FarmPolicy

February 19, 2018

Farm Bill; Ag Economy; Animal Ag; Biofuels; Trade; and Regulations

Farm Bill: Budget- Unwinding Weekend Developments, Farm Spending Implications

Carol E. Lee and Janet Hook reported on Friday at The Wall Street Journal Online that, “The White House and congressional leaders begin a crucial weekend of negotiations on a deficit-reduction deal under a cloud of dour economic news and mounting political pressures on both sides, casting doubt on how significant an agreement they can achieve.

“President Barack Obama and House Speaker John Boehner (R., Ohio) are battling opposition from within their own parties to their decision to strive for a plan that would reduce the deficit by $4 trillion over 10 years, in part by curbing entitlement spending and rewriting the tax code to boost revenue.

“The two men surprised many in Washington this week by aiming for such an ambitious bargain, rather than a smaller package of roughly $2 trillion the White House and Congress had pursued for weeks. Although many Republicans and Democrats say they applaud the goal in theory, they also express doubts about reaching it given the major compromises it would require from both parties heading into an election year.”

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House Ag Comm Hearings- POST November 2010 Elections

SEPTEMBER 2011

September 14– “Examination of the issue of feed availability and its effect on the livestock and poultry industries.”  FarmPolicy.com Summary:

A House Agriculture Committee news release yesterday stated that, “Today, Rep. Thomas Rooney, Chairman of the House Agriculture Committee’s Subcommittee on Livestock, Dairy, and Poultry held a public hearing to examine the issue of feed availability and its effect on the livestock, dairy, and poultry industries.

“Feed accounts for a major component of food animal production – 50 to 80 percent depending on the species. The U.S. livestock, dairy, and poultry industries are confronting tight feed supplies. Many analysts believe this is going to be a persistent challenge for the next several years. This year a widespread drought across parts of the country has only compounded the problem. Members of the Subcommittee heard testimony from representatives of every sector of the animal agriculture industry who described how these conditions are causing stress.”

A news release yesterday from the National Cattlemen’s Beef Association (NCBA) yesterday, which included statements from representatives of NCBA, the National Pork Producers Council, National Turkey Federation, National Chicken Council and the American Feed Industry Association, noted that, “The hearing came on the heels of a U.S. Department of Agriculture World Agriculture Supply and Demand Estimates report that projected this year’s corn crop will be 417 million bushels lower than initial estimates” [related table].

During his opening statement at yesterday’s hearing, Dr. Steven Roger Meyer, President Paragon Economics, Inc., referred to this figure from his prepared testimony and raised the issue of what would happen if the U.S. experienced a wide spread drought that could hamper crop production on a large scale (related audio here– MP3- 2:23).

In his opening statement yesterday, Michael Welch, the President and CEO of Harrison Poultry, Inc., discussed profit margin issues in poultry production and, with respect to biofuels, pointed out that a large amount of ethanol is currently being exported (related audio here– MP3- 1:26).

Subcommittee Ranking Member Dennis Cardoza (D-CA) asked Philip Greene, the Vice President of Foster Farms Inc., about profit margins and sought more detail about prices of end products covering operating costs. (related audio– MP3- 1:23).

And Rep. David Scott (D- GA) asked the panel to flesh out some details of the impact of higher feed costs and sought to ascertain a better understanding of corn price levels and production profitability.  Mr. Welch and Dr. Meyer provided responses to his questions in this interesting exchange (MP3- 5:00) at yesterday’s hearing.

A news release yesterday from the Renewable Fuels Association stated that, “America’s ethanol producers are on pace to produce nearly 40 million metric tons of livestock feed in 2011 – a volume greater than all the corn used on cattle feedlots all across the country.  Additionally, ethanol producers are poised to export nearly 25 percent of that volume to meet growing feed demands around the globe.

“Unfortunately, these facts and other benefits of a robust domestic ethanol industry will likely be overlooked or dismissed out of hand at a stacked deck hearing today before the House Agriculture Subcommittee on Livestock, Dairy, and Poultry.  Witnesses at the hearing include a wide range of livestock and meat processing interests, but do not include anyone from the nation’s ethanol, corn growing, or feed milling industries.”

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September 13– “Subcommittee Wraps Up Audit Hearing Series.”  ELEVENTH AND FINAL AUDIT HEARING.  FarmPolicy.com audio replay of the hearing available here (MP3).  FarmPolicy.com Summary:

A news release yesterday from the House Agriculture Committee stated that, “Today, Rep. Timothy V. Johnson, Chairman of the House Agriculture Committee’s Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture, held an audit hearing to examine U.S. Department of Agriculture (USDA) rural development programs. This is the eleventh and final hearing in the audit series designed to provide members of the committee with a greater understanding of farm policy. Since June, the subcommittee chairmen have examined programs in their respective jurisdictions to determine spending trends and confirm whether the purpose and goals of agricultural programs are being met successfully.”

During his opening statement at yesterday’s hearing, Subcommittee Ranking Member Jim Costa (D-Calif.) focused on the definition of “rural” and noted that this is a key policy variable in considering Rural Development programs (audio here, MP3- 1:38)

During the Q and A portion of yesterday’s hearing, Subcommittee Chairman Johnson delved further into the issue of how USDA defines “rural” and queried the panel of witnesses for details regarding a Department report on the issue- a report that is past due and still not available.  To listen to this interesting exchange, which included remarks from Judith A. Canales, the Administrator for Rural Business and Cooperative Services and Jonathan S. Adelstein, the Administrator for the Rural Utilities Service, just click here (MP3- 5:54).

Also at the hearing, Subcommittee Chairman Johnson asked the panel for more detail regarding the methodology that led to USDA’s estimate that some 250,000 had been created- or saved, as a result of the Rural Development programs.  Click here (MP3-3:35) to listen to this discussion with Administrator Canales.

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September 8– “Subcommittee Holds Audit Hearing on Dairy Programs.” TENTH AUDIT HEARING. FarmPolicy.com audio replay of the hearing available here (MP3).  FarmPolicy.com Summary:

A news release yesterday from the House Agriculture Committee stated that, “Today, Rep. Thomas Rooney, Chairman of the House Agriculture Committee’s Subcommittee on Livestock, Dairy, and Poultry held an audit hearing to examine U.S. Department of Agriculture (USDA) dairy programs. This is the tenth hearing in the series on farm policy that is designed to provide oversight of current spending to ensure programs are delivered effectively. It also provides Members of the Committee with a comprehensive view of farm programs.

Current dairy programs include the Dairy Product Price Support Program (DPPSP), Milk Income Loss Contract (MILC) Program, Dairy Export Incentive Program (DEIP), Livestock Gross Margin Insurance for Dairy (LGM-Dairy), and Federal Milk Marketing Orders (FMMOs). Members of the Subcommittee heard testimony about how these programs are working, current conditions and productivity in the dairy industry, and possible public policy challenges moving forward.”

At yesterday’s hearing, full Committee Ranking Member Collin Peterson (D-Minn.) reminded the panel that there is current discussion about moving dairy policy to a “margin-type program” as opposed to a price based program; Rep. Peterson asked the panel to talk about dairy farm margins over the past few years.  To listen to a portion of this discussion between Rep. Peterson and USDA Senior Economist Larry Salathe, just click here (MP3- 2:08).

Similarly, Rep. Tim Huelskamp (R-Kansas) queried the panel for their general thoughts on the proposed “Foundation for the Future” program, to listen to some of this discussion, which included remarks from Dana Coale, the Deputy Administrator for Dairy Programs, USDA-Agricultural Marketing Service, and Juan Garcia, the Acting Deputy Administrator for Farm Programs, USDA- Farm Service Agency, just click here (MP3- 4:09).

A bit later at yesterday’s hearing, Rep. Joe Courtney (D-Conn.) followed up on Rep. Huelskamp’s line of inquiry and sought to flesh out additional administration perspective on “Foundation for the Future.” This audio clip (MP3- 5:40), which includes remarks from Ms. Coale and Mr. Salathe, contains a portion of this additional discussion.

JULY 2011

July 28–  “Subcommittee Examines Research Programs as Part of Ongoing Audit Effort.”  NINTH AUDIT HEARING.  FarmPolicy.com audio replay of the hearing available here (MP3).  FarmPolicy.com Summary:

Also yesterday, a House Agriculture Committee news release stated that, “The House Agriculture Committee’s Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture, held an audit hearing to examine U.S. Department of Agriculture (USDA) research programs. This is the ninth hearing in the audit series that is designed to provide members of the committee with a greater understanding of farm policy.”

During her opening statement at yesterday’s hearing, Dr. Laurian Unnevehr, the Acting Administrator at USDA’s Economic Research Service, highlighted the importance of public agricultural research (audio– (MP3- 1:30)) and pointed to a recent ERS publication on the issue,“Public Agricultural Research Spending and Future U.S. Agricultural Productivity Growth: Scenarios for 2010-2050”.

A summary of that report noted that, “By 2050, global agricultural demand is projected to grow by 70-100 percent due to population growth, energy demands, and higher incomes in developing countries. Meeting this demand from existing agricultural resources will require raising global agricultural total factor productivity (TFP) by a similar level. The rate of TFP growth of U.S. agriculture has averaged about 1.5 percent annually over the past 50 years, but stagnant (inflation-adjusted) funding for public agricultural research since the 1980s may be causing agricultural TFP growth to slow down. ERS simulations indicate that if U.S. public agricultural R&D spending remains constant (in nominal terms) until 2050, the annual rate of agricultural TFP growth will fall to under 0.75 percent and U.S. agricultural output will increase by only 40 percent by 2050. Under this scenario, raising output beyond this level would require bringing more land, labor, capital, materials, and other resources into production.”

Also at yesterday’s hearing, Subcommittee Ranking Member Jim Costa (D-CA) asked Dr. Cynthia Clark, the Administrator of USDA’s National Agricultural Statistics Service about the quality of the agencies data- audio (MP3- 1:52).

A National Sustainable Agriculture Coalition Blog summary of this hearing is available here.

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July 27– “Committee Holds Eighth Audit Hearing on Agricultural Programs.”  EIGHTH AUDIT HEARING.  FarmPolicy.com audio replay of the hearing available here (MP3).  FarmPolicy.com Summary:

A FarmPolicy audio clip of a portion of the opening statement delivered by Chairman Lucas at yesterday’s hearing can be heard here (MP3- 2:59).

Also at yesterday’s hearing, Rep. Vicky Hartzler (R-MO) asked some very timely and relevant questions about Direct Payments, which she noted are in the news “here lately.”

In response to her inquiry, Juan Garcia, Acting Deputy Administrator for Farm Programs at USDA’s Farm Service Agency (FSA), and FSA Administrator Bruce Nelson provided additional information about the Direct Payment program, including participation rates.

However, the witnesses were reluctant to provide a lot of detail when Rep. Hartzler asked, “In your opinion, what would be the impact on farmers if Direct Payments were to be done away with?”- An idea Rep. Hartzler made clear she was not proposing.

To listen to this exchange from yesterday on Direct Payments, just click here (MP3- 2:49).

Also at yesterday’s House Ag Subcommittee hearing:

Chairman Lucas spent some of his time for questions asking the witnesses about the Supplemental Revenue Assistance Payments (SURE) Program- audio with Mr. Nelson (MP3- 2:55).

– Rep. Austin Scott (R-GA) focused on issues associated with financing farming operations and risk producers face today including price volatility and high production costs- audio with Mr. Nelson (MP3- 2:27).

– Rep. Chris Gibson (R-NY) inquired about crop insurance and potential variables associated with program reform- audio with Mr. Nelson and Mr. Garcia (MP3- 2:38).

– Rep. Reid Ribble (R-WI) focused on planting restrictions on base acres and restraints of growing fruits and vegetables on enrolled acreage.  He specifically sought more information about growing vegetables for processing on program land- audio with Mr. Nelson and Mr. Garcia (MP3- 2:59).

Meanwhile, Philip Brasher reported yesterday at the FoodWatch Blog that, “Farmers who get government payments for land that’s traditionally grown corn, soybeans and other subsidized crops have long been barred from planting fruits and vegetables on that acreage. Existing fruit and vegetable growers in California and other states have insisted on that restriction. However, a special provision in the 2008 farm bill allowed some Midwest farmers to start switching some corn and soybean acreage to tomatoes and other vegetables destined for processing. As it turns out, only about 10,215 acres have been planted to vegetables, just 14 percent of the 75,000 acres allowed under the pilot program.

“Many farmers already had land to grow vegetables on that wasn’t subject to the subsidy restrictions, says Bruce Nelson, administrator of the Agriculture Department’s Farm Service Agency. Another factor: Demand for processed vegetables is weak.

“Some 155 farms participated in the pilot project. Eight-five percent of the farms and farmers were in just three states – Illinois, Indiana and Minnesota – out of seven that were eligible.”

A National Sustainable Agriculture Coalition Blog summary of this hearing is available here.

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July 21Subcommittee Examines Largest Portion of Farm Bill Budget: Nutrition Programs.  SEVENTH AUDIT HEARING.  FarmPolicy.com audio replay of the hearing available here (MP3).  FarmPolicy.com Summary:

A news release yesterday from the House Agriculture 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 Title IV nutrition programs. This is the seventh 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 also provides Members of the Committee with a comprehensive view of farm programs.”

The Chairman of the full committee, Frank Lucas, also delivered remarks at yesterday’s subcommittee hearing, a portion of which can be heard here (MP3-0:43).

Audrey Rowe, the Administrator of USDA’s Food and Nutrition Service (FNS), provided an overview of FNS programs during her opening remarks yesterday and highlighted general demographics of FNS program participants by rhetorically asking, “You may wonder who are these 45 million [Americans that participate in the SNAP program]” (related FarmPolicy.com audio– MP3- 1:18).

Administrator Rowe also discussed issues associated with the accuracy and integrity of the SNAP program (related audio–  MP3- 1:14).

During the discussion portion of yesterday’s hearing, Subcommittee Chairwoman Jean Schmidt (R-OH) highlighted potential overlap of FNS programs (audio– MP3- 1:01), as well as improper FNS payments (audio– MP3- 1:41).

And Rep. Steve King (R-Iowa) inquired about the odd dichotomy of food insecurity and obesity in an exchange with Administrator Rowe (audio– MP3- 1:28).

A National Sustainable Agriculture Coalition Blog summary of this hearing is available here.

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July 20–  Energy and Forestry Programs Under the Microscope During Audit Hearing.  SIXTH AUDIT HEARING.  FarmPolicy.com audio replay of the hearing available here (MP3).  FarmPolicy.com Summary:

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, held a public hearing to review energy and forestry programs within the subcommittee’s jurisdiction. This is a continuation of the series of audit hearings the Agriculture Committee is holding to review programs in advance of writing the next farm bill.”

Sarah Gonzalez reported yesterday at Agri-Pulse Online that, “Every energy program in the current Farm Bill will lose mandatory funding rights after the expiration date of the 2012 Farm Bill. At the Subcommittee on Conservation, Energy and Forestry Agricultural Program Audit on July 20, Chairman Glenn Thompson and subcommittee members led an examination of these energy programs, along with USDA forestry programs.

“‘Thirty-seven programs in the Farm Bill do not have a budget baseline beyond the expiration date of the current farm bill, including every program in the energy title,’ said Thompson. ‘Therefore, if we wish to see any of these programs continue into the future in the current form, we will be faced with the challenge of finding funding elsewhere.’

These 37 programs are allocated through 12 titles of the current farm bill, making it difficult to reallocate funding. Some of these programs, including the Biomass Crop Assistance Program and the Rural Energy for America Program, were added or expanded in the 2008 Farm Bill in an effort to make biomass production a viable option for the nation’s growers.”

(Related FarmPolicy.com audio of remarks from Chairman Thompson at yesterday’s hearing available here (MP3- 0:51).

Yesterday’s Agri-Pulse article added that, “In an effort to distinguish biomass energy programs administered by the USDA from other government programs, [Judy Canales, Administrator, Rural Business Cooperative Service] emphasized the focus many Farm Bill programs have on energy and agriculture.

“‘The Biorefinery Assistance Program differs from the Department of Energy because these technologies are all first-of-a-kind,’ she said. ‘But most importantly, there is usually some element of a relationship to agriculture. We are trying to drive private sector dollars into the rural communities, predominantly.’”

(Related FarmPolicy.com audio of the exchange on the Biorefinery Assistance Program issue with Chairman Thompson and Ms. Canales, available here (MP3- 2:07).

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July 14Subcommittee Examines Farm Loan Programs During Audit Hearing.  FIFTH AUDIT HEARING.  FarmPolicy.com audio replay of the entire hearing available here (MP3).  FarmPolicy.com Summary:

A news release yesterday from the House Agriculture Committee stated that, “Today, Rep. Jeff Fortenberry, Chairman of the House Agriculture Committee’s Subcommittee on Department Operations, Oversight, and Credit, held a hearing to examine the U.S. Department of Agriculture (USDA) Farm Service Agency’s (FSA) loan programs. The audit hearing was a part of the House Agriculture Committee’s ongoing effort to provide oversight of current spending to ensure that programs are being delivered effectively while minimizing waste, fraud, abuse, and duplication. This is the fifth audit hearing in the series.”

At yesterday’s hearing, Chairman Fortenberry (R-Neb.) highlighted the need for credit within the context of the uniqueness of the agricultural industry (related audio– MP3- 1:19), while USDA Farm Service Agency (FSA) Administrator Bruce Nelson provided an overview of FSA loan programs (related audio– MP3- 2:05).

In response to a question from Subcommittee Ranking Member Marcia L. Fudge (D-OH) that dealt with city farm projects (rooftop gardens, indoor gardens), Administrator Nelson stressed that FSA loans are available to all farmers and are not generally allocated based on “rural” considerations but are potentially available for city related operations as well (related audio– MP3- 1:34).

A National Sustainable Agriculture Coalition Blog summary of this hearing is available here.

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July 13Subcommittee Examines Trade & Food Aid Programs During Audit Hearing. FOURTH AUDIT HEARING.  FarmPolicy.com audio replay of the entire hearing available here (MP3).

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July 7Nutrition & Horticulture Subcommittee Examines Specialty Crop Programs.  THIRD AUDIT HEARING.  FarmPolicy.com Summary:

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).

A National Sustainable Agriculture Coalition Blog summary of this hearing is available here.

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July 7Agriculture Subcommittee Continues Farm Policy Audit With Hearing on Conservation Programs.  SECOND AUDIT HEARING. FarmPolicy.com Summary:

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).”

The opening statement from yesterday’s hearing by Subcommittee Chairman Thompson is available here.

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 National Sustainable Agriculture Coalition Blog summary of this hearing is available here.

JUNE 2011

June 24Agriculture Subcommittee Examines Crop Insurance Program.  FIRST AUDIT HEARING.  Unofficial FarmPolicy.com transcript available here.  FarmPolicy.com Summary:

A news release Friday from the House Agriculture Committee stated that, “Today, Rep. K. Michael Conaway, Chairman of the House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management, held the first audit hearing on farm policy. This audit of agricultural programs 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.

Today’s hearing examined the Federal Crop Insurance Program, which is a cornerstone of U.S. farm policy. Subcommittee Members looked for ways to reduce duplication between crop insurance and other farm programs, and examined whether the current administration and funding of the crop insurance program is sufficient to meet producer risk management needs.”

And in this FarmPolicy.com audio clip (MP3- 1:31) from the Subcommittee hearing, the Chairman of the full Committee, Rep. Frank Lucas (R-OK) explained the goals of the Committee’s audit hearings that will examine programs authorized in the farm bill.

During the discussion portion of Friday’s hearing, Subcommittee Chairman Conaway indicated that, “In my opening statement, in Leonard’s [Boswell] and yours as well [Bill Murphy], you talked about the importance of the private-public partnership of delivery of crop insurance. From time to time we hear rumors that that partnership may need to go just totally public, and with a public delivery – I mean a private – excuse me, public delivery of the system. Are you and your stuff committed to this public-private partnership? Because it sure looks like it works to us.”

Bill Murphy, the administrator of the Risk Management Agency (RMA), and the only witness to testify at Friday’s hearing, responded by saying: “Yes, indeed. In fact, the Secretary reiterated that when meeting with one of the trades groups a couple weeks ago in his office. There’s no doubt in my mind that we’re enjoying these participation levels today due to that unique relationship with private agents and their companies.”

Later in the hearing, Rep. Rick Crawford (R-AR) queried Administrator Murphy about regional participation rates in the crop insurance program, noting that, “Can you provide any insight into the differences in participation rates between crops and/or regions? For example, in 2010, according to RMA data, about 68% of rice, and particularly in Arkansas, acres were insured. By contrast, nearly all of Texas cotton acres were insured. Are there unique concerns with certain crops or regions?

Administrator Murphy’s response to this issue is available at page 19 of the FarmPolicy.com Transcript, as well as in this FarmPolicy.com audio clip (MP3- 2:23) of the transaction between Rep. Crawford and Admin. Murphy.

Rep. Robert T. Schilling (R-IL) brought up the issue of acreage reporting (at page 18) and noted that, “One of the concerns is about the duplication of the acreage reporting, including the cost of administering and the frustration that it causes our producers.”

Admin Murphy replied that, “Yeah, I understand your point exactly, sir, and I’m very pleased to tell you we are making progress in this area. Through the Comprehensive Information Management System, the CIMS program, we are pulling together the acreage report dates for both FSA and RMA. I think next year spring crops, 2012, we’ll see the first dates of that, and that will be in the northern country. That has always been a source of angst to growers out there.

“We’re working toward, through that same project, a single report reporting. If the farmer wants to go to his FSA county office and report, why can’t the agent download that information and use it himself, and vice versa? If it’s a rainy Thursday afternoon, why can’t a grower sit and certify at home and have it sent to both programs? That’s the end goal of the CIMS project. Under Secretary [Scuse] is a primary proponent of in the department, and I’m happy to say that we are moving very quickly toward that.”

In addition, Agriculture Committee Ranking Member Collin Peterson (D-Minn.) inquired about changes reflected in the Standard Reinsurance Agreement (SRA) (at page 14-15)- related FarmPolicy audio from this discussion is also available here (MP3- 2:29).

MAY 2011

May 4Subcommittee Examines Issues Facing Pork IndustryOfficial Transcript.  FarmPolicy.com Summary:

A House Ag Committee news release from yesterday stated that, “Rep. Tom Rooney, Chairman of the House Agriculture Committee’s Subcommittee on Livestock, Dairy, and Poultry, held a public hearing today to review the state of America’s pork industry.

“Members of the Subcommittee heard statements from witnesses that represented a cross-section of the pork industry, including a small farrow-to-finish producer, an owner of a large family-owned pork farming network, and a packer.

“The witnesses discussed the economic and policy issues currently affecting the pork industry, including international trade, feed availability, animal health and welfare, environmental policies, and the proposed Grain Inspection, Packers and Stockyards Administration (GIPSA) rule adding new regulations under the Packers and Stockyards Act.”

The first question at yesterday’s hearing was from Chairman Rooney who inquired about crop supplies and feed availability in the case of a short crop this year. To listen to a portion of this discussion from yesterday, just click here (MP3- 3:43).

Likewise, David Scott (D-GA) asked a similar question about corn supplies and feed prices, this discussion can be heard here (MP3- 1:19).

And Subcommittee Ranking Member Dennis Cardoza (D-CA) asked the panel of witnesses about the importance of antibiotic use in the pork production process.  A segment of this discussion is available here (MP3- 3:34).

A news release yesterday from the National Pork Producers Council stated that, “The U.S. pork industry can continue to be a leader in food production and meet domestic and world demand for pork as long as exports continue to grow, feed grains are available and producers are allowed to operate without undue legislative and regulatory burdens, said the National Pork Producers Council in congressional testimony given today.

“NPPC President Doug Wolf, a pork producer from Lancaster, Wis., told the House Agriculture Subcommittee on Livestock, Dairy, and Poultry that the U.S. pork industry is doing well but has concerns about issues that could jeopardize its continued success.”

The release added that, “Tight feed-grain supplies, driven in part by subsidized ethanol production, could cause spot shortages of feed this year, and producers are worried that a weather event in the Corn Belt, for example, could affect next crop year’s – 2011-2012 – supplies. NPPC requested USDA to address the potential crisis, but the agency has taken no action.”

APRIL 2011

April 14Subcommittee Examines Credit Conditions for Agricultural ProducersOfficial Transcript.  FarmPolicy.com Summary:

A news release yesterday from the House Agriculture Committee stated that, “Today, Rep. Jeff Fortenberry (R-NE), Chairman of the House Agriculture Committee’s Subcommittee on Department Operations, Oversight, and Credit held a public hearing to review credit conditions in rural America. A number of institutions provide credit to our nation’s farmers, ranchers, and rural constituents. It is important to ensure credit is readily available through institutions that are fundamentally sound.”

In his opening statement at yesterday’s hearing, Doug Stark, the President and Chief Executive Officer at Farm Credit Services of America, highlighted the issue of increasing agricultural land values and corresponding collateral requirements, related audio available here (MP3- 1:10).

Subcommittee Chairman Fortenberry picked up on this testimony and sought additional detail with respect to the underwriting of agricultural loans from Mr. Stark, audio here (MP3- 1:15).

And in a separate exchange yesterday, Chairman Fortenberry asked Mr. Stark for more details about increases in capital requirements for agricultural loans, which have increased in recent years, audio of this exchange is available here (MP3- 1:40).

Later, Chairman Fortenberry sought perspective on how the current economic environment compares to conditions that preceded the sharp downturn that the agricultural economy endured in the 1980sMatthew H. Williams, Chairman and President of the Gothenburg State Bank (Neb.), and Mr. Stark provided perspective on this inquiry, audio here (MP3- 4:47).

And in response to a a line of questioning from Subcommittee Ranking Member Marcia L. Fudge (D- Ohio), Mr. Stark also pointed out the importance of the federal crop insurance program with respect to credit issues, audio here (MP3- 0:40).

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April 13Subcommittee Examines Issues Facing Poultry IndustryOfficial Transcript.  FarmPolicy.com Summary:

A news release yesterday from the House Agriculture Committee stated that, “Today, Rep. Thomas Rooney (R-FL), Chairman of the House Agriculture Committee’s Subcommittee on Livestock, Dairy, and Poultry held a public hearing to review the state of the poultry industry.

“Members of the Subcommittee heard testimony from a chicken grower, a chicken integrator, and a turkey grower who is also the chairman of a poultry processing cooperative. In addition to educating Members about the structure and economic conditions of the poultry sector, witnesses also highlighted a range of issues impacting the poultry industry, such as environmental policies, feed availability, input prices, trade, and the proposed Grain Inspection, Packers and Stockyards Administration (GIPSA) rule.”

During yesterday’s hearing, Michael Welch, President and Chief Executive Officer of Harrison Poultry, Inc. brought up federal subsidies for corn-based ethanol and noted that, “Corn-based ethanol rules should be realigned.  The rules of the game for corn-based ethanol must be balanced, and the playing field should be leveled to permit chicken producers, and other animal agriculture producers, to more fairly compete for the limited supplies of corn this year and the next few years at least.”  Mr. Welch added that, “Also, it is time to seriously consider a safety-valve to adjust the Renewable Fuel Standard when there is a short-fall in corn supplies such as the current situation.”  He also addressed the possibility of getting acres out of the Conservation Reserve Program.  An audio replay of a portion of Mr. Welch’s remarks can be heard here (MP3- 1:10).

In his prepared testimony, Mr. Welch indicated that, “To assume an adequate number of acres will be planted to corn this year and the next few years and to further assume favorable weather conditions for crops this year and the next few years are not assumptions the U.S. chicken industry is prepared to make, nor should prudent U.S. government policymakers be willing to make.”

Subcommittee Ranking Member Dennis Cardoza (D-California) highlighted issues associated with high feed costs and ethanol when he questioned the panel of witnesses at yesterday’s hearing, to listen to a portion of this discussion, click here (MP3- 4:27).

And in responding questions from Rep. Bob Goodlatte (R- Virginia), Paul Hill, Chairman of the Board, West Liberty Foods, rhetorically asked, “What happens if we have a super short crop? What happens if we don’t have enough?”  He went on to suggest that, “When the stocks-to-use ratio, or whatever, gets below a billion bushels, you have got to start cutting the ethanol mandate.”  (Related audio available here (MP3- 1:08).

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April 7Subcommittee Examines How to Increase Export Opportunities for American ProducersOfficial Transcript.  FarmPolicy.com Summary:

Yesterday, the House Agriculture Committee’s Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture, held a public hearing to review market promotion programs and their effectiveness on expanding exports of U.S. agricultural products.”

At yesterday’s hearing, Rep. Marlin A. Stutzman (R- Indiana) asked John Brewer, the Administrator of USDA’s Foreign Agricultural Service, about corn purchases by China, and inquired about any potential impacts domestic ethanol policy might be having on product availability for exports.  To listen to this exchange from yesterday, just click here (MP3- 3:38).

A news release yesterday from the American Soybean Association (ASA) pointed out that ASA Chief Executive Officer Stephen Censky testified at yesterday’s hearing.

The release stated that, “Soybeans and soybean products are our country’s number one export commodity. Last year, the United States exported a record-setting $23 billion in soybeans, soybean oil and soybean meal. This impressive export growth could not have been achieved without the unique government-industry partnership that characterizes the Foreign Market Development (FMD) ‘Cooperator’ Program and the Market Access Program administered by the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS).

“‘These programs have been tremendously successful and extremely cost-effective in helping expand U.S. exports of soybeans and other agricultural commodities, including corn, wheat, rice, cotton, livestock and meat products, dairy, forest products, peanuts, seafood, and a host of horticultural products,’ Censky testified.”

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April 6- Subcommittee Examines Issues Facing Beef IndustryOfficial Transcript.  FarmPolicy.com Summary:

Subcommittee Ranking Member Rep. Dennis A. Cardoza (D-California) questioned the witnesses about conservation, as well as regulatory issues.  In response to the question, Anne Burkholder, from Cozad, Nebraska, juxtaposed both of the topics and described a “combative” meeting with EPA employees on her operation with the more “collaborative” policy approach of using conservation funding (EQIP) to achieve desirable environmental objectives. To listen to this interesting exchange, just click here (MP3- 4:32).

Also at yesterday’s hearing, Rep. Chris Gibson (R- New York) asked the panel about feed costs and ethanol policy; related audio from this transaction is available here (MP3- 2:58).

FEBRUARY 2011

February 17Public hearing to review the state of the farm economy.  FarmPolicy.com audio replay available hereOfficial Transcript.  FarmPolicy.com Summary:

Secretary of Agriculture Tom Vilsack spent nearly four hours testifying about the U.S. farm economy yesterday on Capitol Hill
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In the morning, he appeared before the House Ag Committee, (prepared testimony) while in the afternoon, he spoke before the Senate Ag Committee, where a second panel of witnesses also followed his presentation (video replay and prepared testimony, opening statement from Chairwoman Debbie Stabenow (D-MI), remarks from Ranking Member Pat Roberts (R-KS)).

During his appearances before the two committees, lawmakers raised a variety of subject matters, including: Biotechnology, conservation, the proposed GIPSA rule, nutrition, trade, the estate tax, and civil rights.

However, larger themes also emerged from yesterday’s hearings. These themes included commodity prices; land values and economic stability; regulation; dairy policy; and crop insurance.

In his opening statement at yesterday’s House hearing, Sec. Vilsack noted that, “The year-over-year increase in feed expenses is projected to slightly exceed the increase in livestock cash receipts. If this occurs, livestock and dairy producers could be under added financial pressure in 2011.”

Both Rep. Glenn Thompson (R-PA) and Rep. Bob Gibbs (R-OH) pursued this issue further in their questions to Sec. Vilsack yesterday morning. Rep. Thompson asked (MP3- 1:30), “Are there other things that USDA is looking at in terms of helping to…keep feed costs down?” Sec. Vilsack noted that, “There is not a tremendous amount we can do to focus on the cost side,” and added that, “We are also working, as you probably know, on some of the impacts of ethanol production and the DDGs that are produced as a result of that process and how they might be able to assist us in stretching our feed dollar.”

Rep. Gibbs pointed out (MP3- 2:24) that, “I just talked recently this week with one of my large hog producers in Ohio and he is really concerned about the cost of feed and the ethanol relationship,” he continued and asked, “What would be the impact if some of the policy on ethanol, government policy, changes- to the market.” Sec. Vilsack pointed out that; “We got a slight indication of what would happen if you prematurely withdraw the support for a maturing industry when we allowed the biodiesel tax credit to lapse.”

During his time to question Secretary Vilsack yesterday, House Ag Committee Chairman Frank Lucas (R-OK) brought up the issue of commodity price stability. After a discussion that included points on global food demand, and an increasing middle class in developing countries, Chairman Lucas inquired as to whether we had “reached a new plateau” with respect to prices based on these demand changes. Sec. Vilsack indicated that, “The one thing I know that is certain about agriculture, Mr. Chairman, is that there is a great deal of uncertainty and you always have to be wary.” He went on to highlight issues associated with production. To listen to this portion of yesterday’s discussion, click here (MP3- 3:00).

Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register Online) that, “Vilsack did not offer those industries [livestock and dairy sectors] any relief although he said the department expects corn acreage to increase by 3 to 5 percent this year.”

“Groups representing livestock producers are pressing Congress to roll back incentives for using corn to make fuel ethanol, but Vilsack, a former Iowa governor, is a staunch advocate for the biofuel industry. Both at the Senate hearing and during an earlier appearance in the House, Vislack warned against cutting off subsidies for ethanol, suggesting that industry might face a similar fate to the biodeisel sector, which collapsed in 2010 after its tax subsidy temporarily lapsed. Economists say the ethanol producers are far less dependent on federal subsidies than biodiesel makers are,” Mr. Brasher noted.

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February 15Public hearing to review the various definitions of rural applied under programs operated by the U.S. Department of Agriculture.  FarmPolicy.com audio replayOfficial Transcript.  FarmPolicy.com Summary:

The House Agriculture Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture held a hearing yesterday to review the various definitions of rural applied under programs operated by the U.S. Department of Agriculture. Testimony from yesterday’s hearing can be found here, while an opening statement from Ranking Member Jim Costa (D-CA) can be found here.

At yesterday’s hearing, Rep. Costa asked USDA Dep. Under Secretary for Rural Development Cheryl Cook, “Do you think that the varying definitions of ‘rural’ as they are applied to the Rural Development programs is a workable system, do you think it is need of some repair, or is about time that we look a brand new approach?”

To listen to this very interesting exchange from yesterday’s hearing, just click here (MP3- 5:07).

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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.”

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Farm Bill; Trade; Biofuels; and the Ag Economy

Farm Bill Issues and Policy- Budget and Appropriations Issues

Stephen Gandel reported recently at Time Online that, “If you want to become rich, Jim Rogers, investment whiz, best-selling author and one of Wall Street’s towering personalities, has this advice: Become a farmer. Food prices have been high recently. Some have questioned how long that can continue. Not Rogers. He predicts that farming incomes will rise dramatically in the next few decades, faster than those in most other industries — even Wall Street. The essence of his argument is this: We don’t need more bankers. What we need are more farmers. The invisible hand will do its magic. ‘The world has got a serious food problem,’ says Rogers. ‘The only real way to solve it is to draw more people back to agriculture.’

It’s been decades since the American heartland has been a money pump and longer since farming was a major source of employment. Old rural towns have emptied as families — and the U.S. — have moved on. Technology, service jobs and finance have been the basis of the economy since at least the 1980s. Farming became the economic equivalent of a protected species — supported by a mix of government handouts, lax regulation (agriculture is one of the few industries shielded from certain child-labor laws) and charity concerts.

But in the past few years, thanks to a wealthier (and hungrier) emerging-market middle class and a boom in biofuels, the business of growing has once again become a growth business. At a time when the overall economy is limping along at an anemic growth rate of 1.9%, net farm income was up 27% last year and is expected to jump another 20% in 2011. Real estate prices in general are again falling this year. But according to the Federal Reserve, the average farm has doubled in value in the past six years. Farmland is quickly emerging as one of the year’s hottest investments on Wall Street.”

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Farm Bill; Trade; Biofuels; Ag Economy; Regulations; and Biotech

Farm Bill Issues

A news release yesterday from Senate Agriculture Committee ranking member Pat Roberts (R-Kansas) stated that, “[Sen. Roberts] today announced a field hearing will be held in Wichita, Kansas on Thursday, August 25 to discuss reauthorization of the Farm Bill.

“‘I’m pleased to host the next Farm Bill field hearing in Wichita, right in the heartland of America,’ said Roberts. ‘This hearing will allow us to garner insight from our producers in Kansas as we begin the important task of writing the next Farm Bill. Their perspectives on current agriculture programs and the direction of this next Farm Bill are critical to the committee’s work in drafting policies that provide producers and rural America with the tools necessary for success.’

“The focus of the hearing will be on the reauthorization of the Farm Bill, exploring its impact on Kansas.”

Note that a FarmPolicy.com summary of Senate Agriculture Committee hearings relating to the 2012 Farm Bill (starting in May) is available here. And a summary of Senate hearings relating to the Farm Bill from last summer, under the previous Congress, can be found here.

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Farm Bill; Ag Economy; Regulations; and Biofuels

Farm Bill: Budget Developments- Political Notes

John D. McKinnon and Carol E. Lee reported in today’s Wall Street Journal that, “Democrats have floated ideas that could raise tax revenues by some $400 billion over the next decade as they negotiate deficit reductions with Republicans, according to people familiar with the plan, posing the most contentious issue as talks reach a critical stage this week.

Republican leaders say they want no tax increases in the deal, though some say they can accept ideas for generating additional revenue along with broader tax changes.

Democrats say significant tax increases are required for fairness, to offset the deep cuts to government services that will make up the bulk of deficit reduction.”

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Farm Bill; Ag Economy; Biotech Issue; and Trade

Farm Bill Issues

Phil Izzo reported on Friday at the Real Time Economics Blog (Wall Street Journal) that, “Growth in the food stamp program continued in the U.S. — with 27 states providing benefits to at least 1 in 7 people.

“The number of food stamp recipients increased 0.1% in April, the most recent month available, compared to March, with 44.5 million people receiving benefits, according a new report from the U.S. Department of Agriculture. Food stamp numbers aren’t seasonally adjusted though, meaning a variety of factors could influence the monthly tallies.

“The food stamp program ballooned during the recession as workers lost their jobs or saw their hours and income reduced. The rate of increase has slowed a bit, but enrollment in the program is still high with 10.4% more people tapping benefits in April than the same month a year earlier.”

Also with respect to SNAP, the recent Op-Ed “The Food-Stamp Crime Wave,” which was published late last month in The Wall Street Journal, generated three interesting leaders to the editor on the nutrition issue that were included in Friday’s paper.

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Ag Economy, NASS, Farm Bill; and Trade

Agricultural Economy

Tom Polansek and Ian Berry reported in today’s Wall Street Journal that, “Evidence that U.S. farmers planted far more corn than expected this growing season sent corn prices plunging and sparked speculation that upward pressure on food prices may be coming to an end.

“The U.S. Agriculture Department said Thursday surveys conducted during the first two weeks of June found farmers had planted 92.3 million acres of corn, the second most since World War II after 93.5 million acres in 2007.

“As recently as June 9, USDA officials had guessed that excessive rain and widespread flooding this spring limited farmers to 90.7 million acres.   But a separate USDA report also found supplies were bigger than expected in early June, signaling relief for food companies, livestock producers and consumers.”

(more…)


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