FarmPolicy

August 21, 2018

United Egg Producers- HSUS; Biofuels; Trade; Farm Bill Issues; and Ag Economy

United Egg Producers- HSUS

William Neuman reported in today’s New York Times that, “Two groups that are usually squawking at each other — egg farmers and animal welfare advocates — announced an unusual agreement on Thursday to work together to seek a federal law that would require larger cages and other improved conditions for the nation’s 280 million laying hens.

“The deal comes after the egg industry has been put increasingly on the defensive. Animal welfare groups have clandestinely recorded videos showing poor conditions on farms, and various states have sought to set more humane standards for hens. Egg producers have also been struggling to improve their image after tainted eggs from several farms in Iowa sickened thousands of people in a nationwide salmonella outbreak last year.

“The agreement was announced by the nation’s main egg industry group, the United Egg Producers, which represents farmers who own about 80 percent of the nation’s laying hens, and the Humane Society of the United States, the nation’s largest animal protection organization.”

The Times article added that, “The groups said they would ask Congress to pass a law enacting the new standards, which they said would be the first federal law addressing the treatment of farm animals and would pre-empt efforts in several states to set their own standards.

“The proposed federal standards would include cages that give hens up to 144 square inches of space each, compared with the 67 square inches that most hens have today. They would also include so-called habitat enrichments, like perches, scratching areas and nesting areas, that allow the birds to express natural behavior.”

Mr. Neuman indicated that, “In a statement Thursday, the National Pork Producers Council said that a federal law regulating living conditions for hens ‘would set a dangerous precedent for allowing the federal government to dictate how livestock and poultry producers raise and care for their animals.’

Robert L. Krouse, chairman of United Egg Producers, acknowledged the difficulties ahead.

“‘That’s part of what we have to do, as United Egg Producers, is talk with these other groups and hopefully get them to see our point of view,’ said Mr. Krouse, an Indiana egg farmer. ‘We understand their concerns, but this is about egg producers, this is a solution that we’ve found for us.’”

Today’s article noted that, “A federal law would be intended to pre-empt state laws. But the groups said it would have to include a faster transition timetable for California egg farmers to match the schedule approved in the ballot measure there, which requires larger cages by 2015.”

A statement yesterday from Arnie Riebli, the President of the Association of California Egg Farmers indicated that:

“While we are still in the process of reviewing today’s agreement between HSUS and the United Egg Producers, we welcome the recognition by HSUS that the enriched colony system is a suitable hen habitat.  California’s egg farmers have long advocated the use of an enriched colony system as a superior living area for hens.

“At the same time, we are very disappointed that California is not being treated equally as the other 49 states.  While the rest of the nation’s egg producers have until 2029 to spend an estimated five billion dollars necessary to comply with this agreement, California egg farmers must comply by 2015.”

Philip Brasher, writing yesterday at his new FoodWatch Blog, reported that, “The egg industry has known for some time that the so-called battery cages that are now the standard industry practice would have to be replaced with something more acceptable to the public. But producers didn’t want to go cage-free, as HSUS had been pushing, in part because cage-free operations require more and better trained workers. Cage-free hens also need more feed, further increasing production costs. The industry preferred instead to switch to a larger style of cages, known as ‘enriched colony’ housing, that give the birds more room to move around and also include perches and nesting areas. (See photo) The deal announced today between HSUS and the United Egg Producers allows the industry to do just that and gives farms a decade and a half to phase in the new housing.

“There’s a big catch, however.  The two groups agreed to jointly ask Congress for a federal law that set standards and a timeline for the changes, and that legislation will have to pass for the deal to go through. If the bill doesn’t pass,  ‘then the agreement would be off and we’d be likely to see more ballot measures, litigation, etc. Both sides want to work together to enact,’ HSUS’ Paul Shapiro told me.”

And the AP reported yesterday that, “Threatened with a series of state laws cracking down on cramped cages, the egg industry on Thursday said it would agree to seek federal regulation to improve conditions for egg-laying hens.

“In an unusual move, the United Egg Producers announced the effort in a joint appearance with the Humane Society of the United States. The egg group represents 95 percent of the egg-laying hens in the United States.”

The AP article noted that, “The proposal comes after laws requiring better hen conditions were passed in Arizona, California, Michigan and Ohio. Animal welfare groups were gearing up to propose additional standards in Washington state and Oregon.”

 

Biofuels

Bill Tomson and Scott Kilman reported in today’s Wall Street Journal that, “The nation’s $6 billion subsidy program for ethanol producers would be eliminated under a proposed deficit-reduction deal detailed Thursday, but corn-state senators negotiated for more than $600 million to help promote sales of ethanol-blended gas at service stations.

The White House, along with key ethanol-industry supporters, backed the proposal, which was cobbled together by three senators. It still faces an uncertain future in the House as one piece of broader bargaining over federal spending and tax policy.

“The proposal would end the decades-old subsidy by July 31. It now gives gasoline retailers an excise tax credit of 45 cents for each gallon of ethanol they blend with their motor fuel. A tax of 54 cents a gallon on imported ethanol would also be retired at the end of the month.”

The Journal article pointed out that, “[Sen. Dianne] Feinstein’s proposal calls for about $1.33 billion in savings achieved for the rest of the year to be used to reduce the federal deficit. The remainder of the savings, about $668 million, would be used to extend a host of tax credits, including money for alternative-fueling infrastructure such as blender pumps at gas stations that let consumers boost the percentage of ethanol in the fuel they buy.

The White House, in a statement, said the senators’ proposal ‘provides a road map for the American biofuels industry to navigate their own future expansion.’”

Chris Clayton reported yesterday at DTN (link requires subscription) that, “Ethanol industry leaders said Thursday a deal struck to overhaul ethanol incentives isn’t exactly what they want, but it’s a workable plan to move the industry forward and replace the ethanol blenders’ credit with, among other items, incentives for blender pumps.

“‘From the industry’s perspective, we have been willing to reform these programs for quite some time, looking for the proper legislative vehicle in order to enact them,’ said Growth Energy CEO Tom Buis. ‘I think this gives us the opportunity to move in the correct direction in order to remove the barriers to the marketplace we face in competing with oil.’”

The DTN article added that, “Any bill, however, still would need to clear both the Senate and the House, as well as be adopted by the president. Further, given that the bill increases federal revenue, House leaders may require that such a bill actually begin in the House before being adopted, a technical issue lawmakers call ‘blue slipping’ a bill.”

Meanwhile, a news release yesterday from the House Committee on Science, Space, and Technology stated that, “Today the Energy & Environment Subcommittee held a hearing to examine the science behind the Environmental Protection Agency’s decision to grant a waiver permitting the use of mid-level ethanol blends of up to 15 percent, a gasoline blend referred to as ‘E15.’ Witnesses criticized the scientific and technical evaluations used by the EPA in making their decision and highlighted numerous risks that could be extremely costly to consumers.”

And Matthew L. Wald reported in yesterday’s New York Times that, “The Energy Department plans to provide a $105 million loan guarantee for the expansion of an ethanol factory in Emmetsburg, Iowa, that intends to make motor fuel from corncobs, leaves and husks.”

 

Trade

Reuters writers Doug Palmer and David Lawder reorted yesterday that, “U.S. trade deals with South Korea, Colombia and Panama cleared initial hurdles in Congress on Thursday, but a party-line clash over a program to help workers displaced by trade threatened future action.

“The Senate Finance Committee backed all three agreements, but panel Republicans unanimously opposed the Korea pact because of the fight over Trade Adjustment Assistance (TAA).

“Meanwhile, the House of Representatives Ways and Means Committee approved the three deals without a single ‘yes’ vote from President Barack Obama’s fellow Democrats.”

The Reuters article explained that, “The committee action sets the stage for Obama to send final bills to implement all three deals to Congress for straight ‘yes’ or ‘no’ votes. That could happen as early as next week.

“However, the Democrat-controlled Senate committee and Republican-led House panel offered conflicting advice over how to handle TAA, a nearly 50-year-old program that has become a major point of contention between the two parties.

Without an agreement on TAA, White House efforts to pass the trade bills could founder, despite concern in both parties that the United States is falling behind the European Union, Canada and others in nailing down trade deals.”

The article noted that, “U.S. Trade Representative Ron Kirk said the administration looked forward to working with congressional leaders to find a way to get both TAA and the trade deals approved.”

 

Farm Bill Issues

A news release yesterday from the House Agriculture Committee stated that, “Today, Rep. Glenn ‘GT’ Thompson, Chairman of the House Agriculture Committee’s Subcommittee on Conservation, Energy, and Forestry, continued the audit hearings on farm policy, which is the first step in the farm bill process. Each chairman of the six subcommittees will hold hearings to examine programs in their respective jurisdictions to determine spending trends and confirm how programs work together.

“Conservation programs protect soil, water, wildlife, and other natural resources on agricultural land. Currently, there are more than 20 conservation programs and subprograms that are administered by the Natural Resources Conservation Service (NRCS) and the Farm Service Agency (FSA). Some of the larger programs include: Conservation Reserve Program (CRP), Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program (CSP), and the Wetlands Reserve Program (WRP).”

To listen to a brief discussion from yesterday’s hearing between Committee Chairman Frank Lucas (R-OK), Bruce Nelson, the Administrator of USDA’s Farm Service Agency and NRCS Chief Dave White, where budget implications and some program specifics were addressed, just click here (MP3- 3:32).

Ranking Member Collin Peterson (D-MN) also discussed the CRP in some detail- within the context of land in the program and production issues- related FarmPolicy audio available here (MP3- 1:24).

A separate news release yesterday from the Ag Committee stated that, “Today, Rep. Jean Schmidt, Chairman of the House Agriculture Committee’s Subcommittee on Nutrition and Horticulture, held an audit hearing to examine specialty crop programs. This is the third hearing in the series on farm policy that is designed to provide oversight of current spending to ensure programs are delivered effectively, while minimizing waste, fraud, abuse, and duplication. It is also provides Members of the Committee with a comprehensive view of farm programs.”

During yesterday’s hearing Subcommittee Ranking Member Joe Baca (D-CA) touched on nutritional issues, including the SNAP program and farmer’s markets, in a conversation with Rayne Pegg the Administrator of USDA’s Agricultural Marketing Service.  To listen to a portion of this discussion from yesterday, just click here (MP3- 2:27).

In other policy developments, a news release yesterday from the House Committee on Small Business stated that, “On Thursday, July 7, 2011 at 10:00 am, the House Small Business Committee Subcommittee on Agriculture, Energy and Trade held a hearing entitled Regulatory Injury: How USDA’s Proposed GIPSA Rule Hurts America’s Small Businesses.  The hearing took place in room 2360 of the Rayburn House Office Building.

“The Committee examined the Grain Inspection, Packer and Stockyards Administration (GIPSA) Proposed Rule on livestock marketing practices. The purpose of the hearing was to highlight the effects of the Proposed Rule on small businesses within the beef, pork and poultry industries and discuss the inadequacies in GIPSA’s Initial Regulatory Flexibility Analysis.”

Witness testimony from yesterday’s hearing is available here.

Also yesterday, a news release from the American Soybean Association (ASA) stated that, “As Congress considers several transportation issues and measures, including appropriations bills and the potential Surface Transportation Reauthorization bill by the authorizing committees, the [ASA] is urging support for its top transportation and infrastructure priorities.

“‘Soybean farmers have a strong interest in ensuring there is a safe and efficient transportation system,’ said ASA President Alan Kemper, a soybean farmer from Lafayette, Ind. ‘The ability to move soybeans from the farm to processing facilities and our export customers is a significant factor in our bottom line. To maintain our industries’ competitive position in the global market, we must invest in our aging and increasingly inefficient transportation infrastructure.’”

And with respect to debt ceiling negotiations and farm program spending, an update posted yesterday at the National Sustainable Agriculture Coalition (NSAC) Blog stated in part that, “The Farm Bill part of the question could be more complicated.  As has been widely reported, the Biden-led negotiations had tentatively agreed on at least $600 billion in cuts over the next ten years to mandatory benefits and subsidies, including about $34 billion in farm bill commodity subsidy cuts.  If taken entirely from the commodity title of the Farm Bill, that would approximately equal a 50 percent cut annually from projected baseline spending levels for the commodity title.”

Yesterday’s NSAC update added that, “Some commentators, though, believe the votes for a mega budget deal are going to be so close and debate so contentious that the cuts to mandatory benefit and subsidy programs will need to be included in their full legislative detail in the August budget vote.  Under that scenario, assuming there continues to be a major budget reduction to farm bill programs, the Agriculture Committees would lose the opportunity to shape the product through more normal legislative process.  The vote on the actual particulars would take place as part and parcel of the floor vote on the deficit reduction/debt ceiling vote.”

Meanwhile, Carol E. Lee, Janet Hook and Naftali Bendavid reported in today’s Wall Street Journal that, “President Barack Obama and congressional leaders agreed Thursday to strive for a blockbuster deficit-reduction deal and will spend the weekend determining whether political support is possible for a sweeping plan to curb entitlements and make major tax-code changes.

“The package to reduce the federal deficit by $4 trillion or more over 10 years is much more ambitious than negotiators envisioned just two weeks ago, and represents the most far-reaching of three options Mr. Obama presented to lawmakers Thursday in a closed-door meeting in the White House Cabinet Room.

“To achieve such a reduction, negotiators likely would have to agree to spending cuts for domestic programs, defense and entitlement programs such as Medicare and Medicaid, as well as boost tax revenues. Most negotiators agree that spending reductions would outweigh any new revenues by a sizable margin, though significant reductions in tax breaks and deductions for businesses also likely would be part of the mix.

 

Agricultural Economy

Bloomberg writer Rudy Ruitenberg reported yesterday that, “World food prices rose in June as the cost of sugar, meat and dairy increased, adding to inflationary pressure that has prompted central banks across the world to raise interest rates.

“An index of 55 food commodities rose to 233.8 points from 231.4 points in May, the United Nations’ Food and Agriculture Organization said in a report on its website today. The gauge climbed to an all-time high of 237.7 in February.”

In domestic news, Bob Sechler reported in today’s Wall Street Journal that, “A nine-month drought parching the south-central U.S. is unlikely to end soon, with National Weather Service officials predicting severe conditions in Texas and Oklahoma at least into early next year.

“The drought is already considered among the worst on record, in terms of depth if not duration. Speakers at a National Oceanic and Atmospheric Administration workshop here [Austin, TX] Thursday called the lack of rain in the state since Oct. 1 ‘stunning’ even by historic standards.”

And Robert Pore reported earlier this week at the Grand Island Independent Online (Neb.) that, “This year, Nebraska farmers planted 10 million acres of corn, and at this point of the crop’s development, that 10 million acres could translate into a record crop this fall of more than 1.6 billion bushels.”

Mr. Pore noted that, “The USDA reported that the statewide cash price for corn on June 15 was $6.30 per bushel, up from $3.44 per bushel from June 2010.

“Depending on markets and weather through the rest of the growing season, if that $6.30 per bushel price of corn were to stay steady through harvest and state farmers see a record production of 1.6 billion bushels, the value of the crop could surpass $10 billion.”

Keith Good

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