January 25, 2020

Farm Bill; Budget; Ag Economy; Biofuels; and, CFTC Issues

Farm Bill Issues

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “The Democratic ranking members of 18 House committees called on their Republican counterparts to convene hearings on a range of issues such as taxes, the farm bill and the Violence Against Women Act, instead of coasting for the next four weeks before the elections.

“‘Not only has the House recessed without addressing these urgent concerns, but the committees you chair are failing to hold hearings and conduct other urgent business,’ they wrote to House Republicans.

“‘As the senior Democrats on the House committees, we reiterate our strong desire for our committees to conduct official business during October,’ they said. ‘We are prepared to work with our chairs to schedule hearings and legislative action in our committees throughout this month, instead of remaining inactive.’”

The letter, which was signed by Ag Committee Ranking Member Collin Peterson (D., Minn.), noted that, “The House will be in session just eight days between August 3 and November 13, although important legislation deserves our immediate attention: middle-­‐income tax cuts, jobs bill, the Farm bill, and the Violence Against Women Act. We also should use the next four weeks to consider responsible deficit reduction alternatives to the looming sequester.”

Meanwhile, Rep. Cathy McMorris Rodgers (R., Wash.), the highest-ranking Republican woman in Congress, serving as the Vice-Chairman of the House Republican Conference, was questioned about the stalled Farm Bill in a recent debate.

Jonathan Brunt reported yesterday at The Spokesman-Review (Spokane, Wash.) Online that, “The Democratic opponent of U.S. Rep. Cathy McMorris Rodgers in the November election [Rich Cowan] used much of their first debate working to portray the incumbent Republican as an ingrained fixture in a bickering Congress.”

The article noted that, “Cowan called Congress ‘broken’ and noted that McMorris Rodgers has a leadership position in the House GOP. He said the inability of the Congress to pass the farm bill – a package of farm policies, subsidies and crop insurance that was approved by the House Agriculture Committee – is a ‘horrible situation for this district.’

“‘You could have come home a hero, an absolute hero to the farmers here, but it didn’t happen because of the broken politics,’ Cowan told McMorris Rodgers.”

The article added that, “McMorris Rodgers said she is confident that after the election Congress will approve the farm bill.

“‘I, too, was quite disappointed that we were not able to reach agreement on the farm bill,’ McMorris Rodgers said. She said after the debate that she, like Cowan, would have voted for the proposal that was approved by the House committee.”

Julie Tremmel reported earlier this week at Fox 23 News (Albany, N.Y.) Online that, “On Tuesday night Congressman Paul Tonko [D., N.Y.] called for a re-authorization of the Farm Bill in the House, chiding his Republican colleagues for letting the bill expire like sour milk.”

The article indicated that, “Rep. Tonko says the decision not act on the bill immediately, instead tabling the measure and adjourning from session early, has put farmers and consumers ‘at grave risk.’”

The update noted that, “Rep. Tonko said, ‘Republicans in the House of Representatives, after Republicans and Democrats in the United States Senate passed a bill, are dragging their feet! And it is unacceptable! This delay, this tactic to not deal with this reauthorization is unacceptable.’

“Tonko continued, ‘And we want to build the voices of support to drive the advocacy, to bring us back into special session, if need be. To make certain that we have a plan ready to go in post-election time, if that’s their choice, but this needs to be done ASAP.’”

John S. Hausman reported earlier this week at MLive Online that, “Democratic U.S. Sen. Debbie Stabenow [Mich.] defended Obamacare and tax breaks for clean energy, talked up her own record on agriculture and jobs and criticized China’s trade record and Republicans’ Medicare proposals during a visit to Muskegon.

“In an editorial board interview with MLive and the Muskegon Chronicle, Stabenow touched on a number of issues. Her focus: jobs and farms.”

The article noted that, “Stabenow focused on her role as chairwoman of the Senate Agriculture Committee. As such, she plugged the 2012 Farm Bill that passed the Senate with bipartisan support but hasn’t been taken up by the House of Representatives.

“The bill would cut spending by $23.6 billion, she said. Without passage by the end of the year, Stabenow said, disaster assistance will lapse for fruit growers and farmers hurt by this year’s drought…[S]tabenow defended her record on jobs and farm issues, pointing to her endorsement for re-election this year by the Michigan Farm Bureau, which more typically endorses Republicans” [see related video from earlier this month].

For a broader update on the Farm Bill and some key House and Senate races, see this FarmPolicy post, which is updated regularly: “Snapshot: An Election Year Farm Bill- Campaign Impacts.”

In other Farm Bill related news, Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “Senate Budget Committee ranking member Jeff Sessions (R-Ala.) this week rejected the Department of Agriculture’s claim that it is not trying to entice Mexican immigrants to move to the United States and sign up for food stamps, and called on USDA to stop these activities immediately.

“Sessions made this request in a Tuesday letter to Agriculture Secretary Tom Vilsack, after Vilsack said the point of its effort in Mexico is not to ‘simply increase the number of program participants.’ Sessions replied that this comment rings hollow in light of how USDA has tried to convince Mexicans to get on the program, formally known as the Supplemental Nutrition Assistance Program (SNAP).”

The Hill update pointed out that, “Sessions asked Vilsack for more details about this partnership by October 18. Specifically, he asked for a summary of all meetings with Mexico on this issue, and an estimate on how much was spent on food stamps for non-citizens over the last decade. Vilsack’s letter noted that the number of refugees and other legal non-citizens using SNAP grew from 640,000 in 2001 to about 1.5 million in 2010.

“Sessions also asked USDA to clarify its understanding of the ‘public charge’ law, which says the government cannot allow immigrants into the country if they are likely to become public charges that require federal assistance.”

On the issue of conservation, the Minneapolis Star-Tribune recently posted a “Q and A” with Ag. Secretary Tom Vilsack on the Conservation Reserve Program.  This brief news item from earlier this week can be found here.

Meanwhile, National Crop Insurance Services (NCIS) indicated in a news release yesterday that, “With the fate of the 2012 Farm Bill still in question and the worst drought in decades fresh in people’s minds, the Crop Insurance Industry is announcing a new website that will serve as a focal point for groups to show their support for crop insurance.

“‘Crop insurance has grown to become the most important tool farmers and ranchers have to manage risk,’ noted Tom Zacharias, NCIS president. ‘As the Farm Bill continues to be discussed, there’s no better time than the present to show your support for this critical risk management tool,’ he said.

“The website ( will serve as a platform allowing organizations, farmers, agents, small businesses and others to sign an open letter to Congress in support of crop insurance. The letter is similar to one that was sent to Congress earlier this summer from major farm and commodity organizations.”


Budget Issues

Lisa Mascaro reported in yesterday’s Los Angeles Times that, “As a lofty political debate over taxes and spending plays out on the presidential campaign trail, a more practical one is unfolding this week in Virginia as eight senators try to strike a bipartisan deficit reduction deal.

“The senators are holed up in a Mount Vernon conference room seeking a way to avoid the so-called fiscal cliff — the year-end confluence of automatic tax increases and budget cuts that could stagger the economy and American households. Failure to act could slice half a percentage point off economic growth next year and deliver a tax increase averaging $2,000.

“No deal is expected before the November election, but the talks are intended to help provide a framework for a lame-duck session of Congress. The ‘Gang of Eight’— four senators from each party — is laboring to reach agreement on a nearly $4-trillion deficit reduction plan to curb the nation’s debt.”

And Manu Raju and Steven Sloan reported earlier this week at Politico that, “Sen. Chuck Schumer roiled the debate over the fiscal cliff Tuesday with a speech at the National Press Club. Sen. Max Baucus is huddling with European leaders on the issue this week. And Sen. Mark Warner is aligning himself with a well-funded outside group and the Senate’s gang of deficit busters to be a go-to guy in the debate.

There’s nothing on the table yet from anyone. But these moves illustrate the furious, power-driven scramble under way right now to shape the real negotiations on the nation’s fiscal future immediately after the election. It’s a drive to lay down markers on taxes, spending and deficit reduction before the real talks begin.

“With the egos and interests of powerful senators, people are starting to step on — actually, stomp on — one another’s toes.”


Agricultural Economy

The Federal Reserve Board released its Summary of Commentary on Current Economic Conditions yesterday.  Commonly referred to as the “Beige Book,” the report included several regional observations with respect to the U.S. agricultural economy; a summary has been posted at Online.

Bloomberg writer Jeff Wilson reported yesterday that, “Drought damage to corn and soybean fields in the U.S., the world’s top grower and exporter, is eroding supplies of the nation’s two largest crops to below year-earlier consumption levels for the first time since 1974.

“The government probably will say [today] that the U.S. corn harvest and inventories on Sept. 1 will be a combined 11.604 billion bushels, less than the 12.33 billion consumed and exported last year, according to a Bloomberg survey of 31 analysts. Soybean supplies will be 2.932 billion bushels, below the 3.157 billion used in 2011. Supplies failed to top usage from the previous year only twice since 1960 for corn and five times for soybeans, U.S. Department of Agriculture data show.”

Paul Kiernan, Shane Romig and Andrew Johnson Jr. reported yesterday at The Wall Street Journal Online that, “The $54 billion soybean market is in a tight spot. South America may be the way out.

The U.S. is on track to harvest its smallest soybean crop in nine years due to damage caused by this past summer’s drought in the Midwest, according to the U.S. Department of Agriculture.”

The Journal article noted that, “Global supplies are expected to remain unusually tight this year and next. The USDA estimates that global soybean stockpiles over the next year could fall to 53.1 million metric tons, down 1% from this year and 24% from last year.

But bad news in the U.S. is turning out to be good news for growers in the rest of the world, especially South America, where farmers are ramping up production to fill the void.”

Meanwhile, Stephanie Gleason and Ian Berry reported in today’s Wall Street Journal that, “The bankruptcy of a California poultry producer is showing in detail how the Midwestern drought is still rippling through the U.S. economy.

Citing the soaring cost of grains used in animal feed, family-owned Zacky Farms LLC filed for Chapter 11 bankruptcy protection Monday and said it plans to put itself on the block.

“The company, founded in 1928, said its finances have been strained because it is spending $1.8 million a week to feed its 1.9 million turkeys and 600,000 chickens. Poultry producers typically feed their birds corn and soybean meal, a protein source made from crushed soybeans.”

An article yesterday at CNN Money Online stated that, “Cattle farmers struggling with record corn prices are feeding their cows candy instead…Feeding candy to cows has become a more popular practice in tandem with the rising price of corn, which has doubled since 2009, fueled by government-subsidized demand for ethanol and this year’s drought. Thrifty and resourceful farmers are tapping into the obscure market for cast-off food ingredients. Cut-rate byproducts of dubious value for human consumption seem to make fine fodder for cows. While corn goes for about $315 a ton, ice-cream sprinkles can be had for as little as $160 a ton.”

Also, the Federal Reserve Bank of Kansas City’s 2012 Agricultural Symposium examined whether agriculture can escape its historical cycles of boom and bust. The latest issue of the Main Street Economist provides a comprehensive summary of the symposium: “Is This Farm Boom Different?  A Summary of the 2012 Agricultural Symposium.”



Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “The comment period ends Thursday for views on how the EPA should respond to requests to waive the Renewable Fuels Standard for the rest of 2012 and 2013.

The waiver request as of late Wednesday afternoon had received 3,569 comments. To comment or review comments, go to [this webpage].”

Mr. Clayton noted that, “With that deadline looming, backers of the RFS have stepped up their push to highlight the ills that would occur under a waiver, as well as the lack of change in the overall grain markets.

“As of now, the EPA is expected to make its decision on the RFS by Nov. 11, responding to the official waiver requests sent by the governors of Arkansas and North Carolina.”


CFTC (Commodity Futures Trading Commission) Issues

Peter Schroeder reported yesterday at The Hill’s On the Money Blog that, “Four of the highest-ranking Republicans on the House Financial Services Committee are concerned the Commodity Futures Trading Commission (CFTC) is spending its time and money in pursuit of ‘ideological and political goals’ instead of fulfilling the agency’s mission.

“In a letter sent to CFTC Chairman Gary Gensler, the lawmakers suggested the financial regulator has spent its time since the Dodd-Frank Wall Street reform law was enacted tackling problems not central to the financial crisis, nor to the agency’s mission or Congress’s intent.

“The letter was signed by House Financial Services Committee Chairman Spencer Bachus (Ala.), Vice Chairman Jeb Hensarling (Texas) and two subcommittee chairs, Reps. Scott Garrett (N.J.) and Randy Neugebauer (Texas). Hensarling is widely believed to be the next head of the committee in 2013, after Bachus hits his term limit at the position.”

Keith Good

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