FarmPolicy

Farm Bill; and the Agricultural Economy

Farm Bill Issues

Jennifer Steinhauer reported in today’s New York Times that, “Congressional agreement on a stalled farm bill seemed increasingly out of reach on Wednesday, as a few hundred farmers gathered near the Capitol to press for its passage. They were greeted by an unusually bipartisan group of lawmakers pushing for action in the House, where Republican leaders have declined to pursue legislation.

“‘Americans want us to work together to get it done for rural America,’ said Senator Debbie Stabenow, Democrat of Michigan and chairwoman of the Senate Agriculture Committee, to the farmers’ cheers. [Note that a video replay of Chairwoman Stabenow’s remarks can be viewed here].

“Senator Jerry Moran, Republican of Kansas, also spoke, chiding members of his own party in the House for refusing to bring their own committee’s farm bill to the floor. ‘Don’t sit on the sidelines waiting for something to happen,’ he said.”

The Times article indicated that, “‘Agriculture has always been bipartisan,’ Ms. Stabenow said. ‘But the extreme element of the House doesn’t believe’ in a farm bill at all, she said, while others ‘don’t want reforms.’ She added, ‘The anti-reformers are hiding behind the extreme elements.’

“Some Republicans are now pondering a one-year extension of the current law. Democrats in both chambers have declined to entertain that idea for now.”

Today’s article added that, “Some Democrats are trying to press the House leadership to allow a vote through something called a ‘discharge petition,’ which, if signed by 218 members, would force a floor vote. But it is being held up by procedural impediments.

“‘I’ll sign it as soon as it’s available,’ said Representative Kristi Noem, a Republican freshman from South Dakota. When it was pointed out to her that this would probably greatly dismay Republican leaders, she added, ‘I take my orders from my district.’”

Michael Catalini reported on Tuesday at National Journal Online that, “A Democratic congressman expects to file a special legislative petition on Tuesday that would force the full House to vote on the farm bill in the event that 218 signatures are collected, a Democratic aide told National Journal.

“Rep. Bruce Braley, D-Iowa, will present the measure, known as a discharge petition, to the House clerk as soon as the Agriculture Committee-passed farm bill is reported to the House.”

The item explained that, “The Agriculture Committee passed the farm bill on July 12, by a vote of 35-11, but Committee Chairman Rep. Frank Lucas, R-Okla., did not report the bill to the House clerk until Monday, the aide said. Discharge petitions can only be introduced either after bills have been reported out of committee, or after 30 legislative days go by.”

In a news release yesterday, Rep. Braley indicated that, “Speaker Boehner is playing unprecedented games by denying and delaying this much needed bill. I am fighting tooth and nail to get the Farm Bill up for a vote and am doing everything possible to get this done for Iowa farmers.”

Meanwhile, Humberto Sanchez reported yesterday at Roll Call Online that, “With agriculture programs set to expire at the end of the month, Rep. Kristi Noem (R-S.D.) expressed frustration with House Republican leaders today over their decision not to consider a committee approved farm bill.

“‘I am disappointed that they haven’t scheduled this for a vote,’ Noem said after speaking at a rally seeking to draw attention to the issue. ‘That has been a big disappointment for me.’

“She has pledged to sign a discharge petition that would force the bill approved by the House Agriculture Committee in July onto the House floor.”

Yesterday’s article noted that, “House Republican leaders have said they don’t intend to bring the committee bill to the floor because there is not enough support for the measure.

“‘What the leadership has told me is that they are not convinced that they have the votes to pass it,’ Noem said. ‘What I have told them is that I don’t believe we’ll ever truly know if we have the votes until we schedule it and have the vote.’

“Noem and Rep. Peter Welch (D-Vt.) sent a letter to House Majority Leader Eric Cantor (R-Va.) today requesting a meeting to discuss the bill.”

In addition, Representatives Noem and Welch penned a column earlier this week at The Hill Online, which stated in part that, “We recognize that a farm bill can’t prevent a drought, and we applaud the Department of Agriculture for its efforts to provide disaster assistance to drought-stricken states. But the certainty a farm bill provides for rural America is the single best drought assistance we can offer. Our farmers and ranchers risk their livelihoods to feed America, and they deserve a risk management system and a farm bill they can rely on.”

A replay of Rep. Noem’s remarks yesterday at the Farm Bill Now rally can be viewed here.

David Rogers reported yesterday at Politico that, “Indeed, since talks at the Republicans’ national convention in Tampa, the fix has seemed in from the House GOP: no action before the election and a push later to postpone debate into the next Congress.

“‘There is no good reason why we didn’t bring this farm bill to the floor,’ Minnesota Rep. Collin Peterson told the [Farm Bill Now rally] crowd. But as the ranking Democrat on the Ag panel and a veteran of many farm bill fights, Peterson also stung many by gruffly warning that the agriculture movement must exert more grassroots pressure if it is to have real success in Washington.

“‘The groundswell is not out there. It is not happening at the grassroots level,’ Peterson said. ‘This rally is a good starting point but …to change this we need 100 or 200 calls from people in their districts to these members (of Congress).’”  [A replay of Rep. Peterson’s remarks at yesterday’s rally can be heard here].

Mr. Rogers pointed out that, “Nonetheless, for all his rough edges, Peterson, a former House Agriculture Committee chairman, has been one of the most aggressive players in the House or Senate in trying to get a bill through Congress. And the good farm economy — even with this summer’s drought — has taken some pressure off the House GOP to move a bill.

“What price will be paid politically in November is not yet clear.”

The Politico article added that, “Asked later to explain his absence from the rally, [House Agriculture Committee Chairman Frank Lucas (R., Okla.)] told POLITICO: ‘It didn’t seem like the place I should be at this given moment.

“‘Right now I am trying to be an honest catalyst trying to work with all my friends to get us to a consensus point to get something done. My big problem is we’re shifting — if we have not already shifted — from a policy process to a political process and it’s the crazy season with only two-and-a-half more days of legislative time charted in the House before Election Day.’

“To date Lucas has played the good soldier, trying to work inside his party with leadership. But there are signs that his patience is wearing thin, and the conflict could come to a head soon.”

At the end of the Politico article, Mr. Rogers noted that, “But Lucas is doubtful that reform would be any easier next year. He checked off the list of savings in the farm bill: about $15 billion from commodity subsidies, $6 billion from conservation, $16.5 billion from food stamps.

“‘There is a high probability that it won’t be possible to achieve that kind of a combination in the next session of Congress,’ Lucas said. ‘Because if anyone believes that one side of the other is going to win the United States Senate by a big enough margin to compel more dramatic reforms than that, then I don’t think they are looking at the scorecard.’”

Erik Wasson and Kevin Bogardus reported yesterday at The Hill Online that, “[Rep. Collin] Peterson said he believes Republican leaders in the House have firmly decided against a five-year bill. But House Agriculture Committee Chairman Frank Lucas (R-Okla.) isn’t giving up and on Monday formally filed the committee report for the five-year bill to the full House.

“‘My goal remains to get a comprehensive, five-year farm bill on the books … Short of that, extending the present farm bill one year to allow us to get it done is the next best choice,’ Lucas said in an emailed statement.”

The Hill item noted that, “‘I would be surprised if the House Republican leadership feel they have the requisite number of votes to move this bill. It has happened before, but I would be surprised,’ said Randy Russell of the Russell Group, a lobbying firm.”

A news release yesterday from Chairwoman Stabenow indicated that, “[Sen. Stabenow] today joined with farmers, business owners and agriculture groups from Michigan and around the country to urge the House of Representatives to pass a Farm Bill…Chairwoman Stabenow said: ‘The Senate passed a bipartisan Farm Bill that achieved major reform months ago. Now the House needs to pass a Farm Bill to help provide economic certainty for our farmers and ranchers and critically needed disaster assistance. Michigan’s farmers know that when there is work to be done on the farm, you can’t put it off for another day. The House of Representatives shouldn’t put off its work for another day either.’”

Chairwoman also spoke yesterday on a morning television program with Al Roker on The Weather Channel regarding the Farm Bill; a video replay of this presentation is available here.

The “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “However, Sen. Pat Roberts of Kansas, the top Republican on the Senate Agriculture Committee, told the press recently that he thinks a new farm bill is no longer possible. He sees an extension, along with a stand-alone disaster aid bill for drought-stricken areas in the cards.

“‘If in fact it’s not possible for a farm bill, which I think we’ve run out of time [for], we need an extension,’ Roberts argued. He said a five-year bill should be the priority ‘but if that’s not possible and you have to accept reality, you don’t have to like it, but you have to accept it.’

“Roberts also worries that lawmakers and some farm groups are wanting ‘… to roll the dice’ and continue to oppose an extension as well as Senate action on the House-passed disaster bill to pressure the House to move on a farm bill in the lame-duck session.”

A news release yesterday from Rep. Tim Walz (D., Minn.) stated that, “Walz has strongly advocated for House leadership to bring the comprehensive, 2012 Farm Bill forward. The bill passed out of the House Agriculture Committee with a strong bipartisan vote of 35-11 in late July. But even with strong bipartisan support, House leadership stonewalled and refused to allow a vote on the five-year bill by the full chamber.

“According to Politico, never in modern history has a Farm Bill been this close to passing and been blocked from doing so.”

A news item yesterday from Rep. Steve King (R., Iowa) stated that, “Unfortunately, Nancy Pelosi is encouraging her Caucus to oppose the bill because of its reforms of fraud and abuse in the SNAP program [food stamps], making it difficult to get support from the other side of the aisle.

“Apparently, in the weeks leading up to Election Day, Nancy Pelosi sees a political advantage in opposing this bill and whipping a ‘nay’ vote. But the Farm Bill is too important to play politics. Our farmers and producers need the certainty that comes from a long-term Farm Bill, and they need it now.”

Bloomberg writer Alan Bjerga reported yesterday that, “‘You have a much better chance of getting a bill in December,’ after the election when disagreements on issues such as food-stamp spending may be easier to resolve, said Mary Kay Thatcher, top lobbyist for the American Farm Bureau Federation, the biggest U.S. farmer group. The Bureau, along with the National Farmers Union and about 40 other organizations held a rally on Capitol Hill today to pressure lawmakers into passing a plan. About 500 people participated.”

Also yesterday, USDA released a short video of recent remarks from Agriculture Secretary Tom Vilsack in which he articulates the need for Congress to pass a Farm Bill.

And, the Los Angeles Times editorial board noted in an item posted yesterday that, “Insiders expect our paralyzed Congress to pass a one-year extension of the old farm bill rather than a new one, but eventually this country will have to address how much it is willing to pay to prevent hunger and to keep poor children nutritionally stable enough to pay attention in class. Even in the face of an economic downturn that’s causing food stamp participation to skyrocket, feeding the hungry should be considered a minimum requirement for a civilized, developed nation.”

Agricultural Economy (WASDE) Report

Gregory Meyer reported yesterday at The Financial Times Online that, “The US has confirmed that grain consumers are recoiling in the face of soaring prices, suggesting a blistering rally in food commodities may start to level off.

“Livestock and poultry farmers cut feed corn consumption by 8 per cent to 4.4bn bushels in the crop year ended August 31, the US Department of Agriculture said in a monthly estimate on Wednesday. The sum was 150m bushels less than its previous estimate.”

(Note that a recap of yesterday’s USDA estimates was posted yesterday at FarmPolicy.com Online).

Yesterday’s FT article stated that, “On Wednesday the USDA reiterated its downbeat outlook for both crops, estimating a corn harvest of 10.73bn bushels, down 13 per cent from a year ago, and a soyabean crop of 2.63bn bushels, down 14 per cent on year.

“But high prices are taking a toll. The department said domestic corn demand would fall 790m bushels from the last crop year, led by declines in the ethanol and feed industries, while exports would drop 290m bushels.”

The article noted that, “Darrel Good, a University of Illinois economist, wrote that ‘the slowing pace of consumption suggests that corn prices have likely peaked’ unless a pending September 28 report on grain stocks contained surprises.”

Ron Nixon reported in today’s New York Times that, “The Agriculture Department on Wednesday slightly lowered its forecast of corn and soybean yields as record heat continued to batter crops in the Midwest, making it likely that farmers will bring in one of the lowest harvests in years.

“The estimates are published monthly, and this is the third report in a row in which the department has lowered its forecasts for this fall’s harvest of corn and soybeans.

“The new data suggested that customers would pay more at the grocery store next year as the prices of corn and soybeans — major ingredients in processed food, animal feed and biofuels — rise to record levels.”

Reuters writer Charles Abbott reported yesterday that, “With the fall harvest running faster than usual, the Agriculture Department lowered its corn forecast by less than 1 percent; traders had expected a cut of nearly 4 percent from August. The surplus at the end of this marketing year would be the smallest since 1996 but 24 percent larger than the trade expectation.”

A news release yesterday from Purdue University noted in part that, “‘The livestock industry gets just a tiny bit of reprieve in the sense that corn isn’t as desperately short as I think many people thought going into this report,’ [Purdue Extension agricultural economist Chris Hurt] said. ‘On the other hand, corn prices aren’t going to fade substantially. It’s going to be very difficult for the livestock industry to just hold on as cash flows are probably going to be negative for the most part.’”

Carol Ryan Dumas reported yesterday at the Capital Press Online that, “The impact of the drought on Midwestern grain production is challenging dairy producers in the Northwest who face increased feed and fuel prices, lower margins, and tighter credit availability.

“Cash-flow has become a serious issue for many Northwest dairies, according to the Washington Dairy Products Commission.”

And Reuters writer Rod Nickel reported yesterday that, “Canada’s second-biggest hog producer, Big Sky Farms, has entered receivership as the North American hog industry struggles under the bruising costs of animal feed.”

Liam Pleven and Biman Mukherji reported in today’s Wall Street Journal that, “Hot, dry weather devastated U.S. corn and soybean crops this summer, sending prices soaring. Now, worries are rising that similar weather patterns could shrink the global supply of wheat.

“Australia cut its forecast this week for the coming harvest, saying rainfall is needed soon to prevent further declines. Russia’s harvest also suffered from heat stress, and the country could stop exporting by November, according to the agriculture ministry. In India, which has emerged as a major exporter, there are concerns a weak monsoon season will undercut conditions for planting next month.

“On Wednesday, the U.S. Department of Agriculture lowered its estimate of global wheat production, forecasting a 5.2% decline in 2012-13.”

And Christopher Doering reported earlier this week at The Des Moines Register Online that, “U.S. Agriculture Secretary Tom Vilsack told an ethanol-friendly audience his support for the renewable fuel hasn’t wavered despite a growing chorus of lawmakers and livestock industry groups calling for a reduction in the use of the biofuel popular in the Midwest.

“Vilsack on Tuesday promoted the benefits of ethanol before a trade group representing the industry. The former Iowa governor and other supporters of the corn-based fuel have said ethanol helps rural economies by creating jobs and boosting income. They also say it reduces the country’s dependence on foreign sources of energy and eases gasoline prices hovering near $4 a gallon.”

Keith Good

Posted by Keith Good • September, 13, 2012 • 3:58 am