In the spring edition of the Agricultural Policy Review, Iowa State University agricultural economist Wendong Zhang penned an article titled, "Four Reasons Why We Aren’t Likely to See a Replay of the 1980’s Farm Crisis," where he explained that, "There are plenty of alarming signs indicating a possible farm crisis: current corn prices are half the 2013 peak level of US $7/bushel; farm income has declined for major commodities (corn, wheat, cattle), falling from the previous year to levels well below recent years; weak farm income and worsening credit conditions continue to trim farmland values, which are expected to trend lower in the months ahead, thus weakening the equity position of producers and the collateral value for lenders. Given the heightening farm financial crisis, many agricultural lenders, academics, and other stakeholders in the US farm sector worry another farm crisis is looming. However, there are four economic and legal reasons why this farm downturn is unlikely to slide into a sudden collapse of agricultural markets."
On Thursday, the Senate Agriculture Committee held a Farm Bill hearing that focused on conservation and forestry issues. This follows previous Farm Bill field hearings in both Kansas and Michigan, as well as Committee meetings on the farm economy and agricultural research. Today's update highlights issues associated with the Conservation Reserve Program, a subject that lawmakers discussed in some detail at last week's hearing.
On Tuesday, a news release from the House Appropriations Committee indicated that, "The House Appropriations Committee today released the fiscal year 2018 Agriculture Appropriations bill, which will be considered in subcommittee [on Wednesday]...The bill totals $20 billion in discretionary funding, which is $876 million lower than the fiscal year 2017 enacted level and $4.64 billion above the President’s budget request. The legislation prioritizes this funding in programs for rural communities, farmers, ranchers, food and drug safety, and nutrition for those in need."
Coral Davenport reported yesterday at The New York Times Online that, "The Trump administration on Tuesday took a major legal step toward repealing a bitterly contested Obama-era regulation designed to limit pollution in about 60 percent of the nation’s bodies of water. The rule, known as Waters of the United States, or Wotus, had extended existing federal protections of large bodies of water, such as the Chesapeake Bay and Puget Sound, to smaller bodies that flow into them, such as rivers, small waterways and wetlands. Issued under the authority of the 1972 Clean Water Act, the rule has been hailed by environmentalists. But farmers, ranchers and real estate developers oppose it as an infringement on their property rights."
Richard Rubin reported yesterday at The Wall Street Journal Online that, "Republicans looking to rewrite the U.S. tax code are taking aim at one of the foundations of modern finance—the deduction that companies get for interest they pay on debt. That deduction affects everyone from titans of Wall Street who load up on junk bonds to pay for multibillion-dollar corporate takeovers to wheat farmers in the Midwest looking to make ends meet before harvest. Yet a House Republican proposal to eliminate the deduction has gotten relatively little sustained public attention or lobbying pressure."
The Senate Finance Committee held a hearing yesterday to examine the administration’s approach to trade policy, and heard testimony from U.S. Trade Representative Robert Lighthizer. Farm state lawmakers expressed concern regarding agriculture and NAFTA renegotiation, admonishing the executive branch to "do no harm" with respect to gains in agricultural trade that have resulted from the agreement. Timelines for the renegotiations were also discussed, as well as agricultural trade issues with China. Potential future bilateral trade negotiations were also mentioned.
Wall Street Journal writer Jacob Bunge reported late last week that, "Friction between the U.S. and Mexico over trade is starting to cut into sales for U.S. farmers and agricultural companies, adding uncertainty for an industry struggling with low commodity prices and excess supply. Over the first four months of 2017, Mexican imports of U.S. soybean meal—used to feed poultry and livestock—dropped 15%, the first decrease for the period in four years, according to data from the U.S. Department of Agriculture. Shipments of U.S. chicken meat fell 11%, the biggest decline for the period since 2003. U.S. corn exports to Mexico declined 6%. Mexico is the largest U.S. export market for those commodities."
Last month, a Wall Street Journal article provided an in-depth look at a variety of statistical indicators from rural America in an article titled, "Rural America is the New, 'Inner City.'" That article explained that, "In terms of poverty, college attainment, teenage births, divorce, death rates from heart disease and cancer, reliance on federal disability insurance and male labor-force participation, rural counties now rank the worst among the four major U.S. population groupings (the others are big cities, suburbs and medium or small metro areas).” The Journal continued its "One Nation, Divisible" series with a front page article in Friday's paper that focused on a different aspect of rural development: Broadband Internet access.
The Senate Ag Committee held a Farm Bill hearing yesterday that focused on agricultural research. Recall that the Committee convened its first Farm Bill discussion back in February in Manhattan, Kansas, and conducted an additional hearing on Farm Bill related issues last month in Frankenmuth, Michigan. And on May 25th, the Committee heard testimony from the USDA Chief Economist as it examined the state of the farm economy. Today's update highlights some of the issues that lawmakers focused on at yesterday's hearing, including the extension service, animal related diseases, and the Trump administration's agricultural budget proposal.
The Senate Appropriations Subcommittee on Agriculture held a hearing yesterday to discuss the President's FY2018 budget request and heard testimony from Agriculture Secretary Sonny Perdue. Recall that late last month, Sec. Perdue discussed the executive branch agricultural budget outline before the House Appropriations Subcommittee on Agriculture. Recent news articles have documented concerns about the President's budget proposal, particularly when it comes to crop insurance and the SNAP program (food stamps). Today's update highlights three issues that Senators discussed at yesterday's meeting: Crop insurance, federal agricultural related research, and dairy issues with Canada.