November 17, 2019

Farm Bill; Budget; Ag Economy; and, Immigration

Farm Bill Issues

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “House Agriculture Committee Chairman Frank Lucas wants to make it clear that he expects USDA to follow through with enrollment and sign up for the direct and counter-cyclical payment programs and that checks should be issued in the fall.

“There is a lot of speculation over whether direct payments would actually be sent out in the fall.

Direct payments normally are sent out in the fall, which gives Congress the potential in budget talks to redirect USDA from issuing the payments, which cost about $5 billion a year.”

Mr. Clayton explained that, “The House Agriculture Committee’s office sent a statement to DTN on Thursday making it clear Chairman Lucas, a Republican from Oklahoma, expects the commodity programs extended for 2013 to remain as they are without any possible late changes coming from Congress. Lucas said sticking with the programs in place now, including direct payments, provides farmers with some policy certainty for this year.

“‘While farmers and ranchers have been denied the five years of certainty a new farm bill would provide, folks in Washington need to stop the guessing game about farm policy for the 2013 crop year, especially with respect to direct payments,’ Lucas said. ‘The existing safety net was extended a year to provide the certainty producers need for the 2013 crop year. This is the law of the land. Anyone familiar with the business of agriculture knows that producers across the country are making spring planting decisions and securing operating loans as we speak. And, I fully expect sign-up for the 2013 crop year — including direct payments — to begin as soon as possible.

“‘I assure you that the five-year farm bill that we will mark up in my committee will honor the commitment Congress made to growers when it extended the 2008 farm bill to cover the 2013 crop year,’ Lucas said.”

Yesterday’s DTN article pointed out that, “Secretary of Agriculture Tom Vilsack was asked at a press conference Monday in Nashville about possible cuts to crop insurance in the next round of budget and sequestration talks. Vilsack noted crop insurance has taken cuts in recent years through contract negotiations and is less likely to be targeted. Direct payments, however, might not be issued next fall.

“‘I think a much larger or deeper question is the issue of direct payments and how certain are we all that direct payments will actually be available,’ Vilsack said. ‘I think the concern a lot of people have is what Congress basically extended, I suppose they could ‘unextend,’ if there is such a word. What Congress giveth, they can take away. And so what we at USDA are supposed to do, we are going to do, and do it in a timely way. But it’s not unrealistic to believe, as they are looking for deficit-reduction strategies, direct payments, I think is far less popular than crop insurance.’”  (Related audio from Sec. Vilsack on Monday, available here (MP3- 1:23)).

Recall also that Rep. Mick Mulvaney (R-S.C.) and Rep. Tom McClintock (R-Calif.) considered a proposal to offset disaster funding for Hurricane Sandy by targeting direct payments, although this legislative idea was ultimately unsuccessful. (Additional information in Wednesday’s FarmPolicy report.)

Meanwhile, in a radio interview earlier this week with Mick Kjar (Ag News 890, Terry Loomis, Farm Director (Fargo, ND)), House Agriculture Committee Ranking Member Collin Peterson (D., Minn.) discussed upcoming budgetary concerns with respect to Farm Bill programs, including direct payments- (Ag News 890 audio clip here (MP3- 2:15)).

Mitch Meador reported on Wednesday at the Lawton Constitution (Lawton, Okla.) Online that, “Garrett King, Oklahoma agricultural liaison for Lucas, Oklahoma’s Third District congressman, told attendees at the Cattle Trails Cow-Calf Conference here [Lawton] Tuesday it was a miracle the farm bill extension made it through.”

The article noted that, “Unfortunately, inclusion of Lucas-Peterson in the year-end agreement was not to be. All ag leaders got was an extension of the 2008 Farm Bill through the end of September. Everything continues the way it was, but some programs are authorized that don’t have funding, King warned. Livestock indemnity and livestock forage programs were reauthorized, but no money went into the bank account.

“‘We’ve got to get money into those programs through the appropriations process. So that is one of our goals in the short term,’ King said.

Ag leaders will also be marking up a new farm bill, but there are now new members on the committees who must be educated and who have the right to weigh in. Congress is also facing new political realities, new priorities that are going to come ahead of the farm bill. The debt ceiling is one. Sequestration has only been delayed for two months, and officials will have to deal with massive cuts across the entire federal government.”

In the interview earlier this week with Mick Kjar (Ag News 890, Fargo, ND), Rep. Collin Peterson also provided his perspective on the White House, GOP House Leadership, and the Senate during the Farm Bill process.  Rep. Peterson specifically noted the assistance and help provided by House Democrat Leader Nancy Pelosi (Calif.) as Farm Bill developments unfolded at the end of last year.

(Recall that Rep. Peterson and then Speaker Pelosi worked closely to get the 2008 Farm Bill over the finish line.  More background on this issue is available in this FarmPolicy update from September).

In his discussion with Mick Kjar, Rep. Peterson also offered insight into the change in GOP leadership on the Senate Agriculture Committee. (Related Ag News 890 audio clip available here (MP3- 2:43)).

Alan Mauldin reported earlier this week at The Moultrie Observer (Ga.) Online that, “On the question of a new farm bill, [Sen. Saxby Chambliss (R., Ga.)] said that for the first time since taking office in 1995 he voted last year against a farm bill because it was not good for farmers in the Southeast.

“He said he supports farm legislation that eliminates direct payments to landowners whether they farm or not, which has long been a criticism of farm programs. The Senate bill, which was not taken up by the House, would have changed that.”

The article added that, “Farmers need countercyclical payments that will help them in tough years when prices are low and do not cost the government money when prices are high, he said. Crop insurance alone that pays for disasters is not sufficient.

“‘The problem is, crop insurance for cotton and peanuts doesn’t work,’ he said.”

In other developments, DTN Executive Editor Marcia Zarley Taylor reported yesterday (link requires subscription) that, “If you liked your crop insurance options for 2012, ask for a replay in 2013. But for 2014 and beyond, your federal risk management choices could become much more expensive and more restricted.

Some of the leading architects of the program worry delayed passage of a permanent farm bill exposes the federal crop insurance program to potential budget cuts…‘The longer we postpone, the worse it could get for crop insurance,’ University of Illinois economist Gary Schnitkey said.”

The article noted that, “[Kansas State economist Art Barnaby] actually invented the concept of harvest price protection in the early 1990s, a feature he thinks protects cash grain marketers as well as livestock feeders. He also strongly defends the crop insurance concept, because it’s far preferable than the billions of dollars of free disaster aid dispensed by Congress in previous decades.”

Yesterday’s article indicated that, “‘Without the harvest price, many Iowa corn farmers would have received no 2012 indemnity payments,’ Barnaby said. ‘Would policy makers have provided an ad hoc disaster program for the 2012 drought, if those farmers had not been collecting crop insurance payments?’”

In news regarding nutrition issues, Teresa Watanabe reported yesterday at the Los Angeles Times Online that, “Fatty corn dogs and sugary coffee cake may become extinct in thousands of school cafeterias nationwide under a landmark new alliance among Los Angeles Unified and five other major urban school districts to leverage their vast purchasing power for healthier fare and lower prices.

“School districts in L.A., New York, Chicago, Dallas, Miami and Orlando, Fla., plan to announce Thursday efforts to use their collective clout — 2.5 million daily meals served and $530 million annually spent — to make wholesome food a national standard.”

The article noted that, “L.A. Unified has overhauled its menu with whole grains and fresh produce; New York offers a salad bar at every school; and Chicago has swapped cupcakes for fruit at school celebrations.

Now, by joining forces, the alliance members hope to move the market and eventually enlist other school districts in the crusade.”

Reuters writers Lisa Lambert and Susan Heavey reported yesterday that, “A report by a panel of experts released on Thursday questioned whether the U.S. government’s food stamp program adequately provides for healthy diets for the more than 47 million low-income people who rely on the benefit.

“The report by the National Academy of Sciences found that the aid for families to pay for groceries, officially called the Supplemental Nutrition Assistance Program, or SNAP, does not account for many barriers to finding affordable, nutritious food by inner-city shoppers.”

The article explained that, “The U.S. Agriculture Department, which administers the aid program, sought the report to help it determine the best way to assess whether food stamps benefits are adequate for recipients to have access to a healthy diet.

“‘We will thoroughly review the analysis and recommendations contained in this report and use them to help set our agenda for future program research,’ USDA said in a statement.”

Also yesterday, Ramsey Cox reported at The Hill’s Floor Action Blog that, “New York and Idaho lawmakers called on the U.S. Department of Agriculture (USDA) to change its nutrition guides to include Greek yogurt as a source of protein.

“Sens. Kirsten Gillibrand (D-N.Y.), Mike Crapo (R-Idaho), Jim Risch (R-Idaho) and Reps. Richard Hanna (D-N.Y.) and Mike Simpson (R-Idaho) sent a letter Thursday to Secretary of Agriculture Tom Vilsack urging him to change USDA guidelines on the protein-packed food.”

Brian Tumulty reported yesterday at PressConnects (Binghamton, NY) Online that, “[Sen. Chuck Schumer (D., N.Y.) began urging the Agriculture Department last June to update its federal school lunch program guide to reflect Greek yogurt’s protein content — more than twice that of regular yogurt.”

And, Sen. Gillibrand tweeted yesterday that, “Greek yogurt is high in protein & should be able to serve as a healthy low-cost protein option for kids in the federal lunch program.”



Molly K. Hooper reported yesterday at  The Hill Online that, “GOP leaders on Thursday heard from rank-and-file members in a closed-door session, with many urging sequester cuts or a government shutdown to take effect in hopes of forcing the White House into accepting spending cuts.

“Those options are ‘very much on the table,’ veteran Rep. Tom Cole (R-Okla.) told reporters on Thursday, from Virginia, where House GOP lawmakers are meeting for their annual retreat.”

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “A coalition of conservative groups on Thursday demanded that Congress only raise the nation’s $16.4 trillion debt limit if a path to a balanced budget is enacted.

“The groups say the plan must balance the budget within 10 years and not include higher taxes.”


Agricultural Economy

Gregory Meyer reported yesterday at The Financial Times Online that, “The heat is gone and the shock has faded, but a terrible US drought remains. And it is not about to disappear.

“That was the message in a government drought forecast released on Thursday, the first to cover the April start date for most corn and soyabean planting.

“While snow and rain have relieved some areas, the majority of the Midwest and high plains regions are still suffering drought. States such as Nebraska and Kansas show no sign of improvement, while the situation in Texas is set to worsen.”

The U.S. Department of Agriculture’s Economic Research Service noted its latest Livestock, Dairy, and Poultry Outlook report yesterday that, “As the drought continues, potential for more cow liquidation increases and prospects for herd rebuilding deteriorate. Drought-affected pastures could result in further placements of lightweight feeder cattle in feedlots and further reduce the supply of heavy feeder cattle for placement. Negative packer margins and record high retail beef prices could dampen rising fed cattle prices.”

And a news item yesterday from Cargill indicated that, “Cargill today announced that it will idle its Plainview, Texas, beef processing facility effective at the close of business, Friday, Feb.1, 2013, resulting primarily from the tight cattle supply brought about by years of drought in Texas and Southern Plains states.”

John Schwartz reported in today’s New York Times that, “For months along the Mississippi River here, the withering drought has caused record-breaking low water levels that have threatened to shut down traffic on the world’s largest navigable inland waterway.

That closing has not happened, however — and now officials are predicting it will not. ‘It looks to me like we’re about to get out of the woods here,’ said Maj. Gen. John W. Peabody, commander of the Mississippi Valley Division of the Army Corps of Engineers. ‘I am very confident that we will be able to sustain navigation for the rest of the season,’ until the river comes up naturally with the spring rains and snow melt.”



Cameron Joseph reported yesterday at The Hill Online that, “Pro-immigration reform groups are revving up efforts to force leaders to tackle with legislation amid concerns the issue could get shoved to the sidelines amid other high-profile fights on Capitol Hill.

“‘We need some action,’ former Commerce Secretary Carlos Gutierrez, who served under former President George W. Bush, said Thursday.”

And The Washington Post editorial board indicated today that, “Sen. Marco Rubio, the Florida Republican in whom some GOP activists have invested presidential hopes for 2016, has seized on the issue of immigration, hoping to stake a claim to leadership in the coming national debate and to revive Republicans’ dismal standing among Hispanics. What’s striking about his plan, outlined so far in the media rather than in legislation, is that it appears to depart from President Obama’s own approach in details, not principles.”

Keith Good

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