FarmPolicy

April 18, 2014

Farm Bill; Ag Economy; Biofuels; Regulations; and, Climate

Farm Bill

David Rogers reported yesterday at Politico that, “After the buckets of political blood spilled over food stamps this past year, the Congressional Budget Office has quietly lowered its cost estimate for the nutrition program by $24 billion over the next decade.

“The ‘technical’ adjustment is tucked into a report issued Monday and reflects revisions in how CBO calculates what the average beneficiary receives each month under food stamps, formally known as the Supplemental Nutrition Assistance Program.

It’s just a 3 percent change but more than a little ironic after the fighting over fewer SNAP dollars that dogged the recently enacted five-year farm bill. Indeed, having announced the adjustment, CBO’s report then goes out of its way to say as little as possible about the rest of the farm bill’s costs, even with the drop in grain prices.”

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Ag Economy; Farm Bill- Policy Issues; Climate; and, Data

Agricultural Economy

Donnelle Eller reported in yesterday’s Des Moines Register that, “More than ever, Craig Boot says there’s little room for error this year as Iowa farmers prepare to plant this spring.

“Prices for corn and soybeans are improving, but depending on land and other expenses, they’re close to production costs for many farmers.”

The article indicated that, “‘We’ll take care of the things we need to take care of … but as far as buying something new and green, there won’t be any big-ticket items like there were in the last few years,’ said [Jerry Mohr, who farms in eastern Iowa near Davenport] recently as he applied fertilizer on fields where he will grow corn and seed corn.

“The federal government projects that U.S. farm income this year will drop 26.6 percent from last year, hurt by lower corn and soybean prices.”

“Add to farmer concerns: Drought conditions encompass about three-fourths of the state, and continued cool temperatures have meant lingering frost in much of Iowa,” yesterday’s article said.

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Climate- Policy Issues; COOL; Ag Economy; Biofuels; Immigration; Biotech; and, EPA

Climate Issues- White House Proposal, and Farm Bill Issues

Justin Gillis reported on the front page of today’s New York Times that, “Climate change is already having sweeping effects on every continent and throughout the world’s oceans, scientists reported Monday, and they warned that the problem is likely to grow substantially worse unless greenhouse emissions are brought under control.

The report by the Intergovernmental Panel on Climate Change, a United Nations group that periodically summarizes climate science, concluded that ice caps are melting, sea ice in the Arctic is collapsing, water supplies are coming under stress, heat waves and heavy rains are intensifying, coral reefs are dying, and fish and many other creatures are migrating toward the poles or in some cases going extinct.”

Chapter Seven of the report, which is available here, is titled, “Food Security & Food Production Systems.”

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Ag Economy; Farm Bill; Biofuels; Climate; and, Political Notes

Agricultural Economy

Paul Davidson reported this week at USA Today Online that, “Prices are rising for a range of food staples, from meat and pork to fruits and vegetables, squeezing consumers still struggling with modest wage gains.

Food prices rose 0.4% in February, the most since September 2011, the Bureau of Labor Statistics said Tuesday. Beef and veal shoppers were socked with some of the biggest increases, as prices jumped 4% from January.”

The article explained that, “Droughts, unusually cold winter weather, rising exports and a virus outbreak in the hog population are among the causes of food inflation, which is expected to accelerate in 2014. The Agriculture Department expects grocery store prices to increase as much as 3.5% in 2014, up from 0.9% last year.”

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Ag Economy; Biofuels; Policy Issues; Calif. Drought; and, Climate

Agricultural Economy

Tony C. Dreibus reported in today’s Wall Street Journal that, “Wheat futures jumped to the highest price in more than 10 months amid concerns that dry weather will curtail production of the grain in the U.S. southern Great Plains.

“Little rain is forecast for the next two weeks in parts of Kansas, Oklahoma and Texas, private weather forecaster Commodity Weather Group said in a report Wednesday. Nearly the entire western half of Kansas, the biggest U.S. wheat producer, is suffering from severe to extreme drought conditions, according to the U.S. Drought Monitor.”

The Journal article stated that, “About 34% of wheat in the state was rated good or excellent as of March 13, down from 37% a week earlier, as dry, windy weather curbed crop prospects, the U.S. Department of Agriculture said in a report Monday. Hard-red winter wheat, grown in the southern Plains and used to make bread, is planted in the fall, lies dormant for the winter, then starts growing again in March and April. Growers harvest the crop mostly in June.”

Mr. Dreibus explained that, “Along with the dry weather in the U.S., unrest in Eastern Europe’s Black Sea region also may be boosting prices, said Craig Turner, a senior broker at Daniels Trading in Chicago.

Russia is expected to move quickly to annex the Ukrainian peninsula of Crimea after voters last week opted to secede. That could slow exports from Ukraine, expected to be the world’s sixth-biggest exporter of the grain this year. If embargoes are put in place, Russian exports may decline, Mr. Turner said.

“‘The more Russia-Ukraine heats up, the more concern that the grain trade could get disrupted,’ Mr. Turner said.”

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Farm Bill; Biotech; Ag Economy; and, Climate Change

Farm Bill

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “USDA is emphasizing some of its programs to help smaller and mid-sized farmers and ranchers.

“Agriculture Secretary Tom Vilsack announced the support initiative Monday after speaking to members of the National Farmers Union at the group’s annual meeting being held in Santa Fe, N.M. USDA rolled out the programs without characterizing what defines a small to mid-sized farmer or rancher.”

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Farm Bill; Climate; Ag Economy; Regulations; Biotech; and, Immigration

Farm Bill

AP writer Henry C. Jackson reported yesterday that, “South Dakota’s congressional delegation pressed the U.S. agriculture secretary Wednesday to expedite a provision in the new farm bill that helps ranchers in the Dakotas and Nebraska recover from an October blizzard.

“The nearly $100 billion-a-year federal farm bill, which awaits President Barack Obama’s signature, restarts a livestock disaster program that had expired. Members of the South Dakota delegation were among those urging Agriculture Secretary Tom Vilsack to make sure there are no delays getting the relief money to ranchers.

“Sens. John Thune, R-S.D., Tim Johnson, D-S.D., Sen. Heidi Heitkamp, D-N.D., and other lawmakers signed a letter Wednesday asking Vilsack to move quickly to provide relief to ranchers and farmers who suffered heavy losses. The total amount of the aid was not clear and would depend on total losses for producers.”

The AP article noted that, “‘They’ve waited long enough for much-needed support,’ said Rep. Kristi Noem, R-S.D., who worked on the committee that combined the House and Senate versions of the farm bill.”

Rep. Noem also wrote a letter to Sec. Vilsack yesterday regarding the implementation of livestock related provisions.

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Farm Bill; Ag Economy; Budget; and, Climate Issues

Farm Bill

Brett Neely reported on Friday at Minnesota Public Radio Online that, “While several key [Farm Bill] issues remain unresolved despite more three years of work on the bill, one of the latest roadblocks is a disagreement about how the federal government should provide a safety net to dairy farmers with GOP House Speaker John Boehner publicly challenging policies long pushed by U.S. Rep. Collin Peterson, D-Minn., the top Democrat on the House Agriculture Committee.”

Mr. Neely explained that, “Peterson wants to establish an insurance program to protect farmers from fluctuations in the cost of feed and what he calls a market stabilization program that would encourage farmers to reduce production when prices drop too far.

“‘The only thing we’re saying is that if you’re taking government help and the market gets oversupplied and so it starts costing the government money, that that cost should be put on the dairy farmers, not on the taxpayers,’ Peterson told MPR News.”

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Farm Bill; Ag Economy; Biotech; Water Measure; and, Climate

Farm Bill Issues

Marisa Schultz reported yesterday at the Detroit News Online that, “After a 16-day government shutdown, Congress kicked off two high-stakes budget negotiations last week to hash out differences — and Michigan’s Sen. Debbie Stabenow is the only elected official in 535-seat Congress who sits at both negotiating tables.

“The budget and farm bill conference committees are two small, bipartisan, bicameral negotiating teams working under tight deadlines to prove there is still some compromise left in Washington. In the thick of the challenge is Stabenow, the Lansing Democrat.”

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Farm Bill; Ag Economy; Regulations; and, Climate

Farm Bill: Lawmaker Perspective

An update posted on Saturday at FOX 34 News (KJTV-TV- Lubbock, Tex.) Online reported that, “Representative Frank Lucas [R., Okla.], chairman of the House Agriculture Committee, toured the food safety lab at Texas Tech [on Saturday]. The ag committee is crafting a five-year farm bill. Lucas said a key component of that bill is agricultural research.”

The update indicated that, “‘It’s time to work out all the details,’ Lucas said. ‘I think we can do that, even with less money to spend. But, remember the fundamental principle that I offered all my colleagues back east, the farm bill is still about making sure we have enough to eat and enough fiber to wear. If it’s going to be a federal farm bill, it has to be something where it is the safety network for all commodity groups and all regions. That’s what we’re pushing hard on, and not everybody agrees on that, but I think we’re going to get there.’”

A related audio clip from the Fox 34 News report can be heard here (MP3- 1:00).

House Ag Committee Ranking Member Collin Peterson (D., Minn.) was a guest on Friday’s AgriTalk radio program with Mike Adams, where the discussion focused on the Farm Bill.

An unofficial FarmPolicy.com transcript of the AgriTalk discussion is available here.

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Farm Bill; Budget (RFS); Ag Economy; Climate; and, Immigration

Farm Bill

The Associated Press reported yesterday that, “The U.S. House of Representatives in 2012 were given one year to come to an agreement on a long-term farm bill. They’re not getting another, said United States Agriculture Secretary Tom Vilsack.

“‘There is no support for an extension in the Senate. It just simply rewards failure, and this needs to get done. Everybody in the countryside knows it needs to get done,’ Vilsack said following a town hall hearing on what he calls the food, farm and jobs bill Saturday morning at the Old Threshers Reunion in Mount Pleasant.”

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Farm Bill; Ag Economy; EPA; Immigration; and, Climate

Farm Bill

House Ag Committee Chairman Frank Lucas (R., Okla.) spoke yesterday with Ramey Cozart on KKBS radio (Guymon, Okla.) and was asked: “What’s the No. 1 thing affecting production agriculture right now?”

In response, Chairman Lucas provided a general overview of the economic and policy landscape by breaking down the outlook into short, medium and long-term perspectives.

Well, in the short term it’s still weather issues, for the next few weeks and months.  Is it going to continue to rain on the Corn Belt?  Are we going to stay green for the rest of the fall?  Will we be able to put a wheat crop in the ground?

In the longer run, the real question is about the farm bill.  We’re operating now in the sixth year of a five-year farm bill.  Will I be able to go to conference in September?  Can I work out the differences with the Senate and get a farm bill on the books?  Because remember, while most farmers and ranchers know that the biggest part of the money in the farm bill is food stamps now, nonetheless the farm bill is the commodity title, it’s crop insurance, it’s the conservation programs, it’s CRP and rural development and farm credit, all those things.

“The farm bill is very important, especially if Mother Nature decides that the last few weeks of green is just temporary and we go back to drought conditions next year and the year after, or world markets take a hiccup, the Chinese stop buying imports, what that does to demand, or just a whole myriad of things.  So putting the farm bill on the books is, in the intermediate, the next most important thing.”

Chairman Lucas explained that, “And if you just want to talk about a long ways down the road, the trade agreements that are going on, because right now the President’s proposed, and it’s a legitimate thing, proposed trying to negotiate with the European Union a trade agreement to open up imports and exports to a greater degree with the Europeans and with the Pacific Rim countries, they’re trying to negotiate that.  That’s all the way from New Zealand around to Japan, for instance.

But the thing on trade agreements is it’s not just trade—is it fair?  By that are the tariffs really the same for stuff going in and out of the country?  Will the people we deal with in other countries standardize what they refer to as phytosanitary standards?  Will they grade and deal with bug and pest and variety issues in a fair and equitable fashion?  If trade is fair, these trade agreements, if they can be concluded, in the long run will open up more markets to us, but it’s got to be fair.  Not just free, it’s got to be fair.

So in the short run it’s the weather, intermediate it’s passing the farm bill, in the long run it’s still these trade deals with the rest of the world.”

As a side note, Katie Smith reported yesterday at Roll Call Online that Chairman Lucas was tied for fifth in a “top ten tally members of Congress with the most town halls scheduled this month.”

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Farm Bill; Appropriations; Ag Economy; Immigration; and, Climate

Farm Bill

Yesterday, Senate Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) appeared on “NOW with Alex Wagner,” the MSNBC television program and discussed the Farm Bill.  A replay of this discussion has been posted at FarmPolicy.com Online.

With respect to a way forward on the Farm Bill, Chairwoman Stabenow indicated that: “In my judgment, I am not going to allow—I will do everything in my power to stop just a temporary continuation like was done last year.  Why?  Because all of the subsidies these guys say they want to end that they don’t support would continue under a continuation budget.  We’d have no savings; we would have no reforms.

All of those things that they talk about would be eliminated and we would just continue with the old way, spending way too much money on the wrong things, and things like local food systems, organics, fruits and vegetables, healthy foods in schools, would not have the funding to continue.  So I don’t support that.  They need to get the job done.”

And Daniel Looker reported yesterday at Agriculture.com that, “Senator Chuck Grassley (R-IA) said Tuesday that he supports the Senate not extending the 2008 farm law again in order to keep pressure on the House of Representatives to pass a new farm bill.”

Mr. Looker noted that, “Grassley, who is a member of the Senate Agriculture Committee, indicated Tuesday that resistance to another extension is coming from the committee’s leader.

“‘I had a discussion with Chairwoman [Debbie] Stabenow (D-MI) and she said I could quote her that she said she’s not going to extend the farm bill for another year,’ Grassley said.

“Not extending current law holds out the possibility that permanent farm bill legislation, dating back to 1949 and earlier, could kick in sometime after the current fiscal year ends on September 30.”

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Farm Bill; Climate; Ag Economy; and, Immigration

Farm Bill: Budget and Policy Issues

An update yesterday at the National Sustainable Agriculture Coalition (NSAC) Blog stated that, “The Congressional Budget Office (CBO) released its first snapshot of the budget projections for 2014 and beyond on Tuesday.  The snapshot includes projections for federal farm bill spending.  The final version of the projections, which will be published in late March, will be the version that is used for determining the costs and savings of competing budget resolutions and farm bill proposals to be debated later this year.  As a general rule, though, there are only rarely big differences between the early snapshot and the final projections.”

The NSAC update noted that, “The 2012 debate on a new farm bill used the March 2012 CBO baseline as its measuring rod.  Compared to that March 2012 baseline, several items stand out in the new version.

“First, the Supplemental Nutrition Assistance Program (SNAP), better known as the food stamp program, is projected to decline in cost by almost $8 billion in the next five years and by nearly $12 billion over the coming decade, relative to last year’s projection.  Those are decreases of 1.9 and 1.5 percent, respectively.”

“Second, CBO projects a decline in the cost of the crop insurance program, by close to $3 billion over the next decade relative to last year’s projection.  The insurance subsidies would still cost close to $9 billion a year, according to CBO.”

Yesterday’s NSAC analysis pointed out that, “Third, the current suite of commodity programs are projected to increase in cost by $1.6 billion over the next 10 years relative to last year’s projection.  The increase is largely due to projected increases in Average Crop Revenue Election (ACRE) payments for corn, soybeans, and wheat and projected increases in counter cyclical payments for cotton.  Dairy program costs drop dramatically after the current one-year extension of the Milk Income Loss Contract (MILC) program — included as part of the short-term farm bill extension enacted at the beginning of January — expires at the end of this year.”

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Budget Issues; Farm Bill; Ag Economy; and, Climate

Budget Issues

Kevin Robillard reported yesterday at Politico that, “Senate Finance Committee Chair Max Baucus wants to protect an estate tax reduction from any deal averting the fiscal cliff, according to his hometown newspaper.

“Baucus told the Great Falls Tribune in an interview Sunday that he wants to keep the Bush-era rate for estate taxes in order to protect ranchers and farmers who pass their properties on to their children.

“‘…Baucus is working to preserve a reduction in estate taxes that exempts the first $5 million of an estate’s value for individuals and taxes the remainder at 35 percent,’ the paper wrote, but didn’t include direct quotes from Baucus on the topic.”

Yesterday, in his weekly column, Sen. Mike Johanns (R., Neb.) indicated that, “The estate tax currently provides an exemption for all estates valued at $5 million or less.  Anything valued in excess of $5 million is taxed at a rate of 35 percent when it is passed to beneficiaries. If this tax policy is left unaddressed, those rates will significantly change come January.  The exemption will drop to $1 million, with anything above that taxed at a staggering 55 percent.  A $1 million threshold might seem like a lot, but rising farmland prices are pushing the value of ag operations into the stratosphere. The average price for an acre of farmland has ballooned from $1,503 in 2010 to $2,425 today, according to the University of Nebraska Department of Agricultural Economics. Nebraska’s average farm size is 966 acres. Thus, one could estimate the average farm value based on land alone at more than $2.3 million, well above the lowered exemption.

“Farmers and ranchers, many of whom have had land in their families for generations, should not be forced to pay Uncle Sam more than half the value of their estate. And producers should not be forced to sell land to avoid the impacts of the fiscal cliff. Unfortunately, I’ve already heard from Nebraskans who are facing this very dilemma.”

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Farm Bill; Biofuels; Ag Economy; Trade; Budget; and, MF Global

Farm Bill- Policy Issues, Crop Insurance

David Shepardson reported yesterday at The Detroit News Online that, “Sen. Debbie Stabenow says she is optimistic Congress will pass disaster assistance for farmers facing a record drought if the House doesn’t approve a farm bill.

“The Lansing Democrat and chair of the Senate Agriculture Committee said she’s been working during the congressional recess to try to get the House to act on farm reform legislation.”

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