Policy Issues; Ag Economy; Trade; Tax Extenders; Regs; Biotech; and, Immigration
Policy Issues; Ag Economy; Trade; Tax Extenders; Regs; Biotech; and, Immigration
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Policy Issues
Bill Tomson reported yesterday at Politico that, “‘It’s never too early to start on the next farm bill,’ said Rep. Mike Conaway, the next chairman of the House Agriculture Committee.
“The Texas Republican, whose position in the top agriculture post was confirmed Tuesday by the House Republican Steering Committee, told POLITICO in an exclusive interview Friday that he’s already thinking about the 2019 farm bill, planning an in-depth review of the food stamp program and ready to help get an immigration reform bill done to help farmers.
“It’s too early to judge the major new subsidy programs in the 2014 farm bill — the five-year, $500 billion blueprint for U.S. agriculture policy that was only signed into law in February — but the next House Agriculture Committee chairman said he expects to begin drafting the next bill by 2017 or 2018 at the latest.”
Mr. Tomson noted that, “Foremost in Conaway’s long-term plan as the new chairman is a complete review of food stamps, aka the Supplemental Nutrition Assistance Program. It constitutes an annual taxpayer expense of about $80 billion — the largest share of every farm bill — and Republicans have been sharpening their knives for more cuts to the program for some time.
“‘We ought to do a soup-to-nuts review of the entire program,’ Conaway said. ‘What works? What doesn’t work? Are there moral hazards baked into the system? Where can the system do a better job? You spend $80 billion [per year] on a program, it ought to work.’”
The Politico article pointed out that, “But reviewing the food stamp program is not the first item on Conaway’s new to-do list. Rather, he said that will be getting new House Agriculture Committee members up to speed on implementation of the 2014 farm bill.
“To aid in the cause, Conaway said he’ll call on Agriculture Secretary Tom Vilsack to testify almost immediately. After Vilsack, there will be a steady stream of USDA division chiefs through 1300 Longworth, the main hearing room used by the committee and its five subcommittees, Conaway said.”
In his article, Mr. Tomson also stated that, “Conaway, who said the topic of immigration comes up just about every time he speaks to farm groups, revealed that he plans to help craft a new, narrow bill to help producers get the workforce they need. Leaving aside the broader, national uproar about overhauling immigration and dealing with citizenship issues, Conaway said the bill would be a straightforward approach and provide non-U.S. citizens a paycheck.
“A spokesman later clarified that Conaway was not addressing a bill that would come out of the House Agriculture Committee, but stressed that it would have broad implications for the farming sector.”
Also yesterday, an update posted at Agri-Pulse included an announcement of the appointment of senior staff to lead the House Agriculture Committee in the 114th Congress.
A news release yesterday from the American Soybean Association (ASA) noted in part that, “‘Rep. Conaway has a proven track record of representing farmers not only in West Central Texas, but across the country, and he will make a fine chairman,’ said [ASA’s First Vice President Wade Cowan, who farms in Brownfield, Texas, just north of Rep. Conaway’s district]. ‘As chair of the Agricultural Subcommittee on General Farm Commodities and Risk Management, Rep. Conaway exhibited fluent understanding of the complex issues that shape the nation’s farm program, and how those issues can impact soybean farmers in the field. With this understanding, we are confident that soybean farmer issues will continue to be well represented within the Committee, and we look forward to working with him and his able staff.’”
Reuters writers Ros Krasny and Christine Stebbins reported yesterday that, “U.S. farmers are about to reap a bumper harvest not just in corn and soybeans but also in new subsidies that could soar to $10 billion, blowing a hole in the government’s promise that its new five-year farm bill would save taxpayers money.”
The article indicated that, “Because of ample supplies, corn prices have fallen well below the long-term average price used as a benchmark for one of the new programs. Ironically, this year’s bumper harvest may not be large enough to compensate for those price falls and revenues for some farmers could be low enough to trigger payments.”
The Reuters writers pointed out that, “USDA Chief Economist Joe Glauber conceded that ARC payments could be high this year and next. But, ‘if prices remain low, those ARC guarantees will be potentially getting much, much smaller over time,’ he told Reuters.”
Market price levels for commodities over the course of the five-year Farm Bill are uncertain. With respect to future market price levels, recall that University of Illinois agricultural economist Darrel Good pointed out earlier this month at the farmdoc daily blog (“A Mixed Pace of Corn and Soybean Consumption”) that, “Stocks at the projected levels do not point to a multiple year period of very low prices.”
A separate farmdoc update on November 10 (“USDA Reports Provide Some Surprises, Particularly for Corn”), noted in part that, “While the large harvest this year will keep prices at relatively low levels, particularly for corn, the odds now favor prices that will be profitable for both corn and soybean producers in 2015-16.”
Meanwhile, a news release yesterday from USDA’s Risk Management Agency (RMA) indicated that, “[RMA] today announced that it is evaluating the feasibility of over 40 additional crops that may be covered under Supplemental Coverage Option (SCO) insurance for the 2016 crop year. SCO, a provision of the 2014 Farm Bill, is designed to help protect producers from yield and market volatility.
“Currently, SCO is available for corn, cotton, cottonseed, grain sorghum, rice, soybeans, spring barley, spring wheat, and winter wheat in selected counties for the 2015 crop year. A list of the crops under review for 2016 can be found on the RMA website at www.rma.usda.gov/news/currentissues/farmbill/index.html . RMA will provide SCO coverage for any crop under review that has adequate data to operate SCO.”
In other news, Marina Koren reported yesterday at National Journal Online that, “There is a bill sitting on Chris Christie’s desk that has managed to unite two seemingly unrelated things: presidential politics and pig farming.
“The legislation, which the New Jersey governor has until early December to sign or veto, would ban the use of gestation crates—metal crates that house pregnant pigs bred for meat—in the state. New Jersey citizens and lawmakers overwhelmingly support banning the crates, and most of New Jersey’s small number of pig farms, about 300, don’t even use them. Republican Gov. Terry Branstad of Iowa, an important presidential primary state, has asked Christie to veto it.”
And in a related article, Mark Z. Barabak reported yesterday at the Los Angeles Times Online that, “But there are a great many hogs and hog farmers in Iowa, the nation’s leading pork producer, and there the legislation is far less popular — at least within the agriculture industry, which carries enormous economic and political weight, even as the state grows more urban and its increasingly citified voters less tied to the soil.
“‘Call Bruce Braley and ask him how important farmers and agriculture, including hogs, are to Iowa,’ suggested Steffen Schmidt, an Iowa State University political scientist and expert on rural politics. ‘He will begin to sob on the phone.’
“(Braley, once a strong favorite for an open U.S. Senate seat, lost earlier this month in good part because the Democratic congressman and former trial lawyer was seen as out of touch with agricultural Iowa and, worse, even a bit contemptuous of the state’s farmers.)”
From a global perspective, Scheherazade Daneshkhu indicated today at The Financial Times Online that, “Fat is becoming a weighty economic issue. Almost a third of the world’s population is overweight or obese, levying an economic cost that rivals that of armed conflict or smoking, according to research by McKinsey consultants.”
Also, Jerry Hagstrom reported this week at National Journal Online that, “In what may be the most powerful attack on junk food published by any government in the world, Brazil is urging its citizens to avoid such ‘ultra-processed products’ as chicken nuggets, potato chips, and soft drinks.
“‘Because of their ingredients, ultra-processed products—such as packaged snacks, soft drinks and instant noodles—are nutritionally unbalanced,’ says the new book Dietary Guidelines for the Brazilian Population.”
Agricultural Economy
Neil Munshi reported yesterday at The Financial Times Online that, “Farmers across North America – and globally – are facing the prospect of a drop in income, and the agricultural equipment industry is bracing for a dramatic slowdown in its $65bn annual global sales…[T]he recent vintage of their farm equipment means many farmers do not need to replace it any time soon. That fact, coupled with the current low crop prices, means some analysts estimate that agricultural equipment sales peaked last year.”
Gregory Meyer reported yesterday at The Financial Times Online that, “Plump profit margins in the US chicken business may be about to fly the coop, a top food and agriculture investor warned as he hinted at listing shares in a poultry producer he controls…[B]ut Paul Fribourg, chairman and chief executive of Continental Grain company, told a New York forum on Wednesday that the commodities cycle might be about to turn.”
The FT article noted that, “‘Today the cycle has gone to the other extreme, where you have incredibly high chicken prices and very low grain prices,’ [Fribourg] added. ‘It’s not going to last. So at the top of the cycle we’re now looking at ways to lock in either long-term margins, or possibly, for example, take our chicken company public.’”
In transportation news, Reuters writer Michael Hirtzer reported yesterday that, “The shipping season on the upper Mississippi River will end on Thursday as ice surrounding locks and dams near Minnesota’s Twin Cities forced the earliest winter closure on records that date back to 1969, the U.S. Army Corps of Engineers said.”
The article noted that, “The Mississippi River connects farms in the Midwest to the Gulf Coast, where about 60 percent of U.S. corn, soybean and wheat exports exit the country. The closure will also halt upriver shipments of fertilizer, salt and other goods to the most northern reaches of the country’s busiest waterway.”
Trade
Reuters writer Krista Hughes reported yesterday that, “U.S. Trade Representative Michael Froman said on Wednesday he still hopes for bipartisan support in Congress on granting the White House the authority to fast track trade deals but added the timing was up to lawmakers.”
The article stated that, “Asked about the prospect that Congress does not pass TPA and the United States is unable to ratify the Trans-Pacific Partnership, Froman said: ‘I don’t consider that possibility.’”
Tax Extenders
Jonathan Weisman reported in yesterday’s New York Times that, “For years, renewing the so-called extenders package has been pro forma…[T]hen last year, as Congress fell into a morass of dysfunction, lawmakers simply failed to act, and the tax breaks lapsed. As it gathered on Tuesday, Congress still had a scheduled 11 days to pass them retroactively, so beneficiaries could seamlessly claim them on their 2014 tax returns.”
Also on the tax extenders issue, in a discussion on yesterday’s AgriTalk radio program with Mike Adams Nebraska GOP Sen. Mike Johanns indicated that, “I’m beginning to think, as we go by day by day, I just think that’s getting to be more of a long shot.”
Regulations
Also on yesterday’s AgriTalk program, Mike Adams asked Sen. Johanns, “Looking ahead to the new Congress, do you think Congress will stop EPA’s Waters of the U.S. rule?”
Sen. Johanns noted that, “I do believe Congress will vote to stop it. Again, we have a President who…very, very supportive of an overreaching sort of federal government, and I think he’ll fight tooth and nail. I believe he’ll veto bills, and I just believe that there’s got to be a whole bunch of strategies on how you’re going to deal with Waters of the U.S.
“I don’t want to be pessimistic about this, but I believe the last two years the Obama Administration is going to bring about a blizzard of regulatory activity. And for those who are here, be on your toes, because it’s not going to be just one strategy that’s going to slow them down, it’ll have to be a whole host of strategies. It could be funding consequences, it could be, you know, disapproval by the House and the Senate. But I just think these last two years are going to be tough, and I think the Obama people are going to do everything they can to legislate by regulating.”
Cristina Marcos reported yesterday at The Hill Online that, “The House on Wednesday passed legislation to prevent the Environmental Protection Agency from issuing new regulations unless it provides the scientific data to justify them.
“Passage of the measure, H.R. 4012, fell largely along party lines with a vote of 237-190.
“The bill is part of the House GOP’s package of legislation on the floor this week to limit the EPA’s regulatory powers. On Tuesday, the House passed a measure to reform the EPA’s Scientific Advisory Board.”
Meanwhile, Christian Berthelsen and Ryan Tracy reported in today’s Wall Street Journal that, “A U.S. Senate report on commodity-market activities at big Wall Street banks accuses the firms of being so powerful they were able to influence prices, gain trading advantages and put the broader financial system at risk by entering volatile businesses such as uranium trading and coal production.
“The two-year, bipartisan probe by the U.S. Senate Permanent Subcommittee on Investigations is the most extensive look at how banks like Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley built up voluminous inventories of aluminum, copper and other commodities. The report said the banks often exceeded regulatory limits on the size of commodity holdings. It portrays banks straying far beyond their traditional business lines to dabble in lucrative but risky activities that posed legal and financial threats to the firms.
“The findings are likely to put additional pressure on the Federal Reserve as it considers whether to restrict or reduce Wall Street banks’ role in physical commodity markets.”
Biotech
Jacob Bunge reported yesterday at The Wall Street Journal Online that, “Archer Daniels Midland Co. sued Syngenta AG over losses the grain trader and processor said it suffered after Syngenta sold genetically engineered corn in the U.S. that had yet to win approval in China.
“ADM said Syngenta’s push to sell its biotech corn to U.S. farmers, without first securing Chinese import approval, led the Asian nation to reject shipments of U.S. corn in the past year. That caused ‘substantial economic losses and damages’ for ADM, the company said in a lawsuit filed in a Louisiana state court.”
Greg Stiles reported this week at The Mail Tribune (Medford, Ore.) Online that, “Jackson County voters passed a ban on GMO crops last May. Now the courts will test the ordinance’s validity.
“Two county farms that grow Roundup Ready alfalfa filed suit Tuesday asking a state court to overturn the voter-approved ban on genetically modified crops or force the county to pay a total of $4.2 million, which they claim is the value of the crop they would have to destroy.”
Immigration
David Nakamura and Pamela Constable reported in today’s Washington Post that, “President Obama will announce his intention Thursday to use his executive powers to shield millions of illegal immigrants from deportation, the most significant presidential intervention to alter the U.S. immigration system in nearly three decades.
“Using a rare prime-time address from the White House, Obama hopes to build public support for his decision to remake border-control laws without approval from Congress, a move likely to spark a major political fight about the limits of presidential power. Obama will provide more details at a rally with immigration advocates in Las Vegas on Friday as the White House begins a campaign to mobilize grass-roots support for the effort.”
The article added that, “Obama discussed his plans with more than a dozen congressional Democrats during a dinner at the White House, outlining why he believes his actions are ‘the first big step’ in reforming the nation’s immigration system.”
Today’s article also noted that, “The administration also is adding a program to facilitate visas for people who invest in the United States and those who pursue science, technology, engineering and math degrees. But the administration determined that it lacked the legal authority to expand visas for migrant farm workers or the existing H-1B visa program for highly skilled foreigners, lawmakers said.”
Michael D. Shear and Robert Pear reported in today’s New York Times that, “But farm workers will not receive specific protection from deportation… [A]dministration officials have said the president’s actions were designed to be ‘legally unassailable,’ which activists said led the White House to make some tough choices.
“Farm workers, for example, will not be singled out for protections because of concerns that it was difficult to justify legally treating them differently from undocumented workers in other jobs, like hotel clerks, day laborers and construction workers.”
Seung Min Kim, a congressional reporter for Politico, tweeted yesterday that, “Obama also noted that he couldn’t make significant changes to ag industry, couldn’t find a way to do it legally #immigration #dinner”
A news release yesterday from the United Farm Workers (UFW) stated that, “Today, Arturo Rodriguez, President of [UFW], met with President Obama to discuss his forthcoming executive action announcement and its impact on farm workers. Following is a statement from Rodriguez in response to the meeting:
“We were pleased to learn from the President today that at least 250,000 farm workers (and at least 125,000 California farm workers) will be eligible for deportation relief under his executive action.”
Lydia Wheeler reported yesterday at The Hill Online that, “Union groups and immigrant advocates are urging President Obama to include farm workers in his planned executive action on immigration.
“‘It makes absolutely no sense, none whatsoever, to take farm workers, hundreds of thousands of them we all know are undocumented, and to take them from our fields,’ Rep. Rep. Luis Gutiérrez (D-Ill.) said at a labor union event in front of the White House on Thursday.
“‘What we should do is document them. Mr. President, give them the working documents they need.’”
Keith Good
Posted by Keith Good • November, 20, 2014 • 5:18 am
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