FarmPolicy

August 17, 2019

Farm Bill; Ag Economy; Biotech, Climate Issues; and Political Notes

Farm Bill

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.”

Mr. Maslyn added that, “As far as environmental issues, there are proposals before Congress that would fundamentally alter the Clean Water Act by deleting the word ‘navigable,’ a term that serves as a limit on the reach of the federal government’s authority. These proposals would greatly expand federal water jurisdiction to include, in some cases, groundwater, ditches, farm and stock ponds and prior converted cropland.”

“On another regulatory matter, we support efforts in the lame duck session to block Environmental Protection Agency greenhouse gas regulations. These regulations, which will begin on January 2, will eventually affect the vast majority of the livestock industry and many farming operations, resulting in higher costs for farmers and ranchers. Many leaders, including President Obama and EPA Administrator Lisa Jackson, believe that the Clean Air Act is not the best way to regulate greenhouse gases. We agree.”

Meanwhile, Natalie J. Ostgaard reported on Thursday at the Crookston Daily Times Online (MN) that, “With the 2010 election campaign now in the home stretch, candidates are hitting the trail hard, trying to reach as many potential voters as they can. Gubernatorial Candidate Mark Dayton managed to squeeze in a meet-and-greet at the Steve Williams farm near Fisher between visits to Moorhead and East Grand Forks Tuesday, with 7th District U.S. Rep. Collin Peterson and State District 1 Sen. LeRoy Stumpf, all Democrats, there to support him and do a little subtle campaigning for their own seats.”

The article noted that, “Dialogue between Peterson and farmers dominated the question-and-answer session, with farmers asking about specific farm bill provisions, environmental and wildlife restrictions on drainage, crop insurance and the ACRE (Average Crop Revenue Election) program. Peterson eventually steered it toward Dayton by telling the audience to ask him some questions, although the governor hopeful said he enjoyed listening to the farm talk on the sidelines.”

A news release from USDA on Friday indicated that, “Agriculture Secretary Tom Vilsack announced that starting today up to $550 million in disaster assistance will be issued to producers of rice, upland cotton, soybeans and sweet potatoes that suffered losses because of excessive moisture or related conditions in 2009. This assistance will be issued by the Farm Service Agency (FSA) through the Crop Assistance Program (CAP).

“‘Producers of these crops suffered quality and quantity losses caused by excess moisture in 2009,’ Vilsack said. ‘They continue to feel the effects of those crop losses and this program will provide timely assistance.’

“Payments will be made available to producers of eligible crops that received Secretarial disaster designations due to excessive moisture or related conditions in 2009. A list of eligible disaster counties for CAP is located at http://disaster.fsa.usda.gov. Producers of eligible crops on farms in disaster counties who certify to a 5 percent or greater crop loss in 2009 due to excessive moisture or related conditions will receive a payment based on a predetermined payment rate times the planted acres of the crop.”

Ag Economy

Monte Whaley reported yesterday at the Denver Post Online that, “The Schlagel family has been pulling sugar beets out of the ground in and around this northern Colorado community for 100 years, but it’s never seen a yield quite like this year’s.

“‘Personally, I think this is the best crop I’ve seen in my whole life,’ said 56-year-old Paul Schlagel, who stood Friday in a 180-acre rolling field of beets that will soon be packaged as sugar for dinner tables.

A combination of science, market conditions and a few breaks from the weather have made this fall’s harvest in Colorado of several different crops the biggest and most profitable in a long time.”

The article stated that, “With a record-high average yield per acre of 45 bushels, Colorado’s winter wheat crop is expected to reach 105.75 million bushels, according to Colorado Wheat, a statewide group that tracks trends for wheat growers.

“Wheat prices paid to Colorado farmers, meanwhile, are projected to average up to $5.23 per bushel, compared with $4.50 last year.”

Yesterday’s Denver Post article noted that, “‘Agriculture is a huge industry in this state, and too many people underestimate its impact,’ said Norm Dalsted, a Colorado State University agriculture economist.

“A farmer makes money, then spends it on tractor repairs, groceries, fuel and other commodities, Dalsted said.

“‘When farmers have money, they spend it — new cars, pickups — it’s the best and most solid stimulus we have,’ he said.”

In a related article, Bloomberg writer Tim Higgins reported on Saturday that, “U.S. pickup sales are getting a boost from rising farm incomes, giving carmakers extra momentum as the auto industry recovers from the worst sales in almost three decades.

“In the first nine months of the year, pickup sales rose 14 percent to 1.2 million, according to Autodata Corp., a Woodcliff Lake, New Jersey-based researcher. The gain outpaced the 10 percent increase overall industry deliveries.

“‘Agriculture is helping out,’ Mark Fields, Ford Motor Co.’s president of the Americas, said yesterday in an interview at a truck event on a ranch near San Antonio. ‘When farmers have a good harvest, they invest in their businesses and a pickup is a tool.’”

Meanwhile, Pat Hill reported on Friday at the DTN Market Matters Blog that, “Thanks to healthy farm income, a measure of rural economic health in a 10-state area of the Midwest gained a little strength this month, but remained below a neutral reading.

“The latest Rural Mainstreet Index (RMI), compiled at Creighton University, rose to 48.4 in October from 47.6 in September, below the growth-neutral level of 50, but well above the 37.5 reported a year ago.

“A couple components of the RMI measure the farm economy directly, and both of these showed growth over last month and a big jump over a year ago. The farmland-price index moved above growth neutral for a ninth straight month to 60.0 from 57.7 in September and 55.3 in August. The agriculture-equipment sales index rose to 61.0 from 56.2 in September and 52.7 in August.”

The DTN item added that, “Several parcels of land auctioned in Iowa recently brought over $9,000 an acre, according to the CEO of a bank in Washington, Iowa, according to the news release for the index.”

In other news, Adam Cancryn reported on Saturday at The Wall Street Journal Online that, “Thunderstorms across parts of west Texas dumped golf-ball-size hail on the region’s cotton fields Thursday night, sparking a run-up in prices on fears the weather will damage the much-needed crop.

“The South Plains region, which houses much of the state’s cotton production, absorbed the brunt of the storms, according to weather reports, including more than two inches of rain and hail measuring as much as one inch in diameter.

With the global market leaning heavily on the U.S., the world’s biggest exporter of the fiber, to close an output gap, investors worried the storms would destroy significant amounts of the crop in Texas, the U.S.’s biggest grower.”

The Journal article explained that, “Cotton needs to be completely dry before it is harvested. The heavy rains in Texas not only will delay harvesting but could damage the crop or stir up mud that discolors the cotton and cuts its value.

“‘There’ll be some instances where possibly there’s damage beyond saving,’ said Shawn Wade, a spokesman for the Plains Cotton Growers Association in Lubbock, Texas. ‘It might take a couple of days before we get a better picture.’

Analysts said the hailstorms shouldn’t seriously affect total production, but in such a tight market, even small losses are cause for concern.”

On Friday, the USDA’s Economic Research Service (ERS) released a report titled, “How Much Lower Are Prices at Discount Stores? An Examination of Retail Food Prices.”

An ERS summary of the report stated that, “Nontraditional stores, including mass merchandisers, supercenters, club warehouse and dollar stores, have increased their food offerings over the past 15 years and often promote themselves as lower priced alternatives to traditional supermarkets. How much lower are food prices at these stores? In order to better understand nontraditional stores’ impact on the cost of food, ERS analysts evaluate food price differences between nontraditional and traditional stores at the national and market level using 2004-06 Nielsen Homescan data. Findings show that nontraditional retailers offer lower prices than traditional stores even after controlling for brand and package size. Comparisons of identical items, at the Universal Product Code (UPC) level, show an expenditure-weighted average price discount of 7.5 percent, with differences ranging from 3 to 28 percent lower in nontraditional stores than in traditional stores. Nontraditional stores in metro areas where such stores have a higher-than-average market share have smaller and less frequent price discounts than those in areas where such stores have a lower market share.”

Biotech

Dow Jones News reported on Friday that, “A federal judge ordered environmental groups and the U.S. Department of Agriculture to present more evidence at a coming hearing, insuring that a courtroom battle over the legality of some genetically modified beets will continue for at least a few more weeks.

“On Friday, Judge Jeffrey White of the U.S. District Court for the Northern District of California asked the government to provide the plaintiffs with unredacted copies of permits the USDA issued to agricultural companies producing the altered beet seeds. He also told the government to provide information to him about acreage that has been planted with the genetically modified seeds.

“In the case, the Washington-based Center for Food Safety and other groups are objecting to the planting of genetically modified beet seeds. Those seeds were planted with the USDA’s approval.”

The article indicated that, “The case is critical to the U.S. sugar industry. Sugar production will fall by about 20% if farmers are banned from planting genetically modified beets next year, according to data the U.S. Department of Agriculture prepared for the case.

“Genetically modified beets, approved just five years ago, currently account for about 95% of the U.S. sugar-beet crop.”

Climate Issues

Shai Oster reported on Saturday at The Wall Street Journal Online that, “The top U.S. climate-change negotiator said Friday after a ‘constructive’ meeting with his Chinese counterpart that ‘there’s a deal to be had’ at the November global-warming summit in Mexico.

U.S. Special Envoy for Climate Change Todd Stern laid out a set of modest goals that he said are within reach while talks on a broader global climate change accord continue into next year.”

The Journal article stated that, “Senior government officials from around the world will gather Nov. 29 for a ministerial meeting on global warming in the Mexican resort city of Cancun. The Copenhagen meeting last December to extend the Kyoto Protocol beyond 2012 ended with a nonbinding accord amid recriminations between China and the U.S., the world’s two biggest sources of global-warming gases.

“Hope for this year’s Cancun summit has been tempered by failure to move forward on many of the questions still being debated. At the heart of the issue is the question of fairness. Developing economies such as China and India say rich countries such as the U.S. should bear the heavier burden because they have a historical responsibility for carbon already in the atmosphere.”

Political Notes- Direct Payments

The New York Times currently classifies the Congressional race for the Third District of Indiana, which is a currently an open seat, as “Solid Republican.” The race includes Democratic candidate Thomas Hayhurst and GOP candidate Marlin Stutzman.

Sylvia A. Smith reported on Friday at the The Journal Gazette Online (Fort Wayne) that, “Marlin Stutzman, the Republican congressional candidate whose family farm operations have received $998,000 in agricultural subsidies since 1995, says it’s not possible for him to decline that money.

Although Stutzman says the direct payments should be eliminated, until they are, ‘we can’t say no.’ He has described the payments as ‘federal mandates.’

“The Agriculture Department says Stutzman could decline the checks.”

The article added that, “Stutzman said it’s a system he abhors. He would like to replace it with crop insurance so farmers could collect if prices fall because of weather conditions, oversupply or other factors that affect the price of crops.”

The New York Times currently calls the South Dakota Congressional competition a “Toss-Up;” and, a Rasmussen Report from Friday indicated that, “Republican Kristi Noem has moved slightly further ahead of incumbent Democrat Stephanie Herseth-Sandlin [House Ag Comm Member] in South Dakota’s election for the U.S. House of Representatives.

“The latest Rasmussen Reports statewide telephone survey of Likely Voters shows Noem, a state legislator, picking up 49% of the vote, while Herseth-Sandlin draws support from 44%. Two percent (2%) prefer some other candidate, and five percent (5%) are still undecided. (To see survey question wording, click here).”

In an October 20 sit down interview with the Argus Leader (SD) editorial board, Noem was asked about direct payments. Specifically, she was asked: “[W]ould you entertain major changes in the direct payment farm subsidy part of the Farm Bill, or are there parts that you would keep off limits for discussion?

Noem answered in part that, “The Direct payments is one specific portion of the Farm Bill and there would be some options there that I think if we could provide other tools for farmers and ranchers to make sure that their risk is managed– I know crop insurance has been a big help for that…[S]o if we could find the right combination of policies that are there to help them do that, I think that is something that should definitely be discussed.”

To listen to this exchange in its entirety, just click here (MP3- one minute).

Political Notes- House Ag Committee Members

The New York Times currently calls the North Dakota Congressional race between Democrat incumbent Earl Pomeroy [House Ag Comm Member] and GOP challenger Rick Berg a “Toss-up.”

Jill Schramm reported yesterday at the Minot Dailly News Online (ND) that, “Facing one of his toughest re-election battles in 18 years, Congressman Earl Pomeroy, D-N.D., is counting on his legislative record to sway voters. But voters might be ready for a change, according to polls throughout the campaign that have shown Pomeroy and challenger Rick Berg running neck-and-neck.

“Berg, a 26-year veteran of the North Dakota House and a former Republican majority leader, has hammered on issues of health-care reform and Washington’s handling of the national recession to capitalize on voter unease.”

The article added that, “[Pomeroy] cites success in helping craft a farm bill that contains permanent disaster assistance and more meaningful crop insurance… [C]urrently the senior, rural member of the Ways and Means Committee, Pomeroy, 58, said North Dakota can’t afford to give up that power to seat a freshman representative.”

In a separate race, The New York Times currently calls the New York Twentieth District Race between Democrat incumbent Scott Murphy [House Ag Comm Member] and GOP challenger Christopher Gibson a “Toss-up.”

John Mason reported on Saturday a The Daily Mail Online (NY) that, “U.S. Rep. Scott Murphy, D-Glens Falls, presents himself as a job creator;” and the article added that, “The congressman is also looking for ways to help the agriculture industry.”

“‘This year there was a crisis in the apple industry,’ he said. ‘Last year it was the dairy industry. It’s about having a system that mitigates problems as we go along. We have to improve the crop insurance business.’”

The article added that, “‘The dairy price support system is totally broken,’ Murphy said. To remediate that, he would like to see a crop and dairy insurance system.

“He said he wants to build consensus around that among cooperatives, dairymen and other interested groups, and is hoping to have something new in the 2012 farm bill.”

And Jessica Taylor reported on Saturday at Politico that, “Turns out Democratic Rep. Scott Murphy will get a nice pop on election eve: According to his campaign, former President Bill Clinton will stump with him in Saratoga County on Monday, Nov. 1, when they’ll hold a joint rally with supporters.”

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More generally, Jonathan Martin and Alex Isenstadt reported on Friday at Politico that, “After consecutive elections marked by big gains in Republican territory, the Democratic Party of 2011 is poised to shrink back to its form before the GOP’s downward spiral: more coastal and urban and less Southern, Midwestern and rural.

“Based on the state of the political map two weeks out from the elections, the famed red vs. blue model that followed the 2004 presidential race appears to be returning to shape, with enough grave threats to Democratic officeholders to suggest that the party — as it is expressed in Congress, at least — could end up even narrower than that.

“Republicans are already well-positioned to capture scores of House, Senate and gubernatorial seats across the South and the heartland. And depending on the strength of the party’s performance on Nov. 2, the GOP is also close to penetrating citadels of Democratic strength in places like Washington, California, Oregon and Massachusetts.”

The article added that, “Of the 69 Democratic-controlled House seats rated as tossups or favoring Republicans by The Cook Political Report, 40 are in the South or Midwest.”

Keith Good

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