Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “The Agriculture Department expects to pay farmers about $430 million for the first year of a new subsidy program, but little of that money is headed for Iowa. Most of the money is going to wheat producers, not the corn growers who pushed for the program, which goes by the name ACRE, which stands for Average Crop Revenue Election. The payments are tied to fluctuations in farm revenue, a combination of crop yields and prices, rather than changes in prices alone.
“The USDA announced today which states would get payments for crops such as corn, soybeans and grain sorghum for 2009. The total payments for all crops are estimated to total about $430 million with about 70 percent of that going to wheat producers and 23 percent to corn growers. Oklahoma, Washington, Illinois, South Dakota, and North Dakota are expected to get about 75 percent of the money, said Isabel Benemelis, a spokeswoman for the USDA’s Farm Service Agency. Farmers in Iowa didn’t qualify unless they grew wheat or oats, relatively minor crops in Iowa for which prices fell sharply in 2009. Illinois corn growers are qualifying for the money because of yield losses they suffered in 2009.”
Reuters writer Charles Abbott reported yesterday that, “Pioneers in cellulosic ethanol, tapped to leapfrog corn-based ethanol, say they are studying or plan to use a new U.S. program that pays farmers and forest owners to experiment with energy crops.
“The Biomass Crop Assistance Program, estimated to cost $461 million, took effect on Wednesday. A wide variety of materials are eligible for support, from wood chips and crop residues to switchgrass, woody plants, algae and animal and food waste.
“U.S. officials say the program will assure a supply of non-food feedstocks as the infant cellulosic industry grows.”
Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “Soft drinks sweetened with corn may have a bigger impact on weight gain and other health issues than previously thought, if a study of fructose levels in sodas stands up.
“The study being published this week in the journal Obesity found that the sugar found in soft drinks may contain as much as 65 percent fructose. The corn sweetener level used in sodas is supposed to contain a nearly equal mixture of fructose and glucose, a similar ratio to that found in table sugar. Fructose tastes sweeter than glucose and fructose may be a larger contributor to weight gain because of the way the body metabolizes it, said the researchers at the University of Southern California. Fructose consumption also may be linked to high blood pressure and other health problems. The highest levels of fructose were found in Coca-Cola, Sprite and Pepsi products, both those sold in bottles and as fountain drinks.
“Representatives of the American Beverage Association and the Corn Refiners Association disputed the results. Maureen Storey, a senior vice president of the ABA, said it is implausible that the soft drinks would contain more than 55 percent fructose, the level found in the high fructose corn syrup used to sweeten them.”
Scott Kilman reported in today’s Wall Street Journal Online that, “The Agriculture Department is standing by its forecast for unusually tame food-price inflation this year but warned Monday that the broad rally in farm commodity prices since midsummer will take a bigger bite out of consumers’ wallets next year.
“In its monthly food-price inflation forecast released Monday, the USDA stuck with the prediction it first made in late August that the government’s widely followed consumer-price index for food will rise between 0.5% and 1.5% this year, which would be the smallest increase since 1992.
“The USDA also left unchanged its forecast for retail food prices to climb by a more typical rate of between 2% and 3% in 2011.”
Mark Maslyn, the executive director of public policy at The American Farm Bureau Federation, penned an outline piece looking at agricultural issues that was posted at The Hill’s Congress Blog on Friday (“A fresh look at agriculture in the 112th Congress”).
In part, Friday’s update noted that, “There’s no question that the 112th Congress will bring new faces and changes to Washington. A few may be familiar with farm policy, but like the public-at-large, most of them won’t. Even the agriculture committees that will write the next farm bill won’t be immune to these changes. As with any new Congress, the American Farm Bureau Federation is looking forward to working with new members to help them better understand one of the nation’s most vital industries.
“With the farm bill, we realize we are living in a different economic and political landscape as compared to when the 2008 farm bill was written. So, as the new agriculture committees settle in and begin work on this important legislation, Farm Bureau will work with committee members to help them understand the role of farm programs and develop a bill that provides an effective and responsive safety net for producers across the country.”
“Vilsack said the aid would assure renewable fuel consumption reaches 36 billion gallons by 2022, with the bulk of it coming from non-food sources such as grass, algae or woody plants.
“During a speech, Vilsack also urged Congress to revive a biodiesel tax credit and to extend, possibly at a lower rate, an ethanol tax credit due to expire on Dec 31. He said a 54-cent-a-gallon tariff on imported ethanol was likely to continue but eventually be phased out.”
Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “The future of the Iowa Farm Bureau’s proposal to scrap farm payments could hinge, at least for the near term, on the outcome of the Nov. 2 election.
“If Republicans take over the House, there is likely to be less urgency to taking up the farm bill next year, says IFB President Craig Lang. And he notes that the likely GOP chairman of the House Agriculture Committee, Oklahoma Rep. Frank Lucas, comes from a state where the direct payments are popular.”
Some testimony that was delivered by witnesses at that hearing has been posted at the Senate Budget Committee Online. Excerpts of comments made at the hearing included the following:
Ryan Pederson, President, Northern Canola Growers Association- “We feel that agriculture has already endured significant cuts in the crop insurance program as approximately $3.9 billion was trimmed recently. A significant portion of that cut was allocated to deficit reduction, which shows that agriculture has already made some necessary contributions to aid in our nation’s deficit problem. This has to be taken into account when cuts are demanded of growers during the discussions of the 2010 Farm Bill….A sound crop insurance program is critical to growers to protect against losses that can result from factors beyond our control. It is even more critical as input costs continue to increase at rates beyond the rate of inflation. The NCGA opposes cuts in the crop insurance baseline. Any reallocation of spending under the program should be used to pay for reforms needed to make it more effective on a nationwide basis…If changes to direct payments are to be made, we would ask that these funds be redirected into additional risk management tools such as crop insurance…We would like to see the ACRE Program focused at a more local level than is currently the case.”
Jeffrey Oberholtzer, Director, National Sunflower Association (NSA) – “Crop Insurance: This is the number one tool for sunflower farmers to protect farm income. Further strengthening of crop insurance programs will be supported by the NSA…Direct Payments: There is general agreement within the board that direct payments should be reinvented if this program is a lightning rod for farm program opponents. Obviously no one wants to give up an income stream like direct payments. However, if direct payments are viewed negatively by the public then adjustments should be made. We would support redirecting at least a portion of these payments to further strengthen crop insurance programs or possibly SURE and ACRE programs…SURE and Disaster Programs: We have not had much experience with the SURE program but give Congress high marks for putting a permanent disaster program in place.”
Robert Carlson, President of the North Dakota Farmers Union- “A shift of direct payments to a new or better program that reflects cost of production plus inflationary safety nets is also favored by our members. The Average Crop Revenue (ACRE) program was an attempt to begin this process, but was complicated from a farmer’s perspective. The program has two levels of payment triggers to meet before it would make payments. It also involves a commitment from all landlords and a commitment for the life of the program that may not match the land rent agreement. A program like ACRE may work if the state payment trigger could be moved to a much smaller region or an individual farm payment trigger.”
Steve Edwardson, Executive Director of the North Dakota Barley Council- “Providing growers with a holistic safety net is critical to maintaining stability in agricultural production and the supply of human food and livestock feed. Improved risk management products are a primary component of a safety net, and will assist in preventing further erosion in the downward trend of barley production.”
James Q. Lynch reported yesterday at the Newton Daily News Online (Iowa) that, “It may be 2010, but Rep. Leonard Boswell has been working on the 2012 Farm Bill and warning that farmers may see some cuts in agricultural programs as Congress tries to rein in the federal debt.
“The next farm bill will include a safety net, the seven-term Des Moines Democrat told The Gazette Editorial Board last week, but programs may have to be capped or ‘adjusted.’
“‘There’s going to be a major effort to get our arms around reducing the debt and starting to draw back on it,’ said Boswell, who served 20 years in the Army, farmed and served in the Iowa Senate before being elected to the U.S. House.”
“They reasoned that a farmer-friendly bill would boost the party’s standing and help restore the urban-rural coalition that enabled Democrats to rule the House for much of the last two-thirds of the 20th Century.
“At a key moment in the House debate, Speaker Nancy Pelosi, a liberal Democrat from San Francisco, sided with the farm bloc against reform-minded lawmakers pushing to slash traditional subsidies on crops. When President Bush vetoed the legislation, Democrats in both the House and Senate voted overwhelmingly to override him.”
Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “Agriculture Secretary Tom Vilsack vigorously defended federal farm subsidies today, saying they’ve enabled American’s to have relatively cheap food, a claim strongly disputed by economists.
“Even though prices for most subsidized crops are soaring this year, Vilsack said farmers still need subsidy program to protect them from future drops in prices.
“‘Who benefits ultimately for all of this? I would argue that it’s not the 250,000 to 270,000 farmers who benefit from this structure. It is actually the rest of us that benefit,’ Vilsack said in a meeting with the Register editorial board. He said Americans have more disposable income than people in the rest of the world because U.S. consumers spend just 10 to 15 percent of their earnings on food.”
A news release from EPA yesterday indicated that, “The U.S. Environmental Protection Agency (EPA) today waived a limitation on selling fuel that is more than 10 percent ethanol for model year 2007 and newer cars and light trucks. The waiver applies to fuel that contains up to 15 percent ethanol – known as E15 – and only to model year 2007 and newer cars and light trucks. This represents the first of a number of actions that are needed from federal, state and industry towards commercialization of E15 gasoline blends. EPA Administrator Lisa P. Jackson made the decision after a review of the Department of Energy’s (DOE’s) extensive testing and other available data on E15’s impact on engine durability and emissions.”
The release noted that, “A decision on the use of E15 in model year 2001 to 2006 vehicles will be made after EPA receives the results of additional DOE testing, which is expected to be completed in November. However, no waiver is being granted this year for E15 use in model year 2000 and older cars and light trucks – or in any motorcycles, heavy-duty vehicles, or non-road engines – because currently there is not testing data to support such a waiver.”
Dan Feldner reported yesterday at the Minot Daily News Online (North Dakota) that, “The first hearing on the 2012 Farm Bill to be held in North Dakota happened Monday afternoon in Mohall, as six area producers gave testimony to Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee, on what they would like to see included.”
The article noted that, “‘Agriculture is still the number one part of our economy,’ Conrad said. ‘The farm bill plays a big role in how effective the agricultural economy is for our state, and I’m pleased to report to you that North Dakota came out number one in terms of per capita payments under the farm bill. And we are number one by a big margin.’
“Conrad said $700 million a year flows to North Dakota producers through the farm bill, equating to per capita payments of $2,628 per person. He noted the next state, South Dakota, got about half as much per capita as North Dakota did.”
Scott Kilman reported in today’s Wall Street Journal that, “Major agricultural commodities continued their extended run-up in price, underscoring how much of America’s farm belt is booming even as the overall economy continues to struggle.
“Contracts for the delivery of corn and soybeans into mid-2011 jumped Monday by 5% and 2%, respectively, after rising their daily permissible limits on Friday, when the U.S. Department of Agriculture sliced production estimates by small percentages. Cash cotton prices rose 3.3% Monday after a 3.9% gain Friday. They are 86% higher than a year ago.
“For many crops, prices are climbing even as big harvests pile up, a rare combination. Farmland values are up while those for some other kinds of real estate languish. Debt on the farm is manageable. Incomes are rising.”
On Friday, USDA’s National Agricultural Statistics Service (NASS) released its Crop Production report, which indicated that, “Corn production is forecast at 12.7 billion bushels, down 4 percent from the September forecast and down 3 percent from last year’s record production of 13.1 billion bushels [related graph]. Based on conditions as of October 1, yields are expected to average 155.8 bushels per acre, down 6.7 bushels from the previous month and 8.9 bushels below last year’s record of 164.7 bushels.”
The NASS report added that, “Soybean production is forecast at a record high 3.41 billion bushels, down 2 percent from September but 1 percent above last year [related graph]. Based on October 1 conditions, yields are expected to average a record high 44.4 bushels per acre, down 0.3 bushel from last month but up 0.4 bushel from last year.”
A news release yesterday from the U.S. Environmental Protection Agency (EPA) indicated that, “[EPA] has issued its fiscal year (FY) 2011 to 2015 strategic plan, which provides a blueprint for advancing EPA’s mission and Administrator Lisa P. Jackson’spriorities.
“This plan presents five strategic goals for advancing the agency’s environmental and human-health mission, accompanied by five cross-cutting fundamental strategies that seek to adapt the EPA’s work inside and outside of the agency to meet the growing environmental protection needs of the day. The plan will guide the agency to foster a renewed commitment to new possibilities for achieving the vision of a cleaner, greener, and more sustainable environment.”