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    Wednesday, May 8, 2013

    Keith Good: Delayed Start Likely to Hurt Corn Yield Potential


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    Agricultural Economy

    Georgina Gustin reported yesterday at the St. Louis Post-Dispatch Online that, “Farmers had crossed their fingers and said their prayers. But then they got what they wanted.

    “A decimating drought last year ravaged the country’s corn crop and had farmers nervously hoping for a snowy winter or rainy spring to replenish parched farmland.

    “But now, after weeks of above-average rain, much of the nation’s corn belt is a muddy mess, leaving farmers frustrated and planting weeks behind schedule, potentially cutting into this year’s expected record crop.”

    The article noted that, “‘The whole corn belt is going to be way behind,’ said Emerson Nafziger, a professor of crop sciences with the University of Illinois. ‘Whenever we shorten our season up with late planting, we tend to decrease yield potential — and we would not expect a record yield after a start like this.’”



    Perry Beeman reported in yesterday’s Des Moines Register that, “The U.S. Department of Agriculture on Monday reported that Iowa farmers managed to plant only 8 percent of the corn crop by Sunday, the slowest start since 1995.

    “Over the past five years, Iowans had planted 56 percent of the corn by this date, on average. Wet, cold conditions have delayed the work.”

    The article noted that, “Warmer and drier conditions Monday and [Tuesday] are expected to help, but rain is back in the forecast mid-week. Even if farmers had been able to plant every day this week, they likely would have needed at least half of next week to finish, agronomists said. That means many could miss Iowa State University’s May 10 deadline for planting to ensure full yields.

    “Some varieties take fewer days to grow, and a good stretch of weather later can sometimes boost yields. As of late last week, economists said they expected little drop in yield if the corn is planted over the next week and a half.”

    AP writer Jim Suhr reported yesterday that, “John Reifsteck looks out at his muddy 1,800-acre central Illinois farm and wonders when he’ll get to plant.

    “Like so many other Midwest growers who were praying for rain during the recent drought, he’s now pining for enough sunshine and heat to dry out his soggy fields as the deadline approaches for deciding what he can even plant this year.”

    The article pointed out that, “‘We keep saying, ‘Don’t panic,’’ [Christopher Hurt, a Purdue University agricultural economist] added. ‘But how many more weeks can we go and not panic? Not many.

    “Adding to the uncertainty are commodities markets, which in recent months have shown volatility. Corn prices dropped about 80 cents in early April but jumped 40 cents early last week, with planting delays accounting for at least some of those swings, said Chad Hart, an Iowa State University agricultural economist. The price of corn remains healthy and allows for profit, he said.”

    A Purdue University news release yesterday stated that, “Indiana farmers getting a little break from frequent rains seized an opportunity in the first week of May to work in their fields at a time when they were weeks behind in planting.

    “Another, wider window might open for them next week, offering the best chance in a month to get caught up at the end of prime time for corn planting.

    “‘This could be the break that farmers have been waiting for,’ said Ken Scheeringa, associate state climatologist, based at Purdue University.”

    Agricultural related tweets yesterday, which included photos, noted that some corn was being planted in northern Illinois and Iowa.

    In other news, Bloomberg writers Joshua Zumbrun and Craig Torres reported yesterday that, “A group of bankers that advises the Federal Reserve’s Board of Governors has warned that farmland prices are inflating ‘a bubble’ and growth in student-loan debt has ‘parallels to the housing crisis.’

    “The concerns of the Federal Advisory Council, made up of 12 bankers who meet quarterly to advise the Fed, are outlined in meeting minutes obtained by Bloomberg through a Freedom of Information Act request.”

    Yesterday’s article noted that, “‘Agricultural land prices are veering further from what makes sense,’ according to minutes of the council’s Feb. 8 gathering. ‘Members believe the run-up in agriculture land prices is a bubble resulting from persistently low interest rates’… . [D]ata compiled by the regional Fed banks have documented the rapid run-up in farmland prices, particularly across the Midwest’s Corn Belt. The Kansas City Fed said irrigated cropland in its district rose 30 percent during 2012, while the Chicago Fed reported a 16 percent increase.”

    Meanwhile, in trade related developments, James Politi, Joe Leahy and Adam Thomson reported yesterday at The Financial Times Online that, “Brazil’s Roberto Azevêdo has emerged as the new director-general of the World Trade Organisation after seeing off Herminio Blanco of Mexico, the favoured candidate of the US and EU, according to officials familiar with the contest.”

    Farm Bill- Policy Issues

    Reuters writer Charles Abbott reported yesterday that, “Congress will begin writing a new, $500 billion farm law next week, the head of the Senate Agriculture Committee said on Tuesday, even as calls mounted for deeper cuts in farm subsidies and food stamp spending.

    “The Senate panel has scheduled a bill-drafting session for May 14. Its House of Representatives counterpart, unofficially, aims to start writing its version on May 15.”

    Mr. Abbott noted that, “Senate Agriculture chairwoman Debbie Stabenow, Democrat of Michigan, has said the Senate bill would cut farm bill outlays by $23 billion over 10 years. The House bill is expected to aim for savings of $35 billion over a decade.”

    “Stabenow’s proposal would shave $4 billion from food stamps, compared with the $20 billion that House Agriculture Committee chairman Frank Lucas, an Oklahoma Republican, has targeted,” yesterday’s article said.

    During a press briefing with reporters yesterday, Senate Majority Leader Harry Reid (D., Nev.) noted that, “We’re now working on WRDA [Water Resources Development Act of 2013]. We’re gonna do — try to do the farm bill. Maybe we have a little energy bill we’re gonna do. We’re gonna move immigration… .”

    And Christopher Doering reported yesterday at The Des Moines Register Online that, “Iowa Sen. Chuck Grassley conceded that even if the farm bill made it out of the Senate Agriculture Committee next week it’s unlikely to be voted on by the full Senate before lawmakers leave for the Memorial Day recess…‘I’d be surprised if this bill could be done in four or five days on the Senate floor,’ said Grassley. ‘I don’t know if it would be done by the break.’ It’s possible, he said, that Senate work on the farm bill will wrap up in June.”

    Ron Nixon noted yesterday at The Caucus Blog (New York Times) that, “Lawmakers extended the current farm bill until September. But even though the bill was extended, several farm programs expired, leaving hundreds of cattle and poultry producers without critical support programs during the worst drought in 50 years.”

    news release yesterday from Sen. Kirsten Gillibrand (D., N.Y.) stated that, “[Sen. Gillibrand] is fighting to include measures [in the Farm Bill] that can strengthen specialty crop insurance, improve access to credit for struggling farmers, invest in rural broadband, and connect locally grown, farm-fresh produce with communities that need it, as well as reform dairy pricing and strengthen income for dairy farmers.”

    Also yesterday, on the House floor (video replay), Rep. Kristi Noem (R., S.D.) discussed the significance of the Farm Bill to the agricultural industry in South Dakota and noted the importance of crop insurance.

    Also on the crop insurance issue, Daniel Looker reported earlier this week at Agriculture.com that, “A coalition of conservation groups and farm and commodity organizations has agreed to back linking conservation compliance to eligibility for crop insurance premium subsidies in the Senate’s 2013 farm bill… . [I]n return for supporting relinking rules against farming highly erodible land and wetlands in return for crop insurance support, commodity groups got a concession from conservationists: the coalition opposes any means testing, payment limits or reductions on premium subsidies for high-income farmers.”

    Mr. Looker pointed out that, “‘Conservation accountability should apply to the entire farm safety net.  Reasonable limits and actively engaged in farming rules should apply to all crop subsidies,’ NSAC [National Sustainable Agriculture Coalition] policy director Ferd Hoefner said in a message sent late Monday. ‘These are fundamental principles supported by the farmers we represent.  We therefore do not support the deal. We may not even support the conservation portion of the deal which appears to include major loopholes, though we will need to see actual legislative language before making a definitive judgment on that score.  We will continue to pursue amendments that support both bedrock principles as the farm bill process continues.’”

    However, a news release yesterday from the American Farm Bureau Federation (AFBF) indicated that, “The [AFBF] has joined with a diverse group of 44 conservation, environmental, crop insurance and agricultural organizations in distributing a position paper that outlines a common-sense compromise to link conservation compliance and crop insurance premium assistance and to oppose means testing, payment limitations or premium subsidy reductions for the crop insurance program.

    “These recommendations have been submitted to leadership of the Senate and House Agriculture committees for their consideration for debate on the new farm bill. In a letter to Senate Agriculture Committee leaders, the organizations said the position provides ‘an effective farm and natural resource safety net.’”

    An update yesterday from American Farmland Trust (AFT) noted that, “‘Conservation compliance is a common-sense, reasonable policy that is good for the environment and good for farmers,’ said Jon Scholl, president of AFT. ‘AFT is pleased to have helped create a compromise position between agriculture and conservation groups that supports the linking of conservation compliance with crop insurance premium assistance. We oppose any form of means testing, payment limitations or premium subsidy reductions for the crop insurance program.’”

    And Tom Lutey reported yesterday The Billings Gazette (Mont.) Online that, “Farmers will have to toe the line on conservation practices or go without taxpayer-subsidized crop insurance under a plan backed by U.S. Agriculture Secretary Tom Vilsack.

    “Vilsack told The Billings Gazette on Monday that the Department of Agriculture will put its weight behind several changes to keep federal conservation efforts viable as Congress eyes cuts to the 2013 farm bill. Lawmakers are expected to begin marking up the five-year farm bill in a few days.”

    Meanwhile, Agricultural Economists Gary Schnitkey (University of Illinois) and Carl Zulauf (Ohio State) penned an update yesterday at the farmdocDaily blog titled, “Questions That Will be the Focus of the Upcoming Farm Bill Debate,” which stated that, “Farm Bill markup likely will begin soon in both the Senate and House Agricultural committees. Much of the focus for traditional program crops will be around three programs: a revenue program, a target price program, and a supplemental crop insurance program (see here for more detail). While the exact nature of the programs will depend on negotiations, what is almost certain is that the programs’ rationale will be risk management. Given a risk management focus, Farm Bill negotiations will need to debate and somehow resolve the following seven questions [full update available here].” 

    On a separate Farm Bill issue regarding energy issues, a news update Monday from Sen. Al Franken (D., Minn.) stated that, “Today, U.S. Sens. [Franken] and Tom Harkin (D-Iowa) introduced the energy legislation to be included in the 2013 Farm Bill, which includes several provisions expected to create jobs throughout Minnesota and the country.

    “Sens. Franken and Harkin’s Rural Energy Investment Act [overview summary here] will help farmers, ranchers, and rural communities by encouraging the growth of agricultural energy technologies, including advanced biofuels, biogas, biomass, and renewable energies.”

    Meanwhile, the Senate Appropriations Subcommittee on State, Foreign Operations, and Related Programs held a hearing yesterday on the F.Y. 2014 USAID Budget, where USAID administrator Rajiv Shah testified.

    At the hearing, Subcommittee Chairman Pat Leahy (D., Vt.) noted that, “You [Dr. Shah] mentioned the food aid program shifting funding from P.L. 480 to the State Foreign Ops bill to be managed by USAID. And this is something — I referred to my past experience as chair of the Senate Agriculture Committee. I’ve watched this from both ends.

    “As I understand it, you want to end what you feel is an inefficient practice of monetization, replacement of cash for the same development purposes and target populations, shift $1.1 billion to international disaster assistance so we can have flexible response in food emergencies, so you have a total of $1.4 billion for emergency food aid.

    “Of course, we’ve heard what will this do to farmers or shippers here. We’re concerned about those jobs. But we also want to make sure that our tax dollars, which are being used to prevent people from starving, are they being used in the best way.”

    Later, Nebraska GOP Senator Mike Johanns indicated that, “Here’s what I would say. There’s another step here. But I think this [food aid] proposal, going as far as it does, it’s just going to be impossible to get done. I just — I’ve been down this road that you’ve been down, and I carry some scars for it.

    “I think there is a case we can make here, but I don’t want to cut farmers out. I don’t want to cut the producers in the United States out of this.

    “So, what I would say is what I’ve said to you directly: I am willing to work with my colleagues on the other side of the aisle, on my side of the aisle. I am willing to work with you to come up with an idea that the administration would find acceptable, that doesn’t cut American agriculture out of this program.”

    On the issue of food safety, Ron Nixon reported in today’s New York Times that, “Inside a warehouse near the Canadian border, boneless hams bound for Philadelphia are coming off a tractor-trailer from Toronto under the gaze of a federal food inspector. Each week, about 20 of the 150 food trucks from Canada are rejected because of paperwork problems or contaminated meat.

    “While Congress spared meat and poultry inspections by the Agriculture Department from the automatic budget cuts known as the sequester, inspections at foreign food factories have been in decline because of years of budget cuts, and border inspections like this one in New York may be eliminated.

    “The Food and Drug Administration, which inspects everything but meat and poultry, is struggling to find the money to inspect foreign foods under a new food safety law that Congress did not support with enough funds. The Obama administration’s 2014 budget calls for an increase in agency financing, but the most money would come from fees that the food industry and Congress oppose. Lawmakers in March did approve an additional $40 million in one-time financing for the agency to put the new law into effect, but food safety experts say more money will be needed.”

    Budget

    Lori Montgomery and Zachary A. Goldfarb reported in today’s Washington Post that, “After four years of trillion-dollar deficits, the red ink is receding rapidly in Washington, easing pressure on policymakers but shattering hopes for a summertime budget deal.

    Federal tax revenue is up and spending is down thanks to an improving economy, tax increases that took effect in January and the automatic budget cuts known as the sequester.”

    Today’s article added that, “The sunnier outlook means that President Obama will be able to pay the nation’s bills for months without seeking additional borrowing authority from Congress — probably until Oct. 1, according to independent forecasts.

    “That might seem like good news, but it is unraveling Republican plans to force a budget deal before Congress takes its August break. Instead, the fiscal fight appears certain to bleed into the fall, when policymakers will face another multi-pronged crisis that pairs the need for a higher debt limit and the fresh risk of default with the threat of a full-scale government shutdown, which is also looming Oct. 1.”

    Transportation- Water

    Daniel Looker reported yesterday at Agriculture.com that, “If you buy fertilizer or sell grain shipped on the Mississippi or Ohio rivers, you’ll be glad to know that on Tuesday the Senate began to consider a new version of the Water Resources Development Act of 2013, or WRDA.

    “It’s authorizing legislation for river transportation and harbor maintenance programs run by the U.S. Army Corps of Engineers. Ag groups including the American Farm Bureau Federation are pushing for its passage.”

    And an update yesterday from the National Council of Farmer Cooperatives (NCFC) indicated that, “The [NCFC] today signaled its support for the inclusion of S. 496, the Farmers Undertake Environmental Land Stewardship Act, as an amendment to the Water Resources Development Act currently being debated on the Senate floor. The amendment seeks to ensure that the Environmental Protection Agency’s pending Spill Prevention, Control and Countermeasure (SPCC) regulations adequately recognizes the low risk of spills on America’s farms and ranches.”

    Immigration

    Sara Murray and Corey Boles reported in today’s Wall Street Journal that, “A bipartisan plan to overhaul immigration laws faced its first test Tuesday as lawmakers began filing amendments that could unravel some carefully negotiated provisions in the bill on issues such as border security and the visa program for low-skill workers.

    “Members of the Senate Judiciary Committee were required to file their amendments by Tuesday evening. Some of the proposals are sure to test fragile alliances among the four Republican and four Democratic senators who drafted the immigration bill and who are trying to protect core provisions, such as a work visa program that was hashed out by the U.S. Chamber of Commerce and the AFL-CIO.”

    The Journal article pointed out that, “The committee will start considering amendments Thursday.”

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