FarmPolicy

November 13, 2018

Farm Bill; Ag Economy; Biofuels; Regulations; and, Immigration

Farm Bill- Policy Issues

Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “The Senate Agriculture Committee hasn’t announced a date yet to mark up the farm bill, but Sen. Chuck Grassley told reporters Tuesday morning the committee will meet next week.

“Responding to a question about a mark-up session next week, Grassley, a Republican from Iowa, said, ‘That’s what I’ve heard and that’s what we’ll be ready for.’

“Grassley said most issues moving into the mark up have been resolved outside of the commodity title. ‘I’d say it’s the only title that’s not settled at this point. There’s pretty much agreement on the rest of the bill.’”

Mr. Clayton pointed out that, “Grassley acknowledged there would be attempts to reduce crop-insurance subsidies, but he said he didn’t think those would succeed. Grassley said 92% of farmers buy crop insurance. Attempts to limit it would reduce participation and lead to more payments for disaster programs.”

The DTN update added that, “Republicans are going to pursue more cuts in the Supplemental Nutrition Assistance Program. Sen. John Thune, R-S.D., a member of the committee, has introduced a bill meant to reduce SNAP, — formerly called food stamps — by $30 billion over 10 years.”

Christopher Doering also reported on this development yesterday at The Des Moines Register Online and explained that, “Grassley said while he hasn’t seen the language of the bill, a recent meeting Democrats and Republicans had with Chairwoman Debbie Stabenow, D-Mich., chair of the Senate Agriculture Committee, indicated most parts of the farm bill appear to have been resolved, except for section that deals with crop subsidies.

“‘We’re all going to have to accept the fact there’s going to be more savings and it’s going to be tougher to make those savings than it was last year,’ said Grassley. ‘Farmers are telling me the most important thing is to maintain crop insurance.’”

Mr. Doering noted that, “The mark-up next week would come nearly a year after the Senate Agriculture Committee completed a farm bill. The full Senate passed a five-year farm bill in June. A month later, the House Agriculture Committee approved its version, but it contained deeper cuts to government nutrition programs than the Senate. The farm bill languished in Congress, leading to an extension of the 2008 law.”

Agricultural Economists Gary Schnitkey (University of Illinois) and Carl Zulauf (Ohio State) noted yesterday at the farmdoc daily blog (“Farm Bill Negotiations: Selection between Three Programs”)  that, “After last year’s failed attempt, Congress will again try to pass a Farm Bill this year. Mark up in both the Senate and House Agricultural Committees likely will occur in the near future. Given bills passed last year in the full Senate and by the House Agricultural Committee, along with proposals put forward this year by farm groups, it is possible to gain a feel for the types of programs likely to be included in the Farm Bill. This year, negotiations likely will be around three programs: a revenue program, a target price program, and a supplemental insurance program. A passed Farm Bill likely will include two, if not all three, of these programs, giving farmers choices among the programs. The exact nature of each program will be determined by negotiations.”

The professors analyzed these programs in greater detail, and included a summary section at the conclusion of yesterday’s farmdoc update.

Meanwhile, Jonathan Knutson reported yesterday at The Daily Republic (Mitchell, S.D.) Online that, “Last fall, for the fourth straight year, Thief River Falls, Minn., farmer Ken Asp chose not to re-enroll some of his farmland in the Conservation Reservation Program.

“Enrolling the land into CRP made economic sense when he did it, in some cases as long as 20 years ago. But times have changed, and Asp now can do better, financially, farming the land than letting it sit idle in CRP.”

Mr. Knutson added that, “In the past two years alone, the number of CRP acres nationally has dropped from 31.2 million to 27 million. Of the 4.2-million-acre decline, North Dakota and Montana accounted for a whopping 1.6 million acres, or 38 percent. Northwest Minnesota and parts of South Dakota also have seen large amounts of land leave the program.”

The conservation community, represented by over fifty organizations, came together and provided a summary document yesterday, “Conservation Community’s Principles and Recommendations for Strengthening the Farm Bill Conservation Title,” which outlined specific ideas for the conservation portion of the Farm Bill.

In part, the summary stated that, “Prices for basic commodities are expected to remain historically high for the foreseeable future as economic growth in the developing world spurs growing demand for food, fiber, and fuel. High prices are already pushing farmers to plant fencerow to fencerow, intensify production on existing farmland, and convert environmentally sensitive land to crop production.”

Also, USDA’s Economic Research Service (ERS) released a report yesterday titled, “The Role of Conservation Programs in Drought Risk Adaptation;” ERS noted that, “This report evaluates the extent to which farms facing higher levels of drought risk are more likely to participate in conservation programs, and finds a strong link between drought risk and program participation.”

With respect to nutrition issues, an update yesterday from the House Ag Committee noted that, “The Supplemental Nutrition Assistance Program (SNAP) benefits are fully funded by the federal government, but the program is administered by the states. As such, states that have the resources to provide job training, or believe sufficient jobs are available can require able-bodied SNAP recipients without dependents to work for their benefits.  Or, states can seek to waive the work requirements. Congress provides states $400 million per year to operate employment and training programs targeting specific needs of the low-income SNAP population.

“‘I commend my home state of Oklahoma in leading the charge to return SNAP beneficiaries to work by no longer seeking to waive the work requirements in SNAP law.  I hope other states will follow their lead,’” Committee Chairman Frank Lucas said.

Josh Hicks reported yesterday at The Federal Eye Blog (Washington Post) that, “The U.S. Department of Agriculture on Monday announced a $4 million plan to increase the use of federal food credits at farmers markets.

“The initiative will expand wireless access to qualified retailers that do not already accept payments through the Supplemental Nutrition Assistance Program, also known as SNAP, which provides financial assistance to help people with little to no income purchase food.”

Also yesterday, a news release from the International Dairy Foods Association stated that, “Food processor, restaurant and retailer groups voiced their strong support last week for the Dairy Freedom Act in a letter to the bill’s authors, Representatives Bob Goodlatte (R-VA) and David Scott (D-GA). The bill would offer the safety net of margin insurance for dairy farmers without forcing them to participate in a supply management program, a provision included in the dairy section of last year’s Senate and House Agriculture Committee Farm Bills.”

In news related to animal production, Megan R. Wilson reported yesterday at The Hill’s RegWatch Blog that, “The political arm of the product review magazine Consumer Reports on Tuesday urged lawmakers and federal regulators to take steps to eliminate antibiotic use in healthy animals.”

In news relating more specifically to the executive branch, an update yesterday from the University of Arkansas provided an overview of Agriculture Secretary Tom Vilsack’s visit to the Fayetteville campus earlier this week.

In addition, AP writer Jeri Clausing reported yesterday that, “The southern New Mexico plant that has been fighting for more than a year for permission to slaughter horses will open soon, unless Congress reinstates a ban on the practice, Agriculture Secretary Tom Vilsack said Tuesday.”

And the editorial board at the Chicago Tribune yesterday discussed the USDA’s handling of farmer discrimination lawsuits brought against the Department.

After referencing the “5,200-word investigative report in Friday’s New York Times” on the issue, the Tribune stated: “Agriculture Secretary Tom Vilsack, a former Democratic governor of Iowa, defended the program, blaming criticism on USDA employees who refuse to admit the agency’s past mistakes. The Justice Department said the program may have headed off even greater expenses.

But that may be wishful thinking. A balance has to be struck between making it feasible for victims of discrimination to get justice and inviting widespread abuse. In this instance the government seems to have erred badly in the direction of making claims too easy.”

In addition, DTN Ag Policy Editor Chris Clayton tweeted yesterday that, “White House names Michael Scuse as Acting Deputy Secretary for USDA –No. 2 job. Scuse had been undersecy for farm and foreign programs.”

 

Agricultural Economy

Perry Beeman reported in yesterday’s Des Moines Register that, “Iowa Agriculture Secretary Bill Northey said in an interview that planting will be scattered for the next week because farmers are worried over a forecast that may send soil temperatures plummeting below the 50 degrees that corn needs to germinate…[I]f conditions improve next week, farmers may have a chance to plant before May 10, generally considered the late side of the normal planting window, Northey said.”

Ken Anderson reported yesterday at Brownfield that, “Rain is expected to move across the state later this week with highs only in the 40’s on Thursday and Friday. But Iowa State University Extension Agronomist Paul Kassel says there’s still plenty of time to get corn planted and still see bumper yields.

“‘We can still use that old May 10th date as a date to be done by,’ Kassel says. ‘There’s even evidence that northwest and north-central Iowa can go even later than that and still achieve maximum yields.’”

Tweets yesterday, which included photos, from producers in Illinois and Indiana indicated that some corn was getting planted; and an AP report from yesterday noted that, “Despite the sudden warm weather, Minnesota farmers are still waiting for the chance to get into their fields.”

Reuters writer Michael Hirtzer reported yesterday that, “U.S. wheat surged 2 percent on Tuesday, with benchmark futures at the Kansas City Board of Trade climbing to the highest level in seven weeks on concerns scouts on an annual crop tour will find freeze-damaged fields in the top growing state of Kansas.”

While a news release Monday from Texas A&M AgriLife Extension noted that, “A late March and three April freezes have hit wheat in its advanced growing stages. But some of the crop still has potential for moderate and good grain production, said Texas A&M AgriLife Extension Service specialists after canvassing three primary wheat growing regions.”

Yesterday, the USDA’s National Agricultural Statistics Service released its monthly Agricultural Prices report, which stated in part that: “The corn price, at $6.67 per bushel, is down 46 cents from last month but 33 cents above April 2012 [graph]…the soybean price, at $14.20 per bushel, decreased 40 cents from March but is 40 cents above April 2012 [graph]…and…the April price for all wheat, at $7.52 per bushel, is down 26 cents from March but 41 cents above April 2012 [graph].”

 

Biofuels

Ben Geman reported yesterday at The Hill’s Energy Blog that, “A bipartisan group of 14 farm-state senators is pressing the Obama administration to challenge new European duties on U.S. ethanol imports before the World Trade Organization.

“In a letter to U.S. trade officials, the lawmakers call the penalties announced in February ‘unprecedented’ and say that European officials failed to make the case that any specific producers or marketers are engaged in ‘dumping.’”

Katy Stech reported in today’s Wall Street Journal that, “The South Bend facility was the country’s first major ethanol plant when it opened in 1984, and now it could be the first to get dismantled after filing for bankruptcy. Several other small towns in the Midwest could face a similar scenario as the ethanol industry begins to emerge from one of the toughest markets in its three-decade history.

“The U.S. needs roughly 13 billion gallons of ethanol each year because most gasoline sold in the country is blended with 10% ethanol under a government mandate. But demand for gasoline has been weaker since 2008 as people chose to drive less in the recession and prolonged economic recovery, leading to an oversupply of the fuel. Last year’s Midwest drought, meanwhile, drove up the price of corn that plants need to brew ethanol.

“U.S. ethanol production fell in 2012 for the first time in 16 years, according to the Renewable Fuels Association [graph], forcing some ethanol plants to idle and take losses as they wait for the oversupply to ease.”

 

Regulations

AP writer Vicki Smith reported yesterday that, “The U.S. Environmental Protection Agency is still exerting a permit power that chicken growers contend it doesn’t have, so a federal judge said he won’t dismiss a lawsuit by a West Virginia farmer the agency had accused of polluting the Chesapeake Bay watershed.

“The EPA argued Lois Alt’s lawsuit was rendered moot in December, when it withdrew violation notices and proposed fines against her Eight is Enough farm in Hardy County. But Alt, the West Virginia Farm Bureau and the American Farm Bureau want their day in court, claiming the EPA’s actions in her case have implications for farmers throughout the region.

“U.S. District Judge John Preston Bailey agreed last week, denying EPA’s motion to dismiss. The agency had not yet filed a response as of Tuesday.”

Julian Hattem reported yesterday at The Hill’s RegWatch Blog that, “The federal environmental regulator has established limits for residues of the chemical weed-killer commercially known as Roundup on fruits and vegetables.

“The Environmental Protection Agency (EPA) is finalizing tolerances for residues of glyphosate, the active ingredient in Monsanto’s popular herbicide brand, on agricultural crops.

“The new rule, scheduled to be published in the Federal Register on Wednesday, establishes different limits for various crops including carrots, canola seeds and citrus fruits.”

And the House Ag Committee issued a news update yesterday titled, “Government Report Confirms Flawed ESA Science; Specific Answers Needed for Farmers, Forest Managers.”

In addition, Jamila Trindle reported in today’s Wall Street Journal that, “The head of the Commodity Futures Trading Commission said the false tweet that temporarily sent markets diving last week highlights the need for the agency to move forward on new oversight of high-speed traders.

“CFTC Chairman Gary Gensler, speaking Tuesday, said he hopes the commission can finish a draft policy paper in the next month or two that could help guide future regulation.”

And Eric Lipton reported in today’s New York Times that, “Wall Street bankers and some of the world’s top finance ministers are waging a bitter international campaign to block Washington financial regulators from extending their policing powers far beyond the nation’s shores.

“The effort — centered on oversight of the $700 trillion marketplace of the financial instruments known as derivatives — is just one front in the battle still being waged nearly three years after Congress passed the Dodd-Frank law, which revamped financial regulations in the United States in hopes of curtailing the risky trading practices blamed for the global financial crisis in 2008.”

 

Immigration

Seung Min Kim reported yesterday at Politico that, “Sen. Marco Rubio acknowledged Tuesday on a conservative radio talk show that the Gang of Eight’s comprehensive immigration reform bill won’t likely pass the Republican-led House.

“The comments from Rubio, perhaps the most influential congressional Republican on immigration, illustrate the challenges facing the prospects for reform after months of private negotiations by a bipartisan coalition of senators produced a wide-ranging, 844-page bill.”

Keith Good

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