FarmPolicy

May 19, 2019

Farm Bill; Budget; Ag Economy; Wheat; Regulations; and, Immigration

Farm Bill

The Senate approved two amendments to the Farm Bill yesterday as Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) noted that (video replay), “I just want to thank colleagues for their diligence as we work through amendments on the Farm Bill.  Our goal is to complete this by the end of the week.”

With respect to the first Farm Bill amendment passed yesterday, Ramsey Cox reported at The Hill’s Floor Action Blog that, “The Senate approved a farm bill amendment that would require a study on risk management of growing alfalfa.

“On Monday, the Senate voted 72-18 for an amendment introduced by Sen. Jerry Moran (R-Kan.). His amendment requires the Federal Crop Insurance Corporation to carry out research and development regarding a crop insurance program for alfalfa. He said his amendment had no cost to taxpayers” [related video of Sen. Moran explaining the amendment just before the vote can be viewed here,  while more detailed remarks on the amendment can be seen in this news release yesterday from Sen. Moran’s office.]

Also yesterday, AP writer Mary Clare Jalonick reported that, “The Senate on Monday voted to make modest changes to the way international food aid is delivered, a much scaled-back version of an overhaul proposed by President Barack Obama earlier this year.

“Senators adopted an amendment by voice vote to a wide-ranging farm bill Monday that would slightly boost dollars to buy locally-grown food close to needy areas abroad. Currently, most food aid is grown in the United States and shipped to developing countries, an approach the Obama administration says is inefficient.

The Senate farm bill would allocate $40 million annually for a local purchase program – an increase from current dollars, but still a small portion of the $1.8 billion spent on food aid. The amendment sponsored by Republican Mike Johanns, of Nebraska, and Democrat Chris Coons, of Delaware, would boost that to $60 million annually.”

Earlier in the day yesterday, Chairwoman Stabenow discussed the Farm Bill and provided an overview of the importance of the legislation (video replay) and noted that, “We have had a good debate and a number of votes, and we’re close to finishing the Bill…[T]his Bill saves money by tightening the rules to prevent fraud and misuse in our nutrition programs.  Our nutrition programs are critical, critical and essential.  Just as crop insurance is there when a farmer has a disaster, food programs are there when a family has a disaster.”

An update yesterday at the Senate Democrats Online stated that, “The Senate will convene at 10:00am on Tuesday…[F]ollowing morning business, the Senate will resume consideration of S.954, the Farm bill.”

And Bloomberg writers Alan Bjerga and Jonathan D. Salant indicated in an article from earlier this week that, “Still, some attention is already turning toward the House, where farm legislation stalled last year. A bill has moved out of the agriculture committee and the debate in the full chamber may begin the week of June 17, said Representative Collin Peterson of Minnesota, the committee’s top Democrat. The floor battles will rage on terrain generally more hostile to subsidies, he said.”

 

Budget- Appropriations

As economic and budgetary developments lessen the likelihood for a comprehensive budget deal between the legislative and executive branches, Peter Nicholas, Janet Hook and Damian Paletta reported in yesterday’s Wall Street Journal that, “The House and Senate are on separate tracks to write spending bills, with members of both parties confronting the difficulty of absorbing another round of cuts under the automatic reductions known as the sequester. Under the sequester, overall spending for defense and discretionary programs is due to drop to $967 billion—down $17 billion from current levels.

“The Appropriations Committee in the GOP-led House has embraced that sequester spending ceiling, but it is keeping military and veterans programs at current levels. That means domestic programs would be cut even more deeply—to levels that even Republicans acknowledge would be too low to pass the House.”

The Journal writers explained that, “In the Senate, by contrast, the Appropriations Committee is defying the sequester-imposed limits and instead preparing to write bills totaling $1.058 trillion—the amount allocated in the Democrats’ budget resolution, which assumed the sequester would be replaced with a deficit-reduction deal of tax increases and entitlement-program cuts.

Amid fading hopes of a broad budget deal, Congress this summer and fall faces anew the question of whether or how federal agencies can live within the constraints of the automatic spending cuts—especially since fiscal 2014 will be just the second of 10 years in which the roughly $100-billion-a-year in cuts will be applied.

“In the absence of a broader budget agreement that would reconcile the different House and Senate spending plans, Congress is likely to resort once again to a stopgap spending bill to keep the government running for the short term.”

On Wednesday, the House Appropriations Subcommittee on Agriculture is scheduled to mark up the FY2014 Agriculture Appropriations Bill.

Meanwhile, Lori Montgomery reported in today’s Washington Post that, “The Obama administration on Monday threatened to veto any spending bills for the coming fiscal year unless Republicans and Democrats reach agreement on a broader budget plan that ‘supports our recovery and enables sufficient investments’ in White House priorities.

“The White House budget office issued the blanket veto threat late Monday in response to two spending bills headed to the floor of the House this week. One would fund veterans affairs and military construction, the other would fund the Department of Homeland Security.”

David Rogers reported yesterday at Politico that, “Could Republicans push President Barack Obama to the point where he feels he has to play shutdown politics when the new fiscal year begins Oct. 1?  Monday’s veto threats against the first two bills reported from the House Appropriations Committee hinted strongly that such a fight could be coming.”

And Paul Kane noted in a lengthy article in today’s Washington Post on the House GOP (“House Republicans broken into fighting factions”) that, “[T]he House has not approved ambitious legislation this year. Lawmakers have instead focused on trying to re-brand the party around kitchen-table issues — although even some of those bills have run into trouble. And the most momentous policy decisions, including an immigration overhaul and a fresh deadline for raising the federal debt limit, have no coherent strategy to consolidate Republicans, much less take on the Democrats.”

 

Agricultural Economy

An update yesterday at the National Weather Service Weather Forecast Office for Central Illinois, which included numerous graphs and data references, indicated that: “Spring 2013: One of the Wettest on Record.”

And Cheri Zagurski and Emily Garnett reported yesterday at DTN (link requires subscription) that, “Planting pace for corn and soybeans continued to slow for a second week in a row since a record was set, according to USDA’s weekly Crop Progress report. Scattered rains continued, mostly in areas that were already too soggy for planters to roll.

“For the week ended June 2, 91% of the nation’s corn crop was planted, compared to 86% last week and a 95% five-year average. This figure, of course, does not reveal much about how many acres will be drowned out.”

The DTN update noted that, “Soybeans are 57% planted, compared to 44% last week and a 74% five-year average.”

Progress has proceeded slowly in Iowa where “farmers were only able to plant an additional three percent of the corn crop,” which lead some observers to point to the possibility of “lower-than-expected yields.”

However, “even with the late start, there’s still a decent chance that farmers will deliver a bigger crop than last year, when drought hampered yields,” Des Moines Register writer Perry Beeman noted.

Andrew Johnson Jr. reported yesterday at The Wall Street Journal Online that, “There are 8.55 million acres of corn still unplanted as of Sunday, said Jerry Gidel, analyst with advisory firm Rice Dairy in Chicago. ‘The problem is over 50% of that unplanted acreage is in northern areas of Iowa, North Dakota, Minnesota and Wisconsin that are vulnerable to shorter growing seasons,’ Mr. Gidel said.”

Meanwhile, Reuters writer Sam Nelson reported yesterday that, “Occasional showers over the next 10 days will continue to slow corn and soybean plantings in the U.S., threatening to trim acreage and yields, an agricultural meteorologist said on Monday.”

And a separate Reuters article from yesterday reported that, “Morgan Stanley forecast 2013 U.S. corn plantings at 93.5 million acres, nearly 4 percent below the U.S. Agriculture Department’s forecast of 97.3 million, as wet weather has slowed fieldwork, the firm said in a research note on Monday.

“The firm projected U.S. corn production for 2013/14 at 13.3 billion bushels, down 6 percent from USDA’s forecast of 14.14 billion.”

Also yesterday, Bloomberg writer Jeff Wilson reported that, “Rising global production of wheat, soybeans and corn will decrease the U.S. share of world agriculture trade and may reduce the value of farmland, according to a study by Ohio State University.

“‘A declining competitive advantage for U.S. crops will ultimately reduce the relative advantage of U.S. farmland and thus the price it can command,’ Carl Zulauf and Nick Rettig, economists at Ohio State, said in a report May 31. Revenue per acre may drop amid falling prices and because of ‘relative yield declines. In short, the U.S. crop sector may be as vulnerable as it was in the late 1970s.’”

The Bloomberg article added that, “From 2007 to 2011, U.S. farmers produced 8.9 percent of the global wheat crop, 35 percent of soybeans and 38 percent of corn. That’s down from 13 percent, 72 percent and 44 percent respectively from 1968 to 1972.”

More specifically with respect to China, Sun Ling Wang and Fred Gale indicated yesterday at Amber Waves Online (USDA- Economic Research Service) that, “China’s agricultural productivity grew rapidly following the implementation of a series of economic reforms since 1978. Reforms led to more efficient resource allocation. China also began to disseminate new technologies (including improved seed varieties and animal breeds) and encourage mechanization. These ‘agricultural modernization’ efforts laid a broad foundation for improved agricultural productivity. But evidence suggests that this growth may not continue into the future. With about 20 percent of the world’s population, 6.5 percent of its land area, and rising living standards, China’s ability to improve farm productivity will have a direct bearing on global food markets. China is already the leading importer of soybeans and cotton and has recently emerged as an importer of other major commodities, including corn, pork, wheat, and rice. A slowdown in productivity growth could bring further demand for imports.”

In a closer look at some aspects of the livestock sector, Purdue University Agricultural Economist Chris Hurt indicated yesterday at the farmdoc daily blog (“Hog Profits Return but Delayed Planting Keeps Producers Wary”) that, “Hog production has returned to profitability as hog prices rallied from the mid-$50s per live hundredweight in March to the low $70s today. Moderation in feed prices after the USDA’s March Grain Stocks report was released in late March also helped reduce costs of production with second quarter costs averaging about $67 per live hundredweight compared to an estimated $70 in the first quarter. Delayed planting that is raising concerns about fewer planted acres and reduced yields has most recently sent corn and meal prices trending to the upside, raising concerns that hog production costs will not drop as much as some had anticipated.”

 

GMO Wheat Issues

Ian Berry and Sameer C. Mohindru reported yesterday at The Wall Street Journal Online that, “Japan said on Monday it would hold back shipments of some wheat imports as Monsanto Co. continued an investigation into an unapproved genetically modified wheat strain at an Oregon farm.”

The Journal article added that, “A Japanese government official said Monday that Japan would keep Western White wheat that arrives in its ports in government custody.

“Japan has no way to test the wheat for the genetically modified trait and has asked the U.S. to develop a test, the official said.”

An update posted yesterday at Monsanto Online indicated that, “Monsanto has provided a validated testing method for the original Roundup Ready wheat trait to the USDA, and, more recently, to government regulators in Japan, Korea, Taiwan and the European Union, as requested. The method will provide these governments with the opportunity to precisely and accurately test for the original Roundup Ready wheat trait and distinguish it from traits that are already approved and widely used in other crops.”

Meanwhile, Reuters writers Charles Abbott and Jane Chung reported yesterday that, “The United States has expanded its search team in Oregon as it hunts for the source of unapproved genetically modified wheat found growing wild on a farm there in April.”

And in other GMO related news, Stephanie Strom reported in today’s New York Times that, “Connecticut on Monday became the first state to pass a bill that would require food manufacturers to label products that contain genetically modified ingredients — but only after other conditions are met.

“Gov. Dannel P. Malloy has said he would sign the bill into law, after reaching an agreement with the legislature to include a provision that the law would not take effect unless four other states, at least one of which shares a border with Connecticut, passed similar regulations.”

 

Regulations

Julian Hattem reported yesterday at The Hill’s RegWatch Blog that, “The U.S. Department of Agriculture (USDA) is removing a regulatory procedure that it claims delayed benefits for rural communities.

“The department on Monday announced that it was seeking to remove a requirement to provide public notice and periods for comment for new rules on property, loans, grants, benefits and contracts.”

A news release yesterday from Sen. John Boozman (R., Ark.) indicated that he had offered an amendment to the Farm Bill regarding regulations, “Boozman Amendment #1098: This Amendment would empower the Secretary of Agriculture to determine whether a major regulation proposed by any federal agency could have any negative impact on access to affordable food.  If such a determination is made, Congressional review of the regulation would be required before implementation.”

 

Immigration- Dairy Variable

Reuters writer Richard Cowan reported yesterday that, “The carefully constructed Senate strategy [on immigration legislation] banks on trying to win over Republican senators representing states scattered throughout the country and where the $35 billion U.S. dairy farm industry contributes heavily to local economies…[F]or example, Wisconsin, Idaho, and Pennsylvania are among the top five dairy-producing states and together there are four Republican senators representing them.

“‘It is a way of giving something to those who may see parts of the bill as undesirable and let them say, ‘At least I’m going to be helping the agriculture industry in my state,’’ said former Republican Senator Mel Martinez of Florida, who was a player in a failed, 2007 attempt at passing an immigration bill.”

Also, Meredith Shiner reported yesterday at Roll Call Online that, “Senators have demanded an open process on the pending immigration bill from day one, and they’re getting it, with the next hurdle coming as soon as next week as the bill heads to the floor.

Though no final decisions have been made by Democratic leaders on how to proceed, sources expect an open amendment process. The substantive conversation on floor strategy is expected to begin Monday evening, at the Democrats’ first leadership meeting in the Capitol after the Memorial Day recess. Senate Minority Leader Mitch McConnell, R-Ky., has said he would not support a filibuster blocking the bill from being brought to the floor.”

Ms. Shiner noted that, “The more amendments leaders allow, the more politically toxic votes could be held for either side. But shutting off debate too soon would open up [Sen. Leader Harry Reid] to charges that he is short-circuiting the process.”

Keith Good

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