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].”
Chris Casteel reported yesterday at The Oklahoman (Oklahoma City) Online that, “Rep. Frank Lucas spent several years working his way to the top spot on the House Agriculture Committee. Once he became chairman, in 2011, he fought for three years to get a sweeping farm bill passed; it was arguably the most significant legislation in the past two years that made it through both houses and got signed into law.
“The western Oklahoma rancher will lose his chairmanship in the next Congress, which begins in January, because of the term limits House Republicans impose on those positions. But he isn’t bemoaning the loss of power and prestige. He said his blood pressure has improved considerably.”
The article added that, “As for the Agriculture Committee, Lucas said that he’ll remain active but won’t bug the next chairman, Texas Republican Mike Conaway.
“‘I would like to give my successor an opportunity to develop his own perspective,’ Lucas said.”
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.’”
Marcia Zarley Taylor reported yesterday at DTN that, “The ghost of the Southwest’s mega-drought continues to haunt growers even after a few rain showers this last growing season. Producers there have been used to paying dearly for each dollar of crop insurance coverage, but the cost-benefit ratio could reach a breaking point in 2015.
“‘Under old farm policies, lenders would look at your portfolio and see how much crop insurance guaranteed in gross revenue, than add in direct payments and that was the basis for your crop loans,’ said Matt Huie, a 38-year-old crop producer from Beesville near the Gulf Coast rim of Texas. ‘Now we’ve seen our basis for loans erode because of drought and erosion in commodity prices.’
“Texas state climatologist John Nielsen-Gammon describes prolonged drought in the Corpus Christi area as one of the two most severe in the region’s recorded history. Only the epic drought of the 1950s to the early 1960s matches it.”
Sabrina Tavernise reported in today’s New York Times that, “The amount of antibiotics sold for use in livestock rose substantially in recent years, according to the Food and Drug Administration, a pattern that experts said was troubling given the efforts to battle antibiotic resistance in humans.
“In an annual report posted online on Thursday, the agency said the amount of medically important antibiotics sold to farmers and ranchers for use in animals raised for meat grew by 16 percent from 2009 to 2012.
“Most troubling, health advocates say, was a rise in the sale of cephalosporins, a class of drug that is important in human health, despite new restrictions the F.D.A. put into place in early 2012. The report showed an 8 percent increase in the sale of those drugs in 2012, confirming advocates’ fears that the agency’s efforts may not be having the desired effect. Sales of those drugs rose by 37 percent from 2009 to 2012.”
The article noted that, “The National Chicken Council, an industry group, said in a statement that the sale of antibiotics did not necessarily correlate with antibiotic resistance trends. It said that most antibiotics used in chicken production were not used in human medicine.
“The report did not differentiate by species; it included all animals raised for meat.”
Late last week, Ron Hays, of The Oklahoma Farm Report and Radio Oklahoma Network, spoke with House Ag Committee Chairman Frank Lucas (R., Okla.) about Farm Bill issues.
An audio replay and summary of the Chairman’s remarks from Thursday can be found here, while an unofficial FarmPolicy.comtranscript of the conversation with Ron Hays and Chairman Lucas is available here.
The Reuters article explained that, “But drought conditions in California and other states could further drive up prices of fresh produce and beef, the USDA warned.
“The agency forecast wholesale pork prices to jump by 10 percent to 11 percent in 2014, hurt by declining supplies after a virus has killed some 7 million piglets in the past year.
“Wholesale beef prices are forecast to jump by 8 percent to 9 percent in 2014, although rising imports are helping to offset some of the decline in domestic supplies.”
Friday’s article added that, “‘The ongoing drought in California could potentially have large and lasting effects on fruit, vegetable, dairy and egg prices, and drought conditions in Texas and Oklahoma could drive beef prices up even further,’ the USDA said.”
Jesse Newman and Tony C. Dreibus reported in today’s Wall Street Journal that, “Tumbling corn prices [related graphs here, here, and here] are sowing fears that many U.S. farmers will suffer their first losses in years and the agricultural economy could face its first sustained slump in a decade.
“Corn prices have plunged nearly 30% in the past three months to their lowest point since 2010 as near-perfect weather in the Midwest fuels expectations of a second consecutive bumper harvest. Prices of other crops have fallen sharply as well, with soybeans trading near 2½-year lows and wheat near four-year lows.”
Abbie Fentress Swanson reported on Friday at National Public Radio (NPR) Online that, “If you’re bringing home the bacon, you may have noticed a price tag inching upward.
“Consumers are paying nearly 13 percent more for pork at the supermarket than they were this time last year, according to the U.S. Department of Agriculture. A deadly pig disease is partially to blame.
“Porcine epidemic diarrhea virus, or PEDv, has killed more than 7 million piglets in the past year, and the number of cases is on the rise. Many hog producers are worried about how to keep their farms immune from a disease that has no proven cure.”
The NPR update noted that, “Meanwhile, economists predict that farmers will reduce the size of their herds this year to minimize costs should PEDv infect their operations. Consumers can also expect pork prices, which now average almost $4 a pound, to continue to rise during the second half of 2014.”
A news release yesterday from Sen. Mark Pryor (D., Ark.) indicated that, “Chairman Mark Pryor today spoke on the Senate floor in support of the Agriculture Appropriations Bill, bipartisan legislation he crafted to help grow our agricultural industry, support our rural communities, and improve the quality of life for families. Pryor is the Chairman of the Agriculture Appropriations Subcommittee.
“The bill passed unanimously out of the Appropriations Committee in May and will now be voted on by the full Senate as part of the bipartisan appropriations package.”
In part, Sen. Pryor stated that, “Mr. President, today I rise in support of the FY15 Agriculture Appropriations Bill. Ranking Member Blunt and I worked tirelessly to craft this common-sense, bipartisan bill. It passed unanimously out of the Appropriations Committee last month, and I’m confident my colleagues will support it this week on the Senate floor.
“Agriculture is something America does better than anyone else. In Arkansas alone, agriculture contributes $17 billion in economic activity annually. It supports 25% of my state’s economy and it is responsible for 1 in 6 jobs.”
Emmarie Huetteman and Ron Nixon reported late last week at The New York Times Online that, “A House vote on an Agriculture Department spending bill containing a provision that would allow schools to opt out of the Obama administration’s nutrition standards for school meals has been delayed until sometime next week, a senior Republican aide said Thursday.”
The article noted that, “Representative Robert B. Aderholt, Republican of Alabama and chairman of a House subcommittee on agriculture appropriations, has said that delaying the rules would give schools 12 months to help them comply.
“Senator Debbie Stabenow, Democrat of Michigan and chairwoman of the Senate Agriculture Committee, said that she recognized that some schools might have problems complying with the nutritional standards and the added cost.
“But Ms. Stabenow said that paying for healthier foods in schools costs less than treating conditions like Type 2 diabetes and hypertension in children, on which $14 billion is spent a year. She said she would work with other lawmakers to help schools but opposed any effort to delay the nutritional standards.”
A news release yesterday from Cargill indicated that, “Cargill, one of the largest pork producers in the U.S., is continuing its commitment of moving to group housing for its sows that produce hogs for pork. Company owned facilities will be 100 percent group housing by the end of calendar 2015. Contract hog farms that contain Cargill-owned sows will transition to 100 percent group housing by the end of calendar 2017. The hogs produced by Cargill-owned sows represent approximately 30 percent of the total hogs harvested annually at the company’s two pork processing facilities in Illinois and Iowa.”
The update noted that, “Based upon the timetable Cargill has set up for completing the transition to group housing for gestating sows, the company will be prepared to support ‘early adopter’ customers seeking pork products from alternative sow housing in the next few years.”
Tom Hamburger reported in today’s Washington Post that, “First lady Michelle Obama is set to take an unusual, high-profile step Tuesday into the center of a legislative battle by delivering White House remarks taking issue with makers of frozen pizzas and french fries and other companies seeking to scale back school lunch standards.
“Obama is scheduled to speak out against a House measure, backed by Republicans and pushed by the food industry and some school officials, that would allow some districts to opt out of federal mandates passed in 2010 to reduce sodium and increase whole grains, fresh fruits and vegetables in school lunches. White House aides say she will announce the launch of a campaign-style push to fight the legislation.
“The effort fits with the spirit of Obama’s ‘Let’s Move’ campaign and other initiatives in which she has advocated for healthy eating and a reduction of obesity. Until now, however, she has largely shied away from direct confrontations with lawmakers and industry groups.”
“The CFTC fares better than in the past in that the GOP allows for a modest $3 million increase for information technology investments. But the $218 million budget is still $62 million less than President Barack Obama’s request and continues a pattern that has frustrated the administration’s ability to implement Wall Street reforms called for under the Dodd-Frank law enacted in July 2010.
“In the case of nutrition programs, the House bill seeks to open the door for starchy, white potatoes to be added to the list of qualified vegetables under the WIC supplemental feeding program for pregnant women and their young children. The Agriculture Department would also be required to establish a waiver process for local school districts which have found it too costly to comply with tougher nutrition standards for school lunch and breakfast programs.”
DTN Ag Policy Editor Chris Clayton reported yesterday that, “Demonstrating some of the complications involved in agriculture and climate change, U.S. Agriculture Secretary Tom Vilsackdisputed Republican views on the Obama administration’s work with dairy producers to reduce methane while the secretary also dismissed a study raising doubts about carbon emissions from cellulosic biofuels.
“Vilsack spoke at an Earth Day forum on climate change held at Drake University and co-sponsored by the magazine New Republic and the League of Women Voters.
“USDA also used the forum to announce $6 million in grants to 10 universitiesto study the effects of climate change on agriculture. The universities are designated as USDA’s ‘climate hubs’ to help producers adapt to changing climate conditions.”
An update posted yesterday at fibre2fashion.com reported that, “The board of the Brazilian Association of Cotton Producers (ABRAPA) has called for a speedy implementation of the World Trade Organization (WTO) panel against the US farm bill, especially in view of the conflict with US regarding the cotton subsidies.
“According to a statement issued by ABRAPA, board members of ABRAPA recently met with Brazilian Ambassador to WTO Paulo Estivallet de Mesquita, also the director of the Economic Department of the Brazilian Ministry of Foreign Affairs (MFA), and requested him to seek for quick action from the WTO panel against the US farm bill [sic].”