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Regulations; Climate; Ag Economy; Trade; Biotech; and, Immigration- Budget

Regulations

Joby Warrick reported in today’s Washington Post that, “The Obama administration has no intention of backing down on major environmental initiatives to fight climate change and improve air and water quality, EPA chief Gina McCarthy said Monday, dismissing Republican threats to thwart proposed regulations by starving the agency of money.”

The Post article noted that, “McCarthy appeared to be rejecting statements by Sen. Mitch McConnell (R-Ky.), the presumptive Senate majority leader in the next Congress, who last week accused President Obama of waging war against the coal industry and vowed to fight the administration’s environmental proposals ‘in any way that we can.’”

“McConnell joined other key Republican lawmakers in suggesting that the new Congress would use its budget authority to block controversial proposals intended to scale back greenhouse-gas emissions and reduce pollution levels in air and water,” today’s article said.

More specifically with respect to water issues and agriculture, Timothy Cama reported yesterday at The Hill Online that, “Environmental Protection Agency (EPA) head Gina McCarthy said she was surprised by the way that opponents attacked her agency’s attempt to redefine its jurisdiction over waterways.

“In a rule released in March, the EPA proposed a new way to determine whether or not something like a stream or pond is covered under the federal Clean Water Act.”

The article indicated that, “‘I wasn’t surprised by the backlash. I was surprised by the focus of it,’ McCarthy said Monday.

She went on to explain that what shocked her the most were charges that the EPA did not do sufficient outreach to businesses, landowners and others before putting out the March rule.”

A recent update at the Red River Farm Network noted that, “The public comment period for the Environmental Protection Agency’s proposed Waters of the US rule ended Friday. While many agriculture groups would like to see the rule completely eliminated, Agriculture Tom Vilsack doesn’t see that happening. ‘Waters of the US isn’t only about farms and ranches,’ said Vilsack. Vilsack told reporters Friday that agriculture groups have said WOTUS extends EPA’s jurisdiction, but the agency disagrees. ‘There is obviously not a meeting of the minds on that issue.’”

Meanwhile, an update yesterday from the National Pork Producers Council (NPPC) stated that, “Because it has ‘numerous and substantial flaws,’ a rule proposed by the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers intended to clarify their authority under the federal Clean Water Act (CWA) over various waters should be withdrawn, said the [NPPC] in comments filed late Friday.”

Likewise, an update yesterday from the National Chicken Council pointed out that, “The U.S. Poultry & Egg Association, National Chicken Council and National Turkey Federation filed comments with the U.S. Environmental Protection Agency (EPA) regarding the proposed rule developed by the EPA and the U.S. Army Corps of Engineers’ (Corps) to define ‘Waters of the United States’ under the Clean Water Act (CWA). Like many other potentially affected parties, the three organizations note that the rule extends the authority and jurisdiction of the CWA and will confound practical implementation, and should be withdrawn.”

And an update yesterday from the National Sustainable Agriculture Coalition stated that, “The twice-extended public comment period for the Environmental Protection Agency (EPA) and Army Corps of Engineers’ (Corps) proposed rule defining ‘waters of the United States’ under the Clean Water Act came to a close last Friday, November 14.  NSAC contributed to the dialogue around the proposed rule by submitting comments seeking greater clarity for agricultural producers, improved stakeholder communication, and additional resources for effective implementation.”

From a broader legislative standpoint, Timothy Cama reported yesterday at The Hill Online that, “The White House threatened Monday to veto a trio of House bills aimed at restricting the Environmental Protection Agency’s (EPA) ability to issue new regulations.

“The threats released Monday apply to the Secret Science Reform Act sponsored by Rep. David Schweikert (R-Ariz), EPA Science Advisory Board Reform Act sponsored by Rep. Chris Stewart (R-Utah) and the Promoting New Manufacturing Act sponsored by Rep. Steve Scalise (R-La.).

“Each bill would put new requirements on the EPA in order for it to update rules, impeding its ability to protect the environment and public health, the White House said.”

Note that the EPA Science Advisory Board Reform Act is on the House Leader’s Daily Schedule for today.

In other news, Tim Devaney reported yesterday at The Hill Online that, “Health groups are urging the U.S. Department of Agriculture (USDA) to push forward with meat labeling requirements that would protect consumers from eating beef that is contaminated with pathogens like E. coli.

“The USDA has been working on the labeling requirements for mechanically-tenderized beef products since 2008, but more than a half dozen health groups and at least one Congresswoman argue that the rules must be finalized by the end of the year so they can go into effect as soon as possible.”

In a separate article yesterday at The Hill, Mr. Devaney reported that, “The price of honey could tick up slightly under new rules from the U.S. Department of Agriculture.

“The USDA proposed Monday to raise fees for the honey industry by 50 percent over the next two years, which could have a trickle down effect on consumers.”

 

Climate

Todd Neeley reported yesterday at the DTN Ag Policy Blog that, “The work by prairie pothole ranchers to maintain grasslands in North Dakota is being used by a General Motors company to improve its carbon footprint, in a new partnership USDA announced Monday that led to the purchase of 40,000 tons of carbon dioxide reduction credits.

A USDA grant was used to create the program that creates a market for carbon credits.”

An update yesterday at Agri-Pulse noted that, “As part of the project, landowners voluntarily place lands under a perpetual easement but retain rights to work the land, such as raising livestock or growing hay. The carbon storage benefits are quantified, verified, and formally registered, resulting in carbon credits. The carbon credits are made available to entities interested in purchasing carbon offsets.”

 

Agricultural Economy

The Food and Agricultural Policy Research Institute (FAPRI) released its monthly update of U.S. crop price projections for 2014-2018 yesterday.

In part, the FAPRI report stated that, “The projected corn price for the 2014/15 marketing year was increased slightly this month, to $3.50 per bushel. USDA slightly reduced its estimate of this year’s record U.S. corn crop… Reduced corn acreage and an assumed return to trend-line yields result in smaller projected corn supplies in 2015. This allows corn prices to recover to $3.89 per bushel for the 2015/16 marketing year, and to exceed $4.00 per bushel from 2016-2018.”

“Offsetting increases in soybean production and use leave projected 2014/15 soybean prices at $10.00 per bushel, very close to last month’s estimate,” FAPRI noted.

Also yesterday, Cheri Zagurski and Emily Unglesbee reported at DTN (link requires subscription) that, “In the last week, corn harvest increased 9 percentage points to 89% complete and soybean harvest increased 4 points to 94% complete, according to USDA’s weekly Crop Progress report. Those totals compare to five-year averages of 88% and 96%.”

A news release yesterday from University of Missouri Extension stated that, “With more than 90 percent of the state’s corn crop harvested, the University of Missouri Variety Testing Program reports yields far exceeding national averages.

“MU Extension specialist Bill Wiebold said Missouri averaged more than 200 bushels per acre. ‘Those are amazing yields,’ he said.”

The U.S. Department of Agriculture’s Economic Research Service (ERS) released its latest Livestock, Dairy, and Poultry Outlook yesterday, which noted that, “With rain reaching most of cattle country, drought-impacted cattle and pasture areas of the United States have improved substantially compared with this time last year. This year, producers face improved winter grazing conditions compared with past years… Not only have the weather conditions given relief to most cattle-producing areas, but a record-breaking corn harvest is apparent. As a result, this year’s harvest has lowered corn and soybean meal prices, and producers have the option to keep cattle on feed and/or pasture for longer periods of time.”

The ERS report also pointed out that, “With relatively low feed prices, conditions continue to encourage expansion in milk production, although at a lesser rate than previously forecast.”

Jacob Bunge and Angela Chen reported yesterday at The Wall Street Journal Online that, “Tyson Foods Inc. expects strong consumer demand for chicken to help overall U.S. meat consumption keep up with rising production next year, supporting prices for the largest U.S. meatpacker.

The meat industry will expand chicken production in 2015, but a continued decline in U.S. cattle supplies will keep beef expensive and extend chicken’s position as the most economical of the major meats, Tyson executives said Monday.

“‘Over the next two, three, four years, high beef and pork prices, relatively speaking, are going to continue to drive demand towards chicken,’ said Tyson Chief Executive Donnie Smith, on a conference call with analysts discussing fourth-quarter earnings.”

Also yesterday, Reuters writer Thomas Escritt reported that, “Dutch authorities said on Sunday they had found a highly contagious strain of bird flu at a poultry farm in the central Netherlands and set about destroying 150,000 chickens…[T]he European Commission said it expected to adopt urgent interim protective measures on Monday to contain the outbreak, including a ban on selling poultry products from the affected areas to EU and third countries.”

 

Trade

Yusuke Horiguchi noted in a column posted yesterday at The Economist Online that, “How then could Japan achieve sustained stronger growth? In addition to supportive macro policies, the priority should be on structural reform measures that have a demand effect as well as a supply effect. A notable example of this is to get the ongoing Trans-Pacific Partnership (TPP) negotiations completed as soon as possible, by agreeing to liberalise its farm sector. Whatever its historical importance, the farm sector—by now a tiny fraction of the Japanese economy—should not be allowed to keep Japan’s tradable sectors hostage for ever. The TPP would revitalise those sectors not only by facilitating access to oversea markets further but also by creating major domestic investment opportunities and needs in the new, more open and competitive trading environment. Awash with cash, Japan’s corporate sector would be ready to invest, with exporters leading the way and numerous firms in their highly integrated supply chains following suit. Such move by Japan on the TPP would also spur growth in its trading partners, for global benefits.”

Jamie Smyth reported yesterday at The Financial Times Online that, “Australia has agreed a trade deal with China that will cut tariffs and remove other impediments to exports in a move the government says will diversify its resource-dependent economy.”

The FT article noted that, “Australian beef and dairy farmers and vintners will benefit from the agreement on tariff cuts on agricultural goods. However, the sensitive sugar and rice sectors in China remain protected.

“‘This is very good for Australian agriculture,’ said [Tony Abbott, Australia’s prime minister.]

“‘It’s at least as good for our agriculture as New Zealand got about six or seven years ago, and their dairy exports to China have gone up from under $500m to over $3bn.’”

Bloomberg writer Phoebe Sedgman reported yesterday that, “China will reduce import tariffs across a range of Australian agriculture products including beef and dairy as part of a free trade agreement that may boost shipments to the world’s second-largest economy.

All dairy tariffs, which can be as high as 20 percent, will be removed within four to 11 years, the Australian government said today. Duties of 12 percent to 25 percent on beef will be removed over nine years and tariffs of 10 percent on live animal exports will be eliminated within four years, it said. Beef is Australia’s most valuable agricultural export and the country is the world’s third-biggest shipper.”

Reuters writer Matt Siegel reported yesterday that, “The agreement gives Australian dairy farmers tariff-free access within four years to China’s lucrative infant formula market, minus any of the ‘safeguard’ caps that currently restrict competitors from New Zealand.

“‘Australia has been marginalized from being a major exporter to China in the last few years, one of the reasons being that milk production (there) has been going down over the last decade,’ said Sandy Chen, dairy analyst at Rabobank in China.”

 

Biotech

AP writer David Pitt reported yesterday that, “Agrochemicals giant Syngenta is facing a growing number of lawsuits challenging its release of a genetically modified corn seed that China had not approved for import, with losses to farmers estimated to be at least $1 billion.

More than 50 lawsuits have been filed in 11 major corn-growing states, including Illinois, Iowa, Missouri and Nebraska with hundreds more being prepared. Some suits are from farmers represented by individual attorneys, others are class-action lawsuits representing hundreds more.

“A federal court panel that manages complex lawsuits involving large numbers of plaintiffs has scheduled a Dec. 4 hearing in Charleston, South Carolina, to decide where to consolidate the cases. It’s likely to be in Iowa or Illinois, according to Rick Paul, an attorney representing 13 farmers who filed suit in federal court in Iowa.”

Reuters writer Carey Gillam reported yesterday that, “Crop-devouring armyworms are showing increasing resistance in some U.S. farm fields to a popular type of genetically modified crop that should kill them, scientists said on Monday.”

 

Immigration- Budget

Rebecca Shabad reported yesterday at The Hill Online that, “House Republicans will gather Tuesday morning to debate what strategy they should take in battling President Obama’s forthcoming executive action on immigration.

“Rank-and-file members are expected to speak their minds about whether the GOP should block Obama’s order with legislation funding the government, even if it means risking a shutdown fight with Democrats.”

Jake Sherman and Manu Raju reported yesterday at Politico that, “Republican leaders have intensified their planning to prevent a government funding showdown, weighing legislative options that would redirect GOP anger at Barack Obama’s expected action on immigration and stave off a political disaster, according to sources involved with the sessions.

“Obama plans to use his executive authority to change the enforcement of immigration laws by the end of the year, a move that top Republicans warn could derail efforts to pass a long-term spending bill by a Dec. 11 deadline. Increasingly, some top Republicans believe that it will be difficult to pass the year-long spending package that they originally envisioned, and are refocusing on a shorter term bill.”

The article added that, “Speaker John Boehner, Senate Minority Leader Mitch McConnell and their top aides and deputies are mulling several options that would give Capitol Hill Republicans the opportunity to vent their frustration with what they view as an unconstitutional power grab by the White House — without jeopardizing the government financing bill.

“The options include offering a separate piece of immigration legislation on the floor aimed at tightening border security and demanding the president enforce existing laws, promises to renew the effort next year when Republicans have larger numbers in both chambers, and passing two separate funding bills — a short-term bill with tight restrictions on immigration enforcement agencies, and another that would fund the rest of the government until the fall.

“The leadership has not made any decisions, and is likely to weigh additional options, as well. The House does not expect to bounce between options on the floor — they will pick one, and stick with it, sources said.”

Michael D. Shear reported in today’s New York Times that, “President Obama is poised to ignore stark warnings that executive action on immigration would amount to ‘violating our laws’ and would be ‘very difficult to defend legally.’

Those warnings came not from Republican lawmakers but from Mr. Obama himself.

“For years, he has waved aside the demands of Latino activists and Democratic allies who begged him to act on his own, and he insisted publicly that a decision to shield millions of immigrants from deportation without an act of Congress would amount to nothing less than the dictates of a king, not a president.”

And The Washington Post editorial board indicated today that, “Now, however, [President Obama] is contemplating executive action not really aimed at one group or another but intended ‘to make the system work better,’ as he said in his post-election news conference. He acknowledges that Congress should and could do this job, but he is tired of waiting.

Three years ago, when advocacy groups pressed him to take such a step, Mr. Obama demurred. ‘Believe me, the idea of doing things on my own is very tempting,’ he said. ‘Not just on immigration reform. But that’s not how — that’s not how our system works. That’s not how our democracy functions. That’s not how our Constitution is written.’

“Mr. Obama may find a constitutional way to rewrite the nation’s immigration laws. But in his frustration with democracy, he is likely to prove his point: Unilateralism will not make the system work.”

Keith Good