FarmPolicy

May 24, 2019

Food Policy Issues; Farm Bill; and, the Ag Economy

Food Policy Issues

Tarini Parti reported yesterday at Politico that, “First lady Michelle Obama unveiled 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!.”

Lyndsey Layton reported yesterday at The Washington Post Online that, “The proposal would affect all kinds of advertising that has become ubiquitous in schools — plastered across scoreboards, vending machines, posters and even cups in the cafeteria.

More than 90 percent of that advertising is for soda, sports drinks and other beverages, according to the Federal Trade Commission. Food companies spent $150 million marketing to children in schools in 2009, according to the FTC.”

The Post article noted that, “As part of the marketing regulation proposal, the Obama administration has announced guidance for school wellness policies, which state a school’s goals for student nutrition and physical activity and map strategies to achieve them. The guidance requires schools to involve parents in setting the policies and calls for periodic assessments to measure progress.

And starting in July, the USDA said it will provide free breakfast and lunch to all students in schools where at least 40 percent of the children are low-income. The move is designed to increase participation in the free meals program and to relieve the paperwork burden on schools and is expected to affect 22,000 schools nationwide, officials said.”

Justin Sink reported yesterday at The Hill’s Briefing Room Blog that, “The announcement on Tuesday comes as the first lady is crisscrossing the country to promote the fourth anniversary of her ‘Let’s Move’ initiative designed to promote child health. Later Tuesday, she’ll travel to Miami for a separate announcement of a commitment by the Boys and Girls Club and National Parks and Recreation Association on a new initiative. Amy Poehler, star of the sitcom ‘Parks and Recreation,’ will participate in the event.”

Meanwhile, Rep. Rodney Davis (R., Il.) was a guest on yesterday’s AgriTalk radio program with Mike Adams where he discussed the School Nutrition Fairness Act.

Rep. Davis explained that the bill “would make the White House during state dinners, the White House cafeteria and the USDA cafeteria follow the exact same guidelines that they’re forcing upon each and every school district in this country.”

On yesterday’s program, Rep. Davis, who is a Member of the Ag Committee, noted that, “This was our chance to create a discussion on this issue.  With the new school guidelines that are coming down the pipeline over the next few weeks I think it’s very imperative that we talk about what cost these rules and regulations are having on our school districts who are already struggling financially, and the cost of those whose school lunch may be the only meal they have that day.”

“When you see the White House serving 2,500 calorie state dinners to our foreign guests.  That’s fine.  If they want to do that, that’s okay.  But they can’t then turn around and make our schools throughout this nation follow guidelines that are costing these school districts hundreds of thousands of dollars.  It’s just not right, and it’s the height of hypocrisy.  And if this is a way to prove that our school districts need flexibility, we’re gonna continue to push that,” Rep. Davis said.

Betsy McKay reported in today’s Wall Street Journal that, “More evidence is emerging that childhood obesity is turning a corner.

“The rate of obesity in preschool-age children dropped about 40% over the past decade, according to data from a comprehensive federal survey published Tuesday in the Journal of the American Medical Association —the latest sign that attempts to help parents improve children’s diets and exercise habits might be starting to have an effect.

The prevalence of obesity among children ages 2 to 5 declined to 8.4% in the years 2011-2012 from 13.9% in 2003-2004, according to the Centers for Disease Control and Prevention. The rate also dropped among children ages 6 to 11, though less significantly, to 17.7% from 18.8% over the same period.”

 

Farm Bill- Policy Issues

With respect to nutrition related issues in the Farm Bill, a news release yesterday from New York Governor Andrew M. Cuomo (D) indicated that, “[Gov. Cuomo] today announced that New York State is taking steps to preserve approximately $457 million a year in Supplemental Nutrition Assistance Program (SNAP) benefits that would otherwise be cut by the recently enacted federal Farm Bill. The bill was slated to cut SNAP benefits an average of $127 per month for affected households in New York, including those that live in government subsidized housing or in certain congregate care settings. This action by the State will save benefits for nearly 300,000 households in New York.”

The release explained that, “New York State, through the Office of Temporary and Disability Assistance (OTDA), will dedicate approximately $6 million in additional federal Low Income Home Energy Assistance Program (LIHEAP) funding to maintain SNAP benefit levels for affected households. The funding will be used to increase the Home Energy Assistance Program (HEAP) benefit of SNAP recipients in certain living situations for whom heat is included in the rent. By receiving the higher HEAP benefit, these households will remain eligible for the highest SNAP allowance for their energy costs, which enables them to continue receiving SNAP benefits at the level for which they are currently eligible.”

An update yesterday at the Economic Research Service (USDA) Chart Gallery webpage indicated that, “In recent years, the number of farmers’ markets that accept benefits from USDA’s Supplemental Nutrition Assistance Program (SNAP) has grown—more than tripling between fiscal 2008 and 2012 and making it possible for more SNAP participants to use their benefits to acquire fruits, vegetables, and other local foods from these markets” [related chart].

Also yesterday, Senate Ag Committee Chairwoman Debbie Stabenow (D., Mich.) spoke yesterday with Joel Heitkamp on the News & Views radio program (KFGO- 790 AM Fargo-Moorhead, N.D.) about the Farm Bill and other issues.

In part, Chairwoman Stabenow noted that, “[I]t was shocking to me how little support there is for agriculture in the U.S. House— honestly, shocking.” (Related audio clip here (MP3- 1:54)).

A news release yesterday from Sen. Kirsten Gillibrand (D., N.Y.) indicated that, “After a push by [Sen. Gillibrand] and Congressman Bill Owens [D., N.Y.], apple exports from New York State to Canada are now moving at a swifter, more cost-effective pace because of a measure included in the Farm Bill. Last week, the first shipment of apples that were not subject to inspection because of the Farm Bill crossed the border without incident.

“Senator Gillibrand and Congressman Bill Owens worked to exempt bulk shipments of U.S. apples to Canada from inspection required under the Apple Export Act, saving apple growers up to $300 per truckload, and allowing growers to create their own distribution schedules, eliminating costly after-hours inspection procedures.”

Also yesterday, AP writer M.L. Johnson reported that, “The U.S. Department of Agriculture announced Tuesday it will spend millions of dollars to help farmers and ranchers improve pastures in five Midwestern states to provide food for the nation’s struggling honeybees.

“Commercial honeybees pollinate an estimated $15 billion worth of produce each year. Many beekeepers bring hives to the Upper Midwest in the summer for bees to gather nectar and pollen for food, then truck them in the spring to California and other states to pollinate everything from almonds to apples to avocadoes.”

And Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “The Senate passed a bill Tuesday that reauthorizes a federal program aimed at assessing the effects of and responding to droughts.

“The Senate passed the measure through a unanimous consent agreement before adjourning for the evening.”

The Hill article explained that, “Rep. Ralph Hall (R-Texas) introduced H.R. 2431, the National Integrated Drought Information Systems Reauthorization Act, which reauthorizes the National Integrated Drought Information System (NIDIS) through 2018.

“Earlier this month, the House voted 365-21 to pass the bill, meaning the legislation now heads to President Obama’s desk for his signature before becoming law.”

 

Agricultural Economy

Russ Parsons reported yesterday at the Los Angeles Times Online that, “How hard is the drought hitting California farmers? Here’s one more example — Marin Sun Farms, one of the pioneers of grass-fed beef, is going to start feeding some of its cattle on grain. There’s just not enough grass to keep them alive.”

An update yesterday at the Economic Research Service (ERS- USDA) Online indicated that, “The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, rose 0.4 percent from December 2013 to January 2014 and is 1.6 percent above the January 2013 level. The CPI for all food increased 0.4 percent from December 2013 to January 2014, increased 0.1 percent from November to December 2013, and is now 1.1 percent above the January 2013 level.”

The ERS overview noted that, “The farm price for cattle increased 7.5 percent in January, while wholesale beef prices rose 5.1 percent. These changes are consistent with reports that unusually cold weather across the U.S. in late 2013 disrupted cattle flows to feedlots and increased production costs for ranchers.”

Nicholas Bergin reported yesterday at the Lincoln Journal Star (Neb.) Online that, “Nebraska has claimed the crown of being the nation’s top cattle feeding state, usurping drought-ravaged Texas, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service.

Nebraska’s new status as No. 1 in cattle feeding is due primarily to a decline in the Lone Star State while numbers for the Cornhusker State were down only slightly, according to a report released Friday.”

Jacob Bunge and David George-Cosh reported in today’s Wall Street Journal that, “Saskatchewan farmer Jack Shymko harvested one of his largest oat crops ever last fall, but he hasn’t been able to move any of his 50,000 bushels to market.

“Mr. Shymko is one of Canada’s many frustrated oat growers who can’t find enough railroad cars to ship their grain at a time of strong demand. Some farmers and industry analysts say the railroads are ignoring grain in favor of carrying crude oil because it is more lucrative to transport.”

The Journal writers pointed out that, “The railways blame delays on the brutal winter cold and after-effects of the country’s huge wheat, canola and oat crops last year.

Either way, Canada’s monthslong grain-shipping backlog is pinching incomes for farmers and sending oat-futures prices soaring in the U.S., which is heavily dependent on its northern neighbor for supplies. The situation is sparking concerns that the U.S. could face shortages in coming months, raising costs for companies like PepsiCo Inc.’s Quaker Oatsdivision and Cheerios maker General Mills Inc. and potentially nudging consumer prices higher.” (See related graphs here and here).

The AP reported yesterday that, “Soybean prices rose to the highest in five months Tuesday as demand for the crop increased.

“The U.S. Department of Agriculture announced a sale of 568,000 metric tons of soybeans Tuesday. Soybean prices have rallied this year amid signs of strong demand from China.”

The AP article added that, “The price of soybeans for delivery in May rose 12.25 cents, or 0.9 percent, to $13.87 a bushel. That’s the highest level since September 2013.

Corn for May rose 3.5 cents, or 0.8 percent, to $4.61 a bushel and wheat for the same month gained 1 cent, or 0.2 percent, to $6.18 a bushel.”

In other news, Jacob Bunge reported in today’s Wall Street Journal that, “Big agricultural companies say the next revolution on the farm will come from feeding data gathered by tractors and other machinery into computers that tell farmers how to increase their output of crops like corn and soybeans.

Monsanto Co., DuPont Co. and other companies are racing to roll out ‘prescriptive planting’ technology to farmers across the U.S. who know from years of experience that tiny adjustments in planting depth or the distance between crop rows can make a big difference in revenue at harvest time.

Some farmers are leery about the new technology. They worry their data might be sold to commodities traders, wind up in the hands of rival farmers or give more leverage to giant seed companies that are among the most enthusiastic sellers of data-driven planting advice. The companies vow not to misuse the information.”

Mr. Bunge pointed out that, “The world’s biggest seed company, Monsanto, estimates that data-driven planting advice to farmers could increase world-wide crop production by about $20 billion a year, or about one-third the value of last year’s U.S. corn crop.

The technology could help improve the average corn harvest to more than 200 bushels an acre from the current 160 bushels, companies say. Such a gain would generate an extra $182 an acre in revenue for farmers, based on recent prices. Iowa corn farmers got about $759 an acre last year.”

And in trade related developments, Gaurav Raghuvanshi reported yesterday at The Wall Street Journal Online that, “Negotiators from the U.S. and 11 other nations in the Asian-Pacific region failed to ink a free-trade pact but claimed to be moving toward a deal.

“The negotiators wrapped up a meeting in Singapore on Tuesday to work out details of the Trans-Pacific Partnership free-trade agreement.

“The talks, which the U.S. views as a way of extending its economic clout in Asia, were supposed to conclude last year. But a number of sticking points, especially between the U.S. and Japan about agriculture and autos, meant that deadline was unachievable.”

AFP writer Bhavan Jaipragas reported yesterday that, “Asia-Pacific trade ministers negotiating a huge US-led free trade area said Tuesday they were making headway but differences remain over market access.

“In a joint statement at the end of a four-day meeting in Singapore, the 12 prospective members of the Trans-Pacific Partnership (TPP) said they had made ‘further strides towards a final agreement.’”

James Politi reported earlier this week at The Financial Times Online that, “The powerful US farm lobby is souring on trade talks with the European Union, charging that Brussels is unwilling to consider any relaxation of health-based curbs on American food imports and warning that it would fight the deal on Capitol Hill if it is shut out.

“In a visit to Washington last week, Karel De Gucht, EU trade commissioner, reiterated his steadfast opposition to allowing any beef treated with hormones into the European market, and ruled out changes to the EU’s tough regime on the approval of genetically-modified organisms.

“His statements were slammed by US farm groups, who had hoped the trade talks launched last year would lead the EU to reconsider a series of bans, restrictions, and slow approvals on US agricultural products that have been among the most fractious matters in transatlantic trade over the past two decades.”

Mr. Politi added that, “Agriculture was always expected to be a main sticking point in the talks to form a ‘Transatlantic Trade and Investment Partnership’, particularly since the goal is not just to reduce tariffs but also to reconcile the two different regulatory philosophies.

“The gap is especially wide on food safety, with the EU practising the ‘precautionary principle’ – which has a much lower threshold for setting restrictions compared to the US, with its more lenient ‘risk assessment’ model.

“Agricultural policy and methods remain the subject of intense debate within the EU and divisive issues among its member states. In May, new European Parliament elections are expected to produce a big swing in favour of populists, many of them anti-American and from rural constituencies. Those lawmakers will ultimately have to approve TTIP so their political hue is vital.”

Keith Good

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