October 18, 2019

Farm Bill; Ag Economy; Trade; GIPSA; Animal Agriculture; and Biofuels

Farm Bill (House Appropriations)

A news release yesterday from the House Appropriations Committee stated that, “The House Appropriations Committee today released the subcommittee draft of the fiscal year 2012 Agriculture Appropriations bill, which will be marked up in the Agriculture Subcommittee tomorrow [Tuesday]. The legislation continues the trend of major spending reductions sought by the Republican majority, totaling $17.2 billion in discretionary funding – a cut of over $2.6 billion from last year’s level or over $5 billion below the President’s budget request for these programs.

“‘While making smart yet significant cuts to save taxpayer dollars, the Agriculture Appropriations bill for next year also funds several important and necessary government programs, including agriculture research, rural development, and safety-net food and nutrition programs,’ House Appropriations Chairman Hal Rogers said. ‘As is the goal of all our Appropriations bills this year, this legislation reflects hard decisions to cut lower priority programs, reduce spending in programs that can be scaled back, and target funds where they are needed most so that our nation continues on the path to fiscal recovery.’”

The release pointed out that, “Agriculture Subcommittee Chairman Jack Kingston also commented on the bill:

“‘America is at a crossroads.  For every dollar the Federal government spends, 42 cents is borrowed.  The gross national debt is now 97 percent of GDP and we are rapidly becoming the next Greece, Spain, or Portugal.  Internationally, this weakens our standing as a global leader and our lenders such as China may seek to restructure our debt if we don’t take care of it ourselves.’”

More specifically, yesterday’s news item added that, “Mandatory food and nutrition programs within the Department of Agriculture – including SNAP (formerly Food Stamps) and child nutrition – are funded at nearly $90 billion, $2 billion less than the President’s request. This funding will allow all individuals and families who meet the programs’ criteria for aid to receive all the benefits available to them, and includes $3 billion in reserve funds in case of unanticipated increases in participation or food price increases.

Child nutrition programs will receive $18.8 billion, which is $1.5 billion over last year’s level and $40 million below the President’s request. This funding will help provide low-income students with free or reduced price breakfasts and lunches at schools in every community in the nation. In addition, the Women, Infants, and Children (WIC) nutrition program is funded at $5.9 billion. While this is a reduction of $832 million from last year, the bill allows the Secretary to utilize fiscal year 2011 carryover funds, $125 million in contingency funds, and other funding options currently authorized in law to allow participants to continue to receive the benefits for which they qualify.

The bill provides over $2.2 billion for agriculture research programs, including the Agriculture Research Service and the National Institute for Food and Agriculture. This is a reduction of over $354 million from last year’s level.”

On conservation, the Appropriations Committee update indicated that, “The bill provides $770 million for Conservation Operations through which the Natural Resources Conservation Service (NRCS) helps farmers, ranchers and private forest landowners to conserve, protect and enhance their land. This is a decrease of $99 million below last year’s level.”

“The bill provides a total of $2.1 billion for rural development programs – a decrease of $338 million from last year’s level,” the Committee release said.

A more detailed breakdown of the Appropriation’s bill provisions can be viewed in this table, while the complete text of the bill can be viewed here.

AP writer Mary Clare Jalonick reported yesterday that, “House Republicans are targeting domestic nutrition programs and international food assistance as they try to control spending in next year’s budget.

“In a bill released Monday, Republicans proposed cutting $832 million — or 11 percent — from this year’s budget for the Women, Infants and Children program, which provides food for low-income mothers and children. The 2012 budget proposal for food and farm programs also includes a decrease of almost $457 million, or 23 percent, from international food assistance.

“The legislation would cut $2 billion from food stamps, or about 1.3 percent of the feeding program’s giant $67 billion budget.”

The AP article explained that, “Republicans who wrote the bill said the cuts in domestic food programs are taken from excess dollars in those accounts, and participants won’t see a decrease in services.

“Domestic nutrition programs are mined for dollars in tight budget times because they often have extra money sitting in their accounts. Money is allocated for the programs based on projections of need and food costs, and those needs are sometimes overestimated.”

Ms. Jalonick added that, “Rep. Rosa DeLauro, D-Conn., said the GOP budget ‘rolls back years of progress.’

“‘This budget threatens the health and security of American families, while asking the most of low-income seniors and the most vulnerable among us,’ she said.”

In broader fiscal news, Reuters writers Andy Sullivan and Richard Cowan reported yesterday that, “President Barack Obama, not Vice President Joe Biden, will have to cement a final deal that would raise the United States’ borrowing authority, a leading Republican said Monday.

“Representative Eric Cantor, the No. 2 Republican in the House of Representatives, said that White House-led budget talks chaired by Biden, set to resume Tuesday, will only lay the groundwork for a deal.”

The article explained that, “The group has so far agreed on roughly $150 billion in proposed spending cuts — far short of the trillions of dollars in savings that Boehner has said will be necessary to win Republican support for raising the debt limit.

“A top congressional Democrat Monday said that political leaders in Washington should wrap up negotiations by June 8 to avoid spooking financial markets.

“‘If we’re going to have to do it, my view is doing it sooner rather than later roils the markets less,’ Steny Hoyer, the No. 2 House Democrat, said in a speech at the Bipartisan Policy Center, a think tank.”

And a news release yesterday from Sen. Jim Inhofe (R-Okla.) stated that, “Today, [Sen. Inhofe] joined all 46 Republican senators in sending a letter to Majority Leader Harry Reid (D-Nev.) on the urgent need to construct and pass a FY2012 budget. 754 days have passed since the Democrat-led Senate last passed a budget, during which time the nation has accumulated approximately $3.2 trillion in new gross debt. With less than six months remaining until the start of the next fiscal year, Senate Democrats have once again failed to even present a budget plan for next year.”


Agricultural Economy

Dan Piller reported yesterday at the Green Fields Blog (Des Moines Register) that, “The U.S. Department of Agriculture reported Monday that 79 percent of the U.S. corn crop was planted as of Sunday, an improvement over the 63 percent from a week ago but still below the five-year average of 87 percent on this date.

Iowa’s crop is 98 percent planted, compared to 94 percent planting average from 2006 through last year.”

Mr. Piller added that, “Illinois made up the most ground in planting during the last week, advancing from about 60 percent planted a week ago to 90 percent completed on Sunday. Indiana, which was just 7 percent planted a week ago advanced to 49 percent planted. Ohio continues to lag the most, with just 11 percent planted during unprecedented rains.

North and South Dakota, which are expected to bring in much of the four million new corn acres this year to help alleviate tight domestic stocks, reported 49 percent and 73 percent of their corn crops planted respectively.”

The AP reported yesterday that, “Several days of dry weather amid the soggy spring has allowed Minnesota farmers to make significant progress in planting their crops…[C]orn is 81 percent planted, up 34 points.”

Louis Aguilar reported yesterday at The Detroit Free Press Online that, “Michigan’s rainy, chilly spring is threatening to turn the planting of the season’s crops into a virtual wash.”

Corn is of the most concern,” the article said, adding that, “U.S. Department of Agriculture officials hoped for a total of 92 million acres of corn this year. But the later the crop goes in, the more potential there is for less-than-stellar yields.

The late plantings run a greater risk of damage from fall frosts because the crop won’t have sufficient time to mature, said Bob Boehm, manager of the commodity and marketing department at the Michigan Farm Bureau.”

Bloomberg writers Alan Bjerga and Whitney McFerron reported yesterday that, “U.S. corn farmers who have yet to plant their crop have only a few days left before they may need to switch to lower-yielding seeds or soybeans, according to Paul Schickler, the president of DuPont’s Pioneer Hi-Bred unit.

“‘We’ve got to get some progress in corn planting before we get farmers switching to earlier maturity seeds with lower yields,’ Schickler said today in an interview in Washington. Wilmington, Delaware-based DuPont is the world’s second-biggest seed seller, after Monsanto Co.”

Gregory Meyer reported yesterday at the Financial Times Online that, “For farmers, commodity traders and food companies, 2011 is shaping up to be the year of the meteorologist.”

The picture so far has analysts nervous, if not panicked. In the US, the world’s top agricultural exporter, deep snow or heavy rains have delayed corn planting in the important states of Indiana, Ohio and North Dakota at a time when their contributions are crucial, potentially shifting acres to soya beans.”

The FT article added that, “Livestock prices have moved closely in line with feed costs in many markets, however, shielding margins for many ranchers and farmers. This raises questions about whether global consumption will slow in a period of higher prices.

Unlike most other goods, food is not an optional purchase. Some analysts think a more likely response is political turmoil.”

University of Illinois Agricultural Economist Darrel Good noted in part yesterday at the FarmDocDaily Blog that, “Concerns about the size of the 2011 U.S. corn crop stem from two sources. One is the potential loss of corn acreage due to flooding in southern areas and the slow planting progress in a number of states. Corn acreage, however, may have exceeded intentions in areas where planting was more timely. Speculation about the magnitude of planted and harvested acreage will continue until June 30 when the USDA releases the Acreage report. Some of the early estimates of lost acreage appear to be over-stated.

“The second source of concern about the size of the 2011 corn crop is the late planting that is occurring in some areas. Through mid-month, planting had progressed at a very slow pace in Indiana, Kentucky, Michigan, Minnesota, North Dakota, Ohio and Wisconsin. It appears that more than the average amount of the U.S. corn acreage will be planted after the optimum date for maximum yield potential. Yield potential, however, is still unknown since weather conditions in July and August are very important for determining yields. The market will monitor USDA’s weekly report of crop conditions to evaluate yield potential as the growing season progresses.”

Meanwhile, the Administrator of USDA’s Risk Management Agency (RMA), William J. Murphy, was a guest on yesterday’s AgriTalk Radio Program with Mike Adams.

RMA is responsible for administrating the Federal Crop Insurance Program and Mr. Murphy discussed a variety of issues about crop insurance in conjunction with this spring’s adverse weather conditions.

To listen to a portion of yesterday’s discussion with Mike Adams and Mr. Murphy, just click here (MP3- 5:10).

In other news, Robert Rodriguez reported yesterday at The Sacramento Bee Online that, “As newly planted crops begin to emerge from the soil, a sense of renewed optimism is spreading across the central San Joaquin Valley.

“After several dry and sluggish years, farmers are planting more acres, investing in equipment and rehiring idled workers.

“Fueling the comeback are more irrigation water for west side growers and rising prices for major crops, including cotton, wheat and nuts.”



A news release yesterday from Sen. Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) stated that, “[Sen. Stabenow] led a group of 41 of Senators in a letter today to President Barack Obama urging him not to submit any trade agreements to Congress-including pending agreements for Colombia, Panama, and South Korea-until Congress agrees to renew a long-term extension of Trade Adjustment Assistance (TAA) to protect American families from being wiped out when their jobs are sent overseas.

“The senators asked the President to work with them to secure bipartisan support for an extension of TAA, including 2009 reforms that provided coverage for service workers as well as workers who lose their jobs to countries other than those with which the United States has formal trade agreements, including China.”

A copy of yesterday’s letter is available here.

And Bloomberg writer Mark Drajem reported on Friday that, “The Doha round of World Trade Organization negotiations faces an ‘unbridgeable’ gap and needs a new approach after a decade without striking a deal, a group of 21 Pacific ministers said.”



DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “The Obama administration will not withdraw the proposed Grain Inspection, Packers and Stockyards Administration rule regarding the marketing of livestock and poultry, even though a bipartisan group of 147 House members wrote Agriculture Secretary Tom Vilsack urging that it be rewritten, a USDA spokesman said late last week.

“‘Congress directed USDA to develop new GIPSA rules to promote marketplace competition in the 2008 farm bill. After issuing the proposed rule in 2010, USDA received over 60,000 comments and the agency is now working to modify and improve the rule based on these comments,’ the spokesman said in an e-mail.

And, although last Wednesday’s letter to Vilsack also asked for a timeline on the proposal, a USDA source said that request is premature.”

And a news release yesterday from the National Farmers Union (NFU)  indicated that, “[NFU] President Roger Johnson sent a letter to all 435 members of the U.S. House of Representatives today urging them to allow U.S. Department of Agriculture (USDA) Secretary Tom Vilsack to continue implementing the proposed Grain Inspection, Packers and Stockyards Administration (GIPSA) rule. The letter was in response to a letter sent by some members of Congress to Secretary Vilsack on May 18 asking that the proposed GIPSA rule be scrapped and that a new rule be written.”


Animal Agriculture

Julie Harker reported on Friday at Brownfield that, “The Animal Health Institute says Congresswoman Louise Slaughter’s letter to the Food and Drug Administration sounding an alarm about antibiotic use in animal feed is ‘much ado about nothing.’

Ron Phillips, vice president of public and legislative affairs at the Animal Health Institute says, ‘She is claiming that the amount used in feed is driving antibiotic resistance in humans and we just have reams and reams of studies that say that’s not the case.’ The AHI is made up of member animal medicine companies.  Phillips says Slaughter’s concerns over the bulk of antibiotics given to animals through feed exaggerate the data.

“‘More importantly are the risk assessments that have been done over the past decade that show that using antibiotics to keep food animals healthy is a small risk to humans,’ says Phillips, ‘And in fact, there may be benefits in terms of food safety.’”



The Wall Street Journal editorial board indicated today that, “One of the immutable laws of modern American politics is that no candidate who wants to win the Iowa Presidential caucuses can afford to oppose subsidies for ethanol. So it’s notable—make that downright amazing—that former Minnesota Governor Tim Pawlenty launched his campaign for the Republican Presidential nomination Monday by including a challenge to King Corn.

“‘The truth about federal energy subsidies, including federal subsidies for ethanol, is that they have to be phased out,’ Mr. Pawlenty told a crowd in Des Moines. ‘We simply can’t afford them anymore.’”

Keith Good

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