Patrick Westhoff is the Director of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri–Columbia and a professor in the MU department of agricultural and applied economics. He was also our St. Louis Agribusiness Club speaker yesterday. I spoke with him beforehand since I had to leave early.
He says his job was to talk about why agricultural markets have been so wild the last several years and why they’ll continue to be volatile for years to come. He says one of the reasons is an “ordinary garden variety one” which is weather. Sometimes people forget that he said. He says they’re watching agricultural land markets vary carefully. And of course he mentions farm policy and the farm bill and the efforts in Washington, DC recently. When it comes to tight corn stocks he says the smallest piece of news is having an impact on markets and he expects that to continue for the next several years. Hear some more of his outlook in my interview.
The Iowa Corn Caucus released its report card for presidential candidates today, giving grades for different policy areas related to agriculture with an overall grade for each candidate.
The highest overall grade went to Newt Gingrich, who scored straight As on every single policy issue. Second in the class was Rick Santorum, who had mostly A’s but faltered under farm programs in the areas of crop insurance and conservation. President Obama received a grade of B, as did Mitt Romney, but the rest of the four major Republican candidates got no more than a C minus. Rick Perry received that grade, while Michelle Bachmann was close behind with a D+ and both Herman Cain and Ron Paul got Ds. Cain in particular failed miserably in the energy policy category and farm programs – getting straight Fs in all those areas.
“Our purpose wasn’t to endorse any candidate, but instead to give farmers a tool that they could take with them to the caucuses in January,” said Iowa Corn Growers senior policy advisor Amanda Taylor. The survey for candidates was developed in conjunction with the National Corn Growers Association (NCGA) to include ten questions directly related to agricultural issues.
ICGA president Kevin Ross noted that only half of candidates responded to the survey, so the Corn Caucus used other methods to determine the grades. “We tracked interviews, speeches, media quotes and all things related to agriculture, including voting records of candidates who held office,” he said. The candidates who did return the survey were Obama, Cain, Gingrich and Santorum.
Agriculture Secretary Tom Vilsack chose the John Deere Des Moines Works facility to talk about his priorities for the 2012 Farm Bill, which he says is really a misnomer.
“After all, for decades this bill has been about a whole lot more than just farming. It’s been about energy, it’s been about nutrition, it’s been about jobs. Now, some may keep calling it the Farm Bill out of convenience, or maybe even out of tradition; but I think we’re doing it a disservice,” Vilsack said.
The secretary acknowledged that fiscal and political realities will have an impact on the outcome for any legislation in the coming year. “So our priorities must be clear. We simply need to do more with less,” he said.
There’s a new ag policy group in town. Welcome to AGree.
Today eight of the world’s leading foundations launched AGree, a new initiative that will tackle long-term food and agriculture policy issues confronting the nation and the world as the population continues to grow and resources become ever-more constrained.
AGree is launching at a pivotal moment for food and agriculture policy. Over the next four decades there will be an additional 2.6 billion people on Earth to feed—a 38 percent population increase from today—in addition to the 925 million people who currently suffer under-nutrition or hunger. Simultaneously, the world faces a limited amount of easily accessible arable land, increasing pressures on freshwater quality and availability and accelerating environmental degradation.
Solutions to these challenges will require best-in-class research, comprehensive analysis and cross-sector dialogue—resources productively brought together for the first time under the AGree initiative. AGree will fill a crucial void in current agriculture research and discussions that frequently do not consider solutions across multiple sectors such as environment, energy, rural economies, and health.
AGree’s mission to nurture dialogue among diverse opinions on agriculture issues is embodied by the leaders of the initiative: Dan Glickman, former secretary of the U.S. Department of Agriculture under President Bill Clinton and a former congressman from Kansas for 18 years; Gary Hirshberg, chairman, president and “CE-Yo” of Stonyfield Farm; Jim Moseley, former deputy secretary at the U.S. Department of Agriculture under President George W. Bush and Indiana farmer for more than 40 years; and, Emmy Simmons, former assistant administrator for Economic Growth, Agriculture, and Trade at the U.S. Agency for International Development and a board member for several organizations engaged in international agriculture and global development.
AGree is funded by Ford Foundation, Bill & Melinda Gates Foundation, The William & Flora Hewlett Foundation, The David and Lucile Packard Foundation, W.K. Kellogg Foundation, The McKnight Foundation, Rockefeller Foundation and The Walton Family Foundation.
The FY 2012 Budget Resolution unveiled by House Budget Committee Chair Paul Ryan (R-Wis) includes reforming current farm programs.
The Republican budget plan would cut farm program spending by $30 billion over the next decade to “reflect the economic reality of record-high farm income by restructuring farm programs, saving taxpayers money and increasing farmer independence.”
Net farm income this year is forecast to be the second-highest recorded in the past 35 years. Production costs have risen, but income has risen faster as prices for major commodities such as corn and soybeans have outstripped even the rising cost of energy. The top five earnings years for farmers in the last 35 years have occurred in the last decade.Yet, at the same time, numerous overlapping government programs exist to provide income support to farmers.
With crop prices – and deficits – hitting new highs, it is time to adjust support to this industry to reflect economic realities.This budget proposes two major reforms to achieve this: First, reduce the fixed payments that go to farmers irrespective of price levels, to reflect that soaring commodity prices are reducing the need for high levels of farm-income support. Second, reform the open-ended nature of the government’s support for crop insurance, so that agricultural producers assume the same kind of responsibility for managing risk that other businesses do.
Corn growers say they are willing to take a proportionate share of budget cuts to get the deficit under control.
“These cuts are significant, but so is our nation’s out-of-control budget deficit,” said National Corn Growers Association President Bart Schott in a statement. “What is important is that farmers are not singled out — the cuts proposed for agriculture are proportional to those proposed for other areas of the federal budget. We know this is just the beginning of the budget discussion. No matter the outcome, we are committed to working with the House and Senate Agriculture Committees to fashion a farm bill that provides farmers with risk management tools that are there when they truly need them.”
The amount consumers will be paying for food at the grocery store could jump this year, but rising farm incomes won’t be the biggest factor in that increase.
“[High oil prices] are probably the biggest reason for the year-to-year changes. The higher energy costs we’ve seen in recent months do increase the cost of transporting and processing the food. And those are a big share of the overall consumer food dollar.”
Westhoff points out that while the amount of money American farmers will be making this year will increase, still only about 20 cents of every food dollar goes back to the people who grow and raise that food.
Westhoff says crop producers should have a good 2011, with livestock producers getting more of a mixed bag. “The positive is we have seen higher prices for cattle and hogs. But they’re also facing much higher feed costs this year.”
He adds that strong international demand for U.S. farm products will buoy the ag sector with cattle prices expected to go up and tightening corn stocks, helped by advancements for the ethanol and biofuels sectors, will keep those prices higher as well.
Westhoff cautions farmers that FAPRI doesn’t have some kind of crystal ball, and producers should expect some volatility.
“If you’re a producer or someone using agricultural products, you’re going to want to be very active in risk management these days to make sure that you’re able to handle different contingencies that might come up over the course of the next couple of months.”
The votes are in, the delegates have spoken and the American Farm Bureau Annual Meeting has concluded with a new set of policies. AFBF President, Bob Stallman, held a closing press conference to point out a few highlights from today’s decision making. He said that even with the adverse weather conditions that happened here in Atlanta the program ran smoothly and attendees all accepted some small changes that had to be made. He pointed out that they’re farmers and deal with the weather every day! I’m going to pull a few comments from the news release that just came out in the interest of time and because I know some AgWired fans are waiting on this.
Stallman told us that delegates voted to “maintain a strong farm income safety net, address dairy price volatility and urge greater oversight of regulatory actions by the Environmental Protection Agency.”
As Congress prepares to draft a new farm bill later this year and in 2012, the delegates reiterated their support for extending the concepts of the 2008 farm bill.
“The 2008 farm bill has worked as farmers and ranchers have weathered market ups and downs over the last four years,” said American Farm Bureau Federation President Bob Stallman. “It’s important to maintain a program that protects our nation’s food, fiber and fuel supply and the consumers who rely on agriculture’s productivity.” (more…)
One of the most important parts of the Annual Meeting of the American Farm Bureau Federation is the annual meeting of the voting delegates. These folks got down to business early this morning and will hopefully conclude this afternoon with a new policy book. This is grassroots policy making in action!
The leadership is at the head table with all the voting delegates in front of them. There are multiple screens showing the policies being debated and corrections or changes are made live. After votes are cast the final version goes to the staff who will prepare a final book of the new policies.
We’re supposed to get a summary of what got passed and a look to the future for AFBF policy in the coming year at a press conference following today’s meetings. We’ll have that for you later in the day.
It looks like the death tax is going to be really hard for Washington legislators to ignore. There are 31 ag groups making sure of it. They sent a letter to President Obama today “urging immediate, permanent and meaningful estate tax reform.” Anyone with a lick of common sense would know that if estate taxes are allowed to be reinstated at the beginning of the year there will be a huge negative impact on the industry let alone individuals. This goes for a lot of people outside the ag industry as well.
During the recent NAFB convention Trade Talk session this was one of the items that came up in my interview with Gregg Doud, National Cattlemen’s Beef Association Chief Economist. Gregg is pictured here being interviewed at Trade Talk by Julie Harker of Brownfield while NCBA’s Mike Deering looks on in the background.
Listen to Gregg describe where things currently stand on the death tax issue: Gregg Doud on Death Tax
Keeping up the pressure, a number of ag groups will join with NCBA in a press conference tomorrow at 1pm EST.
Speaking on behalf of NCBA is Scott Bennett, a junior at Virginia Tech University and an active participant in his family’s operation, Knoll Crest Farm, in Red House, Va. The American Farm Bureau Federation; the American Soybean Association; the National Association of Wheat Growers; the National Corn Growers Association; the National Cotton Council; the National Farmers Union; the National Milk Producers Federation; the National Pork Producers Council; and the Public Lands Council will also participate in the news conference.
This week is the time to give thanks to America’s farmers and ranchers for producing the most affordable and abundant food supply in the world. If you’d like to help do that using your social media channels then please visit #foodthanks.
In this week’s program I’m featuring a couple of interviews from Trade Talk at the NAFB convention. Here’s your chance to hear what the issue priorities are for two of the major farm groups, National Cattlemen’s Beef Association and National Corn Growers Association. I interviewed NCBA Chief Economist, Gregg Doud and a NCGA 1st Vice President Garry Niemeyer. Please enjoy this week’s program and learn about the important issues facing cattle and corn farmers: ZimmCast 282 - Interviews with NCGA and NCBA
This week’s program ends with some fun music from Music Alley since it’s Thanksgiving week. It’s called “I Heart Thanksgiving” by Robert Lund.
Straight from the NAMA Trends in Agriculture conference is a video with one of the presenters produced by Paulsen Marketing.
The 2010 Trends in Agriculture conference wrapped up with a Washington update: what to expect in 2011. Jim Wiesemeyer, senior vice president of policy and trade issues for Informa Economics Inc.’s Washington office, says the next few years could be the beginning of a golden era for agriculture.
This week I read a book about the ongoing discussions regarding the causes of the food crisis. It should come as no surprise that several of the main reasons the globe is in the midst of a food crisis, according to a The Food Wars author Walden Bello, are commodity speculation, biofuels, increased demand for food in Asia brought on by prosperity, and most influential, the massive ag policy reorientation known as structural adjustment.
“More central as root causes have been structural adjustment, free trade, and policies extracting surplus from agriculture for industrialization, all of which have destroyed or eroded the agricultural sector of many countries. No one factor can be pinpointed as the cause of the global food crisis. It is the confluence of these conditions that has made the contemporary food price crisis so threatening and difficult to solve,” writes Bello.
One area of focus in The Food Wars, is how US and EU agriculture and agrofuels policies are hurting those very people they are indirectly supposed to be helping. At one point in the book, Bello describes the “capitalism versus the peasant” and details the move to corporate farming – even in the U.S. He cites a statistic about US government subsidies for agriculture, “currently, 38 percent of producers who provide 92 percent of US food receive 87 percent of all farm program payments.”
He then proceeds to explain how the family farm manages to persist among the growing number of corporate farms.
From there, Bello outlines how many corporate players favor the World Trade Organization’s efforts (WTO) to phase out farm programs that subsidize farmers and allow the dumping of US grain abroad. He then notes that, “the United States has steadfastly refused to significantly reduce, much less dismantle, its farm-support programs, which transfer some $40 billion a year to the agricultural sector from consumers, firms and taxpayers.” He says that this stance ultimately equates to free trade for the world and protectionism for the US.
Obviously, Bello explains the above in great detail in the book but ultimately, he segues into the idea that as we enter the world of deglobalization, there may be an opportunity for peasant and small-farmer based agriculture serving local and regional markets to play a starring role in how the production of food is organized and orchestrated.
Bello does a good overall job of trying to address all the factors that contribute to the rise and fall of food prices. In his conclusion, he offers some ways to help people take control of their food security and points again to small farmers or peasant-based farming as a good model to develop local or regional sustainable alternative economies.
If you can’t take policy makers to the field then take the field to the policy makers.
On Thursday, September 23rd and Friday, September 24th a live wheat field, approximately one quarter of an acre in size, will sprout from the streets of the nation’s capital in an effort to promote food literacy via farm-to-fork wheat education. The North Dakota Wheat Commission along with fellow members of the nation’s wheat industry will unite to deliver an authentic experience to city dwellers and key influencers during the Wheat Foods Council’s second Urban Wheat Field. The event will take place on Maryland Avenue between 3rd and 4th streets.
Coming off the success and excitement of New York’s Urban Wheat Field in 2008, the Wheat Foods Council is looking forward to strengthening their message and enhancing the experience at the Washington, D.C. event.
Experts in the areas of wheat agriculture, milling, baking and nutrition will guide visitors through each phase of the grain’s life cycle, engaging them in hands-on activities and demonstrations along the way. “This is a great opportunity to reach the urban population who may not be familiar with the agriculture industry or completely understand where their food comes from. They will be able to see the farm-to-fork process firsthand,” said Erica Olson, North Dakota Wheat Commission marketing specialist. The wheat on display is a hard red spring wheat variety grown in the Northern Plains.
Preceding the event, the National Association of Wheat Growers will host a reception for congressional staff members to experience the event and meet with representatives from their individual state wheat commissions.
Iowa’s Senator Chuck Grassley spent some time at the Farm Progress Show. I caught up to him and found out that he had been checking out all the new technology on display at the show. When it comes to Washington, DC policy and specifically energy policy he provided an update of what we might expect in coming weeks. In September he says there should be a push to deal with taxes and that might include the expired biodiesel tax credit and the expiring ethanol tax credit. He also mentions the estate tax and the impact of the loss of the exemptions we currently have. In the photo the Senator is being interviewed by Michelle Rook, WNAX.
The Conservation in Action Tour provides an opportunity for farmers to see how other farmers are implementing good conservation practices but it also allows policy makers a chance to learn more about this area. One of our tour participants who spoke to us at our lunch stop was Kelly Shenk, EPA. She works in the Chesapeake Bay Program office.
Kelly told us that she believes we can have viable agriculture and a restored Chesapeake Bay. She says that what she has seen on the tour shows that farmers are doing what needs to be done to control things like nutrient loss. She acknowledges that urban development is a real concern for her agency. Kelly Shenk Presentation
Before the tour got back on the bus I spoke with Kelly and asked her about one of the key concerns I’ve heard expressed from farmers that their best management practices and conservation improvements aren’t being accounted for in the Chesapeake Bay Model. She says that state government and perhaps FSA should started collecting data on this to provide to policy makers. Kelly Shenk Interview
The food versus fuel debate is back in full force, creating division between the crop and livestock industries at a time when it would behoove them to work together against the very real threat of animal activism.
This reached an interesting level last week when Rick Tolman, CEO, National Corn Growers Association (ZimmComm client) published an editorial taking the American Meat Institute to task for joining in a coalition with groups like the Environmental Working Group, National Resources Defense Council and Friends of the Earth. These groups are well documented (pdf) as being extremists with an agenda harmful to agricultural production. They also have their own relationships with other extremist groups like the Humane Society of the United States. Rick says in his editorial, “As the self-proclaimed representative of the “companies that process 95 percent of red meat and 70 percent of turkey in the U.S. and their suppliers throughout America,” AMI really should avoid such curious connections.” I think that sounds very logical. You can listen to an interview with Rick on this subject here: TolmanAMI4910.mp3
Now here’s where I can provide you with an example of how social networking is useful. I tweeted a link to Rick’s editorial and asked AMI for their response. They tweeted me back a link to their response within a couple days. It is attributed to J. Patrick Boyle, President/CEO, American Meat Institute and starts out by saying, “AMI remains committed to our opposition to ethanol subsides and tax credits, a position that is supported by a broad cross-section of producers, processors, consumers and, especially, American taxpayers.
In fact, the federal government has pumped as much as $1.95 per gallon of taxpayer money into subsidies for the production of corn-based ethanol.” The response lists the issues they’re concerned about. So kudos to AMI for creating a response and responding to my request!
However, I have to point out that they didn’t mention their relationship with these extremist groups at all, which was the main focus of Rick’s editorial. I really don’t understand it anymore than Rick does. Seems very counter productive for their members. They’ve helped fund an ad in “The Hill” (pdf) which suggests that ethanol is bad for rural America. Kind of hard to justify that folks. That ad campaign is also funded by the Grocery Manufacturers Association which has aggressively used rhetoric and mis-information to blame ethanol for high food prices. The ad promotes a website called FollowTheScience.org which I’ve heard said should be called FollowTheMoney since it’s mostly a collection of anti-ethanol documents or studies that were funded by the supporting groups and that includes AMI.
It’s also interesting to note that AMI represents meat processors and packers yet their response seems to suggest they represent farmers and ranchers, “American ranchers and livestock producers are the best in the world at what they do – they can compete with anyone on the planet. And they’re not opposed to competing for corn, as long as they can compete for it on a level playing field.”
I think it’s an unfortunate situation. I’ve spoken with lots of corn farmers and beef producers on this issue. In fact, there are quite a few who do both. It is certainly a divisive issue. How would you solve it? I invite your comments and suggestions. But keep it friendly okay?
Post Update: NCGA CEO, Rick Tolman, has published a statement in response to the AMI statement. It’s title, “It’s Not About Ethanol.”
Farmers and small business have found a crop to make them more money – clean energy. This according to a recent report from the Environmental Lay & Policy Center (ELPC) which just released “Farm Energy Success Stories” that demonstrate how a farm or small rural business adopted clean energy technologies and cut energy costs. Much of the monies that made these projects possible came from the Farm Bill’s Rural Energy for America Program (REAP). For example, Jim McBratney, who used a REAP grant to install a wind turbine at his Massachusetts nursery, says REAP is “…the right thing to do. It spurs industry and allows new, better technology to reach the market.”
Andy Olsen, a policy advocate for ELPC an organization that has been a public supporter of the program since its inception in 2003, said, “With the help of farmers, ranchers and rural small businesses, America can make great strides toward solving its energy problems. REAP is creating economic development, energy independence and a cleaner environment one farm at a time.”
The program has also generated new rural businesses. After Glen White slashed his energy costs by installing a solar water heating system on his Indiana farm, he began selling and installing solar energy systems on other farms and homes in the area.
Since 2003, REAP has funded over 3,000 clean energy projects, in 50 states that cover the clean energy spectrum – wind, solar, geothermal, biomass and energy efficiency. The United States Department of Agriculture (USDA), which oversees the program receives applications for more than three times the amount of funds available, and in February, President Obama raised the funding levels to the highest amount ever to $109 million.
David Bennett with the Western Farm Press just posted this news alert about President Barack Obama signing HR 2997, a emergency stimulus package that could benefit farmers. Here is the most recent news on the topic…
President Obama has signed legislation providing fiscal 2010 appropriations — $121 billion — for the USDA, the Department of Health and Human Services, and other agencies.
The article says that 80 percent of the funds will go to school nutrition programs and food stamps.
Of the remaining HR 2997 funds, slightly over $23 billion will be spread among programs for agricultural research, conservation, food safety, housing assistance and the Food and Drug Administration (FDA). Some $290 million, aimed at helping undergird the struggling U.S. dairy industry, will fund dairy farmers with direct support. An additional $60 million will be used to purchase dairy products for food pantries and nutrition programs.
The American Meat Institute posting a press release of this upcoming event that will give food producers a better idea of the Obama administration agenda. Check it out, and let me know if you attend!
Fox News Anchor Bret Baier will offer insights on what to expect from the Obama Administration and Congress at the Washington Insider Breakfast during Worldwide Food Expo 2009, to be held October 28-31, 2009, at Chicago’s McCormick Place.
As one of Fox News Channel’s top Washington anchors, Baier has colorful anecdotes about traveling with and covering the President of the United States. With humor and insight, Baier will share exclusive, behind-the-scenes stories about trips on Air Force One, the inner-workings of the West Wing and what it’s really like to be a part of the White House press corps.
Baier is host of FOX News’ Special Report w/Bret Baier, a daily program for political news, and is a former chief White House and national security correspondent. Baier’s extensive reporting experience has brought him through the halls of the Pentagon, the war fields of Iraq and Afghanistan as well as the campaign trails of elections past and present. Fresh, current and straightforward, his breadth of journalistic experience gives him the ability to offer in-depth insights and perspectives on the inner workings of government.
The Washington Insider Breakfast will be held Friday, Oct. 30 from 8-9 a.m. at McCormick Place and is part of the AMI International Meat, Poultry and Seafood Industry Convention and Exposition. Tickets for this event are $150 per person and available here.
The folks at the United Nations are at it again, this time along with the World Trade Organization. Last time it was their idiotic report about how cows and other forms of livestock are contributing so much to global warming (now calling it climate change which I believe happens naturally every year). This time they’ve moved a step ahead to try and link global climate change to trade. Give me a break. Here’s an excerpt from the WTO press release.
The scientific evidence is now clear that the Earth’s climate system is warming as a result of greenhouse gas emissions which are still increasing worldwide, and will continue to increase over the coming decades unless there are significant changes to current laws, policies and actions. Although freer trade could lead to increased CO2 emissions as a result of raising economic activity. It can also help alleviate climate change, for instance by increasing the diffusion of mitigation technologies.
The fact is that the scientific evidence isn’t clear. There is wide disagreement on this issue of GHG emissions. This is just another attempt to try to create fear in the name of accomplishing a policy objective and one that will have negative impacts on business in general and agriculture in particular. As if somehow, if we would just do what the UN wants on climate policy and what the WTO wants on a Doha agreement, all would be solved and we could sleep at night. It’s just not going to happen folks.
Here’s an excerpt from the UNEP release.
The world cannot continue with “business as usual” and there is a profound need for a successful conclusion to the current negotiations on both climate change and trade opening.
Sounds like the same old, “the sky is falling” story to me. But I’m sure this report will be quoted and pointed to by all the global warming wackos out there ad nauseum.
Post Update: Alert Twitter follower @etcattlewoman pointed me to a great piece on the Wall Street Journal about the growing skepticism worldwide of man made global warming. It’s worth a read.
In this week's program Chuck talks with Mike Adams, AgriTalk.
Chuck and Mike often wind up at the same events all over the country so it seemed like a good idea to do a little AgriTalking about the changes they've seen in the ag media landscape.