FarmPolicy

October 26, 2014

Farm Bill; Budget; Ag Economy; CFTC; and, Trade

Farm Bill Issues

David Rogers reported yesterday at Politico that, “House and Senate farm bill leaders edged closer Thursday, joined in a last ditch effort —together with Agriculture Secy. Tom Vilsackto put in place a new five-year plan before the end of this Congress.

“Vilsack played host to the gathering of the top four Republicans and Democrats on the House and Senate Agriculture Committees [related photo]. And he told reporters later that ‘absolutely’ he remained optimistic that a bill can be completed before Dec. 31 and the focus must be on that goal, not a simple extension.

“‘What I was interested in doing today was basically get all four folks who are critical to this process in the room at the same time talking to each other and we’ve accomplished that,’ Vilsack said. ‘There is a commitment to work and try to get this resolved. The countryside needs a five year farm bill, rural America needs a five year farm bill.’”

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AgriTalk: Charlie Stenholm on Congressional Gridlock

Categories: Farm Bill

From AgriTalk radio, November 28, “Former Texas Congressman Charlie Stenholm, a longtime member of the House Ag Committee, is not terribly optimistic as Congress peers over the edge of the ‘fiscal cliff.’ Stenholm spoke out on the partisan gridlock that is holding up the economy and the farm bill while on AgriTalk at the Ag Retailers Association Conference in San Diego. He also touched on his work to bring back horse slaughter in the U.S.”

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NewsHour: As Immigration Reform Returns to Agenda, Republicans Counter With ‘Achieve Act’

From the PBS NewsHour program, November 28, “Two retiring Republican senators have introduced a new plan for immigration reform that grants legal status but not citizenship to young illegal immigrants brought to the U.S. by their parents. Ray Suarez talks to Sen. Kay Bailey Hutchinson, R-Tex., one of the authors of the plan, and Rep. Luis Gutierrez, D-Ill.”

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Video: USDA Surveying Conservation Programs

Categories: Farm Bill

From the U.S. Department of Agriculture, November 29, “USDA is conducting a survey to help farmers protect the environment and maintain productive farmland.”

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Farm Bill; Ag Economy; Renewable Energy; Budget

Farm Bill, Policy Issues

David Rogers reported yesterday at Politico that, “The four top House and Senate players on the farm bill are scheduled to meet Thursday with Agriculture Secy. Tom Vilsack, a luncheon which has taken on added importance given the growing pressure for some resolution before the end of next month.

“Consumers are threatened by a potential doubling in milk prices January 1, absent some action by Congress. And Vilsack and the Agriculture Committees must soon decide if they have any real shot of wrapping a five-year farm bill into whatever deficit reduction package emerges from talks now between the White House and Congress.

“Kansas Sen. Pat Roberts, the ranking Republican on the Senate panel, told POLITICO Tuesday that he felt encouraged by the administration to pursue this strategy. And Sen. Debbie Stabenow (D-Mich.), the committee’s chairwoman, has signaled that this is very much the direction she is taking as well.”

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Federal Reserve Beige Book: Observations on the Ag Economy

Today the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions.  Commonly referred to as the “Beige Book,” the report included the following observations with respect to the U.S. agricultural economy:

* Fifth District- Richmond- “Agricultural conditions prior to Hurricane Sandy remained favorable. Strong income boosted farm loan repayment rates. Lenders reported a drop in the number of loan renewals and extensions, even as spending for agricultural equipment rose. During October, beef prices rose as farmers struggled with higher feed costs―some producers culled herds, including breeding stock. More recently, Hurricane Sandy’s damage was minimal and localized mainly in coastal areas. In Maryland, an analyst reported that small grain emergence may be affected by standing water and salt water flooding. Snow and cold temperatures in North Carolina hindered farm activity and livestock producers were forced to begin feeding hay due to snow covered pastures; fruit production was not affected. In contrast, most farmers in Virginia were relieved that Hurricane Sandy brought much needed rain without significant damage to the corn and soybeans still in the field.”

* Sixth District- Atlanta- “Much of Georgia continued to experience varying degrees of drought conditions, while the rest of the region enjoyed normal conditions. Some agriculture contacts reported labor shortages. Compared with last year, prices paid to farmers for grain corn, rice, soybeans, beef, and broilers were up while cotton prices were down.”

* Seventh District- Chicago- “The corn harvest was completed ahead of last year’s pace, while the soybean harvest was proceeding more quickly than typical. Much of the District reported higher yields than had been expected during the previous reporting period, reflecting in part timely local rains, later planting, and irrigation. Nonetheless, the drought still cut the District’s output of corn and soybeans substantially relative to last year. Concerns about crop quality due to the drought seemed to diminish, although there were some reports of deliveries rejected for crop diseases. Corn and soybean prices—and with them livestock feeding costs–fell further, though they remained elevated from the levels of a year ago. Milk, hog, and cattle prices edged up from the prior reporting period, which also helped the cash flow of livestock operations. Sugar beet output in Michigan was higher than a year ago, and sugar prices were higher as well. Farmland values continued to rise despite the drought. Moreover, there seemed to be more farmland available to buy, partly due to uncertainty about future tax rates.”

* Eighth District- St. Louis- “As of early November, the rice crop in the District states was fully harvested; similarly, over 90 percent of the corn, cotton, sorghum, and soybean crops have also been harvested. Harvest completion rates were 3 to 12 percentage points higher than their 5-year averages. Planting of winter wheat across the District states was 8 percent ahead of its 5-year average, while over 90 percent of all winter wheat was rated in fair or better condition.”

* Ninth District- Minneapolis- “District crop producers remained in mostly good shape, despite this year’s drought. Farm incomes were bolstered by high crop prices, and farmers were looking at record harvests in areas less affected by drought. However, livestock and dairy producers continued to suffer from higher input costs. Reports of ranchers culling herds due to low hay production and increased feed prices continued to surface. After years of delays, a South Dakota beef slaughter and processing plant began operations in October. Prices received by farmers for wheat, corn, soybeans, beef, dairy products and chicken increased in October from a year earlier; hog, dry bean, turkey and egg prices decreased.”

* Tenth District- Kansas City- “High input costs reduced farm profitability and boosted farm loan demand since the last survey period. Demand for farm operating loans rose as surging feed costs cut livestock operator incomes and crop producers paid higher fuel costs to run irrigation and harvest equipment. With reduced incomes, especially for livestock producers, farm loan renewals and extensions edged up and loan repayment rates eased from recent peaks. Still, bankers reported that sufficient funds were available to meet short-term financing needs. Low soil-moisture levels hindered winter wheat emergence, raising concerns that persistent drought could strain U.S. crop production, keep crop and feed prices high, and force further livestock herd liquidations. Farmland values, however, continued to set new record highs in the District.”

* Eleventh District- Dallas- “The District remained largely in drought, although dry conditions eased in some areas. The crop harvest generally progressed at a good pace. Winter wheat crop conditions were much better than last year, when the drought was more severe in the District. Grain prices trended down over the reporting period but were still at relatively high levels. Cotton prices remained weak and may lead to fewer cotton acres being planted next year. Cattle prices were still higher than normal but contacts noted that high feed costs were keeping producers from expanding their operations and were creating negative margins for feedlots.”

* Twelfth District- San Francisco- “Agricultural producers saw further sales gains, and extraction activity of natural resources used for energy production continued to expand. Contacts noted that the agricultural sector appears to be immune from factors that have restrained growth in other sectors of late: production activity and sales of most crop and livestock products have been growing at a solid pace, as has investment spending on new production equipment.”

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NewsHour: In Efforts to Find a Budget Solution, Lawmakers Debate Tax Hikes, Entitlements

Categories: Budget

Video from yesterday’s PBS NewsHour program- “Congress and the White House face an uphill battle in forging a federal budget solution in order to avoid the automatic sequestration cuts in January 2013. Jeffrey Brown talks to House Representatives Keith Ellison, D-Minn., and Tom Price, R-Ga., about the likely proposals, challenges and compromises expected.”

Watch Lawmakers Debate Tax Hikes, Entitlements for Budget Solution on PBS. See more from PBS NewsHour.

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Farm Bill; Budget; Ag Economy; Biofuels; and, Trade

Farm Bill, Policy Issues

Rebecca Berg reported yesterday at BuzzFeed Online that, “Add the farm bill to the host of other issues being weighed by lawmakers as part of discussions to avert the fiscal cliff.

“Sen. Debbie Stabenow said Tuesday that the bill, which allocates spending for farm subsidies and food stamps, is ‘very much part of the discussion right nowin fiscal cliff talks.

“‘Well, we’re a way to save money,’ said Stabenow, who heads up the Senate Agriculture Committee.”

The update noted that, “Tying the farm bill to fiscal cliff discussions could help revive debate about the measure and increase the odds of approval before the end of the year, during a particularly busy time for Congress.

“‘I’ve talked to the White House about including it as part of the package, and they are certainly very open to doing that,’ Stabenow said.”

Sam Goldfarb and Ben Weyl reported yesterday at Roll Call Online that, “Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., said she was hoping the Senate-passed farm bill’s $23 billion in mandatory savings could be used to help replace the automatic budget cuts. Stabenow said the White House was ‘very open to doing that.’”

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Video: Young Farmer Worries about Estate Tax

Categories: Budget

A recent video from the American Farm Bureau Federation (AFBF) indicated that, “AFBF’s Young Farmer and Rancher Chair Glen Cope explains why the estate tax is such a pivotal issue for the nation’s young farmers and the future of U.S. agriculture.”

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Budget Issues; Farm Bill; Ag Economy; and, Climate

Budget Issues

Kevin Robillard reported yesterday at Politico that, “Senate Finance Committee Chair Max Baucus wants to protect an estate tax reduction from any deal averting the fiscal cliff, according to his hometown newspaper.

“Baucus told the Great Falls Tribune in an interview Sunday that he wants to keep the Bush-era rate for estate taxes in order to protect ranchers and farmers who pass their properties on to their children.

“‘…Baucus is working to preserve a reduction in estate taxes that exempts the first $5 million of an estate’s value for individuals and taxes the remainder at 35 percent,’ the paper wrote, but didn’t include direct quotes from Baucus on the topic.”

Yesterday, in his weekly column, Sen. Mike Johanns (R., Neb.) indicated that, “The estate tax currently provides an exemption for all estates valued at $5 million or less.  Anything valued in excess of $5 million is taxed at a rate of 35 percent when it is passed to beneficiaries. If this tax policy is left unaddressed, those rates will significantly change come January.  The exemption will drop to $1 million, with anything above that taxed at a staggering 55 percent.  A $1 million threshold might seem like a lot, but rising farmland prices are pushing the value of ag operations into the stratosphere. The average price for an acre of farmland has ballooned from $1,503 in 2010 to $2,425 today, according to the University of Nebraska Department of Agricultural Economics. Nebraska’s average farm size is 966 acres. Thus, one could estimate the average farm value based on land alone at more than $2.3 million, well above the lowered exemption.

“Farmers and ranchers, many of whom have had land in their families for generations, should not be forced to pay Uncle Sam more than half the value of their estate. And producers should not be forced to sell land to avoid the impacts of the fiscal cliff. Unfortunately, I’ve already heard from Nebraskans who are facing this very dilemma.”

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The “Fiscal Cliff;” and the “Dairy Cliff”

Farm Bill, Policy Issues

Sean Lengell reported last week at The Washington Times Online that, “A multiyear farm bill that has stalled in Congress could be part of a solution to avoid the looming ‘fiscal cliff’ — if party leaders decide they need its spending cuts to count toward an overall deficit reduction package.”

The article noted that, “Some agriculture programs, such as crop insurance, have continued under a separate authorization. And funding for the food stamp program was included in a six-month stopgap bill to fund the federal government that Congress passed in September.

But some dairy farmers say they’re already feeling a pinch, as the Department of Agriculture’s Milk Income Loss Contract Program, which compensates dairy producers when domestic milk prices fall below a specified level, expired after Sept. 30.”

More specifically, J.T. Rushing reported on Friday at The Gazette (Cedar Rapids, Iowa) Online that, “As if the ‘fiscal cliff’ and the long-suffering farm bill weren’t enough, Iowans may soon face a new dilemma — a ‘dairy cliff.’

“If Congress fails to act in the handful of weeks it has left in its lame-duck session before adjourning for Christmas recess, the nation’s dairy programs for farmers will expire Jan. 1.

“The effects won’t be limited to the dairy industry — retail prices for all sorts of dairy-related products could soar. U.S. Secretary of Agriculture Tom Vilsack has predicted the price of milk could rise to $6 a gallon, just as almost all Americans’ income taxes are scheduled to increase.”

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Drought Impacts Persist; Farm Bill; and, Budget Issues

Annie Gowen reported on the front page of Thursday’s Washington Post that, “Scorching drought and rising demand across the globe have pushed the price of U.S. food exports to record highs this year.

“That is good news for American farmers. But it’s bad news for the hungry, especially on the eve of the holiday season.

The booming market means that the federal government does not need to buy as many excess crops from farmers, resulting in a precipitous drop in government donations to food banks.”

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Farm Bill; Budget; Ag Economy; and, Trade

Farm Bill, Policy Issues

Daniel Looker reported yesterday at Agriculture Online that, “Senator Chuck Grassley (R-IA), a member of the Senate Agriculture Committee, told reporters Tuesday that leaders of the committee remain optimistic about a new farm bill being passed in the current lame-duck session of Congress, which will resume after this week’s Thanksgiving break.

“Grassley said that he talked to the committee’s chairwoman, Senator Debbie Stabenow (D-MI), about the farm bill recently on the floor of the Senate.

“‘She said she thinks we have a good chance of getting it passed,’ Grassley said.”

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Policy Issues; Ag Economy; Budget Issues; and, Trade

Farm Bill and Policy Issues

Ted Booker reported yesterday at The Watertown Daily Times (N.Y.) Online that, “The lull in Congress before the new year may be called the ‘lame duck’ session, but Rep. William L. Owens, D-Plattsburgh [Ag. Comm. Member], says legislators will have to get to work in a hurry to pass a five-year farm bill before the session ends…[S]ome lawmakers have pushed for a short-term extension of the bill, but Mr. Owens has opposed that idea, saying he does not want to see the full bill scrapped.

“Approving an extension ‘would be more complicated than one might think,’ he said. ‘We need to make sure we’re covering all aspects of the plan, and an extension would take just as much time to get done as passing the bill.’”

The article added that, “And if the bill isn’t passed by the end of the year, it will mean more painful cuts to federal programs for farmers. Dairy farmers in the north country already are suffering from the discontinuation of the Milk Income Loss Contract program with the expiration of the bill. The federal safety net reimbursed farmers when national milk prices dropped, said Steve Ammerman, manager of public affairs for the New York Farm Bureau. If the revamped farm bill is passed, farmers would have the option to join a new margin insurance program, which will calculate reimbursements based on the gap between feed and milk costs.”

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Rep. Courtney, Rep. Walz Call for Action on the Farm Bill

Categories: Farm Bill

On the House floor Friday, Rep. Joe Courtney (D., Conn.) and Rep. Tim Walz (D., Minn.), both Members of the House Ag. Committee, called for action on the Farm Bill.

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Tax Issues; Budget; Farm Bill; Biofuels; Ag Economy; and, Trade

Tax Issues

Dan Piller reported on the front page of Sunday’s Des Moines Register (“Pressure’s on to sell farmland before end of the year”) that, “The clean, placid appearance of post-harvest Iowa farmland appears to be far removed from the messy fog of Congressional politics and the fiscal cliff.

But pressure is intense to sell land before Jan. 1 when, if Congress doesn’t intervene, capital gains taxes will rise from 15 percent to 23.8 percent and deductions on estate taxes will drop from $5 million to $1 million.”

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