Reuters writer Richard Cowan reported yesterday that, “The Senate is set to vote next month on permanently stopping the Environmental Protection Agency from regulating pollution linked to global warming from factories, utilities and oil refineries, a spokesman for Senator Lisa Murkowski said on Tuesday.
“The Republican effort, which enjoys the support of at least three Democrats [Blanche Lincoln (Arkansas), Ben Nelson (Nebraska) and Mary Landrieu (Louisiana)], is unlikely to become law. But a strong vote for the measure could further undermine chances for separate legislation to control emissions of carbon dioxide and other greenhouse gases that President Barack Obama wants.
“The vote on EPA regulation could come just as federal agencies wrap up their economic analysis of climate change legislation by Democratic Senator John Kerry and independent Senator Joseph Lieberman, which already faces an uphill fight.”
The article added that, “Murkowski spokesman Robert Dillon said the senator reached an agreement with Senate Majority Leader Harry Reid to hold a vote on her measure on June 10.”
Amy Harder reported yesterday at the NationalJournal Online that, “Sen. Jay Rockefeller, D-W.Va., expressed frustration today that he does not have more supporters for his amendment that delays EPA regulation of greenhouse gas emissions for two years.
“‘I’m having difficulty, for reasons that are troublesome to me, in getting enough co-sponsors,’ Rockefeller said. ‘And that doesn’t mean I can’t bring it to the floor, but I just don’t know — it’s a sort of nervousness about the climate bill.’”
Ms. Harder added that, “The offices of Sens. Robert Casey, D-Pa., and Thomas Carper, D-Del., have been working on an alternative to Rockefeller’s and Murkowski’s efforts that would essentially throw congressional support behind EPA’s recently finalized ‘tailoring rule’ constraining regulation to only the largest stationary emitters.
“Casey said he and Carper may present their measure as an alternative to Murkowski’s on June 10 if it is ready. ‘I think it’s possible, but even what we’ve talked about with Senator Carper is not in any way finalized,’ Casey said. Carper said today that the discussion is only at the staff level so far. ‘They have not reached the member level, so stay tuned,’ he told reporters.”
Meanwhile, Michael O’Brien reported yesterday at The Hill’s Energy Blog that, “The authors of an energy and climate bill are hoping to bring it to the Senate floor in June or July, Sen. Joe Lieberman (I-Conn.) said Tuesday.
“Lieberman, the coauthor of a compromise energy and climate bill with Sen. John Kerry (D-Mass.), said they hope the legislation can come up for a vote in about a month, once he and Kerry have proven to Senate Majority Leader Harry Reid (D-Nev.) that they’re close to achieving 60 votes for their bill.”
In a separate update posted yesterday at NationalJournal.com, Amy Harder indicated that, “Sen. Lindsey Graham, R-S.C., said today the Senate should look to pass ‘smaller versions’ of energy and climate legislation in lieu of a comprehensive approach.
“‘I don’t see 60 votes right now for capping carbon and expanding offshore drilling,’ Graham said after the GOP’s weekly policy luncheon. The oil spill in the Gulf of Mexico has ‘made it a harder climb, so let’s do smaller versions of an energy-climate bill.’”
Yesterday’s update added that, “President Obama addressed Republicans at their luncheon today. When asked if Obama was open to moving forward with an energy-only bill, Graham responded: ‘Not particularly. He was talking about making sure China doesn’t own the alternative energy economy. I agree with that.’”
In a broader look at the President’s meeting with GOP Senators, Ben Geman reported yesterday at The Hill’s Energy Blog that, “President Barack Obama used a meeting with Senate Republicans Tuesday to press for action on energy and climate legislation this year, but faced headwinds in a session that senators described as ‘testy’ and ‘tense.’”
“‘On energy, the President told the conference that the gulf oil disaster should heighten our sense of urgency to hasten the development of new, clean energy sources that will promote energy independence and good-paying American jobs,’ the White House said in a statement after the meeting. ‘And he asked that they work with him on the promising proposals currently before Congress.’”
Mr. Geman indicated that, “[Sen. Lindsay] Graham said he believes Democratic plans to bring up immigration legislation, combined with the Gulf of Mexico oil spill, have made it politically impossible to advance the climate package.”
“[Sen. John] Kerry lauded Obama’s push for energy legislation and called for the president’s ‘continued engagement; in the effort,” The Hill update added.
Also with respect to yesterday’s meeting between Pres. Obama and GOP Senators, Manu Raju reported at Politico yesterday that, “‘The more he [Pres. Obama] talked, the more he got upset,’ Sen. Pat Roberts (R-Kan.) said. ‘He needs to take a valium before he comes in and talks to Republicans and just calm down, and don’t take anything so seriously. If you disagree with someone, it doesn’t mean you’re attacking their motives — and he takes it that way and tends then to lecture and then gets upset.’
“The White House said that Obama made a plea for bipartisanship on some of the country’s most pressing issues — and he urged Republicans to stand up to their base and compromise with the Democratic Party.”
The article also noted that, “‘He [Pres. Obama] wants to do immigration, climate change — all before we go home — he’s a very ambitious guy,’ said Sen. Mike Johanns (R-Neb.). ‘I think he needs to step back and see where the country is at.’”
Reuters writer Tom Doggett reported yesterday that, “World oil demand will continue to grow through 2030, but demand that year will be about 2.5 percent less than previously thought due to use of renewables and higher oil prices, the U.S. government’s top energy forecasting agency said on Tuesday.
“In its annual forecast, the Energy Information Administration said global oil demand will average 103.9 million barrels per day in 2030, down from the agency’s 106.6 million bpd demand estimate in last year’s forecast.”
Meanwhile, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “The tax extenders bill, HR 4213, appeared incredibly close to getting a floor debate as early as Tuesday in the House. It was on the calendar, but now appears to be again in limbo. The Congressional Budget Office came out with a report Friday saying the bill would increase the budget deficit by $134 billion to $140 billion over 10 years, depending on how Congress wants to interpret its own budget rules. Given the nervousness of incumbents over being linked to deficit votes, it now appears that House Democrats don’t have the votes to pass the measure.
“Among the provisions in the bill is the extension/renewal of the $1 biodiesel blenders tax credit, retroactively renewing the tax credit from Jan. 1 and extending it to the end of this year.
“Further, the bill also has $1.5 billion in agricultural disaster assistance in it that Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., pushed in the Senate.”
Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “A credit crunch may be starting to show up on the farm, says Agriculture Secretary Tom Vilsack. He told a group of agribusiness lobbyists today that he is hearing anecdotally about large-scale dairy operations and other farms that are having trouble getting operating loans.
“Vilsack is concerned that the crunch is also going to reach medium-scale operations.”
Credit issues have also come up in some of the recent House Ag Committee 2012 Farm Bill hearings.
In the May 13 hearing in Washington, D.C. (unofficial FarmPolicy.com transcript), University of Illinois Ag Economist Paul Ellinger explained that, “In general, ag lenders have performed well through the crisis. They continued to offer credit during the crisis, and they continue to do so. Agriculture, as an industry, uses a lower amount of debt relative to other sectors. If you compare the total amount of debt in the sector of $250 billion, it is dwarfed by what has been spent in Wall Street at the larger institutions in the recent past. We have a very diverse set of lenders in ag…Loss rates, although they have been increasing during the first part of the crisis, they’re not near at the level of the other sectors in our economy.
“The key stress sectors in the portfolios of ag lenders are dairy, pork, poultry, ethanol and timber. The increased unemployment in rural areas has certainly impacted debt repayment capacity of many farmer borrowers. Historic repayment capacity has relied very heavily on non-farm income, and this is being jeopardized with the amount of unemployment in this area.
“Now, related to the policy issues related to credit, if we’re looking at continued access to credit and credit availability, I think that one of the most important pieces is what Professor Babcock talked about this morning. Having adequate risk controls in place will allow credit to continue. I think this is a very critical piece as we continue to look at making tweaks to the system and changes in risk management. I think the risk management and the risk management aspects will be very important to lenders in the future.
“My concern is risk in the sector is being pushed back to the producer. [Rep. Frank Lucas (R-Oklahoma)] talked about increasing interest rate risk. We have increasing volatility in commodity markets. We have increasing risks related to contractual and counterparty risks. A lot of this risk now is going back to the producer, and we need mechanism for risk management and risk education as a result of that.”
At the May 15 hearing in Alabama (unofficial FarmPolicy.com transcript), Rep. Bobby Bright (D-Alabama) asked farmers, “Would you, each one, take an opportunity and let us know what effect, if any, whether it’s positive or negative, the credit crunch or the lack of credit that has been the subject of our economy over the last number of months, couple of years, has it affected you, and if it’s affected you, how has it affected you?”
– “As of this point, we have not been affected by available credit…But if we continue to produce a crop at a loss, it’s just a matter of time.”
– “We’ve not been affected by it. As long as you can show a cash flow, we got availability for plenty of credit.”
– “I personally have not been affected by the lack of credit, but it runs up the cost of everything else when other people are having problems.”
– “Personally I haven’t been affected, but I would tell you this. I have had more phone calls because of the farm credit crisis that exists out there in the last 30 to 40 days, because farmers are trying to get production loans and the cash flow is a big issue.”
At the May 17 hearing in Texas (unofficial transcript of Panel One discussion that was posted yesterday at FarmPolicy.com), Rep. Mike Rogers (R-Alabama) asked a panel of producers, “And speaking of financing, have y’all found that the tightened credit standards are in any way affecting your ability to get money for your operations?”
Dairy producer Brad Bouma responded that, “Without a doubt, the downturn of the dairy industry and prices in the last 18 months, credit has definitely tightened up across the industry. Cow values are 60% of what they were two years ago, so balance sheet and asset values have dropped accordingly, and credit is definitely tougher to come by.”
At the hearing in South Dakota on May 18 (unofficial FarmPolicy.com transcript), Rep. Bob Goodlatte (R-Virginia) asked, “Because of federal overspending, have you noticed any tighter credit standards that you and other farmers are facing?”
One respondent noted that, “Personally we have not on my farm. I’ve heard some people saying that it’s a little bit more difficult to get their operating loan lined up for next year. I think more in terms of just bankers wanting more information and more documentation, possibly a more concrete marketing plan, things that we probably ought to be doing anyway. I haven’t really heard of a lot of people getting flat turned down at this point.”
In a separate look at agricultural economic variables, University of Illinois Ag Economist Gary Schnitkey indicated in a short paper from Monday (“Revised Corn and Soybean Budgets for 2009 and 2010”) that, “Illinois Farm Business Farm Management (FBFM) recently summarized financial records from Illinois farms for the 2009 year. Based on these summaries, 2009 corn and soybean budgets on [the farmdoc webpage] have been updated to reflect final farm data. In addition, 2010 budgets are revised based on 2009 updates.”
After detailed analysis, Dr. Schnitkey stated that, “Both corn and soybeans had lower net returns in 2009 as compared to 2008 (see Table 1). Corn return of -$29 in 2009 was $269 per acre below the $240 per acre return in 2008. Soybean net return of $66 in 2009 was $103 per acre lower than the $169 per acre return in 2008.
“Corn returns were below soybean returns in 2009. This was the first time since 2003 when corn returns was below soybean return.”
The brief paper added that, “Net returns in 2010 are projected at $45 per acre for corn and -$9 per acre for soybeans (see Table 1). Corn return is projected to be $54 per acre higher than soybean returns. Between 2001 through 2009, corn returns have exceeded soybean returns by an average of $36 per acre. The $54 projected higher returns for corn is above the 2001-2009 average.”
And Reuters news reported yesterday that, “Global economic woes and stock market declines are not causing investors to pull back from investments in U.S. farmland, and may even be encouraging the flow of more money to the sector, according to a leading U.S. agricultural investment executive.
“Despite a slow-down in appreciation values for U.S. farmland and a dip in net farm income, investors seeking counter-cycle, inflation hedge opportunities are continuing to pour money into the market, James McCandless, managing director of UBS AgriVest, told Reuters in an interview this week.”
The article stated that, “From 1990 through 2009, the average annual return on U.S. farmland ownership, including income and appreciation, was just over 11 percent, according to the National Council of Real Estate Investment Fiduciaries (NCREIF). The return in the first quarter of 2010 was 1.11 percent, according to NCREIF.”
The AP reported yesterday that, “An animal welfare group said Tuesday that a graphic video it secretly recorded shows workers at a dairy farm beating cows with crowbars, stabbing them with pitchforks and punching them in their heads.
“The video was recorded in an undercover investigation at Conklin Dairy Farms Inc., said Mercy For Animals, a not-for-profit group that publicizes what it calls cruel practices in the dairy, meat and egg industries and promotes a vegan diet.”
Reuters writer Charles Abbott reported yesterday that, “The U.S. government will soon propose rules to bar meatpackers from unfairly favoring big cattle feedlots and to give poultry producers more leverage, two small-farm groups said on Tuesday.
“The proposal would modify Agriculture Department guidelines on fair play in livestock and poultry sales. Activists say farmers are out-muscled by big packers who dominate meat processing. The 2008 farm law required action on the issue.
“Agriculture Secretary Tom Vilsack told agribusiness lobbyists on Tuesday that changes to marketing rules would be proposed in June but did not specify them. He said the changes would allow USDA to ‘do a better job of responding to some of the complaints we’ve heard’ from farmers.”
Ashley Southall reported yesterday at The New York Times Online that, “Wrangling over the federal budget in Washington has delayed payouts from a $1.25 billion settlement that [John W. Boyd Jr., the president of the National Black Farmers Association] and several others helped negotiate with the federal government to compensate black farmers who claimed that the Agriculture Department had discriminated against them in making loans.”
The Times article noted that, “A lawyer at one of the firms handling the farmers’ claims said last week that a majority of eligible farmers were over 65 and most were in poor health. Younger relatives, she said, often filed claims for farmers who are ill or dead. The lawyer, who asked that her name and that of her firm be withheld because she was not authorized to speak on the matter, added, ‘We have a lot of death certificates.’
“Their cases are an outgrowth of Pigford v. Glickman, a federal discrimination lawsuit brought by Timothy Pigford and about 400 other black farmers.”
Derek Wallbank reported yesterday at MinnPost.com that, “Congress is preparing to reconcile the two separate versions of financial reform passed by the House and Senate, and Rep. Collin Peterson is likely to be a key player as the only Minnesotan on the conference committee.
“‘It’s not going to be impossible, but it’s not going to be easy,’ to join the House and Senate’s financial reform bills, Peterson said.”
The update noted that, “Peterson is expected to win a spot on the conference committee due to his designation as chairman of the House Agriculture Committee. Peterson said his appointment would cover the areas in which his panel has jurisdiction, such as derivatives.
“‘Largely they followed what we had done,’ Peterson said. ‘Some of the changes they made are problematic.’”
The article said that, “One change Peterson listed as particularly problematic was end-user exemption rules.
“‘They made some changes in narrowing the end-user exemption which are problematic for some of my agriculture people,’ Peterson said. ‘The way they’ve got it constructed, from what I can tell, they’re going to pull in people that don’t need to be pulled in – people like John Deere and so forth.’”