FarmPolicy

October 22, 2014

Policy Issues; Ag Economy; Biotech; and, Biofuels

Policy Issues- Farm Bill

Sabrina Tavernise reported in today’s New York Times that, “The amount of antibiotics sold for use in livestock rose substantially in recent years, according to the Food and Drug Administration, a pattern that experts said was troubling given the efforts to battle antibiotic resistance in humans.

“In an annual report posted online on Thursday, the agency said the amount of medically important antibiotics sold to farmers and ranchers for use in animals raised for meat grew by 16 percent from 2009 to 2012.

“Most troubling, health advocates say, was a rise in the sale of cephalosporins, a class of drug that is important in human health, despite new restrictions the F.D.A. put into place in early 2012. The report showed an 8 percent increase in the sale of those drugs in 2012, confirming advocates’ fears that the agency’s efforts may not be having the desired effect. Sales of those drugs rose by 37 percent from 2009 to 2012.”

The article noted that, “The National Chicken Council, an industry group, said in a statement that the sale of antibiotics did not necessarily correlate with antibiotic resistance trends. It said that most antibiotics used in chicken production were not used in human medicine.

“The report did not differentiate by species; it included all animals raised for meat.”

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Farm Bill; Ag Economy; Biotech; Regulations; and, Political Notes

Farm Bill- Policy Issues

Aaron Stanley reported yesterday at The Financial Times Online that, “The US and Brazil agreed on Wednesday to resolve a decade-long feud over cotton subsidies, marking an end to one of the highest-profile disputes in the history of the World Trade Organisation

“‘Today’s agreement brings to a close a matter which put hundreds of millions of dollars in US exports at risk,’ said Mike Froman, US Trade Representative. ‘The United States and Brazil look forward to building on this significant progress in our bilateral economic relationship.’”

The FT article stated that, “Under the agreement [Memorandum of Understanding Related to the Cotton Dispute], the US will pay a lump sum of $300m to Brazilian cotton farmers and modify its support for domestic cotton programmes. Brazil will forfeit $829m in WTO-granted sanctions against US goods and services annually – a portion of which had been allocated for cross-retaliation against US intellectual property rights.

The $300m price tag for resolving the dispute is ‘small beer for the US’, said Frank Samolis, a trade lawyer with Squire Patton Boggs, adding that the agreement clears the slate for trade relations between the two countries after Brazil’s presidential elections, due this weekend.”

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Farm Bill; Ag Economy; Biotech; and, Regulations

Farm Bill

Reuters writer Alonso Soto reported yesterday morning that, “The United States and Brazil are close to settling a decade-old trade dispute over cotton subsidies, three Brazilian sources close to the talks told Reuters, in what would be the first concrete step to repair ties hurt by an espionage scandal.

Washington is within hours of reaching an agreement with Brazilian cotton producers demanding compensation for cotton subsidies enjoyed by U.S. growers, a senior Brazilian government official said. He asked not to be named because negotiations are ongoing.”

The article explained that, “In 2004, Brazil won a challenge against U.S. cotton subsidies at the World Trade Organization, giving it the right to impose $830 million in sanctions against U.S. products. Brazil agreed to suspend the penalty if the United States paid into an assistance fund for Brazilian cotton farmers [related background here and here].

“The United States stopped paying the monthly compensation in October due to budget disagreements in Congress, prompting the Brazilian government to threaten to slap higher tariffs on U.S. products. The retaliation would have deepened diplomatic tensions between both countries, officials and experts said at the time.”

Leslie Josephs and William Mauldin reported last night at The Wall Street Journal Online that, “Brazil and the U.S. have reached an agreement to settle a more than decade-old dispute over U.S. cotton subsidies, people familiar with the negotiations said Tuesday.

“U.S. Agriculture Secretary Tom Vilsack and U.S. Trade Representative Michael Froman will sign the agreement with their Brazilian counterparts on Wednesday, a person familiar with the agreement said.”

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Farm Bill; and, the Ag Economy

Farm Bill

House Ag Committee Ranking Member Collin Peterson (D., Minn.) was a guest yesterday on the AgriTalk radio program with Mike Adams, where the conversation focused on the Farm Bill (audio replay here, MP3- 10:17). An unofficial FarmPolicy.com transcript of yesterday’s discussion is available here.

With respect to USDA Farm Bill implementation, Rep. Peterson noted that, “The Department has put a pretty heavy focus on getting this thing done. There’s been some controversy over the APH decision, which affects Texas and down in that part of the world, that I’ve heard about. The dairy stuff I think could have got going a little bit sooner, but that’s now being actively rolled out. We have our first meeting today in my district with the FSA folks and the University of Minnesota, and I’m going to attend one of those tomorrow to kind of see how that’s all going.

“We had the Secretary here last Thursday in Minnesota, and he’s announcing at that time the PLC/ARC signup. And that’s going to take some real study on the part of farmers to make sure that they understand the implications and have as much information as they can get before they have to make the decision probably sometime after the first of the year.”

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ERS: Crop receipts forecast to fall, livestock receipts could set new records in 2014

ers

From USDA’s Economic Research Service (ERS): “Crop receipts are expected to decline 7 percent in 2014, the second annual decrease following a record high in 2012. Even with record corn production projected, cash receipts for corn are expected to decline by over 20 percent due to a significant decrease (-32 percent) in the annual average corn price. Declines in receipts are also expected for most other major crops including fruits and nuts, wheat, soybeans, and vegetables/melons. A notable exception is cotton, which is projected to recover from a significant decline in 2013. Conversely, record livestock prices are projected to drive a 15.3-percent increase in livestock cash receipts. Despite expected declines in beef production, cattle/calves receipts are expected to set a record in 2014 due to higher prices. Hog production is also expected to decline, but higher expected annual average prices drive the forecast increase in hog cash receipts. Wholesale milk and broiler receipts are expected to benefit from higher production and record annual average prices. See the Farm Income and Wealth Statistics data product for more information on USDA’s 2014 forecast for the farm economy, released on August 26, 2014.”

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Farm Bill; Ag Economy; and, Biotech

Farm Bill

On Friday, Don Wick, of The Red River Farm Network (RRFN), spoke with Secretary of Agriculture Tom Vilsack about Farm Bill issues.

An audio replay of the RRFN discussion can be found here, while an unofficial FarmPolicy.com transcript of the conversation with Don Wick and Sec. Vilsack is available here.

In part, Sec. Vilsack indicated that, “As you know, direct payments, Don, are gone, replaced by a real focus on crop insurance and these new safety net programs, the Agricultural Risk Coverage program and the Price Loss Coverage program. Producers will have, starting Monday, the opportunity to reallocate—I should say the owners of the property have the opportunity to reallocate base acres and to adjust yields, and they’ll have that opportunity from September 29th to February 27, 2015. Starting on November 17, 2014, and continuing at least until March 31st of 2015, they’ll have the opportunity to make the election as to which of these safety net programs is best for their operation.

“To aid them in making that decision between now and the time they make the decision, we are also announcing the availability of an online tool that has been developed by several land grant universities and food policy councils that will allow producers to plug in numbers that are very specific to their own operation.”

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Farm Bill; Ag Economy; and, CFTC

Farm Bill

AP writer David Pitt reported yesterday that, “Farmers can start as early as next week on signing up for new safety net programs that U.S. Agriculture Secretary Tom Vilsack said replaces the much-criticized direct payments with government payouts based on the risks farmers face.

“Vilsack traveled to St. Paul, Minnesota, to hold a news conference to announce the rollout of the programs on Thursday. He held a conference call with reporters to further discuss the programs and answer questions. The programs were established in the 2014 farm bill and will allow farmers to protect themselves against commodity price drops and from lower revenue in poor crop years.

Payouts this year could be significant since anticipated record corn and soybean harvests have sent prices plummeting. At current prices many farmers are likely to lose money, a scenario that will enable them to collect government payments.”

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

Policy Issues

Jonathan Oosting reported yesterday at the MLive Media Group Online that, “Some 150,000 Michigan families are poised to lose an average of $76 in food stamp benefits this fall due to federal cuts that many other states have taken action to avoid.

“The latest farm bill, signed into law here in Michigan last winter, scaled back the Supplemental Nutrition Assistance Program, which includes a provision affording extra food benefits to families who also receive assistance with heating bills.

“Some families who rent don’t have utility bills, but states had been able to help them qualify for extra food stamps by providing just $1 in heating assistance. Under the new farm bill, the minimum ‘heat and eat’ payment is jumping to $21.”

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Ag Economy; Policy Issues; Climate; and, Political Notes

Agricultural Economy

Gregory Meyer reported yesterday at The Financial Times Online that, “Illinois is at the centre of an astonishing rebound in global grain supplies. After almost a decade of shortfalls and price rises, agricultural commodities have declined to the cheapest in four years. The new abundance will have broad effects, weakening incomes of farmers and companies that supply them, fattening profit margins at food and biofuel companies and – eventually – slowing food price inflation for consumers in rich and poor countries alike.

“As the largest agricultural exporter, the US sets the direction for world markets, traders say. Illinois and other states in America’s Midwestern ‘corn belt’ are on track to produce a record US corn harvest for a second consecutive year. The soyabean crop will also be the largest ever, the government predicts.”

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Policy Issues; Ag Economy; and, Regulations

Policy Issues

Marcia Zarley Taylor reported yesterday at the DTN Minding Ag’s Business blog that, “Plunging commodity prices are resetting potential corn payments under various Farm Bill options for 2014. The new calculations also point out how precarious price forecasting can be in assessing which farm program option fits each FSA farm. That’s why so many experts encourage growers to wait until December or January before making a firm commitment to their farm program choices.

“‘By the end of January, the estimate for 2014/15 spring planted crops will be ‘very’ accurate,’ says Kansas State University economist Art Barnaby. And although USDA hasn’t announced signup dates, it’s unlikely signup will occur before January.

Whether ARC or PLC provides better protection is still a moving target. ‘When the Farm Bill was signed last February, it seemed like 2014-crop prices would make [farm supports] largely irrelevant for corn producers. Maybe it would be relevant for wheat and sorghum and solid for rice,’ Brad Lubben, a University of Nebraska economist and director of the North Central Risk Management Education Center in Lincoln, Neb. ‘Six months of bearish price news since then has raised the safety net for corn.’”

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Policy Issues; Ag Economy; Biotech; and, Biofuels

Policy Issues

Late last week, Ron Hays, of The Oklahoma Farm Report and Radio Oklahoma Network, spoke with House Ag Committee Chairman Frank Lucas (R., Okla.) about Farm Bill issues.

An audio replay and summary of the Chairman’s remarks from Thursday can be found here, while an unofficial FarmPolicy.com transcript of the conversation with Ron Hays and Chairman Lucas is available here.

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Policy Issues; Ag Economy; and, Political Notes

Policy Issues

Tennille Tracy and Thomas M. Burton reported in today’s Wall Street Journal that, “The White House unveiled new measures on Thursday to try to preserve the effectiveness of infection-fighting drugs as strains of bacteria become increasingly resistant to the existing arsenal of antibiotics.

“The moves signal a growing concern over drug-resistant infections, which are linked to two million illnesses and 23,000 deaths in the U.S. each year, according to the Centers for Disease Control and Prevention. Some infections are almost entirely untreatable because the appropriate antibiotics have been rendered powerless.”

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Policy Issues; Ag Economy; Biotech; Regulations; and, Political Notes

Policy Issues

A news release yesterday from the House Ag Committee stated that, “Today, Chairman Frank Lucas held a public hearing to review the implementation of state pilot projects under the Supplemental Nutrition Assistance Program (SNAP) of the Agricultural Act of 2014. SNAP is designed primarily to increase the food purchasing power of eligible low-income households to help them buy a nutritional, low-cost diet. One of the reforms in the 2014 Farm Bill included new Employment and Training pilot projects. They allow for up to ten states to develop and test methods to help adults secure employment and job training and reduce their dependency on SNAP.”

Chairman Lucas noted at yesterday’s hearing that, “The Agricultural Act provides up to ten states, with up to $200 million, to operate pilot projects designed to help SNAP recipients prepare for and go to work. The law explains that the approved pilot projects must cover a range of geographic areas, include a mix of voluntary and mandatory participation, and include an assortment of methods designed to promote work.”

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Ag Economy; Policy Issues; Biotech; and, Political Notes

Agricultural Economy

Somini Sengupta reported yesterday at The New York Times Online that, “More than 800 million people worldwide do not get enough to eat, even as the world produces more than twice as much food as it needs, according to new figures released Tuesday by the United Nations.

Hunger has declined slowly over the last decade: 11.3 percent of the world’s population was clinically undernourished in the 2012-14 period, down from 18.7 percent in the 1990-92 period. Hunger keeps its hold on a handful of countries. Chad, Central African Republic and Ethiopia have some of the highest rates of undernourished people. A relatively large percentage of the population remains hungry across South Asia.”

The Times article explained that, “Feeding the world is no longer a question of growing more food. The Food and Agriculture Organization, one of the three agencies that produced the report, says the world produces twice the amount of food that the population needs. The problem is poverty.”

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Policy Issues; Ag Economy; Biotech; and, Regulations

Policy Issues

Emma Dumain, Megan Scully, and Matt Fuller reported yesterday at Roll Call Online that, “After postponing consideration last week of a stop-gap spending measure to fund the government past Sept. 30, House GOP leaders are poised in the days ahead to bring that same piece of legislation to the floor.”

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Biotech; Policy Issues; Ag Economy; and, Political Notes

Biotech

Neil Hume and Gregory Meyer reported on Friday at The Financial Times Online that, “Cargill, one of the largest suppliers of agricultural products and food, is seeking damages from Syngenta in a state court in the US over a biotech seed it claims has almost brought the country’s corn trade with China to a halt.

“Late last year, China started to turn away imports of US corn on the grounds they could contain a genetically modified seed that had not been approved for use in the country.

“The product called Agrisure Viptera had been developed by Syngenta and was designed to protect crops from common pests.”

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