FarmPolicy

May 24, 2019

Farm Bill; Approps; Ag Econ; Wheat; Sec. Vilsack; Smithfield; Biofuels

Farm Bill- Senate

A recent update at the Senate Democrats Online indicated that today, starting at 10:00 a.m., there will be three roll call votes on the Senate floor.  The first vote will be on a motion to invoke cloture on S.954, the Farm bill.

Over 100 agricultural related groups signed a letter to Senators yesterday, which stated in part that, “The undersigned organizations are writing to strongly urge you to vote for cloture tomorrow on the consideration of S. 954, the Agriculture Reform, Food, and Jobs Act of 2013.”

David Rogers reported yesterday at Politico that, “The Senate’s farm bill cloture vote Thursday morning poses a critical test for the Agriculture Committee leadership, which needs a strong showing to clear the way for passage Monday and begin to heal the breach sparked by revisions in the commodity title.”

The article noted that, “Impatient to move onto immigration reform, Majority Leader Harry Reid (D-Nev.) needs to have the decks cleared by early next week, and any Senate stall on the farm bill will be felt across the Capitol.

“All signs there still indicate that the week of June 17 is being set aside for what promises to be a stormy floor debate. House Speaker John Boehner (R-Ohio) is becoming more engaged — pursuing his own campaign against a new dairy program. And House Agriculture Committee Chairman Frank Lucas (R-Okla.) appeared encouraged after a meeting with his conference Tuesday morning.”

Mr. Rogers explained that, “But going forward, the most enduring challenge for [Sen. Ag. Comm. Chairwoman Debbie Stabenow] may be the regional and ideological divide, which cost her precious Southern votes last June and now, could mean the loss of well-placed allies from the Midwest.

“Stabenow’s former partner, Sen. Pat Roberts (R-Kan.), appears to be off the reservation. More important are Sens. John Thune (R-S.D.), chairman of the Republican Conference, and Mike Johanns (R-Neb.), who was Agriculture Secretary under President George W. Bush.

“Behind this split is a decade of change in which net farm income in the Midwest had increased much faster than the national average while income for the Southeast and Southern Plains has trailed behind — or even declined.”

Meanwhile, in a colloquy with Chairwoman Stabenow on the Senate floor Tuesday, Sen. Jeff Merkley (D., Ore.) discussed the “Monsanto Protection Act,” which he noted “refers to a policy rider the House slipped into the recently passed continuing resolution and sent over to the Senate.”

During the floor discussion, Chairwoman Stabenow stated that, “I wish to assure my friend that I think it would be inappropriate for that language to be adopted in a conference committee or otherwise adopted in a manner designed to bypass open debate in the relevant committees and this Chamber.”

Sen. Merkley noted that, “I deeply appreciate the commitment of my colleague to ensure that the Monsanto Protection Act is not tucked into subsequent legislation in a manner that bypasses full committee examination and Senate debate.”

 

Farm Bill- House

A news release yesterday from Rep. Mike Thompson (D., Calif.) stated that, “U.S. Reps. [Thompson] and Jeff Fortenberry (R-NE-1) today introduced H.R. 2260, The Crop Insurance Accountability Act of 2013. The bipartisan legislation enhances conservation by incentivizing responsible farming practices. Under this legislation, in order for farmers to qualify for taxpayer subsidies of crop insurance, they must meet basic conservation requirements that minimize the impact to some of our most sensitive areas such as highly erodible lands and wetlands.”

Meanwhile, yesterday afternoon the House Judiciary Committee held a brief markup of the 2012 Farm Bill, where one amendment was considered and passed by a voice vote.

A news release yesterday from Committee Chairman Bob Goodlatte (R., Va.) noted in part that, “[Chairman Goodlatte] introduced an amendment that would ensure regulations imposed under the FARRM Act are subject to promulgation under the Administrative Procedure Act and the Congressional Review Act, which falls under the jurisdiction of the House Judiciary Committee.  The version of the bill reported by the House Agriculture Committee last month waived this requirement. Congressman Goodlatte’s amendment passed the House Judiciary Committee by voice vote with bipartisan support.”

An unofficial FarmPolicy.com transcript of a large portion of yesterday’s hearing is available here.

During yesterday’s markup, Rep. Suzan DelBene (D., Wash.), who also serves on the Agriculture Committee and opposed the amendment, indicated that, “One of the things in this amendment includes studies on the impact of the dairy stabilization program. If we’re going to do studies on things, then let’s do studies also on food nutrition programs. There’s nothing unique to dairy in this particular case, and that seems to be singled out in this amendment. And frankly, that’s not—this isn’t appropriate use of this amendment.”

Chairman Goodlatte noted that, “I just want to assure her that we do not take out the dairy stabilization program. In fact, we simply allow more public comment input by using the Administrative Procedure Act, which is the standard process for examining any new program, as well as the Congressional Review Act.

“So all we’re asking is that when this program, if it is still in the farm bill when the farm bill finally passes the House and the Senate, and they work out their differences, and pass a conference report and send it to the President, that when the department gets the new programs—and not just dairy. We haven’t singled out dairy, because new conservation programs in here and others are required to go through the Administrative Procedure Act.

Now, a part of that process is to request that the agency do studies, but those studies do not dictate finding any outcome. The outcome might well be that this program will do great things, will reduce prices or will stabilize prices or do other things. It simply says that they should be studied so that as the rule-making process is done it can be done in a fair way with consumers, consumer groups, agricultural groups, dairy processors and others have the opportunity to be heard on the issue. But it does not in any way impair what occurred in the Agriculture Committee in terms of having the dairy stabilization program in the farm bill. We don’t have jurisdiction over that and we’re not attempting to exercise jurisdiction beyond what this committee has jurisdiction for.”

A news release yesterday from the International Dairy Foods Association noted in part that, “The action of the Judiciary Committee reflects growing opposition to a new program that artificially increases milk prices, which is included in the Dairy Security Act. Called the Dairy Market Stabilization Program, the proposal will limit milk supplies by periodically requiring food manufacturers to withhold payments from dairy farmers and to remit the revenues to the USDA.”

 

Farm Bill- Executive Branch

Leslie Reed reported yesterday at the Omaha World-Herald Online that, “A top USDA official defended the federal crop insurance program and food stamp expenditures Wednesday…[S]ome critics say the U.S. should reduce taxpayer subsidies of crop insurance premiums and cap benefits, particularly in light of recent record-high farm revenue.”

The article noted that, “Acting Deputy Secretary Michael Scuse spoke with reporters at the conclusion of two days of meetings with Nebraska agricultural producers. He said the crop insurance claims resulting from last year’s drought proved the worth of the federal program.”

An update yesterday at Brownfield included an audio replay of an interview with Julie Harker and Dep. Sec. Scuse, this interview can be heard here.

Also, DTN writer Todd Neeley penned a detailed article that also covered the visit to Nebraska by Dep. Sec. Scuse and partially focused on prevented planted issues: “Scuse said while there may be many farmers who elect not to plant a corn crop because of the prevented planting provision, the program is working as designed.

“‘Prevented planting is working better,’ he said.”

The DTN article added that, “Though the crop insurance system has faced much scrutiny following the 2012 drought, Scuse said the program is doing what it was designed to do.

“‘I think that proved to everyone that the crop insurance program is a great program,’ he said.”

For additional information on prevented planting, see this recent update from Michigan State University Extension.

 

Appropriations- Agriculture

Yesterday, the House Appropriations Agriculture Subcommittee, on a voice vote, passed its FY14 Appropriations Bill to the Full Committee.

Committee Chairman Hal Rogers (R., Ky.) pointed out at the Subcommittee markup that, “This bill is also representative of the stark reality with which our committee is confronted: while we continue to cut discretionary spending in this committee, mandatory spending continues to rise. Some of you may have heard me say this before – mandatory spending, which constitutes 64% of our whole budget and 86% of this bill, cannot continue to grow unchecked. Despite our efforts to control discretionary spending in this bill by making difficult but thoughtful cuts totaling $1.3 billion, the mandatory portion of this bill, which this committee has no power to control, increases by $1.1 billion.”

Reps. Rosa DeLauro (D., Conn.) (audio – MP3- 3:00) and Sam Farr (D., Calif.) (audio– MP3- 3:30) lamented cuts to nutrition programs, the Commodity Futures Trading Commission and international food aid programs yesterday.  And Committee Ranking Member, Nita Lowey (D., N.Y.) expressed frustration over cuts to the Food and Drug Administration to implement food safety modernizations (audio (MP3- 1:30).

Subcommittee Chairman Robert Aderholt (R., Ala.) noted that, “The bill ensures that the Department of Agriculture, the Food and Drug Administration, and the Commodity Futures Trading Commission have adequate resources to complete their missions successfully and demonstrates our commitment to good stewardship of taxpayers’ limited dollars.”

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “A House Appropriations subcommittee on Wednesday approved a 2014 spending bill that prevents the Commodity Futures Trading Commission (CFTC) from implementing President Obama’s financial reform law… [T]he measure would cut $10 million from the agency’s 2013 budget level instead of giving it a $120 million boost that Obama wanted to implement the Dodd-Frank law.”

 

Agricultural Economy- Immigration, Trade

Yesterday, the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions. Commonly referred to as the “Beige Book,” the report included several district observations with respect to the U.S. agricultural economy– a summary of these sections of the report have been posted at FarmPolicy.com Online.

Leslie Hook and Emiko Terazono reported today at The Financial Times Online that, “China is set to become more dependent on imported grains, oilseeds and meat during the next 10 years, a development that is likely to support prices and fuel further dealmaking in the global agribusiness industry.

“The Food and Agriculture Organization and the OECD on Thursday painted a bullish view for Chinese food demand in their closely watched annual agricultural outlook. The report for the first time devotes a full chapter to China.

The country’s imports of coarse grains, used mostly for fattening herds, are expected to double by 2022. Imports of soyabeans will grow 40 per cent, while meat imports are set to soar – beef imports nearly doubling.”

For additional current analysis on the U.S. corn and soybean markets, see this brief interview from yesterday with University of Illinois Agricultural Economist Darrel Good.

Meanwhile, The Wall Street Journal editorial board indicated today (“The Farm Worker Shortage”) that, “The Senate begins floor debate on immigration reform next week, and our hope is that it can improve the Gang of Eight bill that emerged from the Judiciary Committee with the U.S. economy foremost in mind. One place to start is ending America’s farm-worker shortage… [I]n 2010, farmers reported more than $320 million in losses because they didn’t get the workers they needed. Illegal workers fill most of the gap, but increasingly the bigger companies are moving production to Latin America. Growers estimate that 80,000 acres of fruit and vegetable production have moved out of California alone because of the labor shortage.”

With respect to trade related issues, Richard McGregor and James Politi reported yesterday at The Financial Times Online that, “Some Republicans will use the confirmation hearing of Michael Froman, Barack Obama’s pick to be the next US Trade Representative, on Thursday to try to embarrass the White House over taxes.

“Mr Froman’s records reviewed by the Senate Finance committee show he had nearly $500,000 in a Citigroup fund based in the Cayman Islands, a location used as a symbol of tax avoidance by the Obama campaign in attacks on Republican candidate Mitt Romney in last year’s election.

“The tax issue is unlikely to derail Mr Froman’s nomination, ensuring any controversy will be eclipsed quickly by much weightier policy problems, over how to negotiate two large trade deals with Europe and Asia.”

Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “Sens. Rob Portman (Ohio) and Roy Blunt (Mo.) said they will push Mike Froman’s nomination in the Senate while urging the White House to get to work on fast-track authority, during the Emergency Committee for American Trade (ECAT) annual meeting in Washington.”

Meanwhile, a news release yesterday from Chairwoman Debbie Stabenow indicated that, “[Stabenow], along with a bipartisan group of her colleagues, today unveiled new legislation that will crack down on currency manipulation by Japan, China, and other nations. Currency manipulation costs millions of U.S. jobs and drives up the U.S. trade deficit. The Currency Exchange Rate Oversight Reform Act of 2013 counters the economic harm to American manufacturers and workers caused by currency manipulation, and creates consequences for countries that break international laws against currency manipulation.”

 

GMO Wheat Issues

Ian Berry reported yesterday at The Wall Street Journal Online that, “Monsanto Co. said it is considering sabotage as a possible cause of the finding of unapproved genetically modified wheat in an Oregon field and that its testing reaffirms the incident is isolated.

“The presence of genetically modified wheat in the eastern Oregon field, announced last week by the USDA, is likely due to the ‘accidental or purposeful mixing of seed’ that was planted in the field, said Robb Fraley, Monsanto’s chief technology officer. Mr. Fraley wouldn’t rule out the possibility of sabotage in a conference call with reporters.”

The Journal article noted that, “Monsanto executives said Wednesday that the company has what it considers to be the only reliable test to detect the gene in question, which enables a crop to survive applications of the herbicide glyphosate. The company warned that other tests could result in false positives.”

Veteran agricultural reporter Jerry Hagstrom tweeted yesterday that, “Ag Secretary Vilsack told me USDA will use independent test, not Monsanto, to reassure wheat importers of no gmo wheat in their purchases”

Bloomberg writers Mark Drajem and Jack Kaskey indicated yesterday that, “Scientists say they are befuddled about how this wheat could have gotten into the field after so many years.”

The Monsanto conference call replay and related slides on this issue was posted yesterday at the company’s webpage.

 

Sec. Vilsack Speech on Climate

Zack Colman reported yesterday at The Hill’s Energy Blog that, “Agriculture Secretary Tom Vilsack said Wednesday that climate change is ‘new and different than anything we’ve ever tackled’ in the farming industry… ‘So the fact is, across America, farmers and ranchers and forest landowners are seeing the beginning chapter of what will be a long-term challenge posed by a changing climate. This problem is not going to go away on its own. That’s why America must take steps now to adapt,’ Vilsack said at a Washington, D.C., event hosted by the National Press Club” [text of prepared comments here].

The Hill update added that, “Vilsack said the Agriculture Department (USDA) has taken several steps to mitigate the effects of climate change.

“He noted USDA has doubled down on climate-related research, including developing more drought-resistant seed technologies. It also is promoting cover-cropping and multi-cropping, which help curtail soil erosion and conserve water.”

Meanwhile, Jennifer Jacobs reported yesterday at The Des Moines Register Online that, “Democrat Tom Vilsack considered making a comeback as Iowa governor, but said today he has decided against challenging the likely GOP foe, Terry Branstad.”

 

Smithfield Issues

Michael J. de la Merced reported yesterday at The New York Times Online that, “Another prominent lawmaker is publicly urging regulators to carefully review Smithfield Foods‘ planned $4.7 billion sale to Shuanghui International, one of China’s biggest meat producers.

“Senator Debbie Stabenow, Democrat of Michigan and the chairwoman of the Senate Agriculture Committee, said on Wednesday that she still had concerns about any potential effect that the deal might have on food safety in the United States. Like other critics, she pointed to possible lapses in food quality, citing incidents of Chinese companies that illegally added chemicals like clenbuterol to their meat and the images of thousands of dead hogs floating down the Huangpu River in Shanghai.”

The Times article added that, “In an e-mailed statement, a spokeswoman for Smithfield reiterated that the deal will benefit American hog farmers and that the company will not import Chinese pork products.”

 

Biofuels

Reuters writer Ayesha Rascoe reported yesterday that, “The Environmental Protection Agency plans to announce targets for U.S. ethanol use in 2013 and 2014 this summer, an EPA official told lawmakers on Wednesday, even as critics of the program warned of a brewing fuel crisis.

The United States is nearing the point where the law will require use of more ethanol than can be physically blended into the fuel supply at the most prevalent level of 10 percent ethanol per gallon.”

The article noted that, “[Christopher Grundler, the EPA’s director of the office of transportation and air quality] said EPA, which has the authority to lower ethanol use targets or waive them completely, will determine the best way to address the issue of the so-called ‘blend wall’ and will release the targets by the end of summer.”

And Julian Hattem reported yesterday at The Hill’s RegWatch Blog that, “Republican members of Congress took aim at an environmental regulation requiring that gasoline be mixed with biofuel, claiming it kills jobs and is hurting American families.”

A news release yesterday from Sen. Jim Inhofe (R., Okla.) indicated that, “[Inhofe], senior member of the Environment and Public Works (EPW) Committee, today made the following statement on his amendment number 961 to the Senate farm bill (S. 954) that would allow states to opt-out of the Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS).

“‘I applaud Chairman Lankford for highlighting the many problems that are inherent with the RFS during today’s House Oversight and Government Reform Committee hearing,’ said Inhofe. ‘The RFS has major problems and is in dire need of repeal.’”

In a related item, University of Illinois Agricultural Economists Scott Irwin and Darrel Good provided an interesting analysis yesterday on some associated biofuels issues at the farmdoc daily blog- see “What Price of Corn is Required to Make E85 Competitive?

Keith Good

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