October 19, 2019

News on the Ag Economy: Food Prices; Rural Economic Indicator; and Crop Insurance

A news release yesterday from the World Bank stated that, “Global food prices remain high and volatile, hitting the poorest countries hardest and adding to the strains facing the global economy, according to the World Bank Group’s new Food Price Watch  released ahead of the G-20 Summit in Cannes, France. While the Bank’s food price index has dropped 5 percent from its February 2011 peak and dipped marginally in September by one percent, it remains 19 percent above its September 2010 levels.

“‘The food crisis is far from over,’ said World Bank Group President Robert B. Zoellick, who has urged the G-20 to put food first. ‘Prices remain volatile and millions of people around the world are still suffering. The World Bank has been working closely with the French Presidency of the G-20 and our partner international organizations on actions to protect the most vulnerable from the dangers of food price volatility, while also addressing some of its root causes. Let’s remember, averting crisis is not just about banks and debt. Millions of people around the world face a daily crisis of hunger and malnutrition. At Cannes, the G-20 can and should take steps to address their needs.’”

Meanwhile, the AP reported yesterday that, “For the first time in nearly two years, the overall Business Conditions Index for a nine-state region of the Midwest and Plains took a negative turn.

“Tuesday’s report on the survey of supply managers and executives says the index dropped to 49.9 in October, compared with 52.2 in September.”

With respect to crop insurance, DTN Executive Editor Marcia Zarley Taylor reported yesterday at the Minding Ag’s Business Blog that, “Final harvest payment rates for most spring planted crops were finalized by the Risk Management Agency today.  As expected, Midwest corn growers will benefit from the price rally that lifted markets during the month of October when RMA averages the daily closes on December futures contracts. Corn growers with a harvest price clause in their contracts will be compensated at $6.32, up from the $6.01 spring planting price. (Texas corn rates were settled earlier at $6.94).

“In contrast, in most of the country soybeans’ fall price averaged $12.14/bu., lower than the spring rate of $13.49, so compensation on lost bushels will be made at the higher spring rate.”

Keith Good

Farm Bill Issues and Supercommittee (Budget) Developments

Categories: Audio /Budget /Farm Bill

Farm Bill Issues

Bloomberg writer Alan Bjerga reported earlier this week that, “Agriculture lobbyists are divided over whether to end guaranteed subsidies to growers as rural lawmakers face a deadline tomorrow to propose $23 billion in farm-spending cuts.

“The House and Senate agriculture committees have received at least seven proposals from interest groups such as the National Cotton Council and National Corn Growers Association that would end ‘direct payments’ made to farmers regardless of crop prices, according to a report by Carl Zulauf, an Ohio State University economist. The American Farm Bureau Federation, the largest farmer group, is trying to save the subsidies.

The differences are complicating efforts by lawmakers meeting behind closed doors to craft a 10-year plan for cuts in farm spending. The proposal from the agriculture panels may form the foundation of the next farm-policy bill as some payments to growers of corn, cotton and other crops are replaced by initiatives that may be less costly.”