FarmPolicy

November 27, 2014

Farm Bill; Budget; and, the Ag Economy

Farm Bill –Policy, and Political Notes

The AP reported yesterday that, “Small dairy farmers in the Northeast and Wisconsin say a tough year has been made worse by Congress’ failure to pass a new farm bill before the old one expired.

“While many farm programs have continued through the harvest season even though the farm bill expired Sept. 30, a program that pays dairy farmers when milk prices plummet has ended.

“Many dairy farms were already struggling with low milk prices and high fuel and feed costs as the worst drought in decades dried up grazing land and pushed up the price of hay and feed. Dozens in states like California, the nation’s leading milk producer, have filed for bankruptcy.”

The AP article explained that, “A milk glut sent prices tumbling below the cost of production this summer. They have since rebounded as farmers sold off cows and cut production. But hay and grain prices skyrocketed at the same time as demand for feed increased, all at the same time the drought cut into production.

Now is the time when producers need the MILC payment or something akin to that to allow them to get through this very difficult time, U.S. Agriculture Secretary Tom Vilsack said.”

Yesterday’s article added that, “‘The milk price is good, but expenses are terrible,’ [Myles Goodrich, who runs Molly Brook Farm in West Danville, Vt.] said…[D]ick Gorder, vice president of the Wisconsin Farm Bureau, said some farms in parts of southern Wisconsin that usually grow all their own feed couldn’t in the drought and now have to buy feed, at double the cost of three years ago.”

In addition, yesterday’s AP article noted that, “Vilsack believes the farm bill was stalled to avoid a debate about the depth of cuts to farm programs that the House leadership is envisioning.”

Kevin Miller reported yesterday at The Press Herald (Portland, Maine) Online that, “Maine’s agriculture commissioner was on Capitol Hill last week to express concerns about inaction on a new, multi-year farm bill and to urge support for programs used by the state’s dairy industry.”

“A dairy farmer himself, Whitcomb met with representatives of Maine’s congressional delegation, federal agriculture officials and staffers on key congressional committees,” the article said.

Farm Bill issues have been a point of contention in several key House and Senate races throughout the U.S. this election year (more detailed background here); for example, the AP reported on Saturday that, “Democrat Tammy Baldwin and Republican Tommy Thompson supplied the following answers to questions related to their campaigns and issues in the race for Wisconsin’s open U.S. Senate seat.”

In response to the question, “What would you do to improve the state’s dairy industry?” the candidates indicated that:

Baldwin: No agricultural industry is more important to Wisconsin than our dairy farmers. Right now, Wisconsin dairies are hurting and the current dairy safety net program, the Milk Income Loss Contract (MILC) Program needs significant reform. The proposed Farm Bill contains serious dairy reforms that need a full and thoughtful debate to ensure we move in the right direction for Wisconsin dairy farmers. If dairy farmers continue to experience the deep losses they incurred in 2009 and now in 2012, our family dairies will be few and far between. Worse yet, Congress recessed for the election without extending the MILC program, leaving dairy farmers without a safety net. It’s time for Congress to put aside partisan politics and do what’s right for Wisconsin dairy farmers and pass a five-year Farm Bill.”

GOP candidate and former Badger State Governor Tommy Thompson spoke more broadly, “I grew up on my family’s farm in Elroy, so I know firsthand how important family owned farms are to the economy. That is why I strongly oppose the death tax. Unfortunately, my opponent has repeatedly voted for the death tax. The burden of the death tax will be borne primarily by families, since 98 percent of farms are owned by families or individuals. With up to 85 percent of the typical farm’s value tied up in illiquid assets, we must work to protect family farms. I also support using free trade agreements to open markets for Wisconsin farmers. Free trade is an important tool in keeping American jobs at home and the U.S. competitive in the global economy. Agreements like these promote American agriculture in the global marketplace.”

Meanwhile, Greeley Tribune (Colo.) writer Eric Brown reported over the weekend that, “Weld County farmers are frustrated that Congress has failed to pass an updated farm bill, but they stopped short this week of joining critics of Rep. Cory Gardner, who have accused him of not doing enough to argue their cause.

“Gardner, R-Colo., has taken criticism recently for not signing a petition that would bring a proposed farm bill to the House floor for a vote. Sixty-five other congressmen have signed the petition, well short of the 218 needed to bring a vote.”

Mr. Brown explained that, “In a phone interview this week, Gardner said he hasn’t signed the discharge petition because the House Republican leadership has told him the votes aren’t there to pass the bill as it stands. And, if the proposed bill is forced to the floor by the petition and gets voted down, the farm bill process would have to start all over, Gardner said.

“‘I spoke with House Majority Whip Kevin McCarthy last week … and he said the bill would not pass if the House took a vote on it right now,’ Gardner said. ‘I want a new farm bill in the worst way to help our producers, but I’d hate to see us restart this process now if the House votes down a bill that we’ve put a lot of time into.’”

“Gardner has taken heat from state Senate President Brandon Shaffer, a Democrat who’s running for Gardner’s seat in the November election, for not signing the farm bill discharge petition,” the article said.

Mr. Brown added that, “Gardner noted that House Speaker John Boehner, R-Ohio, has said passing a farm bill will be a high priority for him in the lame-duck session.”

In other news, the AP reported yesterday that, “[House Ag. Comm. Chairman] Frank Lucas [R., Okla.] says he’s confident heading into the Nov. 6 general election as he faces two opponents in his bid for an 11th term.

“‘If I lose sight of what’s important, like any candidate, I run the risk of being voted out of office,’ Lucas said. ‘I believe that I have a track record of coming to Oklahoma every weekend to determine what’s important here.’”

Lucas said he believes the farm bill may be considered during a post-election session of Congress and before the end of the year,” the article said.

Also, The Forum of Fargo-Moorhead (N.D.) recently endorsed House Ag. Comm. Ranking Member Collin Peterson (D., Minn.): “One of the few remaining ‘blue dogs’ in the U.S. House of Representatives, Peterson’s clout is a result of his hard work and the respect he’s garnered from both sides of the political aisle, in particular because of his expertise on farm legislation. He is the go-to guy in the House when it comes to farm bills. A long-time member of the Agriculture Committee (as chairman and ranking member), Peterson’s grasp of production agriculture, farm legislation and agribusiness is second to none. But knowing the details of ag legislation is only one element of his success.”

The Grand Forks Herald yesterday, in an opinion item, also endorsed Ranking Member Peterson, as well as Democrat Senate Ag. Comm. Member Amy Klobuchar.

The Chattanooga Times Free Press (Tenn.) yesterday endorsed Democrat challenger Eric Stewart over GOP incumbent Scott DesJarlais, a Member of the House Ag. Comm.

And The Des Moines Register has endorsed candidates for each of the Hawkeye state’s four Congressional Districts, including: GOP Rep. Tom Latham in the Iowa 3rd District race against House Ag. Comm. Member Leonard Boswell (D); and Democrat Christie Vilsack in the Iowa 4th District race against House Ag. Comm. Member Steve King (R).

The AP reported yesterday that, “Seeking re-election to a mostly rural, east Arkansas district that depends heavily on agriculture, U.S. Rep. Rick Crawford says he’s been a dedicated advocate to the region’s farmers in his two years in office. Democratic challenger Scott Ellington points to Congress’ failure to pass a farm bill as a sign that that the Republican congressman has failed the region’s farmers…[C]rawford, who skipped his party’s national convention after saying he wanted to focus on the farm bill, said he’s done everything in his power to push for its passage and believes Republican House Speaker John Boehner is committed to bringing the legislation to the floor next month. Crawford is a member of the House Agriculture Committee, which held a field hearing on the legislation in Jonesboro this year.”

Tim Rohwer reported on Friday at The Daily Nonpareil (Council Bluffs, Iowa) Online that, “Members of Congress should be quite busy when they return from fall recess in mid-November, Iowa Rep. Tom Latham said Friday.”

The article indicated that, “The House and Senate have each passed their own [Farm] bills, but that’s as far as thing have gone, he said. A major concern, according to Latham, is that those representing more urban locales want more money, or at worst fewer cuts, on food stamps. They’re also seeking easier eligibility for food stamps. Latham expressed concern that abuse is occurring in this program…He even questioned whether the bill should be called the Feed Bill.”

Emily Schettler and Jens Manuel Krogstad reported in yesterday’s Des Moines Register that, “Proposed cuts to a controversial farm bill sitting in limbo in Washington, D.C., have put government food assistance at risk for thousands of Iowa children.

“House Republicans have proposed cutting $16 billion from nutrition programs over the next 10 years as part of efforts to reduce overall government spending. The Senate bill would cut $4 billion.”

The Register article added that, “U.S. Sen. Tom Harkin, a Democrat from Cumming, believes deep cuts would be immoral…U.S. Rep. Tom Latham, R-Ia., said providing food to those in need should remain a top priority. But he wants to re-examine eligibility requirements that were expanded four years ago.”

Meanwhile, Jens Manuel Krogstad and Emily Schettler reported in yesterday’s Des Moines Register that, “About 15 percent of Iowa children lived in poverty as of 2010, rising at a faster rate than in the rest of the nation over the past decade. And as poverty has grown, so has the likelihood that Iowa children are going hungry, a Des Moines Register analysis of child hunger data has found.

At least once during the year, about one out of five Iowa children doesn’t know where his or her next meal will come from, according to Feeding America, a Chicago nonprofit.”

With respect to executive branch activity relating to politics and the Farm Bill, Rob Hotakainen reported late last week at the Kansas City Star Online that, “Agriculture Secretary Tom Vilsack said Thursday that U.S. farm exports are on pace to set a record high in 2013 but that sales will suffer if Congress does not resurrect a $200 million-a-year foreign marketing program that expired Oct. 1…At issue is the contentious ‘market-access program,’ which helps private small- and medium-sized businesses make forays into foreign markets.”

The article noted that, “Vilsack said progress could stall if Congress does not fund the department’s market-access program…But when members of Congress declined to renew the farm bill before their pre-election break last month, that funding came to an end. As a result, Vilsack said, U.S. farmers, ranchers and others who rely on exports are ‘in a pickle.’”

And Jennifer Jacobs reported yesterday at The Des Moines Register Online that GOP vice presidential candidate Paul Ryan made his fifth trip to Iowa yesterday, visiting Council Bluffs, while President Obama is scheduled to campaign in Davenport, Iowa on Wednesday.

 

Budget Issues

Erik Wasson reported on Saturday at The Hill’s On the Money Blog that, “The Hill has compiled a list of what might fall under the budget axe if congressional leaders strike a deal [on the ‘fiscal cliff’] at the end of the year.

“The likely targets were drawn from the 2011 talks between President Obama and Speaker John Boehner (R-Ohio); Obama’s budget proposals; the Biden-led deficit talks; the proposal from the Senate’s ‘Gang of Six,’ and the sequestration bills that have passed and been proposed in the House.”

Among the items noted in Saturday’s article: “Food stamps: House Republicans found $16 billion in savings in their sequestration bill by including a provision that would make it more difficult for recipients of home heating assistance to qualify for food stamps. Some Democrats have supported the policy changes in the stalled farm bill…Farm subsidies: Lawmakers involved in the Biden group found $33 billion in cuts to farm subsidies and conservation programs, while the sequester alternative from House Democrats cuts $24 billion. To achieve the savings, rural lawmakers would have to abandon plans for expanded crop insurance.”

And Pete Kasperowicz reported late last week at The Hill’s Floor Action Blog that, “Rep. Steve King (R-Iowa) said Thursday that Congress and the next president need to work together to ensure that higher estate taxes are not reinstated in 2013, and called for a retroactive solution next year if necessary.”

 

Agricultural Economy

Owen Fletcher and Michael Haddon reported in Saturday’s Wall Street Journal that, “Wheat prices rose after Ukraine said it may run out of supplies for export next month, fueling hopes for increased demand for the U.S. crop…Ukraine, one of the world’s largest wheat exporters, said it could run out of exportable stocks of the grain about the middle of next month.”

Javier Blas reported today at The Financial Times Online that, “The Kremlin has let the market to do its job.

Russian wheat exports have slowed down to a trickle this month after prices in the port of Novorossiysk, the country’s major export terminal in the Black Sea, surged to a 20-year high recently.

“The rally came after a drought that devastated the cereal crop. The Kremlin, which in 2010-11 imposed a brutal export ban that triggered a large rally in agricultural commodities prices globally, has this time let the market work, allowing domestic Russian wheat prices to increase significantly.”

Lynn Hicks reported in Friday’s Des Moines Register that, “The world is better prepared to ride out tight grain supplies and extreme weather, U.N. Secretary-General Ban Ki-moon said Thursday in a visit to the World Food Prize events.

“‘This is not a crisis time,’ Ban said in an interview with The Des Moines Register.

“Ban said the current situation differs from 2008, when grain price spikes led to higher food costs and contributed to political instability in the Mideast and elsewhere. The global food system is more resilient, he said, with more safety nets in place and less panic buying.”

And Jeff Simmons noted at The Des Moines Register opinion page on Friday that, “While headlines around the world have focused on the struggling global economy, a crisis of no less magnitude has been steadily building and is poised to explode in the years ahead: feeding our growing global population.”

Mr. Simmons explained that, “Let’s consider one of our most basic proteins — an egg. Eggs are one of the most easily affordable protein sources. A single egg contains almost all vitamins and minerals a person needs. A single egg has the power to break the vicious life cycle of under-nutrition, which can have a huge impact on development. That impact affects not only individuals but also communities — even countries.

But egg production is declining.

“Today, people around the world consume about 174 eggs per person per year produced by some 6.5 billion hens. Since 2000, egg productivity has been declining by 1 egg per chicken per year. This may not sound like much, but if this trend continues, by 2050 the world will need about 3 times more hens — nearly 18 billion — to feed our families eggs.”

The column added that, “Yet if we could return productivity back to historic rates — helping hens produce a modest 1.5 eggs more per year — it would take only 10.4 billion hens to meet demand. That’s more than 7 billion fewer birds — which translates into a lot less feed, less water and less waste.”

Keith Good

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