FarmPolicy

September 18, 2019

Policy Issues; Immigration; GMO Labels; Regs; and, the Ag Economy

Policy Issues

A news release yesterday from the House Ag Committee stated that, “Rep. Austin Scott, Chairman of the House Agriculture Committee’s Subcommittee on Horticulture, Research, Biotechnology and Foreign Agriculture, today held a public hearing to review current research and application of management strategies to control pests and diseases of pollinators.

“Approximately a third of global food production is dependent on animal pollination for reproduction, and managed honey bees are the most important pollinators of those crops. Some regions of the world have increasingly lost their managed honey bee colonies in recent years. Reports of Colony Collapse Disorder (CCD) surfaced in the United States in 2006. Colony losses are not unusual, but the increase in losses reported in the U.S., some European countries, the Middle East, and Japan are particularly alarming because of the honey bees’ role in pollination and the absence of an easily identifiable cause.”

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Wall Street Journal: Abe Advisor Heizo Takenaka on U.S.-Japan Trade Talks

From The Wall Street Journal, April 29, “Were the recent trade talks between President Obama and Shinzo Abe a wasted opportunity? Japanese economist Heizo Takenaka shares his thoughts with WSJ’s John Bussey.”

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Cattle Profitability- Historic Proportions

A recent news article in The Great Falls Tribune (Mont.) reported that U.S. cattle producers are poised for a record year of profitability. Small cattle numbers and increasing export demand have contributed to robust economic variables in the U.S. cattle market. Nonetheless, drought in the corn belt and other unknowns, could potentially stymie the cattle outlook. And Reuters news recently reported that, “In the midst of the worst California drought in decades, the grass is stunted and some creeks are dry. Ranchers in the Golden State are loading tens of thousands of heifers and steers onto trucks and hauling them eastward to Nevada, Texas, Nebraska and beyond.”

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Immigration; Ag Economy; Trade; and, Regulations

Immigration

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Virginia apple grower Phil Glaize joined U.S. Agriculture Secretary Tom Vilsack on Monday in demanding Congress finish its work on immigration reform.

“Glaize and his family have been in the apple-growing business for 70 years near Winchester, Va., and he has testified on Capitol Hill about the problems trying to find seasonal workers. Like a high percentage of fruit and vegetable growers, Glaize’s main working season is harvest time, when he needs 115 workers for about two-and-a-half months. Another 50 employees work nine months of the year in the packinghouse and another 15 people are employed year-round. About 75% of all people who apply for jobs are Latino, Glaize said. He noted his farm does I-9 verification on all applicants, ‘However, my suspicion is that some of the workers are here illegally.’

Glaize and Vilsack held a press call Monday as the Obama administration keeps pushing the House of Representatives to take up an immigration reform measure.”

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Bloomberg– Vilsack: U.S. Agriculture Needs Immigration Bill

From Bloomberg, April 28 – “U.S. Agriculture Secretary Tom Vilsack talks about food prices, supply, and the impact of overhauling immigration laws on agriculture. Vilsack speaks with Alan Bjerga on Bloomberg Television’s ‘In the Loop.'”

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Ag Economy (Trade); Immigration; Farm Bill- Policy Issues

Agricultural Economy

Alexandra Wexler reported on the front page of Saturday’s Wall Street Journal that, “You can stretch cotton only so far. Pushed by persistently steep prices for the fabric, apparel makers are weaving synthetic fibers into clothing that was once 100% natural.

“The trend is showing up at a range of retailers, from high-end to mass-market. Jeans from Los Angeles-based seller AG, which specializes in premium denim, are made from cotton, lyocell and polyurethane and cost $168. American Apparel Inc. offers a $22 T-shirt that is a blend of polyester, cotton and rayon. A dress from Hennes & Mauritz AB made from rayon and spandex costs $12.95.

This year, U.S. imports of clothing made chiefly from synthetic materials are poised to outpace cotton apparel for the first time in more than two decades. As recently as 2008, 60% of apparel imports—the vast majority of the U.S. clothing market today—were made of cotton [see related graph from the article].”

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ERS: Less production and debt concentrated in highly-leveraged farm businesses than 20 years ago

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From USDA’s Economic Research Service (ERS), April 25- “While the average leverage of farm businesses—as measured by debt-to-asset (D/A) ratios—has decreased over time, some farms remain highly leveraged. The D/A ratio that implies financial vulnerability varies with individual farm business characteristics, but a commonly used threshold to indicate high leverage is a D/A ratio greater than 0.4. Using this definition, highly-leveraged farms consistently accounted for a disproportionate but declining share of the total value of production by all farm businesses between 1992 and 2011. In 2011, 5.3 percent of farm businesses were highly leveraged and contributed 13.4 percent of farm businesses’ total value of production; by comparison, in 1992, 9.5 percent of farm businesses, responsible for 19.6 percent of production, were highly leveraged. The declining role of highly-leveraged farms suggests the sector’s financial resiliency has increased over time because financial shocks—such as an unexpected drop in income or a sudden jump in interest rates—would likely affect fewer farm businesses, producing a smaller share of the value of production. This chart appears at, “Farm Businesses Well-Positioned Financially, Despite Rising Debt,” in the April 2014 Amber Waves online magazine.”

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Trans Pacific Partnership (TPP) – Brief Overview

President Obama was in Japan this week (April 21, 2014) where he met with Prime Minister Shinzo Abe. Joint meetings between the two countries included negotiations over the Trans Pacific Partnership (TPP), and specifically focused on agricultural trade barriers.

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Farm Bill; Ag Economy; Regulations; and, Immigration

Farm Bill- Policy Issues

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “The next bill may be more difficult to develop and pass as a pair of farm-bill lobbyists urged advocates of all types to begin thinking about how to work together again.

“The lobbyists analyzed the political divisions created trying to pass the 2014 farm bill during a panel discussion Wednesday at the Consumer Federation of America’s National Food Policy Conference.

Bill O’Conner, a former House Agriculture Committee staff director and USDA official, noted that the relationship between the farm titles and the nutrition title has ‘changed, and not just in one direction.’”

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Policy Issues; Ag Economy (Trade); Regulations and GMO Labeling

Policy Issues

Tim Devaney reported yesterday at The Hill’s RegWatch Blog that, “The U.S. Department of Agriculture (USDA) is looking to crack down on welfare fraud around the country.

“The USDA’s Food and Nutrition Service announced Wednesday it is targeting people who sell food stamps for money. Some recipients cheat the system by claiming they have lost their food stamp debit cards so they can request new ones, the agency said.

“To combat fraud, the USDA will require states to monitor the Supplemental Nutrition Assistance Program and be on the lookout for excessive requests for replacement cards. People who request four or more replacements in a year will receive a warning notice.”

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Climate- EPA Water Rule; Biofuels; Farm Bill; Ag Economy; FDA; and, Immigration

Climate, EPA Water Rule

DTN Ag Policy Editor Chris Clayton reported yesterday that, “Demonstrating some of the complications involved in agriculture and climate change, U.S. Agriculture Secretary Tom Vilsack disputed Republican views on the Obama administration’s work with dairy producers to reduce methane while the secretary also dismissed a study raising doubts about carbon emissions from cellulosic biofuels.

“Vilsack spoke at an Earth Day forum on climate change held at Drake University and co-sponsored by the magazine New Republic and the League of Women Voters.

“USDA also used the forum to announce $6 million in grants to 10 universitiesto study the effects of climate change on agriculture. The universities are designated as USDA’s ‘climate hubs’ to help producers adapt to changing climate conditions.”

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Trade- Ag Economy; Rural Development; Regulations; and, Immigration

Trade- Agricultural Economy

Doug Palmer reported yesterday at Politico that, “President Barack Obama’s abilities as negotiator-in-chief for the United States will be put to the test this week on a trip to Asia that could set the stage for the conclusion of a huge new free-trade agreement. But the deal faces even more hurdles at home because of opposition from fellow Democrats.

“The trip comes at a critical time for talks on the proposed Trans-Pacific Partnership, a regional free-trade deal that companies hope will boost exports by billions of dollars but labor groups and other opponents fear will move jobs overseas and weaken consumer protections.

“The TPP pact is a key part of the White House’s economic ‘rebalance’ toward Asia. A main goal of the trip is to show that Obama remains committed to that vision, despite his decision last October to cancel a visit to the region because of the U.S. government shutdown.”

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Farm Bill; Ag Economy; Regulations; and, Immigration

Farm Bill- Policy Issues

In an interview last week with Don Wick of the Red River Farm Network, House Ag Committee Ranking Member Collin Peterson (D., Minn.) remarked on USDA’s implementation of the new Farm Bill and noted that, “I think the Department is well along, and it’s gotten a much quicker start this farm bill as opposed to the last farm bill. But there are a lot of complications. As you said, the first thing they focused on was getting the livestock disaster thing going, so that’s happening now. They’re working…I think, I’m expecting in the next week or two to get them to designate these critical conservation areas so we can start getting some of this retention stuff moving yet this summer. I’ve talked with the Secretary a couple times about this, and I think that’s going to happen.

“And they’re working on like 600 different areas that they had to work on, so they’ve got a lot of work to do. But because the bill had been out there for so long, I think they were a little more prepared this time than they were in ’08. But the commodity title, with us getting rid of direct payments and setting up these two new safety nets, where you have to make a choice, that’s more complicated, and it’s going to take them a while to get that put together.”

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Farm Bill; Ag Economy; Food Safety; and, Financial Regulation

Farm Bill

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Top House Republicans on Thursday pressed departing Health and Human Services Secretary Kathleen Sebelius to rein in what they see as food stamp cheating by state governments.

“GOP leaders have been angered that the deficit reduction from the new farm bill could be less than expected because states have found a way to thwart a new restriction on food stamp eligibility in the legislation.

“House Agriculture Committee Chairman Frank Lucas (R-Okla.) and Energy and Commerce Chairman Fred Upton (R-Mich.) wrote to Sebelius seeking answers about how the department administers the Low Income Energy Assistance Program (LIHEAP) and whether it can prevent states from ‘misusing’ the program to get more food stamp dollars.”

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Food Price Update (March CPI)

The Department of Labor noted this week, that food prices increased by 0.4% in March. Drought in Brazil and the U.S., particularly in California, have put a dent in output. Prices for producer products are set to increase as well. And on the East Coast, cold temperatures and rain have also negatively impacted spring crops.

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Ag Economy; Biotech; Regulations; and, Immigration

Agricultural Economy

Yesterday, the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions. Commonly referred to as the “Beige Book,” the report included several observations with respect to the U.S. agricultural economy.

The Chicago District indicated that, “The slow arrival of spring-like weather delayed fieldwork. However, concerns about a delayed start to planting were muted, especially in Illinois and Indiana where 2013 crops performed well after being planted late. The mood among farmers improved as crop prices increased enough from winter lows that breakeven outcomes now seem possible. Hence, there has been more forward contracting of crops than a year ago to manage risk. Higher soybean prices still support a shift in planting intentions toward soybeans and away from corn, but not as much as earlier this year. Fertilizer costs decreased from a year ago, and seed costs were flat. The livestock sector moved further into the black, as milk, hog, and cattle prices increased. Given lower numbers of hogs and cattle available to market, animals were fed longer in order to gain additional weight. Although hog operations were still battling a virus that killed many piglets, there were signs that the worst had past.”

While the Kansas City District noted that, “Crop growing conditions remained dry in March, while livestock prices increased further since the last survey period. The winter wheat crop was in need of moisture and rated in mostly fair to poor condition. Spring fieldwork began, and District farmers followed national trends by intending to plant slightly more soybeans and less corn. With crop prices still lower than a year ago, farm operating loan demand rose this year as farmers financed a larger portion of crop input costs. However, global supply concerns supported strong exports, and crop prices rose to a six-month high during the reporting period. Low cow inventories kept feeder cattle prices elevated, and strong export demand supported higher fed cattle prices. In addition, hog prices surged as the on-going swine virus cut inventories further.”

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