FarmPolicy

June 28, 2017

USDA Outlook; Food Security; Biofuels; Climate Issues; and USDA Civil Rights

USDA Outlook

USDA chief economist Joe Glauber provided an updated economic outlook for agriculture yesterday at the Department’s Annual Outlook Forum in Arlington, Virginia.

In part, Dr. Glauber noted that, “On February 11, USDA’s Economic Research Service (ERS) released its initial estimates of farm income and production expenses for 2010. ERS forecasts net cash income at $76.3 billion, up $5.5 billion from 2009” [related graph from presentation].

And with respect to crop prospects for 2010, Dr. Glauber stated that, “Less land is expected to be planted to the major field crops in 2010 as prices continue to ease from their record levels in 2008…Total planted area for the 8 major crops (wheat, corn, barley, oats, sorghum, soybeans, upland cotton, and rice) is expected to decline to 247.3 million acres, down 1.6 million from 2009. The 8-crop total is down 5.7 million acres from the recent high in 2008 as the net returns outlook is much less favorable than 2 years ago when prices were at or near record highs” [related graph from presentation].

More specifically, USDA estimated that, “Corn plantings for 2010 are expected to rise 2.5 million acres from last year to 89.0 million, the highest level since 2007;” and, “Production is projected at a record 13.2 billion bushels, up just slightly from the 2009/10 record crop as higher area more than offsets a return to trend yields with normal weather.” [Note: Last month a separate estimate regarding corn planted acres for 2010 from a Land Grant University Economist came in at 89.5 million acres. The USDA will release the results of its survey of farmer planting intentions on March 31].

Corn use for ethanol in 2010/11 is projected 5 percent higher at 4.5 billion bushels reflecting higher mandates for biofuels use and continued profitability for ethanol producers and blenders [related graph from presentation]. The year-to-year increase is lower than for 2009/10 when ethanol corn use expanded 17 percent [related graph from presentation].”

“U.S. corn exports for 2010/11 are projected up 5 percent at 2.1 billion bushels as global livestock production rebounds following the global economic crisis;” and, “The season-average farm price is projected at $3.60 per bushel, down $0.10 from the midpoint of the 2009/10 forecast as forward pricing opportunities will be at lower levels than for last year’s crop.”

With respect to soybeans, yesterday’s presentation indicated that, “Soybean planted area for 2010 is expected to fall nearly 500,000 acres from last year to 77.0 million acres as improved returns for corn and rotational considerations boost corn plantings;” and, “Production is projected at 3.26 billion bushels, down about 100 million bushels from the 2009/10 record crop of 3.36 billion on lower planted area (77 million acres, down 0.5 million) and lower (trend) yields of 42.9 bushels per acre compared with last year’s record 44.0 bushels per acre.”

“The season-average farm price is projected at $8.80 per bushel, down $0.65 from the midpoint of the range of the 2009/10 forecast as record South American production weighs on the market.”

For wheat, Dr. Glauber stated that, “Wheat planted area for 2010 is expected to decline 5.3 million acres to 53.8 million. Winter wheat seeded area at 37.1 million acres is down 6.2 million from 2009 and the lowest since 1913;” and, “The 2010/11 season-average farm price is projected at $4.90 per bushel, up $0.05 from the midpoint of the 2009/10 projection, but domestic prices remain under significant pressure from large domestic and global supplies.”

Bloomberg’s Alan Bjerga and Jeff Wilson, writing yesterday on the USDA estimates, reported that, “Cotton production will rise to 16 million bales, from 12.4 million in 2009, with supplies on July 31, 2011, projected at 3.4 million bales, up from 3.3 million this year. A bale weighs about 480 pounds.”

Philip Brasher noted yesterday at the Green Fields Blog (The Des Moines Register) that, “And remember all that concern about rising food prices a few years ago? Food prices jumped by 6.4 percent in 2008 but were up just 0.5 percent last year, due in part to lower energy and transportation costs. This year food prices are expected to rise about 3 percent, which would be in line with historic trends, Glauber said.”

Also yesterday, Dr. Glauber pointed out that, “The livestock, poultry, and dairy sectors are being challenged by continued weakness in domestic and global demand for meat and dairy products. Trade restrictions continue to pressure red meat and poultry exports. Although producers have cut back production in 2009, improved returns will likely slow the rate of production decline in pork and dairy, while an improved forage base has allowed cattle producers to keep cattle on grass longer. Broiler production is expected to gradually increase during 2010 after more than a year of production declines. Total meat production is forecast to be down about 0.5 percent from 2009, with milk production declining about 0.2 percent.”

A related AP article from today reported that, “Only months ago, dairy producers were slaughtering an average of 50,000 dairy cows a week because a milk glut made it impossible to sell their milk for what it cost to produce. Now, with prices improving, dairy farmers are reversing course, saying they’ll produce as much milk as possible this year.

“It’s a wise strategy, according to most industry experts. Milk prices are expected to rebound in 2010 thanks to improved U.S. sales and a recovering export market, so producing as much milk as they can may be the best way for dairy farmers to make up last year’s losses.”

Also yesterday, USDA released its Outlook for U.S. Agricultural Trade report, which noted in part that, “Fiscal 2010 agricultural exports are forecast at $100 billion, up $2 billion from the November forecast and $3.4 billion above final FY 2009 exports. Global economic recovery and healthy commodity prices are supporting exports.”

As a general overview of yesterday’s USDA Outlook Forum, Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “The attacks on conventional agriculture at USDA’s outlook conference have gotten under the skin of some in traditional agribusiness.

“Tim Burrack, an Arlington, Ia., corn and soybean grower and chairman of the Iowa Corn Promotion Board, stood up at the end of a session this afternoon on locally grown foods and said, ‘This is not the USDA that I’ve known.’ The lead speaker at the session was Deputy Agriculture Secretary Kathleen Merrigan, who has directed the department’s shift in emphasis toward local and organic foods.”

Afterwards, a representative of a major agribusiness group was heard to call this year’s outlook conference the ‘The Attack on Traditional Agriculture Conference.’”

Food Security

A news release issued yesterday by the UN’s Food and Agriculture Organization stated that, “Urgent investments, major agricultural research efforts and robust governance are required to ensure that the world’s livestock sector responds to a growing demand for animal products and at the same time contributes to poverty reduction, food security, environmental sustainability and human health, FAO said today in a new edition of its flagship publication the State of Food and Agriculture (SOFA).



“The report stresses that livestock is essential to the livelihoods of around one billion poor people. Livestock provides income, high-quality food, fuel, draught power, building material and fertilizer, thus contributing to food security and nutrition. For many small-scale farmers, livestock also provides an important safety net in times of need.”

Meanwhile, an update posted yesterday at the L.A. Unleashed Blog (Los Angeles Times), stated that, “[Lawyer Antoine F. Goetschel] is Europe’s only animal lawyer and the figurehead for a movement that wants to expand Zurich’s pioneering legal system across Switzerland.

Voters will decide in a March 7 poll whether every canton (state) should be required to appoint an animal lawyer to represent the interests of pets and farm animals in court — in effect a dedicated public prosecutor for dogs, cats and other vertebrates that have been abused by humans.

“‘Swiss law has taken a big step forward in recent years,’ particularly for animals that live in groups, Goetschel tells The Associated Press.”

Biofuels

Reuters writer Charles Abbott reported yesterday that, “Agriculture Secretary Tom Vilsack urged Congress on Thursday to reinstate the $1 a gallon biodiesel tax credit, calling it ‘an important credit’ and ‘a support mechanism’ for renewable fuels.

“The credit expired at the end of 2009.

“Farm groups and allies in Congress are seeking a revival retroactive to January 1, but do not have a legislative vehicle for it.

“At the Agriculture Department’s annual Outlook forum, USDA chief economist Joe Glauber said the future of soyoil as a feedstock for biodiesel is dependent on the future of the credit. Without it, other vegetable and animal oils will be more economical, he said.”

Climate Issues

A statement issued yesterday by American Farm Bureau Federation President Bob Stallman stated that, “The American Farm Bureau Federation has filed a legal challenge to the Environmental Protection Agency’s December finding that greenhouse gases endanger public health and welfare. The agency’s action constitutes the first step toward economy-wide regulation of greenhouse gases. It is an effort to achieve through regulation what has failed to pass Congress and failed as well at the Copenhagen talks.

“EPA regulation of greenhouse gas emissions from farms and ranches through the Clean Air Act could lead to costly and burdensome mandates on America’s food, fiber and renewable fuel producers. It is imperative that the U.S. Court of Appeals conduct a thorough review of the EPA’s endangerment finding.”

Robin Bravender of Greenwire reported on Wednesday at The New York Times Online that, “Industry groups, conservative think tanks, lawmakers and three states filed 16 court challenges to U.S. EPA’s ‘endangerment’ finding for greenhouse gases before yesterday’s deadline, setting the stage for a legal battle over federal climate policies.

“Filing petitions yesterday were the Ohio Coal Association, the Utility Air Regulatory Group, the Portland Cement Association, the state of Texas and the Competitive Enterprise Institute. Another was filed by a coalition that includes the National Association of Manufacturers (NAM), the American Petroleum Institute, the Corn Refiners Association, the National Association of Home Builders, the National Oilseed Processors Association, the National Petrochemical and Refiners Association, and the Western States Petroleum Association.

The lawsuits ask the U.S. Circuit Court of Appeals to review EPA’s determination that greenhouse gases endanger human health and welfare. That finding — released in December in response to a 2007 U.S. Supreme Court ruling — allows the agency to regulate the heat-trapping emissions under the Clean Air Act. Observers expect the court to consolidate the petitions.”

In executive branch developments on the climate issue, Jim Tankersley reported in today’s Los Angeles Times that, “The Obama administration proposed rules Thursday that could affect construction of coal-fired power plants and other government-approved projects that produce large amounts of greenhouse gases.

The guidelines for the first time set uniform standards on how federal agencies consider the causes and effects of climate change during their environmental analyses. They would require study of the greenhouse gas emissions of any project expected to emit at least 25,000 metric tons of carbon dioxide a year — roughly 4,600 cars’ worth.

“The types of projects that could be affected include large-scale landfills, coal-fired power plants and coal mines that give off methane.”

Today’s article noted that, “The guidelines instruct federal agencies to ‘consider opportunities to reduce [greenhouse gas] emissions caused by proposed federal actions’ and ‘use the NEPA [National Environmental Policy Act] process to reduce vulnerability to climate change impacts.”

“Such analysis would not necessarily affect a project’s fate. White House officials said the rules were not meant to regulate greenhouse gas emissions. But after analysis, officials could decide whether a reduction in emissions was needed.”

From a political perspective on the climate debate, Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “Sen. John Kerry (D-Mass.), continuing his combative stance on climate change of late, said Thursday that ‘fanatics, naysayers, and science deniers’ will not prevent international action on climate change.



“Kerry made the comment as part of his response to the news that United Nations climate chief Yvo de Boer will step down this summer.” (See related article in today’s Washington Post).

Mr. Geman added that, “Kerry, and Sens. Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.), are leading Senate efforts to craft a compromise bipartisan climate bill. But they face major hurdles winning the needed 60 votes and securing space on the election-year agenda.

Kerry’s combative tone comes as the landscape for climate advocates has become more difficult.”

Meanwhile, Amy Harder reported yesterday at the National Journal Online that, “John Podesta has ‘hope,’ but certainly not confidence, that Congress can pass a comprehensive climate and energy bill by this spring, a target date set by Senate Majority Leader Harry Reid, D-Nev. In an interview Wednesday with NationalJournal.com, the chief of the Center for American Progress discussed the importance of a price on greenhouse gas emissions and insists that there are Republicans who would support such a measure. President Obama has not, in recent speeches, explicitly endorsed a price on carbon. But Podesta says it’s essential to cut emissions by the amount the administration agreed to in the Copenhagen Accord: 17 percent below 2005 levels by 2020.”

Edited excerpts of the interview are also available at the National Journal link.

USDA Civil Rights

Kevin Bogardus reported yesterday at The Hill Online that, “Sen. Blanche Lincoln (D-Ark.) said Thursday she will work on Capitol Hill to resolve discrimination claims against the Agriculture Department (USDA). 
 


“The centrist senator, who is in charge of the Senate Agriculture Committee and is facing a tough reelection campaign this year, said she will help find funding to resolve black farmers’ discrimination claims against USDA after the Obama administration reached a new settlement with the group.”

The Hill article explained that, “The Justice Department and USDA announced their deal with the black farmers Thursday, agreeing to a $1.25 billion settlement. It follows a 1999 agreement, known as the Pigford settlement, where the federal government agreed to compensate black farmers for decades of discrimination. The new settlement was reached to allow late claimants who missed the original Pigford settlement to re-file and secure compensation.

The $1.25 billion figure encompasses $100 million already appropriated in the 2008 Farm Bill as well as the administration’s 2011 budget request of $1.15 billion to resolve the remaining claims.”

A news release issued yesterday by Iowa GOP Senator Chuck Grassley stated that, “Approximately 75,000 black farmers filed their claims of discrimination through the Pigford consent decree process past the deadline for their claims to be evaluated on the merits. As a result, thousands of victims of discrimination continue to be denied an opportunity even to have their claims heard.

“Grassley has led the effort to put in place a process where these African American farmers can have the opportunity to plead their case based on the merits. He introduced legislation in 2007 and pressed for it to be included in the 2008 farm bill.

“‘I had originally hoped that the Pigford v. Glickman settlement would take care of the injustice that had been left untouched for decades. Unfortunately, many people were shut out of the process. When it became apparent that the Department of Agriculture would not act, we took further steps and introduced legislation to right the wrongs. We finally got something included in the last farm bill and now, with today’s announcement, African American farmers who were wronged by the USDA are one step closer to a full resolution and well-deserved justice.’”

Keith Good

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