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    Friday, June 14, 2013

    Keith Good: Corn Belt is Expanding; Europe Trade Deal May be Faltering


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    Agricultural Economy

    Owen Fletcher reported in today’s Wall Street Journal that, “Wheat has long dominated the windswept farm fields of the northern Great Plains. But increasingly, farmers here are switching to corn, reflecting how climate change, advancements in biotechnology and high corn prices are pushing the nation’s Corn Belt northward.

    “Last year, corn narrowly eclipsed wheat as North Dakota’s most valuable crop as farmers produced a record corn harvest. This year, as farmers across the Corn Belt are finishing up the planting season after an unusually wet spring, the U.S. Department of Agriculture has forecast that 4.1 million acres of North Dakota will be sown with corn, an all-time high and a nearly threefold increase over a decade ago.”

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    And, Simon Romero reported in today’s New York Times that, “Beef consumption in this red-meat colossus [Argentina] has decreased so much over the decades that the nation recently fell from its perch as the world’s top per capita consumer of beef, a title Argentine ranchers are fighting to regain from their tiny neighbor, Uruguay. In another jolt, a study warned that pizzerias could soon outnumber steakhouses in this city.

    “As if that were not enough to rattle the national psyche, Argentina slipped into 11th place, behind countries like New Zealand and Mexico, in the global ranking of beef exporters this year, prompting solemn reactions like one in a major newspaper that declared it ‘the end of a reign.’”

    The Times article noted that, “Argentines ate about 129 pounds of beef a person last year, far surpassing Americans, who mustered a mere 57.5 pounds by comparison. But Argentina’s current level is a pale shadow of its peak: 222 pounds of beef for every man, woman and child, achieved in 1956.

    “Reasons vary for these doldrums. Beef prices have surged with inflation, but cattlemen contend that government price controls aimed at preventing domestic beef consumption from falling further have wreaked havoc by making it costly to maintain large herds. Others, eying China’s rising demand for grains over the last decade, say it is simply more profitable to farm soybeans than to raise cattle.”

    On trade issues, Howard Schneider reported in today’s Washington Post that, “Chances for a broad trade deal between the United States and the European Union are fading following recent revelations about U.S. electronic surveillance programs, oversight of genetically modified food and other issues, according to officials and analysts in the United States and Europe who are following the discussions.

    “European officials are set to meet in Brussels on Friday to debate a formal mandate for their negotiating team, and analysts who have reviewed the draft text say it points toward a more limited agreement rather than the expansive economic opening that officials said couldunleash tens of billions of dollars in additional trade.”

    The Post article noted that, “There is still, those observers and officials say, immense potential for an agreement that could in the long run boost commerce between the world’s top economic partners, lower the costs of doing business by aligning regulatory standards, and make a number of other changes to ease the flow of goods, services and capital across the Atlantic.

    “But hopes for an agreement that would dramatically change the trading landscape — and boost the near-term growth and job prospects for Europe and the United States — have run up against the realities of Europe’s 27-nation political maze, including privacy concerns and French demands for protections of its film and media industries.”

    An update posted yesterday at U.S. Wheat Associates Online stated that, “Every summer, members of a crop survey team from South Korea traverse the Pacific Northwest for a firsthand look at the new wheat harvest. This year’s team was scheduled months before USDA’s Animal and Plant Health Inspection Service (APHIS) announced May 29 that it had identified an unapproved, genetically modified, glyphosate-resistant trait in volunteer wheat in a single Oregon field. But, the timing of the Korea Crop Survey Team’s travel June 16 to 22 to Montana and Oregon provides a great opportunity to reinforce the safety, quality and reliability of the U.S. wheat on which South Korea’s millers, bakers and food processors have come to rely.”

    Immigration

    Lisa Mascaro reported yesterday at the Los Angeles Times Online that, “In the first and only vote Thursday on the immigration bill, senators turned back a Republican measure that would have delayed a path to citizenship for those in the country illegally until after the border with Mexico is fully secure.

    “Republicans still plan to offer several other measures to enhance border security, but this one, from Sen. Charles E. Grassley of Iowa, was one of the most hard-line of the proposals.

    “The 57-43 vote to defeat the amendment offered an imprecise test of whether the Senate will find the 60 votes needed to pass the bill. Some senators who favored the tough approach may still vote for the bill.”

    The LA Times article added that, “Top Republicans, including Jeb Bush, the former Florida governor, sought to nudge GOP lawmakers toward an overhaul of immigration laws that party leaders see as being crucial to winning back Latino voters who have largely turned toward the Democratic Party.

    “Bush met with a small group of House Republicans for a private breakfast and spoke later at a forum.”

    Farm Bill- House Developments, Chairman Lucas

    An update posted yesterday at the Oklahoma Farm Report Online noted that, “The Chairman of the House Ag Committee, Oklahoma Congressman Frank Lucas, talked with Farm Director Ron Hays about the latest farm bill developments on Thursday morning.”  (A replay of the discussion with Chairman Lucas and Ron Hays is available here). 

    The Oklahoma Farm Report update added that, “Lucas told Hays he expects the farm bill to come up on the House floor next week, assuming that the whip count shows that they are close to the 218 votes needed for final passage. He expressed his hope that by Monday the Rules Committee would put out a call for amendments – which he expects hundreds of. Lucas says he has had conversations with the Chairman of the House Rules Committee and that he is expecting the Rules Committee will sort through the amendments, realize redundancy isn’t a good use of time and limit the number of amendments on each subject.

    “The Lucas definition of an ‘open discussion’ on the floor of the House is not for every one of two or three hundred amendments to be heard and possibly voted on- but for all major points of view to have their concerns aired and voted on. This would result in each of the major areas of the bill to be open for consideration in an open but orderly process and the Chairman believes the House will end up voting on 30 to 40 amendments covering every title- including food stamps, sugar, dairy, conservation and crop insurance.”

    In addition, yesterday’s update pointed out that, “Lucas says the debate that could be the most contentious may be over the level of cuts in nutrition spending, although he does expect those who simply don’t like Commodity Title spending will come up the more modest farm safety net that is in this bill- compared to the 2008 or previous farm bills. He also expects several amendments could end up being considered on how much support is reasonable for crop insurance- and he also expects those who want to socially engineer what a farmer should look like will offer payment limitations on the safety net programs- both in Title 1 as well as in crop insurance.”

    Also with respect to the Chairman’s interview with Ron Hays, Jerry Hagstrom reported yesterday at National Journal Online that, “House Agriculture Committee Chairman Frank Lucas, R-Okla., said Thursday he believes that the farm bill will come up on the House floor next week and be finished in two days—assuming the whip count shows that he and ranking member Collin Peterson, D-Minn., are close to the 218 votes they need for final passage.

    “‘I feel better now than at any time I’ve felt in a year’ about convincing a majority of the House to vote for the bill, Lucas told the Oklahoma Farm Report, a radio program. But he added, ‘I don’t expect to go to the floor if we’re not there with the 218 votes.’”

    Mr. Hagstrom pointed out that, “Meanwhile, congressional and specialty-crop industry sources said that Democratic leaders are trying to convince members who are distressed by the proposed $20.5 billion cut in food stamps over 10 years that they should vote for the bill because it contains provisions that would help the fruit and vegetable industry and, in turn, help fight childhood obesity. The specialty-crop provisions in the House bill are better than the Senate bill, one Democratic aide said. Antihunger advocates also met with aides to House Minority Leader Nancy Pelosi, D-Calif., on Thursday to urge her to try to keep food-stamp cuts to a minimum.”

    And Chairman Lucas spoke yesterday with Phil Turney (WBBZ (1230-AM)), and indicated that, “As of this moment, I really expect the [Farm] Bill to come to the floor next Wednesday, I would think that we’ll have a rule over how many amendments and how much debate time- that will probably be a Wednesday, Thursday debate, and hopefully come to a focus next week.” (audio clip- MP3-2:55)).

    And an update yesterday from the Rules Committee stated that, “The Committee on Rules may meet the week of June 17th to grant a rule that could limit the amendment process for floor consideration of H.R. 1947, Federal Agriculture Reform and Risk Management Act of 2013… . [M]embers must also submit 30 hard copies of the amendment, one copy of a brief explanation of the amendment, and an amendment login form to the Rules Committee in room H-312 of the Capitol by 2:00 p.m. on Monday, June 17, 2013.”

    Additional information on the Farm Bill has also been posted at this Rules Committee webpage.

    Speaker Boehner held a news conference yesterday, where in response to the last question from reporters, the Ohio Republican stated: “My goal is always to bring bills to the floor that have a strong Republican majority. And, you know, whether we’re talking about the farm bill, you know — there are parts of the farm bill I hope are improved on the floor of the House through an open process. But I do expect that we’ll have a majority of Republicans voting for the farm bill.”

    An update Wednesday at NCPR Radio (Canton, N.Y.) Online by David Sommerstein stated that, “And there’s a movement to eliminate a part of the new dairy safety net that would control the supply of milk to prevent prices from sharply dropping.

    “That’s a problem to North Country [Democratic] Congressman Bill Owens. Owens says the farm bill will have to be a compromise. But he said you need supply management for another part of the dairy safety net to work – an insurance program that pays farmers when their profit margins shrink.

    “On food stamps, Owens said he would support a compromise – cuts to food stamps of between $8 and $12 billion, or roughly halfway between the Senate and House versions.”

    In other developments, Brian Francisco reported yesterday at The Journal Gazette (Fort Wayne, Ind.) Online that, “U.S. Rep. Marlin Stutzman said Thursday he will try to split food stamps away from the five-year farm bill the House is preparing to debate.

    “‘My focus right now is to convince leadership that we need a vote to separate the bills,’ Stutzman, R-3rd., said in a conference call with reporters.

    “‘I’m working to have an amendment or some sort of procedure to separate the bills,’ he said. ‘There are a lot of folks who are interested in voting for it.… I think you’ll find a lot of support for it.’”

    On this issue, David Hawkings noted yesterday at Roll Call Online that, “‘Can this marriage be saved?’ remains the central storyline as the House gets ready to vote on a farm bill next week.

    “The answer now looks to be a qualified ‘yes’: The union of crop subsidies and food stamps, created out of political convenience in the Nixon era, is on course to be preserved one final time.

    “But a no-fault divorce has a very good chance of being granted before the next farm bill is written near the end of the decade. After 40 years, more and more of the rural lawmakers who care most about the livelihood of farmers have decided they’re ready to dump their urban and suburban colleagues who care more about the nutrition of the poor.”

    Mr. Hawkings stated that, “Finding a middle ground that can sustain the balky and unusual geographic coalition — without causing that allegiance to get swamped by the more typical and partisan size-of-government disputes — will be a main challenge for the farm bill conferees. It may be their last hurrah.

    “One reason the regional alliance is nearing its end is that the balance of power and interests between the factions has gone out of whack. When the conservative Texas Democrat W.R. Poage started forging the coalition in 1969, when he was writing his first farm bill as House Agriculture chairman, the amount being spent on farm aid was nearly identical to the budget for food stamps. But the political support for boosting welfare was greater than for bolstering crop subsidies.”

    “Since the Great Recession started in 2008, right after the last farm bill was enacted, spending on food stamps has about doubled. This year, the government is spending about $80 billion to serve 1 in 7 Americans through what’s now called the Supplemental Nutrition Assistance Program. That price tag is four times as much as the annual grand total for commodity subsidies, agriculture research, crop insurance, land conservation, rural development and other programs that give the ‘farm bill’ that name,” the Roll Call item said.

    Also, Amy Mayer reported yesterday at The Field Notes Blog (Harvest Public Media) that, “And along with the increased role of crop insurance, the [Senate Farm] bill includes a tie-in with conservation measures.”

    The update pointed out that, “And the future of cross-compliance is far from assured.

    “[Neil Hamilton, director of the Agricultural Law Center at Drake University in Des Moines] points out that the House bill headed to floor debate—possibly beginning next week—doesn’t require farmers to engage in conservation practices to be eligible for crop insurance. He expects cross-compliance will be introduced as a floor amendment, and said its prospects there aren’t great.

    “‘Predictably it might fail but it will at least give you a nose count as to where they are,’ Hamilton said. And that outcome could influence what happens in committee.”

    Meanwhile, a National Crop Insurance Services update yesterday stated that, “While farmers must make their decisions about purchasing crop insurance well before they plant, nearly 269,000 policies have been processed through participating companies and RMA as of June 10, 2013. Those policies protect nearly 93 million acres representing nearly $23 billion in liabilities, accounting for $886 million in farmer paid premium.  These numbers will continue to grow as more policies are processed and farmers plant their acres.”

    And a news release yesterday from the American Soybean Association (AS)stated that, “In a letter to lawmakers Thursday, the [ASA], National Corn Growers Association, National Sunflower Association and the U.S. Canola Association urged the House of Representatives to quickly consider and pass H.R. 1947, the Federal Agriculture Reform and Risk Management (‘FARRM’) Act.”

    Farm Bill- Interstate Commerce- Agricultural Production (King Amendment)

    David Weinberg reported yesterday at the Marketplace Morning Report Online that, “Among the many big issues Congress has on its plate — immigration, sequestration and healthcare reform — there are countless smaller battles waged between law makers. One of those battles is about eggs, and it has hatched into a much bigger debate over states’ rights.

    “In 2010, California voters overwhelmingly passed Proposition 2, which set standards for how egg-laying hens could be raised. It requires hens have enough space in their cages to spread their wings.”

    Mr. Weinberg noted that, “In other words, all eggs sold in California had to meet the standard. But opponents of the law argue that it shouldn’t apply to eggs laid outside California. Congressman Steve King of Iowa, the largest egg-producing state, proposed an amendment to the farm bill that would bar states from imposing their agricultural standards on other states.”  [A video replay and FarmPolicy.com transcript of the House Ag Committee debate on this amendment is available here].

    “‘Congressman King’s amendment does not set a national standard for egg production,’ says Mitch Head with United Egg Producers, a trade group that wants a national standard for raising hens. It believes a national standard would settle the issue once and for all and make it easier for all egg producers to comply with the law.”

    Ken Anderson reported yesterday at Brownfield that, “Iowa Representative Steve King was successful in attaching his ‘Protect Interstate Commerce Act’ to the House Ag Committee’s farm bill.  And King says he will fight to keep that language in the bill once it hits the House floor, and eventually, a House-Senate conference committee.

    “The amendment would bar states from imposing their own animal welfare standards on eggs, meat and other ag products brought in from other states.

    “‘This will put an end to, I think, the Humane Society of the United States—whom I refer to as the ‘vegan lobby’—trying to tell us how to take care of our livestock,’ King says.  ‘We put an end to it and then HSUS can find another way to turn us all into vegans.  In the end, they really want to take meat off our plate.’”

    House Appropriations

    news release yesterday from the House Appropriations Committee stated that, “The [Committee] today approved the fiscal year 2014 Agriculture Appropriations bill, which will now head to the House floor for consideration. The proposed legislation funds important agricultural and food programs and services, including food safety, animal and plant health programs, rural development and farm services, marketplace oversight, and nutrition programs.

    “The bill totals $19.5 billion in discretionary funding, which is $1.3 billion below the fiscal year 2013 enacted level and approximately equal to the current level caused by automatic sequestration spending cuts. This total is $516 million below the President’s request for these programs.”

    The release included a list, along with a brief summary, of the amendments that were added to the measure yesterday.

    David Rogers reported yesterday on the Appropriations hearing at Politico noted that, “Indeed, the chaotic, three-hour plus markup gave a little taste of the anticipated free-for-all next week as House Speaker John Boehner edges closer to bringing a much larger five year Farm Bill to the floor.”

    Mr. Rogers noted that, “In Appropriations, potatoes struck first behind Rep. Mike Simpson, a boisterous, popular Idaho Republican who unashamedly promoted his state’s product and won language to make room in WIC’s fruit and vegetable package for white potatoes.”

    And an update yesterday at the National Sustainable Agriculture Coalition Blog stated that, “Rep. Rosa DeLauro (D-CT) offered unsuccessful amendments to restore funding for the Commodity Futures Tradition Corporation (CFTC) and for the Women, Infants, and Children (WIC) nutrition program.”

    Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Democrats opposed the bill because it reflects $91 billion in automatic cuts to the entire federal discretionary budget called for by the sequester-backed 2011 Budget Control Act.

    “They said the bill will result in some 200,000 people losing domestic food assistance and 8 million people internationally going hungry.”

    The Hill update explained that, “The discretionary part of the measure governs the operating budgets of the Agriculture Department, Food and Drug Administration and Commodity Futures Trading Commission (CFTC) and discretionary spending such as on school lunches, international food aid and the Women, Infants and Children (WIC) nutrition program.

    “The committee has no power to alter $120 billion in farm subsidies and food stamp spending, which is governed by the multi-year farm bill. A version of the farm bill for the next five years is expected on the House floor this month.”

    The Senate Agriculture Appropriations Subcommittee is scheduled to hold a hearing on June 18.

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