January 18, 2020

FAPRI Baseline; Biofuels; Disaster Payment Issues; Climate Change; the Farm Bill; and Trade

FAPRI Baseline Update

A University of Missouri news release from yesterday stated that, “The livestock sector can lead the agricultural economy to higher net farm income, assuming the farm economy benefits from a recovering general U.S. economy.

“That analysis tops a 2010 baseline report prepared by the University of Missouri Food and Agricultural Policy Research Institute (FAPRI). The 66-page report will be delivered to the U.S. Congress, Tuesday (Mar. 9). The 10-year baseline shows economic possibilities for livestock, crop and biofuels under certain assumptions.

“‘If jobs–and consumers–return, the agricultural sector will benefit,’ said Pat Westhoff, co-director of MU FAPRI. ‘Higher incomes increase the demand for food, feed, fiber and fuel, supporting farm commodity prices.’”


Climate Change; Trade- Cotton Case; and Animal Agriculture

Climate Change- Administrator Jackson’s Perspective

Reuters writer Timothy Gardner reported yesterday that, “The Environmental Protection Agency chief fought back on Monday against Senate attempts to challenge the agency’s authority to regulate greenhouse gas emissions, saying delaying action would be bad for the economy.

“President Barack Obama has long said the EPA would take steps to regulate greenhouse gases if Congress failed to pass climate legislation. The bill faces an uncertain future in the Senate amid opposition from fossil fuel-rich states.

“Senator Lisa Murkowski, a Republican from oil-producing Alaska, has introduced legislation to stop EPA from taking steps under the Clean Air Act on climate pollution from tailpipes and smokestacks.”


Sec. Vilsack- Trade; Climate Issues; and Crop Insurance

Sec. Vilsack- USDA Perceptions

DTN editor-in-chief Urban C. Lehner noted on Friday that, “Our agriculture secretary has been taking verbal abuse from all directions. When he defended transgenic seeds before a crowd of local-food activists last October, they booed him. When he included organic and local-food speakers at USDA’s annual Outlook meeting in late February, the traditional production-ag types acted as if USDA had been taken over by aliens.”

Unlike his critics in the alternative-ag community, he understands that feeding a growing world population will require increases in agricultural productivity that going local and going organic won’t provide. Unlike his traditional-ag critics, he realizes that agriculture has a role to play in preserving the environment, and to play it well will require adopting the best ideas from a variety of agricultural approaches, including the local and organic movements.

“‘I have two sons, and I love them both,’ Vilsack has said of the competing schools of how agriculture should be practiced.”


Rep. Adrian Smith; Climate Issues; Farm Bill-Ag Economy; and Trade

Five GOOD Minutes- Interview with Rep. Adrian Smith (R-Neb.)

On Friday afternoon (Feb. 26), spoke with Nebraska GOP Congressman Adrian Smith.

Congressman Smith, who serves on the House Agriculture Committee, represents Nebraska’s Third Congressional District, one of the largest agricultural districts in the country.

To listen to our discussion, which covered budget issues, crop insurance and biofuels, just click here (MP3- 5:00).


ERS 2009 Farm Sector Income Forecast; Climate Issues; and SNAP (Food Stamp) Issues

Editor’s Note: Happy Thanksgiving, FarmPolicy will return on Friday.

ERS 2009 Farm Sector Income Forecast

The U.S. Department of Agriculture’s Economic Research Service (ERS) updated its 2009 farm sector income forecast yesterday.

ERS stated that, “Net farm income is forecast to be $57 billion in 2009, down $30 billion (34.5 percent) from 2008. The 2009 forecast is $6.5 billion below the average of $63.6 billion in net farm income earned in the previous 10 years. Still, the $57 billion forecast for 2009 remains the eighth largest amount of income earned in U.S. farming. The top five earnings years have been tightly grouped between 2003 and 2008, attesting to the profitability of farming this decade” [see related graph-net farm income 1998-2009f].


Climate Legislation; EPA Issues; Biofuels; CRP; and Ag Trade Nomination

Climate Legislation

An update posted yesterday at CQPolitics reported that, “Democrats and Republicans on the Senate Environment and Public Works panel tried Tuesday morning to overcome a partisan standoff that could derail a major climate bill even before the committee votes.

“But despite tentative overtures by each side, the feud appears to be continuing.

“Committee Republicans followed through on a threat to boycott Tuesday morning’s session, saying they won’t begin work on the bill until they see a full cost analysis of the measure, which would cap greenhouse gas emissions and establish a market for trading government-issued pollution allowances.”


Climate Legislation; Food Security; Food Prices; Ag Economy; and Trade Issues

Climate Legislation

Philip Brasher noted in yesterday’s Des Moines Register that, “Farmers believe they can play a part in reducing greenhouse gas emissions, but they want money for what they do. That demand is proving to be tough for Congress to do.

“A House-passed climate bill would allow farmers and landowners to earn credits for measures that can remove or keep carbon out of the atmosphere. When farmers stop tilling their fields or convert cropland to pasture, carbon in the form of plant material is kept in the soil rather than released into the air.”


Climate Legislation; Trade Issues; CFTC; and Dairy

Climate Legislation

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Senate Agriculture Committee Chairman Blanche Lincoln made it clear Tuesday her party will have a tough time passing climate legislation in the Senate with her opposition to the ‘deeply-flawed’ cap-and-trade bill.

“The Democrat from Arkansas who took over as chairman of the committee last week told members of the National Cattlemen’s Beef Association that she opposes the climate bill passed by the House in June.

“‘It’s a deeply-flawed bill and I’m not going to support it,’ Lincoln said, generating a round of applause from the cattlemen. ‘As chairman of the Agriculture Committee, I have a great opportunity to weigh in on this issue.’”


Climate Regulation; WTO Cotton Case; and Doha

Climate Regulation

Recall that Jennifer A. Dlouhy reported earlier this week in the San Francisco Chronicle that, “Carbon dioxide will soon be declared a dangerous pollutant – a move that could help propel slow-moving climate-change legislation on Capitol Hill, the head of the Environmental Protection Agency said Monday.

EPA Administrator Lisa Jackson told reporters that a formal ‘endangerment finding,’ which would trigger federal regulations on greenhouse gas emissions, probably would ‘happen in the next months.’”


Climate Legislation; Doha; Animal Agriculture; Biofuels; and California Ag

Climate Legislation

Lisa Lerer reported yesterday at that, “The raucous debate over health care could thwart the Senate’s enactment of sweeping energy and climate legislation this year, say Democratic aides, energy lobbyists and environmentalists.

“If Democrats fail to push through a health care bill — or get embroiled in even more contentious debate this fall — experts fear they’d lose much of the momentum necessary to get the controversial climate and energy legislation through the Senate.

“‘If health care ends up being very contentious, you may not be able to go back to the well again for climate votes,’ said Scott Segal, a lobbyist for energy companies at Bracewell & Giuliani. ‘The debate will either take up too much time, too much political capital or both.’”


Climate Legislation; WTO Cotton Case; Ag Trade; Farm Bill & Policy Perspectives; Food Safety; and Ag Prices

Climate Legislation

Emily Pierce reported yesterday at Roll Call Online that, “The Senate debate on climate change will be delayed until later this fall, given that two key players have said they will not even introduce their bill until late September.

“Senate Environment and Public Works Chairman Barbara Boxer (D-Calif.) and Senate Foreign Relations Chairman John Kerry (D-Mass.) said they would not introduce their legislation next week as they had planned. They attributed the delay to last week’s death of Sen. Edward Kennedy (D-Mass.) and the timing of the health care debate, which continues to rage on.

“‘The Kerry-Boxer bill is moving along well and we are looking forward to introducing legislation that will create millions of clean energy jobs, reduce our dependence on foreign oil, and ensure American leadership in the clean energy economy,’ the two wrote in a statement. ‘Because of Senator Kennedy’s recent passing, Senator Kerry’s August hip surgery, and the intensive work on health care legislation particularly on the Finance Committee where Sen. Kerry serves, Majority Leader Reid has agreed to provide some additional time to work on the final details of our bill, and to reach out to colleagues and important stakeholders. We have told the Majority Leader that our goal is to introduce our bill later in September.’”


Climate Legislation- A Wide Ranging Debate; Farm Policy Perspectives; and Sugar

Climate Legislation- A Wide Ranging Debate

Elisabeth Rosenthal reported in Saturday’s New York Times that, “Mato Grosso means thick forests, and the name was once apt. But today, this Brazilian state is a global epicenter of deforestation. Driven by profits derived from fertile soil, the region’s dense forests have been aggressively cleared over the past decade, and Mato Grasso is now Brazil’s leading producer of soy, corn and cattle, exported across the globe by multinational companies.

“Deforestation, a critical contributor to climate change, effectively accounts for 20 percent of the world’s carbon dioxide emissions and 70 percent of the emissions in Brazil. Halting new deforestation, experts say, is as powerful a way to combat warming as closing the world’s coal plants.

But until now, there has been no financial reward for keeping forest standing. Which is why a growing number of scientists, politicians and environmentalists argue that cash payments — like that offered to [farmer José Marcolini] — are the only way to end tropical forest destruction and provide a game-changing strategy in efforts to limit global warming.”


Ron Kirk- New USTR; WTO Issues; and Lula, Obama Meeting

Ron Kirk- New USTR

David Stout reported in last week’s New York Times that, “Ron Kirk was endorsed by the Senate Finance Committee on Thursday to be United States trade representative, putting to rest a minor embarrassment over back taxes and virtually assuring his confirmation by the full Senate.”


Commodity Developments; EU Farm Policy; Brazil Cotton Case

Commodity Developments

Ian Berry reported in today’s Wall Street Journal that, “Corn prices continue to climb on concerns about Midwestern flooding and crop damage but avoided taking out records.

“Nearby July corn at the Chicago Board of Trade rose 9.75 cents to $7.4225 a bushel Tuesday. It had previously hit highs for eight straight days, most recently at $7.60 intraday on Monday.”



Lisa Schlein, writing last week at the Voice of America (VOA) Online, reported that, “Trade experts from 151 countries are resuming international trade talks in Geneva. Delegates to the World Trade Organization talks hope to reach compromises on a number of issues that have been holding up an agreement to liberalize world trade for the past seven years.”

“Normally, nothing happens at the World Trade Organization during the first week of the New Year. But, these are not normal times. WTO spokesman, Josep Bosch, tells VOA there is a sense of urgency to restart negotiations on the so-called Doha round of trade talks immediately.


Ethanol & Energy Policy- Impact on Farm Bill?

Dan Morgan, writing in today’s Washington Post, reported that, “Corn farmer Jim Handsaker has found a slew of ways to ride the heartland boom in biofuels that is reshaping the economy of rural Iowa.

“He sold some of his 2006 crop this year for more than $4 a bushel, the highest price in a decade. His stake in two nearby ethanol plants brought in several thousand dollars more in dividends. Meanwhile, soaring farmland prices have pushed the value of the 400 acres he owns to around $2 million.

“Even so, come October he will get a subsidy check from the government, part of a $1.6 billion installment that the U.S. Department of Agriculture will send to corn farmers.”

Yesterday, USDA indicated that corn prices, although on a slight downward trend, remain relatively high by historic standards. Meanwhile, the graph below, from The Wall Street Journal Online, demonstrates that ethanol prices are heading in the opposite direction.

The Post article indicated that, “Those annual automatic payments to Handsaker and thousands of other prospering corn growers have long been controversial. But coming at a time when taxpayers are already subsidizing the ethanol industry to the tune of $3 billion a year, the double-barreled support system for those who grow corn and those who turn it into fuel has begun to draw fire in Congress.”


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