FarmPolicy

December 15, 2019

Farm Bill; Ag Economy; Climate; Census; Tax Issues; and, Immigration

Farm Bill

Mikkel Pates reported on Friday at Agweek Online that, “The U.S. Department of Agriculture isn’t likely to announce the fine points of the farm bill commodity title any time soon, two key congressional staffers said.

“Because the payment options are decoupled from planting decisions, the programs farmers choose won’t have bearing for 2014 planting. Bart Fischer, chief economist for the Republican-led U.S. House Agriculture Committee, and Matt Schertz, senior professional staff member, spoke to about 150 people in a two-hour ‘farm bill implementation seminar’ in Fargo, N.D., on May 2. The seminar was organized by U.S. Rep. Kevin Cramer, R-N.D.

“The two largely discussed the evolution of the farm bill and spent the last 20 minutes of the meeting discussing implementation. Cramer said farmers and their advisers need to know how to make decisions with multi-year consequences under the farm bill, which took four years to create and was signed into law on Feb. 7.”

The article indicated that, “North Dakota FSA Director Aaron Krauter did not speak at the meeting but confirmed to Agweek that while the Livestock Indemnity Program and other aspects of the farm bill were implemented right away, U.S. Agriculture Secretary Tom Vilsack has directed FSA employees not to make presentations on the commodity title until details are ironed out, and Fischer and Schertz aren’t directly involved in that.”

Note that the Senate Ag Committee will hold a hearing on Wednesday regarding Farm Bill implementation and will hear testimony from Sec. Vilsack.

Also on Friday, Jonathan Coppess of the University of Illinois indicated at the farmdoc daily blog (“Conservation Compliance and Crop Insurance in the New Farm Bill”) that, “The Agriculture Act of 2014 (the 2014 Farm Bill) links crop insurance premium assistance and compliance with wetlands and highly erodible lands conservation provisions.  As part of the series explaining provisions of the new farm bill (available here), this post discusses the new conservation compliance provisions and requirements.  As with other posts, the discussion below describes those provisions in the farm bill, final operation of compliance for crop insurance will depend on how it is implemented by USDA and updates will be forthcoming as needed.”

Meanwhile, Donnelle Eller reported on the front page of yesterday’s Des Moines Register that, “Wind and rainstorms like those that pummeled most of Iowa last week help carry tons of rich, fertile topsoil from its farmland each year — and potentially cut $1 billion in yield from the state’s 88,000 farms, says an Iowa State University agronomy professor.

Rick Cruse is working to find a better way to measure erosion and its financial impact, building on a report released three years ago that sounded an alarm on the severity of Iowa’s soil erosion. It says parts of Iowa are losing up to 12 times more soil than the government estimates [see related graphs from the article].”

Ms. Eller explained that, “The new model Cruse and his teams are developing is expected to paint an even grimmer picture of Iowa’s soil erosion. More exact data could bolster arguments to expand federal conservation programs that pay for removing highly erodible land from production or for taking prevention steps like building grass buffer strips along streams.”

Also with respect to conservation issues, USDA indicated in a news release Friday that, “The [USDA] and the Department of the Interior today announced that farmers, ranchers and landowners implementing Farm Service Agency (FSA) Conservation Reserve Program (CRP) practices intended to protect and increase lesser prairie-chicken populations will not be subject to additional regulations as a result of the species’ listing as threatened under the Endangered Species Act.”

In a tele-news conference with reporters on Thursday, Sen. Mike Johanns (R., Neb.) was asked about splitting the food stamp section of the Farm Bill from the portions of the law dealing specifically with farm related policy.

In part, Sen. Johanns noted that, “It’s a tempting thing. You know, you have this piece of the farm bill that really is about 80 percent of the spending, and that’s food stamps, nutrition programs, and then you have a much smaller piece that is actually even spent on farm programs anymore.”

“If it were split, can you ever get enough votes to pass farm bill-type legislation or anything relative to farms and ranches and agriculture? And you begin to realize that you might not get the votes to get it done,” the former Ag Secretary pointed out.

Sen. Johanns added that, “Although I will say again, every time the issue comes up, I’m so tempted by it because it sounds so logical, 80 percent of the spending is for food stamps. Why don’t we put that in a separate category and battle that out and let us do what we do with farm policy.

But my worry is you wouldn’t be able to get the bill passed.”

 

Agricultural Economy

An update on Friday at the Economic Research Service (USDA) Chart Gallery page stated that, “Piglet losses from Porcine Epidemic Diarrhea (PEDv) have reduced USDA’s forecast for 2014 pork production and sparked a recent increase in U.S. hog prices.  The 2014 winter pig crop—which will be slaughtered in the summer of 2014—was almost 3 percent lower than a year ago due to pre-weaned piglet deaths associated with PEDv [related chart]. The impact of the piglet losses on total 2014 pork production and prices is expected to be reduced as producers adjust to the changing market conditions. While fewer hogs will be available for slaughter this year, producers are expected to increase slaughter weights in response to the year-over-year rise in hog prices, lower feed costs, and the excess barn space resulting from fewer hogs moving through the production chain. Average dressed hog weights for 2014 are expected to rise by almost 5 pounds above those in 2013, partially offsetting lower slaughter numbers, limiting the annual production decline to about 2 percent compared with 2013, and leading to some easing of hog prices later in 2014.”

Reuters writer Sybille De La Hamaide reported on Friday that, “France will ban imports of live pigs, pork-based byproducts and pig sperm from the United States, Canada, Mexico and Japan to protect against a virus that has killed millions of piglets in North America and Asia, a farm ministry official said on Friday.

“The ban, which is due to be introduced on Saturday and does not include pork meat for human consumption, aims to ward off Porcine Epidemic Diarrhea Virus (PEDv), which has killed around 7 million young pigs since first identified in the United States almost a year ago.

“The disease has reduced hog supplies in the United States and sent retail pork prices to record highs.”

Tony C. Dreibus reported in Saturday’s Wall Street Journal that, “U.S. corn prices slumped nearly 2% amid speculation that drier weather will hasten planting of the grain after weeks of delays.

“Heavy rains in much of the Midwest have muddied fields and prevented farmers from using planting equipment over the past month. Also, unseasonably cold weather has made soil temperatures too cool for planting in some regions. About 19% of the U.S. crop was planted as of April 27, trailing the 28% average over the past five years, according to the U.S. Agriculture Department.

But little rain is forecast to fall in parts of the Midwest through Wednesday, which, combined with warmer temperatures, will help growers plant corn, private forecaster Commodity Weather Group LLC said in a report Friday.”

Also, Leslie Josephs and Alexandra Wexler reported in today’s Wall Street Journal that, “Cotton is trading at its highest level in more than two years as skimpy U.S. supplies and a brighter economic picture push up prices.

“However, some investors and traders think cotton doesn’t have much more room to rise. They say high prices will encourage U.S. farmers to plant a bigger crop for next year, while clothing makers will seek out cheaper substitutes like polyester. Those trends could quickly create a glut in the market.”

Bloomberg writer Phoebe Sedgman reported today that, “Wheat surged to the highest price in more than a year as violence in Ukraine spread to the Black Sea gateway of Odessa, boosting concern exports will be disrupted.

“Futures for July delivery jumped as much as 3.4 percent to $7.405 a bushel on the Chicago Board of Trade, the highest level for a most-active contract since March 28, 2013, and traded at $7.3325 by 1:30 p.m. in Singapore. Prices advanced for a third week in the period ended May 2 on speculation that freezes and droughts may curb production in the U.S., the top shipper.”

And with respect to soybeans, University of Illinois agricultural economist Gary Schnitkey tweeted this graph on Friday depicting soybean consumption in China, the U.S. and other countries and noted that, “A reminder why China is important in soybeans. Graph of soybean consumption by country since 1990.”

In other news, Lizette Alvarez reported in yesterday’s New York Times that, “In the nearly 100 years that Rusty Banack’s family has been growing Florida’s world-famous grapefruit, the industry has lurched from years of bumper crops to the devastation of tree-toppling hurricanes.

“But nothing compares to the current steep decline of the business, despite the state’s standing as the world’s biggest grapefruit producer. Florida produced nearly 41 million boxes of grapefruit a decade ago; this year it is expected to produce 16 million. Some growers have shut down, but the long-timers who remain, like Mr. Banack, have dug in, plunging millions of dollars into the land in an all-out bid to save one of the state’s emblematic citrus crops.”

The article added that, “The most recent set of challenges — less land, more disease, higher costs and decreased consumption — has brought grapefruit production to its lowest point in 75 years, with the exception of the 2004 season, when two hurricanes barreled through the state. Orange trees, the mainstay of the citrus industry, are also being badly hurt by the Asian citrus psyllid, the tiny insect that causes greening of citrus trees. Infected fruit withers and drops before it ripens and cannot be sold.”

And on the issue of food prices, Reuters news reported on Thursday that, “Kraft has raised or will soon increase prices on about 45 percent of the products in its portfolio, including cheese, cold cuts and bacon due to significant spikes in commodities such as dairy and meat, executives said on a conference call with analysts.”

Kathleen Madigan noted late last week at the Real Time Economics Blog that, “A survey of U.S. consumers released Thursday by the Royal Bank of Canada show the vast majority of households have noticed the recent rise in food prices–from milk and meat to baked goods and kitchen staples…[S]ome of those who have noticed the price increases are buying less of an item or substituting a cheaper alternative. But the vast majority are spending less on other goods and services to meet their food bills, or they are increasing their food budgets, leaving less money for saving [related graph].”

Meanwhile, a news release Friday from Sen. Heidi Heitkamp (D., N.D.) stated that, “A conservative estimate of how much revenue North Dakota farmers have lost due to agriculture shipment delays over the course of the previous four months is $66 million, according to a study [Sen. Heitkamp] asked North Dakota State University (NDSU) to conduct. The study also found that if conditions don’t improve, farmers could stand to lose an additional $95 million in income.”

And on trade issues, Reuters writers Jeff Mason and Steve Holland reported on Friday that, “Both [Pres.] Obama and [German Chancellor Angela Merkel] said they were committed to bridging differences to reach a U.S.-EU trade pact, known as the Transatlantic Trade and Investment Partnership.

“‘It will be very important for us to bring the negotiations very quickly to a close,’ Merkel, referring to the talks about the pact, said through a translator.”

“Merkel, in remarks later at the U.S. Chamber of Commerce, the powerful business lobby, said she wanted to wrap up TTIP talks by the end of 2015,” the article said.

 

Climate Change Issues

Evan Halper reported on the front page of yesterday’s Los Angeles Times that, “When a team of researchers from the University of Delaware traveled to Africa two years ago to search for exemplary chickens, they weren’t looking for plump thighs or delicious eggs.

They were seeking out birds that could survive a hotter planet.”

The article noted that, “The researchers were in the vanguard of food scientists, backed by millions of dollars from the federal government, racing to develop new breeds of farm animals that can stand up to the hazards of global warming.

“Some climate-change activists dismiss the work, which is just getting underway, as a distraction and a concession to industrial-style agriculture, which they blame for compounding the world’s environmental problems. Those leading the experiments, however, say new, heat-resistant breeds of farm animals will be essential to feeding the world as climate change takes hold.”

Juliet Eilperin reported on the front page of today’s Washington Post that, “The satellite images viewed by President Obama before a meeting with eight Western governors were stark, showing how snowpack in California’s mountains had shrunk by 86 percent in a single year.

“‘It was a ‘Houston, we have a problem’ moment,’ recalled White House counselor John D. Podesta, one of two aides who briefed the president that February day. Obama mentioned the images several times as he warned the governors that political leaders had no choice but to cope with global warming’s impact.

Ms. Eilperin indicated that, “After years of putting other policy priorities first — and dismaying many liberal allies in the process — Obama is now getting into the weeds on climate change and considers it one of the key components of his legacy, according to aides and advisers.

“He is regularly briefed on scientific reports on the issue, including a national climate assessment that he will help showcase Tuesday. He is using his executive authority to cut greenhouse gas emissions from power plants and other sources, and is moving ahead with stricter fuel-efficiency standards for the heaviest trucks.”

 

Census of Agriculture

A news release on Friday from USDA indicated that, “There are now 3.2 million farmers operating 2.1 million farms on 914.5 million acres of farmland across the United States, according to the 2012 Census of Agriculture, released today by the U.S. Department of Agriculture. The agriculture census presents more than 6 million pieces of information, which provide a detailed look at the U.S. farm sector at the national, state and county levels.”

 

Tax Issues

Ellyn Ferguson reported on Friday that, “Supporters of a generous federal tax deduction for landowners who, in essence, donate property for conservation or preservation are trying to persuade Congress to make the tax break permanent. First, though, they have to get it back on the books; it expired at the end of 2013.

“These conservation, wildlife and agriculture groups had some allies on the Senate Finance Committee, but its members approved only a two-year renewal of the ‘enhanced’ conservation easement deduction. They are hoping for better results from the House Ways and Means Committee, where Chairman Dave Camp, R-Mich., appears to be for the tax break, since he proposed to make it permanent in the tax platform he released in February.”

Ben Geman, Jason Plautz and Clare Foran reported on Friday at National Journal Online that, “GOP Sen. Mike Lee is pushing a bill that his office says would restore ‘free-market competition’ in energy by killing ‘all tax credits for both renewable and traditional energy sources.’

“‘Washington should not be using taxpayer money to pick winners and losers in the energy industry,’ said Lee, a Utah Republican, in a statement. But does the oil-and-gas industry have anything to fear? Not really.

“The bill, which Republican Rep. Mike Pompeo of Kansas has long pushed in the House, would end billions of dollars worth of tax credits that the wind industry has long relied on. It would also do away with an array of other renewable and green-technology tax credits, such as incentives for biofuels and electric cars.”

The National Journal article pointed out that, “Yet the oil-related provisions of the bill would barely graze the industry. It would end a pair of tax credits for so-called enhanced oil-recovery techniques at older wells and extracting oil and gas from low-production ‘marginal’ wells.

“Both those credits are only in effect when energy prices are below certain points. In fact, according to the Congressional Research Service, the marginal-well credit has never been used since its enactment in 2004.”

 

Immigration

Alexander Bolton reported on Friday at The Hill Online that, “Conservative activists have launched an election-year effort to get Republicans to sign a pledge that renounces President Obama’s immigration reform movement.

“Critics of the Senate-passed immigration bill are copying a tactic that has proved wildly successful in battling tax increases.

“They are pushing Republican candidates to sign a pledge to oppose three key components of Obama’s reform agenda. In the past week, it has become an issue in several competitive Republican primaries around the country.”

Keith Good

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