Jonathan Weisman reported in Saturday’s New York Times that, “House Republicans return from spring recess next week to face the difficult — some say impossible — task of filling the gaping holes in the House-passed budget, including figuring out how to slash income tax rates without costing the government any money and finding nearly $3 trillion in savings from entitlement programs over the next decade.
“The budget, which passed the House last month and has since become a central focus of the presidential campaign, has faced blistering criticism for steep cuts to federal programs, including a blast from President Obama, who called it ‘thinly veiled social Darwinism.’”
Mr. Weisman pointed out that, “A half-dozen committees will begin drafting legislation to meet a budget-mandated $261 billion in savings over the next decade to stave off scheduled across-the-board cuts to the military in January.”
“The Agriculture Committee must slice $33.2 billion from its programs, most likely focusing on nutrition and food stamps,” the article noted.
An update at the House Agriculture Committee webpage indicated that the Committee Members will meet on Wednesday morning “to consider a proposal to satisfy the Committee’s reconciliation instructions required by H. Con. Res. 112.”
University of Illinois Agricultural Economist Nick Paulson indicated yesterday at the farmdoc daily blog (“Graphical Illustrations of Proposed Farm Revenue Programs and Crop Insurance”) that, “It is likely the Commodity Title of the next Farm Bill will include a program designed to provide protection against declines in farm revenues from some sort of guarantee based on historical averages. While the specific parameters of such a program will continue to be debated, two distinct program design themes have emerged and been coined ‘deep loss’ and ‘shallow loss’ programs.
“Previous farmdoc daily posts have estimated payments levels and timing associated with these types of programs (here, here, and here) and discussed the differences between the multi-year price protection offered by these revenue programs and the within-year price risk protection offered through crop revenue insurance (here, here, and here). However, based on some recent comments and questions received regarding the outlook for changes to Commodity Title programs, it is apparent that there exists confusion over the basic concepts behind the deep and shallow loss design alternatives. Today’s post provides a simple graphical illustration of how both types of programs address revenue risk, and how they may work with the existing crop insurance program.”
Gardiner Harris reported in today’s New York Times that, “Farmers and ranchers will for the first time need a prescription from a veterinarian before using antibiotics in farm animals, in hopes that more judicious use of the drugs will reduce the tens of thousands of human deaths that result each year from the drugs’ overuse.
“The Food and Drug Administration announced the new rule Wednesday after trying for more than 35 years to stop farmers and ranchers from feeding antibiotics to cattle, pigs, chickens and other animals simply to help the animals grow larger. Using small amounts of antibiotics over long periods of time leads to the growth of bacteria that are resistant to the drugs’ effects, endangering humans who become infected but cannot be treated with routine antibiotic therapy.”
Yesterday the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions. Commonly referred to as the “Beige Book,” the report included the following observations with respect to the U.S. agricultural economy:
Sixth District- Atlanta: “While conditions improved in parts of the District, much of Georgia and Florida continued to experience varying degrees of drought. Contacts also reported that Florida citrus growers continued to fight greening disease. Prices paid to farmers for poultry and soybeans were up from the previous reporting period. Contacts continued to report concerns regarding available labor supplies in Georgia and Alabama, attributing this to the tougher immigration laws.”
Seventh District- Chicago: “Unseasonably warm weather has jumpstarted field work and corn planting in the District. There were reports of tight supplies of some agricultural chemicals, as well as some types of corn seed. Most of the District has sufficient moisture for a strong start to the corn crop. With spring planting taking place up to a month early, some corn will be harvested in August; combined with the potential of a record corn crop, concerns about corn stocks being low before the traditional harvest time diminished and corn prices moved lower. Soybean prices have risen in response to lower-than-expected harvests in South America. The increase in soybean prices relative to corn prices, as well as some acreage being removed from environmental protection restrictions, resulted in an increase in the number of acres that famers expect to plant in soybeans. Milk and hog prices decreased, while cattle prices continued to rise.”
Eighth District- St. Louis: “Monthly output of commercial red meat in the District for February 2012 increased 9.9 percent compared with February 2011. However, monthly output of commercial red meat declined 4.4 percent between January and February 2012. The number of chickens slaughtered and the total live weight also decreased by 4 to 5 percent between January and February 2012.”
Ninth District- Minneapolis: “Agricultural conditions remained strong. Cattle ranchers benefited from both high beef prices and strong export demand as well as ideal weather for the calving season. Drought conditions remained in Minnesota, the Dakotas and western Wisconsin, but were abated somewhat by recent rain and snowfall. Drier conditions may actually lead to increased corn plantings in the eastern Dakotas by making long- flooded fields available. Unseasonably warm weather has led to reports of early spring wheat plantings in some areas. Prices received by farmers for wheat, corn, dry beans, cattle, hogs, eggs and poultry increased in March from the previous month, while dairy prices fell for the month and the year.”
Tenth District- Kansas City: “Agricultural growing conditions improved since the last survey. Scattered rains increased soil moisture levels in many areas, although drought conditions persisted in some western areas of Kansas and Oklahoma. Winter wheat development was ahead of normal with most of the crop upgraded to good condition. Mild winter weather was favorable for calving and encouraged forage growth, reducing the need for supplemental feeding. Spring field work began early, and crop prices moved higher. Low cattle inventories trimmed beef production, and strong domestic and export demand pushed up cattle and hog prices. Operating loan demand declined as many producers used cash to buy crop inputs. Farmland values rose further and were expected to remain at record highs.”
Eleventh District- Dallas: “Rainfall continued to ease drought conditions in many parts of the District. West Texas did not receive much moisture, however, and the severity of drought there worsened over the reporting period. Prospects for 2012 crops are improved due to better soil moisture, and producers will have more flexibility with what to plant.”
Twelve District- San Francisco: “Final sales and orders were robust for a broad range of crop and livestock products, and recent precipitation has eased concerns in parts of the District about drought during the upcoming growing season. Contacts noted increases in the costs of some inputs, such as fertilizer.”
Rep. Tim Huelskamp (R., Kans.), a freshman member of the House Agriculture Committee, was a guest on yesterday’s AgriTalk radio program with Mike Adams where the discussion focused on the upcoming Farm Bill field hearing in Kansas, as well as other Farm Bill issues. An audio replay of this portion of yesterday’s AgriTalk discussion with Rep. Huelskamp and Mike Adams is available here (MP3- 10:20), while an unofficial transcript of the conversation can be downloaded here.
Brett Neely reported yesterday at Minnesota Public Radio (MPR) Online that, “Farmers may face some uncertainty by harvest time as Congress grapples with rewriting the farm bill before it expires in September. On the table are big cuts in federal farm spending.”
“At a recent field hearing in Arkansas, House Agriculture Committee Chairman Frank Lucas, an Oklahoma Republican, sounded optimistic.
“‘We don’t have an easy road ahead of us but I’m confident that by working together we can craft a farm bill that continues to support the success story that is American agriculture,’ Lucas said.”
Rep. Tom Rooney (R., Fla.), the Chairman of the House Agriculture Subcommittee on Livestock, Dairy and Poultry, was a guest on yesterday’s AgriTalk radio program with Mike Adams where a portion of the discussion focused on Farm Bill issues. An audio replay of this portion of yesterday’s AgriTalk discussion with Chairman Rooney and Mike Adams is available here (MP3- 6:42), while an unofficial transcript of this portion of the conversation can be downloaded here.
With respect to the prospects of completing a Farm Bill by September, Chairman Rooney indicated that, “Well, despite the fact that this Congress has been very partisan and very polarized, I am somewhat optimistic that because our chairman, Chairman [Frank] Lucas [R., Okla.], has been able to work with Democrats in the Senate previously this year on what language would be and what cuts would be made, that there is a framework in place right now, as we speak, at least amongst members of the House and the Senate, on the agriculture committees.
“Whether or not we can expand that to getting enough votes in the greater House and the Senate and send something to the president remains to be seen, but I think that the Senate is going to start taking this up in April and May, and then we will begin to take it up in May and June. That’s what Chairman Lucas has told me.”
Chairman Rooney added that, “But again, trying to be the optimist here, we do have some agreements, we do have some framework in place, and a lot of members on both sides of the aisle that represent agricultural districts tend, from what I understand – and this is my first farm bill – to put partisanship aside for this kind of a vote.”
Carol E. Lee reported in today’s Wall Street Journal that, “President Barack Obama delivered a blistering critique of the House Republican budget Tuesday, calling it a ‘radical’ proposal, ‘a Trojan horse’ and ‘a prescription for decline’ and tying it directly to Mitt Romney, the GOP candidate the White House believes Mr. Obama will face in November.”
The Journal article noted that, “House Speaker John Boehner (R., Ohio) dismissed Mr. Obama as ‘unserious’ about tackling the country’s economic challenges because he is focused on campaigning over governing.”
Reuters writer Tom Polansek reported yesterday that, “North Dakota farmer Justin Zahradka will plant wheat this spring on 40 acres that has been off-limits for two decades, protected by a government conservation program that is shrinking as high crop prices make farmland more valuable.
“The 18-year-old high school senior leased the land a year ago from a neighbor who opted not to re-enroll it in the federal Conservation Reserve Program, a scheme that pays farmers and landowners nearly $2 billion annually to leave land idle in order to protect wildlife and the environment.
“After loosening up the soil with vegetables last year, he has high hopes for a good harvest. His acres are part of a total 1.7 percent rise in the number of acres of U.S. field crops that farmers are projected to plant this spring, according to Friday’s annual U.S. Agriculture Department plantings survey.”
Four GOP members of the House Agriculture Committee (Chairman, Frank Lucas (Okla.), Randy Neugebauer (Tex.), Marlin Stutzman (Ind.), and Rick Crawford (Ark.)) held a Farm Bill field hearing on Friday at Arkansas State University in Jonesboro, Ark.
At the opening of the hearing, Chairman Lucas pointed out that, “Today, we’ll hear from a wide variety of producers from across the Southeast. I expect we’ll hear a different perspective than we got in the Northeast and Midwest.
“That’s why it’s so important that we offer a choice of policy options. The broad range of agricultural production makes our country strong, but it also creates challenges when we’re trying to write a single Farm Bill to support so many different regions and commodities.”
Naftali Bendavid and Damian Paletta reported in today’s Wall Street Journal that, “The House approved a Republican budget Thursday after a heated two-day debate that underlined the nation’s political divide and forecast a battle at year’s end over an array of scheduled spending cuts and tax increases.”
The article noted that, “The plan almost certainly won’t become law, given opposition by President Barack Obama and Senate Democrats, but both parties say it will help frame the campaign for the White House and control of Congress. Each side is counting on the November election to give them an upper hand in the debate.
“The vote was 228-191, with all Democrats and 10 Republicans opposing the GOP budget.”
Jonathan Weisman reported in today’s New York Times that, “Under the Ryan plan, spending would be cut $5.3 trillion below President Obama’s budget through 2022. Medicare would be reduced by $205 billion. Medicaid and other health programs would be cut $770 billion. Other entitlement programs, including welfare, food stamps, agriculture subsidies and transportation, would be cut by nearly $2 trillion.”
Daniel Newhauser reported today at Roll Call Online that, “The House floor today will become the Baskin-Robbins of budgets: Every political persuasion has its own flavor.
“Members have already said they will double-dip and vote for multiple spending plans, but with seven budgets to consider during floor debate, it is becoming increasingly clear that Budget Chairman Paul Ryan’s blueprint is the only one that can pass the chamber.
“Even if the Wisconsin Republican’s $1.028 trillion plan wins out, however, it would be a symbolic victory at best. Democratic leadership has pointed out that last summer’s Budget Control Act is the law of the land and they and the Senate will stick to its $1.047 trillion level.”
Katie Micik reported yesterday at DTN that, “Farmers are coming off one of their most profitable years in history and few expect a repeat, according to the latest DTN/The Progressive Farmer Agriculture Confidence Index.
“They remain cautiously optimistic, with an overall survey value of 108.5, but show great divides when asked about their present situation and their expectations for the future. Farmers assess their present situation at a strongly positive value of 140.2, while expectations for the next 12 months notch a pessimistic low at 87.4.
“A value of 100 is considered neutral with higher values indicating optimism and lower values indicating pessimism. DTN surveyed 500 farmers and ranchers across the country between Feb. 27 and March 9. DTN conducts the survey before planting, before harvest and after harvest.”
Farm Bill: House Agriculture Committee Field Hearing- Illinois
Producers Seek Certainty- While Advising, “Do No Harm.”
After a mild winter and unseasonably warm spring, in which a few Midwestern producers have already started to plant corn, five members of the House Agriculture Committee (Chairman, Frank Lucas (R., Okla.), Leonard Boswell (D., Iowa), Mike Conaway (R., Tex.), Randy Hultgren (R., Il.) and Bobby Schilling (R., Il.)) came to the 17th Congressional District on Friday to hear farm policy testimony from grain and livestock producers as the 2008 Farm Bill’s expiration draws closer.
Producers sought to assist lawmakers in an effort to bring policy clarity and direction in the midst of an increasingly volatile agricultural environment. Illinois farmer David Erickson stated that, “I encourage your continued work to complete the farm bill legislation this year and to make it a five-year program that doesn’t rely on temporary extensions,” while Bill Gerard indicated that, “I’d like to see us pass a five year farm bill this year. We farmers are businessmen, and we depend on the stability and certainty of long term farm policy.” Minnesota farmer John Mages added that, “We need a five year farm bill for the same reason we need long term tax policy. We need to be able to go to the banker and be able to make plans for the future.”
David Rogers reported yesterday at Politico that, “Did no one learn anything from last summer? Did 2011 not happen?
“It can seem that way in Congress these days as Republicans bring their new budget resolution to the House floor next week, hoping to push the reset button on Medicare reform and score a trifecta by rewriting the debt deal struck with President Barack Obama last August.”
Mr. Rogers stated that, “Leading the charge is House Budget Committee Chairman Paul Ryan, who is most passionate about getting Washington refocused on long-range entitlement changes. But to protect himself on the right, the Wisconsin Republican risks taking the House in the opposite direction, back to the same divisive fights over appropriations that consumed much of last year.
“In a single stroke, Ryan would unilaterally lower the spending caps set for 2013, shift billions more to defense than prescribed under the 2011 Budget Control Act and roll back across-the-board spending cuts due in January by substituting a new formula — also designed to shield the Pentagon.”
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Posted by Keith Good • April, 16, 2012 • 3:38 am 