House Agriculture Committee Ranking Member Collin Peterson (D., Minn.) was a guest on yesterday’s AgriTalk radio program with Mike Adams where the discussion focused on the Farm Bill (unofficial transcript here, audio replay here).
Mike Adams asked Rep. Peterson, “What do you think is going to happen when you get back in session in September? Are you going to get a bill done?”
The Minnesota Democrat noted that, “We’re trying. We’re trying. We’re using August here to see if we can narrow the differences and get language written and get language scored and so forth so that when we get back, if there’s motivation to move this thing, we’re in a position to do it. But it’s kind of going slow at this point, but we’re trying, we’re pushing.”
Rep. Peterson added that, “I think what people are hoping for is that people will get an earful when they’re home for August and come back on September 10th with a number of members putting pressure on their leadership to try to get this thing moved.”
Noting that some policy conflict exists beyond nutrition issues, Rep. Peterson pointed out that, “I think there’s also divisions on the Republican side regarding the commodity title and crop insurance. You have people on the Republican side that have problems with that. And they’re some of the same folks that opposed us in ’08, Jeff Flake [R., Ariz.] and Ron Kind [D., Wis.]. And Paul Ryan [R., Wis] was one of the ones that opposed us. And so I would say that over the weekend, having him elevated to the Republican ticket probably does not help the situation, because he is not a fan of these farm bills.”
With respect to a path forward, Rep. Peterson, who was first elected to Congress in 1990, explained that, “Well, I think if we’re not able to get the bill resolved and get it ready to go and get it on the floor and passed, my guess would be at this point that what would happen is that potentially there would be an extension of the livestock disaster programs.
“You know, we were eight months late with the ’08 bill because the Senate wouldn’t move, and we didn’t extend the law, because until you get to the winter wheat crop being harvested in May, there’s no real need for a full-blown extension. We did extend certain parts of the bill five different times, but we never did a full-blown extension. So I don’t think there’s a need for that.
“It might be something that people consider, but I think that an extension passed in September means there will be no farm bill until next year. And I think that’s a bad strategy, because CBO scoring and so forth is going to cut back on the baseline, and it will be harder to get this worked out next year than it is this year.”
In addition, Rep. Peterson explained that, “If you took a Senate file and put the disaster bill in it or something else like that and sent it back to the Senate as a message from the House, that would allow the Senate and us to go into conference. So that was raised as a possibility that last week before we left, but it was rejected. But it could be done.
“The other thing that could be done is if we could get this thing close to being resolved by the time we come back on September 10th, we could put it on the floor with a modified closed rule, which is what we did with the ’08 bill, which means you would limit the amendments to ten or 12 major amendments, which are really the main things that need to be considered anyway, and you could have kind of an expedited process.”
On the issue of a potential EPA waiver of the Renewable Fuel Standard, Rep. Peterson noted that, “Well, I think it’s premature. We’re not…we’re looking at estimates, so we don’t know what the final crop is. Obviously it’s going to be down, but we don’t know how much…But the other thing about it is that people that think that suspending or waiving the RFS is going to solve this problem are mistaken. It’s not. And it might have an effect two years from now, but it’s not going to have an effect on the short-term situation.”
Dairy policy was also a subject in yesterday’s AgriTalk discussion. On this issue, Rep. Peterson stated that, “And frankly, dairy, if we don’t get this bill done, dairy is the one segment of agriculture that is in the most jeopardy and the most danger, because we have a program that doesn’t work right now. If we have this new margin insurance system in place, it would basically make the feed cost increases less of a problem, because what you’d be able to do is protect your margin above feed cost, and so the feed cost goes up, you’ve still got the margin on top of that, so it insulates the dairy industry from these gyrations, not only in prices of milk, but also in prices of feed. So without it, I think dairy’s got some very tough time ahead. And I would argue it’s probably the most important thing that needs to get done, sooner rather than later.”
Earlier this week, Rep. Jim Costa (D., Calif.), the Ranking Member of the House Agriculture Rural Development, Research, Biotechnology, and Foreign Agriculture Subcommittee, was a guest earlier this week on KERN- 1180 radio (Bakersfield, Calif.) where he discussed the Farm Bill and the agricultural economy.
Excerpts from that discussion have been posted at FarmPolicy.com Online.
Rep. Costa also highlighted dairy issues, stating that, “I mean Ag has been pretty good in California the last several years and across the country, with the exception of the dairy industry, and right now we’re having bankruptcies at an alarming rate in California. We’ve had some significant dairies in Kern, Tulare, Fresno, Kings County that just in the last several weeks have filed bankruptcies.”
While noting the difference in the prices producers are paid for milk, and production costs, Rep. Costa added that, “And you couple that with the increase in corn prices with the drought conditions, in January to June of this year corn prices increased 63% and in the last weeks they’ve increased another 30 to 35% and so that— And of course I’m one of those who really believe, and I’ve got a bipartisan effort with Congressman [Bob Goodlatte (R., Va.)] to change the renewable fuel standard.
“I don’t think we ought to be using corn to produce ethanol and its impact to feed stocks for dairy is significant.”
Rep. Costa also noted in the interview that, “Speaker Boehner, I believe, would like to have a farm bill. He was here in the Valley earlier this year telling a number of ag interests that if the Senate produced a farm bill that the House would do the same and we would go to conference…[H]ere we are and we’ve got two weeks of session left in September and we’re working hard to try to get the powers to be to work together in a bipartisan fashion for a farm bill, but it’s not looking good at this point.”
In other dairy related developments, a news release on Wednesday from Rep. Kathy Hochul (D., N.Y.) stated that, “Today, [Rep. Hochul] applauded New York State Commissioner of Agriculture Darrel J. Aubertine’s announcement that the threshold for Concentrated Animal Feeding Operations (CAFO) regulations will be raised from 200 cows to 300 cows, providing dairy farmers relief from burdensome regulations. Recently, Rep. Hochul sent a letter to New York Governor Andrew M. Cuomo urging him to take action to help milk producers expand their businesses. The higher threshold, consistent with national standards, will allow dairy farmers to increase milk production, enabling them to fulfill the needs of New York’s growing yogurt industry.”
Rep. Kristi Noem (R., S.D.) noted yesterday at the Argus Leader Online that, “It’s wrong for Congress to leave for five weeks without a Farm Bill. That’s why I voted against a Congressional recess. This vote may not make me popular with my party’s leadership, but it’s the right vote for South Dakota.
“Getting a strong Farm Bill passed is my number one priority. I will continue meeting with House leaders, many of whom aren’t from farm states, to explain the critical importance of the Farm Bill. I will also continue working with Democrat Congressman Peter Welch from Vermont to build bipartisan support for bringing the bill to the floor. Our letter to Congressional leaders garnered 79 signatures from Republicans and Democrats urging a vote. Now this bi-partisan group will keep working through August to gather even more support.”
Rep. Denny Rehberg (R., Mont.), writing earlier this week at the Bozeman Daily Chronicle Online state that, “But as our ag industry struggles with everything from droughts to floods and wildfires, there is simply no excuse for further delay in passing a Farm Bill. House leaders have a responsibility to bring the Farm Bill to the floor to move the process forward in a timely manner. I told them as much in a letter I sent them along with a handful of rural colleagues…The feedback I’ve heard from Montanans at more than 100 public listening sessions could not be more urgent. I’m ready and eager to return to Washington, D.C. at any time to finish this important work.”
Meanwhile, Ohio State University Agricultural Economist Carl Zulauf noted yesterday at the farmdoc daily blog (“Shallow Loss Programs and the 2012 Farm Bill Debate”) that, “A signature issue of the 2012 Farm Bill debate is the addition of a shallow loss program to complement existing crop insurance. Shallow loss programs are included in the farm bills passed by the U.S. Senate and the House Committee on Agriculture. Unless the policy environment changes dramatically, the main question is which version(s) of shallow loss programs will be chosen. This article describes the general approach and program specifics of the various shallow loss proposals and offers some limited, initial observations.”
After the analysis, yesterday’s update concluded by saying, “In summary, the Senate and House Agriculture Committee Farm Bills increase the share of farm production risk that is covered by U.S. risk management programs by adding a shallow loss program. The shallow loss program will have different impacts by area of the county, generally favoring the Midwest where losses on average tend to be smaller than in other parts of the U.S. An alternative view is that the shallow loss program balances out the greater value of the existing crop insurance program to other parts of the U.S. due to the larger losses on average in these areas. Both bills contain competing shallow loss approaches. There is no inherent reason to have competing approaches. Thus, a key decision for the remaining farm bill debate could turn out to be which of the two general shallow loss approaches is chosen by Congress, or whether farmers should be given a choice.”
In news regarding crop insurance, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “The Risk Management Agency’s latest summary of business report shows farmers insured about 268.7 million acres this year, with a total value of crops insured at just under $110 billion…That translated into $10.4 billion in total premiums paid to insurance companies this year, of which $6.55 billion will be from taxpayers through the premium subsidies.”
The DTN update noted that, “Last year’s indemnity came in at $10.8 billion. Already, this year insurers have paid out $948 million due to lost crops, of which wheat losses account for just under $434 million. Cotton producers have received another $136 million in payments.”
And Meghan Grebner reported yesterday at Brownfield that, “[Risk Management Agency administrator Bill Murphy] says the number one question he’s been getting is, ‘Is RMA prepared for the potential claims this fall?’
“‘No doubt we’re going to see record losses this year,’ he says. ‘From a budgetary standpoint there is no issue. Our act actually states ‘such sums as necessary from Treasury.’’ Which he says means RMA can honor all claims that are submitted.”
Bloomberg writer Brian K. Sullivan reported yesterday that, “Drought affected 87 percent of U.S. corn, 85 percent of soybeans, 63 percent of hay and 72 percent of cattle through last week, according to the National Climatic Data Center.
“The drought in the lower 48 states eased last week to 61.8 percent from 62.5 percent, with improvement in all categories of dryness except for the worst, the U.S. Drought Monitor reported.
“The most severe level of drought, called exceptional, expanded to 6.3 percent of the contiguous U.S. from 4.2 percent the previous period. The monitor’s report is for the week ended Aug. 14.”
An update yesterday at CBS News Online noted that, “The amount of land in Nebraska suffering exceptional drought spiked by 19 percentage points to 22.5 percent, while that number in Kansas jumped from 38.6 percent last week to 63.3 percent now. Illinois, another key supplier of corn and soybeans, saw its conditions abate slightly, with the amount of land in the two worst drought categories slipping from 81.18 percent to 79.54 percent.”
Reuters writer Alister Doyle reported yesterday that, “Downpours and heatwaves caused by climate change could disrupt food supplies from the fields to the supermarkets, raising the risk of more price spikes such as this year’s leap triggered by drought in the United States.
“Food security experts working on a chapter in a U.N. overview of global warming due in 2014 said governments should take more account of how extremes of heat, droughts or floods could affect food supplies from seeds to consumers’ plates.”
Meanwhile, Ian Berry reported yesterday at The Wall Street Journal Online that, “Some of the best corn-growing land in the U.S. is still selling for more than $10,000 an acre and drawing buyers to auctions, despite the drought that has stunted crops and created uncertainty about the coming harvest.”
The Journal article added that, “The average cost of farmland in Iowa rose 24% in the second quarter from a year earlier, while Illinois farmland climbed 15%, according to a survey released Thursday by the Federal Reserve Bank of Chicago.
“Iowa had the most expensive farmland in the Midwest, according to U.S. Department of Agriculture data released this month. The average price per acre was $7,300 in Iowa and $6,800 per acre in Illinois, with top land fetching more.
“Across the heart of the Corn Belt, farmland values rose 15% on average, according to the survey. Coupled with Wednesday’s Kansas City Fed report that showed a 26% rise in farmland prices in a seven-state swath of the Plains, the survey provides further evidence that the boom seen in recent years hasn’t stalled.”
Meanwhile, Jude Webber and Gregory Meyer reported yesterday at The Financial Times Online that, “Argentine farmers have planted their second-smallest wheat crop by land area in 110 years while the upcoming corn crop in the important exporter could be as much as a fifth lower in the coming season as a result of dry conditions.
“Commodity markets are closely watching planting intentions in the southern hemisphere, especially Argentina, Brazil and Australia, as the region will be key to offsetting a shortfall created by the worst drought to hit the US farm belt in half a century.”
In news regarding the Renewable Fuel Standard, John H. Cushman, Jr. reported in today’s New York Times that, “Three big intertwined but rival agribusinesses — corn farmers, meat and poultry producers, and biofuel refineries — are in a political fight to protect their interests as a drought ravages corn producers and industrial consumers alike.
“At issue is whether to suspend a five-year-old federal mandate requiring more ethanol in gasoline each year, a policy that has diverted almost half of the domestic corn supply from animal feedlots to ethanol refineries, driven up corn prices and plantings and created a desperate competition for corn as drought grips the nation’s farm belt.”
The Times article noted that, “The Obama administration seems inclined not to interfere. The president ‘has been a strong believer in ethanol,’ a spokeswoman, Jennifer Psaki, said during Mr. Obama’s trip to Iowa this week. ‘He absolutely believes in it — he thinks it’s a driver of the economy here and a key component of renewable energy.’”
Today’s article added that, “Whatever ripple effects are felt in food or gasoline prices, a group of Purdue University economists said on Thursday as they presented a study of a possible waiver, the drought has already done its economic damage.”
Bloomberg writer Alan Bjerga reported yesterday that, “White House Press Secretary Jay Carney in Iowa yesterday told reporters that the U.S. Department of Agriculture and the EPA will be evaluating data to determine what should be done about the waiver requests and that he didn’t know if anyone has directly discussed the topic with the president.”
Nutrition, and Food Safety
Mary MacVean reported yesterday at the Los Angeles Times Online that, “Let’s face it: Kids, especially teenagers, who want sugary drinks can get them. But they’re having a harder time doing that at school.
“Economists monitoring the beverage industry’s promise to get sodas and many other sugary drinks out of schools found that companies shipped 90% fewer calories to schools in 2010, compared with 2004, and reduced shipments of full-calorie sodas by 97%.”
And Helena Bottemiller reported yesterday at Food Safety News Online that, “The U.S. Food and Drug Administration’s annual report to Congress, released this week, offers an overview of what the agency has been up to over the past year.
“In FDA’s latest report, which is required by the 2011 Food Safety Modernization Act, one thing is immediately clear: FDA has an enormous food safety mandate. The agency regulates $417 billion worth of domestic food and $49 billion worth of imported food. In all, the agency oversees more than 421,121 registered domestic and foreign food facilities.”