January 23, 2020

Policy Issues; Ag Economy; Regulations; Trade; and Food Safety

Policy Issues

The AP reported yesterday that, “President Barack Obama plans to create a special advisory council to recommend ways to boost the economic outlook and quality of life for the estimated 60 million people who live in rural areas of the U.S., a White House official said.

“Obama was expected to sign an executive order Thursday establishing the White House Rural Council and naming Agriculture Secretary Tom Vilsack, of Iowa, to be its chairman.”

The AP article noted that, “The panel will be responsible for providing recommendations to the president on investment in rural areas, as well as coordinating with a variety of rural interests, including agricultural groups, small businesses, and state, local and tribal governments.

“It will focus on 10 areas that affect nearly one-fifth of the U.S. population of 308 million. But the panel’s initial focus will be on job creation and economic development.”

Meanwhile, Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “With the Obama administration looking to reduce greenhouse gas emissions, the Agriculture Department is trying to perfect methods for farmers and landowners to get paid for emission-saving practices.

“A $2.8 million project in Iowa and Illinois that the USDA is helping fund will study methods of cutting back on the amount of nitrous oxide, a potent greenhouse gas, that escapes from farmland as a result of farmers using nitrogen fertilizer. The three-year project will involve 100 farmers in the two states will test several methods for reducing nitrous oxide, including reducing their fertilizer use or using practices that reduces the amount of nitrogen that is washed off of fields or emitted into the air.

The idea of this and similar projects the USDA is funding is to quantify how much greenhouse gas emissions can be reduced by various methods and how much farmers and landowners could earn in emission-reduction credits, Agriculture Secretary Tom Vilsack said today.”

A USDA news release from yesterday stated that, “Agriculture Secretary Tom Vilsack today approved about $7.4 million to fund nine large-scale greenhouse gas mitigation projects in 24 states through U.S. Department of Agriculture’s Conservation Innovation Grants (CIG).

“‘We want to help farmers and ranchers make important and innovative contributions to reducing greenhouse gas emissions,’ Vilsack said. ‘These grants are designed to test and verify exciting new approaches to greenhouse gas reduction that other conservation-minded producers will want to put to work on their operations.’”

In other news, an item posted yesterday at The Hill’s Congress Blog pointed out that, “Bad weather is nothing new to farmers. They know the risks when they get into the business, and they hope there are enough 2010’s to offset the 2011’s. The question becomes: how do you weather the storm in a lean year to still be around for another?

“That is where our nation’s farm policy comes into play — to provide some stability for our farmers and for the country’s food and fiber supply while limiting taxpayer exposure.

A good example of this is crop insurance. Farmers buy policies, made possible with government investment, to act as a cushion. When disaster strikes, private insurance companies cover the bulk of the losses, shielding taxpayers from tremendous risk exposure. But, without the public partnership, multiple peril insurance on a crop — something we take for granted on our cars and homes — would not be possible.”

In budget related issues, Christine Souza reported yesterday at the California Farm Bureau Online that, “Programs important to farmers and ranchers that are operated by the U.S. Department of Agriculture and other federal agencies may be scaled back, under a spending plan approved by the House Appropriations Committee last week. The committee approved legislation that reduces federal agriculture programs in fiscal year 2012 by 13.4 percent from the current fiscal year.

“California Farm Bureau Federation Manager of National Affairs Jack King called the committee action a sign of things to come, saying it sets the stage for 2012 Farm Bill discussions.”

More broadly on federal budget developments, Carol E. Lee and Janet Hook reported in today’s Wall Street Journal that, “A third rating agency threatened to downgrade the U.S. government’s credit status if Congress failed to increase the nation’s borrowing limit by early August, increasing pressure on lawmakers and the Obama administration to reach a deficit-reduction deal.”

Jackie Calmes reported in today’s New York Times that, “Recent signs that the economic recovery is flagging have introduced a new tension into the bipartisan budget negotiations, giving rise to calls especially from liberals to limit the size of immediate spending cuts or even to provide an additional fiscal stimulus.

On Thursday, for the first time in two weeks, Vice President Joseph R. Biden Jr. and six Congressional leaders will meet with a new urgency to take up negotiations toward reaching a deficit-reduction deal in July. Democrats will make the case for additional tax revenues to balance spending cuts, an approach Republicans have rejected.”

And Josh Boak reported last night at Politico that, “A sluggish jobs report and plunging stock market have added urgency to Thursday’s bipartisan talks about raising the nation’s debt ceiling, but don’t expect the economic turmoil to instantly force a compromise.”

Beyond the Biden talks, Erik Wasson reported yesterday at The Hill Online that, “The five remaining members of the Senate’s erstwhile Gang of Six deficit negotiators are struggling to stay relevant and pleading with Sen. Tom Coburn (R-Okla.) to rejoin the group.”

“Sen. Kent Conrad (D-N.D.), another of the Senate ‘five guys’ still talking, said [Sen. Saxby Chambliss (Georgia)] and Sen. Mike Crapo (Idaho), the two Republicans, continue to resist producing a plan unless Coburn returns. He said he has not heard of plans to replace Coburn.”

Also, Politico reported yesterday that, “Senate Republicans may demand a symbolic vote to raise the national debt ceiling with no strings attached in order to put pressure on the White House to cede to GOP demands for deep spending cuts.”


Agricultural Economy

The Federal Reserve Board released its latest Summary of Commentary on Current Economic Conditions report yesterday; commonly known as the Beige Book, the report included significant observations on the U.S. agricultural economy.  A summary of yesterday’s Beige Book agricultural analysis has been posted at

Bloomberg writers Jeff Wilson and Whitney McFerron reported yesterday that, “Wet weather that delayed corn planting in the U.S., the world’s largest exporter, may send global inventories to their lowest in 37 years, signaling higher costs for consumers and livestock producers.

More than one-third of Midwest fields were planted after the mid-May target for optimal growth because of excessive rain, and Ohio farmers as of June 5 were the furthest behind since 1989, with 58 percent sown, government data show. Goldman Sachs Group Inc. said June 6 that the disruptions increase the ‘potential for a shortfall.’”

Tracy Turner reported yesterday at The Columbus Dispatch Online that, “Corn and soybean growers in Ohio could lose nearly $1 billion this year as a result of record rains this spring that kept most farmers out of their fields for weeks.

“That’s according to Barry Ward, an assistant professor in Ohio State University’s Department of Agricultural, Environmental, and Development Economics. He said that the potential losses stem from lower yields that corn and soybean growers can expect because of late planting.”

An article posted yesterday at The News-Messenger Online (Fremont, OH) reported that, “Because Ohio’s weather delayed planting, the Ohio Farm Service Agency is extending the date to report prevented planting to July 15, to coincide with the crop reporting deadline.

“‘With the extension, producers will be able to file form CCC-576, Notice of Loss for prevented planting of corn and soybeans, at the same time as filing annual acreage reports, which are also due by July 15,’ said Steve Maurer, state executive director.”

In related news, Marcia Zarley Taylor reported yesterday at DTN’s Minding Ag Business Blog that, “Risk Management Agency Administrator Bill Murphy told DTN today that it was too early to tally how many prevented planting claims will be filed this year.

“‘Keep in mind also that we have late planting options,’ Murphy said. ‘That’s a period after the final planting date, and it’s anywhere from five to 25 days, that the producer can still plant but they experience a percentage reduction in guarantee every day.’”

The DTN item noted that, “$7 corn could be the biggest motivator to get a crop planted, since that’s $1 above the spring price guarantee, he added.

“‘One good thing that is going to keep losses lower this year is producers definitely want to get the crop into the ground and get that high dollar. It’s driving these guys nuts in areas where they can’t get the crop in the ground,’ Murphy said.”

With planting concerns and potential crop supplies an issue this year, Jane Wells reported yesterday at CNBC Online that, “The hottest topic [at the World Pork Expo in Des Moines], however, is the price of corn. Thursday, the USDA updates its outlook on this year’s corn crop, the first update since flooding delayed planting.

“‘In all previous years where corn planting was less than 90 percent complete by the end of May, final corn acreage came in short of March 31 planting intentions,’ says a report from Scotia Capital. ‘On May 29, corn planting was only 86 percent complete.’”

Dan Piller reported yesterday at the Green Fields Blog (Des Moines Register) that, “[Dennis Smith of Archer Financial Services in Chicago] agreed with pork producers who worry there might not be enough corn for both feed and ethanol during late summer this year before the 2011 harvest comes in the fall.

“‘It’s not like an ethanol plant, where we can flip off the switch and take some time off,’ pork producer Randy Spronk of Edgerton, MN.”

Rod Smith reported yesterday at Feedstuffs Online that, “Pork producers — and all producers who feed animals — are in ‘a very precarious position’ related to feed availability, according to Michael Formica, chief environmental counsel for the National Pork Producers Council (NPPC)… ‘It’s a major concern of ours that there will be shortages toward the end of summer,’ Formica said. For many producers, the scenario that they faced last summer may well be repeated, he said: ‘It won’t be the price of corn but the physical location — where is it, where do I have to go to find it.’”

Meanwhile, Bloomberg writer Mario Parker reported yesterday that, “Wet weather that delayed planting may leave global corn inventories at 14.5 percent of estimated consumption, the lowest ratio since 1974, based on government data. Tighter corn supplies might translate into higher production costs at ethanol plants.”

Reuters writer Carey Gillam reported yesterday that, “Corn use for ethanol continues to lag the U.S. Department of Agriculture’s forecast for 5 billion bushels needed this marketing year. Last week 96.075 million bushels were used but they would need to average more than 103 million bushels per week to hit the USDA forecast.”

In more aggregate news coverage of the agricultural economy, Gregory Meyer reported yesterday at The Financial Times Online that, “Some of the world’s most coveted wheat has joined the ranks of the most wildly traded commodities.

“The price of hard red spring wheat, a thinly traded but high-protein crop sought after by bread bakers, has gyrated in the past month and extended its lead on cheaper types of wheat used to make crackers and ice-cream cones.

The moves reflect uncertainty over soggy planting conditions that have hit farms on the plains of northern US and southern Canada. As of last week, only 69 per cent of spring wheat in the key growing state of North Dakota had been planted, when in a normal year almost all of the crop would be in the ground.”

And Bloomberg news reported earlier this week that, “France’s soft-wheat harvest, the European Union’s biggest, may slide 13 percent this year after drought damaged plants, slashing exports in the 2011-12 season, crops office FranceAgriMer said.”

However, Reuters news reported yesterday that, “Farmers in central and eastern Europe are set for a good grains crop this summer as favourable weather has largely offset delayed winter sowings in the region.

“Ample rains and increased spring sowings have helped the plantings across eastern Europe, with Ukraine, a big Black Sea grain producer, expecting to harvest 48 million tonnes of grain this year, compared to 39.2 million in 2010.”

(Recall that the World Agricultural Outlook Board will be releasing its latest World Agricultural Supply and Demand Estimates (WASDE) report, which provides USDA’s comprehensive forecasts of supply and demand for major U.S. and global crops and U.S. livestock, later this morning).

Meanwhile, Scott Kilman reported yesterday at The Wall Street Journal Online that, “The U.S. Agriculture Department sliced its estimate of the number of people who were chronically hungry in 2010 in the world’s poorest nations by 9% to 802 million from its original calculation of 882 million.

“USDA economist Stacey Rosen said Wednesday that better-than-expected grain harvests last year in Sub-Saharan Africa, the world’s most food-insecure region, helped to shield many poor people there from the big increases in global food-commodity prices in the last half of 2010.”



DTN writer Todd Neeley reported on Tuesday (link requires subscription) that, “Agricultural and chemical groups will have their voices heard in a lawsuit filed against EPA that could lead to new restrictions on the use of hundreds of pesticides and other agricultural chemicals.

“The U.S. District Court for the Northern District of California ruled June 3 that the American Farm Bureau Federation, Crop Life America, American Chemistry Council and others will be allowed to intervene in the settlement phase of a lawsuit filed against EPA by the Center for Biological Diversity and Pesticide Action Network North America (which works to reduce use of hazardous pesticides), according to the court’s ruling.

“On Jan. 20, the environmental groups filed a suit that alleged EPA violated the Endangered Species Act by not consulting federal wildlife officials about the potential effects that some 300 registered pesticides and other agricultural chemicals would have on some 200 species, before approving the use of those chemicals.”

Mr. Neeley pointed out that, “Ag groups and others are concerned that if the case is allowed to move forward without their intervention, many agricultural chemicals could be removed from the market while EPA is required to reconsider their effects on endangered species.”



DTN Political Correspondent Jerry Hagstrom reported yesterday that, “In new signals of the dire prospects for the decade-old Doha round of World Trade Organization talks, the New Zealand government has summoned home David Walker, the ambassador who has been chairing agriculture negotiations.”

An update posted yesterday at the Bridges Weekly Trade News Digest Online pointed out that, “WTO members have agreed to try to strike deals this year on certain issues within the long-running Doha Round of global trade talks, while postponing attempts for a comprehensive multilateral accord. The challenge for them now is to identify what might become part of a so-called ‘early harvest’ (if the term can be used nearly seven years after the talks were first scheduled to conclude).

Some trade officials in Geneva have suggested that securing agreement among the WTO’s 153 members on which issues to pull out of the Doha agenda might prove nearly as hard as reaching the broad accord that has eluded them for nearly a decade.”


Food Safety

Bloomberg writers Allison Connolly and Naomi Kresge reported yesterday that, “Germany’s top health official said the deadly E. coli outbreak appeared to be waning as local authorities defended their handling of the crisis.

“At least 2,743 people have been stricken by E. coli since May 2, up from 2,429 yesterday, the European Centre for Disease Prevention and Control said today. The bacteria have caused 25 deaths, an increase of 2 from yesterday, the Stockholm-based agency said.

The outbreak’s cause may never be found, Health Minister Daniel Bahr said. While the number of illnesses reported by the ECDC is increasing, many of them may be old sicknesses that are only now being confirmed in laboratories, according to the Robert Koch Institute, Germany’s disease-control agency. Data from routine surveillance in emergency rooms suggests a decrease in the number of newly ill people, the ECDC said.”

Keith Good

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