’s very similar in other Southern states.’” “Another complaint is that most of the money will go to the wealthiest farmers. Lincoln said the payments follow production,” the article noted. Meanwhile, the AP reported yesterday that, “A $1.5 billion farm aid package sought by Arkansas Sen. Blanche Lincoln as she faces a tough re-election fight may not be funded by the end of the month as the White House promised, a spokeswoman for the Senate Agriculture Committee said Monday. “Lincoln, the chairwoman of the Senate Agriculture Committee, had received a commitment from the Office of Management and Budget that the aid package would be funded administratively by Tuesday. Senate Agriculture Committee spokeswoman Courtney Rowe said Monday it’s possible that won’t happen. “‘She’s continuing to work with the White House and with USDA to find a way forward in delivering the assistance,’ Rowe said Monday. ‘We should have details to announce soon.’” The article added that, “Rowe said Lincoln still has a commitment from the White House that it will fund the package. A White House spokesman did not respond to a request for comment.” The disaster aid issue also came up yesterday in tele-news conference with Agriculture Secretary Tom Vilsack: “Q: [T]his is the final day of the month, and Senator Lincoln– Blanch Lincoln indicated that she had expected to hear something from the administration, USDA, regarding how ad hoc disaster assistance, this would be…Has USDA reached a decision on that?” Sec. Vilsack indicated that, “As far as the ad hoc disaster assistance program is concerned, we’re — you know, I think it’s fair to say that we’re working hard to try to make sure that this is a program that makes sense, that provides help and assistance to those who suffered very serious losses, and that it’s structured in a way that complies with rules and regulations, laws and statutes. “It is a complicated process. We’re going to try to do it as well as we can, and as soon as we’re certain, we will — we’ll be working with the senator’s office and the White House to — to provide the out — the outline of that program. But we’re not there yet.” With respect to the SURE program, DTN Executive Editor Marcia Zarley Taylor reported yesterday at the Minding Ag’s Business Blog that, “Recently I reported that the permanent farm disaster aid program made princes and paupers out of farmers in states struck by farm revenue losses when it first launched for the 2008 crop last January. SURE, the Supplemental Revenue Assistance program, rewarded some growers with maximum $100,000 payments while others with equally legitimate losses collected zero because of technical glitches. Equally troubling, why did SURE shower Iowans with aid in a year when statewide farm incomes reached an all-time record high? How good is the SURE formula in compensating revenue ‘losses’? “Wall Street’s 2008 subprime mortgage panic and farm disaster aid didn’t have much in common, but in politics, timing is everything. Farm aid piggybacked on the emergency economic stimulus bill that year, so Congress increased the coverage level from which the SURE guarantee was calculated. Through Aug. 24, this meant an extra $465 million for 2008 payees, out of a total $1.282 billion in 2008 SURE payments. This economic stimulus ‘super charger’ and related rules actually benefited Texans more than any other state, accounting for $79 million in extra assistance–more than half of the state’s total SURE payouts of $144 million in 2008. For Iowans, the subprime misfortune allowed them to collect an extra $65 million out of $215 million in 2008 aid paid so far.” Yesterday’s update added that, “Even without the extra 2008 bonus, economists are finding flaws in SURE’s ‘wiring.’ A recent journal article by land grant university economists Gary Schnitkey, Carl Zulauf and Michael Langemeir, ‘ACRE, Crop Insurance, and SURE: Interactions and Overlap for U.S. Midwest Crops,’ in the Journal of Agricultural and Applied Economics (Number 3, 2010), points out a bias in the SURE formula that they think overstates the revenue losses. In laymen’s terms, the spring guarantee price for determining your base revenue uses a future’s price. Revenue losses are scored against a season-average cash price at the end of the crop year. “The apples-to-oranges price formula ignores basis–the wide spread between futures prices in Chicago and lower local cash prices–and triggers sizable over payments, the economists contend.” In other news, Senate Ag Committee Ranking Member Saxby Chambliss (R-Georgia) was a guest on Monday’s AgriTalk Radio program with Mike Adams. The two engaged in wide-ranging discussion that included issues associated with the Farm Bill; to listen to remarks from Sen. Chambliss on this issue, including budget concerns, just click here (MP3- about two minutes.) A news release yesterday from Rep. Jerry Moran (R-Kansas) stated that, “Congressman Jerry Moran today requested that House Agriculture Committee Chairman Collin Peterson (D-MN), hold a field hearing in Kansas in advance of the 2012 Farm Bill. Earlier this year, Chairman Peterson began holding field hearings across America to hear directly from farmers and ranchers about U.S. farm policy. Information gathered in field hearings will play an important role in writing the next farm bill. Hearings have been held in the following states: Iowa, Idaho, California, Wyoming, Georgia, Alabama, Texas, South Dakota and North Carolina.” See this link for a FarmPolicy.com overview of the House Ag Committee Farm Bill hearings, and this link for a recap of Senate Ag Committee Farm Bill hearings to date. A news release yesterday from USDA’s Risk Management Agency stated that, “USDA’s Federal Crop Insurance Corporation Board of Directors recently approved Optimum® AcreMax™ 1products as qualifying for the Pilot Biotechnology Endorsement (BE) program, beginning with the 2011 crop year. Optimum® AcreMax™ 1 products are comprised of a combination of a Pioneer® hybrid with Herculex® XTRA insect protection and a Pioneer® hybrid with the Herculex I trait in the same bag.”   USDA Reports A statement by Sec. Vilsack from yesterday indicated that, “Agriculture Secretary Tom Vilsack today released the following statement in response to two USDA reports that show the strength of the overall rural economy and growth in agricultural exports: “‘Today’s reports are encouraging news. They show that while American agriculture has struggled through difficult economic times, the 2008 Farm Bill, the efforts of the Obama Administration – such as the Recovery Act – and the hard work and resilience of America’s farmers and ranchers have helped put American agriculture on the road to recovery.’” The first report, the 2010 Farm Income Forecast, from the USDA’s Economic Research Service (ERS), stated that, “Net farm income is forecast to be $77.1 billion in 2010, up $14.9 billion (24 percent) from 2009 [related graph]. The 2010 forecast is $12.3 billion above the average of $64.8 billion in net farm income earned in the previous 10 years. The $77.1 billion forecast for 2010 remains the fourth largest amount of income earned in U.S. farming.” ERS stated yesterday that, “The average family farm household income is expected to be up by 5.8 percent in 2010, to $81,670. Both farm and off-farm income are forecast to be up in 2010, compared to 2009 [see related graph].” ERS indicated that, “Total production expenses in 2010 are forecast to rise to $284.0 billion, $3.0 billion (1.1 percent) higher than 2009’s estimated $281.0 billion [related graph]. This change is modest relative to increases of $36.5 billion (15.7 percent) in 2007 and $23.7 billion (8.8 percent) in 2008, and follows a $12.0-billion (4.1-percent) drop in 2009. The 2010 forecast puts nominal expenses at the second highest level ever.” And with respect to government payments, yesterday’s update explained that, “Government payments paid directly to producers are expected to total $11.9 billion in 2010, a 3- percent decrease from the $12.3 billion paid out in 2009. This level would be 22 percent below the 5-year average for 2005-09. Direct payments under the Direct and Countercyclical Program (DCP) and the Average Crop Revenue Election Program (ACRE) are forecast at $4.81 billion for 2010. Direct payment rates are fixed in legislation and are not affected by the level of program crop prices. However, the 4-percent decline in direct payments forecast in 2010 relative to the 5-year average is due to producers receiving revenue insurance payments fromthe ACRE program  expected to be $432 million in 2010. Authorized under the Food, Conservation, and Energy Act of 2008, ACRE provides revenue insurance to producers in exchange for a 20 percent reduction in their annual direct payment allotments beginning with the 2009 crop year. “Countercyclical payments are forecast to decrease by 79 percent from $1.17 billion in 2009 to $243 million in 2010. Strong cotton prices are responsible for this projected decrease. Only upland cotton and peanuts are projected to receive countercyclical payments in 2010. “Marketing loan benefits—including loan deficiency payments, marketing loan gains, and certificate exchange gains—are projected at $163 million in 2010, down 97 percent from 2009 levels.” ERS noted that, “Conservation programs include all conservation programs operated by the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS) that provide direct payments to producers. Estimated conservation payments of $3.1 billion in 2010 reflect programs being brought up toward funding levels authorized by current legislation. “Ad hoc and emergency disaster program payments are forecast to be $2.3 billion in 2010, an increase of 256 percent over the $648 million paid out in 2009. The 2008 Farm Act created a permanent fund for disaster assistance, the Agricultural Disaster Relief Trust Fund. Supplemental Revenue Assistance Payments (SURE) from this fund and from the 2009 Recovery Act are expected to amount to $1.5 billion in 2010. All other disaster programs—including primarily the Emergency Conservation Program, Livestock Forage Program, Livestock Indemnity Program, and Noninsured Assistance Program—are functioning at existing statutory authority and appropriation levels.” A related graph from yesterday’s update depicting government payments from 2000-2010f, can be viewed here. The second USDA report cited yesterday by Sec. Vilsack was the, “Outlook for U.S. Agricultural Trade.” This report stated that, “Fiscal 2011 agricultural exports are forecast at $113 billion, up $5.5 billion from the revised 2010 forecast.” William Neuman reported in today’s New York Times that, “Even as the broader economy falters amid signs of a weakening recovery, the nation’s agriculture sector is going strong, bolstered in part by a surge in exports, according to federal estimates of farm trade and income released on Tuesday [see related graph]. “The estimates confirm what economists have been saying for months: agriculture, which was generally not hit as hard by the recession as many other segments of the economy, remains a small bright spot going forward.” The Times article added that, “Joseph Glauber, the agriculture department’s chief economist, said that a strong rebound in livestock and dairy prices had been a major factor in the farm recovery. “Dairy producers were hurt badly in the recession by high costs and low prices, which have recently begun to recover. Cattle and hog producers also struggled with low prices, caused by overproduction. But cattle and hog producers have managed to cut the size of their herds, pushing prices back up at the same time that international demand recovers, Mr. Glauber said.” Also yesterday, USDA’s National Agricultural Statistics Service released its monthly Agricultural Prices report, which stated in part that, “The corn price, at $3.65 per bushel, is up 16 cents from last month and 32 cents above August 2009 [related graph], The soybean price, at $10.10 per bushel, increased 31 cents from July but is 70 cents below August 2009 [related graph], the August all wheat price, at $5.56 per bushel, is up $1.06 from July and 71 cents above August 2009[related graph]; and, “The August all milk price of $16.60 per cwt is up 60 cents from last month and up $4.50 from August 2009 [related graph].” In other news, the Food and Agriculture Organization of the UN indicated in a news release today that, “Surging wheat prices drove international food prices up five percent last month in the biggest month-on-month increase since November 2009, FAO announced. “The FAO Food Price Index (FFPI) averaged 176 points in August, up nearly nine points from July, FAO said in its latest update on the global cereals supply and demand situation. The increase – five percent – brought the Index up to its highest level since September 2008, but still 38 percent down from its peak in June 2008.” And National Public Radio aired a news item on yesterday’s Morning Edition program titled, “Russian Wheat Crisis Boosts U.S. Growers,” which noted that, “Russia’s drought and massive wildfires have sent wheat prices through the roof. Fortunately, most U.S. wheat farmers have had a stellar harvest and are likely to help meet global demand. That’s especially the case in Colorado, which exports 80 percent of the wheat it produces.”   Climate Issues Reuters writer Timothy Gardner reported yesterday that, “Senate Majority Leader Harry Reid said he hoped to pick up Republican votes for a pared-down energy bill after the midterm congressional elections. “‘Maybe after the elections we can get some more Republicans to help us on these issues,’ Reid, a Democrat, told reporters in a teleconference on Tuesday. “But passing any major legislation this year will be an uphill struggle. With Republicans eyeing gains in November 2 elections, Democrats may face fierce campaign opposition on all major initiatives.” The article stated that, “There was little chance cap-and-trade would make it back into the bill, however. ‘It doesn’t appear so at this stage,’ Reid said.”   Biofuels Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Sen. Charles Grassley, R-Iowa, told reporters in a conference call Tuesday he doesn’t think Congress would appease environmental groups by holding more hearings on an expected rule from the Environmental Protection Agency that would allow E-15 blends of ethanol to be sold. Grassley agreed such hearings would only be a delaying tactic, but added that once a rule is released that there will likely be court challenges trying to delay implementation as well. “Grassley said he has recently met with EPA Administrator Lisa Jackson and staff from the U.S. Department of Energy and was told E-15 would be available by January.”   Food Safety Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “Sen. Charles Grassley says consumers could do what the government hasn’t – put egg producer Jack DeCoster out of business. “The Food and Drug Administration probably can’t shut down DeCoster short of finding criminal activity, but ‘the marketplace is making the determination if the law doesn’t,’ Grassley said.” Meanwhile, P.J. Huffstutter reported today at the Los Angeles Times Online that, “Since they were old enough to drive the family skip loader and shovel chicken droppings, the Armstrong brothers followed a state-sanctioned quality-assurance program designed to curtail salmonella in eggs. So have dozens more California egg farmers, who helped develop the guidelines alongside federal and state officials following a salmonella outbreak 15 years ago that sickened thousands of people. “The program, which includes vaccinating hens and testing barns regularly for bacteria, has essentially wiped out salmonella on California farms, industry officials say. Yet only nine other states have enacted similar government-sponsored efforts. “One reason, the Armstrongs and other California farmers contend, is cost. Injecting chickens and swabbing cages takes money — not a fortune, but enough to send egg distributors searching for lower-cost sources.” And the editorial board at the Los Angles Times opined today that, “A bill to give regulators more authority probably would have died quietly in the Senate if not for the crisis, which has focused public attention on food security lapses. The Food Safety Modernization Act, already approved by the House, would give regulators the power to order mandatory recalls of tainted foods and suspend the registration of food facilities. Crossing the 60-vote threshold needed to overcome a Senate filibuster on this bill still won’t be easy considering the extraordinary power of Big Agriculture, but the failure of the current system shows how badly reform is needed.” The opinion item added that, “Meanwhile, a simple and inexpensive way of preventing salmonella exposure is being neglected: vaccines for chickens. U.S. regulators examined such vaccines before the current outbreak but decided not to mandate them, apparently based on outdated studies, according to a recent report in the New York Times. Yet vaccination in Britain has all but wiped out salmonella in eggs there, and California vaccination guidelines have done the same in the Golden State. The FDA should reconsider the evidence. “Industrialized agriculture has profoundly changed the American diet and landscape, greatly reducing the cost of food but exacting a steep price in other areas. One of them is public health, which is under threat not only from farm-based bacteria such as E. coli and salmonella but also from industrial pesticides, synthetic hormones and the overuse of antibiotics on grain-fed livestock. With all that to cope with, fighting salmonella should be comparatively easy. All it takes is a little courage on the part of public officials to resist the farm lobby.”   August 31 Food Safety; Animal Agriculture; Crop Insurance; Climate Issues; Ag Economy; and Biofuels Posted By Keith Good On August 31, 2010  Food Safety Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “The Food and Drug Administration says it found numerous sanitation and biosecurity lapses, including live mice, in the Iowa hen houses that have been linked to a salmonella outbreak and a nationwide egg recall. “Mice are one of the main sources of salmonella bacteria on egg farms. The farms are required by industry standards and now government regulations to make sure that mice and other rodents can’t get in hen houses and infect the birds with salmonella. “However, in reports released today [click here, and here] investigators said they found mice in four farms operated by Galt-based Wright County Egg. The investigators also said they saw rodent burrows, structural damage to houses, gaps around doors, wild birds flying around, and ‘live and dead flies too numerous to count.’” Mr. Brasher noted that, “FDA officials said they are working with the farms to correct the problems but did not say what other actions they may take, although their options include criminal prosecutions. Michael Taylor, FDA’s deputy commissioner for foods, said the agency would start inspecting other farms around the country in September. The agency has not inspected eggs except in the case of outbreaks because it had no regulations for egg farms until July 9. “Hongwei Xin, an expert in poultry housing at Iowa State University, said he’s visited 50 to 70 egg farms in Iowa, including ones operated by major producers Sparboe Farms and Rose Acre Farms, and has never seen the combination of conditions described in the FDA reports and has never observed mice or wild birds in hen houses. ‘This is not very typical at all,’ he said.” Lyndsey Layton reported in today’s Washington Post that, “Michael R. Taylor, deputy FDA commissioner for foods, said the agency will begin inspecting 600 egg-production facilities over the next 15 months to make sure they are complying with new federal rules. “The FDA had never inspected Wright County Egg or Hillandale Farms, according to [Jeff Farrar, FDA associate commissioner for food protection]. “‘Obviously, something was going wrong here,’ said Erik Olson, deputy director at the Pew Health Group, referring to the conditions at the farms found by federal inspectors. ‘The question is whether we can be assured this is not the case at any of these other [egg] laying houses. I don’t think FDA is in a position to answer and it just highlights how badly we need an inspection mandate in federal law. Until you have a cop on the beat checking if you’ve got compliance, things can go awry.’” William Neuman reported in today’s New York Times that, “Inspection reports released by the Food and Drug Administration on Monday described — often in nose-pinching detail — possible ways that salmonella could have been spread undetected through the vast complexes of two companies. “The inspections, conducted over the last three weeks, were the first to check compliance by large egg-producing companies with new federal egg safety rules that were written well before the current outbreak, but went into effect only last month.” The article added that, “‘That is not good management, bottom line,’ said Kenneth E. Anderson, a professor of poultry science at North Carolina State University. ‘I am surprised that an operation was being operated in that manner in this day and age.’” “The recall, which began Aug. 13, involves more than half a billion eggs from the Iowa operations of two leading egg producers, Wright County Egg and Hillandale Farms. About 1,500 reported cases of Salmonella enteritidis have been linked to tainted eggs since the spring — the largest known outbreak associated with that strain of salmonella,” the Times article said. Meanwhile, Rod Smith reported yesterday at Feedstuffs Online that, “As the egg recall related to salmonella-contaminated eggs from two farms spread over the Aug. 21-22 weekend, so did allegations that eggs from big, cage-housing operations are prone to the bacteria. “Nothing is further from the truth, according to Feedstuffs sources. Salmonella can contaminate any animal- or plant-based food from any kind or size of farm operation, and the last major incident in which eggs and salmonella were linked was two years ago in eggs from a cage-free, organic production system, sources noted.” Mr. Smith indicated that, “However, scientists and veterinarians, in a paper released to Feedstuffs, said there are advantages and disadvantages to all hen housing types and suggested several benefits to modern cage housing, including: “* Hens housed in cage systems are protected from litter- and soil-borne parasites and, thus, have less disease and require less medication; “* Eggs from hens housed in cage systems have lower shell bacteria levels than eggs from non-cage systems, allowing for cleaner and safer eggs, and “* Egg production using cage systems represents a stable supply in which eggs are dramatically less expensive than eggs from other systems. “U.S. Department of Agriculture researchers published a report last month from research that compared important parameters of eggs produced in several housing types — including cage, cage free and free range — and that found no one egg was the best or worst.”   Animal Agriculture An update posted last week at Feedstuffs Online stated that, “Ohio Agriculture Department Director Robert Boggs this week said he considers the agreement brokered by Ohio agricultural interests and The Humane Society of the United States through Ohio Gov. Ted Strickland as ‘non-binding,’ and the Ohio Livestock Care Standards Board may not, therefore, follow the deal, which will be considered side-by-side with other ideas for the care of farm animals. He said the board, in some cases, will go beyond the deal to prevent all non-ambulatory animals from being harvested for food, not just cattle, but at the same time, it may not adopt the deal’s language relating to animal confinement.” In other news, Monica Eng reported today at the Los Angeles Times Online that, “A giant slaughterhouse in the Illinois river town of East Moline is creating a big stink — and it hasn’t even been built yet. “Supporters of the proposed facility, which would process thousands of hogs a day, say it would bring jobs and economic revitalization to the Iowa border community. Mayor John Thodos says he thinks it will create 2,500 jobs in an area where unemployment has doubled in five years. “The controversy surrounding the project reflects an intensifying national debate over how we should house, raise, slaughter and process the livestock we consume.” The article noted that, “Opponents say the Triumph Foods project would mean environmental damage, bad odors and lower property values. The plant would be close to the Rock River and wetlands, they note. ‘It’s a huge plant being built on a wetland and a flood plain that could end up flooding nearby homes,’ said Jerry Neff, chairman of the local Sierra Club.” And the USDA’s Economic Research Service (ERS) released a report yesterday titled, “Japan’s Beef Market.” An ERS summary of the report stated that, “This report provides a broad overview of the beef market in Japan, including consumer’s preferences, domestic production practices, domestic and trade policies, and market outlook.” Meanwhile, a news release yesterday from Sen. Tom Harkin (D-Iowa) state that, “Senator Tom Harkin (D-IA) today joined a bipartisan group of 30 senators in writing to the Russian government expressing their concern regarding Russia’s failure to fully honor its recent commitment to allow U.S. poultry products back into Russia. The bipartisan group of senators who sent the letter noted that President Obama and President Medvedev reportedly came to an agreement on June 24 of this year to re-open the Russian market to U.S. poultry. However, since that agreement was reached, Russia has attempted to impose further restrictions on U.S. poultry products rather than move forward to implement the agreement the two presidents reached in June. The senators urged the Russian government to follow through on the commitment made by Russian President Medvedev and immediately allow full importation of U.S. poultry products into Russia. “‘Russia is a valuable trading partner to the poultry producers in our states. These actions are a setback to our countries’ trade relations,’ wrote the senators. ‘We ask you to honor the commitment our two presidents made less than two months ago and implement the agreement without further delay.’”   Crop Insurance A news release yesterday from USDA stated that, “The U. S. Department of Agriculture Risk Management Agency (RMA) said today it will offer an organic price election for four crops during the 2011 production year. In conjunction with that decision, RMA today released three reports that provide the framework for improvements to crop insurance programs that are available to producers of certified organic crops. “‘USDA is working to provide producers of organic crops with improved opportunities and resources,’ said agriculture Secretary Tom Vilsack. ‘We are taking aggressive action to improve delivery of our programs, with impressive results for our customers. The release of these reports and RMA’s announcement of the price election mark another step in that continuing effort.’ “RMA is preparing to issue organic price elections for the 2011 crop year for cotton, corn and soybeans, as well as processing tomatoes.” Meanwhile, a recent Congressional Research Report titled, “Renegotiation of the Standard Reinsurance Agreement (SRA) for Federal Crop Insurance” (by Dennis A. Shields, August 12, 2010), provided an overview of the recently concluded SRA negotiations between USDA and private companies.   Climate Issues Ben Geman reported yesterday at The Hill’s Energy Blog that, “Environmental Protection Agency (EPA) Administrator Lisa Jackson said over the weekend that upcoming climate regulations are modest in scope, comments that come amid Capitol Hill efforts to scuttle the rules. “EPA is set to begin regulating greenhouse gases from power plants and other large emissions sources in 2011, but vows to phase in the requirements slowly and shield small businesses. “‘They [the rules] will be modest, each and every one, because business needs time to understand the regulations that are coming at them. There won’t be any huge shocks to the system,’ Jackson told National Public Radio in an interview broadcast Sunday.” Mr. Geman pointed out that, “Some Capitol Hill lawmakers hope to derail EPA’s ability to regulate greenhouse gas emissions; regulations also face court challenges. Critics of the regulations allege they will harm the economy, while defenders call the fears overblown and say the rules are needed to help slow global warming. “Sen. Jay Rockefeller (D-W.Va.), an ally of his state’s coal industry, has said that Majority Leader Harry Reid (D-Nev.) has promised him a vote this year on his bill to block EPA rules governing stationary emissions sources for two years. Opponents have also eyed appropriations bills for riders to scuttle EPA’s authority. “Jackson also said she remains hopeful Congress will return to climate legislation.” Neil MacFarquhar reported in today’s New York Times that, “The United Nations needs to revise the way it manages its assessments of climate change, with the scientists involved more open to alternative views, more transparent about possible conflicts of interest and more careful to avoid making policy prescriptions, an independent review panel said Monday. “The review panel also recommended that the senior officials involved in producing the periodic assessments serve in their voluntary positions for only one report — a statement interpreted to suggest that the current chairman of the climate panel, Rajendra K. Pachauri, step down.” Jeffrey Ball reported in today’s Wall Street Journal that, “In 2002, when Rajendra Pachauri was elected head of the world’s top climate-science body, Al Gore and other environmentalists condemned him as a favorite of the fossil-fuel industry. “Today, the 70-year-old chairman of the Intergovernmental Panel on Climate Change is under fire for the opposite offense: being a green zealot. “On Monday, the InterAcademy Council, a consortium of national scientific academies, released its report on its investigation into the IPCC under Mr. Pachauri’s leadership. Though it said the organization is ‘successful overall,’ it suggested a number of changes to the IPCC’s managerial structure and to its vetting process designed to reduce errors and bias creeping into the IPCC’s widely watched reports.”   Agricultural Economy Gregory Meyer reported yesterday at the Financial Times Online that, “The price of corn rose on Monday as parched US fields and demand for exports put a premium on grain for delivery in the near future. “The government has forecast a record 13.4bn bushel US corn crop this year after farmers planted seeds early and then enjoyed a favourable mix of sun and rain. But a recent period of pervasive heat has raised fears of a disappointing harvest for the world’s top corn grower. “‘In the past couple of weeks we have seen a resurgence in corn prices that is based on problems in the crop. Dryness has taken over in many areas here in the US,’ said Rich Nelson, director of research at brokers Allendale in McHenry, Illinois. ‘This is going to take a little bit of edge off of corn yields.’” And Heba Saleh reported yesterday at the Financial Times Online that, “In Egypt, if a passer-by spots a piece of bread in the street, the morsel is usually not ignored but picked up and placed reverently on a ledge away from passing feet. Bread is ’aish – life itself. “So Russia’s ban on wheat exports has significantly increased economic and political pressures on an Egyptian government that spends heavily on bread subsidises for its 80m people. “Egypt is the world’s largest importer of the grain and the provision of bread, sold for less than 1 US cent a loaf, is central to the government’s strategy for maintaining social peace. “To that end, Cairo last year obtained about 60 per cent of its wheat imports from Russia.” The FT article noted that, “Despite economic growth in recent years, food subsidies remain a sensitive political issue. The price of bread in particular is deemed to be a red line, which successive governments have been reluctant to cross, fearing social upheaval.” “A recent government study found that 90 per cent of families in the country consume subsidised bread and 60 per cent of them rely on it as a main item in their diet. Some 40 per cent of the population is classified as poor. “As the cost of wheat on the international market jumped, Egypt has turned to other sources for its imports, such as France and the US. “Ministers have also hastened to reassure the country that there will be no increases in the price of the subsidised loaves and that the government will absorb the estimated $400m-$700m expected to be added to an already hefty support bill.”   Biofuels Wendy Reuer reported on Saturday at the Inforum Online (North Dakota) that, “Ethanol producers are running out of time when it comes to tax credits given to the fuel producers who use a blend of ethanol and gas. “At the largest ethanol producing plant in North Dakota, Tharaldson Ethanol in Casselton, officials are hoping lawmakers will be able to come through for them and extend the credit past its expiration date at the end of this year.” The article explained that, “Rep. Earl Pomeroy, D-N.D., stopped at the Tharaldson Ethanol plant Friday to see the state’s newest plant and its 61 employees. “In March, Pomeroy authored a bill that would have extended the credit through 2015. Pomeroy said he knew the bill would be a tough sell but he hopes to at least come through with an ethanol credit extension as large as possible for as long as possible, even if only for another year. “‘It’s critically important that be extended,’ Pomeroy said. ‘It’s just barely been extended in the nick of time in the past.’” The article added that, “Pomeroy said he is fighting a wane in enthusiasm for ethanol in both the government and the public. “‘We’re trying to get past a regulation where you put 90 percent Saudi Arabian gas in your car and only 10 percent from home-grown ethanol gas,’ Pomeroy said.” “Pomeroy said Friday he is hoping to push an extension on the ethanol credit through the U.S. Legislature before the end of the year. He said once an extension can be made then he will also push for programs that will allow ethanol producers to break into the fuel markets further and allow more competition with straight gasoline.” Meanwhile, Reuters writer Tom Doggett reported yesterday that, “U.S. drivers are enjoying the lowest gasoline prices in six months heading into the last vacation weekend of the summer, with the pump price falling below $2.70 a gallon for the first time since late February, the Energy Department said on Monday. “The national price for regular unleaded gasoline declined 2.2 cents over the last week to $2.68 a gallon, up 7 cents from a year ago, but still the lowest since Feb. 22, the department’s Energy Information Administration said in its weekly survey of service stations.”   August 30 Farm Bill; Food Safety; GIPSA Issue; Ag Economy; and Climate Issues Farm Bill On Friday, USDA issued a statement indicating that, “U.S. Department of Agriculture Press Secretary Justin DeJong today released the following statement in response to the recent Bloomberg/Business Week story titled ‘Broadband Trumps Farmer Payments in Rural Aid’: “‘The Obama Administration cares deeply about our farmers and ranchers, and USDA continues to work hard and provide them with the critical support they need to provide this nation with the food, feed, fiber and fuel we rely on. Since becoming Secretary of this department, Secretary Vilsack has advocated fiercely about the need to keep American agriculture strong through farm safety net programs, as well as through efforts to spur economic opportunity in rural America. In recent interviews with a Bloomberg reporter, at NO time did Secretary Vilsack call for $5 billion cuts to farm programs. In fact, he pointed out how USDA already saved $4 billion that was put toward deficit reduction by renegotiating our agreement with crop insurance companies. He also discussed using existing resources more effectively to spur growth and opportunity. As Secretary Vilsack testified before both Senate and House committees regarding the 2012 Farm Bill and he continues to discuss with people throughout the country, rural America continues to face inordinate challenges. As the transcript makes clear, he continues making the case that it is imperative that we keep the farm safety net strong so that the American people can continue to have access to safe, affordable and abundant food.’ “Full transcripts from interviews that took place Thursday, August 5, 2010, and on Tuesday, August 17, 2010  are available.” Meanwhile, the Washington Insider section of DTN reported on Friday (link requires subscription) that, “There is a line of thinking about agricultural policy that says modern policies are changed fundamentally when producers decide they are no longer worth the trouble — as in the 1980s and 1990s. Now, once again, there is a lot of concern about how well programs are working in this era of higher prices and much greater market volatility, it may be time for fundamental changes. “For example, in what would be a major shift in policy, the Iowa Farm Bureau is considering a proposal for the 2012 federal farm bill that would end direct payments to farmers in favor of insuring farmers against revenue fluctuations.” Friday’s update added that, “This development is news at least partly because of Iowa’s role in agricultural safety net programs — the state received just under $500 million in 2008, about 10 percent of the U.S. total and the largest amount of any state. ‘We are looking at alternatives to the direct payments,’ Iowa Farm Bureau President Craig Lang told the press last week following his appearance on an Iowa State Fair panel with Secretary of Agriculture Tom Vilsack. “‘Direct payments are harder and harder to defend, and we are interested in doing our part to help reduce the budget deficit,’ Lang said. If the delegates support the resolution, it would go to the American Farm Bureau Federation for consideration as a national policy position.” After additional analysis, the DTN article noted that, “The direct payments are controversial because they are based on historical production rather than current plantings, they favor certain crops, and they often go to the largest farmers. For these and other reasons, they’ve become a favorite target of critics and House Agriculture Committee Chairman Collin Peterson, D-Minn., told a hearing in May direct payments had become too difficult to defend and some change would be needed before the new farm bill could be passed by 2012.” The August 27 edition of The Kiplinger Agriculture Letter stated that, “If she’s reelected, Senate Ag Com. Chairman Blanche Lincoln (D-AR) promises to fight any cut in direct payments, and several farm state senators will join her. As with past farm bills, the House will likely pass its version before legislation emerges from the Senate, then hold sway on most of its safety net revisions.” In other news regarding Sen. Lincoln, the AP reported yesterday that, “Lincoln has cited as her biggest accomplishments in her first year as agriculture chairman her work on a portion of the financial overhaul bill regulating derivatives, disaster aid for farmers and child nutrition legislation approved by the Senate. “But two of those – the disaster aid package and the child nutrition bill – remain in limbo. Lincoln said she’s confident both will become reality and says her chairmanship represents the amount of work she’s put into representing her state. “‘You work hard to get into places where you know you can be beneficial,’ Lincoln said.” Food Safety Carolyn Lochhead reported in Friday’s San Francisco Chronicle that, “A recall of a half-billion eggs from two mega-farms in Iowa is stoking a fierce controversy over whether factory farming is inherently unsafe – and a battle in California over a 2008 voter initiative banning the standard industry practice of packing hens so tightly in battery cages that they cannot spread their wings. “Voters passed Proposition 2 overwhelmingly in 2008 after animal welfare activists released horrific undercover videos of strangled, deformed and mummified hens in battery cages. “It will take effect in 2015. Animal welfare activists are linking battery cages to the Iowa salmonella outbreak, saying they are not just cruel to animals but a threat to food safety.” The article noted that, “‘Proposition 2 requires cage-free treatment of laying hens, and the evidence is very clear that caging laying hens increases the risk of salmonella,’ said Paul Shapiro, head of the Humane Society of the United States’ Factory Farming Campaign. “But Arnie Riebli, a Petaluma chicken farmer and president of the Association of California Egg Farmers whose family runs Sunrise Farms, a million-hen operation, insisted cages are safer. “‘In a caged environment you are separating the birds from their feces,’ Riebli said. ‘In a cage-free environment you do not do that. You allow the birds to walk in it and you allow the birds to eat it. Believe me, all you’re doing is feeding them bacteria. Would you allow a small child to play in his excrement or eat his excrement?’” Friday’s Chronicle article pointed out that, “The bird battle is raging on three fronts: “– Animal rights activists and egg farmers, usually arch enemies, came together behind a law signed by Gov. Schwarzenegger last month that will ban all eggs coming from outside the state that fail to comply with the battery-cage ban. The new law could save the state’s egg farmers and spread Prop. 2 nationally. “California egg farmers no longer face the threat that cheaper battery-cage eggs from the Midwest will put them out of business. Other states that want to sell in California could be forced to pass their own cage bans. Some states already have passed varying types of bans. “– Farmers and animal activists are clashing over whether Prop. 2 permits any cage, specifically the larger ‘furnished’ hen cages common in Europe that provide perches, nesting boxes and scratch posts that allow hens to express natural behaviors. “– As the California ban promises to spread, it is escalating a national fight over whether factory farming itself is to blame for large outbreaks of food poisoning.” Philip Brasher and Tony Leys reported in yesterday’s Des Moines Register (“DeCosters in Iowa: A checkered legacy”) that, “Wright County seemed to have finally gotten the best of both worlds with the DeCoster family. The notoriety and the environmental problems the DeCosters brought were gone. The money and the jobs they provided were still here. “But now, the county and its most famous businessman are household names nationwide, linked to a massive recall of eggs and the biggest recorded outbreak of illnesses caused by the type of salmonella bacteria found in eggs.” Yesterday’s article noted that, “But Jack DeCoster became a polarizing figure in Iowa soon after arriving in Wright County from Maine in the late 1980s when he started building the huge farms, now common across Iowa, that house thousands of hogs and millions of hens.” “DeCoster piled up one environmental violation after another over his farms’ mishandling of hog and chicken manure in the 1990s until he was denounced by both then-Gov. Terry Branstad, a Republican ally of agribusiness, and the Iowa Farm Bureau Federation, the state’s leading farm organization. In 2000, the state classified DeCoster as a ‘habitual violator’ of environmental rules, which was supposed to ban him from expanding his farms or starting new ones for five years. As it turned out, DeCoster was able to expand his egg operation by using associates to get permits that state officials didn’t link to him. Branstad is running for his old office this year and is using the outbreak to remind voters of his old confrontation with DeCoster.” And the AP reported yesterday that, “Two New York State legislators want to require farmers in the state to vaccinate hens against salmonella, which sickened thousands of Americans and triggered the largest egg recall in U.S. history. “State Sen. Daniel Squadron and Assemblyman Brian Kavanagh announced their proposal Sunday in front of a Lower East Side supermarket in the wake of a nationwide recall of more than a half billion eggs. None of the recalled eggs came from New York.” GIPSA Issue Bloomberg writer Whitney McFerron reported on Friday that, “U.S. Agriculture Secretary Tom Vilsack took a livestock-industry probe to Colorado today, as part of an inquiry that may lead to new rules governing how Tyson Foods Inc., Cargill Inc. and other processors operate. “Vilsack and Attorney General Eric Holder met farmers, meatpackers and feedlot owners in Fort Collins in the fourth of five sessions centered around monopolies in agriculture. The meeting followed a Department of Agriculture proposal that would stop processors from selling livestock to each other and require them to justify their choice of one farmer supplier over another. “The USDA’s June proposal came after the number of cattle and hog farms shrank by 55 percent since 1980 and the top four packers saw their control of boxed beef output rise to 80 percent from 36 percent. Colorado was one of 17 states in a civil action in 2008 that sought to block JBS SA, the world’s largest beef producer, from taking over National Beef Packing Co., the fourth-largest U.S. processor. JBS ended the bid last year.” Reuters writer Bob Burgdorfer reported on Friday that, “There are fewer U.S. livestock producers now than 30 years ago, and Agriculture Secretary Tom Vilsack believes that may be because concentration in the meat industry has forced many to leave the business. “Vilsack and U.S. Attorney General Eric Holder on Friday jointly chaired a public hearing on such concentration, with the intent of slowing the decline in rural populations.” The article noted that, “While Friday’s hearing was designed to focus on concentration in the meat industry, many of the attendees used the forum to speak out for or against marketing rules proposed by USDA’s Grain Inspection and Packers and Stockyards Administration (GIPSA). “Large producers in attendance opposed the rules, claiming they would dismantle marketing agreements that reward them for producing the size and quality of cattle and hogs that meat packers want.” “Smaller producers want the rules, claiming they would make marketing agreements public and would give leverage to GIPSA to prosecute violators. “The comment period on the GIPSA rules ends on November 22.” DTN Ag Policy Editor Chris Clayton reported on Friday (link requires subscription) that, “Producers at Friday’s USDA-Department of Justice hearing who testified about the proposed USDA livestock competition rule will have their comments put into the record for the rule-making process. “Some groups leading up to the meeting had questioned whether comments made about the Grain Inspection, Packers and Stockyards Administration rule would be part of the public record for the public-comment period. Secretary of Agriculture Tom Vilsack made it clear that was the case.” Mr. Clayton indicated that, “The makeup of the panels Friday did not reflect some of the division in the cattle and hog industry over a livestock competition rule proposed by GIPSA. During public testimony, more criticism of the GIPSA rule was heard. Public officials stressed that there must be a balance on the role of government in the market. “‘I think what we heard, artfully said by virtually every panelist, is this is a delicate balance and what we’re going to do is make sure if there is a rebalance that we recalibrate, and if we recalibrate, that we do it in a way that doesn’t necessarily result in harming a market that we want to function,’ Vilsack said. ‘The Congress directed us to do this. The act has not been looked at in quite some time, and it’s fairly clear that the world has changed since the act was enacted.’ “Assistant Attorney General Christine Varney reiterated what she has said in each of the previous agricultural competition hearings, that there is no agenda to these meetings and the direction in agricultural competition. But Varney added, ‘There is something wrong with the system when the farmers can’t make a living.’” A news release Friday from the National Cattlemen’s Beef Association stated that, “Beef and pork producers rallied against USDA’s Grain Inspection, Packers and Stockyards Administration’s (GIPSA) proposed federal rule on the buying and selling of livestock at a public meeting held in Fort Collins, Colo., Aug. 27. The meeting on competition in the livestock industry was hosted by USDA and Department of Justice.” And a news release Friday from the National Farmers Union stated that, “‘A lot of attention has been drawn to this workshop based on the recent disputes on the Grain Inspection, Packers and Stockyards Administration (GIPSA) proposed rule,’ said National Farmers Union (NFU) President Roger Johnson. ‘NFU is pleased to have two members on the speaker panel representing U.S. family farmers and ranchers, who are in favor of the proposed rule. It is vital to have speakers from groups that represent the family farmer, not just the packer-producer organizations.’ “Chris Peterson, Iowa Farmers Union president, and Armando Valdez, Rocky Mountain Farmers Union member, both livestock producers, spoke at the workshop. Peterson and Valdez each highlighted the need for reform in the livestock industry, with an emphasis on the increasing consolidation and vertical integration in the livestock and poultry marketplace, resulting in a tougher environment for independent producers.” Meanwhile, an update posted on Friday at the National Hog Farmer Online reported that, “Rep. Jack Kingston (R-GA) has called for a sound economic analysis to judge both the need and the use for a proposed USDA Grain Inspection, Packers and Stockyards Administration (GIPSA) rule on the procurement of livestock. “‘In my view, it is unprecedented for a federal agency to propose such a wide-sweeping regulation and not conduct an economic analysis,’ Kingston says in a letter to U.S. Department of Agriculture Secretary Tom Vilsack. ‘I am concerned that despite Congress having appropriated $13 million in the current fiscal year for the USDA Office of the Chief Economist, GIPSA has seemingly ignored this resource to analyze the proposal.’” Agricultural Economy The New York Times editorial board opined on Saturday that, “Agricultural experts say they’re not worried about the recent jump in wheat prices, caused largely by the drought in Russia and the ban on Russian wheat exports. The Department of Agriculture is predicting that world wheat production will reach the same level this year — 645 million metric tons — that helped bring prices down from their astonishing $13.50 a bushel peak in February 2008. At present, prices for December wheat are about $6.95 a bushel, down over 50 cents from a month ago, but up nearly 55 percent since early June. “We don’t find the experts consoling. One reason prices have been less volatile is that big grain buyers, like cereal companies, have learned to hedge their buying. And to say that this episode of market volatility is not as bad as the one two years ago — which led to food riots in many parts of the world — is not encouraging. “We’re not supposed to attribute a couple of bad harvests, or the floods in Pakistan, to a changing climate. But this volatility in grain prices was not caused by farmers’ decisions or failures of government policy. It was caused by drought and flood. If this looks like a pattern — or simply a glimpse of things to come — it is worrying.” Climate Issues David A. Fahrenthold reported in today’s Washington Post that, “On Thursday, some of the country’s most respected environmental groups – in the midst of their biggest political fight in two decades – sent a group of activists to Milwaukee with a message. “We’re losing.” The Post article noted that, “A year ago, these groups seemed to be at the peak of their influence, needing only the Senate’s approval for a landmark climate-change bill. But they lost that fight, done in by the sluggish economy and opposition from business and fossil-fuel interests. “Now the groups are wondering how they can keep this loss from becoming a rout as their opponents press their advantage and try to undo the Obama administration’s climate efforts. At two events last week in Wisconsin, environmental groups seemed to be trying two strategies: exhibiting defiance and pleading for sympathy.” Mr. Fahrenthold indicated that, “Washington’s climate battle is still far from over. The Environmental Protection Agency is setting limits on some sources of greenhouse gases: first auto tailpipes, then power plants and factories next year. Now, industry groups and senators from coal-producing states are trying to prevent that. “The White House has said President Obama would veto such an effort, but that would be far easier if environmental groups could whip up public support for him. “There could also be fights over smaller pieces of environmentalists’ agenda: efforts to require more renewable-energy generation nationally and to defend state-level climate plans such as the one in California.” Today’s article stated that, “Before, green groups had wanted so much more than this – they wanted a ‘cap and trade’ bill that would set emissions limits nationwide. The House passed a bill like that, but – after industry groups said it would kill jobs and slow the economy – the Senate decided last month to not even take the issue up. “The bill’s chances, already bad, will get worse if Republicans gain seats, as is widely predicted, in the midterm elections. “‘If it’s not addressed in a lame-duck session of Congress, it will have been punted to the next generation,’ said David Wasserman of the Cook Political Report.”   August 27 Farm Bill;Food Safety; and the Ag Economy Farm Bill Bloomberg writer Alan Bjerga reported yesterday that, “Former Iowa Governor Tom Vilsack knows that Farm Belt protocol requires paying respect to the Butter Cow. During a visit to the Iowa State Fair on Aug. 17, he made the pilgrimage to the 600-pound bovine sculpture carved from pure creamery butter. Now that he is U.S. Agriculture secretary, Vilsack wants to take a chunk out of another sacred cow: $15.4 billion in farm subsidies. “Record federal deficits and changing priorities are spurring President Barack Obama’s administration to redirect who gets rural aid. The government is shifting payments to broadband providers, land-conservation efforts and nutrition programs, Bloomberg Businessweek reports in its Aug. 30 issue. “To many farmers, the changes seem designed to satisfy organic-food devotees, first lady Michelle Obama’s anti- obesity cause, weekend duck hunters, and small-town Internet users –everyone, that is, except traditional farmers. Kris Luoma, 55, a cattle rancher and crop- insurance salesman visiting the Iowa fair from Arcadia, Nebraska, blames the ignorance of Washington policy makers.” Yesterday’s article indicated that, “Vilsack’s USDA in July trimmed $6 billion in payments to crop insurers such as San Francisco-based Wells Fargo & Co. for the next decade. Now he’s looking at cuts of as much as $5 billion a year from an automatic payments program that compensates farmers even if they grow nothing. Vilsack is the chief messenger of this makeover, a turnabout for farmers who have known him as one of their staunchest advocates.” Mr. Bjerga pointed out that, “Agriculture payments have withstood challenges before. The last real attempt to cut subsidies, in 1996, led to a backlash — and bailout checks for farmers after export declines and heat waves persuaded lawmakers to abandon cost-cutting. This time, the $1.3 trillion annual federal deficit will make changes stick, said House Agriculture Committee Chairman Collin Peterson, the Minnesota Democrat whose district’s $243 million in 2009 subsidy payments ranked it No. 6 out of 435.” More specifically with respect to executive branch farm policy perspective, the Bloomberg article stated that, “With more farmers relying on small-town jobs to make ends meet, and even then with incomes trailing those in urban areas by 29 percent, rural economies need to diversify, Vilsack said. Done right, government programs will benefit everyone, he added, including crop growers and ranchers who need thriving communities nearby.” Mr. Bjerga explained that, “While as much as $5 billion in automatic payments to farmers would go to the administration’s new rural initiatives instead, Vilsack said he’s hopeful that deficit-cutting demands will be satisfied by the reductions in crop insurance. “Still, some growers and lawmakers worry that the White House will force further cuts in automatic payments, which farmers use to finance bank loans. And they’re concerned about unintended consequences from dramatic shifts in land use.” And the article concluded by noting that, “Frank Lucas, an Oklahoma Republican who will take over the chairmanship of Peterson’s Agriculture Committee if Republicans in November gain the 39 seats they need to control the House, calls Vilsack a ‘nice guy’ drowning in bad ideas. He listens too much to environmentalists and ‘foodies’ who care more about how crops are produced than whether farmers can make a living, Lucas said. Vilsack disagreed. “‘I might have a slightly different emphasis,’ he said as he ended his fair tour near an exhibit on expanding broadband. ‘But you can’t say I’m not trying.’” Recall that Rep. Lucas and Sec. Vilsack had a firm exchange regarding farm policy priorities back on April 21 at a House Ag Committee hearing in Washington, D.C. According to an official transcript (starting at page 37) of that hearing, Rep. Lucas noted that, “If we are in effect, I guess, saying that the production agriculture component of the farm bill is not the relevant part that it used to be, then I almost have to ask the question I think that would be asked in my town meetings: With the focus that you have provided both budget and conceptual-wise, are you talking about turning rural America into a bedroom community? “Secretary VILSACK. Not at all, Congressman. “Mr. LUCAS. For people—— “Secretary VILSACK. First of all—— “Mr. LUCAS.—for people to go to work every and drive back? “Secretary VILSACK. No, no. This is a great question and I appreciate you asking it…” To listen to the entire spirited exchange on this issue between Ranking Member Lucas and Sec. Vilsack from that hearing, just click here (MP3-9:08). Ron Smith, writing yesterday at the Southwest Farm Press Online, reported that, “USDA Under Secretary for Farm and Foreign Ag Services Jim Miller said the USDA is focused on building a new framework for rural America and enhancing opportunities for U.S. farms and ranches. “‘It is a challenging time for all of agriculture,’ Miller said as keynote speaker, via telephone hookup, for the American Cotton Producers/Cotton Foundation Summer Meeting recently in Lubbock. “‘But we’ve always faced challenging times,’ he said, ‘and we will work through them.’” The article added that, “He said a key goal for USDA is to insure ‘the next generation has more opportunities in agriculture and more options.’ “He said achieving that goal depends on five key factors, including: “‘- Commitment to new ways to strengthen farm income with agricultural research [and], “‘- Expansion and diversification in rural communities to create opportunities for small businesses, even those not directly involved in agriculture.” The article indicated that, “He said the Brazil WTO case remains a challenge to cotton and other industries. A recent agreement that halts Brazil’s counter measures for the time being is ‘not a permanent solution,’ Miller said.” Meanwhile, a news release yesterday from Sen. Kirsten Gillibrand (D-NY) stated that, “As Congress begins debate over the next Farm Bill, U.S. Senator Kirsten Gillibrand, the first New Yorker to serve on the Senate Agriculture Committee in nearly 40 years, today met with Lower Hudson Valley farmers to begin her statewide listening sessions to discuss new efforts to help New York farmers and farming communities. Senator Gillibrand plans to focus on key areas of the Farm Bill that will have major influence on New York, including access to financing, new market opportunities, assistance for specialty crops, and investments in renewable energy.” *** Following The Washington Post (Wednesday) and The New York Times (Thursday), The Wall Street Journal editorial board offered an opinion today on the farm disaster aid proposal that has been highlighted by Sen. Ag Committee Chairman Blanche Lincoln (D-Ark.). The Journal noted today that, “Arkansas Senator Blanche Lincoln is down 20 points in the polls, but the Democrat is apparently going to go down swinging—with $1.5 billion of your money. She is the spending problem, in profile. “Last year heavy rain damaged cotton and rice crops across the South. The 2008 farm bill, passed by a Democratic Congress, created the Supplemental Revenue Assistance Program (SURE) to aid farmers hit by such weather-related disasters. The admirable intent was to stop farm-state Senators from looting the Treasury after every early frost or the like. To qualify for SURE funds, farmers are now required to buy crop insurance (federally subsidized to the tune of about $6 billion a year) and to have lost more than 30% of their crop value. “Mrs. Lincoln wants to pull an end run around this law and make Arkansas farmers eligible for retroactive taxpayer payments. The payments would be made even if the recipients didn’t buy crop insurance and even if their damages were as little as 5%. Most small businesses in America suffered far more than a 5% fall in revenues during the recession, but few are getting six-figure handouts from Uncle Sam. Rice and cotton prices have recovered nicely this year in any event.” After additional analysis, the Journal opinion item concluded by saying, “If Mrs. Lincoln gets her $1.5 billion, the White House will have eviscerated the one laudable farm subsidy reform in years. Congress will revert to raiding the Treasury every year to enrich its wealthiest constituents. All of this in a last ditch, and probably futile, effort to help Mrs. Lincoln retain her Senate seat.” Food Safety Lyndsey Layton reported in today’s Washington Post that, “Laboratory tests have confirmed that two Iowa egg companies are contaminated with the same strain of salmonella blamed for a national outbreak of illness, which continues to claim victims and has sickened at least 1,500 people, federal officials said Thursday. “The confirmation backs up suspicions by the Food and Drug Administration that tainted eggs from the two Iowa producers have caused the biggest case of Salmonella enteritidis disease that federal officials have seen since they began tracking the illness in the 1970s. “The FDA, which has sent 20 investigators to the two farms – Wright County Egg and Hillandale Farms – said Thursday that it had detected the particular strain of salmonella in two barns at Wright County Egg and in feed that the company made and gave to its own chickens. The agency also found that strain in feed that Wright supplied to Hillandale.” Alison Young of USA Today reported yesterday that, “State and federal health agencies identified an Iowa egg company as a likely source of illnesses at least two weeks before the firm launched a massive egg recall Aug. 13 and the public got its first hint of a growing national salmonella outbreak, health officials said in interviews with USA Today. “In late July, the Centers for Disease Control and Prevention even considered reminding the public generally about the dangers of eating undercooked eggs, said Ian Williams, chief of the agency’s outbreak response branch. But the CDC decided it would be more effective to wait until the Food and Drug Administration completed its investigation of the firm, Wright County Egg of Galt, Ia.” Meredith Shiner reported yesterday at Politico that, “A House Energy and Commerce subcommittee is set to hold a hearing Sept. 14 to investigate the owners of two Iowa farms whose eggs have been linked to a massive salmonella outbreak affecting thousands of Americans. “Committee Chairman Henry Waxman (D-Calif.) and Oversight and Investigations Subcommittee Chairman Bart Stupak (D-Mich.) announced Thursday that the panel will convene upon Congress’s return and that they have asked Austin ‘Jack’ DeCoster, the owner of Wright County Egg, and Orland Bethel, the owner of Hillandale Farms, to testify. More than a half billion eggs have been recalled from the two Iowa farms since a link between their product and sick Americans was found.” Meanwhile, Monica Davey reported in today’s New York Times that, “The scrambled eggs, as always, were hissing in a skillet on a recent morning at a coffee shop here [Clarion, Iowa], in an egg-producing county that has suddenly found itself at the center of the nation’s egg recall over salmonella. But the conversation at the weekly gathering of local ladies turned uncharacteristically tense. “One woman suggested that the company at the focus of the recall of hundreds of millions of eggs, with huge facilities here, had done more harm than good locally. A second resident jumped in to defend the operation and the DeCoster family, which runs it, sternly announcing that any troubles ought not be discussed aloud.” The Times noted that, “The intense scrutiny that the DeCosters and another producer, Hillandale Farms, have come under has reopened a fault line in central Iowa, with its endless fields of corn and soybeans and row after row of identical low-slung buildings full of egg-laying hens: on one side, those who detest enormous industrial-size farms and say the risk of a widespread salmonella outbreak is one more reason to fear them; on the other, those who see such farming as the economic savior of these wide open spaces.” And The New York Times editorial board indicated today that, “The recent problems with salmonella-contaminated eggs is a reminder of how much more needs to be done to keep dangerous germs out of the American food supply. The Food and Drug Administration should urge egg producers to vaccinate their hens promptly. The Senate must pass long-stalled legislation that could strengthen the hand of regulators to prevent and control outbreaks of all food-related illnesses. “An article by William Neuman in The Times this week highlighted how vaccinating British hens virtually eliminated the health threat from salmonella-infected eggs. Some 1,500 Americans have been sickened in recent weeks and the F.D.A. announced Thursday that investigators had found the salmonella bacteria in barns and chicken feed at the two farms that are the source of the tainted eggs.” Today’s opinion piece added that, “Meanwhile, a bipartisan group of six prominent senators has released a ‘manager’s amendment’ to a food safety bill that could finally bring the measure to a vote. The House passed its version last year. The bill would give the F.D.A. new powers to enforce disease-prevention plans on food facilities, trace the source of contaminated foods quickly, and order mandatory recalls. “Still it is worrisome that, in an effort to reduce the budgetary cost, the manager’s amendment would require inspections of ‘high risk’ facilities — those that handle certain foods, have a past record of problems or less vigilant prevention efforts — only once every three years, after a five-year transition period. The House bill would require inspections every 6 to 12 months. “The Senate still needs to pass this legislation quickly. Then House-Senate conferees will need to look more closely at whether more frequent inspections are warranted and whether sufficient money can be found to pay for them. They should err on the side of consumer safety.” Ag Economy Bloomberg writer Jeff Wilson reported yesterday that, “Farmland values in one of the most productive regions in the Midwest rose 6 percent in the second quarter as higher grain prices made real estate more attractive, the Federal Reserve Bank of Chicago said. “Increasing demand for wheat, corn and soybeans boosted earnings, supporting higher land prices in the five-state Seventh Federal Reserve District for the third consecutive quarter, according to the report. Gains were reported in Illinois, Indiana and Iowa. Wisconsin had a decline while data from Michigan were inconclusive. “Iowa farmland values rose 8 percent, Illinois had a 5 percent jump and Indiana 4 percent. The drop in Wisconsin reflected reduced dairy profitability, according to the report.” August 26 Food Safety; GIPSA Issue; Disaster Aid; Ag Economy; and Sec. Vilsack Food Safety Andrew Martin reported in yesterday’s New York Times that, “Federal investigators have descended on Iowa to try to figure out the cause of a salmonella outbreak that may have sickened thousands of people and led to the recall of a half billion eggs. “Because most of the tainted eggs have either been used or removed from store shelves, consumers at this point appear to have little to fear from eating eggs as long as they are cooked properly. And new safety rules for egg production, which came too late to prevent this episode, might help stave off a similar outbreak in the future. “But some consumer advocates say the huge egg recall highlights a broader and continuing problem at the heart of the nation’s largest food recalls: a highly complicated and often dysfunctional food safety system.” Mr. Martin explained that, “The responsibility for food safety remains split primarily between the Agriculture Department and the Food and Drug Administration. But the way the responsibilities and resources are divided up can seem so illogical that some of the bureaucrats themselves have called for change. “There are few places where that is more evident than in the regulation of eggs. The F.D.A. oversees the safety of eggs still in their shells, but the Agriculture Department regulates liquid eggs that are used in industrial food production, while also being responsible for chickens and the grading of eggs for quality.” The Times article added that, “Consumer groups and food safety advocates in Congress also hope the salmonella outbreak provides momentum to a comprehensive food safety bill that has already passed the House but remains stalled in the Senate. “‘I think what this will do, its immediate impact, will be to dislodge the food safety legislation out of the Senate,’ said Congresswoman Rosa L. DeLauro, Democrat from Connecticut. ‘This outbreak can propel that forward.’” Peter Eisler of USA Today reported yesterday that, “The outbreak of salmonella in eggs is energizing efforts to pass a long-stalled food safety bill that could prevent or mitigate such problems, according to federal officials, congressional supporters and independent experts.” “‘The pending legislation is absolutely critical,’ Jeff Farrar, associate FDA commissioner for food protection, said in a conference call with reporters. ‘There are just numerous important measures in that bill that will give us new authorities and resources to do our jobs.’” Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “Congressional investigators are looking into federal and state records now in their probe of the Iowa egg farms that have been linked to the salmonella outbreak. “The House Energy and Commerce Committee today asked the Agriculture Department and the Food and Drug Administration for inspection reports, memoranda, testing records, emails and other documents involving the firm since the beginning of 2007.” Mr. Brasher noted that, “Committee spokeswoman Karen Lightfoot said the panel had not decided whether to hold hearings on the outbreak.” The Washington Insider section of DTN reported yesterday (link requires subscription) that, “The U.S. food safety system has a long and distinguished record of preventing contamination and of moving quickly to track down and remove contaminants and control disease outbreaks when they occur. Still, it was largely designed in a much earlier era — as long ago as 1906 for meat inspection, for example, and has become creaky with age. “This is relevant because the recent massive recent egg recalls have caught the attention of a number of key lawmakers, especially since some 1,300 people have reported illnesses traced to one producer, DeCoster Farms of Iowa. The result will be several investigations, and possibly key policy changes.” The DTN item noted that, “For example, Rep. Rosa DeLauro, D-Conn., chairwoman of the House Agriculture, Rural Development and Food and Drug Administration Appropriations subcommittee, is pressing USDA and Food and Drug Administration officials to review operations of Wright County Egg — a division of DeCoster Farms that now has recalled 380 million eggs. She also has included Hillandale Farms in her inquiry, since that operation has recalled 170 million eggs because it used DeCoster hens and feed. “In addition, House Energy and Commerce Committee chairman and the chairman of the panel’s investigations subcommittee have requested details from the owner of Wright County Egg and the president of Hillandale. Chairman Henry Waxman, D-Calif., and subcommittee Chairman Bart Stupak, D-Mich., say they are looking into the companies’ procedures for monitoring eggs for food pathogens, especially.” Meanwhile, Lyndsey Layton reported in today’s Washington Post that, “The Iowa egg farmer at the center of a nationwide outbreak of salmonella illness tangled in the past with the state of Maryland, where he once ran two massive facilities and was charged with violating a quarantine by selling contaminated eggs. “Austin ‘Jack’ DeCoster battled Maryland in the early 1990s over his Eastern Shore egg empire in a dispute that highlights serious regulatory gaps in food safety that have been a factor in the industry for decades.” Deb Nicklay reported today at the Globe Gazette Online (Mason City, IA), that, “Small producers may be benefiting from the recall of almost a half a billion eggs from two farms in Wright County since mid-August.” And Rod Smith reported yesterday at Feedstuffs Online that, “As the egg recall related to salmonella-contaminated eggs from two farms spread over the Aug. 21-22 weekend, so did allegations that eggs from big, cage-housing operations are prone to the bacteria. “Nothing is further from the truth, according to Feedstuffs sources. Salmonella can contaminate any animal- or plant-based food from any kind of farm operation or any size, and the last major incident in which eggs and salmonella were linked was two years ago in eggs from a cage-free, organic production system, sources noted. “Still, a noticeably larger-than-usual number of customers — many of them new to farmers markets — lined up across the country over the weekend to buy eggs from local producers, who said they were selling out early in the mornings. Many of those producers, in conversations with customers, were critical of modern cage housing and large-scale production, according to news reports.” In related news, Reuters writer Aleksandras Budrys reported yesterday that, “Russia may take action against imports of U.S. poultry unless it receives more assurance that the birds are not contaminated with salmonella, the head of consumer protection watchdog RosPotrebNadzor told RIA news agency on Wednesday. “The USA Poultry and Egg Export Council on Tuesday assured Russia that U.S. poultry is safe and not affected by the salmonella outbreak that has forced the recall of more than a half billion U.S. table eggs. But RosPotrebNadzor’s Gennady Onishchenko said this was not sufficient.” GIPSA Issue DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “The fundamental differences in marketing livestock will collide in Colorado Friday as ranchers and feeders air out their never-ending argument before federal officials over the value of cash markets vs. marketing agreements with packers. “It’s an argument now heightened by a controversial proposed USDA livestock marketing rule that will be the center of arguments on both sides in the fourth installment of joint meetings on agricultural competition. The meetings, hosted by Agriculture Secretary Tom Vilsack and U.S. Attorney General Eric Holder, are being held around the country. “Every USDA-DOJ meeting so far has drawn packed audiences in the grain seed, poultry and dairy sectors, but no sector of agriculture has generated such a long, raging debate about competition and market control as the nation’s beef-cattle industry.” Mr. Clayton noted that, “Cattlemen groups on opposing sides have pre-event meetings and press conferences planned for Thursday and have charted buses and are calling for as many of their producers as possible to show up for Friday’s day-long meeting at Colorado State University campus in Fort Collins. R-CALF CEO Bill Bullard wants 25,000 people to show up — far more than capacity at the planned meeting facility. Groups on both sides see the meeting as possibly a chance to tip the scales on the outcome of the livestock rule proposed by the Grain Inspection, Packers & Stockyards Administration. “Marquette, Kan., cattle feeder Allan Sents, who will be on a producer panel Friday, serves as a regional director for the U.S. Cattlemen’s Association. Sents believes a strong cash market affords cattle producers a level of independence from packers that no longer exists in more vertically integrated livestock sectors such as poultry or hogs. He also recently sent Vilsack a letter saying there has been a lot of ‘misinformation and fear mongering’ about the livestock competition rule. “The GIPSA rule will provide pricing transparency as to why a packer paid a particular price for a particular set of cattle. That could provide more leverage for producers negotiating cash sales.” A news release yesterday from Sen. Pat Roberts (R-Kansas) indicated that, “[Sen. Pat Roberts] today led a group of Senators in writing to U.S. Secretary of Agriculture Tom Vilsack regarding questionable behavior leading up to a USDA competition workshop and continued objectivity concerns with the recent Grain Inspection, Packers and Stockyards Administration’s (GIPSA) proposed rule.” The letter, which was also signed by Saxby Chambliss (R-GA), Mike Johanns (R-NE), Sam Brownback (R-KS), and Tom Coburn (R-OK), can be viewed here. Disaster Aid The New York Times editorial board opined in today’s paper that, “Senator Blanche Lincoln, an Arkansas Democrat and chairwoman of the Senate Agriculture Committee, has been seeking $1.5 billion in disaster relief for rice and cotton growers in Arkansas and other Southern states who were hurt by heavy rains. The White House seems all too eager to oblige an important Democrat who is in a very difficult re-election race. “Arkansas cotton farmers suffered real crop losses, averaging 30 percent; rice farmers far less, averaging less than 4 percent. Unfortunately, Ms. Lincoln’s proposal makes no distinction, and in many cases the payments would overcompensate farmers. “Relief payments would be based not on a farm’s actual loss but on the amount it received under the government’s direct payments program, a generous annual subsidy based on a farm’s size regardless of market conditions. Anyone with a loss of more than 5 percent would get a check amounting to 90 percent of the subsidy. This would be a big, unjustified windfall, especially for big farmers.” The Times noted that, “Meanwhile, Collin Peterson, chairman of the House Agriculture Committee, says ‘there is no way they can do this administratively,’ and thinks authorizing legislation is required. “Congress and the administration need to work together to come up with a rational aid program to help farmers who are in real trouble. Ms. Lincoln will have to find a better way to save her job.” Ag Economy Scott Kilman and Julie Fargon reported in today’s Wall Street Journal that, “The U.S. Agriculture Department expects unusually tame food-price inflation this year despite a broad rally in agricultural commodity prices this summer, the agency said Wednesday. “The USDA now forecasts that the consumer-price index for food will climb between 0.5% and 1.5% this year, which would be the smallest increase since 1992. “The inability of the U.S. economy to pick up steam prompted the USDA to lower its forecast by one percentage point from the range of 1.5% to 2.5% it calculated a month ago.” (See related graph from the Journal article). Meanwhile, Tom Polansek reported yesterday at Wall Street Journal Online that, “U.S. wheat prices fell 4% as Egypt, the world’s largest importer of the grain, once again opted against buying U.S. wheat.” “While the outlook for U.S. grains exports remains strong, the absence of evidence of rising export demand leaves markets participants to wonder whether the price gains of recent months are sustainable. U.S. wheat prices are up nearly 40% since the end of June despite recent declines.” Leslie Hook reported yesterday at the Financial Times Online that, “While agricultural markets focus on Russia’s devastating drought, another large shift in soft commodity production and consumption is lurking in the background: China’s mediocre crops this year, combined with a shift in dietary habits, have strained the country’s traditional sufficiency in grains, leading to higher prices and large imports. “The rise in corn and soyabean imports has raised questions over whether Beijing’s policy of grain self-sufficiency will be sustainable as demand rises and agricultural land shrinks under the advance of cities. Meanwhile, corn imports are at levels not seen in 15 years, and soyabean imports have doubled in the past five.” Sec. Vilsack Roger Simon penned a lengthy article about Agriculture Sec. Tom Vilsack that was posted yesterday at Politico. The article, titled, “Exclusive: Tom Vilsack offered to resign over Shirley Sherrod,” is available here. August 25 Food Safety; Climate Issues; Disaster Aid; Biofuels; Ag Economy; and USDA Issue Food Safety Bloomberg writer Molly Peterson reported yesterday that, “A nationwide recall of more than a half billion eggs linked to a salmonella outbreak prompted investigations by U.S. lawmakers as health officials said at least 40 new illnesses have occurred in the past four days. “Wright County Egg and Hillandale Farms of Iowa were asked by lawmakers from the House Energy and Commerce Committee to submit documents dating back more than five years about their safety practices, any alleged violations, and their discovery of the contaminated eggs. Wright County Egg, of Galt, Iowa, has announced recalls of 380 million eggs since Aug. 13. Hillandale, based in New Hampton, Iowa, announced a recall of 170 million eggs on Aug. 19, bringing the total to 550 million.” The article added that, “Representative Rosa DeLauro, a Connecticut Democrat, also today asked the FDA and the U.S. Department of Agriculture about the egg recall. DeLauro asked the agencies what they knew about reports of past violations by the egg producers before the recall occurred. DeLauro heads the House subcommittee in charge of the budget of the FDA and Agriculture Department.” Meanwhile, Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “Get ready to pay more for eggs as a result of the massive recall linked to Iowa’s DeCoster farms. “The wholesale price of Grade A eggs has jumped by 38 percent to $1.35 a dozen from Aug. 13, when the recall started, says Richard Brown, who tracks egg prices for Urner Barry Publications. “‘We know the prices will go up. We don’t know how much,’ Gene Gregory, president and CEO of the United Egg Producers told my colleague Dan Piller at an industry meeting this morning in Des Moines.” The update indicated that, “Although the eggs that have been recalled amount to a relatively small part of total production, disruptions in supplies can have a big effect on prices, since eggs can’t be frozen or stored for long periods, said David Harvey, an Agriculture Department economist. But he doesn’t think the recall will have a major impact on prices and consumption long term, so long as it outbreak is connected to just one group of farms.” Yesterday’s Register item added that, “About 550 million eggs have been recalled by Wright County Egg, a division of the DeCoster operation, and a second producer that used DeCoster hens and feed. “DeCoster was the nation’s sixth largest producer as of 2008, according to Watts Poultry USA. “The DeCoster operation is taking a financial hit due to the recall, because the eggs can’t be sold on the retail market while the Food and Drug Administration investigates the farms. The eggs are instead being routed for processing and pasteurization, according to the company. The resulting egg product goes into a variety of uses, including cake mixes and food service. Eggs are typically diverted to processing when they’ve got quality problems.” Philip Brasher was also a guest on yesterday’s National Public Radio’s All Things Considered Program, where he discussed issues associated with the DeCoster Operation in greater detail. See a transcript of the interview with Mr. Brasher, “A Look At The Company Behind The Egg Recall,” here. And Meredith Shiner reported yesterday at Politico that, “The Senate’s yearlong failure to pass a food safety overhaul has hampered the ability of the Obama administration to quickly recall the 600 million eggs connected to a salmonella outbreak that has sickened nearly 2,000 people, experts and lawmakers say. “The House approved its version of the food safety bill in July 2009 — that was more than 60 recalls of Food and Drug Administration regulated products ago, according to a report by the Make Our Food Safe coalition. But the Senate has continued to drag its feet. “The pressure is now on Senate Majority Leader Harry Reid (D-Nev.), who has consistently pushed the bill to the back burner. Lawmakers, aides and analysts say Reid must bring the bill to the floor when the Senate returns in September in light of the major deficiencies in a nearly century-old regulatory system —- and one of the worst food-related outbreaks yet.” Climate Issues As food safety concerns gain additional attention, climate change legislative issues appear to be fading during the August recess. Derek Wallbank reported yesterday at the MinnPost.com Online that, “Carbon cap and trade legislation is effectively ‘dead’ in Congress, House Agriculture Chairman Collin Peterson told feed industry executives Monday, with the chief struggle over carbon regulation now solely being played out in and around the Environmental Protection Agency. “The Senate isn’t just short of the votes for a cap-and-trade measure like what passed the House last June, it’s short of the votes for any significant climate measure at all. And today Peterson confirmed the whispers on Capitol Hill — that environmental lobbyists are scaling back their efforts on a large-scale climate bill because they too have come to privately accept that it won’t happen this year. “‘The environmental community has basically stood down and they’re pulling all of their money out of the effort and all their lobbying,’ Peterson said. ‘So it’s dead.’ “‘So the issue now is is the EPA going to try to regulate this under the Clean Air Act?’ Peterson said. That was almost certainly a rhetorical question, because the answer is obviously yes. In fact, they’ve already started.” Yesterday’s update noted that, “Ironically, while the carbon bill is dead, so too is a measure that would forbid the EPA from regulating it under the Clean Air Act.” “And with Congress refusing to pass anything on carbon either way, the EPA continues to have free rein to deal with the problem as it sees fit,” yesterday’s article said. Similarly, Jordan Fabian reported yesterday at The Hill’s Blog Briefing Room that, “Senate Minority Leader Mitch McConnell (R-Ky.) said Monday that cap-and-trade energy legislation is ‘dead’ in the upper chamber. “The Senate’s top Republican spoke before a local chamber of commerce in eastern Kentucky. “‘I think cap-and-trade, which is also known as the national energy tax, is dead in the United States Senate,’ McConnell said, according to WKYT.” The Hill update stated that, “McConnell warned the audience that the Obama administration could attempt to mandate some cap-and-trade policies through the executive branch, but said that was unlikely in an election year.” And Ben Geman reported yesterday at The Hill’s Energy Blog that, “The World Resources Institute has a created a nifty online tool that allows visitors to track climate aid pledges stemming from last year’s Copenhagen climate conference. “Developed countries together pledged almost $30 billion in ‘fast start’ financing to help developing countries curb emissions and adapt to climate change. “Now WRI, a Washington, D.C.-based think tank, is tracking whether countries are making good on the plans.” Disaster Aid The Washington Post editorial board opined today that, “When last we checked on U.S. agricultural policy, the Obama administration was paying Brazil $147.3 million to settle its international trade lawsuit over U.S. cotton subsidies, thus freeing Washington to continue lavishing taxpayer money on wealthy farmers in Arkansas, home state of politically embattled Democratic Sen. Blanche Lincoln. We thought this might represent policy sausage-making at its least attractive. “No such luck. As The Post’s Alec MacGillis reported, Ms. Lincoln, who chairs the Senate Agriculture Committee, is now demanding $1.5 billion in ‘disaster aid’ for already-subsidized farmers in Arkansas and other states, mostly in the South. Even the usually farm-friendly Senate balked; the extra spending threatened to sink a $20 billion small-business aid bill that President Obama supports. So White House chief of staff Rahm Emanuel got her to relent in return for his promise to find the money elsewhere by the end of August. Officials are scouring the federal government for cash.” The Post editorial stated that, “If you think this looks like a back-door plan to almost double almost everyone’s subsidy, we agree with you. Even more dubious is the funding source Ms. Lincoln wants the White House to raid: Section 32, an obscure permanent appropriation within the Agriculture Department. The USDA normally must spend it on food for needy children, but a loophole lets the secretary of agriculture divert some money to shore up ‘farmers’ purchasing power.’ This is the loophole that would have to be exploited now. “It would not be the first time. As Ms. Lincoln noted, the Bush administration raided Section 32 for $900 million in aid to drought-stricken cattlemen in 2002, and for $423 million for Florida fruit and vegetable growers in 2004 — both election years. But Ms. Lincoln’s request exceeds those two combined. And since when do George W. Bush’s practices constitute precedent for Democrats? “In fact, the 2008 farm bill, passed over Mr. Bush’s veto, sought to end notoriously recurrent, and notoriously expansive, ‘relief’ demands. It established a fund that farmers afflicted by truly epic events could tap if they bought federally subsidized crop insurance to cover more mundane losses. But most Southern farmers opted out, arguing that insurance was a bad deal for them. Ms. Lincoln, it seems, was their insurance policy.” In a related item regarding farm spending, Peter Du Pont argued in an opinion item posted today at The Wall Street Journal Online that, “With the huge increases in spending enacted in the last two years, it will be difficult to find a congressional consensus on spending reductions. If we cannot all agree, for example, that it’s time to end federal subsidies for ethanol ($6 billion per year) and all manner of farm crop subsidies ($15 billion per year), we won’t make any progress. “After November, there is likely to be an opportunity to accomplish some of these goals. The Democrats see their House control slipping, their Senate majority shrinking.” Biofuels In a separate item regarding biofuels, a news release yesterday from Purdue University indicated that, “A variable subsidy for ethanol producers could cost the government less and provide more security for producers than current fixed rates, according to a Purdue University study. “A variable subsidy rate would insulate producers from risk because as oil and ethanol prices drop, the subsidy for producers would increase, said Wally Tyner, a Purdue agricultural economist and an author of the study. The government would save money because it would not have to pay any subsidy when oil prices are high. “‘There will be times when oil prices are high and the subsidy will be low or nothing at all,’ Tyner said.” Yesterday’s news release added that, “Under a variable rate, there would be no subsidy at $90 per barrel of oil. The subsidy would kick in at 17.5 cents per gallon when oil is at $80 and increase 17.5 cents for every $10 decrease in oil prices. “Using that scenario, the government would pay between $58 million and $360 million over the life of the plant, depending on the subsidy rate. “Tyner said the study’s findings would be moot if the Environmental Protection Agency does not increase the amount of ethanol that can be blended with gasoline from 10 percent to 15 percent. He said without that increase, the United States is at the blending wall, the point at which growth in ethanol production has to stop because the maximum amount possible is being purchased and used by consumers. The EPA is expected to make a decision on the blending limit this fall.” Ag Economy Liam Pleven reported in today’s Wall Street Journal that, “Cattle prices are soaring toward records, pushing up the cost of beef in grocery stores and adding to the risk of a broader wave of food inflation. “The gains are being fueled by rising appetites globally and a dwindling U.S. herd. Purchases of U.S. beef around the world have surged as emerging economies become more prosperous. At the same time, ranchers hit in recent years by drought and the financial crisis have cut the number of cattle to the lowest level in decades.” The Journal article indicated that, “Consumers already are paying more, with the retail price of choice beef up 4% in July from December, according to U.S. Department of Agriculture data. Further increases may be in the offing; last week alone wholesale prices climbed 3.2%. “While some observers said the August rally may be short-lived, they also said the fundamentals of a cattle shortage and rising demand mean prices will remain high over the longer term.” Reuters news reported yesterday (article posted at DTN, link requires subscription) that, “Sales of U.S. farmland are picking up, with rising commodity prices and aggressive bidders helping drive increasing land values, agricultural experts said this week. “Strong interest from non-farmer investors competing against farmers flush with capital is helping spur bidding competitions for prime farmland through the U.S. Midwest. “‘We have seen a continuation of strength in the land market,’ said Loyd Brown, president of Hertz Farm Management, an asset management and farmland brokerage firm.” The Reuters article stated that, “Prices are ranging over $8,000 an acre for high-performing cropland in Iowa and Illinois and are up more than 5 percent in some areas over last quarter, according to Brown, who said he helped complete a sale last week of more than 300 acres of Iowa corn and soybean acreage to an East Coast investor at $7,250 per acre. “Data released earlier this month by the Federal Reserve Bank of Kansas City showed the value of farm land in the U.S. Central Plains rose nearly 4 percent in the second quarter. “Those strong gains are continuing in the third quarter, according to Jason Henderson vice president with the Omaha branch of the Federal Reserve Bank of Kansas City.” USDA Issue Bloomberg writer Alan Bjerga reported yesterday that, “Shirley Sherrod rejected a job offer from the U.S. Department of Agriculture, a month after her firing by the agency for remarks on race, found to be taken out of context, prompted an apology from President Barack Obama. “Sherrod, 62, said too much had happened at the USDA for her to accept the job now and that she may consider accepting a different position later after taking more time off. She spoke at a Washington news conference with Agriculture Secretary Tom Vilsack by her side, saying she wants to continue to be active on civil rights and race issues.” *** Lastly today, a news release yesterday from National Crop Insurance Services stated that, “National Crop Insurance Services (NCIS) announced today that Robert (Bob) Parkerson, NCIS’ President and member of its Board of Directors, will retire effective August 31, 2010, and Tom Zacharias, NCIS’ Executive Vice President, has been named his successor.” “Zacharias joined NCIS in 1990 and was promoted to Executive Vice President in 1998. Zacharias holds a Ph.D. in Agricultural Economics from the University of Illinois (1984), with B.S. (1977) and M.S. (1980) degrees in Agricultural Economics from Texas A&M University. Prior to NCIS he served on the faculties of Iowa State University and Louisiana State University.” August 24 Food Safety; Biotech; EPA; Disaster Aid; Ag Economy; and Corn Use Food Safety Erik Eckholm reported in today’s New York Times that, “As it reeled from the recall of half a billion eggs for possible salmonella infection, the American egg industry was already battling a movement to outlaw its methods as cruel and unsafe, and adapting to the Obama administration’s drive to bolster health rules and inspections. “The cause of the infections at two giant farms in Iowa has not been pinpointed, Margaret Hamburg, commissioner of the Food and Drug Administration, said Monday in a television interview. But ‘there is no question that these farms that are involved in the recall were not operating with the standards of practice that we consider responsible,’ Ms. Hamburg said in the strongest official indication yet that lax procedures may be to blame. “One of those producers, Wright County Egg, responded that it ‘strives to operate our farms in the most responsible manner, and our management team has worked closely with F.D.A. through their review of our farms.’” The article added that, “The other farm under intense scrutiny is Hillandale Farms. “Federal officials have not questioned the intensive methods that have produced cheap eggs and meat but that some criticize as cruel and bad for the environment and public health. “Animal rights advocates, who have campaigned to end the housing of hens in tiers of cages, were quick to seize on the recall. ‘Confining birds in cages means increased salmonella infection in the birds, their eggs and the consumers of caged eggs,’ the Humane Society of the United States wrote last week in a letter to Iowa egg producers.” Today’s article pointed out that, “But the link between cage farming and disease is not so clear, say many academic and government experts who add that some aspects of cage production, which prevents birds from wallowing in their droppings, may be safer than letting hens run loose. “‘Some groups tend to cherry-pick studies to show the results that they want consumers to see,’ said Jeffrey D. Armstrong, dean of agriculture and natural resources at Michigan State University. “‘The bottom line is we don’t know’ whether caged or cage-free production is safer, Mr. Armstrong said.” “By any historical measure, American egg production is efficient and comparatively safe. The current recall is the largest in memory, but involves only a small fraction of the 70 billion eggs produced annually, mostly by hens who spend their lives with six or seven others in cages the size of an open newspaper, their droppings carried away by one conveyer belt while the eggs are whisked off by another,” the Times article said. Lyndsey Layton reported in today’s Washington Post that, “Although it has broad authority to regulate the production of food, the FDA historically has inspected egg-laying facilities only if it suspected contamination, said [Jeff Farrar, the FDA's associate commissioner for food protection]. That is likely to change under a new agency rule that took effect in July. And food safety legislation pending on Capitol Hill would require the FDA to routinely inspect high-risk food facilities, including henhouses. “Under a long-standing regulatory divide, the USDA regulates the health of the chickens, not the eggs they produce. The agency has visited the producers at the heart of the outbreak, but only to grade the quality of their eggs as part of a voluntary program, according to USDA spokesman Caleb Weaver. Quality graders visit packaging facilities, not laying houses, Weaver said. “And while some states inspect farms and egg-laying facilities — and several conduct vigorous inspection programs — Iowa, the leading egg-producing state, does not, said Dustin Vande Hoef, spokesman for the state’s agriculture department. ‘Clearly this is a tragic situation, but two federal agencies have been given the responsibility to ensure food safety and we count on them in that regard,’ Vande Hoef wrote in an e-mail.” “Under legislation that has passed in the House and is expected to be taken up by the Senate in September, the FDA would be required to visit Wright County Egg and other similar producers annually. It would have access to internal company documents that show results of microbial testing and the company would be required to adopt a strategy to prevent contamination and prove that it follows the strategy. The bill also would require companies to keep uniform distribution records, making it easier and faster for the FDA to track contaminated food,” the Post article stated. The New York Times editorial board indicated today that, “The blame for the nationwide recall of tainted eggs must fall on the producers who allowed their eggs to become contaminated and distributed them for sale. But after a decade of tainted beef, spinach, the list goes on — federal officials also must take the rap for moving too slowly to strengthen the country’s food safety system.” And The Washington Post editorial board noted today that, “If there’s a silver lining in the massive recall, it is that this latest outbreak of food-borne illness (remember peanuts, peppers, tomatoes, spinach, etc.) appears to have sparked action in the Senate, where comprehensive food-safety legislation has languished since July 2009. The bill would give the FDA the power to initiate a mandatory recall of contaminated products. And it would set up systems to trace food from farm to fork, thus making it easier and faster to pinpoint sources of contamination. A vote by the full Senate is expected as soon as it returns Sept. 13.” Alicia Mundy reported yesterday at The Washington Wire Blog (Wall Street Journal) that, “For the past year, references to any food problem or recall, no matter how minor, have provoked a chorus of ‘we need a food safety bill now!’ from consumer advocates and Obama administration officials. The Food and Drug Administration’s chiefs have missed few opportunities to talk up the Food Safety Modernization Act, which passed the House last year. “With elections looming, Washington insiders saw little chance that the Senate would complete the bill this fall – until now. The recall of about a half-billion eggs in a salmonella scare may have given new life to the legislation. About 1,300 cases of the disease have been reported with possible links to eggs produced in Iowa.” Alicia Mundy also reported yesterday at the Journal’s Health Blog that, “Rosa DeLauro, the House’s loudest voice on food safety, has just asked the heads of the USDA and the FDA to explain what they knew — and when they knew it — about an egg producer linked to the salmonella outbreak. The DeCoster family operation owns Wright County Egg, which has recalled 380 million eggs, and has ties to Hillandale Farms, the producer that has recalled more than 170 million eggs.” Yesterday’s update added that, “Shortly after DeLauro’s missive went out, Henry Waxman weighed in. “He and Bart Stupak over at the House Energy and Commerce Committee sent their own ‘What did you know and when did you know it?’ letters — but to the two farms at the center of the recalls. The members asked Wright County Egg and Hillandale Farms when they were first in touch with the U.S. government. Waxman and Stupak also requested inspection records for the companies’ facilities; documents related to allegations of health, safety, environmental or animal cruelty violations; and the names of all their egg customers in the last year. “It’s a safe bet that there will be congressional hearings this fall on eggs.” Biotech Issues The AP reported on Friday that, “A judge’s ruling halting planting of genetically modified sugar beet seeds has left growers feeling uncertain as they wait for federal officials to decide the next step for a crop that provides half of the nation’s sugar supply. “Duane Grant, chairman of the board at the Boise, Idaho-based Snake River Sugar Co., said if a solution can’t be worked out to use the genetically modified seed, his company and its growers fear there isn’t enough conventional seed to plant next year. The company produces about 20 percent of the nation’s beet sugar.” The AP article explained that, “Monsanto seeds also dominate corn and soybean production, but experts said last week’s decision is limited to sugar beets. Some groups hope, though, that the ruling could prompt the USDA to take a broader look at questions involving genetically modified crops. “Monsanto referred questions to Luther Markwart, executive vice president of the American Sugar Beet Growers Association. He said the next move is up to the USDA. “‘The message we’re giving people is you have to be patient and let this play out,’ Markwart said. “USDA spokesman Caleb Weaver said the agency’s attorneys are reviewing the ruling but haven’t made any decisions.” “The ruling comes two months after the U.S. Supreme Court lifted a ban on the planting of genetically modified alfalfa seeds. The USDA still must abide by a lower court’s order to conduct an environmental impact study on use of the seeds,” the AP article said. Elisabeth Rosenthal reported in today’s New York Times (“In the Fields of Italy, a Conflict Over Corn”) that, “The World Trade Organization says that general bans on genetically modified crops constitute an unfair trade barrier, because there is no scientific basis for exclusion. But four years after a W.T.O. panel ruled that European Union policies constituted an illegal ‘de facto moratorium’ on the planting of genetically modified seeds, some farmers, like [Giorgio Fidenato, an agronomist], and seed producers like Monsanto complain that Europe still has not really opened its doors. “It is true that a small but growing number of European countries, including Spain, Portugal and Germany, now allow some cultivation of genetically modified crops. But only two genetically modified seeds (MON810 and the Amflora potato seed) out of dozens on the global market have made it through the European Commission’s laborious approval process, a prerequisite for use. “What is more, some areas of Europe have declared themselves ‘G.M.O.-free zones,’ or free of genetically modified organisms. France, Austria and Germany specifically ban MON810, saying they believe that it could harm local crops. In Italy, a Kafkaesque approval process in which the Agriculture Ministry has never established the requirements for success, makes genetically modified crops a nonstarter.” EPA: Water Issues Ben Geman reported on Friday at The Hill’s Energy Blog that, “The Environmental Protection Agency on Friday floated a draft strategy to improve water quality nationwide, one that bluntly recognizes that today’s pollution sources are often difficult to target with traditional Clean Water Act controls. “‘Despite our best efforts and many local successes, our aquatic ecosystems are declining nationwide. The rate at which new waters are being listed for water quality impairments exceeds the pace at which restored waters are removed from the list,’ EPA acknowledged.” The update noted that, “When the landmark water law was enacted in 1972, traditional ‘point sources’ of pollution —think industrial discharge pipes fouling waters — were the big problem. “But times have changed — the strategy notes that ‘Over the last 30 years, stressors have shifted’ and that ‘recent surveys found that nutrient pollution, excess sedimentation, and degradation of shoreline vegetation affect upwards of 50 percent of our lakes and streams.’ “‘In addition, recent National Water Quality Inventories have documented pathogens as a leading cause of river and stream impairments. Sources of these stressors vary regionally, but the main national sources of water degradation are: agriculture, stormwater runoff, habitat, hydrology and landscape modifications, municipal wastewater, and air deposition. EPA’s strategy must now meet these shifting needs and priorities,’ EPA noted.” Mr. Geman added that, “Other plans include wider targeting of pollution from livestock operations…” Disaster Aid The Washington Insider section of DTN reported yesterday (link requires subscription) that, “In order to dampen Republican opposition to a high priority small-business economic package, the White House pressed Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., to pull her $1.5 billion agricultural disaster program, one of the elements of the package that was drawing fire from budget hawks. In return, White House Chief of Staff Rahm Emanuel promised to fund the program through existing USDA authorities. “Colleagues, including Agriculture Committee ranking member Saxby Chambliss of Georgia, expressed doubts that the administration has authority to, as Chambliss put it, ‘spend taxpayer money without it coming through Congress.’ “Others have been even more critical, suggesting not only that the White House lacks authority to follow up on Emanuel’s pledge, but that it was poor policy to attempt to do so. Sen. Tom Coburn, R-Okla and Rep. Jeff Flake, R-Ariz., wrote the president later in the week urging him to reconsider the commitment to Lincoln. They listed several reasons, suggesting that using an administrative route for a large disaster package would violate the regular funding process and fly in the face of Obama’s public comments about the need for transparency in the budget process.” The DTN item noted that, “By now, murmurs of disapproval have come from a number of sources, including some normally friendly to disaster aid programs who suggest the Emanuel-Lincoln deal is unseemly and the program itself may be inequitable, as well. At this time, Lincoln seems determined to defend her proposal in spite of the target it provides her — and the administration’s — political opponents. “Thus, it is likely negative political comments about the program and the political horse trading that has been involved will follow the proposal through the fall elections, Washington Insider believes.” Meanwhile a news release Sunday from Rep. Earl Blumenauer (D-Oregon) stated that, “Last week Congressman Blumenauer met with local farmers as well as representatives from farming distribution networks, farmers markets, conservation groups, communities of faith, and other interested parties to discuss the 2011 reauthorization of the Farm Bill.” “Congressman Blumenauer believes that Oregon is dramatically shortchanged by the current composition of the Farm Bill, particularly because we tend to have smaller scale operations and our farmers and ranchers largely produce food rather than heavily subsidized commodities. Here in the United States, the benefits directed to cotton, corn, and sugar are concentrated in the top percentages of farming interests and flow largely to a handful of states. The environmental titles which would benefit Oregon agricultural interests as well as the environment and the rest of the population are profoundly lacking. “Congressman Blumenauer believes the next Farm Bill should maximize value to the taxpayer, the environment, and especially our Oregon farmers and ranchers.” Ag Economy Pat Hill reported yesterday at DTN (link requires subscription) that, “The outlook for American agribusiness is upbeat, according to the first DTN/The Progressive Farmer Agribusiness Confidence Index. “The index, launched August 23, is designed to measure sentiment in the agribusiness sector. Based on a survey of 100 business managers of a representative array of agribusinesses across the country, the index is a companion to the DTN/The Progressive Farmer Agriculture Confidence Index, which was launched in April. Like that index, this one will be published three times a year: before planting, before harvest and at year’s end. “The initial agribusiness index, calculated by comparing positive and negative survey answers, is 71.0; any score above 50 indicates optimism. The Present Situation Index is 73.5 while the Expectations Index is 69.3.” Corn Use Reuters writer Mica Rosenberg reported yesterday that, “Soaring consumption of high fructose corn syrup in Mexico, aided by high sugar prices and paltry local cane harvests, could accelerate next year and boost sugar exports to the United States. “Mexican consumption of the corn-based sweetener, which is cheaper than sugar, nearly doubled from 653,000 tonnes in the 2008/09 cycle to 1.2 million tonnes this crop year. “While that amounts to less than 20 percent of U.S. consumption of high-fructose corn syrup, known as HFCS, analysts see Mexican demand for corn syrup rising nearly 17 percent in 2010/11 to around 1.4 million tones.” The article added that, “A growing market for U.S. corn syrup in Mexico is welcome news for the U.S. HFCS industry, which is battling a perception among some American consumers that sugar is more healthy.” August 23 FAPRI Baseline Update; Disaster Aid; Trade; Food Safety; Animal Ag; CFTC Issues; and Sugar FAPRI Baseline Update A news release Friday from the University of Missouri Food and Agricultural Policy Research Institute (MU FAPRI) indicated that, “A drought in Russia and reduced global wheat production along with shifts in U.S. crop production affect the entire U.S. agricultural outlook. Changes in one sector ripple through all farm segments. “A mid-year update of the 2010 U.S. agricultural baseline shows increased wheat exports, moderate rises in grain prices and modest recovery in meat and dairy prices paid to farmers.” The release added that, “As in the past, the baseline assumes normal weather conditions and continuation of current federal farm policies. ‘In contrast to the 2010 long-term baseline, this FAPRI baseline update assumes that biofuel tax credits and tariffs all expire on schedule,’ said Pat Westhoff, co-director of MU FAPRI. ‘This is not meant as a judgment about what is or is not likely to occur, but simply an interpretation of what constitutes ‘current policy.’’” “Westhoff said the update should not be confused with a full-review baseline, which is much more exhaustive. The next full baseline process for 2011 begins in November.” (Note that the USDA’s Economic Research Service is scheduled to update its “Farm Income and Costs” report on August 31.) Disaster Aid Alec MacGillis reported in yesterday’s Washington Post that, “The Obama administration is seeking $1.5 billion in disaster relief for farmers, a move that could boost the reelection prospects of Sen. Blanche Lincoln (D-Ark.) but that critics say circumvents established procedures. “Lincoln, the chairman of the Agriculture Committee, has been seeking relief for rice and cotton farmers hurt by heavy rains that struck Arkansas, Mississippi and Louisiana last fall. She sought to include $1.1 billion in aid for those states, along with $400 million for farmers elsewhere, in a small-business bill that Democrats are trying to pass. “To improve the bill’s prospects, Senate leaders asked Lincoln to withdraw the $1.5 billion, with White House Chief of Staff Rahm Emanuel pledging that the government would provide it separately. Robert L. Nabors II, acting deputy director of the Office of Management and Budget, followed up in an Aug. 6 letter to Lincoln: ‘I want to assure you that the Administration is committed to providing assistance consistent with your legislative proposal by the end of this month.’” The article noted that, “But the administration is still looking for the money. ‘We are working to identify administrative authorities and funding,’ OMB spokesman Kenneth Baer said last week. And the deal is coming under widespread criticism. “Black lawmakers note that the administration and Congress have yet to come up with $1.2 billion owed black farmers under the settlement of a major discrimination lawsuit. Republicans say there is no money for the request. And groups opposed to farm subsidies say it would shower money on large farms that suffered few losses and undermine the relief policies established by the 2008 farm bill.” Mr. MacGillis explained that, “Agriculture Committee spokeswoman Courtney Rowe responded to questions with a brief statement. ‘Chairman Lincoln is actively working with both [the Department of Agriculture] and OMB on the details of the disaster assistance and is confident that she will be able to announce them before the end of the month,’ Rowe said. “After Lincoln trumpeted the White House’s pledge, her Republican opponent, Rep. John Boozman, who has a wide lead in Arkansas polls, called it an attempt ‘to bail out somebody who’s in a difficult election by somehow coming up with money that there are real questions about whether they have the authority to do it.’ “Underlying the dispute is the effort to make the $20 billion farm subsidy program more need-based and less abuse-prone. The 2008 farm bill sought to replace improvised payments with a new program, Supplemental Revenue Assistance Payments (SURE), under which farmers in disaster areas would receive standard, formula-based payments.” Meanwhile, AP writer Steve Karnowski reported today that, “The permanent disaster aid program in the 2008 Farm Bill was intended to spare Congress from having to scrape up extra money every time a drought, flood or hurricane struck farm country, but growers in the South claim the plan has failed them. “They argue the program needs changes, and as proof they point to the situation in Arkansas, where Sen. Blanche Lincoln has for months struggled to secure a special $1.5 billion package of disaster aid for Southern farmers hit by bad weather last year. After Lincoln failed to get the funding through Congress, the Obama administration agreed to provide the money administratively. “Southern farmers said they need the help because they didn’t buy crop insurance, a requirement to qualify for the permanent disaster aid plan. Crop insurance sign-up is high among Midwest corn, soybean and wheat farmers, but in the South, many rice and cotton farmers complain premiums are too high for the benefits they receive.” Today’s article stated that, “U.S. Rep. Earl Pomeroy, D-N.D., a member of the House Agriculture Committee, said he and others who crafted the permanent disaster aid program didn’t intend to skew it to the Midwest. “‘We want a program that is equitable right across the country, because that’s the kind of program that’s going to stand the test of time,’ Pomeroy said. “Pomeroy said he wasn’t sympathetic when Lincoln, a Democrat who chairs the Agriculture Committee, put her proposal forward because the permanent plan was supposed to end ad hoc, or one-time, aid. But he agreed Southern farmers are hurting. “‘So maybe this last one is needed while we evaluate what is required to make sure these programs work on a level of regional fairness,’ Pomeroy said.” A related news release Friday from Senator Kent Conrad (D-ND) stated that, “[Sen.Conrad] met today with North Dakota Farm Services Agency (FSA) officials and USDA Undersecretary for Farm and Foreign Agricultural Services Jim Miller to consider the impact the standing disaster program in the 2008 Farm Bill is having on North Dakota’s producers.” The release added that, “Senator Conrad stressed that the program pays only when someone truly has had a whole farm loss, where the old ad hoc method paid on a unit by unit basis. He also stressed that the standing disaster program encouraged the purchase of crop insurance as the Supplemental Revenue Assistance Payments (SURE) Program compensates producers based on the level of the insurance they carry. “As opposed to previous ad hoc disaster programs, this standing disaster program is budgeted for and is paid for, resulting in real reform.” A similar news release Friday from Rep. Earl Pomeroy stated that, “[Rep. Pomeroy] joined Senator Kent Conrad and U.S. Department of Agriculture (USDA) Undersecretary Jim Miller today in Mandan, North Dakota. The group joined Farm Service Agency (FSA) officials and other members of the local agricultural community to discuss the implementation of the Farm Bill’s disaster assistance program—the Supplemental Revenue Assistance Program (SURE). This permanent disaster program, created in the 2008 Farm Bill, builds on crop insurance protection by paying larger payments for producers with higher levels of coverage.” “‘Having permanent disaster programs in place helps bring certainty to farmers and their financers,’ Congressman Pomeroy said. ‘In the past, North Dakota producers had to rely on Congress to pass an ad hoc disaster package—I’m glad we’ve been able to work together to improve that system with the SURE program.’” In more general Farm Bill related news, an update posted on Friday at KFYR-TV reported that, “[Sen.] Conrad says the 2008 Farm Bill was completely paid for. But, he says, because of the current economic climate, spending will likely be cut in the future, and agriculture won’t be exempt from those cuts.” And Janet Kubat Willette reported on Thursday at at AgriNews Online that, “Direct payments are WTO legal, [Dave Frederickson, ag outreach director for Sen. Klobuchar] said, but he wondered if they will be part of the 2012 farm bill. The main issue will be money. Agriculture has already contributed $4 billion to deficit reduction, part of the renegotiation of the Standard Reinsurance Agreement for federal crop insurance that will save $6 billion over 10 years, Frederickson said. He predicted people would hear ‘we’ve already given’ a lot during the farm bill debate.” Trade The Wall Street Journal editorial board opined on Saturday that, “An 18-month trade war between the U.S. and its third largest trading partner took a turn for the worse this week when Mexico announced new tariffs on 26 previously tariff-free items that it imports from America. Washington state apples and California oranges and pistachios, among other things, will now cost 20% more in Mexico than they did last week. Cheeses from California and Wisconsin now face a 25% tariff.” The Journal opinion piece noted that, “Mexican Economy Minister Bruno Ferrari said Thursday that imports of the products on the list dropped 81% in the first year after the tariffs were imposed in March 2009, but Mexico has made clear that it doesn’t want this trade war. Its own trucking industry is open to U.S. competition, and it has carefully targeted its tariffs to hit U.S. goods that Mexicans can import from other countries. A Mexican official told us this week that Mexican President Felipe Calderón discussed the trucking issue with President Obama during his visit to Washington in May, but that three months later ‘nothing has happened.’ “As we look at the new tariff list and its timing, we have to wonder if the Mexicans have the American election calendar in mind. Wisconsin (Russ Feingold), Washington (Patty Murray) and California (Barbara Boxer) are all states with Democratic Senators who follow the Teamster line. “When the new Mexican tariffs inevitably cost American workers their jobs, they should send the bill for unemployment benefits to those Senators—and their Teamster major domo, James Hoffa.” In related news, Capital Press reporter Mitch Lies sat down on Friday with Agriculture Secretary Tom Vilsack in Keizer, Oregon and asked him about the truck dispute with Mexico, an audio clip of this exchange is available here (MP3- 1:20, a little difficult to hear). Sec. Vilsack indicated that he had visited earlier in the week with Transportation Secretary Ray LaHood about the issue, and said that Sec. LaHood is, and has been, communicating with his Mexican counter-part to try to get this issue resolved. A more comprehensive report on Sec. Vilsack’s visit to Oregon and related video is available here. Meanwhile, Howard Schneider reported in today’s Washington Post that, “The message may have been familiar recently when the local Chamber of Commerce took up a proposed free-trade agreement between South Korea and the United States. “‘Wave the flag,’ the speaker exhorted the audience. ‘This is an opportunity to stimulate the U.S. economy at no cost to U.S. taxpayers.’ “But the man on the podium wasn’t the typical business booster. He was South Korean Ambassador Han Duk-soo, who has assumed the unusual role of a foreign official promoting U.S. jobs. With the Obama administration pledging a major new push to ratify the agreement, Han has gone on the stump in cities such as Montgomery, Ala., Peoria, Ill., and Detroit to build American support for free trade and allay concerns that his country is trying to snatch U.S. manufacturing jobs.” The article indicated that, “For three years, since it was negotiated by the Bush administration, the free-trade agreement has languished in Congress. Now trade officials from both countries are trying to resolve the problems that have kept it bottled up, including a dispute over U.S. access to the South Korean auto market and restrictions on U.S. beef imposed after the mad cow scare several years ago.” “The South Korea agreement would be the most significant free-trade pact signed by the United States since the North American Free Trade Agreement with Mexico and Canada in the mid-1990s. And with the dispute over the South Korea agreement serving as a proxy for the larger trade debate in the United States, both advocates and opponents have mobilized,” the article said. Food Safety Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “The head of the Food and Drug Administration says the DeCoster farms in Iowa were not operating safely before a salmonella outbreak that led to the recall of more than half a billion eggs. “‘There’s no question that these farms that are involved in the recall were not operating with the standards of practice that we consider responsible,’ FDA Commissioner Margaret Hamburg told CNN Sunday night. “Hamburg did not elaborate on the problems that FDA investigators have found, but agency officials said last week that the outbreak could have been prevented if regulations that took effect July 9 had been in place earlier. The regulations include testing, sanitation and refrigeration requirements for egg operations and allow the FDA to start inspecting farms for compliance.” Mr. Brasher pointed out that, “The founder of the DeCoster farms, Jack DeCoster, has a long record of environmental problems and violations of immigration laws and worker rights. “Wright County Egg, a DeCoster company has recalled 380 million eggs produced since May, and a second company, Hillandale Farms of Iowa, that used DeCoster hens and feed announced on Friday that it was recalling an additional 170 million eggs. “The U.S. Centers for Disease Control and Prevention said that the salmonella outbreak may be linked to at least 1,200 illnesses since May, and that additional cases may be identified.” Alec MacGillis reported in yesterday’s Washington Post that, “Howard Magwire of the United Egg Producers, a trade group, said the incidence of salmonella outbreaks in the country’s egg industry, which produces 80 billion eggs a year, has dropped in the past decade, thanks to improved industry practices, better state oversight and consumer education. A new egg safety law that went into effect last month is geared toward preventing outbreaks like the ones that began in May by, among other things, requiring more testing for salmonella in chicken barns. “Despite the DeCosters’ record, some state regulators say the company has improved its approach in recent years. Kevin Baskins, a spokesman for Iowa’s Department of Natural Resources, said the agency, which shares oversight of egg producers with the state’s agriculture department, had brought no enforcement actions against the company’s egg operations.” Meanwhile, Rob Stein reported in today’s Washington Post that, “A key member of Congress plans to send a letter to federal regulators Monday seeking a detailed explanation of what they knew about the activities of an Iowa egg producer at the center of a salmonella outbreak and massive egg recall. “Rep. Rosa DeLauro (D-Conn.) plans to ask the Food and Drug Administration and Agriculture Department about Austin ‘Jack’ DeCoster, who owns Wright County Egg. DeLauro chairs the House Appropriations agriculture subcommittee.” Animal Agriculture Philip Brasher reported in yesterday’s Des Moines Register that, “The Obama administration would like to see more hog farmers raising hogs the way the Hilleman brothers do – using fewer antibiotics. “But raising hogs with fewer antibiotics has its challenges, the brothers say. One big one: Some of the black Berkshire hogs grunting and rooting around the Hillemans’ barns are likely to get sick and die before they’re ready for market. That’s because it’s sometimes impractical to treat them, the brothers say. “Randy, Mark and Tom Hilleman raise the hogs for a local cooperative, Eden Farms, that markets Berkshire pork to high-end restaurants.” The article explained that, “Farmers who raise Eden Farms pork earn a premium price for the pigs, because the Berkshires are valued by chefs at high-end restaurants because of the hogs’ fatter, darker meat. “But farmers who supply Eden Farms cannot use antibiotics for growth promotion, a common practice on conventional farms, and they cannot use the drugs at all if the hogs are within 100 days – more than three months – of going to slaughter. “The Food and Drug Administration this summer proposed to phase out the use of antibiotics as growth promotion but still allow drugs to be added to feed or water for purposes of preventing specific diseases, a practice Eden Farms allows for young pigs. The administration is concerned that the overuse of antibiotics in livestock is contributing to the problem of drug-resistant diseases in humans.” The article noted that, “Antibiotics are widely given to hogs of all ages on conventional farms, for prevention and treatment of disease as well as promoting growth. According to the latest USDA survey of farm practices, more than half of farms provided medicated feed to newly weaned nursery pigs and one-third provided it to older ‘finisher’ hogs. About half of farms also gave occasional injections to finisher pigs, the survey found. “Experts say that it’s especially challenging to keep young pigs healthy without the use of antibiotics, since the animals are weaned at 3 weeks old or younger, much earlier than they would be in nature. That’s so the sows can be impregnated and produce another litter as soon as possible.” CFTC Issues A Bloomberg news update from Friday indicated that, “Commodity Futures Trading Commission Chairman Gary Gensler, interviewed for Bloomberg Television’s ‘Political Capital with Al Hunt,’ said U.S. regulators won’t succumb to Wall Street efforts to weaken financial-market oversight as they implement the biggest rules overhaul since the Great Depression.” In a related item on the financial reform bill and CFTC regulations, recall that a July interview with FarmPolicy.com with House Ag Committee Chairman Collin Peterson (D-Minn.) included a brief discussion on the issue of regulatory oversight and enforcement. During that conversation, Chairman Peterson stated that, “I just got off the phone with Chairman Gensler, and he was calling to thank me for working through this with them and Treasury, and so forth. “And we talked about this very thing, about the rule making and regulations, and it’s going to be a huge amount of work here to get this in place. And I told him and warned him that we will be doing extremely aggressive oversight over that process, and we will be meeting on a regular basis to oversee that process and to oversee the decisions that are made to make sure that we make that the risks are being adequately mitigated in whatever they finally come up with.” “Gensler is going to be very aggressive in moving these regulations through the process. We will be on top of that every step of the way, and that’s the way it should be,” Chairman Peterson said. Sugar Carolyn Cui and Bill Tomson reported in Saturday’s Wall Street Journal that, “Global sugar prices soared on Friday after the U.S. said it will ease import restrictions to help avert a national shortage. “The U.S. Department of Agriculture on Thursday said it will give foreign sugar producers a bigger window to send sugar to the U.S. over the next two months.” The article stated that, “The USDA was responding to intense lobbying from sugar users, who claimed the country was in danger of running out of sugar. The USDA this year has twice increased its import quota at the behest of sugar processors and food manufacturers. The sugar users have long been vocal critics of the government’s restrictions on sugar imports, which they argue are designed to protect American farmers by keeping U.S. sugar prices inflated. “Farmers counter that the food companies are just seeking ways to boost profits. U.S. domestic sugar prices are at about 34.13 cents a pound, up 30% in 12 months.” August 17 Trade; Biotech Issues; Animal Agriculture; EPA; Ag Economy; and Elections Trade: Mexico Adds Tariffs Josh Mitchell and Paul Kiernan reported in today’s Wall Street Journal that, “Mexico plans to impose tariffs on an expanded array of American products, from pork to pistachios, escalating a trade dispute over a U.S. ban on Mexican truckers operating north of the border. “Mexico’s Economy Ministry said Monday it would add 26 U.S. products to its tariff list while removing 16 others. The tariffs involve a relatively small slice of U.S. exports. But by targeting products such as pork, apples and California oranges, Mexico appeared to be trying to engage powerful lobbies—and influential lawmakers—to increase pressure on the Obama administration to resolve the long-running spat.” (Note: For more background on this issue, see this FarmPolicy.com update from March 2009; in addition, this issue also came up in a FarmPolicy.com interview with Rep. Adrian Smith (R-Neb.) last month). Today’s Journal article explained that, “By adjusting the list of goods, Mexico hopes to add an element of uncertainty that might prompt U.S. exporters not directly affected by the tariffs to become more vocal against the cross-border trucking ban, Economy Minister Bruno Ferrari said. “Mexico said the levies would now affect 54 agricultural products and 45 manufactured ones. The government is expected to publish a list of affected products this week. A Mexican official Monday said the list included pork, certain cheeses, ketchup, chewing gum, dried and fresh apples, oranges and pistachios.” “[Pres.] Obama could end the ban on Mexican trucks without congressional approval, but that would risk an election-year backlash from unions and powerful congressional Democrats who oppose opening the borders to Mexican trucks. Instead, the administration has sought to work with Congress on a resolution to the trucking dispute,” the Journal article said. Mitchell and Kiernan pointed out that, “U.S. Trade Representative Ron Kirk said the administration was ‘disappointed’ in the tariffs;” and, “The National Pork Producers Council, a trade group, said the tariffs imposed by the industry’s second-biggest export market would have ‘negative economic consequences’ and criticized the U.S. government for ‘not living up to its trade obligations.’” Biotech Issues DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Production of more than half the nation’s sugar supply now hinges on how USDA responds to a federal court order handed down Friday that could stop farmers from planting Roundup Ready sugar beets next spring. “The ruling from U.S. District Judge Jeffrey White in the Northern District of California came down in the evening following a hearing in which environmental groups specifically pushed for an even broader injunction against the Roundup Ready sugar beet crop. The late ruling left much of the discussion about the potential impact from the decision to begin in earnest on Monday. “USDA officials stated, ‘We are reviewing the judge’s order to determine appropriate next steps.’” Yesterday’s article indicated that, “Luther Markwart, executive vice president of the American Sugarbeet Growers Association, said Monday that officials at APHIS [USDA's Animal and Plant Health Inspection Services], which oversees biotechnology regulation, will have to determine how to proceed. The ASGA was one of several major businesses and industry groups that had intervened in the case and will weigh whether to appeal the ruling. “‘APHIS clearly understands the urgency in all of this,’ Markwart said. ‘But those discussions are going to happen this week. There are options available, but APHIS is in the drivers’ seat.’” Mr. Clayton added that, “Markwart said he sees two key points for the industry moving forward. First, the crop in the ground can be harvested, processed and the sugar sold. ‘That’s the most important thing,’ he said. ‘There was not an injunction against any of that.’ “Second, people will have to have some patience for USDA officials to sort out the details and see how to proceed. “‘We don’t have a lot of answers today, and we’re not going to get out in front of APHIS on it,’ he said.” In a news release yesterday from Rep. Adrian Smith (R-Neb.) stated that, “‘This is a ruling which has the potential to disrupt an industry which is vitally important for western Nebraska. Our producers in Nebraska and nationwide need certainty, and I promise to do everything in my power to help ensure sugar beet growers aren’t going to be left out in the cold next planting season,’ Smith said.” Animal Agriculture Bill Marsh reported in Sunday’s New York Times that, “Which came first — consumer preference for humane farming, or pressure from animal welfare advocates? “Some combination of the two is driving big changes in the industrialized treatment of farm animals, including egg-laying hens, the vast majority of which live out their lives packed tightly in ‘battery cages.’ “Ohio, the second-largest producer of eggs after Iowa, is the latest to adjust its standards. Animal welfare advocates and farmers there agreed recently to phase out small crates for gestating hogs and veal calves, and to ban new cages for egg-laying hens. (Existing cages can remain.)” In related news, Rod Smith reported yesterday at Feedstuffs Online that, “Ohio agriculture can go forward with ‘predictability’ and ‘stability’ now that the agricultural community in the state and The Humane Society of the United States (HSUS) have reached an agreement that took an HSUS ballot measure out of this fall’s state election, according to Ohio Gov. Ted Strickland. “The initiative would have had ‘costly, divisive and harmful outcomes’ for Ohio agriculture and other sectors, he said in an exclusive interview with Feedstuffs last week. ‘That was obvious.’ “Although he said he hesitated to suggest what other states should do, he said the Ohio Livestock Care Standards Board and the agreement with HSUS could be models for other states facing similar situations.” Mr. Smith added that, “Strickland said the early polling he had seen clearly indicated that the initiative would pass with ‘an overwhelming vote’ and would almost immediately place ‘draconian’ restrictions on egg, pork and veal production in Ohio. “‘It would have been incredibly harmful’ to Ohio agriculture, he said. “The measure would have required the livestock board to adopt HSUS standards for egg-laying hens, pregnant sows and veal calves that would provide sufficient space for the animals to lie or sit down, stand up, turn around and extend their limbs without touching another animal or the sides of an enclosure such as a cage or stall. This would have made modern cage housing for hens and individual stalls for gestating sows and veal calves illegal and would have carried criminal penalties for violations. “Accordingly, Strickland said while he didn’t know which group or who made the first move, he began facilitating meetings between Ohio agricultural groups and HSUS to determine if there was middle ground around which they could compromise.” However, recall that an update posted last month at the Oklahoma Farm Report Online by Ron Hays included an audio discussion with David Martosko of HumaneWatch.Org regarding the HSUS – Ohio agreement. In part, Mr. Martosko indicated that Ohio Democratic Governor Ted Strickland desperately wanted to keep any animal care related initiative off the ballot in November due to political considerations. Rural voters, which potentially trend to the GOP, would likely have turned out in great numbers if a livestock measure was on the ballot, and in the process, could have voted for Gov. Strickland’s GOP competitor. To listen to a portion of this analysis, just click here (MP3- 0:38). In other news, Ken Anderson reported yesterday at Brownfield that, “Shareholders for McDonald’s have voted against a proposal to buy at least five percent of the restaurant chain’s eggs from cage-free facilities. “The Humane Society of the United States (HSUS), which owns 101 shares in the company, had sponsored the resolution. HSUS argued that cages are inhumane and pointed out that McDonald’s own European operations are transitioning toward purchases of cage-free eggs. “McDonald’s board of directors recommended that shareholders vote against the proposal, saying that the science was not there to support a switch.” EPA Issues Ken Anderson also reported yesterday at Brownfield that, “The U.S. Environmental Protection Agency continues to clamp down on small- to medium-sized cattle feeding operations for violations of the Clean Water Act. The agency’s latest move involved eight northwest Iowa feedlots that have been ordered to apply for federal regulatory permits and cease discharges into streams. “We asked Region 7 [which includes Iowa, Missouri, Kansas and Nebraska] EPA administrator [Karl Brooks] if the agency is concerned about the financial burden its actions might place on smaller producers.” Mr. Anderson noted that, “‘Every operation is different—every operator has a different set of factors that he’s working with—topography, the way he feeds,’ Brooks says, ‘so in some cases, the changes may be ones that you can make without a huge financial investment. In fact, in most cases, I think it’s not a huge financial investment.’ “And Brooks once again denied charges that this EPA is targeting agriculture, and specifically the livestock industry.” To listen to a Brownfield interview with Karl Brooks, just click here. In developments regarding climate regulations, Robin Bravender of Greenwire reported yesterday at The New York Times Online that, “The Obama administration is preparing to issue new fuel economy standards and the first-ever greenhouse gas limits for large trucks and buses. “U.S. EPA and the Transportation Department sent draft rules Friday to the White House regulatory review office that would limit heavy-duty vehicles’ emissions under the Clean Air Act and boost fuel economy standards for medium- and heavy-duty trucks, according to a federal website that tracks new rules.” Agricultural Economy Scott Canon reported on Sunday at the Kansas City Star Online that, “How could a Russian drought in the age of instant information escape the world’s notice until the country’s wheat crop was devastated? When and where will the resulting tsunami in global markets settle? And does that mean he should plant wheat or soybeans, sorghum or corn? “July saw the biggest monthly gains in wheat prices in 51 years. Moscow, smothered in the smoke of wildfires from its drought-toasted plains, imposed an embargo on wheat exports. “Prices spiked, dipped, rebounded, fell. Consider December wheat futures at the Kansas City Board of Trade: $5.52 cents a bushel on May 5, $4.92 on June 10, $7.95 on Aug. 5 and $7.40 at the close on Friday.” The article added that, “It’s hardly bad news for Kansas wheat farmers, although not the bonanza many might expect. The same precautions that farmers take to guard against the worst of times limit the potential upside of the best of times. Still, the mostly ballooning prices figure heavily in whether Kansas farmers will continue to move away from wheat toward other crops. “Consider [Central Kansas farmer Steve Clanton’s] position. He’d sold his wheat long before he harvested — at prices higher that what some of his neighbors were able to cash their crops in for at the local grain elevator, but significantly less that the peak of recent prices. “Wheat producers in Texas and Oklahoma, with their earlier harvests, fared even worse.” “But good times in modern farming, like bad times, are moderated. Few farmers would devote all their fields to wheat, or plan to sell all their harvest at the prices that happen to greet them the day they drive to market,” the article said. Bloomberg writer Jeff Wilson reported yesterday that, “U.S. corn and soybean crops, the world’s largest, may be smaller than the government estimated because of unusual weather across the Midwest, said Mark Schultz at Northstar Commodity Investment Co. in Minneapolis. “In Iowa, the biggest U.S. corn- and soybean-producing state, June was the wettest on record, July was the fifth- wettest, and the first 13 days of August had more than 10 inches (25 centimeters) of rain in some areas, or four times normal, the Iowa State Climatologist said. Parts of the growing region had the second-hottest start to August since 1960, after a month of mostly dry weather, T-Storm Weather LLC said. “‘The crops are smaller because of the flooding in the northern Midwest, and the hot, dry weather across the south’ that reduced ear size and soybean pods, said Schultz said from Minneapolis on Aug. 13. ‘The extreme weather caused more variable crops and not record yields.’” The Bloomberg article stated that, “Corn plants that farmers will begin harvesting next month are maturing 25 percent faster than the five-year average, and the rate of pod development by soybeans is 4 percentage points above normal, USDA data show. Rapid development reduces yield potential, Schultz said. “Midwest temperatures have averaged more than 6 degrees Fahrenheit (10.8 degrees Celsius) above normal in the past 30 days, according to the High Plains Regional Climate Center in Lincoln, Nebraska.” And Adam B. Ellick reported in today’s New York Times that, “Even as the government and international relief workers struggle to get food and clean water to millions of flood-stricken Pakistanis, concerns are growing about the enduring toll of the disaster on the nation’s overall economy, food supply and political stability.” “Providing clean water for millions and avoiding the spread of diseases like cholera are the first priorities. But there are also looming food shortages and price spikes, even in cities. There is also the danger that farmers will miss the fall planting season, raising the prospect of a new cycle of shortfalls next year,” the article said. Mr. Ellick pointed out that, “The floods have submerged about 17 million acres of Pakistan’s most fertile croplands, in a nation where farming is an economic mainstay. The waters have also killed more than 200,000 head of livestock, and washed away large quantities of stored commodities that feed millions throughout the year. “Relief workers warned that if farmers like [Maqbool Anjum, 50, a small-scale wheat farmer in the Khanpur area of southern Punjab Province] missed the deadline to reseed in the fall planting season, the nation could face long-term shortages.” Elections- Senate Ag Committee Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Barring an outright collapse, Democrats will maintain control of the Senate. The question is by how much and whether Sen. Harry Reid, D-Nev., will be back and stay majority leader.” “Naturally, the major race right now is Senate Agriculture Committee Chairman Blanche Lincoln’s campaign in Arkansas against Rep. John Boozman. Right now, this race is considered as ‘leaning Republican’ after Lincoln faced a bruising primary and runoff that drained her campaign finances earlier this spring. An argument from southern agriculture is that Lincoln, as chairman, would help defend southern-favored farm programs as Congress works on the 2012 farm bill. If Lincoln loses and Democrats keep the Senate, then the chairmanship could fall to Sen. Debbie Stabenow, D-Mich., because more senior Democrats on the Ag Committee also already have other high-profile chairmanships.” August 16 Policy Issues; Climate Issues; Ag Economy; Biotech; Trade; and GIPSA Rule Policy Issues: Farm Bill A July 20 Congressional Research Report (“Measuring Equity in Farm Support Levels”- by Randy Schnepf) stated that, “Federal farm law mandates support for, among others, 21 ‘covered commodities.’ Support for these agricultural commodities, as specified in the 2008 farm bill (P.L. 110-246) includes direct payments, counter-cyclical payments, and marketing loan benefits. Since 1996 a handful of these program commodities—feed grains (corn, sorghum, barley, and oats), cotton, wheat, rice, soybeans, and peanuts (hereafter referred to as the major program crops)—have received over $160 billion or 72% of all U.S. farm program payments, primarily in the form of commodity price and income support benefits. “Large disparities in the relative levels of benefit among these commodities have led to questions of equity. This report looks at available data for the major program crops and compares support rates per unit, total payments, payments per harvested acre, payments as a share of the value of production, and payments as a share of the total cost of production. In addition, price and income support levels are compared to market prices. By all of these measures there has been little equity across commodities. However, farmers often have argued for equity based on cost of production. Economists, on the other hand, would use trend (or a moving average of) market prices as the basis for setting support prices in order to avoid market distortions and resource misallocations.” The CRS report stated that, “With respect to commodity price and income support payments, this report focuses its equity analysis on the covered commodities since they are the primary beneficiaries. The author recognizes that fruits, vegetables, tree nuts, ornamental plants, and other minor crops account for nearly half of the value of U.S. crop production but do not receive any direct subsidies. Whether the lack of support for nearly 50% of crop production is equitable is beyond the scope of this analysis. “With the benefit of hindsight it is possible to compare support prices and actual payments against several standards to address questions of equity. Across these commodities, this report compares (1) support levels in the law, (2) yearly average program payments, [related graph] (3) program payments per acre [related graph], (4) payments as a share of crop market values [related graph], (5) payments as a share of production costs [related graph], and (6) support levels with market price trends.” The CRS report stated on page 14 that, “To the extent that the January 1997 through May 2010 time period reflects long-run market conditions, this exercise suggests that upland cotton and rice growers receive a disproportionately high level of both CCP and marketing loan support relative to the other major covered commodities. Barley and soybeans receive disproportionately lower CCP and marketing loan support. The situation is mixed for most of the other crops; however, wheat, corn, sorghum, and oats are within +/- 5% of the parity value for both loan rates and target prices, suggesting that they are the closest to achieving policy equity under this somewhat ad hoc analysis. Policy Issues: Disaster Aid The August 13 edition of The Kiplinger Agriculture Letter (link requires subscription) indicated that, “The proposed disaster aid for ‘09 crops won’t be paid out anytime soon. Senate Ag Com. Chairman Blanche Lincoln (D-AR), fighting for reelection, is pressing for $1.5 billion in payments. Ark. farmers would pocket the most… over $200 million…with the bulk of the money going to big farms in the state. Other senators, however, are thwarting Lincoln’s efforts to get the payments. “Though Obama plans to sidestep Congress and tell USDA to pay the aid… “Court challenges are sure to delay payments if USDA acts unilaterally. Taxpayer groups and many lawmakers would object to the Obama administration grabbing Congress’ power of the purse. Many see the payments as campaign pork. But ag secretaries have often stretched their authority to hand out money. “Note that the aid is mislabeled and has little relation to actual crop losses. It amounts to a near doubling of the annual subsidies paid for owning cropland, though recipients would have to report ‘09 losses of at least 5% from usual yields. USDA crop insurance data show that some states getting big chunks of the aid… Texas, Okla., Miss…did report high losses on ‘09 crops. But in the two states that would collect the most aid…Ark. and Ill…farmers had only moderate losses.” Climate Issues Ben Geman reported on Saturday at The Hill’s Energy Blog that, “The U.S. Chamber of Commerce on Friday filed a lawsuit that challenges EPA’s recent rejection of its petition for reconsideration of the agency’s 2009 ‘endangerment finding’ that greenhouse gases threaten humans. “The finding is the underpinning for upcoming EPA rules limiting emissions from power plants, factories and other sources that are opposed by a number of business groups. “‘The U.S. Chamber, policymakers, numerous trade groups, state governments, and businesses throughout the country have collectively raised strong concerns about the significant negative impact the EPA’s endangerment finding will have on jobs and local economies,’ said Robin Conrad, executive vice president of the U.S. Chamber’s National Chamber Litigation Center, in a prepared statement.” Mr. Geman added that, “The chamber filed for judicial review in the U.S. Court of Appeals for the District of Columbia Circuit. “EPA in late July rejected petitions from the Chamber, states of Virginia and Texas, the Competitive Enterprise Institute, coal giant Peabody Energy Corp. and others that sought to nix the finding.” Darren Samuelsohn reported on Friday at Politico that, “Sen. Jeff Bingaman said Thursday that he doubts Congress will pass any major legislation before Election Day, including a pared-back energy bill focused on responding to the Gulf of Mexico oil spill. “‘I think the Republicans are reluctant to support anything that might result in another signing ceremony between now and the election,’ the chairman of the Energy and Natural Resources Committee told POLITICO after a Mexican lunch here with Rep. Harry Teague and other local Democrats.” Meanwhile, Justin Gillis reported in yesterday’s New York Times that, “The floods battered New England, then Nashville, then Arkansas, then Oklahoma — and were followed by a deluge in Pakistan that has upended the lives of 20 million people. “The summer’s heat waves baked the eastern United States, parts of Africa and eastern Asia, and above all Russia, which lost millions of acres of wheat and thousands of lives in a drought worse than any other in the historical record. “Seemingly disconnected, these far-flung disasters are reviving the question of whether global warming is causing more weather extremes.” Yesterday’s article noted that, “The collective answer of the scientific community can be boiled down to a single word: probably. “‘The climate is changing,’ said Jay Lawrimore, chief of climate analysis at the National Climatic Data Center in Asheville, N.C. ‘Extreme events are occurring with greater frequency, and in many cases with greater intensity.’” David A. Fahrenthold reported in Saturday’s Washington Post that, “So far, this has been the hottest year in recorded history. “On Friday, the National Oceanic and Atmospheric Administration released data showing that, from January to July, the average global temperature was 58.1 degrees. That was 1.22 degrees over the average from the 20th century, and the highest since 1880, when reliable records begin. “Although NOAA experts say global climate change isn’t the only reason 2010 has been so hot — an El Nino event earlier in the year pushed temperatures up — they said it’s still the most important reason.” And the AP reported on Friday that, “Floods, fires, melting ice and feverish heat: From smoke-choked Moscow to water-soaked Iowa and the High Arctic, the planet seems to be having a midsummer breakdown. It’s not just a portent of things to come, scientists say, but a sign of troubling climate change already under way.” Agricultural Economy Mike Hughlett reported late last week at the Minneapolis Star-Tribune Online that, “From corn to soybeans to sugar beets, Minnesota farmers are looking at bumper crops this year. “They’ve benefited from good weather and a particularly mild spring that allowed for early planting. And wheat growers are particularly in the green, as prices for that grain have rocketed over the past several weeks. “Meanwhile, livestock and dairy farmers — who mostly lost money last year — are back in the black in 2010.” The article stated that, “The upshot: ‘Farm income trends should be very good this year,’ said Michael Swanson, an agricultural economist at Wells Fargo in Minneapolis. ‘It’s a very positive outlook right now.’” Tom Sellen reported in Saturday’s Wall Street Journal Online that, “Cotton prices are surging on the back of anticipated shortfalls in global stockpiles caused partly by the devastating floods in Pakistan. “Prices of futures contracts have risen 16% in the past month to the highest since March 2008. The latest rally got underway on widespread concerns that tight global supplies wouldn’t be able to keep pace with surprisingly robust demand from textile makers.” And Anna Raff reported on Saturday at Barron’s Online that, “Given the uncertainty surrounding weather, there’s talk that $7 a bushel is the new floor for wheat futures traded on the Chicago Board of Trade. Wheat recently spiked as high as $8.41 (Aug. 6). This is almost double the nine-month low the grain hit in early June. “‘If Russia’s out for two years, that changes the dynamics,’ says Daniel Basse, president of AgResource Co., a research firm.” Meanwhile, Elizabeth Williams reported on Friday at DTN (link requires subscription) that, “U.S. homeowners are still smarting from a catastrophic drop in property values, the stock market is again sputtering, and the Federal Reserve is driving Treasuries to near zero interest rates. But bucking this gloomy trend is Midwest farm real estate, one of the few assets apparently immune to the nation’s economic downturn.” The DTN article pointed out that, “‘The farmland real estate market caught fire this summer,’ said Jon Hjelm of the ACRE Company in Spencer, Iowa. Per acre prices are once again climbing over $7,000 in parts of northwest Iowa, he reported. Typical of the trend is an outside investor from Chicago who just bought an 80-acre parcel that needed tile and a grass waterway for $7,425 per acre. (Iowa State University pegged the average value of land in that county at $5,153 per acre last December and said prices were virtually unchanged from 2008’s highs.) “Other Iowa realtors estimate that the state’s land values have jumped an average of 3 percent to 5 percent so far this year, but gains aren’t limited to the prime Corn Belt. The Kansas City Federal Reserve reported that farmland in its second quarter survey gained 4.8 percent compared to a year ago, and irrigated land gained 5.6 percent.” Biotech Andrew Pollack reported in Saturday’s New York Times that, “A federal district court judge revoked the government’s approval of genetically engineered sugar beets Friday, saying that the Agriculture Department had not adequately assessed the environmental consequences before approving them for commercial cultivation. “The decision, by Judge Jeffrey S. White of Federal District Court in San Francisco, appears to effectively ban the planting of the genetically modified sugar beets, which make up about 95 percent of the crop, until the Agriculture Department prepares an environmental impact statement and approves the crop again, a process that might take a couple of years. “The decision could cause major problems for sugar beet farmers and sugar processors. In the past the sugar industry has warned there might not be enough non-engineered seeds available. However, the judge ruled that crops currently in the ground can be harvested and made into sugar, so the effects will not be felt until next spring’s planting season.” Scott Kilman reported in today’s Wall Street Journal that, “A federal judge’s decision Friday to undo the government’s five-year-old approval of genetically modified sugar beets, from which roughly half of U.S. sugar is derived, won’t disrupt supplies for at least a year, but could pose headaches for food companies after that. “The order by U.S. District Judge Jeffrey S. White—who had concluded in September 2009 that the U.S. Department of Agriculture hadn’t lived up to its obligation to fully consider whether the weedkiller-tolerant sugar beets might harm the environment—effectively blocks farmers from planting the seed next spring, but leaves alone the crop already in the ground, which can be harvested this fall, processed and sold as sugar.” Mr. Kilman added that, “‘In the short term, at least, we’re aren’t going to see any disruption in the marketing of this year’s crop,’ said Luther Markwart, executive vice president of the American Sugarbeet Growers Association, a Washington, D.C., trade group. “However food companies that depend on a steady supply of U.S. sugar face uncertainty over where they will source their sugar beets after next year.” Trade Reuters news reported on Friday that, “Russia, the top market for U.S. chicken, will lift a ban on U.S. poultry imports starting Aug. 16, the Interfax news agency quoted Russian Agriculture Ministry spokesperson Oleg Aksyonov as saying on Friday. “Russia, where U.S. poultry has been banned since January, will allow poultry imports from 68 U.S. plants out of a total of 87 proposed by the U.S. side, Aksyonov said. “But after meeting with Russian counterparts in Geneva to try to restart trade, halted since January, a U.S. government team said Russia’s proposal was not an acceptable way to implement a deal signed on June 24 by President Barack Obama and President Dmitry Medvedev.” GIPSA Rule Chris Clayton reported on Friday at the DTN Ag Policy Blog that, “Twenty one senators — 19 Democrats, one independent and one Republican — pushed back on Friday to resistance regarding the proposed livestock competition rule from USDA’s Grain Inspection, Packers and Stockyards Administration. Senators wrote Agriculture Secretary Tom Vilsack that the livestock rule should be implemented to better clarify protections for livestock producers under the Packers & Stockyards Act. “‘We urge you to issue a final rule as expeditiously as possible once the comment period is closed and the Department has reviewed the comments and made any appropriate modifications to the proposed rule,’ the senators wrote Vilsack.” Friday’s update stated that, “National Farmers Union President Roger Johnson praised the senators, saying the proposed rule addresses concerns that have been discussed for years and were developed at the direction of the 2008 Farm Bill. “‘The proposed rule is a significant step in the right direction to provide our producers with the means to sell their products in a fair marketplace,’ Johnson stated in a news release. ‘The process for passing this rule has already been slowed due to an extension for the comment period being granted. I urge Secretary Vilsack to issue a final rule as soon as practically feasible after the comment period is closed.’” August 13 Policy Issues; Climate Issues; Ag Economy; Biotech; Trade; and GIPSA Rule Policy Issues: Farm Bill A July 20 Congressional Research Report (“Measuring Equity in Farm Support Levels”- by Randy Schnepf) stated that, “Federal farm law mandates support for, among others, 21 ‘covered commodities.’ Support for these agricultural commodities, as specified in the 2008 farm bill (P.L. 110-246) includes direct payments, counter-cyclical payments, and marketing loan benefits. Since 1996 a handful of these program commodities—feed grains (corn, sorghum, barley, and oats), cotton, wheat, rice, soybeans, and peanuts (hereafter referred to as the major program crops)—have received over $160 billion or 72% of all U.S. farm program payments, primarily in the form of commodity price and income support benefits. “Large disparities in the relative levels of benefit among these commodities have led to questions of equity. This report looks at available data for the major program crops and compares support rates per unit, total payments, payments per harvested acre, payments as a share of the value of production, and payments as a share of the total cost of production. In addition, price and income support levels are compared to market prices. By all of these measures there has been little equity across commodities. However, farmers often have argued for equity based on cost of production. Economists, on the other hand, would use trend (or a moving average of) market prices as the basis for setting support prices in order to avoid market distortions and resource misallocations.” The CRS report stated that, “With respect to commodity price and income support payments, this report focuses its equity analysis on the covered commodities since they are the primary beneficiaries. The author recognizes that fruits, vegetables, tree nuts, ornamental plants, and other minor crops account for nearly half of the value of U.S. crop production but do not receive any direct subsidies. Whether the lack of support for nearly 50% of crop production is equitable is beyond the scope of this analysis. “With the benefit of hindsight it is possible to compare support prices and actual payments against several standards to address questions of equity. Across these commodities, this report compares (1) support levels in the law, (2) yearly average program payments, [related graph] (3) program payments per acre [related graph], (4) payments as a share of crop market values [related graph], (5) payments as a share of production costs [related graph], and (6) support levels with market price trends.” The CRS report stated on page 14 that, “To the extent that the January 1997 through May 2010 time period reflects long-run market conditions, this exercise suggests that upland cotton and rice growers receive a disproportionately high level of both CCP and marketing loan support relative to the other major covered commodities. Barley and soybeans receive disproportionately lower CCP and marketing loan support. The situation is mixed for most of the other crops; however, wheat, corn, sorghum, and oats are within +/- 5% of the parity value for both loan rates and target prices, suggesting that they are the closest to achieving policy equity under this somewhat ad hoc analysis. Policy Issues: Disaster Aid The August 13 edition of The Kiplinger Agriculture Letter (link requires subscription) indicated that, “The proposed disaster aid for ‘09 crops won’t be paid out anytime soon. Senate Ag Com. Chairman Blanche Lincoln (D-AR), fighting for reelection, is pressing for $1.5 billion in payments. Ark. farmers would pocket the most… over $200 million…with the bulk of the money going to big farms in the state. Other senators, however, are thwarting Lincoln’s efforts to get the payments. “Though Obama plans to sidestep Congress and tell USDA to pay the aid… “Court challenges are sure to delay payments if USDA acts unilaterally. Taxpayer groups and many lawmakers would object to the Obama administration grabbing Congress’ power of the purse. Many see the payments as campaign pork. But ag secretaries have often stretched their authority to hand out money. “Note that the aid is mislabeled and has little relation to actual crop losses. It amounts to a near doubling of the annual subsidies paid for owning cropland, though recipients would have to report ‘09 losses of at least 5% from usual yields. USDA crop insurance data show that some states getting big chunks of the aid… Texas, Okla., Miss…did report high losses on ‘09 crops. But in the two states that would collect the most aid…Ark. and Ill…farmers had only moderate losses.” Climate Issues Ben Geman reported on Saturday at The Hill’s Energy Blog that, “The U.S. Chamber of Commerce on Friday filed a lawsuit that challenges EPA’s recent rejection of its petition for reconsideration of the agency’s 2009 ‘endangerment finding’ that greenhouse gases threaten humans. “The finding is the underpinning for upcoming EPA rules limiting emissions from power plants, factories and other sources that are opposed by a number of business groups. “‘The U.S. Chamber, policymakers, numerous trade groups, state governments, and businesses throughout the country have collectively raised strong concerns about the significant negative impact the EPA’s endangerment finding will have on jobs and local economies,’ said Robin Conrad, executive vice president of the U.S. Chamber’s National Chamber Litigation Center, in a prepared statement.” Mr. Geman added that, “The chamber filed for judicial review in the U.S. Court of Appeals for the District of Columbia Circuit. “EPA in late July rejected petitions from the Chamber, states of Virginia and Texas, the Competitive Enterprise Institute, coal giant Peabody Energy Corp. and others that sought to nix the finding.” Darren Samuelsohn reported on Friday at Politico that, “Sen. Jeff Bingaman said Thursday that he doubts Congress will pass any major legislation before Election Day, including a pared-back energy bill focused on responding to the Gulf of Mexico oil spill. “‘I think the Republicans are reluctant to support anything that might result in another signing ceremony between now and the election,’ the chairman of the Energy and Natural Resources Committee told POLITICO after a Mexican lunch here with Rep. Harry Teague and other local Democrats.” Meanwhile, Justin Gillis reported in yesterday’s New York Times that, “The floods battered New England, then Nashville, then Arkansas, then Oklahoma — and were followed by a deluge in Pakistan that has upended the lives of 20 million people. “The summer’s heat waves baked the eastern United States, parts of Africa and eastern Asia, and above all Russia, which lost millions of acres of wheat and thousands of lives in a drought worse than any other in the historical record. “Seemingly disconnected, these far-flung disasters are reviving the question of whether global warming is causing more weather extremes.” Yesterday’s article noted that, “The collective answer of the scientific community can be boiled down to a single word: probably. “‘The climate is changing,’ said Jay Lawrimore, chief of climate analysis at the National Climatic Data Center in Asheville, N.C. ‘Extreme events are occurring with greater frequency, and in many cases with greater intensity.’” David A. Fahrenthold reported in Saturday’s Washington Post that, “So far, this has been the hottest year in recorded history. “On Friday, the National Oceanic and Atmospheric Administration released data showing that, from January to July, the average global temperature was 58.1 degrees. That was 1.22 degrees over the average from the 20th century, and the highest since 1880, when reliable records begin. “Although NOAA experts say global climate change isn’t the only reason 2010 has been so hot — an El Nino event earlier in the year pushed temperatures up — they said it’s still the most important reason.” And the AP reported on Friday that, “Floods, fires, melting ice and feverish heat: From smoke-choked Moscow to water-soaked Iowa and the High Arctic, the planet seems to be having a midsummer breakdown. It’s not just a portent of things to come, scientists say, but a sign of troubling climate change already under way.” Agricultural Economy Mike Hughlett reported late last week at the Minneapolis Star-Tribune Online that, “From corn to soybeans to sugar beets, Minnesota farmers are looking at bumper crops this year. “They’ve benefited from good weather and a particularly mild spring that allowed for early planting. And wheat growers are particularly in the green, as prices for that grain have rocketed over the past several weeks. “Meanwhile, livestock and dairy farmers — who mostly lost money last year — are back in the black in 2010.” The article stated that, “The upshot: ‘Farm income trends should be very good this year,’ said Michael Swanson, an agricultural economist at Wells Fargo in Minneapolis. ‘It’s a very positive outlook right now.’” Tom Sellen reported in Saturday’s Wall Street Journal Online that, “Cotton prices are surging on the back of anticipated shortfalls in global stockpiles caused partly by the devastating floods in Pakistan. “Prices of futures contracts have risen 16% in the past month to the highest since March 2008. The latest rally got underway on widespread concerns that tight global supplies wouldn’t be able to keep pace with surprisingly robust demand from textile makers.” And Anna Raff reported on Saturday at Barron’s Online that, “Given the uncertainty surrounding weather, there’s talk that $7 a bushel is the new floor for wheat futures traded on the Chicago Board of Trade. Wheat recently spiked as high as $8.41 (Aug. 6). This is almost double the nine-month low the grain hit in early June. “‘If Russia’s out for two years, that changes the dynamics,’ says Daniel Basse, president of AgResource Co., a research firm.” Meanwhile, Elizabeth Williams reported on Friday at DTN (link requires subscription) that, “U.S. homeowners are still smarting from a catastrophic drop in property values, the stock market is again sputtering, and the Federal Reserve is driving Treasuries to near zero interest rates. But bucking this gloomy trend is Midwest farm real estate, one of the few assets apparently immune to the nation’s economic downturn.” The DTN article pointed out that, “‘The farmland real estate market caught fire this summer,’ said Jon Hjelm of the ACRE Company in Spencer, Iowa. Per acre prices are once again climbing over $7,000 in parts of northwest Iowa, he reported. Typical of the trend is an outside investor from Chicago who just bought an 80-acre parcel that needed tile and a grass waterway for $7,425 per acre. (Iowa State University pegged the average value of land in that county at $5,153 per acre last December and said prices were virtually unchanged from 2008’s highs.) “Other Iowa realtors estimate that the state’s land values have jumped an average of 3 percent to 5 percent so far this year, but gains aren’t limited to the prime Corn Belt. The Kansas City Federal Reserve reported that farmland in its second quarter survey gained 4.8 percent compared to a year ago, and irrigated land gained 5.6 percent.” Biotech Andrew Pollack reported in Saturday’s New York Times that, “A federal district court judge revoked the government’s approval of genetically engineered sugar beets Friday, saying that the Agriculture Department had not adequately assessed the environmental consequences before approving them for commercial cultivation. “The decision, by Judge Jeffrey S. White of Federal District Court in San Francisco, appears to effectively ban the planting of the genetically modified sugar beets, which make up about 95 percent of the crop, until the Agriculture Department prepares an environmental impact statement and approves the crop again, a process that might take a couple of years. “The decision could cause major problems for sugar beet farmers and sugar processors. In the past the sugar industry has warned there might not be enough non-engineered seeds available. However, the judge ruled that crops currently in the ground can be harvested and made into sugar, so the effects will not be felt until next spring’s planting season.” Scott Kilman reported in today’s Wall Street Journal that, “A federal judge’s decision Friday to undo the government’s five-year-old approval of genetically modified sugar beets, from which roughly half of U.S. sugar is derived, won’t disrupt supplies for at least a year, but could pose headaches for food companies after that. “The order by U.S. District Judge Jeffrey S. White—who had concluded in September 2009 that the U.S. Department of Agriculture hadn’t lived up to its obligation to fully consider whether the weedkiller-tolerant sugar beets might harm the environment—effectively blocks farmers from planting the seed next spring, but leaves alone the crop already in the ground, which can be harvested this fall, processed and sold as sugar.” Mr. Kilman added that, “‘In the short term, at least, we’re aren’t going to see any disruption in the marketing of this year’s crop,’ said Luther Markwart, executive vice president of the American Sugarbeet Growers Association, a Washington, D.C., trade group. “However food companies that depend on a steady supply of U.S. sugar face uncertainty over where they will source their sugar beets after next year.” Trade Reuters news reported on Friday that, “Russia, the top market for U.S. chicken, will lift a ban on U.S. poultry imports starting Aug. 16, the Interfax news agency quoted Russian Agriculture Ministry spokesperson Oleg Aksyonov as saying on Friday. “Russia, where U.S. poultry has been banned since January, will allow poultry imports from 68 U.S. plants out of a total of 87 proposed by the U.S. side, Aksyonov said. “But after meeting with Russian counterparts in Geneva to try to restart trade, halted since January, a U.S. government team said Russia’s proposal was not an acceptable way to implement a deal signed on June 24 by President Barack Obama and President Dmitry Medvedev.” GIPSA Rule Chris Clayton reported on Friday at the DTN Ag Policy Blog that, “Twenty one senators — 19 Democrats, one independent and one Republican — pushed back on Friday to resistance regarding the proposed livestock competition rule from USDA’s Grain Inspection, Packers and Stockyards Administration. Senators wrote Agriculture Secretary Tom Vilsack that the livestock rule should be implemented to better clarify protections for livestock producers under the Packers & Stockyards Act. “‘We urge you to issue a final rule as expeditiously as possible once the comment period is closed and the Department has reviewed the comments and made any appropriate modifications to the proposed rule,’ the senators wrote Vilsack.” Friday’s update stated that, “National Farmers Union President Roger Johnson praised the senators, saying the proposed rule addresses concerns that have been discussed for years and were developed at the direction of the 2008 Farm Bill. “‘The proposed rule is a significant step in the right direction to provide our producers with the means to sell their products in a fair marketplace,’ Johnson stated in a news release. ‘The process for passing this rule has already been slowed due to an extension for the comment period being granted. I urge Secretary Vilsack to issue a final rule as soon as practically feasible after the comment period is closed.’” August 12 Policy Issues; EPA; Climate Issues; Food Safety; and the Agricultural Economy Policy Issues: Animal Agriculture Erik Eckholm reported in today’s New York Times that, “Concessions by farmers in this state [Ohio] to sharply restrict the close confinement of hens, hogs and veal calves are the latest sign that so-called factory farming — a staple of modern agriculture that is seen by critics as inhumane and a threat to the environment and health — is on the verge of significant change. “A recent agreement between farmers and animal rights activists here is a rare compromise in the bitter and growing debate over large-scale, intensive methods of producing eggs and meat, and may well push farmers in other states to give ground, experts say. The rising consumer preference for more ‘natural’ and local products and concerns about pollution and antibiotic use in giant livestock operations are also driving change. “The surprise truce in Ohio follows stronger limits imposed by California voters in 2008; there, extreme caging methods will be banned altogether by 2015. In another sign of the growing clout of the animal welfare movement, a law passed in California this year will also ban imports from other states of eggs produced in crowded cages. Similar limits were approved last year in Michigan and less sweeping restrictions have been adopted in Florida, Arizona and other states.” Today’s article noted that, “Farmers in Ohio have accepted the agreement with chagrin, saying they sense that they must bend with the political and cultural winds. Tim Weaver, whose grandparents started selling eggs in the early 20th century, is proud of his state-of-the art facilities, where four million birds produce more than three million eggs a day. In just one typical barn here at his Heartland Quality Egg Farm, 268,000 small white hens live in cages about the size of an open newspaper, six or seven to a cage. “Mr. Weaver said that after his initial shock at the agreement, he has accepted it as necessary. He will not be immediately affected since it allows existing egg farms to continue but bars new ones with similar cages. He defends his methods, saying, ‘My own belief is that I’m doing the right thing.’” The Times article indicated that, “Egg production is at the center of the debate because more than 90 percent of the country’s eggs are now produced in the stacked rows of cages that critics call inhumane. “Ohio is the country’s second-largest egg producer, after Iowa. In the modern version of an egg barn, hordes of hens live with computer-controlled air circulation, lighting and feeding, their droppings whisked away by conveyor belt for recycling as fertilizer. As the hens jostle one other, their eggs roll onto a belt to be washed, graded and packed without ever being touched by human hands. “Mr. Weaver insists that his chickens are content and less prone to disease than those in barnyard flocks, saying, ‘If our chickens aren’t healthy and happy, they won’t be as productive.’” “Now, the United Egg Producers, a national trade group, says that egg prices would rise by 25 percent if all eggs were produced by uncaged hens, putting stress on consumers and school lunch programs. Animal proponents say that better noncage methods could be developed and that price is not the ultimate issue anyway,” the Times article said. Policy Issues: Disaster Aid The Washington Insider section of DTN reported yesterday (link requires subscription) that, “Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., recently received assurances from the White House that USDA would be able to find $1.5 billion in its administrative budget that it could use to fund Lincoln’s proposed ad hoc agricultural disaster assistance program. Speaking to an audience in his home state of Minnesota, House Ag Chairman Peterson said he told Lincoln he is ‘not a big fan’ of the low threshold for determining eligibility that would require a farmer to have suffered only a 5 percent loss. “Peterson said that under Lincoln’s proposal, USDA would be ‘making payments to some producers who do not need it and we will get all sorts of criticism over it, especially when people realize producers in over half of the counties in the United States will qualify to get a supplemental direct payment.’” The DTN item added that, “As for the way the Obama administration will implement the provision, Peterson said, ‘I guess you can do about anything you want via the Commodity Credit Corporation’ charter. His fear, he says, is that the $1.5 billion for the program would be charged to the farm program ‘account’ when the next farm bill is written. “Neither the White House nor USDA has yet announced where it plans to ‘find’ the new money for Lincoln’s proposed disaster program. But whatever the source may be, the administration will be criticized, and not just by those who traditionally to look askance at farm programs.” Meanwhile, a news release yesterday from the National Black Farmers Association stated in part that, “Despite the advocacy of [Sen. Blanche Lincoln (D-Ark.)], the US Senate has failed in seven attempts to fund a settlement designed to remedy decades of discrimination suffered by black farmers. “Yet, the Obama Administration and Sen. Lincoln were able to find and offer $1.5 billion to farmers in Arkansas and around the country coping with natural disasters — a measure that has come under criticism.” Yesterday’s release added that, “On Aug. 5, Sen. Lincoln said that the time to fund the black farmer settlement was ‘long overdue.’ The Senator went on to say, ‘Time is of the essence, as many Pigford claimants have passed away waiting for closure on this matter. We simply cannot afford to delay this process any further.’ “But the Senate took no conclusive legislative action on behalf of the black farmers. “Adding insult to injury, according to press reports, and confirmed by a letter dated August 6th, from the Executive Office of the President, Office of Management and Budget, Senator Lincoln sought and received assurances that the White House would find $1.5 billion within its budget to help farmers in Arkansas and around the country who are coping with natural disasters. Press reports indicated that White House Chief of Staff, Rahm Emanuel, ‘promised to provide the assistance administratively to get her to agree to delete $1.5 billion in disaster relief assistance for farmers from small-business legislation.’” Policy Issues: Nutrition Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “Anti-hunger activists are criticizing Congress by rolling back food-stamp benefits to pay for saving teacher jobs and to fund higher spending on school lunches and other child nutrition programs. “‘These are real cuts with real impact on low-income households who, for the first time, will see their benefits fall from one month to the next,’ according to the Food Research and Action Center. “The reduction in benefits through the Supplemental Nutrition Assistance Program, as food stamps are now known, provided $11.9 billion for funding teacher salaries and other state programs.” Yesterday’s update noted that, “Aides to Sen. Tom Harkin, D-Ia., issued a statement today saying that the reduction was returning benefits to levels where they were before they were increased as part of the 2009 stimulus bill. “The bill ‘does not ‘cut’ food stamp benefits, but rather returns a temporary increase of benefits that was included in the Recovery Act to normal, historical benefit levels,’ the statement said. ‘Congress always intended for the food stamp increases in the recovery bill be temporary in nature. In fact, they were designed to end over time and revert back to normal levels. Rescinding food stamp increases several years from now is consistent with the original intent of the Recovery Act.’” Mr. Brasher pointed out that, “There is an additional reduction in food stamps contained in a Senate-passed child nutrition bill. That legislation still must be approved by the House. “If that cut goes through as well, a family of four would see their benefits fall by $59 in November 2013, according to FRAC.” In a related item, The Wall Street Journal editorial board opined today that, “Democrats say they’ll restore the food stamp funding once they can find another $12 billion in tax hikes or (less likely) spending cuts to serve as offsets. They’d better hope they keep the House in November. [Representative Rosa DeLauro (D., Conn.)] and her colleagues have clearly put at risk the additional funds they wanted to devote to feeding the poor, at a time when record numbers of Americans are now receiving such assistance.” Policy Issues: Trade The Los Angeles Times editorial board indicated in today’s paper that, “Even in the gloom of an international economic crisis, there is a bright spot of hope: free trade. Successful trade pacts with Panama and Colombia and a pending agreement with South Korea will serve to accelerate investment opportunities across a broad spectrum of business and industry, including agriculture, communications technology and natural resources — for Canada, that is. As for the United States, the best that can be said is that farmers, producers and exporters here have front-row seats as they watch three-quarters of a billion dollars in potential trade flow northward. In recent weeks, however, President Obama has indicated that he intends to finalize a long-overdue free trade agreement with Colombia. We hope he means it. “The president has set the ambitious goal of doubling exports over the next five years, which could create 2 million jobs. But this can’t be achieved without ratification of the pact with Colombia, as well as those with Panama and South Korea.” EPA A recent news release from Senator Richard Lugar (R-Indiana) stated that, “U.S. Sen. Dick Lugar has written Environmental Protection Agency Administrator Lisa Jackson, asking that ‘commonsense’ be used in considering the federal regulation of farm dust. “‘As the U.S. Environmental Protection Agency considers regulations concerning particulate matter under the Clean Air Act, I wanted to share with you my concerns about the potential impact of these regulations on Indiana, especially on farms and rural communities,’ Lugar wrote.” “‘As you deliberate potential regulations that may limit dust emissions, I urge to be mindful of the impact these actions may have on Indiana farmers, agriculture related businesses, and counties and municipalities responsible for road maintenance.’” Meanwhile, the Washington Insider section of DTN reported yesterday (link requires subscription) that, “Many farm-state members of Congress have been getting an earful from constituents who complain about the stepped-up regulatory regime of the Environmental Protection Agency and worry that it will only get worse for production agriculture. This week, House Agriculture Committee Chairman Collin Peterson, D-Minn., gave a strong hint regarding how the agency’s activities might be trimmed back. “Speaking to a farm leadership conference in Minnesota, Peterson said the Obama administration listens too closely to ‘elements of the environmental movement who have way too much influence with this administration’ and that those elements ‘are driving the agenda at EPA.’ “‘EPA is out of control’ and is ‘into everything under the sun,’ said Peterson, adding that part of the problem is the increased size of EPA’s budget. ‘They got more money out of the (economic) stimulus package. They have more money and people and that is allowing them to get into all these different areas — dust, spray drifts, you name it.’ Peterson revealed that he has his staff ‘trying to figure out how to cut their budget down.’” Climate Issues Ben Geman reported yesterday at The Hill’s Energy Blog that, “Prices at the gas pump aren’t high enough to keep energy in the political limelight. “High gasoline prices tend to push energy policy onto the front burner. “The record oil and gasoline prices in the election-season summer of 2008, when average pump prices reached $4.11 per gallon, led Congress to dump coastal drilling bans (even though opening new areas to drilling will, at most, marginally affect prices years down the road).” Mr. Geman added that, “But the latest Short-Term Energy Outlook from the U.S. Energy Information Administration (EIA) released Tuesday predicts that prices, while higher than last year, will remain far, far below those 2008 highs.” Food Safety Julian Pecquet reported earlier this week at The Hill’s Healthwatch Blog that, “The Senate has reached a tentative agreement on food-safety legislation and will brief staffers Thursday, a Senate staffer said, although it’s still unclear how the bill might move forward. The panel is also scheduled to post the manager’s package and a Congressional Budget Office score, another source said.” Agricultural Economy Liam Pleven reported in today’s Wall Street Journal that, “Will drought, rain or locusts drive wheat prices in the near term? “That is one of the big questions sharpening interest in a pair of reports the U.S. Department of Agriculture will issue Thursday. The reports come a week after Russia banned wheat exports amid a ruinous drought that has fueled a 57% price rise in wheat futures since late June. “Market-watchers will closely monitor the USDA’s monthly report on global supply and demand, which will weigh the world’s appetite for corn, soybeans and other crops. Wheat, however, will be the center of attention, including how much of the Russian wheat harvest has been lost and which major grain exporters are picking up the slack.” Roman Olearchyk reported yesterday at the Financial Times Online that, “Ukraine, one of the world’s top grain exporters, said on Wednesday it was considering a cap on wheat exports, a move that would put more pressure on surging global grain prices. “The announcement was made after Russia had intro­duced a ban on grain exports until the end of the year following the devastation of its crops by the worst drought in a century. The World Bank has urged countries not to restrict trade in grain.” Jude Webber reported on Tuesday at the FT Online that, “It hardly matters to Argentina how high international wheat prices go in the wake of Russia’s export ban: its producers are unlikely to be able to cash in. “For the past four years Argentine farmers have been grappling with wheat export limits, which the government says are to protect domestic prices, and also pay 23 per cent in export taxes, further discouraging overseas sales. “So, with scant incentive to produce, farmers have slashed the land sown with wheat to a 111-year low, and cereal exports from the rolling pampas of what should be a breadbasket country have virtually halved over the past five years.” Fiona Harvey reported on Tuesday at the FT Online that, “UK grain farmers are expecting to rake in bumper prices for this year’s harvest on the back of strong rises in the price of wheat and barley in the past few weeks, buoying the arable farming sector after last year’s difficult season. “However, many will miss out on a significant portion of the possible gains, having forward sold their crops in a hedge against weak prices. “Livestock farmers are also looking on with dismay as they see the price of a key input rising sharply at a time when their finances are on a knife-edge, after weaker consumer demand in the recession.” Meanwhile, Bloomberg writer Alan Bjerga reported yesterday that, “Wheat buyers including Egypt are contacting the U.S. government to see if additional American grain is available for sale as Russia struggles with drought, Agriculture Secretary Tom Vilsack said. “‘There’s no question this is an opportunity for us that we are going to take advantage of,’ Vilsack told reporters today at his office in Washington.” Geeta Anand and Arlene Chang reported yesterday at the IndiaRealTime Blog (The Wall Street Journal) that, “India is struggling with too much wheat while the rest of the world is anticipating a shortage. “Rising global wheat prices triggered by the crippling drought in Russia and the nation’s export ban have sparked a world-wide scramble to secure wheat supplies and raised concerns there could be a new bout of food inflation. “India is well insulated from the global wheat crisis because it produces more wheat than it consumes and it has a ban on exporting the grain.” And Nesil Staney reported yesterday at The Wall Street Journal Online that, “Amid all the hand-wringing about the potential for global food inflation thanks to soaring wheat prices, many emerging-market fund managers remain sanguine about the prospects for the top-performing sector. “In a world where deflation is becoming a bigger worry, they say any price increases spurred by the rising cost of grains will be less threatening that they were in 2008.” The Journal article added that, “As wheat prices almost doubled to more than $7 in recent days, many began to worry that poorer nations may again see the price of their staples increase. “The rise in wheat had limited impact on the stocks of the biggest importers—Egypt, Brazil and Indonesia are three of the top four importers of wheat.” August 11 Policy Issues; Climate Developments; Agricultural Economy; Trade; EPA; Biofuels; and Health Care Policy Issues: Payment Limits Tom Steever reported yesterday at Brownfield that, “Senator Charles Grassley expects no immediate action on the federal farm payment limit proposal he introduced with Wisconsin Democratic Senator Russ Feingold. The Iowa Republican says the measure was put forward far enough in advance of the 2012 farm bill to let people know he’s not giving up on limiting farm payments to $250,000 per entity. Grassley has tried unsuccessfully in the past to insert such a limitation in farm legislation. “‘We have nothing against big farmers,’ said Senator Grassley, in a conference call to reporters Tuesday morning. ‘Big farmers can continue to get big if they want to, but we feel that without having a reasonable payment limitation that we’re subsidizing big farmers to get bigger.’” The Brownfield update added that, “Grassley says that what’s changed since his last attempt to limit payments is the greater public scrutiny of federal spending. “‘The farm program is one of those many issues where we can save money,’ said Grassley, ‘and people are very concerned about the deficit so this very great concern at the grassroots about the deficit, I think, is going to help us more than anything else.’” Policy Issues: Senators Melissa Stagnaro reported earlier this week at that Evening Sun Online (Norwich, NY) that, “The next Farm Bill won’t be enacted until 2012, but some federal lawmakers – including Senator Kirsten Gillibrand [D, NY]– are already preparing to shape the legislation which will replace the Food, Conservation and Energy Act of 2008. “Last week Gillibrand, New York’s first representative on the Senate Agricultural Committee in 40 years, announced her intention of hosting ‘listening sessions’ across the state. According to the senator, the purpose of the sessions will be to hear from farmers in agricultural communities about the issues they face. “‘I want to make sure this next Farm Bill is tailored to New York,’ she said, stressing the importance of the state’s 35,000 farms and the $4.5 billion they contribute to the Empire State’s economy.” And the New York Times editorial board indicated in today’s paper that, “[I]t was refreshing to hear how Senator Jon Tester, a Democrat of Montana, is spending his summer vacation. While other senators drove the campaign trail, dialed for dollars or lounged on a beach somewhere, Mr. Tester went home to his farm and harvested wheat. “The senator is the third generation of his family to operate an 1,800-acre farm near Big Sandy, Mont., where the Testers grow organic spring and winter wheat. He is spending the first week of his vacation in his combine, trying to gather the wheat before the sawflies get to it. ‘It brings me back to reality,’ he told a local station, KFBB-TV, this week. ‘The combine doesn’t care if you’re a senator or not. It breaks down whenever it wants to break down.’ “Congress used to be dominated by farmers, and it is unfortunate that Mr. Tester and Senator Charles Grassley of Iowa are the only ones left in the Senate who still actively work the fields. If more members had a life outside of campaigning and lawmaking, it might help put petty political disputes in a little perspective. Sit high up in the cab of a combine, stare out at an endless vista of swaying grain, worry about wheat futures and drought — your opponent a leaf-eating insect — and, suddenly, it should seem a little ridiculous to block an important piece of legislation back in Washington just because it would give the other party a victory.” Policy Issues: SNAP A USDA Daily Radio news item from yesterday stated that, “Efforts to avoid layoffs of teachers and to ensure health care to those in need have resulted in a plan to divert funds from the Supplemental Nutrition Assistance Program, formerly known as Food Stamps.” The one-minute audio news summary included comments on this development from Agriculture Secretary Tom Vilsack who noted that the changes in the SNAP program would not be implemented until sometime in 2013. Alexandra Zavis reported yesterday at the Los Angeles Times Online that, “The U.S. Department of Agriculture is encouraging California to consider reversing a policy that prevents some of the state’s poorest and most vulnerable residents from applying for food stamps, even though it could cost some current recipients their benefits. “The suggestion, contained in a letter to the California Department of Social Services, has raised concern among some advocates for the poor who were hoping federal authorities would allow the state to open the food stamp program only to those recipients of cash assistance for impoverished elderly and disabled people who would not be adversely affected.” The article pointed out that, “The letter received Friday from the Department of Agriculture said federal law prohibits California from changing the rules for some and not all recipients of Supplemental Security Income. “California is the only state that does not allow its 1.2 million Supplemental Security Income recipients to apply for federal food stamps. When the federal cash assistance program was created in 1974, the state decided to increase its matching grant — known as the State Supplementary Payment — by $10 a month in place of administering food stamps for them. “At the time, many Supplemental Security Income recipients qualified only for the minimum food stamp allotment, then $10. Augmenting cash payments by that amount helped the state reduce its administration costs and relieved elderly and disabled people from having to apply for food stamps.” The article added that, “However, a recent increase in food stamp benefits along with cuts to California’s cash assistance grants have raised concern that some Supplemental Security Income recipients are being short-changed by the policy. “According to state officials, Supplemental Security Income recipients who live alone or with another recipient would now be eligible for more benefits if allowed to apply for food stamps. But officials caution there would also be losers if the state reverses the policy, known as the food stamp cash-out. “Currently, households that include members who are not receiving Supplemental Security Income may apply for food stamps without the aid recipient’s income counting against the rest of the family’s eligibility or benefit levels. If California allows Supplemental Security Income recipients to apply for food stamps, it could reduce or eliminate their household benefits.” Climate Developments Robin Bravender of Greenwire reported yesterday at The New York Times Online that, “House lawmakers today derailed a Republican bid to block Democrats from pushing through controversial climate legislation during a lame-duck session. “On a 236-163 procedural vote, the House quashed a resolution (pdf) from Rep. Tom Price (R-Ga.) pledging that Congress would not convene between November and January except in the case of a national emergency. “Price and other GOP lawmakers are looking to fend off Democrats’ efforts to pass major legislation including a sweeping climate and energy bill after the November election. Top White House officials and Democratic leaders have suggested that climate legislation that stalled in the Senate this year may have a better shot once political pressure on Capitol Hill has dissipated.” Agricultural Economy Bloomberg writer Madelene Pearson reported yesterday that, “Pakistan’s deadliest floods that affected 13.8 million people may sweep through southern areas, increasing damage to crops and infrastructure. Extreme heat and smoke from wildfires forced people to flee Moscow. “In China, the death toll from a landslide that buried villages in the country’s west rose to at least 337, with a further 1,148 missing. Temperatures in the central U.S. are forecast to climb back to the 100-degree Fahrenheit (37.7 Celsius) mark this week, and in many areas it will feel much hotter than that, according to the National Weather Service.” The article added that, “‘Climate change is obviously the key input’ influencing agricultural prices now, Jonathan Barratt, managing director at Commodity Broking Services Pty., said by phone from Sydney today. ‘The market is focusing on anything to do with bad weather.’ “In the U.S. Midwest, excessive heat warnings were issued for nine states along the Mississippi River and a heat advisory covers parts of seven more, the weather service said yesterday. It’s the latest heat wave of a Northern Hemisphere summer that shattered records. The heat affecting Russia has gripped Ukraine and Belarus, where records were also set, said Jeff Masters, co- founder of Weather Underground in Ann Arbor, Michigan.” Meanwhile, Bloomberg writer Jeff Wilson reported yesterday that, “Canada’s wheat production will drop 21 percent in the year ending July 31 because of excess rain in Saskatchewan, Manitoba and Alberta, a unit of the U.S. Department of Agriculture said. “Output will fall to 20.9 million metric tons from 26.5 million a year earlier, the USDA’S Foreign Agricultural Service said in a statement posted today on its website. Statistics Canada said on June 23 that production will drop 7.1 percent to 22.7 million. “Exports will decline 16 percent to 15.5 million tons from a year earlier, the USDA unit said.” Reuters writers Rod Nickel and Roberta Rampton reported yesterday that, “Wheat production in the United States and other countries is ‘robust’ enough to avoid a world wheat shortage, despite crippling drought in Russia, U.S. Agriculture Secretary Tom Vilsack said on Tuesday. “‘There are other countries, including the United States, where wheat production is steady and relatively robust enough not to put us in a situation where we were several years ago when there was a potential shortage globally,’ Vilsack told reporters in the Canadian capital Ottawa. ‘Working with our Canadian friends and others in the (European Union) we’ll be able to deal with the difficulties Russia’s situation created.’” And Ray Brindal reported in today’s Wall Street Journal that, “Worries over global wheat supplies could prove to be a bonanza for Australia, a major exporter of high-quality wheat to Asia. “The optimism could change quickly, though, as dry weather and government warnings about the potential for a locust plague have raised skepticism about output. If Australia’s wheat production falls significantly below forecasts, it could drive wheat prices even higher for some key importers, including poorer Asian countries such as Indonesia, Vietnam and the Philippines. “For now, the improving outlook for demand and prices is helping boost the outlook for big Australian companies such as AWB Ltd., an agribusiness company. Its shares have risen 19% since the beginning of July.” Trade A USDA Daily Radio News item from yesterday stated that, “Agriculture Secretary Tom Vilsack in Canada Tuesday, talked about continuing efforts to address a trucking dispute between the U.S. and Mexico which is straining trade relations between the two countries and has U.S. products under punitive tariffs.” Recall that the Mexico truck dispute was an issue that FarmPolicy.com brought up in an interview last month with Nebraska GOP Rep. Adrian Smith, who serves on the House Agriculture Committee. EPA Issues A news release yesterday from the House Committee on Agriculture Republicans indicated that, “Today, Ranking Member Frank Lucas, along with six of his colleagues on the House Agriculture Committee, introduced a bill (H.R. 6087), which clarifies that the use of a pesticide consistent with its registration under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) should not be subject to a costly, redundant, and unnecessary permit process under the Clean Water Act (CWA). “Since passage of the Clean Water Act in 1972, the Environmental Protection Agency has interpreted the act to exclude lawful pesticide applications regulated under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) from National Pollutant Discharge Elimination System (NPDES) permits. However, in January 2009, the 6th Circuit Court of Appeals overturned that longstanding practice in The National Cotton Council of America, et al., v. United States Environmental Protection Agency. The court ruled the EPA did not have the authority under the CWA to exempt application of pesticides. Last year, Rep. Lucas joined several of his colleagues and supported a petition to the Supreme Court to hear the case, but the petition was rejected. “Ranking Member Lucas’ bill would make clear that producers who are in compliance with the requirements of FIFRA do not need to obtain Clean Water Act permits.” “H.R. 6087 is a companion bill to S. 3735, which was introduced by Senators Saxby Chambliss (R-GA) and Blanche Lincoln (D-AR),” the release said. Biofuels A news release yesterday from Oklahoma GOP Senator Jim Inhofe stated that, “U.S. Senator Jim Inhofe (R-Okla.), Ranking Member of the Senate Environment and Public Works Committee, last week introduced legislation to restore consumer choice at the gas pump. The bill, S. 3736, allows a state to opt out of the corn ethanol portions of the Renewable Fuels Standard. Due to ethanol mandates, Oklahoma consumers are being forced to purchase E-10 gasoline, which can cause engine damage and reduced fuel efficiency. The bill will be referred to the EPW Committee; Inhofe will ask Senator Barbara Boxer (D-Calif.), Chair of the EPW Committee, for a hearing on the bill in September.” Health Care and Agriculture A news release yesterday from the House Committee on Agriculture Republicans noted that, “This week during The Ag Minute [MP3], guest host Rep. Adrian Smith, discusses how President Obama’s new health care law negatively affects farmers, ranchers, and small businesses. Section 9006 of the law requires that all businesses file a 1099 with the Internal Revenue Service for every vendor with which it has more than $600 in transactions in a year. Rep. Smith explains that this would be an administrative nightmare for our nation’s family farms, and prompted him to cosponsor H.R. 5141, the Small Business Paperwork Mandate Elimination Act, which will repeal this new requirement.” August 10 Policy Issues; Climate Issues; Ag Economy; and Biotech Issues Policy Issues: Disaster Payments An update posted yesterday at the Oklahoma Farm Report Online reported that, “The White House has promised Arkansas Senator Blanche Lincoln that they can move money around and come up with $1.5 billion in disaster aid that will include 210 million dollars for Arkansas farmers- money that could arrive just days ahead of the November general elections. “Oklahoma Congressman Frank Lucas, the ranking minority member of the House Ag Committee, says that he agrees with the Chairman of the House Ag Committee, Collin Peterson of Minnesota, that there is no way for them administratively to move this amount of money around within USDA without major problems. He calls it a reaction to Senator Lincoln in dire need of help to win reelection this fall in Arkansas. At the same time, he adds that if the White House forces this through- it will provide some much needed help for Oklahoma farmers because of a variety of weather related disasters from the last couple of years.” To listen to an interview with Rep. Lucas and Ron Hays on this issue, just click here. Agricultural disaster aid has become a campaign issue in the U.S. Senate race in Arkansas between Senator Blanche Lincoln (D) and Representative John Boozman (R). An update posted yesterday at Sen. Lincoln’s campaign webpage stated that, “After blocking flood disaster relief for Arkansas agriculture producers in Congress, Congressman John Boozman is now complaining about Senator Blanche Lincoln’s ultimate solution-securing a promise from the Administration to fund her bill with existing budget authority at no added cost to taxpayers.” “Senator Lincoln has fought for months to overcome Republican objections in the Congress to her deficit-neutral disaster assistance package. Congressman Boozman voted against the needed aid and watched idly as Senate Republicans blocked it in order to prop up his Senate bid. After Republican Senators, led by Mitch McConnell, blocked Senator Lincoln’s legislation four times, she secured a commitment from the Administration to deliver the aid. Friday, an Administration official announced that Senator Lincoln’s request would be met by the end of the month. “Both Democratic and Republican Administrations have administered disaster aid on at least 19 occasions over the past decade,” the campaign news update said. Meanwhile, with respect to existing Farm Bill disaster payment mechanisms, DTN Executive Editor Marcia Zarley Taylor reported yesterday (link requires subscription) that, “Errors in a government computer program mean some growers must repay part of the 2008 disaster payments they received as far back as January, but USDA program managers who oversee the Supplemental Revenue Assistance Program (SURE) maintain that such glitches are the exception, not the rule, in the complex program’s administration. “‘We take absolutely no pleasure in writing letters’ notifying farmers to refund 2008 overpayments on SURE aid, said Brandon Willis, deputy administrator of the Farm Service Agency in a phone interview with DTN. He and other agency officials who met with DTN called problems such as overpayments and fluctuating policy ‘isolated incidents’ and not representative of how FSA had implemented the first-ever disaster aid program using a whole-farm revenue yardstick. “Except for its handling of group-risk crop insurance policies, ‘the rules of the game haven’t changed’ since the agency issued final regulations on the SURE program in January, Willis said in response to a DTN feature story published Aug. 2. However, Willis added that Washington had issued multiple directives to state and county offices over the last six months to help them interpret those regulations in complex or special situations.” The DTN article indicated that, “‘SURE is enormously complex. It’s one of the most complex programs FSA has ever had to administer,’ Willis said. For example, SURE formulas needed to accommodate 32 insurance codes and plans in each application and pull records from the Risk Management Agency’s crop insurance files. In the rush to distribute aid for the 2008 crop, FSA hadn’t fully automated computer programs when 2008 sign-up started last January, and that led to a higher workload in county offices and some overpayments. “Only after checks had been issued did FSA discover that a software download of farmer records from the Risk Management Agency did not include an appropriate adjustment for prevented planted or replanted acres, an issue with a number of growers in Iowa and Missouri hit by floods during planting season, Willis explained. The demand for refunds is strictly due to FSA’s error, not a policy change, he stressed.” In a related update posted yesterday at the Minding Ag’s Business Blog, Marcia Zarley Taylor noted that, “Iowa farmer Roger Berg expects to be $60,593 poorer soon, once he receives the official letter. That’s because the Farm Service Agency has indicated it overpaid his 2008 farm disaster payments when it issued him a check last February. The mistake is due to an agency error but it will demand its money back with interest within 30 days. Welcome to another case of the haves and the have nots under the SURE (Supplemental Revenue Assistance Program), the disaster program authorized under the 2008 Farm Act. “Berg’s case involves land he had recently purchased in Keokuk County, Iowa. As the new operator, he lacked actual production history going back the full four years and so FSA calculated his payments using more than one county average plug yield. Later the agency clarified that it should only have inputted one plug yield, he was told, and substituted disaster yields in the other slots. That mistake means Berg Pork may be the latest in a litany of examples where tiny differences result in monumental differences in disaster pay. “‘They can call it whatever they want’–a mistake, a change in regulations or new guidance, Berg says. ‘But it’s the difference between getting $60,000 or getting nothing.’ He thinks he’s justified in asking for assistance, since some of Berg’s new farm ground had insurance guarantees of 198 bu. per acre, but actual yields hit only 135 acres that year. Some fields had higher yields on soybeans than on corn, he says. ‘I had a disaster.’” The DTN blog update added that, “FSA officials who met with DTN by phone last week insisted that such overpayments accounted for less than 1 percent of the $1.15 billion paid out for 2008 claims to date. But they attributed the unfortunate errors to flaws in a computer download from the Risk Management Agency that largely involved prevented planted or replanted acres. Berg had planted all of his crops on time, it’s just that heavy spring rains throughout the Mississippi corridor saturated soils and took a big bite out of corn-on-corn fields that relied on pig manure as fertilizer. ‘Plug yields got me in trouble,’ he says.” Policy Issues: Farm Bill Timing; Crop Insurance An Inside U.S. Trade article from Friday reported that, “House Agriculture Committee Chairman Collin Peterson (D-MN) said here [Vail, CO] this week that he wants to accelerate work on the 2012 farm bill, such that Congress can pass it and submit it to the president by the end of 2011. He also signaled that he is moving away from his idea that the next farm bill should contain revenue insurance provisions designed to guarantee farmers a certain level of revenue, regardless of the crops they plant. “‘I’ve gotten a not very good reaction to that [whole farm, revenue insurance proposal] around the country,’ Peterson told the annual meeting of the American Sugar Alliance (ASA) here [Vail, CO] on Aug. 2. While there ‘may be some attempt … to make that kind of option available to people,’ he said he did not think Congress would ‘require a move in that direction.’” Ron Smith reported on Friday at the Southwest Farm Press Online that, “As a U.S. Congressman Charlie Stenholm never dodged controversial issues but typically found ways to bring disparate factions together to turn dissent into compromise. “As senior policy advisor with Olsson Frank Weeda, Stenholm is using those same skills to work, sometimes behind the scenes, to bring folks on the right and folks on the left to a place he refers to as ‘the sensible center,’ a political platform he said holds from 60 percent to 70 percent of the American people. “Stenholm discussed that theory and a far-ranging list of other topics yesterday at the Big County Wheat Conference in Abilene, Texas.” Mr. Smith noted that, “He said recent House Agriculture Committee hearings may have been criticized as occurring too soon and before the 2008 farm bill was fully implemented. It was the right thing to do, he said ‘because the budget will have more to do with what we do in agriculture than ever before. It’s essential to lock in a baseline and look carefully at what agriculture needs for the future.’” The article added that, “Recent cuts in crop insurance funding could be detrimental to farmers and ranchers, Stenholm said. ‘I just hope it’s not as bad as some folks say it will be. I know crop insurance is important to agriculture. Farmers have to have an opportunity to insure against catastrophic loss and this will be an emphasis for the ag committee as they consider what they need to replace.’ “He said Congress is likely to provide farmers ‘with a base of support but not profitable support.’ “One of the big challenges facing agriculture is the diminishing number of farmers. ‘We have only 121,000 farmers producing 75 percent of all agricultural production in the United States. That number is not politically significant. But we still have the most abundant, safest food supply in the world.’” Policy Issues: Agriculture Mediation Program A news release Friday from Sen. Pat Roberts (R-Kansas) stated that, “[Sen. Roberts] today said companion legislation to a bill he introduced to continue critical agriculture mediation programs passed by the House, was approved by the Senate and heads to the President’s desk to be signed into law. “‘The mediation programs at the Department of Agriculture go a long way in helping our farmers and ranchers seek confidential advice and counsel to address loan problems and disputes before they grow to be too much for the producer too handle,’ Senator Roberts said. “The legislation continues to authorize the Certified State Agriculture Mediation Program for five years.” Policy Issues: Sugar DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “Management of the U.S. sugar program under the 2008 farm bill to satisfy growers and sweetener users is proving difficult because Congress wrote the program with the expectation that the U.S. sugar market would be flooded with foreign sugar, but the reverse is true, USDA officials said here [Vail, CO] last week at the American Sugar Alliance International Sweetener Symposium. “Because Mexico gained full market access to the United States under the North American Free Trade Agreement, analysts expected its sugar would flow northward. But this year Mexico has had production problems and has exported only one third of the sugar it sent to the United States last year. At the same time Brazil is experiencing weather problems, which are delaying the export of sugar to the United States. The result has been tight supplies and high sugar prices, which please U.S. growers, but anger sweetener users.” “‘Neither CBO (Congressional Budget Office) nor USDA expected undersupply to be the issue,’ Daniel Colacicco, director of dairy and sweetener analysis at USDA’s Farm Service Agency, said at the symposium. Because Congress expected an oversupply, the program includes detailed instructions on how to control supply, including a program to use surplus sugar for ethanol production, but ‘there is no comparable mandate to ensure adequate supply at fair prices,’ Colacicco said.” Climate Issues Neil MacFarquhar reported in today’s New York Times that, “Ban Ki-moon, the United Nations secretary general, said Monday that he doubted that member states would reach a new global climate change agreement in December at a conference in Mexico. “Mr. Ban, who was the head cheerleader for reaching a deal during the 2009 conference in Copenhagen, suggested that a better approach might consist of small steps in separate fields that built toward wider consensus rather than aiming for one sweeping pact.” Meanwhile, Darren Goode reported yesterday at The Hill’s Energy Blog that, “July was the 17th warmest in the U.S. since the start of the 20th century, while it was the warmest July on record for several East Coast states and cities, according to a report released Monday by the National Oceanic Atmospheric Administration. “The average temperature for the contiguous U.S. was 75.5 degrees Fahrenheit, or 1.3 degrees Fahrenheit above the 1901-2000 long-term average, according to NOAA’s latest State of the Climate report.” A news release yesterday from the Food and Agriculture Organization of the United Nations stated that, “Production of rice — the world’s most important crop for ensuring food security and addressing poverty — will be thwarted as temperatures increase in rice-growing areas with continued climate change, according to a new study by an international team of scientists. “The research team found evidence that the net impact of projected temperature increases will be to slow the growth of rice production in Asia. Rising temperatures during the past 25 years have already cut the yield growth rate by 10-20% in several locations.” Agriculture Economy: Yields An extension update from yesterday by University of Illinois Agricultural Economist Darrel Good (“All Eyes on the Crop Production Report”) stated that, “The USDA will release the first forecasts of the size of the 2010 U.S. corn and soybean crops on August 12. Those forecasts are based on a large survey of producers and objective yield data gathered in the largest production states. “The first production forecasts are always very important and anticipated with a high degree of interest. Actual production can deviate substantially from the August forecasts, but those forecasts provide important benchmarks for judging the actual size of the crops. They are starting points from which the market evaluates the impact of subsequent weather and crop developments. While always important, the August forecasts take on additional importance this year.” The update added that, “For corn, the size of the 2010 crop has important price implications for two reasons. First, inventories of old crop corn at the beginning of the 2010-11 marketing year are expected to be relatively small. The USDA’s June stocks estimate created some uncertainty about the size of the 2009 crop, the rate of domestic consumption, and prospects for year ending stocks. Still, those stocks are likely to be less than 1.5 billion bushels, or about 11 percent of projected consumption. Second, it appears that demand for U.S. corn will be very strong during the 2010-11 marketing year. Domestically, ethanol production is expected to continue to expand. At a minimum, growth will be in line with the mandated levels of biofuels production. Growth beyond that will depend on the fate of the blenders tax credit that expires at the end of 2010 and on the EPA decision about increasing the blend rate. Export demand for U.S. corn may be enhanced by a much smaller wheat crop in the rest of world, led by declines in Canada, Russia, and Kazakhstan. While current stocks of wheat are large, smaller crops this year and the resulting higher prices of wheat may result in an increase in demand for corn. Exports may get a further boost if China needs to import more corn.” After additional analysis, yesterday’s report stated that, “Expectations about the average yield of the 2010 crops are in a wide range, particularly for corn. Those private firms that tend to be most closely followed have projections in the 166 to 167 bushel range, well above the record yield of 164.7 bushels last year. There are few, if any, forecasts below 160 bushels. Our expectations for 2010 average yields are guided by yield models that reflect the impact of trend, planting date, growing season weather in Iowa, Illinois, and Indiana, and U.S. crop condition ratings. The details of model specification and forecasting procedures were reported last year (http://www.farmdoc.illinois.edu/marketing/mobr/mobr_archive.html). Those models have been updated to include 2009 results. “Our forecast of the 2010 average corn yield is based on crop condition ratings as of August 1, weather through July, and equal chances that August weather will replicate the August weather of each of the past 50 years. The result is a forecast of 158.1 bushels per acre. Unlike last year when the crop yielded better than it looked because of very favorable summer weather (cool and wet), our analysis suggests that the 2010 yield will be lower than implied by crop condition ratings alone. The expected shortfall is due to excessive June precipitation and above average summer temperature. For soybeans, our modeling points to a 2010 U.S. average yield of 43.7 bushels, very near the record 44 bushels of last year. That forecast is within the range of expectations being reported. “While the yield models performed well in 2009, it should be recognized that the models do not capture all of the factors that influence yield and that actual August weather is yet to be determined. The result is that the models have relatively large forecast errors so that confidence in the specific forecasts is limited. Still, the results suggest that the final 2010 yield estimate for corn could be below current market expectations.” Biotech Issues Andrew Pollack reported in today’s New York Times that, “Genetically engineered versions of the canola plant are flourishing in the form of roadside weeds in North Dakota, scientists say, in one of the first instances of a genetically modified crop establishing itself in the wild. “How much of a problem this might be is subject to debate. But critics of biotech crops have long warned that it is hard to keep genes — in this case, genes conferring resistance to common herbicides — from spreading with unwanted consequences.” August 6 Sen.Nutrition Bill Passes; Disaster Aid- Pigford Case; Biofuels; and Ag Economy Sen. Nutrition Bill Passes Abby Phillip reported yesterday at Politico that, “The Senate voted to approve a $4.5 billion childhood nutrition bill on Thursday, which funds food programs in public schools, delivering on a key component of first lady Michelle Obama’s campaign to combat obesity. “It marks the first legislative victory for [Michelle] Obama, who has addressed the issue of childhood obesity at agencies across the executive branch, in public events and in the private sector. “‘Over the past few months, this bill has garnered widespread support from both Democrats and Republicans, all of whom care deeply about the health and well-being of our children and are committed to ensuring they have the nutrition they need to learn, grow and succeed,’ the first lady said in a statement.” The article added that, “In July, Obama issued a statement calling for Congress to act before the current legislation expires in September. And in a Senate speech last week, [Senate Agriculture Committee Chairman Blanche Lincoln (D-Ark.)] called for time to offer amendments and approve the ‘Healthy Hunger-Free Kids Act,’ which passed unanimously out of her committee in March. “Senators found a path forward this week when they funded the reauthorization using a different set of budget offsets from the food stamp or the Supplemental Nutrition Assistance Program, which the Senate also used to fund a $26 billion state aid and education funding bill on Thursday.” (Note: With respect to the use of SNAP funding for the $26 billion state aid bill, this Politico article from Thursday indicated that, “The biggest single savings comes from an $11.9 billion rollback of increased food stamp benefits first approved as part of the giant recovery bill last year. Democrats had always assumed this 13.6 percent bump-up temporary but had wanted to smooth out the disparity over time. The bill now creates a cruder dropoff, worth about $47 a month for a family of three beginning in April 2014 or $516 over the first 12 months.”) Ms. Phillip also pointed out in her Politico article that, “SNAP received a funding boost in the 2008 stimulus bill, but has suffered deep cuts this week, with a $19.9 billion used from the emergency state aid bill; the child nutrition bill will siphon off another $2.2 billion from the program. In a conference call with reporters on Thursday, Lincoln said the money cut from SNAP would not have been spent until 2013, ‘so we’ve got time to recoup.’ “‘I think it’s appropriate if these tax dollars are going to be spent that they’re spent on healthy food for kids,’ Lincoln said.” The AP provided more detail with respect to the funding of the nutrition legislation yesterday: “Part of the deal to move the legislation this week was to change the way it was paid for. While the committee bill partially paid for the legislation by reducing conservation subsidies paid to farmers for using environmentally friendly farming practices, the Senate-passed bill took $2.2 billion out of future funding for food stamp programs instead after some farm-state senators objected to using the subsidy money. “Hunger advocates who had previously supported the bill said they would now oppose it.” The AP article stated that, “Lincoln said Democrats used the money for child nutrition because lawmakers had been eyeing that pot of money for other priorities as well. Food stamp money was also used to pay for a jobs bill the Senate passed Thursday. “‘I think it’s most appropriate if these dollars are going to be spent, that they are spent on nutrition for kids,’ she said.” Jane Black reported yesterday at The All We Can Eat section of The Washington Post that, “The bill allocates $1.2 billion to increase the number of children receiving food, an effort to meet President Obama’s pledge to end childhood hunger by 2015. The remaining $3.2 billion would be used to improve the quality of school meals. This includes an extra 6 cents per meal per student for schools that meet new, stricter nutrition standards and funding for schools to establish school gardens and to source local foods. “The bill also would mandate that the Department of Agriculture develop nutrition standards for all foods sold in schools, not just what is served in the lunch line. Standards for so-called ‘competitive foods,’ which have been controversial in previous years. Some school districts argued that the money earned from vending machines and a la carte lines helped to support sports and arts programs. Food companies were concerned about losing access to millions of schoolchildren.” Ms. Black added that, “The House of Representatives would need to pass its version of the bill in time for President Obama to sign the legislation before Sept. 30, when it is set to expire, or the programs risk losing the newly found funding. Nancy Pelosi has called the chamber back to Washington next week to finish work on a $26 billion plan to prevent the layoffs of tens of thousands of teachers and other public workers. The House is not expected, however, to take up the child nutrition bill until after the August recess. “Rep. George Miller (D — Calif.), the chairman of the House Education and Labor Committee that drafted the House’s child nutrition legislation, released a statement commending the Senate for its ‘important step forward.’ He did not announce a timeline for a vote in the lower chamber.” In a statement released yesterday, Agriculture Secretary Tom Vilsack noted that, “I applaud the bipartisan action in the Senate today to reauthorize and reform the child nutrition and WIC programs by passing the ‘The Healthy Hunger-Free Kids Act.’ First Lady Michelle Obama has been a tremendous champion for this legislation, and I commend the leadership of Senators Reid, McConnell, Lincoln, Chambliss and the remainder of the Senate for their unanimous support. This is a great victory for America’s children.” Senate Agriculture Committee Ranking Member Saxby Chambliss, R-Georgia, noted yesterday that, “‘I am pleased the Senate has overwhelming approved the Healthy, Hunger-Free Kids Act of 2010,’ said Sen. Chambliss. ‘Over 30 million lunches are served each day through the National School Lunch Program, and now we are one step closer to making certain school children have better access to healthy options. I appreciate the efforts of my colleagues on the Senate Agriculture Committee, especially Chairman Lincoln, for their efforts and support of this legislation.’” Iowa Democratic Senator Tom Harkin indicated yesterday that, “‘Today’s passage of the Healthy, Hunger-Free Kids Act is another important step in our efforts to improve the health of our children and ensure all kids have access to nutritious and fulfilling meals. This bill will help us take head-on the epidemics of childhood obesity, diabetes and other diet related diseases,’ said Harkin. ‘I commend Agriculture Committee Chairman Lincoln on all of her work on this important bill. It is testament to her leadership that the bill passed both the Agriculture Committee and the full Senate without a single dissenting vote.’” Democratic Senator Kirsten Gillibrand of New York pointed out yesterday that, “The legislation rids schools of junk food, issues proper alerts to schools when contaminations occur, guarantees all foster children access to school meals, connects farms to schools to supply them with fresh, local produce, and strengthens nutrition resources for children and young mothers. But if our children are ever going to truly succeed in the classroom and beyond, they need better access to healthy meals in the lunchroom, and this legislation falls short of that goal. Further, I’m disappointed that the bill is paid for in part with future funds from the critically important SNAP program. I will continue to fight for more common sense changes to the program and secure the investments we need to make sure every child can achieve their full potential.” Disaster Aid- Pigford Case DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Senate Agriculture Committee Chairman Blanche Lincoln said Thursday there is ample precedent for the White House to administratively fund the $1.5 billion in agricultural disaster aid even as the Environmental Working Group pointed out potential windfalls for farmers compared to the current permanent disaster program. “Lincoln, D-Ark., spoke to reporters Thursday in a conference call after the child nutrition reauthorization bill passed the Senate. Despite skepticism from other lawmakers about the authority of the White House to approve agricultural disaster aid for 2009 crop losses, Lincoln said such administrative decisions are allowed. “‘We’ve got a precedent,’ Lincoln said. ‘It’s been done at least 20 times in the last 10 years where they have used a couple of different sections at USDA where they can do interagency transfers and get those resources out in disaster situations or anything else. So there is absolutely the vehicle and the opportunity to do that. I’ve got a commitment from them. I visited with the White House today, and we are working on making it happen.’” Mr. Clayton added that, “Lincoln, who is behind in polls to her Republican opponent, Rep. John Boozeman of Arkansas, has advocated for ad-hoc disaster aid since late last fall after significant crop losses in her home state. She has argued that SURE is insufficient and would make producers wait more than a year for payments. The original package that Lincoln proposed included $1 billion in supplemental direct payments to farmers who suffered a 5 percent production loss in 2009. “The Environmental Working Group shows Arkansas, Illinois, Texas, Iowa and Oklahoma would be the five largest recipient states under the Lincoln package, in that order.” Yesterday’s DTN update indicated that, “Lincoln was asked about whether her plan would unfairly benefit the largest farms. “‘Some farms are big, some farms are small,’ she said. ‘The payment follows the production.’ “She added, ‘If we are going to feed the 6.6 billion people on the face of the Earth, we need everybody that farms out there.’” Recall that last Friday, Alexander Bolton reported at The Hill Online that, “African-American lawmakers are irate that the Obama administration has promised Sen. Blanche Lincoln (D-Ark.) $1.5 billion in farm aid while claiming it can’t pay a landmark legal settlement with black farmers.” The Hill article stated that, “Members of the black caucus say that if the administration can find $1.5 billion within its administrative funds to pay mostly white farmers in Arkansas and other states, it should be able to pay black farmers who suffered discrimination.” The Washington Insider section of DTN reported yesterday (link requires subscription) that, “Some members of the Congressional Black Caucus are questioning the pledge by the Obama administration to Sen. Blanche Lincoln, D-Ark., that USDA would ‘find’ $1.5 billion in its budget that could be shifted to Lincoln’s proposed ad hoc agricultural disaster assistance package. Their question: why is it that the White House can find $1.5 billion for that effort, but can’t find the $1.2 billion needed to pay off an agreed settlement with black farmers for past discrimination by USDA? “‘The current hardships experienced by other farmers should not trump hardships placed on African Americans and Native Americans by [USDA],’ says a letter written by six members of the Black Caucus to President Obama. The six also called on the president to take administrative action to pay $3.4 billion the federal government promised to settle claims that it mismanaged Native American trust funds. “White House Chief of Staff Rahm Emanuel last week promised Lincoln that USDA would find the $1.5 billion ‘in the next two weeks.’ Opposition to that promise is building on both sides of the aisle in both chambers of Congress, as well as from non-governmental organizations. As a result, whether Agriculture Secretary Tom Vilsack will be able to make good on Emanuel’s promise appears doubtful at this time.” On Wednesday, John Boyd, Founder and President of the National Black Farmers Association appeared on C-SPAN’s Washington Journal morning program and “discussed the latest congressional action in the U.S. Senate regarding settlement of long-standing racial discrimination claims by African-American farmers.” Meanwhile, an article posted yesterday at the Arkansas Democrat-Gazette Online reported that, “Legislation to finalize $4.6 billion in settlements with black farmers and American Indians stalled in the Senate again Thursday amid partisan bickering. “Lawmakers from both parties say they support resolving the long-standing claims of discrimination and mistreatment by federal agencies. But the funding has been caught up for months in a fight over spending and deficits, with Republicans and Democrats arguing over how to pay for them.” The article added that, “For the black farmers, it is the second round of funding from a class-action lawsuit originally settled in 1999 over allegations of widespread discrimination by local Agriculture Department offices in awarding loans and other aid. It is known as the Pigford case, named after Timothy Pigford, a black farmer from North Carolina who was an original plaintiff. “The government already has paid out more than $1 billion to about 16,000 farmers, with most getting payments of about $50,000. The new money is intended for people — some estimates say 70,000 or 80,000 — who were denied earlier payments because they missed deadlines for filing. The amount of money each would get depends on how many claims are successfully filed.” In remarks delivered on the Senate floor yesterday on this issue, Chairman Lincoln stated in part that, “Mr. President, I come to the floor to urge my Senate colleagues to support an important piece of legislation to fund the racial discrimination settlement, known as Pigford II, between African American farmers and the United States Department of Agriculture. The time is long overdue to move beyond USDA’s discriminatory past and begin to right the wrongs African American producers have experienced. “Between 1981 and 1996, African American farmers seeking farm loans and credit were discriminated against, denying them access to government programs and capital. In some cases, these farmers were discouraged from even applying for loans, told they were ineligible or that application forms were unavailable. In other instances, loan applications were intentionally delayed to miss deadlines, continuing to disadvantage these African American farmers.” A news release issues yesterday by Chairman Lincoln after the Senate failed to pass the Pigford funding measure stated that, “[Chairman Lincoln] made the following statement after efforts to provide compensation owed to African American farmers who have been victims of discrimination were blocked by Republican Senators for the sixth time this year. “‘I strongly support efforts to see Arkansas farmers who have faced discrimination receive the compensation they deserve. All farmers should receive equal access and treatment in the delivery of USDA’s programs and services. I am disappointed that for the sixth time this year, Republicans have blocked efforts to correct this injustice and close this chapter of discrimination within USDA. I will continue to urge my Republican friends to join me in supporting this legislation until justice is served,’ Chairman Lincoln said.” Biofuels Darrin Ihnen, the president of the National Corn Growers Association, penned an update yesterday at The Hill’s Congressional Blog titled, “Ethanol: Now is the time — for truth,” which provided an interesting analysis of current ethanol issues. Ag Economy- Wheat, Corn The New York Times (“Russia, Crippled by Drought, Bans Grain Exports”), The Washington Post (“Russia bans grain exports because of fire and drought, sending prices soaring”) and The Wall Street Journal (“Russian Export Ban Raises Global Food Fears”) all featured articles in today’s papers regarding Russian wheat issues. The Wall Street Journal article reported that, “Wheat prices surged Thursday after Russia announced a ban on grain exports, extending a rally that is driving up the cost of corn and other substitutes and underscoring the risk of a broad shock to the global food supply. “Russian Prime Minister Vladimir Putin, responding to the country’s crippling drought and deadly wildfires, said on Thursday that exports will be banned from Aug. 15 until the end of the year. “Russia has become an increasingly important force in the global supply of grains and the move reignited fears that nervous governments will begin hoarding their own supplies, potentially causing a shortage. Nations that already are struggling to feed themselves are scrambling to lock in deliveries, while food companies are facing costs, as are farmers who need grain to feed livestock.” Meanwhile, the AP reported today that, “China could be about to increase its corn imports, offering American farmers a chance for greater profits but making it likely U.S. meat producers who use the grain for feed would have to raise their prices. “U.S. farmers said they’re cautious but hopeful about doing more business with China, which needs more corn to feed the expanding livestock herds that supply meat to its growing middle class. They note Hanver Li, chairman of the market research firm Shanghai JC Intelligence Co. Ltd., estimated last month that China’s corn imports would climb from 1.7 million tons this year to as much as 15 million tons by 2015.” The AP article added that, “China’s Ministry of Agriculture didn’t immediately respond to inquiries about the nation’s demand for corn. However, China’s economic planning agency, the National Development and Reform Commission, said in a statement that the country can grow most of the corn it needs, adding that the increased imports were due to rising domestic prices. “Nonetheless, if imports increase as forecast, China will challenge Japan as the largest importer of U.S. corn, [Paul Bertels, director of economic analysis for the National Corn Growers Association] said. Japan imports about 15 million tons a year. “The U.S. also could set new export records, he said, topping 2008 when 61 million tons of corn were exported. “To meet such demand in China, U.S. farmers would have to expand corn production by 4 million acres, said Darrel Good, a farm economist at the University of Illinois. Even with that, prices would likely remain relatively high, pushing up livestock feed costs and ultimately prices for meat and eggs, Good said.” August 5 Farm Policy Issues; Climate Issues; and Ag Economy Policy Issues: Disaster Aid The Washington Insider section of DTN reported yesterday (link requires subscription) that, “[Senate Ag Committee Chairman Blanche Lincoln’s, D-Ark.] push for relief for the 2009 disaster has been a tough sell. For example, in an earlier Senate floor fight, she held up the fiscal 2010 supplemental appropriations package until Majority Leader Harry Reid, D-Nev., agreed to put the funds she wanted in the small-business economic package. However, Reid was forced to pull back from that deal at the end of last month after Republicans complained about its cost. She then agreed to pull her proposal to add $1.5 billion in agriculture disaster assistance return for White House Chief of Staff Rahm Emanuel’s promise to fund the program through existing USDA authorities.” The DTN item added that, “Political opponents are now crying foul on several grounds. The program Sen. Lincoln is pushing would target disaster assistance through an add-on to farmers who already receive federal subsidies and operate in counties that federal authorities have declared to be disaster areas during 2009. Those who suffered crop losses of at least 5 percent of their crops could receive payments equal to 90 percent of their regular subsidies. “At least some critics are calling this a windfall. They say that losses of at least 30 percent are normally required to be eligible for special payments, rather than the 5 percent losses required under the Lincoln program. “And, there is the question of how the Emanuel deal can be done — and, what USDA authorities the White House intends to tap. For example, Georgia Sen. Saxby Chambliss, the top Republican on the Agriculture Committee, expressed displeasure over the move. ‘I don’t think they’ve got a checkbook down there,’ said Chambliss, who wants such payments considered by Congress. ‘If they can spend taxpayer money without it going through Congress — I don’t know how they do that.’” Yesterday’s update added that, “Lincoln responded that it is not unusual for the executive branch to distribute such disaster aid without congressional action. ‘It’s been done before,’ she said. However, House Ag Committee Chairman Collin Peterson, D-Minn., told the press this week his staff is skeptical that USDA has a mechanism to fund the program.” Policy Issues: 2012 Farm Bill DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “Senate Agriculture Committee ranking member Saxby Chambliss does not favor writing the next farm bill in 2011, a year before the 2008 bill expires, as House Agriculture Chairman Collin Peterson has proposed. “‘It’s not practical,’ Chambliss, R-Ga., said Tuesday in a videoconference speech to the American Sugar Alliance International Sweetener Symposium in Vail. Chambliss said he agrees with Peterson on most agricultural matters but that he thinks it is premature to begin writing the next farm bill before the 2008 farm bill is implemented. The 2008 farm bill extends until Sept. 30, 2012. Peterson has suggested finishing the next bill early so that the Obama administration would have time to implement it in 2012.” Mr. Hagstrom added that, “In his speech Monday, Peterson also said he favors moving early on the bill because he fears budget pressures will get worse as time goes on. Peterson, who also favors simplification of some current programs, said, ‘We shouldn’t do any new farm programs until we get this deficit headed in the right direction.’ “Peterson said he favors reforms in all areas of the farm bill, including the Supplemental Nutrition Assistance Program that used to be known as food stamps. Peterson said that given the obesity problem he would favor making it impossible for food-stamp beneficiaries to use the program to buy ‘empty calorie’ items. ‘They can buy them with their own money,’ he said. Peterson said he would also favor using more data mining to make sure the food stamp program is run efficiently without fraud and abuse. “His idea to shift from crop insurance on individual crops to whole-farm insurance has not proven popular and he will not try to force people to move to a whole-farm insurance system, he said.” Meanwhile, Mark Steil of Minnesota Public Radio reported on Tuesday that, “Speaking at Farmfest, the annual trade show near Redwood Falls, [Chairman Collin Peterson] the seventh district congressman told a crowd of several hundred farmers that given the demands on federal spending, Congress cannot boost funding. “‘We’re going to keep this farm bill within the spending; we’re not going to ask for any new money,’ said Peterson, chairman of the House Agriculture Committee. ‘I think we can make it work.’” And a news release yesterday from Iowa GOP Senator Chuck Grassley stated that, “Senators Chuck Grassley and Russ Feingold today introduced legislation to close loopholes that are being used to game the farm payment system and target payments to actively engaged farmers who need assistance getting over the bumps that come with ensuring a safe and abundant food supply. “The legislation would set a limit of $250,000 for farm payments in an attempt to better target farm program payments to family farmers. The legislation would save the federal treasury more than $1 billion over 10 years.” Policy Issues: Nutrition A news release yesterday from Sen. Ag Committee Chairman Blanche Lincoln (D-Ark.) stated that, “[Sen. Lincoln] continued pressing her Senate colleagues today to reauthorize child nutrition legislation before child nutrition programs expire on Sept. 30. In a speech on the Senate floor, she highlighted that the Healthy, Hunger-Free Kids Act is bipartisan, completely paid for and will address the growing childhood obesity and hunger epidemics.” Yesterday’s update included a transcript and video replay of Chairman Lincoln’s remarks. Policy Issues- Farm Bill: Senate Ag Committee Hearing on Trade A news release from yesterday by the Senate Ag Committee stated that, “U.S. Senator Blanche Lincoln, D- Ark., Chairman of the Senate Agriculture, Nutrition and Forestry Committee, today underscored the need to create thousands of long-term jobs and expand U.S. agricultural exports by relaxing trade and travel restrictions with Cuba. Today’s hearing is the third that Lincoln has held as she leads the Committee in reauthorizing the 2012 Farm Bill. Ambassador Ron Kirk, Joe Mencer of Lake Village, Arkansas, and Dwayne Rhodes of Springdale, Arkansas, were among those who testified. “‘Agriculture is a sector of our economy where we are proving that we can successfully meet the export demands that will help rebuild the U.S. economy,’ Lincoln said. ‘For every additional one billion dollars of agricultural products we export, we can create 9,000 jobs. These are long-term jobs that we desperately need.’” A video replay of yesterday’s hearing, as well as opening statements from witnesses, can be viewed here. Yesterday’s release added that, “Lincoln noted that after 50 years of continued restrictions, our policy with Cuba continues failing to yield results, adding that less restrictive policies will help to usher in an era marked by exponential trade and economic growth.” To listen to an exchange from yesterday’s hearing between Chairman Lincoln and Ambassador Kirk regarding the Cuba trade issue, just click here (MP3- 3:02). A news release from yesterday by Senate Ag Committee Ranking Member Saxby Chambliss (R-Georgia) noted that, “Sen. Chambliss also addressed the status of the World Trade Organization Doha Round. “‘The Doha Round is at an impasse and has been for some time,’ said Sen. Chambliss. ‘It is due in no small part to what Ambassador Kirk notes as the continued resistance of some members to engage in sustained and meaningful negotiations. Let me state unequivocally that the deal on the table is insufficient and unbalanced from the perspective of the Congress. While other countries look to the U.S. to ‘give more’ in order to re-energize the Round, I would suggest unilateral action will harden views in the Senate – and particularly in this Committee – that the Doha Round is fatally flawed. A successful Round is possible, but only when Brazil, China and India recognize that their rising influence in the international economy requires shared sacrifices in order to achieve individual and shared gains.’” To listen to an exchange between Sen. Chambliss and Amb. Kirk from yesterday regarding the Doha talks, just click here (MP3- 3:48). Also with respect to yesterday’s Senate hearing, Reuters writer Christopher Doering reported that, “The top U.S. trade official on Wednesday voiced frustration that Russia has not resumed imports of U.S. poultry, despite an agreement to do so, and said the countries were working to iron out the latest rift. “‘We’re frustrated. We thought we reached an agreement. We had a protocol. We signed it and then, literally at the last minute, there is a new wrinkle,’ U.S. Trade Representative Ron Kirk told reporters. “Russia, which had been the top export market for U.S. chicken, has banned shipments since January, after Moscow said a chlorine treatment commonly used by U.S. processors did not comply with its food safety regulations.” A dialogue on this issue between Sen. Chambliss and Amb. Kirk from yesterday’s hearing is available here (MP3- 3:56). Meanwhile, Senate Finance Committee Chairman Max Baucus (D-Montana) highlighted particular aspects of a free trade agreement with South Korea and expressed concerns about provisions relating to beef. He sought assurances from Amb. Kirk that key provisions on trade relating to beef be included in a final draft and noted that if they were omitted from a final negotiated FTA, he would have to evaluate whether or not to bring the agreement up for a Finance Committee hearing. To listen to this firm exchange from yesterday on the South Korea FTA and beef, just click here (mp3- 4:02). Nebraska GOP Senator Mike Johanns expressed concerns yesterday about Trade Promotion Authority at yesterday’s hearing, an exchange with Amb. Kirk on this issue is available here (MP3- 2:26). And a news release yesterday from the American Soybean Association (ASA) stated that, “[ASA] testified today before the United States Senate Committee on Agriculture, Nutrition, and Forestry to present ASA’s views on international trade issues, including the need for Congress to approve pending Free Trade Agreements, extend Presidential Trade Promotion Authority, and normalize financial relations with Cuba. “‘ASA was pleased with the President’s commitment to double the value of U.S. exports under the National Export Initiative,’ said ASA Vice President Danny Murphy, a soybean producer from Canton, Miss. ‘Efforts to achieve this goal in the agriculture sector will require Congressional approval of the pending Free Trade Agreements with Colombia, South Korea, and Panama, negotiation of new FTAs with key importing countries, and progress on the Asia Pacific Economic Cooperation regional agreement.’ Murphy added that ‘delay in approving the Colombia FTA has caused U.S. soybean producers to lose over 50 percent of their market share.’” Policy Issues: Rural Development A USDA news release from yesterday stated that, “Agriculture Secretary Tom Vilsack today announced the funding of 126 new Recovery Act broadband infrastructure projects that will create jobs and provide rural residents in 38 states and Native American tribal areas access to improved service. Broadband access plays a critical role in expanding economic, health care, educational and public safety services in underserved rural communities. Today’s announcement is part of the second round of USDA broadband funding through the Recovery Act. A complete list of projects receiving Recovery Act broadband grant awards today can be viewed in full HERE.” Policy Issues: Local Food Ben Worthen provided a transcript of a “Q and A” with Michael Pollan today at The Wall Street Journal Online titled, “A Dozen Eggs for $8? Michael Pollan Explains the Math of Buying Local.” Climate Issues Reuters writer Timothy Gardner reported yesterday that, “Now that Senate Majority Leader Harry Reid has all but abandoned climate change legislation this year, the Environmental Protection Agency has to step in to take action on climate. “President Barack Obama has long vowed the EPA would go it alone if Congress failed to act. Once intended as a threat to spur Congress to pass the bill, EPA regulation is now one of Obama’s dwindling options for doing something on climate. “The EPA solution raises the ire of the political right as government intrusion, while disappointing liberals seeking a long-term plan to cut pollutants like carbon dioxide.” After additional analysis, yesterday’s article added that, “But few expect Democrats have the votes to tackle climate change in September when they come back from recess or even in a ‘lame duck’ session after the November elections. And if Republicans pick up seats in Congress in the mid-term votes, legislative action could be stalled for years. “In the meantime, the EPA can hope the sting of its unilateral actions will eventually push broad swathes of utilities and manufacturers to support a climate bill.” In related news, Robin Bravender of Greenwire reported yesterday at The New York Times Online that, “Texas officials warned U.S. EPA this week they won’t change or reinterpret their air pollution laws to comply with federal greenhouse gas regulations, arguing that the Obama administration’s climate rules are illegal. “EPA plans to begin regulating stationary sources of greenhouse gases next January and asked states to inform the agency by this week whether they would need to change state laws or regulations to comply with federal policies. “But Texas Commission on Environmental Quality Chairman Bryan Shaw and Texas Attorney General Greg Abbott (R) blasted EPA for unlawfully attempting to force states to ‘pledge allegiance to its rules.’ The dispute marks the latest in a series of altercations between the Obama EPA and Texas as federal officials have moved to overhaul the state’s air permitting program.” And Ben Geman reported yesterday at The Hill’s Energy Blog that, “Senior House Republicans say a new Government Accountability Office report on the quality of some international greenhouse gas data should prompt U.S. officials to steer clear of binding policies that limit carbon emissions. “Top Energy and Commerce Committee Republicans released GAO findings that emissions ‘inventories’ from many developing countries — including China, the world’s top emitter — were ‘dated and of lower comparability and quality’ compared to data from the U.S. and other wealthy nations.” Ag Economy The USDA’s National Agricultural Statistics Service (NASS) released its annual Land Values and Cash Rents summary yesterday. In part, the NASS report stated that, “The United States cropland value increased by $30 per acre (1.1 percent) to $2,700 per acre” [related national graph, related state graph]. “Nationally, cash rents per acre paid to landlords for cropland in 2010 rose $3.00 (3.0 percent), while pasture rents remained unchanged. Cropland cash rents averaged $102.00 per acre, compared with $99.00 per acre for 2009” [related national graph, related state graph]. Tom Polansek reported in today’s Wall Street Journal that, “Wheat futures’ eight-week rally regained steam on Wednesday by surging 6.7% to above $7.25 a bushel on the Chicago Board of Trade, their highest since September 2008 [related graph]. “This brings gains for the grain to 71% from a June low, despite Tuesday’s small dip. Not only has the scale of the price surge—fueled by widespread crop failures in Russia—taken traders and analysts aback, it has also prompted a range of companies, including breadmakers and owners of pizza chains, to voice cost concerns.” And a news release yesterday from the Food and Agriculture Organization of the UN stated that, “The impact of unfavourable weather events on crops in recent weeks has led FAO to cut its global wheat production forecast for 2010 to 651 million tonnes, from 676 million tonnes reported in June. “But despite production problems in some leading exporting countries, the world wheat market remains far more balanced than at the time of the world food crisis in 2007/08 and fears of a new global food crisis are not justified at this point, FAO said.” August 4 Farm Policy Issues; Ag Economy; Biofuels; Trade; and Climate Issues Policy Issues: Disaster Aid Chris Clayton and Jerry Hagstrom reported yesterday at DTN (link requires subscription) that, “House Agriculture Committee Chairman Collin Peterson said Tuesday he doesn’t see how the Obama administration can administratively approve and come up with $1.5 billion to take care of his Senate counterpart’s disaster aid proposal. “‘I don’t see how they can do it,’ Peterson said.” The DTN article explained that, “Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., announced last week that White House officials told her they could find an administrative fix to fund the disaster package, which she has pushed because of massive crop losses last year in Arkansas. Producers in that state say they didn’t want to wait more than a year for payments under the permanent Supplemental Revenue Assistance Program (SURE).” Clayton and Hagstrom noted that, “Peterson said staff from the House Agriculture Committee called USDA officials ‘and they can’t give us any answer’ as to how such a disaster package could be implemented or distributed. Peterson said he doesn’t think his committee needs to necessarily send a letter opposing the move. ‘I don’t think they can do it,’ he said. ‘They don’t have any framework to make disaster payments.’ “In an interview on the sidelines of the American Sugar Alliance meeting in Vail, Colorado, on Monday Agriculture Undersecretary for Farm and Foreign Agricultural Services Jim Miller said he is ‘in process of conversation with the White House to gain a further elaboration’ of what was promised to Lincoln and is also ‘in conversation with Lincoln in order to have a better [understanding] of what her interest was.’” Yesterday’s article added that, “Miller said the SURE program is not working in the South as it is requires farmers to buy crop insurance at a higher level to qualify for disaster benefits. Southern farmers do not buy as much crop insurance as northern farmers do. Arkansas rice farmers also asked for help with unexpectedly high production costs, which SURE does not cover. Miller said Congress should consider making the program more national in the 2012 farm bill, but he also noted that SURE’s baseline will expire before the new bill is written. “And USDA has been cutting both discretionary and mandatory spending to show budget cuts. A $1.5 billion spike in discretionary spending for disaster aid would wreck a lot of those efforts.” Policy Issues: Nutrition Denise Grady reported in today’s New York Times that, “Americans are continuing to get fatter and fatter, with obesity rates reaching 30 percent or more in nine states last year, as opposed to only three states in 2007, health officials reported on Tuesday. “The increases mean that 2.4 million more people became obese from 2007 to 2009, bringing the total to 72.5 million, or 26.7 percent of the population. The numbers are part of a continuing and ominous trend.” Meanwhile, the AP reported yesterday that, “More Illinois families are receiving food stamps than ever before as a result of the deepest recession in decades, state officials said Monday. “More than 780,000 Illinois families got food stamps in June, up 11.9 percent from a year earlier, the Illinois Department of Human Services reported. Nationally, 40 million Americans — 18.7 million households — use food stamps.” Policy Issues- Farmers Markets Jane Black reported yesterday at the All We Can Eat section of The Washington Post Online that, “The number of farmers markets jumped 16 percent in 2010, according to figures to be released [today] by Department of Agriculture. There are 6,132 farmers markets in operation, up from 5,247 in 2009 [related graph]. “The National Farmers Market Directory reported the greatest surges in the Midwest. Missouri saw the number of markets skyrocket 77 percent; Minnesota’s growth was 61 percent; Idaho and Michigan each saw a 60 percent jump. Locally, Virginia counted 152 markets, up 28 percent from 118 in 2009. Maryland has 107, up 18 percent from 91 in 2009. The District had 28 markets in 2010, a 12 percent increase from 25 in 2009. “There are 886 farmers market open during the off-season. This is the first year the USDA has tracked winter markets.” The update stated that, “Growing interest in farmers markets is driven by consumer concerns about food safety and a renewed focus on healthful eating;” but added that, “Not everyone agrees, however, that the growth in farmers markets is proof of strong local food systems. Researchers at Franklin and Marshall College’s Local Economy recently released a study that suggested that it is largely wealthier urbanites who benefit from farmers markets.” Policy Issues: International Perspectives Kyodo News reported today that, “The Democratic Party of Japan plans to expand the range of farmers entitled to a new agricultural subsidy program to growers of crops other than rice in fiscal 2011, DPJ officials said. “Wheat, soybean, beets and buckwheat are among the crops mentioned in recommendations the ruling party’s agriculture policy task force has drafted for an expanded subsidy program to take effect next April. The subsidies covered rice growers this year.” And Reuters writer Alfred Kueppers reported this week that, “The drought that has decimated the wheat harvest from the Black Earth belt, stretching from Romania to Siberia, has put sowing for next year’s crop in jeopardy too. “Russia, the world’s third largest wheat exporter last year, is in the midst of its worst drought in 130 years, causing forecasters to sharply reduce their export estimates, sending futures soaring in Chicago and Paris.” The article stated that, “The problem is exacerbated by the lack of crop insurance, with Zurich-based insurer Swiss Re estimating that 25 percent of Russian crops have some coverage. “As a result, farmers such as Kryukov have no means to pay off loans taken out to purchase seed and new equipment in expectation of a bumper crop this year. “‘It’s practically impossible,’ Kryukov said, adding that his company borrowed more than 10 million roubles ($330,700) from Moscow Industrial Bank.” The article added that, “Farmers in the Vorobovskiy district want the government to step in. “‘We hope that the government compensates us for 10 percent of our losses,’ Prodimeks Holding’s local General Director Alexander Fedyayev said, adding that he has heard the government may subsidise seed purchases for the upcoming sowing season.” Ag Economy In related news, Terence Roth and William Mauldin reported in today’s Wall Street Journal that, “The scorching temperatures and dry skies threatening Russia’s wheat harvests have also been beating down on Western Europe, which is forecasting lower output of crops from French wheat to Italian tomatoes.” “Western Europeans also expect their own markedly dry summer to cut a swath through the production of grain, fruit and vegetables this year. Economists forecast a boost in seasonal food prices, with the German government reporting a 12% to 15% rise in July.” The Journal article indicated that, “The impact on foodstuffs stretches beyond grain. An Italian farmers association expects Italy’s tomato crop to come up 10% to 15% short this year because of the intense heat. Dutch growers of tulip bulbs could see production fall by 10% or more, and Belgian potato growers forecast a drop in yields.” Meanwhile, Bloomberg news reported yesterday that, “China’s worst flooding in more than a decade may cut production of rice, cotton and pork in the largest producer, boosting prices and hampering government efforts to keep inflation under 3 percent, analysts said. “‘The disastrous weather will reduce rice output by 5 percent to 7 percent and cotton by 5 percent to 10 percent in our initial assessment,’ said Li Qiang, managing director at Shanghai JC Intelligence Co. The drop may ‘lead to inflationary pressure should the government fail to take action,’ he said in an interview yesterday. “The world’s most populous country grows almost a third of the globe’s rice and cotton and produces about half its pork. An output decline may support global prices. Rice has climbed 15 percent in Chicago since June 30, while cotton in New York has advanced 26 percent in the past year. The floods have boosted food prices in China, the largest consumer.” Domestically, USDA’s National Agricultural Statistics Service (NASS) noted in a news release yesterday that, “After setting a record high in 2008, U.S. farm production expenditures decreased by nearly $20 billion in 2009– the first major decline in nearly a quarter century, according to the Farm Production Expenditures 2009 summary released today by [NASS]. “The average production expenditures per farm fell 6.4 percent in 2009, from $140,075 to $131,137. Total U.S. expenditures totaled $287 billion, down from $307 billion in 2008 [related graph]. “Falling petroleum prices were a major factor behind the decline in overall farm expenses, leading to decreases in the costs of fuels, fertilizer and agricultural chemicals. The report shows that farmers and ranchers spent $12.4 billion on fuels in 2009, down 22.5 percent from the previous year. The average U.S. farm operation spent $5,658 on fuel in 2009, $1,642 less than in 2008 [related graph].” Biofuels Javier Blas reported yesterday at the Financial Times Online that, “Archer Daniels Midland, the US-based agricultural trading house, said it expected strong demand from emerging markets to continue as it reported a 15 per cent increase in annual profits.” “The improved results also reflected better margins for corn-based ethanol. The trading house invested heavily in corn-based bio-fuels, a sector which was affected last year by weak demand for gasoline and low oil prices, making the alternative fuel less attractive. The rise in oil prices this year has helped to boost demand for ethanol. Oil prices on Tuesday were at a three-month high, more than $82 a barrel.” And a news release earlier this week from Sen. Tom Harkin (D-Iowa) indicated that, “[Sen. Harkin] released the following statement after leading a meeting of bipartisan senators with EPA Administrator Lisa Jackson and Department of Energy Deputy Secretary Daniel Poneman to discuss delays in the approval of E15 ethanol blend for vehicles. Harkin has been a Senate leader in promoting the production and use of biofuels and has introduced legislation to promote expansion of biofuels markets.” “‘I was very clear at the meeting that I am frustrated that the testing is not complete on E15 and that the timeline has been extended twice. This process seems so much more difficult that it was when E10 was approved. While I had hoped that E15 would be available by now to consumers, Secretary Jackson and Deputy Secretary Poneman were very helpful in fully explaining the rationale for the protracted timeline, and I am looking forward to hearing EPA’s decision on E15 soon. My bottom line is that expanding markets for ethanol is a critical to reducing our dependence on foreign oil. Achieving this goal will require strong leadership from the Administration and from Congress, where I am committed to strengthening of American biofuels markets.’” Trade Reuters writers Bob Burgdorfer and Christopher Doering reported yesterday that, “Russia has raised ‘further issues’ with a trade agreement that was supposed to have restarted U.S. poultry exports to that country after a six-month ban, U.S. chicken industry sources said on Tuesday. “Industry and government sources did not specify the issues raised. The matter has reached Washington where U.S. Agriculture Secretary Tom Vilsack said he was ‘concerned’ and monitoring the situation.” In a broader analysis of trade issues, Elizabeth Williamson and Melanie Trottman reported in today’s Wall Street Journal that, “The Obama administration is promising labor unions that it will enforce a range of worker protections in new trade pacts in an effort to win labor’s support of a revised South Korea free-trade agreement. “President Barack Obama is aiming to present a new version of the trade agreement at the Group of 20 nations summit in Seoul in November and has made it a centerpiece of his efforts to boost U.S. exports and job growth. But he has run into resistance from labor and other groups that maintain that this and other free trade deals don’t go far enough to protect workers’ rights in partner countries or open markets abroad.” Climate Issues Reuters writers Richard Cowan and Tom Doggett reported yesterday that, “U.S. Senate Democrats on Tuesday postponed this week’s vote on alternative energy legislation that also would have strengthened offshore drilling safety in the wake of the Gulf of Mexico oil spill. “Senate Majority Leader Harry Reid’s decision to take the bill off the Senate’s schedule until at least mid-September, when Congress returns from a long summer break, dealt a blow to Democrats’ efforts to hold BP fully responsible for the economic damage from the Gulf oil spill.” The article stated that, “For the second time in a month, Democrats failed to build enough support to advance a major environmental bill. In late July, efforts collapsed in the Senate to mandate reductions in greenhouse gas emissions blamed for global warming. “While Reid said he will try again in September to pass a bill, its fate was uncertain as political partisanship will only grow worse as the November 2 congressional elections near and there are few weeks left to legislate.” Coral Davenport reported yesterday at Politico that, “Senate Democrats on Tuesday punted their oil spill response bill to next month, but the extra time doesn’t guarantee the measure will pass — far from it. “The delay virtually ensures that strategists from both parties will use the congressional recess to hone their plans, talking points and poison-pill amendments for any floor debate, all with an eye toward the midterm elections.” With this background in mind, David A. Fahrenthold and Juliet Eilperin reported in today’s Washington Post that, “The Environmental Protection Agency will soon begin regulating greenhouse gases factory by factory, power plant by power plant. That could be unwieldy, expensive and unpopular — even President Obama has said it’s not his preferred solution. “But for now, it’s his only option. “The next few months could bring a climax to the long-running debate over how to combat climate change, with the EPA trying to implement its rules and industry groups and opponents in Congress seeking to block it with lawsuits or legislation.” The Post writers stated that, “The administration will cite a mandate from the Supreme Court, which ruled in 2007 that greenhouse gases could be regulated like other air pollutants. But opponents will say it has chosen an approach that stretches the law and could impose serious economic costs. “The result of their fight could be the first limits on greenhouse gases from American smokestacks — or a significant defeat for the White House and environmental groups. “The administration ‘wanted to be able to hold out the threat of clean-air regulation [by the EPA], as a way to . . . try to get people to the table,’ said Jeffrey R. Holmstead, an EPA official under the Bush administration, who now works for the law firm Bracewell & Giuliani. ‘They’re now faced with the kind of unenviable task of trying to make it work.’” Today’s article added that, “In Congress, some senators have worked to stop the EPA in its tracks. In June, a resolution from Sen. Lisa Murkowski (R-Alaska) narrowly failed. Another bill from Sen. John D. Rockefeller IV (D-W.Va.), which would suspend the effort for two years, awaits a vote. “A White House spokesman said that Obama would veto Rockefeller’s measure if it passed. But more attempts could be made.” “But critics wonder: If the administration couldn’t force a climate bill through Congress, will it really take the heat of regulating greenhouse gases all by itself?” And Lisa Friedman of ClimateWire reported yesterday at The New York Times Online that, “The United States still stands by its promise to slash global warming pollution despite the Senate’s decision to abandon climate legislation this year, U.S. Special Envoy for Climate Change Todd Stern said yesterday. “In an interview with ClimateWire, Stern said the Obama administration is ‘not backing away’ from its Copenhagen pledge to cut greenhouse gas emissions 17 percent below 2005 levels in the coming decade and more than 80 percent by mid-century. He also laced into critics who say America’s failure to produce legislation this year will have dire consequences for treaty talks.” August 3 Climate Issues; Biofuels; Farm Bill Issues; Trade; Animal Agriculture; and Ag Economy Climate Issues An update posted yesterday at CQPolitics reported that, “Despite House passage last week of an offshore drilling overhaul, the kickoff of the Senate’s long-awaited debate on a companion bill is being greeted by universally low expectations. “Senate Majority Leader Harry Reid is expected to launch the debate Monday by filing a motion to proceed to his energy bill, which would overhaul federal oversight of the outer continental shelf and boost natural-gas-powered and electric cars while also providing $4.5 billion for state and federal recreational and public lands efforts over five years. “Reid’s move would set up a midweek procedural vote that is widely expected to fall short of the 60 votes needed to take up the bill.” Meanwhile, Darren Samuelsohn reported yesterday at Politico that, “President Barack Obama’s ‘Plan B’ for tackling global warming is under attack in the courts and on Capitol Hill. “Through federal lawsuits, two conservative attorneys general, a major coal company and the U.S. Chamber of Commerce are leading the charge to overturn the Environmental Protection Agency’s ability to write its own climate rules. “Key coal-state Democrats and nearly all Republicans are also unified in their bid to slow down the EPA via legislation — and they’re determined to force a series of votes on the issue before the next big suite of rules start kicking in next January.” Yesterday’s article explained that, “Bids to stop the EPA started even before the agency concluded last December that greenhouse gases are a threat to public health and welfare, issuing its all-important endangerment finding that essentially triggered a series of climate-themed rules under the Clean Air Act. “But EPA’s moves are now front and center as the Obama administration starts exercising its administrative muscle after Senate Democrats last month shelved a broader climate bill for the year. “‘People on the pro- and anti-policy side are increasing the intensity of their curiosity of what EPA is doing because they don’t have a process to focus on,’ an Obama administration official said in an interview. ‘We’re definitely the most significant game in town.’” Mr. Samuelsohn explained that, “The EPA took its first big step in the spring when it unveiled new climate-themed standards for motor vehicles, the byproduct of several years of legal wrangling and closed-door negotiations with industry, states and environmentalists. “More rules will come in January for power plants and other major stationary sources. And the EPA is also trying to limit the reach of its future rules on smaller industrial sources by issuing a so-called tailoring rule that sets minimum emission thresholds before any standards would kick in. “The legality of the tailoring rule is under scrutiny in court, but conservatives want to drive home their point that the agency — unless ordered otherwise — is obligated under the law to start setting new restrictions on churches, schools and, maybe someday, lawn mowers.” (Note: See a related Wall Street Journal editorial on this issue from September 3, 2009 which noted that, “The agency is required to regulate sources that emit more than 250 tons of a given air pollutant annually, which may be reasonable for conventional pollutants like NOX or SOX. But this is a very low limit for ubiquitous CO2, and so would capture schools, hospitals, farms, malls, restaurants, large office buildings and many others. To exempt these sources, the tailoring rule unilaterally boosts the rule for greenhouse gases from 250 tons to 25,000 tons, an increase of two orders of magnitude”). In a related article regarding the “tailoring rule” (background available here and here), Robin Bravender of Greenwire reported yesterday at The New York Times Online that, “Environmentalists are suing U.S. EPA over a rule that aims to regulate greenhouse gases from only the largest industrial sources, arguing that the agency exempts too many big polluters. “The Center for Biological Diversity is joining a number of industry groups in challenging EPA’s ‘tailoring’ rule, which will force large facilities to limit their greenhouse gas emissions starting next January. But while industry groups argue that EPA climate rules will hurt businesses, CBD says the agency is not going far enough.” More broadly on the climate issue, Reuters writer Jeff Mason reported today that, “The United States stands by its 2020 target for reducing greenhouse gas emissions despite the Senate’s failure to pass legislation to fight climate change, the top U.S. climate envoy said on Monday. “Todd Stern told Reuters a U.S. proposal, made last year ahead of U.N. climate talks, to reduce emissions roughly 17 percent by 2020 compared to 2005 levels or 3 percent from 1990 levels was still on the table.” And Bloomberg writer Alex Morales reported yesterday that, “Developed countries must give ‘clear proof’ they’ve started disbursing $30 billion of climate aid that they pledged last year to poorer nations, the new United Nations climate chief said. “Evidence of payment will be needed at the UN’s annual end- of-year climate negotiations in Cancun in November and December, Christiana Figueres said at a briefing today as a week of talks started in Bonn. About $10 billion should be paid out this year, a third of the total which covered the years 2010, 2011 and 2012, she said.” More specifically with respect to agriculture, the AP reported yesterday that, “Advances in conventional agriculture have dramatically slowed the flow of greenhouse gases into the atmosphere, in part by allowing farmers to grow more food to meet world demand without plowing up vast tracts of land, a study by three Stanford University researchers has found. “The study, which has been embraced by many agricultural groups but criticized by some environmentalists, found that improvements in technology, plant varieties and other advances enabled farmers to grow more without a big increase in greenhouse gas releases. Much of the credit goes to eliminating the need to plow more land to plant additional crops.” The article pointed out that, “The study, published in June in the Proceedings of the National Academy of Sciences, has been embraced by the agriculture industry as proof that some of environmentalists’ complaints are off the mark. “‘It’s actually something that I’ve been saying for quite some time,’ said Leon Corzine, 60, an Assumption, Ill., corn farmer and past president of the National Corn Growers Association. ‘We really need to talk more about the environmental benefits. The new practices that we do, the new tools in the tool box, whether it’s seed or equipment — our efficiency gains are really kind of dramatic.’ “But some environmentalists said the study is flawed, arguing it’s based on unrealistic scenarios of what would have happened if yields hadn’t increased during the study period.” Biofuels David R. Baker reported yesterday at the San Francisco Chronicle Online that, “In the race to replace oil, electric cars seem to be leaving biofuels in the dust. “Five years ago, biofuels such as ethanol and biodiesel looked like the best bet for breaking the world’s addiction to oil. Biorefineries turning corn into ethanol sprouted across the Midwest, while startups trying to make fuel from wood chips or grass soaked up venture capital. Big automakers considered electric cars a lost cause. “Now the situation has been reversed. The buzz surrounding electric transportation has never been louder, while the biofuel industry struggles to regain momentum after two brutal years.” The article added that, “Many energy analysts, however, caution against counting biofuels out. “Cellulosic ethanol – made from crop stubble, wood chips or grass – could prove to be economical in the next few years, they say. The recession may have delayed the progress of cellulosic entrepreneurs, but it didn’t wipe them out. “In addition, most energy analysts believe both electricity and biofuels have a place in transportation’s future, even if their exact roles have not yet been decided. For example, electricity may be a fine option for powering cars, but not planes.” Reuters writer Tom Doggett reported yesterday that, “U.S. retail gasoline prices fell for the first time in three weeks, the Energy Department said on Monday, but the savings at the pump could be short-lived with higher crude oil costs. “The national price for regular unleaded gasoline declined 1.4 cents over the last week to $2.74 a gallon, but still up 18 cents from a year ago, the department’s Energy Information Administration said in its weekly survey of service stations. “Higher oil prices, which account for more than half the cost of making gasoline, shot up 3 percent to $81.34 a barrel on Monday at the New York Mercantile Exchange, the highest price in nearly three months.” Farm Bill Issues- SURE DTN Executive Editor Marcia Zarley Taylor reported yesterday at the Minding Ag’s Business Blog that, “When Congress wrote what rational people would consider the most complex formula yet for farm disaster aid in the 2008 Farm Act, it was supposed to (1) be a fairer system; (2) compensate people who’d experienced whole farm revenue loss, not a yield loss on a single crop as past farm programs did; (3) pay higher rates to those with better crop insurance coverage. In other words, reward farmers who paid the high premiums for higher levels of coverage. But as I reported in a story on DTN today, these principles aren’t working as the Farm Service Agency struggles to administer the 2008 disaster program. “Just tiny differences between farmers in the same Iowa county with nearly identical circumstances can result in one farmer receiving a disaster payment of $80,000 and the other receiving nothing, a state FSA official told me. A group of about 40 Iowa farmers who purchased so called 90/100 Group Revenue Plans (GRP) are in the ‘nothing’ category now, even though they anticipated receiving up to $245 per acre compensation when they applied for emergency aid last December on their 2008 crop. Farmer Kevin Vierkandt is their spokesperson, and he’s miffed at what he considers are FSA’s unkept promises. “Part of the reason for confusion is that price guarantees in 2008 crop insurance policies experienced a mind-altering range, given the fireworks in commodity prices that season, so from the start, fair was never going to be equal when calculating aid under the new Supplemental Revenue Assistance Program (SURE). For the 2008 corn crop, GRP policy spring price guarantee was $3.75 per bu.; multiperil (MPCI)’s spring price paid $4.75; all revenue-based products’ spring price was $5.40. Farmers with the deluxe 90/100 GRP policies paid extra to add a 150 percent price multiplier, effectively bringing their price guarantee on lost bu. to $6.25.” Yesterday’s DTN update added that, “The new disaster program calculated aid based on crop insurance coverage, but Congress gave FSA discretion to implement these county yield indexed policies like GRP. Otherwise, it was possible to overpay group-risk policyholders for losses, Kansas State University economist Art Barnaby tells me in an e-mail message. “As Washington experts ran the numbers, though, the agency fiddled with the compensation rates on 90/100 GRP policies three times in recent months. When Iowa farmers applied for aid in December 2009, their county offices plugged in $6.25 per bu. as a base price. When new software revised the program, counties found the price changed to $4.75 (the MPCI price); finally in March USDA revised rates again, and dropped the price on GRP to $3.75 (GRP price without the 150 percent adjuster). The season average cash price for corn hit $4.06, so growers with lower level price guarantees would have trouble showing losses. “That change effectively meant few people with GRP policies qualified for aid, even though MPCI corn policyholders received about $69 per acre in Hardin County, an Iowa State University estimate showed.” Also with respect to SURE, a USDA news release from yesterday stated that, “USDA Farm Service Agency (FSA) Administrator Jonathan Coppess today announced that producers have until Thursday, Sept. 30, 2010, to submit an application for payment under the 2008 Supplemental Revenue Assistance Payments (SURE) Program. SURE provides financial assistance for crop production and or quality losses due to a natural disaster.” Trade Reuters writer Emma Ashburn reported yesterday that, “The Obama administration’s top trade official said on Monday ‘real progress’ could be made in the long-stalled Doha round of world trade talks by the end of 2010. “Political changes will help spur momentum for the World Trade Organization talks, now in their ninth year, said Ron Kirk, who has insisted large developing countries like Brazil, China and India must do more to open their markets to U.S. farm and manufactured goods. “‘I’m confident and hopeful that once we get past the elections in Brazil, now that we’re through the elections in Japan, and others, that we will have enough momentum going into the end of the year to make some real progress,’ Kirk told reporters in Washington.” Ambassador Kirk is scheduled to testify tomorrow morning at a Senate Agriculture Committee hearing titled, “Promoting Agricultural Exports: Reviewing U.S. Agricultural Trade Policy and the Farm Bill’s Trade Title.” Animal Agriculture- Antibiotics Sally Schuff reported yesterday at Feedstuffs Online that, “Denmark’s experience with livestock production since the country’s 1995 ban on antibiotics for growth promotion may not be quite the doomsday scenario that is often touted in U.S. livestock circles — at least not according to a top Danish government veterinary official who testified before a congressional subcommittee investigating the growing public health threat of antibiotic resistance. “Dr. Per Henriksen, a veterinarian who heads the Danish Veterinary & Food Administration’s division for chemical food safety, animal welfare and veterinary medicinal products, testified at a key July 12 hearing on antibiotic use in food animals at the invitation of the House energy and commerce subcommittee on health. It was the third hearing the subcommittee held since the spring on the risks and policy options for dealing with antibiotic resistance. “‘The Danish swine industry has been producing pigs without the use of growth promoters for many years now and has increased both the production and the productivity,’ Henriksen testified. ‘The same picture applies in the broiler chicken and cattle industries.’” The Feedstuffs article added that, “It was noted at the subcommittee hearing that Denmark’s ban on subtherapeutic antibiotic use had changed the structure of livestock operations in the country, with large, intensively managed operations replacing small farms. “In recent years, especially 2009, Denmark has seen an upward trend in the therapeutic use of antibiotics that cannot be explained by increasing animal numbers. “‘However, as this increase appears more than 10 years after the ban of growth promoters, we do not relate this to the ban,’ Henriksen testified. “The increase is being addressed by Denmark’s new ‘yellow card’ initiative, which singles out farms using antibiotics above a set threshold and mandates a reduction in use. “Denmark has elaborate data collection on animals and veterinary issues.” Ag Economy Liam Pleven and Tom Polansek reported in today’s Wall Street Journal that, “Wheat prices have staged the most drastic rise in more than 50 years, as a drought in Russia fuels growing worries that it could lead to a global shortage of the grain. “Harsh heat and a lack of rain in Russia have killed half of the crop in some hard-hit areas. The slump in production in one of the world’s most fertile breadbaskets has pushed prices up 62% since early June, and last month saw the biggest and fastest increase since 1959. “Wheat prices, which briefly rose above $7 a bushel on Monday, are at their highest level since September 2008, the year when low supplies of the grain fueled a global food crisis that led to riots in several countries.” Meanwhile, University of Illinois Agricultural Economist Darrel Good pointed out yesterday (“Supply Concerns Drive Crop Prices”) that, “Corn, soybean, and wheat prices have experienced an impressive rally over the past month. From the lows in late June to the high on August 2, December 2010 corn futures rallied nearly $.75, November 2010 soybean futures rallied $1.40, and September wheat futures rallied $2.55. “The increase in prices was triggered by the June 30 USDA reports showing smaller than expected June 1 domestic inventories of corn and soybeans and smaller than expected planted acreage of corn. June 1 wheat inventories were larger than expected, but prices increased based on prospects for smaller crops outside the U.S. Large year-over-year declines in wheat production are expected in Russia, Kazakhstan, and Canada. Last year, those three countries exported 1.6 billion bushels of wheat, or 41 percent of the total non U.S. exports. “Crop prospects in Russia and Kazakhstan have continued to deteriorate and the crop in western Europe came under some late stress. Foreign wheat production could be down as much as 4 percent this year. In addition to the ongoing concerns about world wheat production, there are some concerns about the yield potential for the U.S. corn and soybean crops. While crop condition ratings have remained high, the impact of the unusual combination of extremely wet and warm conditions in June and July in the Corn Belt are not clear. Total June and July rainfall in the Corn Belt was the second largest in the past 50 years; only 1993 had a larger total. The two-month average temperature in the Corn Belt was the fourth highest of the past 50 years. This combination of extreme rainfall and temperatures had not been observed in the previous 50 years. Additional crop yield concerns are being generated by the very warm start to August and the prospects for additional stress on the crops in the Delta region.” After additional analysis, yesterday’s extension update added that, “The price rally of the magnitude of the past month is difficult to sustain. A continuous flow of supportive fundamental information is required for prices to continue to move higher. In particular, the strength in wheat prices may be difficult to sustain. Even with further reductions in estimated world crop size, year ending stocks will remain fully adequate. If relatively high prices persist into the fall of the year, an increase in planted acreage in the northern hemisphere would be expected. “Near term prospects for corn and soybean prices are tied closely with prospects for the U.S. crops. Expectations about crop size fall in a wide range. The USDA’s August Crop Production report will provide an important benchmark.” August 2 Climate Issues; Biofuels; Nutrition; Disaster Aid; Animal Ag; Trade; and the Ag Economy Climate Issues The AP reported on Friday that, “The House approved a bill on Friday to raise safety standards for offshore drilling, remove a federal cap on economic liability for oil spills and impose new fees on oil and gas production. “Democratic leaders hailed the bill as a comprehensive response to the Gulf of Mexico oil spill and said it would increase drilling safety and crack down on oil companies like BP. Companies with significant workplace safety or environmental violations over the preceding seven years would be banned from getting new offshore drilling permits.” The article noted that, “The legislation, which passed 209 to 193, has yet to be taken up in the Senate.” Alexander Bolton reported yesterday at The Hill Online that, “Senate Democrats are gearing up for another week of political message votes as unified GOP opposition has made passage of energy legislation unlikely. “Senate Majority Leader Harry Reid (D-Nev.) had declared July the month to debate and pass comprehensive energy reform legislation. “Instead, the Senate will likely spend only a day this week on a narrow oil spill response bill that appears fated to stall because of another Republican filibuster. The Senate is scheduled to take a recess until mid-September after this week, giving lawmakers a chance to campaign back in their home states. “Energy legislation isn’t even on the top of this week’s agenda.” The article noted that, “The sweeping energy and climate change bill that Democrats had envisioned earlier this year has been pared down to legislation that would eliminate the cap that limits oil companies’ liability for spills.” Meanwhile, The Wall Street Journal editorial board opined today that, “President Obama’s undeniable success in passing liberal legislation hasn’t translated into greater popularity for himself or the Democratic Congress. So perhaps he’ll get a bump in the polls now that he’s suffered his first setback on one of his signature promises. “We refer to the failure of cap and tax, which Mr. Obama once modestly promised would signal ‘the moment when the rise of the oceans began to slow and our planet began to heal.’ Senate Majority Leader Harry Reid gave the plan, if not the planet, up for dead this month, and last week he unveiled a new energy bill whose major provisions include a Cash for Clunkers replay for home appliances and a $5.8 billion subsidy for natural gas vehicles.” The Journal stated that, “In fact, the bill went down for lack of Democratic votes, in particular those from Midwest coal and manufacturing states. Voters in those states have figured out that cap and tax is a redistributionist exercise from the carbon-dependent heartland to the richer coasts. A Democrat—Jay Rockefeller of West Virginia—is also leading the charge to repeal the EPA’s climate ‘endangerment’ regulation that imposes cap and trade though the backdoor.” “Whatever one thinks of the science of climate change, cap and tax is the wrong policy response. At enormous economic cost, it would do little to reduce global carbon emissions. To the extent that it reduces growth, it would make the world less able to cope with the consequences if temperatures do rise. The richer the world, the more resources the world will have to adapt and ameliorate bad effects,” the Journal opinion item said. With respect to the science of climate change, The Washington Post editorial board indicated today that, “In a depressing case of irony by juxtaposition, the death of climate change legislation in the Senate has been followed by the appearance of two government reports in the past week that underscore the overwhelming scientific case for global warming — and go out of the way to repudiate skeptics. “First came a report on global climate from the National Oceanic and Atmospheric Administration, which confirmed that the 2000s were by far the warmest decade in the instrumental record — as were, in their turns, the 1980s and the 1990s. Unlike year-to-year fluctuations, these 10-year shifts are statistically significant. Further, the report notes that it derived its conclusions from an array of data sources — not just the land-surface readings that doubters challenge — from ocean heat uptake to melting land ice to sea level rise.” The Post added that, “Second was a strongly worded response from the Environmental Protection Agency to petitions that it revoke its finding that ‘climate change is real, is occurring due to emissions of greenhouse gases from human activities and threatens human health and environment.’ As with much climate-change skepticism, the petitions were based ‘on selectively edited, out-of-context data and a manufactured controversy,’ EPA Administrator Lisa P. Jackson said. Among other things, the agency reviewed every document from the ‘Climategate’ e-mail hack at a respected British climate research unit. The EPA found what four other independent studies did: that the e-mails contained some ‘candid’ language but nothing that seriously discredits the scientific consensus on global warming.” And the AP reported yesterday that, “The failure of a climate bill in the U.S. Senate is likely to weigh heavily on international negotiations that begin Monday on a new agreement to control global warming. “The decision to strike the bill from the Senate’s immediate agenda has deepened the distrust among poor countries about the intentions of United States and other industrial countries to cut greenhouse gas emissions that power their wealthy economies but risk causing the Earth to dangerously overheat, say climate activists.” Biofuels A news release Friday from Growth Energy stated that, “A newly released working paper from the World Bank found that biofuels were not to blame for the so-called food crisis of 2007 to 2008. For more than a year, Growth Energy, the coalition of U.S. ethanol supporters, has countered claims that ethanol and farm prices were to blame for higher food prices. Today, Tom Buis, CEO of Growth Energy, said this report further refutes the claim that ethanol led to high food prices. The working paper can be found here. “The World Bank’s report, released today, is an about face from its 2008 Policy Research Working Paper which claimed 70-75 percent of the increase in food prices that year was due to biofuels. The authors of the World Bank’s new working paper argue that energy prices and speculation played significant roles in the non-energy commodity price spikes seen in the recent past.” Nutrition First Lady Michelle Obama penned an Op-Ed that was published in today’s Washington Post where she noted that, “Right now, our country has a major opportunity to make our schools and our children healthier. It’s an opportunity we haven’t seen in years, and one that is too important to let pass by. “The Child Nutrition Bill working its way through Congress has support from both Democrats and Republicans. This groundbr