FarmPolicy

May 24, 2019

Farm Bill; Food Safety; Ag Economy; and, Immigration

Farm Bill

Ryan Johnson reported yesterday at The Dickinson Press (N.D.) Online that, “The next five-year Farm Bill is progressing in the House, and representatives could vote on the legislation in the third week of June, Rep. Collin Peterson said Thursday.”

Mr. Johnson noted that, “But Peterson said there are serious questions over the opposition the House legislation will face, both from Republicans who want more spending cuts and Democrats who don’t support the bill’s $20.5 billion in cost savings to the Supplemental Nutrition Assistance Program over the next decade.

“‘We’re not out of the woods yet,’ he said.”

Ranking Member Peterson spoke yesterday at “a roundtable discussion he hosted with Rep. Kevin Cramer, R-N.D,” the article said.

The roundtable took place in Moorhead, Minn., a picture from the meeting is available here.

Yesterday’s article added that, “Peterson said he and [House Ag. Comm. Chairman Frank Lucas] will try to get a rule approved by the majority ahead of discussion to limit amendments and keep the House on track to vote on the bill.

“‘If we have an open rule, we’ll never get this bill done,’ he said. ‘We’ll have 500, 600 amendments probably, and it will take forever.’”

Mr. Johnson pointed out that, “Peterson said there are other concerns — including if they’ll get enough support to get this legislation passed this year. He said one lawmaker recently estimated there’s a maximum of 150 Republicans who will vote for it, meaning 70 or more Democrats in the House will have to vote for legislation that will change eligibility requirements for nutrition assistance.

“‘I’m worried about getting the vote at the end of the day,’ he said.”

In addition, The Dickinson Press article explained that, “Another potential roadblock, Peterson said, is a proposal to require conservation compliance as a condition of the crop insurance program — a major issue in North Dakota, Minnesota and some other Northern Plains states with wetlands.

“He said the Senate Agriculture Committee chairwoman, Sen. Debbie Stabenow, D-Mich., has told him that such a requirement will be in the Senate bill. Even though Peterson and Lucas oppose the plan, he said it likely will come up in a House amendment, and he said he’s not sure if they can keep it from ending up in the final Farm Bill after the two chambers pass their own legislation.”

A news release yesterday from House Budget Committee Ranking Member Chris Van Hollen (D., Md.) stated that, “On Tuesday, [Rep. Van Hollen] met with farmers and local businessmen from Frederick County to hear their concerns and suggestions about actions in Congress that affect local farmers and agricultural producers. On his day-long tour, Congressman Van Hollen visited three farms to learn more about their operations. He also discussed federal efforts to support the agriculture community, including reauthorization of the farm bill and immigration reform.”

The release added that, “The farmers offered feedback about proposed regulations, including the new Food and Drug Administration (FDA) food safety rules. The Congressman, who sent a letter in April to the FDA commissioner asking the agency not to impose undue burdens on small and family-owned farms during the implementation of the Food Safety Modernization Act, pledged to continue to work with the farmers and local businessmen on this and other important issues. To read a copy of the FDA letter, click here.”

 

Food Safety

An update yesterday at Sen. Ag. Comm. Ranking Member Thad Cochran’s Senate page included an article by Ellyn Ferguson titled, “FDA Warns Congress of Funding Shortfall for Food Safety.”

The item stated in part that, “The Food and Drug Administration is warning Congress that without additional funding, the agency will not meet its obligations under a food safety law that puts greater emphasis on prevention of foodborne illnesses.

“The red flag is contained in a report to Congress the agency made public this week. So far, lawmakers have provided about $100 million of the $583 million increase the Congressional Budget Office estimated the FDA needs through fiscal 2015 to fully implement the Food Safety Modernization Act (PL 111-353), according to the FDA report.”

The update noted that, “There are amendments pending to the Senate farm bill (S 954) that call for additional exemptions under the law, including for small farms and food processors. The amendments also seek to keep the agency from moving ahead with rules by withholding FDA funding needed to finalize the farm regulation or by requiring the agency to do more scientific and economic analysis of the regulations’ effect before making any rules final.”

 

Agricultural Economy

Emily Schettler reported this week at The Des Moines Register Online that, “Seemingly endless rain in the past week has made this one of the wettest springs in history for the metro area and state. The metro’s precipitation record could be broken with more rain forecast for the coming days, according to one meteorologist.

“The 13.62 inches of rain Des Moines has received in April and May have made it the fifth-wettest such period in history, according to meteorologist David Pearson of the National Weather Service.”

Reuters writer Sam Nelson reported yesterday that, “Additional rainfall from late Thursday into the weekend will further stall corn and soybean plantings in the U.S. Midwest, threatening to trim acreage and yield potential for each crop, an agricultural meteorologist said on Thursday.

“‘The rain will end in the western Corn Belt on Friday and in the eastern Corn Belt on Saturday,’ said Andy Karst, meteorologist for World Weather Inc. ‘It certainly won’t be ideal for planting.’

“Karst said nearly 100 percent of the Midwest would receive rain with the heaviest rainfall of 1.0 to 3.0 inches or more in Missouri, eastern Kansas, Iowa and Illinois.”

A University of Arkansas Extension update yesterday stated that, “After enjoying a bumper crop in 2012, Arkansas rice growers are bracing for a challenging harvest in 2013 because of an unusually cold, wet spring that has delayed the planting season.

“‘The record yields obtained in 2012 are not a realistic expectation for 2013,’ said Jarrod Hardke, extension rice agronomist with the University of Arkansas System Division of Agriculture.  ‘I am optimistic that we will accumulate a sufficient number of heat units to make good yields, but those hopes could be dashed by an early cool spell in the fall.’”

The update noted that, “Many growers are still deciding whether to plant their rice crops this year or switch instead to soybeans.”

Meanwhile, an update yesterday from the National Climatic Data Center (NOAA) stated that, “According to the May 28, 2013 U.S. Drought Monitor, moderate to exceptional drought covers 44.3% of the contiguous United States, decreasing from last week’s 46.1%.”

University of Illinois Agricultural Economists Bruce J. Sherrick and Gary D. Schnitkey indicated yesterday at the farmdoc daily blog (“Crop Insurance Program Losses in Perspective”) indicated that, “A recent post provided the magnitude of crop insurance losses related to the drought and other events of 2012 (available here), showing the concentrated losses in the heart of the corn belt, and corresponding closely to the areas experiencing the most severe drought conditions. The insert map shows results updated through present of the loss rates from 2012. Ensuing debates related to the Crop Insurance Title in the Farm Bill, and arguments by both supporters of crop insurance, and opponents alike have pointed to the experience and have used individual details to argue such things as: payments were too high to farmers; or, that more shallow loss coverage is needed; or, or that company losses were too great, or that rates are too high or too low; or, that subsidy was greater than needed to attract participation — the point is that a single year’s loss experience does not provide a very complete context to evaluate the performance of the program, and the extreme nature of the drought led to numerous extreme individual experiences. Furthermore, it is actually quite difficult to meaningfully aggregate across time due to the changing nature of coverage provided year to year, evolving product designs and customer shares, and the overall scale of the program that follows both price levels and participation rates through time.”

And, in news regarding trade issues, USDA released its Outlook for U.S. Agricultural Trade yesterday, which stated that, “Fiscal 2013 agricultural exports are forecast at a record $139.5 billion, down $2.5 billion from the February forecast and $3.7 billion above fiscal 2012 exports.”

“U.S. agricultural imports are forecast at a record $111 billion, $1.5 billion lower than the February forecast, but $7.6 billion higher than in fiscal 2012,” the report said.

Paulo Winterstein and Darcy Crowe reported in today’s Wall Street Journal that, “A decadelong commodity boom in Latin America that lifted millions out of poverty is showing signs of fatigue, as fading demand in China hits consumers and corporate earnings from Bogotá to Brasilia.

“The latest evidence of a regional slowdown came Wednesday, when Brazil said its economy grew just 1.9% in the first quarter compared with the year-earlier period, far below estimates for 2.4% growth.”

The Journal writers explained that, “China, a leading buyer of exports from the region, has slowed more than expected, and economists say the country’s double-digit growth is over. On Wednesday, the International Monetary Fund said China would likely grow 7.75% this year, below its previous estimate of 8%.”  (See related graphic from the article here).

In other developments involving China, a news update yesterday from Purdue University stated in part that, “The full impact on the U.S. pork industry of a merger between Smithfield Foods – the world’s largest pork producer – and Chinese firm Shuanghui are not yet known, Purdue Extension agricultural economist Chris Hurt says.

“If approved, the merger could provide new market opportunities for U.S. hog producers and also offer Shuanghui the opportunity to adopt Smithfield’s health, sanitation and environmental standards.

“‘The largest potential advantage for the U.S. pork industry is that Shuanghui is the largest processor and distributor of meat products in China,’ Hurt said. ‘China is the largest producer and consumer of pork. At this early stage it is unclear if this merger will result in more U.S. pork products being exported to China. However, this clearly opens the trade door for increased business to China, which already was the third-largest destination for U.S. pork in 2012.’”

The Purdue update added that, “Growing incomes and demand have resulted in a Chinese pork market with a 3 percent annual growth rate. The U.S. market, on the other hand, is stagnant, meaning Americans will consume the same amount of pork in 2013 as they did in 2005.”

Yesterday, at The New York Times Online, Steven M. Davidoff, a law professor at Ohio State University, also provided analysis of the possible Smithfield sale, “China’s Pork Deal May Hinge on the Risk for an Uproar.”

Also yesterday at The New York Times Online, Michael J. de la Merced provided an additional look at the deal, “A Mystery of Smithfield’s Big China Deal: What Continental Grain Will Do.”

In other trade news, an update yesterday from the U.S. Trade Representative’s Office stated in part that, “On May 29th and 30th, the Office of the United States Trade Representative (USTR), in conjunction with the Interagency Trade Policy Staff Committee (TPSC), chaired a public hearing on U.S. negotiating objectives for the proposed Transatlantic Trade and Investment Partnership (TTIP) agreement. A comprehensive TTIP agreement would augment the United States’ already extensive trade relationship with the European Union (EU), and would build a stronger economic partnership that would benefit businesses of all sizes and increase employment opportunities and growth on both sides of the Atlantic.”

The American Soybean Association (ASA) noted yesterday that, “Richard Wilkins, a soybean farmer from Greenwood, Del., and Executive Committee member of the [ASA], testified today before the Trade Policy Staff Committee of the [USTR] on agricultural and soybean-specific aspects of the proposed [TTIP] between the United States and the 27 member states of the [EU].

In his remarks, Wilkins highlighted the importance of the EU marketplace for American soy, but noted the sharp decline in soy exports to the EU as a result of certain EU policies, including the labeling of products containing biotechnology and discriminatory policies on biofuel feedstocks under the Renewable Energy Directive (RED).”

Yesterday on Bloomberg television, Peter Bishop, deputy CEO at London Chamber of Commerce & Industry and Fredrik Erixon, director at European Centre for International Policy, discussed “the politics behind food and agriculture in a U.S.-EU trade deal” (video replay here).

And a recent update from Farm Policy Facts indicated that, “A new comprehensive analysis of the recently released National Trade Estimates (NTE) and Sanitary and Phyto-Sanitary (SPS) reports show an international playing field sharply tilted against U.S. producers.

The analysis, authored by veteran trade advisor and former Assistant U.S. Trade Representative Don Phillips, details the many barriers and obstacles currently facing U.S. exporters (both tariff and non-tariff).”

Also yesterday, Andrew Johnson Jr. reported at The Wall Street Journal Online that, “U.S. wheat prices came under pressure Thursday after Japan banned some U.S. imports following the discovery of unapproved genetically modified wheat at a farm in Oregon.”

The National Association of Wheat Growers (NAWG) and U.S. Wheat Associates (USW) issued a news release yesterday on this issue that is available here, “USW and NAWG Statement on Japan Possibly Suspending Purchases of Soft White Wheat.”

Steven Mufson reported in today’s Washington Post that, “The report rattled U.S. wheat markets. In addition to Japan’s action, the European Union, which imports more than 1 million tons of U.S. wheat a year, said that it was following developments ‘to ensure E.U. zero-tolerance policy is implemented.’ It asked Monsanto to help detection efforts in Europe.”

The Post article noted that, “Monsanto said in a statement that it ended commercial development of the strain of wheat found in Oregon nine years ago. The company said that about 58 million acres of wheat is planted in the United States every year, and that while the Agriculture Department’s test results in Oregon ‘are unexpected, there is considerable reason to believe that the presence of the Roundup Ready [herbicide-resistant] trait in wheat, if determined to be valid, is very limited.’

But food safety groups drew the opposite conclusion. ‘This was not from a recent trial, which means it’s been sitting there in the environment,’ said Andrew Kimbrell, executive director of the Center for Food Safety, a nonprofit group. ‘It’s highly doubtful that it’s just on one farm. If it’s out there, it’s out there.’ The center’s science policy analyst, Bill Freese, added, ‘It’s been 12 years since this wheat was grown officially in Oregon. It doesn’t just disappear and magically appear 12 years later.’”

Meanwhile, Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “The Senate Finance Committee announced Thursday that it will hold a confirmation hearing for President Obama’s trade representative pick on June 6.

“Obama on May 2 nominated Mike Froman to head the Office of the U.S. Trade Representative, which is responsible for negotiating all trade agreements.”

 

Immigration

Bloomberg writer Jennifer Oldham reported earlier this week that, “As he surveyed a field of three-week-old sweet corn, Colorado farmer Bob Sakata told how a shortage of hands to pack the vegetable forced him to downsize his operations by 40 percent over the past decade.

“‘We were farming close to 4,000 acres and we cut it back to 2,400,’ said Sakata, 87, who has farmed in the state for 67 years. ‘It has a big economic impact on the community. We used to hire 400 people and last year it was 191.’”

Ms. Oldham explained that, “Sakata is among business leaders who took their concerns to U.S. Senator Michael Bennet, co-author of the first major overhaul of the nation’s immigration law in almost 30 years. Bennet said he incorporated their concerns in the bill.

“‘I think what we and they discovered along the way is that there are enough folks that want to fix this that if we put our mind to it, we could actually fix it,’ the 48-year-old Colorado Democrat said in an interview. ‘It was surprising to a lot of people that it was as big of an issue as it was.’

“The Senate plans to start work on the legislation, known as S744, the week of June 10. The Judiciary Committee approved the measure 13-5 on May 21.”

Keith Good

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