A news release yesterday from National Crop Insurance Services indicated that, “On the heels of the 2014 Farm Bill becoming law, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) addressed the crop insurance industry yesterday and noted that crop insurance is now the centerpiece of U.S. farm policy.
“‘Today, crop insurance is the foundation of this Farm Bill and the farm safety net,’ Stabenow, one of the law’s architects, said at the crop insurance industry’s annual convention.”
The update added that, “‘The farmer gets a bill, not a check with crop insurance…and they don’t get help unless they really need it,’ Stabenow said referring to the premiums farmers pay and the indemnities that are only received after losses are verified.
“Stabenow noted that during the debate, farmers stressed their support for crop insurance and asked Congress to strengthen it. And by making crop insurance more readily available to specialty crop growers, she said the policy’s coalition of support has been strengthened.”
Also yesterday, Meghan Grebner reported at Brownfield that, “After finally clearing all the hurdles to get the Agriculture Act of 2014 signed into law, there’s already been speculation if this could be the last Farm Bill of its kind. House Ag Committee Chairman Frank Lucas says it’s increasingly more difficult to pass farm legislation when more and more of our population and decision makers are so far removed from production agriculture.”
The Brownfield item noted that, “And, he adds this Farm Bill represents major change. ‘This new, third generation of farm policy in this last century was difficult to put together because we were changing so many things,’ he says. ‘Just as 1996 changed so many things, just as the first agricultural acts of the 1930’s created policy from nothing.’
“Because of the changes to this Farm Bill and the struggle to get it completed, Lucas tells Brownfield his one regret was not being able to make this version of farm policy permanent law.”
(Related audio from yesterday’s Brownfield update with Chairman Lucas is available here).
And Dave Russell reported yesterday at Brownfield that, “Now that the Farm Bill has been signed, it’s up to the United States Department of Agriculture (USDA) to implement the programs.
“To do that, Agriculture Secretary Vilsack says teams for each Farm Bill title have been put in place.”
Mr. Russell noted that, “The Secretary says another group will be responsible for prioritizing what needs to be done first.
“‘For example, it’s fairly obvious to me that we have to have the disaster assistance for livestock operators restored as quickly as possible because these folks have been waiting for a couple of years,’ the Secretary said. ‘There’s a new dairy program, there’s obviously a revenue protection program, there are slight changes to crop insurance, and those things are obviously priorities.’”
(Related audio from yesterday’s Brownfield update with Agriculture Secretary Tom Vilsack is available here).
Also with respect to the executive branch, a separate news release yesterday from National Crop Insurance Services indicated that, “Now that a new Farm Bill has been approved and crop insurance has emerged as the lynchpin of the farm safety net, the USDA’s Risk Management Agency (RMA) is focused on quickly implementing the new law.
“RMA Administrator Brandon Willis, who spoke today at the crop insurance industry’s annual convention, said cooperation between the agency and crop insurers would be essential during implementation.”
The update added that, “Willis noted that the administration would prioritize implementation based on those programs that affect the most growers. He specifically mentioned ensuring a 2015 signup for the STAX program that provides enhanced insurance protection for cotton farmers and the new Supplemental Coverage Option for growers of other crops.
“He also complimented crop insurers for their service record following the historic 2012 drought and for their hard work when the government was shut down earlier this year. But, he cautioned the industry not to rest on past successes.”
Meanwhile, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “A key theme in debate about conservation programs was to consolidate them and make it easier for producers to sign up for conservation programs. Another key theme was an emphasis on farm production and working lands. Yet, there could be more pressure for conservation dollars in the coming years as farmers and ranchers face more battles with water-quality demands and soil erosion.
“Also, conservation compliance provisions in the farm bill could require more producers to seek technical assistance from USDA and thus also compete for program dollars as well.
“Collectively, conservation programs are projected to spend $57 billion over 10 years coming mainly in the Big Three: Conservation Reserve Program, Conservation Stewardship Program and Environmental Quality Incentives Program. They make up $52 billion in projected costs.”
The DTN item included more specific details regarding specific conservation programs.
In a related item regarding policy variables and the environment, Georgina Gustin reported late last week at Roll Call Online that, “The concept sounds familiar: Polluters looking to meet certain emissions targets buy credits from other entities that have some leftover credits to spare. It’s a cap-and-trade program.
“Only this one is for water pollution and the biggest players in this newly emerging environmental market are farmers. But some environmental advocacy groups dislike the idea and are looking to Congress for assistance after striking out in the courts.”
The Roll Call article pointed out that, “The idea of trading credits between point sources is more straightforward because discharges can be measured more accurately. Not so between point sources and non-point sources. ‘The part of trading that gives people a lot of heartburn is when you start talking about trading between point sources and non-point sources,’ [Beth McGee, a water scientist with the Chesapeake Bay Foundation] said. ‘The consternation is about the verification.’
“In other words, some critics say, it’s difficult to gauge what a credit is worth and whether it’s actually reducing pollution.”
Bloomberg writer Alan Bjerga reported yesterday that, “A waning boom in U.S. crop prices may cut annual farm profits from record levels in recent years, denting demand for Deere & Co. tractors and Monsanto Co. chemicals, economists said ahead of a government report today.
“Flat demand for corn to make ethanol and fewer exports to China may halt gains in farmland values after a 37 percent jump since 2009, leaving farmers with less to invest. The farm law President Barack Obama signed last week also will cut government spending on agriculture, further eroding profit.”
The Bloomberg article indicated that, “‘We’re looking at an era of about three, four, five, years of reduced profitability in agriculture,’ Matthew Roberts, an agricultural economist at Ohio State University in Columbus, said in an interview. Without significant disruptions to crop production, ‘by 2015, 2016, farms that expanded very rapidly over the last few years could be vulnerable, and we would see the first significant farm failures.’
“The slump in the value of U.S. crops will erode prosperity in Corn Belt states, harming rural business and, if sustained, may lead to a wave of farm failures for the first time in a generation, Roberts said.”
Meanwhile, the World Agricultural Outlook Board (WAOB) released its monthly World Agricultural Supply and Demand Estimates (WASDE) report yesterday, which noted that, “U.S. corn ending stocks are projected 150 million bushels lower with the export increase. The season-average farm price for corn is raised 10 cents on both ends of the projected range to $4.20 to $4.80 per bushel.”
The WASDE update added that, “The 2013/14 season-average soybean price range is projected at $11.95 to $13.45, up 20 cents on both ends.”
Also, Tony C. Dreibus and Jeffrey Sparshott reported yesterday at The Wall Street Journal Online that, “Wheat prices rose 1.3% after the U.S. Department of Agriculture forecast lower-than-expected domestic supplies this year amid rising overseas demand for the grain.
“In a closely watched monthly crop report, the government estimated domestic wheat inventories will total 558 million bushels at the end of the 2013-14 season on May 31. The figure was down from the 608 million bushels projected by the USDA last month and well below analyst estimates for 602 million bushels.”
The Journal writers noted that, “Corn prices fell, erasing earlier gains, as traders shrugged off the USDA’s forecast for lower-than-expected stockpiles and instead focused on the fact that inventories this year will still be nearly double the amount a year earlier after a record crop last autumn.”
The article added that, “Soybean futures fell after the USDA raised its outlook for Brazilian production. The South American country will produce a record 90 million metric tons of the oilseeds, up from last month’s projection of 89 million, the government said.”
University of Illinois agricultural economist Darrel Good provided an overview of yesterday’s WASDE report at the farmdoc daily blog in an update titled, “Corn, Soybean, and Wheat Export Projections Increased,” and he also discussed additional details of the report in an interview yesterday with Todd Gleason of University of Illinois Extension (related audio here).
Also, Donnelle Eller reported yesterday at The Des Moines Register Online that, “Iowa farmers say they expect to plant 10.3 million acres of soybeans this spring, about 11 percent more than in 2013, a new survey shows.
“Iowa’s shift from corn is stronger than the nation’s, with U.S. farmers expected to devote about 7 percent more acres to soybeans, according to a survey from the Iowa-Nebraska Equipment Dealers Association in conjunction with AgriSource Inc., a grain marketing, commodity brokerage and crop insurance company with 28 locations across the Midwest.”
In other developments, a news release yesterday from House Ag Committee Ranking Member Collin Peterson (D., Minn.) stated that, “[Rep. Peterson] and Congressman Adrian Smith (R-NE) today sent a letter to President Obama asking for immediate action to address the national propane shortage. More than 70 Members of Congress, including all the members of the Minnesota congressional delegation joined the Peterson-Smith effort by cosigning the bipartisan letter.
“‘Any further reduction in supply threatens to leave many Americans without the fuel necessary to heat homes, businesses, and livestock and poultry operations,’ Peterson and Smith wrote. ‘We ask that you take immediate action to help improve this dire situation and are prepared to help find responsible solutions.’”
Also, an update yesterday from Senate Ag Committee Ranking Member Thad Cochran (R., Miss.) stated that, “[Sens. Cochran] and Roger Wicker (R-Miss) are among 29 Senators who today asked the Obama administration to be more engaged in overcoming a steep drop in propane supplies, a situation that is driving up prices for rural residents and farmers.
“In a letter sent to President Obama on Monday, the bipartisan group of Senators cited the escalating residential and wholesale propane price increases resulting from a significant drop in propane supplies. An Energy Information Agency report shows propane stocks are 24 million barrels lower than last year, a nearly 44 percent decline.”
With respect to trade issues, James Politi and Shawn Donnan reported in yesterday’s Financial Times that, “Mr Obama has grown accustomed to Congressional Republicans thwarting his policy objectives. But the opposition to his trade agenda is coming from within his own party and its traditional supporters, such as labour unions and environmental activists.”
“With the trade sceptics gaining momentum, and midterm congressional elections looming in November, it is far from certain that Mr Obama can win the political support he needs for the deals – at least this year,” the FT article said.
An update yesterday from the American Farm Bureau Federation indicated that, “An approach to agricultural labor reform that focuses solely on immigration enforcement would raise food prices over five years by an additional 5 percent to 6 percent and would cut the nation’s food and fiber production by as much as a staggering $60 billion.
“Those are among the results of a report, ‘Gauging the Farm Sector’s Sensitivity to Immigration Reform,’ conducted by World Agricultural Economic and Environmental Services. The report was commissioned by the American Farm Bureau Federation and released in conjunction with the #ifarmimmigration grassroots campaign, a month-long campaign sponsored by AFBF and the Partnership for a New American Economy to promote the need for agricultural immigration reform.
“By far, the best scenario for farm labor reform both for consumers and farmers is one that includes immigration enforcement, a redesigned guest worker program and the opportunity for skilled laborers currently working in agriculture to earn an adjustment of status. Under that scenario, there would be little to no effect on food prices, and the impact on farm income would be less than 1 percent.”
CFTC- Commodity Futures Trading Commission
Andrew Ackerman and Katy Burne reported in today’s Wall Street Journal that, “The Commodity Futures Trading Commission is preparing to ease restrictions on swaps trading overseas, according to people familiar with the matter, a move that could shift some trading abroad as banks and other firms look for ways to circumvent tough U.S. rules.
“CFTC officials are expected to reach an agreement with counterparts in the European Union as early as this week, these people said, to allow U.S. firms to trade swaps on European platforms as long as those systems are governed by swaps rules that are comparable to those ushered in as part of the 2010 Dodd-Frank law.
“Critics say the agreement will encourage banks to move more swaps trading overseas to escape strict U.S. regulations intended to bring more transparency to the opaque financial products. Swaps, which were at the heart of the 2008 crisis, are complex contracts that allow financial firms and their clients to hedge against risks or bet on an asset’s value.”
The Journal writers pointed out that, “The move is a shift for the CFTC, which, under the leadership of former chairman Gary Gensler, pushed to impose U.S. rules abroad.”
Ricardo Lopez reported yesterday at the Los Angeles Times Online that, “Details of where nearly 9 million pounds of beef products recalled Saturday by a Northern California slaughtering plant were sold were scarce Monday, but a preliminary list of retailers shows that many were Latino meat markets.
“Rancho Feeding Corp. of Petaluma on Saturday announced a recall of 8.7 million pounds of beef products processed at its plant over the last year and sold in California and three other states.”
The article stated that, “A spokesman for the U.S. Department of Agriculture Department’s Food Safety and Inspection Service declined to comment or offer more details about how a year’s worth of beef produced at the plant ended up being sold to retailers and distribution centers.
“There have been no reported illnesses linked to the beef products in question, the company and the USDA said.”
And Lena H. Sun reported in today’s Washington Post that “The Food and Drug Administration is warning against eating Uncle Ben’s rice products served at schools, restaurants, hospitals and other food-service institutions after children in three states suffered burning, itching rashes and headaches and nausea linked to the rice.
“Mars Foodservices of Greenville, Miss., is recalling five- and 25-pound bags of Uncle Ben’s Infused Rice products. Uncle Ben’s products sold in supermarkets and other retail outlets are not involved. Although the recalled product is not typically marketed to individual consumers, it may be available over the Internet and at warehouse-type retailers.”