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January 9




Farm Bill; Ag Economy; Biotech; Biofuels; Animal Ag; Immigration; and, Political Notes- Thursday

Posted By Keith Good On January 9, 2014 

Farm Bill

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “A fight over dairy provisions is threatening to hold up completion of the farm bill this week.

“Negotiators late Wednesday were still aiming to hold a formal meeting of the 2014 farm bill conference committee on Thursday to wrap up the long-delayed $1 trillion subsidy and food stamp measure.

“But a battle over dairy, pitting Speaker John Boehner (R-Ohio) against Rep. Collin Peterson (D-Minn.), the top Democrat on the House Agriculture Committee, was complicating matters.”

Mr. Wasson explained that, “Boehner and dairy-using industries oppose dairy production restrictions favored by Peterson and milk producers. On a Friday conference call, Boehner reiterated his opposition, sources said.

“House Agriculture Committee Chairman Frank Lucas (R-Okla.) said the two sides were still trying to find some way to deal with the dairy supply management issue.

“‘I would say that there’s been lots of discussion on how to address dairy, but really nothing’s changed,’ he said.”

The article noted that, “[Chairman Lucas] said a farm bill meeting is ‘still a possibility, and I want to so bad you can’t imagine.’”

Bloomberg writers Derek Wallbank and Alan Bjerga reported yesterday that, “A longstanding dispute over dairy policy is holding up an agreement between U.S. House and Senate lawmakers on a new farm bill, House Agriculture Committee Chairman Frank Lucas said.

“The most obvious sticking point ‘is the dairy policy,’ Lucas said in an interview today in Washington. ‘We’re just not quite there yet,’ said Lucas, who said that once a ‘handful of things’ are resolved, a conference meeting will be held to resolve remaining issues.”

Yesterday’s Bloomberg article added that, “Plans for a meeting tomorrow appear to be evaporating, said Representative Steve King, an Iowa Republican who is a conferee and the sponsor of the production-practices proposal.

“‘As each hour goes by, the likelihood of a conference this week gets less,’ King said in an interview.”

And Dave Russell reported yesterday at Brownfield that, “Speaking with reporters on Wednesday, January 8, Ohio Senator Sherrod Brown, a member of the Farm Bill Conference Committee said he’s confident a Farm Bill will get done, but when that might happen is still a question.”

Daniel Looker reported earlier this week at Agriculture Online that, “[Iowa GOP Senator Chuck Grassley] conceded that his definition of a farmer and active management ‘are still some of the unresolved issues’ that the conference committee may deal with when in meets.  That could happen as early as Thursday of these week, although some ag group lobbyists doubt the committee will be ready to vote on a final bill until next week.

“Grassley also argues that it’s hypocritical for the committee to cut nutrition spending, by perhaps $8 billion over 10 years, while refusing to close loopholes that benefit the very largest farms.  That, he said, would ‘take food out of the mouths of babes and continue to subsidize wealthy farmers that don’t need the subsidies.’”

Sen. Grassley tweeted yesterday that, “Farm Bill $250K Paymt limit allows big farms to get 5x US Median Household income in subsidies/yr. Some want more-How’s 250K unreasonable?”

Also, a news release yesterday from Sen. John McCain (R., Ariz.) stated that, “[Sen. McCain] today sent a letter to Senators Debbie Stabenow (D-MI) and Thad Cochran (R-MS), the Chairwoman and Ranking Member of the Senate Agriculture Committee, to request that they allow Farm Bill conferees to vote on the repeal of the wasteful and duplicative catfish inspection program at the U.S. Department of Agriculture.”

And during an interview yesterday on The Diane Rehm Show (NPR-WAMU), House Democratic leader Nancy Pelosi (D., Calif.) was asked, “And what about the Farm bill? Do you believe it will come before the House?”

Rep. Pelosi stated that, “I think so. The speaker has said, if they came to an agreement, they would bring a bill to the floor. So I’m optimistic that that can happen soon. We need a farm bill for our farmers, for our nutrition programs, for our economy. It’s really important for not only farmers but for our entire economy. But it is very important for our farmers, so hopefully we will have that, and we will have it soon.”

Meanwhile, Burgess Everett reported yesterday at Politico that, “Democrats are moving away from finding a way to cover the cost of an emergency three-month extension of unemployment benefits, hoping instead to strike a deal to pay for a full-year long extension of the program.

“Senate Republicans spent the past two days floating a raft of proposals to pay for the $6.5 billion extension of benefits that expired Dec. 28, all of which have landed as a dud inside the Democratic caucus, sources said. Instead, the chamber’s focus is shifting to finding the estimated $25 billion needed to fund a year-long extension of the program.”

Niels Lesniewski reported yesterday at Roll Call Online that, “[House Ag Committee Chairman Frank Lucas] said no one from leadership had approached him about using the expected savings from a farm agreement to offset the cost of extended unemployment benefits — or anything else.

“‘We on the conference have been focused on ag policy, and that’s not an issue that’s been brought to my attention by anybody,’ Lucas said.”

And Ed O’Keefe reported in today’s Washington Post that, “Negotiations are almost complete on a long-overdue farm bill that will set new spending levels for the federal food stamp program and add yet another wrinkle to the national debate over income inequalityas Congress mulls how to help unemployed and low-wage workers.”

The Post article noted that, “Plans call for eliminating about $9 billion in funding for food stamps — formally known as the Supplemental Nutrition Assistance Program (SNAP) — over the next decade, according to several aides familiar with the negotiations who are not authorized to speak publicly about the details.”

Today’s article added that, “‘I don’t think we should be focused on the cuts; I think we should be focused on the efficiencies of the program and who it’s genuinely helping,’ said Rep. Marlin A. Stutzman (R-Ind.), a fiscal conservative who pushed for bolder changes to SNAP. Stutzman said he hasn’t decided how he will vote on the final bill.

“Rep. Steve Southerland II (R-Fla.), another outspoken advocate for bolder reforms, said he also would reserve judgment: ‘I think that individual members are going to have to make their decision: Is my support of a farm bill based on a number or is it based on a meshing of the number and the policy reforms?’”

Mr. O’Keefe indicated that, “Sen. Tom Harkin (D-Iowa), a longtime champion for the poor from one of the nation’s most prosperous farm states, said in a statement that ‘compared to the draconian cuts’ sought by House Republicans, the negotiated change is ‘a dramatic improvement, particularly because it wouldn’t cut anyone from the program.’

“Other liberal senators, including Jack Reed (D-R.I.) and Kirsten Gillibrand (D-N.Y.), signaled Wednesday that a higher level of cuts would force them to vote against the entire bill. Reed said he ‘would be very upset’ if the cuts are included, while Gillibrand described the plan as ‘the wrong approach.’”

The article also noted that, “The [dairy] issue is of special concern to House Speaker John A. Boehner (R-Ohio), who outlined his opposition to the price controls in a rare ‘Dear Colleague’ letter to House lawmakers over the summer.

“‘The federal government doesn’t control the supply or price of bread, clothes, or cell phones — it shouldn’t be doing so for milk,’ Boehner said in his letter.”

And with respect to the executive branch, Secretary of Agriculture Tom Vilsack was a guest on The Daily Rundown with Chuck Todd (MSNBC) yesterday where the discussion focused on Farm Bill issues.  A video replay of that conversation is available here, atFarmPolicy.com Online.

In other news, Kevin Bogardus reported yesterday at The Hill Online that, “The world’s largest tuna companies are making a splash in Washington with a fight over rules that keep some catches out of school lunches.

StarKist and Tri Marine are clashing with Bumble Bee and Chicken of the Sea over the Agriculture Department’s strict Buy American standards for where tuna is cleaned, canned and shipped.

“Bumble Bee and Chicken of the Sea lose under the rules. Both companies have facilities that process tuna in the United States, but their product is also cleaned overseas. Under the USDA standards, their tuna cannot be served in schools, denying them access to a lucrative market.”

 

Agricultural Economy

David Pierson reported on the front page of yesterday’s Los Angeles Times that, “For generations, butter got a bad rap.

“It was thought to be cloying, fattening, dangerous for your arteries, and it took a creaming from oil-based substitutes like margarine.

Now with the trans fats in those alternatives under fire, everyone from iron chefs to home cooks is reexamining butter’s place on the refrigerator shelf.”

Mr. Pierson pointed out that, “That shift toward natural ingredients and the backlash against trans fats pushed butter consumption in the U.S. to a 40-year high in 2012, according to the latest statistics.

“Americans now eat 5.6 pounds of butter per capita, up from a low of 4.1 pounds in 1997In the last decade alone, butter consumption has grown 25%.”

Meanwhile, Bloomberg writer Jeff Wilson reported yesterday that, “Corn futures tumbled to a 40-month low and wheat fell to the cheapest since 2011 on speculation that a U.S. government report this week will show ample world supplies. Oilseeds also slumped.”

And Reuters writers Michael Hirtzer and Theopolis Waters reported yesterday that, “Prices for select-grade U.S. wholesale beef hit a record-high on Wednesday for the fourth straight day, as shipments of the meat slowed after a historic winter storm in the United States prompted a surge in live cattle prices, analysts said.

“Higher-quality ‘choice’ beef prices also climbed, rising to the loftiest levels since hitting an all-time high in May, 2013, U.S. Agriculture Department data showed.”

The Reuters article noted that, “The U.S. cattle herd is the smallest in about 60 years, forcing beef packers such as Tyson Foods Inc and Cargill Inc last week to pay feedlots in the southern U.S. Plains as much as $138 per cwt for live cattle, a record price.”

And Bloomberg writer Luzi Ann Javier

 reported yesterday that, “Sugar futures declined in New York to the lowest since July 2010 on signs that an improving global production outlook will add to a supply glut.

“The 2014 cane harvest in Australia, the world’s third-biggest sugar exporter, may exceed 32 million metric tons, compared with about 30.5 million a year earlier, producers’ group Canegrowers said today. In Brazil, the largest producer, rains this week will boost the crop, Somar Meteorologia said yesterday.

Prices slumped 16 percent in 2013, the third straight drop and the longest decline since 1992.”

In news regarding trade issues, a news release yesterday from Senate Ag Committee Chairwoman Debbie Stabenow (D., Mich.) stated in part that, “[Sen. Stabenow] and Lindsey Graham (R-SC), Co-Chairs of the bipartisan Senate Manufacturing Caucus, continued to press for answers from the administration on whether foreign currency manipulation will be addressed in ongoing Trans-Pacific Partnership trade agreement talks. In a letter to President Obama, Sens. Stabenow and Graham reiterated concerns that the most recent round of negotiations did not even touch on currency manipulation, despite the fact that bipartisan majorities in both Houses of Congress support such an agreement and have repeatedly urged the administration to take action.”

 

Biotech

Reuters writer Carey Gillam reported yesterday that, “Monsanto Co, the world’s largest seed company, said Wednesday it was making good progress on development of an herbicide-tolerant wheat, pushing what would be the world’s first biotech wheat a step closer to market.

“Monsanto is already a leading developer of biotech corn, soybeans and other crops and the company has long tried to bring to market a wheat genetically altered to tolerate spraying of glyphosate, the key ingredient in Monsanto’s Roundup herbicide.”

The Reuters article added that, “The company is progressing on work to make crops more drought-hardy, and more pest- and disease resistant. It is also working on a new combination of biotech crops and herbicide chemistry to control weeds that have become resistant to its Roundup herbicide.”

Also yesterday, Reuters news reported that, “Chinese quarantine authorities have sped up testing on imports of distiller’s dried grains, suggesting they have relaxed checks on the corn by-product since rejecting some U.S. cargoes for being tainted with an unapproved GMO strain, traders said.”

China, the world’s top buyer of U.S. DDGs, accounted for about 40 percent of U.S. exports of the high-protein feed in the 2012/13 marketing season,” the article said.

And a separate Reuters article from yesterday reported that, “Switzerland-based Syngenta AG is waiting for China to approve a strain of gene-modified corn present in several U.S. cargoes turned away from Chinese ports in recent months, the company said.

“Since November, China has rejected about 600,000 tonnes of corn from United States, the world’s largest exporter, after detecting traces of MIR 162, also known as Agrisure Viptera, which is still awaiting approval from China’s farm ministry.”

The article added that, “Industry sources said Beijing’s scrutiny of GMO corn is prompted by a glut in domestic supply as it seeks to curb cheap imports and support domestic prices of the grain to help farmers.”

 

Biofuels

Reuters news reported yesterday that, “The U.S. Energy Information Administration (EIA) revised up its 2014 gasoline demand forecast for a fourth straight month on Tuesdayopening the possibility that a controversial cut in ethanol blending mandates could be eased.”

The article explained that, “The higher forecasts are important because they mean there could be more petroleum-based gasoline available than expected to blend with ethanol, leaving the agency room to lessen the proposed cuts in this year’s biofuel blending quotas.

“‘It would give them adequate room, I think, to raise the renewable mandate by 200 to 300 million gallons,’ said Scott Irwin, an agricultural economist at the University of Illinois Urbana-Champaign.

“‘Not only could they, they should, because the methodology is based on these estimates and if the estimates go up, they should allow their number for the renewable mandate to float with the estimate for the blend wall,’ Irwin added.”

And Donnelle Eller reported yesterday at The Des Moines Register Online that, “Iowa biodiesel production pushed over 230 million gallons last year, an increase of 25 percent and a new record, according to the Iowa Renewable Fuels Association.”

Ms. Eller indicated that, “Soybean oil remained the leading biodiesel feedstock in Iowa, accounting for 68 percent of production, the group said. However, the use of lower carbon intensity feedstocks doubled over the previous year. Animal fats accounted for 27 percent of biodiesel feedstocks, while used cooking oil, inedible corn oil and canola oil accounted for the remaining five percent.”

 

Animal Agriculture

Christopher Doering reported in the front page of yesterday’s Des Moines Register that, “Pork giant Smithfield Foods is asking its hog suppliers to phase out the use of controversial stalls to raise pregnant sows.”

The article stated that, “The pork industry said the costs for hog producers to make the changes to their operations would be less significant if they were made during a longer period, a time when older barns would likely need to be replaced anyway.

“About 10 percent of the country’s 5.8 million sows are housed in systems other than gestation stalls. A 2010 study from the University of Minnesota estimated it could cost the pork industry as much as $3.3 billion to transition from gestation crates to group pens.”

Meanwhile, Jim Spencer reported this week at the Minneapolis Star-Tribune Online that, “Sometimes Dar Geiss needs antibiotics to treat the cattle on his ranch in central Minnesota. Soon, he will have to go through a more encumbered procedure to get those drugs.

“A new Food and Drug Administration program aimed at lowering the growth of antibiotic-resistant bacteria dramatically changes the application and delivery of dozens of infection-fighting drugs to cattle, hog, turkey and chicken producers across the country.”

The article noted that, “The use of antibiotic feed to increase animal growth ‘is not something we practice every day,’ said Geiss, president of the Minnesota State Cattlemen’s Association. But, he added, the purchase and use of antibiotics under the new program will be ‘a big switch from nutrition companies to vet oversight.’”

Steve Olsen, who directs the Minnesota Turkey Growers Association, says a shortage of food production vets stretches across the country,” the article said.

Also on the issue of veterinarians, Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “The Senate passed a bill Wednesday that would broaden veterinarians’ ability to dispense controlled substances.

“Sen. Jerry Moran (R-Kan.) introduced S. 1171, which would amend the Controlled Substances Act to allow a veterinarian to transport and dispense controlled substances at a site other than their practice as long as the site of transporting and dispensing is located in a state where the veterinarian is licensed.”

 

Immigration

Kristina Peterson reported yesterday at the Washington Wire Blog (Wall Street Journal) that, “Like many New Year’s resolutions, this one could be tough to keep: The top two House Republicans told GOP lawmakers Wednesday they want to overhaul the immigration system in 2014.

“House Speaker John Boehner (R., Ohio) and Majority Leader Eric Cantor (R., Va.) both included an immigration rewrite among the top 2014 priorities they outlined during a closed-door meeting with the GOP ranks, lawmakers said after the gathering.”

Ms. Peterson noted that, “Republicans have said they want to address immigration laws in a step-by-step fashion, rather than the sweeping, bipartisan bill passed by the Senate last year. Mr. Boehner on Wednesday reiterated his pledge that leaders would not allow negotiators to subsume any narrower bills passed by the House into the broad Senate bill, which includes a controversial path to citizenship for illegal immigrants already living in the U.S.”

And Jennifer Rubin reported yesterday at the Right Turn Blog (Washington Post) that, “In short, in the post-shutdown world with GOP leadership and mainstream Republicans perking up, immigration reform might just be possible.”

 

Political Notes

John Bresnahan, Jake Sherman and Alex Isenstadt reported yesterday at Politico that, “North Carolina Rep. Mike McIntyre and New York Rep. Carolyn McCarthy will not seek reelection this year, according to multiple Democratic sources familiar with their plans – marking a blow to Democratic efforts to win control of the House.

“The 57-year-old McIntyre, who was elected in 1996 to the Wilmington-area congressional seat, narrowly defeated Republican state Sen. David Rouzer in 2012 and was poised to face him in a 2014 rematch. His retirement from the heavily Republican district will further thin the ranks of Blue Dog Democrats.”

Rep. McIntyre is one of the more experienced members of the Agriculture Committee where he serves on the Conservation, Energy, and Forestry Subcommittee and the Livestock, Rural Development, and Credit Subcommittee.

 

--

Keith Good
President
FarmPolicy.com, Inc.
Champaign, IL

 

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January 8




Farm Bill; Biotech; Budget; Ag Economy; Animal Ag; and, Immigration- Wednesday

Posted By Keith Good On January 8, 2014 

Farm Bill

Meredith Shiner and Emma Dumain reported yesterday at Roll Call Online that, “The long-delayed farm bill may finally be on a glide path to passage, after months of partisan wrangling raised doubts over whether such a day would ever come.

“House and Senate conferees are tentatively scheduled to meet Thursday to begin the final process of approving a bill that can be voted on by both chambers, senators and aides said. Leadership aides in both chambers indicated that the long-stalled legislation, which faltered in the House last session, could be sent to the president’s desk by the Martin Luther King Jr. Day recess.

“For weeks, Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., and House Agriculture Chairman Frank D. Lucas, R-Okla., have been engaged in one-on-one negotiations trying to bridge the gap between the two sides. They now believe they have made enough progress to bring the remaining issues to conferees for haggling.”

The Roll Call article noted that, “‘Sen. Stabenow thinks that sometime this week the conference could be completed. I hope that’s the case,’ Senate Majority Leader Harry Reid, D-Nev., told reporters Tuesday.

“Beyond fighting over the final, contentious issues, there could be increased pressure on conferees to act swiftly on the bill — projected to reduce the deficit by about $20 billion — as members eye potential offsets for a pending three-month jobless benefits extension.

Yesterday’s update also pointed out that, “Several sources cautioned that there were still several significant compromises to be made, and a House GOP aide said that many of those issues are likely to be revealed on Thursday.

“For example, a vote could come on what’s known as the ‘King amendment’ — a provision sponsored by Rep. Steve King, R-Iowa, that is intended to block California from applying its animal welfare standards to foods produced in other states.

“‘I would caution against saying that this means that everything’s done. It means we are very close to being done, but there are other steps in the process,’ the aide added. ‘We hope in very short order we will be announcing a conference report, but that doesn’t mean the report would be voted on’ at the conference meeting this week.”

David Rogers reported yesterday at Politico that, “But behind the scenes, Speaker John Boehner (R-Ohio) has stepped back in forcefully, warning that he will not accept ‘supply management’ provisions in the new dairy chapter — an initiative championed by Minnesota Rep. Collin Peterson, the ranking Democrat on the House Agriculture Committee.

“An aide to the speaker confirmed Tuesday that Boehner participated in a conference call last Friday with House Agriculture Chairman Frank Lucas (R-Okla.) and Peterson in which ‘the speaker made clear to Peterson that there’d be no supply management in any final farm bill.’

“Reached last evening Peterson did not hide his irritation. ‘We’re about 12 hours away from not having a farm bill at all if this keeps up,’ he said.”

Mr. Rogers explained that, “At one level, the skirmish now is no surprise. Boehner — a strong ally of powerful processors — has never hidden his opposition to the supply management provisions in the dairy portion.

“At the same time, Peterson has been just as adamant that some such controls are needed to guard against the risk that farmers will overproduce milk to take advantage of a new price insurance program for dairy in the farm bill. Peterson argues that the taxpayers will be left with the cost, and farmers will be hurt by a glut of cheap milk that only serves the purposes, he says, of the processors.

“Despite losing to Boehner in a floor vote on the issue last summer in the House [video replay of House floor debate here], Peterson has persisted in the conference with the help of Stabenow. He can be tenacious in such fights, having chaired the Agriculture panel when the last farm bill was enacted in 2008. And he is an invaluable ally for Lucas in trying to move forward.”

Yesterday’s Politico article also noted that, “Boehner’s power is not unlimited. If the conference report were to come out with supply management in the text, the speaker would be in an awkward spot if he were to block floor action and kill the bill — after all the struggle to get this far.”

Meanwhile, Omaha World-Herald reporter Joseph Morton tweeted yesterday that, “Iowa’s @ChuckGrassley says 4 Farm Bill issues left to hash out: COOL, catfish, subsidy limits and @SteveKingIA amdt on chicken cages”

In other developments, Janet Hook reported in today’s Wall Street Journal that, “Legislation to resurrect benefits for the long-term unemployed overcame an important procedural hurdle in the Senate Tuesday, triggering a debate over how to cover the cost and whether other changes could ease the bill through the Senate and a wary House.”

Senate Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) applauded the Senate action on this issue yesterday: “‘Extending this temporary assistance for people out of work is critical so they can put food on the table, keep the heat on during brutally cold temperatures and keep a roof over their head while they look for a job,’ said Stabenow. ‘This emergency support has always been approved on a bipartisan basis during past downturns and I’m glad several Republicans joined Democrats in approving this today. This is a critical lifeline for families out of work through no fault of their own.’”

Meredith Shiner reported yesterday at Roll Call Online that, “[Sen. Rob Portman (R., Ohio)], in a statement after the vote, echoed that sentiment: ‘I voted to proceed with the debate over how to address unemployment insurance with the hope that during the debate the Senate will agree to pay for the extension and work to improve the unemployment insurance program so it works better to connect those unemployed with available jobs.’

“It might not have been a coordinated strategy on the part of concerned Republicans, but it does appear to be working. Multiple Democratic aides said senators discussed the option of paying for the extension at their weekly caucus luncheon on Tuesday afternoon. And for the first time since Democrats began seriously discussing the expiration of unemployment benefits, a leading senator expressed an openness to exploring potential offsets. Reid on Tuesday talked about the possibility of using the more than $20 billion in projected savings from the pending farm bill — which aides expect to pass this month — to pay for the UI extension.

“‘The farm bill is less than $20 billion. I understand that they’ve cut some of the savings we had before,’ Reid said. ‘Sometime this week the conference could be completed. I hope that’s the case. And certainly that’s a place we could look for some money.’”

An update yesterday at Brownfield quoted Iowa GOP Senator Chuck Grassley as saying, “We aren’t having direct payments because you can’t justify them when farm prices have been so high—here prior to right now—and we did it to save five billion dollars a year.  I think that unemployment needs to be offset, but it ought to be offset with cuts in spending someplace else.”

And Mike Lillis reported yesterday at The Hill Online that, “House Democrats are willing to look at proposals to pay for the estimated $6.4 billion cost of extending unemployment benefits, Minority Whip Steny Hoyer (D-Md.) said Tuesday.

“While Democratic leaders consider the extension an emergency measure that doesn’t require an offset, they would consider GOP proposals to pay for the costs elsewhere in the budget, Hoyer said.”

The Hill update noted that, “House Democrats in December proposed using cuts to agriculture subsidies to pay for the cost of extending the federal benefits — a measure rejected by House Republicans.”

Mr. Lillis also indicated that, “While Hoyer is calling on Boehner and the Republicans to come up with offsets, however, Boehner says that onus falls on President Obama.

“‘One month ago I personally told the White House that another extension of temporary emergency unemployment benefits should not only be paid for but include something to help put people back to work,’ Boehner said in a statement. ‘To date, the president has offered no such plan.’”

In other Farm Bill news Alexandra Wexler reported yesterday at the Money Beat Blog (Wall Street Journal) that, “As the U.S. farm bill continues to languish in Congress, many large cotton growers say their plans for the upcoming planting season remain unchanged.

“If the farm bill– legislation that sets federal farm policy for the next five years– passes, direct payments to growers of row crops like cotton, corn and wheat would likely be scrapped. Eliminating the direct-payment program, in which the government gives money to farmers regardless of crop prices, is a point of accord among both Democrats and Republicans in both the House and Senate.

“Direct payments would be replaced with a more comprehensive crop insurance program for farmers in the new farm bill.”

The Journal update indicated that, “But ‘it’s not as good as what we had,’ said Frank DeStefano, a Mumford, Texas-based farmer who grows about 2000 acres of cotton. ‘It will affect my business, but it won’t change my plan’ for growing cotton this year, he said.

“Other farmers echoed that sentiment. The changes to the farm bill ‘will not affect me at all, what we’re going to grow this year,’ said Clyde Sharp, a farmer who plans to start planting about 2500 acres of cotton in Roll, Ariz. around March 1.”

Also yesterday, Sen. Patrick Leahy (D., Vt.) made a statement on the Farm Bill conference, and Rep. Cheri Bustos (D., Il.) issued a news release titled, “We Should Reward Hunters Who Donate Game & Help Feed The Hungry.”

 

Biotech

Jenny Hopkinson and Helena Bottemiller Evich reported yesterday at Politico that, “The giants of the U.S. food industry who have spent millions fighting state-by-state efforts to mandate new labels for genetically modified organisms are taking a page from their opponents and pushing for a federal GMO law.

“But the Grocery Manufacturers Association, which represents such food and beverage leaders as ConAgra, PepsiCo and Kraft, isn’t exactly joining the anti-GMO movement. It’s advocating for an industry-friendly, law with a voluntary federal standard — a move that food activists see as a power grab by an industry that has tried to kill GMO labeling initiatives every step of the way.”

And the Los Angeles Times editorial board indicated yesterday that, “Contrary to what many consumers assume, a ‘natural’ label on foods doesn’t necessarily mean much. The Food and Drug Administration has never defined the term, though it says it doesn’t object to its use to describe foods without added color, artificial flavors or synthetic substances.

Now the FDA is being asked to broaden the term ‘natural’ into meaninglessness by allowing genetically engineered food to be labeled natural. A letter sent to the FDA by the Grocery Manufacturers Assn. in December, first reported by the New York Times, signals the trade group’s intent to formally seek the ‘natural’ label for the many products that contain bioengineered ingredients. The agency should firmly and swiftly reject any such petition.

“It’s true that most of the foods we eat have their origins in agricultural hybridization. But hybridization also occurs naturally. In contrast, genetic alteration in laboratories to insert certain qualities — resistance to disease or the ability to withstand herbicides — does not occur naturally.”

 

Budget

Niels Lesniewski reported yesterday at Roll Call Online that, “Subcommittee chairmen may be known as cardinals in appropriations parlance, but Senate Appropriations Chairwoman Barbara A. Mikulski called Tuesday’s meeting of the Democratic and Republican spending chiefs on both sides of the Rotunda a ‘conversation’ rather than a ‘conclave.’

“The Maryland Democrat left a meeting of the top four leaders of the congressional spending panels Tuesday afternoon sounding optimistic about getting an omnibus finished soon and averting a shutdownbut she conceded negotiators may need a short reprieve from the current deadline.

“‘So, there’s no white smoke like we have a bill, however … we’ve narrowed our choices,’ Mikulski said, indicating that the principals and staff are upbeat about the chances of getting an agreement.”

 

Agricultural Economy

Eric Brown reported earlier this week at the Greeley Tribune (Colo.) Online that, “Widely recognized as a sector of agriculture that’s seen tough years recently, reports indicate the dairy industry is set for much improved times in 2014.

“Next year, dairymen are expected to see what some experts call a ‘rare’ combination of events — more milk production and yet higher milk prices, so says a recent U.S. Department of Agriculture report.

“Add to that much more affordable livestock feed prices, and milk producers should be in better shape than in past years, economists say.”

The article noted that, “After buying $8-per-bushel corn to feed their livestock during recent drought-stricken years, corn prices fell below $5 per bushel toward the end of 2013.

More affordable feed is expected to push some dairymen to increase the size of their herds. In a USDA report, Chairman of the World Agricultural Outlook Board Gerald Bange said milk production in 2014 is expected to increase to 205.3 billion pounds — up by almost 2 percent from 2013 — and he attributed much of that gain to lower feed costs and dairymen adding cows.

“And while more milk production often leads to lower milk prices, Bange and others say that’s not expected to be the case in 2014, as dairy products continue seeing high demand. Exports of butter fat are expected to stay strong in 2014, as is the domestic demand for non-fat dry milk.”

Mr. Brown added that, “The average all-milk price for 2014 is expected to be at $20.10 per hundredweight, up from $19.95 in 2013.”

Christian Berthelsen reported in today’s Wall Street Journal that, “Cotton prices rose to a three-month high after a growers group in China said farmers aim to plant fewer acres with the fiber this year.

“Cotton for March delivery, the most actively traded contract, rose 1.04 cents, or 1.2%, to 84.67 cents a pound on the ICE Futures U.S. exchange on Tuesday. It was the highest settlement price since Oct. 4.”

And Reuters writer Hugh Bronstein reported yesterday that, “Argentina’s peso slid to an all-time low on Tuesday as supermarkets implemented food price freezes in an agreement with the government aimed at protecting poor families from one of the world’s highest inflation rates.

The year-long price deal on 200 on basic food products, agreed to last week and implemented on Monday, signals a deepening of President Cristina Fernandez’s interventionist policies. With two years left in her second term, food prices are being pumped higher in part by the devaluation of the peso.”

The Reuters article noted that, “The main supermarket chains operating in Argentina include units of Chile’s Cencosud, France’s Carrefour and the United States’ Wal-Mart Stores Inc.

“Grains powerhouse Argentina is the world’s No. 3 soybean and corn supplier as well as its top provider of soymeal animal feed and soyoil, used in the booming biofuels sector.”

 

Animal Agriculture

An update yesterday from Smithfield Foods indicated that, “Smithfield Foods, Inc. and its hog production subsidiary, Murphy-Brown LLC, announced today that it is recommending all of its contract sow growers join with the company in converting their facilities to group housing systems for pregnant sows. The company said that it is asking contract sow growers to convert by 2022 with a sliding scale of incentives to accelerate that timetable. Growers who commit to convert to group housing will receive contract extensions upon completion of the conversion.

“At the same time, Smithfield Foods reported that Murphy-Brown had, through the end of 2013, transitioned 54% of pregnant sows on its company-owned farms in the United States to group housing systems.”

Also, Joel Makower indicated yesterday at GreenBiz.com that, “Today, McDonald’s announces that it will begin purchasing verified sustainable beef in 2016, the first step on a quest to purchase sustainable beef for all of its burgers worldwide.”

 

Immigration

Seung Min Kim reported yesterday at Politico that, “Immigration reform backers see a narrow window in late spring to push a sweeping overhaul through the House — a goal that eluded them in 2013.

“The politics of immigration in the Republican-controlled chamber is still tough — and might be impossible — with many lawmakers opposed to any measure that could be seen as providing amnesty to millions of immigrants living in the United States illegally.

But proponents of an immigration rewrite on and off Capitol Hill hope the tension will ease once Republicans get past primary season and don’t have to worry about challenges to their conservative credentials.”

 

--

Keith Good
President
FarmPolicy.com, Inc.
Champaign, IL

 

FarmPolicy.com is a FREE newsletter and is made possible by the generous support of McLeod, Watkinson & Miller- Attorneys at Law.

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January 7




Farm Bill; Ag Economy; and Budget Issues- Tuesday

Posted By Keith Good On January 7, 2014 

Farm Bill

Secretary of Agriculture Tom Vilsack was a guest on yesterday’s AgriTalk radio program with Mike Adams where a portion of the discussion focused on Farm Bill related issues.

FarmPolicy.com transcript of this part of yesterday’s conversation is available here.

In part, Sec. Vilsack indicated that, “I think it’s important for folks in the countryside to raise the expectation that the time has come for Congress to get its work done. A lot of hard work done by the conference committee leadership- they should be prepared next week to finish and wrap up their work, and there’s no reason why we can’t get this done in the month of January.”

Sec. Vilsack added that, “Now, if it looks like, in the next week or two, that Congress is not going to get its work done, that there is once again a breakdown and a failure, then at that point our focus will shift back to the implementation of permanent law, which is our legal responsibility. But right now our focus is really on making sure we can implement what we hope to be a passed law this month.”

With respect to nutrition spending, Sec. Vilsack pointed out that, “Well, we haven’t seen a specific number, but what I have been encouraged by is the comments of those on the conference committee that the focus needs to be on the right program, the right policy, not so much a focus on the number. If you get the policy right, you’re going to get the number right. And I think you’re going to get a policy that will make the program efficient and effective and defensible, without necessarily making it more difficult for two to three million people to access the program, or in certain cases actually cutting several million people off of the program that actually need it.”

And on the issue of the Brazilian cotton case, Mr. Adams queried: “Brazil is kind of waiting to see what happens with our farm bill, too, and waiting for the cotton payments. Have you had discussions with your counterparts in Brazil about their patience on this issue?”

Sec. Vilsack explained that, “We have, and they’re going through a process, and I think it’s an understandable process, because we’re no longer in a position to be able to make the payments that we were making before that basically delayed any implementation of any retaliation that they’ve been authorized to do, so they’re working through a process—they’re being very deliberate about it—which is giving us and giving Congress enough time to get its work done so that we avoid this altogether.

And that’s honestly the best way to get this thing resolved, is by passage of a farm bill, and that allows us to go back to our Brazilian friends and say we listened, we understand your concerns, we’ve addressed those concerns. And that’s our hope and that’s our belief. And that’s why, again, it’s important to get this done this month.”

Meanwhile, an update yesterday at the Red River Farm Network Online indicated that, “North Dakota Senator Heidi Heitkamp is hoping to see the farm bill conference committee report this week. A member of the Senate Agriculture Committee, Heitkamp says that report will begin the discussion for the entire conference committee. Heitkamp says she is very optimistic that the vast majority of people will be able to support the draft conference committee report. While she remains concerned that something might happen in theHouse, Heitkamp says what’s attractive is the $24 billion in real savings the farm bill contains.”

Mary Wilson reported yesterday at WESA radio (Pittsburgh, Pa.) that, “[Sen. Bob Casey (D., Pa.)] is optimistic about the legislation, which sets the nation’s food and agriculture policy.”

The update stated that, “During a visit to the 98th annual Farm Show in Harrisburg, Casey said the House appears to be more amenable to approving a longer-term fix in the next few months.

“‘We’ve had so far in the Senate over the last now two years a very bipartisan process where we got a farm bill done in 2012, had work done in 2013, but it hasn’t gotten through the House and the Senate in order to be enacted,’ he said. ‘So it’s late, but it seems to be at a point now where it’s going to pass.’”

Rep. Randy Neugebauer (R., Tex.) was interviewed yesterday on KFYO radio (Lubbock, Tex.) where part of the discussion focused on the Farm Bill.

During yesterday’s conversation, Rep. Neugebauer addressed the issue of linking an unemployment insurance benefit extension with the Farm Bill- related audio here (MP3- 1:47).

(As a side note on the unemployment insurance issue, Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “Senate Majority Leader Harry Reid (D-Nev.) on Monday postponed a procedural vote on a three-month extension of federal unemployment benefits…Democrats will need 60 votes to proceed to the bill, and at least 17 senators weren’t present for the vote Monday evening due to the severe cold weather that has delayed flights across the country. The vote is now set for 10:30 a.m. on Tuesday.”)

Also yesterday, Brad Plumer noted at the Wonkblog (Washington Post) that, “The House and Senate will also have to resume their haggling over a five-year farm bill, since the last one just expired. The main point of contention, as before, is over how much to pare back thefood stamp program.”

In an update yesterday at The Fix (Washington Post) titled, “12 lawmakers to watch in January,” Ed O’Keefe reported that, “Sen. Debbie Stabenow (D-Mich.) and Rep. Frank Lucas (R-Okla.): Next to the appropriations bill, this [Farm Bill] is the other major piece of legislation expected to pass the House and Senate in the opening days of 2014. For more than two years, Stabenow and Lucas, who chair the Senate and House agriculture committees, have been working on a new farm bill that sets agricultural policy and provides billions of federal dollars to needy families. The formal announcement of an agreement is expected at some point this week.

“Pay special attention in the coming days to how Democrats and Republicans respond to the proposed cuts in the Supplemental Nutrition Assistance Program, better known as food stamps. House Republicans wanted to eliminate about $40 billion in funding over the next decade, while Senate Democrats wanted about $4 billion in cuts. Negotiators have agreed on about $9 billion in cuts over the next 10 years — not nearly enough for some Republicans, and likely too much for some Democrats to support. How debate on this high-profile part of the legislation shakes out could be critical.”

And David Hawkings noted earlier this week at Roll Call Online that, “Farm bill.  Negotiators are signaling a breakthrough is imminent on an impasse that began 15 months ago. For farmers, the most important feature will be a new subsidy system to replace direct payments, which are widely derided outside rural America because they are delivered regardless of crop prices.

Politically, the No. 1 issue remains how much to pare nutrition assistance for the poor. House Republicans appear united behind the view that, with the economy on the mend, a 6 percent cut to food stamps is not unreasonable. A bipartisan majority in the Senate, viewing the safety net fundamentally differently, went for a cut of about half of 1 percent. Negotiators have settled on 1.5 percent, or $8 billion over a decade, combined with some of the stiffened work requirements for Supplemental Nutrition Assistance Program recipients that GOP conservatives want.

“The assumption here is that — as an extension of his newly short-fused approach to the tea partyers in his ranks — Speaker John A. Boehner will permit the House to debate such a package, knowing it would clear with far less than a majority of the majority.”

Mr. Hawkings added that, “The Ohio Republican’s rationale would be that, for the election-year good of the party, he needs to bring a belated end to at least one marquee piece of the class warfare debate. Plus, Boehner knows Republicans are going to dig in their heels elsewhere, starting with the future for the minimum wage and long-term jobless benefits.

“One sure bet: Even if the farm bill doesn’t get done, Congress will make quick work of a yearlong stopgap. Lawmakers may still be gridlocked, but they’re not crazy — and the absence of a temporary farm bill, to make a complex story short, would threaten a doubling of retail dairy prices.

If there’s one way not to start a campaign year, it’s being blamed for a $7 gallon of milk.”

Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Thursday has been circled on the calendar since the House of Representatives left down Dec. 13. With the House returning to session on Tuesday, it’s expected — well, it’s possible anyway — that the farm-bill conference leaders could call a Thursday meeting for the full group of conferees.

“We’ll see.

“After all, conferees left before Christmas vowing to get a farm bill done in January. If that’s the case, then the principal negotiators from the House and Senate agriculture committees should get those calls out for a meeting quickly because the House calendar will once again be working against them. The House is in session four days this week and four days next week. Congressmen are out the week of Jan. 20. They return Jan. 27-29 before GOP members hold a planning retreat at the end of the month. That translates into seven days of floor time for the House in January after this Friday.”

Mr. Clayton added that, “The Senate also is out the week of Jan. 20.

“Some kind of public meeting will be needed to resolve those prickly issues that are more emotional or parochial than financial.”

The DTN update noted that, “There still has to be serious doubts over whether House Republicans are going to accept cuts to the Supplemental Nutrition Assistance Program at $8 billion over 10 years. Republicans stalled the farm-bill last summer because $19 billion in SNAP cuts wasn’t high enough.”

In other news, Christopher Doering reported yesterday at The Des Moines Register Online that, “The U.S. Department of Agriculture said Monday it intends to purchase up to $126.4 million worth of fruit and vegetable products that will be distributed to needy families under its Emergency Food Assistance Program.

“Items distributed through the food assistance program are either purchased with funds appropriated specifically for it, or are procured through USDA’s market support programs. The foods are provided to states for distribution to local agencies, such as food banks that distribute the food to food pantries and soup kitchens.”

And a news release yesterday from Sen. Mitch McConnell (R., Ky.) noted in part that, “United States Senate Republican Leader Mitch McConnell announced today that the United States Department of Agriculture (USDA) informed him that tobacco quota holders will receive the full amount of their final tobacco payment, as directed by a provision within the Budget Control Act, by the end of FY 2015. Senator McConnell was the primary author of the historic 2004 tobacco buyout.

“Last year, USDA Secretary Tom Vilsack announced that tobacco buyout payments would be subjected to a 7.2% sequestration this year – the final year of tobacco buyout payments. However, Senator McConnell contacted Agriculture Secretary Tom Vilsack and Office of Management and Budget (OMB) Director Sylvia Mathews Burwell identifying a provision within the Budget Control Act that would allow quota holders to receive full payment.”

 

Agricultural Economy

Purdue University agricultural economist Chris Hurt indicated yesterday at the farmdoc daily blog (“Pork Industry Starts Modest Expansion”) that, “Much cheaper feed has led the pork industry to begin an expansion that is expected to continue throughout this year. The current expansion means that pork supplies will begin to grow more rapidly in the last-half of 2014. Feed prices are expected to remain moderate with corn prices only increasing seasonally into the summer and then dropping again with a normal 2014 harvest. Soybean meal prices should move downward for most of the year as South American supplies come to market in the late-winter and spring, and then as larger U.S. soybean acreage continues to put downward pressure on meal prices through the fall.”

Donnelle Eller reported yesterday at The Des Moines Register Online that, “Dangerous winds and temperatures have Iowa livestock producers scrambling to ensure cattle, hogs and other animals have access to water, added food and shelter from harsh, freezing winds, say industry leaders.”

And Bloomberg writers Luzi Ann Javier, Jeff Wilson and Elizabeth Campbell

 reported today that, “Freezing weather across the U.S. will damage crops from winter wheat to oranges and is threatening livestock, sending cattle futures to an all-time high.

“As much as 15 percent of winter-wheat plants in the Great Plains face damage, Kyle Tapley, a senior agricultural meteorologist at MDA Weather Services in Gaithersburg, Maryland, said in a telephone interview. The potential for frost will increase in Florida today as temperatures drop to the upper 20s Fahrenheit, damaging citrus groves, he said. Livestock slaughter will slow because it’s harder to transport animals in the cold and snow, and cattle will have trouble gaining weight, according to commodity broker Allendale Inc.”

In news regarding tradeJames Politi reported earlier this week at The Financial Times Online that, “But it is far from clear that this growing emphasis on economic populism [by President Barack Obama] can be squared with the president’s ambitious second-term trade agenda, including massive deals with other 11 Pacific nations and the EU that could well be sealed within the coming year.

“From the days of the North American Free Trade Agreement, launched 20 years ago, trade has always been a tough sell politically in the US – and, for a Democratic president, it means taking on allies among labour, environmental and consumer groups who are often staunchly opposed to the agreements.”

The FT article noted that, “That shyness surrounding Mr Obama’s public pronouncements on trade may have to be shed soon.

“In the next few weeks, the leaders of the Senate finance committee, who generally support Mr Obama’s trade policy, are expected to unveil legislation that would ensure a much smoother ride on Capitol Hill for trade deals.

“Known as ‘Trade Promotion Authority’, this legislation could prove critical to ensuring the agreements do no get caught in political gridlock in Washington. This will be the first big political test for Mr Obama on trade – and it may take a much higher level of engagement from him to get it passed.”

Bloomberg writer Brian Wingfield reported yesterday that, “Some of the largest U.S. business groups are lining up behind President Barack Obama to pressure Congress to clear the way for a pair of trade deals that could set rules for more than half the world’s economy.

“The agreements, with 11 Pacific Rim countries and the 28-nation European Union may also help Obama deliver on his promise to double U.S. exports above 2009 levels by the end of the year, an increasingly distant goal.

Standing in his way: almost 200 Democrats and Republicans who say they won’t yield to him the ‘fast track’ authority to hammer out agreements without congressional amendments.”

On a separate trade development, Bloomberg news reported yesterday that, “China continued to reject corn cargoes from the U.S. that contained an unapproved genetically modified variety while accepting a first bulk-carrier shipment of the grain from Ukraine.”

And in other news regarding biotech issues, McClatchy writer Michael Doyle reported yesterday that, “An apple genetically engineered not to turn brown is putting the Agriculture Department and the apple industry on the spot.

“The department appears inclined to approve the so-called Arctic apple, designed by a small Canadian company. First, though, officials must confront some enduring public distaste for genetically modified foods.”

The article added that, “‘This is an economic disaster,’ Henry House, an organic apple grower in Davis, Calif., recently warned the Agriculture Department.

Organic growers such as House fear that honeybees will spread genetically engineered apple pollen and contaminate organic orchards. Some consumer advocates maintain a more general antipathy toward engineered foods, while industry groups that include the Northwest Horticultural Council in Yakima, Wash., also object to what would be the first genetically engineered apple in commercial production.”

More broadly on the U.S. agricultural economy, a news release yesterday from DTN stated in part that, “Farmers are still optimistic about the overall state of the agriculture industry but slightly less than a year ago, according to the December 2013 DTN/The Progressive Farmer Agriculture and Agribusiness Confidence Index measuring current and future sentiment of the agriculture sector.

“The composite Agriculture Confidence Index, which surveyed 500 randomly selected producers about their present and future situations, came in at 105.5, down from 109.1 in December 2012. A value of 100 is considered neutral. Higher numerical values indicateoptimism, and values lower than 100 indicate pessimism.”

 

Budget Issues

Meredith Shiner reported yesterday at Roll Call Online that, “If it weren’t clear already that lawmakers — especially Republicans — want to avoid another government shutdown, the overwhelming optimism Monday that Congress will pass an omnibus spending measure for the first time in two years tips their hand.

“Democratic and Republican aides in both chambers believe that Senate Appropriations Chairwoman Barbara A. Mikulski, D-Md., and House Appropriations Chairman Harold Rogers, R-Ky., will come to an agreement this week on a more than $1 trillion bill to fund the government. But even with the highest hopes for swift passage, negotiating a behemoth spending package that touches every corner of the government is not easy.

“Mikulski told CQ Roll Call that four of the 12 appropriations bills have been completed — the Legislative Branch, Commerce-Justice-Science, Military Construction-VA and Transportation-HUD, while the three most challenging bills are Defense, Labor-HHS-Education and Interior-Environment.”

And David Rogers reported yesterday at Politico that, “The government remains under a stopgap continuing resolution or CR due to expire on Jan. 15 and Congress leaves soon after for its mid-January recess. As a practical matter, some extension of the CR will be needed — and should not be controversial if the omnibus is proceeding on course. But the Appropriations leadership wants to keep any extension short so that the pressure is on to complete passage before lawmakers leave Jan. 17.”

The Politico article pointed out that, “In the case of Obama’s financial reforms, the dollars for regulatory agencies are far less — even as they affect the conduct of far greater markets.

“A case in point is the Commodity Futures Trading Commission, which was assigned a greater role over derivative markets under the Dodd-Frank law in 2010 but has met strong resistance from conservatives like [Sen. Richard Shelby (R., Ala.)] who hold the purse strings.

“In the wake of sequestration, the current appropriation for the CFTC is $194.6 million — more than one-third less than Obama requested. Indeed, it is also less than the agency received in 2011 and 2012, and in terms of personnel, the staff of 652 at the CFTC today is about 50 fewer than what the agency had 15 months ago at the end of fiscal 2012.”

 

--

Keith Good
President
FarmPolicy.com, Inc.
Champaign, IL

 

FarmPolicy.com is a FREE newsletter and is made possible by the generous support of McLeod, Watkinson & Miller- Attorneys at Law.

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For instant updates, follow me on twitter


December 19




Farm Bill; Trade; Ag Economy; Budget; Biofuels; and, EPA- Thursday

Posted By Keith Good On December 19, 2013 

Farm Bill- Policy Issues

Jeffrey T. Lewis reported yesterday at The Wall Street Journal Online that, “Brazil’s Trade Ministry took a step Wednesday toward implementing measures in response to the U.S. halting payments to Brazilian cotton agreements.

“The ministry said it would start, in January, a series of public consultations, which it described as ‘a preparatory act for an eventual retaliation.’

“A work group at the trade ministry is preparing a list of possible measures to implement, and will complete its preparations by Feb. 28, the ministry said.”

The Journal article explained that, “The payment of $147 million per year was part of an agreement between the two countries after Brazil won a complaint it had filled with the World Trade Organization. The WTO ruled that Brazil had the right to retaliate against the U.S. because of unfair subsidies to American cotton growers, and, since 2010, the U.S. government has been making monthly payments to the Brazilian Cotton Institute, or IBA.

“The monthly payment of $12.3 million was cut by close to 60% in September because of the U.S. sequester, which forced the government to cut spending across the board. The payments stopped altogether starting in October because the U.S. Congress failed to pass a farm bill that would fund the payments, said IBA President Haroldo Cunha.”

“‘We don’t think retaliation is the best way to get the U.S. to resume payments, but it’s the only way we have right now to react,’ [Cunha] said.”

In a separate Farm Bill issue regarding the King Amendment (background here and here), Iowa Secretary of Agriculture Bill Northey noted in a column this week in The Des Moines Register that, “Contrary to the misinformation from those who want to eliminate animal agriculture, the King amendment is simply designed to prevent California or any state from dictating production methods to farmers in Iowa or any other state. I am a firm believer that farmers know best how to care for their animals and adding arbitrary requirements based on ballot initiatives in California is a real risk to Iowa agriculture and the farmers of our state.”

Mr. Northey added that, “All eggs are subject to federal regulation and must be safely produced or they cannot enter interstate commerce. California is simply trying to protect egg producers in their state after increasing their costs by restricting commerce.”

Meanwhile, a news release yesterday from Rep. Marlin Stutzman (R., Ind.) indicated that, “[Rep. Stutzman], who worked earlier this year to usher a Farm Bill that separated agriculture and nutrition programs through the House for the first time in nearly forty years, issued the following statement today in reaction to news reports stating that agriculture and nutrition programs will be combined in conference committee:

“‘As a farmer and a conservative, I cannot vote for a Farm Bill that reverses a key reform to separate farm policy and food stamps. Earlier this year, the House won a historic victory for transparency and common sense by rejecting a bloated, trillion dollar spending package that was a Farm Bill in name only and instead passing farm and food stamp legislation separately.  The conference committee should continue that work by including separate reauthorization dates for these different programs. Now is not the time for Congress to take a step backwards by returning to business as usual.’”

In other developments regarding nutrition issues, Kim Severson reported at The New York Times Online that, “As Republicans in Congress demand cuts to the $79.8 billion food stamp program, every aspect of it is being examined, including whether people should be allowed to buy candy bars and energy drinks with the aid, and who qualifies for help that averages out to about $133 a month for one person.

“Allegations of fraud, including an informal economy in which food stamps are turned into cash or used to buy liquor, gasoline or other items besides food have been used to argue that the program is out of control. In fact, the black market accounts for just over 1 percent of the total food stamp program, which is far less than fraud in other government programs like Medicare and Medicaid.”

The Times article pointed out that, “Officially, the amount of money lost to underground trafficking is estimated to be 1.3 percent annually. That is down from more than 4 percent in the 1990s when paper coupons had not yet been replaced by electronic benefit cards, called E.B.T.’s, in the program that is formally known as the Supplemental Nutrition Assistance Program, or SNAP.

“Include erroneous payments to recipients because of errors on the part of the government or outright lying on applications, and the overall loss to the food stamp program is about 4.7 percent, according to the Department of Agriculture.

“Although the sheer size of the program means that more than $3 billion is lost to trafficking, fraud and overpayments each year, the rate is less than other government programs, according to federal audits. The Government Accountability Office has estimated that Medicare and Medicaid lose nearly 10 percent to fraud.”

“As part of its increased focus on enforcement, the U.S.D.A. last year sent letters to Craigslist, eBay, Facebook and Twitter asking for help policing food stamp trafficking,” the Times article said.

An update earlier this week at the Daily Chronicle (DeKalb, Il.) Online, quoted Rep. Adam Kinzinger (R., Il.) as saying, “The compromise between the House and Senate contains only slight cuts to food stamps.  It’s not cutting benefits for those in need; it’s working to close loopholes in eligibility.”

Rep. Rodney Davis (R., Il.) discussed Farm Bill issues yesterday on WDWS radio (Champaign, Il) and with respect to the SNAP program he noted that, “There is a lot of talk about just a number.  Will the SNAP cuts be $40 billion? The answer is no.  That was the House version and remember those House bills always have less and cost less.  But the policies that you set actually determine some of the savings that will be scored by the Congressional Budget Office.  So, we have got to set the policies first before you can really determine what the long term savings will be from those reforms.”  (Related audio here (MP3-2:21)).

On a separate nutrition related issue, Alexandra Jaffe reported yesterday at The Hill’s Ballot Box Blog that, “Georgia Republican Rep. Jack Kingston, a candidate for Senate, suggested that low-income students either pay or work for their subsidized school lunches to teach them that ‘there is no such thing as a free lunch.’”

The article indicated that, “‘One of the things I’ve talked to the Secretary of Agriculture about — why don’t you, you know, have the kids pay a dime, pay a nickel, instill in them that there is, in fact, no such thing as a free lunch. Or maybe sweep the floor in the cafeteria,’ he says in a video first reported by The Huffington Post.”

Also yesterday, David Pierson reported at the Los Angeles Times Online that, “Fourteen bipartisan members of the House of Representatives urged lawmakers Wednesday to block Chinese poultry from school lunches and other national nutrition programs because of the country’s poor food safety record.

In a letter, the 12 Democratic representatives and two Republicans called for language in the 2014 agriculture appropriations bill to ensure chicken processed in China is not included in the national school lunch program, the school breakfast program, the child and adult care food program and the summer food service program.”

Mr. Pierson added that, “On Monday, Sen. Charles E. Schumer (D-N.Y.) said the USDA had told Congress it was taking steps to allow poultry raised and slaughtered in China to be sold in the U.S.

An eventual deal is being viewed as a quid pro quo to open the massive Chinese market for U.S. beef, which has been banned since 2003 over fears of mad cow disease.”

In addition, Kimberly Kindy and Brady Dennis reported in today’s Washington Post that, “Recent salmonella outbreaks that sickened at least 523 people and sent dozens to the hospital underscore ‘serious weaknesses’ in the U.S. Department of Agriculture’s oversight of poultry plants, according to a study released Thursday by the Pew Charitable Trusts, which also criticized the government’s failure to push more aggressively for recalls of contaminated meat.

“A separate investigation by Consumer Reports, also published Thursday, suggested that those lapses have contributed to the prevalence of potentially harmful bacteria that lurk in store-bought chicken. The magazine independently tested more than 300 raw chicken breasts purchased from stores across the country and found that every major brand contained ‘worrisome amounts’ of pathogens such as salmonella and E.coli, including some strains resistant to treatment with antibiotics.”

 

Trade

Paul Kane and Ed O’Keefe reported in today’s Washington Post that, “President Obama plans to nominate outgoing Sen. Max Baucus (D-Mont.) as the next U.S. ambassador to China…Baucus, 72, stunned the political establishment this year when he announced that he wouldn’t seek reelection next year.”

Reuters writer Charles Abbott reported yesterday that, “The United States could raise the issue of China’s recent rejection of several U.S. corn cargoes at trade talks this week, an official said on Wednesday.

“A full range of agricultural trade issues for the two countries is expected to be on the agenda at the high-level talks, but the corn issue has emerged as perhaps the most pressing.

“Beijing has rejected as much as 600,000 tonnes of U.S.-grown corn since mid-November on the grounds they contained genetically modified grain not approved for sale in China, a private consultancy estimates. That would be more than twice the official tally of rejections.”

Mr. Abbott noted that, “The U.S. trade representative’s office ‘is closely following this issue,’ a spokeswoman said. ‘We have raised concerns with China regarding increasing delays in the approval process for biotech events.’”

Also yesterday, a news release from the National Pork Producers Council (NPPC) indicated that, “A coalition of agricultural organizations led by the [NPPC] is likely to oppose a final Trans-Pacific Partnership (TPP) trade agreement if it includes Japan but that country doesn’t agree to comprehensive trade liberalization, including elimination of tariffs on virtually all U.S. agricultural products.

“In a letter sent today to U.S. Trade Representative Michael Froman, the 17 groups said the unwillingness of Japanese negotiators to present a comprehensive offer on agricultural products is threatening to undermine the trade talks.”

And a statement yesterday from Michael T. Scuse, USDA Under Secretary for Farm and Foreign Agricultural Services, noted in part that, “Both Brazil and the United States maintain a strong commitment to science-based rulemaking. USDA and MAPA [Brazil's Ministry of Agriculture, Livestock, and Food Supply] recently agreed to a path forward to amend rules that currently limit bilateral beef trade. Bilateral trade of all beef and beef products could occur once each exporting country meets the importing country’s equivalence and technical requirements for animal health and food safety.”

 

Agricultural Economy

Bloomberg writer Jeff Wilson reported yesterday that, “Wheat reached an 18-month low in Chicago on speculation that higher global stockpiles will curtail demand for U.S. grain. Soybeans and corn fell.”

The article noted that, “Wheat futures for delivery in March lost 1.1 percent to close at $6.1275 a bushel at 1:15 p.m. on the Chicago Board of Trade, capping a fifth straight retreat. Prices touched $6.12, the lowest since June 5, 2012.”

Mr. Wilson added that, “Corn futures for delivery in March slipped 0.4 percent to $4.25 a bushel, extending this year’s decline to 39 percent.”

Alexandra Wexler reported yesterday at The Wall Street Journal Online that, “Sugar prices sank to their lowest levels since June 2010 on Wednesday, as bumper harvests from key growers continue to flood the global market.”

The Journal article noted that, “The rout in sugar prices, which are down 19% so far this year, is yet another example of how a surge of supplies has quashed once-booming commodities markets. Analysts attribute much of the rise in supplies to investments made by producers when prices were much higher.”

Also yesterday, Reuters news reported that, “Brazil will increase the amount of land planted with genetically modified soy, corn and cotton by 6.8 percent this season to increase yields, local analytics firm Celeres said on Wednesday…[A]bout 91 percent of Brazil’s soybean crop, which is likely to be the largest in the world when it is harvested early next year, has been planted with GMO seeds, Celeres said. That is up from 89 percent a year earlier.”

Also on the GMO issue, Annie Gasparro and Leslie Josephs reported yesterday at The Wall Street Journal Online that, “The nation’s biggest high-end grocery chain and the hottest Greek yogurt brand are parting ways.

Whole Foods Market Inc. said it will stop selling Chobani Inc. yogurt by early next year to make more room for smaller, exclusive brands, especially those that are organic, or don’t contain genetically modified ingredients.”

Meanwhile, former Sec. of Agriculture Dan Glickman, and Kathleen Merrigan, a former USDA Deputy Secretary, penned a column yesterday at the Los Angeles Times (“What an ‘organic’ food label should mean”) that stated in part that, “During the Clinton administration, we were responsible for implementing the Organic Foods Production Act. One of the implementation decisions that had to be made about the law after its passage was whether GMOs could be used in organic food. After receiving nearly 300,000 public comments during the rule making process, we said no. This means that foods certified as organic are also GMO-free.”

The column explained that: “Personally, neither of us is opposed to the use of GMOs and believe they can address important food and agricultural needs. The public made clear, however, that it didn’t feel such organisms belonged in food with an ‘organic’ label.

“For more than a decade, organic farmers, ranchers and food processors have been subject to rigorous annual inspections to ensure they are in compliance with national organic standards. The scrutiny is carried out by agents accredited by a division of the Department of AgricultureBut responsibility for overseeing food labeling lies with another part of the USDA, along with the Food and Drug Administration, and they continue to reject petitions by organic food producers who want to label their products as ‘GMO-free’ or ‘produced without use of GMOs.’

“Absent such labeling, we continue to have expensive election fights. Last month, for example, a ballot initiative in Washington state sought to mandate labeling of food produced using genetic engineering. It was narrowly defeated, but only after months of debate and $30 million of spending by those wishing to sway voters one way or the other.”

 

Budget

Lori Montgomery reported in today’s Washington Post that, “Congress declared a holiday truce in the budget wars Wednesday, sending President Obama a blueprint for funding the government through 2015. But the next skirmish was already on the horizon: an election-year fight over the national debt.

The budget deal that passed the Senate on Wednesday amounts to a handshake agreement to avoid a government shutdown when a temporary funding measure expires Jan. 15. However, the accord does not address the need once again to raise the debt limit, setting up a potentially complicated confrontation in late February or early March.”

The Post article added that, “Meanwhile, leaders of the congressional spending committees immediately began working on 2014 appropriations — the first in two years — to distribute about $45 billion in extra cash to federal agencies.

“Senate Appropriations Committee Chairman Barbara A. Mikulski (D-Md.) was optimistic that she and her House counterpart, Harold Rogers (R-Ky.), could work through some minor disagreements and deliver an omnibus spending bill to Obama’s desk by Jan. 15.”

 

Biofuels

An update yesterday from Iowa GOP Sen. Chuck Grassley noted in part that, “[Sen. Grassley] today participated in a bipartisan senators’ meeting with Environmental Protection Agency (EPA) Administrator Gina McCarthy to discuss the Obama Administration’s proposed reduction in the Renewable Fuel Standard (RFS).  Grassley made the following comment after the meeting.

“‘I’m glad Administrator McCarthy listened to senators’ concerns.  I tried to impress upon her that while President Obama and his administration have claimed to be in favor of domestic biofuels, this proposal is a step backward and will harm our efforts to further diversify our fuel supply.’”

And a news release yesterday from Sen. Heidi Heitkamp (D., N.D.) stated that, “[Sen. Heitkamp] today met with Environmental Protection Agency (EPA) Administrator Gina McCarthy to voice concern about the Obama Administration’s proposal to reduce the effectiveness of the Renewable Fuel Standard. Heitkamp believes the proposal, which would reduce the required amount of biofuels produced in the U.S., will have a devastating impact on North Dakota’s farmers, damage the state’s vibrant ethanol industry, and hurt our country’s ability to become North American energy independent.

“Earlier today, Heitkamp also sent a letter to Administrator McCarthy

, laying out in detail the case for keeping in place the yearly biofuel production targets that were set in the bipartisan Energy Independence and Security Act of 2007.”

 

Environmental Protection Agency- Clean Water Act

DTN writer Todd Neeley reported yesterday (link requires subscription) that, “Contrary to what EPA officials have suggested in recent public statements, farmers and landowners will pay more for permits and wetlands mitigation because of the way federal agencies want to broaden the Clean Water Act, according to EPA’s own September 2013 analysis.”

Mr. Neeley noted that, “In September, EPA proposed a new rule defining ‘Waters of the United States’ under the Clean Water Act because a pair of Supreme Court decisions had left a lot of uncertainty over the authority EPA and the Army Corps of Engineers have in requiring permits or protecting certain bodies of waters. The proposed rule is under review at the White House.

“What’s more, EPA said the SCOTUS rulings created uncertainty for agriculture and landowners.

“‘Land developers, the energy and transportation sectors, the agricultural community and other businesses face uncertainty surrounding CWA jurisdiction that may lead to reduced willingness to invest in projects or lost investment when entities must alter or abandon project plans,’ the analysis said.”

The DTN article added that, “Yet, in fixing the uncertainty, the EPA rule will force more farmers and landowners to get more permits. In its analysis, EPA said more dredge and fill permits likely would be required for anyone moving soil in areas determined by EPA to be waters of the U.S. That would include dirt work done on U.S. farms and ranches.

The proposed rule could apply to so-called ‘dry’ wetlands where water is present for just two weeks a year. There are roughly 100 million such acres in the lower 48 states. Bloomberg BNA first reported the study last week.”

 

--

Keith Good
President
FarmPolicy.com, Inc.
Champaign, IL

 

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December 18




Farm Bill; Ag Economy; Budget; and, Biofuels- Wednesday

Posted By Keith Good On December 18, 2013 

Farm Bill

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Negotiators have just a few details left before a deal on the long-awaited $1 trillion farm bill is complete.

“Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) told reporters that a framework agreement is ‘close’ and is on track to be announced shortly after Jan. 1.

“‘We will announce it the first week of January. We’ve got to get final scores in,’ she said. ‘We have a couple of things we’re negotiating on now, but we’re close.’”

Mr. Wasson explained that, “The exact shape of the compromise on farm subsidies is also unknown at this stage. Negotiators were trying to reconcile a House proposal that offers a choice of a more generous price-based protection, and a Senate proposal more focused on revenue margin insurance.

“The Senate chairwoman signaled she is not pushing for farm bill deficit savings to be used to pay for an extension of unemployment insurance.

“‘We need to get the farm bill done. I am a strong supporter of unemployment insurance, but that really should be in the category of disaster assistance for people, which is separate,’ she said. ‘Once we get the farm bill done, we can have a discussion on savings.’”

Kristina Peterson reported yesterday at The Wall Street Journal Online that, “Lawmakers crafting a new, five-year farm bill are discussing a reduction in food-stamp funding of roughly $8 billion over 10 years, according to sources familiar with the conversations.”

The Journal article noted that, “In the proposal under discussion, a household would have to receive at least $20 in annual payments through a federal energy assistance program to qualify for a utility allowance which, when deducted from a household’s income, can result in a larger food-stamp benefit. Some states currently give food-stamp recipients a nominal ‘heat and eat’ payment of $1 or another token sum to help households leverage larger food-stamp benefits.

Few lawmakers have objected to the proposed changes, which have drawn bipartisan support. The House of Representatives included raising the threshold to $20 in its food-stamp legislation, while the Senate bill proposed increasing the level to $10But the $8 billion in cuts may not be enough for some Republicans and too much for some Democrats.

“‘I have a problem with that,’ Rep. Jim McGovern (D., Mass.) said in an interview Tuesday, referring to the $8 billion reduction. Mr. McGovern, a member of the broader panel tasked with negotiating a new farm bill, said that any savings generated from changes tied to the heating program should be plowed back into food-stamp funding, since recipients already saw a Nov. 1 cut when an increase in funding from the 2009 Recovery Act ended. ‘I’m not prepared to sign off on a bill I think makes hunger worse,’ he said.”

Ms. Peterson pointed out that, “Some conservative Republicans, meanwhile, have signaled that they would support only much deeper cuts.

“‘I don’t think $8 billion would ever pass the House,’ Rep. Tim Huelskamp (R., Kan.) said last week.”

Meanwhile, Christopher Doering reported yesterday at The Des Moines Register Online that, “Iowa Sen. Chuck Grassley said there is not much interest in a farm bill in Congress outside of lawmakers who are members of the House or Senate Agriculture committees.

“Grassley, a member of the Senate Agriculture Committee, said a major factor limiting the discussion was high corn and soybean prices in recent years that helped generate record income for U.S. farmers. But as supplies of corn and soybeans have increased, leading to a drop in price, these commodities are trading at a point where the cost is at or near what it costs a farmer to produce them, he said.

“‘If that keeps up and we don’t have a farm bill, you’ll have people get nervous about it and more farmers contacting more members of Congress that aren’t on the agriculture committee and you get more talk about it,’ said Grassley.”

Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “On the farm bill, Grassley said he was ‘perplexed’ that some members of the conference committee want to unbundle the tighter payment caps and rules for being actively engaged that Grassley and others not only championed, but got approved in both chambers of Congress.

“Grassley said he thinks opponents are looking for ways to craft new loopholes that would allow people to be considered actively engaged in farming, or avoid the payment caps.”

The DTN update noted that, “Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., ‘stood her ground’ and continues to advocate for Grassley’s reforms, he said.”

With respect to dairy issues, Ohio State University Agricultural Economists John Newton and Cam Thraen indicated yesterday at the farmdoc daily blog (“The Dairy Safety Net Debate of 2013 Part I: Questions and Answers”)  that, “In a previous farmdoc daily post (seehere

) we suggested that a compromise solution to the ongoing U.S. House and Senate debate over the form and substance of a new dairy safety net is a combination of the current Milk Income Loss Contract (MILC) program, augmented to be inclusive of more medium and small scale dairy farms, and a slightly modified income-over-feed-cost (IOFC) margin program, offering support for larger scale dairy farms. Today’s post is part one of a two part series where we provide more information as to why we think this is a better way forward and what we believe are the overlooked and missing details to those safety net programs originally authored by the House and Senate.

“Over the past 18 months, the missing details of the dairy safety net programs have been carefully addressed as part of an ongoing research program at The Ohio State University, Department of Agricultural, Environmental and Development Economics (see herehere,  and here). In this two part series we will summarize our conclusions with regard to our research and modeling efforts.”

On the issue of Country of Origin Labeling (COOL), Harvest Public Media’s Abbie Fentress Swanson reported this week that, “Canada and Mexico — the U.S.’s biggest beef and pork trading partners — have long argued that COOL takes business away from their beef and hog exporters. When initial COOL rules were implemented in 2009, they asked the World Trade Organization to investigate. Two years later, the WTO ruled that some features of COOL were discriminatory and inconsistent with the United States’ trade obligations. The U.S. appealed the ruling, but WTO determined that COOL needed to change.

“To comply, the USDA earlier this year altered provisions on muscle cuts of meat — resulting in the rules being enforced today. Still, Canada is threatening to retaliate with tariffs on a long list of U.S. imports.

In September, the WTO formed a panel to consider whether COOL was restrictive or harmful to U.S. trade partners.”

Ms. Swanson added that, “The latest House version of the farm bill requires Agriculture Secretary Tom Vilsack to conduct an economic analysis of the effect of country-of-origin labeling on consumers, producers and packers no later than six months after a new farm bill is passed.

“During a recent farm bill committee meeting, Rep. Frank Lucas, Republican from Oklahoma and chairman of the House Agriculture Committee, said he was closely watching the pending WTO case related to COOL and potential retaliation from Canada and Mexico.

“‘I am hopeful that working together we can prevent the imposition of tariffs on a wide array of products important to many states,’ Lucas said.”

And National Farmers Union (NFU) President Roger Johnson noted this week in a column at Feedstuffs that, “The [NFU] has been a proud supporter of COOL from its inception. This is a very clear issue: Consumers want to know where their food comes from, and our family farmer members are proud to have the fruits of their labor labeled as such.”

In other news, John Bresnahan and Anna Palmer reported yesterday at Politico that, “Rep. Ed Whitfield is leading the charge on contentious animal welfare legislation — a push that his wife, a paid lobbyist for the Humane Society Legislative Fund, is urging Congress to support.

“The pair’s efforts have included sessions in which they have jointly lobbied lawmakers and aides to support the legislation, according to sources who have met with the couple.

“It’s uncommon for a lawmaker to work so closely with a lobbyist on legislation, especially with a spouse who is paid to lobby on the issue.”

Also yesterday, Alex Isenstadt reported at Politico that, “In a surprising day of congressional retirements, three House members announced separately on Tuesday that they would not seek reelection in 2014 — putting each of their seats in play for their rival parties.

“The most significant departure came in Utah, where Democratic Rep. Jim Matheson said he would be vacating a conservative seat, almost certainly handing it to Republicans in next year’s midterms. But Democrats got good news in Iowa, where GOP Rep. Tom Lathamdeclared that he would be retiring from the swing district he’s held for 10 terms, and in Virginia, where another veteran congressman, GOP Rep. Frank Wolf, announced that he wouldn’t be running for reelection in an up-for-grabs district.”

AP writer Thomas Beaumont pointed out today that, “Latham is a member of the Appropriations Committee and chairman of the transportation subcommittee. He’s also known for his friendship with House Speaker John Boehner and his love of golf.”

Latham also serves on the agriculture subcommittee of the Appropriations Committee.

 

Agricultural Economy

Bloomberg writer Kathleen M. Howley reported this week that, “American farmers have prospered during a three-year boom in corn and cropland prices. As values have soared since 2011, farmers bought more acres and upgraded their harvesters to produce a record corn crop of almost 14 billion bushels in 2013…[N]ow, as corn prices start to decline, bankers and agricultural economists are predicting a slowdown in farmland prices that could turn into a bust.”

The Bloomberg article noted that, “The value of the nation’s $2.5 trillion of farmland may tumble by as much as 30 percent in the next three years as the corn rush ends, according to Gary Ash, chief executive officer for 1st Farm Credit Services in Normal, Illinois.

“‘The increase in land prices was caused by the increase in corn prices,’ Ash said. ‘The reverse is going to be true. The drop in corn is going to result in a drop in land value.’”

Ms. Howley added that, “At the Chicago Board of Trade, where commodities are bought and sold, investors are shunning corn after the three-year run-up in prices. The crop rose to 2013 high of $8 a bushel in July before tumbling to a three-year low of $4.10 earlier this month.”

In more specific developments regarding trade, a recent news release from Sen. Joe Donnelly (D., Ind.) indicated that, “Senators [Donnelly] and Chuck Grassley (R-IA) today led a group of 31 senators in writing a letter to United States Trade Representative, Ambassador Michael Froman, and U.S. Department of Agriculture Secretary Tom Vilsack about the importance of addressing barriers to market access for American pork producers in the Trans-Pacific Partnership.

“The senators noted the importance of exports to the economic well-being of U.S. pork producers and the U.S. economy as a whole, writing, ‘U.S. pork production supports an estimated 550,000 domestic jobs, around 110,000 of which are the direct result of exports. Pork exports now make an annual surplus contribution of nearly $5 billion to the overall U.S. trade balance.’”

Also, Howard Schneider reported yesterday at The Washington Post Online that, “After months of international negotiations over two new trade treaties, the Obama administration is planning a major push to make the case that the agreements will put Americans to work at a decent wage and not further winnow the country’s manufacturing base.

European and U.S. negotiators are in Washington this week to continue work on an agreement that would mesh the world’s two largest economies more closely together. A second proposed treaty, the 12-nation Trans-Pacific Partnership (TPP), may be finished early next year, creating a trade zone covering 40 percent of world economic output and reaching from Chile to Japan.”

And Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “President Obama tapped an Agriculture Department official on Tuesday to take over as a top trade negotiator.

“Obama nominated Darci Vetter on Tuesday to take over as the chief agriculture negotiator at the U.S. Trade Representative’s office.

“Last week, U.S. Trade Representative Michael Froman announced that Islam Siddiqui would leave the post early next year after three years of service.”

 

Budget

James Politi reported yesterday at The Financial Times Online that, “The US Senate took a giant step towards approving the bipartisan budget deal agreed last week, as a dozen Republicans joined the Democratic majority in allowing the measure to move to a final vote.

“The bill – negotiated by Patty Murray, Democratic chair of the Senate budget committee, and Paul Ryan, the Republican chair of the House budget committee – cleared a key procedural hurdle known as ‘cloture’ by 67 to 33.

It will move to a vote on final passage in the upper chamber later this week when it is almost certain to pass. It will then head to the White House for the signature of President Barack Obama, who supports the agreement.”

Janet Hook reported yesterday at The Wall Street Journal Online that, “Lawmakers on the appropriations panels will have to resolve differences not only over spending levels but an array of policy riders that could be attached to the legislation. They are largely from Republicans aiming to restrain the Obama administration on environmental regulation and other matters.

“Sen. Barbara Mikulski (D., Md.), who leads the Senate Appropriations Committee, said negotiations over spending levels were going ‘very well.’ She added: ‘But the second thing is making sure we don’t have poison-pill riders.’”

And DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “The [budget] deal has implications for both the remainder of the fiscal year 2014 Agriculture appropriations bill and for a new farm bill.”

The DTN article noted that, “The House and Senate Agriculture appropriations subcommittees and their staffs ‘will go into overdrive as soon as Senate budget vote done,’ Ferd Hoefner, the policy director of the National Sustainable Agriculture Coalition told DTN.

Hoefner added that there are ‘two intriguing overlaps’ between appropriations and farm bill. Both the House and Senate appropriations bills cut farm bill funding for the Environmental Quality Incentives Program and the Wildlife Habitat Incentives Program, and the House bill also cuts funding for the Wetlands Reserve Program.

“In addition, Hoefner noted, the House and Senate bills contain measures affecting management of the Grain Inspection Packers and Stockyards Administration.”

Mr. Hagstrom added that, “The budget deal, Hoefner said, also contains a provision that would allow USDA’s Natural Resources Conservation Service to charge user fees to farmers seeking technical assistance. But that provision, Hoefner said, could be reversed in the farm bill. NSAC and the National Association of Conservation Districts oppose that user fee.”

 

Biofuels

Christopher Doering reported yesterday at The Des Moines Register Online that, “Sen. Chuck Grassley will meet this week with Environmental Protection Agency Administrator Gina McCarthy to try to persuade her to back down from plans to reduce the amount of ethanol required to be blended into the fuel supply next year.

“Grassley told reporters he will meet with McCarthy Wednesday and underscore the benefits of biofuels – including its impact on farmers, the environment and the country’s national security.”

Ashley Hanley reported this week at KEYC-TV (Mankato, Minn.) Online that, “Breaking with the Obama administration, Congressman [Tim Walz (D., Minn.)] voiced his strong opposition to changing the renewable fuel standards, saying the current standards are heading in the right direction.

Walz says, ‘It is working. It is creating jobs, it creates home grown energy.’”

And Bob Meyer reported earlier this week at Brownfield that, “Renewable Fuels Association president Bob Dineen has sent a letter to the chairs and ranking members of the House Ways and Means Committee and the Senate Finance Committee asking that Congress extend several tax incentives for the biofuels industry. Specifically the Second Generation Biofuel Producer Tax Credit PTC), the Second Generation Biofuel Plant Depreciation Allowance and the Alternative Fuel Vehicle Refueling Property Credit.

“The letter stresses the need to continue the tax credits and depreciation allowance as many of the advanced biofuel facilities in the final stages of development were financed with the expectation the tax credit would be available. The credit is also essential to those biorefineries which are adding systems to capture and process advanced and cellulosic feedstocks.”

Meanwhile, Mark Steil reported yesterday at Minnesota Public Radio Online that, “After years of being on the drawing board, the first commercial cellulosic ethanol plants are scheduled to start operation next year.

“Instead of using kernels of corn, they’ll make the fuel from ‘biomass’ — corn stalks, wood chips and other low-value plant material.

But just as the process is set to become a reality, some question whether it can fuel a viable business without considerable government support.”

The update noted that, “For more than a decade, the company has been working on making cellulosic ethanol for commercial purposes. Since 2008, POET has produced ethanol at a pilot cellulosic plant, and last year it formed a partnership with DSM, a Dutch conglomerate…[E]lsewhere in the United States, at least two other companies — Abengoa in Kansas and DuPont in Iowa — also have cellulosic plants scheduled to open in 2014. But while it looks like a break-through year for the innovative fuel, there’s still plenty of potential trouble ahead.

“‘If the government pulls support, there won’t be any cellulosic ethanol production in 10 years,’ said energy consultant Robert Rapier, chief technology officer for Merica International.”

 

--

Keith Good
President
FarmPolicy.com, Inc.
Champaign, IL

 

FarmPolicy.com is a FREE newsletter and is made possible by the generous support of McLeod, Watkinson & Miller- Attorneys at Law.

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