FarmPolicy

March 26, 2017

Policy Issues; Ag Economy; Trade; and, Biofuels

Policy Issues

A recent update at the Red River Farm Network Online indicated that, “Minnesota Congressman Collin Peterson, who is the ranking member on the House Agriculture Committee, says the heavy lifting is done for the 2014 farm bill. ‘We’ve got everybody on board now with a position that it is not going to be reopened so now the issue is making sure it is implemented correctly.’ While it won’t be reopened, Peterson says the farm bill will likely be subject to criticism once the costs become known. ‘I think people are going to be surprised at how much this is going to end up costing, which is what I was afraid of at the time we passed the bill,’ said Peterson, ‘For example, Iowa and, probably, Minnesota look like they’re going to sign up for the ARC so you’re going to have corn farmers that were getting $20 an acre in direct payments that are going to get $90 an acre and that will cause a commotion.’”

The full interview with RRFN’s Mike Hergert and Rep. Peterson is available here (MP3- 8:00).

The RRFN update also noted that, “South Dakota Senator John Thune was concerned about retaining the target price, which is now known as the reference price, program when the farm bill was written. ‘With commodity prices now falling, I think people may start farming for the farm program instead the market,’ Thune told RRFN [MP3], ‘I was concerned about that and I think that will increase dramatically the cost of the farm bill.’ Thune worries that may create the temptation to reopen the farm bill and ‘I’m very concerned about that.’”

And recall that late last week, Mike Hergert interviewed House Ag Committee Chairman Mike Conaway (R., Tex.), who noted in part 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.”

Mr. Hergert’s full interview with Chairman Conaway is available here (MP3- 6:00); see also this photo from the House Ag Committee’s Instagram webpage with a caption that noted: “I had a blast talking with Mike Hergert with the #RedRiver #Farm Network. Ag reporters like Mike who ask good questions & get the facts right provide a service to our democracy & specifically to our #farmers & #ranchers. The farmers in #NorthDakota & #Minnesota are lucky to have Mike working for them

Meanwhile, Reuters writer P.J. Huffstutter reported on Friday that, “U.S. Department of Agriculture Secretary Tom Vilsack has directed agency staff to create and deliver an updated Animal Welfare Strategy plan within 60 days, according to an internal email reviewed by Reuters.

“The emailed memo from Chavonda Jacobs-Young, head of the agency’s Agricultural Research Service, was sent to all Animal Research Service employees on Friday afternoon in response to recent media reports over controversial animal welfare conditions at its U.S. Meat Animal Research Center in Nebraska.

“The new strategy will include updated training for government employees and others who work with animals in the service’s research labs, according to the email. In addition, an independent panel will be convened to review the group’s animal handling protocols, policies and research practices.”

The New York Times editorial board stated today that, “You don’t have to be a vegan to be repulsed by an account in The Times revealing the moral depths to which the federal government — working as a handmaiden to industrial agriculture — has sunk in pursuit of cheaper meat and fatter corporate profits. The article, by Michael Moss, examines the little-known U.S. Meat Animal Research Center, financed by American taxpayers, which employs the sophisticated tools and scientific expertise of modern animal management — apparently without a conscience.”

The Times stated that, “The humans who work at the center are not necessarily oblivious to its failings. Some veterinarians and researchers told The Times they were appalled by the suffering and abuse. They should not have their consciences degraded by what is supposed to be beneficial work. Congress founded the center 50 years ago. It should oversee it and reform it — or shut it down.”

In other policy developments regarding animal production, The Wall Street Journal editorial board noted in today’s paper that, “California has a way of living up to the worst regulatory expectations, as grocery shoppers across the country are discovering. The state’s latest animal-rights march is levying a punishing new food tax on the nation’s poor.

Egg prices are soaring in California, where the USDA says the average price for a dozen jumbo eggs is $3.16, up from $1.18 a dozen a year ago, and in some parts of the state it’s more than $5. The Iowa State University Egg Industry Center says retail egg prices in California are 66% higher than in other parts of the West. National wholesale egg prices also climbed nearly 35% over the 2014 holiday period, before retreating.

The cause of these price gyrations is an initiative passed by California voters in 2008 that required the state’s poultry farmers to house their hens in significantly larger cages. The state legislature realized this would put home-state farmers at a disadvantage, so in 2010 it compounded the problem by requiring that eggs imported from other states come from farms meeting the same cage standards, effective Jan. 1, 2015.”

The Journal noted that, “There’s a strong argument that this violates the Constitution’s Commerce Clause, which bars states from discriminating against interstate trade…[M]eanwhile, Republicans could revive legislation barring states from enacting restrictions on out-of-state agriculture producers.”

Recall that this issue was discussed in great detail back in May of 2013 at the House Ag Committee during the debate over the Farm Bill, a video replay and transcript of that debate is available here.

And back in 2012, the Senate Ag Committee also discussed egg production issues and heard testimony from Sen. Dianne Feinstein (D., Calif.) regarding legislation titled, the “Egg Products Inspection Act Amendments of 2012.” (A related audio clip during that hearing from Sen. Feinstein is available here– MP3).

At the time, the AP reported that, “The debate over how much space hens should have in their coops has drawn the attention of other livestock producers who fear that they’ll be the next target of animal welfare advocates, and has become a states’ rights issue as some states try to impose their tougher standards on eggs coming from other states.

“‘This is a practical, fair-minded deal that solves a real problem for the egg industry,’ Sen. Dianne Feinstein, D-Calif., told the Senate Agriculture, Nutrition and Forestry Committee. She was promoting her legislation that would increase the size of henhouses and require egg labeling so consumers will know how the hens were raised.”

On Friday, Sen. Feinstein tweeted that, “Proud to receive a perfect score from Humane Society ‪@HSLegFund. I will continue to be a champion for animal welfare. ‪http://bit.ly/1y3woPA 

And Marc Lifsher reported yesterday at the Los Angeles Times Online that, “California has been very, very good to animals.

“So says the Humane Society of the United States, which bills itself as ‘the nation’s largest and most effective animal protection organization.’

For the sixth straight year, the society has ranked the Golden State No. 1 on its list of 50 states for laws and policies relating to wildlife, farm livestock, pets and animal fighting.”

Yesterday’s LA Times article noted that, “On Jan. 1, an initiative approved by voters in 2008 took effect, requiring that egg-laying hens have roomier roosts.”

Also on the issue of animal production, Choices magazine recently published an article titled, “Economics of Antibiotic Use in U.S. Swine and Poultry Production.”

Meanwhile, a news release on Friday from Sen. Thad Cochran (R., Miss.) indicated that, “Members of the Mississippi congressional delegation today asked Secretary of State John Kerry to help encourage Iraq to purchase more rice produced by U.S. farmers, including those in Mississippi.

“U.S. Senators [Cochran], and Roger Wicker, R-Miss., with U.S. Representatives Bennie G. Thompson, D-Miss., Gregg Harper, R-Miss., Alan Nunnelee, R-Miss., and Steven Palazzo, R-Miss., have signed a letter to Kerry that asks for diplomatic assistance to improve trade relations with the Iraqi Grain Board (IGB, or Board). The IGB is expected to soon begin accepting bids on a new tender to buy 30,000 metric tons of rice.”

Sen. John Boozman (R., Ark.) also issued a release on Friday which stated that, “U.S. Senators [Boozman] and Tom Cotton (R-AR) along with Congressmen Rick Crawford (AR-01) and Bruce Westerman (AR-04) joined colleagues in sending a letter to Secretary of State John Kerry urging him to encourage Iraq to purchase more American produced rice.”

And Tennnille Tracy reported in Saturday’s Wall Street Journal that, “For nearly a decade, beekeepers have been losing roughly 30% of their bees each winter, above the 19% depletion rate they say is sustainable, according to the Bee Informed Partnership, a group funded by the Agriculture Department to study bee health. While beekeepers can replenish their colonies by splitting and repopulating healthy hives, it is hard for them to recoup the costs of doing so.

“‘We’re not worried about the bees going extinct,’ said Dennis vanEngelsdorp, a bee researcher at the University of Maryland. ‘We’re worried about the beekeepers going extinct.’

“The government doesn’t track employment statistics on commercial beekeepers, but the White House cited particular concern over the fate of professional beekeepers when it created a task force in June to address bee deaths.” (See also a related Wall Street Journal column from July titled, “Why the Buzz About a Bee-pocalypse Is a Honey Trap.”)

And a news release on Friday from the American Soybean Association (ASA) stated in part that, “In comments submitted to the U.S. Environmental Protection Agency today, the [ASA] disagreed with the conclusions of a recent report from EPA that calls into question the efficacy of neonicotinoid seed treatments in soybean operations.”

And in a separate issue, The Des Moines Register editorial board opined yesterday that, “The lawsuit the Des Moines Water Works contemplates filing against three Iowa counties is not a war against rural Iowa, as some would have it. Rather, it is a civilized approach to resolving a threat to public health.

“The public utility that provides drinking water to a half-million customers in central Iowa has turned to the courts for a remedy for water pollution that the legislative and executive branches of Iowa government have failed to deliver.

This lawsuit could profoundly redefine federal and state regulation of water quality, not just in Iowa but in all states where water quality has deteriorated in large part because of the use of chemical fertilizers by industrial-scale agriculture.”

 

Agricultural Economy

The USDA’s Economic Research Service (ERS) indicated on Friday that, “The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, fell 0.6 percent from November to December and is 0.8 percent above the December 2013 level. The CPI for all food increased 0.3 percent from November to December and is now 3.4 percent above the December 2013 level.”

ERS added that, “Egg prices increased 7.7 percent from November to December and are now 10.7 percent above December 2013 levels. Retail egg prices are among the most volatile retail food prices. Additionally, prices typically spike in the fourth quarter of the year, with increased demand for eggs in holiday baking. There is also concern that the new law affecting eggs sold in California (Proposition 2) will affect retail egg prices across the country. While this may cause higher prices in California, prices elsewhere may face downward pressure if out-of-State egg producers choose not to alter their facilities and look elsewhere within the U.S. to sell their eggs. ERS expects egg prices to increase 2.5 to 3.5 percent in 2015.”

The USDA’s National Agricultural Statistics Service noted on Friday in its monthly Cattle on Feed report that, “Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.7 million head on January 1, 2015. The inventory was 1 percent above January 1, 2014 [related graph].”

In other news, Elizabeth Williams reported on Friday at DTN (link requires subscription) that, “No one expected farmland prices to stay strong as commodity prices tumbled lower in 2014. But unlike corn prices, farmland values haven’t fallen off the cliff.

“In fact, ‘we’re heading more toward a ‘soft landing,’’ said Doug Stark with Farm Credit Services of America, based in Omaha.”

The DTN update stated that, “Top quality farmland is still holding its value in Illinois, reported Mac Boyd with Farmers National in Arcola, Ill. ‘In late 2014, an 89-acre piece in Douglas County sold for $12,900 per acre and an 80-acre farm sold for $13,300 an acre in Coles County in east-central Illinois,’ Boyd noted.”

AP writer Roxana Hegeman reported on Saturday that, “The recent plunge in fuel prices has been a welcome relief across the agricultural sector, helping ease the pain of low grain prices for growers and boosting profits for cattle ranchers.”

Meanwhile, Miriam Jordan reported in Saturday’s Wall Street Journal that, “The U.S. and Mexico are increasingly competing for a dwindling supply of farm labor, according to a new analysis, a development that likely will have long-term implications for the U.S. agricultural sector.

“The majority of hired farmworkers in the U.S., estimated at around 1 million, are Mexican, according to the U.S. Department of Labor. In California, Mexican migrants account for 90% of hired workers, according to independent estimates. But the pool of Mexican agricultural workers is steadily declining, with no indication that it will be reversed, according to J. Edward Taylor, professor of agricultural and resource economics at the University of California, Davis.”

 

Trade

William Mauldin reported in today’s Wall Street Journal that, “Concern that some trade partners are manipulating their currencies to gain an export edge has emerged as a major hurdle to the Obama administration’s efforts to move a Pacific trade agreement through Congress.

“Sharp disagreements over whether rules on currency manipulation should be included in trade deals pit the White House and multinational companies, which oppose such measures, against scores of lawmakers from both parties, labor unions and U.S.-based manufacturers.”

Reuters writer Krista Hughes reported late last week that, “U.S. lawmakers are preparing a new push to stop trading partners unfairly manipulating their currencies to gain an export advantage, a senior Democrat said on Thursday.

“Michigan Senator Debbie Stabenow said she was working with colleagues from both parties on a possible standalone bill to stop currency cheats and also aimed to ensure that an ambitious Pacific trade pact includes strict currency rules.”

 

Biofuels

Jennifer Jacobs reported on the front page of the Business Section of Friday’s Des Moines Register that, “Iowa leaders on Thursday threw down a warning to presidential candidates about the renewable fuel standard.

“‘We’re not going to prejudge any of the candidates from either party,’ Iowa Gov. Terry Branstad said at a news conference at the Iowa Capitol. ‘We want to educate them. We want them to support this because it’s important for Iowa. It’s important for America. It’s important for jobs.’”

Keith Good

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