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Farm Bill; Trade; Ag Economy; and, MF Global

Farm Bill–Policy Issues (Sugar, School Lunches, Dairy, Hurricane Variables) and Political Notes

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Candy-makers are using Halloween to try to get Congress to kill the U.S. sugar support program.”

The article noted that, “The sugar program supports sugar beet and sugarcane growers by restricting imports of sugar. It also limits the amount of domestic sugar that can be sold as long as imports remain low.

“The American Sugar Alliance, which represents farmers, has argued that sugar program does not affect the budget and that removing support for sugar farmers could make the U.S. overly dependent on imports.”

Elahe Izadi reported yesterday at National Journal Online that, “On Oct. 25, the group [American Sugar Alliance] put out a Halloween-themed statement of its own that accuses the candy industry of charging consumers more for products while paying sugar farmers less.”

An article yesterday at ConfectioneryNews.com by Kacey Culliney indicated that, “The US sugar reform debate has been a hot industry topic for some years and has divided opinions between manufacturers and growers.

“The current US sugar policy was set with the 1981 Farm Bill, based on the principle that supply should not exceed demand in order to keep prices stable. The government can restrict the amount of sugar that American sugar farmers can sell, restrict the amount that the US will buy to the level required by trade obligations, and divert excess sugar to ethanol production.

“The American Sugar Alliance, which represents the interest of sugar cane and beet growers, is fully in favor of the existing policy. However trade organizations including the NCA [National Confectioners Association] argue that it is costly for consumers, small business and food manufacturers.”

Meanwhile, a news release yesterday from the House Education and the Workforce Committee stated that, “[C]ommittee Chairman John Kline (R-MN), along with Representatives Kristi Noem (R-SD) and Phil Roe, M.D. (R-TN) today asked the Government Accountability Office (GAO) to evaluate the impact of new requirements under the National School Lunch Program on students, schools, and taxpayers.

“In recent months, reports have indicated the standards are leading to hungrier students, wasted food, and increased costs.”

Rep. Steve King (R., Iowa- Ag. Comm.) indicated in a news item yesterday that, “[Rep. King] released the following statement after hosting Congressman Tim Huelskamp (KS-01) at lunch yesterday with students at Storm Lake Elementary school.  King introduced the ‘No Hungry Kids Act’ with Huelskamp as original cosponsor in response to the new USDA lunch standards. The ‘No Hungry Kids Act’ repeals the United States Department of Agriculture rule that created the new standards, prohibits the USDA’s upper caloric limits, and will protect the rights of parents to send their children to school with the foods of their choice.

“‘I am grateful I could join students and faculty at Storm Lake Elementary who are coping with the new overbearing USDA lunch standards,’ said King. ‘I saw firsthand how President Obama, his wife, and his administration’s rationing of food to students is completely out of hand. This nanny state has gone overboard in determining what children eat- kids should be able to eat all of the healthy, nutritious school food they want. The ‘No Hungry Kids Act’ puts the power back in the hands of parents and directs the USDA to reevaluate the standards and prohibits the USDA from putting all kids on a diet just because some are overweight.’”

In other news, Corey Geiger reported on Tuesday at Hoard’s Dairyman Online that, “Securing Dairy’s Future, the joint annual meeting of the National Dairy Promotion and Research Board, the National Milk Producers’ Federation (NMPF) and the United Dairy Industry Association, kicked off in Orlando, Fla., earlier this week. On Tuesday morning, the National Milk Producers’ Federation held a town hall meeting on a variety of dairy topics from reinvigorating the Real Seal and dairy exports, to immigration and animal care. But front and center was discussions on the pending farm bill.”

The update added that, “In an earlier session, NMPF’s CEO, Jerry Kozak, predicted that we would get a farm bill in the lame duck session after the election. He noted dairy had been the holdup in the past, but this time around it’s potential cuts to food assistance programs that are holding up the bill. ‘If the status quo happens (the House remains a Republican majority, the Senate remains a Democratic majority, and the President gets reelected), we are more likely to see a farm bill,’ concluded John Hollay, director of government relations for NMPF.”

And, on yesterday’s AgriTalk radio program, Mike Adams spoke with Paul Rovey, the Chairman of Dairy Management Inc. about dairy issues, a portion of their conversation can be heard here (MP3- 4:17).

In part, the AgriTalk discussion drew attention to the Innovation Center for U.S. Dairy, a forum for the dairy industry to work together to address barriers and opportunities to foster innovation and increase sales of dairy products. Multiplying resources and partnerships with others in the dairy industry has assisted in the promotion of healthy ingredients for consumers.

Meanwhile, the Government Accountability Office released a report yesterday titled, “FDA Can Better Oversee Food Imports by Assessing and Leveraging Other Countries’ Oversight Resources.”

With respect to the elections, The Detroit News reported yesterday that, “Just days before the Nov. 6 election, Democratic U.S. Sen. Debbie Stabenow is holding on to her double-digit lead over Republican challenger Pete Hoekstra in the latest Detroit News/WDIV Local 4 presidential poll released Wednesday.

“Stabenow, [the Chairwoman of the Senate Ag. Comm.], was leading Hoekstra 52.4 percent to 37.5 percent, a 14.9-point lead, according to the poll of 600 likely voters conducted Saturday through Monday by Glengariff Group Inc. of Chicago.”

The Hill’s Campaign Blog noted yesterday that, “Rep. Rick Berg (R-N.D.) holds a 2-percentage-point lead over Democrat Heidi Heitkamp in a new poll of the North Dakota Senate race, essentially a tie going into in the final stretch.”

An update yesterday at Politico pointed to a recent poll that showed Democratic Rep. Joe Donnelly up by nine points over Republican Richard Mourdock in the Indiana Senate race; likewise, “Democratic Sen. Sherrod Brown [Ag. Comm.], running for re-election in Ohio, is ahead of GOP challenger Josh Mandel by nine points in a poll released Wednesday,” Politico reported yesterday.

In addition, the AP reported earlier this week that, “Superstorm Sandy will end up causing about $20 billion in property damages and $10 billion to $30 billion more in lost business, according to IHS Global Insight, a forecasting firm;” while, Peter Schroeder reported yesterday at The Hill’s On the Money Blog that, “Hurricane Sandy is expected to take a $20 billion bite out of the U.S. economy.”

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “A bipartisan group of members from Long Island called on House leaders to make relief from Hurricane Sandy the top order of business when Congress returns in mid-November.”

A separate update at The Hill yesterday reported that, “Rep. Chaka Fattah (D-Pa.) announced Wednesday that he will introduce legislation to provide $12 billion in new emergency assistance funds in the wake of Hurricane Sandy, a move Republicans say is premature.”

Sen. Chuck Schumer (D., N.Y.) tweeted yesterday that, “this is one of the biggest disasters to strike NY & the country, and the federal response to #Sandy should be just as significant.”

And Ben Geman reported yesterday at The Hill that, “The top Democrat on the House Energy and Commerce Committee [Rep. Henry Waxman (Calif.)] is urging Republicans to hold a hearing in the lame-duck session on links between climate change and Hurricane Sandy.”

Justin Gillis reported in today’s New York Times that, “From the darkened living rooms of Lower Manhattan to the wave-battered shores of Lake Michigan, the question is occurring to millions of people at once: Did the enormous scale and damage from Hurricane Sandy have anything to do with climate change?

“Hesitantly, climate scientists offered an answer this week that is likely to satisfy no one, themselves included. They simply do not know for sure if the storm was caused or made worse by human-induced global warming.”

In more specific news regarding the U.S. budget situation, Peter Schroeder reported yesterday at The Hill that, “The U.S. government will reach its $16.4 trillion debt limit at the end of the year, according to latest estimates from the Treasury Department…Congress will likely have until early 2013 to actually craft a deal to hike the limit before the government exhausts its ability to borrow.”

And in the EU, Reuters news reported yesterday that, “France threatened on Wednesday to reject a European Union budget proposal for the 2014-2020 period if it implies cuts in the bloc’s agriculture spending…‘We oppose the proposed reduction to the Common Agricultural Policy (CAP), which has already been the subject of significant (reduction) efforts in the original proposal of the European Commission,’ French EU Affairs Minister Bernard Cazeneuve said in a statement.

“‘France would not support a multiannual budget that does not maintain the funds of the Common Agricultural Policy,’ he added.”



Rep. Adrian Smith (R., Neb.), Sen. Mike Johanns (R., Neb.), as well as,  Rep. Dave Camp (R., Mich.) and Rep. Kevin Brady (R., Tex.) issued statements yesterday regarding the U.S.-Panama Trade Promotion Agreement entering into force.

The American Soybean Association (ASA) yesterday released a news item titled, “ASA Outlines Priorities for Enhanced United States-European Union Trade.”

Also, an update yesterday from the WTO indicated that, “Director-General Pascal Lamy, in his report on G-20 trade measures issued on 31 October 2012, said that ‘there has been a slowdown in the imposition of new trade restrictive measures by G-20 economies over the past five months’. However, ‘at a time of continuous economic difficulties, trade frictions seem to be increasing’. He urged G-20 governments ‘to redouble their efforts to keep their markets open, and to advance trade opening as a way to counter slowing global economic growth’”.

And Alan Beattie noted yesterday at The Financial Times Online that, “Hypocrisy and exaggeration may be an inevitable part of any election campaign, but the discussions on international economics and trade have had experts in the field longing for next Tuesday’s vote to be over.

Herds of peaceably grazing policy wonks have been left shaking their heads in dismay as the marauding presidential campaigns have rampaged through their turf, leaving a trail of wrong-headed assumptions, non sequiturs and outright falsehoods strewn behind them.”


Agricultural Economy

Yesterday, USDA released its monthly Agricultural Prices report, which noted in part that, “The corn price, at $6.95 per bushel, is up 6 cents from last month and $1.22 above October 2011 [related graph]…The October price for all wheat, at $8.37 per bushel, is up 10 cents from September and $1.10 above October 2011 [related graph]…and…The soybean price, at $14.20 per bushel, decreased 10 cents from September but is $2.40 above October 2011 [related graph].”

A DTN article from yesterday reported (link requires subscription) that, “The nation’s row-crop harvest continued to run well ahead of normal this past week, while emergence of the winter wheat crop was slightly behind normal, according to USDA’s weekly Crop Progress report.  Release of the report was delayed until Wednesday due to Hurricane Sandy.

“As of Sunday, Oct. 28, both the corn and soybean harvests were entering the homestretch, with 91% of the corn crop and 87% of soybeans harvested. That compares to the five-year averages of 60% for corn and 78% for soybeans.”

And Dennis T. Avery penned an update earlier this week at The Center for Global Issues Online titled, “Tropical Rainbelts Still Shifting Global Crops.”


MF Global

Peter Schroeder reported yesterday at The Hill’s On the Money Blog that, “A congressional panel will release its official take on the high-profile collapse of MF Global sometime in the near future.

“The House Financial Services Oversight Subcommittee announced Wednesday — the anniversary of the firm’s bankruptcy — that within a ‘few weeks’ it would publish the findings of its yearlong investigation into how the firm fell and what happened to $1.6 billion in customer funds that went missing in its hectic final days.”

A news release yesterday from Rep. Tim Huelskamp (R., Kan.- Ag. Comm.) indicated that, “On October 31, 2011, MF Global Holdings Ltd. filed for bankruptcy, and on the one-year anniversary of the firm’s collapse no criminal charges have been filed against anyone for the misuse of $1.6 billion in customer funds. Under federal law, commodities trading firms like MF Global are required to segregate customer funds from their trading accounts. But, it is widely known now that MF Global and illegally used customer funds to place bets on European sovereign debt…‘For all the talk of the Obama Administration and its Justice Department cracking down on Wall Street misdeeds, a glaring and intentional oversight is the failure to prosecute Jon Corzine at MF Global for the theft of more than $1 billion,’ Congressman Tim Huelskamp said.”

And Ben Protess reported yesterday at The New York Times Online that, “Federal authorities have all but cleared MF Global’s top executives of criminal wrongdoing, people briefed on the matter say. The government has yet to usher in a wider overhaul of futures trading rules, save for certain piecemeal policy changes. And the profit-making exchanges that rely on brokerage firms for business still police the futures industry, presenting potential conflicts of interest.

“The slowing momentum for change has provided relief for the brokerage firms that dominate the futures trading industry. The Chicago companies, which largely dodged the humbling losses that scarred Wall Street in 2008, continue to cast MF Global as a fleeting distraction rather than a permanent black eye for their business.”

The Times article added that, “Farmers and ranchers traded futures contracts through MF Global to protect themselves from the price swings of their crops. While the clients have received 82 percent of their missing money, they are still owed millions of dollars.”

Keith Good