DTN Ag Policy Editor Jerry Hagstrom reported yesterday that, “House Agriculture Committee Chairman Frank Lucas is planning a farm bill that will cut $38 billion in spending over 10 years, $3 billion more than last year, with $20 billion coming from the food stamps account and $18 billion from the rest of the bill.
“Lucas, a Republican from Oklahoma, has scheduled a markup of the bill on May 15. The proposed $38 billion cut would make it easier to get the bill through the Republican-controlled House, but the large food stamp cut — $20 billion compared with $16.5 billion last year — will make it difficult for House Democrats to support it, and it would make a conference with the Senate more difficult.
“The Senate Agriculture Committee is expected to cut $23 billion over 10 years, the same as last year. Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., has said she wants to mark up a bill in May, and Senate Majority Leader Harry Reid, D-Nev., has said that he wants to bring it to the floor in May.”
Mr. Hagstrom explained that, “Lucas did not provide details on how the $18 billion would be divided among the other titles of the bill.
“But he did say that the commodity title would have the same basis as last year, which would mean elimination of the direct payments program, which costs $4.9 billion per year. The bill would create two new farm programs: a shallow-loss program to pay for losses not covered by crop insurance or a program with payments when crop prices fall below target prices.”
In an update Friday House Agriculture Committee Chairman Frank Lucas (R., Okla.) stated: “Take a road trip across our country and you’ll easily see the diversity of American agriculture. Our farmers produce different crops, employ different growing techniques, and face unique market and weather risks.
“Despite these differences, our farmers have at least one thing in common: a belief that crop insurance is a vital risk management tool that must be preserved.
“Farmers borrow more money in a single year than most Americans will borrow in a lifetime just to produce a crop. The recent drought across the country can attest to the fact that when a farmer loses a crop due to a natural disaster, it’s likely that every farmer in that area is suffering the same loss.”
Chairman Lucas pointed out, “Meanwhile, crop insurance has been on the front line of budget savings: $17 billion worth over the past five years, even before sequestration.”
Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Senate Majority Leader Harry Reid (D-Nev.) announced Thursday that the Senate will take up a five-year farm bill in May.”
Speaking on the Senate floor, Majority Leader Reid indicated that, “The Senate must complete work on job-creating water resources legislation and a Farm Bill during the May work period, so we can move forward on the immigration debate in June.”
The Hill update pointed out that, “The Senate Agriculture Committee has not announced an exact date for a markup of the bill. This time around, Chairman Debbie Stabenow (D-Mich.) will be working with a new ranking member Sen. Thad Cochran (R-Miss.), who is sure to seek a stronger safety net for southern growers of rice and peanuts.”
In a presentation yesterday at a Rural Summit in Washington, D.C. (FarmPolicy.com transcript here), which was organized by the Senate Democratic Steering and Outreach Committee, Chairwoman Stabenow stated that, “As you, I’m sure, know, we passed a bill both in committee and in the Senate on a strong bipartisan vote last year. Folks said it couldn’t be done in the middle of a contentious election time, but everybody stepped up, and we worked hard together, and we got it done. The House committee worked in a bipartisan way and passed a bill out of committee. I worked very closely with the agricultural leadership, both the chairman and the ranking member in the House.
“And then something happened that has never happened before in the history of the country. The leadership in the House would not take up a farm bill. And so we’re having, unfortunately, to go back at it again, so in May we’ll be marking up our bill again. We’re going to be bringing it to the floor. I expect strong bipartisan support. The House committee will pass a bill out with strong bipartisan support.”
Chairwoman Stabenow added that, “We need your involvement and we need to make sure that by September 30th, when the current bill runs out on the farm bill, that we have in place a five-year jobs bill for rural America and agriculture that works.”
Ron Hays, of the Oklahoma Farm Report and Radio Oklahoma Network, spoke yesterday with House Agriculture Committee Chairman Frank Lucas (R., Okla.) about a variety of current policy variables regarding the Farm Bill.
An audio replay and summary of the Chairman’s remarks from yesterday can be found here, while an unofficialFarmPolicy.com transcript of the conversation with Ron Hays and Chairman Lucas is available here.
Chairman Lucas noted that, “May 15’s a go. We’ve not issued the official markup notice yet, Ron, but both Ranking Member Peterson and myself are discussing this in public. I think we have an understanding. Leadership’s been alerted. May 15, I believe that’s a Wednesday, we will mark up the 2013 Farm Bill in the House Agriculture Committee.
“We’ll begin with a draft that essentially is the 2012 document. There have been some adjustments in some points, simply because the various entities like OMB and CBO have rescored some of our expenditures, our savings, and we’ve had to make adjustments to reflect that. But we’re going to have choice, we’re going to save money, we’re going to do it in a bipartisan way, we’re going to have a safety net for all crops in all regions, and we’re going to make sure our fellow citizens who need help have something to eat.”
In the extensive discussion with Ron Hays, Chairman Lucas was asked about crop insurance, in part he noted that, “I think, I believe the Ag Committee will be able to explain and justify everything that will be in the draft of the farm bill when it leaves the committee and goes to the floor, but the floor is where crop insurance will come under assault. It won’t be assaulted in the Ag Committee itself because the membership understand how the program works and why it’s important. And literally, it is becoming, in effect, the safety net of the farm bill as these other programs change so dramatically.”
On Tuesday, Sen. Heidi Heitkamp (D., N.D.) addresses issues associated with the Farm Bill on the Senate floor.
In part Sen. Heitkamp noted that, “We have frustration in farm country. There are 16 million jobs in agriculture. It is the bright spot on our economy, and it is helping to reduce our trade deficit. It is everything in my State.
“We have small farmers, small family farmers who must spend $1 million before they can even take a crop out of the ground. That is an average farmer in my State. That is how much it costs to engage in farming. When we don’t have a farm bill that provides certainty and security for them, we not only hurt them and hurt American agriculture, we risk our secure food supply. So I came here to speak for North Dakota farmers.”
John Mason reported yesterday at The Register Star (Hudson, N.Y.) Online that, “A bill that would help young people get a foothold in farming was announced at Hawthorne Valley Farm Monday.
“U.S. Rep. Chris Gibson [R., N.Y.] pledged to lead the effort to include the Beginning Farmer and Rancher Opportunity Act in the Farm Bill.
“The bill is renewed every five years, and is due for renewal this year. If the act is included in the bill, it would mean about $55 million a year, Gibson said, spent in such areas as training new farmers, grants for marketing, business planning and creation of value-added products, loans for land purchase and farm startup, conservation easements to keep land affordable for working farmers, and aid to returning veterans wishing to get into farming.”
Policy Issues: Crop Insurance, CRP, Nutrition, Animal Production (Antibiotics), and Disaster Declaration
Christopher Doering reported yesterday at The Des Moines Register Online that, “Crop insurance indemnities have risen to a record $17 billion for 2012 crop year, the U.S. Agriculture Department said in its latest report issued on Monday.
“The figure, which was up more than $700 million from the prior week, pushed the total for 2012 to $16.99 billion. The number is higher than 2011 when a series of natural disasters ranging from a freeze in Florida to drought in Texas prompted insurance companies to pay out a record $10.8 billion to farmers, short of the $12 billion they collected in premiums.
“The 2012 drought spread beyond the Midwest to affect more than 60 percent of the contiguous United States, making it the worst since the Dust Bowl in the 1930s. A sharp drop in crop yields pushed corn and soybean prices to record highs during the summer and costs to feed U.S. livestock soared, forcing ranchers to send their herds to slaughter rather than pay the higher feed costs.”
Rob Schultz reported earlier this week at Madison (Wis.) Online that, “The number of state farmers buying crop insurance this year could increase 15 percent after last year’s drought showed how well the program worked.”
“‘Just cropping the land is getting more and more and more expensive, and there’s so much more risk out there from the inputs compared to what your return is. That used to be widening, now it’s narrowing,’ [Michelle Austin, director of insurance services for Badgerland Financial] said.”
Ellyn Ferguson reported on Saturday at Roll Call Online that, “Mississippi’s Thad Cochran, the new ranking Republican on the Senate Agriculture Committee, could be the wild card among the congressional players involved in writing a farm bill that could have a chance of being signed into law this year.
“He took the top GOP seat at the start of the 113th Congress after asserting his seniority on the panel to move Pat Roberts of Kansas out of the spot. The change means not only new leadership but also a regional shift in power that is likely to alter the Senate farm bill’s direction.
“Cochran is expected to champion Southern growers who opposed the 2012 Senate farm bill written by Roberts and Chairwoman Debbie Stabenow, D-Mich. Despite opposition from Cochran and other Southern Republican committee members, the two leaders got the bill through the panel and the Senate floor with bipartisan support.”
The Roll Call article pointed out that, “On nutrition issues, Cochran may surprise those who want to see significant cuts to the Supplemental Nutrition Assistance Program, a domestic food aid program for low-income people that constitutes more than half of all Agriculture Department and farm bill spending. The lawmaker says federal food programs such as SNAP and the national school lunch program have benefited his state, which ranks among the poorest in the nation.”
“So far, Cochran, a veteran of the Senate and a courtly practitioner of behind-the-scenes maneuvering, is keeping his farm bill plans to himself. He says he will seek consensus on a committee bill and does not plan to block or delay the legislation,” the Roll Call article said.
David Rogers reported yesterday at Politico that, “House Agriculture Committee Chairman Frank Lucas (R-Okla.) said Thursday that he will move ahead a farm bill markup May 15 despite pressure from the Republican leadership to take more time first and consider tougher changes in the food stamp program to win over conservative votes.
“Lucas told POLITICO that he was fully prepared to hold listening sessions first with the Republican whip’s office over the next month. But he wants to keep to his schedule and produce a bipartisan bill together with his ranking Democrat, Minnesota Rep. Collin Peterson.
“‘They suggested I take a little more time,’ Lucas said of a meeting Thursday with Majority Leader Eric Cantor (R-Va.) and his top staff. ‘I said I wanted to go May 15 but would be happy to hold the listening sessions to hear what my colleagues think.’”
Mr. Rogers added that, “As the floor leader, Cantor is said to be worried still about the ability to win over conservative support for any farm bill, and Lucas has felt pressure from the leadership to steer more to the right and consider tougher work requirements for food stamp beneficiaries, for example.”
April 17- Spring is arriving a bit slowly to the Midwest. Todd Gleason has more on what producers can expect their crops to be worth this season. The presentation includes analysis from University of Illinois Agricultural Economist Darrel Good.
Several lawmakers highlighted farm policy related legislation this week.
A news release from Rep. Kristi Noem (R., S.D.) yesterday indicated that, “[Rep. Noem] introduced legislation today to provide a dependable safety net for livestock owners in South Dakota and across the United States. The Livestock Disaster Protection Act would extend the Livestock Indemnity Program (LIP), the Livestock Forage Program (LFP) and the Emergency Livestock Assistance Program (ELAP) authorized in the 2008 Farm Bill for five years, as well as retroactive coverage for fiscal years 2012 and 2013.”
“Rep. Noem will work with House Agriculture Committee Chairman Lucas to include these provisions in the new Farm Bill, which is expected to be drafted in the coming weeks,” the release added.
Similarly, an update Tuesday from Sens. Mark Udall (D., Colo.) and Mike Enzi (R., Wyo.) stated that, “[Sens. Udall and Enzi] urged the U.S. Senate Agriculture, Nutrition and Forestry Committee to ensure that permanent livestock disaster assistance is included in the 2013 Farm Bill. Ranchers across the country need access to a strong and permanent safety net in light of the severe ongoing drought affecting much of Colorado, Wyoming and the Rocky Mountain West. A robust livestock insurance program, Udall and Enzi argued in their bipartisan letter, will give ranchers and cattle operators the assurance they need to continue to boost local economies and feed the nation.”
From the American Farm Bureau Federation (AFBF), April 17- A bipartisan group of senators has introduced a new comprehensive immigration reform package. American Farm Bureau President Bob Stallman talks about the importance of the legislation for U.S. agriculture.”
* Fifth District- Richmond– “Cold temperatures and wet weather delayed land preparation and hindered spring plantings in the agricultural sector. Hay supplies were running low in some regions, resulting in higher demand for supplemental feeding. However, a contact on the Eastern Shore of Maryland stated that poultry production and agriculture were doing well, grain and land prices were good, and the overall outlook was positive.”
* Sixth District- Atlanta– “Drought conditions improved significantly in Georgia, southeastern Alabama, and the Florida panhandle. Since the last report, monthly soybean and corn prices rose moderately, while broiler prices reached record highs. Cotton prices continued to be below year-ago levels, but rose modestly since the last report. Driven by increasing global demand and low interest rates, contacts reported continued investment in new, more efficient equipment reducing both labor and fuel costs.”
* Seventh District- Chicago– “Cold weather delayed field work during the reporting period, but there was little concern expressed by contacts that planting would be seriously delayed. Corn and soybean prices dropped based on expectations of a larger crop this year and current stocks that are not as tight as anticipated. Contacts indicated that the number of soybean acres should be higher than the prior year in the District, while corn acres should be lower. Farmers seemed to increase their levels of crop insurance relative to last year. Milk prices moved lower during the reporting period, but remained above the levels of a year ago. Hog prices fell and were under year-ago levels. Cattle prices moved sideways during the reporting period, but were below the levels of a year ago. Some livestock producers were reportedly taking advantage of low long-term interest rates by refinancing and lengthening the maturity of their debt.”
* Eighth District- St. Louis– “Farmers in the District’s states expect to plant more sorghum and soybeans in 2013 than was planted in 2012; they also anticipate planting less corn, cotton, and rice. Additionally, Arkansas and Mississippi farmers expect to significantly increase corn acreage while reducing cotton and rice acreage. As of early April, over 90 percent of the District’s winter wheat crop was rated in fair or better condition, and over 60 percent was rated as good to excellent.”
* Ninth District- Minneapolis– “The District agricultural sector remained in strong condition heading into the planting season, though persistent drought remained a threat. Early indications of planting intentions suggest District farmers plan to increase corn, soybean and hay acreage this year, with a reduction in wheat acres. An agricultural cooperative announced $50 million in investments in the District, including a grain terminal in North Dakota and a fertilizer depot in Minnesota. Prices received by farmers increased in March from a year earlier for wheat, corn, soybeans, hay, chicken, milk and eggs; prices decreased for cattle, hogs, turkeys and dry beans.”
* Tenth District- Kansas City– “Agricultural growing conditions remained poor in most of the District. March precipitation provided little relief to persistent drought, and the winter wheat crop was still in fair to poor condition. Despite recent declines, crop prices remained elevated due to short crop supplies, and District farmers did not plan to significantly alter their current crop mix. Livestock operators continued to post losses with falling cattle and hog prices and high feed costs. Pork exports remained weak, but beef exports edged up, partly due to less restricted trade with Japan. Operating loan demand remained soft as crop insurance payments bolstered farm income. Farmland values rose further and were expected to stay elevated.”
* Eleventh District- Dallas– “Drought conditions worsened slightly across the District over the reporting period. Nearly half of the Texas wheat crop was in poor or very poor condition, and spring crops were largely being planted into very dry soil. Texas feedlots continued to run negative margins, due in part to feed costs remaining elevated. Cotton was a bright spot, with continued strong demand and rising prices.”
* Twelfth District- San Francisco– “Agricultural producers noted increased sales and production activity. Demand for most crop and livestock products grew further. Agricultural producers faced mostly stable or somewhat lower petroleum-based fuel and natural gas costs. Supplies of most raw materials were adequate. However, some contacts communicated concerns that volatile weather conditions and limited water availability in parts of the District could pass through to lower seasonal hiring and reduced agricultural output in coming months.”
Subcommittee Chairman Robert Aderholt (R., Ala.) noted at the outset of yesterday’s hearing that, “The budget includes proposals to eliminate direct payments to farmers, modify the Conservation Reserve Program, and change the crop insurance program. While these proposals may or may not have merit, they do have to go through the authorizing committees. One of the things that the authorizing committees agreed on last year, on a bicameral and bipartisan basis, as they were developing their respective versions of the farm bill was to reduce spending on SNAP. The Senate bill had a $4 billion reduction that passed the Democratic-controlled body, and the House bill had a $16 billion reduction that passed the full committee. Yet your budget proposes to maintain the increase that was provided in the Recovery Act at an additional cost of $2.3 billion. There just seems to be a disconnect here.
“Finally, I look at the President’s overall request and find that it is paid for by an additional $1.1 trillion in new taxes, and never balances. In a sense, this whole proposal really does fit the axiom, ‘dead on arrival.’”