FarmPolicy

July 15, 2019

Rural America; Budget; Farm Bill; Ag Economy; and, Trade

Rural America

Bill Bishop reported yesterday at the Daily Yonder Online that, “The unemployment rate in rural and exurban counties turned down in August, according to the Bureau of Labor Statistics.

“In rural counties, the unemployment rate in August barely nudged under 8 percent, at 7.99 percent. In exurban counties, the rate dove to 7.6 percent. (Exurban counties lie within metropolitan regions, but half the people who live there reside in rural settings.)

Both of these rates are down from July, 2012, when the rural rate was 8.4 percent and the exurban rate was 8 percent.”

The article added that, “Just because unemployment rates are lower, however, doesn’t mean that there’s been a boom in rural employment. There hasn’t been.

“In fact, there are slightly fewer people employed in rural counties this August than in August 2011. According to BLS data released late last week, the number of jobs in rural counties has declined by nearly 3,200 in the last year.

“The unemployment rate has dropped in rural America because the workforce — total number of people working or looking for work — has declined by nearly 228,000 people.”

On Friday, an update at USDA’s Radio News Service indicated that, “The Agriculture Secretary provided his comments on news the nation’s unemployment rate reached its lowest level since January 2009.”  To listen to this one-minute audio segment from USDA, just click here.

Don Davis reported yesterday at The Daily Republic (Mitchell, S.D.) Online that, “As they campaign, presidential candidates Barack Obama and Mitt Romney pretty much ignore rural-specific issues.

It is not that they lack a chance to talk about such issues. Some of the major swing states are heavy on agriculture and candidates often stop there, with Iowa and Wisconsin two Midwestern cases in point.”

The article noted that, “It is a trend that U.S. Rep. Collin Peterson, D-Minn., has seen for many years.”

“‘I think it is going to bring problems to us no matter who wins,’ said Peterson, the top-ranking House Agriculture Committee Democrat. ‘We will just have to deal with it.’

“For Peterson, the short of it is that former Massachusetts Gov. Romney, a Republican, wants to reduce regulations, something many rural residents strongly favor. But the congressman’s fellow Democrat, President Obama, does a better job of supporting the farm bill, which includes farmer disaster protection and a variety of rural development provisions.”

Yesterday’s update added: “‘Agriculture is not a huge piece of the policy portfolio for either candidate,’ said Ed Schafer, former North Dakota governor and U.S. agriculture secretary. ‘I think it is bad.’”

However, Rod Boshart reported yesterday at the Quad-City Times (Davenport, Ia.) Online that, “Rural and agricultural policy will take center stage on Tuesday when Republican Mitt Romney brings his 2012 presidential campaign back to Iowa.

Romney is scheduled to address farm issues during an event held at the Koch family farm near Van Meter. In advance of his speech, the Romney campaign announced its Iowa Farmers for Romney coalition, led by Iowa Agriculture Secretary Bill Northey and former farm bureau leaders Dean Kleckner and Craig Lang, U.S. Sen. Charles Grassley, U.S. Reps. Steve King and Tom Latham and an advisory panel made up of more than 70 rural activists and spouses.”

With respect to current executive branch developments, Joseph Morton, of the Omaha World-Herald, reported yesterday that, “U.S. Secretary of Agriculture Tom Vilsack says the government is seeking creative ways for various parts of the government to pitch in during the [drought] crisis.

Vilsack will be in Omaha on Tuesday for the first of four regional drought workshops.

“In an interview with The World-Herald, the secretary compared the workshops to public meetings the Federal Emergency Management Agency typically holds after a community has been struck by a tornado or hurricane.”

And Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “The strong southern wind warmed up western Iowa on Monday, but tested the effort by Secretary of Agriculture Tom Vilsack to talk about enrollment in a wildlife habitat initiative that is part of the Conservation Reserve Program.

“Vilsack announced Monday that landowners with more than 400,000 acres are ready to sign contracts under the state acres for wildlife enhancement, or ‘SAFE’ program. People are ready to sign the papers, it’s just that they can’t right now because Congress has been unable to pass a farm bill, Vilsack told a few farmers, state USDA agency leaders and reporters.”

Mr. Clayton noted that, “Vilsack was asked about the ability to get the farm bill out of the lame-duck session. Saying some House members wanted much steeper cuts than the House Agriculture Committee passed. During the lame duck session, lawmakers will have to deal with how to manage tax cuts, the sequestration budget cuts and possibly policy legislation such as the farm bill. ‘So it makes it much, much more complex than if they had gotten their job done before Sept. 30,’ Vilsack said.

“He added there is a risk lawmakers fail to agree on a farm bill, which could translate into a short-term extension in to the new Congress or the possibility of reverting to the permanent policy in the 1949 farm bill.”

 

Budget Issues- Senate, House Campaigns

Erik Wasson, reported yesterday at The Hill’s On the Money Blog that, “Investors could suffer significant loses in the coming months as Washington moves closer to the ‘fiscal cliff’ of budget cuts and tax hikes, analysts at Blackrock warn in a new report.

“‘Markets have not priced in the fiscal cliff and assume [Federal Reserve quantitative easing] will drown out other factors,’ the report states. ‘For now all we can say is markets appear to underestimate: the potential for panic in the run-up to the cliff; the possibility of the nation falling off the edge; the cliff’s impact on economic growth.’”

The article added that, “The fiscal cliff refers to the combination of automatic spending cuts and tax increase scheduled to hit in January. The biggest pieces are the expiration of George W. Bush-era tax rates and the sequestration of discretionary funds mandated by the failure of the 2011 supercommittee to strike a deal.

Blackrock says Wall Street remains convinced that Congress and President Obama will find some way to replace the cuts in the lame-duck session, but insiders in Washington say going over the cliff is a real possibility.”

With respect to the November elections and the U.S. Senate, yesterday’s Need-to-Know Daily Email (National Journal) reported that, “With Democratic pickups in once long-shot states like Arizona and Indiana augmenting their hopes in Massachusetts, Nevada and Maine, and GOP candidates trailing in states such as Ohio and Wisconsin, and running even in Montana and North Dakota, the only sure GOP pickup today looks like Nebraska. That map leaves some Democratic aides predicating the party picks up a seat, and GOP aides dialing down talk of regaining the Senate to gaining just a few seats. Republicans are banking on a Mitt Romney surge to change the equation.”

And Daniel Newhauser reported today at Roll Call Online that, “The House Blue Dog Coalition, still reeling from 2010 elections that cut its ranks in half, looks likely to sustain additional losses this year that would cast doubt on the group’s influence in the 113th Congress.”

The article indicated that, “If House Republicans remain in the majority but their margin slims, [Members and aides tied to the group] say, it will be Blue Dogs who help Speaker John Boehner (R-Ohio) push compromise legislation out of the House.

“The same goes for committees. The farm bill, for instance, would not have gotten out of the House Agriculture Committee without ranking member Collin Peterson (Minn.) and a cast of Blue Dogs on the panel.”

 

Farm Bill- Nutrition Issues

Patti Zarling reported on Sunday at the Green Bay Press-Gazette Online that, “Local schools administrators generally applaud new federal rules requiring that hot meal programs offer more fresh produce, fruits and whole grains.

“But they say the transition isn’t always easy.

“Some area high school students are heading to nearby fast food restaurants instead of school lunch lines, and students may bring lunches from home or throw out school-provided food they don’t like. School officials say the toughest challenge may be rules that limit the number of calories that can be served for lunch to no more than 650 calories for elementary school students, 700 for middle schoolers and 850 for high school students, which can leave students hungry.”

Zachary Reid reported yesterday at the Richmond Times-Dispatch that, “Fried foods, sodium-rich canned vegetables and enriched flour products are giving way to whole grains, baked goods, and lots of fresh fruits and vegetables.

“‘Improving the nutrition of school meals is an important investment in the future of America’s children,’ Kevin Concannon, the U.S. Department of Agriculture’s undersecretary for Food, Nutrition and Consumer Services, said in August as the USDA enacted the standards. ‘We know that healthy food plays a vital role in strengthening a child’s body and mind and the healthier school meals will help to ensure our children can learn, grow and reach their full potential.’”

The article noted that, “School districts the nation over have had to adopt the standards.

It hasn’t been easy. From culture shock to the sheer volume of new work, the change has stressed staffs and budgets.”

And, an editorial yesterday at the Pittsburgh Post-Gazette yesterday stated that, “Students are eating healthier school lunches and breakfasts these days and, despite their grumbling, this round in the war against childhood obesity goes to first lady Michelle Obama, Congress and innovative school districts that espouse the new federal guidelines.”

Meanwhile, Mike Esterl reported in today’s Wall Street Journal that, “Coca-Cola Co., PepsiCo Inc. and Dr Pepper Snapple Group will start displaying their drinks’ calories on vending machines next year and point consumers toward less sugary versions, their latest response to critics who have singled them out for contributing to the nation’s obesity epidemic.

“The project, which will first launch in Chicago and San Antonio, Texas, aims to stop the spread of anti-soda measures in city halls after New York City moved to limit portion sizes and other cities weigh taxes on sugary beverages to lower consumption and raise revenue.”

 

Agricultural Economy

University of Illinois Agricultural Economist Darrel Good noted yesterday at the farmdoc daily Blog (“Corn and Soybean Prices Searching for Support”) that, “December 2012 corn futures declined by $1.44 (17 percent) from the high on August 10 to the recent low on September 28. That contract has managed a recovery of about $0.40 so far this month. November 2012 soybean futures declined by $2.85 (16 percent) from the high on September 4 to the low on October 3 and have rebounded about $0.45 since then.

“Prices over the past two months for corn and the past month for soybeans appear to be in the classic ‘short crop, long tail’ pattern where prices peak early in a year of sharply lower production and then decline in the post-harvest period as the smaller supplies get rationed and production rebounds in the following year. A change in the trend of lower prices will require an additional supply shock or evidence that supplies have not been sufficiently rationed.”

After additional analysis, yesterday’s update noted that, “While corn and soybean prices have declined sharply from their peaks, prices are still very high by any measure. The pace at which prices transition to lower levels will be determined by a number of factors, beginning with the USDA’s October production forecasts.”

Krissa Welshans reported recently at FeedStuffs Online that, “Rabobank has published a new report looking at the global dairy industry in the third quarter of 2012, particularly examining supply, demand and pricing developments in key markets around the world.

“In the report, authored by the bank’s Food & Agribusiness Research & Advisory group, Rabobank said the global dairy market appears to be headed for a period of renewed supply scarcity in the next year.

“According to Rabobank, the tightening market comes largely from the supply side, where low milk prices, extreme feed costs and unfavorable weather are expected to slow production growth in export regions to a trickle.”

And Jack Farchy reported today at The Financial Times Online that, “Which countries will be worst affected by the sharp rise in global grains prices?

“The International Monetary Fund, which has an interest in the question because it is usually a source of loans for countries that have run out of money, has studied the vulnerability of different regions to the jump in food prices due to the US drought.

“In one section of its World Economic Outlook published on Monday, the fund analyses the effects of the ‘food supply crunch’”.

(Note that the IMF report is available here.)

Today’s FT article explained that, “While commodities traders – who are awaiting the US Department of Agriculture’s monthly forecasts on Thursday – may have already moved on from the US drought, higher prices are still a reality for consumers of wheat, corn and soyabeans. Despite a recent correction, prices for the three staples are still up 20-40 per cent year on year.

“The IMF breaks down the issue into three sub-questions: which countries have low food inventories; which countries are most dependent on the global markets for their food supply; and which countries’ populations spend the largest proportion of their income on food.

“The countries and regions at the most vulnerable end of the range for each of the categories are the most likely to suffer problems, the fund explains.”

Also on the IMF report, Sudeep Reddy and Bob Davis reported in today’s Wall Street Journal that, “The fund expects the world economy to expand just 3.3% this year and 3.6% in 2013, as growth slows in nearly every major nation and political uncertainties threaten recoveries in the U.S. and euro zone.”

 

Trade

Byron Tau reported yesterday at Politico that, “In his Monday foreign policy address in Virginia, Mitt Romney accused President Obama of failing to champion free trade.

“‘I will champion free trade and restore it as a critical element of our strategy, both in the Middle East and across the world,’ Romney said.”

Keith Good

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