September 18, 2019

Farm Bill; Biofuels-Climate Issues; Trade; Acreage Report; and Financial Reform

Farm Bill: Senate Hearing

A Senate Agriculture Committee news release from yesterday stated that, “U.S. Senator Blanche Lincoln (D-Ark.), Chairman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, today called for strengthening the safety net for family farmers and ranchers as she led the Committee in its first farm bill hearing. Today’s hearing focused on maintaining a strong U.S. farm policy and was the first of several that will take place this year as the Committee prepares to reauthorize the 2012 farm bill. Secretary of Agriculture Tom Vilsack, and Dow Brantley, an England, Arkansas producer, were among those who testified.

“‘I am proud of our farmers and ranchers that put food on our table, clothes on our back, and fuel in our cars and trucks. As the daughter of an Arkansas rice farmer, I understand the significant challenges that unpredictable weather and competitive global markets present to those who clothe and feed us. As Chairman of the Senate Agriculture Committee, Arkansas farm families and producers throughout the nation can rest assured that I will fight for policies that allow them to continue to provide the safest, most affordable supply of food and fiber in the world,’ said Lincoln.”

The release noted that, “Others who testified at today’s hearing included Bob Stallman, President of the American Farm Bureau Federation [related news release]; Roger Johnson, President of the National Farmers Union [related news release], Thomas Cochran, a Georgia producer; Chris Pawelski, a New York producer; and Mark Watne, a North Dakota producer. Lincoln questioned the witnesses on the success of current farm safety net programs and discussed ways to improve the programs.”

In her opening statement at yesterday’s hearing, Chairman Lincoln noted in part that, “[W]e need to look before we leap. More than anything else, I think most American farm and ranch families simply want steady, predictable, supportive policies coming out of Washington… and for us to otherwise get out of their way. Huge policy fluctuations, mixed signals coming out of Washington, and the uncertainty that these things create make it very difficult for our producers to compete, invest, and plan for the future. So, rather than start from scratch or from some new fangled idea cooked up in Washington or in some college professor’s office, we need to reassure our farmers and ranchers that we will start where we left off: the 2008 Farm Bill. If we can do better by our producers in 2012, great. But, if not, current law serves as the benchmark from which we will work.”

A news release yesterday from Sen. Pat Roberts (R-Kansas) indicated that, “At a hearing of the Senate Committee on Agriculture on the 2008 Farm Bill with U.S. Secretary of Agriculture, Tom Vilsack, Senator Roberts again urged the Secretary and members of the committee to promote the interests of all farmers and ranchers and was critical of new burdensome regulations, cuts to crop insurance and a meager trade agenda. Roberts was also critical of the media’s portrayal of production agriculture.”

In a related item, Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “Agriculture Secretary Tom Vilsack, who’s been criticized by some in agribusiness for his promotion of small-scale farmers, gave a passionate defense of conventional producers at a Senate hearing today and got into a dispute with a cable TV show in the process.

“He told the Senate agriculture committee that the public owes farmers gratitude for how little Americans pay for food, an estimated 10 percent of their income on average.

“‘You may never need a police officer. I hope you never need a police officer. But every day, two or three times a day, you need a farmer,’ the former Iowa governor said in response to a question from Sen. Pat Roberts, R-Kansas.”

To listen to a portion of the exchange yesterday between Sen. Roberts and Sec. Vilsack, click on this audio clip (MP3-7:02).

Mr. Brasher also noted that, “But even as Vilsack defended conventional farming, he also kept up his push to increase the numbers of new small- and medium-scale farmers. He suggested Congress make it a goal to add 100,000 new farmers, an echo of a Clinton-era program to put an additional 100,000 police officers on the streets.”

Senate Ag. Comm. Ranking Member Saxby Chambliss noted yesterday that, “[A]griculture spending is a small share of the federal budget. Over the ten-year projected period of 2011 through 2020, the Congressional Budget Office (CBO) estimates Commodity Credit Corporation outlays as 0.24 percent, less than one half of one percent of all mandatory and discretionary spending. Adding nutrition program spending raises the share to just 2.31 percent of the total federal budget.”

Sen. Chambliss also asked Sec. Vilsack about USDA’s “five pillars” (trade, rural broadband, renewable energy, conservation and research) that will make Rural America stronger; specifically, Sen. Chambliss asked, “Where do production agriculture and commodity and risk management programs fit into that picture of those five pillars?” To listen to this exchange, just click here (MP3-3:06).

Budget and Farm Bill baseline issues were also discussed at yesterday’s hearing.

To listen to a discussion on this issue with Chairman Lincoln and Sec. Vilsack, which included comments about the recently released Standard Reinsurance Agreement, just click here (MP3-2:50).

Nebraska GOP Senator Mike Johanns also asked about the Farm Bill baseline issue in greater detail. As part of this discussion with Sec. Vilsack, Sen. Johanns also asked for analysis from USDA’s Chief Economist on the broader development of the relative share of farm payments going to traditional counter-cyclical commodity payments versus crop insurance payments. Sen. Johanns indicated that he would like more details on “the inter workings” of this payment allocation dynamic. To listen to this exchange, just click here (MP3-5:24).

In related news regarding crop insurance, DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “USDA Risk Management Agency Administrator Bill Murphy said today that his agency has sent crop insurance companies a revised final offer of a new standard reinsurance agreement. RMA gives the companies until July 12 to sign it.

“The original deadline was today.”

Mr. Hagstrom added that, “After a Senate Agriculture Committee hearing, Murphy told reporters that he had made concessions to the companies on the structure of the agreement but did not made any changes in the proposal to cut $6 billion in the program or to put restrictions on agent commissions. The companies and the agents have said the cuts the Obama administration has made using authority given to RMA in the 2008 farm bill may lead to delivery service problems, but the companies are expected to sign the agreement.

“Agriculture Secretary Tom Vilsack told the Senate Agriculture Committee today that he believes the new agreement is fair and that the new commission structure will give agents ‘a fair return for their work.’”

Biofuels- Climate Issues

Todd Neeley reported yesterday at DTN (link requires subscription) that, “U.S. Agriculture Secretary Tom Vilsack sent a message Wednesday to Congress members to pass comprehensive energy legislation this year.

“The U.S. Supreme Court already has cleared the way for the Environmental Protection Agency to regulate greenhouse gas emissions.”

The DTN article indicated that, “However, during his keynote speech at the 25x’25 national summit in Washington, D.C., Vilsack said Congress should make that decision.

‘It’s not as if nothing is going to happen,’ he said. ‘The question is who is going to define what happens. Even (EPA) Administrator (Lisa) Jackson would rather there be legislative direction rather than administrative. It’s better that the people’s representatives act on this.’”

Mr. Neeley stated that, “Just last week, USDA released a report that outlines a plan to move the U.S. to 36 billion gallons of biofuels production by 2022.

“That includes plans to build new biorefineries in all 50 states that will use a variety of feedstocks to make ethanol, making blender pumps available across the country and expanding the number of flexible fuel vehicles.

In light of that report, Vilsack said federal lawmakers need to implement policies to spark biofuels production, including reinstating the $1 biodiesel blenders credit that expired last December and extending the 45-cent ethanol blenders tax credit that expires at the end of 2010. And the EPA should approve a move to E15.”

Yesterday’s article added that, “Growth Energy CEO Tom Buis said part of comprehensive energy legislation should remove barriers to expand ethanol production.

“‘What we need is comprehensive legislation,’ he said. ‘We want to see more FFVs, blender pumps, loan guarantees for ethanol pipelines — we want to see a lot of things. The toughest thing in any business is uncertainty. If you’re an investor and you know the tax credit is good for one year, it’s not enough. They need some certainty.’

Comprehensive energy legislation, Vilsack said, is about creating jobs in some of the poorest areas in rural America.”

In related developments, a news release issued yesterday by Rep. Adrian Smith (R-Neb.) stated that, “Today, Reps. Stephanie Herseth Sandlin (D-SD) and Adrian Smith (R-NE) introduced the Consumer Fuels Choice Act of 2010. The legislation would increase the use of clean renewable biofuels by providing grants to defray the cost of installing blender pump infrastructure. A ‘blender pump’ is a fuel pump capable of dispensing at least three different blends of gasoline and ethanol, as selected by the pump operator.

“The spread of blender pumps around the country would allow a much larger group of consumers to choose varying blends of ethanol and gasoline for their vehicles. Nationwide, most of the approximately 165 stations which currently have blender pumps are located in the Midwest.

The Consumer Fuels Choice Act will authorize grants of 50 percent of the cost of installing blender pumps and storage tanks for the sale of ethanol fuel blends, including E-85 fuel. Nebraska, a leader in ethanol production, lags behind in fueling stations with only four. South Dakota currently has 49 locations with about 95 blender pumps.”

In a broader looker at legislative developments on climate issues, Evan Lehmann and Saqib Rahim of ClimateWire reported yesterday at The New York Times Online that, “Republican Sen. Olympia Snowe expressed support yesterday for making electric utilities pay fees for releasing carbon dioxide, giving Senate Democrats a critical Republican supporter in their stalled pursuit of climate legislation.

“The assertion could inject momentum into a downsized plan to regulate emissions, supporters say, following weeks of impasses and fractured opinions around a broader bill that sought to cut carbon from thousands of businesses.

“Snowe, a moderate from Maine, has been discussing the utility option privately with colleagues for months, one source said, seeing it as politically appealing even as Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) were developing legislation to include refineries and factories under the cap.”

Darren Samuelsohn and Coral Davenport reported yesterday at Politico that, “Sen. Lindsey Graham (R-S.C.) said he had doubts that a utility-only proposal such as the one Democrats floated at a White House meeting Tuesday could get enough traction, given competing interests and the short calendar before the elections.

“‘Somebody’s got to produce a proposal the utilities can agree to, a chance to look at it, and the environmental community would have to sign off on it,’ Graham said. ‘That’s a heavy lift between now and then.’

“At the White House session, Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) explained they’d be willing to work on a proposal that focuses only on power plant emissions rather than the sweeping package they offered last month that also covered greenhouse gas emissions from transportation and large manufacturers.”

Bloomberg writers Lisa Lerer and Simon Lomax reported yesterday that, “Democrats don’t hold enough seats to pass an energy bill without some Republican support and remain split over the scope of the legislation. Party leaders have been looking for Obama’s help to mend the rift within their party and secure a handful of Republican votes.”

The article added that, “[Sen. Leader Harry Reid (D-Nev.)] plans to introduce energy legislation in mid-July and has yet to decide on the parameters of the bill, spokesman Jim Manley said. Democrats would consider the legislation before voting in August to confirm Elena Kagan to the Supreme Court, said Manley.

“The Senate has little time to get energy legislation passed into law this year, Republicans said.

“‘Our enemy when it comes to advancing an energy policy right now is the calendar and the timing,’ Senator Lisa Murkowski, an Alaska Republican, told reporters.”

And Darren Goode reported yesterday at The Hill’s Energy Blog that, “Adding to the growing list of ads pushing for Senate action on climate and energy policy this summer, the Environmental Defense Action Fund on Wednesday launched a $3 million TV campaign targeting a bipartisan list of 20 mostly-centrist senators.”


Yeganeh June Torbati reported in today’s New York Times that, “The House Agriculture Committee voted Wednesday to reverse a decades-long ban on United States citizens traveling to Cuba and to ease restrictions on the sale of American commodities there.

“Though the vote is only a first step toward Congressional approval of the changes, supporters view it as a significant step toward normalization of the relationship between the countries.

“The bill, the Travel Restriction Reform and Export Enhancement Act, must still go through the Foreign Affairs and Financial Services Committees before it can be considered by the full House. Then the Senate would have to act.”

The Times article added that, “Proponents of the bill said it would be a major boost for American farmers. The bill, which would allow American commodities to be sold directly to Cuba and allow some direct financial transactions with Cuban banks, is supported by several business and farming groups, including the U.S. Chamber of Commerce and the National Farmers Union.

“‘This is a great opportunity to expand trade,’ said Representative Collin C. Peterson, Democrat of Minnesota and the chairman of the committee. He added that American travel to Cuba would ‘show the Cuban people how great democracy can be.’”

The AP reported yesterday that, “The House Agriculture Committee voted 25-20 to allow travel to Cuba and make it easier to sell U.S. agricultural exports there. Farm-state members of Congress have long supported expanding opportunities to sell food to the island.”

Reuters writer Doug Palmer reported yesterday that, “The 25-20 vote in the House of Representatives Agriculture Committee sets the stage for a potentially blistering debate this year in both the full House and the Senate.

“‘We have tried isolating Cuba for more than fifty years and it has not worked,’ House Agriculture Committee Chairman Collin Peterson said. ‘Today’s vote demonstrates that Congress is ready to change our nation’s approach on this issue.’”

Both the American Farm Bureau Federation and the National Farmers Union applauded the passage of the Cuban trade measure.

Acreage Report

A news release yesterday from USDA’s National Agricultural Statistic Service stated that, “U.S. farmers planted 78.9 million acres of soybeans, exceeding last year’s planted area by 1.4 million acres, or 2 percent, and setting a new record high, according to the Acreage report released today by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS).

Farmers also planted a near record-breaking 87.9 million acres to corn, up 1.4 million acres from last year but down 1 percent from March. This marks the second consecutive increase in planted acreage to corn and the second highest acreage on record since 1946, only behind 2007.”

The release added that, “NASS also released the quarterly Grain Stocks report today, showing corn stocks up 1 percent from June 2009, soybean stocks down 4 percent and all wheat stocks up 48 percent. Despite the increase in corn stocks from this time last year, there was a 3.38 billion bushel disappearance between March and May. This is the highest disappearance on record for corn during this quarter.”

Ian Berry reported in today’s Wall Street Journal that, “Fresh U.S. government data rattled corn markets on Wednesday, sending futures prices soaring 9% and raising questions about the precision of earlier estimates.”

“Corn for July delivery ended up 29.25 cents, or 9%, at $3.5425 a bushel on the Chicago Board of Trade. The most actively traded contract, for delivery of corn in December, jumped 8.6% to $3.735. Most contracts opened already at the daily limit for moves in the price of corn in either direction. At its highest point, July corn was up 9.8% and December was up 8.7%.

“Prices are down 17% from the 2010 high set before the January report was released.”

Bloomberg writers Jeff Wilson and Alan Bjerga reported yesterday that, “U.S. farmers sowed 87.872 million acres (35.6 million hectares) with corn, less than expected and below a prior government forecast as below-average temperatures and wet weather in May interfered with field work.

“In a March survey, growers indicated they would plant 88.789 million acres. The average estimate of 14 analysts in a Bloomberg News survey was 89.252 million acres. A year ago, 86.482 million acres were planted, the U.S. Department of Agriculture said today in a report.”

Financial Reform

Brady Dennis and Jia Lynn Yang reported in today’s Washington Post that, “The House approved new financial regulations Wednesday, but Senate leaders postponed a vote on the bill, preventing the landmark legislation from reaching President Obama’s desk until at least mid-July.

“House members voted 237 to 192 to approve the final version of the bill, which emerged from the House-Senate conference committee earlier in the week. The sweeping legislation would, among other things, set up an independent consumer bureau within the Federal Reserve to protect borrowers from lending abuses, establish oversight of the vast derivatives market and enable the government to wind down large, failing firms.”

A House Ag. Comm. news release from yesterday stated that, “House Agriculture Committee Chairman Collin Peterson today commended the House of Representatives for passing the conference report on the Wall Street Reform and Consumer Protection Act (H.R. 4173).

“‘I am pleased the conference report contains many of the provisions the House Agriculture Committee endorsed in three different bills on these topics,’ Chairman Peterson said. ‘This bill will mitigate the outrageous price spikes in commodity markets that we first saw two years ago, bring greater transparency to the derivatives market through mandatory clearing and ensure that end users can continue using derivatives to hedge risk.’

“‘This comprehensive legislation represents a middle ground between the House and Senate products. And, while no one got everything they wanted in this bill, I think we got a bill that will help prevent another crisis in the financial markets like the one we experienced in 2008,’ Chairman Peterson said.”

Keith Good

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