December 10, 2019

Regulations (EPA); Farm Bill; Ag Economy; and Biofuels

Regulations- Environmental Protection Agency (EPA)

Todd Neeley reported on Friday at DTN (link requires subscription) that, “State officials, agriculture groups and pesticide retailers say more time is needed to implement new pesticide permitting rules coming down from the U.S. Environmental Protection Agency, in separate letters sent to EPA and Congress in recent weeks.

“Groups and individuals are pressuring EPA and Congress to step in before a court-mandated April 9 deadline to implement the National Pollutant Discharge Elimination System, or NPDES permits for pesticide applications.

The program could require farmers to obtain pesticide permits depending on where they live.”

The article added that, “In a Feb. 11 letter to EPA Administrator Lisa Jackson, three state agriculture officials asked EPA to seek a six-month delay from the Sixth Circuit Court of Appeals on the deadline. The Sixth Circuit required the permits as part of a ruling in a case involving pesticide applications for cotton two years ago.

“In the letter, Andrew Fisk, director of the Maine Bureau of Land and Water Quality, Jim Burnette, pesticides administrator at the North Carolina Department of Agriculture and Consumer Services, and Leonard Blackham, commissioner of the Utah Department of Agriculture and Food, said their states need more time to implement rules.”

Friday’s article explained that, “EPA was forced to create the program as a result of a 2009 decision by the Sixth Circuit Court of Appeals in the National Cotton Council v. EPA case. The court decided that EPA could not exempt pesticide users from Clean Water Act requirements.

In that case, the court vacated EPA’s 2006 rule that said NPDES permits were not required for pesticides applications to, over or near U.S. waters, as long as they were in compliance with pesticide labeling required by EPA in the Federal Insecticide, Fungicide, and Rodenticide Act, or FIFRA.

“In testimony before a joint hearing of the House Agriculture and Transportation subcommittees Wednesday, Fisk said the EPA regulation amounts to an unfunded mandate” (An audio replay of Wednesday’s hearing is available here).

Mr. Neeley pointed out that, “In another letter to House Agriculture Committee Chairman Rep. Frank Lucas, R-Okla., Tuesday, a group of 35 farm, state and retail organizations asked for new legislation ahead of the deadline.”

In a separate DTN article, Todd Neeley reported yesterday (link requires subscription) that, “A new lawsuit filed by the Center for Biological Diversity and the Pesticide Action Network North America against the U.S. Environmental Protection Agency, could threaten agriculture by stopping the use of pesticides, herbicides and other chemicals near endangered species until the EPA reviews and makes changes to the Endangered Species Act.

“‘It would be devastating,’ [Kansas farmer Mike Studer] said. ‘We would literally be out of the business of farming without herbicides in this day. I wouldn’t plant it (crops) without herbicides.’

“Steve M. Swaffar, director of natural resources for the Kansas Farm Bureau, said state farmers could experience hundreds of millions of dollars in losses related to reductions in yield.”

The article explained that, “In all, 13 Kansas counties were considered for critical-habitat designation for the Topeka shiner [a minnow], including 12 counties in the eastern part of the state. Those include Marshall, Pottawatomie, Riley, Dickinson, Geary, Wabaunsee, Shawnee, Morris, Marion, Butler, Greenwood and Chase.

“The U.S. Fish and Wildlife Service said about 836 miles of streams in Iowa, Minnesota and Nebraska were designated as critical habitats for the Topeka shiner and management plans are in the works to recover the species.”

Mr. Neeley pointed out that, “In Kansas it cost at least $400,000 to implement the plan, according to estimates from the Kansas Department of Wildlife and Parks.

“Swaffar said Kansas farmers currently don’t face any particular restrictions to use chemicals or implement certain farm practices.

“According to the 2007 Census of Agriculture, there are 7,892 farms in the 12-county area, accounting for annual crop sales of about $335 million.”

Meanwhile, an EPA news release from Friday stated that, “The [EPA] is inviting the public to provide input on a plan that will guide EPA’s retrospective reviews of regulations as part of the agency’s response to President Obama’s January 18, 2011 Executive Order (EO) 13563, ‘Improving Regulation and Regulatory Review.’

“EO 13563 directs each federal agency to consider ‘how best to promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome.’ Specifically, the EO calls on every agency to develop ‘a preliminary plan, consistent with law and its resources and regulatory priorities, under which the agency will periodically review its existing significant regulations to determine whether such regulations should be modified, streamlined, expanded or repealed to make the agency’s regulatory program more effective and or less burdensome in achieving its regulatory objectives.’”

The release added that, “By late May, EPA will provide the public with its retrospective review plan, as well as the initial list of regulations it plans to review.”

Farm Bill Issues

Agri-Pulse Senior Editor Stewart Doan recently spoke with Rep. Mike Conaway (R-Texas), chairman of the Agriculture Committee’s General Farm Commodities and Risk Management Subcommittee, on the Agri-Pulse Open Mic program.

A portion of their conversation (audio clip here, MP3- 3:00) focused on the Farm Bill and associated budget issues. In part, Rep. Conaway indicated that farmers just want to be treated fairly with respect to their share of budget cuts and added that, “In the Farm Bill itself, eighty plus percent of the money is in nutrition and not in the safety net, and we can’t take nutrition off the table- it has to be scrutinized and scrubbed.”

Rep. Conaway also responded to a general inquiry about whether the budget situation would drive change in the safety net components. In his response, Rep. Conaway referred to the series of hearings the House Ag Committee held last year on the Farm Bill and noted that in general, producers indicated that the current bill is working.

Ron Hays reported yesterday at the Oklahoma Farm Report Online that, “There’s lot of detractors that would like to take away from agriculture the money for Direct Payments that is a part of current farm policy. We talked about this key part of the current safety net for farmers with OSU Ag Policy professor Dr. Michael Dicks.

“Dicks says he fully understands why Oklahoma Congressman and current House Ag Committee Chairman Frank Lucas likes Direct Payments and wants to extend them into the 2012 Farm Bill. The key reason Congressman Lucas and others want to keep Direct Payments is what they do for the budget baseline. The five to six billion dollars allocated to farmers through Direct Payments is accounted for in the budget baseline- and it is Michael Dicks’ contention that if you lose the Direct Payments- that you lose the one element of farm policy that gives you a chance to hang onto the baseline we have maintained to this point.

Dr. Dicks is convinced that if we go to an expanded ACRE type program that uses that money- it will not be a consistent amount of money that will be accounted for in the budget baseline. He believes that our last significant pot of money will be drawn away. Dicks says that the farm program bottom line is ‘You have to have some way of protecting that budget- and that’s the only thing we have got folks.’”

To listen to a complete audio overview and interview with Dr. Dicks from Ron Hays, just click here.

With respect to nutrition issues, Monica Eng reported on Sunday at the Chicago Tribune Online that, “For the 2010-11 school year, [Chicago Public Schools] CPS and its caterer, Chartwells-Thompson, switched to menus featuring more whole-grain products, less sodium and a wider variety of vegetables. Most cereals offered have less than 10 grams of sugar per serving.

“Chartwells and CPS note that these changes exceed existing U.S. Department of Agriculture meal standards, but they appear to have created negative impressions of healthy foods among many students.”

The article noted that, “CPS forbids the use of salt in the preparation of vegetables or other fresh food offered to students, although the district allows high levels of sodium in the processed foods it serves.

The results of this policy could be seen on recent visits to lunchrooms, where trays of boiled broccoli, zucchini and a pea-carrot mix sat virtually ignored by students. Many of those who did take the vegetables left them on the tray uneaten.”

“‘Some people think that if you serve it, they will eat it,’ said [Brian Wansink, a professor at Cornell University who specializes in eating behavior], whose research is available online at ‘But if you take away something people like and just hope they will take the new healthy thing without you goosing it, you often find that kids just won’t eat school lunches — they’ll eat a lot worse.’”

Agricultural Economy

Reuters writer K.T. Arasu reported on Sunday that, “Grain markets will turn their attention to supply-side factors this week, with forecasts from the U.S. government set to show increased spring seeding and the record harvest of soybeans in Brazil gaining speed.

“The U.S. Department of Agriculture’s annual Outlook Forum on Thursday and Friday comes on the heels of the department’s preliminary projections last week of unexpectedly higher corn and soybean seedings, which pressured prices for two days.

There is a nascent consensus among analysts that forecasts at the conference could be similar to the baseline projections, which estimated 92 million acres to be planted with corn – the second-highest since World War Two — and 78 million of soy.”

The article added that, “Darrel Good, an agricultural economist and professor emeritus with the University of Illinois at Urbana-Champaign, said he would be surprised if the outlook forum forecast crop data that was much different from the preliminary projections…He said the increase in grain acreage was a vital step toward boosting U.S. and global supplies and thereby cooling record-high food prices. Good said the other crucial factor would be for the weather to make it a good growing season.”

And a University of Illinois extension article from yesterday (“Is There Enough Acres?”) stated in part that, “For corn acreage, two questions need to be answered. How many acres of corn need to be planted in 2011? and Is there opportunity to accommodate the needed increase? An opinion about the amount of the acreage needed is influenced by a number of factors, including the likely strength of demand, a judgment about the appropriate level of price, the desired level of 2011-12 marketing year ending stocks, and the expected U.S. average yield in 2011. With prices at ‘reasonable’ levels, it appears that corn consumption would likely be near 13.25 billion bushels during the 2011-12 marketing year. To bring some price relief to end users of corn, but maintain prices at profitable levels for producers, some build-up in year ending stocks should be an objective for next year. An inventory near one billion bushels would not provide a large buffer for production shortfalls beyond 2011, but would likely meet the dual price objective. An increase in stocks of 325 million bushels would require a crop of 13.575 billion bushels. For now, the safest assumption about the 2011 average corn yield is a trend value. However, there doesn’t seem to be complete agreement on trend value. The USDA and others are using a trend yield of 162 bushels. Our analysis suggests that trend yield for 2011 is close to 159 bushels. A yield of 162 bushels implies that harvested acreage would need to be near 83.8 million and planted acreage near 90.9 to produce a crop of 13.575. A yield of 159 bushels implies harvested acreage of 85.4 and planted acreage of 92.5 million. To allow for yield risk, we still believe planted acreage of corn needs to be near 93 million in 2011.

“The recent history of total planted acreage of crop land in the U.S. shows that total acreage tends to expand when commodity prices are high. It should be possible to plant an additional 4.8 million acres of corn in 2011 even with an increase in winter wheat and cotton acreage. However, corn prices will have to remain high enough to motivate such a large increase. Corn prices continued to move higher through last week. However, prices for the 2011 crop have not increased as much as the old crop. March 2012 futures are $.90 below March 2011 futures prices. More strength in new crop corn prices may be required to get the needed acreage response.”

Meanwhile, Bloomberg writer Thomas Kutty Abraham reported yesterday that, “Governments worldwide will increase their role in global food markets and may boost stockpiles and subsidies or impose trade curbs to head off the protests that have rippled through the Middle East, commodity traders said.

“‘Greater political intervention in food matters is only to be expected,’ Alan Winney, chairman of Emerald Group Australia Pty Ltd., said in an interview at a sugar-industry conference in Dubai. ‘Governments will be careful to take preemptive measures to prevent increases in food prices,’ said Winney.”


Reuters writer Carey Gillam reported yesterday that, “Budget cuts by Congress and fresh fears about food security are among many obstacles threatening growth of U.S. ethanol, according to industry leaders.

“Investments into expanded ethanol production remain stymied by uncertainty about how U.S. tax and energy policy will impact the industry, and access to markets is limited in part by state regulatory barriers to the use of higher level ethanol blends, industry experts said on Monday.

“‘The challenges facing our industry today are as vexing and complicated as any we have ever faced,’ said Renewable Fuels Association CEO Bob Dinneen in an address to the National Ethanol Conference in Phoenix. ‘We need to step up our game.

“‘Capitol Hill is now ruled by bean counters,’ he said.”

Yesterday’s article added that, “With Congress focused on slashing the federal budget, incentives like the Volumetric Ethanol Excise Tax Credit (VEETC), are in jeopardy. After a one-year extension was granted in December, VEETC, which offers a 45 cent reduction in federal fuel excise tax, is set to expire at the end of this year.

Congress is looking at several options including, rescinding the incentive altogether, moving it to a variable incentive tied to crude oil or gasoline prices, converting it to a producer credit, converting it to a retailer credit for flex-fuel infrastructure or making the blenders tax credit apply only to volumes blended in excess of federal standards.

“‘An expiration of the tax incentive is a very real possibility,’ said Dinneen. ‘Such an outcome would put the future of this industry in jeopardy.’”

Yesterday on the AgriTalk Radio Program, host Mike Adams discussed a variety of current biofuel issues with Bob Dinneen. Their conversation touched on current challenges facing the industry, including the Continuing Resolution passed by the House over the weekend, which contained provisions relating to ethanol. The discussion also turned to the idea of reforming federal tax incentives for biofuels. To listen to a portion of this discussion from yesterday’s AgriTalk Program, just click here (MP3- 5:30).

Keith Good

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