FarmPolicy

March 25, 2019

Farm Bill; Nutrition Issues; Ag Economy; Regs; and, Immigration

Farm Bill- Conservation

AP writer John Flesher reported yesterday that, “The U.S. Department of Agriculture is teaming with businesses, nonprofits and others on a five-year, $2.4 billion program that will fund locally designed soil and water conservation projects nationwide, Secretary Tom Vilsack said Tuesday.

“Authorized by the new farm law enacted earlier this year, the Regional Conservation Partnership Program is intended to involve the private sector more directly in planning and funding environmental protection initiatives tied to agriculture [see related USDA video].

“‘It’s a new approach to conservation that is really going to encourage people to think in very innovative and creative ways,’ Vilsack said.”

The AP article added that, “In addition to protecting the environment, the projects will bolster the rural economy by supporting tourism and outdoor recreation jobs while avoiding pollution that would cost more to clean up, he said.

USDA will spend $1.2 billion — including $400 million the first year — and raise an equal amount from participants. Successful applications will include offers of cash, labor or other contributions, as well as plans for achieving measurable solutions and using new approaches, said Jason Weller, chief of the Natural Resources Conservation Service.

“Vilsack announced the program in Michigan [related television report], home state of Senate Agriculture Committee Chairwoman Debbie Stabenow, primary writer of the farm bill with Rep. Frank Lucas of Oklahoma. They held a news conference in Bay City near Lake Huron’s Saginaw Bay, where nutrient runoff from croplands causes algae blooms that degrade water quality.”

DTN Ag Policy Editor Chris Clayton reported yesterday that, “USDA formally rolled out the RCPP on Tuesday, effectively alerting groups that it time to organize their coalitions and put together their funding proposals.

Eight regions of the county have been designated as Critical Conservation Areas [related map]: the California Bay Delta, Chesapeake Bay, Colorado River basin, Columbia River Basin, Great Lakes, Longleaf Pine Range in the Southeast, the Mississippi River basin and Prairie Grasslands in the plains. Those areas will receive special funding priority on a national basis of 35% of the total RCPP expenditures.

“Agriculture Secretary Tom Vilsack said USDA will send out grants of roughly $400 million over the next several months for the program. USDA will spend $1.2 billion on the regional partnerships over the life of the farm bill. Vilsack said the belief is that USDA can at least get an equal match from state, local and business contributions and technical assistance. ‘First and foremost, it’s about improving soil quality and water quality,’ Vilsack said on a conference call Tuesday.”

Mr. Clayton added that, “Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., credited USDA for the speed the department is implementing conservation programs. She and others were in Bay City, Mich., to talk about conservation and highlight the importance of these programs to helping clean up the Great Lakes. ‘These are very important tools for our farmers and ranchers. As we look to moving to risk-management tools rather than a subsidy approach, conservation is a very important part of that, as well as what it means for our larger communities and our watersheds.’”

Daniel Looker reported yesterday at Agriculture.com that, “Vilsack was asked how an appropriations bill from the House of Representatives that trims spending on mandatory conservation funds will affect the RCPP, which draws from several traditional conservation programs. Vilsack said that the farm bill requires that 7% of funds for EQIP (Environmental Quality Incentives Program) and 7% of CSP (Conservation Stewardship Program) must be directed toward the RCPP. The House Appropriations Committee aims to reduce funding for both programs, which Vilsack said, ‘would have some small impact.’

“Stabenow said she hopes that when the Senate appropriations bill is reconciled with the House version in a conference committee later this year that some of those funds will be restored.”

 

Nutrition Issues

David S. Joachim reported in today’s New York Times that, “Michelle Obama turned uncharacteristically political on Tuesday, pushing back against a measure pending in the Republican-controlled House that would let some schools opt out of federal dietary standards for school lunches.

“The standards, approved by Congress and the president in 2010, set limits on sodium, fat and calories, and require that unhealthy menu items be replaced with fruits, vegetables and whole grains.

“Some big food companies and Republican lawmakers have criticized the rules, calling them inflexible, ineffective and expensive. Representative Robert B. Aderholt, Republican of Alabama, has attached language to a spending bill that would waive the requirements for financially ailing school districts.”

The Times article noted that, “In response, Mrs. Obama met with a half-dozen school officials on Tuesday from New York, California, Virginia, Maryland, Georgia and Tennessee who attested to the success of the new standards in their school systems. The standards have been introduced gradually over the last two years.

“‘The last thing that we can afford to do right now is play politics with our kids’ health, especially when we’re finally starting to see some progress on this issue,’ Mrs. Obama told the group, adding, ‘It’s unacceptable to me not just as first lady, but as a mother.’”

“The School Nutrition Association, which represents cafeteria administrators, issued a statement on Tuesday calling the rules ‘overly prescriptive’ and citing Agriculture Department data showing a drop in school-lunch participation since the standards were adopted,” today’s article said.

Tom Hamburger reported in today’s Washington Post that, “[Mrs. Obama’s] sharply worded foray into a Capitol Hill dispute startled backers of legislation that would allow some districts to temporarily opt out of new federal mandates to increase whole grains, fresh fruits and vegetables in school lunches.

“‘These new federal regulations should not drive local school nutrition programs under water,’ said Brian Rell, spokesman for Rep. Robert B. Aderholt (R-Ala.), who sponsored House legislation that would grant qualifying school districts an opportunity to postpone enforcement of the new rules. ‘This temporary one-year waiver simply provides them a lifeline,’ he said, noting that only districts that lost money in part of the past year would qualify for the waiver.”

Caroline Porter reported in today’s Wall Street Journal that, “The nutritional rules, which Ms. Obama championed through the Healthy Hunger-Free Kids Act in 2010, increase the amount of fruits and vegetables in school meals, decrease sodium levels and modify portion sizes, among other things. The rules have sparked pushback from some school-nutrition officials and Republican lawmakers who point to higher costs, wasted food and difficulty meeting deadlines for changes.

“Last week, the U.S. Department of Agriculture aimed to allay some of those concerns by extending a deadline on a requirement that a majority of pasta be made with whole grains.”

In other policy developments, a news release yesterday from Rep. Tom Reed (R., N.Y.) indicated that, “Tom Reed was in Elmira at the Food Bank of the Southern Tier Tuesday to introduce his Fighting Hunger Incentive Act. Reed’s bill incentivizes restaurants, grocery stores, farmers and other businesses to contribute their excess inventory to local food banks and pantries by permanently extending the food inventory donation tax provision that expired at the end of last year. Reed’s bill provides a tax deduction over the cost of the goods if the food is donated to a charitable organization.”

And Jim Carlton reported in today’s Wall Street Journal that, “Rancher Pete Tomera slowed his pickup truck on a dusty mountain road one day last week and swept an arm toward tall green grass blowing in the wind: ‘Man, look at all the feed a cow could eat,’ he said.

“Since last summer, Mr. Tomera’s 1,800 cows have been banished from these mountains in northern Nevada [related graph], part of a clampdown by the Interior Department’s Bureau of Land Management against grazing on federal lands during an extended drought. An additional 500 head of cattle owned by two other ranching families have been ordered off a roughly 350,000-acre grazing allotment managed by the BLM in the Shoshone Range about 10 miles to the south of this town. The animals have been put out to private pastures or fed hay at far greater cost than on the public land.

“Early this week, dozens of supporters of the ranchers staged demonstrations to protest grazing policies that they say are overly restrictive, especially in light of recent rains that have turned many hillsides green.”

 

Agricultural Economy

Cheri Zagurski reported yesterday at DTN (link requires subscription) that, “Corn planting advanced to 88% complete nationwide in the week ended May 25, according to USDA’s latest weekly Crop Progress and Condition report, while winter wheat condition held steady.”

The DTN article added that, “Soybeans planted advanced to 59% complete, compared to 33% last week and a 56% five-year average. Emergence reached 25%, compared to 9% last week and a 27% five-year average.”

University of Illinois agricultural economist Darrel Good indicated yesterday at the farmdoc daily blog (“Planted Acres – Did the Market Get It Right?”) that, “The impact of spring price and weather conditions on producer planting decisions will be revealed in the USDA’s Acreage report to be released on June 30. While that report will still reflect some planting intentions, history suggests that final acreage numbers will be close to those reflected in the June survey, except in areas of very delayed planting.   The main concern with the way new crop prices have unfolded is that the markets may not have provided enough incentive for corn acreage. While overall corn planting progress remained near the 5-year average pace through May 18, there were significant geographical differences in planting progress. Progress was 25 to 37 percentage points behind the 5-year average in Michigan, Minnesota, North Dakota, and Wisconsin. Those four states accounted for 20 percent of the intended corn acreage this year. It may be that some of those acres will not be planted to corn. Perhaps reductions in corn acreage in those states were partially offset by acreage that exceeded intentions in states where planting occurred rapidly even though prices did not encourage more corn acres.

Ultimately, the question is not if planted acreage was near intentions revealed in March, but if planted acreage results in a level of production that yields reasonable prices for both crops in the 2014-15 marketing year. That answer will not be known for some time. For producers with a high level of crop revenue insurance coverage, the risk associated with lower prices is greater for soybeans than for corn since November soybean futures are about $1.00 above the spring price and December corn futures are only $0.05 above the spring price.”

Emiko Terazono reported yesterday at The Financial Times Online that, “Barbecue aficionados preparing to fire up the charcoal this summer are in for a shock as the price of pork ribs and steak has jumped over the past year.

“Pork prices have surged as a pig virus, which has decimated piglets in North America, has spread to Latin America and Asia. Beef prices have also jumped as drought in key cattle-rearing regions in the US, Australia and New Zealand has cut cattle herds in the face of growing demand.

“Prices are expected to remain high throughout the year, as the pressure on supply shows no signs of abating, according to analysts.”

In other news, Jacob Bunge and David Kesmodel reported in today’s Wall Street Journal that, “Pilgrim’s Pride Corp. swooped in with a $5.5 billion offer for Hillshire Brands Co., maker of Jimmy Dean sausage and Ball Park hot dogs, a surprise bid that could upend Hillshire’s plan to expand its supermarket sway by buying Pinnacle Foods Inc.

“Buying Hillshire would give Pilgrim’s, one of the largest chicken producers in the U.S., something it lacks: a portfolio of brand-name prepared meats, including Hillshire’s namesake lunch meats and Aidells sausages, as well as Sara Lee desserts. It would create the second biggest company in the U.S. meat market, after Tyson Foods Inc., with a combined $12 billion in annual revenue and a reach spanning farms, processing plants and supermarket shelves.”

With respect to transportation issues, a news release yesterday from Rep. Kevin Cramer (R., N.D.) indicated that, “Today [Rep. Cramer] released updated fertilizer shipment data from BNSF Railway and Canadian Pacific Railway (CP). Of their goal of delivering 52 trainloads of fertilizer over a six-week period beginning April 12, BNSF reports they have originated 53 trainloads and delivered 50 of them as of May 22. The CP report notes 175 train cars were delivered in North Dakota during the week of May 11, an increase from 76 cars during the week of May 4.”

Meanwhile, a news release yesterday from New York Governor Andrew M. Cuomo stated that, “[Gov. Cuomo] today announced that, for the second year in a row, New York is the yogurt capital of the nation. Preliminary data indicates that in 2013, New York produced 741 million pounds of yogurt, up from 695 million pounds in 2012. As confirmed by the USDA National Agricultural Statistics Service, New York was the top ranked yogurt producer in 2013, a position it ascended to in 2012. New York once again exceeded California, which produced 591 million pounds of yogurt in 2013.”

More broadly, Danny Hakim reported in today’s New York Times that, “Ukraine was once the breadbasket of the Soviet Union, known for its rich soil where grain, sunflowers and livestock flourished. But farming production dropped sharply in the chaotic decade after the collapse of communism, and recovery has come in fits and starts. Production is only now returning to peak levels of the 1990s, stymied by the corruption, red tape and inefficiencies that have plagued the broader Ukrainian economy for years and left the villagers living humble existences.

Restoring Ukraine’s farming legacy will be crucial to the success of the country’s newly elected president, the billionaire businessman Petro O. Poroshenko. Such efforts would go a long way toward fixing Ukraine’s economy and reducing its dependence on Russia. Agriculture once accounted for nearly 20 percent of the gross domestic product; it is now roughly 10 percent.”

 

Regulations

Matt Fuller reported yesterday at Roll Call Online that, “The Obama administration’s move to expand regulatory control over the nation’s rivers and streams has some Republicans from the Southwest boiling mad, with a group of conservatives calling the EPA proposal a ‘water grab.’

“Arizona Republicans David Schweikert, Paul Gosar and Matt Salmon, along with Texas Republican Lamar Smith, have set a hearing Monday in Phoenix to discuss the new rules, which critics contend would extend federal authority to small creeks, ditches and even dry washes on private land.”

 

Immigration

Steven Dennis reported yesterday at Roll Call Online that, “President Barack Obama won’t act to reduce deportations on his own until the end of the summer — giving Speaker John A. Boehner one more chance to vote on an immigration overhaul.

“Two administration officials confirmed that the president has directed Homeland Security Secretary Jeh Johnson to hold off on releasing the results of his review of immigration policy in the meantime.

The hope in the White House is that once Republican primary season largely wraps up on June 10, Boehner will have the political space to get something done.”

Keith Good

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