DTN Ag Policy Editor Chris Clayton reported yesterday that, “USDA is faced with trying to sort out some complicated changes to commodity programs quickly with fewer staff to help walk farmers through all the various decisions, Deputy Agriculture Secretary Krysta Harden said Thursday.
“Harden got a chance at Commodity Classic to address her old employers as she talked about implementing the farm bill with members of the American Soybean Association. She also talked to members of the National Corn Growers Association about the farm bill.”
Gregory Meyer reported yesterday at The Financial Times Online that, “Hoarding by US corn farmers has pinched profits at some of the world’s biggest grain merchants, even as the nation wallows in its largest harvest in history.
“Analysts and executives had expected companies such as Bunge and Archer Daniels Midland to report huge profits from buying and storing corn this year. But quarterly results have been underwhelming, they say.”
The FT article explained that, “Merchants say US farmers are clinging to their 13.9bn-bushel corn crop after prices fell 35 per cent in the past year, setting up a test of wills as Brazil prepares to launch its own huge harvest on to the export market.”
Mr. Meyer pointed out that, “The biggest US trading houses, including ADM, Bunge, Cargill, CHS and Gavilon, a unit of Japan’s Marubeni, have added about 1bn bushels of US storage capacity in the past decade, bringing the total to more than 5bn, according to Sosland Publishing’s 2014 Grain & Milling Annual.
“But soaring cereals prices after the worst drought since the 1930s in 2012 enabled farmers to reinvest income in their own storage bins. US on-farm storage capacity totals 13bn bushels, 2bn more than 10 years ago.”
Tarini Parti reported yesterday at Politico that, “First lady Michelle Obamaunveiled a proposal Tuesday that would ban marketing junk food and sodas in schools — an unusually aggressive position for the administration that could draw the ire of school districts, food companies and conservatives” [transcript of remarks by Mrs. Obama here, and additional background here].
“Schools would no longer be able to house vending machines that sport images of their flagship sodas, as part of the updated school wellness policy crafted by the Department of Agriculture. They would be prevented from having posters that promote unhealthy food and drinks or using cups in cafeterias that market high-calorie beverages, among other forms of promotion,” the Politico article said.
Ms. Parti added that, “The proposal would require marketing of all food and drinks to fall in line with the same healthier standards that are expected to be required of foods sold during the 2014-15 school year. Both sets of measures, which go beyond the new school lunch and breakfast requirements, stem from the 2010 Healthy Hunger-Free Kids Act.
“Already, about 90 percent of school districts are meeting the updated school lunch standards, the first lady touted at the event, where she was introduced by Agriculture Secretary Tom Vilsack along with a parent and a 14-year-old boy who briefly talked about the benefits of Let’s Move!.”
Matthew Weaver reported yesterday at the Capital Press Online that, “Rep. Cathy McMorris Rodgers, R-Wash., says she’ll be watching implementation of the 2014 Farm Bill to make sure new rules and provisions will be workable for farmers in Eastern Washington. McMorris Rodgers anticipates providing more leadership for agriculture issues after Rep. Doc Hastings retires at the end of 2014.
“Rep. Cathy McMorris Rodgers represents Washington’s 5th district, which includes much of Eastern Washington. As chair of the House Republican Conference, she is currently the fourth highest-ranking Republican. She was first elected in 2004.”
The Capital Press article, which continued in a “Q and A” format, added that, “Within the farm bill, the crop insurance program is especially important to our wheat growers. They gave up direct payments, but we need to have that crop insurance safety net as they move forward,” Rep. Rodgers noted.
And on the issue of immigration, Rep. Rodgers indicated that, “Obviously within agriculture, we continue to have significant workforce needs. For Washington state, in any given year, we need between 80,000 and 100,000 people to help pick our product. Our current H-2A guest worker program will provide 5,000 to 10,000, so it doesn’t come close to meeting the need. It is very important that we are taking steps to fix what is a broken immigration system. I’m hopeful we’re going to continue to see more progress on this front in 2014. Several of these bills have passed the judiciary committee in the House, and I think we’re going to start seeing more of those bills come to the floor.”
A news release on Friday (“U.S. Sugar Producers Set Sights on Foreign Subsidies”) indicated that, “With a strong five-year sugar policy at their side, U.S. sugar producers are now setting their sights on addressing the foreign sugar subsidies that make U.S. sugar policy necessary. That’s according to Jack Roney, director of economics and policy analysis for the American Sugar Alliance (ASA), who spoke today at the USDA Agricultural Outlook Forum.
“‘U.S. sugar producers are among the most efficient in the world, and we would thrive in a global freemarket, if one existed,’ he explained. ‘But historically, sugar has been and continues to be the world’s most distorted commodity market because of foreign subsidization. Something must be done about it.’
“Roney says that sugar producers are so serious about addressing foreign subsidies that, even after passage of a five-year Farm Bill, they still remain willing to give up U.S. sugar policy if other countries will end their direct and indirect market-distorting policies.”
In part, today’s article noted that, “But just as a new industry for Iowa is about to take root, a proposed change in government policy could limit demand for ethanol and send new plants and jobs to other countries. Think Brazil, China or European nations…The U.S. Environmental Protection Agency has proposed reducing the amount of renewable fuel that must be blended into the fuel supply that powers American vehicles. The EPA says it’s bending to market realities: The mandates were too aggressive and hard to reach, given that autos have become more fuel-efficient.”
The Register article added that, “Using cellulosic ethanol in your tank is expected to reduce greenhouse gas emissions 86 percent when compared with gasoline, according to the U.S. Department of Energy. Corn-based ethanol, as it’s currently made, reduces greenhouse gases an average of about 20 percent.” (See related video below).
A recent report (Feb. 21) on WSET-TV (Lynchburg, Va.) indicated that, “ABC 13 also asked [Rep. Robert Hurt (R., Va.)] about the ‘Farm Bill’ the president recently signed, which aims to provide help to rural communities.”
“‘I don’t think there is anything in the farm bill more important than crop insurance and that is risk management,’ Hurt said. ‘Farmers across our district were glad we finally did get a farm bill passed.'”
David Rogers reported yesterday at Politico that, “Updated projections by the Agriculture Department on Thursday forecast significant price declines for corn, wheat and even soybeans — all large enough to trigger potential payments under the new farm bill.
“Corn stands out the most, with average prices dropping to $3.90 per bushel in the coming crop year, even after the department assumes reduced plantings. Wheat would fall to $5.30 a bushel, also with reduced plantings.
“Soybeans fare best of the three and will continue to see increased plantings. But the $9.65-per-bushel price reflects an estimated 24 percent decline from what the department estimated for the current 2013-2014 farm cycle.”
Reuters writer Christine Stebbins reported yesterday that, “U.S. farmers and bankers have almost a year to get ready for major changes in 2015 as crop insurance rather than direct cash payments to producers becomes the centerpiece of farm policy under the five-year farm bill signed by President Barack Obama earlier this month.
“For 2014 plantings, analysts said there will be no major changes to crop insuranceexcept sharply lower grain prices than in 2013, which will lower potential payments and premiums. Then in 2015, farmers will have a new insurance option for supplemental coverage based on local county yields.”
“‘The message is crop insurance does become the foundation of the farm bill and the primary safety net for producers because they have lost all those direct payments,’ [Michael Barrett, senior vice president for crop insurance at Farm Credit Services of America] said.”
Via The Daily Times (Salisbury, Md.)- “Congress wants to find out if a federal crop insurance program is feasible when the crop in question is chickens or turkeys.
“An amendment to the farm bill, recently passed by both the House and Senate, calls for a report drawn up for Congress on whether a federal program should be launched to insure poultry growers ‘against business disruptions caused by integrator bankruptcy‘ or by ‘a catastrophic event.’
The provision in the bill was championed by Sens. Chris Coons, D-Del., and Saxby Chambliss, R-Ga. In a news conference Tuesday, Coons said he envisions an insurance program that would have helped growers for Allen Family Foods when the Sussex County-based company went bankrupt in 2011.”
David Pierson reported yesterday at the Los Angeles Times Online that, “For decades, China’s rulers deemed grain production a linchpin to its national security. The policy of self-sufficiency was a legacy of its planned economy from the days of Mao when China was increasingly isolated from the outside world.
“But China’s communist founders couldn’t have predicted the nation’s dizzying rise in meat consumption, which has grown nearly ten-fold to 71 million metric tons since 1975.
The article noted: “That’s why China has been increasingly importing grains such as soybeans and corn from the U.S. and Brazil to boost its livestock population. Grain self-sufficiency was becoming like communist dogma in China: more a theory than a practice.
“Then last week, Beijing called it quits by announcing it was scaling back its annual grain production targets to put a greater emphasis on quality rather than quantity.”
Mr. Pierson explained that, “The shift in grain policy was the clearest signal that policymakers had decided meat production was paramount, a pivot that will ripple across the globe and probably intensify China’s quest for foreign sources of meat, grain and dairy.”
Dan Friedman reported earlier this week at the New York Daily News Online that, “Sen. Kirsten Gillibrand and 71 other congressional Democrats are asking the agriculture secretary to delay a new law cutting food stamps for hundreds of thousands of Americans.
“‘Our states need time to adjust their policies to accommodate this drastic cut and roll out the changes seamlessly,’ the lawmakers say in a letter they plan to send Tuesday to Agriculture Secretary Tom Vilsack.
“Gillibrand lined up the lawmakers to sign off on the letter, which asks Vilsack to delay until next fall a provision in the massive farm bill Congress passed this month that cuts $8 billion in food stamp aid.”
“Meeting with farmers and ranchers around Fresno — where electronic signs along highways flash entreatingly to drivers, ‘Serious drought. Help save water’ — Mr. Obama pledged $183 million from existing federal funds for drought relief programs in California. Though the announcement won cautious support in this region, Mr. Obama also pressed ahead with the more difficult task of enlisting rural America in his campaign on climate change by linking it to the drought.
Jesse Newman reported yesterday at The Wall Street Journal Online that, “Prices for agricultural land in some key states in the U.S. Farm Belt last year grew at the slowest pace in four years, according to a quarterly report Thursday from the Federal Reserve Bank of Chicago.
“Values for farmland in the Chicago Fed’s district, which includes all of Iowa and most of Illinois, Indiana, Michigan and Wisconsin, rose 5% in 2013, the report showed, down from growth of 16% in 2012. Last year’s growth was the slowest pace since 2009 and the second slowest in the past decade, the bank said” [related graph].