January 28, 2020

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

Farm Bill

David Rogers reported yesterday at Politico that, “After a two-year struggle and more perils than ‘Downton Abbey,’ Congress should finally see a new farm bill this week as House-Senate negotiators worked through the weekend in hopes of filing the legislation by Monday night.

“Going into Sunday night, disputes continued over livestock regulations. But afternoon staff briefings were already being held on the proposed agreement, and the hope was to call the conferees together for their signatures on Monday.

“Indeed, the mood was such that no one believed any longer that more time would help; instead, it was judged better to grab the opportunity for House action this week. And if the farm bill is filed Monday night, the leadership is proposing to call it up as early as Wednesday, a fast turnaround for a measure given up as dead by many just months ago.”

Mr. Rogers noted that, “Bipartisan support remains crucial, but Democrats have won significant compromises on food stamp funding and Speaker John Boehner (R-Ohio) is promising a real push to deliver the needed Republican votes.”

After a discussion on nutrition issues, the Politico article stated that, “On the agriculture side of the ledger, any cost estimate is suspect after the drop in corn prices over the summer. Cash sales were just $4.10 per bushel this past Friday— well below the baseline used by the Congressional Budget Office.

“Nonetheless the farm bill represents a landmark rewrite of commodity programs and should yield savings for taxpayers by ending the nearly 18-year-old system of direct cash subsidies to farmers.”

And following a closer look at Title I variables, yesterday’s article indicated that, “House Agriculture Committee Chairman Frank Lucas (R-Okla.), together with Southern senators, was pressing for some relief from new payment limits seen as threat to large family farm operations. At the same time, country-of-origin labeling requirements — first enacted in 2002 — were again a battleground between independent cow-calf ranchers and the more centralized beef industry with ties to Lucas and House Republicans.

The compromise taking shape on payment limits would set a new cap of $125,000 per individual or $250,000 for a farm married couple. But within that number there would be no fixed apportionments of what could be received from ARC [Agriculture Risk Coverage] and PLC [Price Loss Coverage] vs. marketing loans. On the issue of who qualifies as being ‘actively engaged,’ the deal appears to kick that issue up to Agriculture Secretary Tom Vilsack to decide but makes clear that farmers who own their land should automatically qualify.”

Ferd Hoefner, Policy Director for the National Sustainable Agriculture Coalition, indicated in an Email yesterday that, “We have heard reports that the lead farm bill negotiators of the conference committee have rejected the bipartisan farm subsidy reform included in both the House and Senate-passed farm bills.  Instead of a $50,000 annual limit on the primary payments (or double that for married couples), the lead negotiators have decided instead on a $125,000 limit (again, doubled for married couples).  In other words, they have increased the House and Senate-passed bipartisan agreement by 150 percent, an egregious increase showing profound disrespect for the democratic process and the normal rules of Congress that make identical provisions passed by both bodies not open to change in a House-Senate conference.

“Even that appalling give-away was not enough, however, according to reports from the behind closed doors final negotiation on Sunday.   In addition, the lead negotiators have evidently also decided not to adopt the House and Senate-passed provisions to close the loopholes that currently allow large, wealthy farms to collect many multiples of the nominal payment limit.  Instead, they leave the loopholes entirely in place, allowing for unlimited payments, and punt any decisions about the ultimate fate of the loopholes to the Obama Administration.  Granted the same authority by the 2008 Farm Bill, the Obama Administration decided to keep the current loopholes intact, providing little prospect that anything would prove different the second time around the same block.”

Ed O’Keefe reported yesterday at the Post Politics Blog (Washington Post) that, “A final version of the Farm Bill, legislation that accounts for billions of dollars in federal spending and has lingered on the congressional to-do list for two years, is expected to be unveiled as early as Monday, with final passage likely in the coming days, according to several aides familiar with the talks.

If an agreement is finalized Monday, senior House aides said that Republican leaders will bring the measure up for a vote in the House, where they believe it will pass with sufficient bipartisan support. The bill would then move to the Senate and likely be approved before a mid-February recess.”

The article noted that, “With thousands of pages of policy to write, staffers on both sides of the Capitol Hill spent the weekend settling several remaining areas of concern.”

Mr. O’Keefe indicated that some of these issues included: Dairy policy, COOL (Country of Origin Labeling), and “whether to put limits on the Agriculture Department’s ‘actively engaged’ farmer program.’”

More specifically with respect to COOL, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Groups that support leaving country-of-origin meat labeling untouched have been making a final push over the weekend to discourage farm-bill conferees from changing the language.”

Also, AP writer Hope Yen reported yesterday that, “In a first, working-age people now make up the majority in U.S. households that rely on food stamps — a switch from a few years ago, when children and the elderly were the main recipients.

“Some of the change is due to demographics, such as the trend toward having fewer children. But a slow economic recovery with high unemployment, stagnant wages and an increasing gulf between low-wage and high-skill jobs also plays a big role. It suggests that government spending on the $80 billion-a-year food stamp program — twice what it cost five years ago — may not subside significantly anytime soon.”

The AP article stated that, “Several economists say food stamp rolls are likely to remain elevated for some time. Historically, there has been a lag before an improving unemployment rate leads to a substantial decline in food stamp rolls; the Congressional Budget Office has projected it could take 10 years.”

In perspective regarding the executive branch, White House senior adviser Dan Pfeiffer was a guest on some of yesterday morning’s political programs where he indicated that:

– “So, we have to find areas where we can work together. We can start by passing — extend unemployment benefits for 1.6 million Americans. Pass the farm bill, pass immigration reform, infrastructure.” (Fox News Sunday)

– “There were some items right before Congress we can do together, passing immigration reform, extending unemployment benefits for 1.6 million Americans, patent reform, innovation act — motivation our economy, the farm bill.” (CNN State of the Union)

And in other policy related news, Philip Brasher reported on Friday at Roll Call Online that, “Even as they raise concerns about corporate use of farm data, farm groups are turning to Congress to stop the Environmental Protection Agency from releasing information that it compiles on agricultural operations it regulates.”


Agricultural Economy

AP writer Jason Dearen reported yesterday that, “Because of historically dry conditions, California’s soil moisture — a key ingredient for the forage that cattle graze on — is low throughout the state. With feed costs high and weeks of dry weather in the forecast, ranchers are already selling off parts of their herds as normally green grazing pastures have turned brown.”

The article explained that, “Some of California’s herd will be headed to Texas, which is recovering from its own severe drought. That state’s herd of five million head of cattle has shrunk over the past few years by a quarter, said Jason Cleere, a rancher and beef cattle specialist with Texas AgriLife Extension at Texas A&M University.

But as the drought has eased in most of Texas, the herd is being rebuilt, creating a market for California’s ranchers looking to sell. ‘There’s a lot of room for more cows to come into our state, and for ranchers to add some back,’ Cleere said.”

On Friday, USDA’s National Agricultural Statistics Service (NASS) released its Cattle on Feed report, which stated that, “Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.6 million head on January 1, 2014. The inventory was 5 percent below January 1, 2013 [related graph].”

The NASS update added that, “Placements in feedlots during December totaled 1.68 million, 1 percent above 2012 [related graph].

Bloomberg writer Elizabeth Campbell reported on Friday that, “U.S. feedlots unexpectedly increased the number of cattle purchased in December compared with a year earlier, a government report showed.”

And Dan Frosch reported in yesterday’s New York Times that, “To be sure, beef cattle prices have risen sharply of late, driven in part by historically low inventories. But the increasing costs of feeding and caring for cattle have prompted more ranchers to get out of the business, said Mike Miller, a senior vice president for the National Cattlemen’s Beef Association, which has its headquarters in Centennial, Colo., not far from the stockyards.

Fifty years ago, Mr. Miller said, a family of four could make a decent living off 250 cows. These days, it would take more than twice as many for the same family to earn the same amount of money, he said.”

Also on the California drought issue, Evan Halper reported yesterday at the Los Angeles Times Online that, “Beleaguered and outnumbered, California Republicans think they may have found a crucial ally — drought.

“Up and down the state’s increasingly dry Central Valley, Republicans have pounded away at the argument that Democratic policies — particularly environmental rules — are to blame for the parched fields and dwindling reservoirs that threaten to bankrupt farms and wipe out jobs.”

And The Wall Street Journal editorial board penned an opinion item in today’s paper titled, “On the California Water Front: How green politics has exacerbated the state’s growing shortages.”

Meanwhile, USDA’s Economic Research Service noted on Friday that, “The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, was unchanged from November to December and is 1.5 percent above the December 2012 level. The CPI for all food increased 0.1 percent from November to December, decreased 0.1 percent from October to November, and is now 1.1 percent above the December 2012 level.”

Also, Caroline Porter and Alison Sider reported in Saturday’s Wall Street Journal that, “Frigid temperatures in many parts of the country are contributing to soaring demand for propane, kicking off a surge in prices and a scramble to get the liquid gas used in agriculture and home heating to parts of the Midwest and South.

“‘Demand has just been unprecedented,’ said Eldon Meyers, the operations and risk manager for K & H Cooperative Oil Co. in north-central Iowa. He said winter heating sales were 35% higher in December than a year earlier, and January’s cold spell means that propane needs ‘have really hit the fan this past week.’”

The Journal writers pointed out that, “Jim Boyer, a farmer in Ringsted, Iowa, who grows corn and soybeans and raises about 16,000 hogs annually, figured the high prices will create a $9,000 hole in his budget. ‘We are using a lot more propane than we normally do,’ said Mr. Boyer, adding that he ran through his propane reserve earlier than expected and keeps his eight buildings devoted to hogs at 82 degrees Fahrenheit.”

In news developments highlighting trade issues, the Los Angeles Times editorial board opined recently that, “Paralyzed by ideological divisions, Congress has done little to promote economic growth or reduce unemployment since Republicans took over the House in 2011. One exception has been the approval of free-trade deals with South Korea, Colombia and Panama that lower barriers in those countries to U.S. exports and services. Any further trade deals face a huge hurdle, however: The law setting the ground rules for negotiating and approving such agreements expired in 2007. A bipartisan proposal to update the law is pending in both chambers, and lawmakers should make it a top priority to put a version on President Obama’s desk.”

And Reuters writers Niu Shuping and Fayen Wong reported on Friday that, “China is set to keep rejecting U.S. corn shipments containing an unapproved genetically modified strain at least until the end of March, shrugging off pressure from Washington to swiftly approve the variety developed by crop chemicals giant Syngenta AG.”



Reuters writer Timothy Gardner reported on Friday that, “The U.S. environmental regulator informed oil industry groups on Thursday that it will reconsider the 2013 target for advanced ethanol made from grasses, trees and crop waste as producers struggle to make enough of the fuel.

“Oil industry groups had petitioned the Environmental Protection Agency, or EPA, last year to lower the target because oil refiners would be required to buy millions of dollars worth of credits if cellulosic was unavailable.”

A news release Friday from Rep. Tim Walz (D., Minn.) stated that, “Today, [Rep. Walz] joined a group of his colleagues in calling for a meeting with President Barack Obama to discuss the unacceptable proposed renewable fuels volume obligations (RVOs) for the Renewable Fuels Standard (RFS). Walz was joined by Reps. Collin Peterson (MN-07), Rick Nolan (MN-08), Dave Loebsack (IA-02), Bruce Braley (IA-01), Cheri Bustos (IL-17), and William Enyart (IL-12), in sending the letter. The same group of Representatives recently met with the Environmental Protection Agency Administrator Gina McCarthy and shared their strong concerns about the devastating impact this cut will have on farmers, rural communities, and future investments in biofuels.”

And AP writer Henry C. Jackson reported yesterday that, “With a deadline for comments approaching, North Dakota’s congressional delegation is pressing the Obama administration to reverse course on proposed changes that would significantly reduce the amount of ethanol in the country’s fuel supply.”

Christopher Doering reported in yesterday’s Des Moines Register that, “The Obama administration’s push to lower the amount of ethanol that must be blended into the country’s gasoline supply this year has drawn thousands of comments from the public, including a large number from residents, lawmakers and businesses in Iowa, where respondents are largely critical of the controversial proposal.”

Also, a news release Friday from the American Farm Bureau Federation (AFBF) stated that, “The [AFBF] this week stated its opposition to the Environmental Protection Agency’s 2014 Renewable Fuel Standard requirements, which would scale back the total amount of biofuels that must be blended into the nation’s gasoline supply. AFBF responded to EPA’s Federal Register notice for public comment.”



Peter Schroeder, Russell Berman and Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Republican leaders have yet to figure out what they want to get out of the debt limit fight, just weeks before risking a default.

“GOP lawmakers of all stripes have been adamant that Democrats will have to give something in exchange for a boost to the $16.7 trillion borrowing cap. But exactly what is still a big question.”

The Hill writers noted that, “If a debt limit plan waits until the end of next week, Congress will have just four weeks to strike a deal. And for one of those weeks, Congress is scheduled to be out of session for the Presidents’ Day recess.”

However, Seung Min Kim reported on Friday that, “Democrats are drawing their red line against debt limit concessions — again.

“Senate Budget Committee Chairwoman Patty Murray (D-Wash.) will release a letter later Friday saying Democrats will not heed any GOP demands in exchange for hiking the debt limit next month in the latest round of the fiscal fights that have plagued the Capitol.

“‘We will not negotiate over whether or not the United States of America should pay its bills,’ Murray writes in the letter, provided in advance to POLITICO. ‘And once again, before they get any further down this damaging path, we call on our Republican colleagues to not play politics with our economic recovery.’”



Laura Meckler reported on the front page of Saturday’s Wall Street Journal that, “An effort by House lawmakers to overhaul immigration policy, which seemed all but dead for much of last year, is about to be revived and take center stage in Congress, with a new push by House Republican leaders and a fresh pitch by President Barack Obama in his State of the Union address Tuesday.

“House GOP leaders are expected to release broad principles to guide the chamber’s immigration debate as soon as the coming week. They will include a call to grant legal status to millions of people now in the country illegally, people familiar with the plans say, a step that many in the GOP oppose as a reward for people who broke U.S. law.”

The Journal article noted that, “House leaders hope to bring legislation to the floor as early as April, the people close to the process said, after the deadline has passed in many states for challengers to file paperwork needed to run for Congress. Republican leaders hope that would diminish chances that a lawmaker’s support for immigration bills winds up sparking a primary-election fight.”

David Nakamura reported on the front page of Saturday’s Washington Post that, “Obama administration officials and congressional Democrats expressed optimism that new momentum in the House could yield results after months in which the issue [immigration] languished in the lower chamber. But they cautioned that it is far too early to determine whether a compromise could be reached between the House and Senate, which approved a bipartisan plan to overhaul border-control laws last June.”

And Alexander Bolton and Russell Berman reported yesterday at The Hill Online that, “The immigration reform debate in the House could boil down to a handful of influential Tea Party conservatives.

“Proponents and opponents of creating a pathway to citizenship for millions of illegal immigrants and other reforms have zeroed in on ‘peer leaders’ in the House GOP. These conservatives include Reps. Jason Chaffetz (Utah), Trey Gowdy (S.C.), Justin Amash (Mich.), Renee Ellmers (N.C.) and Steve Scalise (La.).”

Keith Good

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