Farm Bill–Policy Issues (Budget, Prop. 37), Political Notes
Ken Anderson reported yesterday at Brownfield that, “Iowa Senator Chuck Grassley believes the outcome of the Presidential election will determine whether the 2008 farm bill is extended or a new five-year farm bill is passed during the lame duck session.
“Grassley says if President Obama is re-elected, he thinks taxes and the fiscal cliff will be the main focus of the lame duck session.
“‘If Obama is re-elected and we have to deal with taxes and the fiscal cliff in November and December, I think it’s going to be pretty difficult to get more than a five-month extension of the farm bill,’ Grassley says. ‘If Romney would be elected and we put taxes and the fiscal cliff six months into next year, then there will be more time—and there might be time for a five-year farm bill.’”
Recall that a report over the weekend at The Hill Online indicated that, “…[T]he last best hope for the 2012 farm bill to pass will be if it is riding on fiscal cliff legislation…‘People on both sides of the aisle have made it clear to me that the only way it will be passed is as part of the fiscal cliff bill, if there is one,’ one lobbyist said.”
National Milk Producers Federation President & CEO Jerry Kozak was guest on yesterday’s AgriTalk radio program with Mike Adams where a portion of their conversation focused Farm Bill issues, as well as trade.
To listen to part of this discussion from yesterday’s AgriTalk show, just click here (MP3- 2:44).
Meanwhile, an update posted yesterday at National Journal Online reported that, “Rep. Joe Donnelly, a Senate candidate in Indiana, hopes to get some last-minute mileage out of the farm bill stalled in Congress.
“The Democrat will be joined by Rep. Collin Peterson of Minnesota, the House Agriculture Committee’s top Democrat, to talk about the need for a five-year farm bill. The pair will appear at a winery in Plainfield, Ind.
“Donnelly has consistently tried to portray his GOP opponent, Richard Mourdock, as an uncompromising partisan and the farm bill appears to be another means to do so.”
As a side note, Lisa Mascaro reported in yesterday’s Los Angeles Times that, “In her 25th year in Congress, [House Minority Leader Nancy Pelosi (D., Calif.)] has embarked on a seemingly improbable drive to retake the House majority and — though she will not say so — return as speaker. Analysts predict Democrats will fall short. But the ever-undaunted Pelosi, pleased by the numerology of her anniversary and the seats required for the majority, employs a catchy slogan: ‘25 in 25.’
“This could be Pelosi’s last stand, a final, determined effort to go out swinging, preparing one day to leave Washington not as the fallen speaker demonized by the conservative right, but as a political powerhouse.”
Yesterday’s article pointed out that, “Now, up-and-coming Democrats have begun jockeying for leadership roles farther down the ladder. Pelosi declined to discuss her plans except to say she would serve another term if reelected as the congresswoman from San Francisco, which is all but certain.
“The reality is that no Democrat has clearly emerged in the House who can outwork, out-maneuver or out-fundraise Pelosi. In Washington, she has done more than any other Democratic lawmaker to bankroll the party’s electoral chances.
“Over the last 22 months, Pelosi has participated in more than 650 fundraising events, raising nearly $72 million for House Democrats. Since 2002, she has raised nearly $315 million for Democrats.”
For a brief overview on how Rep. Peterson (then the House Ag. Comm. Chairman), and Rep. Pelosi (then Speaker) worked together on the 2008 Farm Bill, see this FarmPolicy.com update from last month.
In other political notes, David Catanese reported earlier this week at Politico that, “Mitt Romney isn’t the only one whose fortunes may rest on Ohio.
“Republicans have renewed optimism that a late surge by Senate candidate Josh Mandel could offer a Buckeye State surprise — and keep the party’s fading chances of winning the Senate alive.
“Make no mistake: Democratic Sen. Sherrod Brown [Sen. Ag. Comm. Member] remains the favorite.
“The grizzled first-term incumbent has clung to a durable polling lead over the hard-charging 35-year-old state treasurer. Internal tracking polls consistently have shown Brown running just ahead of President Barack Obama.”
The article added that, “But it’s also true that Mandel has closed on Brown in the final weeks, turning the race from a potential landslide into a single-digit affair.”
For a closer look at several key U.S. House and Senate races, see this FarmPolicy.com update.
In other news, Dan Piller reported earlier this week at The Des Moines Register Online that, “Hurricane Sandy caused hog and cattle traders to turn cautious Monday for fears that the massive storm will at least temporarily reduce demand among the 50 million people in its path.
“Sales of all perishable items are expected to drop sharply as consumers are left without power to keep refrigerators and freezers running, and restaurants close for several days.”
And, Russell Berman reported yesterday at The Hill Online that, “As leaders assess the high cost of damage from Hurricane Sandy, officials in both parties say the Federal Emergency Management Agency has ample funding for disaster relief — at least for now.
“FEMA’s coffers are nearly full because the storm struck at the beginning of the fiscal year, which started Oct. 1.
“On top of more than $1 billion left over in the Disaster Relief Fund from last year, Congress has appropriated $7.1 billion for fiscal 2013. President Obama’s decision to make disaster declarations in New York and New Jersey — in addition to emergency declarations in eight other states and the District of Columbia — allows local officials to access those funds immediately.”
Kate Ackley and Janie Lorber reported yesterday at Roll Call Online that, “While official Washington remained closed today, lobbyists said they were already working with clients from big financial institutions to small East Coast towns in storm-ravaged areas to assess what they might ask of the federal government when it reopens Wednesday.
“‘We have clients affected and they will need help,’ said Howard Marlowe, president of the American League of Lobbyists, who runs Marlowe & Co. and represents clients from North Carolina to New Jersey. ‘They are just reporting in on damage.’
“Washington lobbyists representing towns and businesses in affected areas said their clients are still taking stock of the damage and will wait to see what aid will be covered in presidential disaster declarations before asking the federal government for extra help. Congress may take up a supplemental spending bill for disaster relief when it convenes in a lame-duck session.”
Also on budget issues, Rep. Randy Neugebauer (R., Tex.- Ag. Comm.) tweeted yesterday that, “The gov’t spent a record $6.26b on #foodstamps in July, a clear sign that Obama economy isn’t getting Americans back on their feet.”
Meanwhile, Marc Lifsher reported yesterday at the Los Angeles Times Online that, “Backing for Proposition 37, the genetically engineered food labeling initiative, is falling, fast.
“A new poll by the California Business Roundtable and the Pepperdine University School of Public Policy showed 39.1% of likely voters support the measure, while 50.5% oppose the labeling requirement. Undecided voters represented 10.5% of respondents.
“The results released Tuesday show a a drop in support of nine percentage points since a similar survey just over two weeks ago.”
Steve Painter reported earlier this week at The Arkansas Democrat Gazette that, “Record-high prices are forecast for cattle headed to slaughter in 2013 as a result of prolonged drought conditions in the nation’s midsection.
“Cattlemen in Arkansas and other affected regions continue to shrink their herds because of a lack of hay and grass to feed them.
“The drought ‘made us sell a lot of cattle two to three months early,’ said Harold Sargent, president of Farmers Livestock Auction in Springdale. Calves that should be selling now, he said, were sold in June and July.”
Mr. Painter noted that, “A study released last month by the University of Arkansas System Agriculture Division found that drought has cost the Arkansas beef cattle industry $128 million and projected that losses could go higher. Of the ranchers surveyed, 3 percent said they intended to sell all of their livestock.
“Authors of the study said the $128 million loss ‘should be deemed a conservative estimate of the direct impact of the drought on cow-calf producers’ income.’ The drought cost to producers was estimated at $141 per head.”
The Democrat Gazette article indicated that, “The key question, [Travis Justice, executive director of the Arkansas Beef Council] said, is how much of the influx of cattle going to slaughter simply happened early because of the drought, and how much of it represents herds being liquidated and ranchers exiting the business.
“‘We’ve heard and we’ve seen both,’ he said.
“Justice noted that the number of cattle sent to feedlots continues to decline, an indication that the calf supply is dropping and that the rising price of corn is putting a damper on the industry. Those conditions point to higher beef prices in stores, he said.”
A recent update from the Federal Reserve Bank of Kansas City (“Farm Lending Rises with Higher Production Costs”) pointed out that, “The summer drought spurred higher feed costs and farm lending activity at commercial banks. During the second quarter, farm operating loans rose at their fastest pace in five years. An August survey of national commercial banks revealed additional demand for short- term farm operating loans in the third quarter as input costs soared. Lending to livestock operations jumped as feed costs spiked and herd liquidations boosted loans for feeder cattle. Higher fuel costs to power irrigation systems and harvest crops also increased lending to crop producers. Investment in farm machinery and equipment remained strong, although some bankers expected capital spending to slow as producers evaluated cash flow needs.”
Javier Blas reported yesterday at The Financial Times Online that, “ADM, one of the world’s largest agricultural commodities traders, on Tuesday said its net profits plunged 60 per cent in the most recent quarter as US corn supplies, one of its leading revenue drivers, declined due to the worst drought hitting the country in half a century.
“Archer Daniels Midland said it earned $182m, or 28 cents per share, in the three months to the end of September, down from $460m, or 68 cents per share, in the same period last year. Patricia Woertz, chairman and chief executive, described the past three months as a ‘complicated quarter, challenged by the drought’.
“‘We are implementing plans to navigate the tight US crop supply,’ Ms Woertz said in a statement. The US Department of Agriculture forecast the country’s corn harvest would drop in 2012-13 to just 10.7bn bushels, the lowest since 2002-03.”
And Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “A free trade agreement between the United States and Panama goes into effect on Wednesday, a deal supporters say will expand growing trade between the two nations.”
Christopher Doering reported yesterday at The Des Moines Register Online that, “Novozymes said it has developed a new enzyme called Avantec that allows more ethanol to be produced from corn.
“The Danish industrial enzymes maker said Avantec enables ethanol producers to squeeze an extra 2.5 percent more ethanol out of the corn they use to produce the renewable fuel. The result is that ethanol producers would need less corn to produce the same amount of fuel, thereby boosting their bottom line. Some facilities could experience little to no increase while other plants seeing a jump of as much as 4 percent depending on the several factors such as the temperature and feedstock quality being used.”
MF Global (CFTC)
Reuters writer Ann Saphir reported that, “It’s a common sentiment in the U.S. futures industry, where many say everything is different and yet little has changed since the Oct. 31 failure of the giant brokerage [MF Global] and the $1.6 billion hole it blew in customer accounts.
“Trading is down. Market participants worry that hundreds of pages of new and proposed rules do little to safeguard customer money, and will pinch already razor-thin brokerage profits. Some say regulators need to crack down harder on existing rules.”
The article noted that, “Industry leaders say they’ve done a lot to exorcise the lingering ghosts of MF Global, including requirements that CEOs sign off on big drawdowns of customer money, and beefed-up auditing.
“‘Customers are in a better place today,’ CME Executive Chairman Terrence Duffy told Reuters on Monday. ‘There are a lot of new processes in place that have really shored up the system.’
“Or, as Chris Hehmeyer, chairman of the Chicago-based National Futures Association, put it: ‘It doesn’t feel safer. But it is safer.’”
Aaron Lucchetti, Julie Steinberg and Mike Spector reported yesterday at The Wall Street Journal Online that, “Who broke the law by raiding customer accounts at MF Global Holdings Ltd.?
“Investigators seem no closer to the answer than they were when the New York brokerage firm filed for bankruptcy exactly a year ago Wednesday, owing thousands of farmers and ranchers, hedge funds and other investors an estimated $1.6 billion. Their money was supposed to be stashed safely at MF Global, but company officials used much of it for margin calls and other obligations.
“The last, best hope for a breakthrough in the probe is Edith O’Brien, the former assistant treasurer at MF Global. Working in the company’s Chicago office, she was the go-to person for emergency money transfers as MF Global flailed for its life.”
The Journal writers indicated that, “Friends say she has been worried about becoming the ‘fall guy’ in the probe, especially since former MF Global Chief Executive Jon S. Corzine told lawmakers in December that she assured him the $175 million transfer was proper.”