May 21, 2018

Farm Bill; Ag Economy; and, Budget

Farm Bill- Dairy Issues

David Rogers reported yesterday at Politico that, “House Agriculture Committee Chairman Frank Lucas conceded Thursday that final action on a farm bill conference report is now likely to slip into late January — a major blow to himself and an ominous turn for the bill itself.

“The draft package combines a landmark rewrite of commodity programs together with cuts from food stamps to generate in the range of $25 billion in 10-year savings, according to preliminary estimates. These accomplishments remain a strong argument for saving the bill. but the persistent in-fighting and delays are taking their toll and a worry for supporters.

“‘It needs to be done as soon as possible but the issues are of such magnitude I can’t go until I get the issues addressed,’ Lucas said. The Oklahoma Republican admitted to immense frustration — and some surprise — at the full dimensions of the standoff now between Speaker John Boehner (R-Ohio) and Lucas’s own ranking Democrat, Minnesota Rep. Collin Peterson, over dairy policy.”

The article noted that, “Lucas said he is now working on options to broker some compromise but he conceded as chairman, ‘There comes a point in time here where I have to pick a side and go with it.’”

During a radio interview yesterday morning with Doug Williams on K-101 (Woodward, Okla.), Mr. Williams asked Chairman Lucas: “Where does our congressman, and the chairman of this congressional committee, come down on this [dairy] subject?”

After a long pause, Mr. Williams followed up: “Was I not supposed to ask that question?”

Chairman Lucas noted: “No, that’s a fair question, and I don’t have an answer yet.”

In yesterday’s Politico article, Mr. Rogers also explained that, “Indeed Boehner sounded this theme again in his weekly press conference on Thursday. ‘The Soviet-style dairy program we have will continue, but let’s not make it any worse by including supply and management tools,’ the speaker said. ‘I’ve fought off the supply and management ideas for 23 years that I have been in Congress, and my position hasn’t changed, and Mr. Peterson and others are well aware of it.’

“Asked directly if he would block the farm bill conference report from coming back to the House floor if it did include the Peterson supply management language, Boehner suggested Lucas would protect him from having to make that decision.

“‘I am confident that the conference report will not include supply and management provisions for the dairy program,’ the speaker said.”  [Related audio from yesterday’s press briefing with Speaker Boehner can be heard here (MP3- 1:00)].

The Politico article added that, “Lucas said that in his own conversations with Boehner, the speaker had warned him explicitly. ‘His statement to me was that if supply management is in it, it’s not coming to the floor. Flat out,’ Lucas said.

“‘If the conference adopts Peterson exclusively, his language on dairy, we might not have a conference report. Where do I go from there?’ the chairman said. ‘By the same token if the conference rejects Peterson, Collin has been a very key player in helping to pull this all together. How will he react? Will he light a match and blow up a stick of political dynamite?’

“‘I’m trying to work with both factions on any or all options.’ Lucas said, but he likened the experience to trying to separate two over-heated bulls in the middle of a pasture.”

Mr. Rogers also noted that, “Peterson lost to Boehner on the supply management issue during the House farm bill debate last summer. But his language has the support of the Senate in its version of the farm bill. And the Minnesota Democrat believes he has the votes in the House-Senate talks now to ultimately prevail.

“An important swing vote here is Rep. Mike Rogers (R-Ala.). Rogers is counted as loyal to Lucas but under pressure from dairymen at home to back Peterson if possible. ‘I get the feel that Rogers’s dairymen want Peterson’s language,’ Lucas said, when asked about his own conversation with Rogers this week. ‘I get the feeling that Rogers wants to be reflective of his dairymen.’”

Also, the  “Washington Insider” section of DTN reported in part yesterday (link requires subscription) that, “Then, even more surprising, last Friday, Jan. 3, a very similar scenario played out once again. This time, Lucas called Boehner to set up a three-way call that included Peterson. And Peterson reportedly opened the call with a 15-minute discourse on dairy, frequently mentioning the need for supply management language. Boehner is said to have ‘just listened.’

“A bit later, Peterson sort of wound up with, ‘Well, John, we may have to see what happens if we just call this report up with supply management language included.’ At that, Boehner is said to have responded directly with the comment that if that were to happen, ‘I would not bring it (farm bill conference report) up for a House vote’ — a conversation stopper if there ever was one.”

The DTN item noted that, “At least a few observers have wondered what all this really is about, and whether Boehner really feels as strongly about the dairy proposal as his responses to Peterson indicate, and now they have an answer, sort of. Still, they note that he hasn’t attempted to kill the sugar program with its supply controls, they say.

“As a result, some wonder if this is not just a way to kill this bill and hold out for still greater cuts to the supplemental nutrition program that some of his caucus are demanding and blame it on dairy proposals rather on opposition to the poverty program.”

Congressmen Bob Goodlatte (R., Va.) and David Scott (D., Ga.) released a statement yesterday on the dairy issue and sent a letter to leaders of the Conference Committee reminding them of the House of Representatives’ overwhelming rejection of supply management provisions.

Meanwhile, Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) on Thursday urged all sides to back down and agree to a dairy compromise in order to complete the stalled farm bill.

“Stabenow says she has floated compromises to resolve a deepening dispute between Speaker John Boehner (R-Ohio) and supporters of dairy production controls in the Senate farm bill.

“‘Over the weekend we’ve got to come to a conclusion here … we are basically down to focusing on differing approaches on dairy,’ she said. ‘It would be a shame if the Speaker tried to stop the farm bill at this point.’”

The article noted that, “‘I’m hopeful that the Speaker will take a look at the fact his proposal … would cost billions of dollars more in taxpayer money, which is certainly not something we want,’ [Stabenow] said. ‘There are certainly are compromises if people are willing to do that.’”

Mr. Wasson pointed out that, “The Michigan senator, who has tried to pass a farm bill since 2012, said that the bill could be done this month, but ruled out finishing it next week, as had originally been the goal. She said the House could vote on the farm bill next week, and that the Senate could tackle it after the Martin Luther King Day recess…[T]o get to the floor, negotiators might skip doing a farm bill conference at all. That would involved getting enough conferees to sign the chairmen’s mark.”

The Hill update added that, “Rep. Steve King (R-Iowa) said separately Thursday that Stabenow and Senate Democrats are refusing to discuss his amendment aimed at stopping states from banning the import of products based on means of production. He indicated that without that amendment in the farm bill, he may be unable to support it.”

In a separate update yesterday at The Hill Online, Erik Wasson noted that, “Lucas said his negotiations with Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) are still revolving around how to calculate payment limits for farm subsides as well.”


Farm Bill: Commodity Title, Payment Limitations

Daniel Looker reported yesterday at Agriculture Online that, “Speaking to reporters Thursday, Senate Agriculture Committee member and past chairman Tom Harkin (D-IA) said that working out the details of commodity programs remains one of the sticking points to holding a meeting of the conference committee to approve a final farm bill. The committee appears unlikely to meet today, as had been expected earlier this week.

“‘It hasn’t been resolved yet. That’s one of the things that needs to be resolved,’ Harkin told

“Harkin said he understands that both the revenue program and a new version of a target price program are likely to pay farmers according to their base acres, not planted acres.”

Mr. Looker added that, “Harkin is one of the Senate Ag Committee members of the conference committee and, like most, he opposes raising target prices and making payments on planted acres when prices fall below that level. ‘That might encourage overproduction,’ he said, as well as putting more pressure on fragile farmland.

“At this point, ‘it appears that payments will be made on historical base acres,’ Harkin said.”

Yesterday’s article noted that, “Harkin said Thursday that it’s possible negotiations could go on into the next week or two, and that it might even be February before the conference committee meets. But he didn’t seem to see that as a barrier to finishing a farm bill early in the new year.”

And Iowa’s other Senator, Chuck Grassley, tweeted yesterday that, “Farms w/ 16 mgrs seem 2 want mgmt likeCongress Makes no sense 2 me. Extra mgrs r only 2 exploit taxpayers Key 2 keep my reforms in FarmBill”

Sen. Grassley made additional remarks on the Farm Bill in a brief video that was released yesterday by his office.


Farm Bill: Nutrition

Ron Nixon reported yesterday at The New York Times Online that, “People close to the negotiations said Thursday that a deal had been reached to cut about $9 billion over 10 years from the food stamp program, formally known as the Supplemental Nutrition Assistance Program.”

The Times article added that, “Joel Berg, the executive director of the New York City Coalition Against Hunger, said, ‘The willingness of some Senate Democrats to double new cuts to the program — while leaving the corporate welfare in the bill mostly intact — is unthinkable.’

“It was unclear how the new figure for the cuts would affect votes for a final bill. Many Senate Democrats may be reluctant to support larger reductions to the program, while House conservatives may see the cuts as too low. Lawmakers in both chambers said they were taking a wait-and-see approach.”

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “House Majority Leader Nancy Pelosi (D-Calif.) on Thursday did not reject outright the $9 billion in food stamp cuts that sources say are in the compromise farm bill that is nearing completion.

“Pelosi, whose support will likely be crucial to passing the $1 trillion legislation, said she is still waiting to see the details of the cuts.”

And AP writer Mary Clare Jalonick reported yesterday that, “Doctors are warning that if Congress cuts food stamps, the federal government could be socked with bigger health bills. Maybe not immediately, they say, but over time if the poor wind up in doctors’ offices or hospitals as a result.

“Among the health risks of hunger are spiked rates of diabetes and developmental problems for young children down the road.”

The U.S. Department of Agriculture released a “Fact Sheet” yesterday (“A Strong Nutrition Program to Help Hardworking American Families”) which stated in part that, “This week, Agriculture Under Secretary Kevin Concannon and Anne Alonzo, Administrator for the Agricultural Marketing Service joined George Jones, CEO of Bread for the City to highlight the need for a new Farm Bill that adequately invests in America’s nutrition safety net. Food assistance programs, along with the National School Lunch Program and School Breakfast Program, provide a critical means to provide healthy food for Americans who are working hard but struggling to fill their plate.”

Also yesterday, Mark Weiner reported at The Post-Standard Online (Syracuse, N.Y.) that, “The federal government’s three-month test of Chobani yogurt as a substitute for protein in school lunches has turned out to be a big success, U.S. Sen. Charles Schumer said today.

“The U.S. Department of Agriculture tested Chobani’s Greek yogurt with school lunches offered in four states, including New York, from September to November. The result: Kids ate 200,000 pounds of yogurt worth $300,000.

Schumer, D-N.Y., said the success of the pilot program in New York, Tennessee, Idaho and Arizona should persuade the USDA to expand the pilot program to other states.”


Farm Bill: Executive Branch Perspective- Sec. of Ag. Tom Vilsack

An update yesterday at the Red River Farm Network Online indicated that, “Agriculture Secretary Tom Vilsack says USDA is ready to rock and roll as soon as Congress passes a farm bill. Vilsack says Congress needs to get its work done. ‘We’ve been told by Congress now for two years that the bill was right around the corner. The time has come for no more excuses, whatever has to be done to get the final issues resolves needs to get done. I will guarantee that USDA is prepared to implement this thing as quickly as we properly can. We have prioritized what we need to do what we need to do first, second, third within each title. We’re ready, but right now we can’t do anything until we get Congress to finish its work.’ Vilsack says every day that passes makes it harder to get rules and regulations written in time for the 2014 crop.  [Entire Red River Farm Network interview (MP3- 6:00)].”

Sec. Vilsack also spoke yesterday with Greg Akagi on The Kansas Ag Network; a summary of the discussion noted that, “The Secretary discussed the need for Congress to pass a new farm bill.  He also discussed some of the remaining points that members of the farm bill conference committee are trying to work out and also comments on the proposed technical fees that would be added to what farmers and ranchers may pay in regards to participating in conservation programs.”


Agricultural Economy, Trade, and Biotech

Tony C. Dreibus reported yesterday at The Wall Street Journal Online that, “Corn prices fell to the lowest in more than three years and wheat dropped to a 24-month low, reflecting slack export demand for U.S. grain amid rising production.

“Grain prices also slipped as traders braced for the possibility that U.S. government crop reports Friday will show that last year’s corn harvest was larger than forecast.”

A news release yesterday from the Food and Agriculture Organization of the United Nations indicated that, “The FAO Food Price Index averaged 206.7 points in December, nearly unchanged from the previous month, with a sharp increase in dairy prices and high meat values balancing out a steep decline in sugar quotations and lower cereal and oil prices.

“For 2013 as a whole, the index averaged 209.9 points – down 1.6 percent from 2012, and well below 2011’s peak of 230.1, but still the third highest annual value on record.”

In news regarding animal production, Christopher Doering reported in yesterday’s Des Moines Register that, “Just days after pork giant Smithfield Foods offered incentives for contract hog farmers to move away from gestation crates, Tyson Foods said Thursday it was urging its growers to stop the controversial practice or take other steps to improve animal care.”

And in trade developments, Siobhan Hughes and William Mauldin reported in today’s Wall Street Journal that, “Lawmakers on Thursday unveiled legislation to put congressional backing of trade deals on a fast track, including language aimed at discouraging trading partners from using their currencies to gain a competitive advantage.

“Under the fast-track procedure, known formally as ‘trade promotion authority,’ Congress agrees to approve trade deals with an up-or-down vote, without amending them or slowing them down with procedural tactics.”

Those welcoming this legislative action included: U.S. Trade Representative Michael Froman, House GOP Leaders, Sen. Mike Johanns (R., Neb.), Rep. Adrian Smith (R., Neb.), Sen. Roy Blunt (R., Mo.), the American Farm Bureau Federation, the National Pork Producers Council,  and the National Corn Growers Association.

Representatives Rosa DeLauro (D., Conn.), Louise Slaughter (D., N.Y.), George Miller (D., Calif.) and Chellie Pingree (D. Maine) were among those expressing reservations on the trade measure (see news releases here and here).

In biotech news, Steve Mistler reported yesterday at the Kennebec Journal (Augusta, Maine) Online that, “Gov. Paul LePage has signed a bill that would require food producers to label foods that contain genetically modified ingredients. The law makes Maine the second state in the country to pass such a measure. However, other states must adopt similar legislation before Maine’s labeling provision goes into effect.”



Bloomberg writers Roxana Tiron and Derek Wallbank reported yesterday that, “Congressional negotiators have completed work on the military portion of a plan to finance the U.S. government and avoid a second shutdown in four months, said House Appropriations Committee member Ken Calvert.

Lawmakers are generally agreed on 11 of the 12 sections of the measure, said Calvert, a California Republican, without saying which section remained unfinished.”

The article noted that, “Current government funding runs out in a week, on Jan. 15. House Appropriations Chairman Hal Rogers said that ‘because of Senate procedures,’ Congress may need to approve a two-day stopgap spending measure to keep the government operating until the final bill is enacted.”

Keith Good

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