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Climate; Ag Economy; Policy Issues; and, Biotech

Climate Change- Agriculture

Justin Gillis reported in today’s New York Times that, “The effects of human-induced climate change are being felt in every corner of the United States, scientists reported Tuesday, with water growing scarcer in dry regions, torrential rains increasing in wet regions, heat waves becoming more common and more severe, wildfires growing worse, and forests dying under assault from heat-loving insects.

“Such sweeping changes have been caused by an average warming of less than 2 degrees Fahrenheit over most land areas of the country in the past century, the scientists found. If greenhouse gases like carbon dioxide and methane continue to escalate at a rapid pace, they said, the warming could conceivably exceed 10 degrees by the end of this century.”

The Times article noted that, “The study, known as the National Climate Assessment, was prepared by a large scientific panel overseen by the government and received final approval at a meeting Tuesday.

“The White House, which released the report, wants to maximize its impact to drum up a sense of urgency among Americans about climate change — and thus to build political support for a contentious new climate change regulation that President Obama plans to issue in June.”

Alicia Mundy and Colleen McCain Nelson reported in today’s Wall Street Journal that, “The congressionally mandated National Climate Assessment, produced by more than 300 experts overseen by a panel of 60 scientists, pins much of the increase in climate change on human behavior. The report says, however, that it isn’t too late to implement policies to reduce emissions of greenhouse gases, such as carbon dioxide and methane, and calls on governments at all levels to find ways to lower carbon emissions, particularly from energy production.”

DTN Ag Policy Editor Chris Clayton reported yesterday that, “Soil conservation practices will become more critical as weather volatility increases with higher temperatures and rising atmospheric carbon-dioxide levels, said one of the lead authors of the agriculture chapter in the National Climate Assessment released Tuesday.”

The DTN article indicated that, “As the food system becomes increasingly globalized, more extreme weather will pressure food security in the coming decades. Commodity prices will become more volatile as food production is disrupted.

“Climate change will affect agriculture, though farmers in some parts of the U.S. could see benefits from longer growing seasons while others will suffer. In the Midwest, for instance, higher levels of carbon dioxide in the atmosphere could translate into longer growing seasons that will boost yields for some crops over the next 15-20 years. Production gains would continue despite more frequent extreme weather events such as heat waves, droughts and floods.

One of the major takeaways from the report is that agriculture can adapt, but protecting land and water resources will become more critical, said Jerry Hatfield, a USDA soil scientist in Ames, Iowa, and one of the lead authors of the chapter about agriculture. Extreme variability in precipitation will increase soil erosion through either intense rainfalls or droughts and high winds. These challenges will require more innovative conservation practices in the future.”

Yesterday’s article pointed out that, “We’re going to have to look very hard at conservation practices to protect the soil from erosion, Hatfield said. That means leaving higher levels of residue on the ground and changing crop rotations to add cover crops to both build organic matter and increase water-holding capacity in the soil.”

On yesterday’s AgriTalk radio program, host Mike Adams had a conversation about the new climate report with USDA’s climate expert, William Hohenstein.

Mr. Hohenstein noted that, “Well, there’s no one that’s talking about regulating agriculture to deal with climate change. In fact agriculture is one of the sectors that’s most affected by climate change, and so a lot of the work within USDA is focused on dealing with the changes that we’re likely to see and how to manage those risks for farmers.

“It is true that agriculture is a source of emissions. It’s about 6% of U.S. greenhouse gas emissions. But as the administration just put out in their methane strategy, the approach they’re taking with agriculture in terms of emissions is a voluntary one, and primarily through the programs that USDA administers, the conservation and energy programs, and so things like EQIP or the Conservation Security Program, or the programs in rural development that help farmers manage manure. Those are going to be the tools we use to deal with the emission side of the equation. I think what farmers also need to focus on is what we expect to see with regard to climate change and how that could affect their operations.”

Mr. Adams asked: “So you’re saying that the plan for now is still a voluntary plan and not mandatory when it comes to this issue, is that right?”

Mr. Hohenstein responded by saying, “That’s right. And it’s going to be implemented primarily through the conservation programs and the programs that farmers are used to under the farm bill.”

Mr. Hohenstein also noted on yesterday’s AgriTalk program that, “I think what we’re worried about is some of that variability is likely to increase, and so we’re likely to see an increase in terms of the frequency and intensity of droughts. We’re likely to see increases in these extreme high temperatures that we’ve been seeing in midsummer that can affect crop production and livestock as well. And then we’re already seeing changes in precipitation patterns, and in particular these extreme rainfall events that can have impacts on soil erosion and soil health.

And so a lot of the advice we’re giving to farmers is to practice good conservation and stewardship practices. Having healthy soil is a real key to maintaining good production under climate variability. It can help with drought, it can help dealing with extreme water as well.

“On the livestock side we’re staring to make recommendations about how to, if you’re putting in a new barn or a new facility, how to make sure that you’re cooling the livestock. And we’re also doing a lot of research on changes in feed, changes in diet that can help animals withstand higher temperatures.”

In a statement yesterday, Sec. of Agriculture Tom Vilsack noted in part that, “‘The National Climate Assessment confirms that climate change is affecting every region of the country and critical sectors of the economy like agriculture. This assessment provides an unprecedented look at how the changing climate and extreme weather impact rural America,’ said Secretary Vilsack. ‘The Obama Administration continues to take steps to responsibly cut carbon pollution, slow the effects of climate change and support an expanded domestic energy economy. At USDA, we’re working closely with our nation’s farmers, ranchers and forest landowners to help them manage the negative impacts of climate change, reduce their energy costs, and grow the bioeconomy to create jobs in rural America.’”

And National Farmers Union President Roger Johnson noted in a statement yesterday that, “The National Climate Assessment only confirms what family farmers and ranchers have been experiencing: global climate change is increasing the occurrence and severity of volatile weather events, which then directly impact agricultural risk, farmers’ bottom lines and the entire rural economy.

“The administration’s report is clear. Congress must take legislative action to mitigate climate change in order to protect farmers, ranchers, consumers and rural communities.

I also encourage the administration to heed its own advice by rejecting the U.S. Environmental Protection Agency’s misguided proposal to reduce the biofuel production targets under the Renewable Fuel Standard. The RFS is currently our country’s most important strategy to reduce greenhouse gas emissions in the transportation sector. The EPA’s proposal will not only adversely impact commodity prices and rural employment, but will also move our country further from achieving our climate change mitigation goals.”

Also, an update yesterday from NOAA’s Environmental Visualization Laboratory indicated that, “The most intense droughts, categorized as ‘exceptional,’ are associated with prolonged shortages of water and result in widespread crop and other vegetation losses. A new report released by the U.S. Global Change Research Program provides the most detailed and authoritative analysis of climate change and climate impacts, like drought, for the U.S. This image shows the number of weeks that areas across the globe have experienced exceptional drought vegetation stress, dating back to when NOAA’s satellites first began monitoring vegetation patterns in 1981. Areas above 60 degrees latitude and desert locations have been omitted from the analysis. Long-term and consistent measurements of conditions such as vegetation stress allow NOAA to provide the environmental intelligence data needed to make informed decisions.

“Explore global satellite-based vegetation and drought data from the past to the present using NOAA View.”


Agricultural Economy

Reuters writer Theopolis Waters reported yesterday that, “A lethal pig virus sweeping across farms in the United States could cut pork production as much as 7 percent this year, a far steeper decline than the government has forecast, according to agribusiness research firm Rabobank.

“Porcine Epidemic Diarrhea virus (PEDv) has killed about 7 million baby pigs since it was detected a year ago in the United States, where the outbreak has been most severe. It has also appeared in Canada and parts of Asia.

“The Rabobank research note estimated there would be a 6 percent to 7 percent drop in 2014 U.S. pork production tied to losses from the virus. The USDA had said PEDv could reduce output by 2 percent.”

Thomas Hale reported yesterday at The Financial Times Online that, “Soyabean prices fell to a three-week low after signs that production from South America is set to improve eased concerns about tight supplies in the US, the world’s leading grower.

“CBOT July soyabeans fell 0.9 per cent to $14.49½ a bushel on Tuesday [related graph].”

The FT article added that, “Elsewhere, July wheat rose to its highest level since June 2013 as the markets responded to tensions in Ukraine and concerns about dry weather in the US southern plains.

“Over the weekend, temperatures peaked at 102ºF in Wichita, Kansas, adding to fears that extremely hot weather will have an adverse effect on wheat supplies.

“The Chicago July wheat future rose 1.3 per cent to $7.38¾ a bushel on Tuesday – its highest level since June 2013.”

Meanwhile, Erin McCarthy reported yesterday at The Numbers Guy Blog (Wall Street Journal) that, “California, meanwhile, is expected to face major losses in its agricultural sector as the state has suffered a drought for three years. The California Farm Water Coalition expects $7.5 billion in economic losses from the drought, including $3.6 billion from lost agricultural production [related graph].”

And Edward Wong reported in yesterday’s New York Times that, “The Chinese government has imposed new limits on foreign brands of milk powder and infant formula sold in China, according to reports on Monday by the state-run news media.

“The restrictions appear to be the latest attempt by the government to reduce the enormous demand for foreign-made dairy products and bolster the sales of domestic brands.”


Policy Issues: Crop Insurance, Egg Production

University of Illinois agricultural economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“2013 Crop Insurance Performance in Illinois”) that, “With the recent addition of Group payments, most crop insurance payments likely have been entered into the Risk Management Agency’s Summary of Business, allowing an assessment of crop insurance loss performance for 2013. In Illinois, $661 million of insurance payments were made on all crops while total premiums were $823 million, leading to a 2013 loss ratio of .80. The .80 loss ratio was above the 2000-2012 average of .77, but below the 2012 loss ratio of 4.56. A factor contributing to insurance payments in 2013 was a price decrease for corn.”

The update added that, “Losses experienced in Illinois during 2013 were considerably lower than the drought induced losses of 2012. The 2013 loss ratio was slightly higher than the 2000-2012 average.   The harvest price for corn was 22% lower than the projected price. This decrease was a major factor contributing to corn payments in 2013.”

Ken Klippen of the National Association of Egg Farmers indicated in a recent column at the Columbia Daily Tribune (Mo.) that, “The April 27 commentary titled ‘Koster lays an egg with suit,’ by Michael Makarian of the Humane Society Legislative Fund, continues the misleading rhetoric from his group. Missouri Attorney General Chris Koster is to be commended for leading the nation in a lawsuit against the California egg law.

“California assumes the role of determining the commerce of eggs, which is a violation of the U.S. Constitution Article 1, Section 8, Clause 3 granting Congress the power to regulate commerce between the states. If California wishes to regulate egg production within the state, that’s its right, but it requires out-of-state egg sellers to implement California’s food safety regulations. That appears to Markarian to be a good idea, but it goes beyond federal regulations under the FDA’s food safety standards for eggs.

“Markarian’s implication stemming from the salmonella outbreak in Iowa a few years ago that consumers are somehow buying less-safe eggs is again a gross misrepresentation of the facts. R.K. Gast of the U.S. Department of Agriculture Southeast Regional Laboratory in Athens, Ga., and three other scientists recently published their findings that there are no significant differences in the frequency of egg contamination by salmonella in chickens housed in conventional cages compared to enriched cages, the ones promoted by California.”

The column added that, “Markarian’s effort is a form of ‘gradualism’ in making small changes leading to more expensive eggs. This will result in reducing the availability of lower-priced eggs to lower-income families. The laws established in 2012 in Europe to change the production systems for eggs led to a 20 percent shortage of eggs in the stores, a 44 percent increase in price, projected insolvencies of upward of 30 percent of German egg farmers and now pressure from the Farm Animal Welfare Forum (FAWF) calling on the U.K. government to lead the way forcing new animal welfare issues in Europe, including total cage-free.”



Bloomberg writer Duane D. Stanford reported yesterday that, “Kraft Foods Group Inc. and other packaged-food giants are facing a prospect they’ve dreaded for years: a state law requiring them to label products containing genetically modified organisms.

“Vermont Governor Peter Shumlin, a Democrat, has vowed to sign a GMO labeling bill on May 8, saying on Twitter that residents deserve to know what’s in their food. The legislation will require certain products sold in the state to note that they ‘may be partially produced with genetic engineering.’

The move would make Vermont the first state to require the labeling, following failed attempts to pass legislation in California and Washington. And while Vermont’s population is small — at about 627,000, it has fewer people than the east side of Manhattan — the law could prompt other states to follow suit. At least 13 states have bills pending as the issue gains momentum, fueled in part by social media.”

The article added that, “Kraft, Monsanto Co. and DuPont Co. are among the food makers that have lobbied against stalled GMO labeling legislation in California, the most populous state. They argue that labeling laws could increase food manufacturing and retail costs for processors and grocers. The Washington Research Council, a Seattle-based group that opposed the labeling bill in that state, estimated it would add as much as $520 to the annual food bill for a family of four.

“GMO labeling laws also would create a false perception that the foods are unhealthy, despite a lack of scientific evidence, Hillshire Brands Co. Chief Executive Officer Sean Connolly said yesterday in an interview. If the labeling is going to be required, he would prefer the regulations come from the federal government.”

Keith Good