FarmPolicy

September 19, 2019

Farm Bill Issues; Food Costs

Categories: Farm Bill /Food Prices

DTN Political Correspondent Jerry Hagstrom reported yesterday that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., said this week he wants the new farm bill to raise the dollar value in sales a farmer needs to be included in the Census of Agriculture, and he wants to save money by ending crop subsidies to landowners and farmers with fewer than 20 acres that qualify for government payments.

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Pres. Bush: If no Farm Bill by April 18, Then One Year Extension

Reuters writer Charles Abbott reported yesterday that, “President Bush urged Congress on Thursday to break a deadlock on the new U.S. farm law by April 18 and warned he will veto a bill that raises taxes or lacks more stringent crop subsidy rules.

“Lawmakers have been stymied for weeks over how to pay for an increase of $10 billion over 10 years. Leaders of the House Agriculture Committee said they will draft a ‘baseline’ bill without new money if there is no breakthrough by Friday.

“‘If a final agreement is not reached by April 18, I call on Congress to extend current law for at least one year,’ Bush said in a statement.”

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Farm Bill Extended Through April 18; Food Costs; Biofuels

Congressional Quarterly reported yesterday that, “The Senate on Wednesday passed a 30-day extension of the nation’s farm law to give bicameral negotiators more time to hammer out a deal on a long-term agriculture policy overhaul.

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Farm Bill: Extending the Extension; WASDE Report

Congressional Quarterly writer Catharine Richert reported yesterday that, “Both parties in the House have agreed to move a 30-day extension of the farm policy law this week as negotiations continue on a five-year rewrite.

“‘We are not going to let the farm bill die,’ said House Minority Leader John A. Boehner, R-Ohio.”

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Biofuels: Oil & Corn Prices, Environmental Concerns

Brian Baskin, writing in today’s Wall Street Journal, reported that, “Light, sweet crude for April delivery rose $2.75, or 2.6%, to $107.90 a barrel on the New York Mercantile Exchange, a settlement record. The front-month contract hit an intraday high of $108.21, marking the ninth out of the last 10 sessions in which a record was set.

“Futures have risen $20 in less than two months, largely on the weakness in the dollar, which makes commodities priced in the U.S. currency relatively cheap for buyers in other currencies.”

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As Farm Bill Stalls, Focus on Commodity Supply and Demand

David Streitfeld reported in yesterday’s New York Times that, “Everywhere, the cost of food is rising sharply. Whether the world is in for a long period of continued increases has become one of the most urgent issues in economics.

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Corn Yields and Farm Policy: An Important Link- Part II

Categories: Ethanol /Farm Bill

Recall that last Sunday FarmPolicy.com pointed out that supply and demand factors have recently coalesced in a way that has caused the market price of several key program crops to increase substantially.

These higher market prices have turned attention to a wide range of important issues including energy policy and biofuels, food inflation, and conservation program management.

Some might argue that corn is one of the more important variables in the current high price environment. Corn is a versatile crop that is used for a variety of purposes, and acreage decisions regarding corn have ripple impacts on the supply and price of other commodities.

As a result, corn yields and more specifically, estimates regarding the projected growth rate in corn yields, have taken on an important role in the farm policy debate.

Last week’s update noted that the more important policy issue in the current environment is the rate of growth in corn yields: Are corn yields increasing at a faster rate?

Agricultural economists at the University of Illinois have looked at this issue in greater detail and have summarized their results in a short, easy to read paper entitled, “Are Corn Trend Yields Increasing at a Faster Rate?” (To listen to an audio recap on this issue, just click here (MP3- about 8 and half minutes).

On Tuesday, March 4, WILL AM 580 Radio (Champaign, IL) and University of Illinois Extension held an outlook meeting at which Dan Basse of Ag Resource delivered a keynote address that covered a wide range of current agricultural issues.

As part of his broad outline of issues, Mr. Basse also addressed the important issue of corn yields and policy.

Mr. Basse referred to this slide in his presentation, and noted that, “[USDA Under Secretary for Rural Development] Tom Dorr stated at the USDA meeting just a few weeks ago- said that if we are to maintain, we need corn yields at 300 bushels per acre sometime within the next two decades. I would agree with that, if we can get there, everything will be fine. If we can’t get there people in Washington will very quickly start wondering about their biofuel policies and why we are using food for the production of fuel.”

To listen to more extended comments on this issue from Dan Basse, and some of his observations and perspectives on the corn yield impact on U.S. farm and energy policy, just click here (MP3- six minutes).

The audio recap also includes a brief audio excerpt from some comments regarding corn yields made recently by Jon Doggett of the National Corn Growers Association at a Farm Foundation policy forum in Washington, D.C.

Keith Good

Farm Bill- Chairman Harkin: “I’m convinced a deal is within our reach”

Philip Brasher, writing yesterday at the Des Moines Register Online, reported that, “Congressional negotiators are nearing a deal on funding a new farm bill, but agricultural programs may have to be extended another month, says Sen. Tom Harkin, D-Iowa.

“‘I’m convinced a deal is within our reach,’ Harkin said Thursday.”

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FAPRI Baseline Projections; Pres. Bush on Biofuels

Yesterday, the Food and Agricultural Policy Research Institute (FAPRI) released their U.S. Baseline Briefing Book: Projections for Agricultural and Biofuel Markets.

A related FAPRI press release explained that the 68-page 2008 FAPRI Baseline Briefing Book was delivered to the U.S. Congress and U.S. Department of Agriculture yesterday; and noted that, “The independent analysis which projects the agricultural economy for 10 years is requested annually by Congress.”

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Farm Bill: Spending and Jurisdictional Issues Stymie Progress

Dow Jones News writer Bill Tomson reported recently that, “The Bush administration, in a letter, has offered to allow Congress to go $10 billion over budget in drafting the 2008 farm bill so long as lawmakers agree to make significant subsidy and funding reforms.

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Chairman Peterson on Farm Bill: “We’re moving slowly ahead, at least not backwards”

Congressional Quarterly writer Catharine Richert reported yesterday that, “Farm-state lawmakers have not rejected the Bush administration’s latest funding proposal for the farm bill, but they say there is still plenty of work to be done.

“‘There’s no soup yet,’ said Democrat Debbie Stabenow of Michigan after she and other Senate Agriculture Committee members met to consider the list of spending cuts proposed by the Agriculture Department.”

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Corn Concerns & Higher Market Prices Draw Focus to Conservation

Corn Concerns

Jerry Hirsch reported in Sunday’s Los Angeles Times that, “Corn is a key element of the U.S. food supply. It is what dairy cows eat to make milk and hens consume to lay eggs. It fattens cattle, hogs and chickens before slaughter. It makes soda sweet. As the building block of ethanol, it is now also a major component of auto fuel.

“And that may signal trouble ahead.

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Corn Yields and Farm Policy: An Important Link

Categories: Farm Bill

Supply and demand factors have recently coalesced in a way that has caused the market price of several key program crops to increase substantially.

These higher market prices have turned attention to a wide range of important issues including energy policy and biofuels, food inflation, and conservation program management.

Some might argue that corn is one of the more important variables in the current high price environment. Corn is a versatile crop that is used for a variety of purposes, and acreage decisions regarding corn has ripple impacts on the supply and price of other commodities.

As a result, corn yields and more specifically, estimates regarding the projected growth rate in corn yields, has taken on an important role in the farm policy debate.

Last year, the U.S. average yield per acre of corn was about 150 bushels, and there is agreement that corn yields have generally increased over time (see related graph).

The more important policy issue in the current environment is the rate of growth in corn yields: Are corn yields increasing at a faster rate?

Agricultural economists at the University of Illinois have looked at this issue in greater detail and have summarized their results in a short, easy to read paper entitled, “Are Corn Trend Yields Increasing at a Faster Rate?

I recently had a chance to sit down and speak with Scott Irwin, one of the co-authors of the paper.

Professor Irwin not only explained the results of the paper, but also tied in how these conclusions might be used for additional perspective in the current policy debate.

To listen to an audio recap on this issue, which includes my conversation with Professor Irwin, just click here (MP3- about 8 and half minutes).

The audio recap also includes a brief audio excerpt from a speech made recently by Rick Tolman, the CEO of the National Corn Growers Association.

To listen to the recap, just click here (MP3).

Keith Good

Farm Bill Debate- Recent Chronology

Thursday

Carolyn Lochhead reported in Thursday’s San Francisco Chronicle that, “As Sens. Barack Obama and Hillary Rodham Clinton toured the land denouncing special interests, giveaways to the rich, home foreclosures, job losses and a middle-class squeeze, back in Washington House Speaker Nancy Pelosi and other top Democrats met behind closed doors on a plan to raise taxes and cut food stamp money to protect billions of dollars for agribusiness, a sector of the economy that is booming.

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