Week of May 12-16, 2008 Archive
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May 16th
STALLMAN DEFENDS FARM BILL IN LETTERS TO EDITORS---The Wall Street Journal today received a letter from American Farm Bureau Federation President Bob Stallman in support of the bipartisan, compromise farm bill conference report. Stallman’s letter rebuts points made by a recent WSJ editorial (“Who Wants to be a Millionaire,” May 14) lambasting the farm bill.
Stallman wrote the editorial “lacked a basic understanding of the delicate balance struck by the 2008 farm bill and why all of American society benefits by investing in a basic safety net, such as the one the farm bill offers our nation’s modern family-owned farms. The farm bill carries out many important missions, including food assistance and nutrition programs for needy Americans, programs to help conserve our natural resources, food safety and even support for our rural communities. While commodity supports for farmers are often the only aspect editorial writers focus on, it is important to point out that out of the entire $300 billion package, only about $35 billion goes to funding a basic, no-frills safety net for America’s farmers.
“Further, in spite of all the charges otherwise, those looking for meaningful reform in this farm bill don’t really have to look too far to find it. In spite of many attacks from farm bill critics, this bill cuts deeply into the financial safety net that provides basic support to America’s farmers and helps provide food security for our nation in these uncertain times. The last farm bill included $95 billion in commodity-type supports for farmers over five years. This bill slashes that five-year total to about $48 billion, which includes commodity-type supports, disaster assistance and crop insurance.
“In other words, the safety net for agriculture is expected to cost right around half of what it did in the 2002 bill. That is a substantial cut. Reform? You bet. The numbers speak for themselves. In spite of a cut in the cornerstone support offered by direct payments, this is a good, solid bill for American agriculture, American consumers and the environment. We applaud Congress for supporting America’s farmers and ranch families.”
In addition, letters expressing similar views were submitted to The New York Times and The Houston Chronicle this week.
---FARM BILL ACTION MOVES INTO NEXT WEEK---The House and Senate approved the farm bill conference report this week by veto-proof margins. The House supported the farm bill by a margin of 318-106; the Senate passed it 81-15. Click to view the House and Senate vote breakdowns.
President Bush is expected to veto the farm bill next week, possibly on Tuesday. If that is the case, then American Farm Bureau Federation farm policy specialists believe it is likely congressional leaders will schedule over-ride votes for Wednesday or Thursday before adjourning for the Memorial Day recess.
Keep in mind that the new farm bill is expected to cost about half that of the 2002 farm bill. Mandatory spending for Title I (commodity) in the 2002 farm bill cost about $95 billion over five years. In the pending farm bill, the total budget for Title I, plus permanent disaster assistance and crop insurance—which is not Title I spending—is expected to cost about $48 billion over five years.
In related legislative business, the House and Senate extended the existing 2002 farm bill through next Friday, May 23. It was set to expire today.
The New York Times today reports the Senate vote “virtually seals President Bush’s defeat in a battle over agriculture policy.” An editorial in the same paper states Bush “should keep his promise to veto it and demand better legislation.” An editorial in The Washington Post today describes the farm bill as “the epitome of old-style Washington politics.”
--COLO. FARM BUREAU SATISFIED WITH NEW ANIMAL LAW---Colorado Gov. Bill Ritter (D) this week enacted legislation regulating the care of farm animals.
In an op-ed submitted to media outlets, Colorado Farm Bureau President Alan Foutz described the new law as “welcome news to Colorado farmers and ranchers. It will, over the long term, help make sure our agriculture and livestock community has a strong voice in the regulation of animal care practices in this state.
“In the last few years, concerns have been raised about some of the standard practices we’ve used for many years in raising farm animals,” Foutz wrote. “All of these practices, it’s important to note, have been developed over time by livestock veterinarians and other animal scientists.
“Nevertheless, the Colorado agriculture community is listening to these concerns because we understand the public holds us to high standards. The bill signed by Gov. Ritter makes it very clear that we take those concerns seriously, giving the force of law, for example, to the Colorado Pork Producers’ commitment to phase out pregnancy safety pens for sows.
“But it’s important to keep one other point in mind as we move forward. While we’re always willing to take a fresh look at what we do and how we do it—and to be sensitive to the public—we also believe that animal and livestock practices ought to be reviewed by experts like livestock veterinarians and other animal care scientists. And like most of our neighbors here in Colorado, we believe decisions about animal care need to be made on the basis of sound science, not on purely emotional impressions.”
Near the end of the op-ed, Foutz wrote, “The care of farm animals is a legitimate issue for reasonable discussion. But that discussion should be conducted by the people who know what it’s like to care for animals every day of the year.”
---MOST AMERICANS BELIEVE MEAT IS SAFE---Ninety percent of consumers believe the meat, poultry and fish their groceries sell is safe, according to a survey by the grocery industry. The same survey shows nearly 80 percent of consumers trust the Agriculture Department to ensure food safety, and 76 percent said they hold that view of the Food and Drug Administration.
In addition, the Food Marketing Institute’s U.S. Grocery Shopper Trends 2008 report shows Americans’ concerns about the economy are bearing out in the decisions they make related to food and dining. Seventy-one percent said their views of the economy compel them to eat at home more, and 67 percent said they are buying fewer luxury foods. Sixty percent said they are buying more store brands, and 58 percent said they are eating more leftovers.
Further, 41 percent of shoppers said they are very concerned about the nutritional content of the foods they eat, with fat of all kinds being a major concern.
---KEY HOUSE COMMITTEE EXTENDS BIODIESEL TAX CREDIT---The House Ways and Means Committee this week approved H.R. 6049, a bill that extends tax credits favored by the biodiesel industry.
Among the bill’s provisions, it extends the biodiesel tax incentive for one year through Dec. 31, 2009; provides a dollar-a-gallon incentive for all biodiesel, regardless of feedstock; and shuts the “splash-and-dash” loophole that allows foreign-produced fuel to enter the U.S, claim the biodiesel tax incentive, and then be shipped to a third country.
According to the National Biodiesel Board, biodiesel displaced 20 million barrels of petroleum in 2007. Biodiesel also is a clean-burning fuel that reduces carbon emissions by 78 percent, the equivalent of removing 700,000 cars from the nation’s roadways.
Click here to read a new release about this issue.
May 15th
---USDA: RECKLESS SPENDING, SUBSIDIES FOR WEALTHY---In a scolding statement released yesterday following House passage of the 2008 farm bill conference report, Secretary of Agriculture Ed Schafer said Congress did not capitalize on “the opportunity to work with the administration to craft a farm bill that delivers reform to outdated, costly farm programs.”
“Instead, Congress chose a different path, and today they passed a bloated, earmark-laden bill that spends nearly $20 billion over its original cost and continues to balance subsidy payments to the wealthy on the backs of the middleclass taxpayer,” Schafer stated. “The bill passed today is a farm bill in name only. It does not target help for the farmers who really need it, and it increases the size and cost of government while jeopardizing the future of legitimate farm programs by damaging the credibility of farm bills in general.”
According to Schafer, at a time of record-setting income for farmers, the farm bill sends “the wrong message to the rest of the country who are not experiencing the boom of the agriculture sector. This bill is loaded with taxpayer funded pet projects at a time when Americans are struggling to buy groceries and afford gas to get to work.”
Schafer said the bill is “eight months behind schedule,” and he called the farm bill “trade distorting,” marked by its failure to “provide meaningful reform.” The statement also highlighted several “massive earmarks,” including “$170 million for the salmon fishermen on the West Coast, or $500 million for a single entity land buy in Montana, just to name a few.”
“Reckless spending like this is not what farm bills should be about. Congress had a real chance to implement reform and strengthen farm programs for the next decade. This reform could have allowed for savings to be reinvested in future agriculture needs, such as energy and research. Instead, they decided to spend billions upon billions of taxpayer dollars to grow government and invest in the tired status quo. The president will veto this bill, and I encourage members of Congress on both sides of the aisle to support his stand for fiscal discipline and the best interests of America's farmers and ranchers.”
The American Farm Bureau Federation strongly supports the farm bill.
---HOUSE, SENATE APPROVE FARM BILL CONFERENCE REPORT---The House on Wednesday voted to approve the farm bill conference report by a 318-106 margin. The Senate today approved the legislation by an 81-15 margin.
Click here to read the American Farm Bureau Federation’s news release.
President Bush has vowed to veto the farm bill next week. (See item above for Agriculture Secretary Ed Schafer’s most recent statement of the Bush administration’s objections.)
The vote tallies are significant because, with a presidential veto looming, lawmakers will have to vote again to override the veto. Overriding a veto requires the support of two-thirds of the members of each chamber. In the House, that means at least 290 votes will be needed; in the Senate, at least 67 votes will be needed.
Securing a sufficient number of votes in the House is deemed the more difficult task. House Minority Leader John Boehner (R-Ohio) and the White House actively whipped for votes against the farm bill this week, and it is expected they will do so again once the override vote is scheduled. Certain House members, most of them Republicans, may feel more pressure to vote against the farm bill conference report when it comes up for a second vote than felt that way on Wednesday.
American Farm Bureau Federation farm policy specialists are monitoring the situation closely and actively working to gauge congressional support. AFBF urges state Farm Bureaus to remind lawmakers that their votes on the conference report will help determine “Friend of Farm Bureau” awards later this year.
Multiple media outlets weighed in with farm bill articles following the House vote: The New York Times, The Des Moines Register, the Associated Press, Reuters, the Brownfield Network, The Delta Farm Press and The Wall Street Journal. A separate article in today’s edition of The Wall Street Journal looks at how some House Republicans are distancing themselves from Bush, with the farm bill just one front in that fight.
For more information, contact AFBF’s Mary Kay Thatcher at 202-406-3661 or mkt@fb.org or Tara Smith at 202-406-3675 or taras@fb.org.
---TURBULENT FUTURES MARKETS CHALLENGING FARMERS---While financial and risk-management decisions always have been challenging aspects of farm and ranch work, extreme volatility in commodity markets in recent months has made these jobs even more difficult for farmers, even as prices have soared.
During a Capitol Hill hearing today, American Farm Bureau Federation President Bob Stallman told lawmakers that farmers are contending with unusual degrees of financial risk and exposure as futures markets have become increasingly volatile. While sky-high futures contract prices cause many Americans to believe farmers are bringing home the proverbial bacon, the reality is that few farmers benefit directly from the contracts advertised by commodity exchanges. Most farmers are not in positions to capture these higher futures prices.
Stallman cautioned that because of the disparity between futures contracts and cash, or spot, prices, farmers could find themselves exposed to more risk as time goes on. He also said the role of speculative and commodity-index-related trading in agricultural futures markets, while growing for some time, has reached historic levels and contributes to market uncertainty.
---INTERIOR ADDS POLAR BEARS TO THREATENED LIST---Interior Secretary Dirk Kempthorne listed polar bears as “threatened” under the Endangered Species Act on Wednesday. The American Farm Bureau Federation opposes the listing.
Kempthorne said the loss of Arctic sea ice due to a warming climate could drive polar bears to the brink of extinction in less than four decades, The Washington Post reports.
“This has been a difficult decision,” Kempthorne said. “But in light of the scientific record and the restraints of the inflexible law that guides me, I believe it was the only decision I could make.”
In addition, Kempthorne said he would ensure his decision did not “open the door” for activists to force the adoption of limits on greenhouse gas emissions linked to global warming. He also said the act “is not the right tool to set U.S. climate-change policy.”
---SCHOLL TO LEAD AMERICAN FARMLAND TRUST---Jon Scholl, a former Illinois Farm Bureau staff member, has been named president of the American Farmland Trust (AFT). He succeeds Ralph Grossi, who departs after 23 years at the helm.
Scholl most recently served as the counselor to the administrator for agricultural policy at the Environmental Protection Agency. Prior to that position, Scholl served for 25 years with the Illinois Farm Bureau as executive assistant to the president and in a variety of other roles.
An excerpt from the AFT news release follows: “We are delighted to bring a new president of Jon’s caliber on board to lead the organization at this exciting time. As a farmer and former Farm Bureau and EPA official, Jon embodies AFT’s mission at the intersection of agriculture and the environment. Jon is uniquely qualified to build on our tradition of leadership in farmland protection and to lead AFT in the years ahead as we implement a new strategic plan.”
Scholl is a native of McLean County, Ill. He will begin his AFT tenure on July 7.
May 13th
---TIGHT SUPPLIES, STRONG DEMAND CONTINUE---Tight supplies and strong demand mean prices for corn and soybeans are likely to remain high for the foreseeable future, according to American Farm Bureau Federation economic analysis of two recent government reports.
“The degree to which soybean supplies are tight is probably the biggest surprise in this report,” Terry Francl, AFBF senior economist, said. The Agriculture Department’s World Agricultural Supply and Demand Estimates (WASDE) report for May projects 2008/09 soybean ending stocks of just 185 million bushels, some 85 million bushels less than the average pre-report estimate. A crop production report also was released Friday.
The report also showed a slight reduction—of a bushel an acre—in corn yield estimates for the current crop year compared to a report published in February. The latest estimate predicts corn yields of 153.9 bushels an acre.
“The corn yield projection was probably the most watched-for number in this report,” Francl said. “However, given the slow plantings to date and the likelihood of further delays based on weather forecasts, many observers had thought that number should be reduced by 3 bushels an acre or perhaps more.”
Francl said the WASDE report continues to illustrate trends that have been occurring over the past few years. “With the exception of wheat, supply and demand balances, particularly for corn and beans, will remain tight and prices high. Moreover, despite the high crop prices of the past year or so, it is not clear that demand rationing has truly begun.
“Consequently, it’s unclear how high prices will go—perhaps $7 a bushel for corn and $15 a bushel for beans—before the rationing process truly sets in. I sense we are getting close to that point, but we are not there quite yet.”
To read the complete AFBF news release, which includes Francl’s comments about wheat and cotton, click here.
To view the complete USDA WASDE report, link to the following Web site: www.usda.gov/oce/commodity/wasde/index.htm. The crop production report may be viewed at this Web site: http://usda.mannlib.cornell.edu/usda/current/CropProd/CropProd-05-09-2008.pdf. The Des Moines Register published a short item about the government reports.
In addition, the Associated Press reports, “Corn prices sank Monday as investors took profits from last week’s record-setting rally and bet that forecasts for dry weather in the Midwest will allow farmers to speed planting. … The outlook for warm, drier weather after weeks of heavy rain in the U.S. Corn Belt is expected to ease planting delays that have driven up corn prices to unprecedented levels. Wet weather in midwestern states had left fields too soggy for planting, putting farmers far behind schedule.”
---CORN, RICE TOO EXPENSIVE TO PLANT FOR SOME---Despite soaring prices for certain crops, The Los Angeles Times reports some farmers are shying away from planting corn and rice in favor of cheaper-to-grow wheat, soybeans and safflower.
“They say the reason is simple. The cost of planting some crops is rising as fast as their prices, and sometimes faster, leaving little incentive to increase production of some foods that remain in high demand around the world,” the article notes.
“The little-noticed development could keep the price of some foods at their current high levels, or send them even higher, until worldwide supply can catch up with demand, economists say.”
The cost of producing an acre of corn, for example, has risen almost 47 percent over the last year, according to Wells Fargo & Co. estimates, outpacing the 35-percent increase in the price of corn in the same period, according to the LAT.
One farmer, Charlie Hoppin, who farms 3,200 acres scattered across Yolo and Sutter counties, is “one farmer opting for a crop other than corn. He figures that safflower will be just as profitable, if not better, and a whole lot easier to farm.”
“At today’s prices, corn brings in roughly $1,200 an acre. Safflower will bring in $750. But fertilizer is less than half the cost, the seed is less and I won’t need the same irrigation or pesticides,” Hoppin said.
The LAT article is accompanied by this graph showing corn production costs.
---CBO SCORE SHOWS FARM BILL $5 BILLION SHORT---The farm bill is short $5 billion, according to analysis by the Congressional Budget Office. That means House and Senate negotiators and staff members are working feverishly to close the budget shortfall so votes can proceed on the conference report this week. Votes may be delayed until an agreement is reached.
American Farm Bureau Federation farm policy specialists are monitoring the situation closely and lobbying against dipping into direct payments to find the funds.
AFBF’s Mary Kay Thatcher explained the issue on “AgriTalk” on Monday. Click here to listen to the audio recording.
Assuming the budget shortfall can be overcome and the farm bill conference report is approved by the House and Senate, AFBF’s Tara Smith said preparing to override a certain veto by President Bush is critical.
“We need about 60 more votes from Republicans than we had during the House vote last time around in July,” Smith told AFBF’s “Newsline” on Monday. “So we’ve got a battle.”
However, Smith cautioned, “The controversy is still over how big the bill is and the fact that it is still $10 billion in spending over the budget for the bill. Keep in mind that that funding is fully offset. So it will not be adding to the deficit.” (Click here to listen to an audio recording or read a transcript of “Newsline.”)
For more information, read today’s editions of The Hill and the Brownfield Network. The Des Moines Register today published a summary of the farm bill’s major provisions.
---NOT TOO LATE TO RETURN AG CENSUS FORMS---Farmers and ranchers still have time to complete and submit the 2007 Census of Agriculture forms they should have received several months ago. The materials may be submitted using the Internet or postal mail
Agriculture Secretary Ed Schafer on Monday said more than 2 million responses have been received, but a good number of producers have not been heard from yet.
Conducted every five years, the agricultural census is the only source of consistent and comprehensive agricultural data for every state and county in the nation. That information is used by town planners, policymakers, agribusinesses and others to make important growth-generating decisions that will shape rural communities for future generations.
USDA’s National Agricultural Statistics Service (NASS) already sent a second reminder mailing. Representatives from NASS’s 46 field offices are now calling and visiting producers who have not responded.
Regardless of whether individuals are actively engaged in agriculture, everyone who received a census form is required by law to respond. For more information or assistance, call 1-888-424-7828 or visit http://www.agcensus.usda.gov/.
---CANADA CONFIRMS BOVINE TB IN MANITOBA---Canadian officials on May 1 confirmed a five-year-old beef cow from a herd in Manitoba had bovine tuberculosis (TB), Pro Farmer reports. The Canadian Food Inspection Agency (CFIA) said no part of the infected cow entered the human or animal food chains, and there is no public health risk.
The herd of 240 cattle is near the Riding Mountain National Park in an area considered high risk for bovine TB. The herd was tested in March under CFIA’s enhanced surveillance program, and the test results for this cow were considered suspicious. The animal was destroyed.
May 12
AFBF RESPONDS TO ANTI-ETHANOL EDITORIAL IN NY TIMES---American Farm Bureau Federation President Bob Stallman sent a letter to the New York Times in response to yesterday’s editorial, “Rethinking Ethanol.” The editorial urged waiving the renewable fuel standard and eliminating ethanol tax credits.
“Waiving the renewable fuel standard (RFS) and killing ethanol tax credits would be similar to eating seedcorn,” Stallman wrote. “With no seed there is no crop and the RFS and tax credits are the seed we need to stimulate the next generation of cellulosic biofuels.”
Further, Stallman explained it is unlikely that waiving the RFS requirements would cause any reduction in corn prices, let alone food costs. He noted corn prices mainly affect consumer prices through livestock production, and the marginal price effects would take several months, even years, to work their way through to the consumer.
In closing, Stallman pointed out that the RFS lowers current gas prices by as much as 15 percent, saving consumers roughly 50 cents a gallon.
---FLORIDA FB MEMBERS MARCHING FOR IMMIGRATION REFORM---Florida Farm Bureau members will march from the American Farm Bureau Federation office to Capitol Hill on Tuesday to call attention to the need for reform of federal immigration laws. About 90 Florida farmers, ranchers, growers and staff members are in Washington, D.C, this week to learn about current issues and meet with lawmakers.
The march, themed “Don’t Tie Our Hands! Pass Comprehensive Immigration Reform in 2008,” will include farmers walking with green ribbons wrapped around their hands to symbolize how their hands have been tied for years as a result of inaction on immigration reform. The walk will end at the Longworth House Office Building, where farmers will fan out to meet with their legislators.
For more information, contact Florida Farm Bureau’s Dana Brooks at 202-258-7029 or 352-538-4095.
---DOJ URGES COURT TO END PRIVATE COMPANY BSE TESTING---The Bush administration is urging a federal appeals court to stop companies, including Kansas-based meat processor Creekstone Farms, from testing cattle for bovine spongiform encephalopathy, according to USA Today. Creekstone won the right to conduct its own BSE testing in a lower court ruling, but the decision was appealed by the Justice Department.
Currently, fewer than 1 percent of slaughtered cattle are tested for BSE under federal guidelines. The administration opposes Creekstone and other companies from doing BSE testing because it “does not guarantee food safety and could result in a false positive that scares consumers.”
Not all large meat processing company representatives support being able to test for BSE, citing the possibility that it could create unfair pressure to test all animals, which could result in higher costs and, ultimately, higher consumer prices.
---U.S. CONSUMER CONFIDENCE IN FOOD SAFETY REBOUNDS---Consumer confidence in the safety of food purchased at the supermarket has rebounded to 81 percent, up from an 18-year low of 66 percent reported by the Food Marketing Institute last year. Although the news is good, only 11 percent of those surveyed are “completely confident,” down from 15 percent in 2007, and 70 percent are “somewhat confident.” Consumer confidence in the safety of restaurant food increased to 65 percent, from 43 percent in 2007.
“Retailers are taking extensive measures to help safeguard the food supply from the source to the consumer’s kitchen,” said Tim Hammonds, FMI’s president and CEO. Rigorous safety standards through independent audits and certification, including FMI’s Safe Quality Food Program, play a key role, according to Hammonds. More information is available online here.
---SOUTH KOREANS PROTEST AGAINST U.S. BEEF---Over the weekend thousands of South Koreans protested the resumption of U.S. beef trade. Korean government officials are attempting to counter incorrect information about the safety of U.S. beef that is being spread by the media in their country. | 
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