FarmPolicy

December 18, 2014

Tax Extenders- Budget; Policy Issues; Trade; Ag Economy; and, Regulations

Tax Extenders- Budget

Michael A. Memoli reported yesterday at the Los Angeles Times Online that, “A turbulent lame-duck session of Congress came to a sudden end Tuesday as the Senate rushed to clear a lingering tax bill and some key presidential nominations in a late-night flurry of final votes.

Lawmakers signed off on a deal to extend $45 billion worth of tax breaks through this calendar year, ensuring that businesses and individuals can claim the deductions in their next IRS filings. The 76-16 vote also approved what had been a separate bill to create new tax-free accounts that can be used for the care of disabled family members.”

The article explained that, “The agreement sent lawmakers home earlier than many had expected just a few days ago, when Sen. Ted Cruz (R-Texas) forced members into a marathon weekend session as he made a final, unsuccessful effort to derail President Obama’s new immigration policy during consideration of the $1.1-trillion spending deal.

Congress passed the bill Saturday and Obama signed the package into law without ceremony Tuesday night, the White House announced.”

Mr. Memoli stated that, “The Senate formally adjourned shortly before midnight. The House, which has already wrapped up its work, will follow suit this week.”

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Ag Economy; Biotech; Biofuels; Policy Issues; and, Budget Developments

Agricultural Economy

An update yesterday from the Food and Agriculture Organization of the United Nations stated that, “Latest indications confirm that world cereal production will reach an all-time record of more than 2.5 billion tonnes in 2014.

“Buoyed by bumper crops in Europe and a record maize output in the United States of America, this year’s cereal output should reach 2.532 billion tonnes, including rice in milled terms, or 0.3% higher than 2013, according to FAO’s latest Crop Prospects and Food Situation Report.

“The record global cereal harvest in 2014 will outpace projected world cereal utilization in 2014/15, allowing stocks to rise to their highest level since 2000 and pushing the worldwide stock-to-use ratio, a proxy measure for supply conditions, to rise to 25.2 percent, its highest level in 13 years, according to FAO.”

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Budget; Policy Issues; and, the Agricultural Economy

Budget

Ashley Parker and Jonathan Weisman reported in today’s New York Times that, “Congressional leaders reached a deal Tuesday on a more than $1 trillion spending package that would fund most of the federal government through the current fiscal year.

“But because negotiations on the package dragged over policy details, House lawmakers also prepared to move on a short-term spending measure that would avert a government shutdown if Congress cannot pass the larger bill by Thursday, when the current funding expires.”

The Times article explained that, “The spending bill would fund nearly all of the federal government through September 2015, except for the Department of Homeland Security, which it would fund only through February, in retaliation for President Obama’s unilateral action to defer the deportation of as many as five million undocumented immigrants. Congressional Republicans plan to take up funding for the agency — which has primary responsibility for carrying out the president’s immigration directive — early next year, when they will control both chambers of Congress and believe they will have more leverage.”

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Ag Economy; Budget- Immigration; Policy Issues; and, Biofuels

Agricultural Economy- Trade Issues- Biotech, and Transportation News

Anthony Faiola reported on the front page of today’s Washington Post that, “On a velvety green patch of the French countryside, organic farmer Jean Cabaret gave a little shudder. A looming trade deal with the United States, he fears, may make his worst culinary nightmare come true: an invasion of Europe by American ‘Frankenfoods.’

“‘Hormone-boosted beef. Chlorine-washed chicken. Genetically altered vegetables. This is what they want for us,’ warned Cabaret, standing before his majestic herd of free-range cows. ‘In France, food is about pleasure, about taste. But in the United States, they put anything in their mouths. No, this must be stopped.’

“In Europe, this is a season of angsteven paranoia — over a historic bid to link the United States and the 28-nation European Union in the world’s largest free-trade deal.”

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Ag Economy- Trade; Budget; Tax Extenders; Policy Issues; and, CFTC

Agricultural Economy- Trade Issues

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.

The Fifth District (Richmond) noted that, “Some growers planned fewer equipment purchases relative to a year ago;” while the Tenth District (Kansas City) indicated that, “Farm income expectations fell sharply since the last survey period as above- average corn and soybean yields were not expected to fully offset low crop prices. District contacts reported current levels of farm income that were significantly lower than last year despite some support from crop insurance and strong profits in the livestock sector. Although reduced income for crop producers had contributed to a rise in the need for short-term loans to the farm sector, agricultural bankers reported that sufficient funds were available for qualified borrowers. Following several years of very strong growth, District cropland values declined slightly in recent months and were holding just above year-ago levels.”

And the Ninth District (Minneapolis) pointed out that, “Farm incomes continued to be affected by lower crop prices; in contrast, livestock and dairy producers benefited from lower feed costs and high output prices.”

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Ag Economy; Policy Issues; Biotech; Biofuels; Budget; and, Tax Extenders

Agricultural Economy

Jacob Bunge and Jesse Newman reported in today’s Wall Street Journal that, “Illinois farmer Darrel Gingerich harvested a huge corn crop this autumn thanks to near-flawless weather. Now, he is stashing it away.

“‘I didn’t sell any more than we had to in order to cover our costs for this year,’ the 53-year-old said.

“Mr. Gingerich is one of many Midwestern farmers who decided to hold on to their crops as they watched prices languish over the summer. Their collective strategy has since paid off, helping to fan a 15% rise in corn futures and a 10% jump in soybean futures since September that is also the result of a slow U.S. harvest and gains in other agricultural markets. Corn’s gain over the roughly two-month harvest period of October and November was its largest for that span in eight years and second largest in more than three decades, while soybeans’ climb was the biggest in five years.”

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

Agricultural Economy

Donnelle Eller reported on the front page of yesterday’s Des Moines Register that, “As good as the outlook is for cattle producers over the next couple of years, it is about as grim for Iowa corn and soybean growers, thanks to tumbling commodity prices and the stubbornly high cost of growing crops.

Lower grain prices have helped cattle, pork and other livestock producers post improved profits. But the price slump also creates economic uncertainty in a state that leads the nation in corn production and ranks second in soybeans. As Iowa grain farmers brace for potential losses, leaders ask: How much will farm income drop, and how far will it ripple?”

The article noted that, “Chad Hart, an Iowa State University farm economist, estimates that grain production losses in Iowa this year could be as high as $2.6 billion, based on year-end pricing. Farmers who nailed down higher prices earlier in the year will fare better. Overall, improved profits from livestock producers are expected to more than offset grain losses.”

The Register article added that, “Hart agreed that government subsidies will help mute the effect of lower prices and compensate some Iowa farmers for crop damage this year, such as heavy spring rains in north Iowa. ‘But it doesn’t get you out of the hole,’ he said. ‘It just makes the hole less deep.’”

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Policy Issues; Ag Economy; Immigration-Budget; and, Regulations

Policy Issues

Helena Bottemiller Evich reported yesterday at Politico that, “[‘Top Chef’ judge Tom Colicchio] is part of a growing army of chefs across the country looking to channel their growing celebrity to influence food and agriculture policy in Washington, from school nutrition to the farm bill to animal welfare and even fisheries management. Their number is legion, their ranks full of names like Rachael Ray and Mario Batali along with scores of local celebrity chefs and restaurateurs — and their increasingly organized effort backs up some of the Obama administration’s sweeping food policy agenda right as it faces down an adversarial Congress.”

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Ag Economy; Tax Extenders; Policy Issues; Budget- Immigration; Regs; and, the RFS

Agricultural Economy

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].”

ERS indicated that, “The annual value of U.S. crop production is expected to decline in 2014 from 2013’s all-time high [related graph]…[C]orn production has increased significantly since the 2012 marketing year, with corn exports more than doubling. Soybean production has also increased significantly since the 2012 marketing year as have soybean exports.”

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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; RFS; Immigration; and, the Ag Economy

Policy Issues

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.”

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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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Policy Issues; Ag Economy; Trade; Tax Extenders; Regs; Biotech; and, Immigration

Policy Issues

Bill Tomson reported yesterday at Politico that, “‘It’s never too early to start on the next farm bill,’ said Rep. Mike Conaway, the next chairman of the House Agriculture Committee.

“The Texas Republican, whose position in the top agriculture post was confirmed Tuesday by the House Republican Steering Committee, told POLITICO in an exclusive interview Friday that he’s already thinking about the 2019 farm bill, planning an in-depth review of the food stamp program and ready to help get an immigration reform bill done to help farmers.

“It’s too early to judge the major new subsidy programs in the 2014 farm bill — the five-year, $500 billion blueprint for U.S. agriculture policy that was only signed into law in February — but the next House Agriculture Committee chairman said he expects to begin drafting the next bill by 2017 or 2018 at the latest.”

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Video: Affordability of Crop Insurance Policies

Categories: Farm Bill

From National Crop Insurance Services, November 11, 2014- Crop insurance policies must remain affordable for farmers and ranchers or the entire farm safety net will fail, crop insurance providers said today in a new educational video.

Farmers help fund current farm policy by spending approximately $4 billion a year out of their own pockets on crop insurance policies and by shouldering a portion of losses in the form of deductibles before receiving assistance.

“But if insurance bills get too big, or deductible losses get too high, fewer farmers will sign up for policies, and the whole system will collapse,” noted the video. “If that happens, not only will it be harder for farm families to bounce back after disaster, but costs that are currently being borne by farmers and private insurance providers will shift back to taxpayers.”

Congress took steps in the 2014 Farm Bill to keep crop insurance affordable. Among the steps spotlighted in the video:

· Farmers receive discounts on the premiums they pay for coverage, including discounts for new and beginning farmers looking to start a career in agriculture.
· Supplemental coverage is made available to help counterbalance a portion of deductible losses.
· And Congress defeated attempts by some opponents of agriculture to cap crop insurance benefits and make policies more expensive for everyone.

This is the second in a series of educational videos meant to highlight three policy attributes that are essential to maintaining a strong crop insurance system. The first three-minute segment examined the importance of making crop insurance, widely available, and a future piece will look at maintaining the viability of private-sector delivery.

Congress cemented crop insurance’s role as the centerpiece of the farm safety net during the 2014 Farm Bill,” explained Tom Zacharias, president of National Crop Insurance Services (NCIS), the trade group that sponsored the video series. “However, that safety net will breakdown if crop insurance policies aren’t widely available, aren’t affordable to producers, and aren’t economically viable to be administered by efficient private insurance providers.”

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

Agricultural Economy

A news release yesterday from USDA’s National Agricultural Statistics Service (NASS) indicated that, “According to the November Crop Production report released today by [NASS], corn production is expected to reach 14.4 billion bushels this year, up 3 percent from 2013 [related graph]. Soybean production is forecast at 3.96 billion bushels this year, up 18 percent from 2013 [related graph]. Both crops are on target for record-high yields and production. Based on conditions as of November 1, yields for corn are expected to average 173.4 bushels per acre, down 0.8 bushel from the October forecast, but 14.6 bushels above the 2013 average. As for soybeans, yields are expected to average a record high 47.5 bushels per acre, up 0.4 bushel from October and up 3.5 bushels from last year.”

Also yesterday, the World Agricultural Outlook Board (WAOB) released its monthly World Agricultural Supply and Demand Estimates (WASDE) report, which incorporated the NASS production report.

The WASDE report included this overview table of corn supply and demand variables, and stated that, “Projected corn ending stocks are lowered 73 million bushels. The projected range for the season-average farm corn price is raised 10 cents on each end to $3.20 to $3.80 per bushel.”

Likewise, yesterday’s WAOB report included this overview table of soybean variables, and explained that, “Soybean and soybean product prices for 2014/15 are unchanged from last month. The U.S. season-average soybean price range is projected at $9.00 to $11.00 per bushel. Soybean meal and soybean oil prices are projected at $330 to $370 per short ton and 34 to 38 cents per pound, respectively.”

With respect to wheat, yesterday’s WASDE update added that, “The projected range for the 2014/15 season-average farm price is narrowed 10 cents on both the high and low end to $5.65 to $6.15 per bushel.”

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