An update yesterday from the Federal Reserve Bank of Minneapolis stated that, “Farm incomes fell from April through June, according to results of the Minneapolis Fed’s second-quarter (July) agricultural credit conditions survey. Capital spending decreased, while household spending held roughly steady, lenders responding to the survey indicated. Falling incomes pushed the rate of loan repayment down slightly, while renewals and extensions increased, though most lenders reported that both were flat. Respondents noted further signs that cropland values were moderating, with prices falling in some areas, though the volume of land sales appears to have decreased. The third-quarter outlook is for continued contraction, with survey respondents predicting further decreases in income, capital expenditure and household spending.”
Yesterday’s update added that, “Recent quarterly surveys have indicated that land prices have moderated following a multiyear period of strong growth, and the second-quarter results continue this trend; values decreased in some cases, along with cash rents. The average value for nonirrigated cropland in the district fell by almost 2 percent from a year earlier, according to survey respondents. Irrigated land fell slightly more (between 2 percent and 3 percent), while ranchland values increased 4 percent, likely owing to strong livestock and dairy prices. The district average cash rent for nonirrigated land fell 6 percent from a year ago, more than the decrease in value. Rents for irrigated land decreased 4 percent, while ranchland rents, which had continued growing in recent quarters, fell by nearly 2 percent.”
The Minneapolis Fed update also noted that, “Not surprisingly, expectations are slightly pessimistic, on balance. Across the district, 52 percent of lenders predicted that farm income will decrease in the third quarter of 2014, compared with 12 percent forecasting increases.”
Paul Sonne and Anton Troianovski reported in today’s Wall Street Journal that, “Russia banned imports of a wide range of U.S. and European foods on Thursday in response to Western sanctions, confronting Russians with a type of economic isolation largely unseen since the Soviet era.
“Prime Minister Dmitry Medvedev outlined the products subject to the one-year ban—beef, pork, poultry, fish, fruit, vegetables, cheese, milk and other dairy products from the U.S., Canada, the European Union, Norway and Australia—in a radical response to penalties imposed on Russia over the crisis in Ukraine.”
Damian Paletta and Josh Zumbrun reported earlier this week at the Washington Wire Blog (Wall Street Journal) that, “The number of Americans receiving food stamps is now falling at a faster clip, with more than 1.2 million people moving out of the program between October and February, according to federal data.
“As of February, the most recent data available, 46.2 million Americans received Supplemental Nutrition Assistance Program benefits. That’s the lowest level since August 2011 and down from the March 2013 peak of 47.7 million people. The $5.8 billion in benefits paid out in February was the lowest level since at least 2010 [related graph].”
The update added that, “SNAP isn’t the only government-assistance program where persistent growth appears to have slowed. The number of people collecting benefits under a supplemental nutritional program for Women, Infants, and Children [WIC] fell to 8.1 million in February, the lowest level in several years.”
“The bill, dubbed the ‘Safe and Accurate Food Labeling Act,’ was drafted by U.S. Rep. Mike Pompeo and is aimed at overriding bills in about two dozen states that would require foods made with genetically engineered crops to be labeled as such.
“The bill specifically prohibits any mandatory labeling of foods developed using bioengineering.”
The Wall Street Journal provided interesting coverage of recent U.S. Census data relating to Rural population declines— and growth. While some areas of the Midwest are experiencing population declines, areas in the Great Plains, such as North Dakota and Texas have seen populations rise.
In a recent interview on KTIV-TV (Sioux City, Iowa), Secretary of Agriculture Tom Vilsack, the former Iowa Governor, talked about presidential politics on the eve of second presidential debate. It was noted that Sec. Vilsack was not speaking as a government official in the interview, but on behalf of the “Obama for America Campaign.”
A video replay of the interview is available here:
Recall that GOP Presidential Nominee Mitt Romney addressed farm policy issues in Iowa last week, a recap of Gov. Romney’s presentation is available here.
A recent column by Sec. Vilsack on rural and agriculture issues can be found here, while Iowa State Secretary of Agriculture Bill Northey indicated in a recent column that Gov. Romney was best for rural America.
David Shepardson reported yesterday at The Detroit News Online that, “Sen. Debbie Stabenow says she is optimistic Congress will pass disaster assistance for farmers facing a record drought if the House doesn’t approve a farm bill.
“The Lansing Democrat and chair of the Senate Agriculture Committee said she’s been working during the congressional recess to try to get the House to act on farm reform legislation.”
From The Wall Street Journal: Secretary of Agriculture Tom Vilsack tells attendees at the Democratic National Convention how much work President Barack Obama has done for rural families, farmers, and small business owners.
Carol E. Lee provided a brief update in today’s Wall Street Journal regarding President Obama’s three day trip to Iowa last week. [Illustration from today's Wall Street Journal].
Ms. Lee pointed out that, “In his speeches, he attacked his Republican opponent, Mitt Romney, on policy matters, including a few of local concern: He stood in a field of windmills to accuse Mr. Romney of opposing alternative energy sources and, at a family farm, he blamed Republicans for stalling aid to those struggling in the drought. (Mr. Romney has said that wind energy should compete with other energy sources in the marketplace, without the tax credit. Republicans say a GOP measure on drought relief was blocked by Democrats in the Senate.)
“But it was Mr. Obama’s informal stops along the way—including the Iowa State Fair and a bar where he bought beers for 10 patrons—that the president’s advisers hoped would be devoured by local news outlets. Mr. Obama opened his wallet to buy snow cones for a pair of young kids in Denison, announcing, ‘It’s the president’s treat.’”
Today’s Journal article added that, “Republicans also paid attention to the state, sending Paul Ryan to Iowa for his first solo appearance after joining the Republican ticket as the vice- presidential candidate. Mr. Ryan, too, hit the state fair, though as a fitness buff, he bypassed the fried food. It will be no surprise if the GOP ticket returns to the state soon.”
More specifically on the energy issue, The Wall Street Journal editorial board noted today that, “Mr. Obama’s plan to eliminate oil and gas subsidies would lower the budget deficit by less than $3 billion a year, but creating a true level playing field in energy, and allowing markets to determine which energy sources are used, would save $37 billion. That’s an energy plan that makes sense.”
The Washington Post editorial board pointed out on Friday that, “Mr. Obama is also promising Iowans an extended tax credit for wind-energy production, which expires at the end of this year but to date has helped Iowa generate 20 percent of its electricity from that source. Not incidentally, Iowa farmers get $11 million a year renting their land to windmill operators. Mr. Obama argues that this is job-creating clean energy, and he is hardly alone in that. Supposedly fiscally conservative, free-market Republicans such as Rep. Steve King of Iowa tout the tax credit, which costs the Treasury well over $1 billion a year. Of course, that money might have created even more jobs elsewhere, or saved more carbon emissions, if the government did not steer it into Iowa wind farms.
“Republican challenger Mitt Romney deserves credit for opposing an extension to the wind subsidy, a position that could hurt him in Iowa and in Colorado, another windy swing state.”
And on the drought / Farm Bill issue, the Post opined that, “Actually, almost nothing in the farm bill would affect drought-stricken farms one way or the other. About 80 percent of the bill’s nearly $1 trillion price tag (over 10 years) reflects the cost of food stamps, an essential part of the safety net. The rest is largely a grab bag of subsidies for producers, with the biggest benefits for the largest farms, i.e., those least vulnerable to drought and other risks. Existing law already provides subsidized crop insurance for more than 80 percent of the nation’s farmland; many dairy farms, too, enjoy subsidized insurance against rising feed costs.
“There are, indeed, modest reforms in the bill; it eliminates costly and wasteful ‘direct payments‘ but offsets that by expanding crop insurance subsidies. The bill would protect producers so much that they might lose their incentive to use land prudently, thus raising the potential for losses in the next drought. To really help livestock farms, which are most hurt by rising corn prices, Mr. Obama should heed elected officials in both parties — including Gov. Martin O’Malley (D) of Maryland — who are asking his administration to waive ethanol mandates so that more grain would be available for animal feed.”
However, Politico reported today that, “At the entrance of a coal mine in southeastern Ohio, Mitt Romney tried to stake a claim as the most energy-friendly candidate…[S]tanding next to a backhoe bucket filled with raw coal, Romney told the crowd that Obama, who is speaking today in Iowa, is running ads in the key swing state of Ohio saying he supports coal while telling other audiences that he thinks the nation needs only wind and solar power.
“‘I thought, how in the world can you go out there and tell people things that just aren’t true?’ Romney asked. ‘If you believe the whole answer for energy needs is wind and solar, then say that. I know he says that to some audiences out West. Then just say it.’”
Today’s article added that, “The White House and the Obama campaign have spent months working to counter GOP allegations that the president has ‘declared war on coal.’”
A portion of Gov. Romney’s remarks from today can be viewed in the following video clip.
DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Despite the economics of crop production and federal spending right now, there is still room for conservation practices and promoting wildlife, USDA’s chief conservationist said.
“Dave White, chief of the Natural Resources Conservation Service, spoke over the weekend to hunters at the Pheasant Fest convention and expo in Kansas City. White said landowners are trying to balance the various growing demands on their land.
“‘We have agriculture production and we have sustainability and we can have it built in where wildlife is a part of it,’ White said. ‘I don’t think there is one farm or one ranch or one woodlot in the United States of America that doesn’t have room for wildlife.’”