FarmPolicy

July 15, 2019

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.

Meanwhile, a news release yesterday from Sen. Kirsten Gillibrand (D., N.Y.) indicated that, “Standing in the Binghamton High School cafeteria, [Sen. Gillibrand] said she will fight to protect healthier food standards and programs for schools as Congress prepares to debate child nutrition standards. Gillibrand also announced bipartisan legislation to provide more children with nutritious meals throughout the summer.

“Gillibrand’s proposed legislation would give more children access to healthy summer meals by expanding the U.S. Department of Agriculture (USDA) Summer Food Service Program. The legislation would help improve nutrition and enhance learning in underserved areas by better integrating summer education and meals programs, making it easier for public-private partner organizations to participate in the summer meals program, and by providing the option of a third meal for children who attend evening enrichment programs.”

More broadly on nutrition related issues, Donald G. McNeil, Jr. indicated in today’s New York Times that, “People in some poor and middle-income countries have healthier diets than those in rich ones, but major Western snack and soft drink makers are targeting children in ways that will damage their health, according to a new series of studies on obesity.

“The studies, published last week in special issues of The Lancet and Lancet Global Health on obesity, detailed worsening food-consumption habits around the world. The research also showed how much advertising for junk foods had soared and how few countries had moved to protect their children from it.”

Also this week, the House Committee on Oversight and Government Reform will hold a subcommittee hearing on Thursday on “the Impacts of EPA Air and Water Regulations on States and the American People.”

“The hearing will specifically examine the Administration’s proposed new regulations on National Ambient Air Quality Standards for Ozone, the definition of ‘Waters of the United States,’ and power generation in the United States.”

 

Trade- West Coast Ports

Also on Thursday, the Senate Finance Committee is scheduled to hold a hearing titled, “Congress and U.S. Tariff Policy.”

Vicki Needham reported yesterday at The Hill Online that, “The nation’s top trade official made another pitch for updating trade negotiating powers as an Asia-Pacific deal moves toward the finish line.

U.S. Trade Representative Michael Froman argued that trade promotion authority provides the best avenue for Congress to shape the contents of agreements such as the Trans-Pacific Partnership (TPP), which is steadily moving toward completion.”

Recall that President Obama used his weekly address on Saturday to call on Congress to pass TPA.

Politico’s Morning Trade newsletter reported yesterday that, “Late last week, the White House hosted a phone call with reporters to extol the benefits of new trade deals for Minnesota, an agricultural powerhouse home to agribusiness giant Cargill.

“[Rep. Erik Paulsen (R., Minn.)] was an early enthusiastic supporter of a TPA bill introduced last year. But the state’s five Democratic representatives — including Collin Peterson, the ranking member of the House Agriculture Committee — all signed a letter in 2013 expressing concern about the trade legislation and the proposed Trans-Pacific Partnership free trade agreement with Japan and 10 other countries in the Asia-Pacific.

Peterson’s office did not respond yesterday to a question about how he intends to vote on trade promotion authority and the Asia-Pacific trade deal. But spokespeople for Democratic Reps. Rick Nolan and Tim Walz confirmed their opposition to TPA.”

A news release yesterday from Sen. Tammy Baldwin (D., Wis.) stated in part that, “[Sen. Baldwin] continued her efforts to protect Wisconsin and American dairy and cheese producers, meat manufacturers and brewers from trade initiatives that would change the common names for meats, cheeses, and beers Wisconsinites enjoy every day. Senator Baldwin called on the U.S. Senate Finance Committee to reject any efforts that would restrict the ability of Wisconsin producers to use the generic names that they have used for generations.”

Meanwhile, an article yesterday at The Wall Street Journal Online reported that, “Canada’s Minister of Agriculture is sharing more details on the impact a cow, recently detected with bovine spongiform encephalopathy (BSE) disease, is having on the country’s beef industry.

“At the Grainworld conference here in Winnipeg, Manitoba, on Monday morning Gerry Ritz told reporters there are five countries that have closed their doors to imports of Canadian beef.”

And, Danny Hakim reported in today’s New York Times that, “Syngenta, a Swiss chemicals company, produces one of America’s most popular herbicides. It is called atrazine, and 73.7 million pounds of the chemical compound were applied in the United States in 2013. It was used on more than half of all corn crops, two-thirds of sorghum and up to 90 percent of sugar cane.

“But Syngenta cannot sell atrazine to farms in its own backyard.”

“Syngenta, however, did not get the memo,” today’s article said, explaining that, “Even though the European Union banned atrazine over a decade ago, the company has long insisted that the pesticide was not banned. On one corporate website, Syngenta points to ‘anti-atrazine activists’ who ‘claim that ‘atrazine’ is banned in the European Union. This is patently false.’”

In other news, Peter Jamison reported yesterday at the Los Angeles Times Online that, “Southern California port officials say it could take up to three months to clear cargo that piled up during a labor dispute that threatened to cripple West Coast commerce.”

Bloomberg writers James Nash and Alison Vekshin reported yesterday that, “The backlogs may take as long as three months to untangle at the Los Angeles port, the nation’s busiest, said Executive Director Gene Seroka. The mayors of Los Angeles and Long Beach expressed concern Monday about losing business to other ports over the long run because of congestion and the possibility of another labor flare-up.”

In a statement yesterday regarding the labor agreement at the ports, Democratic Leader Nancy Pelosi (Calif.) noted that, “We are all grateful for the willingness of both the ILWU and PMA to engage in the hard work of compromise, and I congratulate Labor Secretary Tom Perez and Secretary of Commerce Penny Pritzker for their leadership in helping this agreement come together.”

House Ag Committee member Jim Costa (D., Calif.) noted yesterday that, “As a leading exporter of agricultural goods, news of this agreement was especially welcomed in the San Joaquin Valley. Our businesses, farmers, farmworkers, and manufacturers, all of which were losing millions of dollars in spoiled products and downsizing their workforce, can finally operate with the certainty that further delays are not on the horizon.”

However, Keith Laing reported yesterday at The Hill Online that, “Sen. Cory Gardner (R-Colo.) is blaming a dockworkers’ union for a contentious labor dispute that led to a partial shutdown of 29 ports on the west coast, despite a recent agreement to end the cargo slowdown.”

 

Agricultural Economy

In addition to a Reuters article on Monday noting that some Midwestern farmers were breaking farmland lease contracts with landowners due to lower commodity prices and reduced farm income, a separate article by P.J. Huffstutter and Tom Polansek stated that, “U.S. farmers nervous that slumping grain prices will crimp profits are increasingly leasing equipment instead of buying it, creating new risks for manufacturers like Deere & Co that could suffer from declining values for leased machinery.

“Farmers, facing weak markets after years of cashing in on soaring crop prices, are readjusting to a new normal in which they scrutinize every expense, particularly high-ticket items like massive shiny tractors and planters.

“The shift toward leases is the latest ripple effect from the downturn in the farming economy, which the Agriculture Department predicts will cut net farm income by more than 30 percent this year to $73.6 billion, the lowest since 2007.”

The article added that, “Switching to equipment leases allows farmers to take advantage of historically low interest rates and frees up capital for other financial needs, such as buying seed produced by companies like Monsanto Co and DuPont Pioneer, along with fertilizer and paying farmland rents.”

University of Illinois agricultural economist John Newton indicated on Monday at the farmdocdaily blog (“Projected Soybean Plantings Are Surprisingly Low“) that, “On February 20, USDA released the Grain and Oilseeds Outlook as part of the 2015 Agricultural Outlook Forum. The report includes projections of the anticipated supply and consumption of corn and soybeans for the upcoming 2015-16 marketing year. Among the highlights of this report are projections of 2015 planting intentions for corn, soybeans, and wheat.

“Current expectations are for lower commodity prices [see related FarmPolicy.com update] in the 2015-16 marketing year ($3.50/bu corn. $9.00 per bushel soybeans, and $5.10 per bushel wheat). In large part due to these lower commodity price expectations USDA projects total wheat, corn, and soybean planted acreage at 228 million acres in 2015, down 3.1 million acres from 2014.”

After additional analysis, Dr. Newton noted that, “In light of the average trade guess, USDA surprised the market by dismissing expectations for increased soybean plantings and projecting fewer soybean acres planted in 2015. For 2015, USDA projects planted acres of soybeans at 83.5 million acres. If realized, this total would represent a 200,000 acre decline from 2014, and is significantly less than the average trade guess of 86.0 million acres. With respect to harvested soybean acres, the USDA projection is for 82.6 million acres, down 500,000 acres from 2014, but 2.7 million acres less than the average trade guess of 85.3 million acres.”

 

Budget

Kristina Peterson and Andrew Grossman reported in today’s Wall Street Journal that, “Senate Majority Leader Mitch McConnell said Monday he planned to bring up a bill targeting President Barack Obama’s recent immigration policy, separating it from the Department of Homeland Security funding that Republicans have tried to use as leverage in the immigration fight so far.

“The move appeared unlikely to defuse the standoff that has paralyzed Congress for weeks, with the agency’s funding set to expire on Friday at midnight. Mr. McConnell (R., Ky.) didn’t say how he planned to address Homeland Security funding, leaving open the question of whether Congress will reach a deal to keep the agency running.”

The Washington Post editorial board noted today that, “On taking control of both houses of Congress, Republican leaders pledged to avoid further government shutdowns. They then set precisely the opposite course — a course seemingly designed to prove they are incapable of governing.”

Keith Good

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