January 20, 2020

Farm Policy Issues; Ag Economy; and, Immigration

Farm Policy Issues- Biotech

Pat Curtis reported yesterday at Radio Iowa Online that, “A Minnesota Congressman who is playing a key role in enacting a new Farm Bill was in Iowa City over the weekend for a forum on the issue. Collin Peterson met with farmers and advocates for providing food assistance to those who can’t afford it. Peterson, the House Agriculture Committee’s top-ranking Democrat, says farmers would suffer greatly if they were not provided government help in paying crop insurance premiums.

“‘In my opinion, if you don’t have some sort of crop insurance product available to ordinary people and a reasonable target price floor, what you’re going to end up with is rich people with deep pockets farming and nobody else. That’s what you’re going to end up with and that is bad for the country and I’m not going to be part of it,’ Peterson said.”

Also yesterday, Bloomberg writer Alan Bjerga reported that, “The U.S. Department of Agriculture may have improperly paid as much as $36 million in aid to 6,336 dead people, according to government auditors who recommended stronger safeguards.

“Random sampling of USDA’s program rolls with the Social Security Administration’s master list of dead individuals found that 6,336 people got conservation aid, crop-insurance subsidies or disaster assistance more than one year after they had died from 2008 through 2012, the Government Accounting Office said today in a report.”

And Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “House Republican leaders looking to adjourn for the August break at the end of this week could run into trouble, as members of both parties might vote against leaving to protest the lack of progress on spending measures, immigration, the budget and the farm bill.

“Failing to adjourn has the potential to create a clunky August for both the House and Senate. Unless both chambers agree to leave, both would have to hold two pro forma sessions each week throughout August — forcing a few members and several House and Senate aides to show up each day for no reason.”

The Hill article noted that, “This month is shaping up much like July 2012, when every Democrat and several dozen Republicans said the lack of a farm bill or any deal on middle class taxes meant they shouldn’t adjourn for August.”

Mr. Kasperowicz pointed out that, “This year, Democrats have already been arguing that the House should not leave without first working out budget differences with the Senate and figuring out the farm bill.

“Democrats are also mad that the House will leave town without passing any immigration bill, and are outraged that House Republicans have failed to call up any bill reauthorizing the federal food stamp program.”

Also on the nutrition issue, a report by Tamara Keith on yesterday’s “Morning Edition” program from National Public Radio (NPR) indicated that, “In dollars, food stamps are the largest part of the Farm Bill – 75 billion in 2012. According to the latest government figures, 47 million people are getting assistance through the program, a number that has risen dramatically since the start of the recession. And these benefits are at the heart of the political drama over the Farm Bill.”

The NPR item noted that, “Steve Southerland is a Republican congressman from Florida. He’s author of an amendment that would have added tough new work requirements to the SNAP program. He believes government benefits have encouraged some people not to get jobs.”

“One thing we cannot put a number on is the number of casualties because people were never connected to their purpose in life,” Rep. Southerland said.

However, the NPR story pointed out that, “The majority of people on food stamps are either working or not expected to work because they’re children, elderly or disabled.”

In other developments, David A. Fahrenthold reported in today’s Washington Post that, “Marty the Magician might not need a disaster plan for his rabbit, after all.

On Monday, the Agriculture Department announced that it would formally ‘stay’ a new rule that requires animal ‘exhibitors’ to write disaster plans. The rule applied even to exhibitors as small-time as Marty Hahne, a magician in Missouri with one rabbit.”

Today’s article added that, “Last week, after The Washington Post published a story on Hahne, the USDA announced that it would ‘immediately’ review the rule. But that review had not been completed by Monday, when the disaster plans were supposed to be finished.

“About 5:15 p.m., the USDA said it would not enforce the rule.”


Agricultural Economy

Cheri Zagurski and Anthony Greder reported yesterday at DTN (link requires subscription) that, “Corn silking leapt 28 percentage points in the week ended July 28, according to USDA’s weekly Crop Progress report. That puts silking progress within 4 percentage points of the five-year average.

“Eight percent of the nation’s corn crop was in the dough stage as of July 28, compared to a five-year average of 17%.

Corn conditions held steady at 11% poor to very poor and 63% good to excellent.”

The DTN update noted that, “Soybeans were 65% blooming and 20% setting pods, compared to 46% and 8% last week, respectively. The five-year averages are 74% and 34%, respectively.

Soybean conditions worsened slightly with one percentage point moving out of the good category and into the poor category when compared to last week’s ratings.”

Perry Beeman reported yesterday at The Des Moines Register Online that, “The U.S. Department of Agriculture on Monday reported that 51 percent of Iowa’s soil is short on moisture, despite some improvement during cooler weather.

“‘Although rainfall lessened moisture concerns in some areas, crops were still in need of additional precipitation, especially in western Iowa, which received the least amount of rain,’ USDA reported.”

Meanwhile, Bloomberg writers Jeff Wilson and Whitney McFerron reported yesterday that, “Corn extended declines to a 33-month low and soybeans fell on speculation that U.S. crops will benefit from cooler weather and rain in the next two weeks. Wheat rose.

Temperatures will average below normal over much of the Midwest in the next two weeks, helping to boost yields in areas with adequate soil moisture and reducing stress on crops that have not received significant rain this month, World Weather Inc. said in a report today. Fields from Kansas to Kentucky will get rain during the next two days and some crops in Nebraska and Iowa will benefit from moisture beginning Aug. 1, the private forecaster said.”

Parts of Central Illinois have experienced record low temperatures recently with unseasonably cool temperatures expected to continue for the early part of this week.

And University of Illinois Agricultural Economist Darrel Good noted in part yesterday at the farmdoc daily blog (“Demand Prospects for Old Crop and New Crop Soybeans”) that, “Unlike the U.S. corn market, where demand and consumption appear to be plateauing, demand prospects for soybeans appear to be strong. If that is the case, a period of higher soybean prices relative to corn prices would be expected.”

Also, Bloomberg writer Aya Takada reported today that, “Japan will resume purchases of U.S. western-white wheat, lifting a two-month ban on the grain imposed after the discovery of unapproved gene-altered crop on an Oregon farm, said the agriculture ministry. Futures climbed.

“‘We will restart tenders to import western-white wheat on Aug. 1, while purchases of soft-white wheat for livestock feed are planned to resume on Aug. 7,’ said spokesman Fumihiro Michikura by phone today. Both types are grown in Oregon, where the GM wheat developed by Monsanto Co. was found.

A resumption of Japanese purchases may support wheat futures in Chicago, which have lost 15 percent this year on prospects for abundant global production, said Takaki Shigemoto, an analyst at JSC Corp. in Tokyo. The action also eased food industry concerns about short supply, as Japan depends on imports for almost 90 percent of its wheat, he said. Western-white wheat is used in Japan for production of cakes and cookies.”

An update yesterday from the USDA on the GM wheat issue indicated that, “Since May 3, 2013, [USDA] Animal and Plant Health Inspection Service (APHIS) has been conducting a thorough investigation into the detection of genetically engineered (GE) glyphosate-resistant wheat plants in one field of one farm in Oregon. Extensive testing following the detection of these plants confirmed the wheat as a variety – MON71800 – developed by Monsanto. The ongoing investigation is working to uncover how MON71800 GE wheat came to be in the field and to determine the extent of its presence.

All of the evidence collected thus far – specifically, the absence of MON71800 in seed and grain samples tested by USDA laboratories, and reports from nearly 270 farmers interviewed by USDA investigators that they have not observed glyphosate-resistant wheat plants in their fields – indicates that the extent of the presence of this GE wheat remains the single detection of the GE wheat plants in one field of one farm in Oregon.”

In other biotech related news, AP writer Susan Haigh reported yesterday that, “State lawmakers are urging their colleagues in neighboring New York to consider legislation that requires genetically modified food to be labeled for consumers, hoping passage there will ultimately lead to the final enactment of Connecticut’s new labeling law.

Connecticut’s mandate can’t take effect until other Northeast states pass similar labeling rules.”

And, Kim Severson reported in today’s New York Times that, “Peaches, the gem of the Southern summer, are just not so sweet this year.

“The tomatoes in Tennessee are splitting. Tobacco in North Carolina is drowning. And watermelons, which seem as if they would like all the rain that has soaked the South, have taken perhaps the biggest hit of all.

Some watermelon farmers in South Georgia say they have lost half their crop. The melons that did survive are not anywhere as good as a Southern watermelon ought to be.”

Ms. Severson explained that, “Day after day, the rains have come to a part of the country that relies on the hot summer sun for everything from backyard tomato sandwiches to billions of dollars in commercial row crops, fruit and peanuts.

“While the contiguous United States as a whole is about only 6 percent above its normal rainfall this year, Southern states are swamped. Through June, Georgia was 34 percent above normal, according to the National Oceanic and Atmospheric Administration’s National Climatic Data Center. Both South Carolina and North Carolina were about 25 percent above normal. Alabama’s rainfall was up 22 percent.

The weather is a particular shock because more than two-thirds of the region was abnormally dry or suffering a drought last year.”

The article added that, “Although the total cost to farmers has yet to be tallied, agricultural officials in several states in the Deep South predict severe losses this year that could be in the billions of dollars.”

More broadly, a recent publication from the Federal Reserve Bank of Kansas City (“Agricultural Lending Shifts to Large Banks”) indicated that, “The market share of agricultural loans shifted more toward large commercial banks in the second quarter. According to national survey data from the second week of May, the share of non-real estate loans originated by large banks relative to their smaller counterparts jumped to the highest level in nearly 20 years. Rising production costs prompted some agricultural producers to take on more debt, and lenders continued to compete for market share. The shift to borrowing from larger lenders could be due, in part, to attractive and flexible loan terms. Typically, larger banks offered more floating interest rate loans at lower rates than small and midsized lenders, suggesting larger banks may be better able to accommodate the borrowing needs of large producers expanding their operations.”

The report added that, “Agricultural banks started 2013 on a solid financial footing. Though slightly lower than year- ago levels, the return on assets at agricultural banks in the first quarter continued to exceed the returns at other small banks. Farm loan repayments remained strong, reducing delinquency rates and net charge-off amounts, most noticeably at large commercial banks. Rising farmland values also contributed to higher farm real estate loan volumes. However, more agricultural bankers expected farmland values to plateau in the coming months.”



DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Reflecting that the Obama administration plans to keep a spotlight on immigration reform, the White House released a new report Monday highlighting the impact of immigration reform on agriculture and rural America.

“Agriculture Secretary Tom Vilsack was tapped to unveil the report, which looks at the state of the labor market in agriculture. The report also promotes the benefits of the Senate immigration bill that passed in June. Vilsack stressed the opportunity is here to get an immigration bill completed.

“‘There is momentum for this. There is a desire to get this done,’ he said. ‘There is an alignment of interest groups you don’t normally see.’”

The DTN article noted that, “Vilsack said a comprehensive immigration bill, such as the one passed by the Senate, would provide worker security and level the playing field for those farmers who already insist on making sure their workers are in the country legally.

While the Senate passed a comprehensive immigration bill, the House is expected to take a piecemeal approach. The House of Representatives also goes on summer break later this week without taking up an immigration bill on the floor. House Budget Committee Chairman Paul Ryan, R-Wis., was quoted at a town-hall meeting late last week saying immigration measures likely won’t be debated by the full House until at least October.”

Carolyn Lochhead reported yesterday at the San Francisco Chronicle Online that, “The White House applied pressure on rural lawmakers Monday with a report that immigration reform is necessary to keep farms from moving operations abroad.

“‘Folks are making decisions to move their operations out of the United States,’ because of a lack of workers, said Agriculture Secretary Tom Vilsack in a conference call. The biggest effect is in California with its $34 billion a year produce industry. Most fresh fruits and vegetables are harvested and packed by hand, mostly by immigrant workers who crossed the border illegally.

Vilsack said that without better access to migrant farm workers, the state could lose between $1.7 billion and $3.1 billion a year in lost farm income. The report said 74 percent of the state’s farm labor force is non-citizen, and probably most of those are undocumented.”

Keith Good

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