January 27, 2020

Updated- California Drought Issues Persist- Most difficult year facing the San Joaquin Valley in 50 years

Bettina Boxall and David Pierson reported on the front page of Saturday’s Los Angeles Times that, “In another blow to California’s parched heartland, federal officials said Friday that for the second year in a row most Central Valley farmers are unlikely to receive water from the region’s major irrigation project this summer.

“The announcement, while expected, means growers will probably have to idle more land — and produce fewer crops — because there is simply not enough water for all of their fields.

“‘It’s frustrating that we’ll be fallowing the same or more land than last year,’ said Dan Errotabere, a vegetable and nut farmer in Riverdale, 25 miles southwest of Fresno. ‘That equates to lost revenue, lost taxes and less employee hours. The effect on communities is real.'”

Saturday’s article noted that, “The agency’s initial assessment of how much water they can send to growers is always conservative. There are still two months left in the rainy season and if conditions improve, so could the allocation.

“Moreover, the zero allocation doesn’t apply to farmers in the Sacramento and San Joaquin valleys who have historic water rights that the government must honor before they dole out supplies to everyone else. The bureau expects to send those farmers 75% of their sizable contract amounts, or a total of about 2.6 million acre-feet.”

Boxall and Pierson explained that, “But for many Central Valley growers, 2015 is looking worse than last year, when they left between 400,000 and 500,000 acres unplanted for lack of water, dealing a $2-billion blow to the state’s agricultural sector.

“‘Last year was a struggle, and now we’re dealing with the accumulative effect in year four of drought,’ said Ryan Jacobsen, executive director of the Fresno County Farm Bureau. ‘As we move forward, we’re predicting this will be the most difficult year facing the San Joaquin Valley in 50 years.'”

Jim Carlton reported on Friday at the Wall Street Journal Online that, “California farmers face being cut off from federal water imports for the second straight year, in an unprecedented move likely to worsen crop losses in the nation’s biggest agricultural state.”

Mr. Carlton noted that, “Farmers, meanwhile, say they will have to continue to fallow fields and take other cost-cutting measures as they try to wait out a drought they say has been worsened by federal regulatory restrictions on how water is allocated. Many get water from alternate sources, including wells or by buying it on the private market, but often at a much higher price than the federal supplies.

In 2014, the state’s agriculture economy lost more than $2.2 billion and more than 17,000 jobs as farmers fallowed nearly a half million acres of fields, according to estimates last year by the Center for Watershed Sciences at the University of California, Davis. Barring an unforeseen deluge, the losses this year are expected to be ‘a bit more’ than that, said Jay Lund, the center’s director.”

The Journal article added that, “Dan Errotabere, for example, said his family fallowed 1,200 of the 3,600 acres on their farm in the district last year, ‘and it will be that much or more this year.’ Mr. Errotabere said this year the Fresno County farm likely won’t plant vegetable crops like tomatoes and garlic so well water can be conserved to keep its almond orchards alive. As a result, he said, the farm likely will hire only ’20 to 30′ of the 80 seasonal workers it normally employs.

“‘This is as bad a drought as it comes,’ said Mr. Erratobere, 59, whose family has farmed there since the 1920s.”

House Ag Committee member Jim Costa (D., Calif.) indicated in a statement Friday that, ““Today’s announcement by the U.S. Bureau of Reclamation, while not unexpected, is another devastating blow to the farmers, the farmworkers and the communities of the San Joaquin Valley. In a year where rainfall in Northern California is normal for this time of year and storage in Shasta Reservoir is also near its historical average for this time of year, for Central Valley Project agriculture, for a second year in a row, to receive none of its contracted water is simply inexcusable. Today’s initial allocation only provides further evidence of how broken California’s water delivery system is for those who live and work south of the Delta and points to the need for Congress to intervene to provide direction to better balance the impacts of regulations. This four year drought and the inability to maximize the capture of the water in the system when it has been available have drastically stunted the Valley’s agriculture industry, and it seems this year will be no different. What has been devastating to this point will now become catastrophic.”

Meanwhile, the U.S. Monthly Drought Outlook on Saturday indicated that, “During late February, mostly dry weather returned to the Pacific Northwest and northern California, limiting any further drought improvements.”

Drought expansion is also possible across parts of far northwestern California and southwestern Oregon,” the update said.


Highlights: House Appropriations Subcommittee on Agriculture- Budget Hearing, NRCS Chief

On Friday, the House Appropriations Subcommittee on Agriculture held a budget hearing and heard testimony from USDA- Natural Resources Conservation Service (NRCS) Chief Jason Weller.

In his opening statement at Friday’s hearing, Subcommittee Chairman Robert Aderholt (R., Ala.) indicated that, “We convene today to review NRCS’s fiscal year 2016 budget request. NRCS requests a total of $1.031 billion in discretionary funding for its salaries, expenses, programs, and activities. In addition, about $3.2 billion will be available through the farm bill’s mandatory conservation programs to farmers, ranchers, and private forest landowners to help them preserve, protect, and enhance their land.”

During the discussion portion of the hearing, Rep. Sanford Bishop (D., Ga.) brought up the issue of NRCS using drones in its remote sensing work– here is the exchange with Chief Well on this issue.

Rep. Sanford Bishop: Can you tell us if you have any plans to utilize drones to assist in the collection of information, because you do a lot of photography, put a lot of contracts out to take pictures, and there’s a tremendous amount of interest in the use of drones in agriculture, particularly in assisting the optimal design and layout of fields for water assessments and other related issues.

“Have you looked at this issue? Are there any current interagency discussions with FAA or other agencies concerning the growth in the use of drones? Obviously there are some security issues involved, but there’s also a great deal of interest for commercializing that practice and using it in agriculture.”

Mr. Jason Weller: “Absolutely. It’s a new technology, but we also have to be careful because folks do have privacy concerns. The FAA also had safety concerns. So in part NRCS, we sort of said full stop, let’s wait for FAA to actually come out with a rule.

Now that the rule has been issued, we’re trying to figure out how the NRCS can work within that to do remote sensing, but in a way that protects privacy, assure landowners who are not there there’s a regulatory component, because I know folks have some concerns when the federal government starts flying drones over their property. So we just need to make sure NRCS is doing this technology in a way that’s appropriate, that’s sensitive to landowners’ concerns, but also then helps us do a better job of managing resources.”

Also at the hearing, Rep. David Young (R., Iowa) wanted more information about NRCS wetland determinations and the farmer’s ability to appeal these decisions.

Rep. David Young: “Last year the NRCS proposed updating the way it conducts wetlands determinations in the prairie pothole states, you know, Minnesota, Iowa, North Dakota, South Dakota. How will the wetland determination proposal affect producers, and when there is a review, will there be an ability for folks to have a second request for review and a second opinion if they disagree with the determination you make?”

Mr. Weller: “Yes. So first starting with what a producer hopefully will experience with us. What we’re proposing is bringing a modern, up-to-date, scientifically driven approach to doing what we’re calling off site determinations. This is a practice we’ve had at NRCS for decades. But what we didn’t have in the prairie pothole region is a consistent approach across all four states. So depending on where your property was, you had a different approach that we needed to update.

“So what this means, though, is actually, at the end of the day, when we implement this—because we were just seeking comments on this approach so far—is better service for a producer. So right now, as you know, there’s been a backlog, particularly in North and South Dakota, but Iowa as well. And in a lot of cases it’s because it’s on site determinations. It takes staff time. When you do an off site determination, you’re using remote sensing technology, you know, photography, LIDAR coverage, other techniques to really do equivalent, if not a more accurate determination approach.

The bottom line is time savings. So the average number of times it takes to do an off site determination is six hours. The average number of hours it takes to do on site is at least 14 hours. Many of them are 40 hours. And that doesn’t count all the driving time. When you break that down in dollars and cents, if you just say, take—you assume 30 bucks an hour for like a field technician to go out and do it, that equates to about 170 bucks to do an off site determination. When you do on site it’s like over $400 a determination, on average.

But when you multiply that over like South Dakota, where they have 2,500 determinations in the backlog, that’s the difference between $300,000 over a million dollars. And when it comes down to that kind of expenditure, when you add that up across four states, you’re talking real money. And that’s money I’d rather employ back in the field to provide, you know, technical assistance to producers as opposed to investing it in a way that we can be more efficient.

“So to your question about what happens for the producer, the first approach would be the off site determinations, which will be much more efficient. They’ll get determinations made quicker. It’s a preliminary determination. If they don’t like the determination, they can then appeal it and they can then request an on site determination.

“If they don’t like the on site determination from the field staff, they can then appeal that to the state office. If they don’t like the state office determination, they can then appeal that to the national appeals division. So there’s absolutely all these protections for a producer. We’re not changing any of that, how that works. We’re actually just trying to streamline it and get the determinations made faster and cheaper.”

And a third key issue discussed at Friday’s Appropriations Committee hearing was on the Regional Conservation Partnership Program.

Chief Weller noted that, “It’s the Regional Conservation Partnership Program, which is a new authority in the 2014 Farm Bill. The basic idea here is you actually invite local partners to devise their own projects. You ask them what do they want to do. So what we’re finding is that more often than not you go into places like the Salinas Valley or the [Pajaro] Valley, in your district, for example, and there’s a lot of people doing a lot of really good things, but more often than not we’re not coordinated. We’re putting a lot of money in the ground, but in a way we’re like ships passing in the night.

“So what we did at the Regional Conservation Partnership Program, it’s sort of like pulling a sock inside out. Instead of the federal government saying this is what we’re going to do in your community, instead we asked the community what do you want to do, and then we’re here to support you. So we opened it up to competition, and we got applications, 600 applications from every state in the country, from all over the country, and folks were really excited about this.

“And what it does is it catalyzes that locally led approach where you get like the Santa Cruz RCD. They then talk to Driscoll’s Berries, they talk to the Pajaro Valley Water Management Agency, they talk to Santa Cruz extension, they talk to the marine sanctuary, and they leverage the resources upfront, and then they come to us and they say NRCS, this is what we would like to do with the EQIP program in the Pajaro Valley to save water, but also to increase ground water recharge.

“And so one of the projects we funded then in the Pajaro Valley this year through our first round was $800,000 of NRCS money matched by $900,000 of the partners, so a total project over one and a half million dollars that they estimate is going to save over 400 acre feet of withdrawal from the aquifer, but also add additional recharge aquifer of 600 acre feet. That is a lot of water savings in a water scarce area.

“But you’re getting industry involved, Driscoll’s Berries; you’re getting extension to provide really good outreach and education; you’re engaging RCD, so it’s a locally led approach; and the federal government then is just a co-investor, we’re a true partner in this. So this is one example. Nationally we have 115 of these projects that they’re just showing this is an approach we really absolutely have to pursue.”

Keith Good

California Drought Update

Following a report earlier this week in the Los Angeles Times, which pointed to the persistent dry conditions in California, an update this week at the National Drought Monitor indicated that, “It was another dry week for much of the West, with parts of the Pacific Northwest, Northern California, Arizona, New Mexico, and the Intermountain Basin receiving no precipitation.”

Mountain snowpack remained well below normal, not just in California but all across the Cascades, Sierra Nevada, and Intermountain Basin,” the update said.

Bloomberg writer Craig Giammona reported this week that, “Carrot farming is proving to be a tough job for Campbell Soup Co.

“The soup giant, which acquired a carrot business as part of its 2012 purchase of Bolthouse Farms, is struggling with extreme weather in California, the crops’ main growing region. The conditions — first drought, then intense rains — contributed to a 28 percent decline in the division’s profit last quarter.

California’s record-setting drought has forced Campbell to shift harvesting to farms that weren’t as hard hit, as well as increasing land and water costs. In December, a series of rainstorms struck the state. While they didn’t end the drought, they damaged the crops.”

From a policy perspective, a news release on Thursday from Rep. John Garamendi (D., Calif.) stated that, “Rep. Doug LaMalfa (R-CA-01) and [Rep. Garamendi] today announced the introduction of HR 1060, which will accelerate the completion of a feasibility study of Sites Reservoir and authorize the project should it be found feasible. Located in Colusa and Glenn counties, Sites Reservoir is a proposed off-stream reservoir that would store as much as 1.8 million acre feet of water for cities, agriculture and the environment.”

The news release noted that, “The California Department of Water Resources recently reported that Sites Reservoir would generate an additional 900,000 acre feet of water during droughts, enough water to supply over seven million Californians for an entire year.”

“The Northern California Water Agency produced an infographic on Sites Reservoir,” the release said.


Friday Morning Update: Policy; Trade; Ag Economy; Biofuels; Biotech; and, Budget

Policy Issues

On Thursday, the House Agriculture Nutrition Subcommittee met, “to review SNAP recipient characteristics and dynamics.” Yesterday’s hearing followed Wednesday’s full House Ag Committee meeting on SNAP and nutrition issues.

A summary and overview of Thursday’s Subcommittee hearing is available here.

Over the past two days, the House Ag Committee has been presented with a large amount of detailed analysis and information on SNAP; it appears that Chairman Mike Conaway’s (R., Tex.) top-to-bottom review of the program is off to a substantive and serious start.

In remarks on the House floor Thursday, Ag Nutrition Subcommittee ranking member Jim McGovern (D., Mass.) indicated that, “Mr. Speaker, yesterday the House Agriculture Committee – where I am proud to serve – held the first hearing in its ‘top-to-bottom’ review of the Supplemental Nutrition Assistance Program, or SNAP.

“SNAP is the nation’s pre-eminent anti-hunger program that provides critical food assistance to more than 46 million Americans. Last year, 16 million children – or 1 in 5 American children – relied on SNAP. Unfortunately, every indication is that Republicans will once again try to cut this critical safety-net program.”


House Ag Nutrition Subcommittee Hearing on SNAP

Categories: Farm Bill /Nutrition

On Thursday afternoon, the House Agriculture Nutrition Subcommittee held a hearing, “to review SNAP recipient characteristics and dynamics.”

On Wednesday, the full Committee heard background testimony from two experts on the SNAP program.

In her opening statement on Thursday, Subcommittee Chairwoman Jackie Walorski (R., Ind.) indicated that, “The full committee yesterday examined why a review of SNAP is so important – it’s the largest welfare program in both the number of recipients and the amount of spending, yet the program lacks a clear mission and the data reveals that it is not helping lift people out of poverty. It is my hope and expectation that this subcommittee, along with the work done at the full committee, will explore and gain a better understanding of the entire program and specifically its recipients to find unmet needs and areas of overlap.”

Chairwoman Walorski added that, “Today is not about policy recommendations; it’s about understanding the diverse characteristics and dynamics of the more than 46 million Americans who receive benefits from this program each month. Over the coming months, our review will include a range of stakeholder perspectives, including current and former recipients; non-profits, states and localities, the food industry, and nutrition experts to name a few.”

Subcommitte ranking member Jim McGovern (D., Mass.) noted in his opening remarks that, “As I said at yesterday’s hearing, I’m a little surprised that we’re starting the first ‘top-to-bottom’ review of programs within this Committee’s jurisdiction with SNAP, a program whose caseloads and spending are going down according to CBO. I hope we exercise the same rigorous oversight on farm subsidies to big agribusiness – payments that CBO projections indicate could end up costing nearly $5 billion more than expected in the farm bill.”

Ranking member McGovern added that, “I hope today’s hearing builds upon some of the overarching themes that came up yesterday. In particular, we need to address one the biggest flaws in our social safety net, the so-called ‘cliff.’ This happens when someone gets a job but earns so little they lose their benefits and end up worse off. And, if we really want to move people out of poverty for good, we need to raise the minimum wage.”

The Subcommittee heard testimony from only one panel that included: Karen Cunnyngham, a Senior Researcher at Mathematica Policy Research, Dr. Gregory Mills a Senior Fellow at the Urban Institute, Dr. James P. Ziliak from the University of Kentucky and Stephen Tordella, the president of Decision Demographics.

In her prepared testimony, Karen Cunnyngham indicated that, “In fiscal year 2013, 41 percent of SNAP households received the maximum benefit and 5 percent received the minimum benefit. The average monthly SNAP benefit was $271. SNAP households with children received a relatively high average benefit of $410, while households with elderly individuals received a relatively low one of $134. One reason for the difference in average benefits is the difference in average household size: 3.2 people for SNAP households with children, compared with 1.3 people for households with elderly individuals. SNAP households that include a nonelderly adult with a disability had an average monthly SNAP benefit of $204 and households with no elderly individuals, individuals with disabilities, or children had an average benefit of $195.”

Dr. Gregory Mills noted in his prepared remarks yesterday that, “This study examines the rates, causes, and costs of participant churn in SNAP. Churn occurs when a household receiving SNAP exits the program and then re-enters within four months or less, as defined by FNS for this research. Some churn is to be expected—as when a temporary increase in earnings makes a family briefly ineligible for assistance. Churn presents a policy concern, however, when benefits are disrupted for households who were continuously eligible. In these situations families lose benefits while off the program, with added time and expense involved in re-entering. Budgetarily, the pattern of case closings and reopenings brings higher State and federal administrative costs. Importantly, about half of the households who churn are families with children whose food security is placed at risk.”

Dr. James P. Ziliak stated in his prepared testimony that, “The past decade of near uninterrupted growth in participation is unprecedented in the program’s history. By most measures the recession of 2001 was mild, and with declining unemployment in the aftermath of the recession, past experience would have dictated a decline in participation in the mid 2000s. This did not happen. Participation then accelerated with the onset of the Great Recession as millions of Americans lost work.”

Dr. Ziliak added that, “[T]he fraction of SNAP households headed by a high school dropout has plummeted by more than half since 1980, and by 2011, more than a third of SNAP households were headed by someone with some college or more.”

In his prepared remarks, Stephen Tordella noted that, “The most common events associated with entry into SNAP were related to decreases in family earnings, loss of employment, and changes to the family situation. Among those who entered SNAP in the study period, 30 percent experienced a substantial decrease in family earnings in the previous four months, while 23 percent experienced a substantial loss in other family income—income aside from earnings and Temporary Assistance for Needy Families (TANF). Nearly 16 percent of those who entered SNAP were in families where a member became unemployed within the previous four months, and 12 percent experienced a change in their family situation within the previous four months, such as a pregnancy, a new dependent in the family, or a separation or divorce.”

On the other hand, Mr. Tordella noted that, “In about 30 percent of households that exit SNAP, the data do not show an event related to improved financial circumstances or reduced need in the previous four months that we would readily associate with exit from the program. About 70 percent experienced a substantial increase in income or a decrease in the number of family members. Thirty-seven percent experienced more than one of these events in the four months before exiting. Increases in earnings were the most common of the events we examined that preceded exits. These events, however, are common and do not always lead to exiting SNAP.”

With respect to re-entry into the program, Mr. Tordella explained that, “Forty-seven percent of SNAP participants who exited the program in the panel period re-entered within 12 months. Another 12 percent re-entered within two years, for a total of 59 percent re-entering within 24 months. Participants returned to the program more quickly during 2008 to 2012 than prior study periods. In the mid-2000s, 53 percent of participants re-entered within two years.”

During the discussion portion of yesterday’s hearing, Chairman Walorski had the following exchange with Dr. Mills.

Rep. Jackie Walorski: Mr. Mills, I have a question for you. In your churn study, talking about the cycling of families on and off of benefits, you mentioned one of the reasons that recipients were experiencing personal difficulties. And kind of in a follow-up to a question I had yesterday on the full committee on SNAP about families getting real help, what’s the engagement level of states going into these recertifications?

Dr. Gregory Mills: It’s rather extensive. That is to say the effort that is put into the recertification is a full review of the eligibility factors of the case, so it’s immigration, citizenship, it’s their household income, expenses, and resources. So it is, in terms of case worker effort, it’s probably something like two to three hours of a case worker’s time.

Rep. Walorski: So there is a case worker from SNAP that potentially knows there’s a situation with a family?

Dr. Mills: A scheduled—well, I’m talking actually about a scheduled recertification, so those would occur typically at intervals of 12 or 24 months. The point I was trying to make in my testimony was that the, say, two to three hours that might be spent by a case worker at recertification is far less than what is required at an initial application. And the phenomenon of churn causes individuals, once they go off the program, many of them have to come back by going through a full initial application, which may require, say, six or seven hours of a case worker’s time, so it’s more—

Rep. Walorski: And what did you learn in your interview process on interviews with SNAP staff and those in the community-based organizations?

Dr. Mills: I indicated some of the recommendations that individuals have, the staff of these offices. We interviewed staff in one local office in each of the six states. We also interviewed representatives of community-based organizations. And I believe the chairman actually made reference in his opening statement the other day to the extension of the food assistance network to include food banks and other nonprofit organizations.

Some states do make use of such community-based organizations to assist clients in the outreach and in applying for benefits. That is a strategy that some states also use at recertification, allowing the client to be interviewed by a worker at a food bank if, for instance, they might find it difficult to get to a local office, and if they’re already going to that food bank and it would represent less burden for them.

Rep. Walorski: I appreciate it. Maybe this is the disadvantage of longer certification periods, fewer interactions and opportunities to help families. I appreciate your testimony.

And ranking member McGovern had this exchange with Dr. Mills.

Rep. Jim McGovern: Thank you very much. Just on this issue of churning and recertification, we had a witness here yesterday who said that there should be more certification processes. And I guess my question to you is, you know, how would requirements for more frequent recertification likely affect the churn rate?

Dr. Mills: I think of this as a tradeoff that’s a difficult one to make. As I pointed out in my testimony, there are multiple objectives here. You want to provide access to the program for those who are eligible for benefits, and at the same time you want to maintain the integrity of the program by not allowing those who are ineligible to access the program. So the procedural barriers exist for multiple reasons. You want to make sure that people in fact meet the eligibility requirements, but you don’t want to place those barriers or those hurdles so high that it might prevent those who are in fact entitled to receive benefits from entering the program.

In general, as I think you heard from [Robert Greenstein, President of the Center on Budget and Policy Priorities] the other day, the error rates in the program are very low. Only about 1% of recipients in the SNAP program are in fact ineligible and should not be receiving benefits. All others are eligible and perhaps not receiving the correct amount. But the program, by those measures, is very well administered, reflecting the amount of attention that goes into initial certification and recertification.

More barriers—I think that this is getting to your question—more barriers, more procedural requirements almost certainly would increase the rate of churn because there would be some individuals eligible for assistance who would not be able to meet those requirements, and they would go off, but they’d be unable to make ends meet without those benefits, they would reapply.

Rep. McGovern: Right. And I’d like to think that we all can agree that everybody who is eligible for this benefit should be able to get it, that we shouldn’t be going out of our way to make it more difficult for eligible people to get a food benefit.

And at the conclusion of Thursday’s hearing, Rep. McGovern noted that, “The SNAP program is a food program, it is not a job-training program, it is not a jobs program, and we need to make sure that everybody in this country has access to food; food ought to be a right- and I think this is a program that works.”

Also, in remarks yesterday on the House floor, Rep. McGovern noted in part that, “Mr. Speaker, yesterday the House Agriculture Committee – where I am proud to serve – held the first hearing in its ‘top-to-bottom’ review of the Supplemental Nutrition Assistance Program, or SNAP.

“SNAP is the nation’s pre-eminent anti-hunger program that provides critical food assistance to more than 46 million Americans. Last year, 16 million children – or 1 in 5 American children – relied on SNAP. Unfortunately, every indication is that Republicans will once again try to cut this critical safety-net program.”

Keith Good

Update on Regulatory Issues

In addition to the drop in corn and soybean values over the past three years, which has contributed to lower expected farm income and reduced rates of growth in the value of farmland, U.S. producers have also expressed concern about the burden of federal regulations.

 Timothy Cama reported at The Hill Online on Wednesday that, “House Republicans used a Wednesday hearing on the Environmental Protection Agency’s (EPA) budget to attack various regulations being pursued by the agency.”

The article noted that, “‘EPA seems intent on locking in a long list of new regulations that will bind future administrations,’ Rep. Fred Upton (R-Mich.), chairman of the Energy and Commerce Committee, said at the hearing of two subcommittees of the panel.”

“EPA Administrator Gina McCarthy defended her rulemaking agenda and the agency’s funding request for fiscal 2016, asking for $8.59 billion, a $452 million increase over what it received in the most recent year,” the article said.

A news release on Wednesday from Rep. Kevin Kramer (R., N.D.) indicated that, “Today, [Rep. Kramer] Congressman questioned EPA Administrator Gina McCarthy about the impact the Waters of the United States rulemaking will have on small businesses in North Dakota and across the United States.

“‘I was deeply disappointed EPA Administrator McCarthy did not think the negative impact the expanded Waters of the United States definition will have on small businesses and small entities in North Dakota and across the country was a big deal. I am committed to ensuring that North Dakotans are not harmed by Washington bureaucrats,’ said Cramer.”

The news update added that, “Congressman Cramer has been a leader in opposing overreach by the EPA and cosponsored The Waters of the United States Regulatory Overreach Protection Act of 2014 which would prohibit the EPA and the Corps from further developing or administering the proposed rule in any form, and reaffirm the authority of state and local officials to determine how non-jurisdictional waters should be regulated. Bicameral legislation in the new Congress is being developed as the EPA expects to finalize their rule in April.”

Meanwhile, the House Ag Committee will be taking a closer look at the Waters of the U.S. rule in a hearing schedule for next week:

Also, a news update Wednesday from Rep. Frank Lucas (R., Okla.) stated that, “[Rep. Lucas] Congressman Frank and Congressman Collin Peterson (D-Minn.) today introduced H.R. 1029, the EPA Science Advisory Board Reform Act of 2015, legislation to ensure the science guiding EPA’s regulatory policy is objective, independent and available for public review. The bipartisan bill establishes guidelines for membership to the Science Advisory Board, which advises the EPA’s regulatory decisions. Companion legislation was also introduced today in the Senate by Sens. John Boozman (R-Ark.) and Joe Manchin (D-W.Va.).”

The release added that, “‘The Science Advisory Board’s work is important to making sure the EPA considers all scientific information when writing regulations that will impact American farmers, families and small businesses. This legislation builds on the work done in the 2014 Farm Bill and is necessary to ensure the EPA takes into account the best information possible, with input from the public and independent stakeholders. A balanced and independent Science Advisory Board will help alleviate some of the unintended consequences surrounding EPA regulations,’ said Congressman Peterson.”

Meanwhile, AP writer Emery P. Dalesio reported on Wednesday that, “The U.S. Environmental Protection Agency will investigate whether North Carolina’s environmental agency lightly regulated the state’s industrial hog operations because their neighbors are minorities.

“The Waterkeeper Alliance and other groups released an EPA letter Wednesday stating the federal agency will launch a civil rights investigation of North Carolina’s Department of Environment and Natural Resources. The groups had asked the EPA last fall to investigate whether DENR would have been tougher on 2,000 North Carolina swine operations raising 10 million hogs if the neighbors were not black, Hispanic or Native American.”


Thursday Morning Update: Policy Issues; Trade; Ag Economy; and, Budget Issues

Policy Issues

On Wednesday, the House Agriculture Committee met to discuss the SNAP program and nutrition issues, a summary and overview of this Committee hearing is available here.

Also on the SNAP issue, a report yesterday by  Mathematica Policy Research presented “estimates that, for each state, measure the need for SNAP and the program’s effectiveness in each of the three years from 2010 to 2012.”

The Mathematica item stated that, “This report presents estimates that, for each state, measure the need for SNAP and the program’s effectiveness in each of the three fiscal years from 2010 to 2012. The estimated numbers of people eligible for SNAP measure the need for the program. The estimated SNAP participation rates measure, state by state, the program’s performance in reaching its target population. In addition to the participation rates that pertain to all eligible people, we derived estimates of participation rates for the ‘working poor,’ that is, people who were eligible for SNAP and lived in households in which someone earned income from a job.”

The report noted that, “Tables III.1  and III.2  present our final shrinkage estimates of SNAP participation rates and the number of people eligible, respectively, in each state for FY 2010 to FY 2012 for all eligible people and for the working poor.”

Recall that he House Agriculture Nutrition Subcommittee will hold a hearing today, “to review SNAP recipient characteristics and dynamics.”

Also on Wednesday, Secretary of Agriculture Tom Vilisack presented testimony at the House Appropriations Subcommittee on Agriculture.


House Ag Committee Hearing: SNAP (Food Stamps)

Categories: Farm Bill /Nutrition

At a House Agriculture Committee hearing on Wednesday that focused on the SNAP program and nutrition issues, Chairman Mike Conaway (R., Tex.) indicated that, “[The Supplemental Nutrition Assistance Program (SNAP)] is the largest program under the Committee’s jurisdiction, and today’s hearing marks the beginning of a top-to-bottom review of the program. We will conduct this review without preconceived notions and with a commitment to strengthening the program so it can serve as a tool to help individuals move up the economic ladder.”

Chairman Conaway added that, “We can all agree that no one ought to go hungry in America, and SNAP is essential in protecting the most vulnerable citizens during tough times. For many it is a vital lifeline to keeping food on the table. What we don’t want is for this program to hold people back from achieving their potential. I believe there is a role for SNAP, but we need to have a complete and clear understanding of its mission and purpose.”

Robert Greenstein, President of the Center on Budget and Policy Priorities, and University of Maryland Professor Douglas J. Besharov were the only two witnesses at Wednesday’s hearing.

In prepared testimony, Prof. Besharov noted that, “I applaud this committee’s multi-faceted re-examination of the program, its past, present, and future. Based on my research and analysis, I think the key challenge is to modernize a massive program that started as a small program of food assistance to become the primary US program of income support.”

Prof. Besharov added that, “That would mean coordinating the SNAP program with Temporary Assistance for Needy Families (TANF), Unemployment Insurance, Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI), and the Earned Income Tax Credit (EITC) and other tax credits. In doing so, there should be an effort to rationalize the current patchwork of programs that make up the US safety-net in a way that balances what looks to be long-term weak demand for labor economic with the need to minimize the work and marriage disincentives in current law.”

Prof. Besharov pointed out that, “Today, instead of hunger, the central nutritional problem facing the poor, indeed all Americans, is not too little food but, rather too much—or at least too many calories. Although there are still some pockets of real hunger in America, they are predominantly among populations with behavioral or emotional problems.”

In his testimony, Prof. Besharov explained that, “As I have described, states are financially and politically rewarded when they move people off UI and TANF (programs with at least some activation requirements) and on to SNAP. This incentive was not created deliberately, but, rather, is a historic accident of how and when the programs were established…[R]eal reform probably requires that the states be made financial partners of the federal government. States should have a more direct financial stake in the proper governance of SNAP programs, including of eligibility determinations. Given that all program funds come from the federal government, a substantial liberalization of eligibility determinations was predictable. State officials have little reason to be cost conscious—as long as program funds seem available.”

During the discussion portion of Wednesday’s hearing, House Ag Nutrition Subcommittee Chairwoman Jackie Walorski (R., Ind.) had this exchange with Prof. Besharov:

Rep. Walorski: “And I guess as we’ve talked about today, we’ve talked about the issue of how do families, how do single moms and how do underemployed families pay for food, and healthcare, and lodging, and daycare, how does all this happen. And my question is, when they finally get to a point where they have figured all this out, what then does the government do to really help these families?

“Has the SNAP program historically been just a Band-Aid to pass them on to the next…somebody else to deal with them or is there a sense that, you know, there’s an opportunity to actually look at what this government can do, should do, and actually getting real help to the financial challenges and how this happened to begin with? So I guess just historically, where do you see this? Has this always just been a Band-Aid to try to get people along or is there a long-term solution that’s been talked about?

Prof. Besharov: “Well, I think the world’s changed. Before 1996 we would have had this conversation about TANF. And what happened was when the Congress reformed TANF and the case loads went way down, the SNAP case loads, over time, over a 20 year period, went up. And as I said in my testimony, some people on the right, especially, call SNAP welfare 2.0, which is this is the new version of that.

The difference is that within the SNAP program, the states don’t have an incentive to really reform, to provide those kinds of uplifting services because of the formula. The formula is if a state wants to provide services to people in your district in Indiana, it has to pay 50% of the cost, but if it wants to just give out SNAP benefits, it only pays the administrative costs, and those are very low.

So my recommendation is that whatever the incentive is, whether it’s giving the states a bounty every time they get somebody from SNAP a job or an advanced degree or whatever, give them a financial incentive to help the people on SNAP. It’s not there now.”

A video replay of Rep. Walorski’s complete remarks at Wednesday’s hearing can be seen here:

Subcommittee Chairwoman Warloski also made the following tweet on Wednesday:

In his prepared remarks, Mr. Greenstein noted that, “As of the end of 2014, SNAP was helping more than 46 million low-income Americans to afford a nutritionally adequate diet by providing them with benefits via a debit card that can be used only to purchase food. The benefits are relatively modest. SNAP participants receive an average benefit of $1.42 per person per meal.”

Mr. Greenstein added that, “SNAP targets benefits on those most in need and least able to afford an adequate diet. Its benefit formula considers a household’s income level, along with its essential expenses such as rent, medicine, and child care needed to work. Although a family’s income is the most important factor affecting its ability to purchase food, it is not the only factor; a family whose rent and utility costs consume two-thirds of its income will have less money to buy food than a family that has the same income but receives a rental voucher to cover a portion of its rental costs.

“The program’s targeting of benefits adds some complexity. However, it helps to ensure that SNAP provides the largest levels of assistance to the poorest families with the greatest needs, and lesser assistance to those whose level of need is less severe.”

Mr. Greenstein pointed to research that “found that adults who had access to food stamps as young children had an 18 percentage point higher high school graduation rate than the children who hadn’t had access to food stamps. The children with access to food stamps also had significantly lower rates of ‘metabolic syndrome‘ (obesity, high blood pressure, heart disease, and diabetes) and better health in adulthood. In addition, women who had access to food stamps as young children had higher earnings and lower rates of welfare receipt in adulthood.”

Mr. Greenstein also pointed out that, “SNAP error rates now stand at record lows. Fewer than 1 percent of SNAP benefits are issued to households that do not meet all of the program’s eligibility requirements.”

Also at Wednesday’s hearing, House Ag Nutrition Subcommittee ranking member Jim McGovern (D., Mass.) raised questions about the hearing, noting that: “You know, today’s hearing is described as the start of a top to bottom review of SNAP, and I’m certainly a proponent of rigorous oversight of all programs. But I have to say, at the beginning, I find it a little bit curious that we seem to be singling out SNAP for review, especially at a time when the most recent CBO projections show that SNAP case loads and spending is moving in a downward direction, and CBO also says that payments to farmers could be nearly $5 billion more than was originally expected in the farm bill. I don’t know why we’re not beginning with a top to bottom review of that, but

“And I appreciate you being here. And I hope, if we’re going to do a top to bottom review, that we also, at some point, have a panel of beneficiaries, people who are on the program, who can testify firsthand what works and what doesn’t work. And maybe we should also have someone from [the Food and Nutrition Service] here as well, because they administer the program. I hope that this is not going to be an exercise in another attack against poor people because I fear I’ve seen this movie before, and I didn’t like it the first time. But it is what it is.”

Keith Good

Wednesday Morning Update: Senate Ag Committee Farm Bill Hearing, Ag Economy; Trade; Budget; and, Biofuels

Policy Issues- Senate Ag Committee Hearing; House Ag Committee Hearing Today

In two separate panels, agricultural producers and Secretary of Agriculture Tom Vilsack testified before the Senate Agriculture Committee on the implementation of  last year’s Farm Bill Tuesday morning.

A summary and overview of the hearing is available here.

AP writer Mary Clare Jalonick reported on Tuesday that, “Congressional Republicans are laying the groundwork for an overhaul of the nation’s food stamp program, trying again after an unsuccessful attempt two years ago.

“House Agriculture Chairman Mike Conaway, R-Texas, said Tuesday that his panel is starting a comprehensive, multiyear review of the program to see what’s working. He said ‘either huge reforms or small reforms’ could come from that, though he wouldn’t detail what those might be.

“Conaway says a 2013 GOP effort to cut food stamps ‘didn’t resonate well’ because Republicans didn’t spell out why it was important. House Republican leaders tried unsuccessfully to cut the program by 5 percent annually by passing a bill with broad new work requirements.”

The AP article noted that, “Some Democrats say they are wary of the review process. Agriculture Committee member James McGovern, a Massachusetts Democrat who is a longtime advocate for food stamps, said he wonders why the SNAP program is singled out for review and not expensive farm programs.

“‘I am deeply concerned about this,’ McGovern said. ‘This is a program that by and large works.’”

Meanwhile, David Pierson reported yesterday at the Los Angeles Times Online that, “An estimated 9 million people are sickened and 1,000 killed by food-borne illnesses in the U.S. each year, but until now officials were unable to pinpoint which foods were most likely to blame.

“In a report released Tuesday, the U.S. Centers for Disease Control and Prevention, the U.S. Food and Drug Administration and the U.S. Department of Food and Agriculture’s Food Safety and Inspection Service detailed the sources of the most common food-borne illnesses with the aim of improving food safety and policy.”

The LA Times article noted that, “Among the findings: More than 80% of E. coli O157 cases were attributed to beef or crops such as leafy vegetables.

“About 75% of campylobacter illnesses were linked to dairy (66%), particularly raw milk dairy, and chicken (8%).

“More than 80% of listeria illnesses were attributed to fruit (50%) and dairy (31%).”


Agricultural Economy

Also on Tuesday, USDA’s National Agricultural Statistics Service released its annual U.S. Crop Values Summary, a link to the complete report along with highlights regarding corn and soybeans can also be found at

Tuesday’s Los Angeles Times contained an article highlighting ongoing drought concerns California. The article included this quote from Bill Patzert, a climatologist with the Jet Propulsion Laboratory: “If you think we’ve turned around on the drought, stop smoking whatever you’re smoking.”

Details on this article, as well as Reuters news updates that focused on agricultural issues in Brazil, Ukraine, and Russia have been posted here.

And Jon Hilsenrath reported on the front page of today’s Wall Street Journal that, “Federal Reserve Chairwoman Janet Yellen, sounding upbeat about the economy, laid the groundwork for interest-rate increases later this year.

“‘The employment situation in the United States has been improving on many dimensions,’ Ms. Yellen told the Senate Banking Committee on Tuesday, her first of two days of semiannual testimony before lawmakers. Spending and production had increased at a ‘solid rate,’ she added, and should remain strong enough to keep bringing unemployment down.”


Trade Issues (TPA, TPP); West Coast Ports

And in trade related news, William Mauldin reported in Wednesday’s Wall Street Journal that, “Lawmakers from both parties are trying to strike a difficult balance as they wrangle over the final intricacies of a bill that would expedite consideration of trade deals.

“House and Senate leaders crafting the so-called fast-track bill want to include sweeteners to attract skeptical Democrats, including rules to allow lawmakers greater access to the details of continuing trade negotiations.

“But supporters fear too many provisions friendly to Democrats could alienate Republicans and the business community, or even put a major Pacific trade deal at risk when it comes up for a final vote. The U.S., Japan and 10 other Pacific Rim countries are hoping to agree to the final terms of the trade partnership in coming months.”

Mr. Mauldin explained that, “The bill’s authors—Sen. Orrin Hatch (R., Utah), Sen. Ron Wyden (D., Ore.) and Rep. Paul Ryan (R., Wis.)—are now fighting over how much leverage to give lawmakers to remove any coming trade deals from fast-track protection. That would subject the pacts to ordinary amendments and procedural delays.”

Reuters writer Krista Hughes reported on Tuesday that, “U.S. Federal Reserve Chair Janet Yellen warned Congress on Tuesday against a bid to crack down on currency cheats and said adding currency rules to trade deals could hobble monetary policy.

“Lawmakers have introduced legislation allowing firms to seek compensation for currency weakness overseas and some are also fighting to include a currency chapter in upcoming trade deals such as the 12-nation Trans-Pacific Partnership (TPP).”

Also on Tuesday, Reuters news indicated that, “A meeting aimed at sealing a Pacific trade deal has been called for April, Mexico’s economy minister said on Tuesday, adding he was optimistic it would be sealed in the first half of 2015.

“‘I am very optimistic that there will be good news for the TPP in the first half of this year,’ Ildefonso Guajardo told Reuters, referring to the Trans-Pacific Partnership.”

On the West Coast Port issue, Diana Marcum reported on Tuesday at the Los Angeles Times Online that, “An end to labor strife at West Coast ports should speed up cargo operations, but it may be too late to help California’s drought-weary nut and citrus farmers.

Citrus took the hardest hit. Oranges, many bound for Chinese New Year celebrations, sat decaying on ships, at docks and on the ground as a nine-month labor dispute snarled ports. Fieldworkers, packinghouse employees and truck drivers had their hours cut.”

The article added that, “Losses could reach as high as 50% of citrus exports, or $500 million, according to trade groups… [F]or California’s almond farmers and processors, the severe cargo backlogs have raised fears that foreign buyers could cancel contracts for almonds stuck in storage and buy from other countries.”



David Nakamura and Sean Sullivan reported on the front page of today’s Washington Post that, “The Senate moved closer Tuesday to a deal to avert a partial shutdown of the Department of Homeland Security, but the proposal faced an uncertain future in the House, where Republican leaders conspicuously refused to embrace it.

“Senate Majority Leader Mitch McConnell (R-Ky.) told reporters he was prepared to move swiftly to extend funding for DHS through the fiscal year in a bill that is not contingent on Republican demands to repeal President Obama’s executive actions on immigration.”



Bloomberg writer Mario Parker reported on Tuesday that, “Ethanol producers are cutting output after getting squeezed by the biggest drop in gasoline prices since 2008.

“Valero Energy Corp. and Green Plains Renewable Energy Inc., representing about 15 percent of U.S. capacity, have reduced operations as margins narrowed. At a typical mill in Illinois that makes ethanol from corn, profit margins have almost totally disappeared, compared with $1.33 a gallon a year ago, according to AgTrader Talk, a Clive, Iowa-based consulting company.”

Keith Good

Senate Ag Committee Farm Bill Hearing

At a Senate Agriculture Committee hearing on Tuesday, lawmakers reviewed the implementation of the Farm Bill after one year and heard testimony from farmers and Secretary of Agriculture Tom Vilsack.

In his opening remarks, Chairman Pat Roberts (R., Kan.) indicated that, “As our first order of business it’s only right that we recognize and appreciate our leader of the past four years and the tremendous amount of good work she accomplished during a very difficult time.

Senator Stabenow is a dedicated and fierce leader of agriculture policy whose tenacity successfully carried a farm bill across the goal line when many believed it wouldn’t get done.”


USDA- NASS Report- Crop Values 2014 Summary

On Tuesday, USDA’s National Agricultural Statistics Service (NASS) released its Crop Values Summary report for 2014.

In part the NASS report included these two tables highlighting corn and soybean values:

(Click here for a larger view).

The table shows the average price of corn in the U.S.:

2012- $6.89
2013- $4.46

2014- $3.65

(Click here for a larger view).

The table shows the average price of soybeans in the U.S.:

2012- $14.40
2013- $13.00

2014- $10.20


Ag Economy Update- Calif. Drought; International Issues

Joseph Serna reported in today’s Los Angeles Times that, “When it’s as dry as it has been for three years, a couple of weeks of sporadic rain or a big storm or two in Los Angeles can make it seem as though Southern California is getting a healthy dose of rainfall.

But in fact, the city’s rain totals since Oct. 1 — the beginning of a rain year that ends Sept. 30 — show that L.A. is still on pace for a below-average year.”

The article noted that, “About 3.88 inches of rain fell on downtown L.A. in December, the most in that month in four years. And the region has been doused by more rainfall just in the last few days. But between that December and this February there was January — the month that is the traditional portal to Southern California’s three wettest months.

“And that month was very dry, with just over an inch of rain. The average rainfall in January for downtown L.A. is over 3 inches.

When the Southland has been in an awful dry streak for several years, a middling rain year can come across as more substantial than it actually is.”

Today’s article added that, “‘It’s a lot compared to the last three years, but the last three years were the driest in the history of California,’ said Bill Patzert, a climatologist with the Jet Propulsion Laboratory. ‘If you think we’ve turned around on the drought, stop smoking whatever you’re smoking.'”

More broadly, Reuters writer Gustavo Bonato reported today that, “A growing protest by Brazilian truck drivers against high fuel prices entered a seventh day on Tuesday, interrupting supplies of diesel and food across several commodity-rich states at the start of harvest season.

“The protests are part of a reaction to the return of fuel taxes, one of several unpopular measures that President Dilma Rousseff is counting on to shore up government fiscal accounts.”

The article added that, “Truckers started restricting the flow of goods along BR 163, the main highway running through top soybean-producing state Mato Grosso, on Feb. 18 but the demonstrations quickly spread and spilled into as many as six states by Monday, including Minas Gerais, Parana, Goias and Rio Grande do Sul.”

And Reuters writers Polina Devitt and Pavel Polityuk reported that, “Officials in both Russia and Ukraine are considering tougher trade protections to keep food prices from spiralling as their currencies collapse, with Moscow taking more aggressive steps than Kiev to control exports.

“The two countries, on opposite sides of a war in eastern Ukraine that has killed more than 5,600 people, are both among the world’s biggest exporters of wheat, through Black Sea ports that help feed Africa and the Middle East.

“Both have seen their currencies collapse in the past year, making exports more valuable in local terms and driving up the politically sensitive domestic price of food.”


Policy Issues; Trade; Ag Economy; and, Budget Issues Tuesday

Policy Issues

In a letter yesterday to Senate and House Budget Committee leaders, a large number of food, agriculture and policy organizations indicated that, “The undersigned 392 organizations, representing America’s agriculture, nutrition, conservation, rural development, finance, forestry, energy, trade, labor, equipment manufactures and crop insurance sectors, strongly urge you to reject calls for additional cuts to programs within the jurisdiction of the Senate and House Agriculture Committees.

Just over one year ago, Congress passed, and the President signed into law, sweeping changes to our nation’s food and farm policy that included significant deficit reduction. The 2014 Farm Bill required over three years of debate in both chambers of Congress and ultimately ended with the consolidation of over 100 programs and cuts to mandatory spending across many titles, including the elimination of the direct payment program. These cuts came in addition to those already in effect due to sequestration.”

After noting that the new measure saved an estimated $23 billion, the letter stated that, “We, therefore, oppose re-opening any title of the Farm Bill during the consideration of the 2016 Budget Resolution and strongly urge you to refrain from including reconciliation instructions for either the Senate Committee on Agriculture, Nutrition, and Forestry or for the House Committee on Agriculture.”

Recall that The House Ag Committee will hold hearings this week on Wednesday and Thursday regarding Farm Bill nutrition issues; while, this morning, the Senate Ag Committee will hold a hearing on Farm Bill implementation and hear testimony from Sec. of Ag. Tom Vilsack.

Sec. Vilsack is also scheduled to appear on Wednesday at the House Appropriations Subcommittee on Agriculture.

(more…) Monday News Update

Recall that earlier this month, USDA updated its U.S. Farm Sector Income Forecast and noted that, “Net farm income is forecast to be $73.6 billion in 2015, down nearly 32 percent from 2014’s forecast of $108 billion. The 2015 forecast would be the lowest since 2009.”

Scott Irwin, an agricultural economist at the University of Illinois at Urbana-Champaign, noted that, “It’s neither happy times nor is the sky falling in terms of agriculture incomes.”

However, Reuters news published a disconcerting article on Monday which stated that, “Across the U.S. Midwest, the plunge in grain prices to near four-year lows is pitting landowners determined to sustain rental incomes against farmer tenants worried about making rent payments because their revenues are squeezed.”

The article noted that, “Some grain farmers already see the burden as too big. They are taking an extreme step, one not widely seen since the 1980s: breaching lease contracts, reducing how much land they will sow this spring and risking years-long legal battles with landlords.”

Meanwhile, a separate Reuters article over the weekend focused on the issue of genetically modified crops in India.

Details on these two Reuters articles can be found at

The Wall Street Journal reported on Monday that it will “likely take months for the backlog to clear” at West Coast Ports after this weekends resolution of the labor dispute there.  Labor Secretary Tom Perez discussed his role in resolving the dispute Monday morning on MSNBC and CNBC television.

Monday’s papers also included a look at the ongoing budget showdown regarding the Department of Homeland Security. The impetus for the dispute stemmed from executive branch action on immigration policy.  Meanwhile, a subsequent federal court ruling temporarily stopping executive branch implementation of the that policy has added to the complexity of how to resolve the dispute.

An article on the front page of Monday’s Wall Street Journal noted that, “Senate Republicans, still mulling their options, are most likely to end up supporting a short-term extension of the agency’s current funding.” Also, Nathan Koppel reported today at The Wall Street Journal Online that, “The Obama administration on Monday asked a federal court to allow it to continue implementing the president’s immigration plan, which was temporarily blocked last week by a Texas judge.”

News with potentially negative implications for the Trans-Pacific Partnership trade negotiations and Japan unfolded on Monday.

Robin Harding reported today at The Financial Times Online that, “Shinzo Abe, the Japanese prime minister, has lost an important ally on the Trans-Pacific Partnership trade deal after his agriculture minster resigned in a scandal over political donations.”

The FT article added that, “The resignation matters because Mr Nishikawa is a longstanding member of the LDP’s ‘agricultural tribe’. He acted as a firewall for Mr Abe against internal party critics on trade deals and farm reform.

“Negotiators are near a deal on the huge TPP agreement, and agricultural reform is one of Mr Abe’s top priorities this year, so the loss of Mr Nishikawa is a blow to the prime minister’s agenda.”

Also today at is a summary of a recent USDA- Economic Research Service report highlighting agricultural trade issues with China, as well as a look at an ERS publication on wetlands and the Farm Bill.

Keith Good

Recent USDA Updates: Trade with China, and Farm Bill Issues

A recent report from USDA’s Economic Research Service (ERS) (“China’s Growing Demand for Agricultural Imports” ) indicated that, “China’s 2001 accession to the World Trade Organization lowered barriers to agricultural imports, and its economic growth has generated new demands for agricultural commodities. An agricultural trading relationship of mutual importance is developing between the United States and China. The United States accounted for over 24 percent of the value of China’s agricultural imports during 2012-13, a larger share than any other country. U.S. agricultural sales to China doubled from 2008 to 2012, reaching nearly $26 billion in annual sales. China has overtaken Japan, Mexico, and Canada to become the leading export market for U.S. agricultural products.”

“All of China’s leading suppliers of agricultural imports are countries richly endowed with land resources: the United States, Brazil, Australia, Canada, New Zealand, and Argentina. China has been importing more agricultural products from many of these countries, but the United States remains the leader,” the ERS report said.

The ERS report stated that, “Soybeans, other oilseeds, and fats and oils represent nearly half of China’s agricultural import value. Soybeans and other oilseeds are processed to extract oils, and the residual meal is used as a high-protein animal feed ingredient. China also imports fats and oils that are refined and manufactured into consumer oil products. China produces most of its own meat and dairy products, but imports of these products are also significant. The mix of agricultural imports is diver- sifying as China’s purchases of fruits, nuts, cassava, sugar, wine, breeding stock, and processed food imports rise.”

With respect to livestock, the ERS report indicated that, “China’s imports of meat and animal offal rose to over 2.5 mmt during 2013. Pork meat and offal are the largest types of meat imported…China’s imports of dairy products grew more than fourfold from 2008 to 2013, reaching 1.6 mmt.”

Farm Bill

A separate ERS report this month (“Targeting Investments To Cost Effectively Restore and Protect Wetland Ecosystems: Some Economic Insights“) stated that, “USDA has spent more than $4.2 billion on wetland restoration and protection over the last two decades. One challenge in allocating these funds is the lack of information on variations in wetland benefits and costs across the Nation. This report discusses the biophysical impacts of new wetlands for eight benefit categories: duck hunting, carbon sequestration, flood protection, nitrogen removal, species protection, open space, sediment removal, and groundwater recharge, as well as the value of these impacts for some categories. In addition, it presents county-level estimates of the costs of restoring and preserving wetlands for some parts of the United States. Although the estimates range in precision and are not comprehensive, they call attention to some areas where the benefits of new wetlands are likely to exceed costs or perhaps may be insignificant. For example, the benefits of restoring and preserving wetlands near the Missouri River in central North and South Dakota are likely to exceed costs. Findings underscore the need for additional information that may increase the number, accuracy, and spatial resolution of wetland benefit estimates.”

Also, the U.S. Department of Agriculture’s Farm Service Agency indicated in a tweet on Monday that:


Reuters News: Farmland Rent Issues; and GM Crops for India

Categories: Biotech

Agricultural Economy

Reuters writers Jo Winterbottom and P.J. Huffstutter reported today that, “Across the U.S. Midwest, the plunge in grain prices to near four-year lows is pitting landowners determined to sustain rental incomes against farmer tenants worried about making rent payments because their revenues are squeezed.

“Some grain farmers already see the burden as too big. They are taking an extreme step, one not widely seen since the 1980s: breaching lease contracts, reducing how much land they will sow this spring and risking years-long legal battles with landlords.

“The tensions add to other signs the agricultural boom that the U.S. grain farming sector has enjoyed for a decade is over. On Friday, tractor maker John Deere cut its profit forecast citing falling sales caused by lower farm income and grain prices.”

The Reuters writers explained that, “Many rent payments – which vary from a few thousand dollars for a tiny farm to millions for a major operation – are due on March 1, just weeks after the U.S. Department of Agriculture (USDA) estimated net farm income, which peaked at $129 billion in 2013, could slide by almost a third this year to $74 billion.”

The writers also pointed out that, “How many people are walking away from leases they had committed to is not known. In Iowa, the nation’s top corn and soybean producer, one real estate expert says that out of the estimated 100,000 farmland leases in the state, 1,000 or more could be breached by this spring.

“The stakes are high because huge swaths of agricultural land are leased: As of 2012, in the majority of counties in the Midwest Corn Belt and the grain-growing Plains, at least 40 percent of farmland was leased or rented out, USDA data shows.

“‘It’s hard to know where the bottom is on this,’ said David Miller, Iowa Farm Bureau’s director of research and commodity services.”


Reuters writers Krishna N. Das and Mayank Bhardwaj reported over the weekend that, “On a fenced plot not far from Indian Prime Minister Narendra Modi’s home, a field of mustard is in full yellow bloom, representing his government’s reversal of an effective ban on field trials of genetically modified (GM) food crops.

“The GM mustard planted in the half-acre field in the grounds of the Indian Agricultural Research Institute in New Delhi is in the final stage of trials before the variety is allowed to be sold commercially, and that could come within two years, scientists associated with the project say.”

The article noted that, “India placed a moratorium on GM aubergine in 2010 fearing the effect on food safety and biodiversity. Field trials of other GM crops were not formally halted, but the regulatory system was brought to a deadlock.

But allowing GM crops is critical to Modi’s goal of boosting dismal farm productivity in India, where urbanization is devouring arable land and population growth will mean there are 1.5 billion mouths to feed by 2030 – more even than China.

“Starting in August last year, his government resumed the field trials for selected crops with little publicity”.

The Reuters writers indicated that, “Modi was a supporter of GM crops when he was chief minister of Gujarat state over a decade ago, the time when GM cotton was introduced in the country and became a huge success. Launched in 2002, Bt cotton, which produces its own pesticide, is the country’s only GM crop and covers 95 percent of India’s cotton cultivation of 11.6 million hectares (28.7 million acres).

“From being a net importer, India has become the world’s second-largest producer and exporter of the fiber.”


« Past Entries