FarmPolicy

Farm Bill; Ag Economy; Trade; and Animal Agriculture

Farm Bill: Senate Ag Committee Hearing

Sara Wyant reported yesterday at Agri-Pulse Online that, “Citing the need to focus on ‘principles, not programs,’ Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich, kicked off the first official 2012 farm bill hearing today. An ‘all-star’ cast, including Agriculture Secretary Tom Vilsack and former Secretary Dan Glickman testified during the event, which focused on ‘The Role, Risks and Challenges for American Agriculture and the next Farm Bill in meeting the demands of a Growing World.’”

(FarmPolicy Note: A video replay of yesterday’s hearing, along with submitted testimony from the witnesses is available here.  Recall that a summary of House Agriculture Committee hearings on the Farm Bill from last spring and summer, prior to the November 2010 elections, can be viewed here.  And a summary of Senate hearings relating to the Farm Bill from last summer, under the previous Congress, can be found here.  The next Senate Farm Bill hearing, “Opportunities for Growth: Michigan and the 2012 Farm Bill,” will be on Tuesday at Michigan State University.)

Ms. Wyant indicated that, “Much of the hearing focused on highlighting the important role that farmers and the agriculture industry, in general, have played in sustainably feeding Americans, but also a growing, hungry world. But panelists also addressed a number of short and long-term challenges ahead including increased volatility, the need to increase productivity and farm program flexibility, and the need to make investments despite the nation’s debt crisis.

“‘Despite all of the economic and budget struggles over the last decade, agriculture has remained a bright spot: agriculture has continued to grow, farmers have innovated and become even more productive, and they have become even better stewards of our land and water resources,’ noted Sen. Stabenow. ‘And we are not only feeding the world because of that innovation, but we’re showing farmers in every corner of the world new strategies to be more productive themselves.’”

Forrest Laws reported yesterday at the Delta Farm Press Online that, “In her opening remarks, Sen. Debbie Stabenow, D-Mich., chairman of the Senate Agriculture Committee, said innovation in American agriculture can help revolutionize global farming in order to successfully meet the needs of a growing and diverse world but the U.S. still faces many challenges to continue leading the world in productivity, innovation and sustainability.

“‘It’s easy to take our agriculture policies for granted – to assume that without them, things would work just the same as they do now,’ she said. ‘But when we look back at history, we can only marvel at how far we have come. Today, people in the western edge of the Oklahoma panhandle are enduring the longest drought on record, with nearly 220 days without rain.

“‘That’s worse than the droughts experienced during the Dust Bowl. And yet we are not experiencing another Dust Bowl; the topsoil isn’t blowing away. That’s a testament to the good work our farmers and ranchers have done thanks to voluntary conservation efforts in the farm bill.’”

Meanwhile, Sara Wyant also noted in her Agri-Pulse article from yesterday that, “Asked to name the top 2-3 lessons he’s learned since becoming Secretary, Vilsack noted the importance of continued investments in research, a responsibility to conserve natural resources, and need for the rest of the world to continue to embrace technology.

“However, he noted that continuing to make investments in agriculture will be difficult because of the ‘fiscal and political realities about the size of the debt, the deficit, and the tight budget environment.’”

Also at yesterday’s hearing, Nebraska GOP Senator Mike Johanns noted that he was pleased with Sec. Vilsack’s reference in his testimony for the need for a farm safety net in appropriate circumstances.  With respect to “the whole concept of a safety net,” Sen. Johanns said that when he speaks with producers, they often referred to the crop insurance program as the “mainstay” of the safety net.  The former U.S. Agriculture Secretary pointed out that, “it is crop insurance that we need to be focused on.”  Johanns sought Sec. Vilsack’s thoughts on “crop insurance as kind of the bedrock upon which we built a safety net for the next Farm Bill.”  To listen to a portion of this discussion between Sen. Johanns and Sec. Vilsack, just click on this FarmPolicy link (MP3- 4:20).

Later, near the end of yesterday’s hearing, Sen. Johanns stated that, “As we think about the next Farm Bill, in many respects I am coming to the conclusion that this Farm Bill is about risk management.”  (Related FarmPolicy audio here (MP3- 1:04)).

Similarly, Senator John Thune (R-SD) indicated at yesterday’s hearing that, “All we have to do is look across the country, from drought in the Southwest, severe flooding in the Northern Plains, Midwest and South and record-setting numbers of tornadoes in numerous states, and we realize the incredible devastation and toll that natural disasters have wreaked on millions of acres of farmland and to poultry and other livestock producers.

“From any perspective, effective risk management for agriculture producers should be one of the highest priorities for all of us on this Committee as we write the next Farm Bill.”

A full replay of Sen. Thune’s remarks from yesterday can be found here.

Highlighting the need for American agriculture to remain competitive, particularly in light of the continued commitment of the European Union to support its producers, Senate Budget Committee Chairman Kent Conrad (D-ND) queried Sec. Vilsack about how current budgetary issues could potentially impact the competitiveness of U.S. agriculture in the international arena.  (Related FarmPolicy audio here (MP3- 2:48)).

A news release from Sen. Conrad regarding yesterday’s hearing can be found here.

Tight commodity supplies were another issue that came up at yesterday’s Senate hearing.

Barry Mumby, a farmer from Michigan, discussed a variety of issues that have impacted spring planting throughout the country, in conjunction with already tight supplies, and noted that; “I fear that we are going to fall substantially short of what is projected right now and I think that we are on the edge of a very, very dangerous time.”  (Related FarmPolicy audio here (MP3- 1:50)).

Sen. Johanns picked up on the issue of short commodity stocks and also expressed concerns about adequate supplies.  In response to questions and observations from Sen. Johanns, Mr. Mumby stated that, “I think we are going to have historically low corn stocks at the end of this year.  September is going to be very difficult for anyone to buy a bushel of corn any place.”  (Related FarmPolicy audio here (MP3- 3:01)).

A news release yesterday from Agriculture Committee Member Sen. Sherrod Brown (D-OH) noted that, “US farmers are now struggling with difficult weather, natural disasters, growing populations, and improving diets abroad – all putting a greater demand on U.S. agricultural exports and international food aid programs.  The world’s population is estimated to grow to more than 9 billion by 2050, yet the amount of available farmland is expected to remain stagnant.  Food production will need to increase by 70-100 percent by mid-century to meet this growing population.”

Agricultural Economy

Ben Sutherly reported yesterday at the Dayton Daily News (OH) Online that, “Persistent wet weather continues to sideline local farmers as the corn-planting season nears its end.”

The AP reported yesterday that, “Purdue University says Indiana farmers are making progress planting their rain-delayed corn crop and about half of it’s now in the ground.

“But as the planting season drags on past the optimal time, Purdue agronomist Bob Nielsen says many farmers are switching to faster-maturing corn hybrids that might beat the fall frost.”

A news release yesterday from the Michigan Agri-Business Association stated that, “The continuing heavy rain all across Michigan this spring has most farmers way behind on spring planting and other work.”

The release noted that, “This will also be a rocky year for commodity and food prices when all factors are considered: near-record commodity prices for corn, soybeans and wheat; strong world demand; and low carryover inventories.

“‘If there was ever a year when we needed perfect conditions to maximize yields and production, 2011 is the year, and it is not shaping up that way,’ [Jim Byrum, president of the Michigan Agri-Business Association] said.

A news update posted yesterday at KFYR-TV (Bismarck, ND) stated that, “Releases from the Missouri River reservoirs will reach historic levels in the coming weeks, the result of above-normal snow in the mountains and extraordinary rain over the last several weeks. Significant flooding in cities, towns and agricultural land is expected in North and South Dakota with many areas from Sioux City, Iowa, to the Mississippi rising above flood stage.”

In a report filed yesterday from Devils Lake, North Dakota, DTN Ag Policy Editor Chris Clayton reported (link requires subscription) that, “Farmers in the Dakotas were expected to step up this year and help fill the need for corn given strong demand. In March, USDA forecast that North Dakota would plant 2.5 million acres of corn, an increase of 450,000 acres from last year. South Dakota is projected to plant 5.4 million acres, a 950,000-acre increase from last year. As of Monday, USDA projected North Dakota had 1.22 million acres of corn planted, or about half the expected crop.

“Flooding in other parts of the country may have taken 2 million to 3 million acres out of production elsewhere, leaving even more of a gap.

“Wednesday was the date set by the Risk Management Agency beyond which farmers will start seeing their crop insurance coverage dwindle 1 percent for every day that planting is delayed. North Dakota also consistently has been the leading state for prevented planting claims since the early 1990s.”

Mr. Clayton added that, “So much of North Dakota’s farm ground has standing water. In many places, it actually whitecaps when the wind blows over the once-cropped fields. In other areas, such as eastern parts of the state, mud needs warmer weather to dry out.

“North Dakota farmers can’t cope with the volume of water that has Devils Lake, and most of the watersheds south of the lake, full of water. Devils Lake itself is like a bowl reaching the brim full of water, but more keeps pouring in.”

In other news, a Farm Service Agency news release from yesterday stated that, “In response to drought conditions, USDA’s Farm Service Agency (FSA) authorized emergency grazing use of Conservation Reserve Program (CRP) acres for an additional 13 Texas counties effective immediately. This most recent authorization brings the total to 51 counties approved to graze CRP acres.”

Meanwhile, in global developments, Alexei Barrionuevo reported in today’s New York Times that, “When the Chinese came looking for more soybeans here [Brazil] last year, they inquired about buying land — lots of it.

“Officials in this farming area would not sell the hundreds of thousands of acres needed. Undeterred, the Chinese pursued a different strategy: providing credit to farmers and potentially tripling the soybeans grown here to feed chickens and hogs back in China.

“‘They need the soy more than anyone,’ said Edimilson Santana, a farmer in the small town of Uruaçu. ‘This could be a new beginning for farmers here.’”

The Times article added that, “The $7 billion agreement signed last month — to produce six million tons of soybeans a year — is one of several struck in recent weeks as China hurries to shore up its food security and offset its growing reliance on crops from the United States by pursuing vast tracts of Latin America’s agricultural heartland.

“Even as Brazil, Argentina and other nations move to impose limits on farmland purchases by foreigners, the Chinese are seeking to more directly control production themselves, taking their nation’s fervor for agricultural self-sufficiency overseas.”

Trade

Tom Polansek reported in today’s Wall Street Journal that, “The U.S. government confirmed on Thursday that exporters struck deals to sell corn to China, fueling expectations the Asian nation will be a customer whenever prices for the commodity dip.”

The article added that, “Prices on Thursday continued to climb back toward all-time records set earlier this spring. Fueling the rise in futures was the USDA report and continued concerns wet weather will keep farmers from planting enough corn to replenish precariously low supplies. Corn for July delivery ended up 3.25 cents, or 0.4%, at $7.455 a bushel at the Chicago Board of Trade.”

Bloomberg writer Alan Bjerga reported yesterday that, “U.S. farm exports will jump to a record $137 billion in the year ending Sept. 30 as companies including Bunge Ltd. and Archer Daniels Midland Co. expand shipping capacity to meet rising demand.

“The total would be 26 percent higher than last year’s $108.7 billion, and more than the previous record of $114.9 billion in 2008, the department said today in a quarterly report. A February forecast was for $135.5 billion. Imports are projected to rise to $93 billion, also an all-time high, and 5.7 percent above the USDA’s earlier prediction.

“‘Record agricultural exports should help support more than 1 million jobs across the nation,’ U.S. Agriculture Secretary Tom Vilsack said today at a congressional hearing. Overseas shipments of agricultural products totaled $75 billion in the first six months of the fiscal year, according to the USDA.”

In other news, Reuters news reported yesterday that, “A top Republican senator said he feared the Obama administration was squandering its chance to win approval of trade agreements with South Korea, Colombia and Panama by tying them to renewal of retraining programs for displaced U.S. workers.

“‘My problem is we can’t get TAA (Trade Adjustment Assistance) through this Congress,’ Senator Orrin Hatch, the top Republican on the Senate Finance Committee, said at a hearing on the South Korean pact.

“‘If we can’t get TAA through because it’s too expensive under current circumstances, why hold up three agreements that are going to create all kinds of jobs,’ Hatch said.”

To listen to an exchange on this issue between Sen. Hatch and Deputy U.S. Trade Reprensentative Demetrios Marantis, just click here (MP3- 5:22).

Also yesterday, Iowa GOP Senator Charles Grassley delivered a statement on the Senate floor regarding pending U.S. free trade agreements.

Animal Agriculture

Peter Wong reported earlier this week at The Statesman Journal (Salem, OR) Online that, “Egg-laying hens would get more room, in rules to be adopted by the Oregon Department of Agriculture, under a bill that cleared the Oregon Senate on Wednesday.

“Senate Bill 805, which moved to the House on a 26-4 vote, was sponsored at the request of Senate President Peter Courtney, D-Salem.”

The article noted that, “The bill would require Oregon farmers and all farms which produce eggs for sale in Oregon to use the ‘enriched colony cage system’ which nearly doubles or triples the space for each hen depending on the egg product produced. In the larger enclosures, hens would be able to perform normal behaviors such as standing up, turning around, flapping their wings and perching.”

Keith Good

Posted by Keith Good • May, 27, 2011 • 4:17 am