April 24, 2014

Des Moines Register: New ethanol industry blooms in Iowa, but could soon be uprooted

Categories: Ethanol

On the front page of today’s Des Moines Register, Donnelle Eller and Christopher Doering take a closer look at issues regarding biofuels, “New ethanol industry blooms in Iowa, but it could soon be uprooted.”

In part, today’s article noted that, “But just as a new industry for Iowa is about to take root, a proposed change in government policy could limit demand for ethanol and send new plants and jobs to other countries. Think Brazil, China or European nations…The U.S. Environmental Protection Agency has proposed reducing the amount of renewable fuel that must be blended into the fuel supply that powers American vehicles. The EPA says it’s bending to market realities: The mandates were too aggressive and hard to reach, given that autos have become more fuel-efficient.”

The Register article added that, “Using cellulosic ethanol in your tank is expected to reduce greenhouse gas emissions 86 percent when compared with gasoline, according to the U.S. Department of Energy. Corn-based ethanol, as it’s currently made, reduces greenhouse gases an average of about 20 percent.” (See related video below).



Farm Bill; Ag Economy; and, Biofuels

Farm Bill Issues

Reuters writer Christine Stebbins reported yesterday that, “U.S. farmers and bankers have almost a year to get ready for major changes in 2015 as crop insurance rather than direct cash payments to producers becomes the centerpiece of farm policy under the five-year farm bill signed by President Barack Obama earlier this month.

“For 2014 plantings, analysts said there will be no major changes to crop insurance except sharply lower grain prices than in 2013, which will lower potential payments and premiums. Then in 2015, farmers will have a new insurance option for supplemental coverage based on local county yields.”

“‘The message is crop insurance does become the foundation of the farm bill and the primary safety net for producers because they have lost all those direct payments,’ [Michael Barrett, senior vice president for crop insurance at Farm Credit Services of America] said.”


Farm Bill; Ag Economy; Biofuels; Budget; and, Immigration

Farm Bill

David Rogers reported yesterday at Politico that, “After a two-year struggle and more perils than ‘Downton Abbey,’ Congress should finally see a new farm bill this week as House-Senate negotiators worked through the weekend in hopes of filing the legislation by Monday night.

“Going into Sunday night, disputes continued over livestock regulations. But afternoon staff briefings were already being held on the proposed agreement, and the hope was to call the conferees together for their signatures on Monday.

“Indeed, the mood was such that no one believed any longer that more time would help; instead, it was judged better to grab the opportunity for House action this week. And if the farm bill is filed Monday night, the leadership is proposing to call it up as early as Wednesday, a fast turnaround for a measure given up as dead by many just months ago.”

Mr. Rogers noted that, “Bipartisan support remains crucial, but Democrats have won significant compromises on food stamp funding and Speaker John Boehner (R-Ohio) is promising a real push to deliver the needed Republican votes.”


Farm Bill; Ag Economy; Biofuels; Biotech; Budget; and, Immigration

Farm Bill

David Rogers reported yesterday at Politico that, “Yards from the finish line, farm bill negotiators are struggling with two final issues — dairy and payment limits — each of which takes Congress back full circle to the question asked when the whole debate began two years ago.

How far should government go to protect farmers from bad times — and, sometimes, themselves?

“In dairy’s case, Speaker John Boehner (R-Ohio) is adamant that he won’t accept the hands-on approach espoused in the Senate bill to manage future milk supplies to protect farmers’ margins. Corporate giants like Kraft Foods and Nestle back the speaker. And this puts House Agriculture Committee Chairman Frank Lucas (R-Okla.) in the hellish position of having to go against the man who’s been his best friend and ally in the whole tortured farm bill debate: Rep. Collin Peterson (D-Minn.).”

The article noted that, “In the case of payment limits, it’s a very different set of players. But the question is again one of balancing government’s role and the risks of modern agriculture.”


Farm Bill; Ag Economy; Biofuels; Biotech; Budget; and, Immigration

Farm Bill – Policy Issues

The “Washington Insider” section of DTN explained yesterday (link requires subscription) that, “A number of reports have indicated that an agreement among farm bill conferees that would provide a new dairy policy program without supply management means the farm bill is all but completed. However, there remain several loose ends still dangling until Congress reconvenes next week.

“Chief among these are provisions covering crop subsidy caps and country-of-origin labeling (COOL) for meat and meat products. Some Capitol Hill sources predict that the four farm bill principals likely will decide those issues during a meeting among themselves rather than holding a meeting that includes all 41 conferees.

“There are some who are promoting a modified North American label for COOL, without a U.S.-origin label, but some pro-COOL farm group lobbyists are opposed. Others are counseling that USDA take its time regarding the final COOL rule, choosing instead to wait until the World Trade Organization decides a pending case on that rule that has been filed by Canada and Mexico.”


Farm Bill; Ag Economy; Biotech, Biofuels; CFTC; and, Immigration

Farm Bill Issues

Ali Meyer reported yesterday at that, “A record 20% of American households, one in five, were on food stamps in 2013, according to data from the U.S. Department of Agriculture (USDA).”

Meanwhile, Ron Nixon reported yesterday at The New York Times Online that, “Late last year, staff members at the Capital Area Food Bank here [Washington] began fielding requests for larger deliveries from the dozens of soup kitchens and food pantries that it supplies as more and more people showed up seeking help.

“The food bank said it was not unusual to see a surge before Thanksgiving or Christmas. But this time the lines were caused not by the holidays but by a $5 billion cut to the federal food stamp program that took effect in November when a provision in the 2009 stimulus bill expired.

“Now the food bank, which provided about 45 million pounds of food last year, says it is preparing for even greater demand as Congress prepares to cut billions of dollars more from the food stamp program, which is included in a farm bill that has yet to pass. About 47 million Americans receive food stamps.”

Mr. Nixon explained that, “It is unclear when the new cuts will kick in, even if Congress manages to pass a new farm bill, an effort that has taken almost two years. The House and the Senate appear to have worked out most of their differences on the bill. That compromise is expected to cut about $9 billion from food stamps over 10 years. House Republicans had wanted to trim financing by $40 billion over the same period, and a bipartisan Senate bill sought a $4 billion cut.

“But House members, most of them Republicans, may be unwilling to pass a bill that includes anything less than the $40 billion cut. And senators, especially Democrats, may see the compromise measure as going too far. President Obama has threatened to veto any bill that cuts too deeply.”


Farm Bill; Ag Economy; Biofuels; Biotech; and, Immigration

Farm Bill: Dairy Issues- News Article Timeline

Ramsey Cox reported yesterday afternoon (12:32 pm) at The Hill’s Floor Action Blog that, “Sen. Richard Blumenthal (D-Conn.) raised his glass of milk Thursday on the Senate floor to celebrate a reported breakthrough in a deal on dairy in the farm bill negotiations.”

The Hill update noted that, “Blumenthal, who serves on the Senate Agriculture Committee, said he was ‘pleased’ that farm bill conferees were nearing a deal on dairy policies — the last issue that needed to be worked out in the bill.

“‘I am pleased they have reached a dairy compromise,’ Blumenthal said. But the senator didn’t reveal any details about the deal.”

A short time later (1:23 pm), Erik Wasson reported at The Hill’s On the Money Blog that, “The stalled farm bill is picking up momentum again, as negotiators try to resolve all remaining differences this week.

“House Agriculture Committee ranking member Collin Peterson (D-Minn.) said Thursday that farm bill negotiators are aiming to unveil the legislation next week and have it voted on during the last week of January, half of which is taken up by the Republican annual retreat.”


Farm Bill; Ag Economy; Budget; Biofuels; and, Biotech

Farm Bill

Erik Wasson reported yesterday at The Hill’s on the Money Blog that, “The House could be moving closer to resolving the impasse over dairy that has so far stymied passage of a five-year farm bill.

“House Agriculture Committee Chairman Frank Lucas (R-Okla.) said Wednesday that work is moving forward on a compromise dairy subsidy reform.”

Mr. Wasson explained that, “Lucas said the compromise does not have supply management but instead is seeking another disincentive to stop farmers from overproducing milk in response to the subsidy.

“‘You have to have disincentives to cause the market to make rational decisions. That’s not just dairy policy, that’s everything in life,’ he said. ‘This compromise has to provide a rational market signal without telling you how to turn the valve on your milk tank.’

“‘We’re moving forward until somebody tells us no,’ Lucas added.”


Farm Bill; Ag Economy; Biotech; Biofuels; Animal Ag; Immigration; and, Political Notes

Farm Bill

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “A fight over dairy provisions is threatening to hold up completion of the farm bill this week.

“Negotiators late Wednesday were still aiming to hold a formal meeting of the 2014 farm bill conference committee on Thursday to wrap up the long-delayed $1 trillion subsidy and food stamp measure.

“But a battle over dairy, pitting Speaker John Boehner (R-Ohio) against Rep. Collin Peterson (D-Minn.), the top Democrat on the House Agriculture Committee, was complicating matters.”


Farm Bill; Biofuels; and, the Ag Economy

Farm Bill- Policy Issues

Christopher Doering reported yesterday at The Des Moines Register Online that, “Iowa Sen. Chuck Grassley said he was still confident Congress could complete its much-delayed work on a five-year, $500 billion farm bill this month.

It looks ‘more like the end of the second week of January I would expect that we get a bill to the president,’ Grassley told reporters in a conference call Thursday. ‘I haven’t heard anything to the contrary.’

“Grassley said among the sticking points so far is a measure he has championed that would place limits on how much in federal subsidies an individual farmer may receive and revising the definition of a farmer to prevent non-farmers from receiving large benefit payouts.”

Sen. Grassley also highlighted these issues in a couple of tweets yesterday (see here and here).


Farm Bill; Trade; Budget; Regulations; Biofuels; and, Immigration

Farm Bill

Tony C Dreibus reported on Tuesday at The Wall Street Journal Online that, “Corn futures fell on the last trading day of 2013, bringing this year’s loss to 40% and making the grain the worst performer on the S&P GSCI Index of 24 commodities. Soybeans also declined while wheat rose.

Corn prices plunged this year as production in the U.S., the world’s biggest grower and exporter of the grain, surged to a record 13.989 billion bushels. Farmers gathered 160.4 bushels an acre from U.S. corn fields, a 30% increase from last year’s drought-ravaged crop, according to the Agriculture Department.”


Farm Bill; Ag Economy; and, Biofuels

Farm Bill- Policy Issues

The “Washington Insider” section of DTN indicated yesterday (link requires subscription) that, “Like it or not, the farm bill has long been deeply intertwined with the national social safety net. Now, it seems possible that it will become even more so–a fact that could reduce odds of passage of a five-year bill in the near future.”

The DTN item pointed out that, “[T]he House bill included such large cuts for nutrition that it has always been questionable whether the conference committee’s heroic compromise–a still large nearly $9 billion cut for nutrition–could pass.”

Yesterday’s update added that, “Now, however, the Democrats seem bent on upping the ante for the whole process. Last week, Rep. Chris Van Hollen, D, Md., told colleagues he wants them to withhold essential Democratic votes on any final House-Senate farm bill unless Republicans agree to extend the now-expired, longer-term unemployment compensation. Congressional Democrats say they are united in their criticism of the pull-back in emergency unemployment insurance and in efforts to extend the programs in the new year.”


Ag Economy; Farm Bill; Regulations; and, Biofuels

Agricultural Economy

Gregory Meyer reported yesterday at The Financial Times Online that, “US farmers are becoming gripped by anxiety even as they close the books on their best financial year.

“A twin threat of sagging grain prices and a retreat on biofuels policy in Washington has prompted warnings that some farm operations could struggle to break even in 2014, a stark shift from the nominal record $131bn they earned this year.”

Mr. Meyer explained that, “Lower crop prices could also force Washington to pay billions of dollars worth of new subsidies outlined in the farm bill under negotiation in Congress, even as other subsidies are cut.

“A prime source of concern is that farmers will collect an average $4.40 per bushel for corn for the marketing year that started on September 1, down 36 per cent from the prior year, the Department of Agriculture estimates. Corn for March delivery traded at just over $4.27 at the end of last week on the Chicago Board of Trade.”


Farm Bill; Regulations; Ag Economy; Biofuels; and, Budget Issues

Farm Bill

Friday’s Congressional Record contained a statement from Sen. Pat Leahy (D., Vt.), which indicated in part that, “Madam President, while the days are limited before the end of 2013, the Farm Bill Conference Committee presses on, working together in a bipartisan fashion to resolve differences and to take the steps necessary to enact a comprehensive and balanced farm bill. Under the leadership of Chairwoman Stabenow and Chairman Lucas, it now appears we are on target to complete our work on this bill early in the New Year.

“Nonetheless, it has now been more than 440 days since the farm bill first expired. Farms are businesses, and farmers in Vermont and across the country are desperate to have a new farm bill enacted to give them the much-needed certainty for their planting and other farm decisions. Since the 2008 farm bill expired last year, we have seen parts of the country ravaged by blizzards that wiped out cattle herds while commodity prices slump.”


Farm Bill; Trade; Ag Economy; Budget; Biofuels; and, EPA

Farm Bill- Policy Issues

Jeffrey T. Lewis reported yesterday at The Wall Street Journal Online that, “Brazil’s Trade Ministry took a step Wednesday toward implementing measures in response to the U.S. halting payments to Brazilian cotton agreements.

“The ministry said it would start, in January, a series of public consultations, which it described as ‘a preparatory act for an eventual retaliation.’

“A work group at the trade ministry is preparing a list of possible measures to implement, and will complete its preparations by Feb. 28, the ministry said.”


Farm Bill; Ag Economy; Budget; and, Biofuels

Farm Bill

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Negotiators have just a few details left before a deal on the long-awaited $1 trillion farm bill is complete.

“Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) told reporters that a framework agreement is ‘close’ and is on track to be announced shortly after Jan. 1.

“‘We will announce it the first week of January. We’ve got to get final scores in,’ she said. ‘We have a couple of things we’re negotiating on now, but we’re close.’”


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