Sen. Shaheen noted that the reforms contained in the amendment would not eliminate the safety net for sugar producers.

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The House is expected to take up the Farm Bill in June, policy observers have noted that nutrition funding, which is the largest component of Farm Bill spending, will be contentious issue in the floor debate.

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A large number of amendments have been filed to the 2013 Farm Bill (S.954).  Yesterday, senators discussed the broad based legislation for a second day on the Senate floor, while considering four of the amendments to the measure.

Two of the amendments passed easily.  An update yesterday afternoon at the Senate Democrats Online discussed the two amendments, one that was proposed by Sen. Maria Cantwell (D., Wash.) (amendment #919 regarding Indian tribes – land and soil conservation programs) and the other by Sen. Jeff Sessions (R., Ala.) (amendment #945, as modified eligibility criteria for agriculture irrigation assistance).

And Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “The Senate began amendment work Tuesday on a five-year farm bill, passing the first amendment with broad bipartisan support.

“The Senate voted 87-8 to accept an amendment introduced by Sen. Maria Cantwell (D-Wash.). Her amendment would allow Indian tribes to participate in soil and water conservation programs…[A]fter the vote on Cantwell’s amendment, the Senate also approved Sen. Jeff Sessions’ (R-Ala.) amendment, which aims to clarify the eligibility criteria for those who qualify for agriculture irrigation assistance. His amendment was passed by voice vote.”

In contrast, two separate amendments that were related to the politically controversial nutrition program, which is the largest component of Farm Bill spending, both failed yesterday.

As AP writer Mary Clare Jalonick explained yesterday, “With [Sen. Ag. Comm. Chairwoman Debbie Stabenow (D., Mich.)] objecting to both amendments, the chamber rejected, 58-40, a Republican effort to expand the cuts and also rejected, 70-26, a Democratic effort to eliminate them. The amendment by Sen. Pat Roberts, R-Kan. [video replay of presentation] , would have expanded the cuts to $3.5 billion a year; the amendment by Sen. Kristen Gillibrand, D-N.Y. [video replay of a portion of her presentation], would have eliminated the cuts.”

Ms. Jalonick noted yesterday that in the end, “The Senate voted Tuesday to keep a $400 million annual cut — or roughly a half of 1 percent — to the food stamp program as part of a major five-year farm bill.

“Food stamps now cost almost $80 billion annually and are used by 1 in 7 Americans.”

“Resolving the differences on food aid, now called the Supplemental Nutrition Assistance Program, or SNAP, between the two chambers will be key to passage of the massive five-year farm bill that lawmakers are attempting to push through for the third year in a row. The far-reaching bill costs almost $100 billion annually and would set policy for farm subsidies, rural programs and the food aid.

“The House version of the farm bill would cut $2 billion a year, or a little more than 3 percent, from the food aid program, which has more than doubled in cost since 2008.”

With respect to cuts to SNAP in the House Ag. Comm. version of the bill, Rep. Rick Crawford (R., Ark.) noted yesterday on the AgriTalk radio program with Mike Adams that, “You really have to look at the bipartisan [House Ag. Comm.] vote of 36-10 that really bears out what we think is hitting the sweet spot here with $20.5 billion in reforms- and really done in a many manner that is very responsible and doesn’t take- or threaten a single calorie to folks who need it” (related AgriTalk audio here (MP3- 2:46)).

A news release yesterday from Sen. Roberts noted that, “[Sen. Roberts] today offered an amendment (948) to the 2013 Farm Bill to save taxpayers nearly $31 billion and restore integrity to [SNAP], more commonly known as food stamps, while preserving food benefits for those in need.

“Before the vote, Roberts said in part, ‘This amendment would help rein in the largest expenditure within Department of Agriculture’s budget – the Supplemental Nutrition Assistance Program…I am not proposing a dramatic change in the policy of nutrition programs, such as block granting programs to states would represent. Instead this amendment enforces principles of good government and returns SNAP spending to much more responsible levels.’”

Daniel Looker reported yesterday at Agriculture.com that, “Roberts said the Gillibrand amendment was also aimed at crop insurance. It would have lowered the return on investment for crop insurers to 12% a year from the current 14% allowed by USDA. The Obama Admidministration has also proposed that change, which would save about $1.2 billion over a decade.

“Last week the Administration repeated its call for more cuts to crop insurance spending in the farm bill, which were laid out when it released its proposed 2014 budget in April.

“The Senate’s farm bill expands crop insurance spending, which is likely to be a target of more amendments.”

Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) urged senators to vote against both amendments. She said that the committee’s $4 billion cuts addressed only ‘waste, fraud and abuse’ within the food stamp program.

“‘Every family that currently qualifies for nutrition assistance in this country continues to get that assistance,’ Stabenow said of the food stamp changes in the farm bill. ‘We do make sure there is integrity in the programs.’

“Stabenow also pointed out that the $4 billion in saving from food stamp reductions offset a much-needed increase in the crop insurance protections for farmers.”

In a column this week at The Hill Online, Chairwoman Stabenow noted that, “The bill also saves money by tightening rules to prevent fraud and misuse in nutrition programs. It stops lottery winners from continuing to receive assistance, cracks down on retailers engaged in benefit trafficking and prevents states from allowing some individuals to claim expenses they do not have in order to get additional benefits above what their expenses allow. By ending program misuse we can save money without cutting standard benefits or hurting parents who need temporary help feeding their children during a financial crisis.”

Sen. Gillibrand tweeted yesterday that, “V disappointed my amendment to restore $4.1b in funding to ‪#SNAP food stamp program in ‪#farmbill failed on the Senate floor today.”

Meanwhile, Chris Clayton and Jerrry Hagstrom reported yesterday at DTN (link requires subscription) that, “Despite his own push on target prices, [Iowa GOP Charles Grassley] said he thinks the farm bill will change little during the Senate floor debate. ‘Right now, it looks like there may not be any change, even though I would be part of trying to make some change,’ he said. ‘I think this bill will be pretty much intact when it passes the Senate.’”

The DTN article added that, “One area that could change in the bill involves crop-insurance premium subsidies. Farm and conservation groups have come together for a proposal supported by the Agriculture Committee to link conservation compliance to eligibility for crop-insurance premium subsidies. In return, farm groups want to ensure there is income means testing for those crop-insurance premium subsidies. Still, Sens. Dick Durbin, D-Ill., and Tom Coburn, R-Okla., have reintroduced their amendment to limit the amount of premium subsidy for any person or legal entity with an average adjusted gross income of more than $750,000. That same proposal got 66 votes last year.”

Also, Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “North Dakota Sens. John Hoeven (R) and Heidi Heitkamp (D) warned their colleagues not to support a farm bill amendment that would change subsidies for sugar farmers.

“‘This [sugar] program is critical to the compromise of the farm bill itself,’ Heitkamp said on the Senate floor Tuesday. ‘Let the bill stay intact’” [video replay of floor remarks here].

“Sens. Jeanne Shaheen (D-N.H.), Pat Toomey (R-Pa.) and Mark Kirk (R-Ill.) introduced an amendment on Monday that would reform subsidies for sugar farmers,” the Hill item said; and added that, “North Dakota produces a large amount of sugar beets. Hoeven said there would be ‘extreme volatility in the global sugar market’ if the United States ended its sugar subsidy program, which is included in S. 954.”

An update at the Senate Democrats webpage noted that, “The Senate stands in adjournment until 9:30am on Wednesday, May 22, 2013.  Following any Leader remarks, the Senate will be in morning business for one hour with the Republicans controlling the first half and the Majority controlling the final half.  Following morning business, the Senate will resume consideration of S.954, the Farm bill. We will continue to work through amendments to the Farm bill during Wednesday’s session of the Senate.”

Also yesterday, in a more detailed look at crop insurance issues, Marcia Zarley Taylor noted in an update yesterday at the DTN Minding Ag’s Business Blog (“Truth Serum for Crop Insurance Costs”) that, “Bottom line is that the government will spend about $11.8 billion subsidizing crop insurance for the 2012 crop [remember that 2012 was the equivalent of Hurricane Sandy for drought losses, probably the most expensive crop loss ever]. It’s a big deal but nothing like the $19 billion or $20 billion USDA spent on farmers in the height of the 1980s credit crisis, not taking even inflation into account.

“Since 2001, the average taxpayer cost of crop insurance has been about $5.3 billion to $5.5 billion/year, according to [Kansas State University Economist Art Barnaby]. While the Congressional Budget Office pegs future 10-year costs at $8.8 billion/year, they must make guesstimates of future crop sizes and prices so have a high margin of error.”

Agricultural Economy

A recent Economic Research Service (ERS- USDA) update by Mark Jekanowski and Gary Vocke (“Crop Outlook Reflects Near-Term Prices and Longer Term Market Trends”) indicated that, “USDA released its initial scenarios on the U.S. crop outlook for 2013/14 in February during the Agricultural Outlook Forum (www.usda.gov/oce/forum/). On March 28, USDA’s National Agricultural Statistics Service (NASS) released its Prospective Plantings report, providing a first glimpse of acreage decisions for more than 20 different commodities based on a nationwide survey of farmers. These initial indications suggest a continuation of recent trends toward expansion of corn and soybean acres at the expense of rice and cotton. A number of world market developments lie behind this shift, including the expansion of U.S. ethanol production, rising demand in China for U.S soybeans, and new competition for U.S. wheat producers from Black Sea wheat exporters. Actual plantings may diverge from producer intentions, but these broader world market developments are expected to continue to shape planting decisions of U.S. farmers.”

Meanwhile, Gregory Meyer reported yesterday at The Financial Times Online that, “From 1900-19 US farmland gained 70 per cent. Then the farming economy was hit by a rise in interest rates and a slowdown in food imports after the first world war. Land prices collapsed back to turn-of-the-century levels by 1940.

“Over the past decade, US farmland prices have doubled as the Federal Reserve has held interest rates at historic lows and demand has stayed strong. The big question is what will happen when monetary policy is tightened and the supply of grain grows.”

The FT article noted that, “First, most US crop prices are falling – CBOT corn delivered after the harvest is about $5 a bushel, the lowest in almost a year, as US, Brazilian and Argentine farmers eye record crops.

“Second, interest rates have nowhere to go but upwards. ‘When we get a combination of those two things – declining grain prices and rising interest rates – we’re going to see an adjustment in farmland values in the Midwest,’ says Stephen Gabriel, chief economist at the Farm Credit Administration, which oversees government-sponsored agricultural lenders. ‘A 20 per cent decline would not be out of the question.’”

Mr. Meyer added that, “The FCS [U.S. Farm Credit System] says members have in some instances taken steps to reduce risks from farmland loans, including limiting loan sizes to 65 per cent of land values. Mr Gabriel says the system is ‘well positioned to withstand’ a price correction…[U]nlike the last bust of the 1980s, farmers’ debts are also low relative to their assets. Fertile land is not a crowded trade. Managers say they believe that less than 1 per cent is held by institutional investors, with cash-rich farmers bidding for the rest. In some states such as Iowa, institutional ownership is banned.”

University of Illinois Agricultural Economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“Farmland Prices and Interest Rates”) that, “Farmland prices continue to increase during the first part of 2013. However, as indicated in this post, farmland prices appear to be in line with current agricultural returns and current levels of interest rates. Currently, interest rates are low, leading to support for high and increasing farmland prices. A rising interest rate environment could lead to downward pressure being placed on farmland prices. In this post, historical interest rates are examined to place the current interest rate environment into context.”

And Owen Fletcher reported yesterday at The Wall Street Journal Online that, “U.S. corn futures fell 1.5% Tuesday, to a four-week low, after a rush of corn plantings eased concerns about this year’s output.

“Corn futures for July delivery at the Chicago Board of Trade settled down 9 1/2 cents, or 1.5%, at $6.40 a bushel, the lowest close for the front-month contract since April 24.”

In other news, Ian Berry reported in today’s Wall Street Journal that, “Insecticide sales are surging after years of decline, as American farmers plant more corn and a genetic modification designed to protect the crop from pests has started to lose its effectiveness.

“The sales are a boon for big pesticide makers, such as American Vanguard Corp. and Syngenta AG. But it has sparked fresh concerns among environmental groups and some scientists that one of the most widely touted benefits of genetically modified crops—that they reduce the need for chemical pest control—is unraveling. At the same time, the resurgence of insecticides could expose both farmers and beneficial insects to potential harm.”

Immigration

Ashley Parker and Julia Preston reported in today’s New York Times that, “The Senate Judiciary Committee on Tuesday approved a broad overhaul of the nation’s immigration laws on a bipartisan vote, sending the most significant immigration policy changes in decades to the full Senate, where the debate is expected to begin next month.”

Commodity Futures Trading Commission- House Agriculture Committee Hearing

Katie Micik reported yesterday at DTN (link requires subscription) that, “Two provisions of CFTC’s proposed rules to enhance customer protections came under fire in a House Agriculture Committee hearing on the regulator’s reauthorization on Tuesday.

“Futures industry leaders said the proposals on residual interest and capital charges would substantially increase the cost of hedging, perhaps requiring customers to put up to $100 billion more in collateral, and would disproportionately affect small to mid-size futures commission merchants. They urged CFTC to complete a thorough cost-benefit analysis before implementing the rule.”

Ms. Micik noted that, “The residual interest provision requires futures commission merchants (FCMs) to maintain enough capital to cover any deficiency in customer collateral in real time, although the industry participants on the panel said no system currently exists to monitor the intra-day margin deficiencies.

“The proposed rule also shortens the timeframe for capital charges on underfunded collateral accounts to one day after a margin call is issued versus the current three-day grace period.”

Also, Scott Patterson and Jamila Trindle reported yesterday at The Wall Street Journal Online that, “An investigation into the Commodity Futures Trading Commission’s response to the collapse of MF Global Holdings Ltd. raises fresh questions about how prepared regulators were for the firm’s sudden implosion in October 2011 and cast Chairman Gary Gensler in a negative light.

“The report, by the CFTC’s inspector general, reveals new details about Mr. Gensler’s decision to recuse himself from the investigation and said Mr. Gensler used his private email thousands of times to communicate with staff members about MF Global. MF Global collapsed after huge bets it made on European bonds went south.”

Keith Good

Sen. Roberts noted that the House Ag. Comm. passed Farm Bill contained over $20 billion in cuts to the federal program while the Senate Ag. Comm. version of the bill included approximately $4 billion in cuts. His amendment, which he discussed in some detail, what have cut some aspects of the SNAP program by a total of $30 billion.

A related tweet from Sen. Roberts on this issue:

We must restore intergrity to the food stamp system RT @stewsays: The #Senate is voting on the @senpatroberts amendment to the farm bill.

— Pat Roberts (@SenPatRoberts) May 21, 2013

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The Farm Bill passed out of the Ag. Comm. included approximately $4 billion in cuts to the program. Sen. Gillibrand maintained that the program should not be subject to any cuts in the farm legislation.

A portion of her remarks are included below.

After the vote on her amendment, Sen. Gillibrand tweeted:

V disappointed my amendment to restore $4.1b in funding to #SNAP food stamp program in #farmbill failed on the Senate floor today.

— Kirsten Gillibrand (@SenGillibrand) May 21, 2013

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Yesterday afternoon, the Senate proceeded to consider the Farm Bill (S.954).

“Democrats and Republicans disagree on many things. So it’s really remarkable and encouraging to see how well Senators Stabenow and Senator Cochran — the chairman and ranking member of the Senate Agriculture Committee — worked together to bring the agriculture jobs bill to the floor. Their work has been exemplary — some would say old-fashioned — the way things used to be,” Senate Majority Leader Harry Reid (D., Nev.) said yesterday.

“In an effort to expedite the floor process, the committee even included many of the amendments that were adopted last year, when the Senate considered and passed a farm bill. I hope their cooperative spirit guides our work on this important legislation. American farmers are counting on us. So is the economy,” Leader Reid noted; while adding that, “But to keep American farms strong, Congress must pass a strong farm bill.”

In remarks on the Senate floor yesterday (video replay here) Senate Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) stated that, “Most of us don’t have to worry about how many days it’s been since the last rainfall.  Or whether or not it’s going to freeze in May after the fruit trees are blooming.  Most of us don’t have to worry about decisions and weather conditions around the world and how it affects our livelihood.  And that’s why we have the Farm Bill.  We have a Farm Bill because farmers are in the riskiest business in the world.”

Chairwoman Stabenow noted that, “We are putting in caps on payments to farmers, we’re closing loopholes that allowed people who weren’t actually farming to receive payments, and we’re strengthening crop insurance so farmers can go to an agent and buy insurance to protect their crops from bad weather or market swings.”

Committee ranking member Thad Cochran (R., Miss.) also addressed the Senate chamber yesterday (video replay) and “focused on farm program reforms and savings in the legislation, as well as the importance of agriculture to the American economy,” according to a news release.

Meanwhile, Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “Sen. Sherrod Brown (D-Ohio) said the House farm bill cuts to food stamps, also called the Supplemental Nutrition Assistance Program (SNAP), could not pass in the Senate [video replay, full remarks].

“‘We shouldn’t be cutting federal nutrition programs,’ Brown said Monday. ‘[The Senate] bill cuts $4 billion from SNAP and that’s already $4 billion too much. … The House’s $20 billion in SNAP cuts won’t pass muster in the Senate and certainly won’t get my support.’”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Reid would like to clear the Senate calendar of legislation such as the farm bill with the plan to provide as much time as possible in June for the Senate to debate the comprehensive immigration reform bill now being debated in the Judiciary Committee.

“That said, it took all of about 30 minutes on the floor Monday before Sen. John McCain, R-Ariz., threw the first wrench into the farm-bill machinery. Introducing an amendment co-sponsored by Sen. Dianne Feinstein, D-Calif., McCain said the amendment would eliminate the crop-insurance premium subsidy for tobacco. McCain pointed to the $10 billion tobacco subsidy bailout to question why taxpayers now subsidize crop insurance for tobacco.”

The DTN article noted, “‘Well, it turns out Joe Camel’s nose has been under the tent all this time in the form of hidden crop-insurance subsidies,’ McCain said.

“McCain then questioned the justification for subsidizing crop insurance for tobacco considering the cost tobacco use creates for taxpayers in terms of more expensive health care [audio of a portion of Sen. McCain’s remarks available here (MP3- 2:37)].

David Rogers reported yesterday at Politico that, “Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) urged her colleagues to look at the crop insurance program with a ‘broad lens’ and not focus on one crop singled out for its impact on health care.

“The underlying farm bill, in fact, ends direct cash subsidies to producers — a costly system dating back to the mid-90’s. And while the government absorbs about 62 percent of the premium costs for crop insurance, the farmer never sees that subsidy. What he or she sees is the bill for the remaining 38 percent — not some cash handout like today.”

Mr. Rogers noted that, “‘We’ve moved to a system where we’re asking farmers to put some skin in the game,’ Stabenow said. ‘We’re saying you have to have crop insurance, you have to be part of paying for it.’

“‘As we move to that cornerstone, I would hope that we could keep that in place and not see efforts that will weaken it around the edges.’”

A news update yesterday from Sen. Jeanne Shaheen (D., N.H.) stated that, “[Sens. Shaheen], Pat Toomey (R-PA) and Mark Kirk (R-IL) today are announcing plans to implement commonsense reforms to the U.S. sugar program by amending the Senate Farm Bill with a bipartisan effort that will save consumers money.  The trio will introduce the Sugar Reform Act as an amendment to roll back unnecessary provisions that unfairly benefit wealthy sugar famers at the expense of consumers.  This legislation, introduced earlier this year as a stand-alone bill with bipartisan, bicameral support, will reform domestic supply restrictions, lower price support levels, and ensure adequate sugar supplies at reasonable prices.”

And a news update yesterday from Sen. Jeff Merkley (D., Ore.) stated that, “Today, Oregon’s Senator Jeff Merkley announced that he would put forward an amendment to the Senate farm bill that would repeal a controversial provision of the recently-passed continuing resolution known as the ‘Monsanto Protection Act.’

“‘The Monsanto Protection Act is an outrageous example of a special interest loophole,’ said Merkley. ‘This provision nullifies the actions of a court that is enforcing the law to protect farmers, the environment and public health. That is unacceptable.’

“To avoid public scrutiny, the ‘Monsanto Protection Act’ was quietly and anonymously inserted into the continuing resolution passed this March to avert a government shutdown.”

Meanwhile, a news release yesterday from Sen. Heidi Heitkamp (D. N.D.) stated that, [Sen. Heitkamp] will spend the week pushing for agriculture policies that work for North Dakota as the full Senate debates a long-term Farm Bill. Heitkamp is committed to preserving the provisions she supported in the current bill, which passed the Senate Agriculture Committee in a strong bipartisan fashion last week.…‘This is a critically important week for the Farm Bill,’ said Heitkamp. ‘Now is the time for the Senate to step up and pass this major reform legislation, which will send a clear signal to the House of Representatives that this work must get done. While we can’t know for sure if the House will actually bring a Farm Bill to the floor for a vote this year, it is our duty in the Senate to show leadership and move this legislation forward.”

Speaking yesterday on the AgriTalk radio program with Mike Adams, Senior Director of Congressional Relations for the American Farm Bureau Federation, Mary Kay Thatcher, noted that, “I think the Senate floor, you’re likely to see some hits on crop insurance, probably quite a few.  I think you could have people come in and just try to repeal the ability to rely on permanent law to get this bill done every four years or five years.  And then you’re going to have just a whole host of conservation and nutrition type amendments.  And if you were a betting person, you’d bet at least 100 amendments will be filed on the bill.”

More specifically on the commodity title Ms. Thatcher noted that, “Well, certainly peanut and rice producers have wanted a reasonable target price throughout the debate on this bill.  They have, in general, felt like a revenue program or like the ARC program or the RLC over in the House, or a crop insurance program doesn’t work as well for them as it works for other commodities, and so they’ve pretty much said we don’t want to look at some of these shallow loss revenue programs.  We just want a target price that will be set, that target price will stay set for the life of the bill, we’ll worry about our own yields and revenue, etc., just give us the target price… [N]ow, the target prices on the Senate side, you would have to say, are less trade distorting than those on the House side, number one because they are lower, and number two because they’re tied to the old base acres rather than tied to current planted acres…”

With respect to the House side, Ms. Thatcher noted on yesterday’s AgriTalk program that, “I think the House floor is just going to be a nightmare.  We are going to have so many nutrition amendments, and we have so many fewer rural people on the House side.  I can’t really see a way that you make either the Senate or the House bill much improved from where they are now, and I can see lots of ways that they could get a lot worse.”

A floor schedule update posted recently at the Senate Democrats webpage indicated that, “The Senate stands in adjournment until 10:00am on Tuesday, May 21, 2013.  Following any Leader remarks, the Senate will be in morning business for one hour with the Majority controlling the first half and the Republicans controlling the final half.  Following morning business, the Senate will resume consideration of S.954, the Farm bill.”

With respect to executive branch perspective on the Farm Bill, Reuters writer Charles Abbott reported yesterday that, “The Senate should cut crop insurance subsidies, the most expensive part of the farm safety net, by $1 billion a year before it passes the new farm bill, the White House said on Monday.

The Reuters article noted that, “It [the executive branch proposal] would reduce the federal subsidy on premiums, now averaging 62 cents of each $1, by 3 percentage points on the most heavily subsidized and most popular policies, which shield crop revenue from low prices and poor yields.

“Premium subsidies would be cut by an additional 2 points on policies that base the revenue guarantee on market prices at harvest time rather than the price projected at planting time. One analyst said those policies were unduly expensive in the 2012 drought because commodity prices soared in the fall.

“The administration also would limit insurers to a 12 percent rate of return, down 2 points, and lower the annual payment, now $1.3 billion, to defray overhead costs.”

And in a statement yesterday, Sec. of Ag. Tom Vilsack noted in part that, “I also appreciate efforts by Chairman Lucas and Congressman Peterson to pass a bill out of the House Agriculture Committee. I am deeply concerned about portions of the House version of the bill, including significant cuts that would deny struggling families and their children access to food assistance. The Administration strongly supports the Supplemental Nutrition Assistance Program (SNAP), a cornerstone of our Nation’s food assistance safety net, which is why it was not subject to cuts in the President’s Budget.”

Agricultural Economy

Gregory Meyer reported yesterday at The Financial Times Online that, “US farmers driving floodlit tractors into the night have planted the most corn in any week on record in a sprint that could force prices lower on world agricultural commodity markets.

“US Department of Agriculture data suggested farmers seeded a record 42m acres (17m hectares) in the seven days to Sunday – an area larger than Austria, Ireland or South Korea. Seventy-one per cent of corn fields were planted in the main farm states by Sunday, up from 28 per cent the week before.”

The FT article added that, “Planted Illinois corn acreage jumped from 17 per cent to 74 per cent in the week, USDA reported.

“In Iowa, the biggest corn-growing state, the jump was from 15 per cent to 71 per cent.”

Mr. Meyer explained that, “Corn prices have remained high this spring as steady rain left fields too muddy to plant. This threatened to expose late-germinating corn stalks to severe midsummer heat.”

AP writer David Pitt reported yesterday that, “Clark Kelly plans to spend a lot of time on the links this spring. The Illinois farmer is plowing the Hend-Co-Hills Golf Course near tiny Biggsville into a cornfield.

“He’s not the only one turning over soil in unlikely places. Across the Midwest, farmers are planting crops on almost any scrap of available land to take advantage of consistently high corn and soybean prices. Growers are knocking down old barns, tearing out fencerows and digging up land that had once been preserved for wildlife.”

Also yesterday, a news release from the National Pork Producers Council (NPPC) stated that, “A coalition of U.S. food and agricultural organizations led by the [NPPC] is urging the Obama administration to press the European Union to negotiate a ‘comprehensive’ free trade agreement, including addressing sanitary-phytosanitary (SPS) barriers to trade.

“In a letter signed by 47 organizations sent today to U.S. Trade Representative nominee Mike Froman, the coalition expressed concern with a resolution approved last month by the European Parliament that in negotiating the Transatlantic Trade and Investment Partnership (TTIP) with the United States the EU should maintain the ‘precautionary principle’ for SPS issues. Precautionary measures are implemented based on the mere identification of potential risk or, worse, on public perception and political considerations rather than on science-based risk assessments. The World Trade Organization requires member countries’ SPS measures to be based on scientific risk assessments.”

Keith Good

In part, Sen. Brown noted that, “People who are going to receive federally subsidized crop insurance need to show they are meeting basic conservation requirements. Again, the days of subsidies without conditions and subsidies without responsibility are over. It is an example of what can happen when groups with different perspectives— the commodities farmers and the conservationists -come together to listen to each other. By relinking crop insurance subsidies with good environmental practices, this bill makes our farm safety net more defensible and protects our natural resources.”

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In part, Sen. Cochran noted that, “The committee has crafted reforms in the nutrition title to eliminate waste, fraud, and abuse in the Supplemental Nutrition Assistance Program. These are big challenges, and these challenges have been met with a recognition that there are people who need the support of programs such as this—schoolchildren who are attending school and getting the benefit of a reduced price and, in some cases, free meals at school. This has made major contributions to the quality of work and the degree and level of education that children are able to absorb and benefit from, and it is tied to these programs.”

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In part, Chairwoman Stabenow noted that, “That is why we have what we call the farm bill. We have a farm bill because farmers are in the riskiest business in the world. We saw that last year as our country was in the grip of the worst drought in generations. We saw this as ranchers had to cull their herds because they couldn’t get enough food or water for their cattle. We saw all across the country that farmers lost their crops in late spring freezes that wiped out cherry and apple crops in Michigan and other parts of the country. That is why the top goal of the agriculture reform bill is risk management. We are reforming farm programs, ending direct payments and other subsidies that have no relationship to risk and instead giving farmers market-based risk management tools. That is the hallmark of this farm bill.

“We want to make sure a farm that has been passed on for generations doesn’t face bankruptcy because of a drought or other events outside the farmer’s control. We also want to make sure that when there is a drought we are conserving our precious soil and water resources. When it comes to conservation, the farm bill is risk management for the whole country. Conservation programs in the farm bill make sure our soil doesn’t blow away and our waters aren’t polluted by runoff.

“In many parts of the country last year we had a drought that was worse than the Dust Bowl, but we didn’t have a dust bowl. We didn’t have out-of-control erosion, and that is because the farm bill did what it was supposed to do in conservation. Soil stayed on the ground. It is easy to take that for granted as well.”

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A floor schedule update posted recently at the Senate Democrats webpage indicated that, “The Senate stands in adjournment until 2:00pm on Monday, May 20, 2013.  Following any Leader remarks, the Senate will be in a period of morning business until 3:00pm.

“Following morning business, the Senate will proceed to the consideration of S.954, the Farm bill.”

And the Congressional Budget Office on Friday released its cost estimate of the Senate Ag Committee based legislation, which can be viewed here, “S. 954, Agriculture Reform and Risk Management Act of 2013.”

Also on Friday, The Mississippi Business Journal Blog reported that, “Politics, agriculture, and the economy were the hot topics on a rainy Delta morning as hundreds gathered for the 78th annual meeting of Delta Council, Friday, May 17, on the campus of Delta State University…[F]ollowing the business session of the annual meeting, United States Senator Thad Cochran introduced United States Senator from Michigan and Chairwoman of the Senate Committee on Agriculture, Forestry and Nutrition Debbie Stabenow as the featured speaker.”

Friday’s update noted that, “‘We passed a Farm Bill last year with a broad, bipartisan vote – in the middle of an election year, no less,’ said Stabenow. ‘Unfortunately, the House did not take up the Farm Bill on the floor and the 2008 Farm Bill expired on September 30. This was unacceptable to us, as was the partial extension that was added to the fiscal cliff deal on January 1st of this year, which left out many key programs, including disaster assistance. So when Senator Cochran and I sat down at the beginning of this year, I told him I wanted to build on our successes from last year and give America’s farmers the Farm Bill they deserve. We had made great progress, and we knew that, together, we could make even more. Together, we worked to craft another strong Farm Bill that gives farmers the ability to manage their risk; that streamlines programs and cuts red tape for farmers; and that recognizes the diversity of agriculture from the cotton fields in the Mississippi Delta to the cherry orchards of Traverse City in northern Michigan.’

“Stabenow thanked Senator Cochran for his leadership, noting that writing a Farm Bill that works for every region of the country can be challenging. ‘I’m glad Senator Cochran joined the leadership team and helped build the Southern connection we needed to make sure this bill works for everyone – that cotton, rice and peanut farmers receive the support they need to succeed.’

“The Senator cited the changes in rice farming over the past 20 years as an example. ‘The high costs of rice farming have deterred entry for new farmers, the number of rice farms has dropped by almost half, and the average rice farm size has more than doubled between 1992 and 2007. We took this and other aspects of rice and peanut farming into consideration when creating a new price program. Under the Adverse Market Protection program, which would operate very similarly to the existing counter-cyclical program, payments are made on historic base acres and decoupled from production. This way, farmers would still have the freedom to decide what and where to plant,’ she said. ‘For most crops, payments would only be made to farmers when prices drop below 55 percent of their historic rolling average. For rice and peanuts, however, there will be a fixed target price, and producers would have the opportunity to update their historic payment yields and acres. We also have included the crop insurance program designed specifically for cotton that we drafted in the 2012 Farm Bill that takes into account the unique challenges of cotton growers.’”

Pete Kasperowicz reported on Friday at The Hill’s Floor Action Blog that, “The main business of the Senate next week is the $955 billion farm bill. Senate leaders aren’t expecting to finish work on the bill next week, but it will start the process of passing the nation’s next five-year agricultural plan.

“The bill would cut $23 billion from current spending levels over 10 years, but some Republicans have noted with a similar bill last year, that this cut is from post-stimulus levels. It also cuts $4 billion in food stamps, which has led to some Democratic opposition.

“Still, the Senate seems likely to pass a version of the bill passed the Senate last year in a 64-35 vote.”

With respect to Farm Bill perspective from the House, DTN Ag Policy Editor Chris Clayton reported on Friday that, “The House Agriculture Committee will face floor fights on a number of issues from both parties when the farm bill is taken up, but should be able to hold together its version of the bill for eventual negotiations with the Senate later this summer, ranking member Collin Peterson said Friday.

“Peterson, a Democrat from Minnesota, also expressed confidence the farm bill could be done before the August recess if both versions are able to get past their respective floor debates in the coming weeks. Peterson said his conversations with House Agriculture Committee Chairman Frank Lucas, R-Okla., suggest the legislation will be debated in mid-June. Floor debate begins on the Senate bill Monday afternoon.

“‘Having said that, we have challenges facing us when we get to the floor,’ Peterson said.”

Mr. Clayton pointed out that, “Peterson noted 13 of 21 Democrats on the committee voted for the bill, ‘which was better than I thought.’ Peterson said it showed there is ability to get Democratic votes despite $20.5 billion in cuts to the Supplemental Nutrition Assistance Program.

“In the coming weeks, Peterson said he, Lucas and others will be talking with House leaders about how to manage the floor debate. Peterson said without restrictions on amendments, the floor debate will become too unwieldy to manage.

“Peterson still sees significant battles on the floor, starting with nutrition programs and cuts.”

In the telenews conference with reporters on Friday, Rep. Peterson stated: “That’s a tricky thing because you have some Democrats that have taken a position, which I think is not defensible, that SNAP can’t be cut one penny.  I think that’s a ridiculous position.  You’ve got people on the other side that want $130 billion of cuts, and that’s ridiculous.”

Noting that without administration opposition to the Farm Bill, and no veto override vote to plan for, Rep. Peterson stated that only 218 votes were needed in the House to pass the measure; he added that, “We don’t expect…you know, [Speaker] Boehner is not going to be for this bill.  [Majority Leader] Cantor, I would be surprised if he is.  But I think Kevin McCarthy probably will be for the bill, who’s the whip, so I expect, at the end of the day, there will be some help on their side, and there will help on our side.  Leader Pelosi is behind us.  I’ve been talking to her.  She will be supporting what we’re doing.”

On the crop insurance issue, Rep. Peterson noted that, “I’ve been looking into the flood insurance situation.  Flood insurance is being subsidized roughly the same amount as crop insurance, so if we’re going to have this discussion and they want to reduce government subsidy in crop insurance, then I would argue we ought to be looking at flood insurance as well, because I think there’s more reason for the government to be behind crop insurance than there is flood insurance, because crop insurance supports the food production system, which is a national security issue, and has much bigger implications than whether you’re going to build a mansion on the Outer Banks that gets wiped out every other year and why the government should subsidize that.  So that’s where, when we get to this discussion, that’s where I think it should be focused.”

A reporter asked Rep. Peterson on Friday: “Congressman, the conservation compliance tie-in with crop insurance in the Senate, on the House Ag Committee bill, how do you see that issue coming together as we get to the floor and ultimately into conference?

“Rep. Peterson:  Well, that will be a fight.  The chairman feels strongly about this.  I supported him.  So the position of the committee is to not tie the two together.  There will be an amendment on this on the floor.  This will be a tough fight.  We may not win.  But we’ll deal with what comes out of the situation.”

Beyond crop insurance issues, Rep. Peterson pointed out that, “We’re going to have challenges in certain areas on the floor.  The dairy issue will be a contentious issue.  There will be a vote on sugar, which will also be contentious.  There will be other issues in other areas, so it’s not going to be easy…And it looks like the Senate is on track to get their bill moved.  And at the end of the day, this bill is going to be written in conference, and we just need to figure out how to get this to conference.  That’s the trick.”

Eric Wasson reported on Friday at The Hill’s On the Money Blog that, “Pelosi’s office clarified Friday that the minority leader supports moving forward on a farm bill, but has not weighed in on the substance of the Agriculture Committee bill.

“‘As Ranking Member Peterson stated today, Leader Pelosi is supportive of getting a five year farm bill reauthorized. She is hopeful that the Republican leadership will bring the committee-passed bill to the floor under an open rule so that Members will have an opportunity to weigh in.  Sixteen million jobs are on the line, including 800,000 jobs in California,’ spokesman Drew Hammill said.”

Ted Booker reported on Friday at the Watertown Daily Times (N.Y.) Online that, “The new margin insurance program [for dairy producers] is expected to be hotly contested in the House, even though it is included in versions of the farm bill passed by committee, according to U.S. Rep. William L. Owens, D-Plattsburgh [N.Y.] The free, voluntary insurance program is designed to help dairy farmers combat low milk prices and high feed costs. It would reimburse farmers when the difference between their costs and milk prices surpasses a certain threshold.”

The article noted that, “Because the Dairy Freedom Act [an alternative dairy proposal] is supported by House Speaker John A. Boehner, Mr. Owens said, it has a strong chance of being approved on the floor. If that happens, he said, the fight over that policy would then be waged between the House and Senate before a final bill is sent to the president.”

To listen to remarks on the dairy issue by Rep. Peterson from Wednesday’s Ag Committee markup of the Farm Bill, just click here (MP3- 6:00).

In executive branch perspective on Farm Bill issues, on Thursday’s AgriTalk radio program with Mike Adams, Sec. of Agriculture Tom Vilsack noted that, “I think frankly, at the end of the day, it isn’t going to be target prices that is the most difficult hurdle to cross here.  I think it’s going to be the dairy program that absolutely needs to be done.  We have too much volatility in dairy prices.  It’s not stable.  I think Rep. Peterson has taken a good shot at trying to resolve the volatility issue.  I think he’s got some challenges with the speaker of the house on the supply side piece of it.

“But at the end of the day, he’s right that you can’t have a program that just opens up the checkbook.  There has to be some constraint and restraint on that.  But at the same time you need a system that provides better assistance and help for dairy producers when prices are low or feed costs are high.”

Also last week, Bloomberg writers Eric Martin and Alan Bjerga reported that, “U.S. House and Senate agriculture committee proposals for a new farm law represent a ‘good faith’ effort by lawmakers to resolve a trade dispute over cotton with Brazil, U.S. Agriculture Secretary Tom Vilsack said.

“The proposals passed this week may modify farm subsidies enough to satisfy the South American nation, Vilsack said today in an interview in Mexico City. The U.S. competes with Brazil in exporting grain, soybeans, beef and cotton.

“‘We would not intentionally pass legislation with the knowledge or awareness that it was going to invite a series of challenges,’ Vilsack said after a meeting with Enrique Martinez, Mexico’s agriculture minister. Farm-bill subsidy plans, which emphasize crop insurance over price-pegged supports, represent ‘a real good-faith effort to resolve that issue with Brazil and to get it finished once and for all,’ Vilsack said.”

Also on the Farm Bill, David Rogers reported on Friday that, “Pigs, chickens, the U.S. Constitution — and a dose of olive oil — all got thrown together in a House farm bill markup that took a remarkable turn from the barnyard to the judicial bench late Wednesday night.

“‘I’m one of these country lawyers, which is no lawyer at all,’ Rep. Jim Costa (D-Calif.) was candid to say at the outset. But that didn’t stop him or most of the House Agriculture Committee from plunging into an hour-long debate on the constitutional fine points of the interstate commerce clause and state laws excluding eggs or meat that don’t meet local production standards.”

(Note that at a FarmPolicy.com transcript of the full debate from Wednesday on this issue is available here).

Mr. Rogers added that, “Before the dust settled, the committee had adopted a far-reaching amendment that infuriated animal welfare groups, delighted the pork and beef lobbies and broke more than a few eggs. Where it goes next in the context of the larger farm bill debate, no one truly knows. But scores of state laws could be impacted and it surely reaches well beyond its initial target: sunny California.

“Most simply the language would bar any state from excluding the marketing of ‘agricultural products’ if they have been grown in a manner ‘pursuant’ to federal law and the laws of the state or locality from which they come.

“Proponents argue that this is needed to allow the free flow of farm commerce across state lines. But for animal welfare groups, it’s a huge Catch 22, since the same committee continues to resist any new federal standards for raising livestock — preferring to leave the issue to farmers and individual states.”

And Ron Nixon reported in Saturday’s New York Times that, “In response to the Obama administration’s plans to overhaul the nation’s international food aid program, which provides food to disaster-stricken regions, Congress this week began laying the groundwork for its own changes.

“Farm bills passed this week by the House and Senate Agriculture Committees do not go as far as the Obama administration’s proposal, which would move the $1.4 billion program from the budget of the Agriculture Department to the foreign affairs budget in an effort to speed delivery and cut costs. The bills reauthorized the food aid program and left it largely intact, in the agriculture budget.”

Mr. Nixon indicated that, “Senator Debbie Stabenow, Democrat of Michigan and the chairwoman of the Senate Agriculture Committee, said she had had conversations with the Obama administration about changes to the food aid program.

“‘We chose to keep it in the Agriculture Department, but give it more flexibility,’ she said in a conference call with reporters on Thursday. ‘I think it’s a big step forward, and it had bipartisan support.’

“Tamara Hinton, a spokeswoman for the House Agriculture Committee, said there was also widespread support among members of the committee for keeping food aid in the farm bill.”

Meanwhile, University of Illinois Agricultural Economist Nick Paulson noted on Thursday at the farmdoc daily blog (“A Farm Bill Update: More Changes to Commodity Programs”) that, “After creating a one-year extension to the 2008 Farm Bill in the midst of larger budget issues at the end of last year, Congress has resumed the Farm Bill process. Both the Senate and House Ag Committees have released 2013 Farm Bill markups (see Senate version here; House version here). Both the Senate and House drafts are similar to the versions passed by the full Senate and House Ag Committee in 2012 (see previous posts from Carl Zulauf summarizing those here and here) in that the majority of existing commodity programs (direct, countercyclical, ACRE, and SURE programs) are repealed to achieve spending reductions. However, there have been some slight changes to the programs created to replace those being repealed, particularly in the new version from the Senate. Today’s post provides a summary of some of those commodity program changes. Discussion of continued changes in other titles, such as Crop Insurance, and the budget implications will be saved for future posts.”

Agricultural Economy

Michael Birnbaum reported in Saturday’s Washington Post that, “Many Europeans see American farming and its reliance on genetically modified crops as more Frankenstein than Farmer in the Dell.

“Now, the opposition here [Lennewitz, Germany] to U.S. agricultural practices is threatening to become a major battle in discussions starting next month that could sweep away trade barriers between the United States and Europe.”

The Post article noted that, “Many here worry that a trade pact would ease regulations that have made it difficult for genetically modified crops and products to reach European shores. Genetically modified crops are broadly unpopular in Europe, and farmers and environmentalists fear that if trade restrictions are lowered, both genetically modified seeds and U.S.-grown genetically modified products would quickly take over European farmland and grocery stores.

“Some farmers are hoping to stop the talks if rules that govern their work are thrown into the mix, and they are determined to keep U.S. industrial farming an ocean’s-length away.”

Michael Wines reported in today’s New York Times that, “The land, known as Section 35, sits atop the High Plains Aquifer, a waterlogged jumble of sand, clay and gravel that begins beneath Wyoming and South Dakota and stretches clear to the Texas Panhandle. The aquifer’s northern reaches still hold enough water in many places to last hundreds of years. But as one heads south, it is increasingly tapped out, drained by ever more intensive farming and, lately, by drought.

“Vast stretches of Texas farmland lying over the aquifer no longer support irrigation. In west-central Kansas, up to a fifth of the irrigated farmland along a 100-mile swath of the aquifer has already gone dry. In many other places, there no longer is enough water to supply farmers’ peak needs during Kansas’ scorching summers.

“And when the groundwater runs out, it is gone for good. Refilling the aquifer would require hundreds, if not thousands, of years of rains.”

And on Friday, Reuters writer Sam Nelson penned an article titled, “U.S. farmers dodge showers to plant corn at breakneck pace.”

Keith Good

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In a telenews conference with reporters yesterday, Senate Ag. Comm. Chairwoman Debbie Stabenow (D., Mich.) commented on how quickly the panel’s Farm Bill will move from the Committee to the Senate floor: “I don’t know if this is a record, but it’s got to be one of the — possible records for getting a bill from committee on to the floor for consideration, so I’m very pleased about that…after coming out of the committee with 15 to five strong bipartisan vote, we did not have objection to moving to the bill, and there are very few things that have occurred this year, or in — in over the last number of years, that did not require a motion to proceed, and several days of waiting, and a cloture vote, and so on, in order to get to the bill.

“We did not have to do that, there was not an objection to going to the bill, and I hope that bodes well for — for moving things through next week.”

Later, Chairwoman Stabenow indicated that, “We’re going to start debate, and we’ll be moving on amendments, you know, as quickly as possible. So I absolutely expect to be on amendments next week, and you know, urging people now to put their amendments together, let them know — let us know what they are so we can work with them.”

Speaking yesterday on the Agriculture Today radio program (Red River Farm Network), Senator Amy Klobuchar (D., Minn.) stated that, “[The Farm Bill] went directly to the floor, I don’t think people– usually when you guys ask me questions its, ‘Okay, you got it through the Committee what’s next?’  And I say, ‘Well, we hope in the next six months we will go to the floor.’ This time it was six hours, and we have the bill on the floor.”

Sen. Klobuchar added that, “there’s good amendments and dumb amendments and we’ll hear them all, get through them and get the bill passed before Memorial Day.”

A news release earlier this week from Sen. Bob Casey (D., Penn.) indicated that, “With frost hitting farms throughout the state, [Sen. Casey], today, pushed for passage of a 5 year Farm Bill before the Senate’s Memorial Day recess.  During a conference call, Senator Casey discussed data showing the benefits that farm bill will have for all Pennsylvanians and highlight the Farm Bill’s inclusion of a crop insurance provision which could aid farmers hit by the recent frost.”

Beyond procedure, when asked yesterday about the House Ag. Comm. passed Farm Bill, which contains much larger cuts to nutrition programs than the Senate version, Chairwoman Stabenow stated: “Well, first of all, I absolutely reject the level of cuts and the way this is done in the House. They eliminate something called categorical eligibility, which we’ve now voted down either two or three times on the Senate floor on a bipartisan basis.  It came up in committee this week, it was voted down on a bipartisan basis. So that policy does not have support in the U.S. Senate. I won’t support it in conference, and so we will look for ways that we can continue to provide savings by tackling abuse, or misuse.”

AP writer Mary Clare Jalonick reported yesterday that, “The two chambers are far apart on how much the $80 billion-a-year program [SNAP] should be cut, however, reflecting a deep ideological and at times emotional divide on the role of government in helping the poor… At both committee meetings, debate over the food stamp cuts was heated, with defenders of the program saying the bills would take food out of the mouths of children and the elderly.”

With respect to the House Ag Committee debate on nutrition, Jerry Hagstrom reported this week at National Journal Online that, “But since the 2010 election, the panel’s membership has consisted of very different types of people, who seem to enjoy being hostile to each other…[W]hen it came time to talk about nutrition, Republicans and Democrats couldn’t wait to show how differently they view the world.”

Rep. Joe Crowley (D., N.Y.) spoke on the House floor recently about cuts to the SNAP program (video replay here), and on the floor Wednesday, Rep. Barbara Lee (D., Calif.) noted that, “Every $1 in SNAP benefits generates $1.70 in economic activity. Yet the Republican farm bill cuts nearly $21 billion from our Nation’s antihunger program while millions of Americans continue to struggle from the impacts of the Great Recession.”

Speaking yesterday with Mike Adams on the AgriTalk radio program, Rep. Steve Fincher (R., Tenn.) indicated that, “And let me be clear about this.  The cuts [in nutrition programs] that we’re making are not cutting people.  They’re reforming programs, existing programs that have been abused.  There’s fraud.  So what we’re doing is tightening these up.  The duplicate programs, we’re reforming those and putting them together, and still making sure that our most vulnerable in our society are taken care of.

“But at the same time, this is a huge, huge program that’s really slipping away from us, and we’ve got to do our part.  I mean, our job in Congress is to make sure that the taxpayer money that’s being sent to Washington is being spent in a responsible way, and in a lot of these areas they’re not.  We think probably, in the end, we will be tickled if we can end up with that $20 billion number.  This is going to be a dog fight on the House floor.  So hopefully we end up with that number.”

On potential procedural movement of the Farm Bill in the House, Mr. Hagstrom indicated in his National Journal article that, “[Chairman] Lucas has said the House leadership has told him the bill will come up on the floor in June. That would follow Senate consideration of the legislation, which is expected to begin Monday. Senate and House leaders want to finish a conference before Sept. 30, when the current extension of the 2008 farm bill is scheduled to expire.”

In addition to nutritional differences in the Committee passed legislation in each chamber, a reporter on yesterday’s conference call noted to Chairwoman Stabenow:  “You were unable to get that egg bill into your mark… Yet the House, as you know, last night, had a contentious debate and included this amendment of Steve King’s to basically block states from being able to impose rules on other states.  What do you think about that particular amendment, and how do you expect to address this issue?”

(Note that a FarmPolicy.com transcript of the debate on the King Amendment is available here, while a video replay can be found here).

Chairwoman Stabenow stated that, “Well, our egg producers need some help.  Right now there’s a patchwork of regulations around the country.  I mean, what happened last night in the debate is exactly the reason why we need a national standard.  And the egg producers came together to develop something that’s workable only for them.  I know others in the livestock community think somehow that creates a slippery slope and the possibility of pressure on them to do the same thing.

“I really personally disagree.  I think this is something that an industry has done to step up and form an agreement so that the egg producers in Michigan are going to be able to stay in Michigan and sell around the country.  But unfortunately, we did not have the support in committee to put this bill into the farm bill.

“And I’m going to continue to look for ways to help the egg producers, because I think they’ve stepped up in a responsible way.”

Dan Charles noted yesterday at the salt blog (NPR) that, “When the agriculture committees of both House and Senate finished their versions of the farm bill this week, all mention of guaranteed living space for egg-laying hens had vanished.

“In fact, the House committee adopted a provision that could make it more difficult for states to set such standards. This amendment, offered by Rep. Steve King, R-Iowa, would prohibit any effort by state governments to control the way that their food is produced by out-of-state farmers. The measure is aimed specifically at California’s Proposition 2, which is set to ban farmers in Iowa or Idaho from selling their eggs in California if those eggs come from chickens housed in traditional cages.”

On the issue of crop insurance, Chairwoman Stabenow noted yesterday: “Well, this is the number one most supported program in the farm bill, from a farmer perspective.  Everywhere we’ve gone, as I’ve traveled around the country, farmers have said we’re willing to give up direct payment subsidies.  We know, from a taxpayer standpoint, that doesn’t make sense that we receive help in good times, but crop insurance is what works for us.”

Meanwhile, differing perspectives on Title I of the Farm Bill continue to percolate.

Speaking with reporters yesterday, Sen. Mike Johanns (R., Neb.) noted that, “This year’s farm bill presents some different problems though. This draft, in my judgment — judgment, represents a step backward for Ag policy. Instead of moving forward with a free market type system, what this farm bill does, is it doubles down on something called, target prices, which is really a subsidy for certain commodities.

“That was eliminated in last year’s farm bill. With bipartisan support, it actually got 64 votes in the Senate, got out of committee, but now it’s back in this bill. The government should not be involved in setting prices for commodities. The government should not be involved in raising target prices, which is exactly what’s happening.”

And earlier this week on the AgriTalk radio program with Mike Adams, Sen. Pat Roberts (R., Kans.) expressed similar concerns with respect to the target price concepts and noted that he did not think the current committee bill was “a reform oriented Farm Bill like we passed last year”- Sen. Roberts audio here (MP3- 4:00).

Mikkel Pates reported yesterday at AgWeek Online that, “Will farmers who opted out of the farm program so they could drain wetlands to grow valuable crops now be forced to restore those wetlands if they want to keep vital premium subsidies on their crop insurance?

“Sen. John Hoeven, R-N.D., hopes not. North Dakota’s senior senator tried in vain to pass a half-dozen amendments to the Senate Agriculture Nutrition and Forestry Committee version of the 2013 farm bill that would have kept crop insurance disconnected from conservation compliance, or at least reduce the regulatory burden of compliance.

“That didn’t work in the Senate Ag Committee bill, passed May 14, but Hoeven says he’s still working to keep the insurance and conservation ‘decoupled.’ He says an opportunity is in a conference committee with the House Ag Committee farm bill, also passed this week.”

Mr. Pates added that, “The House version, passed hours later on May 15, does not tie crop insurance to compliance with conservation programs. Additionally, the House bill saves $6 billion by consolidating duplicative conservation programs and streamlining the delivery of incentive funds to farmers, ranchers, and landowners.

“‘The voluntary, incentive-based method of encouraging conservation in the House bill is the right approach,’ says U.S. Rep. Kevin Cramer, R-N.D. ‘Farmers in North Dakota do not need Washington instructing them on how to farm and care for their land. Ensuring crop insurance is decoupled from conservation programs is a top priority for our farmers and ranchers.’”

Additional lawmaker perspective on the House Ag. Committee passed Farm Bill included:

Rep. K. Michael Conaway (R., Tex)- “The bill strengthens Title I by putting in place a new safety net, one that will offer ranchers and farmers choices in how to manage risk while reforming outdated policy. This move creates regional equity among agriculture producers, increasing their choices and implementing a broad approach to production agriculture.”

Rep. Kristi Noem (R., S.D.)- “I fought for policies that are most important to South Dakota, such as livestock disaster programs, forestry provisions to help fight the pine beetle, conservation and a permanent office of tribal relations within the Department of Agriculture. I am proud they were included in this bill and will keep fighting on behalf of South Dakota as the Farm Bill moves forward.”

Rep. Bill Owens (D., N.Y.)- “Owens also applauded the inclusion of a number of local initiatives he either sponsored or co-sponsored earlier this year.  H.R. 1297, the Agricultural Credit Expansion Act, and H.R. 1298, legislation to increase export opportunities for local apple growers, were both originally introduced by Rep. Owens and included this week in the Agriculture Committee’s markup of the Farm Bill.  In addition, H.R. 1272, the Maple Tapping Access Program Act, was also included in the bill.  Rep. Owens joined Rep. Peter Welch as a co-sponsor in introducing that legislation earlier this year.”

Rep. Adrian Smith (R., Neb.)- “Passage of a responsible, long-term Farm Bill is among my highest priorities and yesterday’s markup in the Agriculture Committee was a step in the right direction.”

Rep. Rick Crawford (R., Ark.)- “The House Farm Bill reflects the regional diversity in American agricultural production, including the heavily irrigated Mid-South. The Senate farm bill takes a positive step in sharing this goal, which brings us closer than ever to a final product.”

Rep. Randy Neugebauer (R., Tex.)- “I think there’s more room to target our nutrition funding better.”

Rep. Tim Walz (D., Minn.)- “Speaker Boehner and Majority Leader Cantor should bring this bipartisan bill forward for a vote without delay… [I]’m especially concerned about the large cuts to SNAP, which helps hardworking families and seniors who are struggling to put food on the table. Americans don’t want a handout, just a hand-up in times of need. I’m hopeful much of this funding will be restored in conference with the Senate.”

Rep. John Garamendi (D., Calif.)- “While there’s room for improvement, particularly in light of the shortsighted cuts to food assistance, I believe passing a Farm Bill out of the House Agriculture Committee is a good first step.”

Rep. Jim Costa (D., Calif.)- “We still have more work to do to ensure the 2013 Farm Bill works for all Americans, including revisiting cuts to the Supplemental Nutrition Assistance Program (SNAP), but we are moving this process forward…There is too much good in this bill to let it die before it is heard on the House floor. Rural America cannot afford inaction. We owe them a vote.”

Rep. Suzan DelBene (D., Wash.)- “Today’s bill will benefit our local producers of specialty crops, such as fruits and vegetables, with programs to help them expand and enter new international markets. The funding for the Specialty Crop Research Initiative and Specialty Crop Block Grant Program increased significantly and will help our farmers who rely on partnerships with our local universities to improve crop quality and yields.”

Rep. Kurt Schrader (D., Ore.)- “Overall, I was very pleased with our ability to secure increased funding for our specialty crop programs.  The funding will allow the specialty crop industry to continue to exceed innovative expectations, generate greater economic output and make sure that our food continues to be the safest in the world. This industry is a big piece of the puzzle in making sure that Oregon and American agriculture remain as competitive as possible in the global marketplace for years to come.”

Rep. Annie Kuster (D., N.H.)- “I am gravely disappointed that this legislation undermines assistance for hungry families, and I fought hard to protect this essential program. At the same time, this Farm Bill contains many important reforms: it eliminates wasteful direct payment subsidies, streamlines more than 100 duplicative programs, and includes both an amendment I sponsored to support rural colleges and an amendment I cosponsored to expand access to local, healthy food.”

Rep. Bob Gibbs (R., Ohio)- “As past President of the Ohio Farm Bureau, I believe that agriculture policy should be based on market-driven principles.  Including language for dairy farmers that effectively equates to supply management is the exact opposite of a free market system.  Ohio dairy farmers need to be able to grow with the market, and artificially setting limits on the milk they can produce will only keep them more dependent on government subsidies.

“Finally, I believe the commodity title, Title One, is drastically unfair to Ohio farmers.  The commodity title now includes target prices that are set so high for certain crops, that some farmers may have guaranteed profits.  I believe farmers should be making decisions on what to plant based on market signals, not on which crop will give them the most government subsidy.  I fully support a Farm Bill that gives farmers and producers ways to mitigate their risk to continue to provide a safe and affordable food supply.”

Agricultural Economy

Gregory Meyer reported yesterday at The Financial Times Online that, “Farmland prices in the US corn belt have risen at double-digit clip this year despite weaker grain markets in a move that will intensify debate over whether loose monetary policy and congressional largesse are inflating a bubble.

“Agricultural land values increased 15 per cent on last year during the first quarter in a district that includes Illinois, Indiana, Iowa, Michigan and Wisconsin, the Federal Reserve Bank of Chicago said on Thursday. The region’s farmland values have trebled in the past decade.

“Whether the market is overheating has become a feverishly discussed question among land shoppers from farmers to pension funds. Past booms have ended in prolonged declines, with US prices plunging by 66 per cent from 1919-1940 and more than 40 per cent from 1981-1987, according to research published by the Kansas City Fed.”

Keith Good