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Chairman Peterson; Climate Legislation; Ag Economy (Sugar, Peanuts); USDA Information; and North Dakota

Chairman Peterson

House Agriculture Committee Chairman Collin Peterson (D-Minn.) was a guest on yesterday’s AgriTalk radio program with Mike Adams.

As part of yesterday’s discussion (MP3-about nine minutes), Chairman Peterson and Mike Adams discussed the Mexican tariff issue, the peer review of EPA’s analysis regarding biofuels and indirect land use, climate change, and livestock issues.

Climate Legislation

With respect to recent developments on climate legislation, DTN Ag Policy Editor Chris Clayton reported yesterday that, “Ron Boyer may be on the cutting edge of stoking the debate over the accuracy of the science behind climate change.

“A retired county-health air-quality expert who now runs an agricultural and engineering consulting business, Boyer spent three months putting together a program held Thursday called ‘Debunking Climate Changes Myths.’ Boyer says he got fed up with people declaring the science on climate change was definitive.

“‘What really pushed me over the edge to do this was the people who kept saying the science was settled and the debate is over,’ Boyer said. ‘Well, I’m a scientist, and I know the science is never settled.’”

After additional analysis, yesterday’s DTN article explained that, “Agriculture is divided over the climate legislation and its impact. The American Farm Bureau Federation aggressively opposes the bill, claiming there would be no benefits for farmers and much higher energy costs. The National Farmers Union and U.S. Secretary of Agriculture Tom Vilsack, on the other hand, argue farmers could benefit from carbon offsets and that there could be more devastating effects on agriculture if increased greenhouse-gas emissions lead to more droughts or other environmental disasters.

“Tom Huff, a cow-calf producer from Fair Grove, Mo., sat through the day’s panels and became alarmed about the potential effects that cap-and-trade legislation could have on diesel costs and fertilizer.

“‘Anything I’ve seen about cap-and-trade, I don’t want to exaggerate, but this could be the worst piece of legislation in my lifetime,’ Huff said.

“Beyond direct costs, Huff said, he worries that if Congress passes a bill, the U.S. would slap tariffs on goods from other countries, igniting a possible trade war over carbon emissions.”

In an update posted yesterday at The Green Fields Blog (The Des Moines Register), Philip Brasher reported that, “The cap-and-trade plan to reduce greenhouse gas emissions has run into a lot of opposition in the Senate, but the idea isn’t dead yet. So say the analysts at Washington-based ClearView Energy Partners LLC, which has been tracking the climate issue closely.

“In a lengthy report on the issue’s state of play, ClearView says the Obama administration is still likely to get cap-and-trade enacted with its threat to regulate emissions unilaterally under the Clean Air Act.

“‘We don’t yet believe climate debate will collapse into ‘Plan B’,’ an energy bill pending in the Senate that would reduce the use of fossils through energy efficiency gains in buildings, manufacturing and motor vehicles, and mandated use of renewable electricity.”

Mr. Brasher added that, “The Environmental Protection Agency has already proposed to regulate greenhouse gas emissions on its own and could take additional steps toward that end yet this month and likely before the Copenhagen climate summit in December, the analysts write.

“There are sharp divisions in the Senate, however, even among Democrats over the idea of imposing caps on emissions and setting up a trading system for carbon offsets. The House narrowly approved such a cap-and-trade plan in June. Then there is the question of whether the administration would really follow through with its threat of imposing the emission caps on its own ahead of the 2010 elections.”

Recall that Representative Jerry Moran (R-Kansas) has expressed skepticism about the persuasiveness of passing climate legislation due to the threat of potential future action from the executive branch.

In an interview last month on the AgriTalk radio program with Mike Adams (July 8th), Rep. Moran elaborated on this issue and pointed out that, “[T]he EPA has not begun rule making process, it would take several years for that to occur. In the meantime, we may have a different Congress, ultimately, Administration thought may change, the science may be different, and so passing something to avoid something we fear in the future does not seem like the right course of action to me.

To listen to Rep. Moran’s broader perspective on this issue, click on this audio clip (MP3-3:00) from the July 8 AgriTalk Radio program with Mike Adams.

Likewise, Indiana GOP Senator Richard Lugar has also indicated that the threat of EPA climate change legislation is not a persuasive argument in the climate change debate.

From an international perspective, Reuters news reported yesterday that, “Australian Prime Minister Kevin Rudd said on Friday he had no intention of calling a snap election, despite parliament’s rejection of his government’s promised plan to cut greenhouse gas emissions.

In the biggest setback to Rudd’s agenda since his 2007 election victory, the upper house Senate on Thursday rejected Rudd’s emissions scheme after rival conservative, green and independent lawmakers joined forces to oppose it.

“If the Senate blocks or rejects the legislation a second time, after an interval of three months, it would hand Rudd a trigger for an early poll dominated by climate change.”

Meanwhile, James Kanter reported yesterday at The Green Inc. Blog (The New York Times) that, “Leading figures from the French wine and food industries are urging their government to push for a strong global agreement at a United Nations climate summit in Copenhagen in December, warning that failure to cut greenhouse gases will devastate their sector.

“‘The jewels of our cultural heritage, French wines, elegant and refined, are today in danger,’ a group of 50 winemakers, sommeliers and chefs wrote in an opinion piece published on Aug. 12 in the newspaper Le Monde and addressed to French President Nicolas Sarkozy.

“‘Changes in the climate are leaving our vineyards increasingly vulnerable. Summer heat waves, recent hail storms in the Bordeaux region, new diseases coming from the south — these disturbances will soon be much more serious,’ the piece continued.”

And with respect to India, Ketaki Gokhale reported in today’s Wall Street Journal that, “India has established one of the world’s largest forest-protection funds and plans to set up a regulatory body modeled on the U.S. Environmental Protection Agency in an effort to improve its dismal environmental track record. The move comes even as the country resists firm caps on carbon emissions.

“The $2.5 billion fund will be earmarked for the regeneration and management of forests, which have been identified by researchers as an important means of reducing carbon emissions, said Jairam Ramesh, India’s minister of state for environment and forests, on Thursday. An additional $1 billion in public funds will be allocated for ‘forestry-related activities,’ according to a new report from the Indian Ministry of Environment and Forests.”

The Journal item indicated that, “Mr. Ramesh reiterated India’s longstanding position that the nation wouldn’t accept emissions caps because that would limit economic growth, and that developed countries, which have much higher cumulative emissions, should take a more appropriate share of the responsibility. The U.S., for example, produces 20.9% of global carbon emissions, according to the 2007 Human Development Report put out by the United Nations Development Program.

He was also adamant that India wouldn’t cut back on its consumption of coal, a big source of carbon emissions. ‘We have the third-largest reserve of coal,’ Mr. Ramesh said. ‘It would be foolish of us to give up on that option.’ Building a nuclear plant takes seven to 10 years, he pointed out.”

Ag Economy

In a brief item posted today at the Omaha World Herald Online, Steve Jordan reported that, “Farm Credit Services of America said net income in the three months that ended June 30 was $44.8 million, down 22.7 percent from $57.9 million a year earlier. Six-month net income was $73.8 million, down 25.5 percent from $99 million a year ago.”

Sugar

Jerry Hirsch reported in today’s Los Angeles Times that, “The price of sugar on world markets has soared this year, prompting a coalition of the nation’s largest food manufacturers to warn of a pending shortage and to ask the Agriculture Department to ease quotas on imports.

But although prices have risen domestically and abroad, analysts say fears of empty supermarket shelves are overblown and that the gloomy outlook of big food companies is really part of a larger effort to pressure the government into dismantling sugar trade barriers.

“The futures price of sugar traded on world markets closed at 22.2 cents a pound Thursday, down about a penny from the previous day but still up 72% in six months. Weather problems in the sugar-producing regions of India, the diversion of Brazilian sugar cane to produce ethanol, and a growing global sweet tooth are behind the increase, according to analysts.”

The LA Times article added that, “There is considerable debate about whether the run-up in sugar prices is a sign of a looming crisis. Just a fraction of global sugar supplies is traded on international markets. And according to the USDA, the wholesale price of sugar in the United States has risen by just 15% from a year ago to a little under 35 cents a pound.

“‘I do not think there will be a severe sugar shortage for U.S. food manufacturers in the near future,’ said Tom Graves, a Standard & Poor’s equity analyst who follows the big food companies.

Graves said the warning by the food companies was more about the politics of sugar quotas than price spikes or shortages.”

Bloomberg writer Alan Bjerga reported yesterday that, “The largest U.S. sugar-growers group disputes a Department of Agriculture forecast of an 89 percent drop in Mexican supplies and opposes looser import restrictions.

“The forecast for Mexican shipments may be overstated, said Jack Roney, the group’s economics and policy analysis director in Washington. Yesterday, the USDA raised an estimate for U.S. stockpiles in the year ending Sept. 30 by 14 percent and almost doubled the forecast for next year. The agency has until Sept. 30 to change the import rules before a six-month window closes.

“‘We’ve got plenty of sugar on hand to sell, and there’s plenty of time’ to consider increasing import caps, Roney said. The USDA’s latest forecasts show there’s no urgency, he said.”

Peanuts

An article posted yesterday at the Southeast Farm Press Online reported that, “U.S. peanut production is forecast by the USDA at 3.53 billion pounds, down 32 percent from last year and down 4 percent from 2007.

“Area for harvest is expected to total 1.07 million acres, unchanged from June but down 29 percent from 2008. Yields are expected to average 3,301 pounds per acre, down 115 pounds from last year’s record yield, but would be the second highest yield on record if realized.

“Planted acreage, at 1.10 million, is unchanged from the June estimate.

“Production in the Southeast States (Alabama, Florida, Georgia, Mississippi, and South Carolina) is expected to total 2.64 billion pounds, down 30 percent from last year’s production.”

USDA Information

Chris Clayton noted yesterday at DTN Ag Policy Blog that, “Building a little bit from my Monday rant on getting scheduling information from USDA, Radio Iowa’s O. Kay Henderson reported Tuesday that Secretary of Agriculture Tom Vilsack will return to Iowa to ‘host a town-hall-style forum at this year’s Iowa State Fair, although staff from USDA and the White House are not releasing the details yet — such as the date or time for the event.

“‘I’m coming back to Iowa, an opportunity to do an outreach effort at the State Fair and I’m sure that there’ll be questions ranging from health care to energy policy to farm policy, so I’m looking forward to a good discussion with folks back home,’ Vilsack told Henderson.

“And again, this is crazy. The Iowa State Fair is effectively the biggest gathering in Iowa every year. More than 1 million ticket sales are generated for the event. Someone really wanting to go to the fair, but also meet the Agriculture Secretary now effectively has to wait until USDA announces he will be there — three, maybe four hours before the actual forum.”

Mr. Clayton added that, “USDA continues to violate the premise that the Obama administration is going to be one of the most open administrations in history. When then-Ag Secretary Mike Johanns scheduled a forum on the farm bill, the meeting was announced weeks in advance. Again, I [Clayton] argue USDA’s press office thinks they are operating a political campaign instead of a policy department.”

North Dakota

Eli Saslow reported in today’s Washington Post that, “For the first time in five months, Janet Morgan was on her way to work — a happy occasion diminished only by what now was required to get there. She packed 13 boxes into the bed of her rusted pickup, careful to include what she considered her ‘survival items.’ Family photographs would help her stave off loneliness. A 5,000-piece puzzle would prevent boredom. Instructional Spanish audiotapes would offer simulated conversation.

Morgan, 63, loaded all of it into the truck before dawn one recent Saturday and left her home in Zanesville, Ohio. She drove past the technology companies that had repeatedly denied her applications, continued out of Ohio and then through Indiana, Illinois, Wisconsin and Minnesota. She traveled for 20 hours and 1,032 miles until finally she came upon a field of hay barrels and prairie grass, a deserted horizon interrupted by one towering road sign: ‘Welcome to North Dakota — Feel the Spirit!

“‘Am I crazy?’ Morgan asked shortly after she crossed into the state. ‘There’s nothing out here but open space.’”

Today’s Post article added that, “Open space and open jobs, which is why Morgan and thousands of others have moved to North Dakota during the past year. The state, once known primarily for its remoteness, is enjoying a new reputation as a haven amid economic collapse nationwide. It has the country’s lowest unemployment rate at 4.2 percent, a budget surplus of $1.2 billion and more than 9,000 unfilled jobs. North Dakotans, conservative by nature, avoided risky loans that elsewhere wreaked havoc on banks and real estate, and the state’s agriculture and energy industries continued to grow at record pace. Here, this is what passes for an economic problem: ‘We’ve been presented with the challenge of filling a wide array of open jobs,’ said Shane Goettle, the state’s commerce commissioner.

“North Dakota officials held a series of job fairs this year in states decimated by the recession and hired a talent recruiter to create a glitzy Web site to woo those looking for work. In June, Morgan stumbled upon the site and e-submitted a résumé that listed interests in communications, banking and teaching piano. She received an e-mail reply within hours: ‘Hi Janet. Yes, there will be a job for you here.’”

***

And lastly today, Reuters writer Doug Palmer reported yesterday that, “The U.S. ambassador to the World Trade Organization, Peter Allgeier, is taking a job in the private sector next month, in another setback to long-running world trade talks.

“Allgeier’s departure is a ‘serious, but not fatal’ blow to Doha round negotiations now in their eighth year, said Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers, a U.S. business group.

“‘His departure from Geneva, where a lot of the negotiations takes place, is a setback. You can’t have somebody with his abilities and his knowledge … leave without having it felt,’ Vargo said, a former U.S. Commerce Department official and long-time friend of Allgeier.”

Keith Good