FarmPolicy

September 2, 2014

Farm Bill; Ag Economy; CFTC; and, EPA

Farm Bill

Niels Lesniewski reported yesterday at Roll Call Online that, “Senate Agriculture Chairwoman Debbie Stabenow told attendees at a farm bill rally outside the Capitol that she won’t back another short-term extension of farm programs.

“Stabenow wants House Republican leaders to agree to take the farm bill to conference, even without an answer on what the House will do about the Supplemental Nutrition Assistance Program, commonly known as food stamps.

“‘The leadership needs to trust and support [the House Agriculture Committee] and just simply go to conference, appoint conferees, quit playing politics with food assistance,’ the Michigan Democrat said.”

Mr. Lesniewski pointed out that, “Stabenow also complained that some want to take the money saved by eliminating direct payments without doing a full overhaul of farm programs.”

Lauren Fox reported yesterday at US News Online that, “Before the recess, House Majority Leader Eric Cantor, R-Va., announced a tentative agreement with conservatives on a food assistance plan, inching the House closer to a completed bill. Under the plan, the GOP caucus proposed shaving $40 billion in food stamps, 10 times more than the spending cuts proposed in the Senate bill.

“The Senate passed its full farm bill in June. Some are advocating the current farm bill simply be extended to give farmers certainty in the market, but Stabenow says that she won’t support another extension.

“‘I do not support an extension because it is bad policy that yields no deficit reduction, no reform and does nothing to help American agriculture create jobs. It’s time to do the work we were sent here to do and finally finish this Farm Bill,’ she said.”

And an article in today’s New York Times noted that: “‘In these trying budgetary times, it makes no sense to pay farmers who haven’t suffered a loss,’ said Senator Debbie Stabenow, Democrat of Michigan and chairwoman of the Senate Agriculture Committee. ‘Under new reforms passed in the new farm bill, you will have to farm to receive money from the safety net.’”

Also, Tait Militana, a reporter for CQ Roll Call, tweeted yesterday that, “GOP nutrition measure could see floor action next week‪#farmbill ($) ‪http://cq.com/doc/news-4339566?from=bluebox&pos=bb07 …

Meanwhile, DTN Political Correspondent Jerry Hagstrom reported yesterday that, “House Agriculture Committee Chairman Frank Lucas said Sunday that he will run for re-election in 2014, and that if the farm bill does not pass during this Congress, he will ask the House Republican Steering Committee for a waiver from rules so that he can continue as Agriculture Committee chairman in the next Congress.

“In an exclusive interview with DTN on Sunday in his home state, Lucas said that he considers the talk in Washington about a two-year extension of the farm bill to be an attempt to slow down consideration of the farm bill so that it would be written under different leadership. Under House Republican rules, Lucas is scheduled to end his term as top-ranking Republican on the committee when this Congress concludes at the end of 2014.

“‘In the nature of the battle we are engaged in, there may be some folks who have figured out that term limits are a permanent thing in the U.S. House,’ Lucas said.”

Mary Kay Thatcher, the Senior Director of Congressional Relations for the American Farm Bureau Federation, was a guest on yesterday’s AgriTalk radio program with Mike Adams where the discussion centered on the Farm Bill.

Ms. Thatcher noted that, “And you know we’ve already got people talking about let’s do another extension.  That’s just not a great idea.  I think that we’ve had way too much discussion about the fact that direct payments, or at least part of the direct payments, wouldn’t be included in a one or two year extension.  And it’s, again, not that the direct payments won’t be there, because we all know they’re going to go out the door, but it’s the fact that we need to take some of that savings from not having direct payments to put it into other places to indeed make sure we do have a viable safety net.”

And with respect to nutrition issues, Ms. Thatcher explained that, “And you know, even if they [the House] pass a bill that cuts $40 billion, that’s going to make it even more difficult to conference with a $4 billion cut in the Senate side.  There is, I think, a fairly limited amount that you can push down the Senate throat.

“You look at somebody like Thad Cochran.  He’s got more people in his state of Mississippi who are not getting enough food on an annual basis.  You look at Debbie Stabenow, who represents Michigan.  Think the auto industry in Detroit.  You know that her food stamp use there is pretty high.  There just aren’t going to be the votes to cut, I don’t think, more than six, eight, maybe ten billion at the maxSo if you pass a $40 billion, that’s a long ways for some of the Tea Party Republicans to say, well, I voted for 40, but I’ll take ten.”

Elaine Tassy reported yesterday at the Albuquerque Journal Online that, “Just about everyone who receives monthly food help from the SNAP program, roughly one in every five New Mexicans, will see a cut in benefits when a piece of the stimulus package boosting that program ends in less than two months.”

The article noted that, “Even as SNAP benefits dip, Roadrunner Food Bank is beefing up its efforts to teach people who might qualify for benefits how to navigate the SNAP enrollment process, since thousands of eligible New Mexicans are not enrolled.

“Roadrunner is also training its volunteers to show constituents how to sign up when they pick up food at distribution sites such as schools, churches and other community organizations, and it is training staff members of other community organizations on how to assist the people they serve in applying for SNAP.”

Also yesterday, Pete Kasperowicz reported at The Hill’s Floor Action Blog that, “Rep. Bruce Braley (D-Iowa) on Monday asked House Speaker John Boehner (R-Ohio) to cancel plans for a week off in late September, so the House can deal with a range of pressing issues, including Syria…‘The Congress must also pass critical pieces of legislation such as the Farm Bill and Fiscal Year 2014 Appropriations before September 30,’ [Braley] added. ‘Instead of recessing yet again, the House should remain at work and continue to work to resolve the challenges that lie ahead.’”

National Crop Insurance Services (NCIS) released a video yesterday titled, “A Shift in U.S. Farm Policy;” accompanying text with the video stated that, “The farm safety net for America’s farmers and ranchers has shifted from the traditional programs of direct payments, counter cyclical payments, etc., to a risk management-based crop insurance program. In 2012, the U.S. crop insurance program protected more than $117 billion in liability on more than 280 million acres.”

A news release yesterday from NCIS indicated that, “On the heels of the worst drought in decades, Americas farmers — and the rural economies they support — bounced back and are expecting a record corn crop this year, due in part to the fact that 86 percent of planted cropland was protected by crop insurance last year.”

And a statement yesterday from NCIS president Tom Zacharias, in response to the Bloomberg News story “Taxpayers turn U.S. farmers into fat cats with subsidies,” indicated in part that, “The primary reason behind the growth and success of crop insurance over the last decade is that farmers, farm groups, banks and other lenders, elected officials and those who live and work in rural America understand that it is the best, most cost-effective risk management tool farmers have.   That is why the lack of balance and clear agenda behind the first in this series of articles is so troubling.

For example, the article claims that the government ‘pays farmers to buy coverage,’ which is absolutely false.  Farmers purchase crop insurance policies with money out of their own pockets.  If a loss does not occur, which is the case for most farmers in most years, then purchasing crop insurance is a net loss, not a gain, for farmers.”

The Los Angeles Times editorial board indicated yesterday that, “Federal efforts to protect growers of sugar beets and sugar cane epitomize everything that’s wrong with U.S. farm programs. At times they’ve artificially raised the price of sugar, costing consumers billions of dollars; at other times they’ve stuck taxpayers with the bill for the surplus sugar production they’ve promoted. The fact that the sugar program is likely to survive the latest rewrite of the farm bill unscathed is a testament to how limited the bill’s ‘reforms’ are.”

In other policy news, Bill Tomson and Helena Bottemiller Evich reported yesterday at Politico that, “Kids are going back to school and so is the ground beef filler dubbed ‘pink slime’… [A]s of Sept. 3, seven states put in orders to the USDA for about 2 million pounds of beef that may contain the controversial product for the meals they serve in the 2013-14 school year. At this time last year there were only three states — Iowa, Nebraska and South Dakota — that had put in orders for beef that may contain lean finely textured beef.”

Tarini Parti and Bill Tomson reported yesterday at Politico that, “Chicken raised and slaughtered in China could be sitting on U.S. grocery store shelves as soon as a year from now, a top meat safety official told POLITICO before leaving on a weeklong trip to China.”

The Politico writers explained that, “But the prospect of Chinese-raised birds also being allowed into the United States will be one of the main topics of discussion on the table, too, when Al Almanza, administrator of the U.S. Department of Agriculture’s Food Safety and Inspection Service, talks to Chinese officials this week. Almanza left for Beijing on Monday for a meeting that was supposed to take place last month, as POLITICO previously reported, but was rescheduled.

“The USDA notified China last week that four of its processing plants were cleared by inspectors to begin processing U.S.-origin chicken and selling it back into the American market. Officials have also been inspecting Chinese slaughtering facilities to make sure they are up to U.S. standards, a key prerequisite for China to begin selling its own, homegrown chicken to the U.S., Almanza told POLITICO in an interview at USDA headquarters on Friday.

“But more needs to be done to establish equivalency between the U.S. and Chinese poultry plants before the USDA approves the country for exporting its own chicken, which is what a formal letter being sent to Chinese officials in three to four weeks will say, Almanza said. There are some unresolved issues as the USDA works to guarantee that Chinese safety standards are equivalent to U.S. standards.”

Ben Goad reported yesterday at The Hill’s RegWatch Blog that, “The U.S. Department of Agriculture faces mounting pressure to drop plans to overhaul federal inspection regulations at the nation’s poultry plants.

“The Center for Science in the Public Interest (CSPI), a Washington-based nonprofit, is the latest public interest group to call on the agency to scrap a proposed rule that would cut federal personnel and shift inspection responsibilities to plant employees.”

 

Agricultural Economy

David Kesmodel reported yesterday at The Wall Street Journal Online that, “U.S. soybean and grain prices slid Monday, pressured by profit-taking as traders braced for a key government crop report later this week.

“Soybean futures retreated after rallying for most of the past three weeks amid concerns that hot, dry weather in the Midwest will reduce the size of this year’s crop. Prices had jumped to a six-week high last week after surging 13% in August.”

Bloomberg writer Phoebe Sedgman reported today that, “Soybeans declined for a second day on expectations that rain forecast for the Midwest will help ease crop stress in the biggest U.S. growing region.”

The article pointed out that, “About 52 percent of the U.S. soybean crop was rated in good or excellent condition as of Sept. 8, the USDA said yesterday. While that is down from 54 percent a week earlier, it compares with 32 percent a year prior, the agency’s data show. About 54 percent of the corn crop was rated good or excellent from 56 percent a week earlier, the USDA said.”

As a side note, a tweet yesterday from the National Weather Service stated that, “Today (9/9/13) is now the latest 100 deg reading on record for Des Moines. Sept 7, 1939 was the previous latest date of 100. ‪#iawx

University of Illinois Agricultural Economist Darrel Good indicated yesterday at the farmdoc daily blog (“Looking Ahead to the September 1 Corn Stocks Estimate”) that, “The size of the U.S. corn crop will be the most important price factor in that market for the next few months. The market is expecting a crop large enough to meet consumption needs without price rationing, but is not expecting as large an increase in marketing year ending stocks as projected a month ago. The USDA’s production forecast to be released on September 12 will provide for updated projections of marketing year consumption, ending stocks, and average farm price.

“At the margin, the size of the inventory of old crop corn on September 1 will also influence the expected balance of supply and consumption during the current marketing year.”

A news release yesterday from University of Missouri Extension noted that, “Results of the University of Missouri Extension annual land values opinion survey show that land prices in the state have continued to climb. However, the survey suggests a slowdown in the next year.

“‘The average value of good cropland by our survey was $4,510 per acre,’ says Ron Plain, an MU Extension agricultural economist and co-author of the report. ‘That was up 17 percent compared to July 2012.’”

The update added that, “‘A lot of the respondents think we may be, at least short term, nearing a peak in Missouri farmland values,’ Plain says. ‘They indicated that they thought cropland would increase between 2 and 3 percent in the coming year, pastureland between 1 and 2 percent, and other land about 1 percent.’”

Also yesterday, Bloomberg writers Alan Bjerga and Mario Parker reported that, “Efforts to roll back rules that nurtured the corn-based ethanol industry threaten to stunt other promising biofuels, according to a developer working on one of the nation’s first commercial plants that won’t use the grain.

“Lower quotas for renewable fuel use are being considered as part of a plan to raise the federal borrowing limit by U.S. House of Representatives Majority Leader Eric Cantor, a Virginia Republican. The move would threaten investments in a few next-generation plants, said Stephan Tanda, a managing board member at Royal DSM NV, a Heerlen, Netherlands-based manufacturer.”

 

CFTC- Commodity Futures Trading Commission

Jamila Trindle reported in yesterday’s Wall Street Journal that, “Regulators are making a second run at a rule designed to limit speculation in commodity markets, a year after the Commodity Futures Trading Commission’s initial attempt was tossed out by a federal court.

“The CFTC could vote as early as the end of the month on a revised version of the rule, which aims to curb sharp price spikes by limiting the percentage of the market any one firm can control in certain commodities.”

And Dina ElBoghdady reported in today’s Washington Post that, “Federal regulators signaled on Monday that they may more strictly oversee the high-speed trading that’s come to dominate financial markets and impose risk controls in response to a series of market-disrupting technology glitches.

“The 137-page ‘concept release’ from the Commodity Futures Trading Commission comes at a time when regulators are struggling to cope with a technological revolution that has transformed trading from a human-centric endeavor to one driven by computers that execute orders at blink-of-an-eye speeds — sometimes with disastrous results.”

 

EPA- Environmental Protection Agency

Ben Goad reported yesterday at The Hill’s RegWatch Blog that, “Republican lawmakers on Monday issued a scathing report accusing the Environmental Protection Agency of flouting transparency regulations in pursuit of its policy goals.

“‘The Obama Administration has advanced the most aggressive, far-left environmental agenda ever and developed the most secretive, behind-closed-doors way of doing it. And that’s not by accident,’ said Sen. David Vitter (R-La.), the top Republican on the Senate Committee on Environment and Public Works.

“The 30-page report, prepared by Republican members of the panel, primarily focuses on EPA activities under former Administrator Lisa Jackson, who left the agency in February.”

Keith Good

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