Farm Bill Issues; Appropriations; And, The Ag Economy

By Keith Good

Ron Hays, of The Oklahoma Farm Report and Radio Oklahoma Network, spoke yesterday with House Ag Committee Chairman Frank Lucas (R., Okla.) about Farm Bill implementation issues.

An audio replay and summary of the Chairman’s remarks from yesterday can be found here, while an unofficial FarmPolicy.com transcript of the conversation with Ron Hays and Chairman Lucas is available here.

In part, Mr. Hays queried: “Let’s talk about crop insurance. I know this is kind of a sore point right now. The subcommittee that Chairman Mr. Conaway, under the House Ag Committee umbrella, had Michael Scuse in here just a few days ago [summary of that hearing here, related article from Politico here], it seemed like the request was pretty clear to Mr. Scuse and to USDA: we need APH, actual production history, for this upcoming crop season, starting with wheat growers when they put the crop in the ground here in a matter of a few more weeks. USDA doesn’t seem to have much intention to get this done.”

Chairman Lucas indicated that, “The response that USDA gave that day, and they’ve given to me personally from the top all the way to the bottom, is they have so many things going on they can’t implement the process. But for our listeners out there, actual production history adjustment is critical when you’ve been through the kind of drought that we’ve been through for multi years in our region.

“What I’ve asked of the Department, what Mr. Conaway made the request of the Department, what I’ve asked of the Secretary is if you can’t implement it for the whole country for this coming crop year, at least look at Oklahoma and Texas and Colorado, California and New Mexico, Kansas, the places that have suffered from the drought. If you can’t implement the whole thing, at least consider doing a partial implementation in the hardest hit areas.

“Producers who have really suffered in recent years, this APH is the difference between having viable crop insurance for the coming year or not having viable crop insurance. And you’re exactly right, it’s going to be time soon to put the wheat in the ground in our region.”

Mr. Hays pointed out that, “It just seems like that they could go ahead and do this to accommodate our winter wheat producers, then turn around, continue to work on it. They’ve got till really early next year to be able to put all the finishing touches on it for spring planted crops.”

Chairman Lucas added that, “I wholeheartedly agree. And that’s the point that both Conaway and I have been pressing on everyone from the Secretary on down. Show a little flexibility, show a little consideration for the areas hardest hit. But so far the Department is going at the pace they want to go at in implementing the APH adjustment.”

With respect to the livestock disaster program, Chairman Lucas explained that, “We, in the farm bill, attempted to use the language from the ’08 Farm Bill in reference to the livestock disaster language to minimize the complications of implementing the new program. When it came time to actually implement, USDA told me essentially what they’ve told producers across the country, that as many as three different platforms of computer software do not work together, that they have been working nonstop with IBM and other folks to try and correct that.

“But what it amounts to is producers have been obligated across the country, or in the drought areas, I should say, to sit down with pencil and paper and work [real close] with the office folks. It’s a slow process, but it’s worth your time. If you’re in a drought area, in particular in the Southwest United States, you need to make an appointment. And an appointment is a necessary thing in most FSA offices because of the amount of time and effort involved.”

Chairman Lucas also noted that, “We also need to remember that when you move away from the old direct payment system and you basically use a risk management safety net, they have a lot of changes in the programs, a lot of new things to implement, and so in all fairness to the Department, they have a full plate out there to try to address. So by and large, stepping away from APH, stepping away from the issues dealing with livestock disaster, I think they are…I think they’re making progress in a whole bunch of areas, and I would expect that, and I appreciate that.”

Also this week, in an article at Agriculture Online, Daniel Looker pointed to a recent Farm Bill webinar with Iowa State University economist Chad Hart and Kevin McClure, a program specialist with the Iowa Farm Service Agency office.

Farm Bill- Senate Ag Committee Hearing

Jacqui Fatka reported yesterday at Feedstuffs Online that, “Legislators, school officials and dieticians are struggling to balance the idea of what a school meal should consist of and under what guidance school meals should operate. Key personnel on the front lines of implementing school lunch standards shared their views on challenges and success stories that have come about from the 2010 Healthy Hunger-Free Kids Act during a Senate Agriculture Committee hearing July 23 as a larger effort to update child nutrition laws.

“Julia Bauscher president of the School Nutrition Assn. testified that schools want school meals to be appealing to all kids, but that also brings with it significant challenges. She said it’s important to allow for some flexibility to ensure students continue to come to the cafeteria and eat and not give up on school lunches. And operators need a little bit of flexibility to ensure all students can participate.”

The Feedstuffs article added that, “Scott Clements, director of the office of Healthy Schools and Child Nutrition at the Mississippi Department of Education said since 2010, 150 policy memos have been sent out to clarify regulations under the updated standards. A big challenge is that once those memos are released, states have to look at how to implement and then get training out to school districts.”

During her opening remarks at yesterday’s hearing, Committee Chairwoman Debbie Stabenow (D., Mich.) pointed out that, “This is so important when you look at where we are right now, in terms of childhood obesity.”

“We can only make these important changes if our friends and partners in the food industry, non-profit organizations, agriculture, state and federal agencies, cafeterias and classrooms all work together.”

Former Ag Secretary Mike Johanns (R., Neb.) pointed out at yesterday’s hearing that, “When I visit schools and I open it up to questions… one of the common criticisms I hear from kids relates to the school lunch program. It may be about choices, it may be about food they don’t want to eat, it may be about they’re not getting enough to eat… It seems to me that whatever we do with all of our good intentions, if we can’t sell it to kids we are fooling ourselves, because, it will go on their plate, then to the trash bin.

“I worry that we’ve thrown so much at schools, that we are going to get to a point where participation goes down, schools will back away from the program [and] kids will back away from the program.”

Sen. John Thune (R., S.D.) indicated yesterday that, “‘I have heard from school administrators in my state of South Dakota who tell me that the higher cost of food needed to meet the USDA standards has resulted in financial loss and even the release of school employees just so that school can meet its financial obligations,’ said Thune. ‘There is no federal law, regulation, or policy that should be considered a gold standard.’”

Similarly, Sen. John Hoeven (R., N.D.) noted yesterday that, “‘We all want our children to be healthy and to have nutritious meals. As we work to reauthorize our nutrition programs, we need to make sure we provide enough flexibility for our schools to meet the requirements,’ said Hoeven. ‘A one-size-fits-all approach to school nutrition rules ignores the challenges our schools face to acquire foods that not only meet these requirements, but that students will eat.’”

And a news update yesterday from Sen. Heidi Heitkamp (D., N.D.) indicated that, [Sen. Heitkamp] today made the case for improved nutrition in the nation’s schools, but highlighted that the federal government can’t just mandate changes without providing the resources necessary for making them a reality.

“During a Senate Committee on Agriculture, Nutrition & Forestry hearing in front of school nutrition leaders, legislation she introduced earlier this year to give our nation’s schools greater access to the tools and resources they need to offer healthy food options for students was discussed. Heitkamp is concerned because 74 percent of school districts in North Dakota need at least one piece of kitchen equipment to better serve healthy meals.”

Also, United Fresh past Board member Phil Muir, President and CEO of Muir Copper Canyon Farms, Salt Lake City, UT, noted yesterday that, “Schools that were proactive in improving the healthfulness of school meals early on, made incremental changes, and offered nutrition education are not having problems or experiencing increased plate waste.”

Meanwhile, Roberto A. Ferdman reported in today’s Washington Post that, “Forty-two percent of obese children and adolescents in the U.S.—ages 8 to 15—misperceive their weight as normal, according to a new report (pdf) by the Centers for Disease Control and Prevention’s National Center for Health Statistics. Among obese boys, the rate is almost 48 percent; for obese girls, it’s roughly 36 percent. And America’s overweight children are even more confused about the relative size of their respective waistlines—some three quarters of overweight children and teens consider themselves to be ‘about the right weight.’”

Recall that this afternoon, the House Ag Subcommittee on Department Operations, Oversight, and Nutrition will hold a hearing, “To examine the role of the Supplemental Nutrition Assistance Program in relation to other Federal assistance programs.”

Damian Paletta reported in today’s Wall Street Journal that, “House Budget Committee Chairman Paul Ryan on Thursday will propose consolidating up to 11 federal anti-poverty programs into a single funding stream for states, a plan he says will include new work requirements and create more accountability and efficiency in assisting low-income Americans.

“A brief description of what the Wisconsin Republican calls an ‘Opportunity Grant’ was published in an op-ed penned by Mr. Ryan, which was posted Wednesday on USA Today’s website. Food stamps, housing assistance, child-care aid and cash welfare would be among the funding streams pooled into the program, potentially redirecting more than $100 billion in federal support each year.”

In other developments, a news release yesterday from USDA stated that, “Agriculture Secretary Tom Vilsack today announced the creation of the Foundation for Food and Agricultural Research (FFAR) and the appointment of a 15-member board of directors. The new foundation will leverage public and private resources to increase the scientific and technological research, innovation, and partnerships critical to boosting America’s agricultural economy.”

Sen. Ag. Comm. Chairwoman Stabenow noted in part yesterday that, “‘This new Research Foundation is one of the most important victories in the Farm Bill,’ Stabenow said. ‘We designed this foundation to leverage public-private dollars to continue making America the most productive and efficient agricultural producer in the world.”

Also yesterday, USDA’s Farm Service Agency noted that, “Agriculture Secretary Tom Vilsack today announced that the U.S. Department of Agriculture (USDA) has selected 36 energy facilities in 14 states to accept biomass deliveries supported by the Biomass Crop Assistance Program (BCAP), which was authorized by the 2014 Farm Bill. Biomass owners who supply these facilities may qualify for BCAP delivery assistance starting July 28, 2014.”

Meanwhile, Chris Clayton reported yesterday at the DTN Ag Policy blog that, “The Obama administration and a top executive in the farm credit system will announce an investment fund on Thursday set up to generate $10 billion in market loans in rural America.

“The Rural Infrastructure Opportunity Fund could broaden investment in rural America, but it also could translate into communities paying higher interest rates to fund needed projects rather than waiting in line for potentially lower interest rates through USDA loans.

“The announcement by Agriculture Secretary Tom Vilsack was designed to draw attention to an inaugural Rural Opportunity Investment conference that the White House is hosting this week. The conference is meant to highlight the administration’s efforts to improve the economy in rural America. The conference includes representatives from investment banks, pension fund managers, commercial bankers and businesses to spur capital investment, Vilsack said.”

 Appropriations

Cristina Marcos reported yesterday at The Hill Online that, “The chairman of the House spending panel said Wednesday that members are talking about moving a continuing resolution before the chamber adjourns for the August recess next week but have not made a final decision.

“House Appropriations Committee Chairman Hal Rogers (R-Ky.) said limited time is the rationale for moving a funding measure before the five-week break.”

 Agricultural Economy

University of Illinois agricultural economists Scott Irwin and Darrel Good indicated yesterday at the farmdoc daily blog (“The 2014 U.S. Average Soybean Yield: Headed for a New Record?”) that, “While not receiving quite as much attention, the USDA is currently forecasting a new record yield (45.2 bushels) of soybeans in 2014, exceeding the 2009 record of 44 bushels by a large margin. Like corn, high soybean yield expectations this year are based on generally favorable growing conditions to date and on the high percentage of the crop rated in good or excellent condition.  The USDA’s Crop Progress report of July 21 estimated that 73 percent of the crop in the 18 major producing states was in either good or excellent condition as of July 20.

That is the largest percentage in those two categories for that week since 1994, when 83 percent of the crop was rated in good or excellent condition, the third largest since the report was initiated in 1986, and 14 points above the average for 1986 through 2013.  The purpose of the today’s article is to specifically identify the summer weather conditions that contribute to high U.S. soybean yields and compare weather conditions to date in 2014 with those previous very favorable conditions.  We follow the same procedures that we used in our previous analysis of corn yield prospects.”