FarmPolicy

January 29, 2020

Budget – Immigration; Tax Extenders; Ag Economy; Biotech; Biofuels; and, Regulations

Budget – Immigration

Ashley Parker reported in today’s New York Times that, “Congressional Republicans returning to Washington on Monday found themselves facing a treacherous 10 days as they try to balance their desire to fight President Obama’s executive action on immigration with the political imperative not to shut down the government.

“Congress must pass a broad spending bill before Dec. 11 to prevent a government shutdown. But Mr. Obama’s executive action last month, which could allow up to five million people now in the country illegally to live and work without threat of deportation, has inflamed Republicans and complicated their calculation over what has often been a routine spending fight.”

Ms. Parker explained that, “House Republicans are reviewing a plan by Representative Tom Price of Georgia, who is popular among more conservative members, that offers a hybrid solution: a combination of a broad-based spending bill that would keep the government funded through September 2015 and a stopgap spending measure to pay for operations of the Department of Homeland Security, the agency with primary responsibility for carrying out Mr. Obama’s immigration action.

“That plan, which is being called the ‘Cromnibus’ for its combined elements of a continuing resolution for the short-term portion and omnibus for the broader-based spending, is likely to be considered when House Republicans gather Tuesday morning in a closed-door meeting.”

The Times article noted that, “Members of the House and Senate Appropriations Committees are still pushing for a clean spending bill, which they plan to have ready by next week.”

Ms. Parker also pointed out that, “Another group of House Republicans, including Representative Mario Diaz-Balart of Florida, is quietly continuing to work on its own incremental immigration legislation. The proposal would most likely start with the border security measures favored by all Republicans, but also address other issues within the immigration system, including the illegal immigrants already in the country. No legislation out of the House is likely to happen until the new Congress.”

“On Tuesday, both the House Homeland Security Committee and the House Judiciary Committee have scheduled hearings on Mr. Obama’s executive action. Jeh Johnson, the secretary of Homeland Security and one of the architects of Mr. Obama’s action, is set to testify before the Homeland Security Committee,” the Times article said.

Jake Sherman, John Bresnahan and Anna Palmer reported yesterday at Politico that, “House Republican leadership is beginning to advocate for a two-part plan to avoid a government shutdown.

“They are pushing for a bill, authored by conservative Florida Rep. Ted Yoho, that responds to Barack Obama’s recent actions on immigration. The bill states that the executive branch cannot exempt ‘by executive order, regulation, or any other means, categories of persons unlawfully present in the United States from removal under the immigration laws.’”

The Politico writers indicated that, “At the same time, House Republican leaders will begin advocating for a so-called ‘Cromnibus’ – a two-part government funding bill which would keep most of the government funded until September 2015, while funding on a short-term basis immigration enforcement agencies. This idea was originally envisioned by conservative Georgia Rep. Tom Price.”

Emma Dumain reported yesterday at Roll Call Online that, “There’s no certainty that Republican leaders have the support in the House to pass either plan, with many rank-and-file lawmakers determined to use the spending bill as the sole vehicle for leverage.

If they don’t have the necessary 218 GOP votes, they’ll need Democrats to lend a hand — and Minority Leader Nancy Pelosi has already made it clear her caucus won’t help hoist anything over the finish line that falls sort of a ‘clean’ omnibus.”

 

Tax Extenders

John D. McKinnon and Siobhan Hughes reported in today’s Wall Street Journal that, “Lawmakers divided about whether to renew a raft of expiring tax breaks appear increasingly likely to extend them only through 2014, a move that would leave businesses and individuals in limbo for 2015 and beyond.

“Congressional aides with knowledge of the negotiations said talks continued about a broader package that could extend some provisions permanently and others through 2015. However, they said, those negotiations were proving difficult.

“The temporary breaks include about 50 separate provisions benefiting businesses, individuals and nonprofits. The vast majority expired at the end of 2013, but still can be claimed for 2014, if Congress can agree soon on how to renew them.”

The Journal writers noted that, “Rep. Pat Tiberi (R., Ohio), a member of the tax-writing Ways and Means Committee, said Monday he expected the House would vote this week on a bill extending the tax breaks through 2014.”

Bernie Becker reported yesterday at The Hill Online that, “The House posted its one-year deal to restore the expired provisions on Monday, setting up a vote on the measure as soon as Wednesday.

“The $45 billion bill would extend practically all of the more than 50 individual and business provisions that expired at the end of 2013, and a pair of incentives scheduled to expire at the end of this year.”

Kelsey Snell reported yesterday at Politico that, “A broader bill that would have ensured at least a two-year extension for all of the breaks fell apart last week after the White House and liberal Democrats said that it handed out free breaks to corporations while ignoring expansion of credits for the working poor.”

Bloomberg tax policy reporter Richard Rubin tweeted yesterday that, “Tax extenders bill is $44.7 billion over 10 years. So about 10 percent of the big deal that went bust last week.”

 

Agricultural Economy

An update yesterday at Amber Waves Online, a publication from USDA’s Economic Research Service (ERS), by Ron Sands (“With Adequate Productivity Growth, Global Agriculture Is Resilient to Future Population and Economic Growth”) indicated that, “Rapid improvements in agricultural productivity in recent decades have freed resources such as land and labor for nonagricultural uses, dampened the environmental impact of farming, and made food more affordable to a growing world population. However, prospects for future growth in agricultural productivity are uncertain, particularly in light of climate change. If agricultural productivity growth slows in future years, how will global agricultural output, consumption, land use, and prices adjust? To address this question, ERS researchers recently used the agency’s global agricultural and energy economic model—the Future Agricultural Resources Model (FARM) —to simulate agricultural markets in 2050 under a range of different scenarios.”

Highlights of the ERS analysis include: “Growth in agricultural productivity will determine how agricultural input, output, and land markets will adjust to increased demand.

“A continuation of recent productivity growth trends should allow the agricultural sector to respond to increased demand with little additional use of land and other agricultural inputs, but a slowdown in productivity growth could result in high agricultural commodity prices and additional environmental stress.”

In a separate Amber Waves update from ERS (“Milk Production Continues Shifting to Large-Scale Farms”), James MacDonald and Doris Newton noted that, “Production has shifted to larger farms in most agricultural commodity sectors over the last two decades. This consolidation has contributed to productivity growth in agriculture, leading to lower commodity and food prices and reducing total resource use in food and fiber production. As consolidation reduces the farm population, it also makes starting small and mid-sized farming operations more difficult. This is especially true for dairy farms, where a major transformation of the sector has reduced the number of dairy farms by nearly 60 percent over the past 20 years, even as total milk production increased by one-third. Recent results from the Census of Agriculture and the Agricultural Resource Management Survey (ARMS) detail how and why the structure of dairy production has changed.

The mean herd size on dairy operations rose from 61 cows in 1992 to 144 in 2012, but that shift understates the nature of the change in dairy production; most cows are now on farms that are much larger than the mean. The midpoint farm size is used to track cows; the midpoint shows the herd size at which half of all cows are in larger herds and half are in smaller herds. In 1992, the midpoint of 101 cows was not much larger than the mean, reflecting the fact that most cows were on small and mid-size dairy farms. However, the midpoint rose sharply over the next two decades, to 900 cows by 2012, over 6 times larger than the mean herd size [related graph].”

Meanwhile, Emily Alpert Reyes and Joseph Serna reported in yesterday’s Los Angeles Times that, “Mostly light but steady showers fell across a large swath of Southern California on Sunday, with the heaviest rain falling in mountain and coastal areas, causing mud and rock slides that forced the closure of a section of Pacific Coast Highway.”

But the article added that, “The storm is not expected to put much of a dent in California’s persistent drought, however.”

An update yesterday at the Red River Farm Network indicated that, “Because of rising global production, Rabobank is expecting soybean prices to decline about 8 percent through 2015. Rabobank says declining biodiesel production coupled with increased acreage will keep pressure on prices…Rabobank is expecting corn futures to be slightly higher next year as farmers put more corn into on-farm storage. Rabobank is expecting record storage levels through the third quarter of 2015 as farmers wait for higher prices. Rabobank expects corn prices to increase but expects the price to remain below the four dollar mark for 2015.”

Jesse Newman reported yesterday at The Wall Street Journal Online that, “Wheat futures rose Monday as cold weather descends around the world, prompting concerns over the health of global grain crops…[M]eanwhile, corn prices fell amid concerns that lower crude oil and gasoline prices could reduce demand for ethanol, a corn-based fuel additive.”

More specifically with respect to corn use, University of Illinois agricultural economist Darrel Good indicated yesterday at the farmdoc daily blog (“Monthly Review of Corn Consumption”) that, “For the year, the USDA has projected corn used for ethanol production during the 2014-15 marketing year at 5.15 billion bushels, only 0.3 percent more than used last year. Corn use during the last three quarters of the year would have to be one percent less than use of a year ago to meet that projection. Domestic ethanol consumption may plateau during the current corn marketing year, following a three percent increase last year, if lower crude oil and gasoline prices make higher ethanol blends uncompetitive. Continued increases in ethanol production, then, would require a continuation of the growth in the net export balance. That balance is difficult to gauge due to changing crude oil, gasoline, and ethanol price relationships, but a decline in the trade balance is not anticipated. At this juncture, it appears likely that corn used for ethanol production this year will at least reach the current USDA projection.”

Reuters writer Tom Polansek reported yesterday that, “Hawaii has identified its first outbreak of a deadly pig virus that emerged in the continental United States last year, confounding officials who are uncertain how the disease arrived over thousands of miles of ocean.”

Josh Barro reported yesterday at The New York Times Online that, “According to statistics published by the United States Department of Agriculture, per capita consumption of fresh raspberries grew 475 percent from 2000 to 2012, the most recent year for which data are available. Blueberry consumption is up 411 percent, and strawberries are up 60 percent.

“Before you pat yourself on the back for your healthy eating habits, you should know you’re probably not eating a lot more fresh fruit in total: The latest reading is 48 pounds per person per year, up just 1 percent since 2000.

“But if you compare apples and oranges, you’ll find we now eat 9 percent less of each, and 11 percent fewer bananas. The decline in those three mainstays, which still account for 49 percent of the fresh fruit we eat, has made room in our diets for more berries, pineapples (up 99 percent), mangoes (up 42 percent), papayas (up 41 percent), tangerines (up 40 percent), lemons (up 56 percent) and avocados (up 139 percent), which, yes, the agriculture department says are fruit.”

Jane E. Brody reported yesterday at the Well blog (New York Times) that, “Alaijah Borden was 10 years old and significantly overweight when Dr. Sundari Periasamy, a pediatrician at Harlem Hospital Center in New York, enrolled the middle-schooler in an innovative program to increase her consumption of fruits and vegetables — and, hopefully, to reduce her weight.

“After two years in the program, Alaijah is an unqualified success story: She lost five pounds the first year by snacking on fruits and vegetables, then eight pounds more the second year, when she cut down on greasy foods.”

 

Biotech

Chris Clayton reported yesterday at the DTN Ag Policy blog that, “Biotech labeling battles appear primed to continue in 2015, despite defeat at the polls and little or no movement among dueling pieces of legislation in Congress.

“The group Food Policy Action will deliver a petition to lawmakers Tuesday calling on Congress to require labeling all foods that include ingredients from genetically-engineered crops.”

Mr. Clayton explained that, “The Food Policy Action, though, is hanging its petition on a pair of matching bills in the House and Senate that have virtually zero chance of passage. Sen. Barbara Boxer, D-Calif., and Rep. Peter DeFazio, D-Ore., are the lead sponsors of identical bills, the Genetically Engineered Food Right to Know Act, HR 1699/S. 809.”

The DTN update added that, “Meanwhile, the Grocery Manufacturers Association and others are pushing a bill drafted by Rep. Mike Pompeo, R-Kan., the Safe and Accurate Food Labeling Act or HR 4432. Pompeo’s bill would effectively block any state labeling laws and ensure only the Food and Drug Administration could require labels on foods containing ingredients from biotech crops. Under the bill, the FDA could only require biotech labels if there is a determination that a label is needed to protect health or safety. Govtrack.us gives Pompeo’s bill a 4% chance of becoming law.

“A spokesman for Pompeo told DTN on Monday that the House Energy & Commerce Committee will hold a hearing on Pompeo’s bill on Dec. 10.”

Reuters writer Gus Trompiz reported yesterday that, “Advances in understanding the genetic make-up of plants could ultimately help to produce more resilient, higher-yielding crops, the head of French seed company Limagrain said, with the potential to end the heated debate over genetic modification.”

 

Biofuels

Laura Barron-Lopez reported yesterday at The Hill Online that, “A top fuel manufacturer is threatening to sue the Environmental Protection Agency for failing to meet deadlines on its 2015 proposal for the renewable fuel mandate.

“The American Fuel and Petrochemical Manufacturers (AFPM) on Monday filed a notice of intent to sue the agency over the 2015 Renewable Fuel Standard (RFS), which requires refiners to mix a certain amount of ethanol and biofuels into the nation’s fuel supply.”

 

Regulations

Todd Neeley reported yesterday at DTN that, “Since many traditional major emitters of ground-level ozone pollution have installed new technology to combat that pollution, newly proposed EPA standards released last week could require farms across the country to do their part in reducing those emissions.

“The standards, however, could require action from farms in areas found to be in nonattainment. Exactly how this regulation could affect U.S. agriculture remains to be seen.”

The DTN article noted that, “Andrew Walmsley, a director of congressional relations with the American Farm Bureau Federation in Washington, D.C., said the proposed rule could be another in a growing list of regulations that could hurt U.S. farmers and ranchers.

“‘The potential exists for farmers and ranchers to be negatively impacted by EPA’s latest proposal especially for those that will be in areas of nonattainment,’ he said. ‘Farmers could be impacted by higher input prices due to increases in electricity costs, lost economic opportunity due to stifled development in some rural counties and finally some states might focus on actual regulation of farms by forcing producers to retrofit off-road heavy-duty diesel engines with selective catalytic reduction systems.’”

Keith Good

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