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Farm Bill; Tax Extenders; Ag Economy; Immigration; and, Political Notes

Farm Bill- Policy Issues

A recent update at fibre2fashion.com reported that, “Members of the Federal Senate, the Upper House of the National Congress of Brazil, have sought strong measures against the protectionism of cotton producers, adopted by the US Government under its new Farm Act, according to the senators who participated in a joint public hearing on the issue at the Committees on Agriculture and Agrarian Reform and on External Relations and National Defense.

The new Farm Act, with wider subsidies, assures revenues to the American cotton producer even if nothing is produced, the senators said, according to the information on Federal Senate website.

“At the meeting, Senator Ricardo Ferraco said, ‘The new American farm act is, in a rather disguised way, trying to violate a competitive international trade.’”

The article noted: “Explaining the issue, Senator Ana Amélia said that without subsidies the Brazilian cotton production is more competitive than the American. ‘The difference is that the Brazilian farmer, when planting, looks up towards the sky to see if St Peter will deliver rain. But the American producer looks towards the Treasury, to Washington, to the availability of resources that will assure their payment,’ she said.”

The article added that, “Enio Cordeiro, from the Ministry of External Relations, informed that the Government has started working on a negotiated solution at the WTO, aiming to prove that the amendments to the new act violate an agreement signed by the United States. If an agreement is not made by June, he said, Brazil will seek an arbitration mechanism through the WTO, in which it will have to prove the demand to specialists selected to analyze the case.

“In case a negotiated solution is not found, Brazil has the option of adopting the mechanism of commercial retaliation against the United States, but André Alvin Rizzo, from the Ministry of Development, Industry and Foreign Trade was of the opinion that commercial blockades would have consequences for the Brazilian domestic market.”

An Inside U.S. Trade article on Friday reported that, “A Brazilian official last week publicly warned that Brazil will resume litigation against the United States at the World Trade Organization if the two countries cannot settle by June their longstanding dispute over U.S. subsidies for cotton and other agricultural products, according to a report by Brazil’s Senate news agency.

“The comments by Enio Cordeiro, the senior official in charge of economic affairs in Brazil’s Ministry of Exterior Relations, came during a May 8 hearing in Brazil’s Senate. An informed source confirmed the accuracy of the report, and said Cordeiro’s comments mean that, absent a settlement by June, Brazil will request a compliance panel in the cotton case under Article 21.5 of the WTO Dispute Settlement Understanding.”

Meanwhile, an update on Friday at the National Sustainable Agriculture Coalition blog indicated that, “Next week is a big week for agriculture appropriations. On Tuesday, May 20, both the House and the Senate Agriculture Appropriations Subcommittees will debate and almost certainly pass their respective agriculture funding bills for fiscal year (FY) 2015. The full Senate Appropriations Committee will then take up the agriculture appropriations bill on Thursday, May 22. The full House Appropriations Committee is tentatively scheduled to take up that chamber’s agriculture appropriations bill one week later on May 29.

“Ahead of markup on Tuesday, both Subcommittees are putting the final touches on their initial bills. The Subcommittees will debate each bill and potentially offer amendments, though amendments are almost always held back until the full Appropriations Committee action.”

Also this week, Cristina Marcos reported on Friday at The Hill Online that, “Both the House and Senate are expected to take up a conference report on the Water Resources Reform and Development Act (WRRDA). The $8.2 billion bill would authorize funding to boost U.S. water infrastructure projects.

“Negotiations between the House and Senate lasted for months due to different approaches to determining which projects should receive funding. The legislation is expected to pass both chambers.”

A news release Friday from Sen. Michael Bennet (D., Colo.) noted that, “Colorado U.S. Senators [Bennet], Mark Udall, and Congressman Scott Tipton are requesting that the [USDA] designate the Colorado River basin as a Critical Conservation Area (CCA) under the 2014 Farm Bill’s Regional Conservation Partnership Program (RCPP)…[I]n a letter to Agriculture Secretary Tom Vilsack, the Colorado lawmakers wrote: ‘Despite above average snowpack in some portions of the region this past winter, the Colorado River basin as a whole continues to be in the midst of historic drought conditions that are only projected to worsen in the coming years. The region is in need of coordinated federal assistance to continue providing robust agricultural and economic output into the future and would benefit greatly from the resources and programs offered through the RCPP.’”

Recall that a Senate Ag Committee hearing this month, Chairwoman Debbie Stabenow (D., Mich.) noted that, “This [the RCPP] is probably one of the most understated policies in the 2014 farm bill. It has the potential really to transform the face and the future of agricultural stewardship.”

With respect to nutrition, AP writer Jamie Stengle reported on Saturday that, “Although the USDA says 90 percent of schools are meeting the updated nutrition standards that were implemented two years ago, a survey of school food service officials by the Kids’ Safe and Healthful Foods Project — a collaboration between the Pew Charitable Trusts and the Robert Wood Johnson Foundation — found that 88 percent of districts need at least one more piece of kitchen equipment…[D]ebbi Beauvais, who oversees school nutrition at three school districts in Rochester, New York, said something as simple as offering breakfast smoothies meant purchasing two industrial-grade blenders for about $1,600 each. Other improvements over the years have included a $1 million renovation of a high school cafeteria to food court-style service.”

Ramsey Cox reported on Friday at The Hill Online that, “Sens. Tom Harkin (D-Iowa) and Richard Blumenthal (D-Conn.) introduced a bill Thursday that would end a tax subsidy for the marketing of unhealthy food and beverages to children.”

The article explained that, “The Stop Subsidizing Childhood Obesity Act would shift the money saved from eliminating the tax credit to the U.S. Department of Agriculture’s Fresh Fruit and Vegetable Program, which provides fresh fruit or vegetable snacks to elementary school students in low-income schools.

“Under the current tax code, companies can deduct marketing and advertising expenses from their income taxes.”

In other news, Jacqui Fatka reported on Friday at Feedstuffs Online that, “The stage is set for another debate on the first amendments rights of mandatory country-of-origin labeling for meat products.

“The U.S. Court of Appeals for the District of Columbia Circuit vacated a ruling provided March 28 that vacated a request for a preliminary injunction to block the implementation of the updated country-of-origin labeling law that USDA updated in May 2013.

The court will hear oral arguments before the full court at 9:30 am on Monday, May 19. The court has scheduled 30 minutes of oral arguments from each side, followed by an opportunity for the 12-judge panel to ask questions. However the previous panel hearing in January went much longer and this time is expected to be longer as well, said Judy Coleman, lawyer at Hogan Lovells which is representing the American Meat Institute and other plaintiffs.”

And a news release late last week from Rep. Rick Crawford (R., Ark.) indicated that, “Per the request of [Rep. Crawford], a House Committee on Natural Resources field hearing in Batesville Wednesday addressed landowner concerns regarding U.S. Fish and Wildlife Service (FWS) Critical Habitat Designations.

“The hearing, entitled Protecting the Rights of Property Owners: Proposed Federal Critical Habitat Designations Gone Wild, hosted nine witnesses — including eight from Arkansas and one from FWS — as well as more than 200 public attendees.”

The release noted that, “The discussed Critical Habitat Designation (CHD) dealt with two mussel species classified as endangered by FWS — the Neosho Mucket and the Rabbitsfoot mussel, with the latter mussel occupying the most Critical Habitat within Arkansas. Together, CHDs for these two species affect nearly 770 Arkansas river miles covering 31 counties, according to the Association of Arkansas Counties (AAC). If fully implemented, they would affect nearly 42 percent of the state’s geographical area.”

For more recent news issues regarding species designations, see this brief FarmPolicy.com overview.

 

Tax Extenders Issue

The Washington Post editorial board opined yesterday that, “This may be one of those times when no bill is better than a bad bill. Certainly it won’t be the end of the world if both the House and the Senate have to ponder this turkey a while longer, during which time they may come up with a way to pay for it — or even the gumption to end the absurd annual ‘tax extender’ ritual once and for all.”

 

Agricultural Economy

A recent article at Barron’s (“Meat Prices’ Sizzling Ascent: Pork, Beef Prices Soar”) reported that, “Barbecue chefs might want to pick up smelling salts before they hit the supermarket meat aisle this summer, because the price tags could make them light-headed.

Meat prices have jumped in the past few months, with the retail cost of beef up more than 9% this year and pork up more than 5%, according to the U.S. Department of Agriculture. We’re looking at major increases over already record-high prices, says Ricky Volpe, an economist at the USDA.

“Higher meat exports account for some of the rise. But much of the increase has been caused by supply shortages. Droughts in the past couple of years caused corn and grain prices to spike, making it more costly to raise a cow and convincing farmers to thin their herds. Pork supplies are also falling, in part because of a virus called PEDv that has already killed millions of pigs since last year. Some farmers have slaughtered hogs ahead of schedule in anticipation that the disease will continue to spread. As supply slips, prices ascend.”

And Bloomberg writers Elizabeth Campbell and Megan Durisin reported on Friday that, “U.S. feedlots placed 4.9 percent fewer cattle in April compared to a year earlier, a bigger decline than estimated, government figures showed [related graph]”

Aldo Svaldi reported on Friday at the Denver Post Online that, “A large influx of Californians are relocating to Colorado this year — they just happen to be entering on four legs, not two.

California ranchers, despite near-record beef prices, are culling their cattle herds in response to one of the most severe droughts that state has ever faced.

Colorado ranchers are taking advantage, purchasing steers as they have in years past, but also buying cows to rebuild herds thinned after years of dry conditions.”

Meanwhile, Gregory Meyer reported yesterday at The Financial Times Online that, “A run on egg whites in the US food industry has made prices sizzle for the sticky ingredient, stirring up turbulence for companies from Cargill to an investment holding of Goldman Sachs.

Analysts say the fragile egg supply chain has been under pressure as fast-food restaurants race to add low-cholesterol egg sandwiches to menu boards. The cost of liquid egg whites has flipped above yolks for the first time in years, according to Urner Barry, a food price information service.

“In the latest sign of a squeeze, the US Bureau of Labor Statistics last week reported wholesale prices for processed eggs had leapt 56 per cent from a year ago. The average American eats more than 250 eggs annually, according to the US Department of Agriculture.”

And Leslie Josephs reported in today’s Wall Street Journal that, “The world’s sugar glut is melting away.

“Global production of the sweetener is set to fall short of consumption in 2015, snapping four consecutive years of oversupply, largely due to falling output in top exporter Brazil.

The supply concerns are driving sugar prices higher. Raw-sugar futures rose 4.1% last week, the biggest weekly percentage gain in almost two months. The July contract, which is the most actively traded, ended the week at 17.91 cents a pound on the ICE Futures U.S. exchange.”

In addition, coffee prices are on the rise, while, “Wheat logged its biggest weekly drop since 2011 as traders reassessed the outlook for supplies of the grain.”

And USDA’s Economic Research Service released a report on Friday titled, “Pesticide Use in U.S. Agriculture: 21 Selected Crops, 1960-2008,” that, “examines trends in pesticide use in U.S. agriculture from 1960 to 2008, focusing on 21 crops that account for more than 70 percent of pesticide use, and identifies the factors affecting these trends.”

A couple of interesting graphs from the report can be seen here and here.

 

Immigration

Markus Schmidt reported on Friday at the Richmond Times-Dispatch (Va.) Online that, “U.S. Secretary of Agriculture Tom Vilsack said Thursday that agribusiness in Virginia would reap major benefits from comprehensive immigration reform and he urged House Republicans to pass similar legislation as the Senate did in 2013.

“‘I’ve talked to Virginia producers who tell me that they are finding it more difficult each year to get stable and secure workers because of the failure of our immigration system to work for agriculture,’ Vilsack said in a phone interview.”

Kristina Peterson and Laura Meckler reported on Friday at The Wall Street Journal Online that, “House Majority Leader Eric Cantor (R., Va.) indicated Friday he won’t allow a vote on a proposal to let people brought to the U.S. illegally as children gain legal permanent residence after serving in the military.”

And AP writer Kevin Freking reported on Saturday that, “Republican Rep. David Valadao says he’s not worried that Congress’ failure to pass immigration legislation will hurt his prospects for re-election to a district in California’s agricultural heartland. Same goes for GOP Rep. Jeff Denham, who represents a neighboring district in the state’s San Joaquin Valley.

“Still, the California congressmen are making sure voters know they support an immigration overhaul. They’re aware that Democrats will try to turn the congressional gridlock into an advantage during this year’s midterm elections.”

Also, Mike Lillis reported on Friday at The Hill Online that, “Conservatives have found a new weapon in their fight against the Obama administration over immigration: thousands of immigrants convicted of crimes.

“Speaker John Boehner (R-Ohio) has said repeatedly that Republicans are reluctant to overhaul the nation’s immigration laws because they don’t trust the administration to implement them.”

 

Political Notes

Jennifer Jacobs reported on the front page of yesterday’s Des Moines Register that, “Even if Democrat Tom Vilsack isn’t interested in speculating about whether he might make an ideal vice presidential candidate in 2016, Joe Biden is.

“‘He’s one of the stars of the Cabinet,’ Biden told The Des Moines Register during an interview at a party hosted by Iowans in Washington, D.C., this month. ‘I was kidding with Tom when he greeted me, and I joked and I said if Tom were running the whole economy, it’d be growing at 9 1/2 percent.’”

The Register article noted that, “For one thing, he’s [Sec. Vilsack] gotten better at working with Congress. He found it a challenge at first — he’s not a slap-you-on-the-back kind of guy; he’s more than impatient with legislative bottlenecks. A recent eclat: When the farm bill became tainted with partisan politics — Republicans branded Barack Obama ‘the food stamps president’ and worked to rein in spending on the program — Vilsack negotiated behind the scenes to solve some issues, including key dairy matters.”

Meanwhile, in an article yesterday at National Journal Online, which focused on the current political climate in Arkansas- including the race for U.S. Senate-  Ron Fournier reported that, “[Rep. Tom Cotton (R)] said he opposed the farm bill because of its food stamp provisions. Fine, but this is an agriculture state. Voting against the farm bill is like rooting against the University of Arkansas Razorbacks: It might make sense, but nobody wants to hear it. A fellow GOP candidate told me Cotton’s farm bill vote was ‘dumb’ and ‘silly.’”

Keith Good