FarmPolicy

April 16, 2014

Climate Bill; Ag Economy- Animal Agriculture; “Rural Tour,” Peanuts; and CFTC Issues

Climate Bill- Senate Focus: Democratic “Moderates” a Key Vote

Paul Kane reported in today’s Washington Post that, “President Obama’s climate-change legislation begins a daunting march through the Senate this week, with supporters acknowledging they are as many as 15 votes shy of victory and well aware that deals to attract more votes could erode the bill’s environment-friendly objectives.

“Senators will weigh a slew of potential compromises — everything from allowing more offshore drilling for oil and natural gas to increasing funding for nuclear energy — that they think would inch the package closer to passage. But environmental activists warn that the 1,400-page House version of the bill already includes so many giveaways to corporate America that more horse-trading in the Senate could lead them to oppose the final version.

Four of Obama’s cabinet secretaries will kick-start the push for the climate bill when they appear today before the Senate’s Environment and Public Works Committee, which is drafting its portion of the climate legislation. Obama will be promoting the effort to limit greenhouse gases at the Group of Eight meeting in Italy on Thursday, when the leaders of the world’s largest economies are slated to focus on efforts to slow global environmental change.”

Mr. Kane explained that, “[Sen. Majority Leader Harry Reid (D-Nev.)] has tasked a handful of committee chairs with completing their portions of the legislation by Sept. 18, at which point he hopes to cobble together the pieces and get the package to the floor late in the fall. As outlined, the bill would create a ‘cap-and-trade’ system placing the first national limit on greenhouse-gas emissions, gradually tightening those limits over the next four decades with a goal of reducing emissions 83 percent by 2050. Major emitters of greenhouse gases — including any business that burns fossil fuels such as oil, natural gas or coal — would have to reduce their emissions or buy allowances, which would be traded on markets like commodities.

As of today, Reid can count on the support of about 40 to 45 senators for that basic premise, according to aides and outside activists backing the legislation. Supporters are targeting a pool of roughly two dozen lawmakers — including about 15 of Reid’s Democrats — who will determine the legislation’s fate.

The battle ahead differs from many on Capitol Hill in that ideology is considered to be less influential than geography. Even some of the chamber’s most liberal members have resisted signing on as they await the best deal possible for key industries in their states.”

Today’s Post article indicated that, “The narrow 219 to [212] victory on June 26 in the House has given Senate backers some level of hope, despite the concessions they might be forced into accepting. ‘I am very optimistic. As a legislator and a chairman, I don’t deal in hypotheticals, I don’t think negatively. I think positively, especially after the House vote,’ Sen. Barbara Boxer (D-Calif.), chairman of the environment committee, said yesterday.”

More specifically with respect to what Democratic Senators may be of particular interest in a climate bill vote, Alexander Bolton reported yesterday at The Hill Online that, “Half a dozen members of the Senate Democratic Conference pose the biggest threat to President Obama’s agenda, giving Senate Republicans a fighting chance to block the administration’s major expansions of government.

“GOP leaders have begun reaching out to these centrists, hoping they will buck their party on Obama’s two biggest initiatives: healthcare reform and climate change legislation.”

Mr. Bolton stated that, “Leading the pack of potential defectors are Sen. Ben Nelson, a pro-business Democrat from Nebraska; Sen. Joe Lieberman, a self-described Independent Democrat from Connecticut; and Sen. Mary Landrieu, a Louisiana Democrat who represents a conservative state.”

The Hill article added that, “The other Democrats who are expected to voice the most serious objections to either or both of the administrations top priorities are: Sens. Evan Bayh (Ind.), Blanche Lincoln (Ark.) and Mark Pryor (Ark.).”

On climate change and energy legislation, Bayh, Lincoln and Pryor are seen as a collective headache for Democratic leaders,” the article said.

In more detail regarding legislative activity in the Senate, Darren Samuelsohn reported yesterday at The New York Times Online (Greenwire) that, “On Wednesday morning, the Senate Finance Committee weighs in with a hearings on the international trade issues that factor into a global warming bill. And the Senate Foreign Relations Committee hears later that afternoon about the European Union’s five-year effort to control climate-changing emissions while dealing with competition from developing countries.”

Mr. Samuelsohn explained that, “Also Wednesday, Reid plans to bring together the chairmen of the six key Senate committees for what are now becoming regular strategy sessions on the issue: Agriculture’s Tom Harkin of Iowa; Commerce, Science and Transportation’s John Rockefeller of West Virginia; Energy and Natural Resources’ Jeff Bingaman of NewMexico; Environment and Public Works’ Barbara Boxer of California; Finance’s Max Baucus of Montana; and Foreign Relations’ John Kerry of Massachusetts.

“Boxer is expected to take the lead in writing the core components of the climate bill, building in large part off the House legislation approved less than two weeks ago on a 219-212 vote. A Democratic committee aide today said legislative text should be ready for public release within the next two weeks. Boxer has set aside the weeks of July 27-31 and Aug. 3-7 for marking up the bill.

Other EPW Committee hearings scheduled for this month include a July 14 morning session on the role of agriculture and forestry, as well as an afternoon meeting on transportation issues. Boxer also plans a July 16 hearing on how U.S. businesses can stay competitive globally while still facing climate restrictions.”

Philip Brasher, writing yesterday at The Des Moines Register Green Fields Blog, reported that, “Now that a climate bill has passed the House, attention is shifting to the Senate and Iowa Sen. Tom Harkin is joining the discussions among top Democrats.

“‘One of his top priorities is going to be making sure that the issues important to agriculture and rural America really play a major role in shaping the legislation,’ said Grant Gustafson, a spokesman for the Senate agriculture committee, which Harkin chairs.

“Tomorrow, Harkin plans to join a group of senators led by Sen. Barbara Boxer, the California Democrat who is chairman of the Senate Environment and Public Works Committee. Gustafson said Harkin would be taking Agriculture Secretary Tom Vilsack to the meeting. On Wednesday, Harkin will take part in a meeting of committee chairmen organized by Majority Leader Harry Reid, D-Nev.”

Meanwhile, in an article from last week, Bloomberg writer Aaron Eglitis stated that, “Ohio’s two senators, Voinovich and Democrat Sherrod Brown, are among some two dozen senators from industrial and farm states who will be critical to passage of a cap-and-trade plan. More than 80 percent of Ohio’s electricity comes from coal- fired power plants, which are among the biggest producers of greenhouse gas emissions.

“The state’s unemployment rate exceeds the national average. A cap-and-trade bill must protect manufacturers from sharp increases in energy prices and overseas competition from companies operating under less-stringent pollution limits, the senators say.”

And with respect to reflection on the House vote for the Waxman-Markey climate bill, an item posted yesterday at Hotline On Call (National Journal) reported that, “Beginning tomorrow, Americans United for Change will air television ads thanking House members for backing the Obama energy bill. The members cast a tough vote for a variety of reasons. Some represent coal country, for example, while others hail from GOP-leaning districts.” Just click here to view the Ad.

From an international perspective, the AP reported yesterday that, “Developing countries need money now to grapple with global warming, and the Group of Eight summit this week could energize troubled climate negotiations if it decided to make ‘significant’ funds available, the top U.N. climate official said Monday.

“The focus of U.N. climate talks over the past 18 months has been on an agreement to control greenhouse gases after 2012, when the Kyoto Protocol expires, including cash for developing countries.

“But Yvo de Boer, who oversees the talks among 192 nations, says bumping up existing climate funds now would be a ‘practical, useful, tangible’ signal to developing countries that the rich countries are serious about a deal. The accord is due to be completed in Copenhagen in December.

Ag Economy- Dairy

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “With world wholesale dairy prices at their lowest level in five years, farm groups are calling on the Obama administration and Congress to take action to help dairy farmers.”

Mr. Hagstrom noted that, “The House Agriculture Livestock, Dairy and Poultry Subcommittee will hold a hearing on problems in the dairy sector on July 14, Agriculture Committee Chairman Collin Peterson, D-Minn., announced Friday.

“The National Farmers Union wrote congressional farm leaders on June 22 urging passage of a dairy stimulus package including a bill introduced in April by Sens. Bob Casey, D-Pa., and Arlen Specter, R-Pa. The Farmers Union also called for low-interest and emergency loan for dairy farmers, including a foreclosure mitigation program, the elimination of dairy forward contracting and other measures.”

A news release issued yesterday by USDA stated that, “Agriculture Secretary Tom Vilsack today announced initial allocations under USDA’s Dairy Export Incentive Program (DEIP) for the period July 1, 2009, through June 30, 2010. The program helps U.S. dairy exporters meet prevailing world prices and encourages the development of international export markets in areas where U.S. dairy products are not competitive due to subsidized dairy products from other countries.”

Ag Economy- Pork Production

Purdue University Agricultural Economist Chris Hurt noted yesterday (“Pork Producers’ Luck May Be Improving”) that, “The breeding herd is not dropping fast enough to bring pork production back to profitability. However, falling corn prices and prospects for lower soybean meal prices this fall are allowing producers to begin to feel like there may be some rays of hope.”

Dr. Hurt added that, “Corn prices are lower right now than many had anticipated. Ownership of corn for the coming year’s feeding needs should be considered. Soybean meal prices should also collapse as we near the more abundant new crop supplies, and as markets this winter look to the restoration of the Southern hemisphere crop. Waiting to cover meal needs seems prudent at this point.

“Maybe the luck has shifted for pork prices as well. Lean hog futures have been so depressed a sizable rally would not be out of the question. If producers feel that luck is finally shifting their way, then waiting for further recovery in pork prices seems prudent as well.”

Animal Agriculture- Welfare Policy Issues

Rod Smith reported recently at FeedStuffs Online that, “Attitudes and education — not facilities and laws regulating those facilities — are central to animal husbandry and welfare on the farm, according to James Kinder, chair of the animal sciences department at The Ohio State University.

He said the approach taken by the Humane Society of the United States (HSUS) in California last year, which it also likely will take in Ohio next year, is one of facilities and regulation and is not an effective means to achieve animal welfare.

“HSUS has the wrong perspective, he said in a statement earlier this month. Improvements in animal welfare need to come through changing attitudes and behaviors of producers and their employees — through education, he said.”

In other news regarding animal agriculture production, yesterday’s AgriTalk Radio Program with Mike Adams contained a detailed look at legislative action that is unfolding in Michigan that seeks to address animal welfare concerns in a way that is somewhat unique compared to what happened in California and what is currently unfolding in Ohio.

On yesterday’s show, Mike Adams spoke with Michigan State Rep. Mike Simpson about how the state legislature is working to address animal welfare concerns while considering the increasing importance of agriculture to the state. To listen to a portion of this interesting discussion from yesterday, just click here (MP3-9:30).

And for more detailed analysis regarding legislative activity and animal welfare, see “Animal welfare, animal care and ballot initiatives: What’s the solution?”-which was written by Candace Croney, PhD., The Ohio State University, Columbus and Stanley Curtis, PhD., University of Illinois at Urbana-Champaign. This item was posted last week at FeedStuffs Online.

Executive Branch “Rural Tour”

A news release issued yesterday by USDA stated that, “U.S. Secretary of Agriculture Tom Vilsack today visited New Hampshire and held a rural community forum to discuss efforts by the Obama Administration to rebuild and revitalize rural America, to listen to local residents talk about how USDA can assist them, and to discuss solutions to challenges facing their communities. This event follows the launch of the Obama Administration’s ‘Rural Tour’ last week, and is the eighth similar forum Vilsack has led since being sworn in as Secretary.”

To view several Twitter updates from yesterday’s event, including one which stated: “Overflow crowd…And people are still arriving – filling the aisles!,” see the Rural Tour Twitter page.

In a related item, Roger Thurow and Timothy W. Martin reported in today’s Wall Street Journal that, “The president’s stimulus plan has been aimed primarily at the top of the economy, pumping money into banks and car companies and state and city governments. But it also has put more money into the hands of the poorest Americans by boosting monthly food-stamp allocations. Starting in April, a family of four on food stamps received an average of $80 extra.

“Money from the program — officially known as the Supplemental Nutrition Assistance Program — percolates quickly through the economy. The U.S. Department of Agriculture calculates that for every $5 of food-stamp spending, there is $9.20 of total economic activity, as grocers and farmers pay their employees and suppliers, who in turn shop and pay their bills.

“While other stimulus money has been slow to circulate, the food-stamp boost is almost immediate, with 80% of the benefits being redeemed within two weeks of receipt and 97% within a month, the USDA says.”

Peanuts

Elton Robinson reported yesterday at the Southeast Farm Press Online that, “One of the biggest benefits to growing peanuts in Mississippi has been the relative lack of disease pressure compared to other more established growing regions of the Southeast.

“That honeymoon period appears to be ending, according to Mike Howell, area Extension agronomist at Mississippi State University, who has peanut responsibilities for the state.

“Eight years ago, fewer than 4,000 acres of peanuts were planted in Mississippi. But when the 2002 farm bill did away with the quota system for peanuts, acreage started to climb.”

Yesterday’s article noted that, “The state averaged a little over 2 tons per acre in 2008, which places them near the top in average yield in the United States. Howell attributes that to ‘relatively low disease pressure. Until last year, we had been able to get by without spraying a lot of fungicide.’

“‘But it looks like the honeymoon period is over,’ Howell said. ‘We’re starting to see some diseases creep in on us. Up until now, we haven’t had the acreage to allow the inoculum to build up.’

“The buildup of disease ‘is not critical,’ Howell says. ‘We’re just going to have to stay on top of it and tighten that spray window up a little bit.’”

Meanwhile, an audio update (one-minute) posted yesterday at SouthEastAgNet.com by Tyron Spearman focused on a campaign in Georgia regarding peanut butter donations: “There is a new campaign underway in Georgia which involves many aspects of the peanut industry,” the item said.

CFTC Issues

Zachary A. Goldfarb reported in today’s Washington Post that, “The Commodity Futures Trading Commission will consider new measures to curb speculation in the markets for energy and other commodities, the agency is set to announce today.

“The move aims to reduce the volatility of prices but faces resistance from top Wall Street firms, which fear the efforts could cut into profits. Regulators and lawmakers increasingly worry that these firms have used their size and power to inflate the prices of commodities, booking profits in the process.

“Concern over such deal-making reached a fever pitch last summer, when oil prices were sky high and people were feeling pain at the gas pump. CFTC data showed last year that a significant amount of trading in oil was concentrated in the hands of just a few speculators. These worries have waned since then, as gas prices have moderated from last year’s highs, though a recent run-up in fuel prices may prompt new questions.”

Keith Good

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