FarmPolicy

November 27, 2014

Ag Economy; Tax Extenders; Policy Issues; Budget- Immigration; Regs; and, the RFS

Agricultural Economy

The U.S. Department of Agriculture’s Economic Research Service (ERS) updated its 2014 Farm Sector Income Forecast yesterday, and noted that, “Net farm income is forecast to be $96.9 billion in 2014, down 21.1 percent from 2013’s estimate of $122.8 billion. The 2014 forecast would be the lowest since 2010, but would remain $16 billion above the previous 10-year average ($80.8 billion) [related graph].”

ERS indicated that, “The annual value of U.S. crop production is expected to decline in 2014 from 2013’s all-time high [related graph]…[C]orn production has increased significantly since the 2012 marketing year, with corn exports more than doubling. Soybean production has also increased significantly since the 2012 marketing year as have soybean exports.”

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Immigration; Policy Issues; Ag Economy; Tax Extenders; and, Regulations

Immigration

Brian Knowlton reported earlier this week at The New York Times Online that, “President Obama, in an interview broadcast on Sunday, said he rejects Republican criticism that he has exceeded his authority in moving to spare millions of undocumented immigrants from deportation, adding that he has been ‘very restrained’ in his use of executive authority.

“Angry Republican lawmakers have accused Mr. Obama of unconstitutional, even imperial, overreach. They have pointed to past remarks in which he himself suggested that his powers to act were limited.”

The Times article added that, “Mr. Obama has framed his action not as an amnesty for some undocumented immigrants but as a directive, in part, to federal agencies to focus their attention on those with criminal records, not on law-abiding, taxpaying, longtime immigrants. In all, about five million of the estimated 11 million undocumented immigrants would be protected.”

Kristi Boswell, Director of Congressional Relations for the American Farm Bureau Federation, was a guest yesterday on the AgriTalk radio program with Mike Adams, where the conversation focused on immigration issues (audio replay here, MP3- 10:18). An unofficial FarmPolicy.com transcript of yesterday’s discussion is available here.

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Policy Issues; RFS; Immigration; and, the Ag Economy

Policy Issues

Chris Casteel reported yesterday at The Oklahoman (Oklahoma City) Online that, “Rep. Frank Lucas spent several years working his way to the top spot on the House Agriculture Committee. Once he became chairman, in 2011, he fought for three years to get a sweeping farm bill passed; it was arguably the most significant legislation in the past two years that made it through both houses and got signed into law.

“The western Oklahoma rancher will lose his chairmanship in the next Congress, which begins in January, because of the term limits House Republicans impose on those positions. But he isn’t bemoaning the loss of power and prestige. He said his blood pressure has improved considerably.”

The article added that, “As for the Agriculture Committee, Lucas said that he’ll remain active but won’t bug the next chairman, Texas Republican Mike Conaway.

“‘I would like to give my successor an opportunity to develop his own perspective,’ Lucas said.”

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Policy Issues; Tax Extenders; Immigration; Ag Economy; and, Regulations

Policy Issues

Tennille Tracy reported yesterday at the Washington Wire blog (Wall Street Journal) that, “Rep. Mike Conaway (R., Texas), the newly appointed chair of the House Agriculture Committee, is pledging to undertake a ‘thoughtful’ review of food stamps.

“Mr. Conaway, a certified public accountant, has been critical of the food stamp program, formally known as the Supplemental Nutrition Assistance Program or SNAP. He defended Republican-led efforts to eliminate billions from the program and supports tougher work requirements for able-bodied adults without children.

“‘The committee will conduct a thoughtful review of all programs under its jurisdiction,’ Mr. Conaway said in an e-mail. ‘It’s only natural for much of that review to focus on nutrition programs as they account for almost 80% of the spending within the jurisdiction of the committee.’”

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Policy Issues; Ag Economy; Trade; Tax Extenders; Regs; Biotech; and, Immigration

Policy Issues

Bill Tomson reported yesterday at Politico that, “‘It’s never too early to start on the next farm bill,’ said Rep. Mike Conaway, the next chairman of the House Agriculture Committee.

“The Texas Republican, whose position in the top agriculture post was confirmed Tuesday by the House Republican Steering Committee, told POLITICO in an exclusive interview Friday that he’s already thinking about the 2019 farm bill, planning an in-depth review of the food stamp program and ready to help get an immigration reform bill done to help farmers.

“It’s too early to judge the major new subsidy programs in the 2014 farm bill — the five-year, $500 billion blueprint for U.S. agriculture policy that was only signed into law in February — but the next House Agriculture Committee chairman said he expects to begin drafting the next bill by 2017 or 2018 at the latest.”

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Policy Issues; Immigration; Ag Economy; Trade; Tax Extenders; and, Regulations

Policy Issues

A news release yesterday from Rep. Mike Conaway (R., Tex.) indicated that, “[Congressman Conaway] issued the following statement after the House Republican Steering Committee selected him as the 50th chairman of the House Committee on Agriculture.

“‘I am humbled and honored to be selected as the 50th chairman of the storied House Committee on Agriculture. The work that farmers and ranchers do is part of our country’s foundation. They feed, fuel, and clothe our nation. I look forward to building on the bipartisan work of the chairmen who have led this committee for the past two centuries.

“‘I represent, and love, rural America. It’s the backbone of our country. The values and concepts that make America great are stored in rural America, and I want to protect that. There are fewer and fewer voices representing rural America, and I am honored to be one of those voices. That is my overarching drive as the Committee moves forward.’”

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Regulations; Climate; Ag Economy; Trade; Biotech; and, Immigration- Budget

Regulations

Joby Warrick reported in today’s Washington Post that, “The Obama administration has no intention of backing down on major environmental initiatives to fight climate change and improve air and water quality, EPA chief Gina McCarthy said Monday, dismissing Republican threats to thwart proposed regulations by starving the agency of money.”

The Post article noted that, “McCarthy appeared to be rejecting statements by Sen. Mitch McConnell (R-Ky.), the presumptive Senate majority leader in the next Congress, who last week accused President Obama of waging war against the coal industry and vowed to fight the administration’s environmental proposals ‘in any way that we can.’”

“McConnell joined other key Republican lawmakers in suggesting that the new Congress would use its budget authority to block controversial proposals intended to scale back greenhouse-gas emissions and reduce pollution levels in air and water,” today’s article said.

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Ag Economy; Biotech; Policy Issues; Trade; Immigration; and, Regulations

Agricultural Economy

Jesse Newman reported on Friday at The Wall Street Journal Online that, “Farmland values rose in the third quarter in parts of the Midwest and southern U.S. despite declining farm incomes, according to a report Friday by the Federal Reserve Bank of St. Louis.

“The average price of ‘quality’ farmland in the St. Louis Fed’s district, which includes parts of Illinois, Kentucky and Mississippi, gained 11.8% from the second quarter to its highest level since the bank launched its survey of agricultural conditions two years ago.

“The findings contrasted with reports Thursday from other Fed banks in the Midwest that showed declines in their districts’ farmland values in the third quarter, as falling U.S. crop prices pinched demand for cropland.”

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Video: Affordability of Crop Insurance Policies

Categories: Farm Bill

From National Crop Insurance Services, November 11, 2014- Crop insurance policies must remain affordable for farmers and ranchers or the entire farm safety net will fail, crop insurance providers said today in a new educational video.

Farmers help fund current farm policy by spending approximately $4 billion a year out of their own pockets on crop insurance policies and by shouldering a portion of losses in the form of deductibles before receiving assistance.

“But if insurance bills get too big, or deductible losses get too high, fewer farmers will sign up for policies, and the whole system will collapse,” noted the video. “If that happens, not only will it be harder for farm families to bounce back after disaster, but costs that are currently being borne by farmers and private insurance providers will shift back to taxpayers.”

Congress took steps in the 2014 Farm Bill to keep crop insurance affordable. Among the steps spotlighted in the video:

· Farmers receive discounts on the premiums they pay for coverage, including discounts for new and beginning farmers looking to start a career in agriculture.
· Supplemental coverage is made available to help counterbalance a portion of deductible losses.
· And Congress defeated attempts by some opponents of agriculture to cap crop insurance benefits and make policies more expensive for everyone.

This is the second in a series of educational videos meant to highlight three policy attributes that are essential to maintaining a strong crop insurance system. The first three-minute segment examined the importance of making crop insurance, widely available, and a future piece will look at maintaining the viability of private-sector delivery.

Congress cemented crop insurance’s role as the centerpiece of the farm safety net during the 2014 Farm Bill,” explained Tom Zacharias, president of National Crop Insurance Services (NCIS), the trade group that sponsored the video series. “However, that safety net will breakdown if crop insurance policies aren’t widely available, aren’t affordable to producers, and aren’t economically viable to be administered by efficient private insurance providers.”

ERS: China demand a major driver in global dairy markets

ers

From the U.S. Department of Agriculture’s Economic Research Service (ERS)- “Increasing demand in China for imported dairy products has become a major driver in global markets, especially for milk powders and whey products. The largest increase in Chinese imports has been milk powders with greater than 1.5 percent butterfat, which includes whole milk powder. New Zealand has been the primary supplier of whole milk powder to China, while the United States has been a significant supplier of skim milk and whey products. In 2013, the United States supplied about 23 percent of China’s imports of skim milk powder and about 47 percent of its imports of whey products. Most milk powders are further processed and used for infant formulas, ultra-high temperature (UHT) milk, yogurt, milk-based beverages, and food processing. About half of the imported whey products are used for animal feed, with the rest mainly used for the processed food industry and infant formula. Find additional data and analysis of dairy markets in Livestock, Dairy, and Poultry Outlook: October 2014 and Dairy Data.”

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Ag Economy; Policy Issues; Trade; Immigration- Budget; and, Biotech

Agricultural Economy

Jesse Newman reported yesterday at The Wall Street Journal Online that, “Farmland values declined across much of the Midwest in the third quarter, continuing a slowdown driven by two years of lower U.S. crop prices, according to Federal Reserve reports on Thursday.

“The average price of farmland in the Federal Reserve Bank of Chicago’s district, which includes Illinois, Iowa and other big farm states, fell 2% from the second quarter, the largest quarterly drop since the end of 2008, the Chicago Fed said.”

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Legislative Agenda; Farm Policy; Biotech; Regulations; and, Climate

Legislative Agenda: Keystone, Budget- Immigration Link, and Trade

Ashley Parker and Jeremy W. Peters reported in today’s New York Times that, “As newly victorious and recently vanquished members of Congress descended Wednesday on Capitol Hill, defeated Democrats trudged in for some of their final votes, ebullient Republicans toured their new digs, and the denouement of Election Day continued to play out as the House and the Senate scheduled dueling votes to try to influence the outcome of the lone unresolved Senate race in Louisiana.

“But Wednesday’s activities — or lack thereof — after a six-week absence from the Capitol underscored how much inertia still rules. Despite larger fights over funding the government, operations in Syria, and executive action on immigration, the only votes in the Senate on Wednesday were procedural steps on a pair of federal court nominees.”

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Policy Issues; Ag Econ; Biotech; Trade; Immigration; CFTC; and Climate

Policy Issues- Farm Bill, Tax Extenders

Chase Purdy reported yesterday at Politico that, “‘Kansas Republican Pat Roberts, the likely next chairman of the Senate Agriculture Committee, says he has no plans to reopen the farm bill to make any substantial changes,’ Pro Agriculture’s Bill Tomson reports this morning. ‘Roberts, who sought far bigger cuts to food stamps and opposed the price-based subsidies in the 2014 farm bill, stressed in an interview with POLITICO Monday that it would be a mistake to expose the massive five-year, $500 billion piece of legislation to others who would seek to make changes.’

“‘I do not intend to open up the farm bill,’ Roberts assured. ‘That would be irresponsible.’”

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Ag Economy; Farm Bill; Budget; Immigration; Trade; Biotech; and, Regulations

Agricultural Economy

A news release yesterday from USDA’s National Agricultural Statistics Service (NASS) indicated that, “According to the November Crop Production report released today by [NASS], corn production is expected to reach 14.4 billion bushels this year, up 3 percent from 2013 [related graph]. Soybean production is forecast at 3.96 billion bushels this year, up 18 percent from 2013 [related graph]. Both crops are on target for record-high yields and production. Based on conditions as of November 1, yields for corn are expected to average 173.4 bushels per acre, down 0.8 bushel from the October forecast, but 14.6 bushels above the 2013 average. As for soybeans, yields are expected to average a record high 47.5 bushels per acre, up 0.4 bushel from October and up 3.5 bushels from last year.”

Also yesterday, the World Agricultural Outlook Board (WAOB) released its monthly World Agricultural Supply and Demand Estimates (WASDE) report, which incorporated the NASS production report.

The WASDE report included this overview table of corn supply and demand variables, and stated that, “Projected corn ending stocks are lowered 73 million bushels. The projected range for the season-average farm corn price is raised 10 cents on each end to $3.20 to $3.80 per bushel.”

Likewise, yesterday’s WAOB report included this overview table of soybean variables, and explained that, “Soybean and soybean product prices for 2014/15 are unchanged from last month. The U.S. season-average soybean price range is projected at $9.00 to $11.00 per bushel. Soybean meal and soybean oil prices are projected at $330 to $370 per short ton and 34 to 38 cents per pound, respectively.”

With respect to wheat, yesterday’s WASDE update added that, “The projected range for the 2014/15 season-average farm price is narrowed 10 cents on both the high and low end to $5.65 to $6.15 per bushel.”

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Policy Issues; Trade; Ag Economy; Biotech; Immigration; and, Regulations

Policy Issues: Farm Bill; Tax Extenders; and Budget

Pat Westhoff, the director of the Food and Agricultural Policy Research Institute at the University of Missouri, indicated in a column on Saturday at the Columbia Daily Tribune (Mo.) Online that, “Our current set of farm and food policies only can be understood in the context of past budget debates. Although many other factors will drive future farm policy decisions, it’s a safe bet that budgetary concerns will continue to play a central role.

In 2011, Congress was considering a large budget deal, and the leaders of the House and Senate committees in charge of writing farm legislation put together a package designed to reduce federal spending on farm and nutrition programs by $23 billion over the next 10 years.

“That budget deal fell apart, but the agricultural and nutrition provisions that were intended to be part of that deal became the basis for what eventually became the 2014 farm bill. Indeed, the final farm bill still targeted the same $23 billion in savings initially proposed more than two years previously.”

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Broad Policy Issues; Farm-Food Policy; Ag Economy; and, Regulations

Broad Policy Issues- Budget, Taxes, Immigration, and Trade

Budget, and Taxes

Lori Montgomery and Ed O’Keefe reported in today’s Washington Post that, “Before ceding full control of Congress to the GOP in January, Senate Democrats are planning to rush a host of critical measures to President Obama’s desk, including bills to revive dozens of expired tax breaks and avoid a government shutdown for another year.”

The Post writers explained that, “Republican leaders, too, are inclined to clear the legislative decks of must-pass bills so they can start fresh in January, when they will have control of both chambers of Congress for the first time in eight years. Leaders from both parties are due at the White House for a lunch Friday to begin discussing the parameters of the possible in a new era of Republican domination.”

Today’s article noted that, “House and Senate negotiators have been at work for weeks on a comprehensive bill to fund federal agencies through next September, and aides said they hope to bring the measure to a vote before the Dec. 11 deadline.

Some conservatives are agitating for a temporary measure that would allow Republicans to revisit agency funding levels when they take charge early next year. But Republican leaders, including Sen. Mitch McConnell (Ky.), would rather get the bills for fiscal 2015, which began in October, out of the way so they can focus on crafting a budget for fiscal 2016.”

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