Last week, the Federal Reserve Bank of Kansas City released a paper, “Initial Impacts of the 2012 Drought,” that “discusses some of the frequently asked questions surrounding the drought and its initial economic impacts on agricultural producers, agribusinesses and U.S. food prices. Although the drought is far from over and its final toll on U.S. agriculture is still uncertain, the 2012 drought will undoubtedly be etched into farmers’ memories for years to come.”
In particular, the paper stated that, “Despite lower feeder cattle prices, cattle feedlot enterprises face significant losses from high feed costs. Break-even prices for cattle feedlot operations surged in July as the price for feeds, such as soybean meal, corn gluten and dried distillers grains, jumped more than 25 percent since May.”
The Federal Reserve paper included this helpful graph depicting break even prices for parts of the livestock sector.
As lawmakers start a summer work period away from the nation’s capital, pressure to pass a five-year Farm Bill persists.
Recall that while the Senate passed a comprehensive Farm Bill on June 21 and the House Agriculture Committee passed a five-year measure on July 12, both with bipartisan support, the House GOP leadership would not acquiesce to a floor vote on the Ag Committee bill. After a short-lived attempt to bring up a one-year extension of farm programs, while drought conditions worsened across much of the U.S., the House alternatively passed a disaster related bill on Thursday. The Senate did not take up this legislation for a vote.
Senate Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) explained on the Senate floor Thursday that lawmakers would work over the August recess to bridge differences between the House and Senate agricultural perspectives by September. And as David Rogers reported on Thursday at Politico, “But ‘if for some reason or not, we are not able to succeed’ Stabenow opened the door to a stand-alone disaster-aid bill in September, albeit broader than the House package.”
In a video statement from late last week, Senate Ag Committee ranking member Pat Roberts (R., Kan.) stated that, “I am astonished, if not outraged, that the Senate Democrats left Washington without even considering the House passed livestock disaster package. They are playing politics with a devastating drought.”
On the Senate floor last week, Missouri GOP Senator Roy Blunt, who grew up on a dairy farm, also expressed his disappointment with the failure of Congress to address disaster relief.
Also last week, a video statement from Mary Kay Thatcher, Senior Director of Congressional Relations at the American Farm Bureau Federation (AFBF) indicated that lawmakers need to finish the farm bill when they return to Washington in September.