February 25, 2020

House-Senate Ag Committees, Market Prices, and ERS Livestock Industry Report

House-Senate Ag Committees

A news release issued yesterday by the House Agriculture Committee stated that, “Members of the House Agriculture Committee met today to organize the Committee and adopt the Committee’s rules for the 111th Congress.”

The committee also ratified the members and leadership of all six subcommittees. Agriculture Committee Chair Collin C. Peterson (MN) and Ranking Minority Member Frank D. Lucas (OK) serve as ex officio Members of all subcommittees.”

Yesterday’s news release indicated that, Rep. Leonard L. Boswell (D-Iowa) will chair the Subcommittee on General Farm Commodities and Risk Management- the jurisdiction of this Subcommittee includes: “Program and markets related to cotton, cottonseed, wheat, feed grains, soybeans, oilseeds, rice, dry beans, peas, lentils, the Commodity Credit Corporation, risk management including crop insurance and commodity exchanges.”

With respect to the Senate Agriculture Committee, a news release from yesterday stated that, “Senator Tom Harkin (D-IA), Chairman of the Senate Committee on Agriculture, Nutrition and Forestry, today announced the list of Democratic Senators that will comprise the majority of the Committee. The roster includes newly-named Senators Gillibrand of New York and Bennet of Colorado.”

Philip Brasher, writing yesterday at the Green Fields Blog (The Des Moines Register) noted that, “On the Republican side, the only new member is former Agriculture Secretary Mike Johanns, now a senator from Nebraska.”

Mr. Brasher added that, “The committee’s top priority this year will be reauthorizing child nutrition programs.”

Meanwhile, an update posted yesterday by Charles Abbott at the Commodity Corner Blog (Reuters News) reported that, “During his first week on the job, Agriculture Secretary Tom Vilsack said no one knows for sure how many people work at the Agriculture Department. Speaking to USDA employees and later to reporters, he used that startling anomaly as an argument to update USDA’s computer equipment.

“Like the admonition against saying ‘never’ or ‘always’ during an argument, there could be a corollary: Never say ‘no one knows’ in a bureaucracy.”

Mr. Abbott indicated that, “A USDA employee quickly provided an answer for Reuters: 99,439 fulltime, part-time and temporary federal employees as of Monday based on figures from the payroll agency.

“There were some qualifiers in Vilsack’s statement. He said he asked the Obama transition team and ‘I was told no one knows for sure how many people work at (USDA). They could tell me how many checks are issued, but not how many people actually work here.’”

In news regarding the Farm Bill, a news release issued yesterday by the USDA stated that, “Agriculture Secretary Tom Vilsack said today that the Commodity Credit Corporation (CCC) will make $490 million available in partial 2008 Counter-cyclical Program (CCP) payments to eligible producers with enrolled upland cotton base acres in the Direct and Counter-cyclical Program (DCP). The projected partial CCP rate for producers with enrolled upland cotton base acres is 5.03 cents per pound or 40 percent of the projected total rate of 12.58 cents per pound.

“‘These payments represent another step in the implementation of the 2008 Farm Bill and the commitment that President Obama has made to providing our farmers and ranchers with a safety net during these tough times,’ Vilsack said.”

Market Prices

Bloomberg writer Jeff Wilson reported yesterday that, “Corn rose the most in more than a week on speculation President Barack Obama’s stimulus plan will revive economic growth and demand for grain used to make food, animal feed and ethanol.

“The Standard & Poor’s 500 Index rose as much as 3.8 percent, heading for the first four-day rally since November, as the U.S. House of Representatives prepared to pass Obama’s proposal to spend more than $800 billion. Corn before today plunged 53 percent from a record in June as a recession in the U.S. slowed demand for meat and fuel made from the grain.”

The Bloomberg article noted that, “Corn futures for March delivery rose 7 cents, or 1.9 percent, to $3.845 a bushel on the Chicago Board of Trade, the biggest percentage gain for a most-active contract since Jan. 16. The most-active contract is down from a record $7.9925 on June 27.

“The Obama plan would provide money for scores of initiatives, including $40 billion to extend health care coverage to the jobless, $20 billion for school repairs, $30 billion for highway infrastructure projects, $20 billion for food stamps, $18 billion for Pell college tuition grants, and $18.5 billion for energy efficiency and renewable energy programs.”

Brian Baskin reported in today’s Wall Street Journal that, “Crude-oil futures rose on a surprise drop in gasoline inventories, though continued concern about the weak U.S. economy prevented larger gains.

“Oil prices were pulled higher by gasoline futures, which surged after a Department of Energy report showed a draw on fuel inventories last week, defying most forecasts. Gasoline inventories fell by 100,000 barrels in the week ended Jan. 23, where analysts had given an average estimate of a 1.5-million-barrel build, in a Dow Jones survey.

“Light, sweet crude for March delivery settled 58 cents, or 1.4%, higher, at $42.16 a barrel on the New York Mercantile Exchange. Front-month February reformulated gasoline blendstock, or RBOB, settled 7.50 cents, or 6.8%, higher, at $1.1835 a gallon. February heating oil settled 4.70 cents, or 3.4%, higher, at $1.4215 a gallon.”

ERS Livestock Industry Report

Last week, the USDA’s Economic Research Service (ERS) released a report entitled, “The Transformation of U.S. Livestock Agriculture: Scale, Efficiency, and Risks.”

An ERS summary of the report stated that, “U.S. livestock production has shifted to much larger and more specialized farms, and the various stages of input provision, farm production, and processing are now much more tightly coordinated through formal contracts and shared ownership of assets. Important financial advantages have driven these structural changes, which in turn have boosted productivity growth in the livestock sector. But structural changes can also generate environmental and health risks for society, as industrialization concentrates animals and animal wastes in localized areas. This report relies on farm-level data to detail the nature, causes, and effects of structural changes in livestock production.”

Keith Good

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