FarmPolicy

March 25, 2017

Trade; Policy Issues; Ag Economy; Biofuels; Regulations; and, Biotech

Trade

Vicki Needham and Mike Lillis reported yesterday at The Hill Online that, “A trade war is erupting between Democrats and the Obama administration over efforts to pass ‘fast-track’ legislation that would smooth the way for two major trade deals.

Dozens of House Democrats are expressing deep reservations about the White House’s trade agenda, putting themselves on a collision course with President Obama over concerns that the deals will benefit big business at the expense of U.S. workers.”

The article noted that, “Speaker John Boehner (R-Ohio) said earlier this month that the legislation will need at least 50 Democratic votes since there will be some GOP opposition.”

Vicki Needham reported yesterday at The Hill Online that, “The Senate’s top Democrat said he won’t consider giving President Obama expanded trade powers until he is convinced that far-reaching trade agreements will help the middle class.

“Senate Minority Leader Harry Reid (D-Nev.) said Thursday that he is opposed to trade promotion authority, also known as fast-track, over concerns that the expanded trade deals will harm U.S. workers.”

Ms. Needham noted that, “Senate Finance Committee Chairman Orrin Hatch (R-Utah) [related hearing information] and his counterpart in the House, Rep. Paul Ryan (R-Wis.), chairman of the Ways and Means Committee [related hearing information], have each said the issue is atop their agenda and that they want to complete trade promotion authority early this year.”

Meanwhile, Justin Sink reported yesterday at The Hill Online that, “The White House plans to ‘work hard’ to secure the Democratic votes needed to pass legislation granting President Obama new fast-track authority to help negotiate a pair of trade deals, chief of staff Denis McDonough said Thursday.

“‘We don’t take anything for granted. … We’re not banking anything. So we’re going to work this hard to make sure that we get it,’ McDonough said at a Politico lunch, adding that Obama would ‘attack’ the effort with ‘vigor.’”

And in a separate Hill article yesterday, Justin Sink reported that, “There are ‘dozens’ of Democratic lawmakers in the House and the Senate who support granting President Obama new authority to fast-track negotiations on a pair of major trade deals, Commerce Secretary Penny Pritzker said Thursday.

“‘I’ve been talking to dozens of our Democratic leaders, both in the House and the Senate, who have an open mind and understand the reason that we need fast track and we need these trade agreements is to get market access for our businesses, to continue to be able to export into all these countries,’ Pritzker said during an appearance on CNBC’s ‘Squawk Box.’”

Beyond TPA, Reuters writer Dave Graham reported yesterday that, “A deal on a 12-nation Asia-Pacific trade pact could be concluded in mid-March, Mexico’s economy minister, Ildefonso Guajardo, said on Thursday.

“‘It’s feasible,’ Guajardo told Reuters after holding talks in Mexico earlier this week with U.S. Trade Representative Michael Froman.”

The Reuters article noted that, “The pact, known as the Trans-Pacific Partnership (TPP), has faced stumbling blocks, in significant part because of wrangling between its two biggest economies, the United States and Japan, over agricultural tariffs.

“Progress on the talks has been held up largely on Japan’s insistence on protecting politically powerful farm sectors such as beef.”

Dylan Baddour reported yesterday at the Houston Chronicle Online that, “A trans-Pacific trade agreement topped the agenda of U.S. Secretary of Agriculture Tom Vilsack during his visit to the Houston Chronicle boardroom today. He heralded the pact, which would break down trade barriers between the United States and 11 Pacific nations, excluding China.

“Vilsack, a Democrat from Iowa, passed through Houston on a nationwide tour following President Obama’s State of the Union address Tuesday, in which the president advocated the agreement as a means to counteract Chinese influence in Pacific economics. In his visit, Vilsack talked up other aspects of administration policy including immigration reform and agricultural programs.

“‘If we can’t get this [trade pact] done, we cede the trade discussion to China,’ Vilsack said.”

And The Washington Post editorial board opined in today’s paper that, “Both economically and geopolitically, the Trans-Pacific Partnership would perpetuate the United States’ stabilizing role in Asia; it is one of the Obama administration’s brightest ideas. All that’s left now is for both the president and Republican leaders in Congress to keep their promises and make it happen.”

On the issue of Cuba, Felicia Schwartz reported in today’s Wall Street Journal that, “U.S. and Cuban officials held a first round of talks in Havana on re-establishing diplomatic relations, calling the discussions productive but saying further conversations are needed before the two sides can formally re-establish embassies, an important first step.

“In the midst of the historic session, some potential obstacles to an eventual agreement began to emerge. The leader of the Cuban delegation, Josefina Vidal, said re-establishing diplomatic relations would be challenging so long as Cuba remains ‘unjustly’ designated by Washington as a state sponsor of terror.”

Karen DeYoung reported in today’s Washington Post that, “In separate news conferences afterward, at the end of [the Cuban and American delegations] first round of talks Thursday, both sides pronounced it ‘productive,’ respectful and positive.

But both acknowledged that ‘profound differences’ remain.”

 

Policy Issues

In an interview yesterday on the Red River Farm Network, House Ag Committee Chairman Mike Conaway (R., Tex.) told Mike Hergert that, “We’ll take an approach that says you want to spend $80 billion a year on food stamps? Let’s take a look at that and let’s see what works, what doesn’t work, and let’s understand the program. Let’s reevaluate how that program is considered successful by looking at how quickly folks can get off the program, back on their own two feet, taking care of their own families, as opposed to the current model that says, you know, it’s successful the longer you stay on it. So we’ll be going through that.”

Chairman Conaway added that, “I think the trade issue is one where we can work with the White House and try to move some trade issues that are good for production agriculture.”

The House Ag Committee held an organizational meeting yesterday and Chairman Conaway indicated that, “During the 114th Congress, the Committee will ensure that the Agricultural Act of 2014—which we labored over for most of the last 4 years—is implemented appropriately. We will also reauthorize the CFTC while ensuring that other key end-user protections are signed into law. We will focus on aggressive oversight of all policies and programs under the Committee’s jurisdiction, including a full-scale review of the Supplemental Nutrition Assistance Program. I’ve said it before and I’ll say it again here today: I am not pre-judging the outcome of the work our committee will undertake. We owe it to American taxpayers to do a thoughtful and thorough review of the programs under our jurisdiction.”

 

Agricultural Economy

Bloomberg writer Rudy Ruitenberg reported yesterday that, “World corn output will beat a November forecast, the International Grains Council said, lifting the estimate an eighth time on improved prospects for South America.

“Bigger corn and wheat crops will expand world grain output excluding rice to a record and lift inventories at the end of the season to the highest in about 30 years, the London-based organization wrote in a report today.

Corn futures have dropped 9.7 percent in Chicago in the past 12 months as U.S. growers harvested a record crop and the outlook for production in Brazil and Argentina improved, while wheat futures have dropped 4.4 percent. Cheaper grain has contributed to a drop in international food prices.”

Yesterday, USDA’s National Agricultural Statistics Service released its monthly Milk Production report, which stated in part that, “Milk production in the 23 major States during December totaled 16.2 billion pounds, up 3.2 percent from December 2013. November revised production at 15.5 billion pounds, was up 3.5 percent from November 2013 [related graph].”

Also yesterday, Bloomberg writer Brian K. Sullivan reported that, “California will reach the halfway point in its rainy season this weekend. Hopes that the three-year drought will be washed away are probably already in the past.

“While December brought heavy rains that put the state on pace for a normal season, there hasn’t been much precipitation since then. Since Jan. 1, Sacramento and Fresno have received too little to measure.”

An update this week from the U.S. Drought Monitor stated that, “Between 2 and 5 inches of precipitation fell on a small part of northwestern most California, but the bulk of the state was dry. Following some of the previous week’s deterioration in some areas, areas of dryness and drought changed little this week [related graph].”

Jacob Bunge reported today at The Wall Street Journal Online that, “Rising temperatures in coming decades could sharply reduce U.S. crop production and reshape the nation’s agriculture industry, according to a new climate-change analysis.

Parts of Midwestern states that account for much of the country’s corn and soybean output may surrender nearly a quarter of their crops as temperatures climb over the next five to 25 years, according to the report from the Risky Business Project. The group was created by Henry Paulson, a U.S. Treasury secretary under President George W. Bush, and hedge-fund billionaire Tom Steyer, who is a major Democratic donor.”

Mr. Bunge noted that, “If the U.S. agricultural industry doesn’t plan and adapt, the potential for smaller crops could diminish the country’s role in supplying food to other nations, said Gregory Page, executive chairman of Cargill Inc., one of the world’s largest agricultural companies, and a Risky Business committee member. Midwest farmers could respond by changing crops, planting seeds suited to hotter environments and expanding their growing seasons, the report said.”

Meanwhile, USDA’s National Agricultural Statistics Service yesterday released its Congressional District Rankings from the 2012 Census.

This table illustrates the Congressional District with the largest number of farm operators and number of farms (Nebraska’s 3rd Congressional District, represented by Republican Adrian Smith ranked first).

And this table illustrates the top Congressional Districts by Government Payments Received, North Dakota ranked first on this list.

Complete Congressional District Profiles from the Census of Agriculture can be found at this webpage.

The Financial Times daily Email briefing FirstFT indicated today that, “What’s the beef There are plenty of headlines telling us about the risks of eating meat – obesity, heart disease, cancer – as well as the environmental issues with growing it. But it’s not clear-cut: a growing body of research suggests that giving up meat could do more harm than good. (New Scientist $)”

 

Biofuels

Jennifer Jacobs reported on the front page of the Business Section in yesterday’s Des Moines Register that, “Iowa will be Battleground Ethanol in the 2016 presidential race if a couple of seasoned political strategists have their way.

“Their underlying message: Candidates who don’t support a federal renewable fuels rule have a history of losing races in corn-intense Iowa.

“A coalition of Iowans led by Democrat Derek Eadon and Republican Eric Branstad intends to spend the next few months bringing presidential hopefuls up to speed on why they believe the Renewable Fuel Standard is crucial to the economy in Iowa and the nation. After that, they’ll make sure Iowa voters know which side each candidate has taken.”

Bloomberg writer Alan Bjerga reported yesterday that, “Renewable-fuels advocates are promising to spend millions putting ethanol back in the debate for Iowa’s first-in-the-nation caucus next year as cheap oil and setbacks in biofuels policy make the additive less central to voters.

“Iowa Governor Terry Branstad, backed by state corn-grower and renewable-fuels associations and the Washington-based biofuels lobby Growth Energy, on Thursday formed America’s Renewable Future, to make the Renewable Fuels Standard an issue in the 2016 race. The Iowa caucus is set for early January.”

 

Regulations

Timothy Cama reported yesterday at The Hill Online that, “President Obama said he will nominate the Environmental Protection Agency’s (EPA) acting deputy chief to take the position officially.

Stan Meiburg came back to the EPA as its acting deputy administrator in October. He had worked at the agency for nearly four decades before retiring earlier in 2014 as the head of the EPA’s Atlanta office.”

Scott Calvert reported in today’s Wall Street Journal that, “In one of his first official acts, Maryland’s new Republican Gov. Larry Hogan put the brakes on expanded farm-pollution regulations just as they were about to take effect, setting up a potential fight with the Democratic-controlled Legislature and drawing concern from the federal agency monitoring Chesapeake Bay cleanup efforts.”

Mr. Calvert pointed out that, “Other U.S. agricultural areas are grappling with similar issues. Iowa’s largest water utility plans to sue three rural counties in the state to force them to tackle farm runoff. In Ohio, lawmakers are seeking measures to prevent algae blooms such as the one that shut down Toledo’s drinking-water supply for two days last summer.

“Kevin Anderson, who grows corn and soybeans on 2,800 acres in Princess Anne, Md., said he was relieved by the governor’s action. He said the new rules, which were to be phased in over six years, would have cost him $187,000 a year—the likely expense for buying commercial fertilizer.”

 

Biotech

A brief Wall Street Journal video from earlier this week (“Bill Gates Discusses GMO Controversy”) indicated that: “The Gates Foundation co-chair responds to criticism by some environmentalists and others against the use of genetically modified seeds.”

Keith Good

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