January 25, 2020

Farm Bill; Ag Economy; Biotech, Biofuels; CFTC; and, Immigration

Farm Bill Issues

Ali Meyer reported yesterday at that, “A record 20% of American households, one in five, were on food stamps in 2013, according to data from the U.S. Department of Agriculture (USDA).”

Meanwhile, Ron Nixon reported yesterday at The New York Times Online that, “Late last year, staff members at the Capital Area Food Bank here [Washington] began fielding requests for larger deliveries from the dozens of soup kitchens and food pantries that it supplies as more and more people showed up seeking help.

“The food bank said it was not unusual to see a surge before Thanksgiving or Christmas. But this time the lines were caused not by the holidays but by a $5 billion cut to the federal food stamp program that took effect in November when a provision in the 2009 stimulus bill expired.

“Now the food bank, which provided about 45 million pounds of food last year, says it is preparing for even greater demand as Congress prepares to cut billions of dollars more from the food stamp program, which is included in a farm bill that has yet to pass. About 47 million Americans receive food stamps.”

Mr. Nixon explained that, “It is unclear when the new cuts will kick in, even if Congress manages to pass a new farm bill, an effort that has taken almost two years. The House and the Senate appear to have worked out most of their differences on the bill. That compromise is expected to cut about $9 billion from food stamps over 10 years. House Republicans had wanted to trim financing by $40 billion over the same period, and a bipartisan Senate bill sought a $4 billion cut.

“But House members, most of them Republicans, may be unwilling to pass a bill that includes anything less than the $40 billion cut. And senators, especially Democrats, may see the compromise measure as going too far. President Obama has threatened to veto any bill that cuts too deeply.”

The Times article added that, “Lawmakers say the compromise would not force anyone off the food stamp rolls. The budget savings, said Senator Debbie Stabenow, Democrat of Michigan and chairwoman of the Senate Agriculture Committee, would come from changes to the way states administer a federal program that helps low-income families with their heating bills.”

Chris Morisse Vizza reported this week at the Journal and Courier (Lafayette, Ind.) Online that, “Agreement on a five-year farm bill may be announced soon, according to [Sen. Joe Donnelly (D., Ind.)].

“The legislation has been stalled for months while the Senate, which Democrats control, and the Republican-controlled House have battled over cuts in food stamp funding, which is included in the ag bill. The House approved a $40 billion cut in food aid over a 10-year period.

“‘There will be a $9 billion reduction,’ Donnelly said of the pending Senate proposal. ‘We’ve been carefully going line by line. … We have worked hard to make sure SNAP covers our children.’ The reference was to the Supplemental Nutrition Assistance Program.”

Meanwhile, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Discussing the farm bill, [Iowa GOP Sen. Chuck Grassley] said the principal negotiators may take his language defining an actively engaged farmer out of the farm bill and leave it up to USDA to determine who is actively engaged. This Congress is filled with lawmakers who have criticized administrative rulemaking usurping congressional authority. Yet, farm-bill conferees now seem intent on turning over rulemaking to USDA to redefine who is actively engaged as a farmer.”


Agricultural Economy

Nathan Phelps indicated this week at the Green Bay Press Gazette Online that, “Wisconsin dairy farmers ended 2013 with an acceptable price for their milk, and while anything can happen over the next 12 months, the outlook for 2014 is ‘cautiously optimistic.’

“One of the drags on the bottom lines of farmers last year was the cost of feed — namely corn and hay, crops that faced diminished yields in 2012 thanks to a severe drought in many parts of the state.”

The article noted that, “‘Last year was an OK year,’ said Zen Miller, a dairy and livestock agent with the Outagamie County University of Wisconsin Extension Service. ‘If you were buying a lot of corn, it was $6 or $7 per bushel, for seven, eight, or nine months of the year; you were paying large prices for corn, even though the milk price was up.’

“The coming year looks a little better with milk prices up and diminished feed prices, Miller said.”

The article also stated that, “Sharp declines in milk prices are not expected this year, but milk production could climb, according to Bob Cropp, a dairy market expert with the University of Wisconsin-Madison.

“‘With higher milk prices and lower feed costs, as we move through the year we can expect milk production to pick up with milk cows being added and improved milk per cow (production),’ he wrote in a December market outlook. ‘This will put some downward pressure on milk prices for the second half of the year.’”

Bloomberg writer Elizabeth Campbell reported yesterday that, “Milk futures in Chicago jumped to the highest on record, signaling higher costs for consumers, as exports surge and a record drought threatens output in California, the nation’s top producer.”

Also yesterday, Chuin-Wei Yap reported at The Wall Street Journal Online that, “China imported record volumes of corn in December, with the U.S. accounting for a still-dominant but declining share of shipments to the massive grain market.

China’s shift to a protein-rich diet is changing global trade flows. The Middle Kingdom is already the world’s largest consumer of corn, and its rising food demands have turned the nation from being a net exporter of corn three years ago to the world’s fifth-largest importer, according to financial-services firm Rabobank.”

The Journal article stated that, “Senior government officials have warned that the country may face a corn-supply deficit in coming years due to increasing demand from livestock and food-processing industries. Some 70% of China’s corn consumption goes to livestock, with the rest feeding processors that turn it into syrups and starches, among other foods.

“In recent months, the agriculture ministry has defended a trend of rising corn imports, saying that a combination of domestic and foreign resources is ‘an inevitable choice for China.’ However, some military strategists have warned that Western nations could use grain imports as a strategy to undermine China’s security.”

In other news, Ken Anderson reported yesterday at Brownfield that, “A semi-annual study of farmland values by Omaha-based Farm Credit Services of America (FCSAmerica) suggests the market for farmland could be leveling off, or in some cases, softening.

“The analysis of ag real estate sales transactions—both auctions and private sales—shows farmland values in Iowa declined nearly three percent in the second half of 2013, while Nebraska prices were up less than one percent.  South Dakota land values remained fairly strong, recording a seven percent increase.”

And Stephanie Strom reported in yesterday’s New York Times that, “Neither the United States Department of Agriculture nor the National Pork Producers Council has data on the number of pastured pigs, though in 2006, research done at Iowa State University estimated that the drift, as a group of pigs is known, numbered from 500,000 to 750,000.

Several factors are driving the appetite for pasture-raised pork, grocers and chefs say. Consumers are increasingly aware of and concerned about the conditions under which livestock is raised, and somewhat more willing to pay higher prices for meat certified to have come from animals that were humanely raised.

“Big food businesses from McDonald’s to Oscar Mayer and Safeway have promised to stop selling pork from pigs raised in crates over the next decade. Smithfield Farms, one of the country’s largest pork processors, announced this month that it was encouraging all contractors raising hogs on its behalf to move to the use of group pens, which have to be big enough for several pigs to live in comfortably, with space to walk around and bed down.”

Meanwhile, Geoffrey Mohan reported yesterday at the Los Angles Times Online that, “A rapidly mutating virus has leaped from plants to honeybees, where it is reproducing and contributing to the collapse of colonies vital to the multibillion-dollar agricultural industry, according to a new study.”

In news regarding USDA data, University of Illinois agricultural economist Darrel Good indicated yesterday at the farmdoc daily blog (“Comparing NASS and FSA Planted Acreage Data”) that, “The relationship between FSA [USDA’s Farm Service Agency] and NASS [USDA’s National Agricultural Statistics Service] planted acreage estimates can be useful in forming early expectations of the NASS final acreage estimates. FSA releases reports of planted acreage monthly from August through January, reflecting the producer reports received and processed to date.  Beginning In October, NASS formally uses the FSA estimates as input into their estimates.  In most years, however, the September FSA estimates are close to the final FSA estimates, or can be used to anticipate final FSA estimates, and therefore final NASS estimates. The FSA estimates in September 2013, for example, provided an early indication that NASS September corn and soybean acreage estimates were too high, having not yet fully reflected the magnitude of prevented plantings.”

With respect to trade, AP writer Juergen Baetz reported yesterday that, “The European Union announced Tuesday a partial suspension of the free trade negotiations with the United States to hold a three months-long public consultation due to worries about some of the deal’s proposed rules for investment.”

The AP article noted that, “The suspension won’t derail the overall negotiations that officials hope to conclude by the end of the year, according to the EU Commission, the 28-nation bloc’s executive arm. The next high-level meeting in the talks is planned for mid-February in Washington, followed by a new negotiation round in March, both of which will go ahead as planned, said spokesman John Clancy.

“The part of the free trade deal that is being contested is a provision that would allow investors or multinational firms to bring arbitration claims against a state when the country is alleged to have broken the pact’s investment guidelines.”

And Amie Parnes reported yesterday at The Hill Online that, “The White House is making a major push to convince Congress to give the president trade promotion authority (TPA), which would make it easier for President Obama to negotiate pacts with other countries.

“A flurry of meetings has taken place in recent days since legislation was introduced to give the president the authority, with U.S. Trade Representative Mike Froman meeting with approximately 70 lawmakers on both sides of the aisle in the House and Senate.”



Reuters writer Tom Polansek reported yesterday that, “Syngenta AG is pressing ahead with U.S. sales of a new corn trait that is not approved in China, fueling concerns of another jarring GMO trade quarrel with the world’s fastest-growing food importer.

“While the U.S. grain industry lobbies the Chinese government to stop rejecting cargoes of corn containing another unauthorized genetically modified Syngenta strain, farmers in the Midwest are weighing whether to take a chance on the Swiss-based company’s new product, engineered to combat pests called rootworms.

“Syngenta, the world’s largest crop chemicals company, said its Agrisure Duracade trait will be available for planting for the first time this year in ‘limited quantities’ after U.S. authorities cleared it for sale and cultivation last year.”

The in-depth and interesting Reuters article added that, “John Latham, president of Iowa-based Latham Hi-Tech Seeds, has licensed the Duracade trait from Syngenta for this spring. But without approval from China, he says, U.S. corn growers have been wary of booking those seeds and that some elevators may refuse to accept corn with the trait.

“Peterson Farms Seed in North Dakota decided against licensing the Duracade trait from Syngenta because of concerns about China, agronomy manager Adam Spelhaug said. The firm sells corn with the Viptera trait, he said, while making sure that customers who buy those seeds can sell to markets that accept the trait.”



Derek Sullivan reported on Monday at the Post-Bulletin (Rochester, Minn.) Online that, “Minnesota Sen. Al Franken met with area farmers on Saturday to show his disappointment with proposed rules that would lower the amount of ethanol that could be added to gasoline.”

The article noted that, “[Sen. Franken] also has written to President Barack Obama and spoken to him directly to express opposition to any cuts to the Renewable Fuel Standards that would reduce the total amount of ethanol blended into gasoline supplies.

“‘I told him that he’s from Illinois, a state that has a big corn crop, and that the proposed RFS rules are going in the wrong direction,’ Franken told the crowd. ‘This is exactly the wrong time to send this message. We can’t tell corn farmers that we’re not going to extend the RFS for ethanol and biodiesel.’”

“Franken added that Sen. Amy Klobuchar, D-Minn., and Sen. Chuck Grassley, R-Iowa, have considered going to the Federal Trade Commission to put a stop to gas companies who make life difficult for business owners who use blender pumps,” the article said.

Christopher Doering reported yesterday at The Des Moines Register Online that, “Iowa Sen. Chuck Grassley said Tuesday President Obama must get involved in the debate over the country’s ethanol policy or risk handing ‘a big victory’ to the oil industry.

“During a call with reporters, Grassley said the November proposal by the Environmental Protection Agency to reduce the blending level requirements for renewable fuels in 2014 would likely move forward, despite pressure from ethanol groups and members of Congress, unless the White House chose to step in. The measure has been met with intense opposition from Iowa’s Washington delegation and Gov. Terry Branstad who have lobbied the EPA to rescind the reduction amid fears it could cost the state jobs and income.”


CFTC- Commodity Futures Trading Commission

Andrew Ackerman reported yesterday at The Wall Street Journal Online that, “A Senate panel is poised as early as next month to advance the nomination of Timothy Massad to head the Commodity Futures Trading Commission, though some lawmakers are questioning his approach to financial regulation.

“President Barack Obama tapped Mr. Massad in November to succeed Gary Gensler. The Senate Agriculture Committee, which plans to weigh Mr. Massad’s nomination in coming weeks, also plans to take up the nominations of Sharon Bowen, a securities lawyer at Latham & Watkins LLP, and brokerage executive J. Christopher Giancarlo to fill commissioner slots.

“The confirmation hearings come at a critical time for the CFTC, which has completed the bulk of its rule-writing for the 2010 Dodd-Frank financial-overhaul law but must now finish implementing and overseeing its efforts to bring stricter regulation to the multitrillion-dollar derivatives market.”

Meanwhile, Peter Schroeder reported yesterday at The Hill’s On the Money Blog that, “Jon Corzine’s efforts to have a lawsuit filed against him by a federal regulator dismissed have come up short.

“A U.S. District judge determined that the push to toss a case filed by the Commodity Futures Trading Commission was ‘without merit.’

“Judge Victor Marrero, in a ruling filed earlier this month, determined it was too early to say whether the regulator would be able to prove its case against the former head of the bankrupt firm MF Global and another former employee.”



Michael D. Shear reported in today’s New York Times that, “The two women might at first seem more like political rivals than a reminder of the way things used to work in Washington.

Esther Olavarria, a Democrat, left Cuba as a child, worked as Senator Edward M. Kennedy’s top immigration lawyer and now holds a post in the White House. Rebecca Tallent, a Republican, left suburban Arizona and became Senator John McCain’s chief of staff, briefly advised Sarah Palin in 2008 and is now a top policy aide to Speaker John A. Boehner of Ohio.

But if there is any way to unlock the immigration stalemate in Washington, colleagues say these two might find it.”

The Times article stated that, “A decade ago, the two women spent months in marathon back-room deal-making sessions as they repeatedly tried to bring lawmakers together on overhauls that would have given legal status to immigrants, secured the border and opened the country to more legal workers. In the process, they formed a friendship that transcended party affiliation.”

Today’s article pointed out that, “Ms. Tallent, 34, is a key player in writing what Mr. Boehner and other House Republicans call guiding principles for an immigration overhaul. The goals, which are expected to be outlined in detail in the next week, are likely to include bolstered border security and enforcement inside the country, fast-track legalization for agricultural laborers, more visas for high-tech workers, and an opportunity for young immigrants who came to the country illegally as children to become American citizens.

“At the White House, Ms. Olavarria, 56, is charged with finding a compromise that Democrats and activists can live with. Both sides say they expect the two women to immerse themselves in back-channel talks, if they have not already.”

And Reid J. Epstein reported yesterday at Politico that, “The White House is trying to dial down the partisan rhetoric on immigration — and it’s asking its allies to do the same.

“In meetings with immigration reform advocates, White House officials have said President Barack Obama won’t threaten to take unilateral executive action — at least not yet — and that he wants to give House Republicans some breathing room to try to pass legislation this year, said immigration advocates who have participated in the sessions.”

Keith Good

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