FarmPolicy

January 20, 2020

Appropriations- Nutrition; Ag Economy; Farm Bill; Biofuels; Regs; and, Immigration

Appropriations- Nutrition Issues

The House Appropriations Committee will markup the FY15 Agriculture spending bill this morning, the bill is available here, while the Committee draft report can be found here.

In part, the draft report states that, “The Committee is concerned about the challenges and costs that local schools face in implementing the various regulations from the Healthy, Hunger-Free Kids Act of 2010. Schools from across the Nation have expressed concern with increased food costs and plate waste coupled with decreased participation in the National School Lunch Program (NSLP), all of which is resulting in at least half of all school food authorities to experience a decline in revenue. A February 27, 2014, GAO report found that student participation in the NSLP declined by 1.2 million students from school year 2010–11 through school year 2012–13. Additional meal requirements are scheduled to be implemented in the 2014–15 school year as well as the ‘Smart Snacks in School’ interim final rule.

“To address the concerns of local schools, the FY 2014 conference report directed the Secretary to establish a waiver process for schools incurring costs to provide more time to comply with some of these regulations. On March 14, 2014, the Secretary responded he did not have the statutory authority to grant such waivers. Therefore, the Committee includes bill language that provides schools with flexibility by allowing schools experiencing a financial loss for at least a six-month period to seek a waiver from compliance with the final regulations. The Committee directs USDA to implement this provision in a timely and streamlined manner. Schools receiving a waiver under this provision shall, at a minimum, implement the nutrition standards in effect prior to the final rule issued on January 26, 2012. The bill language does not provide for a change in reimbursement rates and only applies to the 2014–15 school year.”

Tom Hamburger reported yesterday at the Post Politics Blog (Washington Post) that, “The House Appropriations Committee is expected to vote Thursday on legislation that would grant waivers to school districts that report they are having financial problems as they comply with the dietary requirements of the Healthy Hunger-free Kids Act, which passed in 2010.

First Lady Michelle Obama came out swinging against the waiver idea on Tuesday. In a rare display of public opposition to a legislative proposal, Mrs. Obama said that the plan, authored by congressional Republicans, ‘is unacceptable to me not just as first lady but also as a mother.’”

The Post update noted that, “[Mrs. Obama’s] views were backed late Tuesday by 19 past presidents of the most influential lobby on cafeteria policy, the School Nutrition Association (SNA). They jointly sent a letter to Senate and House Appropriators urging them to ‘reject calls for waivers’ and ‘maintain strong standards in all schools.’

“In a dizzying shift, that view was countered Wednesday when the current leadership of the SNA held a press conference call with several school nutrition directors from around the country who backed the waiver legislation.”

In a column in today’s New York Times, Mrs. Obama indicated that, “Yet some members of the House of Representatives are now threatening to roll back these new standards and lower the quality of food our kids get in school. They want to make it optional, not mandatory, for schools to serve fruits and vegetables to our kids. They also want to allow more sodium and fewer whole grains than recommended into school lunches. These issues will be considered when the House Appropriations Committee takes up the annual spending bill for the Agriculture Department on Thursday.”

Mrs. Obama added that, “Our children deserve so much better than this. Even with the progress we have made, one in three children in this country is still overweight or obese. One in three is expected to develop diabetes in his or her lifetime. And this isn’t just about our children’s health; it’s about the health of our economy as well. We already spend an estimated $190 billion a year treating obesity-related conditions. Just think about what those numbers will look like in a decade or two if we don’t start solving this problem now.”

Agriculture Appropriations Subcommittee Chairman Robert Aderholt (R., Ala.) discussed this issue in more detail in a brief interview yesterday on the CNN OutFront program. In part, Chairman Aderholt noted that, “These rules are so onerous, they really go beyond reason…[W]e are not talking about feeding hamburgers and hot dogs and pizza everyday to the kids.” He added that schools are just asking for a waiver for twelve months to see if they can try to meet these standards, “We are not asking to completely roll back the system.”

Erik Wasson reported yesterday at The Hill Online that, “Obama’s Agriculture secretary held a conference call the day after first lady Michelle Obama slammed the House GOP for offering language that she said would erode the new nutrition standards her husband has put into place.

The administration and congressional Democrats are making a full-court press against the House language a day before it comes before the full House Appropriations Committee.

Vilsack said that a core problem with the House waiver is that it would be granted to any school lunch program that can show a financial loss.”

The Hill update indicated that, “Agriculture Secretary Tom Vilsack said Wednesday the Agriculture Department could accept compromise Senate language on school lunch standards, even as it vehemently opposes a House spending bill provision that would grant waivers to struggling schools.

“‘We would obviously work with that,’ Vilsack said of the Senate compromise, adding that he views it as ‘consistent’ with the USDA efforts to help schools cope with new tougher standards.”

In a separate update yesterday at The Hill Online, Erik Wasson reported that, “Rep. Sam Farr (D-Calif.) will offer an amendment on Thursday to stop the House GOP attempt to allow schools to opt out of Obama administration nutrition standards.

“Farr, the ranking member on the agriculture appropriations subcommittee, will present the amendment at the full House Appropriations Committee meeting where the bill containing the waiver language is contained.”

A news release yesterday from the First Focus Campaign for Children indicated that, the organization “released a letter today urging leadership of the U.S. House of Representatives’ Appropriations Committee to support an amendment by Congressman Sam Farr (D-CA) to protect science-based standards for federally-funded school nutrition initiatives. Farr’s amendment would strike a provision in the draft [USDA] appropriations bill offering schools waivers of nutrition standards established under the Healthy, Hunger-Free Kids Act of 2010.”

In addition, the House Appropriations Committee draft report also stated that, “The Committee is concerned about the growing incidence of the porcine epidemic diarrhea virus and swine delta coronavirus and strongly encourages USDA to utilize its research, extension, and animal health resources in partnership with pork producers, related industries, and land-grant universities to quickly develop and deploy effective control and management tools.”

 

Agricultural Economy

Reuters writer Tom Polansek reported yesterday that, “An Indiana farm has become the first to confirm publicly it suffered a second outbreak of a deadly pig virus, fueling concerns that a disease that has wiped out 10 percent of the U.S. hog population will be harder to contain than producers and veterinarians expected.

“The farm, through its veterinarian, publicly acknowledged on Tuesday a repeat incident of Porcine Epidemic Diarrhea virus (PEDv), which has killed up to 7 million pigs and pushed pork prices to record highs since it was first identified in the United States a year ago.”

Meanwhile, Rebecca Howard and Isabella Steger reported yesterday at The Wall Street Journal Online that, “Global milk prices are falling sharply as producers in New Zealand, Europe and the U.S. ramp up exports to feed the Chinese market.

“China’s demand for imported milk has soared as the country grows richer and as a result of health scares involving the domestic dairy industry. That has boosted global prices in recent years, leading to an economic boom in New Zealand, the world’s largest dairy exporter, and pushing up earnings for U.S. dairy farmers.

“Since touching a record high in February, however, the average price of dairy products offered at auction has dropped more than 20% to below $4,000 a metric ton, according to GlobalDairyTrade, a trading platform established by New Zealand’s Fonterra Co-Operative Group Ltd. [related graph].”

Also, Shane Romig reported in today’s Wall Street Journal that, “Farmers across this country’s [Argentina] breadbasket have battled President Cristina Kirchner’s populist government for years.

Now their record-setting soy crop is helping to prop up their nemesis, by bringing in the international reserves vital to help her government avoid another currency crisis. On Wednesday, the Central Bank said the crop would help it to maintain its current $28 billion level of reserves by year’s end.”

The article pointed out that, “With the harvest in full swing and continuing through July, soybean shipments have earned more than $8 billion and are expected to reach a record $29 billion, according to official data and analyst projections. The oilseed, Argentina’s most profitable grain, makes up about a third of the country’s exports by value [related graph.]”

And Reuters writer Karl Plume reported earlier this week that, “Two bulk shipments of Brazilian soybeans arrived at the U.S. ports of Wilmington, North Carolina, and Norfolk, Virginia, over the weekend, the first large South American shipments to hit the U.S. East Coast this season, Reuters shipping data showed…[T]he United States, the world’s biggest soybean producer and second largest exporter, is expected to import a record 2.45 million tonnes of soybeans in the year ended Aug. 31 to alleviate the tightest supplies in a decade, according to the U.S. Department of Agriculture.”

With respect to transportation issues, Reuters news reported yesterday that, “Canadian National Railway Co, Canada’s largest rail carrier, said on Wednesday it is exceeding grain-shipment levels mandated earlier this year by the Canadian government despite a record crop that has squeezed available transportation and infrastructure.

“The company said in a statement that May hopper-car deliveries to Western Canadian elevators are expected to average 5,500 per week, or 50 percent above the eight-year average and 38 percent higher than the prior record for the month.”

Also yesterday, USDA’s National Agricultural Statistics Service (NASS) released its “Farms and Land in Farms 2013 Summary.”

In part, the NASS report stated that, “The number of farms in the United States in 2013 was estimated at 2.10 million, down 7 thousand farms from 2012. Total land in farms, at 914 million acres, decreased 360 thousand acres from 2012. The average farm size in 2013 was 435 acres, up 2 acres from the previous year [related graph].”

In trade related news, Shawn Donnan, Richard McGregor and James Politi reported this week at The Financial Times Online that, “But [Senate Finance Committee Chairman Ron Wyden (D., Ore.)] holds in his hands the fate of the ‘fast track’ authority Mr Obama needs from Congress in order to conclude deals with the EU, trading partners in the Pacific Rim and the two dozen economies the US is working with to update the global rules for the $4.6tn annual trade in services. Without the Senate’s assent the White House’s ambitious second-term trade agenda is likely to go nowhere and Mr Wyden’s support is critical.

“That backing is conditional, Mr Wyden says, on an effort to at least partially reverse one of the biggest trends in US politics of the past 20 years. Since the early 1990s and a bitter debate over the North American Free Trade Agreement the majority of congressional Democrats, urged on by labour unions, have voted against trade agreements.

Mr Wyden says he wants to use the debate over granting the president Trade Promotion Authority, as it is formally known, to soak up Democratic concerns and build a ‘new and enduring bipartisan coalition for expanded trade.’”

A statement yesterday from the U.S. Wheat Associates, National Association of Wheat Growers, USA Rice Federation, National Pork Producers Council and the International Dairy Foods Association indicated in part that, “Minister Amari’s statement in Singapore that none of Japan’s sensitive agricultural items will be fully liberalized may signal the end of hopes for the Trans-Pacific Partnership (TPP) to become a truly comprehensive and forward-looking 21st Century agreement. A country cannot shield its primary agricultural products from competition and still claim to be committed to a high-standard agreement liberalizing essentially all goods.”

 

Farm Bill

University of Illinois agricultural economists Gary Schnitkey and Darrel Good indicated yesterday at the farmdoc daily blog (“Historical Variability of Soybean and Wheat Market Year Average Prices and Price Loss Coverage Payments”) that, “Based on historical variability, distributions of Market Year Average (MYA) prices for soybeans and wheat are developed and shown in this paper. From these distributions, the chance and payment rates of Price Loss Coverage (PLC) are calculated. Given a long-run price for soybeans of $11.00 per bushel, the chance of a PLC payment is 4% and the PLC rate is $.028 per bushel. Given a long-run price for wheat of $6.00 per bushel, the chance of a PLC payment is 31% and the payment rate is $.214 per bushel.”

 

Biofuels

The U.S. Energy Information Administration recently released its Monthly Biodiesel Production Report, which stated that, “U.S. production of biodiesel was 76 million gallons in February 2014. Biodiesel production during February 2014 was about 4 million gallons higher than production in January 2014.”

And Reuters writer Jeferson Ribeiro reported this week that, “Brazil will increase the amount of biodiesel that must be blended into diesel to 6 percent in July and to 7 percent in November from the current 5 percent, Mines and Energy Minister Edison Lobao said on Wednesday.”

 

Regulations

DTN writer Todd Neeley reported yesterday that, “EPA has failed to accurately calculate the costs and scope of its proposed Clean Water Act rule published for public comment until July 21. The proposed rule is full of errors, lacks transparency and would expand the federal government’s regulatory control over land not previously regulated by the CWA, according to a new analysis by University of California-Berkley economist David Sunding.

 

Immigration

Emma Dumain reported yesterday at Roll Call Online that, “Political forces from the left and the right gathered at the Virginia state Capitol Wednesday with a shared objective: Ratchet up the immigration pressure on Eric Cantor.

“On one side were the pro-immigration activists — led by an Illinois Democrat — calling for the House majority leader to at least allow legislation an up or down vote. On the other was a political rival all-too-ready to hang the word ‘amnesty’ around the Virginia Republican’s neck.

In the middle of the debate, walking a political tightrope with less than two weeks to go before a closely-watched primary race and the clock steadily ticking down on the 113th Congress, is Cantor.”

And the New York Times editorial board indicated today that, “Other immigration advocates have said Congress’s July Fourth recess is make-or-break time. If House Republicans haven’t shown willingness to move a bill by then, then summer lassitude and fall electoral politics will take over, the moment will vanish and the job of fixing the system will fall to the next Congress and president, or the next, or the next.

“Even July is too long a wait for thousands of would-be Americans who would qualify for legal status under the stalled reform. Instead, they live in fear of being torn from their families, as the Obama administration keeps on deporting people, figuring that after two million deportations, give or take, what’s a few thousand more?”

Keith Good

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