READ the NAFB's National Ag News as heard inside the BARN for July 20th

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“Coalition Says Study Shows Need for RFS Reform”

A coalition of livestock and poultry groups is urging Congress to reform the Renewable Fuel Standard. They say the call for change is supported by a new economic study conducted by Dr. Thomas Elam – President of Farm Econ LLC. Elam’s study found that federal ethanol policy has increased and destabilized corn, soybean and wheat prices to the detriment of food and fuel producers and consumers. According to Elam – the increases seen in commodity prices are strongly associated with the RFS mandate. He adds that because the promised benefits on oil imports and gasoline prices haven’t been seen – Americans are paying more for food without seeing lower prices at the pump. Elam calls it a lose-lose situation.

As several aspects of the Renewable Fuel Standard are examined by a Senate Biofuels Investment and RFS Market Congressional Study Group – the coalition says the study will provide critical facts needed to reform the standard. Among the results – the study found that the higher energy cost of ethanol and its negative effect on fuel mileage added about 14.5-billion dollars – or 10-cents per gallon – to motorists’ fuel costs in 2011. It also shows that the rate of change for the Consumer Price Index for meats, poultry, fish and eggs increased by 79-percent – while it decreased by 41-percent for non-food items since the RFS was revised in 2007. Other findings highlighted by the coalition include the rise in corn prices to more than six-dollars a bushel in 2011 from two-dollars in 2005, U.S. exports of 1.2-billion gallons of ethanol in 2011 and the increase in corn used for ethanol production from 1.6-billion bushels in 2005 to five-billion in 2011.

In urging RFS reform – the coalition cited the Elam study’s conclusion that the mandate should be revised to allow automatic adjustments to reduce incentives for ethanol production when corn stocks are forecast to reach critically low levels. The coalition supports legislation sponsored by Representative Bob Goodlatte of Virginia and California Representative Jim Costa that would require a biannual review of ending corn stocks relative to their total use. The RFS could be reduced by different percentages when the ratio falls to certain percentages. According to the coalition – such relief is extremely urgent because of the recent spike in corn prices brought on by predictions the U.S. will run short of corn this summer as a result of the drought conditions. They say another short corn crop would be extremely devastating to the animal agriculture industry, food makers and foodservice providers – as well as consumers.

The Elam study was funded by the American Meat Institute, California Dairy Inc., the Milk Producers Cooperative, the National Cattlemen’s Beef Association, the National Chicken Council, the National Pork Producers Council and the National Turkey Federation. A full copy of the study is available through the National Chicken Council website at www dot nationalchickencouncil dot org (www.nationalchickencouncil.org).

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“Russian Trade Bill Gets Approval of Senate Finance Committee”

The Senate Finance Committee has unanimously approved the bill establishing permanent normal trade relations with Russia. Finance Chair Max Baucus said the committee took a major step forward to seize the opportunity to boost U.S. exports to Russia and create jobs needed here at home. Pointing out that Russia will formally be a member of the World Trade Organization next month – Baucus said Congress has that as a deadline for passing PNTR. If Congress misses that deadline – he said American farmers, ranchers, workers and businesses will lose out to the other 154 members of the WTO that already have PNTR with Russia. The American Soybean Association urged the Senate to take up the bill as quickly as possible and called on the House to move forward with a companion bill. Importing more than 770-million dollars in meat, poultry, egg and dairy products in 2011 – ASA notes Russia is an important market for the U.S. soy industry. Steve Wellman – the group’s President – says the Finance Committee’s vote moves the soy industry one step closer to expanding an already beneficial and positive relationship with a valuable partner.

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“Drought a Stark Reminder of Need for Farm Bill”

U.S. Ag Secretary Tom Vilsack is using the circumstances surrounding the drought – which he says is the most serious situation we’ve had probably in a quarter century – to call for passage of a new farm bill that includes disaster assistance. The Secretary has noted several times that USDA is using all its administrative powers to help the farmers and ranchers impacted by the drought – but that it’s limited because the disaster programs included in the 2008 Farm Bill have already expired. National Corn Growers Association Vice President Pam Johnson says the drought is a wake-up call and a visible reminder of why the farm bill is written. She says it just needs to be done. American Farm Bureau Federation President Bob Stallman agrees. He says providing farmers with improved risk management tools is a core principle in the House and Senate versions of the pending farm bill. Stallman says both contain new tools that will assist farmers – but also restore several expired provisions that would help livestock producers manage weather-related risks.

Stallman says the widespread drought has imposed stress on people, crops and livestock – but the full impact on the nation won’t be known for several months. He says the impact on the food supply and food prices aren’t yet known. The true extent of the damage to the corn crop won’t be known until harvest is completed. Stallman says the August crop report from USDA – which will include actual in-the-field surveys – will provide a clearer picture. Yet if conditions don’t improve – he says the biggest impact will come in the next crop year. While data suggests most of the corn and other row crops in the drought-stricken regions are covered by crop insurance – Stallman says it’s often a different story for producers of other crops. He says that’s why Farm Bureau called for a strengthened federal crop insurance program. According to Stallman – Farm Bureau remains hopeful congressional leaders will expedite their work on the vital legislation called the farm bill.

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“Minority Leader Calls for Farm Bill Action”

House Speaker John Boehner has reportedly said no decisions have been made on the farm bill – but Minority Leader Nancy Pelosi is urging action before the August recess. While stating she cannot support the food stamp cut in the House bill – Pelosi said inaction on the legislation would mean economic, nutritional and employment crisis throughout our rural communities. She says the diversity of views that exist about specifics in the farm bill – including her thoughts on cuts to food and nutrition programs – are all the more reason to bring the bill up under an open rule that allows for debate and amendments.

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“Where the House Ag Leaders Stand on Moving the Farm Bill”

House Ag Committee Chairman Frank Lucas hasn’t been willing to talk about floor time for the farm bill as an “if” – just as a “when.” But when that time comes – he wants a rule that requires a filing requirement the day before so Ag Committee lawyers, economists and members can see what is going to come up on the floor. If House leadership is going to allow an unlimited number of amendments – he wants to know there will be time to understand what’s in the amendments so they can be explained on the floor of the House. Ranking Member Collin Peterson would prefer a modified closed rule that would limit the number of amendments. He notes nearly 100 amendments were considered by the Agriculture Committee – some of which were redundant. If the House leadership insists on a wide-open rule – Peterson says people will offer the same amendment over and over. He says that doesn’t accomplish anything.

Peterson is optimistic he and Lucas can get the farm bill through the House, move on to conference with the Senate and get the bill done by September 30th – but Lucas has still been willing to acknowledge the possibility that an extension of existing policy might be necessary.

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“Naval Demonstration of Biofuels”

Because the nation’s reliance on foreign oil is a significant and well-recognized military vulnerability – U.S. Secretary of the Navy Ray Mabus says the Navy is pursuing alternatives. A U.S. Navy Carrier Strike Group was operating on advanced biofuel for two days to test the fuel’s performance in an operational setting. The demonstration took place off the coast of Hawaii as part of the Rim of the Pacific Exercise. Mabus observed operations – including fueling helicopters and jets from the deck of a nuclear-powered carrier, completing arrested landings of aircraft onto a carrier – the first ever using biofuels, refueling a destroyer while underway and air-to-air refueling. Mabus says the successful demonstration was a unique opportunity to witness the seamless integration of advanced biofuel and energy efficient technologies in some of the Navy’s most sophisticated air and sea platforms. U.S. Ag Secretary Tom Vilsack says the historic significance of the Navy’s operation on biofuels should not be underestimated. According to Vilsack – we can, as a nation, change the fuel production and distribution paradigm in the world if we are consistent in our efforts to increase our production and use of domestic biofuels which are important to our energy and national security as well as create jobs.

SOURCE: NAFB News Service