FarmPolicy

August 18, 2019

Farm Bill; Ag Economy; Obama Bus Tour; Trade; and Animal Ag

Farm Bill Issues: Budget- Super Committee Analysis

Rosalind S. Helderman reported in yesterday’s Washington Post that, “The 12 congressional lawmakers appointed last week to the new, high-stakes deficit reduction panel will convene next month amid super-partisan pressures that have blocked past efforts at bipartisan compromise on debt reduction. Skepticism that they will reach a mutually acceptable agreement is running high.

But in their early public comments since receiving the assignment, several of the lawmakers appointed to the panel have sounded unexpectedly eager to find common ground — and to avoid taking the kind of rigid stands that would be difficult to rescind once negotiations begin.”

The Post article added that, “It is far from clear that this apparent spirit of conciliation can translate into actual agreement.”

“For the so-called ‘supercommittee,’ the stakes are high. Not only is there pressure to help stabilize the nation’s finances, but pressure also to help restore Congress’s reputation as an institution that can function effectively.”

Yesterday’s article reminded readers that, “Without agreement, the government will face automatic cuts of $1.2 trillion over the next 10 years, split between domestic and defense spending, providing a painful consequence for failure not present in previous efforts.”

Reuters writers Donna Smith and Richard Cowan reported on Saturday that, “Having said no to taxes for months, Republicans now are saying maybe, in the face of public disgust over a deadlock in the U.S. Congress, a near government default and a worsening global economic crisis.

“Prompting some hope for a return to fiscal order are the statements and reputations of some of the six Republicans named this week to join with six Democrats on a special committee to end the standoff over the U.S. deficit.

“In one of his first interviews after being named to the ‘Joint Select Committee on Deficit Reduction,’ Representative Dave Camp told Reuters, ‘I don’t want to rule anything in or out’ when the panel starts its work.”

The Reuters article indicated that, “So, if Republicans were to go along with modest revenue increases, Democrats might find it easier to say yes to equally modest savings to the Medicare healthcare program for the elderly, some of which already have been suggested by Obama.

“But even if the super committee settles on around $1.5 trillion in new savings, it likely will not be enough to satisfy global financial markets demanding a more ambitious result — as much as double that amount — accomplished through long-term reforms of government benefit programs and a broad revamp of the U.S. tax code.”

Roll Call writer Steven T. Dennis reported today that, “Initial statements from leaders and committee members began in a conciliatory fashion, with a charge to agree on a deficit reduction package of at least $1.2 trillion.

“But the roster, composed primarily of staunch partisans close to leadership, doesn’t inspire hope for a big compromise.”

Josiah Ryan reported on Friday at The Hill’s Floor Action Blog that, “Sen. Max Baucus (D-Mont.) said he would like to see the deficit-cutting supercommittee, of which he is a member, slash more than the $1.5 trillion mandated by Congress.

“‘Ideally we will at least meet the charge,’ said Baucus. ‘[B]ut I would like to go further.’”

And in more specific reporting on the budget and agriculture, David Bennett noted on Friday at the Delta Farm Press Online that, “On Friday morning, Delta Farm Press spoke with D.C.-based Mark Maslyn, executive director of public policy with the American Farm Bureau Federation (AFBF), about expectations regarding the committee’s work, the next farm bill and the difficulties of the current legislative climate. Among his comments:

““We like things like direct payments, conservation, crop insurance/risk-management programs.

“I’ll tell you what we’re going to do: we’ll have a discussion with our board of directors and talk about what suggestions we’ll make to the agriculture committees as to where the reductions, or savings, should come from.

“We’ve been telling our members for the last 18 months that the next farm bill will have less money to spend than the previous farm bill.”

An update posted on Friday at Farm Futures Online stated that, “[National Farmers Union President Roger Johnson] says the major problem with the Super Committee decisions is the uncertainty and delay it will cause in writing the next Farm Bill.

“‘It means that we don’t know anything yet in terms of writing a new Farm Bill,’ Johnson said. ‘We’re going to have to wait until we see what the Super Committee comes out with, then we’re going to have to wait and see whether that is something that is able to advance in Congress and get the President’s signature. Only then will we have, hopefully, some long term certainty sufficient to write a Farm Bill, and the calendar, you know the pages keep turning.’

“The Super Committee has until Nov. 23 to finish their proposal. Johnson says the worst part is this also leads to continued uncertainty in the marketplace.”

Meanwhile, Brian Francisco reported late last week at the Fort Wayne Journal Gazette Online (Indiana) that, “Rep. Marlin Stutzman, R-3rd [Indiana], wanted to know what was on farmers’ minds Wednesday.

It wasn’t farming.

“His audience at New Haven Chamber of Commerce’s third annual Ag Appreciation Day peppered Stutzman with questions about the national debt, the health care law, interest rates, oil drilling and business regulations.”

The article noted that, “Stutzman, a member of the House Agriculture Committee, was the only person to talk about next year’s renewal of the farm bill.”

Tracy Buffington reported on Thursday at the Fremont Tribune Online (Nebraska) that, “While he knew there would be a conversation about the budget, Sen. Mike Johanns [R-Neb.] really wanted to talk about agriculture.

“Stopping in West Point on Wednesday, the former U.S. Secretary of Agriculture said discussions have begun on a new farm bill…”

The former Agriculture Secretary noted that, “We’ll be arm wrestling over [the] budget more than anything, and that affects everything from conservation programs to direct payments to whatever. That’s just the reality we’re finding ourselves.”

 

Agricultural Economy

Saskia De Melker reported last week at the PBS NewsHour Online that, “Record heat and dry conditions continue to plague large parts of the United States this summer. While the south central region of the United States has been hit especially hard, more than 30 percent of the country is now experiencing drought, according to the National Drought Mitigation Center.”

Also last week, DTN’s Urban C. Lehner noted that, “Debt crisis in Europe. Debt downgrade in America. Tsunami in Japan.

“And this just scratches the surface. Add political upheaval in the Middle East. Floods along the Mississippi and Missouri rivers. Drought in Texas.”

Mr. Lehner added that, “If there’s a silver lining for farmers and ranchers, it’s the prospect of continued low interest rates. Only a few months ago the smart money was on rates rising later this year or early next. Economists were predicting a pickup in economic growth that would force the Federal Reserve to begin pushing short-term interest rates up.”

Interviewed in late July, Ross Anderson of AgriBank thought short-term rates would stay low until 2013. His opinion matters because he’s the chief credit officer for one of the Farm Credit System’s largest district banks, with a territory stretching from Ohio to Wyoming and from Arkansas to North Dakota. AgriBank has skin in the game.

“My colleague Marcia Taylor and I talked with Anderson before U.S. government debt was downgraded, and with it the bonds of the Farm Credit System. But it isn’t likely those events will undermine Anderson’s forecast. The immediate, counterintuitive reaction was a decline in yields on 10-year U.S. Treasuries.”

Friday’s DTN update stated that, “There could still be a bit of an uptick, especially if other ratings agencies follow Standard & Poor’s. But after the downgrade, Anderson’s view got a boost from a body whose opinion matters even more — the Federal Reserve Board. At its latest meeting, the Fed made an unusual long-term forecast of low short-term rates ‘at least through 2013.’

Whatever else can be said about it, that’s good news for farmers and ranchers. More good news: Anderson told us he sees high grain prices, tempered by high volatility, continuing for another two to three years. Add it all up and ‘It’s very hard for me to see a problem in the grains sector for at least two years if not three.’

“But that doesn’t mean AgriBank is letting down its guard. As Marcia has written in some detail and with great authority in her blog (http://bit.ly/…), Anderson has directed local credit officers to dig into the ability of 5,000-acre to 15,000-acre farmers to repay loans.”

 

President Obama’s Bus Tour

The AP reported today that, “The president sets out Monday for a three-day bus tour through Minnesota, Iowa and Illinois that will give him a chance to hear directly from the public in a region that helped launch him to the White House in 2008, and where Republican presidential hopefuls are now battling it out. It comes after the president spent much of the summer holed up in the nation’s capital enmeshed in bitterly partisan negotiations on the debt crisis that cratered his approval ratings and those of Congress amid a faltering economy and high unemployment.”

The article explained that, “It’s an official White House tour, not a campaign swing, but it’s also the first bus trip Obama has embarked on since he toured the country seeking the presidency.”

An AP article posted on Friday at the Galesburg Register-Mail (Illinois) stated that, “President Barack Obama is expected to focus on the local agriculture industry when he visits Alpha and Atkinson (IL) next Wednesday… State Rep. Don Moffitt, R-Gilson, said he expected the focus of the President Obama’s tour through the region to be on agriculture.”

Rebecca Kaplan and Jim O’Sullivan reported on Friday at National Journal Online that, “Across southern Minnesota, northern and eastern Iowa, and northwestern Illinois, Obama is slated to visit five towns whose aggregate population, according to the 2010 census, crept just north of 15,000.

“The best part about these towns? They’re doing darn well in the face of the country’s worst economic decline since the Great Depression.

“Where the country faces an unemployment rate stubbornly stuck in the 9-point range, the four counties Obama will visit top out at 7.7 percent in Henry County, Ill. The lowest, in Winnishiek County, Iowa, is a mere 5.9 percent.”

In related developments, DTN Political Correspondent Jerry Hagstrom reported on Friday that, “The White House report on rural jobs and economic security released Friday sends a strong signal that President Barack Obama will fight hard for the rural vote in 2012. The report was released in advance of Obama’s three-day bus trip to the Midwest next week.

“‘This report on ‘Jobs and Economic Security in Rural America‘ underscores the commitment my administration is making to rural communities,’ Obama wrote in a letter accompanying the report. ‘It highlights some of the many programs and policies my administration has implemented in rural America to support economic growth. It also offers a look at the economic agenda we will continue to pursue during my presidency.’”

Mr. Hagstrom explained that, “Agriculture Secretary Tom Vilsack, who will accompany the president on the tour, said in a White House call to reporters that Obama would make announcements involving credit, investment and renewable fuels that will have implications nationwide.

“The White House also released a long list of Cabinet secretaries’ recent and planned trips to rural America that Vilsack said could number 100 by the end of summer. The White House is not billing the president’s trip as political, and Vilsack has insisted that the White House Rural Council is a policy effort, not a political one. Some rural Democrats have said privately they wish Obama would be more aggressive in pointing out actions his administration has taken to benefit rural America and the dangers of too much budget cutting.

Obama did better in rural America in 2008 than other Democratic presidential candidates since Bill Clinton, and probably mounted the strongest rural effort by a Democratic presidential candidate in decades.”

DTN Ag Policy Editor Chris Clayton reported on Friday that, “When President Barack Obama gets out into the countryside next week for a three-day bus trip to hear from rural Americans, he’ll largely concentrate his travel in the Midwest, which has weathered the recession better than other rural areas of the country.”

“Yet, with an unemployment rate of 6%, Iowa is doing much better than other rural areas. Minnesota’s jobless rate is around 6.7%. Illinois has a 9.2% unemployment rate, which is close to the national average.”

Mr. Clayton noted that, “In a press call Friday, Agriculture Secretary Tom Vilsack said it wasn’t necessarily important for the president’s road trip to visit the counties that struggle the most economically to get his message across to the nation.

“‘I think it’s important for the president to be in a place where he can underscore the significant contribution agriculture is making to the country, as a way of acknowledging that,’ Vilsack said.”

O. Kay Henderson reported on Saturday at Radio Iowa Online that, “U.S. Ag Secretary Tom Vilsack says in the past few years rural America has developed a ‘formula’ for economic success.

“‘Farmers understand that you can’t be overly burdened with debt. They understand you have to invest, wisely, resources,’ Vilsack says. ‘They have used research to increase their productivity to an extraordinary extent which has allowed them to export their surplus to the rest of the world and the result is higher incomes for farmers and more jobs connected to those exports.’

“Vilsack is chairman of the White House Rural Council and he hints President Obama will make a big announcement next week when the president visits northeast Iowa.”

 

Trade

Vicki Needham reported yesterday at The Hill’s On The Money Blog that, “Passing three pending free-trade deals remains a top priority for the White House and congressional leaders as competing interests nudge their way onto the September agenda.”

The update explained that, “One senior Senate Republican aide said ‘we’ve been calling on the White House to send them up so we could act on them, literally, for years.’

“A House aide suggested that the Obama administration send the agreements to Capitol Hill.

“‘The president highlighted the agreements yesterday in his speech in Michigan, noting that they are teed up, and he called on Congress to pass them because they create jobs,’ the aide said. ‘Our Members agree, but the problem is that the president has not sent them to Congress, and we can’t act until he does.’”

Yesterday’s Hill item noted that, “The process hasn’t exactly been easy. The Obama administration made changes to all three agreements and both parties have brokered back and forth on other items such as the White House demand to pass Trade Adjustment Assistance (TAA) along with all three accords.

Despite the sense of urgency from all sides, the legislative agenda is filling with other high-priority issues such as passage of a stop-gap measure for the fiscal year 2012 budget that must be done by Oct. 1. Those negotiations could push off the trade deals until October.”

And in his weekly address, President Obama stated: “Let’s finish trade deals so we can sell more American-made goods around the world.”

 

Animal Agriculture

Bill Tomson reported in Saturday’s Wall Street Journal that, “The outbreak of illness from turkey contaminated with antibiotic-resistant salmonella is reviving a debate over whether federal regulators need to curtail the use of antibiotics in livestock.

“Livestock consumed some 28.6 million pounds of antibiotics in 2009, most of it in feed, according to the Food and Drug Administration. While that may prevent disease in the short term, some food-safety specialists say that over time, the heavy use promotes the evolution of bacteria that can fight off the drugs and threaten humans.”

The Journal article noted that, “Industry groups, however, are cautious about regulation. Supporters of current practice say consistently putting antibiotics in feed may actually help human health by reducing animal diseases. They also say the antibiotics promote livestock growth—because the animals use up less energy fighting off infections—and bring lower meat prices for consumers.

“‘Antibiotics have been safely used on farms, along with other animal drugs, for half a century to treat and control disease in animals and to improve the animal’s overall health, allowing for greater productivity,’ said Sherrie Rosenblatt, spokeswoman for the National Turkey Federation.”

Keith Good

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