FarmPolicy

October 30, 2014

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

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 Minneapolis District indicated that, “Hog producers continued to lose large numbers of animals to a virus, pushing up prices for pork, as well as poultry. Cattle producers enjoyed record beef prices, as overseas demand grew and efforts to rebuild the U.S. herd kept cattle from going to slaughter.”

The Kansas City District noted that, “Profit margins for livestock operators improved further as low cattle and hog supplies pushed prices higher and feed costs remained flat.”

And the San Francisco District added that, “In general, dairy operations benefited from low feed costs. Pork production remained weak as a fatal virus swept through pig farms in some areas.”

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Appropriations- Nutrition; Ag Economy; Farm Bill; Biofuels; Regs; and, Immigration

Appropriations- Nutrition Issues

The House Appropriations Committee will markup the FY15 Agriculture spending bill this morning, the bill is available here, while the Committee draft report can be found here.

In part, the draft report states that, “The Committee is concerned about the challenges and costs that local schools face in implementing the various regulations from the Healthy, Hunger-Free Kids Act of 2010. Schools from across the Nation have expressed concern with increased food costs and plate waste coupled with decreased participation in the National School Lunch Program (NSLP), all of which is resulting in at least half of all school food authorities to experience a decline in revenue. A February 27, 2014, GAO report found that student participation in the NSLP declined by 1.2 million students from school year 2010–11 through school year 2012–13. Additional meal requirements are scheduled to be implemented in the 2014–15 school year as well as the ‘Smart Snacks in School’ interim final rule.

“To address the concerns of local schools, the FY 2014 conference report directed the Secretary to establish a waiver process for schools incurring costs to provide more time to comply with some of these regulations. On March 14, 2014, the Secretary responded he did not have the statutory authority to grant such waivers. Therefore, the Committee includes bill language that provides schools with flexibility by allowing schools experiencing a financial loss for at least a six-month period to seek a waiver from compliance with the final regulations. The Committee directs USDA to implement this provision in a timely and streamlined manner. Schools receiving a waiver under this provision shall, at a minimum, implement the nutrition standards in effect prior to the final rule issued on January 26, 2012. The bill language does not provide for a change in reimbursement rates and only applies to the 2014–15 school year.”

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Appropriations; Biofuels; Biotech; Immigration; CFTC; Tax Extenders; Data; and, the Ag Economy

Appropriations- Nutrition, and Conservation

Tom Hamburger reported in today’s Washington Post that, “First lady Michelle Obama is set to take an unusual, high-profile step Tuesday into the center of a legislative battle by delivering White House remarks taking issue with makers of frozen pizzas and french fries and other companies seeking to scale back school lunch standards.

“Obama is scheduled to speak out against a House measure, backed by Republicans and pushed by the food industry and some school officials, that would allow some districts to opt out of federal mandates passed in 2010 to reduce sodium and increase whole grains, fresh fruits and vegetables in school lunches. White House aides say she will announce the launch of a campaign-style push to fight the legislation.

“The effort fits with the spirit of Obama’s ‘Let’s Move’ campaign and other initiatives in which she has advocated for healthy eating and a reduction of obesity. Until now, however, she has largely shied away from direct confrontations with lawmakers and industry groups.”

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Appropriations; WRDA; Policy Issues; Ag Economy; Biotech; and, Climate

Agriculture Appropriations- House

Erik Wasson reported yesterday at The Hill Online that, “The House on Tuesday moved forward with legislation aimed at exempting some schools from lunch nutrition rules that have been a part of first lady Michelle Obama’s anti-childhood obesity initiative.

“An Appropriations subpanel approved language that would require the Agriculture Department to waive requirements to serve fruits, vegetables and low-sodium and low-fat foods for schools that can show their lunch programs are losing money.

“Subcommittee Chairman Robert Aderholt (R-Ala.) said the temporary waivers are needed because some school districts are losing too much money and need more time to adjust to the requirement. He said a big problem is that students are refusing to eat the healthy foods.”

To listen to remarks on this issue from Chairman Aderholt at yesterday’s markup, just click here (MP3- 1:43).

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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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Ag Economy; Transportation Bill; Tax Extenders; Farm Bill; CFTC; Immigration; and, WRDA

Agricultural Economy

Steve Everly reported earlier this week at the Kansas City Star Online that, “It’s shaping up as another summer of discontent for Gary Millershaski.

The Kansas wheat farmer is in his third year of drought and things are not looking good this time around for his 3,500 acres of wheat. The question is not if but how much his harvest is going to get slammed. By one estimate, his harvest will be about half of his best ones.”

Mr. Everly pointed out that, “His concerns were confirmed Friday when the federal government said it expects the Kansas winter wheat crop will be the worst since 1996.”

Daniel O’Brien, extension agricultural economist for Kansas State University, calculates this year’s winter wheat crop could bring in $900 million less compared with good years. That figure doesn’t include any proceeds from crop insurance.”

The article added that, “More than half of Kansas is currently classified as being in a drought.”

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Trade; WRDA; Ag Economy; Farm Bill; Regs; and, Biotech Labels

Trade

The Senate Finance Committee considered five executive branch nominees yesterday, including Darci Vetter, who has been nominated to be Chief Agricultural Negotiator at the Office of the United States Trade Representative.

Finance Committee Chairman Ron Wyden (D., Ore.) indicated at yesterday’s hearing that, “If confirmed, Ms. Vetter will have the important task of being the lead trade negotiator to take on the tariff and non-tariff barriers that are imposed all over the world on American agriculture exports. The U.S. has an ambitious trade agenda with important agriculture negotiations taking place among the world’s biggest and most dynamic markets. It will be important for the United States to have a skilled hand in these negotiations, and Darci is the right person at the right time.

“Right now, for example, the U.S. is in the middle of important, yet difficult, negotiations with Japan and other Trans Pacific Partnership [TPP] participants regarding America’s most important agricultural crops: wheat, dairy, poultry. We will be relying on Darci to push for the comprehensive and ambitious outcome that our farmers and producers expect and our economy needs.”

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Farm Bill Hearing; Ag Economy; Biofuels; and, CFTC

Farm Bill: Senate Ag Committee Hearing with Sec. Vilsack- Policy Issues

Senate Ag Committee Chairwoman Debbie Stabenow (D., Mich.) convened a hearing yesterday to examine USDA’s ongoing implementation of the 2014 Farm Bill. Secretary of Agriculture Tom Vilsack provided testimony at yesterday’s hearing.

In light of this week’s executive branch report on climate change, and the noted emphasis on Farm Bill programs that will be key policy variables in protecting the soil from erosion, DTN Ag Policy Editor Chris Clayton reported yesterday that “emphasis on various conservation programs” was “one theme” at yesterday’s Ag Committee hearing.

More specifically, Mr. Clayton indicated that, “[Chairwoman Stabenow] asked Vilsack about the Regional Conservation Partnership Program. ‘This is probably one of the most understated policies in the 2014 farm bill. It has the potential really to transform the face and the future of agricultural stewardship,’ Stabenow said.

“The partnerships are expected to leverage local and private money to broaden conservation efforts. Vilsack said USDA has started a series of listening sessions about the regional partnerships program. The department plans to identify the critical areas that would be eligible for the regional partnerships. Vilsack also said USDA wants to get the program launched in time to highlight the issues of bringing investment capital to rural America as part of the White House Rural Council.”

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CNBC– “TPP negotiations have ‘good momentum': US trade chief”

Categories: Trade

From CNBC, May 7- “U.S. trade representative Michael Froman, says the Trans-Pacific Partnership is gaining ‘good momentum‘ but negotiations are ‘complex‘ and take time.”

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Farm Bill; Trade; Ag Economy; Regulations; and, Immigration

Farm Bill- Policy Issues

David Rogers reported yesterday at Politico that, “After years of trying, the potato lobby may have found the votes to break into the government’s premier nutrition program for pregnant mothers and their infants.

“Prominent members of both parties have signed onto an industry-backed letter circulating this week in the Senate, and nutrition groups are clearly alarmed after successfully blocking the powerful lobby in final talks on the farm bill last winter.

“If successful, the industry will gain what it sees as an important marketing tool. But critics charge that the end result will open the door to more special interests and violate a long-standing commitment by Congress to let independent scientists decide what foods are most needed.”

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Ag Economy (Hearing- PEDv); Trade; Farm Bill; Regs; and, Biofuels

Agricultural Economy: House Ag Livestock Subcommittee Hearing- PEDv, Drought

DTN Ag Policy Editor Chris Clayton reported yesterday that, “Animal-health experts at USDA don’t know how they are going to implement a plan to require pork producers to report cases of porcine epidemic diarrhea virus or track movements of animals in herds with the infection.

“Two weeks ago, the department announced new plans to tighten biosecurity and reduce the spread of PED that was first reported in the country nearly a year ago. Since that time, the pork industry has raised a lot of questions about just how USDA intends to implement such a plan. USDA’s Animal and Plant Health Inspection Service doesn’t yet have a strategy to track the movement of hogs from infected herds without putting an undue burden on pork producers nationally.”

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Policy Issues; Immigration; GMO Labels; Regs; and, the Ag Economy

Policy Issues

A news release yesterday from the House Ag Committee stated that, “Rep. Austin Scott, Chairman of the House Agriculture Committee’s Subcommittee on Horticulture, Research, Biotechnology and Foreign Agriculture, today held a public hearing to review current research and application of management strategies to control pests and diseases of pollinators.

“Approximately a third of global food production is dependent on animal pollination for reproduction, and managed honey bees are the most important pollinators of those crops. Some regions of the world have increasingly lost their managed honey bee colonies in recent years. Reports of Colony Collapse Disorder (CCD) surfaced in the United States in 2006. Colony losses are not unusual, but the increase in losses reported in the U.S., some European countries, the Middle East, and Japan are particularly alarming because of the honey bees’ role in pollination and the absence of an easily identifiable cause.”

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Wall Street Journal: Abe Advisor Heizo Takenaka on U.S.-Japan Trade Talks

From The Wall Street Journal, April 29, “Were the recent trade talks between President Obama and Shinzo Abe a wasted opportunity? Japanese economist Heizo Takenaka shares his thoughts with WSJ’s John Bussey.”

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Immigration; Ag Economy; Trade; and, Regulations

Immigration

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Virginia apple grower Phil Glaize joined U.S. Agriculture Secretary Tom Vilsack on Monday in demanding Congress finish its work on immigration reform.

“Glaize and his family have been in the apple-growing business for 70 years near Winchester, Va., and he has testified on Capitol Hill about the problems trying to find seasonal workers. Like a high percentage of fruit and vegetable growers, Glaize’s main working season is harvest time, when he needs 115 workers for about two-and-a-half months. Another 50 employees work nine months of the year in the packinghouse and another 15 people are employed year-round. About 75% of all people who apply for jobs are Latino, Glaize said. He noted his farm does I-9 verification on all applicants, ‘However, my suspicion is that some of the workers are here illegally.’

Glaize and Vilsack held a press call Monday as the Obama administration keeps pushing the House of Representatives to take up an immigration reform measure.”

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Policy Issues; Ag Economy (Trade); Regulations and GMO Labeling

Policy Issues

Tim Devaney reported yesterday at The Hill’s RegWatch Blog that, “The U.S. Department of Agriculture (USDA) is looking to crack down on welfare fraud around the country.

“The USDA’s Food and Nutrition Service announced Wednesday it is targeting people who sell food stamps for money. Some recipients cheat the system by claiming they have lost their food stamp debit cards so they can request new ones, the agency said.

“To combat fraud, the USDA will require states to monitor the Supplemental Nutrition Assistance Program and be on the lookout for excessive requests for replacement cards. People who request four or more replacements in a year will receive a warning notice.”

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Farm Bill; Immigration; Biofuels; Trade; and, MF Global

Farm Bill Issues

Reuters writer Charles Abbott reported yesterday that, “The Republican-controlled U.S. House of Representatives needs to solve its farm bill impasse by enacting the Senate’s bipartisan bill, Majority Leader Harry Reid said on Monday, warning that the Democrat-run Senate will not extend current law again.

“The House defeated its own farm bill last week – the first time such a bill has failed in a House vote – and analysts have said a short-term extension of the 2008 farm law would be the easiest solution.

“On the Senate floor, Reid said ‘the Senate will not pass another temporary farm bill extension.’”

(Note that a video replay of Sen. Reid’s presentation on the Senate floor, and transcript of his remarks, are available here,  at FarmPolicy.com Online.  See also this news release yesterday from Purdue University, “Second farm bill extension seems likely, Purdue ag economists say.”)

Mr. Abbott noted that, “A spokesman for House Majority Leader Eric Cantor said ‘no decisions have been made on next steps.’”

The Reuters article pointed out that, “House Republican leaders canceled plans for a vote this week on an Agriculture Department funding bill. One farm lobbyist said it would have been ‘round two’ on the farm bill since it covers the same contentious subjects.”

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