FarmPolicy

May 24, 2019

Farm Bill; Animal Agriculture; and, Agricultural Economy

Farm Bill: Senate Floor Action

The Associated Press reported yesterday that, “A five-year farm and food bill that would revamp the federal safety net for farmers and eliminate direct government payments for idle crop fields took its first step toward passage Thursday in the Senate.

A 90-8 vote to officially begin debate opens the way for what could be several weeks of attempts to amend proposed legislation that spends some $100 billion a year on crop insurance, conservation and nutrition programs.”

The AP article added that, “The House Agriculture Committee is expected to write a farm bill more sympathetic to southern growers, who want to keep aspects of the existing system where farmers are paid when prices dip below certain target levels. House Republicans also say that more savings can be squeezed out of the food stamp program.”

Daniel Strauss reported yesterday at The Hill’s Floor Action Blog that, “The chamber voted 90-8 on a cloture vote on a motion to proceed to the Agriculture Reform, Food and Jobs Act of 2012 (S. 3240). Republican Sens. Tom Coburn (Okla.), John Cornyn (Texas), Jim DeMint (S.C.), Orrin Hatch (Utah), Dean Heller (Nev.), James Inhofe (Okla.), Ron Johnson (Wis.) and Mike Lee (Utah) voted against the motion. The bill needed 60 votes to advance.”

A news release yesterday from the National Milk Producers Federation noted that, “The 2012 Farm Bill, formally designated S. 3240, passed the cloture vote Thursday by an overwhelming margin of 90-8. The measure now proceeds to the full Senate floor for debate and amendments, a process that could take several weeks before a final vote is taken.

“Thursday’s action ‘greatly increases the chances that we can get our dairy reform proposal through the Senate, as well as the House, and passed into law this year,’ said Jerry Kozak, President and CEO of NMPF. ‘We commend Senators Stabenow and Roberts, the leaders of the Senate Agriculture Committee, for their dogged determination to get this bill to the Senate floor.’”

National Corn Growers Association President Garry Niemeyer indicated yesterday that, “The National Corn Growers Association cheers the strong bipartisan vote and appreciates the work of Sens. Stabenow and Roberts on this legislation.”

Senator Saxby Chambliss (R., Ga.) spoke about the Farm Bill yesterday on the Senate floor.  In part, the former Senate Ag Committee Chairman addressed issues associated with the safety net and regional equity, as well as reaction from Ag Committee leadership to proposals thus far that seek to remedy the concerns that Sen. Chambliss outlined.  To listen to a portion of remarks on theses issues from Sen. Chambliss yesterday, just click here (MP3- 2:18).  A video replay of the entire remarks from Sen. Chambliss yesterday can be seen here.

Senate Budget Committee Chairman Kent Conrad (D., N.D.) noted yesterday that, “Despite what many critics on the East and West Coast may argue, Farm Bill spending is only a tiny sliver of the overall federal budget.  In truth, the farm safety net under the new Farm Bill is estimated to represent about 1/3 of 1 percent of total federal spending,” Senator Conrad said. “The nation’s agricultural policy benefits every consumer in this country.  As a share of disposable income, Americans have the cheapest food in the history of the world.”

Senate Ag Committee Ranking Member Pat Roberts (R., Kan.) pointed out yesterday that, “This is a reform bill. No other committee, in the House or Senate, has voluntarily undertaken programmatic and funding reforms at this level in this budget climate.”

Senate Ben Nelson (D., Neb.) indicated yesterday that, “As we end those [direct payment] subsidies, the farm bill establishes that crop insurance will be the focal point of risk management, as it should.”

And Iowa GOP Senate Chuck Grassley noted yesterday that, “This bill contains crucial reform to the ‘actively engaged’ requirements.  These reforms will ensure farm payments go to actual farmers.”

Senator John Hoeven (R., N.D.) stated yesterday that, “If you think of the total federal budget as this cornfield, then the portion that goes to the farm bill would be similar to this ear of corn. The portion that actually goes to farmers and ranchers would be one kernel of corn out of the entire field.”

 

Farm Bill: Amendments

Senator Jerry Moran (R., Kan.) was a guest on yesterday’s AgriTalk radio program with Mike Adams where their conversation focused on the Farm Bill. Specifically, Sen. Moran highlighted issues associated with the Farm Bill amendment process in the Senate as well as timing variables.  A portion of yesterday’s AgriTalk show can be heard here (MP3- 3:54).

Senator Amy Klobuchar (D., Minn.) discussed similar issues in a report by Randy Koenen on yesterday’s Agriculture Today radio program from the Red River Farm Network.  Click here (MP3- 1:22) to listen to a brief clip from yesterday’s Agriculture Today program.

Daniel Strauss reported yesterday at The Hill’s Floor Action Blog that, “Sen. Debbie Stabenow (D-Mich.) issued a strong warning against senators attaching unrelated amendments to a farm bill the Senate is considering.”

“‘Amendments that have nothing to do with agriculture do not belong in the Farm Bill and delay the Senate’s ability to get its job done,’ Stabenow said in a statement to The Hill. ‘There are not many bills that reduce the deficit and create jobs with as much bipartisan support as this one, so it’d be unfortunate if a small group of senators tried to get in the way of it with off-topic amendments.’

“The Senate spent most of Wednesday introducing amendments to the farm bill, many of which were not directly related to the legislation. An agreement over amendments could be the deciding factor over whether the farm bill moves forward. If legislators do not come to an agreement on amendments, the farm bill could stall in the chamber,” The Hill update said.

Daniel Strauss reported yesterday at The Hill that, “In the days before the vote, senators began introducing amendments, some of which were not directly related to the farm bill, like an amendment by Sen. Rand Paul (R-Ky.) cutting off aid to Pakistan until a doctor who helped the CIA find Osama bin Laden is released from prison.”

In a separate update yesterday at The Hill Online, Daniel Strauss reported that, “Sen. Tom Coburn (R-Okla.) wants to attach a proposal to end federal funding to party conventions to a farm bill currently under consideration in the Senate…[C]oburn’s is one of a number of amendments senators have introduced that could stall the farm bill.”

Ron Nixon reported yesterday at The New York Times Online that, “Senator Frank R. Lautenberg, Democrat of New Jersey, introduced an amendment to the Farm Bill to require a study into the links between sugary soft drinks and obesity.”

Daniel Looker reported yesterday at Agriculture.com that, “By Thursday, more than 30 amendments had been filed to the 2012 Senate farm bill, ranging from a ban on support for ethanol blender pumps, to two approaches to limiting crop insurance premium subsidies, to increasing the bill’s relatively small level of funding for beginning farmer programs.”

Mr. Looker added that, “Two amendments take different approaches to limiting subsidies for farmers’ crop insurance premiums. One, introduced by Senators Tom Coburn (R-OK) and Dick Durbin (D-IL), would reduce premium subsidies by 15% for farmers (or legal entities) with adjusted gross income above $750,000. The limit would start with the 2014 reinsurance year.

“The other approach, backed by Senators Jeanne Shaheen (D-NH) and Pat Toomey (R-PA) would limit subsidies for farmer premiums to $40,000 per year.”

Yesterday’s article pointed out that, “Crop insurance would also be affected by another amendment from Senator Ben Cardin (D-MD) that would tie conservation compliance requirements to crop insurance eligibility. Senator Tom Harkin (D-IA), a member of the Senate Agriculture Committee and former chairman, told Agriculture.com Thursday that he supports linking compliance to crop insurance.”

Note also that an update yesterday at the National Sustainable Agriculture Coalition blog stated that, “On Thursday, June 7, 2012, Center for Rural Affairs, Environmental Working Group, National Farmers Union, National Sustainable Agriculture Coalition, and Oxfam America sent a letter to the Senate regarding federal crop insurance premium subsidies in the 2012 Farm Bill.”

A news release yesterday from Senator Kirsten Gillibrand (D., N.Y.) stated that, “U.S. Senators Olympia J. Snowe (R-Maine) and [Gillibrand] have filed an amendment (S.A. 2190) to the 2012 Farm Bill (S. 3240) that would provide certainty for the nation’s dairy farmers by stabilizing milk pricing.  Specifically, the amendment would allow dairy industry groups to present milk pricing reforms to U.S. Department of Agriculture (USDA) for consideration in a public hearing setting; eliminate the end product price formula to set prices for class III milk; and order the Secretary of Agriculture to release the Department’s final proposal to industry organizations for approval by referendum.”

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Conservative Sens. Jeff Sessions (R-Ala.) and Rand Paul (R-Ky.) have offered amendments to the farm bill that would greatly cut federal spending on food stamps.”

And, a news item yesterday from the Coalition for Sugar Reform stated that, “In response to the filing of an amendment to reform the costly U.S. sugar program, the Coalition for Sugar Reform praised a bipartisan group of Senators for offering the amendment, and urged all Senators to support its approval. The amendment to the 2012 Farm Bill – the Agriculture Reform, Food, and Jobs Act of 2012, S. 3240 – under consideration this week in the U.S. Senate, would roll back the sugar program’s most onerous provisions, which were enacted as part of the 2008 Farm Bill. The amendment was filed by Sens. Jeanne Shaheen (D-­‐NH), Richard Lugar (R-­‐IN), Mark Kirk (R-­‐IL), Richard Durbin (D-­‐IL), Pat Toomey (R-­‐PA) and Dan Coats (R-­‐IN).”

 

Farm Bill: Analysis and Provisions

University of Illinois Agricultural Economist Nick Paulson indicated yesterday at the farmdoc daily blog (“Understanding the Supplemental Coverage Option”) that, “In addition to the Ag Risk Coverage (ARC) program in the Commodity Title, the Senate Ag Committee’s 2012 Farm Bill (summarized here, with more details on SCO here) also includes an optional program to supplement individual insurance coverage with county-level yield or revenue coverage in the Crop Insurance Title. The Supplemental Coverage Option, or SCO, offers county-level coverage for a portion of the individual farmer’s insurance deductible. For farmers who choose to enroll in the ARC program, SCO will cover losses ranging from their elected insurance coverage level to 79% of the SCO guarantee, resulting in a 21% deductible. For farm not enrolled in ARC, SCO coverage would range from their insurance coverage level to 90% of the SCO guarantee, resulting in a 10% deductible.”

Following his analysis, Dr. Paulson noted that, “The choice between ARC and SCO (as well as the option to combine them) and the impact of their availability on crop insurance choices are issues which should carefully be considered. The yield protection offered by the SCO program is arguably better than ARC as it is assumed to incorporate yield trends. However, the price component of SCO, which is assumed to be similar to insurance programs, does not offer the multi-year price protection provided by ARC’s moving average. Adoption of SCO among farmers may also be impacted by the way in which it will be administered – through the Federal Crop Insurance Corporation. In contrast to ARC, which would be administered through the Farm Service Agency, there will be direct financial incentives to the crop insurance industry to support and encourage enrollment in SCO.”

 

Farm Bill: Executive Branch

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “The White House on Thursday said formally that it supports passage of the Senate’s five-year farm bill but emphasized that President Obama wants more cuts to support payments to farmers.”

David Rogers reported yesterday at Politico that, “The Senate’s new farm bill sailed through its first floor test Thursday morning and won long-awaited support from the White House, which must keep its own eye on swing states like Iowa in the November presidential election.

“‘We have to get this done,’ Agriculture Secretary Tom Vilsack told POLITICO. ‘We have an extraordinarily robust farm economy, and if you want that to continue, you have to have certainty about policies going forward.’

“Major hurdles remain, but the lopsided 90-8 procedural vote was a boost for proponents hoping to win Senate passage this month. And the House Agriculture Committee is moving up its own markup to the week of June 18 in anticipation of House floor debate in July.”

Mr. Rogers added that, “The notion that any lumbering farm bill could survive in a Tea Party-driven House seemed laughable to many just months ago. But Minnesota Rep. Collin Peterson, a veteran of past battles and the ranking Democrat on the House panel, told POLITICO: ‘If this gets through the Senate, the dynamics change and I don’t think they can stop it.’”

 

Animal Agriculture

In other policy developments, an update yesterday at Feedstuffs Online reported that, “An egg industry transition in hen housing from conventional cages to enriched colony cages should increase consumer-level egg prices by less than 2 cents/doz., according to a new study released by the United Egg Producers (UEP) today.

The analysis, commission by UEP and conducted by Agralytica in Alexander, Va., concludes that most of the 2-cent impact would not occur until well into the 2020s and would be based on capital investments that would be necessary for egg producers ($20-24 per hen), modestly higher labor costs (9%) and slightly higher feed consumption (4%).

“Egg prices this week are an average of $1.15/doz. across the country.”

A news release yesterday from United Egg Producers noted that, “Gene Gregory, president of UEP, said ‘In polling, consumers have told us, by an overwhelming margin of 12- to-1, that they prefer their eggs to be produced in the enriched colony cage system because it allows the hens nearly double the amount of space, as well as opportunities to perform more of their natural behaviors like perching and nesting. Farmers need a level playing field and a reasonable transition period to be able to invest the capital needed to give consumers what they want, and this federal legislation is what consumers want, what farmers need, and what scientific experts support.’”

 

Agricultural Economy

Bloomberg writer Rudy Ruitenberg reported yesterday that, “Global food prices had their biggest drop in more than two years in May as the cost of dairy products slumped on increased supply, easing strain on household budgets.

“An index of 55 food items tracked by the United Nations’ Food & Agriculture Organization fell 4.2 percent to 203.9 points from 213 points in April, the Rome-based agency reported on its websiteThat was the biggest percentage drop since March 2010.”

Bloomberg writer Whitney McFerron reported yesterday that, “Potential record corn production in the U.S. and steady demand from ethanol makers may pressure prices of the grain, said Joseph Glauber, the chief economist for the U.S. Department of Agriculture.

U.S. corn production at a record 14.79 billion bushels may help ease global stockpiles that tightened in the previous crop year, Glauber said today at the International Grains Council’s annual conference in London. Consumption of ethanol, a corn- based gasoline additive, may be ‘relatively flat’ because high prices have curbed fuel demand and last year the U.S. let a tax credit for refiners expire, he said.”

Keith Good

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