- FarmPolicy - http://farmpolicy.com -

Farm Bill; House Ag Committee Hearing; Regulations; Animal Ag; and Trade

Farm Bill: Budget Concerns- Supercommittee Implications

House Agriculture Committee Chairman Frank Lucas (R-Oklahoma) was a guest on yesterday’s AgriTalk Radio Program with Mike Adams.  A full replay of their wide-ranging conversation is available here.

In part, Chairman Lucas addressed issues associated with the budget and the work of the supercommittee and discussed the potential interaction of this process with the development of the 2012 Farm Bill- this portion of yesterday’s AgriTalk program can be heard here (MP3- 5:03).

The recent National Cotton Council Farm Bill recommendations were also touched on during this portion of yesterday’s AgriTalk interview.

Mike Adams and Chairman Lucas also discussed (MP3- 1:39) the just concluded Farm Bill audit hearings conducted by the House Agriculture Subcommittees.  The eleven hearings provided a detailed overview of many important Farm Bill programs, and a brief overview summary of the audit hearings can be found at this FarmPolicy.com webpage.

In broader news regarding the supercommittee, Seung Min Kim reported yesterday at Politico that, “All 12 members of the powerful deficit-slashing supercommittee plan to meet for breakfast on Thursday — marking the first full meeting behind closed doors…An aide on Wednesday confirmed plans for the morning meeting.”

Meredith Shiner reported yesterday at Roll Call that, “Advance notice of private meetings of the super committee is not required. The rules approved in the group’s first meeting dictate that public hearings must be announced seven days in advance.

“Multiple sources close to the committee indicated that co-Chairs Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas) are likely to announce the next round of public events Thursday.”

And while the supercommittee still must determine what baseline assumptions it will incorporate, Alexander Bolton reported yesterday at The Hill Online that, “The debt supercommittee is unlikely to ‘go big’ and find more than $1.5 trillion in budget cuts, according to a member of the special panel….The key lawmaker, who spoke on condition of anonymity, said it is unrealistic to think the 12 lawmakers on the panel will be able to agree to a budget-cutting deal as large as $3 trillion or $4 trillion, as some have urged it to do.”

Nonetheless, Russell Berman reported yesterday at The Hill that, “Add the centrist Blue Dog Coalition to the list of groups pushing the deficit-reduction supercommittee to expand its ambitions and find more than $1.5 trillion in budget savings.

“The Blue Dog leadership released a letter to the 12-member panel on Wednesday asking it to endorse a plan that would reduce the deficit by at least $4 trillion over the next decade.”

And Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “House Minority Whip Steny Hoyer (D-Md.) said Wednesday morning that the deficit-reduction ‘supercommittee’ must go beyond its mandate to cut $1.5 trillion from the federal deficit, but must get there in part by adding new tax revenues.”

The update pointed out that, “Hoyer added that creating jobs is another way to help the government reduce the deficit, and said for that reason, Congress must pass President Obama’s jobs bill. That bill looks to spend $447 billion on new unemployment and jobs programs, but House Republicans have rejected it because he is proposing to raise taxes to pay for it.”

The President’s jobs bill, which was introduced this week in the Senate, is an additional variable that could have an impact on budget considerations.

Josiah Ryan reported yesterday at The Hill’s Floor Action Blog that, “Sen. Jeff Sessions (R-Ala.) on Wednesday demanded to see a more detailed analysis of President Obama’s job-creation plan, and warned the bill’s spending could ‘obliterate’ many of the cuts made in the August deal to raise the nation’s debt limit.

“‘I believe the president needs to be honest in admitting that the bill’s short-term cost would wipe out, obliterate, the $7 billion in savings next year resulting from the debt-limit deal,’ said Sessions.”

With respect to some of the political dynamics at play over the jobs bill, Carrie Budoff Brown and Jake Sherman indicated yesterday at Politico that: “President Barack Obama needs House Speaker John Boehner’s help to muscle a jobs bill through Congress, but he’s betting that Boehner needs the win just as badly.

“The White House strategy rests on the risky assumption that Obama can sell Boehner on a new political reality: With voters desperate for jobs, neither leader can afford to do nothing.”

But Jennifer Steinhauer reported in today’s New York Times that, “Many Congressional Democrats, smarting from the fallout over the 2009 stimulus bill, say there is little chance they will be able to support the [jobs] bill as a single entity, citing an array of elements they cannot abide.

“‘I think the American people are very skeptical of big pieces of legislation,’ Senator Bob Casey, a Democrat from Pennsylvania, said in an interview Wednesday, joining a growing chorus of Democrats who prefer an à la carte version of the bill despite White House resistance to that approach. ‘For that reason alone I think we should break it up.’”

Carol E. Lee and Laura Meckler tied some of these recent developments on the budget, supercommitee action, and the jobs bill together in an article in today’s Wall Street Journal.

Recognizing that the President will release his own deficit reduction proposal on September 19, the Journal writers explained that: “But next week, Mr. Obama will insert himself into the debate over long-term deficit reduction, a battle between the parties that damaged his standing this summer and is beginning anew. A new congressional supercommittee is looking for ways to cut deficits by at least $1.2 trillion over 10 years.”

“Mr. Obama will continue to press for Congress to quickly pass his jobs plan, which includes new government spending and tax cuts. He also will make a quieter case for long-term deficit reduction, arguing that the two sets of proposals are not mutually exclusive.”

The Journal writers added that, “Part of Mr. Obama’s problem is that he may need the supercommittee to agree to deficit- reduction measures to pay for his jobs package. Republicans aren’t interested in doing that, said Ryan Patmintra, spokesman for Sen. Jon Kyl (R., Ariz.), a member of the panel.”

 

House Agriculture Committee Hearing

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.”

Meanwhile, Neena Rai and Tom Polansek reported in today’s Wall Street Journal that, “Ukraine corn exports are set to double over the next year, providing some relief to global grain markets that expect a disappointing U.S. harvest.”

And Reuters writer Carey Gillam reported yesterday that, “As harvest of the new U.S. corn crop gets under way, there simply may not be enough corn to go around, some ethanol experts said. That could drive corn prices even higher than the recent record levels.

“‘At current expected production levels of corn … there’s absolutely no question that demand has to be rationed,’ said Linn Group analyst Jerrod Kitt.”

 

Regulations

Yesterday the House Committee on Oversight and Government Reform held a hearing titled, “How A Broken Process Leads To Flawed Regulations.” A related Committee staff report is available here.

A news release yesterday from the National Cattlemen’s Beef Association stated that, “The House Committee on Oversight and Government Reform today hosted a hearing called ‘How A Broken Process Leads To Flawed Regulations.’ Representing the livestock industry was Robbie LeValley, co-owner, Homestead Meats and member of the board of directors for the National Cattlemen’s Beef Association (NCBA). She told the committee about the potential impact of the U.S. Department of Agriculture’s (USDA) proposed livestock marketing regulation – the GIPSA rule (Grain Inspection, Packers and Stockyards Administration would oversee the rule). Specifically, LeValley denounced big government invading the private marketplace.

“‘Value-based marketing has given our family business the opportunity to compete for market share at the highest level,’ said LeValley, a third generation Colorado cattlewoman who sells beef directly to consumers. ‘We do not need big government setting up shop on our farms and ranches. Government intrusion into the private marketplace is not the answer.’

“She told the committee that USDA did not conduct a cost/benefit analysis before proposing the rule. NCBA, the National Pork Producers Council (NPPC) and other groups commissioned an independent analysis by Informa Economics, which concluded the rule would result in the loss of more than 23,000 jobs and reduce the annual gross domestic product by $1.6 billion.”

Meanwhile, DTN Ag Policy Editor Chris Clayton penned an interesting article yesterday titled, “Restricting the Regulators: Farm Groups Back Freezes in Regulatory Process.”

Also yesterday, Nebraska GOP Senator Mike Johanns appeared on Fox Business News to discuss his recently introduced bills to ease federal regulations (video replay here).

And Wes Barrett reported yesterday at Fox News Online that, “Farmers are concerned that some new, tighter federal regulations on agriculture are stunting the growth of their businesses and say regulatory uncertainty makes it difficult for them to plan for the future.”

 

Animal Agriculture Issues

Bill Tomson reported yesterday at The Wall Street Journal Online that, “Federal officials are doing a poor job monitoring how antibiotics are used by livestock producers, making it impossible to properly examine the development of bacterial resistance to the drugs and the impact on Americans, according to a Government Accountability Office report [full report here, summary of the GAO report here].

“‘Without detailed use data and representative resistance data, agencies cannot examine trends and understand the relationship between use and resistance,’ the GAO concluded in a report requested by Rep. Louise Slaughter (D., N.Y.).

“The Food and Drug Administration collects data on how much antibiotics are used on livestock, but doesn’t monitor which kinds of animals get different kinds of antibiotics, the GAO said in a 77-page report released this week.”

The Journal article noted that, “The National Pork Producers Council, in reaction to the GAO report, said Wednesday, ‘Not only is there no scientific study linking antibiotic use in food animals to antibiotic resistance in humans, as the U.S. pork industry has continually pointed out, but there isn’t even adequate data to conduct a study.’”

 

Trade

Also on yesterday’s AgriTalk radio show, Mike Adams asked Chairman Lucas about the three pending U.S. trade deals, click here (MP3- 1:15) to listen to a portion of this discussion.

Reuters writer Doug Palmer reported earlier this week that, “Senate Majority Leader Harry Reid on Tuesday said the Senate would soon begin debate on a bill to help retrain workers thrown out of work by foreign competition, setting the stage for President Barack Obama to submit three long-delayed trade deals to Congress.

“The Nevada Democrat told reporters he would soon bring up legislation for two trade programs — Trade Adjustment Assistance (TAA), which is a worker retraining program, and the Generalized System of Preferences (GSP), which waives duties on imports from developing countries.”

And Vicki Needham reported yesterday at The Hill Online that, “Republicans took to the Senate floor Wednesday to urge the Obama administration to immediately send three pending free-trade agreements to Capitol Hill.

“The floor speeches are part of a campaign by the GOP to pressure the White House to reach an agreement with House leadership on passing a worker-aid program that would free up the trade deals for congressional votes, a move supporters argue will create jobs in the stagnating economy.

“‘We’ve got to move forward on this,’ said Sen. Rob Portman (R-Ohio), who — along with Sen. Roy Blunt (R-Mo.) and at least a dozen other Republicans — has vowed to support the streamlined version of the worker-aid bill in order to get the White House to submit the trade deals.”

Click here to view comments made yesterday on the Senate floor regarding trade from Senate Agriculture Committee Ranking Member Pat Roberts (R-Kansas), while remarks from Senators Mike Johanns (R-Neb.) and Roy Blunt can be viewed here and here.

Keith Good