FarmPolicy

April 24, 2019

Farm Bill; Regulations; Food Safety; and the Ag Economy

Farm Bill Issues

Jim Harger reported yesterday at The Grand Rapids Press (Mich.) Online that, “U.S. Secretary of Agriculture Tom Vilsack and Democratic U.S. Sen. Debbie Stabenow assured about 150 farmers and farm policy experts Monday they will fight for farm interests despite calls for deep cuts in Washington D.C.

“The greatest threat in Washington is the GOP-controlled U.S. House, which has called for $48 billion in cuts to farm programs, said Stabenow, who chairs the Senate Agriculture Committee.

“‘Our challenge right now, honestly, is all the new members in the House,’ said Stabenow, who brought Vilsack to an hour-long meeting in a pole barn owned by Sparta farmer Jim Mays.”

The article stated that, “Most of those in attendance were concerned about the Farm Bill, which is re-written every four years and will be on the table next year. It includes a wide range of farm and food-related policies, ranging from farm subsidies to school lunch programs.”

Mr. Harger indicated that, “Stabenow warned the group that direct farm payments will be cut but said she will fight for programs that form a safety net for farmers.

“‘There’s going to be a real move to strengthen crop insurance, we need to know what’s working for you on crop insurance,’ she said. ‘We’ve got to make sure we’re still providing a safety net. We don’t want you to be wiped out by two days of bad weather.’

“The visit to May Farms in Kent County’s ‘Fruit Ridge’ region, was one of three stop-offs for Stabenow and Vilsack on Monday. They began their tour at a food testing laboratory in Battle Creek. After the visit to Sparta, they headed for the Michigan Biotechnology Institute at Michigan State University.”

Recall that the Senate Agriculture Committee will be holding a hearing Thursday in Wichita, Kansas titled, “Looking Ahead: Kansas and the 2012 Farm Bill.”

Also yesterday, Agri-Pulse Senior Editor Stewart Doan filed an audio report yesterday titled, “Corn, soy and cotton grower panel lists safety net priorities for 2012 Farm Bill.”  To listen to this brief report, just click here.

And the AP reported yesterday that, “Telecommunications companies in 16 states will share more than $103 million in federal funding to help expand broadband Internet access to those areas of rural America that haven’t been reached by the high-speed service or are underserved, the U.S. Department of Agriculture announced Monday.

“Policymakers, public interest groups and telecom companies are seeking to bridge the digital divide by reaching even the most remote pockets of the U.S. with broadband internet, hoping to improve economic and educational opportunities there.”

More broadly on rural issues and politics, Phillip Hayes, a former subcommittee staff director for the Senate Agriculture Committee, indicated yesterday at Politico that, “Barack Obama recognized something in 2008 that few Democratic presidential hopefuls before him had: Rural voters matter. And the best way to cultivate their support is on the farm.

A continued courtship appears to be well underway for 2012. It was clear with President Barack Obama’s bus tour through the nation’s breadbasket and the new White House report touting its economic achievements in rural America.

“But Obama won’t win the traditionally conservative rural vote. He doesn’t need to. He only needs to keep Republican support low enough that the traditionally left-leaning urban vote can put him over the top.”

Mr. Hayes added that, “Farmers and ranchers are upset with an Environmental Protection Agency, which they consider overreaching and job killing. Growers say that they feel under attack by some left-of-center voices pushing organic, locally grown food as the only option for America’s future. Many also fear that the recovery from this year’s devastating droughts and floods will be hampered by federal budget pressures that threaten to cut funding for policies designed to act as a backstop during such times.

“The candidate who can ease these fears and lay out a plan for continued rural economic growth, without gutting popular farm policies, will win the votes needed to swing the swing states.”

 

Regulations

And with respect to regulatory concerns, Laura Meckler reported last night at The Wall Street Journal Online that, “The Obama administration will release final plans Tuesday for ending or cutting back hundreds of regulations, an effort to reduce the burden on business and counter criticism that the White House is tone-deaf to business concerns.

“Certain railroad cars won’t have to install expensive technology, hospitals will be able to skip a round of federal paperwork and low-risk travelers to the U.S. will enjoy expedited entry, officials said. Some businesses will be allowed to file federal forms electronically.

The administration estimates that about a dozen of the changes will save businesses some $10 billion over five years, with other smaller initiatives adding to the total.”

Nonetheless, the Journal article noted that, “But the changes don’t affect the broad thrust of major administration initiatives that have drawn criticism from businesses, such as proposed rules to reduce carbon emissions and laws passed last year that aim to protect consumers from financial and health-insurance abuses.”

Also in today’s Journal, Cass Sunstein, the administrator of the Office of Information and Regulatory Affairs, which is part of the White House’s Office of Management and Budget, penned an Op-Ed titled, “Washington Is Eliminating Red Tape.”

In part, the opinion item stated that, “Early this year, President Obama ordered an unprecedentedly ambitious government-wide review of existing federal regulations, emphasizing that we must ‘measure, and seek to improve, the actual results of regulatory requirements.’ He directed agencies and departments to produce preliminary plans to streamline those requirements and eliminate red tape.

“Last May, agencies released over two dozen preliminary plans, identifying reforms that will save billions of dollars. At the same time, agencies asked the public to evaluate the preliminary plans, identify new reforms, and participate in creating a 21st-century regulatory system that protects public health and safety while also promoting economic growth and job creation.

Today I can announce that agencies are releasing their final plans, including hundreds of initiatives that will reduce costs, simplify the system, and eliminate redundancy and inconsistency.”

Mr. Sunstein added that, “Today’s plans explicitly recognize that the regulatory look-back is not a one-time endeavor. Agencies will continue to revisit existing rules, asking whether they should be updated, streamlined or repealed. And they will do so in close consultation with the public. Ideas are welcome at any time.

“The president has directed agencies to give careful consideration to both benefits and costs, to promote public input and listen to stakeholders, to simplify and harmonize rules, to select approaches that promote innovation, and to consider flexible approaches that reduce burdens and maintain freedom of choice.”

 

Food Safety

William Neuman reported in today’s New York Times that, “This summer there has been a drumbeat of food-related illnesses. Strawberries containing E. coli killed one person in Oregon and sickened at least nine others. Ground turkey contaminated with salmonella poisoned more than 100 people nationwide, with one dead, and prompted one of the largest meat recalls ever. Imported papayas tainted with salmonella sickened at least 99. Sprouts grown in Idaho were linked to salmonella illnesses in five states.

“The landmark food safety law passed by Congress last December is supposed to reduce the frequency and severity of food safety problems, but the roll call of recent cases underlines the magnitude of the task.

“‘It’s an enormous undertaking,’ said Mike Taylor, the Food and Drug Administration’s deputy commissioner for foods, whose job it is to turn the far-reaching law into a coherent set of rules that farmers, food processors and importers can follow and regulators can enforce.”

The Times article added that, “The agency is taking on the expanded mission at a time when Washington budget-slashing means that regulators have little hope of getting additional money and may instead have their budgets cut by Congress.

“‘We have to have the resources to implement this law,’ Mr. Taylor said.

“‘The stark choice is we either find the resources or we forgo implementing this law the way Congress intended. You can’t build something brand-new without the resources to do it.’”

 

Agricultural Economy

Chris Clayton reported yesterday at DTN (link requires subscription) that, “Coming off what was a strong year in cotton production in Texas, hopes of a repeat have evaporated like water from a pivot nozzle in 100-degree heat.

Driving around, there are empty fields from Amarillo to Lubbock, and beyond that are fields that are planted but are bare of plants — except for the occasional field that has been reclaimed by tumbleweeds. In a normal year, an irrigated field might yield 750 pounds. This year, even in irrigated fields, yields are much lower or nonexistent.

“While agriculture sometimes takes a backseat to other industry, the cotton industry is so significant around Lubbock that city officials and the local mall have called Plains Cotton Growers office to gauge the overall economic impact of crop losses on the community. Farmer losses are insured, but the gins and oilseed crushers that rely on the cotton business are going to suffer from lack of business.”

The DTN article added that, “Rainfall around Lubbock has ranged from anywhere from an inch to 3 inches for the year. Even irrigators recognize their water is largely supplemental. With no rainfall, irrigated crop conditions range widely in the southern plains. About 1.9 million irrigated acres were planted, of which nearly 228,000 have been abandoned.

The failed or abandoned acres are higher than anytime the cotton group has been keeping data on production. Plains Cotton Growers estimates that out of a projected 5.3 million bales, perhaps 2 million will be harvested.”

Beyond drought, flood issues have also been an ongoing concern for producers.

Jack Nicas and Joe Barrett reported in yesterday’s Wall Street Journal that, “After record flooding this year, the U.S. Army Corps of Engineers faces an epic repair job on the nation’s decades-old flood defenses in the Mississippi and Missouri River basins, and it’s already clear that the work won’t be completed in time to protect some areas from even run-of-the-mill flooding.

“On the Missouri, where the corps is hurrying to drain its upstream reservoirs to make room for next spring’s flood season, damage is still being done. But on the Mississippi, where the flooding ended months ago, the corps’ multibillion-dollar restoration of levees won’t be done by spring.

“‘We may have a flood of less significance having catastrophic impacts until we get this system back together,’ said Maj. Gen. Michael Walsh, commander of the corps in the Mississippi Valley. Last week, he got an earful from farmers here in southeast Missouri whose fields were intentionally inundated in May for the first time since 1937 to spare areas elsewhere.”

Meanwhile, Cheri Zagurski and Anthony Greder reported yesterday at DTN (link requires subscription) that, “Corn conditions were expected to fall in this week’s USDA Crop Progress report, and they did, although a bit more than pre-report guesses.

“Seventeen percent of the nation’s corn crop is rated very poor to poor as of Aug. 21. That compares to 15% last week and 10% on average. Fifty-seven percent of the crop is rated good to excellent, compared to 60% last week and an average of 70%.

Yesterday’s article added that, “Soybean conditions also fell, with 14% of the crop rated very poor to poor, compared to 13% last week and an average of 13%. Fifty-nine percent of the soybeans were rated good to excellent, compared to 61% last week and an average of 64%.”

Purdue University Agricultural Economist Chris Hurt noted yesterday (“Pork Producers Ability to Pay for Corn”) that, “This year’s corn crop is not big enough to meet the entire consumption base that has been built. Prices will have to be high enough to convince some end users to reduce consumption from current levels.  Can the pork industry compete with other end users?

“The answer is complex and will depend on many factors including how small the U.S. corn crop is and production in the southern hemisphere this winter.  Ultimately the question is how high corn prices have to be to get a sufficient number of end users to reduce consumption.

“The largest competitor for corn in the coming year will be the ethanol industry where USDA analysts currently estimate 5.1 billion bushels of corn use.  To meet the mandated domestic Renewable Fuels Standard (RFS) will require about 4.7 billion bushels with nearly 400 million additional bushels used to make ethanol that will be exported.  The 5.1 billion bushels of mostly mandated usage is 39 percent of the 2011 crop.”

Dr. Hurt added that, “Mandated corn use was troublesome to the animal industries when corn was abundant. Now with short corn supplies, the concerns are even greater.  Clearly use of 400 million bushels of a limited corn supply to produce ethanol to be exported to countries like Brazil is far beyond the intent of Congress in the 2007 energy legislation that established the current RFS.  The short corn supply increases the odds that some end users, including the animal industries, will appeal to the EPA to consider exercising the emergency clause to reduce ethanol mandates for 2012.

“Without a reduction in mandates, the cut-back in corn usage will primarily be thrust upon the non-fuel sectors represented primarily by the domestic animal sector and corn exports.”

Meanwhile, Caroline Henshaw reported yesterday at the Source Blog (Wall Street Journal) that, “Beijing’s hopes for food self-sufficiency may prove little more than a pipe dream as growing pressures on China’s water system limit its agricultural potential.

“China’s influence on world food markets has grown steadily in recent years as consumption has increased, driven by population growth and a growing taste for more Westernized diets by the country’s expanding middle class.”

Yesterday’s update indicated that, “The Asian giant caused ripples in world grain markets by becoming a net importer of corn for the first time in 15 years last season and analysts expect its sugar imports could rise by 50% in the 2011-12 crop year due to growing demand for sweet foods and drinks.

“But now experts warn that China’s increasingly intensive farming practices—driven by the government’s attempts to contain spiralling food-price inflation—are causing long-term damage to the country’s water resources, leaving Beijing’s goal of food self-sufficiency even further out of reach.”

In other news, Bloomberg writer Sophia Pearson reported yesterday that, “Syngenta AG, the world’s largest maker of agricultural chemicals, sued a unit of Bunge Ltd. over claims it’s illegally refusing to accept corn produced from the company’s bioengineered seeds.

“Bunge, which operates a network of grain elevators and receiving stations, posted a notice on its website and at several locations that it is ‘unable to accept’ delivery of corn or soybeans produced by Syngenta’s Agrisure Viptera seeds and another product made by DuPont Co., according to the complaint. Bunge said in the notice that the seed products haven’t received international approval from major export destinations, according to the complaint filed in federal court in Sioux City, Iowa.

“The product complies with all U.S. regulatory requirements, Syngenta said today in a statement.”

And, Bloomberg writer Alan Bjerga reported yesterday that, “U.S. agricultural businesses are less optimistic about their current and future economic situation than in February, according to a survey-based index produced by industry researcher and publisher DTN/The Progressive Farmer.

Farmers, veterinarians and sellers of seed, chemicals, feed and machinery gave their present economic circumstances an index score of 97.8, down from 113.2 in February, DTN said today in the report based on a survey conducted Aug. 2 to Aug. 9. Respondents gave a rating of 89.5 for their outlook for the economy one year from now, down from 115.8 in February. The sentiment of 100 was established in the benchmark month of August 2010.”

Keith Good

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