October 21, 2014

Rep. Smith- Nebraska Exports Benefit World Consumers

In response to questions from Congressman Adrian Smith (R-NE), panelists at a Ways and Means Trade Subcommittee hearing discuss how protectionist trade policies hurt consumers.


Ag Appropriations; Ag Economy; Regs; Water Bill; and, Political Notes

Agricultural Appropriations- Policy Issues

Today the House will consider the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2015 (H.R. 4800), which will be debated under a “Modified Open Rule.” (“The rule provides for one hour of general debate and makes in order any amendment offered that complies with the House rules. Additionally, the Rule provides for 10 minutes of debate per amendment equally divided between the proponent and an opponent and up to 10 pro forma amendments for the purpose of debate offered by the Chair and Ranking Member or their designee.”)

Bloomberg writers Alan Bjerga and Derek Wallbank reported yesterday that, “House Republicans today will try to roll back school-lunch nutrition requirements — passed in 2010 with the backing of First Lady Michelle Obama — saying the rules bust local budgets and micromanage what children eat.

The vote, over a provision in the U.S. agriculture spending bill, is a proxy for a larger debate between Republicans, who call the rules a massive government overreach, and Democrats, who say the opposing party is trying to protect the interests of big food producers.”


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

Agricultural Economy

A news release yesterday from Cargill indicated that, “Cargill, one of the largest pork producers in the U.S., is continuing its commitment of moving to group housing for its sows that produce hogs for pork. Company owned facilities will be 100 percent group housing by the end of calendar 2015. Contract hog farms that contain Cargill-owned sows will transition to 100 percent group housing by the end of calendar 2017. The hogs produced by Cargill-owned sows represent approximately 30 percent of the total hogs harvested annually at the company’s two pork processing facilities in Illinois and Iowa.”

The update noted that, “Based upon the timetable Cargill has set up for completing the transition to group housing for gestating sows, the company will be prepared to support ‘early adopter’ customers seeking pork products from alternative sow housing in the next few years.”


House Legislative Agenda; Farm Bill; Biotech; and, the Ag Economy

House Legislative Agenda- Ag Appropriations, CFTC

Matt Fuller reported on Friday at Roll Call Online that, “Majority Leader Eric Cantor laid out a busy legislative agenda for the remainder of June in a memo to House Republicans sent Friday, scheduling floor time to address issues at the Department of Veterans Affairs, three appropriations bills, three tax extender bills, and legislation to make gas and other energy prices cheaper. Notably absent from the agenda: any mention of immigration, an unemployment extension or the expiring Export-Import Bank.”

Cantor’s memo indicated that Agriculture was one of the three appropriations bills that would be considered.

More specifically, the Majority Leader’s schedule for this week noted that the Agriculture Appropriations measure was listed under the heading, “Tuesday, June 10th and the Balance of the Week;” and, a notice from the House Rules Committee indicated that the Agriculture Appropriations bill would be addressed at a hearing scheduled for Tuesday afternoon.

Recall that the Appropriations Committee passed the fiscal year 2015 Agriculture Appropriations bill on May 29, and that debate on the measure centered around controversial nutrition provisions regarding the allowance of “school districts a one-year waiver to opt out of improved nutrition standards promoted by Michelle Obama.”

Interestingly, as this appropriations issue potentially moves to the House floor this week, the Senate Agriculture Committee will also be holding a hearing Thursday titled, “A National Priority: The Importance of Child Nutrition Programs to our Nation’s Health, Economy and National Security.”


Ag Economy; and Farm Bill Issues

Agricultural Economy

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Pork producers who have hogs testing positive for porcine epidemic diarrhea virus now will be required to report the outbreak to USDA and develop a strategy for improving biosecurity measures on their farm.

“USDA issued a federal order on Thursday requiring pork producers to notify the department when their hog herds test positive for PEDV. Producers must notify their veterinarians or the state veterinarian’s office about positive cases.

“While mandating producers report the disease, Agriculture Secretary Tom Vilsack told pork producers at the World Pork Expo that the federal order does not require herd quarantines or restrictions on the movement of animals. Those issues had been major concerns by industry leaders when USDA announced in April that it would get more engaged in trying to stem the spread of PEDV.”


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

Agricultural Economy

Yesterday, the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions.  Commonly referred to as the “Beige Book,” the report included several observations with respect to the U.S. agricultural economy.

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

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

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


Federal Reserve Beige Book: Observations on the Ag Economy- June 2014

Today the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions.  Commonly referred to as the “Beige Book,” the report included the following observations with respect to the U.S. agricultural economy:

* Fifth District- Richmond- “Agriculture contacts reported that fertilizer prices remained stable, chemical prices rose slightly, and farm equipment prices edged up. A South Carolina farmer said that delayed planting increased field days but did not affect his crop plans. Wholesale agribusiness executives reported that sales were at normal seasonal volumes.”

* Sixth District- Atlanta- “Parts of the District saw excessive rain, with flooding reported in lower Alabama and the Florida panhandle. There were some reports of crop damage and delayed planting attributed to excessive moisture.”

* Seventh District- Chicago- “Corn and soybean planting progressed quickly after precipitation and cool temperatures slowed fieldwork earlier in the spring, though planting in Michigan and Wisconsin was still lagging. Cold soil temperatures are still a concern; some contacts reported that the corn crop was in good shape but that the emergence of soybeans was behind average. Moisture levels were at least adequate for planting throughout the District, although parts of Iowa remained in drought. Corn and wheat prices were lower, while soybean prices drifted higher. Livestock prices remained well above the levels of a year ago, although hog prices moved lower. High milk prices encouraged the expansion of dairies, and high cattle prices appear to be leading to some new entrants into the livestock business. Farm machinery was readily available after several years of waiting lists for purchases.”

* Eighth District – St. Louis- “As of mid-May, on average, corn planting across the District was about 81 percent complete and about 93 percent of the winter wheat crop was rated in fair or better condition.”

* Ninth District- Minneapolis- “District farmers saw their financial condition continue to weaken, while livestock and dairy producers were in better shape. More than half of respondents to the Minneapolis Fed’s first quarter (April) Survey of Agricultural Credit Conditions said farm incomes and capital spending fell in the first three months of 2014, and about the same percentage expect it to decrease in the second quarter. A late spring and heavy early-season rains significantly delayed corn and soybean plantings throughout the district. Hog producers continued to lose large numbers of animals to a virus, pushing up prices for pork, as well as poultry. Cattle producers enjoyed record beef prices, as overseas demand grew and efforts to rebuild the U.S. herd kept cattle from going to slaughter. Grain elevators reported delays in shipping grain due to rail capacity constraints.”

* Tenth District- Kansas City- “Farm income prospects for crop producers dimmed since the last survey period, while profitability in the livestock sector improved. Winter wheat growers were concerned that the poor condition of the crop would limit profits despite an upswing in wheat prices. Corn and soybean prices were steady since the last survey period but remained well below year-ago levels. Spring planting prompted increased demand for operating loans to pay for crop inputs. In contrast, profit margins for livestock operators improved further as low cattle and hog supplies pushed prices higher and feed costs remained flat. Strong demand for grazing pastures supported a modest rise in ranchland values, but cropland values generally held steady. Farm loan repayment rates dipped below year ago-levels, and District bankers reported a slight rise in carry-over debt relative to last year.”

* Eleventh District- Dallas- “District drought conditions worsened further over the reporting period. Most of the Texas panhandle fell into exceptional drought, the most severe drought classification. Winter wheat crop conditions deteriorated and a relatively large share of Texas’ wheat acres were abandoned and will not be harvested this year. Cotton planting season began and farmers were already concerned about poor production due to the very dry soil, particularly for dryland cotton. Agricultural commodity prices stayed strong. Export sales for cotton fell over the last six weeks in response to high cotton prices.”

* Twelfth District- San Francisco- “Demand for assorted fruits and vegetables and livestock products increased, but production in agricultural and resource-related industries was uneven across the District. Concerns about water costs and availability mounted in some areas. Contacts noted that drought conditions in California and Arizona led to reduced herd sizes and decreased plantings of annual crops, including tomatoes and rice. On the other hand, farmers in Idaho anticipated adequate water supplies and planted grains, hay, and potatoes ahead of schedule, expecting the level of plantings in 2014 to be similar to 2013. In general, dairy operations benefited from low feed costs. Pork production remained weak as a fatal virus swept through pig farms in some areas. Contacts noted that demand from China for fertilizer and logs was strong.”


Climate; Biotech; Ag Economy; Appropriations; and, Regulations

Climate Issues

Coral Davenport reported in today’s New York Times that, “The Obama administration on Monday will announce one of the strongest actions ever taken by the United States government to fight climate change, a proposed Environmental Protection Agency regulation to cut carbon pollution from the nation’s power plants 30 percent from 2005 levels by 2030, according to people briefed on the plan who spoke anonymously because they had been asked not to reveal details.”

The Times article added that, “It is also likely to stand as President Obama’s last chance to substantially shape domestic policy and as a defining element of his legacy. The president, who failed to push a sweeping climate change bill through Congress in his first term [related FarmPolicy update from June 27, 2009- a measure passed the House, but not the Senate], is now acting on his own by using his executive authority under the 1970 Clean Air Act to issue the regulation.”


Appropriations; Farm Bill; Ag Economy; Biofuels; Labels; Data; and, Regs

House Appropriations Committee Passes Ag Spending Measure

David Rogers reported yesterday at Politico that, “It was the first lady vs. the ‘lunch ladies’ at the House Appropriations Committee on Thursday morning as Republicans pushed ahead with their plan offering school districts a one-year waiver to opt out of improved nutrition standards promoted by Michelle Obama.

“The action came as the panel approved a $142.5 billion farm and food safety budget for the coming year, including $20.9 billion in new discretionary appropriations for the operations of the Agriculture Department and Food and Drug Administration.

“From vending machine junk food labels to the merits of fresh white potatoes in the diet of low-income mothers and their young children, nutrition items dominated the meeting. But the school meals fight drew the most attention, given the first lady’s prominence, and the key 29-22 committee vote followed a spirited debate that approached two hours.”


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

Appropriations- Nutrition Issues

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

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

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


CNN OutFront- Lawmaker: Healthy lunch rules ‘go beyond reason’

Categories: Nutrition

From CNN OutFront- May 28- “It’s rare that the first lady gets publicly involved in a political fight. But she has some major beef with House Republicans who want to enable schools to opt out of the nutrition standards that the first lady fought for.

“‘The last thing we can afford to do right now is play politics with our kids’ health,’ she said. ‘Now is not the time to roll back everything that we have worked for. Our kids deserve so much better than that.’

“Republican Congressman Robert Aderholt– He’s backing the bill that would let cash-strapped schools opt out of the nutrition regulations.”


Farm Bill; Nutrition Issues; Ag Economy; Regs; and, Immigration

Farm Bill- Conservation

AP writer John Flesher reported yesterday that, “The U.S. Department of Agriculture is teaming with businesses, nonprofits and others on a five-year, $2.4 billion program that will fund locally designed soil and water conservation projects nationwide, Secretary Tom Vilsack said Tuesday.

“Authorized by the new farm law enacted earlier this year, the Regional Conservation Partnership Program is intended to involve the private sector more directly in planning and funding environmental protection initiatives tied to agriculture [see related USDA video].

“‘It’s a new approach to conservation that is really going to encourage people to think in very innovative and creative ways,’ Vilsack said.”


USDA Video: Venture Conservationist -USDA’s Regional Conservation Partnership Program

Categories: Farm Bill

From USDA, May 27- “USDA announces a new approach to conservation — a partnership program to recruit new partners and leverage additional investments for conservation projects in local communities.”


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

Appropriations- Nutrition, and Conservation

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

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

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


Agriculture Appropriations; Drought Legislation; Regulations; and, Food Prices

Agriculture Appropriations, Farm Bill 

The House Appropriations Committee will meet on Thursday this week to markup the FY 2015 Agriculture Appropriations Bill.

Last week the House Agriculture Appropriations Subcommittee approved spending language that “would require the Agriculture Department to waive requirements to serve fruits, vegetables and low-sodium and low-fat foods for schools that can show their lunch programs are losing money” (The Hill, “House panel cuts school nutrition standards.”).

And recall that last Thursday, the Senate Appropriations Committee adopted fiscal year 2015 spending allocations for Agriculture.

David Rogers reported last week at Politico that, “[T]he [Sen. Appropriations] committee also opted for compromise and gave Agriculture Secretary Tom Vilsack some flexibility in addressing complaints from school districts regarding the level of whole-grain foods they must include in lunch and breakfast meals.”


WSJ Video: “‘Pink Slime’ Returns as Beef Prices Spike

From The Wall Street Journal, May 23- “Just in time for the summer barbecue season, the finely textured beef product known as pink slime is making a comeback. WSJ’s Kelsey Gee joins the News Hub with Sara Murray.”

See also this related article on the front page of Saturday’s Wall Street Journal.


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