FarmPolicy

April 23, 2014

Climate- EPA Water Rule; Biofuels; Farm Bill; Ag Economy; FDA; and, Immigration- Wednesday

Climate, EPA Water Rule

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 Vilsack disputed 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.”

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Trade- Ag Economy; Rural Development; Regulations; and, Immigration

Trade- Agricultural Economy

Doug Palmer reported yesterday at Politico that, “President Barack Obama’s abilities as negotiator-in-chief for the United States will be put to the test this week on a trip to Asia that could set the stage for the conclusion of a huge new free-trade agreement. But the deal faces even more hurdles at home because of opposition from fellow Democrats.

“The trip comes at a critical time for talks on the proposed Trans-Pacific Partnership, a regional free-trade deal that companies hope will boost exports by billions of dollars but labor groups and other opponents fear will move jobs overseas and weaken consumer protections.

“The TPP pact is a key part of the White House’s economic ‘rebalance’ toward Asia. A main goal of the trip is to show that Obama remains committed to that vision, despite his decision last October to cancel a visit to the region because of the U.S. government shutdown.”

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Farm Bill; Ag Economy; Regulations; and, Immigration

Farm Bill- Policy Issues

In an interview last week with Don Wick of the Red River Farm Network, House Ag Committee Ranking Member Collin Peterson (D., Minn.) remarked on USDA’s implementation of the new Farm Bill and noted that, “I think the Department is well along, and it’s gotten a much quicker start this farm bill as opposed to the last farm bill. But there are a lot of complications. As you said, the first thing they focused on was getting the livestock disaster thing going, so that’s happening now. They’re working…I think, I’m expecting in the next week or two to get them to designate these critical conservation areas so we can start getting some of this retention stuff moving yet this summer. I’ve talked with the Secretary a couple times about this, and I think that’s going to happen.

“And they’re working on like 600 different areas that they had to work on, so they’ve got a lot of work to do. But because the bill had been out there for so long, I think they were a little more prepared this time than they were in ’08. But the commodity title, with us getting rid of direct payments and setting up these two new safety nets, where you have to make a choice, that’s more complicated, and it’s going to take them a while to get that put together.”

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Ag Economy; Biotech; Regulations; and, Immigration

Agricultural Economy

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 Chicago District indicated that, “The slow arrival of spring-like weather delayed fieldwork. However, concerns about a delayed start to planting were muted, especially in Illinois and Indiana where 2013 crops performed well after being planted late. The mood among farmers improved as crop prices increased enough from winter lows that breakeven outcomes now seem possible. Hence, there has been more forward contracting of crops than a year ago to manage risk. Higher soybean prices still support a shift in planting intentions toward soybeans and away from corn, but not as much as earlier this year. Fertilizer costs decreased from a year ago, and seed costs were flat. The livestock sector moved further into the black, as milk, hog, and cattle prices increased. Given lower numbers of hogs and cattle available to market, animals were fed longer in order to gain additional weight. Although hog operations were still battling a virus that killed many piglets, there were signs that the worst had past.”

While the Kansas City District noted that, “Crop growing conditions remained dry in March, while livestock prices increased further since the last survey period. The winter wheat crop was in need of moisture and rated in mostly fair to poor condition. Spring fieldwork began, and District farmers followed national trends by intending to plant slightly more soybeans and less corn. With crop prices still lower than a year ago, farm operating loan demand rose this year as farmers financed a larger portion of crop input costs. However, global supply concerns supported strong exports, and crop prices rose to a six-month high during the reporting period. Low cow inventories kept feeder cattle prices elevated, and strong export demand supported higher fed cattle prices. In addition, hog prices surged as the on-going swine virus cut inventories further.”

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Farm Bill- Policy Issues; Ag Economy; and, Immigration

Farm Bill- Policy Issues

Ron Hays, of The Oklahoma Farm Report and Radio Oklahoma Network, spoke on Saturday with House Ag Committee Chairman Frank Lucas (R., Okla.) about the Farm Bill and farm policy variables at an agriculture town hall during the Oklahoma City Farm Show.

An audio replay and summary of the Chairman’s remarks from Saturday can be found here , while an unofficial FarmPolicy.com transcript of a portion of Saturday’s conversation with Ron Hays and Chairman Lucas is available here.

Chairman Lucas walked the crowd through a brief overview of the development of the 2014 Farm Bill including some of the political realities that contributed to “a two and a half year process of passing a Farm Bill” that “should have taken six months.”

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Focus on the U.S. Ag Economy; Biofuels; Immigration; and, CFTC

Agricultural Economy: USDA Reports- Planting Intentions, Grain Stocks

A news release yesterday from USDA’s National Agricultural Statistics Service (NASS) indicated that, “Producers surveyed across the United States intend to plant an estimated 81.5 million acres of soybeans in 2014, up 6 percent from last year and an all-time record high, according to the Prospective Plantings report released today by [NASS].  If realized, soybeans will surpass the previous record of 77.5 million acres planted in the United States set in 2009.”

The release added that, “Corn growers intend to plant 91.7 million acres in 2014, down 4 percent from last year and if realized the lowest planted acreage since 2010. Expected returns for corn are anticipated to be lower in 2014 compared with recent years [related graph].”

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Climate- Policy Issues; COOL; Ag Economy; Biofuels; Immigration; Biotech; and, EPA

Climate Issues- White House Proposal, and Farm Bill Issues

Justin Gillis reported on the front page of today’s New York Times that, “Climate change is already having sweeping effects on every continent and throughout the world’s oceans, scientists reported Monday, and they warned that the problem is likely to grow substantially worse unless greenhouse emissions are brought under control.

The report by the Intergovernmental Panel on Climate Change, a United Nations group that periodically summarizes climate science, concluded that ice caps are melting, sea ice in the Arctic is collapsing, water supplies are coming under stress, heat waves and heavy rains are intensifying, coral reefs are dying, and fish and many other creatures are migrating toward the poles or in some cases going extinct.”

Chapter Seven of the report, which is available here, is titled, “Food Security & Food Production Systems.”

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

EPA Water Issues

DTN writer Todd Neeley reported yesterday that, “Though U.S. agriculture groups have feared an expected expansion of the Clean Water Act for nearly three years, some 53 conservation practices would for the first time be exempt and previous agriculture exemptions from the law would stay in place in a newly proposed rule announced Tuesday by EPA.

“EPA Administrator Gina McCarthy told reporters that critics of the proposal may be pleasantly surprised by what they find in the rule, which will trigger a 90-day comment period once published in the Federal Register in the next few weeks. McCarthy said she believes the new rule will improve the Clean Water Act and reward farmers and other landowners for long-standing conservation practices.” (The proposal can be viewed here).

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

Biotech

Ellyn Ferguson reported yesterday at Roll Call Online that, “Large-scale farming and agribusiness, derisively dubbed Big Ag by critics, look to polish their image this week with a Statuary Hall ceremony for a hero in the field and a screening of a documentary about young farmers and ranchers.

“On Tuesday, top lawmakers, including Speaker John A. Boehner, R-Ohio, plan to attend the installation of a bronze statue of plant scientist Norman E. Borlaug. Borlaug is hailed as the father of the 1960s ‘Green Revolution’ that improved crop production in Mexico and Asia.”

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Farm Bill; Ag Economy; Biofuels; Regs; Immigration; and, Political Notes

Farm Bill

Damian Paletta reported this week at The Real Time Economics Blog (Wall Street Journal) that, “After years of increases that defied the roaring stock market of 2013 and the slowly falling unemployment rate, the number of Americans receiving food stamps appears to be easing. Somewhat. Very, very slowly.

“The U.S. Department of Agriculture, which administers the Supplemental Nutrition Assistance Program, reported that 46.8 million Americans received SNAP benefits in December. That is a lot of people, but it’s also the lowest number of Americans to receive benefits since June 2012. The December 2013 figure was down 1 million people from December 2012 [see related graph].

The Journal update explained that, “SNAP data can bounce around, and it’s unclear whether the number of people receiving benefits will continue to fall. The December figures don’t take into account changes that were made in February when Congress passed a farm bill that included new limits on who can receive food stamps. Also, as more and more Americans return to work and earn more money, the number of people receiving these benefits is expected to fall, though many thought total enrollment would fall more quickly than it has.”

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

Farm Bill

David Rogers reported yesterday at Politico that, “Falling commodity prices and a new farm bill are adding up to a wild ride for those charged with predicting government expenditures for agriculture over the next five years.

“That’s the bottom line of a new analysis released Thursday that averages as many as 500 outcomes but shows the gap between the high and low ranges for the Commodity Credit Corporation can be as wide as $11 billion to $12 billion in any given year [related graph].

“Prepared by the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri, the 58-page report is the most detailed attempt yet to look ahead at the next decade in the context of the new farm bill.”

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Ag Economy; Farm Bill; Regulations; and, Immigration

Agricultural Economy

David Rogers reported yesterday at Politico that, “Updated projections by the Agriculture Department on Thursday forecast significant price declines for corn, wheat and even soybeans — all large enough to trigger potential payments under the new farm bill.

Corn stands out the most, with average prices dropping to $3.90 per bushel in the coming crop year, even after the department assumes reduced plantings. Wheat would fall to $5.30 a bushel, also with reduced plantings.

Soybeans fare best of the three and will continue to see increased plantings. But the $9.65-per-bushel price reflects an estimated 24 percent decline from what the department estimated for the current 2013-2014 farm cycle.”

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Farm Bill; Ag Economy; Biotech; and, Immigration

Farm Bill- Policy Issues

Norimitsu Onishi and Coral Davenport reported in Saturday’s New York Times that, “President Obama arrived in the heart of California’s parched farmland on Friday afternoon to offer tens of millions of dollars in federal assistance to the state, where the lack of rain and snow this winter has led to the severest drought in its modern history.

Meeting with farmers and ranchers around Fresno — where electronic signs along highways flash entreatingly to drivers, ‘Serious drought. Help save water’ — Mr. Obama pledged $183 million from existing federal funds for drought relief programs in California. Though the announcement won cautious support in this region, Mr. Obama also pressed ahead with the more difficult task of enlisting rural America in his campaign on climate change by linking it to the drought.

“The president was accompanied on his tour by the state’s top Democrats, a show of solidarity that underscored the emerging partisan battle over the management of the drought in the nation’s most populous state and the source of half of the country’s fruits and vegetables.”

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Ag Economy- Farm Bill; Food Issues; Biotech; Biofuels; Immigration; and, CFTC

Agricultural Economy- Farm Bill

Jesse Newman reported yesterday at The Wall Street Journal Online that, “Prices for agricultural land in some key states in the U.S. Farm Belt last year grew at the slowest pace in four years, according to a quarterly report Thursday from the Federal Reserve Bank of Chicago.

“Values for farmland in the Chicago Fed’s district, which includes all of Iowa and most of Illinois, Indiana, Michigan and Wisconsin, rose 5% in 2013, the report showed, down from growth of 16% in 2012. Last year’s growth was the slowest pace since 2009 and the second slowest in the past decade, the bank said” [related graph].

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Farm Bill; Ag Economy; Immigration; CFTC; and, Food Safety

Farm Bill

A news release yesterday from National Crop Insurance Services indicated that, “On the heels of the 2014 Farm Bill becoming law, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) addressed the crop insurance industry yesterday and noted that crop insurance is now the centerpiece of U.S. farm policy.

“‘Today, crop insurance is the foundation of this Farm Bill and the farm safety net,’ Stabenow, one of the law’s architects, said at the crop insurance industry’s annual convention.”

The update added that, “‘The farmer gets a bill, not a check with crop insurance…and they don’t get help unless they really need it,’ Stabenow said referring to the premiums farmers pay and the indemnities that are only received after losses are verified.

“Stabenow noted that during the debate, farmers stressed their support for crop insurance and asked Congress to strengthen it. And by making crop insurance more readily available to specialty crop growers, she said the policy’s coalition of support has been strengthened.”

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Farm Bill; Ag Economy; Biotech; and, Immigration

Farm Bill

The “Washington Insider” section of DTN (link requires subscription) reported on Friday that, “One of the program areas watched carefully in the farm bill debate was cotton, since the United States is still accused of failing to comply with the 2004 World Trade Organization case it lost to Brazil. Advocates argue that the final version of the farm bill changes to U.S. cotton subsidies to insurance and thus should comply. They also argue that since the changes have the stated goal of promoting a negotiated settlement to the longstanding dispute, the proposal should not be considered as illegally protectionist.

“In fact, Brazil is in the driver’s seat in this dispute since it won the earlier WTO case, but it has not yet taken a formal position on the bill. Still, a number of U.S. observers note that that Brazilian officials made plain their opposition to the new bill’s proposals by pointing out objectionable provisions and emphasizing that the farm bill still contains a substantial volume of trade-distorting subsidies for U.S. cotton growers.

“Separately, Brazilian Foreign Minister Luiz Alberto Figueiredo also told U.S. Trade Representative Michael Froman in a Jan. 30 meeting that Brazil was evaluating the bill to see if it protects Brazilian interests. In addition, the minister told the press that his government has not ruled out retaliation as a possibility.”

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