FarmPolicy

September 23, 2019

Farm Bill; Ag Economy; and, Smithfield

Farm Bill

David Rogers reported yesterday at Politico that, “The chairwoman of the Congressional Black Caucus, Rep. Marcia Fudge, signaled Thursday that she is prepared to make new concessions on food stamps to advance Farm Bill talks with the Senate.

“But having met face to face with Majority Leader Eric Cantor this week, Fudge, a Democrat from Ohio, said she came away more skeptical that the Virginia Republican is willing to move from his own positions to get a deal.

‘”He doesn’t want a bill,’ Fudge told POLITICO of their Tuesday meeting. ‘Just in terms of our discussion, it was clear to me, it was my sense that he really does not want a bill.’”

Mr. Rogers noted that, “As a member of the House Agriculture Committee, Fudge had opposed the initial $20.5 billion package of food stamp savings reported by the panel as part of its farm bill in June. But she said she was now willing to consider supporting the savings as a way to get to conference with the Senate, if the Republican floor amendments — including one promoted by Cantor — are first pulled out.

“‘I would consider voting for that bill, yes,’ Fudge said. ‘I am willing to make concessions to get [the farm] bill done. I don’t know how we separate the nutrition portion from the farm bill portion. However, it is my sense that [Cantor] does not want a bill for whatever reason. That’s how I feel.’”

The Politico article noted that, “Cantor’s office insists he is not obstructing but trying first to come up with a replacement for the nutrition title, which was jettisoned — at his urging — after the initial farm bill collapsed in June.

“A working group of about 20 selected Republicans — most of them conservatives — has been meeting with the leader and House Agriculture Committee Chairman Frank Lucas (R-Okla.) for the past two weeks. But with the House slated to go home next Friday for the August recess, Cantor’s office confirmed that no food stamp proposal is on the schedule.

“This led to a testy exchange on the House floor Thursday between Cantor and Minority Whip Steny Hoyer (D-Md.).”

In addition, yesterday’s article added that, “‘There’s nothing on here about going to conference. The gentleman has told me we’re not going to conference until we’ve passed something on nutrition,’ Hoyer said.

“‘We are engaged in discussions with the chairman of the Agriculture Committee as to forging a consensus on a nutrition piece, so we can act again on that,’ Cantor answered. ‘It is not accurate that we don’t intend to eventually go to conference and iron out the differences between the House and Senate on both of those issues, on the Ag policies as well as the nutrition policies.’

“‘I didn’t talk about intentions,’ Hoyer snapped. ‘I talked about facts.’”

A video replay of a portion of the exchange on the Farm Bill between Reps. Cantor and Hoyer on the floor yesterday can be viewed here, at FarmPolicy.com Online.

Meanwhile, in a tele-news conference with reporters yesterday, Nebraska GOP Senator Mike Johanns stated that, “I think everybody on the Senate side is ready to go to conference. We are truly waiting on the House. They passed part of the farm bill. They passed the farm piece of it, but the nutrition piece still hangs out there. I would love to tell you that this is going to be done so we could conference it in August. I don’t see that happening at the moment. I just think it’s unlikely, and I think that’s unfortunate, because that also has an end of the fiscal year deadline, which would be September 30th.

If a conference is established, the conference is usually put together by rank — by seniority, which is so often the case in the House and the Senate. So I just think, at the end of the day, you’ll see names that have been here a long time who will be on the conference committee. But I work with all of these people, and I’ll be — I’ll continue to be confident that I’ll have a significant amount of sway on what the final farm bill looks like.

“And in the end, although there are parts of it I’m not cheering about, this was a good bill for Nebraska. And I was a yes vote, and I’m very pleased that we got it done in the Senate. And now we need the House to act.”

The former Agriculture Secretary added that, “You know, one of the tough things about states like ours, you know, our number-one industry is agriculture. This is important stuff, but the reality is that in many parts of the country you have congressional districts that have no farms or ranches. It’s completely, 100 percent urban. So in order to get this done, I just think you need a coalition of interests who want to try to do something reasonable. Now, here’s what I would say — and I’ve been saying this for two years — this was never going to be a bill that had endless amounts of money to be thrown around. It was going to bill where — be a bill where spending was going to have to be cut and everybody was going to have to live with it, whether you were a farmer or whether you wanted food stamps, you know? It just is what it is, and at the end of the day, I think we came up with a pretty good bill in the Senate. Maybe it can be improved upon in the House.”

Also yesterday, Pat Curtis reported at Radio Iowa Online that, “It’s now been two weeks since the Republican led U.S. House approved a trimmed-down version of the Farm Bill, leaving out ‘food stamps’ and other federal nutrition programs. Congressman Bruce Braley, a Democrat from Waterloo, calls it a ‘fake’ Farm Bill and isn’t sure when the whole issue might be resolved.

“‘I haven’t heard a single peep out of the Republican leadership since the fake Farm Bill passed on the House floor several weeks ago,’ Braley says. ‘There was a commitment to bring the nutrition title back to the floor, but we’ve heard nothing about that.’”

The Radio Iowa update noted that, “A one year extension of the Farm Bill was approved last year and is set to expire September 30th. ‘It’s very discouraging and frustrating to me,’ Braley says. ‘I continue to work with my colleagues on both sides of the isle who want to see a robust five-year Farm Bill come back to the House for a vote, but right now it’s very murky as to when that’s going to happen.’”

In other developments, an editorial yesterday at The Oklahoman (Okla. City) Online stated that, “Congressional Democrats, longtime champions of government spending and subsidies, are doing their best impression of Captain Renault in ‘Casablanca.’ But where Renault was ‘shocked, shocked’ that gambling was occurring even as a croupier handed him his winnings, Democrats are dismayed that people who qualify for farm subsidies are actually getting them.

“U.S. Rep. George Miller, D-Calif., calls it ‘outrageous’ that Rep. Frank Lucas, R-Cheyenne, has received farm subsidies…[I]magine, a farmer getting farm subsidies! What’s next? Film tax credits going to movie producers? Parents claiming the child tax credit? Wealthy liberals keeping more of their own money from the Bush-era tax cuts?

The opinion item indicated that, “Miller is upset that the U.S. House passed a federal farm bill that didn’t include unrelated food stamp provisions. But when Lucas brought a bill containing both programs to the House floor, it was rejected. Miller was among the opponents, food stamps and all.

He has no credibility in complaining about the lack of food stamp funding that he rejected and the use of subsidies that he previously supported.”

An update yesterday  from National Crop Insurance Services stated that, “While farmers must make their decisions about purchasing crop insurance well before they plant, more than 697,000 policies have been processed through participating companies and RMA as of July 22, 2013. Those policies protect more than 178 million acres representing more than $64 billion in liabilities, accounting for $2.4 billion in farmer paid premium.  These numbers will continue to grow as more policies are processed and farmers plant their acres.

“In 2012, farmers invested more than $4.1 billion to purchase more than 1.2 million crop insurance policies, protecting 128 different crops.”

In other policy news, Ben Goad reported yesterday at The Hill’s RegWatch Blog that, “Legislation introduced Thursday in the House would prohibit companies that market unhealthy food to children to claim certain tax deductions.

The bill, penned by Rep. Rosa DeLauro (D-Conn.), wouldn’t bar food manufacturers from marketing their products to anyone they choose.

“But companies who sell food out of line with federal dietary guidelines would be unable to write off expenses stemming from advertising campaigns directed at children, including TV and radio spots, celebrity endorsements and a range of promotions.”

 

Agricultural Economy

The USDA’s Economic Research Service indicated this week that, “The CPI [Consumer Price Indexes] for all food increased 0.1 percent from May to June, decreased 0.1 percent from April to May, and is now 1.4 percent above the June 2012 level. The food-at-home CPI increased 0.1 percent in June and is up 0.9 percent from last June, while the food-away-from-home (restaurant) index increased 0.2 percent in June and is up 2.2 percent from last June. The all-items CPI rose 0.2 percent in June and is 1.8 percent above the June 2012 level. The overall direction of prices in 2013 continues to be mixed, and the food-at-home CPI is flat thus far in 2013.

Beef prices were up 0.4 percent in June and are 1.4 percent above last June, with steak prices up 1.9 percent and ground beef prices down 0.5 percent. The impact of high feed prices on retail beef prices was small (in percentage terms), because prices for many beef products had already attained record highs before the effects of the drought were realized. ERS has revised its beef forecast for 2013 downward to 2 to 3 percent. Pork prices increased 0.7 percent in June and are 0.6 percent above last June’s level. A decline in exports and increased hog production have resulted in pork prices thus far in 2013 that are well below 2012 prices. While pork prices are expected to rise for the remainder of the year, ERS expects inflation for the CPI for pork to range from 0 to 1 percent.”

And, David Kesmodel reported yesterday at The Wall Street Journal Online that, “Corn futures fell to a fresh 2½-year low, pressured by increasingly favorable weather outlooks for the U.S. crop.

“The front-month September corn contract dropped 12 1/4 cents, or 2.4%, to $4.96 a bushel, the lowest settlement for the front-month contract since October 2010. Futures had hit fresh lows earlier this week dating to November 2010.”

The Journal article added that, “Soybean futures settled at a 13-month low. Soybeans for August delivery at the Chicago Board of Trade ended down 37 1/4 cents, or 2.7%, at $13.55 1/4 a bushel. Thursday’s losses follow a precipitous drop in front-month soybeans Wednesday, driven in large part by a wave of farmer selling in the Midwest.”

Bloomberg writers Alan Bjerga and Peter Cook reported yesterday that, “Japan, which stopped buying U.S. wheat after a genetically modified variety was discovered in an Oregon field, may resume purchases as soon as next month, Agriculture Secretary Tom Vilsack said.

“‘We’ve come a long way in terms of the Ministry of Agriculture in Japan to reassure them,’ Vilsack said yesterday in an interview with Peter Cook on Bloomberg Television’s ‘Capitol Gains’ to air July 28. ‘I think that hopefully they’re getting their questions answered and that sometime, perhaps as early as August, we would see a resumption.’

“Monsanto Co., which developed the wheat, and the U.S. Department of Agriculture are investigating how a gene-altered plant that hasn’t been approved for commercial use was found on an Oregon farm eight years after nationwide field tests ended. After the USDA’s May 29 announcement, Japan, South Korea and Taiwan suspended some U.S. wheat purchases.”

The Bloomberg article added that, “Vilsack declined to comment on possible causes of the contamination.

“‘I think it’s better that we let the investigation run its course and find out at the end of that process what we know,’ he said. ‘We’re very sure it doesn’t pose a safety threat to the food supply.’”

 

Smithfield

Alicia Mundy reported yesterday at the Washington Wire Blog (Wall Street Journal) that, “The pending $4.7 billion sale of Smithfield Foods Inc., the world’s largest pork producer, to a Chinese company, has provoked health safety questions from the House Energy and Commerce Committee about the impact on America’s supply of the heart-disease drug heparin.

“In addition to pork products, Smithfield is one of the largest U.S.-based suppliers of crude heparin, the starting material for a crucial blood thinner used by some 12 million American patients, said a letter from committee Chairman Fred Upton (R., Mich.) to company President C. Larry Pope on Tuesday.

“‘We are concerned over how the Shuanghui acquisition would impact Smithfield Foods heparin operations,’ said the letter.”

Yesterday’s update continued: “It added that the committee has an ongoing investigation into the contamination of the U.S. heparin supply of 2008, linked to 81 deaths and hundreds of injuries. A government review said the adulteration was traced to processing plants in China, which provides about 80% of America’s heparin supplies.

“‘The Committee’s investigation indicates that the U.S. heparin supply is stressed, and could well be in shortage.  China’s heparin market is experiencing its own pressures, and Smithfield Foods under Shuanghui control may be pressured to export its crude heparin product to China instead of supplying U.S. companies,’ said the letter.

“Smithfield’s spokeswoman said the company was reviewing the congressional letter.  Shuanghui International Holdings Ltd. spokesmen didn’t immediately respond to a request for comment.”

Ms. Mundy noted that, “Sen. Debbie Stabenow, the Michigan Democrat who chairs the Senate Agriculture Committee, raised concerns about the Smithfield-Shuanghui proposed deal during a hearing in early July.  She said in a statement Thursday:  ‘Concerns like these are exactly why I’ve said the FDA and USDA should be part of the review process for this acquisition. We need to make sure that American interests are protected when potential foreign purchases of U.S. companies are being reviewed.’”

Keith Good

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