FarmPolicy

December 12, 2019

FAO Food Price Index Declines…Again

A news release on Thursday from the Food and Agriculture Organization of the United Nations (FAO) stated that, “The FAO Food Price Index declined to a 55-month low in February, dropping 1.0 percent from January and 14 percent below its level a year earlier.

“Lower prices for cereals, meat and especially sugar more than offset an increase in milk and palm oil prices.

“The FAO Food Price Index averaged 179.4 points in February, down from 181.2 points in January and 208.6 points in February 2014.”

The update explained that, “Its ongoing decline – to its lowest level since July 2010 – reflects robust supply conditions as well as ongoing weakness in many currencies versus the U.S. dollar, which appear set to continue, said Michael Griffin, FAO’s dairy and livestock market expert.”

Bloomberg writer Rudy Ruitenberg reported on Thursday that, “‘We’re looking forward to very good crops in many countries,’ Concepcion Calpe, an FAO economist in Rome, said by phone Thursday. ‘Supplies appear to be very, very abundant and more than sufficient to cover the expected demand. With the kind of reserves we have today, it would take a lot of changes in the forecast to change the trend’ for food prices, she said.

“A gauge of grain costs dropped 3.2 percent from January and is down 14 percent from a year earlier, the report showed.”

The Bloomberg article added that, “Global grain production rose 0.8 percent to 2.542 billion metric tons last year, 0.3 percent higher than the agency’s previous estimate, it said in a separate report. World stockpiles will climb 8.6 percent to 630.5 million tons by the end of June, a second consecutive annual increase.”

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Update on the Iowa Ag Summit

In a two page article, with several helpful graphics, Donnelle Eller and Christopher Doering reported in Thursday’s Des Moines Register that, “Bruce Rastetter, the man behind the Iowa Agriculture Summit, is determined not to give away too much about the farm issues he will press potential presidential candidates to discuss Saturday in Des Moines.

“Undoubtedly, Rastetter will pepper the nation’s top Republican contenders about their support for ethanol and biodiesel. Biofuels are a political hot potato that either cuts our need for foreign oil and creates rural jobs or is unnecessary because of higher domestic production, depending on which expert you talk with.

But there’s a host of other issues the presidential aspirants must prepare for: free trade, immigration, conservation, biotechnology and food labeling, government subsidies, wind and solar power, and livestock production and animal welfare, Rastetter said.”


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The Register article indicated that, “Here’s a closer look at five top ag issues:

“1. Immigration

“The issue: Farm organizations say an overhaul is needed to protect undocumented agricultural workers, but it should come from Congress, not the White House. President Barack Obama tried to use his executive power to protect millions of undocumented immigrants from deportation last November, but it provided minimal relief to agriculture and has been overturned by a Texas judge. During the last Congress, the Senate passed a new immigration reform bill, but the Republican-led House failed to act.”


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Thursday’s article noted that, “2. Water quality

“The issue: Despite assurances otherwise from the EPA, agricultural groups contend the federal Waters of the U.S. rule would expand the ‘navigable waters’ protected by the Clean Water Act to include not only rivers and lakes but also ditches, stream beds and self-made ponds that carry water only when it rains. Farmers say they would face higher costs for environmental assessments and would need to apply for permits to allow them to till soil, apply fertilizer or engage in some conservation practices.”


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The article continued, and pointed to: “3. International trade

“The issue: Republicans and the White House have pledged to work together, and one indication of that sincerity could be trade. While much of the attention in recent months has fallen on Cuba, where Obama has proposed to normalize trade relations, a bigger boon to agriculture could come through the Trade Promotion Authority. The so-called fast-track authority, which expired in 2007, would allow Obama to negotiate trade deals, and submit them to Congress for a vote.”


(Click here for large, full screen view).

Next on the Register list: “4. Biotechnology & labeling

“The issue: If more states require labeling of foods made with genetically modified ingredients, Congress could be pressured to establish a uniform, nationwide law regulating the controversial technology found in much of the U.S. food supply.”

And lastly, Thursday’s article indicated that, “5. Ethanol mandate

“The issue: Lawmakers and oil trade groups led by the American Petroleum Institute are opposed to the Renewable Fuel Standard, a mandate that requires a certain amount of the largely corn-based fuel to be blended into the gasoline supply. They are pushing ahead to change or repeal the 8-year-old law popular with farmers and rural America. But change appears difficult. Many newly elected Republicans support the existing measure.”

Also in today’s Register, Kathie Obradovich stated in a column that, “Presidential candidates need to do more than just wear a seed-corn cap and get their eggs in the right baskets on farm issues to impress Iowa Secretary of Agriculture Bill Northey and other Iowa voters.

“‘I wouldn’t want somebody to just walk in and say, ‘I’m against California on eggs, I’m for RFS,’ and just check the boxes trying to get the positions right,’ Northey, a Republican, said. ‘They better explain why … and they should be able to fit that into their overall philosophy of government, if they’ve thought through those things.’

Ms. Obradovich added that, “What does hurt is if a candidate gets caught trying to pretend that playing Farmville on their phones somehow makes them the next John Deere. The gaffes stand out like Gucci loafers at the Iowa State Fair.”

Meanwhile, Geoff Earle reported on Wednesday at the New York Post Online that, ” Former Gov. George Pataki is about to join a throng of potential Republican presidential candidates appearing at high-profile speaking events in South Carolina and Iowa – and he’ll be emphasizing his down-on-the-farm roots.

“‘I’m from New York and I probably spent more of my life on a farm than anybody out there,’ Pataki told The Post, referring to rival Republicans, days before heading out to one GOP event, the Iowa Agriculture Summit.”

The Post update noted that, “Pataki grew up on a family Peekskill farm with ‘everything from corn to tomatoes starting with strawberries in the spring and running through apples and pumpkins in the fall.’ Now, he and his wife, Libby, run a farm that sells cherries, hay, and has 85 head of cattle.

“‘We’re doing grass-fed free range, hormone-free beef. I am not unaccustomed to getting my hands dirty on a farm,’ said Pataki, who also has a successful government consulting and legal practice.”

And Bloomberg writers Julie Bykowicz and Alan Bjerga reported on Thursday that, “The summit dovetails with efforts by Iowa Governor Terry Branstad, a Republican who is close to Rastetter, to start a grass-roots effort to make ethanol a central issue in the Iowa caucuses next January, traditionally the first vote of the presidential primary season. Earlier this year, Branstad announced the formation of a new group, America’s Renewable Future, which intends to mobilize a pro-ethanol army of 25,000 people from each party to participate in the caucuses. The group is backed by Growth Energy, the most active ethanol lobby, and headed by Branstad’s son Eric, who was Iowa field director for the 2004 Bush-Cheney campaign. He says he plans to open an office in each of Iowa’s 99 counties. ‘We can get our message into the coffee shops where the candidates are,’ Eric says. ‘Then we can use Iowa’s unique status to teach the rest of the country how important ethanol is.'”

Beth Reinhard reported on Thursday at The Wall Street Journal Online that, “For decades, presidential candidates have bowed to Iowa’s corn-based ethanol industry while campaigning in a state where corn is king.

But several of the likely Republican candidates slated to address the state’s agricultural industry on Saturday backed the sunset of ethanol subsidies in 2011, and many oppose the industry’s new sacred cow: the renewable-fuel standard, which requires blending ethanol and other biofuels into the gasoline supply.

“How the likely White House contenders navigate the issue will signal how much Republican politics are now driven by the party’s conservative base, which balks at government interference in the marketplace. Two GOP contenders who want to phase out the renewable-fuel standard, Florida Sen. Marco Rubio and Louisiana Gov. Bobby Jindal, are skipping the event.”

The Journal article added that, “Former Florida Gov. Jeb Bush, who is making his first trip to Iowa since flagging his White House ambitions, doesn’t appear to have publicly commented on the fuel standard, which was signed into law by his brother, former President George W. Bushf. However, the former Florida governor praised Republican presidential candidate Tim Pawlenty for ‘truth-telling’ when he advocating phasing out ethanol subsidies in 2011…Longstanding support among presidential candidates for Iowa’s agricultural interests began to crack in the 2008 campaign, when Republican Sen. John McCain opposed federal ethanol subsidies that totaled $6 billion a year.”

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Thursday Morning Update: Policy; Ag Economy; Trade; Regs; and, Political Notes

Policy Issues

A House Ag Committee news release yesterday stated that, “Today, Chairman of the Agriculture Committee K. Michael Conaway (TX-11), Nutrition Subcommittee Chairwoman Jackie Walorski (IN-2), and Livestock and Foreign Agriculture Subcommittee Chairman David Rouzer (NC-7) sent a letter to Agriculture Secretary Tom Vilsack and Health and Human Services Secretary Sylvia Burwell raising concerns about recommendations received from the Dietary Guidelines Advisory Committee (DGAC).

“‘Members of the Dietary Guidelines Advisory Committee greatly exceeded their scope in developing recommendations,’ Chairman Conaway said. ‘The Secretaries share responsibility for these flawed recommendations because they failed to keep the Committee focused on nutritional recommendations and away from areas such as sustainability and tax policy, which are outside of the Committee’s purview. At a time when consumers are already subjected to conflicting and often contradictory nutrition and health information, the dietary guidelines must provide the public with realistic, science-based recommendations. Given the grave concerns that have been raised, more time is needed for public comment, and those comments should be fully reviewed and considered.’”

Also yesterday, House Appropriations Subcommittee on Agriculture Chairman Robert Aderholt (R., Ala.) turned his attention to the Dietary Guidelines during a hearing where FDA Administrator, Dr. Margaret Hamburg, presented budget related testimony.

During the discussion portion of yesterday’s hearing, Chairman Aderholt noted that, “Let me switch over to dietary guidelines. The Department of Health & Human Services, and of course FDA is a part of that, has a lead role in developing the dietary guidelines for Americans in 2015. The Secretary of Agriculture appeared before this subcommittee, was sitting where you are sitting just about a week ago. He made a commitment to adhere to the statutory directive for developing the dietary guidelines for Americans. And as he put it, and this was his quote, “I know my role and I will color within the lines.”

Chairman Aderholt went on to ask Dr. Hamburg: “Can we get an assurance from the Department of Health & Human Services that the final report would include only nutrient and dietary recommendations and not include environmental factors and other extraneous material?”

A complete transcript of the exchange between Chairman Aderholt and Dr. Hamburg on the Dietary Guideline issues can be found in this update that was posted yesterday at FarmPolicy.com.

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Update on Recent Regulatory Issues

Categories: Regulations

On Wednesday, the Senate Committee on Environment and Public Works held an oversight hearing to review the President’s budget request for the EPA.

An update yesterday from Sen. Mike Rounds (R., S.D.) stated that, “[Sen. Rounds], a member of the Senate Environment and Public Works (EPA) Committee, today had the opportunity to question Environmental Protection Agency (EPA) Administrator Gina McCarthy about the agency’s process for determining the economic impact when proposing major new rules. In addition, he asked her to clarify EPA’s contradictory statements about the public comments received on the proposed Waters of the U.S. rule. Misleading statements could confuse the public into thinking the proposed rule, which received overwhelmingly negative feedback, was more favorable than EPA portrayed.

And a news release yesterday from Ag Committee Chairman Pat Roberts (R., Kan.) stated that, “U.S. Senators [Roberts], Heidi Heitkamp (D-N.D.), and Jerry Moran (R-Kan.) today introduced bi-partisan and bi-cameral legislation eliminating a burdensome regulation that requires agriculture industry professionals to obtain a hazardous material endorsement before transporting diesel fuel critical for a number of agricultural operations.”

Also yesterday, Sen. John Thune (R., S.D.) “introduced a bill to prevent the U.S. Fish and Wildlife Service (FWS) from listing the northern long-eared bat under the Endangered Species Act (ESA).”

An update yesterday from Sen. John Boozman (R., Ark.) indicated that, “U.S. Senators [Boozman], Tom Cotton (R-AR) and 21 of their colleagues questioned U.S. Fish & Wildlife Service (Service) Director Dan Ashe [related letter here] regarding the agency’s consideration of the Northern Long-Eared Bat’s (NLEB) addition to the endangered species list. These bats can be found across the entire state of Arkansas, and activities throughout most of our state could be impacted by the current proposals from the Service.”

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