FarmPolicy

October 2, 2014

Farm Bill; Ag Economy; Biotech; and, Regulations

Farm Bill

Reuters writer Alonso Soto reported yesterday morning that, “The United States and Brazil are close to settling a decade-old trade dispute over cotton subsidies, three Brazilian sources close to the talks told Reuters, in what would be the first concrete step to repair ties hurt by an espionage scandal.

Washington is within hours of reaching an agreement with Brazilian cotton producers demanding compensation for cotton subsidies enjoyed by U.S. growers, a senior Brazilian government official said. He asked not to be named because negotiations are ongoing.”

The article explained that, “In 2004, Brazil won a challenge against U.S. cotton subsidies at the World Trade Organization, giving it the right to impose $830 million in sanctions against U.S. products. Brazil agreed to suspend the penalty if the United States paid into an assistance fund for Brazilian cotton farmers [related background here and here].

“The United States stopped paying the monthly compensation in October due to budget disagreements in Congress, prompting the Brazilian government to threaten to slap higher tariffs on U.S. products. The retaliation would have deepened diplomatic tensions between both countries, officials and experts said at the time.”

Leslie Josephs and William Mauldin reported last night at The Wall Street Journal Online that, “Brazil and the U.S. have reached an agreement to settle a more than decade-old dispute over U.S. cotton subsidies, people familiar with the negotiations said Tuesday.

“U.S. Agriculture Secretary Tom Vilsack and U.S. Trade Representative Michael Froman will sign the agreement with their Brazilian counterparts on Wednesday, a person familiar with the agreement said.”

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Farm Bill; and, the Ag Economy

Farm Bill

House Ag Committee Ranking Member Collin Peterson (D., Minn.) was a guest yesterday on the AgriTalk radio program with Mike Adams, where the conversation focused on the Farm Bill (audio replay here, MP3- 10:17). An unofficial FarmPolicy.com transcript of yesterday’s discussion is available here.

With respect to USDA Farm Bill implementation, Rep. Peterson noted that, “The Department has put a pretty heavy focus on getting this thing done. There’s been some controversy over the APH decision, which affects Texas and down in that part of the world, that I’ve heard about. The dairy stuff I think could have got going a little bit sooner, but that’s now being actively rolled out. We have our first meeting today in my district with the FSA folks and the University of Minnesota, and I’m going to attend one of those tomorrow to kind of see how that’s all going.

“We had the Secretary here last Thursday in Minnesota, and he’s announcing at that time the PLC/ARC signup. And that’s going to take some real study on the part of farmers to make sure that they understand the implications and have as much information as they can get before they have to make the decision probably sometime after the first of the year.”

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Farm Bill; Ag Economy; and, Biotech

Farm Bill

On Friday, Don Wick, of The Red River Farm Network (RRFN), spoke with Secretary of Agriculture Tom Vilsack about Farm Bill issues.

An audio replay of the RRFN discussion can be found here, while an unofficial FarmPolicy.com transcript of the conversation with Don Wick and Sec. Vilsack is available here.

In part, Sec. Vilsack indicated that, “As you know, direct payments, Don, are gone, replaced by a real focus on crop insurance and these new safety net programs, the Agricultural Risk Coverage program and the Price Loss Coverage program. Producers will have, starting Monday, the opportunity to reallocate—I should say the owners of the property have the opportunity to reallocate base acres and to adjust yields, and they’ll have that opportunity from September 29th to February 27, 2015. Starting on November 17, 2014, and continuing at least until March 31st of 2015, they’ll have the opportunity to make the election as to which of these safety net programs is best for their operation.

“To aid them in making that decision between now and the time they make the decision, we are also announcing the availability of an online tool that has been developed by several land grant universities and food policy councils that will allow producers to plug in numbers that are very specific to their own operation.”

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Farm Bill; Ag Economy; and, CFTC

Farm Bill

AP writer David Pitt reported yesterday that, “Farmers can start as early as next week on signing up for new safety net programs that U.S. Agriculture Secretary Tom Vilsack said replaces the much-criticized direct payments with government payouts based on the risks farmers face.

“Vilsack traveled to St. Paul, Minnesota, to hold a news conference to announce the rollout of the programs on Thursday. He held a conference call with reporters to further discuss the programs and answer questions. The programs were established in the 2014 farm bill and will allow farmers to protect themselves against commodity price drops and from lower revenue in poor crop years.

Payouts this year could be significant since anticipated record corn and soybean harvests have sent prices plummeting. At current prices many farmers are likely to lose money, a scenario that will enable them to collect government payments.”

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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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Policy Issues; Ag Economy; and, Regulations

Policy Issues

Marcia Zarley Taylor reported yesterday at the DTN Minding Ag’s Business blog that, “Plunging commodity prices are resetting potential corn payments under various Farm Bill options for 2014. The new calculations also point out how precarious price forecasting can be in assessing which farm program option fits each FSA farm. That’s why so many experts encourage growers to wait until December or January before making a firm commitment to their farm program choices.

“‘By the end of January, the estimate for 2014/15 spring planted crops will be ‘very’ accurate,’ says Kansas State University economist Art Barnaby. And although USDA hasn’t announced signup dates, it’s unlikely signup will occur before January.

Whether ARC or PLC provides better protection is still a moving target. ‘When the Farm Bill was signed last February, it seemed like 2014-crop prices would make [farm supports] largely irrelevant for corn producers. Maybe it would be relevant for wheat and sorghum and solid for rice,’ Brad Lubben, a University of Nebraska economist and director of the North Central Risk Management Education Center in Lincoln, Neb. ‘Six months of bearish price news since then has raised the safety net for corn.’”

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Policy Issues; Ag Economy; Biotech; and, Biofuels

Policy Issues

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.com transcript of the conversation with Ron Hays and Chairman Lucas is available here.

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Policy Issues; Ag Economy; and, Political Notes

Policy Issues

Tennille Tracy and Thomas M. Burton reported in today’s Wall Street Journal that, “The White House unveiled new measures on Thursday to try to preserve the effectiveness of infection-fighting drugs as strains of bacteria become increasingly resistant to the existing arsenal of antibiotics.

“The moves signal a growing concern over drug-resistant infections, which are linked to two million illnesses and 23,000 deaths in the U.S. each year, according to the Centers for Disease Control and Prevention. Some infections are almost entirely untreatable because the appropriate antibiotics have been rendered powerless.”

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Policy Issues; Ag Economy; Biotech; Regulations; and, Political Notes

Policy Issues

A news release yesterday from the House Ag Committee stated that, “Today, Chairman Frank Lucas held a public hearing to review the implementation of state pilot projects under the Supplemental Nutrition Assistance Program (SNAP) of the Agricultural Act of 2014. SNAP is designed primarily to increase the food purchasing power of eligible low-income households to help them buy a nutritional, low-cost diet. One of the reforms in the 2014 Farm Bill included new Employment and Training pilot projects. They allow for up to ten states to develop and test methods to help adults secure employment and job training and reduce their dependency on SNAP.”

Chairman Lucas noted at yesterday’s hearing that, “The Agricultural Act provides up to ten states, with up to $200 million, to operate pilot projects designed to help SNAP recipients prepare for and go to work. The law explains that the approved pilot projects must cover a range of geographic areas, include a mix of voluntary and mandatory participation, and include an assortment of methods designed to promote work.”

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Policy Issues; Ag Economy; Biotech; and, Regulations

Policy Issues

Emma Dumain, Megan Scully, and Matt Fuller reported yesterday at Roll Call Online that, “After postponing consideration last week of a stop-gap spending measure to fund the government past Sept. 30, House GOP leaders are poised in the days ahead to bring that same piece of legislation to the floor.”

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Biotech; Policy Issues; Ag Economy; and, Political Notes

Biotech

Neil Hume and Gregory Meyer reported on Friday at The Financial Times Online that, “Cargill, one of the largest suppliers of agricultural products and food, is seeking damages from Syngenta in a state court in the US over a biotech seed it claims has almost brought the country’s corn trade with China to a halt.

“Late last year, China started to turn away imports of US corn on the grounds they could contain a genetically modified seed that had not been approved for use in the country.

“The product called Agrisure Viptera had been developed by Syngenta and was designed to protect crops from common pests.”

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Ag Economy; Policy Issues; and, Political Notes

Agricultural Economy

Yesterday’s Crop Production report from the USDA’s National Agricultural Statistics Service (NASS) noted that, “Corn production is forecast at 14.4 billion bushels, up 3 percent from both the August forecast and from 2013. Based on conditions as of September 1, yields are expected to average 171.7 bushels per acre, up 4.3 bushels from the August forecast and 12.9 bushels above the 2013 average. If realized, this will be the highest yield and production on record for the United States [related graph].”

The report added that, “Soybean production is forecast at a record 3.91 billion bushels, up 3 percent from August and up 19 percent from last year. Based on September 1 conditions, yields are expected to average a record high 46.6 bushels per acre, up 1.2 bushels from last month and up 3.3 bushels from last year [related graph].”

Incorporating the NASS production estimates, the World Agricultural Outlook Board yesterday also released its monthly World Agricultural Supply and Demand Estimates (WASDE) report.

A summary of key variables for corn from yesterday’s WASDE report is available here, while a soybean summary can be found here.

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Ag Economy; Biofuels; and, Policy Issues

Agricultural Economy

AP writer Joan Lowy reported yesterday that, “Senators and shippers complained Wednesday that widespread delays in freight rail shipments are hurting a wide array of industries and driving some companies out of business, and they expressed doubt that the railroad companies are doing all they can to fix the problem.

“The delays, which escalated late last year and continued through the spring and summer, appear to be the result of too few rail cars and too much demand from shippers, officials representing the agriculture, auto and chemical industries told a hearing of the Senate Commerce, Science and Transportation Committee. Lawmakers displayed a photo of a giant mound of wheat standing in the open because North Dakota farmers can’t get a railroad company to ship it.

Shipping rates are 90 percent higher than they were in 2002, but service has drastically diminished, said Calvin Dooley, president of the American Chemistry Council.”

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Policy Issues; Ag Economy; and, Regulations

Policy Issues

AP writer Steve Karnowski reported yesterday that, “The U.S. Department of Agriculture announced $328 million in funding Monday to protect and restore farmlands, grasslands and wetlands across the country.

The initiative, using money provided in the new five-year farm bill, will buy conservation easements from farmers to protect the environment, help wildlife populations and promote outdoor recreation, the USDA said in its announcement. The agency selected 380 projects nationwide covering 32,000 acres of prime farmland, 45,000 acres of grasslands and 52,000 acres of wetlands.”

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

Policy Issues

Michael R. Crittenden reported in today’s Wall Street Journal that, “Lawmakers returning to Capitol Hill on Monday hope to quickly deal with a government funding measure and several other must-address items before decamping to the campaign trail ahead of November’s midterm elections.

“After a five-week summer break, legislators have given themselves a tight window to pass a stopgap measure to keep the government running beyond Sept. 30, as well as decide how to handle other-deadline driven issues such as the U.S. Export-Import Bank and a long-standing moratorium on Internet access taxes.”

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Ag Economy; Policy Issues; and, Political Notes

Agricultural Economy

Robert Wright reported yesterday at The Financial Times Online that, “Senior executives from two of North America’s biggest rail operators on Thursday pleaded with regulators not to force them to take other operators’ trains on their networks in areas of the northern plains plagued by severe freight delays.

“The executives from BNSF, operator of the US’s second-biggest rail network, and Canadian Pacific were speaking at a Surface Transportation Board field hearing in Fargo, North Dakota.”

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