FarmPolicy

August 22, 2014

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

Farm Bill

On the House Floor Friday, Majority Leader Eric Cantor (R., Va.) and Minority Whip Steny Hoyer (D., Md.) discussed the upcoming floor schedule and the Farm Bill (video replay and transcript available here).

Rep. Cantor stated that, “Chairman Frank Lucas and the members of the Agriculture Committee have worked very hard to produce a 5-year farm bill with strong reforms, and I look forward to a full debate on the floor.”

Seemingly less confident that the measure will reach a vote on the floor, Rep. Hoyer indicated that, “If I can ask him [Cantor] a question initially about the farm bill, which has obviously been very controversial in the past, still remains controversial in many ways, and I’m wondering, in light of the fact that the Senate passed a farm bill in a pretty bipartisan way, 66–27, with 18 Republicans voting in favor, but I know the Speaker has observed the divisions within the Republican Conference, and obviously there are some divisions within our caucus as well, and I’m wondering whether or not in fact the gentleman is confident that we will get to completion and a vote on the farm bill next week.”

Rep. Cantor replied: “I would respond by saying that it’s certainly our intention to complete deliberation on the farm bill. The Speaker has continued to commit himself and our conference to an open process for this House, and I look forward to a robust debate on what, as the gentleman knows, has been a bipartisan effort at the committee.”

Regarding the controversial SNAP cuts, Rep. Hoyer noted that, “As the gentleman knows, on our side of the aisle, there is very significant concern about the status of the Supplemental Nutrition Assistance Program, and I would hope that as a rule is considered on that bill, I don’t know whether the gentleman knows at this point in time, that we would have an opportunity to have a significant number of amendments on that bill to reflect the House working its will, as the Speaker has so often observed, and I yield to my friend for whatever information he may have.”

And in reply, Rep. Cantor pointed out that: “I would respond by saying that I do think there is a commitment to genuine and robust debate on all sides. And hopefully, without speaking to details because, as the gentleman knows, the Rules Committee has not met, that would include all subject matter in the bill.”

Before moving on to other issues, Rep. Hoyer indicated that, “I thank the gentleman for that and look forward to that because I know on both sides of the aisle, this is a bill that has strong feelings among different perspectives on this bill and with respect to different subjects.”

The House Leader’s Weekly Schedule includes the Farm Bill: “H.R. 1947 -­‐ Federal Agriculture Reform and Risk Management Act of 2013 (Subject to a Rule) (Sponsored by Rep. Frank Lucas / Agriculture Committee).”

And the Rules Committee has scheduled a meeting regarding the Farm Bill on Monday, June 17, 2013 at 5:00 PM.

Additional information on the Farm Bill can be found at this Rules Committee webpage.

Pete Kasperowicz and Erik Wasson reported on Friday at The Hill’s Floor Action Blog that, “A well-placed source said the [Farm] bill’s sponsors were within 10 votes of the 218 needed.”

More optimistically, Chris Day reported on Saturday at the Stillwater NewsPress Online that, “The U.S. House will approve a farm bill this year, Rep. Frank Lucas said Saturday.

“The bill will be debated on the House floor Wednesday and Thursday and will pass after 30 to 60 amendments are considered, he said.

“‘It’s farm bill, farm bill, farm bill for me these days,’ said Lucas, R-Okla., at a Congressional question and answer session with journalists from around the state at the Oklahoma Press Association’s annual conference.”

Christopher Doering reported in yesterday’s Des Moines Register that, “Farm groups and GOP lawmakers noted that even though Boehner’s support for the legislation helped win the backing from a handful of key Republicans, it still will be a fight to get it through the House.”

The Register article stated that, “Iowa Sen. Chuck Grassley said the House needs to pass a farm bill this month so lawmakers in both the House and Senate can have time in July to merge their bills into one final measure they will vote on. Congress leaves for summer recess in early August and does not return to Washington until after Labor Day.

“‘It’s touch and go’ as to whether the farm bill makes it out of the House, Grassley, a Republican, recently told reporters.”

In an article yesterday at The Hill Online, Molly K. Hooper noted that, “Boehner has already committed to moving a five-year farm measure, which is set for a vote on the floor this week. But there are sure to be dozens of GOP defections.”

Also, AP writer Mary Clare Jalonick reported today that, “Approval of a massive farm bill — and the cost of a gallon of milk — could hinge on a proposed new dairy program the House is expected to vote on this week.

“An overhaul of dairy policy and a new insurance program for dairy farmers included in the farm bill have passionately divided farm-state lawmakers. Most importantly, it has caused a rift between House Speaker John Boehner, R-Ohio, and the top Democrat on the House Agriculture Committee, Rep. Collin Peterson of Minnesota.”

The AP article noted that, “The proposed dairy program would do away with current price supports and allow farmers to purchase a new kind of insurance that pays out when the gap between the price they receive for milk and their feed costs narrows. The program is voluntary, but farmers who participate also would have to sign up for a so-called market stabilization program that could dictate production cuts when oversupply drives down prices.”

Ms. Jalonick added that, “Peterson wrote the proposed dairy policy, which Boehner last year compared to communism. Boehner is backing an amendment by the chairman of the House Judiciary Committee, Virginia Republican Robert Goodlatte, which would scale it back.

“‘I’m caught between two raging bulls in a pasture,’ Lucas joked as he lobbied colleagues to vote for his farm bill last week.”

Lucas says he has extracted promises from both men that they won’t turn on the bill if they lose the vote,” the article said.

And David Rogers reported yesterday at Politico that, “The House opens debate Tuesday on a new five-year farm bill with Republicans encouraged by their vote count but faced with continued infighting among commodity groups over the shape of future subsidies.

To the surprise of many, the powerful corn and soybean lobbies are backing a Midwest floor challenge to the new price-loss program crafted by the House Agriculture Committee, which is already struggling to win what’s expected to be a close vote on final passage.”

The Politico article stated that, “Floor amendments must be filed by Monday afternoon with the House Rules Committee, which will meet Monday and Tuesday to deal with the giant 629-page bill. Monday’s meeting is to lay the groundwork for general debate the next day. Tuesday will dictate the amendment process and what promises to be a series of knockdown fights Wednesday and Thursday.

“Rep. Collin Peterson (D-Minn.), who will manage the bill with Lucas, sounded upbeat Saturday. ‘In the end, I think we will be fine,’ he told POLITICO. But if the farm bill collapses, it’s very unlikely that Congress will again approve a broad extension of current law as it did last winter.

Crop insurance and nutrition programs would survive because of separate authorizations. But there’s broad consensus that commodity programs could be lost given the appetite for spending reductions.”

Meanwhile, writing yesterday at the DTN Ag Policy Blog, Chris Clayton took a closer look at the issue of separating the nutrition title from the Farm Bill, “Splitting Farm Bill Programs Not a Policy Panacea.”

In a related item, Gale Holland reported late last week at the Los Angeles Times Online that, “More children are at risk of going hungry in Los Angeles County than in any other county in the nation, according to a report released this week.

“Using 2011 survey and statistical data from the U.S. Census and U.S. Department of Agriculture, Feeding America, a national network of food banks, found that 650,000 children in Los Angeles County are ‘food insecure.’

“The finding does not necessarily mean the children here are chronically hungry.”

With respect to executive branch perspective, Chris Hoff reported on Friday at the Lubbock Avalanche-Journal Online that, “But the new farm bill is about more than farms for [Sec. of Ag. Tom Vilsack]. He began a town hall meeting at Texas Tech on Friday, June 14, by explaining the Federal Agriculture Reform and Risk Management Act was really a food, farm and jobs bill.

“‘It is important for the country to realize,’ Vilsack said, ‘this bill has something for everyone.’”

The article noted that, “One problem related to soil loss has been the way crop insurance companies handle the growth and development of cover crops. Under current regulations, cover crops that protect the soil are discouraged.”

In other developments, an editorial posted yesterday at the Northeast Mississippi Daily Journal (Tupelo) Online stated that, “In Mississippi, about 20 percent of residents receive some kind of nutrition assistance. In the 1st Congressional District, USDA figures show 35,263 of 289,000 total households receiving nutrition help, SNAP households in the 1st District have a median household income of $13,328 compared to $43,294 for non-SNAP households: $847.5 million in fiscal year 2010, to a monthly average of 575,674 people in Mississippi.

“USDA also calculates the economic multiplier at $9 in local activity for every $5 in SNAP investment in Mississippi, which means the loss of significant SNAP outlays in the state would have some negative effect on the general economy.”

The opinion item added that, “[Ag. Comm. Ranking Member Thad Cochran (R., Miss.)], of course, voted for the 2013 Senate bill, as did Sen. Roger Wicker, R-Miss.

An outcome more like the Senate’s spending rule in the farm bill of 2013 would be to many Mississippians’ nutritional advantage.”

The editorial board at the Quad-City Times (Davenport, Iowa) Online stated on Saturday (“Farm bill gives House GOP a chance to govern”)  that, “Now it’s up to Boehner and his Republican majority to prove if they’re capable of governance. Thirty-six times, he chose to allow useless floor votes to posture against Obamacare. This summer, he needs to show he leads a majority capable of much more.”

 

Agricultural Economy- Smithfield- Trade

The U.N. Food and Agriculture Organization (FAO) indicated on Saturday that, “FAO Director-General José Graziano da Silva formally recognized 38 countries for reducing hunger by half well ahead of international targets for the year 2015.

“During a high-level ceremony attended by several heads of state, 18 countries received diplomas for early achievement of targets set by both Millennium Development Goal 1 (MDG1) — to halve the proportion of hungry people by 2015 — plus the more stringent World Food Summit (WFS) goal of halving the absolute number of hungry people by 2015.

“They are: Armenia, Azerbaijan, Cuba, Djibouti, Georgia, Ghana, Guyana, Kuwait, Kyrgyzstan, Nicaragua, Peru, Saint Vincent and the Grenadines, Samoa, Sao Tome and Principe, Thailand, Turkmenistan, Venezuela and Viet Nam.”

Jeffrey Sparshott reported on Friday at the Real Time Economics Blog (Wall Street Journal) that, “Prices that U.S. companies pay for fresh eggs took flight last month, buoyed by an avian flu outbreak in Mexico.

The producer price index for fresh eggs soared almost 42%, the biggest gain on record, driving broader inflation for food products, the Labor Department said Friday.

“A leading reason for the crack up: U.S. farmers are exporting more eggs to Mexico, eating into supplies for American consumers. The United States’ southern neighbor has been hit by avian influenza, forcing the slaughter of thousands of chickens.”

The update noted that, “Prices have already started to come down from May. In the Northeast, wholesale prices for large eggs were about 87 cents to 91 cents a dozen earlier this month, compared with a high range of $1.25 to $1.29 earlier in May, according to the USDA.”

Christopher Doering reported on Friday at The Des Moines Register Online that, “The purchase of Smithfield Foods by Chinese meat processor Shuanghui International Holdings has drawn support from farm groups and many politicians, who are optimistic that a larger market for U.S. pork could outweigh potential risks from the deal.

“But one of the most outspoken holdouts on the surprise $4.7 billion merger announced more than two weeks ago remains Sen. Chuck Grassley, R-Ia., who still hasn’t decided whether to support the deal.”

The Register article pointed out that, “‘You’ll find me taking a measured approach, particularly with the antitrust division of the Justice Department, to raise a lot of questions about a lot of mergers — banking, airlines, railroads and things like that,’ said Grassley, a member of both the Agriculture and Judiciary committees in the Senate.

“In an interview Friday, he added: ‘I’ve always felt that the antitrust people in the Justice Department didn’t have a very good understanding of American agriculture.’”

Meanwhile, AP writer Tom Raum reported on Saturday that, “As President Barack Obama pushes an ambitious agenda to liberalize global trading, political trade wars already are forming, and they’re with fellow Democrats rather than with Republicans, his usual antagonists.”

The article noted that, “Obama worked to overcome Democratic resistance to win passage in 2011 of trade pacts with South Korea, Panama and Colombia, completing negotiations begun by his Republican predecessor, President George W. Bush.

“The talks for a new Asia-Pacific free-trade zone came up in the Obama-Xi meetings last weekend.”

Mr. Raum explained that, “But the possible inclusion of Japan, the third-largest economy, after the U.S. and China, generated heat from auto-state lawmakers, who criticized Japan’s efforts to restrict auto imports.

Sen. Debbie Stabenow, D-Mich., pledged to fight ratification if Japan won’t ‘stop blocking American companies from its markets.’”

And Reuters writers Philip Blenkinsop and Robin Emmott reported on Friday that, “France cleared the European Union to launch free-trade talks with the United States on Friday after fellow EU members accepted its demand to shield movies and online entertainment from the might of Hollywood and Silicon Valley…[T]he final mandate given to EU trade chief Karel De Gucht, who will lead negotiations, does not include the audiovisual sector. However, it does give the Commission the right to ask member states for a broader mandate at a later stage.”

 

Regulations- Wheat

Reuters writer Charles Abbott reported on Friday that, “The unapproved genetically modified wheat that was discovered sprouting in Oregon appears to have been ‘a single isolated incident,’ U.S. agricultural officials said on Friday in their most detailed description yet of their ongoing investigation.”

More broadly on the GMO issue, Christopher Hope penned an article on Friday at The Telegraph Online titled, “David Cameron: ‘It is time to look again at GM food’”- the subtitle of the article stated: “David Cameron has opened the way to Britain relaxing rules on genetically modified food.”

Meanwhile, The New York Times editorial board noted on Saturday (“The EPA Backs Off on Factory Farms”) that, “Right now, the patchwork of regulations — which assume a great deal of self-policing — suits the factory-farm industry all too well. So does the E.P.A.’s inability to gather even the most basic information about those farms. The industry believes that the less consumers know, the better. President Obama’s nominee to lead the E.P.A., Gina McCarthy, is still awaiting Senate confirmation. If and when she gets the job, she should make it an early priority to get the data she needs to shed light on — and forcefully regulate — an industry that thrives on ignorance.”

 

Biofuels

University of Illinois Agricultural Economist Scott Irwin indicated on Friday at the farmdoc daily blog (“An Updated Look at the Profitability of Ethanol Production”) that, “It is no surprise to readers of farmdoc daily that ethanol production has played a major role in the grain price boom since 2006. Increasing ethanol production has been driven by a combination of market incentives and biofuels polices. Given the prominence of ethanol production it is important to track the profitability of the industry in order to assess likely ethanol production trends and potential impacts on grain market supply, demand, and prices.”

Friday’s update concluded by noting that, “After starting out the recent boom period with strong profits, ethanol plants have struggled to maintain profitability. It is not clear whether the recent 3 month period of positive margins will be maintained going forward. A case can be made for some optimism given the possibility of lower corn prices in the upcoming marketing year and pressures for increasing volumes of ethanol to meet the rising mandate for renewable fuels under the RFS. Another extended period of red ink like 2012 does not appear to be in the cards.”

 

Immigration

Tal Kopan reported yesterday at Politico that, “Sen. Lindsey Graham predicts immigration reform will pass the Senate with more than 70 votes, saying passage is necessary to stop the ‘demographic death spiral’ in the Republican Party.

“‘I’m going to leave you on a positive note, I think we’re going to have a political breakthrough that Congress is going to pass immigration reform. I think we’re going to get plus-70 votes, I’ve never been more optimistic about it,’ the South Carolina Republican said Sunday on NBC’s ‘Meet the Press.’”

Janet Hook reported in today’s Wall Street Journal that, “As the Senate moves toward passing the broadest immigration bill in a generation, the House is about to serve up the issue in small slices.

“The man wielding the knife is House Judiciary Committee Chairman Bob Goodlatte (R., Va.), whose panel meets Tuesday  to take the House’s first formal action on immigration legislation.

Mr. Goodlatte, a low-profile conservative who is new to the chairman’s job this year, opposes the Senate’s comprehensive bill and plans instead to advance a series of more narrowly focused immigration bills. He will begin Tuesday with votes on a get-tough enforcement measure that would turn the debate sharply to the right.”

Keith Good

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