FarmPolicy

December 21, 2014

Policy Issues; Tax Extenders; Budget; Trade- Ag Economy; and, Regulations

Policy Issues

Damian Paletta and Mark Peters reported on the front page of today’s Wall Street Journal that, “A large number of Republican governors are pushing to reshape social-welfare programs with drug testing or other requirements, arguing that the new rules better prepare recipients for employment and assure taxpayers that the benefit money is well spent.

“Gov. Scott Walker of Wisconsin, fresh off his re-election, said he would propose his state join several others in mandating drug screening for people seeking nutrition or cash assistance. Utah Republicans want to require that certain residents allow the state to assist them in finding a job if they want to collect benefits through Medicaid, the health-care program for low-income and disabled Americans. Indiana Gov. Mike Pence is proposing Medicaid recipients kick in at least a few dollars a month as a condition for receiving benefits.”

The Journal writers noted that, “The drug-test push is part of a wave of changes that Republican governors are eyeing for Medicaid, cash assistance, unemployment and nutrition assistance, programs run jointly by federal and state governments.”

Paletta and Peters also explained that, “Drug-screening rules, though they have disqualified relatively few people from benefits, have proved to be the most contentious. Earlier this month, a federal appeals court struck down a 2011 Florida law that required drug screening for people seeking benefits through the Temporary Assistance for Needy Families program, saying the requirement was unconstitutional and that the state hadn’t demonstrated that recipients have more of a drug problem than the general population.

This year, the U.S. Agriculture Department blocked a drug-screening requirement in Georgia for the state’s food-stamp program, which it oversees.”

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Budget; Biotech; Agricultural Economy; and, Policy Issues

Budget

Ashley Parker and Robert Pear reported in yesterday’s New York Times that, “After moments of high drama, dry process and acrimony, the Senate passed a sweeping $1.1 trillion spending package Saturday night, abruptly ending several days of chaotic legislative maneuvers and clearing the bill for President Obama to sign.

“The legislation, which will fund most of the government through the fiscal year that ends in September, passed in a bipartisan vote, 56 to 40, after a turbulent process — a fitting coda for a governing body that has often failed to govern.”

Robert Pear reported on the front page of today’s New York Times that, “Health insurance companies preserved their tax breaks. Farmers and ranchers were spared having to report on pollution from manure. Tourist destinations like Las Vegas benefited from a travel promotion program.

“Also buried in the giant spending bill that cleared the Senate on Saturday and is headed to President Obama for his signature were provisions that prohibit the federal government from requiring less salt in school lunches and allow schools to obtain exemptions from whole-grain requirements for pasta and tortillas.

“The watered-down standards for school meals were a setback for the first lady, Michelle Obama, who had vowed to fight ‘until the bitter end’ for tougher nutrition standards. But they were a victory for food companies and some local school officials, who had sought changes in regulations that are taking effect over several years.”

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Ag Economy; Biotech; Biofuels; Policy Issues; and, Budget Developments

Agricultural Economy

An update yesterday from the Food and Agriculture Organization of the United Nations stated that, “Latest indications confirm that world cereal production will reach an all-time record of more than 2.5 billion tonnes in 2014.

“Buoyed by bumper crops in Europe and a record maize output in the United States of America, this year’s cereal output should reach 2.532 billion tonnes, including rice in milled terms, or 0.3% higher than 2013, according to FAO’s latest Crop Prospects and Food Situation Report.

“The record global cereal harvest in 2014 will outpace projected world cereal utilization in 2014/15, allowing stocks to rise to their highest level since 2000 and pushing the worldwide stock-to-use ratio, a proxy measure for supply conditions, to rise to 25.2 percent, its highest level in 13 years, according to FAO.”

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Biotech; Biofuels; CFTC; Policy Issues; Budget; and, Ag Economy

Yesterday, lawmakers on Capitol Hill held three separate hearings on important topics germane to U.S. farm and food policy. The hearings highlighted issues associated with biotechnology, biofuels and the Commodity Futures Trading Commission.

Biotechnology, GMO Food Labeling

AP writer Mary Clare Jalonick reported yesterday that, “The food industry is likely to find a receptive Congress come January in its fight against mandatory labeling of genetically modified foods.

“Republicans and Democrats on a House Energy and Commerce subcommittee questioned Wednesday whether requiring a label on any packaged food including genetically modified organisms — or foods grown from seeds engineered in labs — would be misleading to consumers since there is little scientific evidence that such foods are unsafe. The food industry has made a similar argument.

“Congress has shown increasing interest in getting involved in the labeling debate as the food industry has faced a potential patchwork of state laws requiring it. The hearing previewed GOP efforts to push legislation next year that would reaffirm that such food labels are voluntary, overriding any state laws that require them. The bill, introduced by Rep. Mike Pompeo, R-Kansas, has the backing of the food industry.”

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Budget; Policy Issues; and, the Agricultural Economy

Budget

Ashley Parker and Jonathan Weisman reported in today’s New York Times that, “Congressional leaders reached a deal Tuesday on a more than $1 trillion spending package that would fund most of the federal government through the current fiscal year.

“But because negotiations on the package dragged over policy details, House lawmakers also prepared to move on a short-term spending measure that would avert a government shutdown if Congress cannot pass the larger bill by Thursday, when the current funding expires.”

The Times article explained that, “The spending bill would fund nearly all of the federal government through September 2015, except for the Department of Homeland Security, which it would fund only through February, in retaliation for President Obama’s unilateral action to defer the deportation of as many as five million undocumented immigrants. Congressional Republicans plan to take up funding for the agency — which has primary responsibility for carrying out the president’s immigration directive — early next year, when they will control both chambers of Congress and believe they will have more leverage.”

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Budget; Policy Issues; Agricultural Economy; and, Biotech

Budget

Ed O’Keefe reported in today’s Washington Post that, “Plans to quickly approve a $1.1 trillion spending package to keep most of the federal government open through the end of the fiscal year fell apart late Monday, increasing the chance lawmakers will miss a Thursday deadline.

“Just in case, top appropriators said Monday that they were ready to pass a short-term extension of a few days in order to give the House and Senate more time to pass the final bill and end the least productive congressional session in modern history.

“Top leaders spent most of Monday reviewing the final details of the massive spending bill, but hopes of unveiling the legislation by midnight were dashed amid last-minute disagreements over the renewal of a terrorism insurance program.”

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Budget- Policy Issues; Ag Economy; Biotech; Biofuels; Tax Extenders, and Climate

Budget- Policy Issues

David Rogers reported yesterday at Politico that, “House-Senate negotiators neared agreement Sunday on the last pieces of a $1.1 trillion spending bill designed to avert any shutdown this week and put most government agencies on firm footing through next September.

“Building on a long weekend of talks, the goal was to file the giant measure by late Monday and then push for quick floor action before the current funding runs out Thursday night.”

The article noted that, “Child nutrition standards backed by first lady Michelle Obama were in play, though the House agreed to back away from some of its earlier demands.”

The article added that, “To appease the right, the Department of Homeland Security will be kept on a short leash so Republicans can revisit the issue of Obama’s executive order on immigration.”

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Ag Economy; Budget- Immigration; Policy Issues; and, Biofuels

Agricultural Economy- Trade Issues- Biotech, and Transportation News

Anthony Faiola reported on the front page of today’s Washington Post that, “On a velvety green patch of the French countryside, organic farmer Jean Cabaret gave a little shudder. A looming trade deal with the United States, he fears, may make his worst culinary nightmare come true: an invasion of Europe by American ‘Frankenfoods.’

“‘Hormone-boosted beef. Chlorine-washed chicken. Genetically altered vegetables. This is what they want for us,’ warned Cabaret, standing before his majestic herd of free-range cows. ‘In France, food is about pleasure, about taste. But in the United States, they put anything in their mouths. No, this must be stopped.’

“In Europe, this is a season of angsteven paranoia — over a historic bid to link the United States and the 28-nation European Union in the world’s largest free-trade deal.”

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Ag Economy- Trade; Budget; Tax Extenders; Policy Issues; and, CFTC

Agricultural Economy- Trade Issues

Yesterday, the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions. Commonly referred to as the “Beige Book,” the report included several observations with respect to the U.S. agricultural economy.

The Fifth District (Richmond) noted that, “Some growers planned fewer equipment purchases relative to a year ago;” while the Tenth District (Kansas City) indicated that, “Farm income expectations fell sharply since the last survey period as above- average corn and soybean yields were not expected to fully offset low crop prices. District contacts reported current levels of farm income that were significantly lower than last year despite some support from crop insurance and strong profits in the livestock sector. Although reduced income for crop producers had contributed to a rise in the need for short-term loans to the farm sector, agricultural bankers reported that sufficient funds were available for qualified borrowers. Following several years of very strong growth, District cropland values declined slightly in recent months and were holding just above year-ago levels.”

And the Ninth District (Minneapolis) pointed out that, “Farm incomes continued to be affected by lower crop prices; in contrast, livestock and dairy producers benefited from lower feed costs and high output prices.”

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Ag Economy; Policy Issues; Biotech; Biofuels; Budget; and, Tax Extenders

Agricultural Economy

Jacob Bunge and Jesse Newman reported in today’s Wall Street Journal that, “Illinois farmer Darrel Gingerich harvested a huge corn crop this autumn thanks to near-flawless weather. Now, he is stashing it away.

“‘I didn’t sell any more than we had to in order to cover our costs for this year,’ the 53-year-old said.

“Mr. Gingerich is one of many Midwestern farmers who decided to hold on to their crops as they watched prices languish over the summer. Their collective strategy has since paid off, helping to fan a 15% rise in corn futures and a 10% jump in soybean futures since September that is also the result of a slow U.S. harvest and gains in other agricultural markets. Corn’s gain over the roughly two-month harvest period of October and November was its largest for that span in eight years and second largest in more than three decades, while soybeans’ climb was the biggest in five years.”

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Budget – Immigration; Tax Extenders; Ag Economy; Biotech; Biofuels; and, Regulations

Budget – Immigration

Ashley Parker reported in today’s New York Times that, “Congressional Republicans returning to Washington on Monday found themselves facing a treacherous 10 days as they try to balance their desire to fight President Obama’s executive action on immigration with the political imperative not to shut down the government.

“Congress must pass a broad spending bill before Dec. 11 to prevent a government shutdown. But Mr. Obama’s executive action last month, which could allow up to five million people now in the country illegally to live and work without threat of deportation, has inflamed Republicans and complicated their calculation over what has often been a routine spending fight.”

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Ag Economy; Policy Issues; Biofuels; Immigration- Budget; and, Regulations

Agricultural Economy

Donnelle Eller reported on the front page of yesterday’s Des Moines Register that, “As good as the outlook is for cattle producers over the next couple of years, it is about as grim for Iowa corn and soybean growers, thanks to tumbling commodity prices and the stubbornly high cost of growing crops.

Lower grain prices have helped cattle, pork and other livestock producers post improved profits. But the price slump also creates economic uncertainty in a state that leads the nation in corn production and ranks second in soybeans. As Iowa grain farmers brace for potential losses, leaders ask: How much will farm income drop, and how far will it ripple?”

The article noted that, “Chad Hart, an Iowa State University farm economist, estimates that grain production losses in Iowa this year could be as high as $2.6 billion, based on year-end pricing. Farmers who nailed down higher prices earlier in the year will fare better. Overall, improved profits from livestock producers are expected to more than offset grain losses.”

The Register article added that, “Hart agreed that government subsidies will help mute the effect of lower prices and compensate some Iowa farmers for crop damage this year, such as heavy spring rains in north Iowa. ‘But it doesn’t get you out of the hole,’ he said. ‘It just makes the hole less deep.’”

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Policy Issues; Ag Economy; Immigration-Budget; and, Regulations

Policy Issues

Helena Bottemiller Evich reported yesterday at Politico that, “[‘Top Chef’ judge Tom Colicchio] is part of a growing army of chefs across the country looking to channel their growing celebrity to influence food and agriculture policy in Washington, from school nutrition to the farm bill to animal welfare and even fisheries management. Their number is legion, their ranks full of names like Rachael Ray and Mario Batali along with scores of local celebrity chefs and restaurateurs — and their increasingly organized effort backs up some of the Obama administration’s sweeping food policy agenda right as it faces down an adversarial Congress.”

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Ag Economy; Tax Extenders; Policy Issues; Budget- Immigration; Regs; and, the RFS

Agricultural Economy

The U.S. Department of Agriculture’s Economic Research Service (ERS) updated its 2014 Farm Sector Income Forecast yesterday, and noted that, “Net farm income is forecast to be $96.9 billion in 2014, down 21.1 percent from 2013’s estimate of $122.8 billion. The 2014 forecast would be the lowest since 2010, but would remain $16 billion above the previous 10-year average ($80.8 billion) [related graph].”

ERS indicated that, “The annual value of U.S. crop production is expected to decline in 2014 from 2013’s all-time high [related graph]…[C]orn production has increased significantly since the 2012 marketing year, with corn exports more than doubling. Soybean production has also increased significantly since the 2012 marketing year as have soybean exports.”

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Policy Issues; Immigration; Ag Economy; Trade; Tax Extenders; and, Regulations

Policy Issues

A news release yesterday from Rep. Mike Conaway (R., Tex.) indicated that, “[Congressman Conaway] issued the following statement after the House Republican Steering Committee selected him as the 50th chairman of the House Committee on Agriculture.

“‘I am humbled and honored to be selected as the 50th chairman of the storied House Committee on Agriculture. The work that farmers and ranchers do is part of our country’s foundation. They feed, fuel, and clothe our nation. I look forward to building on the bipartisan work of the chairmen who have led this committee for the past two centuries.

“‘I represent, and love, rural America. It’s the backbone of our country. The values and concepts that make America great are stored in rural America, and I want to protect that. There are fewer and fewer voices representing rural America, and I am honored to be one of those voices. That is my overarching drive as the Committee moves forward.’”

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Regulations; Climate; Ag Economy; Trade; Biotech; and, Immigration- Budget

Regulations

Joby Warrick reported in today’s Washington Post that, “The Obama administration has no intention of backing down on major environmental initiatives to fight climate change and improve air and water quality, EPA chief Gina McCarthy said Monday, dismissing Republican threats to thwart proposed regulations by starving the agency of money.”

The Post article noted that, “McCarthy appeared to be rejecting statements by Sen. Mitch McConnell (R-Ky.), the presumptive Senate majority leader in the next Congress, who last week accused President Obama of waging war against the coal industry and vowed to fight the administration’s environmental proposals ‘in any way that we can.’”

“McConnell joined other key Republican lawmakers in suggesting that the new Congress would use its budget authority to block controversial proposals intended to scale back greenhouse-gas emissions and reduce pollution levels in air and water,” today’s article said.

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