FarmPolicy

October 23, 2014

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

Farm Bill

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “North Dakota’s congressional delegation issued a joint news release on Monday to highlight tweaks to USDA’s rules for prevented-planting crop insurance in 2014.

“The two senators and one congressman stated, ‘The new rules come following pressure from North Dakota’s delegation to clarify the rules and make the program work for producers.’”

The DTN article added that, “USDA’s Risk Management Agency announced a new Special Provision for the Prairie Pothole region that will clarify acreage eligible for prevented planting in regions of Iowa, Minnesota, Montana, North Dakota and South Dakota for the 2014 crop and succeeding crop years.

“‘The goal is to make federal crop insurance policy more objective and to provide clarity for the producers facing prevented planting losses,’ said RMA Administrator Brandon Willis.”

Mr. Clayton explained that, “According to RMA, the new provision will require that in order for acreage to be eligible for prevented planting payments, the acreage must have been planted and harvested (or incurred an insurable loss other than for excess moisture) in at least one out of the last four years, regardless of whether any of those years was abnormally dry.

“RMA stated the new provision creates a more objective means for determining acreage eligible for prevented planting than the current rule. However, once the producer is unable to plant and harvest on certain acreage in at least one of the four most recent crop years, the producer will need to demonstrate the land is farmable by planting and harvesting (or incurring an insurable loss other than for excess moisture) two years in a row.

“RMA stated that to be eligible for a prevented planting payment, a cause of loss that prevented planting must have occurred within the prevented planting insurance period for both new and carryover policies. For more information, producers should contact their crop insurance agents.”

On yesterday’s Agriculture Today radio program (Red River Farm Network), Don Wick also provided a report on the prevented-planting issue, which included additional remarks from Administrator Willis.

To listen to this portion of yesterday’s Agriculture Today program, just click here (MP3- 1:49).

Meanwhile, Eric Bradner reported yesterday at Politico that, “An international coalition of farmers and meatpackers is asking a federal judge to rip the labels off beef, pork and chicken that tell consumers where their meat came from.

“The American Meat Institute, American Association of Meat Processors and seven other organizations, including mostly beef- and pork-related trade groups from Canada and Mexico, are urging Judge Ketanji B. Jackson of the U.S. District Court for the District of Columbia, to block the rule’s enforcement. In a hearing scheduled for Tuesday, the nine groups that oppose the rule will argue for an injunction against the mandate, which they say compels speech in violation of the First Amendment.

“The timing is critical: The Agriculture Department is due to start enforcing its new version of the 4-year-old rule in November.”

And a news update Friday from Rep. Dan Kildee (D., Mich.) indicated that, “Surrounded by local farmers at the Downtown Saginaw Farmers’ Market, [Kildee] today announced his second bill in Congress, the Local Food for Healthy Families Act, which would promote healthy, fresh and Michigan-grown fruits and vegetables at farmers’ markets across Michigan. The bill would expand funding for programs like Michigan’s Double Up Food Bucks (DUFB), a food incentive program that gives state residents on food assistance more purchasing power to buy healthy, locally-grown produce.”

“Programs like DUFB are not mandatory, but rather a way for Supplemental Nutrition Assistance Program (SNAP) recipients to maximize their purchasing power when shopping for food. For those who receive SNAP benefits and shop at participating farmers’ markets, the amount of money spent is matched up to a certain dollar amount with ‘food bucks’ tokens that can be used to buy fresh, Michigan-grown fruits and vegetables.”

In other news related to nutrition issues, Anna Gorman reported yesterday at the Los Angeles Times Online that, “Los Angeles County children are drinking fewer sodas and other sugary drinks, according to a new report by the Centers for Disease Control and Prevention.

“The percentage of children 17 and younger who drank one or more sugar-sweetened drink each day dropped from 43% in 2007 to 38% in 2011.”

The article noted that, “There were also racial and ethnic disparities, with nearly 49% of black youths and 42% of Latino youths having daily sugary drinks, compared with 26% of whites and 28% of Asians.”

Also, the Farm Bill has become an issue in the Arkansas Senate race.

Tamara Keith reported yesterday on National Public Radio’s (NPR) Morning Edition program that, “If Republicans are going to retake the U.S. Senate in 2014, their path runs through Arkansas. The state’s two-term Democratic senator, Mark Pryor, is often called the Senate’s most vulnerable incumbent.

“And, while the election is still 15 months away, it’s already gone negative.

“Pryor’s campaign went up with an ad accusing his opponent, freshman U.S. Rep. Tom Cotton, of ‘hurting the people of Arkansas,’ even before the military veteran and conservative Republican officially announced he was running.”

The NPR item indicated that, “Since his first days in office, Cotton has shown a willingness to buck his party’s leadership, choosing a more conservative path on several votes — most recently, with the farm bill.

“‘Which I think shows that I’m an independent voice for the people of Arkansas, regardless of political party,’ he says.

“Cotton helped vote down a version of the bill that — like farm bills going back decades — combined agriculture programs with food stamps. Cotton later supported a measure that would strip out the food stamp part.

“‘I voted for a real farm bill,’ he says. ‘Mark Pryor voted for a food stamp bill. I want farm programs that are designed to help Arkansas’ farmers without holding them hostage to Barack Obama’s food stamp program.’”

The Morning Edition segment added: “But Pryor says it’s a ‘contrast that works for me.’

Most major farm groups have called for a comprehensive bill that includes food stamps. And that’s what Pryor supports.

“‘What the House has done on the farm bill makes the farm bill impassable,’ Pryor says, while riding in an ATV down a dusty path on a tour of a habitat restoration project made possible, in part, by the farm bill.

“‘You cannot pass that bill in the Senate,’ he adds. ‘I’m not sure you can get it through the House again, either.’”

On a separate policy issue, from an international perspective, Biman Mukherji and Niharika Mandhana reported in today’s Wall Street Journal that, “India’s lower house of Parliament on Monday approved sweeping legislation guaranteeing cheap grain for nearly 70% of the country’s 1.2 billion people, a move hailed by supporters as a major step toward eliminating hunger but one that raises questions about whether the government can bear the cost.

“The bill, the centerpiece of the Congress party-led government’s policy agenda, passed after a nine-hour debate during a rare break in the partisan gridlock that has gripped the legislature. The upper house also is expected to approve the bill.

Under the law, highly subsidized rice, wheat and other grain will be offered at a fraction of market prices to low-income people. It will cover about 75% of people living in the countryside and 50% of people living in cities. India is home to a quarter of the world’s hungry, according to the United Nations.”

 

Budget

Brian Faler reported yesterday at Politico that, “Treasury Secretary Jack Lew on Monday warned congressional leaders that the government will run up against its borrowing limit by mid-October, setting up an earlier-than-expected deadline for what will be the fall’s most contentious battle between the Obama administration and Republicans.

“Lew said his department will soon run out of the accounting maneuvers it’s been using to stave off default and warned lawmakers not to wait until the last minute to raise the debt limit.”

The article stated that, “The deadline, sooner than what some forecasters had estimated, comes amid concern that Congress has no plan for handling the needed increase to the government’s borrowing authority.

“The Obama administration has said it will not negotiate over raising the debt limit, while Republicans have a long list of demands, including revising President Barack Obama’s signature health-care law.”

Zachary A. Goldfarb reported in today’s Washington Post that, “Separately, the White House and Congress face a deadline at the end of next month to renew regular funding for government operations — or risk a shutdown. In a shutdown, many agencies would close but ‘essential’ functions, such as Social Security and Medicare payments, would continue.

Congress is in session for only nine days in September, leading to expectations that lawmakers may pass a budget measure to fund the government for a few weeks or months.

“But there’s no guarantee — mainly because of partisan disagreement about whether to continue the automatic spending cuts known as the sequester that are slicing defense and domestic agency budgets.”

Damian Paletta reported in today’s Wall Street Journal that, “In 2011, the White House and congressional Republicans locked horns in a bitter feud over the debt ceiling. They spent weeks working to craft a deficit-reduction agreement to combine with an increase in the debt ceiling, but those talks collapsed in late July and financial markets swung wildly.

The debt ceiling was increased in early August as part of the Budget Control Act, which set caps on certain spending levels and led to the across-the-board ‘sequester’ cuts that began in March and are scheduled to continue through 2021.”

 

Agricultural Economy

Gregory Meyer reported yesterday at The Financial Times Online that, “Grain prices sprang higher as a late-summer heatwave crept into the US Midwest, threatening to reduce the size of corn and soyabean crops.

“CBOT December corn jumped 6.5 percent to $5.00½ a bushel yesterday, while CBOT November soyabeans climbed 4.6 percent to $13.89½ a bushel. Prices of these futures contracts are tied to expectations of the US harvest.”

The FT article noted that, “The National Weather Service forecast high odds of above-normal temperatures across the upper Midwest in the next week. Commodity Weather Group, a forecaster, said at least 40 per cent of the Midwest breadbasket region would see reduced crop yields, especially in soyabeans.”

Kelsey Gee and Ian Berry reported in today’s The Wall Street Journal that, “Monday’s rally came after grain and soybean prices had tumbled for much of this year amid forecasts for big U.S. crops in 2013 and softer demand for corn from foreign buyers [related graph]. Market participants largely have been anticipating huge crops this fall that would help replenish domestic supplies that shrunk to historically low levels after last year’s U.S. drought curtailed production.

“But the U.S. soybean crop is seen as especially vulnerable to soaring temperatures and dryness in coming weeks as it goes through important growth phases. Also, the crop was planted later than usual due to a chilly, wet spring in the Midwest, making it more vulnerable to adverse late-summer weather.”

Bloomberg writers Jeff Wilson and Phoebe Sedgman reported yesterday that, “Temperatures will average as much as 14 degrees Fahrenheit above normal during the next 10 days, with little rain expected in the Midwest, T-Storm Weather LLC said in a note to clients today. July and August will be the driest since 1936 in Iowa, Illinois and Indiana.”

The article added that, “Soybean-crop conditions declined in 14 of the top 18 producing states, and corn ratings declined in 11 states, the USDA said in a report today after the close of trading. About 58 percent of the soybeans were rated in good or excellent condition yesterday, down from 62 percent a week earlier, the USDA said. Corn rated in good or excellent condition fell to 59 percent from 61 percent a week earlier.”

A report yesterday from USDA’s Radio News Service included additional remarks on crop conditions from USDA meteorologist Brad Rippey, “Corn and Soybean Condition Worsening.”

Tom Lutey reported over the weekend at the Billings Gazette (Mont.) Online that, “Montana appears headed for another billion-dollar wheat crop, though wet weather has dramatically slowed spring harvest in the northern counties.

“A billion dollars is the high-water mark for wheat values, achieved only six times in state history, but five times since 2007 as commodities prices have surged. Agriculture is the state’s single largest economic sector, representing about 13 percent of Montana economic activity. One in five Montana jobs is tied to agriculture.”

With respect to livestock related issues, Purdue University Agricultural Economist Chris Hurt indicated yesterday at the farmdoc daily blog (“Hog Outlook Turns Less Optimistic”) that, “Just when it looked like hog production was headed safely back to profitability in 2014, hot and dry weather late in the growing season has threatened the bright outlook. Rapid increases in feed prices have raised expected costs nearly five dollars per live hundredweight from their lows in early August. This has not wiped out the profit potential, but should make hog producers more cautious about expansion.”

In other news, Cameron McWhirter and Caroline Porter reported in yesterday’s Wall Street Journal that, “Mississippi River barge operators and their customers had been hoping business would get back to normal this year after two years of extreme weather that wreaked havoc on the river’s bustling freight traffic [related graph].

“But massive flooding in 2011 and last year’s drought have permanently altered some aspects of shipping on the Mississippi and its tributaries, the nation’s largest river system and one of its most important commercial waterways.

“Even though water levels are more normal this year, businesses that depend on the river are writing protective measures into their shipping contracts, building more flood-resistant port facilities and trying to diversify their revenue streams to offset years of weather-related financial losses.”

 

Biofuels

Christopher Doering  reported yesterday at The Des Moines Register Online that, “The ethanol industry took a shot at the oil industry with a multi-million dollar nationwide advertising campaign Monday, the latest in the ongoing struggle between the two bitter foes to control the future of the country’s renewable fuel policy.

“The advertising blitz from Growth Energy, the largest trade group representing the ethanol industry, said the campaign will inform consumers about the benefits of the corn-based fuel and counter an aggressive push by oil groups to attack the fuel through what they describe as misleading and inaccurate information.

“The ad, titled — ‘You’re no dummy. Don’t let the oil industry treat you like one.’ –will be run on major cable news networks and in print and radio, including in Iowa markets.”

DTN writer Todd Neeley reported yesterday that, “Growth Energy Chief Executive Officer Tom Buis said the last time the ethanol industry didn’t respond to a similar campaign was the launch of the food-versus-fuel effort by oil and food industry groups in 2008 that essentially pointed to the expansion of ethanol production as the reason for rising food prices.

“‘The anti-ethanol crowd in 2008 made the biggest, boldest lie on food versus fuel and the industry didn’t challenge,’ he said. ‘We’re not going to let them do it this time.’

“Though the first television spot is slated to run for the next several weeks, Buis said the campaign will be ongoing, suggesting there are more ads to come depending on oil industry response.”

 

Immigration

Russell Berman  reported yesterday at The Hill Online that, “A leading Democratic advocate for immigration reform is holding events in the Virginia districts of two House Republicans on Monday to build pressure on Republicans to bring up comprehensive immigration legislation when Congress returns in September.

“Rep. Luis Gutiérrez (Ill.) is holding events in the districts of Reps. Frank Wolf and Bob Goodlatte, the powerful chairman of the Judiciary Committee charged with leading the House Republican effort on immigration reform.”

Meanwhile, the American Farm Bureau Federation released a brief video recently on the immigration issue titled, “Farm Labor Needs Are Tied to Immigration Reform.”

Keith Good

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