DTN Ag Policy Editor Chris Clayton reported yesterday that, “A bipartisan group of 44 senators sent a letter Tuesday to Senate leaders calling on them to bring the farm bill to the floor.

“In a letter to Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., senators stated, ‘With our constant focus on job creation, we write to urge you to schedule floor consideration of the ‘Agriculture Reform, Food and Jobs Act of 2012′ as soon as possible.’”

The DTN article noted that, “An informal view of Senate Agriculture Committee leaders is that they wanted to see floor action on the farm bill before the Senate breaks for Memorial Day. Speaking to reporters on a conference call Tuesday morning, Sen. Charles Grassley, R-Iowa, said there have been no indications from Senate leaders that the farm bill could come up next week.

“‘It might not be a bad deal to bring it up before recess so we actually got the thing done, but I don’t expect it would be,’ Grassley said.”

“Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and Ranking Member Pat Roberts, R-Kan., did not join others in signing the letter but nonetheless want to see the bill adopted. They will hold a press call on Wednesday to report on progress on the bill,” the article said.

An update yesterday from the American Soybean Association (ASA) indicated that, “‘We are particularly encouraged by the broad and diverse coalition of senators that have lent their support to this letter, and we echo their call to bring the legislation quickly to the floor in the interest of America’s soybean farmers,’ said ASA President Steve Wellman. ‘The nation depends on a vibrant agriculture sector, and agriculture depends on a practical and workable Farm Bill. The ramifications of this legislation are indeed huge, and it remains our goal to see a Farm Bill in 2012.’”

A news release yesterday from the National Milk Producers Federation (NMPF) stated that, “The Senate leadership received a similar letter from farm groups last week, when NMPF joined more than 125 other agricultural organizations in pointing out how important it is to act on the farm bill quickly.”

“NMPF President and CEO Jerry Kozak said that ‘the clock is ticking on our opportunity to get a farm bill done in 2012. We appreciate the display of bipartisan effort by senators from across the country to move this legislation forward.’”

Chris Clayton noted yesterday at the DTN Ag Policy Blog that, “The Hagstrom Report noted there may have been 44 senators on the letter Tuesday wanting action on the farm bill, but there were actually 45 senators asking leaders for quick action. Sen. Dianne Feinstein, D-Calif., had sent her own letter Monday wanting action on the farm bill and also wanting amendments approved for fruits and vegetables.

“A staffer for one of the Senate leaders emailed me [Mr. Clayton] Tuesday that the farm bill will likely receive floor time in June.

“The House Agriculture Committee begins three days of hearings on the farm bill Wednesday with a 10 a.m. EDT hearing on crop insurance and the commodity title.”

A news release yesterday from Rep. John Garamendi (D., Calif.) stated that, “Today, in a letter to the House Committee on Agriculture, [Rep. Garamendi], Congressman Jerry McNerney (D., Calif.), Congresswoman Lois Capps (D., Calif.), and 29 of their colleagues in the California Congressional Delegation detailed their top priorities in the upcoming 2012 Farm Bill, which Congress is expected to consider later this year.  The 2012 Farm Bill, which sets food and farm policy for the nation, provides multi-year funding for a wide range of agriculture programs.

“‘As a rancher and a pear farmer, I know the unique challenges that California’s agriculture community faces,’ said Garamendi. ‘The Farm Bill offers the opportunity for California’s farm businesses to overcome these hurdles through advanced research, pest management, and marketing assistance programs. The bill can also connect disadvantaged families, especially children, with the food they need to lead healthy, productive lives. I join my colleagues in urging the Committee to pass a fiscally responsible Farm Bill that helps America’s families and farmers to Make It In America and grow it in America.’”

Meanwhile, the “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “U.S. Trade Representative Ron Kirk says he believes that reform of farm subsidies might be possible in today’s economic environment. ‘The overall economic situation in all of our countries puts us in a better position to have a more thoughtful conversation about farming support than we have in a very long time,’ he said. ‘I happen to believe if there is a silver lining in this economic instability around the world, it’s forcing a more thoughtful conversation about all subsidies and farm supports, certainly in our Congress, in Europe, in Brazil.’

“Kirk’s evaluation of the situation dovetails with a second set of circumstances that could lead to changes in current farm policy: the booming U.S. farm economy. Sunday’s Washington Post carried an article by one of its columnists –– Robert J. Samuelson –– who argues that changes in the nature of global markets for agricultural products and the significantly different structure of the assets and debt held by U.S. farmers should lead Congress to drop federal agricultural subsidies when it approves the next farm bill.

“That won’t happen, of course. But the themes of tough times for the overall economy coupled with the robust state of the farm economy could prove to be two high hurdles for farm-state legislators to overcome when the farm bill negotiated later this year.”

University of Illinois Agricultural Economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“Simple versus Olympic Averages in Prices used in Farm Commodity Programs”) that, “When historical averages are needed, an Olympic average often is used rather than a simple average in calculating benchmarks in Farm Bill commodity programs. For example, the Agricultural Risk Coverage (ARC) program that was passed by the Senate Agriculture Committee uses Olympic averages of prices and yields in calculating benchmark revenue. In this post, Olympic averages are compared to simple averages for corn and soybean prices. Generally, Olympic and simple averages will track one over time. The relationship of Olympic to simple averages depends on the nature of distributions across time.”  Dr. Schnitkey noted that, “For prices, it is difficult to know the relationship between Olympic and simple averages.”

Also yesterday at the farmdoc daily blog, Ohio State University Economist Carl Zulauf penned a brief item titled, “Update on U.S. Senate Ag Committee version of New Farm Bill.”

Patrick Gavin reported yesterday at Politico that, “From the department of clever legislation labeling: Rep. Jared Polis is introducing a piece of legislation that covers pizza, named The SLICE Act…Polis is upset that unhealthy pizza is being routinely served to students and classified as a vegetable by the USDA.”

Yesterday’s Politico update added that, “Corey Henry, the vice president of communications for the American Frozen Food Institute, writes in with a response to Polis.

“‘Congress did not make pizza a vegetable. Pizza is not now considered a vegetable and never will be considered a vegetable, and no one has ever, or will ever, ask that pizza be considered a vegetable. Congress acted to retain the current vegetable crediting for tomato paste as part of USDA’s new school meal nutrition standards in recognition of tomato paste’s significant nutritional value. Tomato paste is an incredibly versatile and nutrient rich food, packed with Vitamins A and C and rich in fiber, potassium and antioxidants. Nearly two whole tomatoes are required to make just one tablespoon of tomato sauce, which is why USDA rightly credits 1/8th of a cup of tomato paste as a full serving of vegetables. Indeed, USDA’s latest Dietary Guidelines for Americans encourage increased consumption of tomato products, such as paste and sauce.’”

In other policy related news, Sarah Muirhead reported yesterday at Feedstuffs Online that, “Denny’s announced today that it will work with its suppliers to eliminate the practice of confining pigs in gestation crates for its bacon, sausage and other pork products.”

Budget

Damian Paletta reported yesterday at The Wall Street Journal Online that, “House Speaker John Boehner said Tuesday that any increase in the government’s borrowing limit must be accompanied by spending cuts and other budget savings of greater value, and he rejected tax increases as part of any deal to reduce the federal deficit.

“Those positions signaled to the White House that congressional Republicans are prepared for fiscal brinkmanship at the end of the year, when Bush-era tax cuts are scheduled to expire, large automatic spending cuts are set to begin and the government reaches its $16.394 trillion borrowing limit.”

Jonathan Weisman reported in today’s New York Times that, “Democrats immediately accused Mr. Boehner of once again holding the nation’s full faith and credit hostage to his conservative political agenda, even as Republicans cut corners on the deal struck last summer to end the last debt-ceiling crisis.

“Treasury Secretary Timothy F. Geithner, speaking at the same meeting sponsored by the financier Peter G. Peterson, said the government could bump into its borrowing limit before the end of the year, but, he said, the Treasury has enough ‘tools’ to keep the government afloat into early next year. That should push a debt-ceiling showdown well past the November election.

“Mr. Geithner appealed to lawmakers to raise the debt ceiling ‘this time without the drama and the pain and damage that it caused the country last July.’ And he said an orderly solution could be reached.”

Rosalind S. Helderman reported yesterday at the 2chambers blog (The Washington Post) that, “Senate Minority Leader Mitch McConnell (R-Ky.) said he agreed with Boehner’s framework for requiring cuts equal to any debt ceiling increase.

“‘A request of the president to ask us to raise the debt ceiling ought to generate a significant response to deal with the problem of deficit and debt,’ he said.

“But White House spokesman Jay Carney responded that a ‘charade’ like last summer’s fight over the issue would hurt the economy.”

The New York Times editorial board noted today that, “Mr. Boehner said on Tuesday that his party would again refuse to raise any taxes, relying on spending cuts to offset the debt increase. He also announced that the House would vote before the November election to continue all the Bush tax cuts, set to expire on Jan. 1, depriving the Treasury over a decade of more than $3.5 trillion that could be used for deficit reduction.

“This time, at least, Democrats have more leverage than they did last year. The House cannot prevent those tax cuts from expiring by itself, nor can it stop the big military cuts that also begin on Jan. 1.

“Some members might be willing to reach a deal, but Mr. Boehner’s decision to again threaten a default shows that he is an unreliable budget negotiator. President Obama failed to recognize that last time, and Congressional Democrats gave in too easily. We hope both are hearing the message this time around.”

Agricultural Economy

Ian Berry reported yesterday at The Wall Street Journal Online that, “Farmland values across the U.S. Midwest continued to surge in the first quarter, buoyed by high crop prices and easing drought conditions in some states.”

Mr. Berry pointed out that, “In the heart of the U.S. corn belt, cropland values rose 19% in the first quarter from the year-earlier period, the Federal Reserve Bank of Chicago said in a report Tuesday. While it noted that the year-over-year price increases edged down from the ‘torrid’ pace of 2011, farmland values still increased 5% from the previous quarter.

“A separate report Tuesday from the Federal Reserve Bank of Kansas City showed even greater increases, with values for nonirrigated farmland across the district, which includes much of the central and southern Plains, jumping 25% from a year earlier and 8% from the prior quarter. Cropland values in that district were also fueled by increased energy production in states such as Oklahoma and Kansas, which boosted land-lease revenue from mineral rights.”

Owen Fletcher reported in today’s Wall Street Journal that, “U.S. wheat futures rose 2%, boosted by concerns about dry weather in overseas wheat-producing regions and a less-optimistic government assessment of the U.S. winter-wheat crop.

“Tuesday’s rally came after wheat prices mostly fell over the past two months. Warm weather in the U.S. has sped up development of the winter crop and raised analysts’ expectations for a large, early harvest that will augment already ample global wheat supplies.”

Javier Blas reported yesterday at The Financial Times Online that, “The annual ‘acreage battle’ in the US to decide which crop – corn or soyabean – will receive the biggest increase in farmland area has yet to be settled.

“In the first round of the 2012-13 battle, the US Department of Agriculture declared corn as the big winner as farmers said they intended to sow 95.9m acres of the grain, up 4 per cent from 2011-12 and the highest since 1937. The area devoted to soyabean fell 73.9m acres, down 1 per cent from 2011-12.”

The FT article explained that, “The big increase in corn acreage was the natural response to historically high prices and a favourable ratio of corn-to-soyabean prices in late 2011 and early 2012. But since the USDA published its Prospective Planting report, based on a survey of 84,500 US farmers in early March, the ratio has shifted in favour of the oilseed.

“The price ratio for new crop soyabean-to-corn has moved from 2.05 times at the end of last year to 2.51 in late March, rising further to 2.68 times last week. In effect, the market has been trying to ‘buy back’ some acreage for corn to boost soyabean production.”

Meanwhile, an update posted yesterday at the Economic Research Service (USDA- ERS) Charts of Note webpage, stated that, “Fertilizer prices paid by farmers outpaced the increase in crop prices received by farmers from 2004 to 2008, driven largely by high energy prices and input material costs. In response to record fertilizer prices in 2008, farmers reduced fertilizer consumption, which contributed to a large decline in fertilizer prices in 2010. Since then, fertilizer prices have started to climb once again, driven mainly by strong domestic demand for plant nutrients resulting from high crop prices despite a steady decline in nitrogen fertilizer input (natural gas) costs. This chart is based on the data in table 8 of the ERS data product, Fertilizer Use and Price, updated May 4, 2012.”

Joe Leahy reported yesterday at The Financial Times Online that, “Brazil’s cost of sugar production has risen to match that in parts of Europe, illustrating the declining competitiveness of Latin America’s largest economy even in one of its core agricultural industries, according to a key trader of the commodity.

“Once by far the lowest-cost producers, Brazilian sugar companies are suffering from a stronger currency, inefficient infrastructure and rising labour and overheads, leading traders to consider moving production to new markets, such as Africa, said Alberto Weisser, chief executive officer of Bunge, one of the world’s largest commodities traders.”

And Bloomberg writer Whitney McFerron reported yesterday that, “Global poultry prices may ‘remain strong’ in the next two quarters as world meat demand increases and supplies decrease in the U.S. and Brazil, Rabobank International said.

“Beef prices that climbed to a record this year will support poultry, Rabobank analysts including David Nelson said in a report e-mailed today. U.S. wholesale choice beef prices climbed to $1.988 a pound on Feb. 29, the highest since at least January 2004, according to the U.S. Department of Agriculture.”

Regulations

Bloomberg writer Silla Brush reported yesterday that, “U.S. House lawmakers, acting after JPMorgan Chase & Co. (JPM) announced $2 billion in derivatives trading losses, delayed a committee vote on legislation easing Dodd- Frank Act swaps rules.

“The U.S. House Agriculture Committee postponed a May 17 committee meeting to vote on the measures, which would limit the international reach of the 2010 regulatory-overhaul law’s swaps regulations and allow more derivatives trading to occur in federally insured banks.

“‘As always, Washington has a tendency to overreact. While the news of JPMorgan’s trading loss is unfortunate, the bipartisan legislation the committee was scheduled to consider is unrelated to the cause of the trading loss,’ Representative Frank D. Lucas, an Oklahoma Republican and chairman of the committee, said in a statement.

“‘However, this committee will take the time to gather all relevant information before we proceed to ensure there are no unintended consequences of the legislation that would encourage recklessness in our financial institutions,’ Lucas said.”

Victoria McGrane and Jessica Holzer reported yesterday at The Wall Street Journal Online that, “On Tuesday, Sen. Mike Johanns of Nebraska, a Republican on the Senate Banking Committee, said he wants the J.P. Morgan Chase & Co. chief executive to expound on the bank’s $2 billion-plus trading loss.”

The article added that, “Rep. Randy Neugebauer (R., Texas), chairman of the House Financial Services Subcommittee on Oversight and Investigations, said lawmakers need a ‘a clear picture of what happened at J.P. Morgan so that we can determine whether the actions that caused this loss pose risks to our financial markets and our economy as a whole.’”

Political Notes

Naftali Bendavid reported in today’s Wall Street Journal that, “A state senator who had been stuck for weeks in third place in polls has won the GOP nomination for a U.S. Senate seat from Nebraska, continuing a pattern of challengers successfully taking on prominent Republicans in party primaries.

“State Sen. Deb Fischer capped a remarkable surge by capturing the Senate nomination on Tuesday. She will face Democrat Bob Kerrey, a former Nebraska senator and governor, in the November election.”

Keith Good

A news release yesterday from the National Corn Growers Association (NCGA) stated that, “As the House Agriculture Committee continues farm bill hearings this week, the [NCGA] and several other agriculture groups today sent a letter to House Ag Chairman Frank Lucas and Ranking Member Collin Peterson on the importance of crop insurance.

“‘Federal crop insurance provides an effective risk management tool to farmers and ranchers when they are facing losses beyond their control,’ the letter stated. ‘It reduces taxpayer risk exposure; it makes hedging possible to help mitigate market volatility; and it provides lenders with greater certainty that loans made to producers will be repaid.’”

The release added that, “NCGA has previously stated that crop insurance remains the number one priority in the new farm bill as well as a market oriented, risk management tool to cover multi-year price declines.”

And, a news release yesterday from National Crop Insurance Services (NCIS) indicated that, “As the House Agriculture Subcommittee on General Farm Commodities and Risk Management prepares to hold a hearing later this week, [NCIS] today released the second in an ongoing series of educational videos on crop insurance.  This video puts a sharp focus on the risk that Texas farmers – who received roughly one-quarter of all indemnities in 2011 – faced in last year’s historic and ongoing drought.

“The video, titled ‘2011 Southwest Case Study,’ contains an overview of the catastrophic drought by NCIS President Tom Zacharias, highlighting the extent of the damage throughout the state and the role crop insurance played in mitigating that damage.  Additionally, two Texans were interviewed to better explain farmers’ ability to survive the drought and bounce back to plant again in 2012.

“Rick Boyd, a banker with First United Bank in Lubbock, explains that many banks require farmers to purchase crop insurance to secure their loans.  Boyd noted that if it wasn’t for crop insurance, any Texas farmers might not be back in their fields planting again this year.   ‘2011 was such that, with the insurance, we did not have any farmers that actually went out of business, and over 90 percent of our customers had to draw on their insurance claims,’ he said.  ‘The programs were in place that allowed them, not to make a profit, but to actually get a lot of their expense money back and that was enough to enable them to get financing for the upcoming year,’ he added.”

The “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “Last month, the Senate Agriculture Committee passed by a large margin a bill to replace the 2008 Farm Act, but was opposed by high profile southerners who got most of the headlines. They charged that the bill’s safety net was skewed, with relatively strong provisions for corn and soybeans and wheat, but weak supports for rice, cotton and peanuts.

“In response, Committee Chair Debbie Stabenow, D-Mich., and ranking minority member Pat Roberts, R-Kan., said that the direct payments, which many southerners prefer could no longer be defended and, that there was a limit to what the committee could provide in the way of additional support. The southerners responded that they expected better treatment from budget hawks in the House, and that they might oppose the bill on the floor.”

The DTN item pointed out that, “There are other important points of contention regarding the bill, observers note. For example, the Senate Ag Committee draft bill did not include a number of conservation proposals such as the requirement that producers who receive crop insurance subsidies comply with certain conservation rules. However, such a policy is opposed by rural bankers who told Congress that while conservation compliance is important, it could affect their customers’ ability to get and keep coverage. At this time, there appears to be little interest in the Senate in adding such a provision, and even less in the House.

“Yet another concern is the question of whether the Senate insurance program will satisfy Brazil and comply with the demands from their successful trade challenge that is forcing the United States to pay $147 million annually to avoid sanctions allowed by the World Trade Organization.”

Yesterday’s item noted that, “Dan Sumner, a University of California-Davis economist and ex-USDA official who serves as a consultant to Brazilian interests says the proposed cotton program is actually more trade distorting than current policy. Sumner said the STAX insurance program proposed by the National Cotton Council ‘would allow U.S. cotton farmers to ‘lock in’ currently high farm revenues, further insulating them from market forces.’ The program would cover revenue losses of more than 10% and require farmers to pay just 20 percent of the premium. ‘It’s natural that someone looking at it would say that’s a big production subsidy,’ Sumner said.

“Rep. Randy Neugebauer, a Texas Republican, disagrees and asserts that that lawmakers are prepared to face another WTO challenge, if it comes. However, Senate Ag ranking Republican Roberts told the press that he wanted to ‘work around any WTO problems’ with the bill. However, he says he doesn’t expect the bill to be altered.”

The “Washington Insider” item added that, “So, it is clear that a great deal of work remains on highly controversial issues before a farm bill will be ready for floor votes in either chamber. In addition, while many producers believe they will be in a better position now than in the future to fight for programs they want, they are uncertain about how the election will change that view.

“Now, in spite of the political din surrounding the Senate bill, the focus is shifting toward the House committee and its debate which is expected in June. Depending on what happens in the House, the bill that emerges likely will have baseline savings of $23 billion to more than $30 billion –– savings that could lead to its inclusion in some amendment-proof vehicle as a spending offset.”

Late last week, Senate Agriculture Committee Member John Boozman (R., Ark.) discussed the Farm Bill with Mallory Hardin on KARK’s ‘Arkansas Today’ afternoon news, a video replay of this brief interview, in which Sen. Boozman explains some of the concerns he and other Southern Senators have with the current version of the Senate Farm Bill, can be viewed here.

More specifically, a recent analysis from the University of Arkansas (“Arkansas representative farm analysis ARC proposal in Senate markup”), “takes the following specification of the ARC proposal and applies it to a stochastic analysis of Arkansas representative farms. This preliminary analysis is only for the Stuttgart farm (rice‐soybean‐wheat) assuming individual election.”

And a news release late last week from Rep. Bruce Braley quoted the Iowa Democrat as saying: “The Farm Bill is the single most important piece of legislation this year that affects Iowa jobs and the Iowa economy.  From renewable energy to conservation programs, from crop insurance to agricultural research and rural development, the Farm Bill has a huge impact on our state.  It’s my job to listen to Iowans and get their feedback on what needs to be included in this important bill.  I’m working to make the Farm Bill a job creator in Iowa.”

Meanwhile, a news release from USDA yesterday noted that, “[USDA] Farm Service Agency (FSA) Administrator Bruce Nelson today reminded producers that enrollment for the 2012 Direct and Counter-Cyclical Program (DCP) and the Average Crop Revenue Election Program (ACRE) ends on June 1, 2012.”

With respect to nutrition issues, Elise Viebeck reported yesterday at The Hill’s Health Watch Blog that, “Rep. Jared Polis (D-Colo.) introduced a bill Monday to stop the amount of tomato paste used on a children’s slice of pizza from counting as a serving of vegetables in school lunches, arguing that the standard effectively qualifies pizza as a vegetable.

“He said he hopes the measure can be included in this year’s farm bill.

“‘Pizza has a place in school meals but equating it with broccoli, carrots and celery seriously undermines this nation’s efforts to support children’s health,’ a fact sheet from Polis’s office stated.”

Yesterday’s article added that, “Legislative language passed last year blocked stricter school nutrition standards proposed by the Department of Agriculture (USDA) and allowed an eighth of a cup of tomato paste — roughly the amount used on a children’s slice of pizza — to count as one serving of vegetables.

“Polis called the decision ‘absurd’ and blamed both Congress and the frozen food lobby.”

On the issue of conservation, some of the Nation’s leading hunting and angling groups sent a letter to House Agriculture Committee Leadership yesterday that encouraged the House to adopt a strong Sodsaver provision in the next Farm Bill, a copy of the letter is available here.

And, an update yesterday at the Wisconsin Ag Connection yesterday stated that, “One of the most outspoken opponents of the Dairy Security Act says the debate over federal dairy policy is ‘far from over.’ The Wisconsin-based Dairy Business Association released a memo on Friday after it was learned that the House version of the Farm Bill would likely include the DSA as its solution to reorganizing the way most dairy producers are paid for their milk.

“The group cited statements from House Speaker John Boehner, who blasted Minnesota Congressman Collin Peterson earlier this year for proposing what he called ‘a convoluted dairy policy.’

“DBA also said a group of dairy producers, farm association representatives and processors met with House Ag Committee member Reid Ribble in Appleton at a roundtable discussion of the Senate farm bill this month, in which the entire group reiterated its support for a free-market system.”

In other policy news, Monica Eng reported yesterday at the Chicago Tribune Online that, “As the battle wages on over the safety of feeding antibiotics to livestock for growth promotion, a new report reveals yet another source of unregulated antibiotics in American animal feed–spent ethanol grain.

“The new report by advocacy group the Institute for Agriculture and Trade Policy suggests that a relatively new source of food for livestock may contain levels of penicillin, erythromycin and other antibiotics. Both of these are medically important drugs whose effectiveness in treating humans can be compromised by overuse in animal feed for non-sick animals.

“When the Food and Drug Administration discovered the antibiotic residues in the grain in 2008, it started requiring ethanol/distiller grain producers to get approval for their presence as a food additive.”

The Tribune article pointed out that, “Last Friday [Representatives] Edward J. Markey (D-Mass) and Louise Slaughter (D-NY) sent a letter to the FDA asking what it would do to better regulate these residues and why it has not released more information about its 2008 findings of antibiotic residue in half of the spent grain tested.

“Charles Staff of the Distillers Grain Technical Council took issue with the report, however, saying that it conflated concern over the use of antibiotics added directly to animal feed with the ‘far far lower levels’ in distillers grain.

“‘We are talking about parts per billion that is potentially present,’ Staff said, adding that levels of antibiotics in distillers grain have dropped significantly since the 2008 FDA analysis. ‘We are talking about minuscule levels and you can see that in the later 2010 samples taken by the FDA. [Ethanol producers] have better control and the antibiotic companies have established technical service and people who go out out to the ethanol plants and monitor how they are using it.’”

Budget Issues

Lori Montgomery reported in today’s Washington Post that, “Defense contractors have slowed hiring. Tax advisers are warning firms not to count on favorite breaks. And hospitals are scouring their books for ways to cut costs.

“Across the U.S. economy, anxiety is rising about the potential for widespread disruptions after the November election, when a lame-duck Congress will have barely two months to resolve a grinding standoff over taxes and spending.

“The halls of the U.S. Capitol are already teeming with people warning of disaster if lawmakers fail to defuse a New Year’s budget bomb scheduled to raise taxes for every American taxpayer and slash spending at the Pentagon and most other federal agencies.”

The Post article noted that, “In the meantime, political leaders are focused less on finding solutions than on drawing lines in the sand. In a speech Tuesday, House Speaker John A. Boehner (R-Ohio) plans to address the issue of national debt, which will once again be nearing its legal limit in January, just as the tax hikes and spending cuts are due to hit.

“According to advance remarks provided to The Post, Boehner will insist that any increase in the debt limit be accompanied by spending ‘cuts and reforms greater than the debt limit increase’ — the same demand that pushed the Treasury to the brink of default during last summer’s debt-limit standoff.”

Today’s article explained that, “For the moment, most economic forecasters are taking a sanguine view. Mark Zandi of Moody’s Analytics predicts that the lame-duck Congress will make a deal to rescind half the spending cuts and raise taxes for the wealthiest 2 or 3 percent of households — but leave everyone else alone.

“‘There’s a lot of room for compromise,’ Zandi said, noting that Boehner and Obama came close to agreement last summer.

“But others are skeptical that lawmakers, fresh from the combat of the campaign trail, will be able to agree on anything. Federal Reserve Chairman Ben S. Bernanke recently warned that the Fed would have ‘absolutely no . . . ability whatsoever’ to cushion the shock to the economy if the nation sails over what he calls the ‘fiscal cliff’ in January. And many analysts worry that the uncertainty will itself begin to dampen economic growth long before New Year’s Day.”

Agricultural Economy

Cheri Zagurski and Anthony Greder reported yesterday at DTN (link requires subscription) that, “Crop progress continues to gallop along, well ahead of last year and the five-year average, according to USDA’s weekly report.

“Corn is 87% planted and 56% emerged, compared to 56% and 16% last year and 66% and 28% averages, respectively.”

“Soybean progress is also moving along at a rapid clip. Forty-six percent of the crop is planted, compared to 17% last year and a 24% average.”

In an analysis yesterday (“Corn Market Direction Unfolding, Magnitude Still Uncertain”) University of Illinois Agricultural Economist Darrel Good indicated that, “Conditions are in place for a very large U.S. corn harvest, a return to a more abundant stocks situation, and a return to lower prices.  The magnitude of these changes is still to be determined and will unfold over an extended period.  Even with higher average yields this year, substantially lower corn prices could have a disproportionately large impact on producer returns as anecdotal evidence suggests that a relatively small portion of the 2012 crop has been forward-priced at higher price levels.”

In other news, Dan McCrum reported yesterday at The Financial Times Online that, “TIAA-CREF, which manages $487bn of assets for university professors and non-profit workers in the US, has raised $2bn from fellow institutional investors to invest in global farmland as it aims to develop a new agricultural asset class.

“The move represents a further step by institutional investors to look for ways to exploit the rapid growth of emerging markets and for long term alternatives to stocks and bonds following the poor performance of the last decade.”

The FT article noted that, “‘We see increased protein consumption in developing economies and alternative energy mandates driving increased demand for food, fibre and fuel from a limited resource – land,’ said Jose Minaya, head of global natural resources and infrastructure investments at TIAA-CREF.

“The group already has around $2.5bn invested in farmland, representing 600,000 acres spread across 400 different properties that are typically then leased to farmers to operate.”

Trade

An update yesterday the U.S. Trade Representative’s Office webpage noted that, “Tomorrow, United States Trade Representative Ron Kirk will give remarks at an event celebrating the entry-into-force of the U.S. Colombia trade agreement and World Trade Month. The U.S.-Colombia trade agreement will help to support more jobs here at home by providing additional opportunities for U.S. exporters to sell more goods and services to Colombia, the third-largest Latin American economy.”

Keith Good

Pat Westhoff, the director of the Food and Agricultural Policy Research Institute at the University of Missouri, noted in a column on Saturday that, “The farm bill cleared its first hurdle last month, gaining approval from a key Senate committee. There are no guarantees that all the remaining hurdles will be cleared this year.”

Dr. Westhoff noted that, “Compared to simply extending current law, the bill would cut net federal spending by $23 billion over the next 10 years, according to estimates by the Congressional Budget Office. Spending is cut by reducing farm subsidies and making smaller changes in conservation programs and the supplemental nutrition assistance program, or SNAP, formerly known as the food stamp program.”

“The draft farm bill uses some of the savings from eliminating direct payments to create a new Agriculture Risk Coverage program. The program would pay farmers for smaller losses that are not covered by crop insurance. The proposed formulas are complex, but farmers would get a payment when per-acre revenues fall by at least 11 percent from a recent average. Farmers are expected to use the existing crop insurance program to protect themselves against losses of more than 21 percent.”

Dr. Westhoff added that, “Getting a bill out of committee is only the first step. The House still needs to put together its proposal. Under normal circumstances, there would be debates and votes on the floors of both chambers and a conference committee to work out differences. Reports suggest it is unlikely that all of those normal steps can be completed before the November elections.

“Some believe a bill could be completed during a post-election lame-duck session of Congress. The bill’s budget savings could help offset the cost of extending current tax cuts or heading off other planned spending cuts. However, enough hurdles remain that it still seems very possible that the 2012 farm bill will become the 2013 farm bill.”

As action from the full Senate and the House Agriculture Committee is forestalled, a couple of interesting opinion-based items were published over the weekend.

Long time columnist Robert J. Samuelson indicated yesterday that, “Sitting in the cab of a $350,000 John Deere tractor pulling a $150,000 Deere corn planter, Greg Carson embodies modern American agriculture. It’s capital-intensive, high-tech, efficient — and now immensely profitable. Looking for a bright spot in the U.S. economy? The farm belt is it.

“Driven by high grain and soybean prices, farmers’ cash income hit a record $109 billion in 2011. Land values have followed high crop prices. Since 2006, an average acre of Iowa farmland has doubled. Last year, the increase was 33 percent, to $6,708, reports Michael Duffy of Iowa State University. And farms sustain factories. Iowa’s unemployment rate is now 5.2 percent compared with 8.1 percent nationally.”

While noting that, “With less debt, farmers are less vulnerable to repayment problems,” yesterday’s column added that, “Price increases in the 1970s reflected general inflation. Current prices rest on sturdier pillars: for starters, corn demand for ethanol mandated to be mixed with gasoline.

“A second source of demand comes from developing countries, led by China, that are improving diets by shifting to more beef, pork, poultry and dairy products. This requires more corn and soybeans for animal feed.”

Mr. Samuelson concluded by saying: “Congress is writing a new farm bill and is struggling with how much to trim subsidies. But why should prosperous grain farmers and absentee owners receive special treatment and windfalls? The proper level of subsidies is simple: zero.”

However, with respect to high grain prices driving record income, Dan Piller reported on Saturday at The Des Moines Register Online that, “Iowa’s farmers and state economy watchers face the reality that a ‘historically rare period’ of prosperity for Iowa agriculture may be ending.

“The U.S. Department of Agriculture last week forecast a return to more normal corn surpluses of almost 2 billion bushels. The more ample supplies could drive down corn prices to as low as $4.20 per bushel by year’s end, compared with an average price of $6.20 in 2011, the USDA predicted [see related graph].”

Mr. Piller explained that, “If the forecast holds, the impact will ripple across Iowa’s economy. During the ag boom, farmers with cash to spend have bid up land prices and bought new tractors and combines. Deere & Co., seed companies and other manufacturers have added thousands of workers to meet demand.

“‘A reduction in corn prices will take away cash from the economy,’ said state banking superintendent Jim Schipper, also a farm banker in Osceola.”

The Register article noted that, “‘When you are paying $300 per acre or more for rent, along with the cost of fertilizer, seeds and diesel that we’re paying this year, you have a cost of production that is well above $5 per bushel,’ said Kevin Ross, who farms near Minden in western Iowa and is president of the Iowa Corn Growers Association.

“Other parts of Iowa’s economy would benefit from a big price drop, including ethanol manufacturers as well as livestock producers, because of lower feed costs. Consumers, in turn, could see lower meat prices.”

Meanwhile, Paul Johnson, the President of the Minnesota Association of Wheat Growers noted in a letter-to-the-editor at the Minneapolis Start Tribune on Friday that, “The Star Tribune’s May 7 editorial on crop insurance (‘Small farms lose as crop program grows’) was insulting and unfair. Crop insurance has become the risk-management tool of choice for Minnesota farmers, because it works. The program was created to ensure that the private sector would help shoulder part of agriculture’s risk.

“As recently as the late 1990s, only about 30 percent of farmers participated. Today, crop insurance covers 80 percent of eligible lands, providing more than $114 billion in coverage in 2011. Crop insurance not only prevents taxpayers from shouldering the full burden of a farm disaster, but also gets payments to farmers quickly, typically within 30 days of finishing a claim.”

“Mother Nature does not just strike small farms. A crop-insurance indemnity does not make a farmer or rancher ‘whole’ any more than a check from an insurance company replaces a house lost in a tornado,” the letter said.

Also on crop insurance, John Mages, the President of the Minnesota Corn Growers Association, indicated on Friday that, “Crop insurance is a public-private partnership, designed to ensure that when disaster strikes, the private sector – crop insurance companies – are there to help shoulder the risk and the financial burden of rebuilding.  Crop insurance policies are purchased by the farmer and suited to the farmer’s needs, comfort with risk and financial situation.

“In the past, before purchasing crop insurance was the widespread and widely available option, disasters like last year’s would have triggered large, stand-alone disaster bills in Congress, aimed at trying to save as many farms as possible.  Those bills would have cost taxpayers dearly, and unfortunately, would have taken months, or even several years to finally get into the hands of the farmers who need the help.  Not a good situation for either party involved.

“In 2011, with 80 percent of eligible lands protected by crop insurance, private sector companies paid out in excess of$10.7 billion in payments to farmers who had purchased plans and suffered losses.  Those checks were often in the hands of the farmers in 30 days or less after they completed the necessary paper work.  It’s because of the effectiveness and efficiency of crop insurance that many of us are in our fields planting today instead of being forced to auction off our farms.”

With respect to dairy issues, Bill Bruins, the president of the Wisconsin Farm Bureau Federation, noted in a column late last week at the Wisconsin State Journal Online that, “Congress continues to craft the next U.S. farm bill, but the debate is basically over on an issue important to Wisconsin — the federal dairy program.

“The bipartisan Dairy Security Act, developed over three years with extensive input from farmers, ends the existing, antiquated dairy program, and replaces it with one that is both better for farmers and less costly for taxpayers. Congress should grab this win-win proposition, insert it into the dairy section of the farm bill and move on.”

In other policy news, Dina ElBoghdady reported on Saturday at The Washington Post Online that, “Next month, the Agriculture Department will begin testing raw ground beef for the ‘Big Six’ at meat plants in order to keep these pathogens off people’s plates. The decision comes four years after scientists and government experts warned of the dangers these germs pose to the nation’s food supply. Since then, the Big Six have been repeatedly tied to multi-state outbreaks and illnesses.

“Most of those illnesses were not linked to beef. They were linked to sprouts or lettuce or no source at all. The meat industry argues that it is being unfairly targeted. Only once before — with the notorious E. coli O157:H7 — have regulators banned a pathogen from fresh meat.”

The article added that, “If the Food and Drug Administration detects any pathogens in the food it oversees — vegetables, fruits, seafood and just about everything other than meat — it yanks the products. But the resource-strapped agency inspects only a fraction of its plants every year.

“By contrast, the law requires the USDA to inspect all meat plants daily.

“And the government says it is time to add the Big Six to the daily routine.”

Meanwhile, a news release on Friday from Rep. Edward Markey (D., Mass.) stated that, “Concerned that corn-based livestock feed could be linked to a sharp rise in antibiotic resistance, today [Rep. Markey and Louise Slaughter (D-N.Y.) asked the Food and Drug Administration (FDA) what the agency is doing to ensure appropriate use of antibiotics in food-animal production. The same antibiotics that are used in animal agriculture, such as penicillin and erythromycin, are also used by ethanol producers to prevent bacterial growth during the corn-based ethanol fermentation process. Producers then sell the byproduct of ethanol production as livestock and poultry feed, a use that appears to be sliding under the regulatory radar.

“In the letter sent today to FDA Commissioner Margaret Hamburg, the lawmakers ask the agency about its recent effort to reduce the use of antibiotics for animal growth promotion in food-animals, as well as what the FDA is doing to ensure that ethanol producers comply with regulations for food additives.”

Trade

A news release Friday from the National Farmers Union (NFU) indicated that, “[NFU] President Roger Johnson issued the following statement today in anticipation of the Trans-Pacific Partnership (TPP) negotiations that will take place in Dallas on Saturday:

“‘NFU supports fair trade that mutually benefits all nations involved and allows agriculture to compete on a level playing field. NFU strongly supports the Trade Reform, Accountability, Development, and Employment (TRADE) Act, which requires that all trade agreements include provisions that ensure other countries have environmental, food safety, health, and labor standards equal to or greater than those in the United States.

“‘The United States must be able to write a farm bill that provides family farmers and ranchers with an ample safety net under any trade agreement. Time and again the World Trade Organization has denied us the right to protect farmers and ranchers because of the structure of our trade agreements. It is critical for the survival of family farms and rural America that we are able to write a farm bill that helps farmers in times of need, when prices collapse and disaster strikes.’”

The “Washington Insider” section of DTN stated on Friday (link requires subscription) that, “U.S. Trade Representative Ron Kirk says more countries are inquiring about the possibility of joining ongoing talks aimed at creating a Trans-Pacific Partnership free trade agreement. They include not only Canada, Japan and Mexico, all of which have been mentioned before, but also Costa Rica, Colombia and the European Union, the latter two of which are interesting because they do not front on the Pacific Ocean.

“If the interest expressed in joining the TPP continues to grow, the trade agreement could become something like the World Trade Organization Lite in a few years. However, some trade observers say TPP likely will operate under a distinctly different set of rules governing issues not addressed by the WTO and its predecessor, the General Agreement on Tariffs and Trade. Those issues could include government trading enterprises and currency valuations.

“The nine nations currently negotiating the TPP include Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States. The 12th round of TPP negotiations are being held this week in Dallas.”

Aaron Back, Toko Sekiguchi and Yuka Hayashi reported yesterday at The Wall Street Journal Online that, “The leaders of China, Japan and South Korea agreed to begin free-trade negotiations this year, opening the possibility of an agreement that could rival the world’s largest free-trade zones in size, although it is likely to be far less comprehensive or rigorous.

“‘The free-trade agreement will unleash economic vitality of the region and boost economic integration,’ Chinese Premier Wen Jiabao said at a news conference with Japan’s Prime Minister Yoshihiko Noda and South Korean President Lee Myung-bak, during a summit among the nations in Beijing.

“The three countries accounted for 19.7% of global gross domestic product in 2010, compared with 27.2% for the North American Free Trade Agreement, which includes the U.S., Canada and Mexico, and 25.8% for the European Union, according to World Bank data.”

And Bloomberg writers Rebecca Christie and Brian Wingfield reported on Friday that, “The European Union and the U.S., which have the world’s largest bilateral economic relationship, are making progress on a trade accord that may be spelled out by mid-2014, EU Trade Commissioner Karel De Gucht said.

“Tariffs, services, procurement and regulatory issues top the agenda for the proposed agreement, which is taking shape this year. An interim report on the deal’s potential scope is due in June with a final document by the end of 2012, and negotiations could start soon after.”

For more information on EU agricultural trade, see this recent European Commission publication, “Agricultural trade in 2011: the EU and the world.”

In other trade developments, a news release Friday from the U.S. Trade Representative’s Office stated that, “Ambassador Ron Kirk announced today that the United States requested the World Trade Organization (‘WTO’) to establish a dispute settlement panel to decide U.S. claims regarding the Government of India’s restrictions on imports of various U.S. agricultural products, including poultry meat and chicken eggs. While India asserts that its measures are aimed at preventing entry of avian influenza, India’s measures are inconsistent with the relevant science, international guidelines, and the standards India has set for its own domestic industry.

“‘It is essential that U.S. farmers obtain the reliable market access that India agreed to,’ said Ambassador Kirk. ‘The United States holds its agriculture industry to the highest standards of safety and is confident the WTO will agree that there is no justification for India’s restrictions on U.S. exports.’”

Brazil

Leslie Josephs reported yesterday at The Wall Street Journal Online that, “Sugar prices near 20-month lows have raised questions over Brazil’s future as a leader in both the sugar and ethanol industries.

“The South American nation is the largest grower of sugar cane, which can be used to make sugar or ethanol from fermented sugar-cane juice. Its cane fields are growing old, and Brazil is grappling with how to reinvigorate them amid low prices and years of neglect in the wake of the 2008 financial crisis.

“The industry is also trying to plot a course for ethanol production at a time when Brazil’s government—which determines how much ethanol is used in ethanol-gasoline blends and whose state-controlled oil company Petróleo Brasileiro SA, controls gasoline prices—is focusing attention on large offshore oil reserves.”

The Journal article noted that, “This Wednesday, sugar and ethanol producers, economists, commodity traders and analysts will mull over these issues at the sixth New York Sugar Conference, an annual event that is kicking off on a sour note with sugar prices down more than 12% this year.”

Yesterday’s article added that, “‘The government’s view on ethanol changed because they have oil resources to develop,’ said Michael McDougall, a senior vice president at brokerage Newedge, and a panelist at the sugar conference. ‘The whole ethanol [push] was started because they were importing large amounts of fuel. That expansion has now ground to a halt.’”

Keith Good

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “The crop insurance industry could benefit from ‘common sense structural changes,’ according to a pair of senators, who cite a recent government study in calling on the Senate Agriculture Committee to further investigate reducing premium subsidies to farmers.

“In a bi-partisan letter, Sens. Tom Coburn, R-Okla., and Dick Durbin, D-Ill., wrote earlier this week to Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and ranking member Pat Roberts, R-Kan., asking them examine ways to find taxpayer savings in crop insurance. Coburn and Durbin cited a Government Accountability Office report last month requested by Coburn that highlighted the growing costs of the crop insurance program.”

Mr. Clayton pointed out that, “In the 2008 farm bill, lawmakers chopped $3 billion from the industry’s projected growth over 10 years and also created a timing shift that will delay up to $3 billion in payments. A new contract negotiated between the industry and USDA in 2010 also cut another $6 billion in projected spending over 10 years from insurers. Instead of insurance cuts, the Senate farm bill expands insurance with a new program for cotton and add-ons for other, smaller crops. Those insurance programs are meant to help offset cuts to commodity programs.”

The DTN article stated that, “The Government Accountability Office, Congress’ investigative arm on examining government spending, stated in its report a $40,000 cap on premium subsidies would have saved taxpayers $1 billion last year and as much as $358 million in 2010. By the same token, those taxpayer savings would have cost farmers comparable amounts, assuming they would have paid to keep the same level of insurance protection.

“Coburn and Durbin pointed out that taxpayers paid an average of 62% of the premium subsidy in 2011. Earlier this year, the president’s budget called for lowering that to a 50% level.”

Mr. Clayton noted that, “In a statement to DTN, Tom Zacharias, president of National Crop Insurance Services, said crop insurance is popular and proven time and time again to be the most efficient way to deliver assistance to farmers quickly after a disaster to help them recover. Further, the public-private partnership was specifically designed over the past three decades to limit taxpayer risk exposure by shifting it to private business.”

Yesterday’s article added that, “Moreover, the plan recently outlined by the GAO would adversely affect many of America’s full-time farmers, Zacharias said. He cited University of Illinois agricultural economist Gary Schnitkey, who recently looked at the $40,000 cap in terms of how it would have worked in recent years.

“Because of the fact that both the insurable value of crop revenue and premiums go up with high commodity prices, in years where prices are high, farmers will hit the premium cap with fewer acres farmed. For example, a farm in Illinois with 1,682 insured acres would have hit the limit in 2011. In 2010 it would have taken 2,710 acres. A payment limit could have differential impacts on farms, according to Schnitkey. Factors including the amount of specific risk present on a given farm and the amount of acres that are rented for cash could greatly affect when a farm hits the cap.”

Daniel Looker reported yesterday at Agriculture.com that, “Senator Tom Coburn, an Oklahoma doctor who is leading a crusade against the rising federal deficit, is planning to introduce an amendment to the Senate Agriculture Committee’s farm bill that would cap crop insurance premium subsidies.

“Coburn’s spokeswoman, Becky Bernhardt, when asked by Agriculture.com if the Republican senator plans to introduce an amendment with a $40,000 cap or some other level, replied in an email message, ‘The short answer is yes,’ Bernhardt said. ‘It is Senator Coburn’s hope that the ultimate result will be for the Senate to engage in debate and vote on amendments to the farm bill that would include GAO’s recommendations and save taxpayers $1 billion.’”

Mr. Looker indicated that, “Coburn and Durbin responded, too, to members of Congress who say crop insurance programs have already been cut enough.

“‘Let us be clear: further reductions to crop insurance are not a reflection of opposition to the program. In fact, we would argue the opposite – it is critical to make good programs better to ensure they are performing as intended and are fiscally sound taxpayer investments,’ the senators said.”

Yesterday’s article added that, “David Graves, manager and secretary of the American Association of Crop Insurers in Washington, DC, told Agriculture.com that his group has been preparing for floor amendments that might affect crop insurance when the farm bill comes up for a vote in the full Senate.

“‘We know these kinds of questions are out there but over the 30 years I’ve been hearing them, there are always these kinds of questions,’ Graves said.”

“‘We don’t believe Congress should or will be unduly swayed by these arguments because they miss the point,’ [Graves] said—and the point is that all farmers are subject to forces they can’t control.”

Meanwhile, Kim Geiger, writing yesterday at the Los Angeles Times Online, reported that, “The farm bill now before Congress includes a provision — estimated to cost about $3 billion a year — that would help cover the losses farmers suffer before their crop insurance policies kick in. Those losses, termed deductibles, can run in the tens of thousands of dollars for a typical mid-size farm.

“Supporters say it’s a money saver because it would replace an existing subsidy costing $5 billion a year. That subsidy, known as direct payments, pays farmland owners a set amount regardless of whether they’ve planted crops on the land.”

Yesterday’s article noted that, “Critics of the proposal concede it may be less costly than the direct-payment subsidies but say it would still take away U.S. Agriculture Department funds from more important programs such as food stamps, which fed 1 in 7 U.S. residents in an average month last year.”

Along these lines, and in reference to this week’s Institute of Medicine obesity report, “The Weight of the Nation,” The Wall Street Journal editorial board noted today that, “The panelists want to expand farm subsidies—entitlements for plants and animals—to include fruits and vegetables. They would have done far better to endorse an end to subsidies for row crops like corn, which become low-quality calories via refined starches and high-fructose corn syrup.”

In addition, The Washington Post editorial board indicated today that, “The government should eliminate programs that encourage unhealthy eating, such as agriculture supports, and direct the money it spends on school lunches or Supplemental Nutritional Assistance Program (SNAP) benefits — formerly known as food stamps — toward healthier foods. The feds must approach the issue delicately, not dictating diets to the poor. Yet there are reasonable ways to use federal leverage — SNAP spending last year totaled $72 billion — to encourage purchases of oranges over orange soda.”

And a news release yesterday from Rabobank stated in part that, “Health and convenience will be the leading drivers of increased demand for fresh vegetables in the next five years, according to a report released today from Rabobank’s Food & Agribusiness Research and Advisory (FAR) group.  The report cites the growing U.S. health crisis and consumer desire for easy-to-prepare meals among the reasons.

“The report notes that even though Americans are concerned about the U.S. obesity epidemic, the stand-alone marketing of a ‘healthy benefit’ to mainstream consumers isn’t enough to increase consumption of fresh vegetables – evident by the overall flat consumption rate of fresh vegetables in recent years.  The report recommends that produce firms put more emphasis on creating value-added products that are not only healthy, but easy to prepare.”

Also yesterday, Bloomberg writers Alan Bjerga and Stephanie Armour reported that, “More Americans want additional information on nutrition labels than two years ago while confidence in the safety of U.S. food is unchanged, according to a survey released today by an industry-backed research group.

“Twenty-four percent of respondents said they would prefer more information on labels, including data on nutrition, ingredients and potential allergens and their side effects. That’s up from 18 percent in the International Food Information Council’s previous survey of consumer perceptions of food technology in 2010. Sixty-nine percent were very or somewhat confident in U.S. food safety, the same as two years ago.”

In more specific Farm Bill developments, in a tele-news conference yesterday Nebraska GOP Senator Mike Johanns stated that, “Now that the farm bill has been passed out of the Senate Ag Committee, I and others are pushing for support to get it to the Senate floor. I’ve written a letter urging the Senate party leaders to bring the bill to the floor ASAP, and I’m currently distributing it to my Senate colleagues, trying to gain some support to get this to the floor.

“We continue to work on this. We’ll sign up as many of my colleagues as we possibly can. It is time to get it to the floor. I’ll just remind everybody that, with the end of this crop year, this farm bill expires, so we need to do something.”

Sen. Johanns was asked yesterday: “Senator, the Senate Ag Committee moved so quickly on their side of the farm bill, it seems to be just dragging so much on the House side. Are you guys having some frustrations from a Senate perspective?”

Sen. Johanns replied, “Not yet. My hope is that the Senate proposal will become the template, if you will, for a discussion of ag policy. I would have to imagine that we are — we are going to see the House come up with some different ideas. That is the way things work in a two-house system.

“Chairman Lucas is seeming to indicate that June — sometime in the summer timeframe he’s hoping to go to work on the farm bill. My hope is that our efforts on the Senate side will give them the template, give them the base upon which to build some ideas on the House side, get it done on both sides, get it to conference. There’s still a chance we could get this done.”

A news release yesterday from the House Ag Committee stated that, “Today, Rep. Jeff Fortenberry, Chairman of the House Agriculture Committee’s Subcommittee on Department Operations, Oversight, and Credit held a public hearing to learn more about how credit programs are working for farmers and how they should continue in the 2012 Farm Bill.”

At yesterday’s hearing Rep. Steve King (R., Iowa) queried the panel about crop insurance issues, and in this exchange- audio (MP3- 1:29), Matthew H. Williams, the Chairman and President of Gothenburg State Bank (Neb.) expanded on some of the benefits of the crop insurance program to the agricultural marketplace.

Rep. King also asked the witnesses about conservation compliance and farm program participation.  The witnesses noted that conservation compliance should not be linked with crop insurance- audio (MP3- 0:43).

Also at yesterday’s hearing, Rep. Rick Crawford (R., Ark.) had an interesting exchange with Jeff Gerhart, the Chairman, Bank of Newman Grove (Neb.) on the issue of agricultural land values- audio (MP3- 2:38).

Budget Issues

Jonathan Weisman reported in today’s New York Times that, “The House approved sweeping legislation on Thursday to cut $310 billion from the deficit over the next decade — much of it from programs for the poor — and shift some of that savings to the Pentagon to stave off automatic military spending cuts scheduled for next year.

“The legislation has no chance of passing the Senate or of becoming law. The White House issued a stern veto threat, saying the bill would ‘fail the test of fairness and shared responsibility.’”

The article noted that, “Republicans framed the fight as a test of seriousness, saying their party was the only one willing to make the difficult choices necessary to tame the deficit. President Obama’s polices are ‘not working’ and need to be changed, said Representative Paul D. Ryan of Wisconsin, the Budget Committee chairman [related statement].”

Bloomberg writer Brian Faler reported yesterday that, “The U.S. House voted to cut food stamps, federal workers’ benefits and other domestic programs to avoid scheduled reductions in defense spending.

“The chamber today passed, 218-199, a plan to cut about $310 billion in spending to replace automatic defense-spending reductions that lawmakers in both parties agree shouldn’t be allowed to take effect in January.”

The Bloomberg article noted that, “State governments ‘wanted to try to make as many federal dollars as available to as many people as possible,’ said Agriculture Committee Chairman Frank Lucas, an Oklahoma Republican.

“Democrats ‘would have you believe that we’re decimating the nutritional safety net and that hungry children and seniors will be left to fend for themselves,’ he said. That’s a ‘scare tactic,’ said Lucas, who said the changes would close ‘program loopholes.’

“The cuts drew a sharp critique from Representative Joe Baca, a California Democrat who said he once relied on food stamps.”

House Agriculture Committee Ranking Member Collin Peterson (D., Minn.) issued a statement yesterday indicating that, ““Everything must be on the table if we are going to have a serious conversation about getting our budget under control. Refusing to consider large budget items like defense and choosing instead to slash nutrition programs that feed millions of hard-working families is not the way to balance our budget. Since we know this isn’t going anywhere the only thing that will likely come out of this vote is an even more divided Congress.

“The farm bill expires this fall and while the Agriculture Committee has a strong history of bipartisanship I worry that if we continue down this partisan path it will be far more difficult to pass a farm bill this year.”

Agricultural Economy (WASDE Report)

Owen Fletcher and Bill Tomson reported yesterday at The Wall Street Journal Online that, “Corn prices fell 2.5% after the U.S. government raised its forecast for near-term supplies of the grain and projected a record harvest this autumn.

“The projections by the U.S. Department of Agriculture cast a cloud over a corn market that has been buoyed in recent weeks by worries about tight supplies. The forecasts not only discredited some of those concerns, but also reaffirmed that an infusion of newly harvested supplies later this year could be more than enough to replenish stockpiles.”

The Journal article noted that, “U.S. corn production is expected to increase this year to a record 14.79 billion bushels, up from 12.36 billion bushels last year, as a fast start to the planting season could boost crop yields, the government said. Corn yields may reach a record 166 bushels an acre, the USDA said. The government’s projected corn harvest would shatter the old record of 13.092 billion bushels set in 2009.”

Reuters writer Charles Abbott reported yesterday that, “USDA had less bountiful outlooks for other supplies, with domestic soybean inventories seen falling to 145 million bushels for the 2012/13 year from 210 million this year, with a stocks-to-use ratio ‘at a historically low 4.4 percent.’”

The article added that, “The report threatens to extend a cycle of volatile prices, with a shortage of one crop in one year giving way to a shortage of another in the next. Food prices spiked in 2008 and have remained high and volatile since then because of the razor-thin stocks and huge demand globally, especially from a hungry China.”

Emiko Terazono reported yesterday at The Financial Times Online that, “The jump in inventories is likely to weigh on prices for newly harvested corn. The USDA has forecast average prices paid to farmers will fall to a range of $4.20-$5.00 per bushel in 2012-13, down from a record $5.95-$6.25 per bushel this season.

“The record US production comes as the USDA anticipated record Chinese corn imports due to the higher use of the grain to fatten livestock, including pigs and poultry. The USDA predicted Chinese imports for the 2012-13 crop year at 7m tonnes, and revised its forecast higher for the current season to 5m. The figures are higher than the previous peak of 4.3m set during the drought of 1994-95.”

A breakdown of yesterday’s USDA report is available at the farmdoc daily blog- “As Usual, USDA Reports Contain Some Surprises,” by University of Illinois Agricultural Economist Darrel Good.

Also yesterday, Secretary of Agriculture Tom Vilsack spoke about the agricultural economy in a brief Bloomberg interview- video replay.

Keith Good

DTN Political Correspondent Jerry Hagstrom reported yesterday that, “All crops need a farm program that protects them from multiyear price drops, House Agriculture Committee Chairman Frank Lucas said Tuesday, a position with which House Agriculture ranking member Collin Peterson agrees.

“In a wide-ranging exclusive interview with The Hagstrom Report and DTN, Lucas, R-Okla., praised Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., for her ‘herculean efforts’ to get a bill through committee, and said that he would not underestimate her ability to convince Senate Majority Leader Harry Reid, D-Nev., to provide time on the Senate floor to debate the bill.

“However, Lucas said although the Senate bill’s ‘shallow loss’ revenue program that would cover some losses beyond crop insurance is ‘a great tool’ in good times when prices are high, it would not provide a proper safety net if prices plummet.”

Mr. Hagstrom explained that, “Because payments under the shallow loss program would depend on revenue comparisons that would gradually go down under such circumstances, there would be ‘a free fall to the bottom,’ he said. On the other hand, if target prices were written into the bill, payments would trigger whenever prices reached a certain level.

“‘You write a farm bill for the bad times,’ Lucas said.

“The bill that Stabenow, Lucas, Peterson and Senate Agriculture Committee ranking member Pat Roberts, R-Kan., sent to the supercommittee in charge of deficit reduction in December gave farmers a choice between the shallow loss program and a target price-based program, but Stabenow and Roberts left it out of the Senate package.”

Yesterday’s DTN update noted that, “Peterson, D-Minn., said in a separate interview that he also believes the target prices and counter-cyclical program should be continued.

“‘Crop insurance looks like a really big deal, but if prices go down … you’re going to be insuring yourself for a loss,’ Peterson said. ‘I do not see crop insurance as a safety net.’”

Mr. Hagstrom also pointed out that, “Lucas also said he believes the House version of the bill will cut close to the $33 billion over 10 years that President Barack Obama has proposed. He said he is comfortable with the other titles of the farm bill, but that the House will insist on a bigger cut to food stamps than the Senate bill’s $4 billion.

“The House bill may contain a slightly different cotton program from the one in the Senate bill, he said. Lucas declined to provide details of what the House bill might do differently for rice and peanuts, but noted that he wants sorghum treated properly because it is a crop that requires less water than most crops and has a lot of potential.”

Meanwhile, University of Illinois Agricultural Economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“ARC and Multi-Year Price Declines”) that, “The Senate Agriculture Committee recently passed a version of the Farm Bill that now moves for debate in the entire Senate. This Bill replaces direct, counter-cyclical, and SURE payments with Agricultural Risk Coverage (ARC), a revenue-based program that is further described in yesterday’s post by Carl Zulauf (see here). In today’s post, ARC payments are computed for cases in which prices are low for several years. This emphasis is taken as ARC is specifically designed to provide protection in cases of multi-year revenue losses, cases in in which crop insurance often provides limited protection. ARC payments are computed for corn in Champaign County, Illinois, as further described in the next section.”

After a brief but detailed analysis, Dr. Schnitkey noted that, “If prices are persistently low for several years, ARC payments will decline over time as lower prices enter into the calculation of benchmark revenue. Hence, ARC will provide payments in early years of a multi-year price decline, eventually though farmers will need to fully adjust to price declines as ARC payment decline.”

In other developments, a House Agriculture Subcommittee will hold a hearing this morning at 10:00 that will focus on the Farm Bill and credit programs.

Tom Steever reported yesterday at Brownfield that, “The clock is ticking and there is a sense of urgency for action to take place on the farm bill, according to Senator John Thune. Speaking to reporters Wednesday [audio (MP3- 7:21)], the South Dakota GOP lawmaker said it’s up to Senate Democratic leadership to schedule time for the full Senate to consider that chamber’s version of federal farm policy.

“‘It’s really a question of whether or not we’re serious enough about getting the new bill passed so that we don’t end up having to do an extension of the current bill when we hit that September 30 deadline,’ said Thune, in Washington, D.C., ‘and it strikes me, at least, that if we are serious about not having to do an extension and getting a new farm bill put in place, that we’re going to have to move it through the Senate pretty soon.’”

J.T. Rushing reported earlier this week at the Cedar Rapids Gazette (Iowa) that, “The federal farm bill has a long way to go on Capitol Hill, and a short time to get there.”

The article stated that, “Committee Chairwoman Debbie Stabenow, D-Mich., told The Gazette she is optimistic of success, but acknowledges the intense pressures.

“‘The big question is in the House,’ she said. ‘We’re going to send them a really strong, bipartisan bill, and do everything we can to work with them. … The biggest challenge is simply having enough time.’

“Senate action on the bill must happen fairly quickly because the House Agriculture Committee hasn’t even begun drafting its bill since members wanted to see the Senate version first.”

On the nutrition issue, The Gazette article added that, “Stark ideological differences between the Democratic-controlled Senate and the Republican-controlled House are all but certain, with Republicans likely to protest any provisions they see as overly generous — some have already begun calling for significant cuts to food stamp programs, for example.”

The article added that, “[Former Ag Committee Chairman Tom Harkin (D., Iowa)] also pledged to fight against any cuts in food stamp programs.”

An update posted earlier this week at FreedomWorks Online (“New Farm Bill Must Harvest Savings and Not Plant New Entitlements”) included a link to a letter from nearly a dozen organizations, which stated in part that, “[W]e believe Congress must not create any new potentially budget-busting entitlement programs that would increase Washington’s role in farm business decisions, such as efforts to put taxpayers on the hook for ‘shallow losses’ in annual farm business revenue… The House of Representatives must lead a full and open legislative debate on Farm Bill reauthorization.”

The editorial board at the Orlando Sentinel opined today that, “All those lawmakers who insist they’re serious about eliminating wasteful federal spending — that includes Florida Sens. Bill Nelson and Marco Rubio — have a chance to prove it by rejecting another five-year renewal of subsidies and demanding an end to the payments. Besides burdening taxpayers and deepening the deficit, they distort the free market and undermine efforts to expand U.S. trade.”

The opinion item added that, “The real winner in Florida would be Big Sugar; the Senate bill would maintain the import limits and sales quotas that prop up the price of U.S.-produced sugar. This government meddling in the free market, unlike subsidies, doesn’t impose a cost on taxpayers directly, but it forces U.S. consumers and food makers to pay much more for sugar. Studies have shown the sugar program is a net negative for the U.S. economy, but the industry has invested heavily in lobbying and political campaigns to hold on to its sweet deal.”

With respect to the executive branch, Reuters writer Carey Gillam reported earlier this week that, “A top USDA official said he is backing the U.S. Senate version of a new Farm Bill and says it deserves rapid passage as a fair program that will benefit U.S. producers.

“A competing plan by the U.S. House of Representatives would make much deeper cuts. Two House hearings were scheduled for this week, but there are growing concerns that wrangling over the Farm Bill could persist past election day, meaning several current programs relied on by producers would expire Sept. 30.

“‘We are encouraging Congress … to have a Farm Bill completed as soon as possible,’ the Agriculture Department’s Under Secretary for Farm and Foreign Agricultural Services Michael Scuse said in an interview with Reuters on Tuesday.”

The Reuters article noted that, “A viable crop insurance program is key, Scuse said, as producers need protection from the devastating impacts of drought, floods, and freezes.

“Last year, the U.S. crop insurance program insured about $110 billion in value for producers. The program paid out about $10 billion in indemnities, he said. The coverage is essential if farmers and their lenders are going to keep food production high, he said.”

The AP reported yesterday that, “The federal government is spending $4 million to help hook up farmers and low-income customers.

“Currently, fewer than a quarter of the nation’s roughly 7,100 farmers markets are set up to use the Electronic Benefit Transfer system, or food stamps. But Kathleen Merrigan, deputy secretary of agriculture, said she hopes these grants will bring another 4,000 of those outlets on line with the Supplemental Nutrition Assistance Program.

“‘SNAP participation at farmers’ markets helps provide fresh fruit and vegetables to families and expands the customer base for local farmers — a win-win for agriculture and local communities,’ she said in a statement.”

The New York Times editorial board noted today that, “The wholesale produce market at Hunts Point in the South Bronx features fruits and vegetables from around the nation and the world. Yet the 105-acre distribution hub provides very little space for smaller, local farmers to sell their produce to schools, restaurants and other retailers. Only about 4 percent of the $2.3 billion in annual sales there comes from food grown in New York State; another 8 percent comes from New Jersey.

“A wholesale hub for local farmers could help improve their viability and preserve farmland that is disappearing in New York at a rate of almost 70 acres a day. These farmers tend to manage their land and crops in a more environmentally sound way, and, for consumers, locally grown produce can be fresher than that shipped from afar.”

In other policy news, Chris Clayton reported yesterday at DTN (link requires subscription) that, “Safeway won’t be making quick changes after the nation’s second-largest grocer declared Monday it would move over time to buying its pork from vendors that slaughter hogs not born to sows sequestered in gestation crates.”

The DTN article added that, “Safeway did not offer a date on when the company would move completely away from buying pork from hogs whose sows were kept in individual sow cages. Brian Dowling, Safeway’s vice president of public affairs, said in an interview Tuesday, it would take years to implement and added that time frames range greatly among different companies who have made similar announcements. The plan to move away from gestation crates will involve working with the meatpacking industry. Safeway has no set timeline.”

Mr. Clayton noted that, “The National Pork Producers Council has cited positions taken by the American Veterinary Medical Association and the American Association of Swine Veterinarians, which NPPC states ‘recognize gestation stalls and group housing systems as appropriate for providing for the well-being of sows during pregnancy. In fact, the key factor that most affects animal well-being is husbandry skills — that is, the care given to each animal.’

“Still, there are some large pork industry integrators who have made their own announcements to move away from gestation stalls, notably Smithfield Foods and Cargill Inc.”

Budget Issues

Rosalind S. Helderman reported yesterday at The Washington Post Online that, “The House is expected to vote Thursday on a Republican plan that would spare the Pentagon from the deep across-the-board spending cuts envisioned as part of last summer’s debt-ceiling agreement, reviving what has been an emotional debate in Washington about the best ways to reduce the federal budget deficit.

“With a series of troubling end-of-year deadlines looming, Republicans are proposing to replace the first round of $110 billion in reductions, which are set to take effect in January.”

The Post article stated that, “To forestall the defense hit, the GOP proposal would cut funding for food stamps, eliminate key pieces of the federal health-care law and slash funding designed to help the government better monitor the financial sector.

“The package would cut $36 billion from the food stamp program by reducing benefits to recipients and tightening eligibility.”

The article explained that, “The Democratic-held Senate opposes the Republican proposal and members of both parties have said they think the automatic cuts ultimately could be replaced only as part of a major bipartisan deal that would not be struck until after the November election.”

Agricultural Economy

Owen Fletcher reported in today’s Wall Street Journal that, “Corn prices fell 2.5% as traders sought to curb risk ahead of a U.S. government report Thursday that may point to a big rise in supplies later this year.

“Corn for July delivery, the most actively traded contract, fell 15.75 cents, to $6.0725 a bushel at the Chicago Board of Trade on Wednesday.

“Corn fell along with wheat and soybean futures as traders braced for the U.S. Department of Agriculture on Thursday to issue its latest supply-and-demand tables for major crops. Corn traders worry the USDA could give a high forecast for domestic corn inventories at the end of the crop’s next marketing year, which starts Sept. 1. A forecast above analysts’ expectations, due to a likely large U.S. crop this autumn, could send futures lower.”

Trade

Reuters writer Doug Palmer reported earlier this week that, “Pressure around the world to cut government spending and accelerate economic growth has improved the environment for talks about reducing farm subsidies, one of the most sensitive areas of trade, a top U.S. official said on Tuesday.

“‘I do think the overall economic situation in all of our countries puts us in a better position to have a more thoughtful conversation about farming support than we have (had) in a very long time,’ U.S. Trade Representative Ron Kirk said in remarks at the U.S. State Department.

“His comments came as the 10-year-old Doha round of world trade talks to liberalize trade in agriculture, manufactured goods and services remains in a deep coma.”

Mr. Palmer pointed out that, “But farm support programs are on the agenda in the proposed Trans-Pacific Partnership (TPP) agreement covering the United States and eight other countries in the Asia-Pacific.

“U.S. dairy and sugar producers, in particular, are concerned their government programs could suffer from a deal in those talks.

“In addition, the United States and the European Union have been mulling a possible free trade agreement, which could require cuts in farm supports.”

Regulations

A news release yesterday from the American Farm Bureau Federation (AFBF) stated that, “The [AFBF] Tuesday, along with 14 state Farm Bureau organizations and 16 other national and regional agricultural organizations, filed a motion seeking to intervene in Gulf Restoration Network, et al. v. Jackson, et al., a lawsuit seeking to force the Environmental Protection Agency to establish federal numeric nutrient water quality standards for all states in the Mississippi River Basin. The resolution of the lawsuit could be significant for farmers, municipalities and others throughout the 31-state basin because numeric nutrient standards could lead to more costly and stringent limits on nutrient runoff to waters that ultimately contribute to the Mississippi River.

“Under the Clean Water Act, states may use either ‘narrative’ or ‘numeric’ standards as a method for determining water quality. Most states in the Mississippi River Basin use narrative standards, such as ‘no nutrients at levels that cause a harmful imbalance of aquatic populations.’ However, if this lawsuit is successful, EPA would be forced to override existing state standards with federal water quality standards and to express those standards as specific numeric limits on nutrients.”

Keith Good

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “During the congressional recess and this week, both aides and lobbyists were reluctant to speak on the record about the proposed farm bill.

“One aide to a senator who is not a member of the Senate Agriculture Committee said committee aides had begun asking staffers from other offices their opinion of the bill and whether their bosses would support it as written.”

Mr. Hagstrom added that, “Senate aides noted that the bill that came out of the Senate Agriculture Committee was a product of the committee’s current membership, which includes Sens. Sherrod Brown, D-Ohio, and John Thune, R-S.D., who wrote the ‘shallow loss’ program that is the centerpiece of the new commodity support program, and Sen. Richard Lugar, R-Ind., a former Agriculture chairman, who supported it.

“Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and ranking member Pat Roberts, R-Kan., said at the April 26 markup of the farm bill that they are open to further changes to the commodity title if they fit within the budget, but it’s unclear whether the committee is considering any proposals to address the issues that rice and peanut growers and others have raised about the draft bill.”

Yesterday’s DTN article pointed out that, “One lobbyist also said it is becoming clear that [House Agriculture Committee Chairman Frank Lucas (R., Okla.)] will write his own bill, and that the final bill will have to be reconciled with whatever the House produces, but that farm leaders would like the two bills to be as similar as possible to reduce the time for reconciliation and to create an image of solidarity to get the bill passed.”

Tom Steever reported yesterday at Brownfield that, “Passing the farm bill this year is a tall order, but perhaps easier than it would be next year. Senator Charles Grassley of Iowa says he’s pushing for the measure’s passage this year and he hopes Senate Agriculture Committee leaders will also urge Senate leadership to get the measure up to the Senate floor.

“‘Because it would be really advantageous for all agriculture all over the United States to get it up [to the Senate floor], because next year we’ll have a lower baseline,’ said Grassley, during a conference call with reporters Tuesday. ‘It’ll be a little more difficult to write a bill than it is this year. If we get it written now, it’ll probably be unchanged for 5 or 6 years.’”

With respect to the executive branch, Christopher Doering reported yesterday at The Des Moines Register Online that, “Tom Vilsack, Iowa’s former governor turned national agricultural chief, has managed to do something that’s nearly impossible for someone in his position: get almost everyone in the farm sector to like him.

“But those warm feelings could soon be put to the test, as rural America closely watches maneuvering to enact a new half-trillion-dollar farm bill.

“Vilsack, the 61-year-old cheerleader for rural America, has been largely spared the intense criticism that often hounds the country’s agriculture secretary. Those in agriculture attribute the high regard he’s enjoying to his ability to balance the diverse interests of various farm groups across the country.”

Mr. Doering indicated that, “A major test for Vilsack, [House Ag Committee Chairman Frank Lucas (R., Okla.)] said, will be how he reacts after Congress completes the farm bill.

“‘I would like to think that when we put a good farm bill on the president’s desk, I would hope that the secretary will recommend that the president sign it,’ he said.”

Yesterday’s article noted that, “Vilsack has repeatedly urged Congress to act on the farm bill before October and has pledged to work more closely than his predecessors with lawmakers to help get one done. If Congress fails to act, he said lawmakers risk slowing or even stopping the torrid economic growth in rural America.

“‘If it does not get done, then we are left without programs to support farmers and ranchers, and we create a great deal of uncertainty, which no doubt will impact and affect decisions throughout the supply chain that will compromise the enormous progress we’ve seen recently,’ he said. ‘Why would you not want to get this done, when things are going as well as they are going?’”

And Darryl Fears reported yesterday at the Washington Post Online that, “The U.S. Agriculture Department will put up $33 million for grants and technical assistance to help American farmers and ranchers take steps to stop polluted storm runoff from gushing into 157 watersheds, including a small portion of the Chesapeake Bay.

“Agriculture Secretary Tom Vilsack announced the Water Quality Initiative on Tuesday to improve ‘impaired watersheds in every U.S. state and territory.’ Vilsack called the push ‘a bold step . . . to improve water quality in some very challenging watersheds.’”

Meanwhile, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Ohio State University agricultural economist Carl Zulauf posted a report Tuesday [“U.S. Senate Ag Committee version of New Farm Bill” - farmdoc daily blog] analyzing some of the commodity program changes in the Senate farm bill’s commodity provisions and the Agriculture Risk Coverage program, or ARC.

“Zulauf spells out that the farm bill clearly establishes crop insurance as the foundation of the safety net. ‘However, the search for a complement program remains on-going. This bill proposes 3 alternatives: (1) a county multiple-year shallow loss program (i.e., county ARC), (2) a farm multiple-year, shallow loss program (i.e., farm ARC), and (3) a supplemental county insurance coverage option (SCO). While many desire a single complement program, it is important to remember that risk varies notably across the U.S. and by crop. This variation makes creation of a single program to complement insurance difficult. Thus, the optimal policy might be multiple programs to complement insurance.’

“Zulauf lays out several factors a farm will have to consider in examining the best option.”

A news release yesterday from the House Agriculture Committee stated that, “Today, Rep. Jean Schmidt, Chairman of the House Agriculture Committee’s Subcommittee on Nutrition and Horticulture, held a hearing to continue receiving input on agricultural programs in preparation for writing the 2012 Farm Bill. This hearing focused on specialty crop and nutrition programs.

“The first panel of witnesses included growers and representatives of the specialty crop community to discuss the programs under Title X of the 2008 Farm Bill…[T]he second panel of witnesses discussed the various nutrition programs under the Subcommittee’s jurisdiction.”

A related news release yesterday from Western Growers indicated that, “Farmers who produce the nation’s healthy fresh produce want a seat at the table for the major federal food and farm legislation—the farm bill. That’s the message Western Growers chairman Mike Jarrard took to Congress. As president & COO of Mann Packing in Salinas, Calif.—a producer of fresh cut vegetables—he knows firsthand the food his industry produces goes hand-in-hand with a healthier eating lifestyle. That’s an important message for Congress to hear.

“‘We are local, national and international contributing to health and well-being … We grow the best medicine,’ Jarrard said during a House Agriculture Committee hearing this morning in Washington, D.C. ‘Let’s consider that all produce is good produce—whether its organic, conventional or local.’

“While federal farm bill discussions over the years largely centered on program crops such as the major grain crops, the specialty crop industry now is reiterating the vital role it plays to grow healthy & nutritious food for Americans, according to Jarrard’s testimony to the U.S. House Committee on Agriculture’s Subcommittee on Nutrition and Horticulture.”

During his opening statement at yesterday’s hearing, Mr. Jarrard elaborated on issues associated with specialty crop block grants to states; to listen to a portion of his remarks, just click here (MP3- 1:38).

Also at panel one of yesterday’s hearing, Rep. Chellie Pingree (D., Maine) asked the witnesses specifically about crop insurance for organic crops.  To listen to a portion of this discussion, which included remarks from Russell Libby, the Executive Director of the Maine Organic Farmers and Gardeners Association, as well as Mr. Jarrard, just click here (MP3- 1:46).

Subcommittee Ranking Member Joe Baca (D., Calif.) indicated at yesterday’s hearing that, “The $33 billion in cuts to federal nutrition programs approved by the Agriculture Committee last month sets an unfortunate precedent that disregards the health and well-being of millions of struggling Americans. As the Committee begins to work in earnest on the 2012 Farm Bill, it is critical that we work to protect our nutrition safety net, promote consumption of healthy fruits and vegetables in schools across all 50 states, and ensure that no one in America goes hungry. Today’s hearing served as an important reminder of the need for a strong SNAP program. As our witnesses made clear, SNAP continues to be one of the most efficient and effective government programs, and is a critical lifeline for the health and nutrition of 46 million plus Americans.”

At the beginning of the second panel yesterday, Stacy Dean the Vice President for Food Assistance Policy at the Center on Budget and Policy Priorities provided an overview background of some key issues associated with the SNAP program (food stamps)- audio (MP3- 1:48).

And Rep. Baca specifically asked yesterday how the proposed reconciliation cuts in SNAP would impact the economy- audio (includes remarks from Ms. Dean) (MP3- 0:47).

And full Committee Chairman Frank Lucas participated in yesterday’s Subcommittee hearing and queried the second panel about what USDA can do to further prevent fraud and abuse in the SNAP program, a subject that is often highlighted in media reports- audio (includes remarks from Dr. Ron Haskins a Senior Fellow at the Brookings Institution, and Ms. Dean) (MP3- 2:30).

Both Subcommittee Chairwoman Schmidt and Rep. Jim McGovern (D., Mass.) asked the witnesses yesterday if their was a way to generate savings from the SNAP program that would not result in a negative impact on program participants- audio from Chairwoman Schmidt (includes remarks from Dr. Haskins and Ms. Dean (MP3- 1:31),  also audio from Rep. McGovern (includes remarks from Rodney Bivens the Founder and Executive Director of the Regional Food Bank of Oklahoma, and Ms. Dean) (MP3- 1:27).

In related news, a recent article posted at The Chronicle of Higher Education Online reported that, “A record number of people are depending on federally financed food assistance. Food-stamp use increased from an average monthly caseload of 17 million in 2000 to 44 million people in 2011, according to the U.S. Department of Agriculture’s Web site. Last year, one in six people—almost 50 million Americans, or 15 percent of the population—received food stamps.

“Ms. Bruninga-Matteau is part of an often overlooked, and growing, subgroup of Ph.D. recipients, adjunct professors, and other Americans with advanced degrees who have had to apply for food stamps or some other form of government aid since late 2007.

“Some are struggling to pay back student loans and cover basic living expenses as they submit scores of applications for a limited pool of full-time academic positions. Others are trying to raise families or pay for their children’s college expenses on the low and fluctuating pay they receive as professors off the tenure track, a group that now makes up 70 percent of faculties.”

In other policy news, Betsy McKay reported yesterday at The Wall Street Journal Online that, “Obesity is so entrenched in the U.S. that it would take an intense push by schools, employers, doctors and others to reverse an epidemic that accounts for billions of dollars in annual health-care costs, concluded a report released Tuesday.

“The report by the Institute of Medicine, an influential independent body that advises the federal government on health policy, recommended requiring at least 60 minutes of physical activity a day in schools and considering excise taxes on sugar-sweetened beverages. It urged food companies to improve nutritional standards for foods marketed to people under 18 years old, recommending that mandatory standards be considered at all levels of government if the companies don’t adopt their own.”

Agricultural Economy

Ken Anderson reported yesterday at Brownfield that, “Farmland rental rates in Iowa rose by 18 percent from 2011 to 2012.

“That’s based on the latest rental rate survey by Iowa State University (ISU) Extension and Outreach.  It shows the average cash rent for farmland is up 38 dollars this year to an average of 252 dollars per acre—and that’s on top of a 30 dollar per acre increase in 2011.”

A recent report posted at the Erie Times-News Online (Pa.) indicated that, “Grower Chester Sceiford estimates that this spring he’s lost 80 to 90 percent of his cherry crop plus the grapes in low-lying areas of his vineyard… Seasonal frosts through April 29 killed fruit buds that were coaxed out early by summerlike temperatures throughout the Erie region in March. Temperatures from late March through April dipped to freezing or below more than a dozen times.”

The update added that, “Grapes, the region’s largest fruit crop, took the brunt of the frost damage. While there’s no estimate yet of how much of the 2012 crop has been lost, it’s shaping up to be the worst frost damage in 35 years, said Rich Erdle, member services director for the Westfield, N.Y.-based National Grape Cooperative, which owns Welch’s.

“‘The damage is significant, and that’s from Ohio through Pennsylvania and New York, even in Ontario,’ Erdle said.”

Marshall Eckblad reported in today’s Wall Street Journal that, “In the Chicago futures pits, prices of lean hogs are going belly up.

“The 26% decline in prices over the past nine months has frustrated traders, farmers and meat processors, who have long anticipated a rebound. It also has shown little benefit to consumers, who still are paying record prices for pork chops or to snack on BLTs, as retailers are reluctant to discount pork products.”

Today’s article noted that, “Those high retail prices are a big part of the problem, traders say. The high cost is deterring U.S. consumers from buying pork products as demand from places such as China and South Korea also slows. Also, supplies are likely to be more plentiful than usual thanks to the mild U.S. winter, which caused hogs to add on more pounds than usual.

“That has all combined to drive down lean-hog prices at a time when prices typically would be rising in the roughly $8.6 billion market. Summer is approaching and supplies of pigs typically dwindle at this time of year. As Americans dust off their grills and start perusing pork-loin recipes, prices typically head higher. U.S. wholesale pork prices typically rise about 20% from winter through late summer.”

MF Global

Aaron Lucchetti reported yesterday at The Wall Street Journal Online that, “A Republican member of the House Financial Services Committee said 22 lawmakers have agreed to co-sign a letter asking the Justice Department to turn over its investigation of failed futures firm MF Global Holdings Ltd. to an independent counsel.

“Rep. Michael Grimm (R., N.Y.), started circulating the letter last week. As of Tuesday, 22 other Republicans and no Democrats have signed the letter. In an interview, Mr. Grimm said he is working to get more signatures and expects to send the letter to Attorney General Eric Holder later this week.”

Trade

The “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “Whether Canada, Japan and Mexico will join Trans-Pacific Partnership negotiations any time soon remains unclear. Last month, at a briefing to launch the TPP Business Coalition, which will lobby to support the eventual accord, U.S. Trade Representative Ron Kirk said the administration ‘absolutely welcomes’ the interest of the three additional countries, but that the substance of the negotiations will drive decisions about timing.

“Administration officials have said they hope to complete TPP talks this year, but some industry sources doubt that goal will be met and negotiations will continue into 2013 and maybe beyond. A more important aim may be to have enough agreement among current countries so Japan, Canada and Mexico would have to come into the talks with many major issues already agreed upon, particularly on agriculture, which would present significant hurdles for Japan and Canada.

“The TPP talks in Dallas over the next 10 days will give a good indication of how much momentum there is for completing the trade agreement in the next year or so.”

Political Notes

Paul Kane reported in today’s Washington Post that, “Republican Sen. Richard G. Lugar of Indiana, a 35-year member of the Senate and one of Washington’s leading experts on U.S. foreign policy, lost his bid for reelection Tuesday after a conservative backlash inside the GOP denied him his party’s nomination for a seventh term.”

And Christopher Doering reported earlier this week at The Des Moines Register Online that, “After a steady rise from mayor to Cabinet secretary in Washington, Tom Vilsack speaks like a man who’s come to grips with the fact his successful political career could be nearing its end.

“Vilsack, 61, said in an interview he’s not interested in running for office unless he were to try again for the presidency or were asked to be vice president.

“‘You can’t run for president today; four years from now there’s a lot that could happen,’ he said.”

Keith Good

A news release yesterday from the National Farmers Union (NFU) stated that, “[NFU] and a coalition of agricultural, conservation, environmental, energy, forestry, hunger, and rural stakeholders sent a letter to Senate leadership today urging them to bring the Agriculture Reform, Food and Jobs Act of 2012 to the Senate floor as soon as possible. NFU led the effort, which was supported by more than 125 organizations.

“‘This is one piece of legislation upon which all Americans depend, urban as well as rural,’ stated the letter. ‘With limited time remaining before the expiration of current program authorities, time is of the essence.’”

Also yesterday, the Senate Agriculture Committee provided an updated summary of the Farm Bill proposal it passed on April 26; this summary overview is available here.

A Radio News Service item from USDA yesterday noted that, “A top Agriculture Department official says those who are crafting farm legislation need to realize the importance of insurance for crops, but should not forget that other producers need a safety net as well.”  To listen to this brief report (1:00), which includes remarks from USDA Under Secretary for Farm and Foreign Agricultural Services Michael Scuse, just click here.

Agri-Pulse Senior Editor Stewart Doan, in an audio report today (“USDA’s Scuse: FSA not engaged in farm bill implementation planning yet”), also provided recent remarks on the Farm Bill from Under Secretary Scuse.  To listen to today’s Agri-Pulse report, just click here (1:52).

A news release yesterday from Rep. Rick Crawford (R., Ark.) noted that, “Today, Congressman Rick Crawford is reminding his constituents they can have a voice in crafting new farm policy. Crawford, who serves on the House Agriculture Committee, is encouraging Arkansas farmers to submit comments and suggestions for federal agriculture policy online at http://agriculture.house.gov/farmbill  by May 20th.”

And later this morning at 11:00, the House Agriculture Subcommittee on Nutrition and Horticulture will hold a Farm Bill hearing on Specialty Crops and Nutrition Programs.

Meanwhile, the Minneapolis Star-Tribune editorial board opined yesterday that, “Congress continues to find ways to throw money at farmers, whether they need it or not. The latest boondoggle comes from the Senate Agriculture Committee, which last week passed a farm bill, known as the Agriculture Reform, Food and Jobs Act of 2012.

“The bill slashes at least $23 billion from some farm subsidies and other programs, meaning lawmakers are living up to their pledge to stop making direct payments to farmers for crops they don’t grow. That’s progress. However, in a political sleight of hand the senators want to pour money back into the farmers’ pockets with over-the-top crop insurance subsidies.”

In other policy related news, David Brown reported in today’s Washington Post that, “In 2030, 42 percent of American adults will be obese, and about one-quarter of that group will be severely obese, a condition that shortens life and incurs large medical expenses, a new study predicts.

“This view into the future is less ominous than one published four years ago that predicted that 51 percent of the population would be obese in 2030. Nevertheless, the trend fortells a huge drag on the health and economic welfare of the United States.”

The Post article noted that, “The new study, published in the American Journal of Preventive Medicine, used obesity prevalence data from 1990 through 2008 to extrapolate future trends. The information came from the Behavioral Risk Factor Surveillance System, a federally funded telephone survey. People underestimate their weight when asked on the phone; that fact was compensated for in the mathematical model.”

Budget Issues

Janet Hook and Damian Paletta reported last night at The Wall Street Journal Online that, “House Republicans, seeking to prevent defense-spending cuts at the end of the year, advanced a plan [summary, text] that would instead reduce spending on health-care programs, food aid and other major domestic initiatives of the Obama administration.

“The bill developed by House Budget Committee Chairman Paul Ryan (R., Wis.) would cut about $261 billion in domestic spending over the next decade and roll back portions of the 2010 health-care law and the Dodd-Frank financial overhaul.

“It was approved Monday by the House Budget Committee on a 21-9 party line vote and likely will be approved by the House later this week. But it is a dead letter in the Senate because the cuts in the social safety net are anathema to Democrats who control that chamber.”

The Journal writers explained that, “The bill also stands as an opening GOP bid in negotiations—tied to last year’s failure by a legislative supercommittee to reach a broader deficit-cutting accord—that likely won’t be settled until a lame-duck session of Congress after the November election.

“The supercommittee impasse triggered a plan requiring nearly $1.2 trillion in spending cuts—half from defense programs and half from domestic programs—over the next decade. Of those, $110 billion are scheduled to take effect on Jan. 2, unless Congress acts to avert them.”

The Journal article added that, “A sizable portion of the domestic cuts in the House GOP bill come from programs benefiting the poor, including food stamps, Medicaid, and a child tax credit… But Democrats lambasted the GOP for slashing safety net programs, which would be exempt from the mandatory budget cuts, while protecting the Pentagon and ruling off limits any tax increases for the wealthy.

“They said it spoke volumes about GOP priorities that the Agriculture Committee called for cutting food stamps while focusing less on cutting farm subsidies. ‘The issue is not whether we should implement a plan to reduce the deficit,’ said Rep. Chris Van Hollen (D., Md.), ranking Democrat on the Budget Committee. ‘We should. The question is how do we do it?’”

Jonathan Weisman reported in today’s New York Times that, “The House Budget Committee on Monday took up budget bills passed out of six different committees last month, packaged them and sent them to the full House as one bill on a party-line vote. A separate bill, also approved by the committee, would formally lift the threat of automatic Pentagon cuts next year.

“Neither of the measures will pass the Senate, but the final House vote this Thursday amounts to a Republican bet that voters will reward the party for its tough-love priorities, despite Democratic attacks that will only build in intensity this week.”

The Times article added that, “The Congressional Budget Office estimated that the bill would push 1.8 million people off food stamps and could cost 280,000 children their school lunch subsidies…”

Rosalind S. Helderman reported yesterday at the 2chambers blog (Washington Post) that, “In his budget, President Obama proposed turning off the sequester and replacing it with a series of spending cuts but also closing tax loopholes and increasing taxes on the wealthy.

“With Democrats in the Senate opposed, the House GOP proposal will not be used to turn off the sequester. Instead, many members of Congress hope to reach a bipartisan deal after the election, when the Jan. 1 expiration of the Bush tax cuts will also be looming, raising the possibility of a grand bargain on spending and taxes.”

An update posted yesterday at the National Sustainable Agriculture Coalition (NSAC) Blog pointed out that, “In a quirky turn of events, the House Budget Committee on Monday modified its decision to use $1.028 trillion as the top-line discretionary spending cap for the House for fiscal year (FY) 2013.  Instead, the Committee temporarily adjusted the spending cap to $1.047 for the first three months of the 2013 fiscal year (Oct.-Dec. 2012), after which the cap would return to the lower level of $1.028 trillion.

“The discretionary spending adjustment would temporarily bring the House spending level in line with the Senate level and with the levels agreed upon by both chambers in the Budget Control Act of 2011.  This leaves open the possibility that the House Appropriations Committee will re-issue its allocations to each appropriations subcommittee, including the Agriculture Appropriations Subcommittee.”

The NSAC update added that, “The allocations determine how much each appropriations subcommittee can spend on its respective funding bill for the year.  The House Appropriations Committee’s current allocation for the agriculture appropriations bill is $19.4 billion, which is $1.4 billion below the Senate allocation.

“The adjustment also means that the Subcommittee will now have the option to produce a FY 2013 appropriations bill that more closely parallels the Senate bill, which was written to Budget Control Act levels and which the Committee passed on April 26.”

Also note that Jackie Calmes reported in today’s New York Times that, “With a polarized Congress already on the defensive, President Obama on Tuesday will outline a five-point ‘to do’ list for lawmakers that packages job creation and mortgage relief ideas he has proposed before, administration officials say.

“Mr. Obama will present the election-year list during a visit to a university science complex in Albany. The components of his challenge to Congress — and to the Republican-led House in particular — will be a feature of his appearances throughout the spring, aides said.”

Agricultural Economy

Cheri Zagurski and Anthony Greder reported yesterday at DTN (link requires subscription) that, “Soybean emergence was reported for the first time this growing season on Monday’s USDA weekly Crop Progress report. The nation’s soybeans are 7% emerged for the week ended May 6, compared to 2% last year and a 3% average rate.

“Soybean planting was reported at 24% complete, compared to 12% last week, 6% last year and an 11% average.”

The DTN item added that, “Corn planting continues to rocket along with 71% of the crop reported in the ground. That compares to 53% last week, 32% last year and a 47% average rate. Corn emergence is reported at 32%, compared to 15% last week, 6% last year and a 13% average.”

Dan Piller reported yesterday at the Green Fields Blog (Des Moines Register) that, “Beef Products Inc. said Monday it will close permanently the three plants, including one in Waterloo, that made lean textured beef trimmings that became a media sensation in March.

“After the moniker ‘pink slime’ was widely used in network news and social media reports, BPI closed the Waterloo plant under what it said at the time were temporary conditions. On Monday the company, based in Dakota Dunes, S.D., made the closing permanent in Waterloo and also at plants in Amarillo, Tx., and Garden City, Kan.

“A total of 650 workers will lose their jobs, 220 at Waterloo.”

Regulations

Marjorie Elizabeth Wood, a lecturer in history at the University of New Hampshire, noted in a column posted yesterday at The New York Times Online that, “Last month, a proposal by the United States Department of Labor to prevent children under age 16 from working in dangerous farm jobs ignited a firestorm in conservative media outlets. The new rules would have restricted having young workers handle pesticide, operate heavy machinery, cut timber and perform other agricultural tasks identified as hazardous to children by the National Institute for Occupational Safety and Health.

“Conservatives quickly went on the attack. Senator Jerry Moran, a Kansas Republican, argued that ‘if the federal government can regulate the kind of relationship between parents and their children on their own family’s farm, there is almost nothing off-limits in which we see the federal government intruding in a way of life.’ Fox News posted a story entitled, ‘Team Obama Wants Children Banned from Doing Farm Chores.’ Sarah Palin chimed in on Facebook: ‘The Obama administration is working on regulations that would prevent children from working on our own family farms.’

“So the Obama administration quickly reversed course, acknowledging ‘thousands of comments expressing concerns about the effect of the proposed rules on small family-owned farms.’”

Ms. Wood noted that, “This is not the first time reform of agricultural child labor laws has been beaten back by a supposed threat to the family farm. In the 1920s a proposed Child Labor Amendment to the Constitution was fiercely contested. The amendment would have given Congress power to regulate the labor of people under age 18. But by orchestrating a sophisticated campaign that included front groups with names such as Citizens’ Committee to Protect Our Homes and Children, business interests frightened farm families with propaganda about a government conspiracy to forbid chores on the family farm.”

Concluding, yesterday’s column stated that, “The recent proposal by the Department of Labor was intended to protect poor migrant child workers who do seasonal farm work for ‘Big Agriculture.’ They sorely need it. According to Human Rights Watch, child farm workers are at greater risk of pesticide poisoning, serious injury, heat illness, and death than any other youth workers in America.

“The hullabaloo revealed that the same commercial forces that thwarted the Child Labor Amendment in the 1920s continue to stymie reform today. In an age when Big Agriculture still benefits from the laxity of our child labor laws, the reformers’ legacy is one we would do well to reclaim.”

Political Notes

Paul Kane reported in today’s Washington Post that, “Sen. Richard G. Lugar (Ind.) will head into Tuesday’s Republican primary as the underdog to a conservative challenger, threatening to end his 36-year tenure not as his party’s elder statesman on foreign affairs but as an ousted moderate who had trouble explaining to voters where he lived.

“Lugar, 80, will face Indiana state Treasurer Richard Mourdock, a career politician whose staunch conservatism could make him a more beatable opponent for the presumptive Democratic nominee, Rep. Joe Donnelly.”

Michael Warren reported yesterday at The Weekly Standard Blog that, “Big Government reports that the Young Guns Network, a group tied to House Republican leader Eric Cantor, has purchased another direct mail item supporting Dick Lugar over Richard Mourdock in the GOP Senate primary in Indiana. The item focuses on Lugar’s support for ethanol subsidies and pro-environmental policies, while Mourdock’s plan is called ‘extreme’ and one that ‘means higher prices at the pump.’

“Mourdock, the state treasurer and a favorite among Tea Party members and grassroots conservatives, appears to have a lead over Lugar going into tomorrow’s primary. A poll released late last week showed Mourdock 10 points ahead of the 80-year-old, six-term incumbent Lugar. Lugar has earned support from establishment Republicans, like the Young Guns Network and the Chamber of Commerce.”

***

Lastly today, The National Agricultural Law Center recently announced a webinar (“Legal Issues in Animal Agriculture: Regulating Living Space”) that will be held on Thursday, May 10, 2012.

According to the Center’s webpage, where registration for the webinar is available, “This presentation, part of a series of webinars on current legal issues in animal agriculture, will focus on the emerging legal and policy issues dealing with farm animal confinement. This presentation focuses on the laws and regulations of farm animal confinement in the United States, with a special emphasis on the statutory evolution behind them.”

Keith Good

Daniel Malloy reported on Friday evening at the Atlanta Journal-Constitution Online that, “Tim Burch’s family farm in southwest Georgia has been buoyed by federal farm subsidies in years when cotton and peanut prices have plummeted.

“That safety net is threatened this year, Burch said, as Congress moves forward on a new farm bill, aiming for tens of billions of dollars in cuts by remaking the federal subsidy system. The result earned bipartisan support in a Senate committee last month, but a group of Southern senators including Georgia Republican Saxby Chambliss refused to back the bill, saying it’s a raw deal in particular for peanut and rice farmers.

“In a phone interview last week, Burch, of Baker County, said a new proposed insurance plan would be inadequate.”

The AJC article explained that, “For peanuts, Chambliss and others are pushing a program to pay farmers if prices drop too low.

“Most of the crops covered in the insurance program — such as corn and soybeans — are traded on the Chicago Mercantile Exchange, making prices easy to establish and insure against. Peanuts are not traded on the exchange and thus are more exposed to wild price swings. Also, Chambliss said many peanut farmers will switch crops depending on what prices look like for the coming year. That skews results for an insurance program that measures coverage based on farmers’ crop yields over a five-year period.

“‘There is very little benefit to peanut farmers that is available under that proposal,’ Chambliss said.”

Mr. Malloy added that, “Cotton producers will be covered by a new program developed by the National Cotton Council that Chambliss described as ‘a crop insurance plan on steroids,’ brought about in part by an international trade dispute with Brazil.”

Last week’s article pointed out that, “A companion bill has yet to emerge in the Republican-controlled House, and it likely will be much different. The farm bill includes spending on nutrition programs such as food stamps, which House Republicans have shown far more eagerness to cut than farmer payments.

“Republican Rep. Jack Kingston of Savannah pointed out that nutrition programs have grown into the vast majority of agriculture spending and thus should bear more of the cuts.

“‘If they don’t get the food welfare portion of the farm bill reformed, I’m going to vote no,’ said Kingston, who presides over agriculture spending on the Appropriations Committee. ‘Because it’s getting out of control.’”

“The House will likely be a friendlier audience for his [Chambliss] concerns. Chambliss said he is in frequent contact with House Agriculture Committee Chairman Frank Lucas, R-Okla., about the plight of the peanut, and he expects his concerns to be reflected in the House product,” the AJC article said.  “Kingston said the Senate opposition means ‘the House Southerners would maybe have a little more leverage, a little more influence.’”

Also on the nutrition issue, a news release Thursday from Rosa L. DeLauro (D., Conn.) stated that, “[Rep. DeLauro] led a panel discussion this morning on the importance of anti-hunger programs critical for Connecticut children, families and seniors. The panel, held in New Haven, focused on the impact proposed cuts to food stamps and other critical programs would have in Connecticut and across the nation and what actions their supporters need to take to prevent those cuts. Over 405,000 people rely on food stamps in Connecticut alone.”

The release quoted Rep. DeLauro, who is a Member of the House Agriculture Appropriations Subcommittee that, “In times when families are struggling day in and day out, our food security policies are even more vital. That is why I am fighting in Congress against proposals that would devastate our federal anti-hunger and public health programs.”

With respect to the necessity of getting a Farm Bill passed, Erik Wasson observed yesterday at The Hill’s On the Money Blog (“Nine tasks Congress can’t avoid”) that the Farm Bill ranked number seven in his list of nine pieces of “must-pass legislation” that Congress “just can’t wait” to approve.

Mr. Wasson stated that, “Authority to pay for farm subsidies, conservation programs and food stamps expires at the end of September when the 2008 farm bill runs out. Congress will either have to pass a new five-year farm bill or extend the old bill and neither will be easy in the House, where fiscal conservatives want to see deep cuts. Agriculture Secretary Tom Vilsack told The Hill that House demands for $200 billion in cuts, most notably achieved by block granting the food stamp program to the states, is the biggest obstacle to the farm bill. The Senate Agriculture Committee in late April reported a bill over the objections of southern senators concerned about cuts to rice and peanut subsidies. The Senate Agriculture bill achieves $24 billion in deficit reduction, mostly through eliminating direct payments to farmers and replacing them with new crop insurance measures. The deficit reduction is less than the White House hoped for.  Senate Democrats say they will bring the bill to the floor even though there is no timeline for action yet in the House.”

A news release Friday from the American Soybean Association (ASA) stated that, “In a letter to Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) this week, the [ASA] and stakeholder groups from across agriculture urged the Senate to bring the Agriculture Reform, Food and Jobs Act of 2012, more commonly known as the Farm Bill, to the floor for consideration as quickly as possible.”

Meanwhile, an update posted on Friday at the National Sustainable Agriculture Coalition (NSAC) blog provided a more detailed look at the safety net polices contained in Title I of the Senate passed measure.

The NSAC update indicated that, “The main storyline of the commodity title emerging from Senate Agriculture Committee markup of the 2012 Farm Bill is the elimination of direct payments and counter-cyclical payments and the creation of a new replacement program to be known as Agriculture Risk Coverage (ARC) payments.  ARC builds on and replaces the Average Crop Revenue Election (ACRE) program option from the last farm bill.  ARC would cover wheat, corn, sorghum, barley, oats, rice, soybeans, other oilseeds, pulse crops (dry peas, lentils, chickpeas), peanuts, and possibly popcorn.

“The marketing loan program would continue without change, including the possibility of the government making loan deficiency payments if prices should fall to low levels.

“Cotton would be given its own special program known as Stacked Income Protection Plan (or STAX).  Just prior to markup, a target or reference price for cotton and an acreage cap were both removed from the plan.”

The NSAC update went on to discuss a variety of Title I issues, including: ARC Basics, Flexibility, Payment Caps, AGI, Conservation Requirements, Commodity and Crop Insurance Funding, Whole Farm Revenue Insurance, and Organic Crop Insurance.

University of Illinois Agricultural Economist Nick Paulson indicated on Friday at the farmdoc daily blog (“Estimates of Regional Shifts in Commodity Program Support: IL Corn and Soybeans”) that, “The Farm Bill recently passed by the Senate outlines some major changes to programs included in the Commodity Title. As expected, the direct, counter-cyclical, and ACRE programs were replaced by a revenue program referred to as Ag Risk Coverage (ARC). This shift towards a risk-based program has implications for the relative impact on crop producers across the country. In general, while the expected overall levels of support for producers will decline due to budget cuts, moving from a program which provides fixed payments to farmers which are proportional to productivity levels (direct payments) to a program which provides support when revenue declines from an historical average benchmark (ARC) will tend to favor producers in areas of higher crop yield risk. Today’s post estimates this effect for Illinois corn and soybean producers by comparing support levels under the direct payment program to the expected payments from the Senate’s county-level ARC program.”

After his analysis, Dr. Paulson stated that, “Expected payments from the county-level ARC program outlined in the Senate’s Farm Bill are estimated to be smaller than direct payments received by corn and soybean producers throughout Illinois. The estimates also indicate a relative shift in support from areas/crops with higher productivity and lower yield risk to areas/crops with higher yield risk. Thus, while all Illinois corn and soybean producers should expect lower levels of support over the next Farm Bill period, the magnitude of this effect will vary across the state. This result is expected given the shift from a program that provides payments which are proportional to average productivity to a program which provides both yield and price risk protection over time.”

In other news, Tom Lutey reported on Friday at the Billings Gazette (Mont.) Online that, “Two decades earlier his [farmer Justin Downs] grandfather, frustrated with this earth, signed a 10-year contract with the U.S. government agreeing not to farm it in exchange for a check. Thousands of farmers did the same with their untillable and vulnerable land, conscripting it to the Conservation Reserve Program. Grain prices were low and the CRP assured at least some profit. By letting the land go to grass, the government also created wildlife habitat, and in some cases avoided problems like soil erosion into waterways.

“Commodities prices are now sizzling. Farmers like Downs are taking land out of CRP and the program is being cut back from 39 million acres nationwide in 2008 to 25 million acres. The Senate version of the 2012 farm bill would give the program a $6 billion trim. That version passed out of the Senate Agriculture Committee last week. Similar cuts are expected in the House version that is progressing more slowly.”

The article noted that, “The conservation program doesn’t make as much sense now, Downs said. Payments haven’t kept up with market prices.”

Meanwhile, the editorial board at The Des Moines Register recently opined that, “Farmers who sign up for crop insurance, however, are not required to participate in soil and water conservation programs. In other words, taxpayers protect farmers from risk of participating in the market economy while people who live downstream must accept the consequences of those irresponsible farmers who push their land to the limit.

“Farm organizations and their supporters insist that great strides have been made in protecting soil and water quality. But while many farmers are good stewards of the land, the evidence in the aggregate is that we are, to coin a phrase, losing ground. The federal government plays a major role in agriculture, and in exchange it is not too much to ask that all farmers who benefit should be good stewards of the land.”

More specifically on crop insurance issues, Mike Becker, assistant vice president for federal affairs for the National Association of Professional Insurance Agents, noted in a column yesterday that, “The National Association of Farm Service Agency County Office Employees is an organization that represents employees of the Farm Service Agency.

“NASCOE has been engaging in an active lobbying campaign urging federal regulators and legislators to remove private-sector insurance agents from crop insurance and replace them with FSA employees, which would be a terrible move.”

Mr. Becker stated that, “The federal government sold crop insurance until nearly 30 years ago. Because the program was unsuccessful under direct federal involvement, Congress decided to partner with the private sector.

“Farmers were given a choice of dealing with a government employee or a private-sector crop insurance agent.

“Farmers nearly abandoned the federal government option and bought their crop insurance through the private sector. The federal option was quickly phased out.”

Jim Spencer reported late last week at the Minneapolis Star-Tribune Online that, “The sugar program passed out of the Senate Agriculture Committee unscathed on April 26 with the support of Sen. Amy Klobuchar, D-Minn. The senator has said current sugar policy has a positive impact on Minnesota’s economy.

“Last week, another attempt to change the sugar policy failed, as the U.S. Trade Representative’s office spurned an effort to include sugar in the Trans Pacific Partnership (TPP) trade negotiations. Associations representing some of America’s biggest food processors — including Minnesota-based giants Cargill, General Mills and Land O’Lakes — were pushing the trade office to eliminate tariffs on sugar produced by TPP countries.”

Kevin Bogardus reported on Saturday at The Hill’s Energy and Environment Blog that, “An ardent critic of federal agriculture subsidies has enlisted one of K Street’s premier firms to do battle on this year’s farm bill.

“The Environmental Working Group Action Fund — the 501(c)4 affiliate of the Environmental Working Group (EWG) — has signed up Mehlman Vogel Castagnetti to lobby on the legislation.”

And recent articles noted that Rep. Adrian Smith (R., Neb.), Rep. Mo Brooks (R., Ala.) and Sen. Tim Johnson (D., S.D.) all recently met with constituents to discuss Farm Bill related issues.

In developments impacting animal agriculture, Dana Flavelle reported on Friday at the Toronto Star Online that, “Canada’s largest fast food chain has toughened its stance on animal welfare issues amid growing pressure from advocacy groups and consumers.

“Tim Hortons Inc. announced Friday it would boost the number of eggs it wants to buy from farmers that use bigger, better cages for their hens.

“The 4,000-plus restaurant chain also called on the pork industry to end the practice of confining pregnant sows to ‘gestation stalls,’ saying it would give preference to suppliers who have clear plans to phase them out.”

Budget Issues

Russell Berman reported yesterday at The Hill Online that, “House lawmakers will return to a familiar debate over the deficit when they come back to Washington on Monday following a weeklong recess.

“Republican leaders are planning to bring up a $260 billion measure to slash the budget gap and replace across-the-board spending cuts set to take effect in 2013.

“The bill, known as a ‘reconciliation’ proposal, is the product of six House committees and will be combined into one piece of legislation by the House Budget Committee. Democrats have already panned it as an extension of the House GOP proposal that ‘reflects the wrong priorities’ by protecting tax cuts for the wealthy and cutting programs for the poor.”

The Hill article noted that, “In addition to the $78 billion in sequester replacement, the bill contains an additional $180 billion in cuts aimed at reducing the deficit. Among the federal programs hit are food stamps, funding for the 2010 healthcare and financial regulatory laws and the refundable child tax credit.”

J. Lester Feder and Matt DoBias reported yesterday at Politico on the lame-duck session of Congress coming up after the November elections.  During this session, the writers noted, a January 2013 deadline looms for four significant budget related issues: “Borrowing will once again approach the debt ceiling; the payroll tax and Bush tax cuts will expire; massive pay cuts to Medicare providers will take effect; and the sequester will gore budget cows sacred to both parties.”

On the potential for headway in the lame-duck session, the Politico article pointed out that, “A lot depends on how the elections shake out, of course. If Mitt Romney wins and Republicans take a stronger hold of Congress, they might be able to move a package of entitlement and spending cuts relatively easily. If President Barack Obama wins a second term and Republicans take losses in the House, that could empower Democrats to hold the line against major changes to entitlements and try to extract more in revenues.

“But if voters return Obama and a heavily Republican Congress to Washington, the parties could be even more entrenched in their opposing positions.”

Agricultural Economy

Marshall Eckblad reported in today’s Wall Street Journal that, “U.S. cattle futures are starting to rebound from a spate of bad news in the beef industry, including a case of mad-cow disease and controversy over an additive derided as ‘pink slime.’

“Live-cattle futures have climbed 3% since late last month, when rumors of the discovery of mad-cow disease in the U.S. jolted markets a few hours before government officials confirmed the case.”

The AP reported on Friday that, “A disaster is unfolding in Michigan orchards as erratic spring weather causes some of the biggest losses in decades of cherries, apples and other fruits, growers said Thursday.

“A rare extended period of summerlike temperatures in March caused trees to blossom early, only to be zapped by an unrelenting series of April frosts and freezes. The one-two punch killed many buds, while recent cold snaps and rainstorms have discouraged honeybees from pollinating those that survived.”

MF Global

Aaron Lucchetti reported yesterday at The Wall Street Journal Online that, “In the fight to get their missing money back, not all customers at MF Global Holdings Ltd. were created equal.

“Andrew McCormick, a commodity-fund manager in Seattle, had about $480,000 at MF Global when the firm collapsed in October. Half of his money was invested in the U.S., and the other half went into non-U.S. investments.

“So far, the 27-year-old Mr. McCormick has recovered about $175,000 on his U.S. holdings—or 72% of what he is owed.”

The article explained that, “About 1,700 clients with a combined $700 million at MF Global are in the same predicament, with nothing to show for the investments they made outside the U.S. Those customers comprise a sliver of the 36,000 that MF Global’s U.S. brokerage unit had when the firm sank, but they represent nearly half of the estimated $1.6 billion still missing.

“Their situation is a product of several regulatory and legal loopholes that can put investors who plow money into holdings outside the U.S. at a disadvantage if their brokerage firm goes bust.”

Keith Good

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “The chance of a farm bill coming out of the U.S. Senate anytime soon could hinge largely on safety net prospects for a pair of Southern crops that collectively account for about 4.5 million acres of the 320 million or so acres that will be planted this year.

“With the cotton industry largely satisfied with its new insurance program, rice and peanut farmers are counting on Southern senators to make a stand for them before the Senate floor debate on the new farm bill. They also see more hope in the House, where Agriculture Committee Chairman Frank Lucas, R-Okla., has said the Senate farm bill doesn’t do enough to factor in regional and crop differences.”

Mr. Clayton pointed out that, “Randy Veach, president of the Arkansas Farm Bureau, is a cotton, rice, soybean and wheat farmer in northeast Arkansas, who said farm groups will be working to make changes to the Senate bill. If lawmakers are going to do away with direct payments, then an alternative commodity program is needed that will be better than what is in the Senate bill, Veach said.”

“Problems with rice and peanuts stem partly from not having a good alternative to direct payments. The National Cotton Council also has raised concerns about the Senate bill, but is supportive of the legislation including the insurance program proposed by NCC, the Stacked Income Protection Program. Craig Brown, vice president of producer affairs for the cotton council, told the Agritalk radio program on Tuesday, ‘If the cotton provisions remain as they are, then it’s a bill we can support.’”

Yesterday’s DTN article indicated that, “Still, cotton, peanuts and rice have seen significant declines in commodity program payments since the beginning of the 2008 farm bill. Cotton payments this year are forecast at 20% of what they were in 2007. Peanut payments are 16% of 2007 figures. Rice payments are more equal and haven’t seen the variability or decline of other crops.

“Armond Morris, chairman of the Georgia Peanut Commission, said it’s difficult to find one commodity program that would work for everyone. Morris noted he was facing high energy costs because a drought right now in Georgia demands irrigation on all of his crops. Like other Southerners, he would like to see the counter-cyclical program remain with a better target price installed.

“‘The bankers have got to know there is going to be enough return on that acre of peanuts to pay the bills,’ Morris said.”

Daniel Looker reported yesterday at Agriculture.com that, “The chairman of the [House Agriculture] committee, Representative Frank Lucas (R-OK) recently told North American Agricultural Journalists in Washington that the crop insurance industry has already given much to reducing the federal deficit. He and the leaders of congressional ag committees from both parties have opposed a line in the Obama Administration budget for 2013 that would shave crop insurance premium subsidies for farmers by two percentage points.

“‘Don’t kill the program by taking away the incentives to participate.’ Lucas told NAAJ.

“The version of a 2012 farm bill passed last week by the Senate Agriculture Committee doesn’t cut crop insurance subsidies.”

Mr. Looker noted that, “In April, the cost of crop insurance made it into the pages of The New York Times when a report by the Government Accountability Office, the investigative arm of Congress, on that topic became public. The study was requested by Senator Tom Coburn, a fiscal conservative Republican from Oklahoma. (Coburn, you may recall, was part of the bipartisan ‘Gang of Six’ senators who tried to find agreement on deficit cutting last summer.)”

Yesterday’s article noted that, “In a report released this week, University of Illinois agricultural economist Gary Schnitkey, one of the nation’s authorities on crop insurance, crunched the numbers on how a $40,000 cap would have worked in recent years.

“The insurable value of your crop revenue goes up with high prices, and so do the premiums. That means you’ll hit the cap sooner in years like last year. By Schnitkey’s calculation, a farm in Illinois with 1,682 insured acres would have hit the limit in 2011.  In 2010 it would have taken 2,710 acres.

“Schnitkey uses Illinois Farm Business Farm Management records to adjust his calculations to reflect that a portion of a typical farm in that state is on a 50/50 share rent arrangement, where the farmer would pay half of the premium. Farms that are all owned or cash rented would be affected differently.”

After additional analysis, Mr. Looker noted that, “[Representative Collin Peterson, the ranking Democrat on the House Agriculture Committee, speaking to members of North American Agricultural Journalists last month in Washington] pointed out that a recent standard reinsurance agreement between USDA and the private insurance companies that sell crop insurance cut some $6 billion in subsidies to the industry.

“‘I’m told by some of the companies if we go too far here, that we could see a mass consolidation in the industry,’ Peterson said, ‘…that we could end up with two companies. If we screw this thing up that’s what will happen’

“Peterson said he’s unwilling to make big changes in crop insurance until Congress can evaluate how the industry and the program is affected by rerating of crop insurance. Starting this year, corn and soybean farmers in the Midwest are seeing a slight drop in premiums due to rerating, while producers in Texas, Colorado and other higher risk areas have seen an increase.

“‘We have no data on how all those changes have played out,’ Peterson said.”

Yesterday’s article added that, “But Peterson did hold the door open for changes to the subsidies for farmer premiums.

“‘I think the more salient questions about crop insurance is looking at the subsidies, are we at the right level?’ he asked.”

Also yesterday, the “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “A key issue as the 2012 farm bill comes together is the degree to which support and risk management programs affect farmers’ future planting decisions. The greater a program’s potential to influence the mix of crops, the greater will be the potential for the United States to be the defendant in a World Trade Organization dispute settlement undertaking.

“Already, Brazil’s ambassador to the WTO is questioning the cotton provisions of the farm bill that was approved last week by the Senate Agriculture Committee. Roberto Azevedo expressed concern that the new provisions will not correct distortions to which Brazil objected earlier and which led to a WTO ruling against the United States. ‘It looks very similar to what has been proposed by the National Cotton Council which, from our previous analysis, would introduce a very high element of distortion in the cotton markets,’ Roberto Azevedo said.”

The DTN item stated that, “Meanwhile, even here, potential production and marketing distortions of the Senate measure’s programs have come up. Ohio State University agricultural economist Luther Tweeten has noted that if new crop insurance provisions result in increased production of some crops, competing countries could challenge crop insurance in a WTO court as giving U.S. producers unfair advantages of certain commodities.

“Over the years, members of Congress have been fond of saying that U.S. farm policy will be written in Washington, not at WTO headquarters in Geneva. That is true, of course. Still, when Congress does finalize its work on the 2012 Act, it would be a good idea to at least consider how other WTO members may view U.S. farm programs as a way to avoid trade headaches down the road.”

Meanwhile, a news release yesterday from Senate Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) indicated that, “[Chairwoman Stabenow] led the Committee in considering and approving the Agriculture Reform, Food and Jobs Act of 2012 last week with broad bipartisan support.  The bill reforms food and agricultural policy by eliminating direct payments, consolidating programs and ending duplication, and cracking down on abuse in food assistance programs. This new Farm Bill saves $23 billion while strengthening crop insurance and other initiatives that help create American agricultural jobs (a summary of the bill can be found here).”

Yesterday’s release added that, “Following are statements from a wide variety of Michigan-based and national organizations and stakeholders, praising the bill for its major reforms and for the collaborative, inclusive and exceptionally bipartisan process of drafting it.”  This lengthy list of statements can be viewed here.

A news release on Wednesday from Rep. Vicky Hartzler (R., Mo.) stated that, “[Rep. Hartzler], a member of the House Agriculture Committee, has hosted a roundtable discussion in Clinton today to gather input from representatives of Missouri’s agriculture community to collect their thoughts on the 2012 Farm Bill that is making its way through Congress.

“‘The purpose of this meeting was to bring together farmers and ranchers who are going to be most affected by the Farm Bill,’ said Hartzler. ‘Decisions regarding agriculture should be made by these stakeholders – NOT by Washington bureaucrats. It is imperative that the thoughts and concerns of farmers and ranchers be represented when the Farm Bill gets to the floor of the House for a vote.’”

And more specifically on budget issues, David Rogers reported earlier this week at Politico that, “The House Budget Committee meets Monday afternoon to put the final touches on the more than $300 billion 10-year package — the opening shot of a fall campaign to preserve defense spending without bowing to Democratic demands for new taxes.

“Monthly food stamp benefits would be cut, hitting millions of single-mother households by summer’s end.”

Mr. Rogers noted that, “There have been ugly moments in the course of committee markups: snide comments about what food stamp recipients buy at the local grocery line…”  (Note that some excerpts from the House Agriculture Committee Business meeting on this issue from April 18 can be viewed here).

Ed O’Keefe reported yesterday at the 2Chambers Blog (Washington Post) that, “House Democrats plan to attack the spending plan next week as the GOP-controlled House votes on a budget reconciliation package that includes cuts to replace automatic, across-the-board reductions set to begin in January as part of the Budget Control Act. The BCA raised the debt ceiling, cut $1 trillion in federal spending and authorized another $1.2 trillion in cuts over the next decade, with roughly half of the money coming from defense spending.”

And, Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “The House will return next week to start the process of passing FY 2013 appropriations bills, and will begin by considering legislation funding the Departments of Commerce and Justice, as well as the National Aeronautics and Space Administration and other agencies.

“The House Rules Committee will meet the evening of May 7 to approve a rule for the bill and could start floor consideration as early as May 8.”

Trade

A news release Monday from Senator Ron Wyden (D., Ore.) stated that, “Looking to increase jobs and economic development in Oregon, [Sen. Wyden] said today that negotiations to open up Asian-Pacific markets and Congress’ consideration of a new Farm Bill offer opportunities to increase the domestic sale and international export of Oregon agricultural products.

“‘My guiding principle in improving the Oregon economy is that we grow things here, add value to them and ship them somewhere, and nothing says that more than selling more Oregon fruits, vegetables and other high-value products at home and aboard,’ Wyden said. ‘Fortunately, we are at a point – domestically and internationally – where we can do something about both.’”

The release noted that, “Wyden said that the Trans-Pacific Partnership negotiations offer an opportunity to open markets in developed countries such as New Zealand and Australia, along with emerging markets like Vietnam and Malaysia.  There is also a significant chance that Japan, one of the most closed markets to Oregon agriculture, will join the negotiations.”

A news release yesterday from Senator Charles Grassley (R., Iowa) indicated that, “[Sen. Grassley] is urging the Obama administration to focus on resolution of ongoing trade and related disputes at the U.S.-China Strategic & Economic Dialogue.

“This dialogue began in 2006 as a framework for the two countries, which represent the largest and second-largest economies in the world, to discuss economic issues.

“Grassley signed a letter sent yesterday to the four cabinet secretaries participating in the meeting.”

In part, the letter stated that, “The continued growth in U.S. agriculture exports to China exemplifies the mutually beneficial potential of the U.S.-China economic relationship.  American farmers and ranchers are the most competitive in the world, and they can help feed the large Chinese population as per-capita income and caloric intake improves across the country.  But to reach these new markets, China must abide by science-based international food and safety standards.  China must not erect arbitrary sanitary and phytosanitary barriers to prevent American agriculture exports from reaching the Chinese market.  Erecting such barriers in retaliation for unrelated U.S. policies continues to harm America’s competitiveness and farmers and ranchers.”

Agricultural Economy

A news release yesterday from the Food and Agriculture Organization of the United Nations stated that, “Global food prices measured by the FAO Food Price Index fell three points or 1.4 percent from March to April 2012 but seem to have stabilized at a relatively high level of 214 points, FAO said today.

“The fall was the first after three consecutive months of increases and although the index is significantly down from its record level of 235 points in April 2011, it is still well above the figures of under 200 which preceded the 2008 food crisis.

“The index was published in the latest FAO Food Outlook, a global market analysis which comes out twice a year.”

MF Global

Daniel Strauss reported yesterday at The Hill’s Floor Action Blog that, “Rep. Michael Grimm (R-N.Y.) is calling on the Department of Justice to hand over the investigation of MF Global Holdings to an independent counsel.

“Grimm, a member of the House Financial Services Committee, is circulating a letter to his colleagues urging Attorney General Eric Holder to appoint an independent counsel to handle the investigation of the collapsed brokerage firm run by former Sen. Jon Corzine (D-N.J.). Grimm plans to send the letter to Holder in a week.”

Biofuels

A news release yesterday from USDA stated that, “Agriculture Secretary Vilsack today called on petroleum companies to help increase the percentage of ethanol in America’s gas tanks in order to reduce dependence on foreign oil, boost job creation and promote development of renewable energy from farm-produced feedstocks. Recent Environmental Protection Agency (EPA) action approved the use of E15, a fuel blend that is 15 percent ethanol and 85 percent gasoline, up from the current 10 percent blend level.”

A news release yesterday from the American Petroleum Institute stated that, “In a conference call with reporters today, API Downstream Group Director Bob Greco discussed a new analysis of EPA’s regulations to allow higher amounts of ethanol in gasoline (E15), which showed that ‘an estimated half of all gasoline station equipment is not compatible with E15’ and said that this could result in serious safety and environmental problems for consumers:

“EPA continues to move forward with its decision to approve the use of 15 percent ethanol in gasoline, even though testing to date shows this higher concentration would not be fully compatible with much of the dispensing and storage infrastructure at our nation’s gas stations,” the release noted.

Chris Clayton noted yesterday at the DTN Ag Policy Blog that, “The Renewable Fuels Association released a statement before the API released its analysis. RFA stated, ‘Where legitimate concerns exists, such as misfueling concerns created by the partial nature of the E15 waiver, the Renewable Fuels Association has worked in good faith with all stakeholders to address these issues. The RFA has created a website dedicated to E15 information www.E15fuel.org a misfueling mitigation plan to help retailers avoid confusion, and an E15 Retailer Handbook for gas station owners seeking to offer E15.’”

Political Notes

Michael M. Grynbaum reported on the front page of today’s New York Times that, “Representative Louise M. Slaughter has always been a fighter. But political battles do not come much tougher than this.

“A 13-term Democrat, Ms. Slaughter has spent the last four weeks living in Strong Memorial Hospital here, rehabilitating the left leg she shattered in a fall last month. From a wheelchair, she watches as her Republican opponent meets voters and raises money.

“Ms. Slaughter has been unable to travel to Washington. She cannot visit the towns in her newly redrawn district. By Election Day, she will be 83.”

The Times article stated that, “Redistricting has left Ms. Slaughter with a new, more conservative constituency that is less favorable to Democrats than her previous district. She had one of the worst attendance records in the House last year, which she attributed to an unspecified family matter. And she is facing an energetic challenge from Maggie A. Brooks, a 57-year-old television anchor turned county executive, and the only other politician besides Ms. Slaughter who is on a first-name basis with voters in this lakefront region.”

“Strategists on both sides agree the race will hinge on Ms. Slaughter’s ability to win over her new district, which combines downtown Rochester with its surrounding suburbs and rural villages. About two-thirds of the district’s residents were not in Ms. Slaughter’s previous territory — although they know her from local TV — and Democrats, although still outnumbering Republicans in the district, now account for 40 percent of registered voters, compared with 56 percent before,” today’s article said.

Recall that Rep. Slaughter co-authored a column at Politico on Monday titled, “Antibiotic misuse a threat to public.”

Senate Agriculture Committee Member Kirsten Gillibrand (D., NY) expressed her general agreement with the Politico column in a Tweet yesterday evening where she noted that, “Agree w/@louiseslaughter, we must limit the use of antibiotics in agriculture to medical use: politi.co/JQ33AZ @US_FDA.”

Keith Good

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Agriculture Secretary Tom Vilsack, in an interview with The Hill this week, said demands by the House GOP for deep cuts especially for food stamps now constitute the top obstacle for passage of a 2012 farm bill by September when current farm programs expire.

“Vilsack offered some praise for the version of the farm bill that passed out of the Senate Agriculture Committee last week, even though it contains about $9 billion less in deficit reduction than President Obama had sought in his latest budget.

“He said the differences with the president pale in comparison to the differences with the House.”

Yesterday’s update added that, “The House-passed 2013 budget authored by Rep. Paul Ryan (R-Wis.) calls for the food stamp program to be block granted to the states, resulting in massive spending cuts.

“Vilsack said these cuts would not only harm the poor who use food stamps, but farmers could lose $20 billion in direct income from cuts to the program as well.

“‘That’s obviously just not going to happen,’ he said.”

The Hill article pointed out that, “The secretary did say more work may be needed on a proposed cotton program that has been newly criticized by Brazil. Traditional cotton subsidies have been ruled against in the World Trade Organization and Brazilian opposition to a new revenue insurance scheme could lead to sanctions, Vilsack noted.

“Vilsack would not say he is hopeful about passing a farm bill by September but instead he stressed the dangers of not doing so.”

With respect to WTO issues and the Senate version of the Farm Bill, Bridges (International Centre for Trade and Sustainable Development) reported yesterday that, “The most discussed trade issue in the Farm Bill debate is perhaps a resolution to the United States – Upland Cotton dispute with Brazil. The high-profile dispute was put on hold in 2010, after the US agreed to pay Brazil US$147 million annually in exchange for the South American country refraining from putting into effect promised retaliation. Both countries also agreed that US farm legislation would be modified to resolve the dispute.

“A Brazilian official, speaking on condition of anonymity, observed that the National Cotton Council’s STAX proposal will likely ‘not be accepted as a solution’ to the US-Brazil cotton dispute. ‘We were disappointed with the markup from the Senate,’ he added.

“STAX is the Stacked Income Protection Plan for producers of upland cotton, a programme meant to make up for losses beyond what is covered under ordinary crop insurance. Ambassador Roberto Azevedo, Brazil’s representative to the WTO, had earlier written to Congressional agriculture committees describing how STAX and other proposals would be trade distorting.”

(Note that Craig Brown, Vice-President of Producer Affairs for the National Cotton Council spoke about Farm Bill issues, including the STAX program earlier this week on AgriTalk with Mike Adams, an unofficial FarmPolicy.com transcript of that conversation can be downloaded here.)

And, the editorial board at The Wisconsin State Journal indicated yesterday that, “U.S. Rep. Ron Kind, D-La Crosse, warned Friday that big new subsidies to cotton producers, protecting them against shallow revenue losses, would cost $3.2 billion over 10 years.

“Kind — along with Reps. Jeff Flake, R-Ariz., and Earl Bulmenauer, D-Ore. — also introduced legislation to end a nearly $150 million annual subsidy to the Brazilian cotton industry. The payment to Brazil essentially pays off the South American nation so it doesn’t object further to the World Trade Organization about heavy subsidies of cotton growers in the United States that violate trade agreements.

“Kind suggested the payment to Brazil is emblematic of a Congress that still isn’t serious about approving a fiscally-responsible farm bill.”

The opinion item added that, “Congress is getting closer to a farm bill that cuts waste while preserving a solid safety net for those hard workers who produce our food.

“It’s the right direction — but not far enough toward reform.”

Meanwhile, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Senate Agriculture Committee Member Charles Grassley, R-Iowa, told reporters Wednesday the farm bill is generating more questions, particularly regarding timeframe.

“Grassley noted Senate Majority Leader Harry Reid, D-Nev., had indicated at least once that the farm bill was on the list of major legislation Reid would like to get done. Grassley said the Senate has to move before the August break.

“‘If we don’t get this done by the Aug. 5 break, then it’s not going to get done until September, then of course you get down to November and December,’ Grassley said.”

The DTN update stated that, “There has been no official word from Reid or Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., about a timeframe for a floor debate. Stabenow said last week she hoped to know more in a few weeks.

“On the idea some farmers or groups would like to see the farm bill held up for a year, Grassley said there would be no benefit to Southerners delaying the farm bill because a year down the line the budget score will likely be worse for commodities.”

In other news, Mikkel Pates reported yesterday in an article posted at the Grand Forks Herald (ND) Online that, “The head of the U.S. Department of Agriculture’s Natural Resources Conservation Service promised by September to come up with a just solution for wetland determination backlogs when he spoke Monday at the Red River Valley Fairgrounds here [West Fargo, ND].

“Wetlands determinations that are held up, waiting for NRCS approval, have become frustrating for the region’s farmers, particularly those in the central and southern Red River Valley. They want to use tile drainage or water management to contend with a string of wet years, and to capitalize on higher commodity prices and land values.

“‘I have one shot to make this right,’ said NRCS chief Dave White, who came to Fargo at the invitation of Sen. John Hoeven, R-N.D. ‘It’s got to be legally defensible. It’s got to be fair, it’s got to be equitable, it’s got to be transparent…”

The article noted that, “Farmers who want to tile and need to drain land must fill out federal forms (AD-1026), requiring that NRCS complete a ‘certified’ wetland determination. This can start with office work, but ends with a field determination.”

“Fed up with the backlog, some farm leaders at the meeting reported that they or their neighbors have dropped out of the farm program entirely. Hoeven took the opportunity to stress that he’s against tying conservation compliance to crop insurance, which is one tool environmental groups have advocated to keep conservation techniques in place,” yesterday’s article said.

Food Safety

Dina ElBoghdady reported in today’s Washington Post that, “More than a year after President Obama signed a landmark food-safety bill, the key provisions are hung up at a unit of the White House that is in charge of reviewing proposed policy changes.

“The delay at the Office of Management and Budget baffles consumer advocates and industry groups, which joined forces to lobby for passage of the legislation and press for its funding. The united front by this unusual alliance — and the president’s enthusiastic endorsement of the legislation in the past — makes the hold-up especially puzzling.

“In recent letters to the administration, nearly half a dozen groups expressed frustration with the OMB.”

The Post article indicated that, “OMB officials say the duration of this review is not unusual given the complexity of the regulations. ‘The administration is working as expeditiously as possible to implement this legislation we fought so hard for,’ said Moira Mack, an OMB spokeswoman.

“Obama signed the legislation in January 2011 after a string of food-borne outbreaks shook consumer confidence in the nation’s food supply.”

Bloomberg writer Stephanie Armour reported yesterday that, “Sources of tainted beef will be identified faster under a U.S. plan to improve the tracking of meat sent from suppliers and processors that may sicken consumers.

“Investigators will search for where the spoiled meat came from after their own tests find E. coli in beef rather than waiting days for multiple confirmation tests, the Agriculture Department said today in a statement. The investigation to find the origin of the contaminated product, such as a slaughterhouse or processor, will happen 24 to 48 hours faster, the USDA said.

“‘These measures will provide us with more tools to protect our food supply, resulting in stronger public health protections for consumers,’ Elisabeth Hagen, the USDA’s undersecretary for food safety, said in the statement.”

Meanwhile, Kathie Obradovich noted this week at the Iowa Politics Blog (Des Moines Register) that, “Christie Vilsack, a Democratic candidate for Congress, said she talked to her husband, U.S. agriculture secretary Tom Vilsack, about the USDA’s proposed poultry inspection rule before taking a somewhat contrary position. They won’t discuss it again, she said.

“Iowa’s former first lady, who is running against Republican Rep. Steve King, said in her statement that jobs for poultry inspectors should not be privatized. ‘There are inherent concerns with allowing companies to inspect themselves, especially with an increase in line speeds that could make inspection more difficult and raise safety issues,’ she said.

“The USDA proposed rule, aimed at providing quicker inspections, would speed up factory lines for inspections and eliminate an estimated 800 jobs.  The proposal also shifts responsibility from the Food Inspection and Safety Service to employees of the processing facility.”

The update added that, “She said her husband explained the USDA’s proposal to her, but it’s now a closed subject.  ‘I won’t, now that I’ve made that statement, I will not ever talk to my husband about it again. Or, I should say, he will not talk to me,’ she said. ‘He made it clear that we will not be talking about this again. But he certainly educated me on the department’s position.’

“That’s because USDA is in a public comment period on the proposed rule, a campaign staffer said.”

Erik Wasson reported earlier this week at The Hill’s Ballot Box Blog that, “Agriculture Secretary Tom Vilsack on Tuesday signaled that he could soon hit the campaign trail on behalf of his wife, Christie, who is running against Republican Rep. Steve King in Iowa’s 4th district.

“Vilsack, the former governor of Iowa, made clear that if he does get involved, he will follow strict guidelines governing his appearance.

“‘There are important necessary restrictions that need to be followed not just for Christie but for any congressional candidate,’ he told The Hill in an interview.”

Regulatory Issues (GMO Labeling, Labor, and Speculation)

Ian Berry reported yesterday at The Wall Street Journal Online that, “Opponents of genetically modified foods are making headway in California with a proposed ballot initiative that would require food companies to label many products containing such ingredients.

“Backers of the initiative, including consumer activists and organic-food groups, said Wednesday they had submitted nearly double the number of signatures required by the state to place the proposal on the Nov. 6 ballot. California officials will take at least several weeks to certify the initiative, but people on both sides of the issue expect it to appear on the ballot.

“The proposal, which faces opposition from big agribusiness and food companies, puts California at the center of a wider debate over genetically engineered foods that has gained new life in the U.S.”

Miriam Jordan reported yesterday at The Wall Street Journal Online that, “The Department of Homeland Security, continuing its crackdown on employers who hire illegal immigrants, has ordered hundreds of companies in recent weeks to submit their hiring records for inspection.

“This year’s first ‘silent raids’ haven’t been publicly announced by Immigration and Customs Enforcement, the DHS agency that conducts them. But an ICE spokeswoman confirmed on Tuesday that as of March 29, the agency had notified 500 businesses ‘of all sizes and types’ to turn over I-9 employment-eligibility forms and other documents for audits.”

The Journal article pointed out that, “Since January 2009, the Obama administration has audited at least 7,533 employers suspected of hiring illegal labor and imposed about $100 million in administrative and criminal fines—more audits and penalties than were imposed during the entire George W. Bush administration. The latest penalty hit HerbCo International Inc., a big Washington state-based supplier of organic herbs, which agreed Tuesday to pay $1 million in fines for employing illegal immigrants and then rehiring some of them after an ICE audit last year.”

Francesco Guerrera reported yesterday at The Wall Street Journal Online that, “The chairman of the world’s largest futures exchange is coming to the defense of speculators.

“Two weeks after President Barack Obama blamed speculators, traders who wager on the future direction of commodity prices, for driving fuel prices higher and urged regulators to be tougher on them, Terry Duffy, the executive chairman of exchange operator CME Group Inc. hit back with a pointed explanation of investors’ role in financial markets.

“‘People need to study their facts before criticizing speculators,’ Mr. Duffy, whose Chicago company is the largest futures exchange by volume, said in an interview on the sidelines of the Milken Institute’s Global Conference. He argued that speculators provide vital liquidity to a host of markets.”

The Journal article indicated that, “Last month, the president accused ‘speculators’ of rigging the oil markets, pushing up fuel prices for ordinary Americans. ‘Rising gas prices means a rough ride for a lot of families,’ he said in a speech at the White House. ‘We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage and driving prices higher, only to flip the oil for a quick profit.’

“Mr. Duffy dismissed the criticism, saying that speculators play an important part in financial markets. ‘When the Dow goes above 13000, Google goes above $600 per share and everybody celebrates, who do you think did that? The U.S. equity market is 100% speculators,’ he said.”

Trade

Bridges (International Centre for Trade and Sustainable Development) reported yesterday that, “Six months after expressing interest in joining the proposed Trans-Pacific Partnership (TPP) Agreement, Canada, Japan, and Mexico have yet to join the nine-country talks, with a high-profile bilateral meeting in Washington between the US and Japanese heads of state on Monday ending without a formal announcement regarding Tokyo’s bid. Current TPP members are said to be still evaluating whether it is feasible to take on new members while also trying to clinch a deal by year’s end.

“The TPP negotiations – launched in 2005 among four countries, and eventually expanding to a group of nine – are three-quarters of the way done, according to Dominic Goh, director-general of international economics at Singapore’s foreign affairs ministry, in comments reported by the Wall Street Journal. The administration of US President Barack Obama has made the accord one of the centrepieces of the White House trade agenda, with Obama hoping for a deal by the end of 2012.

“The proposed pact currently includes Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the US, and Vietnam as members. Canada, Japan, and Mexico expressed interest in joining the talks in November 2011 at the annual Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting (see Bridges Weekly, 16 November 2011).”

Keith Good

Senate Agriculture Committee Member John Boozman (R., Ark.) was a guest yesterday on KASU radio (Jonesboro, Ark.) with host Mark Smith where in part, the two discussed 2012 Farm Bill issues and the bill that passed the Senate Agriculture Committee last week.

During a portion of yesterday’s discussion, Sen. Boozman elaborated on concerns from Southern producers, the potential difference in the House “vision” of the measure, why the Senate Ag Committee voted on a Farm Bill proposal prior to the House Ag Committee, and the SNAP (food stamps) program.  The discussion of these issues can be heard in this clip from the KASU program (MP3- 3:50).

On yesterday’s AgriTalk radio program with Mike Adams, Craig Brown, Vice-President of Producer Affairs for the National Cotton Council also discussed several Farm Bill related issues.

An audio replay of this portion of yesterday’s AgriTalk program is available here, (MP3- 10:15), while an unofficial FarmPolicy.com transcript of the conversation can be downloaded here.

A portion of yesterday’s discussion focused on potential WTO concerns– Mr. Adams: Let’s start with what you like about the farm bill that came out of the Senate Ag Committee.

Mr. Brown: Well, we appreciate Chairwoman Stabenow and Ranking Member Roberts’ willingness to include the Stacked Income Protection Program in the Senate bill. It’s the basic delivery system that the cotton industry recommended, albeit with some changes that were made. But basically it’s the provision that we recommended ever since this process has started for the ’12 farm bill debate.

Mr. Adams: How does this deal with the Brazilian WTO case as well?

Mr. Brown: Well, we believe that it gives the basis for our government to go back to the Brazilian government and argue that we have complied with the WTO decision, because it does away with countercyclical payments, it makes modifications to the marketing loan, and it creates a new delivery system that is crop insurance based. And it’s substantially less spending authority than was the case in the original WTO decision, so we believe it’s the basis for which the United States can go make an argument to Brazil that we’ve complied with the case.

On the issue of payment limits, Mr. Brown noted that, “Well, we’re very concerned on behalf of our producers, who are very diversified and grow a lot of different crops, about the trend that Congress has been taking, and specifically Senator Grassley in his endeavor to try to further tighten down eligibility for commercial size farms. We’re particularly concerned with the provisions that are in the bill that relate to a tighter payment limit, a reduced AGI means test, and also some changes in the eligibility requirements.”

Mr. Brown also noted that, “If the cotton provisions remain as they are, then it’s a bill that we can support.”

Meanwhile, Bloomberg writer Alan Bjerga reported yesterday that, “U.S. food-stamp use, which Republicans have cited as evidence of a failing economy, dropped 0.3 percent in February from the previous month, the government said.

“About 46.326 million Americans received aid, down from 46.45 million in January, the U.S. Department of Agriculture said today in an e-mail. Participation was 4.8 percent higher than a year earlier. February was the second consecutive monthly drop.”

Sean Lengell reported earlier this week at The Washington Times Online that, “A Senate proposal to end direct federal payments to farmers and replace it with a new subsidy program gambles that crop prices will remain at historically high levels, a tactic that could backfire and double its cost, some experts say.

“The proposed ‘shallow loss’ program would pay farmers when decreasing yields or declining crop prices result in a farmer’s revenue falling below historic averages. The program would save about $2 billion annually compared with the current $5 billion direct payment system — but only if crop prices remain near their current levels. If prices dip, the saving could disappear and the cost could exceed the direct payment price tag, experts say.”

Recall that on Thursday at a House Agriculture Subcommittee hearing on conservation issues, House Ag Committee Ranking Member Collin Peterson (D., Minn.) pointed out that, “And I frankly think that what we’re doing, what’s going on over in the Senate, is a mistake, because when these prices go down – and they will – there is not going to be any floor under this deal. And this happened in ’96 when we did Freedom to Farm, and it collapsed, and two years later we spent more money than we ever spent in history bailing people out.

“Well, I just want to tell people that this time, when these prices go down – and they will – there isn’t going to be any money to bail anybody out, so people better be careful about what they’re doing here. It’s all good to look at this when the prices are good and everybody’s been making a lot of money, but I’ve been around long enough to know that’s going to go the other way.”

An update posted yesterday at the House Ag Committee webpage indicated that the Subcommittee on Nutrition and Horticulture has scheduled a hearing regarding Specialty Crop and Nutrition Programs on Tuesday, May 8, 2012 at 11:00 a.m.  And, the Subcommittee on Department Operations, Oversight, and Credit has scheduled a hearing on Thursday, May 10, 2012 at 10:00 a.m. to address Credit Programs.

Policy Issues

In other policy related developments, a news release yesterday from USDA stated that, “Agriculture Secretary Tom Vilsack today announced the publication in the Federal Register of new proposed guidelines for the USDA BioPreferred program that could expand the ability of USDA to designate biobased products for Federal purchase. USDA is proposing to allow for the designation of intermediate ingredients such as fibers, resins, and chemicals so that the products made from them could more easily be designated for preferred Federal procurement.”

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “Del. Eleanor Holmes Norton (D-D.C.) has put forward legislation creating a federal program aimed at reducing the number of overweight Americans.

“The Lifelong Improvements in Food and Exercise (LIFE) Act, H.R. 4604, proposes spending $25 million on the program in fiscal 2013, and ‘such sums as may be necessary’ for the next three years after that. The money would be used to train health professionals to help overweight people, including by educating them about proper nutrition and exercise, and making them more aware of the risks of obesity.”

On the issue of organic agriculture, an update yesterday at the Voice of America (VAO) Online pointed to a recent study published in the journal Nature (“Comparing the yields of organic and conventional agriculture”).  The VAO update noted that, “In a new study, researchers wanted to measure the difference between conventional and organic yields. So they combined the results of sixty-six earlier studies. They found that some organic farms can yield almost as much as conventional farms. But most cannot.”

In more specific news relating to animal agriculture, Bloomberg writer Whitney McFerron reported earlier this week that, “European Union rules requiring pig farmers to keep animals in larger pens may mean production in the world’s second-biggest pork exporter is set to tumble as farmers choose between barn remodeling or going out of business.

“Beginning Jan. 1, farmers in the 27-nation bloc will be required to keep breeding animals together in open pens for most of their lives, instead of confining them individually in stalls that are often too small for a pig to turn around. Pork output in Europe, the biggest shipper after the United States, may drop as much as 10 percent after the ruling goes into effect, because some farmers aren’t prepared to make the change, Britain’s Agriculture and Horticulture Development Board said.”

In related news regarding protein consumption, an update posted earlier this week at The Economist Online stated that, “The world has a burgeoning appetite for meat. Fifty years ago global consumption was 70m tonnes. By 2007—the latest year for which comparable data are available—it had risen to 268m tonnes. In a similar vein, the amount of meat eaten by each person has leapt from around 22kg in 1961 to 40kg in 2007.”

Budget

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “House Budget Committee Chairman Paul Ryan (R-Wis.) has introduced legislation to replace a mandatory across-the-board discretionary spending cut in fiscal year 2013 that is required by last summer’s deal to raise the debt ceiling.

“The bill is the start of an effort to prevent $600 billion in defense cuts over 10 years that both parties argue would reduce U.S. national security. The defense cuts were supposed to pressure a ‘supercommittee’ of lawmakers to find alternative cuts in the budget, but that panel failed to come up with a plan.”

Yesterday’s update noted that, “Another piece of legislation, the Sequester Replacement Reconciliation Act, is a 187-page bill that outlines the various cuts and savings to mandatory programs that will make up for ending the sequester. Cuts in this bill come from recommendations made by six House committees: Agriculture, Energy and Commerce, Financial Services, Judiciary, Oversight and Government Reform and Ways and Means.”

“According to reports filed this week, the Agriculture Committee cuts would save $7.7 billion in the first year, and $33.2 billion over ten years, almost all of which come from reforms to federal food stamp assistance,” The Hill update said.

In related news on the political climate in Washington, Politico writers Charles Mahtesian and Jim VandeHei reported yesterday that, “Think Congress is a big, dysfunctional, polarized mess?

“Just wait: It’s going to get worse.

“The House is certainly the most extreme illustration of what’s to come. Moderate Republicans are basically extinct. Conservative Democrats, who not long ago accounted for more than a quarter of the party in the House, are getting wiped away, too — and will likely number a little more than a dozen after November.”

The article added that, “The Senate, once the chamber of deliberation and reason, is getting its own extreme makeover. Moderates such as Maine Republican Olympia Snowe and Democrat Ben Nelson are bolting an institution that barely resembles the one they entered as idealistic deal makers.

“As it stands, Congress is more polarized than at any time since Reconstruction, according to data compiled by Keith Poole and Howard Rosenthal, political scientists who study congressional voting.”

Rural Economy

A news update yesterday from Creighton University stated that, “The monthly Business Conditions Index for the nine-state, Mid-America region [Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota] indicates growing strength in the regional economy. The index, a leading economic indicator from a monthly survey of supply managers, has increased for five straight months.

“The index, which ranges between 0 and 100, climbed to 60.0 from 58.6 in March and 58.4 in February. ‘Despite higher energy prices, manufacturers, especially those tied to international markets and agriculture expanded briskly for the month. Heavy manufacturing continues to be source of growth for the region with export oriented manufacturers leading the way,’ said Ernie Goss, director of Creighton’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics.”

Laurie Winslow reported yesterday at the Tulsa World Online that, “The state’s [Oklahoma] Business Conditions Index rose to a healthy 62.6 in April, up from 58.6 in March, according to information released Tuesday by Creighton University in Omaha, Neb… ‘Second only to North Dakota, Oklahoma’s growth continues uninterrupted and very positive. Our survey indicates no change to that growth in the months ahead,’ said Ernie Goss, director of Creighton’s Economic Forecasting Group, in a written statement. ‘Despite healthy economic activity, firms in the state are not adding to the hourly work-week of current employees. Instead, firms are adding new workers.’”

Trade

Reuters writer Charles Abbott reported yesterday that, “A South Korean delegation will conduct a week-long review this week of U.S. mad-cow safeguards and will meet with the top U.S. animal health official on Tuesday in the wake of a new U.S. case of the brain-wasting disease.

“A USDA spokesman said it is routine for trading partners to seek details about animal disease outbreaks. Agriculture Secretary Tom Vilsack wrote to 28 countries, including major importers, last week to assure them U.S. beef is safe to eat.

“‘The Republic of Korea is an important partner and we welcome the opportunity to share information about the effective system we have in place for safeguarding against the risks posed by BSE,’ said USDA spokesman Matt Herrick, using the abbreviation for mad cow’s formal name, bovine spongiform encephalopathy.”

Mr. Abbott explained that, “Canada, Mexico, Japan and South Korea, in that order, were the largest markets for U.S. beef in 2011, accounting for 90 percent of beef exports. Ten percent of U.S. beef is exported. Some 380 million lbs, worth $661 million, were shipped to South Korea in 2011, says USDA.”

An update posted yesterday at the Economic Research Service (USDA- ERS) Charts of Note webpage stated that, “Agricultural trade within the NAFTA region has recovered from the recent global economic downturn, reaching record levels in 2011. The total value (exports and imports) of U.S. agricultural trade with Canada and Mexico reached about $72.1 billion in 2011, compared with $60.7 billion in 2008 and $54.7 billion in 2009. Prior to the downturn, regional agricultural trade had enjoyed a long period of sustained growth with few interruptions. Even when accounting for the effects of the recent downturn, U.S. agricultural trade with Canada and Mexico has nearly quadrupled since NAFTA’s implementation in 1994. This chart is an update of one found in the ERS report, NAFTA at 17, WRS-11-01, March 2011.”

A WTO (World Trade Organization) news release from yesterday stated that, “Director-General Pascal Lamy reported to the General Council on 1 May 2012 that on the Doha Round, ‘my conversations over the past few weeks with Ministers and delegations have provided me with a sense that Members wish to continue to explore any opportunities to gain the necessary traction and make tangible progress soon.’ He added that the recent G-20 Trade Ministerial in Puerto Vallarta, Mexico supported giving ‘fresh impetus to the Doha negotiations towards results in areas with potential for prompt resolution — such as trade facilitation — while intensifying efforts to find ways and approaches to overcome the most critical and fundamental stalemates in specially challenging areas.’”

Keith Good

A news release yesterday from the Senate Agriculture Committee stated that, “Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, led the Committee in considering and approving the Agriculture Reform, Food and Jobs Act of 2012, last Thursday with broad bipartisan support. The bill reforms food and agricultural policy by eliminating direct payments, consolidating programs and ending duplication, and cracking down on abuse in food assistance programs. This new Farm Bill saves $23 billion while strengthening crop insurance and other initiatives that help create American agricultural jobs.”

The release went on to include statements by Senators “from both sides of the aisle, praising the bill for its major reforms, and for the collaborative, inclusive and exceptionally bipartisan process of drafting it.”

Deborah Mcdermott noted yesterday at the Sea Coast (Portsmouth, NH) Online, with respect to the passage of the Farm Bill out of the Senate Ag Committee, that, “‘It’s a significant step,’ said Maine [Democrat] Congresswoman Chellie Pingree, who has championed the small farmer in her work on the House Agriculture Committee. ‘I feel great about what’s in the bill.’

“Pingree, lead sponsor of the Local Farms, Food and Jobs Act, which has more than 70 co-sponsors in the House, was on the other side of the Capitol last week, working the Senate Agriculture Committee to get portions of her bill into the Senate version of the Farm Bill.”

Ms. Mcdermott added that, “Senate Agriculture Committee chairwoman Debbie Stabenow of Michigan is ‘a great champion’ of the small farmer and ‘very good on organic,’ Pingree said. ‘But every little thing is a negotiation. We couldn’t get everything we wanted. I’m ready to overhaul agriculture tomorrow, but we made some strides. It’s the old way clashing with the new way, and sometimes that takes a while.’”

A news release yesterday from Rep. Pingree stated that, “The Senate Agriculture Committee passed a farm bill late last week that contained a number of provisions to support local and organic farms. All of those provisions were included in the Local Farms, Food and Jobs Act, introduced by Pingree earlier this year.

“‘I was glad to see that this bill adopts some key programs that will support smaller farmers and organic farmers and make it easier for consumers to have access to local food,’ Pingree, a member of the House Agriculture Committee said today. ‘Local food is good for the economy and good for families. Consumers want access to local food and it’s time our agriculture policy start catching up with that.’”

Yesterday’s release indicated that, “Pingree said while the bill does provide support for local food, it doesn’t go far enough.

“‘This is a first step and we have a long way to go still. I was disappointed the Committee didn’t include the no-cost common sense farm to school programs contained in the Local Farms, Food and Jobs Act. And while I’m pleased that the bill includes elimination of direct automatic subsidy payments it doesn’t go far enough in reforming the current crop insurance program,’ Pingree said.”

Farm Bill Issues: Southern Concerns, Conservation, Dairy and Nutrition Issues

David Bennett reported yesterday at the Delta Farm Press Online that, “After a farm bill passed out of the Senate Agriculture Committee on April 26, focus has shifted to the House version. That’s especially true in the South, where agriculture leaders expect the House bill to be friendlier to the region than what will soon hit the Senate floor.

“‘I think it’s pretty telling that four of the five ‘no’ votes on the (Senate Agriculture) Committee were from southern senators,’ said Randy Veach, Arkansas Farm Bureau President, the day after the bill’s passage. ‘That sends a message that this bill does not contain an adequate safety net for southern agriculture.’”

An update posted yesterday at the National Sustainable Agriculture Coalition (NSAC) Blog stated that, “We are thrilled to report that the Senate Agriculture Committee’s version of the Farm Bill, as passed out of Committee on April 26, includes a nationwide Sodsaver provision to protect native prairie across the country.  The Sodsaver provision was originally filed as an amendment on April 23 by Republican Senators John Thune (R-SD), Mike Johanns (R-NE) and Democratic Senator Sherrod Brown (D-OH) and subsequently was accepted into the revised draft bill presented by Chairwoman Debbie Stabenow (D-MI) and Ranking Member Pat Roberts (R-KS) on April 25.  NSAC commends these Senators for their commitment to conserving our most valuable natural resources.

“While the Sodsaver provision in the Senate bill does not, as we had proposed, deny all crop insurance subsidies on newly broken out land, it does provide for a 50 percent reduction in the subsidy.  It also includes two important provisions that prevent people from gaming the system to increase their revenue insurance coverage at the expense of taxpayers and the environment.  One keeps the newly broken out land isolated from other crop acres the producer may have when calculating insurable yields.  The other requires the operator to take a percentage of the county average yield until being able to show a multi-year yield history.”

The NSAC update noted that, “While the Senate bill does reattach attach highly erodible land and wetland conservation requirements to Title 1 commodity payments, conservation program payments, and federal loan programs, we are disappointed to report that it does not do so for the largest of all farm payment categories, federal crop insurance subsidies.”

With respect to dairy issues, Gary Truitt reported yesterday at Hoosier Ag Today (HAT) Online that, “The focus on the Farm Bill has been on the commodity title, but the recently advanced Senate Ag Committee bill also contains reform in US dairy policy. Chuck Conner, with the National Council of Farmer Cooperatives, which represents many dairy co-ops, says the dairy section of the Farm Bill is a step in the right direction.  He said it will help dairy producers continue to grow dairy exports, ‘The new policies in the Farm Bill reflect the dairy industry becoming more focused on markets, particularly international markets.’   Currently, dairy exports account for about 15% of dairy product demand.

“Conner told HAT the goal of the new policy is to provide some economic stability to the dairy market and give producers a way to deal with extreme price volatility. He said, going forward, the market will provide great economic opportunity for dairy producers, but also great risk, ‘Our policy must provide a safety net for when the volatility drops dairy prices to very low levels.’  The Senate legislation includes a new, voluntary, margin protection program endorsed by the National Milk Producers Federation (NMPF) meant to safeguard farmers against disastrously low margins, such as those generated by the low milk prices and high feed costs that cost dairy farmers $20 billion in net worth between 2007 and 2009.”

Meanwhile, Kevin Concannon, the undersecretary for food, nutrition and consumer services at USDA, penned a column yesterday at Politico (“Cutting food stamps hurts poor”) which stated that, “The Agriculture Department published new research this month that further cements the significant positive impact of the Supplemental Nutrition Assistance Program, or food stamps, in combating poverty’s effects on low-income Americans. The report’s implications are clear: Lives of the 46.5 million Americans — primarily children, the elderly or disabled — who rely on this critical lifeline are better because they have a safety net to help them meet basic nutrition needs when times are tough.”

Mr. Concannon pointed out that, “In addition to its profound anti-poverty effects in reducing hunger, evidence demonstrates that SNAP is a well-managed investment. More than 96 percent of the time, states pay the correct amount of benefits to eligible participants. This is the highest payment accuracy rate in program history. It underscores more than 15 years of improvement in wisely managing taxpayer dollars.

“This is also one of the highest payment accuracy rates among all federal means-tested programs. But we are still not satisfied. The Agriculture Department is now working with states to improve this rate even more.

“The department also continues to be aggressive in its pursuit of fraud and abuse. Though any amount of fraud is unacceptable, the rate of trafficking in food stamps remains about 1 percent — a historical low.”

Yesterday’s column added that, “That’s why it’s so puzzling that the House Agriculture Committee passed more than $33 billion in additional cuts to SNAP — at a time when the program has never been more urgently needed by Americans, and its operation is highly efficient.”

Policy Issues: Animal Agriculture

A separate column yesterday at Politico (“Antibiotics threaten public health”), penned by Rep. Louise Slaughter (D-N.Y.), lead sponsor of the Preservation of Antibiotics for Medical Treatment Act; Robert Lawrence, the Director of the Johns Hopkins Center for a Livable Future; and Caroline Smith DeWaal, the Director of the food safety program at the Center for Science in the Public Interest, stated that, “The Food and Drug Administration concluded in 1977 that feeding antibiotics daily to healthy livestock, chickens and hogs could promote antibiotic-resistant bacteria, capable of infecting people.

“Instead of addressing this growing public health threat, the FDA dragged its feet for more than three decades. But a federal judge ruled in March that the agency must finally take action. The court ordered the FDA to withdraw approval for the use in animal feed of two antibiotics important for human health.

“This decision — in a case brought by consumer groups like the Natural Resources Defense Council and the Center for Science in the Public Interest — is a landmark victory in ending the misuse of antibiotics.”

The column added that, “But the fight is not over. Without a timeline, the FDA and the drug industry can continue to delay action for months — even years.

“So Congress must take action by passing new legislation that would ban the use of antibiotics critical for human health in animal feed — while preserving the ability of veterinarians to treat sick animals.”

A news release last week from the National Pork Producers Council indicated that, “Domino’s Pizza shareholders last Wednesday rejected – by a majority vote of 80 percent – a resolution from the Humane Society of the United States (HSUS) requiring its pork suppliers to stop the use of gestation stalls. The National Pork Producers Council hailed the move as a vote for common sense.

“Animal activist groups recently have influenced several prominent foodservice companies, including McDonald’s, Wendy’s and Burger King, to make poorly informed decisions on sow housing.

“‘The vote to reject the HSUS resolution was a vote for common sense,’ said NPPC President R.C. Hunt, a pork producer from Wilson, N.C. ‘We appreciate Domino’s belief that America’s farmers, veterinarians and other animal agriculture experts are better suited than activist groups to determine what the best animal care practices are.’”

Regulations

DTN writer Todd Neeley reported yesterday that, “Both sides in a federal lawsuit that could affect the use of hundreds of pesticides may be getting closer to striking a settlement agreement, according to a status report filed in a California court Friday.

“Both sides have asked for an extension of the negotiation deadline from May 4 to July 13, indicating they are making progress.”

Mr. Neeley explained that, “On Jan. 20, 2011, the Center for Biological Diversity and other environmental groups filed suit in the U.S. District Court for the Northern District of California, alleging EPA violated the Endangered Species Act by not consulting federal wildlife officials about the potential effects that pesticides and other ag chemicals would have on hundreds of species.

“The lawsuit names some 300 registered pesticides and other ag chemicals, and their potential effects on about 200 species. The lawsuit could affect some 30,000 ag chemical-endangered species combinations in all 50 states.”

Meanwhile, Jacqueline Palank reported yesterday at The Wall Street Journal Online that, “A bankruptcy judge shot down an attempt by an MF Global Holdings Ltd. commodities customer to block the firm’s executives, including former Chief Executive Jon S. Corzine, from accessing millions of dollars in insurance proceeds.

“Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan on Monday denied Sapere Wealth Management LLC’s request for an injunction that would block MF Global’s executives from drawing $30 million in available insurance funds while Sapere appeals their right to payment. The insurance covers the costs the executives may face defending themselves against ‘wrongful act’ lawsuits.”

Also on the MF Global issue, Jeremy Bernfeld of Harvest Public Media filed a report late last week titled, “MF Global crisis leaves rural brokers stuck in the middle.”  The report noted that, “The Lefflers [Tom and Patty of Augusta, Kan.] and other rural brokers are caught in the middle of a tug-of-war they can’t control.

“‘It’s one of these situations which you always hear about: The big boys caused the problem. It’s the little guys that have to pick the pieces up, have to talk to everybody and explain to them what happened,’ Leffler said. ‘Even though we didn’t have anything to do with it, we’ve got to explain it.’”

Agricultural Economy

Javier Blas reported yesterday at The Financial Times Online that, “If rising oil prices were not enough, investors now have to contend with a bigger risk: a repeat of the 2007-08 spike in food prices.

“Prices of commodities ranging from soyabeans and corn to rapeseed and feeder cattle are soaring as bad weather and strong demand in China combine to tighten supplies and trigger food inflation fears.”

The USDA’s National Agricultural Statistics Service released its monthly Agricultural Prices report yesterday, which stated in part that, “The corn price, at $6.14 per bushel, is down 21 cents from last month and 22 cents below April 2011 [related graph]; The soybean price, at $13.80 per bushel, increased 80 cents from March and is 70 cents above April 2011 [related graph]; and, the April price for all wheat, at $6.87 per bushel, is down 32 cents from March and $1.14 below April 2011 [related graph].”

Cheri Zagurski and Anthony Greder reported yesterday at DTN (link requires subscription) that, “Fifty-three percent of the nation’s corn crop was planted as of April 29, according to USDA’s latest weekly Crop Progress report. That is nearly twice the speed of planting during an average year.”

“Soybean planting was reported at 12% complete, compared to 2% last year and a 5% average,” the DTN article said.

Trade

A news release on Friday from Rep. Adrian Smith (R., Neb.) stated that, “[Rep. Smith] today sent a letter to U.S. Trade Representative Ron Kirk and U.S. Secretary of Agriculture Tom Vilsack asking they work with the Colombian government to remove its unjustified sanitary and phytosanitary (SPS) requirements on certain pork imports. This unscientific trade barrier would cause U.S. pork producers not to realize the full economic benefits possible under the recently-passed Colombia Free Trade Agreement.”

The “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “However belatedly, the House Ways and Means Committee is planning to hold a hearing on whether the United States should grant permanent normal trade relations status to Russia after that country becomes a member of the World Trade Organization. No specific date for the hearing has been set, but committee Chairman Dave Camp, R-Mich., indicated it would be sometime in June.

“Russian officials continue to believe their legislature will approve the legal steps needed to join the WTO before the end of summer. If the United States fails to grant PNTR (also known as most-favored nation) status to Russia, Russia would be able legally to discriminate against U.S. products once it is a WTO member. The effect would be to punish U.S. exporters and reward their foreign competitors who would gain a foothold in the Russian market.”

A news release yesterday from the Coalition for Sugar Reform stated that, “In a letter sent today to U.S. Trade Representative Ron Kirk, 15 major business organizations urged USTR to include all agricultural commodities in the ongoing Trans-Pacific Partnership (TPP) negotiations and to drop the longstanding and outdated protection of the very profitable and influential U.S. sugar industry.”

And Enda Curran reported yesterday at The Wall Street Journal Online that, “Canada is confident it can win the backing of Australia and New Zealand to join a proposed Asia-Pacific trade pact despite differences over concessions to agriculture, Trade Minister Ed Fast said Tuesday.

“‘We’re still in ongoing consultations with Australia but I am confident that based on the merits of the case, which we believe is quite compelling, that we will have a positive result,’ Fast told Dow Jones Newswires.

“Canada’s minister is on a swing visit through Australia and New Zealand to shore up backing for the country’s bid to join negotiations on the Trans-Pacific Partnership, which aims to eliminate all tariffs among member nations within 10 years.”

Keith Good

Senate Ag Committee Ranking Member Pat Roberts (R., Kan.) was a guest on Friday’s AgriTalk radio program with Mike Adams where part of their conversation turned to last week’s Senate action on the Farm Bill.  In part, Sen. Roberts noted that, “I think that we can talk [Senate Leader] Harry Reid [D., Nev.] into putting this on the floor,” and added that, “I really don’t expect that many amendments.”

The Kansas Republican pointed out that, “We saved over $23 billion for the taxpayer.  We are the first authorizing committee- agriculture led the way- in providing significant deficit reduction to reduce the debt and spending, over $23 billion.”

To listen to the full remarks on the Farm Bill from Sen. Roberts, just click here (MP3- 3:31).

Senator Jerry Moran (R., Kan.) also spoke briefly about the Farm Bill on Friday’s AgriTalk program and pointed out that, considering the broad support from the Committee, he thought Leader Reid would bring the bill to the Senate floor for a vote and noted that he would likely offer amendments to the legislation.  Sen. Moran stated that, “We need to make certain that all commodities in all regions are treated fairly.”

Sen. Moran’s complete remarks on the Farm Bill from Friday can be heard here (MP3- 1:12).

An item posted on Saturday at the Great Falls Tribune (Mont.) Online explained that, “The only thing that is certain now is that cuts will be made to the U.S. Department of Agriculture’s budget, which not only includes agricultural and conservation programs, crop insurance and lending, but also food stamp and school lunch programs. The Senate version of the Farm Bill includes $25 billion in cuts over the next decade. The House’s is something like $180 billion in cuts over the next 10 years.”

In a brief audio report on Friday (“House Ag leadership united in opposition to Senate Ag Farm Bill”), Agri-Pulse Senior Editor Stewart Doan included remarks from House Agriculture Committee Ranking Member Collin Peterson (D., Minn.) who noted that, “[House Ag Committee] Chairman [Frank] Lucas [R., Okla.] and I at this point, are both still supporting the target price concept that was in the Super Committee Bill.”  Ranking Member Peterson pointed out that, “You cannot pass a bill if you have Southern agriculture opposed to it.”

Click here to listen to the complete Agri-Pulse report (1:26).

With respect to the executive branch, Gannett writer Christopher Doering reported late last week that, “U.S. lawmakers risk slowing or even stopping the torrid economic growth in rural America if Congress fails to pass a farm bill this year, the head of the Agriculture Department said Friday.”

“Agriculture Secretary Tom Vilsack said in an interview he understands lawmakers are saddled with a bevy of challenges that could make passing a farm bill difficult, including the need to balance the interests of different geographic regions and commodities. But he added that should not be enough to deter Congress from acting in order to keep the momentum going in agriculture.”

Mr. Doering noted that, “Vilsack expressed concern over the ‘serious, serious depth of cuts’ that are being floated in the House that could ‘irreparably harm’ a host of farm programs ranging from conservation to nutrition. He pointed out that excessive cuts to programs such as food stamps, for example, could make their way down to the bottom line of farmers who collect about 16 cents of every dollar spent at the grocery store.”

Farm Bill: Southern Concerns, and Trade Issues (WTO- Cotton)

A news release last week from the Corn Producers Association of Texas (CPAT) stated that (FarmPolicy correction- an earlier version of this update had incorrectly restated a portion of the release), “The [CPAT] is appreciative of the efforts of the Senate Committee on Agriculture, Nutrition and Forestry on the 2012 Farm Bill by passing legislation from the committee today; however, the organization says the current bill poses some serious concerns for Texas producers.

“During the markup session this morning, Senator Saxby Chambliss (R-Ga.) spoke on the disproportionate impact the presented Commodity Title of the bill has to varying regions across the nation.  CPAT concurs with Sen. Chambliss’ sentiments in this regard, as do Chairman of the House Ag Committee Frank Lucas (R-Okla.) and Rep. Michael Conaway (R-Texas) in statements released in response to the Senate committee’s passing yesterday.”

The release added that, “CPAT Executive Director David Gibson said the organization had the Agricultural and Food Policy Center at Texas A&M University analyze the bill presented by the Senate committee prior to the markup, which shows Texas corn producers would not have an adequate safety net if prices for corn, during the life of the 2012 Farm Bill, were to fall below CBO projected prices.”

And Paul Hollis reported on Friday at the Southeast Farm Press Online that, “Texas farmer and president of the Western Peanut Growers Association Jimbo Grissom recently told a Senate panel that U.S. peanut producers support two provisions for a new farm bill — an equitable risk management tool and a ‘producer choice’ crop program.

“Grissom told the U.S. Senate Committee on Agriculture, Nutrition & Forestry that in addition to a viable crop insurance program, peanut producers need ‘a real choice between a new revenue program for peanuts and a target price program for peanuts.’”

Mr. Hollis noted that, “The ‘producer choice,’ he said, should be between a counter cyclical-type program (with no direct payments) with a $534 per-ton target price and a $355 per-ton marketing loan, or a new revenue program based on the Rotterdam price with a price floor of $534 and a differentiation in peanuts yields between irrigation production and non-irrigated production with a $355 per-ton marketing loan.”

“The absence of a crop revenue insurance policy for peanuts, [Grissom] said, only serves to make the lack of risk management tools much worse. ‘Most of the commodity program options being discussed this year are predicated on the existence of crop revenue insurance as a foundation of the policy. That option is simply foreclosed for peanuts because RMA has not yet been able to clear a revenue policy for our crop.’”

Meanwhile, a news release Friday from Rep. Ron Kind (D., Wis.) stated that, “[Rep. Kind] today with his colleagues Rep. Jeff Flake (R-AZ) and Rep. Earl Blumenauer (D-OR) introduced legislation to put an end to the $147 million in taxpayer dollars going to the Brazilian cotton agribusiness each year.”

Recall that back in June, during a debate on the 2012 Agriculture spending bill, Rep. Flake sought to take the $147 million out of direct payments to cotton farmers to pay the Brazilians- audio (2:03).  However, last week’s markup of the Senate Agriculture Bill eliminated direct payments.

Friday’s news release indicated that, “The Senate Agriculture Committee had an opportunity to put an end to the subsidies going to the Brazilian Cotton Institute in their markup of the farm bill this week. Unfortunately, they instead created an entirely new, heavily subsidized ‘insurance’ program for American cotton producers, which covers shallow revenue losses, and costs $3.2 billion over 10 years.

“‘Adding a new shallow revenue loss program with unlimited payments will only burden taxpayers more and will surely be challenged again by Brazil at the WTO, risking another loss and even more costly, unnecessary payouts to foreign producers,’ said Rep. Kind.”

The “Washington Insider” section of DTN on Friday (link requires subscription) stated that, “The cotton program being developed by the Senate Agriculture Committee is drawing intense scrutiny from trade officials in Brazil who believe that as currently configured, the program will be even more trade-distorting than previously was the case.

“Roberto Azevedo, Brazil’s ambassador to the World Trade Organization, told the Bloomberg BNA news service that the Brazilian government was still examining in detail the proposed farm bill, which contains a new safety net for cotton growers called the Stacked Income Protection Plan (STAX).”

The DTN update noted that, “Azevedo said that under the proposed STAX program, ‘you can have extremely high prices, you may be making wonderful profits, and you will still get payments. That is the problem: you’re getting money where you otherwise wouldn’t.’ And, he added, ‘depending on prices, on the market conditions, those expenditures will be a lot higher than they would have been with the previous programs.’ If that proves to the case, Brazil and the United States could find themselves once again before another WTO dispute settlement panel.”

Recall that an Inside U.S. Trade article from February 10 of this year (“Brazil Blasts Farm Bill Proposals, Suggests They Could Violate WTO Rules”) stated that, “The Brazilian government is criticizing several proposals put forward by U.S. senators and agriculture industry groups for inclusion in the next farm bill, arguing that they would increase trade-distorting subsidies provided by the U.S. government and, if implemented, could even violate World Trade Organization rules.

“In a letter dated from last month and sent to the chairmen and ranking members of the two congressional agriculture committees, Brazil reserved its harshest criticism for a proposal by the National Cotton Council (NCC).”

The Inside U.S. Trade article from February noted that, “‘In our view, no farm program can be WTO-compliant and cover ‘shallow losses‘ — thereby insulating farmers from market forces — to the extent foreseen in the aforementioned NCC proposal,’ Azevedo wrote. STAX would ‘result in billions of dollars in subsidies, providing cotton producers with a large incentive to maintain very high current acreage and production, or even increase it.’”

The article from earlier this year added that, “In an interview, NCC chief economist Gary Adams said that the STAX proposal was designed to address the WTO findings in the cotton case. He argued that if STAX were implemented, it would result in about a 60 percent reduction in subsidy outlays moving forward compared with the 1999-2005 period examined by the WTO.”

Urban C. Lehner, DTN Vice President of Editorial Operations reported on Friday at his blog- An Urban’s Rural View, that, “When the chairs and ranking members of the House and Senate Agriculture Committees met recently with agricultural journalists, they were asked whether the next farm bill will move the U.S. away from its obligations as a member of the World Trade Organization.

“The legislators’ answer, boiled down to simplest terms: ‘Who cares?’

“OK, that’s an oversimplification, a fib even. Three of the four did express vague sympathy for the WTO issue and some have consulted trade experts. But none of the four made a convincing case that Congress will pass a WTO-friendly farm bill.”

Mr. Lehner added that, “The one who came closest to ‘who cares’ was the ranking member of the House committee, Minnesota Democrat Collin Peterson. ‘In my view the WTO is irrelevant at this point,’ Peterson said. No one’s going to sue the U.S., he said, ‘so why should we tie ourselves into knots?’”

Farm Bill: Additional Issues- SNAP, Conservation, Dairy, Information Sharing, Catfish, and Opinion

Kate Maehr, the executive director and CEO of the Greater Chicago Food Depository, noted in a column published in yesterday’s Chicago Sun-Times that, “Congress is considering major cuts to the Supplemental Nutrition Assistance Program (formerly known as food stamps), which supports 46 million low- and middle-income people — half of whom are children. Proposed Senate cuts in the Farm Bill, which funds SNAP, would slash $4 billion from benefits in coming years.

“The House’s proposed fiscal year 2013 budget would cut a staggering $33 billion from SNAP in the next 10 years.

“Reining in the budget is in order. But balancing the budget on the backs of the most vulnerable is not acceptable.”

Meanwhile, a report yesterday at the Grand Forks Herald (N.D.) Online stated that, “Conservation groups across the country are applauding the Senate Agriculture Committee for its decision Thursday to maintain a strong conservation component in the 2012 farm bill.”

And Jim Spencer reported over the weekend at the Minneapolis Star-Tribune Online that, “Dairy farmer Dave Buck feeds his calves at 6:30 in the morning and 6:30 in the evening. He wants them to grow healthy on his land in Goodhue, Minn., so they produce as much milk as possible.

“Now, Buck and thousands of other Minnesota dairy farmers and dairy food processors may have to choose between getting the most milk from cows or participating in a voluntary government system that ties insurance protection to accepting occasional production limits.”

The Star-Tribune article stated that, “The goal of the proposed program is to protect farmers against losses and to eliminate big price swings, like the ones that drove a significant number of dairy farmers out of business in 2009. Whether that’s a good idea has fractured agriculture communities across the country, including Minnesota, the nation’s seventh-largest dairy state.

“The Minnesota Milk Producers Association, of which Buck serves as vice president, came out against production limits. But many national and regional dairy farm trade groups support the measure, which was introduced in Congress by a longtime farmer ally, Seventh District Democratic Rep. Collin Peterson.

“Some of the state’s biggest dairy processors are also divided.”

Mr. Spencer noted that, “The Dairy Security Act, as the new system is called, was incorporated into the five-year farm bill that the Senate Agriculture Committee passed last week. The House Agriculture Committee must still weigh in on the bill and the House and Senate must vote on it.”

Lori Potter reported on Friday at the Kearney Hub (Neb.) Online that, “In a conference call at Thursday’s CPNRD [Central Platte Natural Resources District] board meeting Grand Island, Nebraska Sen. Ben Nelson said the [Senate Committee Farm Bill] legislation includes wording that allows entities such as natural resources districts to access basic landowner-producer information from U.S. Department of Agriculture’s Farm Service Agency records.

“Central Platte officials have tried unsuccessfully for four years to get some general data that’s already part of ag producers’ FSA records. Central Platte’s interest is information needed to certify irrigated acres, CPNRD General Manager Ron Bishop told the Hub.”

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “As the 2012 farm bill moves to the Senate floor, a scuffle has intensified over the inspection of catfish.

“The battle pits the southern catfish industry and its supporters against a wider coalition of agriculture groups and fiscal conservatives.”

The Hill article noted that, “In this fight, catfish farmers actually want tougher inspection of their products while their opponents say they are trying to create an unfair system just to block imports of fish from Vietnam.”

On Saturday, The Washington Post editorial board criticized the Farm Bill draft passed by the Senate Agriculture Committee, while The New York Times published an editorial that focused on food safety issues: “While the first lady, Michelle Obama, champions the issue of healthy food, the rest of the administration does not seem to have gotten the message. There are now three important food issues on hold. And health and nutrition advocates worry that they are stalled for the election season, or longer, because of pushback from the food industry.”

And last week the Senate confirmed Michael T. Scuse to be undersecretary of Agriculture for farm and foreign agriculture services.

Regulations

Todd Neeley reported on Friday (link requires subscription) that, “The EPA and the U.S. Army Corps of Engineers would be prevented from using a controversial Clean Water Act guidance document to make wetlands determinations if legislation working its way through Congress becomes law.

“On Friday lawmakers in the House introduced H.R. 4965 that would prohibit EPA and the Corps of Engineers from using a proposed CWA guidance document to enforce the act. The bill, introduced by Reps. John Mica, R-Fla.; Nick Rahall, R-W.V.; Frank Lucas, R-Okla.; Collin Peterson, D-Minn.; and Bob Gibbs, R-Ohio, is nearly identical to S.2245, the ‘Preserve the Waters of the U.S. Act’ introduced in March.

“The yet-to-be-released final CWA guidance has drawn the ire of many agriculture interest groups who say the guidance allows EPA to expand its control of waters in the U.S.”

Ian Berry, Marshall Eckblad, and Curt Thacker reported on Friday at The Wall Street Journal Online that, “The Commodity Futures Trading Commission has asked the U.S. Department of Agriculture to provide a timeline of the decisions and events leading to the department’s announcement Tuesday of a new case of mad-cow disease, which jolted markets before the information was officially released.

“U.S. live-cattle futures prices began tumbling on rumors at least two hours before the USDA announced the first reported U.S. case of mad-cow disease—formally known as bovine spongiform encephalopathy—since 2006.”

And Sam Hananel reported in today’s Washington Post that, “The Obama administration’s move to scrap a plan that would prevent some children from working in dangerous farm jobs drew sharp rebukes Friday from child-welfare advocates who claim the president caved in to election-year pressure from farmers and Republicans.”

Agricultural Economy

Javier Blas and Emiko Terazono reported yesterday at the Financial Times Online that, “The price of soyabeans is heading towards the record high set during the 2007-08 food crisis, which is set to reignite fears of runaway global food inflation.

“The surge in prices is because of falling global production levels following dry weather in Latin America and increased China imports.”

And Owen Fletcher reported in Saturday’s Wall Street Journal that, “Corn prices jumped 4.6% after the federal government reported the sixth-largest export sale ever for the grain, which analysts believe is headed for China.

“The sale, the latest indication of the Chinese appetite for U.S. corn, coincided with analysts’ expectations in recent weeks that China would make a large purchase from the U.S. to help replenish its reserves. China’s state-owned grain-stockpiling enterprise, China Grain Reserves Corp., said in March that it would continue to import corn this year if it found a need or if doing so would be profitable.”

Keith Good

David Rogers reported yesterday at Politico that, “Landmark farm legislation cleared the Senate Agriculture Committee Thursday, promising wholesale changes in commodity programs but also opening up a major breach with Southern growers angered by what they see as an unfair tilt toward the Midwest Corn Belt.

“The 16-5 vote—counting proxies — underscored the regional split, with two former Agriculture chairmen from the South and Senate Minority Leader Mitch McConnell from the border state of Kentucky joining in the opposition.

“The action followed a long night of final adjustments in what proved a vain attempt to buy unity. Cotton won concessions on its own revenue protection program, including a decision to lift the acreage cap on land enrolled. But the leadership resisted any return to a countercyclical program with target prices, and Sen. Saxby Chambliss (R-Ga.) bluntly warned that peanuts and rice will take a ‘huge hit’ and are left ‘without any safety net whatsoever.’”  (Note: To listen to detailed remarks from Sen. Chambliss at yesterday’s markup in which he methodically explains some of the unique characteristics of peanut and rice production, and how these differences translate into desired policy options that are separate from Midwestern corn and soybean operations, just click here (MP3- 6:12)).

Mr. Rogers stated that: “Indeed, corn and soybeans appear the big winners in what would be an historic shift away from direct cash payments and price supports in favor of new forms of subsidized crop insurance.”

The Politico article noted that, “Breaking down the numbers, estimates show that corn’s share would fall 25 percent, while rice drops 70 percent, and peanuts and cotton lose in the range of 41 percent.”

“Sen. John Boozman (R-Ark.) argued that rice farmers in his state would have a hard time getting operating loans without a higher price and predicted ‘the commodity title as it is currently written will have a devastating impact on Southern ag.’ [full statement] Even the typically gentle Sen. Thad Cochran (R-Miss.) didn’t hide his irritation” [full statement],  the Politico article said.

Mr. Rogers pointed out that, “And not to be forgotten in these calculations too is [House Ag Committee Chairman Frank Lucas], with his own Southern ties in Oklahoma.

“‘I am disappointed by the Senate bill’s commodity title because it does not work for all of agriculture,’ he said in a statement later. ‘It fails to provide producers a viable safety net and instead locks in profit for a couple of commodities.

“‘I have made it clear that my chief priority is making certain that the commodity title is equitable and provides a safety net for all covered commodities and all regions of the country. A shallow loss program is not a safety net. It does not provide protection against price declines over multiple years and it does not work for all commodities.’”

Recall that earlier this week, Chairman Lucas pointed out that, “If you craft a program where one or two commodity groups benefit greatly and a couple of commodity groups limp along and most of the rest are left out, that’s unacceptable policy.”

Chairman Lucas also noted this week that, “A farm bill should not just be guaranteeing that the good times are the best, but a farm bill is about one or two or three or four bad years.”

House Ag Committee Ranking Member Collin Peterson (D., Minn.) noted in part yesterday that, “The strong, bipartisan tone set by the Senate mark-up makes me more confident that we can get past some of the recent partisanship and get a farm bill done this year. We know there will be differences between the House and Senate bills but I am confident that, if permitted, we can work through these differences in conference committee.”

At a House Subcommittee hearing yesterday morning, Rep. Peterson pointed out that, “And I frankly think that what we’re doing, what’s going on over in the Senate, is a mistake, because when these prices go down – and they will – there is not going to be any floor under this deal. And this happened in ’96 when we did Freedom to Farm, and it collapsed, and two years later we spent more money than we ever spent in history bailing people out.

“Well, I just want to tell people that this time, when these prices go down – and they will – there isn’t going to be any money to bail anybody out, so people better be careful about what they’re doing here. It’s all good to look at this when the prices are good and everybody’s been making a lot of money, but I’ve been around long enough to know that’s going to go the other way.”

Also at yesterday’s markup, Sen. Chambliss stated that, “But I think I know what the House is going to do, if they take a bill at all, its going to be more in the direction of what we have proposed to the Chair and the Ranking Member with respect to both peanuts and to rice.”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “The bill makes dramatic changes to the farm-program safety net. Direct payments, counter-cyclical payments and the Average Crop Revenue Election program all go away to be replaced with one program that has a $50,000 payment cap for an individual or a $100,000 cap for a married couple. The bill would have ‘the tightest payment limits ever,’ said Agriculture Committee Chairwoman Debbie Stabenow, D-Mich.”

Mr. Clayton explained that, “Stabenow said the bill, which had changed in the past few days, would save $24.7 billion over 10 years under the Congressional Budget Office cost estimate. Commodity programs showed $17.6 billion in cuts. That was before some changes made Thursday that added costs back into the bill, including re-inserting $800 million in mandatory spending for various renewable energy programs.

“Stabenow and committee ranking member Pat Roberts, R-Kan., said they are determined, however, to ensure at least $23 billion in savings.

“Speaking to reporters after the bill was approved, Stabenow and Roberts touted the reform nature of the bill. Not only were commodity programs overhauled, but the bill cuts more than $6 billion in conservation programs as well. Areas such as conservation and rural development would see significant program consolidation.”

The DTN article added that, “The bill also lowered the adjusted gross income eligibility to $750,000. Moreover, the bill makes major changes to language involving ‘actively engaged’ to further restrict who is eligible for payments.”

Reuters writer Charles Abbott indicated yesterday that, “An insurance-like program would compensate grain and soybean growers when revenue from a crop was 11-21 percent below the five-year average with a maximum payment of $50,000. The federally subsidized crop insurance system would cover deeper losses. Cotton growers would use a separate, but similar, program.”

Daniel Looker reported yesterday at Agriculture.com that, “The committee voted to make several changes to the bill Thursday, with the biggest being the addition of $800 million in mandatory spending for the energy title, which promotes the development of new crops for biofuels and has an energy efficiency assistance program that Agriculture Secretary Tom Vilsack has also used to support installation of blender pumps that dispense different mixes of ethanol and gasoline.

“The amendment, offered by Senator Kent Conrad (D-ND) would have taken about half of the funds for the energy title from a program for cotton gins, but Conrad agreed to an amendment from Senator Saxby Chambliss (R-GA) take all of the $800 million from the extra savings in the farm bill in the CBO score.”

Bloomberg writer Alan Bjerga pointed out yesterday that, “The bill also would extend the U.S. sugar-support program, which includes domestic marketing quotas and import restrictions.”

A news release yesterday from the Senate Agriculture Committee provided additional details contained in the Senate passed measure.

Additional Lawmaker Reaction to the Senate Legislation

* A news release yesterday from Sen. Conrad noted that, “During debate today, the Ag Committee accepted several amendments offered by Senator Conrad to improve the Farm Bill, including elements of a proposal he developed with Senators John Hoeven (R-ND) [related statement] and Max Baucus (D-MT) to strengthen the farm safety net program while reducing complexity and duplication in farm programs.

“Their proposal for a shallow loss revenue program addresses two main shortcomings of the federal crop insurance: program deductibles that greatly exceed the operating margins for a crop and the lack of adequate coverage during multi-year price declines. Additionally, the shallow loss program will reduce complexity and duplication in farm programs while saving taxpayer dollars.

“Under the proposal, producers will have the opportunity to choose between county level coverage or farm level coverage.”

* Sen. Mike Johanns (R., Neb.)- “Moving away from direct payments while bolstering the crop insurance program is good for our farmers and ranchers and good for American agriculture.”

* Sen. Chuck Grassley (R., Iowa)- “The bill also includes a provision to begin closing the loopholes that allow people who aren’t involved in farming to collect farm payments.  The provision prevents non-farmers from being able to use the management loophole in current law.”

* Sen. Richard Lugar (R., Ind.)- “Vowed to continue to seek the elimination of the outdated, job-killing sugar program.”

* Sen. Kirsten Gillibrand (D., N.Y.)- “And I do appreciate the investments you’ve made in terms of trying to help long-term dairy reform.”

Commodity Group and Organizational Reaction

* National Milk Producers Federation (NMPF)- “The Senate legislation includes a new, voluntary margin protection program, endorsed by NMPF, to better safeguard farmers against disastrously low margins, such as those generated by the low milk prices and high feed costs that cost dairy farmers $20 billion in net worth between 2007 and 2009.  ‘The Senate has taken a huge step in the right direction by including the dairy reforms modeled after NMPF’s Foundation for the Future program,’ said Jerry Kozak, President and CEO of NMPF.”

* Tom Zacharias, president, National Crop Insurance Services- “The bill passed out of the Committee today responded to calls from growers of most major crops by keeping crop insurance strong and ensuring that it will remain at the forefront of modern-day farm policy. We appreciate the Committee’s efforts to improve the crop insurance title and limit the adverse impacts of other programs on crop insurance. The fact that farmers are in the fields planting following a difficult 2011 growing season shows how well the current crop insurance system is working.”

* American Soybean Association (ASA)- “ASA is very pleased with the Senate Agriculture Committee’s work today, and throughout the Farm Bill process. As passed by the Committee, this legislation will serve the needs not only of soybean farmers, but of the entire farming community.”

* National Cotton Council (NCC) Chairman Chuck Coley – “The U.S. cotton industry is grateful to Chairwoman Stabenow (D-MI) and Senator Roberts (R-KS) – along with the solid support of Senators Chambliss (R-GA), Cochran (R-MS) and Boozman (R-AR) — for including the NCC’s Stacked Income Protection Plan (STAX) and modified marketing assistance loan program, both designed to meet budget challenges and the resolving of the Brazil WTO case.”

* Bob Stallman, President, American Farm Bureau Federation- “We will continue to seek improvements in several areas as this bill moves forward, particularly in how to provide more equity among commodities, and ways to better address deep, catastrophic losses. Now that this first phase has been completed, we will continue to assist Senators in any way we can to assemble a final Senate bill that addresses the challenges and risks faced by today’s farm families.”

* National Farmers Union (NFU) President Roger Johnson- “NFU welcomes the adjustments made to the new Agriculture Risk Coverage (ARC) program, which will allow farmers to choose a coverage plan that allows them to best manage their risk. Additionally, the temporary extension of the Supplemental Revenue Assistance (SURE) program to cover disaster-level losses suffered during the 2012 crop year and of the Milk Income Loss Contract Program (MILC) will provide needed protection during the transition period as the next farm bill is implemented.”

* American Sugar Alliance- ““The Committee overwhelmingly agreed that America’s popular no-cost sugar policy should be continued.  This is great news for the 142,000 Americans employed by sugar; great news for the country’s food security; and great news for taxpayers who will continue to receive an ample and affordable sugar supply without government cost.”

* National Sustainable Agriculture Coalition (NSAC)- “The Committee also enacted a nationwide ‘Sodsaver’ provision to protect native grass and prairie lands.  The provision reduces crop insurance premium subsidies and tightens program rules in a manner that will reduce the taxpayer-funded incentive to destroy important grassland resources.

“‘By agreeing to a nationwide ‘Sodsaver’ provision championed by Senators Thune (R-SD), Brown (D-OH), and Johanns (R-NE), the Senate Agriculture Committee made sure that taxpayer dollars are not subsidizing the destruction of native grass and prairie lands,’ said [Ferd Hoefner, Policy Director for the NSAC]. ‘These lands are diminishing at a rapid rate and protecting them provides ranching opportunities and economic, environmental, and recreational benefits to rural communities.’”

* Craig Cox, Senior Vice President for Agriculture and Natural Resources of the Environmental Working Group- “We hope the full Senate will take additional steps to ensure that farmers who receive these insurance subsidies commit to protect soil health and wetlands.”

* National Council of Farmer Cooperatives President Chuck Conner- “A key element of this for NCFC and our dairy co-op members is the package of dairy reforms contained in the draft legislation that is supported by dairy producers of all sizes and in all regions of the country. NCFC strenuously opposes any amendment, including the one offered by Senator Michael Bennett (D-Colo.) that would weaken the dairy provisions and which, if accepted, would cost dairy farmers more than $400 million in additional expenses.”

Farm Bill: House Ag Committee Subcommittee Hearings- Dairy, and Conservation

A news release yesterday from the House Ag Committee stated that, “Today, Rep. Thomas J. Rooney, Chairman of the House Agriculture Committee’s Subcommittee on Livestock, Dairy, and Poultry held a hearing on reforming dairy programs in the 2012 Farm Bill.  This is the third of eight hearings which are gathering agricultural leaders in Washington to share their perspective on farm policy.”

To listen to remarks on dairy reform issues at yesterday’s hearing, focusing particularly on ideas associated with the Dairy Security Act, from Committee Ranking Member Collin Peterson, just click here (MP3- 4:12).

A separate release yesterday from Representative Glenn ‘GT’ Thompson (R., Pa.) stated that, “[Rep. Thompson], Chairman of the House Agriculture Committee’s Subcommittee on Conservation, Energy, and Forestry, today held a hearing to learn from members of the agriculture community on how conservation programs should be structured and revised in the 2012 Farm Bill. This is the second of eight hearings at the Subcommittee level to gather input from national agricultural leaders and stakeholders before the House Agriculture Committee begins drafting the 2012 Farm Bill reauthorization.”

Some remarks from Ranking Member Peterson at this hearing are available in this unofficial FarmPolicy.com transcript.

In part, Rep. Peterson noted that, “And so I drive around my district and I have never seen anything like what’s going on right now. The land that’s being broke up, land that should not be farmed is being broke up. All of the tree lines are being taken out. All of the old homesteads are being bulldozed down. If you don’t think things are changing, you know, it’s… And I think this is going on all over the country.

“So I would argue that…somebody in the testimony said we should freeze rental rates. I think we should raise the rental rates. I think they’re out of whack from what reality is today, and the rental rates in CRP [Conservation Reserve Program] are about 25% of what the rent is for farmland. Now, the Secretary moved to raise the rental rates on continuous, which is fine, but the pressure is on the big tract CRP.”

Rep. Peterson added that, “We have land being broken up that’s never been broken. They’re dragging up rocks bigger than a house out of these things. This is land that should not be farmed. And we’re allowing the crop insurance system to provide a backstop for these people to do this. They know they can break up this land and the crop insurance is going to cover them even if they don’t get a crop, and most of them know they aren’t going to get a crop.

“So I hope that we can focus on some of these real issues and not get off on this ideology about, well, we’ve got to take every CRP acre in the country out so we can have cheap corn. That is a shortsighted policy. And I understand that people liked it when we had two dollar corn. It made it easy for the livestock industry.”

And on the issue of linking crop insurance and conservation compliance, Rep. Peterson stated that, “Which leads me to the next issue that I probably shouldn’t even wade into, but this whole issue of the tying conservation compliance to crop insurance. I’ve had discussions about this, and I don’t see how this can work without doing serious damage to the crop insurance system. We made a conscious decision in ’96 to separate these, and I, for the life of me, cannot see how you’re going to be able to comply with this or make it work without damaging the system. Nobody’s been able to explain that to me.”

Also yesterday in the House, a news release from Rep. Kristi Noem (R., S.D.) stated that, “[Rep. Noem] today introduced legislation to provide a dependable safety net for livestock owners in South Dakota and across the United States. The Livestock Disaster Protection Act would extend the Livestock Indemnity Program (LIP), the Livestock Forage Program (LFP) and the Emergency Livestock Assistance Program (ELAP) authorized in the 2008 Farm Bill for five years as well as provide coverage for the current fiscal year, as the programs expired in the Fall of last year… Rep. Noem will work with House Agriculture Committee Chairman Lucas to include the Livestock Disaster Protection Act in the new Farm Bill, which is currently being drafted.”

Appropriations

A news release yesterday from the Senate Appropriations Committee stated that, “The Senate Committee on Appropriations today approved the FY 2013 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies; and Energy and Water Development Appropriations bills by a vote of 28-1.  Both measures will now be reported to the full Senate for its consideration.”

A summary of the Agriculture bill is available here.

Senator Roy Blunt’s (R., Mo.) opening statement from yesterday’s markup is available here.

Regulations

Rachel Leven reported yesterday at The Hill Online that, “The Labor Department withdrew a proposed rule Thursday that would have limited the work that children can perform on farms.”

Keith Good