Environmental Protection Agency (EPA)- Policy Issues

Secretary of Agriculture Tom Vilsack was a guest on yesterday's AgriTalk radio program with Mike Adams where, in part, the conversation focused on recent EPA water related issues. An unofficial FarmPolicy.com transcript of yesterday's complete discussion with Mr. Adams and Sec. Vilsack is available here.

Mr. Adams queried yesterday: "A lot of news this week, a lot of conversation about the release by EPA concerning a clarification of the Clean Water Act, and really the waters of the U.S. and the interpretation there. Now we have heard it explained that this is a protection for agriculture, that the exemptions will not only be kept in place, but enhanced, in some cases. But we're hearing a lot of skepticism and criticism from some in agriculture saying they still think it's an overreach by EPA. Now USDA is included in this as far as a consultation with EPA. What's your interpretation of it, and what is USDA's role in this?"

Sec. Vilsack indicated that, "Well, I think we have been working with EPA and the Corps of Engineers for the last couple years to make sure that they fully understood and appreciated what goes on on the farm and on ranches around the country, so as they crafted a response to litigation or response to their statutory responsibilities in terms of the Clean Water Act that they could take into consideration what's happening on the ground.

"It seems to me that basically what they've done is essentially three things. One is that they continue to amplify and continue to support the exemptions that already existed in the Clean Water Act for normal farming practices. Secondly, they made sure that they were clear that this was not going to apply to groundwater, it wasn't going to create additional responsibilities in terms of ditch maintenance, it wasn't going to basically change the way in which EPA was viewing things like artificial lakes for rice production, things of that nature.

"All the concerns that were being raised in the countryside as they went around in the listening sessions and as we educated them about the circumstances of the Clean Water Act they tried to respond and tried to make sure that people understood that that's not what this was about.

"They went one step further, and I think this is the most important thing, from my perspective, that they did, and that is that they enumerated specific conservation practices that are very important to farmers and ranchers and landowners. They specifically indicated that if you were engaged in these 56 conservation practices that you no longer have to notify the Corps or notify the EPA or potentially get a permit before you implemented those conservation practices. And we were able to convince the EPA that if the goal here was clean water, if the goal was to protect water supplies, conservation, that's precisely what conservation is all about, so you shouldn't discourage conservation by making it more difficult, you should encourage it by removing the notification and permitting responsibilities, and that's essentially what they've done, and I think that's a positive move."

Mr. Adams also pointed out: "Now the concerns in agriculture are that where we're headed with this is that EPA will eventually just be able to control a farmer, telling the farmer here's what you can or cannot put on your land or a livestock operation, here is what you can or cannot feed the livestock, because it's going to wind up in water somewhere, so we have regulation. Is that a fair or reasonable concern or not?"

Sec. Vilsack responded by noting in part that: "Under the circumstances, if you look at basically what they're saying, this does and does not cover. When you talk about normal farming practices, when you talk about not being involved with tile drainage systems, storm water runoff, when you look at the reality of what they're doing, what you see is that some of the concerns really are not necessarily justified."

Sec. Vilsack went on to discuss issues related to swine production and PEDv, a spreading swine related virus that has killed piglets in the U.S., China and Europe; as well as, Farm Bill implementation issues.

DTN writer Todd Neeley reported yesterday that, "A list of conservation and other farm practices that are exempt from the Clean Water Act are just the beginning, EPA Administrator Gina McCarthy told a House committee Thursday. The agency intends to work with the industry to identify more practices that improve water quality, she said.

"On the downside, McCarthy said, because the practices are listed in a Clean Water Act interpretative rule, they could be subject to removal at some point. Not all ag practices are on the list, especially those that already require permits."

Mr. Neeley explained that, "'We're changing no exemption that currently exists under the law,' she said. 'It doesn't mean the 53 practices would have required a permit. It just means we're providing certainty. The goal is we're going to continue to add to those practices.'

"Though McCarthy was called to testify before two committees this week about the agency's $7.9 billion budget, in both hearings lawmakers confronted her on the newly released rule, with the most aggressive pursuit coming in the House Thursday."

The DTN update added that, "Rep. Ken Calvert, R-Calif., said he believes the rule will expand EPA authority to even those bodies of waters that are dry most of the time.

"'Every small business and farmer could be subject to a fine if you disturb a puddle on the farm,' he said.

"Members of the committee questioned why EPA would release the proposed rule before the work of a scientific advisory board is completed."

Also at yesterday's House appropriations committee hearing, Reuters writer Ayesha Rascoe reported that, "U.S. energy markets cannot absorb the levels of biofuels required by law to be blended into the fuel supply in 2014, Environmental Protection Agency headGina McCarthy said on Thursday, defending a controversial proposal to slash the target for this year.

"The EPA is working on final 2014 biofuel use targets after issuing a proposal in November that slashed federal requirements for ethanol in U.S. fuel supplies.

"Although it is under pressure from the biofuel industry to reverse the move changes, McCarthy's comments suggested the agency might stick to its guns, or come to some kind of middle ground on targets."

Yesterday's article noted that, "'We're going to take a reasonable approach that recognizes the infrastructure challenges and the inability at this point to achieve the levels of ethanol that are in the law,' McCarthy said at a House appropriations committee hearing."

Meanwhile, in other policy related issues, Reuters writer Ros Krasny reported yesterday that, "The Obama administration on Thursday listed the lesser prairie chicken, a small grassland bird native to parts of the country's oil and gas belt, as 'threatened,' a move that could draw the ire of some Western lawmakers and energy producers.

"'The lesser prairie chicken is in dire straits,' said U.S. Fish and Wildlife Service director Dan Ashe, citing a 'rapid and severe decline' in the species' population.

"Energy companies worried that some oil and gas fields could become off-limits to drilling and that the move could also affect wind farms and other activity. A coalition of energy groups termed the listing 'not warranted' in a letter to the USFWS this month."

Lawmakers expressed reaction to this decision yesterday, including House Ag Committee Chairman Frank Lucas (R., Okla.), who noted that, "'I was disappointed the Fish and Wildlife Service announced the listing of the Lesser Prairie Chicken as threatened under the Endangered Species Act,' said [Chairman Lucas]. 'I believe the conservation efforts seen in the five-range states were more than sufficient to warrant a non-listing of the LPC. While I understand the importance of conserving the species, this means Oklahoma farmers, ranchers and energy producers will have to abide to an additional layer of burdensome regulations.'"

House Agriculture Committee Members K. Michael Conaway (R., Tex.) and Randy Neugebauer (R., Tex.) also expressed disappointment with the listing yesterday.

And Sen. Jerry Moran (R., Kans.) noted in part yesterday that, "Listing the Lesser Prairie Chicken under the Endangered Species Act will have real consequences on many sectors in communities across Kansas including agriculture, oil and gas development, ranching, transportation and wind energy. I am confident there are ways to address conserving the species while not hampering economic growth and farming and ranching activities. As conservation efforts are considered, producers deserve the flexibility to implement plans that fit their operations."

Also yesterday, a news release from the House Natural Resources Committee indicated that, "[Committee] Chairman Doc Hastings (WA-04), Rep. Cynthia Lummis (Wyoming-at large), Rep. Randy Neugebauer (TX-19), and Rep. Bill Huizenga (MI-02) today introduced four limited bills to improve and update the Endangered Species Act (ESA). The bills are supported by all of the Members of the ESA Congressional Working Group, representing districts across the nation, and are based on the recommendations and findings of their report and input from a broad array of stakeholders, including the Western Governors' Association. The four bills focus on transparency and species recovery.

"The House Natural Resources Committee will hold a Full Committee legislative hearing on these bills on Tuesday, April 8th."

Food and Drug Administration (FDA) Issues

A news release yesterday from Rep. Thomas Massie (R., Ky.) stated that, "[Rep. Massie], Chellie Pingree (D-ME) and a bipartisan coalition of 18 other lawmakers have introduced legislation to improve consumer food choices and to protect local farmers from federal interference. The two bills - the 'Milk Freedom of Act of 2014' and the 'Interstate Milk Freedom Act of 2014' - are the first in a series of 'food freedom' bills that Rep. Massie plans to introduce this year."

The news update explained that, "Raw milk is fresh milk that has not been pasteurized, and may contain beneficial nutrients that have not been eliminated by the pasteurization process. Although Congress has never passed legislation banning raw milk, the federal Food and Drug Administration has used their regulatory authority to prosecute farmers for selling raw milk."

A joint news release yesterday from the International Dairy Foods Association and the National Milk Producers Federation stated in part that, "The nation's dairy farmers and dairy companies today expressed their opposition to new legislation in Congress that would allow the interstate sales of raw milk, saying that any additional availability of the product will increase the number of sicknesses and deaths of people who consume it."

In addition, FDA Commissioner Dr. Margaret Hamburg testified yesterday before the House Appropriations Agriculture Subcommittee on a wide range of issues.

The issue of genetically modified food (GMO) and food product labeling came up at yesterday's hearing.

In an exchange with Appropriations Committee Ranking Member Nita Lowey (D., N.Y.), Commissioner Hamburg noted that, "…we have not seen evidence of safety risks associated with GMO foods in terms of health…" To listen to the entire discussion with Rep. Lowey and Commissioner Hamburg on this issue, just click here (MP3- 5:18).

Rep. Tom Latham (R., Iowa) also brought up the issue of GMO labeling and reminded the Subcommittee about the success Norman Borlaug had in saving a billion lives through the advanced use of technology in seeds- related audio (MP3- 2:00).

Agricultural Economy

U.S. Department of Agriculture Chief Economist Joe Glauber was also a guest on yesterday's AgriTalk radio program with Mike Adams where the discussion focused on the agricultural economy. An unofficial FarmPolicy.com transcript of yesterday's conversation with Mr. Adams and Dr. Glauber is available here.

Dr. Glauber indicated that, "The one thing that has concerned me a lot over the last month or so, more than anything that I've been watching, of course, is the PEDv issue and what's going on on the hog side. And we're really…we'll know on Friday when we see the hogs and pigs report, or at least we'll have a little better idea of what the fatality rate on piglets has been and what that's going to mean for supplies in summer.

"But generally the picture that we painted at Outlook was this is an improved situation for the animal sector, and so looking at beef, looking at poultry, looking at pork, looking at dairy, all that looks a lot better because of the lower feed costs. And the only troubling spots, I think, you know, on the hog side with PEDv and as far as the beef side, you still have persistent drought in the southern plains. And I think that's certainly-and California, obviously, which is a different story all in…you know, because there you also have to look at fruits and vegetables and tree crops and things.

"But generally, from the sector standpoint, we're coming into the year in such good position. We will be looking at lower cash incomes. I think that's pretty clear. But some of that is due to the fact that the farm bill shifted payments. We're not having direct payments this year, but if there are revenue drops we'll see payments come in in 2015. So I think generally a pretty good outlook."

Meanwhile, Joel Aschbrenner reported yesterday at The Des Moines Register Online that, "Iowa farmland values dropped 5.4 percent during the past six months, according to a report released today, marking the end of a five-year run that saw land prices surge to record highs.

"The average price of an acre of tillable crop land was $8,268, down from $8,690 during the six months ending September 1, according to the semi-annual survey from Iowa Realtors Land Institute."

AP writer Steve Karnowski reported yesterday that, "Lower corn prices fueled a dramatic 78 percent drop in Minnesota farm income last year, according to an annual report released Thursday by the Minnesota State Colleges and Universities system and University of Minnesota Extension.

"Net farm income was $41,899 for the median farm in the study, compared with $189,679 in 2012. Livestock farms did not fare much better, as incomes for dairy, hog and beef operations also declined in 2013.

"While the authors said they expect another down year for crop farmers in 2014, they expect a much better year for livestock producers who are already catching a break from lower feed costs and higher meat prices."

The AP article noted that, "Other factors putting the squeeze on profits included rising land rents and other production costs, [Extension economist Dale Nordquist] said, as well as and a cold, wet spring followed by drought that led to below-average yields.

"'At current prices, many producers will lose money on cash-rented land in the coming year,' Ron Dvergsten, coordinator of the farm business management program at Northland Community & Technical College in Thief River Falls, said in the report."

An update this week at the U.S. Drought Monitor Online stated that, "In western portions of Oklahoma, continued short-term precipitation deficits, low humidity, and windy conditions continued to dry top soils leading to the expansion of areas of Severe Drought (D2), Extreme Drought (D3), and Exceptional Drought (D4). In Kansas, short- term dryness led to expansion of Moderate Drought (D1) in the central portion [related graphs here and here]."

The update added that, "On the map, short-term precipitation deficits led to expansion of Severe Drought (D2) in southeastern California as well as expansion of a small area of Exceptional Drought (D4) along the coast in Santa Barbara and Ventura Counties [related graph]."

Dan Frosch reported in today's New York Times that, "For months on end, the Southwest has been in the clutches of an unrelenting drought, one of the worst in New Mexico's history. Earlier this month, the federal Agriculture Department declared six counties in the state as natural disaster areas because of the drought, including Dona Ana County, where Las Cruces sits.

"While the lack of rainfall has left many ranchers and farmers reeling - and has earned the Rio Grande the nickname 'Rio Sand' - pecan growers here have been able to thrive."

In other news, Peter Harriman reported yesterday at the Argues Leader (Sioux Falls, S.D.) Online that, "Bumper corn, soybean and wheat crops last year, expansion of North Dakota's Bakken oil field, and a long, cold winter that affected the size and speed of the trains railroads could operate have joined to create a persistent bottleneck in rail shipping of ethanol and grain.

"This is no way to run a railroad, rail, state and agricultural officials agree. But while BNSF Railway spokeswoman Amy McBeth says the problem is operational and not systemic, and the bottleneck will be cleared, Soy Transportation Coalition Executive DirectorMike Steenhoek points to the continued growth of both oil and agricultural traffic and wonders how much more the rail system can absorb."

An update regarding rural population and recent U.S. Census data was posted yesterday at FarmPolicy.com Online. A Wall Street Journal article from yesterday pointed out that, "North Dakota, now in the midst of an oil-drilling boom, has become the country's fastest-growing state after more than half a century of stagnation."

Also, Reuters writer Rod Nickel reported yesterday that, "Truckloads of Canadian canola and wheat are flowing briskly into U.S. crushing plants and elevators, as Canada's farmers seek to get round an unprecedented backlog of crops destined for ports.

"A record-smashing Canadian harvest and brutal winter have overwhelmed Canadian National Railway Co and Canadian Pacific Limited, the key links in moving western crops to ports on the Pacific Ocean, the Great Lakes and St. Lawrence Seaway.

"As much as C$20 billion ($18 billion) worth of grain and oilseeds is piled up in country elevators and farm bins waiting for rail cars, limiting sales opportunities in Canada and pinching farmers' cash flow."

Meanwhile, Grigori Gerenstein reported yesterday at The Wall Street Journal Online that, "Ukrainian farmers and local government officials are expressing concern that this year's spring grain planted area and the country's grain harvest will be smaller as the political turmoil in the country is leading to a lack of financing and rising costs for imported fuel and fertilizers."

Heba Saleh and Jack Farchy reported this week at The Financial Times Online that, "Egypt is discussing a trade agreement with the customs union of Russia, Belarus and Kazakhstan, in the latest sign that Moscow is seeking to capitalise on US troubles in the Middle East to expand its own influence in the region."

The FT article pointed out that, "One-fifth of Russian wheat exports have gone to Egypt so far in 2013/14, making the North African country the largest importer of Russian wheat. Cairo bought 2.6m tonnes of Russian wheat between July 1 and the end of February."

Also yesterday, Huileng Tan reported at The Wall Street Journal Online that, "Chinese importers of soybeans and rubber are backing out of deals, adding to a wide range of evidence showing rising financial stress in the world's second-biggest economy.

"Most purchases are private, with little data on the volumes affected, but traders at Asian trading firms say they are seeing a sharp rise in canceled contracts this year while other buyers are demanding heavy discounts."

Meanwhile, Tim Devaney reported yesterday at The Hill's RegWatch Blog that, "A health organization is accusing the Obama administration of allowing 'trade to trump food safety' by opening the U.S. market to Korean poultry, despite a recent outbreak of the bird flu there and other health inspection violations.

"The U.S. Department of Agriculture (USDA) published a rule Wednesday that would allow South Korean farmers to sell chicken products to the United States."