FarmPolicy

December 20, 2014

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

Immigration

Brian Knowlton reported earlier this week at The New York Times Online that, “President Obama, in an interview broadcast on Sunday, said he rejects Republican criticism that he has exceeded his authority in moving to spare millions of undocumented immigrants from deportation, adding that he has been ‘very restrained’ in his use of executive authority.

“Angry Republican lawmakers have accused Mr. Obama of unconstitutional, even imperial, overreach. They have pointed to past remarks in which he himself suggested that his powers to act were limited.”

The Times article added that, “Mr. Obama has framed his action not as an amnesty for some undocumented immigrants but as a directive, in part, to federal agencies to focus their attention on those with criminal records, not on law-abiding, taxpaying, longtime immigrants. In all, about five million of the estimated 11 million undocumented immigrants would be protected.”

Kristi Boswell, Director of Congressional Relations for the American Farm Bureau Federation, was a guest yesterday on the AgriTalk radio program with Mike Adams, where the conversation focused on immigration issues (audio replay here, MP3- 10:18). An unofficial FarmPolicy.com transcript of yesterday’s discussion is available here.

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

Policy Issues

Tennille Tracy reported yesterday at the Washington Wire blog (Wall Street Journal) that, “Rep. Mike Conaway (R., Texas), the newly appointed chair of the House Agriculture Committee, is pledging to undertake a ‘thoughtful’ review of food stamps.

“Mr. Conaway, a certified public accountant, has been critical of the food stamp program, formally known as the Supplemental Nutrition Assistance Program or SNAP. He defended Republican-led efforts to eliminate billions from the program and supports tougher work requirements for able-bodied adults without children.

“‘The committee will conduct a thoughtful review of all programs under its jurisdiction,’ Mr. Conaway said in an e-mail. ‘It’s only natural for much of that review to focus on nutrition programs as they account for almost 80% of the spending within the jurisdiction of the committee.’”

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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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Legislative Agenda; Farm Policy; Biotech; Regulations; and, Climate

Legislative Agenda: Keystone, Budget- Immigration Link, and Trade

Ashley Parker and Jeremy W. Peters reported in today’s New York Times that, “As newly victorious and recently vanquished members of Congress descended Wednesday on Capitol Hill, defeated Democrats trudged in for some of their final votes, ebullient Republicans toured their new digs, and the denouement of Election Day continued to play out as the House and the Senate scheduled dueling votes to try to influence the outcome of the lone unresolved Senate race in Louisiana.

“But Wednesday’s activities — or lack thereof — after a six-week absence from the Capitol underscored how much inertia still rules. Despite larger fights over funding the government, operations in Syria, and executive action on immigration, the only votes in the Senate on Wednesday were procedural steps on a pair of federal court nominees.”

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Policy Issues; Ag Econ; Biotech; Trade; Immigration; CFTC; and Climate

Policy Issues- Farm Bill, Tax Extenders

Chase Purdy reported yesterday at Politico that, “‘Kansas Republican Pat Roberts, the likely next chairman of the Senate Agriculture Committee, says he has no plans to reopen the farm bill to make any substantial changes,’ Pro Agriculture’s Bill Tomson reports this morning. ‘Roberts, who sought far bigger cuts to food stamps and opposed the price-based subsidies in the 2014 farm bill, stressed in an interview with POLITICO Monday that it would be a mistake to expose the massive five-year, $500 billion piece of legislation to others who would seek to make changes.’

“‘I do not intend to open up the farm bill,’ Roberts assured. ‘That would be irresponsible.’”

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Ag Economy; Policy Issues; Regs; Biofuels; Climate; and Political Notes

Agricultural Economy

Grant Gerlock reported yesterday at The Salt blog (National Public Radio) that, “U.S. farmers are bringing in what’s expected to be a record-breaking harvest for both corn and soybeans. But for many farmers, that may be too much of a good thing.

“Farmers will haul in 4 billion bushels of soybeans and 14.5 billion bushels of corn, according to USDA estimates. The problem? Demand can’t keep up with that monster harvest. Corn and soybean prices have been falling for months. A bushel of corn is now worth under $4 — about half what it was two years ago.”

The update noted that, “That means a glut of corn and soybeans and the lowest prices in at least five years. To make matters worse, the oil boom in North Dakota is tying up the railways used to ship grain. Trains for things like coal or imports are also running behind. Bruce Blanton at the U.S. Department of Agriculture says the wait means some of the harvest could go to waste…[S]ome farmers will have so much grain to sell, they’ll still manage to make some money. Others will lean on saving or subsidized crop insurance. Low prices could even trigger a new set of government safety nets in the Farm Bill.

Cory Walters, an agricultural economist at the University of Nebraska-Lincoln, says rising costs for everything from seeds to fertilizer make these low commodity prices harder to handle.

“‘Does that mean we’re going to have multiple years of low prices and it’s all doom and gloom? No, I don’t buy that right now,’ Walters says. ‘Because there’s a lot of changes could happen from year to year on acreage, weather.’”

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

Agricultural Economy- Farm Income, Prices, and, Cost Variables

Marcia Zarley Taylor reported on Friday at DTN that, “A Halloween forecast by Purdue University paints a grim outlook for the grain economy through at least 2015, and possibly the next three or four years.

Indiana grain farm incomes are expected to tumble 30% in 2014 and another 35% in 2015, even including government payments under the new farm bill, Purdue Economist Chris Hurt said. He gauges the state’s grain incomes at $1.1 billion for 2015, down from the recent high of $3.4 billion in 2011.”

The DTN article noted that, “In a webinar on the changing business climate for agriculture, Hurt and other Purdue economists emphasized that cash rents and farm input costs have been slow to adjust to the new realities of commodity markets. The main problem is that production costs need to fall by about 20% to realign with the current price outlook.

The crop production system could be vulnerable for the next three or four years and possibly beyond that, Hurt said. ‘We have a cost structure that’s built on $5 corn and $12 soybeans, but the reality is the market is only going to offer $4 corn and $9 to $10 soybeans,’ Hurt said. ‘For some growers it will mean trauma or failure, but most will make the adjustments, given enough time.’”

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Ag Economy; Farm Bill; Regulations; and, Climate

Agricultural Economy

Yesterday, the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri provided an update on crop price projections reflecting information available in mid-October.

A summary of the FAPRI update indicated that, “The projected corn price for the 2014/15 marketing year was reduced slightly this month, to $3.40 per bushel. The record U.S. corn crop got even bigger in USDA’s October estimates, and carry-in stocks were also greater than had been estimated in September.

“Corn acreage could decline in 2015, and more typical growing conditions would result in lower yields next year. Projected prices increase to $3.74 per bushel for 2015/16, and to $4.20 per bushel by 2018/19.”

Yesterday’s update added that, “USDA soybean production estimates also increased slightly this month, but this was offset by a reduction in carry-in stocks, leaving total supplies marginally reduced from September estimates. The projected 2014/15 soybean price is little changed from last month, at $9.95 per bushel.

“Soybean acreage could stay near this year’s record in 2015 and the resulting large soybean supplies cause projected 2015/16 prices to drop to $8.93 per bushel, before recovering to $10.50 per bushel by 2018/19.”

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

Agricultural Economy

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. A summary of the ag related comments can be found here, at FarmPolicy.com Online.

In part, yesterday’s report noted that, “Lower corn prices continued to benefit poultry and livestock producers that rely on corn for feed” (Atlanta District); “Livestock and dairy producers continued to benefit from lower feed costs and high output prices” (Minneapolis District); “Cattle prices continued to be at a record high while feed prices fell, boosting profitability for cattle producers” (Dallas District) and “low corn prices and stable fertilizer and machinery prices benefited dairy and feedlot operations” (San Francisco District).

The Chicago District noted that, “Crop income was lower than a year ago as higher yields were insufficient to offset lower prices. Crop insurance will cover some of the lost income, but farmers already are planning to trim costs for next year, particularly spending on farm equipment and other capital purchases.”

And the Kansas City District added that, “Crop insurance and some pre-selling of this year’s crop at higher prices earlier in the year may help mitigate the effect on overall farm incomes of recent spot price declinesThe demand for farm operating loans has risen substantially from last year as more crop producers borrowed to pay for operating costs. Bankers also reported a rise in requests for agricultural loan renewals and extensions and noted that loan repayment rates have edged down from the high levels seen the past few years. Despite the sharp drop in crop prices, farmland values were typically holding at high levels.”

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

Agricultural Economy

Reuters writer Julie Ingwersen reported yesterday that, “U.S. corn futures rose 3.6 percent on Monday, the second-biggest single-day jump of 2014, as rains in the Midwest interrupted the harvest and slowed the arrival of a record-large crop into marketing channels, traders said.

“Soybeans and wheat followed corn’s lead, with a weaker dollar supporting grains, making them more attractive to those holding other currencies.

“‘Rains should be widespread and heavy across all but far northwestern portions of the Midwest today and tomorrow, which will stall corn and soybean harvesting,’ MDA Weather Services said Monday in a daily note.”

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

Agricultural Economy

Tom Meersman reported over the weekend at the Minneapolis Star-Tribune Online that, “The prospect of a bin-busting crop has driven corn prices to their lowest levels in four years and raised fears of a prolonged slump for crop farmers in Minnesota and elsewhere.

“After three years of profits, analysts are calling 2014 a break-even year, at best. Some think prices could drop more and stay low into 2015.”

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Regulations; Ag Economy; Climate; Immigration; and, Political Notes

Regulations

Todd Neeley reported yesterday at DTN that, “Farm groups are using mapping technology in their latest effort to block EPA from finalizing new regulations under the Clean Water Act.

“A map of the state of Iowa virtually is covered in red — a color that has agriculture groups burning mad at an image that represents all the waters that could be considered jurisdictional if the proposed Clean Water Act rule becomes finalized. An image from the South Dakota Farm Bureau maps the same waters painted green across easily two-thirds of that state — mostly covering South Dakota’s western half.

“A number of ag groups including the American Farm Bureau Federation, the National Pork Producers Council, National Corn Growers Association, National Cattlemen’s Beef Association, among others, have been undertaking the seemingly impossible task of mapping those waters that could be in EPA’s control. In addition, this week the House Committee on Science, Space and Technology is set to post online similar maps of all 50 states provided to the committee by EPA.”

With respect to the Science, Space and Technology Committee action regarding EPA maps, in a separate update yesterday at DTN, Mr. Neeley reported that, “A House committee is pressuring EPA to release more information about an October 2013 agency contract to create waters and wetlands maps of all 50 states, including making those maps part of the official record on the proposed Clean Water Act rule.

“Along with posting EPA maps to its website Wednesday, House Science Space and Technology Committee Chairman Rep. Lamar Smith, R-Texas, asked EPA Administrator Gina McCarthy to release other documents related to the agency’s spending of taxpayer dollars to hire a consultant to develop the maps.”

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Ag Economy; Farm Bill; Political Notes (Farm Bill); Climate; and, Regs

Agricultural Economy

Yesterday, USDA’s Economic Research Service (ERS) updated its 2014 Farm Sector Income Forecast, which stated that, “Net farm income is forecast to be $113.2 billion in 2014, down 13.8 percent from 2013’s forecast of $131.3 billion. If realized, the 2014 forecast would be the lowest since 2010, but would still remain more than $25 billion above the previous 10-year annual average. After adjusting for inflation, 2013’s net farm income is expected to be the highest since 1973; the 2014 net farm income forecast would be the fifth highest [related graph].

ERS noted that, “The annual value of U.S. crop production is expected to decline 10.6 percent in 2014 from 2013’s predicted all-time high. Expected declines in cash receipts are especially large for feed crops such as corn. Corn receipts are expected to experience the largest dollar decline in 2014 receipts among farm commodity categories…Declines in soybean receipts are anticipated as higher production and quantities sold are more than offset by large price declines (11.3 percent) [related graph].”

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Farm Bill; C.O.O.L.; Ag Economy; Climate; and, Regulations

Farm Bill

A news release yesterday from the U.S. Department of Agriculture (USDA) stated that, “[USDA] today announced continued progress in implementing provisions of the 2014 Farm Bill that will strengthen and expand insurance coverage options for farmers and ranchers. The new Supplemental Coverage Option (SCO), available through the federal crop insurance program and set to begin with the 2015 crop year, is designed to help protect producers from yield and market volatility.”

The release explained that, “SCO will be available for corn, cotton, grain sorghum, rice, soybeans, spring barley, spring wheat, and winter wheat in selected counties for the 2015 crop year. Producers should contact their crop insurance agents to discuss eligibility in time to sign up for winter wheat coverage. RMA plans to make SCO more widely available by adding more counties and crops. Information on SCO for 2015 winter and spring wheat is available on the RMA website at www.rma.usda.gov. Selected counties for other commodities will be released later this summer.”

Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “USDA announced on Tuesday where farmers growing winter wheat would be eligible to buy the new Supplemental Coverage Option crop insurance this fall.

“SCO, created in the 2014 farm bill, is a supplemental county insurance that could cover a portion of a farmer’s deductible revenue on a countywide plan. A farmer buys the insurance as an enhancement to an individual policy.

Winter wheat farmers would effectively be the first ones who get the option of buying SCO for their 2015 crop. However, not every winter wheat farmer will get the option of buying the policy. Farmers in counties reflecting about 80% of the overall winter wheat acreage would get the option of enrolling. Almost all of Kansas, excluding a couple of counties, would be able to enroll, as would farmers in the western half of Oklahoma, southern and western Nebraska, parts of South Dakota, Colorado, Montana, Idaho, Oregon and Washington State would get to enroll, as well as farmers in sections of California, Arkansas, Missouri, Illinois, Ohio, Michigan and Wisconsin as well as a few counties in both North and South Carolina, New Mexico, Wyoming, New York and Pennsylvania. For a full map, go to http://dld.bz/…

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