FarmPolicy

August 21, 2019

Farm Bill; Ag Economy; Climate; Trade; Animal Agriculture; and Food Safety

Farm Bill

Alan Beattie reported yesterday at The Financial Times Online that, “The Republicans have portrayed themselves as the party of fiscal responsibility. But even Republicans on the heavily conservative wing of the party have only suggested broad outlines for cuts to balance the budget.”

Nonetheless, Tony Kindelspire reported on Sunday at the Longmont Times-Call Online (Colorado) that, “Tuesday’s election has farmers across the country nervous, according to Kent Peppler, a fourth-generation farmer near Mead who also is president of the Rocky Mountain Farmers Union.

It’s not because the Republicans took control of the U.S. House of Representatives; it’s how they took control and what that might mean for the 2012 Farm Bill, which is being crafted now.

“‘The Republicans were elected primarily on the platform of cutting spending, so that’s not good news for the Farm Bill,’ said Peppler, who grows a variety of crops on about 500 acres. ‘Under the budget constraints that we’re seeing right now, we could see some severe attacks on the Farm Bill itself.’”

The article noted that, “[Tom Buis, former president of the National Farmers Union and current CEO of Growth Energy] said budget concerns, and particularly the deficit, will drive every discussion in Washington once the new Congress takes over in January.

“‘It doesn’t take a rocket scientist to figure out it’s going to be the No. 1 issue when Congress returns to town,’ said Buis, speaking by phone from Washington, D.C.”

“‘Farm bills are never easy to write, but if you don’t have the budget baseline to fund it, there’s going to be cuts,’ Buis said. ‘That doesn’t just apply to the Farm Bill. It applies to the highway bill or any other type of legislation you pass.’”

The article added that, “And [Peppler] expects Republican Cory Gardner, who ousted Democrat Betsy Markey on Tuesday in Colorado’s 4th District, to gain a seat on the [Agriculture] committee.”

On the issue of whether or not the GOP controlled House would in fact take on tough spending choices, National Journal writer Major Garrett indicated yesterday on The Diane Rehm Radio Show that, “My colleague, Susan Davis, and I spent last week talking to about 20 or so of the newly elected members of the House Republican caucus…[A]nd I asked many of them, I said, are you prepared to put your life in Congress on the line, testing the proposition that your voters really sent you to bring back less and to give them less than they had before? And several of them — Vicky Hartzler is a classic example from Missouri’s 4th Congressional District. She beat a 17-term incumbent — Ike Skelton, a beloved Democrat in Missouri. She said, I’m going to find out, and I’m prepared to find out.”

Julie Harker reported yesterday at Brownfield that, “The president of the National Farmers Union [Roger Johnson] says money was the biggest challenge for the 2012 Farm Bill before the election and continues to be the biggest challenge.”

Meanwhile, DTN Political Correspondent Jerry Hagstrom reported yesterday that, “House Agriculture Committee Chairman Collin Peterson is lobbying Senate Budget Committee Chairman Kent Conrad to take the chairmanship of the Senate Agriculture Committee, but two key North Dakota farm leaders say Conrad’s position on Budget is critical to finding money for the 2012 farm bill.

“The chairmanship of the Agriculture committee is open because Sen. Blanche Lincoln, D-Ark., the current chairman, was defeated in Nov. 2 election. Conrad was in line to be chairman when Sen. Tom Harkin, D-Iowa, left the chairmanship to take over the Health, Education, Labor and Pensions Committee. But Conrad, D-N.D., kept Budget and left Agriculture to Lincoln. Sen. Debbie Stabenow, D-Mich., right now is next in line to become chairman if Conrad does not take it.

“Conrad did not respond to repeated requests last week for an interview on the chairmanship issue, but a spokesman stated in an email, ‘The senator has not yet made up his mind and will not do so until he speaks with his constituents and his colleagues.’”

Mr. Hagstrom explained that, “Peterson, D-Minn., who will become ranking member on the committee because the Democrats lost control of the House, said in an interview last week that if Conrad wants to get re-elected in 2012 he should take Agriculture. For Conrad to stay on Budget would be ‘a big mistake. Look what happened to [House Budget Chairman John] Spratt,’ a South Carolina Democrat who was defeated Tuesday. Lincoln was also defeated, but Peterson said he would still advise Conrad to take Agriculture. ‘Look what happened to me,’ said Peterson, who easily won re-election.

Lobbyists believe Peterson wants Conrad to be chairman because he wants a senator from a commodity-producing state to lead the committee. Peterson said it would be harder for Rep. Frank Lucas, R-Okla., who is likely to become House Ag chairman, to work with Stabenow. But Peterson added that he and Lucas ‘can work with whoever is in charge.’ He also acknowledged that Conrad’s role on Budget had helped deliver money for the bill, adding, ‘It’s his decision.’”

A recent Congressional Quarterly article by Ellyn Ferguson pointed out that, “Stabenow, who would become only the second woman to lead the panel, has been a strong supporter of more research and other resources for specialty crops, such as fruits and vegetables. Her focus reflects Michigan’s varied agricultural industry…[H]er focus on specialty crops may make some traditional big agriculture interests uneasy, especially as growing deficit concerns increase pressure to trim back entitlement programs.”

The CQ article added that, “The biggest threat to Conrad’s re-election may have been erased on Election Day, when popular Republican Gov. John Hoeven was elected to the state’s vacant Senate seat. That means Conrad will not have to face Hoeven in two years.

“‘The Ag Committee chairmanship might provide a small boost among Republican farmers, but I do not foresee him needing that at this point,’ said Eric D. Raile, a political science professor at North Dakota State University.”

Ag Economy

Katie Micik of DTN reported yesterday (link requires subscription) that, “Conditions are right for a bubble in farmland values, Kansas City Federal Reserve Chairman Thomas Hoenig told an agriculture bankers’ conference Monday.

“‘I don’t predict bubbles, I know that that’s hazardous, but I do know when conditions are right for bubbles,’ he said to the American Bankers Association North American Agricultural Lenders conference in Omaha on Monday.

“Farmland prices have been on the rise nationwide and much of that land is owned free and clear, unlike the highly leveraged position prior to the farmland crash of the 1980s, Hoenig noted.”

The DTN article indicated that, “‘However, my experience says if you’re sitting there and you’re seeing big appreciations, what’s the next thing you do?’ Hoenig said. ‘Well, if I could leverage that, I could buy this. Look at the appreciation in the value, I could pay this down, and I don’t have to worry about it, because the asset value’s there, so the bank’s in good shape — they’re more than covered with loan-to-value ratio — let’s do this. So you slowly see the leverage increase, because the leverage in the ’70s didn’t happen overnight. It took a while.’

“‘So what I worry about are the incentives we’re placing in the market that then create the conditions for a bubble.’”

Similarly, Reuters writers Kristina Cooke and Maria Aspan reported yesterday that, “Surging grain prices and growing investor interest are lifting farmland prices in the Midwest, and bank regulators fear that another U.S. bubble may be inflating.

“Farmland prices are 58 percent above their 2000 levels in inflation-adjusted terms, according to the Federal Deposit Insurance Corp. That’s about how much residential real estate prices rose in the United States from 2000 through 2004.”

The Reuters article noted that, “For over a year, some Midwestern state regulators have been eyeing potential weaknesses, and national bank regulators are starting to join them.”

“Michael Collins, lending officer at the Federal Reserve Bank of Philadelphia, recently cited agricultural lending when asked about potential risks for banks.

“‘The question is, is it sustainable? Or is it more speculative in terms of people chasing the values? So we are looking into it,’ he said.”

Climate Issues

Robin Bravender reported last week at Politico that, “One of the Obama administration’s most aggressive officials on global warming regulations is stepping down from her post at the Environmental Protection Agency.

Lisa Heinzerling, the head of EPA’s policy office, will return to her position as a Georgetown University law professor at the end of the year, said EPA spokesman Brendan Gilfillan.”

In other developments, Ms. Bravender indicated yesterday at Politico that, “One of the top climate skeptics in the House is asking GOP leadership to keep the Democrats’ global warming committee alive to investigate the Obama administration’s environmental policies.

“Rep. Jim Sensenbrenner (R-Wis.), ranking member of the Select Committee on Energy Independence and Global Warming, is making good on his promise to pitch Republicans to revamp the committee to focus on the costs of Environmental Protection Agency regulations.

“‘The threat of the EPA’s reach into the economy is so great that it deserves special attention this Congress, and no panel has developed more experience on these topics than the Select Committee on Energy Independence and Global Warming,’ Sensenbrenner said in a statement.”

Ben Geman reported yesterday at The Hill’s Energy Blog that, “Here’s a sneak preview of the coming battles between the GOP-run House and the Environmental Protection Agency:



EPA Administrator Lisa Jackson told Rep. Joe Barton (R-Texas) Monday that his attacks on the costs of Clean Air Act rules are way off base.

“‘EPA’s common-sense steps to implement the Clean Air Act result in much greater economic value than cost to Americans,’ she wrote in a letter to Barton, the top Republican on the Energy and Commerce Committee.”

And Robin Bravender and Darren Samuelsohn reported yesterday at Politico that, “A handful of swing-state Democrats hold the cards when it comes to blocking the Obama administration’s climate change policies.

At least 56 senators next year are likely to support efforts to block the Environmental Protection Agency’s plans to regulate greenhouse gas emissions, a POLITICO analysis shows. That’s just short of the 60 they’d need to overcome a filibuster, but a slew of moderate Democrats facing reelection in 2012 could put that number within reach.

“Democratic senators including Sherrod Brown of Ohio, Bob Casey of Pennsylvania, Debbie Stabenow of Michigan and Jon Tester of Montana haven’t supported past efforts to stall climate rules, but they could change their minds with an eye on their 2012 races.”

With respect to the states and federal climate policy, John Collins Rudolf reported yesterday at the Green Blog (The New York Times) that, “Texas officials step up their efforts to strip the Environmental Protection Agency of its authority to regulate the state’s carbon dioxide emissions, the highest in the nation. The attorney general, Greg Abbott, has filed seven lawsuits against the agency in the last nine months related to climate rules and other environmental controls. [The Los Angeles Times]

“The Texas governor, Rick Perry, recently re-elected to his third term, continues to take a hard line against the E.P.A. and federal regulation in general. He recently said the Texas electorate was fed up with federal policies that ‘micromanage’ their lives. ‘They’re tired of the government killing jobs with their do-gooder policies that have nothing to do with science or economics,’ Mr. Perry said during his victory speech. [YouTube]”

Trade

Alan Beattie reported yesterday at The Financial Times Online that, “Barack Obama, the US president, will attempt to clinch an outline deal this week on a high-profile bilateral trade agreement with South Korea, in spite of opposition from part of the US auto motive industry.”

The FT article added that, “Ron Kirk, US trade representative, flew to Seoul to try to thrash out a deal over US access to the South Korean market, the agreement’s main sticking point. US beef exporters, previously vocal opponents of the deal, have moderated their position in an attempt to make a more gradual entry into Asian country.”

Animal Agriculture

A news release yesterday from the United Egg Producers stated that, “American consumers continue to overwhelmingly purchase traditional eggs produced in modern cages when they visit their local grocery stores, according to Information Resources, Inc. (IRI) which tracks grocery store sales.

Americans purchase 19.8 billion (96%) traditional eggs every year at grocery stores, according to the latest IRI data, compared to 619 million cage-free eggs (3%) and 227 million (1%) organic free range eggs. The data is from third quarter, 2010 (July through September, 2010). The total volume of eggs purchased in the third quarter was 5.2 billion eggs, down by 3% compared to the third quarter of 2009, most likely due to a major recall of eggs from two farms in August, 2010.”

The release added that, “Perhaps indicating the weakness in demand for cage free and organic free range eggs, the U.S. Department of Agriculture reports that retail organic free range eggs are being advertised this week at $2.64 per dozen, 33% less than one year ago ($4.00); cage free eggs are being advertised at $2.50 per dozen, down 14% from one year ago ($2.90); and traditional egg retail prices are up 8% compared to one year ago ($1.02).

Gene Gregory, president of United Egg Producers, says that despite pressure by some animal rights groups, the overwhelming majority of American consumers continue to prefer regular eggs from modern cage housing systems rather than cage free. ‘Americans vote every day with their wallets, and regular eggs from modern cage housing systems win every time by a landslide ratio of 96 percent.’”

Food Safety

P.J. Huffstutter reported today at the Los Angeles Times Online that, “More than a quarter of a million eggs from an Ohio farm have been recalled from eight states because of Salmonella enteritidis concerns.

“This marks the latest high-profile woe for the nation’s food-safety system. And it potentially could add to the legal troubles faced by the Iowa farmer at the center of two massive egg recalls over the summer.

“Cal-Maine Foods Inc., the nation’s leading egg seller and distributor, said Monday that it was recalling 288,000 eggs that the Jackson, Miss., firm had bought from Ohio Fresh Eggs.”

The LA Times article noted that, “Austin ‘Jack’ DeCoster, whose Wright County Egg was one of the two Iowa farms connected to at least 1,600 people falling ill because of contaminated eggs earlier this year, has long had financial ties to Ohio Fresh Egg. (New FDA rules governing egg safety went into effect July 9, too late to prevent the widespread salmonella outbreak.)

“In 2003, DeCoster made a $125-million investment in Ohio Fresh Eggs, a company co-owned by Orland Bethel, who is also the owner of Hillandale Farms, the other Iowa farm connected to the August recalls of 550 million eggs. Ohio state officials questioned the investment, but a state court ultimately ruled that there was no wrongdoing.”

Meanwhile, the AP reported yesterday that, “Thousands of people likely were sickened by salmonella-contaminated eggs from two Iowa companies last summer, but lawyers said far fewer have the proof needed for a successful lawsuit and most cases filed will be settled out of court.

“So far, attorneys in Seattle, Houston, Chicago and Minneapolis have filed at least 10 cases related to recalls by Wright County Egg and Hillandale Farms of Iowa. The companies recalled 550 million eggs in August after a salmonella outbreak was traced to their farms.”

The AP article noted that, “Lawyers said they know of hundreds of people who claim they became sick after eating eggs, but the challenge for victims is proving they became ill because they ate contaminated eggs.”

Keith Good

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