FarmPolicy

December 18, 2018

Ag Economy; Farm Bill; Tax Extenders; WRDA; Transportation Bill; and, Organics

Agricultural Economy- Fed Districts Note Land Values Soften

Jacob Bunge reported in today’s Wall Street Journal that, “Farmland values fell in the first quarter in much of the Midwest, the latest sign of a downturn in the market after a yearslong boom fueled by rising commodity prices, according to Federal Reserve reports on Thursday.

“Average prices for agricultural land in the Federal Reserve Bank of St. Louis’s district, which includes parts of Illinois, Indiana and Missouri, fell 6% in the first quarter from the prior quarter, the bank said [related graph].”

Mr. Bunge explained that, “Prices for nonirrigated farmland in the Kansas City Fed district, which includes Kansas and Nebraska, declined 1.4% over the same period. Meanwhile, the Chicago Fed reported a 1% quarter-to-quarter decline, the first in five years for a district that includes Iowa, Michigan and parts of Illinois and Indiana [related graph].

“The reports indicate the U.S. farmland market has softened further, after cooling last year as U.S. grain and soybean prices fell sharply amid large harvests. Farmers produced the biggest corn crop ever last autumn, just one year after the nation’s worst drought in decades drove prices for the grain to record highs. Corn futures prices at the Chicago Board of Trade have fallen 24% over the past 12 months.”

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Farm Bill- Policy Issues (Hearings); Tax Extenders; Ag Economy; and, CFTC- Friday

Farm Bill- Policy Issues: House Ag Committee Hearing

The House Ag Committee held a hearing yesterday “to review the state of the rural economy,” and heard from Secretary of Agriculture Tom Vilsack.

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Farm Bill; and, the Ag Economy

Farm Bill Issues

House Agriculture Committee Ranking Member Collin Peterson (D., Minn.) was a guest on yesterday’s AgriTalk radio program with Mike Adams where the conversation focused on the Farm Bill.

An audio replay of this portion of yesterday’s AgriTalk program can be heard here (MP3- 12:52), while an unofficial FarmPolicy.com transcript of yesterday’s discussion is available here.

Rep. Peterson indicated that, “[House Speaker] John Boehner [R., Ohio] has wanted to do [the Farm Bill] in lame duck all along. I had discussions with him this summer, and he said, well, we’re going to handle it in the lame duck. So hopefully we will have an ally in the speaker in bringing this up in the lame duck session, and that should be helpful.

But one of the things I’m concerned about is there is no real work going on. We’re just kind of waiting right now. And I’m a little bit worried about having enough time during the lame duck to get this done. We’re going to have to move this early, as soon as we get back, on the House floor in order to get it into conference and get it worked out and get it back on the floor before we adjourn for Christmas.”

Ranking Member Peterson added that, “[Speaker Boehner] wants to do a bill. He’s never been for an extension, I don’t think. He’s not been the problem. The problem has been [House Majority Leader Eric] Cantor [R., Va.] and his allies. There’s a hundred and some of them that probably have ten different reasons why they’re against this. Some of them think we haven’t made enough reform in the commodity title. Some of them don’t like the sugar program, some of them don’t like the dairy program, some of them it’s food stamps. They want to cut more out of food stamps. So they’re all over the map.

And there’s a fair number of them, a hundred, a hundred and some Republicans. And that’s been the problem. They haven’t wanted to bring this up when they’re divided within their caucus. But this 90 day extension that was tried, that was a bunch of nonsense, because there was nothing that was going to happen in 90 days. The first problem was 91 days. So if they were going to do an extension at that point, they should have done a longer one.”

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2012 Drought Weighs on Farm Bill, RFS, Food Prices, and Crop Insurance

John D. Sutter reported on Saturday at CNN Online that, “Triple-digit temperatures and sparse rain this summer produced one of the most severe and widespread U.S. droughts in a half-century. Most headlines have focused on the extent of the drought — the fact that it enveloped more than half the country; or that temperatures in July were the hottest for any month on record in the continental United States. Somewhat lost in that national conversation are the stories of [Missouri dairy farmer Mark Argall] and other small-scale farmers who are being pushed out of the only line of work they’ve ever known.

“For them — and for the rural communities that depend on their incomes — the drought is far more than a news item. It’s an earth-shattering event, one they worry could lead the dairy communities of southern Missouri to unravel.

“And, perhaps saddest of all, farmers say the sell-offs could have been avoided.”

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Secretary Vilsack Addresses Drought; Farm Bill; and, Trade

Peter Baker reported in today’s New York Times that, “The Obama administration warned Wednesday that food supplies were at risk from the worsening drought afflicting more than half of the country and called on Congress to revive lapsed disaster aid programs.

President Obama reviewed the situation with Tom Vilsack, the agriculture secretary, who called it ‘the most serious situation’ in about 25 years and added that he was praying for rain.

“‘I get on my knees every day, and I’m saying an extra prayer now,’ Mr. Vilsack told reporters at the White House after his discussions with Mr. Obama. ‘If I had a rain prayer or rain dance I could do, I would do it.’”

(Note that a transcript of Sec. Vilsack’s full remarks have been posted at FarmPolicy.com Online).

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Farm Bill (Mark-up Today); BSE; House Ag Comm; Animal Ag; Budget Issues; and Food Prices

Farm Bill: Senate Ag Committee Mark-up Today

A press release last night from the Senate Ag Committee indicated that, “Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, will convene a meeting of the full Committee for purposes of considering and marking up the 2012 Farm Bill on Thursday, April 26 at 10:30 a.m. in the Committee’s hearing room, 328-A of the Russell Senate Office Building.”

Recall that today’s hearing was originally scheduled for Wednesday.  With respect to this one-day delay, a daily National Journal Daily Email from yesterday, the Need-To-Know Memo, reported that, “After complaints from Southern farm groups and western corn growers, the Senate Committee on Agriculture Nutrition and Forestry has postponed the markup of the Farm Bill.”

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Farm Bill- Policy Issues; the Ag Economy; and Regulations (MF Global)

Farm Bill: House Agriculture Committee Field Hearing- Illinois

Producers Seek Certainty- While Advising, “Do No Harm.”

After a mild winter and unseasonably warm spring, in which a few Midwestern producers have already started to plant corn, five members of the House Agriculture Committee (Chairman, Frank Lucas (R., Okla.), Leonard Boswell (D., Iowa), Mike Conaway (R., Tex.), Randy Hultgren (R., Il.) and Bobby Schilling (R., Il.)) came to the 17th Congressional District on Friday to hear farm policy testimony from grain and livestock producers as the 2008 Farm Bill’s expiration draws closer.

Producers sought to assist lawmakers in an effort to bring policy clarity and direction in the midst of an increasingly volatile agricultural environment.  Illinois farmer David Erickson stated that, “I encourage your continued work to complete the farm bill legislation this year and to make it a five-year program that doesn’t rely on temporary extensions,” while Bill Gerard indicated that, “I’d like to see us pass a five year farm bill this year. We farmers are businessmen, and we depend on the stability and certainty of long term farm policy.”  Minnesota farmer John Mages added that, “We need a five year farm bill for the same reason we need long term tax policy. We need to be able to go to the banker and be able to make plans for the future.”

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Budget Issues; Farm Bill; and Regulatory Issues (MF Global)

Budget Issues

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “Rep. Doug Lamborn (R-Colo.) on Wednesday introduced a bill that would prevent Congress from considering an increase in the debt ceiling unless both the House and Senate have approved a concurrent budget resolution, something the Senate has not done in nearly three years.

“Lamborn announced his bill as the House was debating whether to accept President Obama’s request to increase the debt ceiling by another $1.2 trillion. The House voted to disapprove of Obama’s request, but the Senate is not expected to follow suit, making the debt ceiling hike inevitable.

“Lamborn said his bill would at least require a budget to be in place before these debt-ceiling increases can occur.”

Meanwhile, yesterday’s Need-to-Know Daily Email from National Journal reported that, “Asked in a mid-afternoon briefing on Wednesday if President Obama’s rejection of the Keystone XL pipeline would factor into ongoing negotiations to extend the payroll-tax cut and other tax provisions, a visibly angry House Speaker John Boehner, R-Ohio, said ‘all options are on the table,’ adding: ‘This fight is not over – you can count on it.’”

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Budget; Ag Economy; Policy Issues; and Biofuels

Budget Issues

Damian Paletta reported in today’s Wall Street Journal that, “The White House notified Congress on Thursday that the government was near its $15.194 trillion borrowing limit, ushering in the debut of procedural theater in which the debt limit will ultimately be raised even if Congress votes against it.

“Formal notification by the administration gives Congress 15 days to disapprove of an increase, or the debt ceiling would automatically adjust up an additional $1.2 trillion.

“But under procedures resulting from last August’s budget agreement that sought to avoid a government default, President Barack Obama could issue a veto, and the ceiling would rise even if Congress moves to block it.”

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Budget and Farm Policy Issues; Regulations (MF Global); and; the Ag Economy

Budget and Farm Policy Issues

Janet Hook reported in Saturday’s Wall Street Journal that, “Washington’s high-decibel battle over the payroll-tax break ended Friday without debate, a roll-call vote or even a peep of dissent, as Congress approved legislation to prevent a Jan. 1 tax increase.

The House and Senate quickly approved a two-month extension of the tax break. The action ended the latest in a series of partisan stalemates that have driven Congress’s approval ratings to an all-time low.”

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Farm Bill; Ag Economy; Biofuels; and Regulations

Farm Bill Proposals, Budget Issues

DTN Ag Policy Editor Chris Clayton reported on Friday that, “With a new proposal from a bipartisan group of senators, the fight over the farm safety net and commodity program survival is shifting from direct payments to the permanent disaster program.

“Possible policy options are coming in quickly as the congressional super committee begins its work to cut the rate of growth of the federal debt over the next decade. The House and Senate Agriculture Committees have less than one month to offer proposed budget cuts as part of the process. It’s becoming more evident that the super committee process will translate into writing the next farm bill.”

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Farm Bill; Ag Economy; and Regulations

Farm Bill Issues

A news release on Friday from the National Cotton Council (NCC) stated that, “The National Cotton Council believes that sound farm policy is essential to the economic viability of the cotton industry. The combination of the marketing loan, Direct Payments (DP) and Counter-cyclical Payments (CCP), as structured in the 2008 Farm Bill, has served the cotton industry extraordinarily well and, in recent years, has required minimal federal outlays.

“However, it is clear that future deficit reduction efforts will place unprecedented pressure on the existing structure. The Budget Control Act reinforces the severe funding constraints facing not only U.S. cotton, but all of agriculture. Deficit reduction will lower the baseline funds available to upland cotton, and simply downsizing the current program structure would likely undermine the effectiveness of the programs to the extent that alternatives must be evaluated to ensure growers have access to the most effective safety net.

“The cotton industry faces another unique challenge. As part of developing new farm legislation, the U.S. cotton industry must work with Congress and the Administration to resolve the longstanding Brazil WTO case and remove the threat of imminent retaliation against exports of U.S. goods, services and intellectual property.”

The NCC release added that, “In order to respond to the challenge of designing the most effective safety net with reduced funding, and to make modifications that will lead to the resolution of the Brazil case, the industry recommends an adjustment to the current program, which will result in strengthening growers’ ability to manage risk by making an affordable revenue-based crop insurance program available for purchase. By making modest enhancements to existing products, the program would provide an effective tool for growers to manage that portion of their risks for which affordable options are not currently available.

The revenue-based crop insurance safety net would be complemented by a modified marketing loan that is adjusted to satisfy the Brazil WTO case. In the opinion of the U.S. cotton industry, this structure will best utilize reduced budget resources, respond to public criticism by directing benefits to growers who suffer losses resulting from factors beyond their control, and build on existing crop insurance program, thus ensuring there is no duplication and offering the potential for program simplification.”

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Farm Bill; Ag Economy; Regulations; Trade; and Animal Agriculture

Farm Bill: Budget Issues (Crop Insurance)

Sara Wyant reported yesterday at Agri-Pulse Online that, “Leaders of the nation’s leading corn, soybean and wheat organizations want lawmakers to know that agriculture has already contributed to deficit reduction and any further cuts should be made by the House and Senate Agriculture Committees.

“Those are just some of the key messages that leaders of the American Soybean Association (ASA), the National Corn Growers Association (NCGA), and the National Association of Wheat Growers (NAWG) agreed to during meetings this week, said ASA President Alan Kemper.”

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United Egg Producers- HSUS; Biofuels; Trade; Farm Bill Issues; and Ag Economy

United Egg Producers- HSUS

William Neuman reported in today’s New York Times that, “Two groups that are usually squawking at each other — egg farmers and animal welfare advocates — announced an unusual agreement on Thursday to work together to seek a federal law that would require larger cages and other improved conditions for the nation’s 280 million laying hens.

“The deal comes after the egg industry has been put increasingly on the defensive. Animal welfare groups have clandestinely recorded videos showing poor conditions on farms, and various states have sought to set more humane standards for hens. Egg producers have also been struggling to improve their image after tainted eggs from several farms in Iowa sickened thousands of people in a nationwide salmonella outbreak last year.

“The agreement was announced by the nation’s main egg industry group, the United Egg Producers, which represents farmers who own about 80 percent of the nation’s laying hens, and the Humane Society of the United States, the nation’s largest animal protection organization.”

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Policy Issues; Ag Economy (WASDE); Biofuels; and Food Safety

Policy Issues

Robin Bravender reported last night at Politico that, “Top Cabinet officials insisted Thursday that the White House hasn’t forgotten rural America, despite critics’ claims that the administration is pursuing policies that will hurt farmers and small businesses.

“President Barack Obama signed an executive order Thursday establishing a White House Rural Council aimed at boosting job creation and economic development in rural areas.

“But key administration officials said Obama has had rural America’s back all along.”

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Farm Bill; Food Safety; Ag Economy; and Trade Issues

Farm Bill Issues

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “With budget-cutting in vogue, Sen. Charles Grassley is dusting off his long-time proposal to put a hard cap on farm-program payments.

“Grassley, an Iowa Republican, told reporters Tuesday that he is introducing ‘The Rural American Preservation Act’ that would put a $125,000 cap on farm payments for individuals and a $250,000 cap for married couples.

“‘We need to not subsidize big farmers getting bigger and driving up the costs of farmland and cash rents so younger, beginning farmers can’t get started,’ Grassley said.”

(Note that this Brownfield link contains an audio replay of Sen. Grassley remarks from yesterday).

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