FarmPolicy

March 30, 2015

Sunday Update: Policy Issues; Ag Economy; and, Biofuels

Reminder: Only four reports left, FarmPolicy.com ends Friday.

Policy Issues

Reuters writer Christine Stebbins reported on Friday that, “U.S. farmers will have another week to enroll in the government’s new subsidy programs under the five-year farm bill, with the deadline extended to April 7, the U.S. Department of Agriculture said on Friday.

“The final day for farmers to update their crop acreage and yield history, the first step to qualify for the new subsidies, will be extended to April 7. The farmers had already had the deadline to update their acreage data extended by one month to March 31.”

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Tuesday Morning Update: Baseline Updates- Policy Issues; Animal Research; Trade; Iowa Ag Summit; and, the Ag Economy

Baseline Updates- Policy Issues

On Monday, the Congressional Budget Office (CBO) released its updated baseline Budget Projections for 2015 to 2025.

A brief overview of CBO’s January baseline projections can be found here.

Also on Monday, the Food and Agricultural Policy Research Institute (FAPRI) released its latest baseline-briefing book.

Both baseline updates showed a change in farm program spending projections from previous baseline reports.

Politico writer David Rogers, and Philip Brasher of Agri-Pulse, separately examined the numbers in greater detail on Monday- details of their reporting can be found at this FarmPolicy.com update from yesterday.

More broadly, yesterday’s FAPRI update stated that, “Lower prices have resulted in a large decline in crop producer income and could result in significant federal spending under new programs established by the 2014 farm bill. After reaching record levels in 2014, most livestock sector prices are also expected to decline in 2015. As a result, net farm income is projected to fall sharply.”

Average projected corn prices recover to $3.89 per bushel for the 2015/16 marketing year in response to reduced U.S. production. Wheat and soybean prices both fall in 2015/16, to $5.17 per bushel and $9.29 per bushel, respectively, given continued large global supplies,” FAPRI said.

In addition, CBO’s outlook for the SNAP program is available here, while the CBO’s outlook for child nutrition programs can be found here.

Meanwhile, Marcia Zarley Taylor reported yesterday at DTN (link requires subscription) that, “U.S. crop farmers have just weeks left to make their five-year farm program decision. For most, the March 31 choice will be narrowed between ARC-County and Production Loss Coverage (PLC). Many corn-soybean growers in the northern Corn Belt see good reason to go with what they call the ‘surer thing’ of ARC payments, DTN interviews have found.

“Even in counties that experienced bumper yields in 2014, growers may face little or no ARC payments in 2014 but still are banking that ARC will outpay PLC for 2015 and beyond. For example, McLean County, Illinois, averaged an amazing 217 bpa corn yield in 2014, so stands to collect no ARC payments, the University of Illinois estimates. However, with a return to average or below average yields in 2015, ARC-County payments could jump to $78/base acre in 2015.”

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Highlights and Summary: Iowa Ag Summit

Donnelle Eller and Jennifer Jacobs reported on the front page of Sunday’s Des Moines Register that, “Nine GOP White House contenders did their best to sound more compelling and better-versed on farm-related matters than their competitors Saturday as they were quizzed during an unusual showcase of agriculture policy on the presidential campaign trail.”

The Register writers explained that, “Unlike the raucous, free-wheeling political rock concert that was the freedom summit, which was hosted by conservative Republican U.S. Rep. Steve King, [moderator and pork and ethanol entrepreneur Bruce Rastetter], a mainstream Republican, kept tighter control on the conversation. He staged a living-room-like setting with leather chairs and a vase of tulips and conducted interview-style question-and-answer sessions on renewable fuels, the wind energy production tax credit, normalizing trade with Cuba, biotechnology, illegal immigration, water pollution from farm runoff and other topics.

“The mood in the crowd of about 900 was warm but mostly subdued as they heard from, in order: New Jersey Gov. Chris Christie, former Arkansas Gov. Mike Huckabee, former Florida Gov. Jeb Bush, former Texas Gov. Rick Perry, U.S. Sen. Ted Cruz of Texas, U.S. Sen. Lindsey Graham of South Carolina, former U.S. Sen. Rick Santorum of Pennsylvania, former New York Gov. George Pataki and Wisconsin Gov. Scott Walker. Despite the free tickets and free lunch, a third of the seats were empty by afternoon.”

Sunday’s article noted that, “The Republicans’ stances differed little except on the Renewable Fuel Standard, a federal mandate that outlines how much ethanol and biodiesel must be blended annually into the country’s fuel supply. Most said they understand and accept the need for the mandate, at least until it can be phased out. Santorum and Huckabee in particular passionately defended it.

But Pataki expressed vocal opposition to the RFS, as did Cruz, whose answers were met with applause.”

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Prelude to The Iowa Ag Summit- Perspective on Crop Insurance Subsidies Will Likely Be Solicited

Following coverage of the Iowa Ag Summit from earlier this week, Jennifer Jacobs reported on Thursday at The Des Moines Register Online that, “The debut of Jeb Bush [related article] on the Iowa presidential landscape is one factor that marks Saturday’s Iowa Agriculture Summit as an important milestone of the early 2016 campaign.

“It’s also the first big multi-contender GOP presidential forum that will attract business Republicans who are more interested in economic issues than social issues or God’s place in the civic arena.”

Ms. Jacobs went on to discuss “eight things to watch for” at the Summit; the list included the following:

1. Who are the hottest speakers?

2. Who will exhibit the best farm savvy?

3. Will anyone be perceived as anti-ag?

4. How will Christie deal with any awkwardness with the moderator? (“[Host Bruce Rastetter, an agribusiness leader and GOP power player] was one of seven Iowa politicos who flew to New Jersey on a 2012 recruitment mission. He has since backed off support for Christie, saying he’s reserving judgment on the 2016 contenders.”)

5. Will Rubio be a new stand-out? Or someone else?

6. How will Patty Judge be received?

7. Will this event elevate Rastetter’s stature among Republicans?

8. Will GOP contenders who skip the summit be hurt by their absence?And  reported today at Radio Iowa Online that, ” who say they may compete for the Republican Party’s 2016 presidential nomination will be featured at the first-ever Iowa Agricultural Summit tomorrow. The event’s host is of Hubbard, a man who has donated hundreds of thousands of dollars to conservative candidates and causes over the past decade and a half — from the fortune he amassed raising hogs and investing in ethanol production.

And, O. Kay Henderson reported today at Radio Iowa Online that, “Eleven politicians who say they may compete for the Republican Party’s 2016 presidential nomination will be featured at the first-ever Iowa Agricultural Summit tomorrow. The event’s host is Bruce Rastetter of Hubbard, a man who has donated hundreds of thousands of dollars to conservative candidates and causes over the past decade and a half — from the fortune he amassed raising hogs and investing in ethanol production.

“‘Food doesn’t come from a grocery store. You just happen to buy it there,’ Rastetter said during an interview with Radio Iowa, ‘so this is something that affects every American because every American eats and is concerned about food safety, the environment, sustainability — those kinds of things.'”

The article noted that, “‘I hear a number of them are calling around, asking people for their views, their perspective, getting updates on policies and why they exist,’ Rastetter said. ‘So I think that’s all a good thing and we had hoped they would be more up-to-speed with ag policy with just the idea of this summit.’

“Rastetter said the topics for his conversations with the candidates haven’t been kept secret. For example, he plans to ask whether the candidates support federal crop insurance subsidies and pending international trade deals that could boost U.S. ag exports. He will also ask for their views on topics like organic food labeling and immigration policy.”

Today’s update added that, “The event comes at a critical time for agriculture, according to [Iowa GOP Governor Terry Branstad]. He points to falling ag land values, layoffs at John Deere and the USDA’s prediction that net farm income will fall by 32 percent this year. Branstad said the candidates will have an opportunity to ‘articulate a vision’ for bringing ‘prosperity’ to rural America.”

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Friday Morning Update: Biotech; Policy; Ag Economy; Iowa Ag Summit; and, Biofuels

Biotech

Jacob Bunge reported in today’s Wall Street Journal that, “U.S. regulators for the first time are proposing limits on the planting of some genetically engineered corn to combat a voracious pest that has evolved to resist the bug-killing crops, a potential blow to makers of biotech seeds.

“The measures proposed by the Environmental Protection Agency represent a bold step to thwart the corn rootworm, a bug that ranks among the most expensive crop threats to U.S. corn farmers.

“The plan is aimed at widely grown corn varieties sold by Monsanto Co. , the first to sell rootworm-resistant corn, and rival seed makers including DuPont Co. and Dow Chemical Co. Such corn seeds have been genetically modified to secrete proteins that are toxic to destructive insects, but safe for human consumption, helping to reduce farmers’ reliance on synthetic pesticides.”

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Monday Quick Take: Ag Economy; Trade; Biofuels, and, the Budget

Agricultural Economy

As the ongoing drought in California persists, with resulting adverse water policy determinations for many Golden State farmers, Cindy Change and Matt Hamilton reported in Monday’s Los Angeles Times that, “A winter storm swept through Southern California on Sunday, bringing scattered showers, hail and thunder while higher elevations were expected to see a foot of snow overnight.

“The low-pressure system brought a smattering of storm cells, dumping rain throughout the region from San Luis Obispo to Orange counties.”

Monday’s article noted that, “After a morning lull in precipitation, a second, weaker storm is expected to pass through Monday afternoon. But the rain will not put much of a dent in the state’s lingering drought.

“‘Right now it’s enough to make my cactus smile and to green everything up,’ said Bill Patzert, a climatologist with the Jet Propulsion Laboratory in La Cañada Flintridge. ‘But we would need an inch a day for the next 30 days to make a dent in this drought…. Let’s get right down to it, this is puny.'”

Reuters news reported on Monday that, “Striking truck drivers resumed some roadblocks in Brazil on Monday even as the government cracked down on protesters and promised to implement a law to lower toll costs and give other benefits to the transport sector.

“In the southern state of Rio Grande do Sul, where police had cleared roads by detaining protesters and bringing in back-up troops on Sunday, protesters were stopping trucks at 10 points, the local highway police said. Police were working to clear them, a spokesman said.”

Monday’s article explained that, “The nearly 2-week-old movement has slowed grain deliveries, forced meat-processing plants to close and started to leave some grocery stores with bare shelves.

The country’s No. 2 and 3 soy-exporting ports of Paranagua and Rio Grande have warned that dwindling soy stocks at the ports could affect exports if roadblocks continue.”

Meanwhile, Alexandra Stevenson and Paul Mozur reported in today’s New York Times that, “The smartphone tells the story of a kiwi fruit in China.

With a quick scan of a code, shoppers can look up the fruit’s complete thousand-mile journey from a vine in a lush valley along the upper Yangtze River to a bin in a Beijing supermarket. The smartphone feature, which also details soil and water tests from the farm, is intended to ensure that the kiwi has not been contaminated anywhere along the way.”

Today’s article noted that, “Controlling China’s sprawling food supply chain has proved a frustrating endeavor. Government regulators and state-owned agriculture companies have tried to tackle the problem in a number of ways — increasing factory inspections, conducting mass laboratory tests, enhancing enforcement procedures, even with prosecutions and executions — but food safety scandals still emerge too often.

Chinese technology companies believe they can do it better. From the farm to the table, the country’s biggest players are looking to upgrade archaic systems with robust data collection, smartphone apps, online marketplaces and fancy gadgetry.”

Trade

The New York Times editorial board indicated on Monday that, “The Obama administration and the governments of 11 countries could conclude a sweeping trade agreement known as the Trans-Pacific Partnership in the coming months. Members of Congress should make sure that this and other deals being negotiated are good for America.”

The Times item, added that, “In recent years, trade agreements have become increasingly comprehensive, covering subjects that go far beyond familiar trade issues like tariffs and quotas. The T.P.P. negotiators, for instance, are discussing labor rights, environmental protection, patent and copyright law and how governments treat state-owned businesses. Done right, such deals can raise standards everywhere, protecting workers and opening new markets for American businesses. But there are potential downsides, too, including possible job losses.”

Biofuels

Dan Morgan, a retired reporter and editor with The Washington Post, noted in a column in yesterday’s Des Moines Register that, “Every day nearly a thousand railroad cars roll across the country carrying part of the soaring U.S. energy production that has shaken the global oil cartel and sent gasoline prices plummeting. The cargo is ethanol made from home-grown corn.

“This other American energy boom has been overshadowed by the stunning comeback of the domestic oil industry. President Barack Obama didn’t mention ethanol, biofuels, or agriculture in his State of the Union address, even as he boasted that the country was ‘number one in oil and gas.’ Yet a thriving renewable fuels industry also deserves a share of the credit for the energy renaissance.”

 

Mr. Morgan indicated that, “Based on numbers from the Department of Energy and the oil industry, the amount of ethanol used daily in the United States is now roughly equivalent to the gasoline from 1.2 million barrels of crude oil. That’s about the volume of oil from North Dakota’s Bakken shale, and only slightly less than Qatar’s daily output in 2014.

“Without ethanol, global stocks of oil would have been lower and crude oil prices would have been $10 a barrel higher at the end of 2013, according to a study last year by economist Philip K. Verleger Jr., an energy adviser to Presidents Gerald Ford and Jimmy Carter. Ethanol sold for less than gasoline for all but seven weeks between the start of 2011 and last November, according to data collected by Oil Price Information Service and New York Mercantile Exchange. ‘Blending ethanol with gasoline has been profitable to the refining industry and some of that has been passed on to consumers,’ said Scott Irwin, a University of Illinois agricultural economist.”

Yesterday’s column pointed out that, “Yet ethanol from corn is now out of favor in Washington. In 2011, Congress cancelled a 33-year-old tax credit for blending it with gasoline. For more than a year, the White House has been considering a proposal by the Environmental Protection Agency to scale back requirements for biofuels in gasoline and diesel fuel that were set in 2007 energy legislation. EPA has taken other actions as well that could slow or even end the growth of ethanol, based on the agency’s concern about the fuel market’s ability to absorb larger volumes.

“The just-released White House annual economic report to Congress does cite the growth of ethanol and biofuels along with other energy achievements. But President Obama, once an enthusiast, last mentioned ethanol publicly on Aug. 17, 2011, when he stressed the need to ‘figure out how we can make biofuels out of things that don’t involve our food chain.'”

Concluding, Mr. Morgan noted that, “With grain prices near lows of a few years ago and ethanol production at record levels, corn farmers insist they can grow more crops for energy without hurting consumers or the land. ‘No matter how you slice it, corn produces food and energy more efficiently than anything else,’ said Ron Alverson, a corn farmer and founding chairman of Dakota Ethanol, a 48 million gallon-a-year plant in Wentworth, S.D.

The administration may not see it that way. Even so, the biofuels industry deserves better than to be the orphan of President Obama’s energy policy. In an ‘all of the above’ energy strategy, it seems only fair to give the ‘corn patch’ a place alongside the ‘oil patch.'”

Budget

Mike DeBonis and Paul Kane reported on the front page of Monday’s Washington Post that, “House Republican leaders will face a familiar dilemma this week when they try again to approve funding to keep the Department of Homeland Security functioning through the end of September: They know their party is too divided to resolve the crisis on its own but fear the political fallout if they rely on Democrats to get them out of the jam.”

The Post article noted that, “By late Sunday, [Speaker John] Boehner’s House Republicans had no clear path to a solution other than retreating from their demands that the DHS funding measure include provisions that would block ­implementation of President Obama’s executive actions on immigration.”

Speaker Boehner addressed the DHS funding issue yesterday on “Face the Nation.”

Keith Good

Wednesday Morning Update: Senate Ag Committee Farm Bill Hearing, Ag Economy; Trade; Budget; and, Biofuels

Policy Issues- Senate Ag Committee Hearing; House Ag Committee Hearing Today

In two separate panels, agricultural producers and Secretary of Agriculture Tom Vilsack testified before the Senate Agriculture Committee on the implementation of  last year’s Farm Bill Tuesday morning.

A FarmPolicy.com summary and overview of the hearing is available here.

AP writer Mary Clare Jalonick reported on Tuesday that, “Congressional Republicans are laying the groundwork for an overhaul of the nation’s food stamp program, trying again after an unsuccessful attempt two years ago.

“House Agriculture Chairman Mike Conaway, R-Texas, said Tuesday that his panel is starting a comprehensive, multiyear review of the program to see what’s working. He said ‘either huge reforms or small reforms’ could come from that, though he wouldn’t detail what those might be.

“Conaway says a 2013 GOP effort to cut food stamps ‘didn’t resonate well’ because Republicans didn’t spell out why it was important. House Republican leaders tried unsuccessfully to cut the program by 5 percent annually by passing a bill with broad new work requirements.”

The AP article noted that, “Some Democrats say they are wary of the review process. Agriculture Committee member James McGovern, a Massachusetts Democrat who is a longtime advocate for food stamps, said he wonders why the SNAP program is singled out for review and not expensive farm programs.

“‘I am deeply concerned about this,’ McGovern said. ‘This is a program that by and large works.’”

Meanwhile, David Pierson reported yesterday at the Los Angeles Times Online that, “An estimated 9 million people are sickened and 1,000 killed by food-borne illnesses in the U.S. each year, but until now officials were unable to pinpoint which foods were most likely to blame.

“In a report released Tuesday, the U.S. Centers for Disease Control and Prevention, the U.S. Food and Drug Administration and the U.S. Department of Food and Agriculture’s Food Safety and Inspection Service detailed the sources of the most common food-borne illnesses with the aim of improving food safety and policy.”

The LA Times article noted that, “Among the findings: More than 80% of E. coli O157 cases were attributed to beef or crops such as leafy vegetables.

“About 75% of campylobacter illnesses were linked to dairy (66%), particularly raw milk dairy, and chicken (8%).

“More than 80% of listeria illnesses were attributed to fruit (50%) and dairy (31%).”

 

Agricultural Economy

Also on Tuesday, USDA’s National Agricultural Statistics Service released its annual U.S. Crop Values Summary, a link to the complete report along with highlights regarding corn and soybeans can also be found at FarmPolicy.com.

Tuesday’s Los Angeles Times contained an article highlighting ongoing drought concerns California. The article included this quote from Bill Patzert, a climatologist with the Jet Propulsion Laboratory: “If you think we’ve turned around on the drought, stop smoking whatever you’re smoking.”

Details on this article, as well as Reuters news updates that focused on agricultural issues in Brazil, Ukraine, and Russia have been posted here.

And Jon Hilsenrath reported on the front page of today’s Wall Street Journal that, “Federal Reserve Chairwoman Janet Yellen, sounding upbeat about the economy, laid the groundwork for interest-rate increases later this year.

“‘The employment situation in the United States has been improving on many dimensions,’ Ms. Yellen told the Senate Banking Committee on Tuesday, her first of two days of semiannual testimony before lawmakers. Spending and production had increased at a ‘solid rate,’ she added, and should remain strong enough to keep bringing unemployment down.”

 

Trade Issues (TPA, TPP); West Coast Ports

And in trade related news, William Mauldin reported in Wednesday’s Wall Street Journal that, “Lawmakers from both parties are trying to strike a difficult balance as they wrangle over the final intricacies of a bill that would expedite consideration of trade deals.

“House and Senate leaders crafting the so-called fast-track bill want to include sweeteners to attract skeptical Democrats, including rules to allow lawmakers greater access to the details of continuing trade negotiations.

“But supporters fear too many provisions friendly to Democrats could alienate Republicans and the business community, or even put a major Pacific trade deal at risk when it comes up for a final vote. The U.S., Japan and 10 other Pacific Rim countries are hoping to agree to the final terms of the trade partnership in coming months.”

Mr. Mauldin explained that, “The bill’s authors—Sen. Orrin Hatch (R., Utah), Sen. Ron Wyden (D., Ore.) and Rep. Paul Ryan (R., Wis.)—are now fighting over how much leverage to give lawmakers to remove any coming trade deals from fast-track protection. That would subject the pacts to ordinary amendments and procedural delays.”

Reuters writer Krista Hughes reported on Tuesday that, “U.S. Federal Reserve Chair Janet Yellen warned Congress on Tuesday against a bid to crack down on currency cheats and said adding currency rules to trade deals could hobble monetary policy.

“Lawmakers have introduced legislation allowing firms to seek compensation for currency weakness overseas and some are also fighting to include a currency chapter in upcoming trade deals such as the 12-nation Trans-Pacific Partnership (TPP).”

Also on Tuesday, Reuters news indicated that, “A meeting aimed at sealing a Pacific trade deal has been called for April, Mexico’s economy minister said on Tuesday, adding he was optimistic it would be sealed in the first half of 2015.

“‘I am very optimistic that there will be good news for the TPP in the first half of this year,’ Ildefonso Guajardo told Reuters, referring to the Trans-Pacific Partnership.”

On the West Coast Port issue, Diana Marcum reported on Tuesday at the Los Angeles Times Online that, “An end to labor strife at West Coast ports should speed up cargo operations, but it may be too late to help California’s drought-weary nut and citrus farmers.

Citrus took the hardest hit. Oranges, many bound for Chinese New Year celebrations, sat decaying on ships, at docks and on the ground as a nine-month labor dispute snarled ports. Fieldworkers, packinghouse employees and truck drivers had their hours cut.”

The article added that, “Losses could reach as high as 50% of citrus exports, or $500 million, according to trade groups… [F]or California’s almond farmers and processors, the severe cargo backlogs have raised fears that foreign buyers could cancel contracts for almonds stuck in storage and buy from other countries.”

 

Budget

David Nakamura and Sean Sullivan reported on the front page of today’s Washington Post that, “The Senate moved closer Tuesday to a deal to avert a partial shutdown of the Department of Homeland Security, but the proposal faced an uncertain future in the House, where Republican leaders conspicuously refused to embrace it.

“Senate Majority Leader Mitch McConnell (R-Ky.) told reporters he was prepared to move swiftly to extend funding for DHS through the fiscal year in a bill that is not contingent on Republican demands to repeal President Obama’s executive actions on immigration.”

 

Biofuels

Bloomberg writer Mario Parker reported on Tuesday that, “Ethanol producers are cutting output after getting squeezed by the biggest drop in gasoline prices since 2008.

“Valero Energy Corp. and Green Plains Renewable Energy Inc., representing about 15 percent of U.S. capacity, have reduced operations as margins narrowed. At a typical mill in Illinois that makes ethanol from corn, profit margins have almost totally disappeared, compared with $1.33 a gallon a year ago, according to AgTrader Talk, a Clive, Iowa-based consulting company.”

Keith Good

Policy; Trade; Regulations; Biofuels; Labor; and, the Ag Economy

Policy Issues

DTN Political Correspondent Jerry Hagstrom reported yesterday that, “The chairmen of the House and Senate Agriculture Committees detailed some of their priorities Tuesday in speeches before the National Association of State Departments of Agriculture.

“House Agriculture Committee Chairman Michael Conaway, R-Texas, discussed a wide range of issues. Senate Agriculture Committee Chairman Pat Roberts, R-Kan., used most of his speech to explain where he thinks the nation stands politically.”

Mr. Hagstrom indicated that, “Conaway also said he hopes the House Budget Committee — should it undertake budget reconciliation — gives the Agriculture Committee a dollar figure to cut from the programs under the committee’s jurisdiction without any instructions on what to cut.

“Conaway declined to say whether he would take any cut entirely from the Supplemental Nutrition Assistance Program (SNAP), the biggest program at USDA, which accounts for about 70% of USDA spending.

“Conaway said President Barack Obama’s budget proposal, which includes a cut to the crop insurance program, has no chance of being approved by Congress, but did not rule out a cut to crop insurance in reconciliation.”

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Policy Issues; Ag Economy; Trade; and, Biofuels

Policy Issues

A recent update at the Red River Farm Network Online indicated that, “Minnesota Congressman Collin Peterson, who is the ranking member on the House Agriculture Committee, says the heavy lifting is done for the 2014 farm bill. ‘We’ve got everybody on board now with a position that it is not going to be reopened so now the issue is making sure it is implemented correctly.’ While it won’t be reopened, Peterson says the farm bill will likely be subject to criticism once the costs become known. ‘I think people are going to be surprised at how much this is going to end up costing, which is what I was afraid of at the time we passed the bill,’ said Peterson, ‘For example, Iowa and, probably, Minnesota look like they’re going to sign up for the ARC so you’re going to have corn farmers that were getting $20 an acre in direct payments that are going to get $90 an acre and that will cause a commotion.’”

The full interview with RRFN’s Mike Hergert and Rep. Peterson is available here (MP3- 8:00).

The RRFN update also noted that, “South Dakota Senator John Thune was concerned about retaining the target price, which is now known as the reference price, program when the farm bill was written. ‘With commodity prices now falling, I think people may start farming for the farm program instead the market,’ Thune told RRFN [MP3], ‘I was concerned about that and I think that will increase dramatically the cost of the farm bill.’ Thune worries that may create the temptation to reopen the farm bill and ‘I’m very concerned about that.’”

And recall that late last week, Mike Hergert interviewed House Ag Committee Chairman Mike Conaway (R., Tex.), who noted in part that, “We’ll take an approach that says you want to spend $80 billion a year on food stamps? Let’s take a look at that and let’s see what works, what doesn’t work, and let’s understand the program. Let’s reevaluate how that program is considered successful by looking at how quickly folks can get off the program, back on their own two feet, taking care of their own families, as opposed to the current model that says, you know, it’s successful the longer you stay on it. So we’ll be going through that.”

Mr. Hergert’s full interview with Chairman Conaway is available here (MP3- 6:00); see also this photo from the House Ag Committee’s Instagram webpage with a caption that noted: “I had a blast talking with Mike Hergert with the #RedRiver #Farm Network. Ag reporters like Mike who ask good questions & get the facts right provide a service to our democracy & specifically to our #farmers & #ranchers. The farmers in #NorthDakota & #Minnesota are lucky to have Mike working for them

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

Trade

Vicki Needham and Mike Lillis reported yesterday at The Hill Online that, “A trade war is erupting between Democrats and the Obama administration over efforts to pass ‘fast-track’ legislation that would smooth the way for two major trade deals.

Dozens of House Democrats are expressing deep reservations about the White House’s trade agenda, putting themselves on a collision course with President Obama over concerns that the deals will benefit big business at the expense of U.S. workers.”

The article noted that, “Speaker John Boehner (R-Ohio) said earlier this month that the legislation will need at least 50 Democratic votes since there will be some GOP opposition.”

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Policy; Ag Economy; Trade (Cuba); Regulations; and, Biofuels

Policy Issues

Evan Halper reported on the front page of yesterday’s Los Angeles Times that, “The political clash over climate change has entered new territory that does not involve a massive oil pipeline or a subsidy for renewable energy, but a quaint federal chart that tries to nudge Americans toward a healthy diet.

“The food pyramid, that 3-decade-old backbone of grade-school nutrition lessons, has become a test case of how far the Obama administration is willing to push its global warming agenda.

“The unexpected debate began with a suggestion by a prominent panel of government scientists: The food pyramid — recently refashioned in the shape of a dinner plate — could be reworked to consider the heavy carbon impact of raising animals for meat, they said. A growing body of research has found that meat animals, and cows, in particular, with their belching of greenhouse gases, trampling of the landscape and need for massive amounts of water, are a major factor in global warming.”

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Cuba; Ag Economy; Policy Issues; Immigration; Biofuels; and, Regulations

Cuba- Trade Issues

Karen DeYoung reported on the front page of today’s Washington Post that, “The Obama administration announced new rules easing travel and trade restrictions against Cuba on Thursday, moving quickly to implement steps the president ordered less than a month ago when he said the United States would reestablish diplomatic relations with the island’s communist government.

“Freed from cumbersome requirements to obtain a Treasury Department license, individual Americans will be able to travel to Cuba provided they say the trip is intended to serve religious, educational or other approved purposes under the still-standing U.S. embargo. When they return, they can bring up to $400 in Cuban goods, including $100 worth of alcohol and tobacco.”

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

Policy Issues

Philip Brasher reported on Friday at Agri-Pulse Online that, “A top lobbyist for food and beverage giant PepsiCo Inc. who was formerly a top aide to Senate Agriculture Chairman Pat Roberts is taking over as the Agriculture Committee’s chief of staff as it prepares to rewrite federal child nutrition policy.

Joel Leftwich, a native of Wellington, Kansas, worked for Roberts, R-Kan., as deputy staff director for the committee before becoming senior director for PepsiCo’s public policy and government affairs team in March 2013.

One of the committee’s main orders of business this year will be to reauthorize the law that sets standards for school meals and the Women, Infants and Children nutrition program. The programs have a broad impact on the food and beverage industry. First lady Michelle Obama has made it a top priority to preserve higher school nutrition standards that USDA imposed under the expiring law, the Healthy, Hunger-Free Kids Act.

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ERS: Cost of corn falls relative to ethanol, boosting refiner margins

Categories: Ethanol

ers

From the U.S. Department of Agriculture’s Economic Research Service (ERS)- “Reflecting growing supplies, corn prices have been trending lower since reaching a record high season average farm price of $6.89 per bushel for the 2012/13 marketing year (September/August). Monthly average corn prices fell sharply between July 2013 and January 2014, and then declined further through 2014, reflecting a record 2014 corn crop, projected at 14.4 billion bushels. Corn prices in 2014/15 are projected at $3.50 per bushel, down 50 percent since the summer of 2013. However, throughout this period ethanol prices have remained relatively steady, averaging $2.41 per gallon. Corn is the leading feedstock for ethanol production in the United States, and ethanol represents about 40 percent of total corn use. With the price of corn declining and ethanol prices steady, ethanol producer margins have strengthened over the past 18 months. Higher margins would typically encourage greater production, but with domestic use limited to the 10 percent ethanol blend already used in most gasoline, the market can only expand through increased gasoline use or higher exports. This chart is based on data found in the U.S. Bioenergy Statistics database.”

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Policy; Immigration; Biotech; Biofuels; Ag Economy; Trade; and, Regulations

Policy Issues

Secretary of Agriculture Tom Vilsack was a guest on yesterday’s AgriTalk radio program with Mike Adams, where the conversation focused on beef checkoff issues, COOL (Country of Origin Labeling), Farm Bill implementation, and trade with Cuba (audio replay here, MP3- 11:30). An unofficial FarmPolicy.com transcript of yesterday’s discussion is available here.

On the checkoff issue, Sec. Vilsack indicated that, “Well, Mike, it was fairly obvious that the industry was not interested in having a second checkoff, and obviously the only reason we proposed it was because I believe, and I think most in the industry believe, that we need additional resources for promotion and research in the beef industry. This is an industry that faces some interesting challenges at home, and some great opportunities abroad, and there is an opportunity, I think, with increasing the checkoff and increasing investment in the checkoff, to do more research and more promotion and more marketing.

“But the industry made the decision that they were not interested in a second checkoff, and they have been unable to reach consensus on how to increase the existing checkoff, so when the writing is on the wall, you basically have to pay attention to the attitude of the folks you’re trying to serve. And it’s an unfortunate circumstance. My hope is that the industry will take an opportunity now to reach consensus, to figure out a way to strengthen the beef checkoff program.”

And in comments regarding beef imports, Sec. Vilsack pointed out that, “But if there is an equivalency determination, which is to say that the processes are equal to or better than what the U.S. does, and if it comes from an area where we’ve already done a risk assessment and find little or no risk, and that there are protections, then the science and the international rules basically say we have to open up our market opportunities, and then that allows us to go to other countries who are creating barriers to our beef products and be able to articulate and say very clearly we live by these rules and we think that—and we live by the science, and we think everyone should live by the rules and the science so that you have a much more objective system, rather than a subjective one.”

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Trade; Ag Economy; Immigration; Biofuels; and, Policy Issues

Trade Issues

Jeevan Vasagar reported yesterday at The Financial Times Online that, “A small grilled sausage from Bavaria has become the unlikely symbol of German resistance to the transatlantic trade deal being negotiated between the EU and the US, after the country’s agriculture minister warned that ‘not every sausage can be protected’ in the trade talks.

Christian Schmidt, Germany’s agriculture minister, said in an interview with Der Spiegel: ‘If we want to seize the opportunities of free trade with the enormous American market then we can’t carry on protecting every sausage and cheese speciality.’

“Food producers, politicians and campaigners against the trade deal seized on his remarks as evidence that the protection of regional brands would be sacrificed to globalisation.”

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