FarmPolicy

April 21, 2014

Farm Bill; Ag Economy; Biotech; Biofuels; Animal Ag; Immigration; and, Political Notes

Farm Bill

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “A fight over dairy provisions is threatening to hold up completion of the farm bill this week.

“Negotiators late Wednesday were still aiming to hold a formal meeting of the 2014 farm bill conference committee on Thursday to wrap up the long-delayed $1 trillion subsidy and food stamp measure.

“But a battle over dairy, pitting Speaker John Boehner (R-Ohio) against Rep. Collin Peterson (D-Minn.), the top Democrat on the House Agriculture Committee, was complicating matters.”

Mr. Wasson explained that, “Boehner and dairy-using industries oppose dairy production restrictions favored by Peterson and milk producers. On a Friday conference call, Boehner reiterated his opposition, sources said.

“House Agriculture Committee Chairman Frank Lucas (R-Okla.) said the two sides were still trying to find some way to deal with the dairy supply management issue.

“‘I would say that there’s been lots of discussion on how to address dairy, but really nothing’s changed,’ he said.”

The article noted that, “[Chairman Lucas] said a farm bill meeting is ‘still a possibility, and I want to so bad you can’t imagine.’”

Bloomberg writers Derek Wallbank and Alan Bjerga reported yesterday that, “A longstanding dispute over dairy policy is holding up an agreement between U.S. House and Senate lawmakers on a new farm bill, House Agriculture Committee Chairman Frank Lucas said.

“The most obvious sticking point ‘is the dairy policy,’ Lucas said in an interview today in Washington. ‘We’re just not quite there yet,’ said Lucas, who said that once a ‘handful of things’ are resolved, a conference meeting will be held to resolve remaining issues.”

Yesterday’s Bloomberg article added that, “Plans for a meeting tomorrow appear to be evaporating, said Representative Steve King, an Iowa Republican who is a conferee and the sponsor of the production-practices proposal.

“‘As each hour goes by, the likelihood of a conference this week gets less,’ King said in an interview.”

And Dave Russell reported yesterday at Brownfield that, “Speaking with reporters on Wednesday, January 8, Ohio Senator Sherrod Brown, a member of the Farm Bill Conference Committee said he’s confident a Farm Bill will get done, but when that might happen is still a question.”

Daniel Looker reported earlier this week at Agriculture Online that, “[Iowa GOP Senator Chuck Grassley] conceded that his definition of a farmer and active management ‘are still some of the unresolved issues’ that the conference committee may deal with when in meets.  That could happen as early as Thursday of these week, although some ag group lobbyists doubt the committee will be ready to vote on a final bill until next week.

“Grassley also argues that it’s hypocritical for the committee to cut nutrition spending, by perhaps $8 billion over 10 years, while refusing to close loopholes that benefit the very largest farms.  That, he said, would ‘take food out of the mouths of babes and continue to subsidize wealthy farmers that don’t need the subsidies.’”

Sen. Grassley tweeted yesterday that, “Farm Bill $250K Paymt limit allows big farms to get 5x US Median Household income in subsidies/yr. Some want more-How’s 250K unreasonable?”

Also, a news release yesterday from Sen. John McCain (R., Ariz.) stated that, “[Sen. McCain] today sent a letter to Senators Debbie Stabenow (D-MI) and Thad Cochran (R-MS), the Chairwoman and Ranking Member of the Senate Agriculture Committee, to request that they allow Farm Bill conferees to vote on the repeal of the wasteful and duplicative catfish inspection program at the U.S. Department of Agriculture.”

And during an interview yesterday on The Diane Rehm Show (NPR-WAMU), House Democratic leader Nancy Pelosi (D., Calif.) was asked, “And what about the Farm bill? Do you believe it will come before the House?”

Rep. Pelosi stated that, “I think so. The speaker has said, if they came to an agreement, they would bring a bill to the floor. So I’m optimistic that that can happen soon. We need a farm bill for our farmers, for our nutrition programs, for our economy. It’s really important for not only farmers but for our entire economy. But it is very important for our farmers, so hopefully we will have that, and we will have it soon.”

Meanwhile, Burgess Everett reported yesterday at Politico that, “Democrats are moving away from finding a way to cover the cost of an emergency three-month extension of unemployment benefits, hoping instead to strike a deal to pay for a full-year long extension of the program.

“Senate Republicans spent the past two days floating a raft of proposals to pay for the $6.5 billion extension of benefits that expired Dec. 28, all of which have landed as a dud inside the Democratic caucus, sources said. Instead, the chamber’s focus is shifting to finding the estimated $25 billion needed to fund a year-long extension of the program.”

Niels Lesniewski reported yesterday at Roll Call Online that, “[House Ag Committee Chairman Frank Lucas] said no one from leadership had approached him about using the expected savings from a farm agreement to offset the cost of extended unemployment benefits — or anything else.

“‘We on the conference have been focused on ag policy, and that’s not an issue that’s been brought to my attention by anybody,’ Lucas said.”

And Ed O’Keefe reported in today’s Washington Post that, “Negotiations are almost complete on a long-overdue farm bill that will set new spending levels for the federal food stamp program and add yet another wrinkle to the national debate over income inequality as Congress mulls how to help unemployed and low-wage workers.”

The Post article noted that, “Plans call for eliminating about $9 billion in funding for food stamps — formally known as the Supplemental Nutrition Assistance Program (SNAP) — over the next decade, according to several aides familiar with the negotiations who are not authorized to speak publicly about the details.”

Today’s article added that, “‘I don’t think we should be focused on the cuts; I think we should be focused on the efficiencies of the program and who it’s genuinely helping,’ said Rep. Marlin A. Stutzman (R-Ind.), a fiscal conservative who pushed for bolder changes to SNAP. Stutzman said he hasn’t decided how he will vote on the final bill.

“Rep. Steve Southerland II (R-Fla.), another outspoken advocate for bolder reforms, said he also would reserve judgment: ‘I think that individual members are going to have to make their decision: Is my support of a farm bill based on a number or is it based on a meshing of the number and the policy reforms?’”

Mr. O’Keefe indicated that, “Sen. Tom Harkin (D-Iowa), a longtime champion for the poor from one of the nation’s most prosperous farm states, said in a statement that ‘compared to the draconian cuts’ sought by House Republicans, the negotiated change is ‘a dramatic improvement, particularly because it wouldn’t cut anyone from the program.’

“Other liberal senators, including Jack Reed (D-R.I.) and Kirsten Gillibrand (D-N.Y.), signaled Wednesday that a higher level of cuts would force them to vote against the entire bill. Reed said he ‘would be very upset’ if the cuts are included, while Gillibrand described the plan as ‘the wrong approach.’”

The article also noted that, “The [dairy] issue is of special concern to House Speaker John A. Boehner (R-Ohio), who outlined his opposition to the price controls in a rare ‘Dear Colleague’ letter to House lawmakers over the summer.

“‘The federal government doesn’t control the supply or price of bread, clothes, or cell phones — it shouldn’t be doing so for milk,’ Boehner said in his letter.”

And with respect to the executive branch, Secretary of Agriculture Tom Vilsack was a guest on The Daily Rundown with Chuck Todd (MSNBC) yesterday where the discussion focused on Farm Bill issues.  A video replay of that conversation is available here, at FarmPolicy.com Online.

In other news, Kevin Bogardus reported yesterday at The Hill Online that, “The world’s largest tuna companies are making a splash in Washington with a fight over rules that keep some catches out of school lunches.

StarKist and Tri Marine are clashing with Bumble Bee and Chicken of the Sea over the Agriculture Department’s strict Buy American standards for where tuna is cleaned, canned and shipped.

“Bumble Bee and Chicken of the Sea lose under the rules. Both companies have facilities that process tuna in the United States, but their product is also cleaned overseas. Under the USDA standards, their tuna cannot be served in schools, denying them access to a lucrative market.”

 

Agricultural Economy

David Pierson reported on the front page of yesterday’s Los Angeles Times that, “For generations, butter got a bad rap.

“It was thought to be cloying, fattening, dangerous for your arteries, and it took a creaming from oil-based substitutes like margarine.

Now with the trans fats in those alternatives under fire, everyone from iron chefs to home cooks is reexamining butter’s place on the refrigerator shelf.”

Mr. Pierson pointed out that, “That shift toward natural ingredients and the backlash against trans fats pushed butter consumption in the U.S. to a 40-year high in 2012, according to the latest statistics.

“Americans now eat 5.6 pounds of butter per capita, up from a low of 4.1 pounds in 1997. In the last decade alone, butter consumption has grown 25%.”

Meanwhile, Bloomberg writer Jeff Wilson reported yesterday that, “Corn futures tumbled to a 40-month low and wheat fell to the cheapest since 2011 on speculation that a U.S. government report this week will show ample world supplies. Oilseeds also slumped.”

And Reuters writers Michael Hirtzer and Theopolis Waters reported yesterday that, “Prices for select-grade U.S. wholesale beef hit a record-high on Wednesday for the fourth straight day, as shipments of the meat slowed after a historic winter storm in the United States prompted a surge in live cattle prices, analysts said.

“Higher-quality ‘choice’ beef prices also climbed, rising to the loftiest levels since hitting an all-time high in May, 2013, U.S. Agriculture Department data showed.”

The Reuters article noted that, “The U.S. cattle herd is the smallest in about 60 years, forcing beef packers such as Tyson Foods Inc and Cargill Inc last week to pay feedlots in the southern U.S. Plains as much as $138 per cwt for live cattle, a record price.”

And Bloomberg writer Luzi Ann Javier reported yesterday that, “Sugar futures declined in New York to the lowest since July 2010 on signs that an improving global production outlook will add to a supply glut.

“The 2014 cane harvest in Australia, the world’s third-biggest sugar exporter, may exceed 32 million metric tons, compared with about 30.5 million a year earlier, producers’ group Canegrowers said today. In Brazil, the largest producer, rains this week will boost the crop, Somar Meteorologia said yesterday.

Prices slumped 16 percent in 2013, the third straight drop and the longest decline since 1992.”

In news regarding trade issues, a news release yesterday from Senate Ag Committee Chairwoman Debbie Stabenow (D., Mich.) stated in part that, “[Sen. Stabenow] and Lindsey Graham (R-SC), Co-Chairs of the bipartisan Senate Manufacturing Caucus, continued to press for answers from the administration on whether foreign currency manipulation will be addressed in ongoing Trans-Pacific Partnership trade agreement talks. In a letter to President Obama, Sens. Stabenow and Graham reiterated concerns that the most recent round of negotiations did not even touch on currency manipulation, despite the fact that bipartisan majorities in both Houses of Congress support such an agreement and have repeatedly urged the administration to take action.”

 

Biotech

Reuters writer Carey Gillam reported yesterday that, “Monsanto Co, the world’s largest seed company, said Wednesday it was making good progress on development of an herbicide-tolerant wheat, pushing what would be the world’s first biotech wheat a step closer to market.

“Monsanto is already a leading developer of biotech corn, soybeans and other crops and the company has long tried to bring to market a wheat genetically altered to tolerate spraying of glyphosate, the key ingredient in Monsanto’s Roundup herbicide.”

The Reuters article added that, “The company is progressing on work to make crops more drought-hardy, and more pest- and disease resistant. It is also working on a new combination of biotech crops and herbicide chemistry to control weeds that have become resistant to its Roundup herbicide.”

Also yesterday, Reuters news reported that, “Chinese quarantine authorities have sped up testing on imports of distiller’s dried grains, suggesting they have relaxed checks on the corn by-product since rejecting some U.S. cargoes for being tainted with an unapproved GMO strain, traders said.”

China, the world’s top buyer of U.S. DDGs, accounted for about 40 percent of U.S. exports of the high-protein feed in the 2012/13 marketing season,” the article said.

And a separate Reuters article from yesterday reported that, “Switzerland-based Syngenta AG is waiting for China to approve a strain of gene-modified corn present in several U.S. cargoes turned away from Chinese ports in recent months, the company said.

“Since November, China has rejected about 600,000 tonnes of corn from United States, the world’s largest exporter, after detecting traces of MIR 162, also known as Agrisure Viptera, which is still awaiting approval from China’s farm ministry.”

The article added that, “Industry sources said Beijing’s scrutiny of GMO corn is prompted by a glut in domestic supply as it seeks to curb cheap imports and support domestic prices of the grain to help farmers.”

 

Biofuels

Reuters news reported yesterday that, “The U.S. Energy Information Administration (EIA) revised up its 2014 gasoline demand forecast for a fourth straight month on Tuesday, opening the possibility that a controversial cut in ethanol blending mandates could be eased.”

The article explained that, “The higher forecasts are important because they mean there could be more petroleum-based gasoline available than expected to blend with ethanol, leaving the agency room to lessen the proposed cuts in this year’s biofuel blending quotas.

“‘It would give them adequate room, I think, to raise the renewable mandate by 200 to 300 million gallons,’ said Scott Irwin, an agricultural economist at the University of Illinois Urbana-Champaign.

“‘Not only could they, they should, because the methodology is based on these estimates and if the estimates go up, they should allow their number for the renewable mandate to float with the estimate for the blend wall,’ Irwin added.”

And Donnelle Eller reported yesterday at The Des Moines Register Online that, “Iowa biodiesel production pushed over 230 million gallons last year, an increase of 25 percent and a new record, according to the Iowa Renewable Fuels Association.”

Ms. Eller indicated that, “Soybean oil remained the leading biodiesel feedstock in Iowa, accounting for 68 percent of production, the group said. However, the use of lower carbon intensity feedstocks doubled over the previous year. Animal fats accounted for 27 percent of biodiesel feedstocks, while used cooking oil, inedible corn oil and canola oil accounted for the remaining five percent.”

 

Animal Agriculture

Christopher Doering reported in the front page of yesterday’s Des Moines Register that, “Pork giant Smithfield Foods is asking its hog suppliers to phase out the use of controversial stalls to raise pregnant sows.”

The article stated that, “The pork industry said the costs for hog producers to make the changes to their operations would be less significant if they were made during a longer period, a time when older barns would likely need to be replaced anyway.

“About 10 percent of the country’s 5.8 million sows are housed in systems other than gestation stalls. A 2010 study from the University of Minnesota estimated it could cost the pork industry as much as $3.3 billion to transition from gestation crates to group pens.”

Meanwhile, Jim Spencer reported this week at the Minneapolis Star-Tribune Online that, “Sometimes Dar Geiss needs antibiotics to treat the cattle on his ranch in central Minnesota. Soon, he will have to go through a more encumbered procedure to get those drugs.

“A new Food and Drug Administration program aimed at lowering the growth of antibiotic-resistant bacteria dramatically changes the application and delivery of dozens of infection-fighting drugs to cattle, hog, turkey and chicken producers across the country.”

The article noted that, “The use of antibiotic feed to increase animal growth ‘is not something we practice every day,’ said Geiss, president of the Minnesota State Cattlemen’s Association. But, he added, the purchase and use of antibiotics under the new program will be ‘a big switch from nutrition companies to vet oversight.’”

Steve Olsen, who directs the Minnesota Turkey Growers Association, says a shortage of food production vets stretches across the country,” the article said.

Also on the issue of veterinarians, Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “The Senate passed a bill Wednesday that would broaden veterinarians’ ability to dispense controlled substances.

“Sen. Jerry Moran (R-Kan.) introduced S. 1171, which would amend the Controlled Substances Act to allow a veterinarian to transport and dispense controlled substances at a site other than their practice as long as the site of transporting and dispensing is located in a state where the veterinarian is licensed.”

 

Immigration

Kristina Peterson reported yesterday at the Washington Wire Blog (Wall Street Journal) that, “Like many New Year’s resolutions, this one could be tough to keep: The top two House Republicans told GOP lawmakers Wednesday they want to overhaul the immigration system in 2014.

“House Speaker John Boehner (R., Ohio) and Majority Leader Eric Cantor (R., Va.) both included an immigration rewrite among the top 2014 priorities they outlined during a closed-door meeting with the GOP ranks, lawmakers said after the gathering.”

Ms. Peterson noted that, “Republicans have said they want to address immigration laws in a step-by-step fashion, rather than the sweeping, bipartisan bill passed by the Senate last year. Mr. Boehner on Wednesday reiterated his pledge that leaders would not allow negotiators to subsume any narrower bills passed by the House into the broad Senate bill, which includes a controversial path to citizenship for illegal immigrants already living in the U.S.”

And Jennifer Rubin reported yesterday at the Right Turn Blog (Washington Post) that, “In short, in the post-shutdown world with GOP leadership and mainstream Republicans perking up, immigration reform might just be possible.”

 

Political Notes

John Bresnahan, Jake Sherman and Alex Isenstadt reported yesterday at Politico that, “North Carolina Rep. Mike McIntyre and New York Rep. Carolyn McCarthy will not seek reelection this year, according to multiple Democratic sources familiar with their plans – marking a blow to Democratic efforts to win control of the House.

“The 57-year-old McIntyre, who was elected in 1996 to the Wilmington-area congressional seat, narrowly defeated Republican state Sen. David Rouzer in 2012 and was poised to face him in a 2014 rematch. His retirement from the heavily Republican district will further thin the ranks of Blue Dog Democrats.”

Rep. McIntyre is one of the more experienced members of the Agriculture Committee where he serves on the Conservation, Energy, and Forestry Subcommittee and the Livestock, Rural Development, and Credit Subcommittee.

Keith Good

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