FarmPolicy

December 14, 2017

Farm Bill Issues; Food Safety; Ag Economy; and Financial Regulation

Farm Bill: FarmPolicy.com Resources- UNOFFICIAL Transcripts

Recall that back on April 30, the House Agriculture Committee held a field hearing in Des Moines, Iowa to review U.S. agriculture policy as the Committee begins the process of considering the 2012 Farm Bill.

An UNOFFICIAL transcript of this hearing has been posted at FarmPolicy.com and is available here.

Likewise, last Tuesday, the House Ag Committee held a field hearing in Sioux Falls, South Dakota in preparation for the 2012 Farm Bill.

An UNOFFICIAL transcript of this hearing has been posted at FarmPolicy.com and is available here.

Meanwhile, a brief FarmPolicy.com recap of all of the House Ag Committee Farm Bill hearings is available here.

2012 Farm Bill News Developments

Mikkel Pates reported yesterday at AgWeek Online that, “Rep. Collin Peterson, D-Minn., chairman of the House Agriculture Committee, and colleague Rep., Stephanie Herseth Sandlin, D-S.D., brought home issues of ethanol and risk management policy in 2012 farm bill hearings May 18 in Sioux Falls, S.D.”

Yesterday’s article stated that, “Gary Duffy, a diversified crop and livestock producer from Oldham, S.D., president of the South Dakota Corn Growers Association, described crop insurance as ‘the greatest risk management tool producers have,’ and especially revenue-based programs.

“He says the Average Crop Revenue Election program provides help while cutting direct payments and lowering loan deficiency payments.

Duffy says ACRE is relatively complex, however, and poses ‘real challenges’ for farmers to decide whether to enroll. He also says the program should be county- or even farm-based, citing the dramatic difference in rainfall between places even within Kingsbury County, S.D.”

Mr. Pates noted that, “Rep. Mike Rogers, R-Ala., asked the producer panel whether Congress could get farmers to opt out of existing farm support programs if crop insurance programs were significantly improved.

“‘Silence,’ Rogers said, smiling, after several seconds of pause.

“Finally, Kevin Scott of Valley Springs, S.D., chairman of the South Dakota Soybean Association, spoke up, saying he’d have to consider it, but then warned there could be a danger of the crop insurance payments becoming a ‘pass through’ that wouldn’t benefit operators but could raise land rents and values.”

Yesterday’s AgWeek article indicated that, “Scott VanderWal, a Volga, S.D., farmer and president of the South Dakota Farm Bureau, was one of the few in the panels to talk about fiscal responsibility. He says his group’s analysis of making the ACRE program county-based, for example, might make it cost-prohibitive.

VanderWal says his group would accept shifts of commodity program funding to crop insurance, where individual responsibility plays a part.”

Lisa Hare reported on Saturday at the Yankton Press and Dakotan (South Dakota) that, “As part of the 2012 Farm Bill negotiations, USDA officials are pushing for a $7 billion cut in crop insurance spending.

“‘They’re pulling the rug right out from under us,’ said Ronnie Holt, a crop insurance agent from Texas and current chairman of the Crop Insurance Professionals Association.”

The article noted that, “Farmers fear an upheaval in coverage, and insurers are concerned such deep cuts will harm thousands of workers in the crop insurance business.

“‘Crop insurance is an integral component of the financial safety net for rural America and is crucial to helping producers manage risk,’ said Rep. Stephanie Herseth Sandlin (D — S.D.) in a recent phone interview.”

Ms. Hare explained that, “Tuesday, Herseth Sandlin was joined by a bipartisan group of 11 members of the U.S. House Agriculture Committee for a field hearing in Sioux Falls designed to gather input directly from area producers on the 2012 Farm Bill. The hearing was held at Augustana College in Sioux Falls, and included testimony from a diverse group of producers representing agricultural and rural interests, including grain production, biofuels and forestry products.”

Among the many issues crucial to the new Farm Bill, the federal crop insurance program was one topic which garnered comments at the hearing.”

Saturday’s article added that, “The USDA’s Risk Management Agency (RMA) is currently in the process of renegotiating the Standard Reinsurance Agreement (SRA), which outlines the relationship between the Federal Crop Insurance Corporation and the 15 crop insurance companies that deliver the insurance program to producers.

“The 2008 Farm Bill authorized RMA to renegotiate the SRA for the 2012 Farm Bill.

“‘I have some concerns that the proposed cuts in the SRA could undermine the availability of crop insurance and, consequently, financing for producers, as well as jeopardize many rural jobs and economic activity connected to delivering crop insurance,’ Herseth Sandlin added.”

(FarmPolicy.com Note: At last Tuesday’s hearing, South Dakota farmer Doug Sombke pointed out that, “Any major change to crop insurance would be felt very dramatically across rural America, I can tell you that.”)

Meanwhile, on a separate issue, recall that at the April 30 Farm Bill hearing in Des Moines, Iowa, Ranking Member Frank Lucas (R-Oklahoma) referenced a previous Committee hearing on April 21 where the Committee heard Farm Bill testimony from Sec. of Ag. Tom Vilsack [unofficial transcript]. In his opening statement in Des Moines, Rep. Lucas stated in part that, “Last week, during a hearing in Washington, I was concerned that the Administration’s priorities seem to differ so greatly from my producers’ priorities. There was barely a mention of the safety net, conservation programs, or many of the programs I hear about from my producers. I think it’s imperative that Congress work together with the Administration to come up with workable solutions for the many problems our rural communities face. But first this Administration must prove its commitment to production ag.”

In a related news item from yesterday, an update posted at USDA’s Daily Radio News stated that, “Agriculture Secretary Tom Vilsack says farm safety net programs don’t just help farmers; they help all consumers.” In the one-minute audio clip, Sec. Vilsack defended the farm safety net program and noted that the system allowed for consumers to spend only about 10% of their disposable income on food purchases.

Farm Bill: Nutrition Issues

An AFP article from yesterday reported that, “US Agriculture Secretary Tom Vilsack on Monday urged Congress to plow billions more dollars into programs to end the twin scourges of child obesity and hunger, which impact children, the economy and national security.

“With some 17 million children living in households that have to sometimes skip meals to make ends meet, and with a third of US children obese or on the road to becoming so, Vilsack called on lawmakers to ‘appropriate one billion dollars a year more into programs’ aimed at ending the two crises.”

Yesterday’s article noted that, “Childhood hunger and obesity should be made national priorities, said Vilsack, speaking at the launch of a report on child hunger at the Center for American Progress.

“Not only was it morally wrong for so many children to be going hungry in the world’s richest nation, but hunger and obesity also impact the economy, US competitivity and even national security, Vilsack argued.”

In broader issues regarding food security, Sarah Muirhead reported this week at FeedStuffs Online that, “The future holds the immense challenge of how to feed a population that will increase 50% by 2050, but the good news is that it can be done, according to Dr. Jim Pettigrew of the University of Illinois.

“‘In the coming decades, agriculturists will face a challenge in producing enough food to satisfy a world with a rapidly increasing appetite,’ Pettigrew said. ‘There is little new land that can be used for production of feed for animals, so we must become more efficient in the use of feed. … More broadly, I believe that we can succeed in the challenge of producing enough food to the extent that we make the investments and take the creative actions necessary for success.’”

The article stated that, “Pettigrew said when peeling back the layers, it is easy to see that the issue of feeding the world is really twofold: and a matter of food sufficiency in regard to how enough food can be produced to feed the world’s growing population and also food security in the sense of how everyone in the world can access an adequate amount of food every day.

What Pettigrew does not see as being part of the solution is the government’s use of food aid because it does not produce food; it only moves it around and can actually have very detrimental effects on agriculture in those countries receiving the aid. Instead, Pettigrew recommends solid investments to create actual food production solutions for countries in need.”

Food Safety

A news release issued yesterday by Sen. Tom Harkin (D-Iowa) stated that, “[Sen. Harkin], Chairman of the Health, Education, Labor and Pensions (HELP) Committee, released the following statement today after news that raw alfalfa sprouts had been linked to a Salmonella outbreak in ten states. The tainted sprouts were distributed to a variety of restaurants, delicatessens and retailers, including Trader Joe’s and Wal-Mart stores by Caldwell Fresh Foods of Maywood, CA. On November 18, 2009, the HELP Committee reported out the FDA Food Modernization Act of 2009, a comprehensive food safety bill, without a single dissenting vote. The bill must now go to the full Senate for consideration. A summary of the bill can be found here and more information on the alfalfa recall can be found here.

“‘Incidents of food borne diseases are not only increasing, but happening with an all-too-common frequency. Just a few weeks ago, E.Coli was found in lettuce. Today’s announcement about Salmonella in alfalfa sprouts reinforces the need to reform our broken food safety system.’”

Meanwhile, the Government Accountability Office (GAO) released an update yesterday titled, “Food Safety: FDA Has Begun to Take Action to Address Weaknesses in Food Safety Research, but Gaps Remain.”

In part the GAO report stated that, “The United States faces challenges to ensuring food safety. First, imported food makes up a substantial and growing portion of the U.S. food supply, with 60 percent of fresh fruits and vegetables and 80 percent of seafood coming from across our borders. In recent years, there has been an increase in reported outbreaks of foodborne illness associated with both domestic and imported produce. Second, we are increasingly eating foods that are consumed raw and that have often been associated with foodborne illness outbreaks, including leafy greens such as spinach. Finally, shifting demographics means that more of the U.S. population is, and increasingly will be, susceptible to foodborne illnesses.”

In a separate article on food safety regarding organic production, Jane Palmer reported yesterday at the Mercury News Online (California) that, “[Tom] Willey and his wife, Densesse, own an organic farm just outside of Madera in the central San Joaquin Valley, where they grow lettuce, carrots, cabbage and nearly 50 other hand-harvested vegetables. They supply 800 local families and West Coast retailers with a year-round supply of fresh produce.

“But in the last three years, a dark cloud has gathered over Willey’s farm. He and other organic farmers say stricter food-safety regulations, developed after a cluster of outbreaks of bacterial contamination in spinach and lettuce in 2006, threaten the principles upon which their farms are based.

“While Willey already adheres to the voluntary food-safety regulations deemed necessary by the organic farm community, he feels that many of the rules — which include cutting bare buffer zones around crops, using poison to kill rodents and washing produce with chlorinated water — run contrary to growing healthy and safe food.”

The article added that, “‘Healthy produce cannot be grown in sterile environments,’ Willey said. ‘That’s both ignorant and dangerous.’

Moreover, opponents of the regulations say that the new measures are threatening the livelihood of small-scale and organic farms. Willey, who refuses to adhere to regulations he believes are ultimately harmful, runs the risk of not being able to sell his crops. Other small farms that do comply face burdensome costs.”

Ag Economy

Bloomberg writer Jeff Wilson reported yesterday that, “Midwest farmers sped up this year’s planting as warmer, drier weather during the second half of last week firmed muddy fields and provided a boost to U.S. crops stunted by cold, wet weather earlier this month.

About 93 percent of the corn crop was planted as of yesterday, up from 87 percent a week earlier and 80 percent a year earlier, the U.S. Department of Agriculture said today in a report. The prior five-year average was 89 percent. An estimated 71 percent of corn plants had emerged from the ground, compared with the five-year average of 62 percent.”

“About 71 percent were in good or excellent condition, up from 67 percent a week earlier, when the department made its first rating of the season. There were no crop ratings a year earlier because wet, cold weather delayed planting.”

Mr. Wilson added that, “About 53 percent of the soybean crop was planted as of yesterday, up from 38 percent a week earlier and 44 percent a year earlier, the USDA said. The average over the previous five years was 57 percent. An estimated 24 percent of the oilseed has emerged from the ground on May 23, up from 13 percent a week earlier and a five-year average of 23 percent.”

Meanwhile, a brief article regarding the pork sector (“Can Lofty Pork Prices Be Maintained?”) was posted yesterday at a University of Illinois Extension webpage.

The article, which was written by Purdue University Economist Chris Hurt, indicated that, “Hog and pork markets probably won’t be able to maintain the excitement of this spring when live hog prices reached the mid-$60s in early-to-mid-May. Recent concerns over European debt have caused many markets to be more cautious about world economic recovery and consumer demand. The related strengthening of the dollar has also dimmed prospects for meat exports. Last year demonstrated just how critical a recessionary economy was in weakening pork demand. A more cautious world now likely means some moderation in pork prices from recent lofty levels, but prices are not going to fold either.

The best news is that pork supplies are down and will stay down for the rest of the year. Pork production so far this year has been down four percent, and with population growth and expanded trade, per capita availability has been down about five percent. Per capita supplies should be down near eight percent this summer, then down three percent to finish the year. Limited amounts of pork should help maintain very strong prices, especially through the summer.”

Yesterday’s update added that, “There is another problem on the horizon, and that is higher retail prices. Data through April shows that U.S. retailers still had not increased the price of pork to consumers. In the first four months of the year, retailers sold pork five cents per pound cheaper than in the same period in 2009. This means that the sharp increase in the farm level prices this spring are primarily being absorbed by much smaller retail margins. That won’t last. You can bet that retail prices will soar in coming months.”

Financial Regulation

Victoria McGrane and Damian Paletta reported yesterday at The Wall Street Journal Online that, “Congressional leaders began putting together the team of U.S. lawmakers Monday that will finalize sweeping changes to U.S. financial markets, and the expected lineup suggests banks could face an uphill battle eliminating the more onerous curbs on their business.

“U.S. Senate leaders are expected as soon as Tuesday to appoint seven Democrats and five Republicans. Senate Banking Chairman Christopher Dodd (D., Conn.) and Agriculture Chairman Blanche Lincoln (D., Ark.) are expected to play a key role for Democrats, while Sens. Richard Shelby of Alabama and Judd Gregg of New Hampshire are anticipated to be among those representing the GOP.

“The roster of Senate Democrats, which is also said to include Sens. Patrick Leahy of Vermont and Tom Harkin of Iowa, suggests the conference will be dominated by veteran lawmakers. That could leave few seats for the Democrats elected in recent years who are generally seen as more friendly to business.”

Keith Good

Comments are closed.