Keith Good Farm Policy: Passing Farm Bill Could be Tougher in 2013
Farm Bill Issues
DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “During the congressional recess and this week, both aides and lobbyists were reluctant to speak on the record about the proposed farm bill.
“One aide to a senator who is not a member of the Senate Agriculture Committee said committee aides had begun asking staffers from other offices their opinion of the bill and whether their bosses would support it as written.”
Mr. Hagstrom added that, “Senate aides noted that the bill that came out of the Senate Agriculture Committee was a product of the committee’s current membership, which includes Sens. Sherrod Brown, D-Ohio, and John Thune, R-S.D., who wrote the ‘shallow loss’ program that is the centerpiece of the new commodity support program, and Sen. Richard Lugar, R-Ind., a former Agriculture chairman, who supported it.
“Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and ranking member Pat Roberts, R-Kan., said at the April 26 markup of the farm bill that they are open to further changes to the commodity title if they fit within the budget, but it’s unclear whether the committee is considering any proposals to address the issues that rice and peanut growers and others have raised about the draft bill.”
Yesterday’s DTN article pointed out that, “One lobbyist also said it is becoming clear that [House Agriculture Committee Chairman Frank Lucas (R., Okla.)] will write his own bill, and that the final bill will have to be reconciled with whatever the House produces, but that farm leaders would like the two bills to be as similar as possible to reduce the time for reconciliation and to create an image of solidarity to get the bill passed.”
Tom Steever reported yesterday at Brownfield that, “Passing the farm bill this year is a tall order, but perhaps easier than it would be next year. Senator Charles Grassley of Iowa says he’s pushing for the measure’s passage this year and he hopes Senate Agriculture Committee leaders will also urge Senate leadership to get the measure up to the Senate floor.
“‘Because it would be really advantageous for all agriculture all over the United States to get it up [to the Senate floor], because next year we’ll have a lower baseline,’ said Grassley, during a conference call with reporters Tuesday. ‘It’ll be a little more difficult to write a bill than it is this year. If we get it written now, it’ll probably be unchanged for 5 or 6 years.’”
With respect to the executive branch, Christopher Doering reported yesterday at The Des Moines Register Online that, “Tom Vilsack, Iowa’s former governor turned national agricultural chief, has managed to do something that’s nearly impossible for someone in his position: get almost everyone in the farm sector to like him.
“But those warm feelings could soon be put to the test, as rural America closely watches maneuvering to enact a new half-trillion-dollar farm bill.
“Vilsack, the 61-year-old cheerleader for rural America, has been largely spared the intense criticism that often hounds the country’s agriculture secretary. Those in agriculture attribute the high regard he’s enjoying to his ability to balance the diverse interests of various farm groups across the country.”
Mr. Doering indicated that, “A major test for Vilsack, [House Ag Committee Chairman Frank Lucas (R., Okla.)] said, will be how he reacts after Congress completes the farm bill.
“‘I would like to think that when we put a good farm bill on the president’s desk, I would hope that the secretary will recommend that the president sign it,’ he said.”
Yesterday’s article noted that, “Vilsack has repeatedly urged Congress to act on the farm bill before October and has pledged to work more closely than his predecessors with lawmakers to help get one done. If Congress fails to act, he said lawmakers risk slowing or even stopping the torrid economic growth in rural America.
“‘If it does not get done, then we are left without programs to support farmers and ranchers, and we create a great deal of uncertainty, which no doubt will impact and affect decisions throughout the supply chain that will compromise the enormous progress we’ve seen recently,’ he said. ‘Why would you not want to get this done, when things are going as well as they are going?’”
And Darryl Fears reported yesterday at the Washington Post Online that, “The U.S. Agriculture Department will put up $33 million for grants and technical assistance to help American farmers and ranchers take steps to stop polluted storm runoff from gushing into 157 watersheds, including a small portion of the Chesapeake Bay.
“Agriculture Secretary Tom Vilsack announced the Water Quality Initiative on Tuesday to improve ‘impaired watersheds in every U.S. state and territory.’ Vilsack called the push ‘a bold step . . . to improve water quality in some very challenging watersheds.’”
Meanwhile, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Ohio State University agricultural economist Carl Zulauf posted a report Tuesday [“U.S. Senate Ag Committee version of New Farm Bill” – farmdoc daily blog] analyzing some of the commodity program changes in the Senate farm bill’s commodity provisions and the Agriculture Risk Coverage program, or ARC.
“Zulauf spells out that the farm bill clearly establishes crop insurance as the foundation of the safety net. ‘However, the search for a complement program remains on-going. This bill proposes 3 alternatives: (1) a county multiple-year shallow loss program (i.e., county ARC), (2) a farm multiple-year, shallow loss program (i.e., farm ARC), and (3) a supplemental county insurance coverage option (SCO). While many desire a single complement program, it is important to remember that risk varies notably across the U.S. and by crop. This variation makes creation of a single program to complement insurance difficult. Thus, the optimal policy might be multiple programs to complement insurance.’
“Zulauf lays out several factors a farm will have to consider in examining the best option.”
A news release yesterday from the House Agriculture Committee stated that, “Today, Rep. Jean Schmidt, Chairman of the House Agriculture Committee’s Subcommittee on Nutrition and Horticulture, held a hearing to continue receiving input on agricultural programs in preparation for writing the 2012 Farm Bill. This hearing focused on specialty crop and nutrition programs.
“The first panel of witnesses included growers and representatives of the specialty crop community to discuss the programs under Title X of the 2008 Farm Bill…[T]he second panel of witnesses discussed the various nutrition programs under the Subcommittee’s jurisdiction.”
A related news release yesterday from Western Growers indicated that, “Farmers who produce the nation’s healthy fresh produce want a seat at the table for the major federal food and farm legislation—the farm bill. That’s the message Western Growers chairman Mike Jarrard took to Congress. As president & COO of Mann Packing in Salinas, Calif.—a producer of fresh cut vegetables—he knows firsthand the food his industry produces goes hand-in-hand with a healthier eating lifestyle. That’s an important message for Congress to hear.
“‘We are local, national and international contributing to health and well-being … We grow the best medicine,’ Jarrard said during a House Agriculture Committee hearing this morning in Washington, D.C. ‘Let’s consider that all produce is good produce—whether its organic, conventional or local.’
“While federal farm bill discussions over the years largely centered on program crops such as the major grain crops, the specialty crop industry now is reiterating the vital role it plays to grow healthy & nutritious food for Americans, according to Jarrard’s testimony to the U.S. House Committee on Agriculture’s Subcommittee on Nutrition and Horticulture.”
During his opening statement at yesterday’s hearing, Mr. Jarrard elaborated on issues associated with specialty crop block grants to states; to listen to a portion of his remarks, just click here (MP3- 1:38).
Also at panel one of yesterday’s hearing, Rep. Chellie Pingree (D., Maine) asked the witnesses specifically about crop insurance for organic crops. To listen to a portion of this discussion, which included remarks from Russell Libby, the Executive Director of the Maine Organic Farmers and Gardeners Association, as well as Mr. Jarrard, just click here (MP3- 1:46).
Subcommittee Ranking Member Joe Baca (D., Calif.) indicated at yesterday’s hearing that, “The $33 billion in cuts to federal nutrition programs approved by the Agriculture Committee last month sets an unfortunate precedent that disregards the health and well-being of millions of struggling Americans. As the Committee begins to work in earnest on the 2012 Farm Bill, it is critical that we work to protect our nutrition safety net, promote consumption of healthy fruits and vegetables in schools across all 50 states, and ensure that no one in America goes hungry. Today’s hearing served as an important reminder of the need for a strong SNAP program. As our witnesses made clear, SNAP continues to be one of the most efficient and effective government programs, and is a critical lifeline for the health and nutrition of 46 million plus Americans.”
At the beginning of the second panel yesterday, Stacy Dean the Vice President for Food Assistance Policy at the Center on Budget and Policy Priorities provided an overview background of some key issues associated with the SNAP program (food stamps)- audio (MP3- 1:48).
And Rep. Baca specifically asked yesterday how the proposed reconciliation cuts in SNAP would impact the economy- audio (includes remarks from Ms. Dean) (MP3- 0:47).
And full Committee Chairman Frank Lucas participated in yesterday’s Subcommittee hearing and queried the second panel about what USDA can do to further prevent fraud and abuse in the SNAP program, a subject that is often highlighted in media reports-audio (includes remarks from Dr. Ron Haskins a Senior Fellow at the Brookings Institution, and Ms. Dean) (MP3- 2:30).
Both Subcommittee Chairwoman Schmidt and Rep. Jim McGovern (D., Mass.) asked the witnesses yesterday if their was a way to generate savings from the SNAP program that would not result in a negative impact on program participants- audio from Chairwoman Schmidt (includes remarks from Dr. Haskins and Ms. Dean (MP3- 1:31), also audio from Rep. McGovern (includes remarks from Rodney Bivens the Founder and Executive Director of the Regional Food Bank of Oklahoma, and Ms. Dean) (MP3- 1:27).
In related news, a recent article posted at The Chronicle of Higher Education Online reported that, “A record number of people are depending on federally financed food assistance. Food-stamp use increased from an average monthly caseload of 17 million in 2000 to 44 million people in 2011, according to the U.S. Department of Agriculture’s Web site. Last year, one in six people—almost 50 million Americans, or 15 percent of the population—received food stamps.
“Ms. Bruninga-Matteau is part of an often overlooked, and growing, subgroup of Ph.D. recipients, adjunct professors, and other Americans with advanced degrees who have had to apply for food stamps or some other form of government aid since late 2007.
“Some are struggling to pay back student loans and cover basic living expenses as they submit scores of applications for a limited pool of full-time academic positions. Others are trying to raise families or pay for their children’s college expenses on the low and fluctuating pay they receive as professors off the tenure track, a group that now makes up 70 percent of faculties.”
In other policy news, Betsy McKay reported yesterday at The Wall Street Journal Online that, “Obesity is so entrenched in the U.S. that it would take an intense push by schools, employers, doctors and others to reverse an epidemic that accounts for billions of dollars in annual health-care costs, concluded a report released Tuesday.
“The report by the Institute of Medicine, an influential independent body that advises the federal government on health policy, recommended requiring at least 60 minutes of physical activity a day in schools and considering excise taxes on sugar-sweetened beverages. It urged food companies to improve nutritional standards for foods marketed to people under 18 years old, recommending that mandatory standards be considered at all levels of government if the companies don’t adopt their own.”
Ken Anderson reported yesterday at Brownfield that, “Farmland rental rates in Iowa rose by 18 percent from 2011 to 2012.
“That’s based on the latest rental rate survey by Iowa State University (ISU) Extension and Outreach. It shows the average cash rent for farmland is up 38 dollars this year to an average of 252 dollars per acre—and that’s on top of a 30 dollar per acre increase in 2011.”
A recent report posted at the Erie Times-News Online (Pa.) indicated that, “Grower Chester Sceiford estimates that this spring he’s lost 80 to 90 percent of his cherry crop plus the grapes in low-lying areas of his vineyard… Seasonal frosts through April 29 killed fruit buds that were coaxed out early by summerlike temperatures throughout the Erie region in March. Temperatures from late March through April dipped to freezing or below more than a dozen times.”
The update added that, “Grapes, the region’s largest fruit crop, took the brunt of the frost damage. While there’s no estimate yet of how much of the 2012 crop has been lost, it’s shaping up to be the worst frost damage in 35 years, said Rich Erdle, member services director for the Westfield, N.Y.-based National Grape Cooperative, which owns Welch’s.
“‘The damage is significant, and that’s from Ohio through Pennsylvania and New York, even in Ontario,’ Erdle said.”
Marshall Eckblad reported in today’s Wall Street Journal that, “In the Chicago futures pits, prices of lean hogs are going belly up.
“The 26% decline in prices over the past nine months has frustrated traders, farmers and meat processors, who have long anticipated a rebound. It also has shown little benefit to consumers, who still are paying record prices for pork chops or to snack on BLTs, as retailers are reluctant to discount pork products.”
Today’s article noted that, “Those high retail prices are a big part of the problem, traders say. The high cost is deterring U.S. consumers from buying pork products as demand from places such as China and South Korea also slows. Also, supplies are likely to be more plentiful than usual thanks to the mild U.S. winter, which caused hogs to add on more pounds than usual.
“That has all combined to drive down lean-hog prices at a time when prices typically would be rising in the roughly $8.6 billion market. Summer is approaching and supplies of pigs typically dwindle at this time of year. As Americans dust off their grills and start perusing pork-loin recipes, prices typically head higher. U.S. wholesale pork prices typically rise about 20% from winter through late summer.”
Aaron Lucchetti reported yesterday at The Wall Street Journal Online that, “A Republican member of the House Financial Services Committee said 22 lawmakers have agreed to co-sign a letter asking the Justice Department to turn over its investigation of failed futures firm MF Global Holdings Ltd. to an independent counsel.
“Rep. Michael Grimm (R., N.Y.), started circulating the letter last week. As of Tuesday, 22 other Republicans and no Democrats have signed the letter. In an interview, Mr. Grimm said he is working to get more signatures and expects to send the letter to Attorney General Eric Holder later this week.”
The “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “Whether Canada, Japan and Mexico will join Trans-Pacific Partnership negotiations any time soon remains unclear. Last month, at a briefing to launch the TPP Business Coalition, which will lobby to support the eventual accord, U.S. Trade Representative Ron Kirk said the administration ‘absolutely welcomes’ the interest of the three additional countries, but that the substance of the negotiations will drive decisions about timing.
“Administration officials have said they hope to complete TPP talks this year, but some industry sources doubt that goal will be met and negotiations will continue into 2013 and maybe beyond. A more important aim may be to have enough agreement among current countries so Japan, Canada and Mexico would have to come into the talks with many major issues already agreed upon, particularly on agriculture, which would present significant hurdles for Japan and Canada.
“The TPP talks in Dallas over the next 10 days will give a good indication of how much momentum there is for completing the trade agreement in the next year or so.”
The ICE Dec and Mar contracts gave back 160 and 87 points on the week, respectively, as last week’s inversion between the two contracts gave way to partial carry. Well,