Daily Ag News Summary 02/15/2017

House Ag Committee Begins New Farm Bill Game

The House Agriculture Committee held their first full Committee hearing of the 115th Congress on Wednesday focusing on the “Rural Economic Outlook”. Chairman Mike Conaway (TX-R) said “America’s farmers and ranchers are facing very difficult times right now. This is something that the Federal Reserve, the Agricultural & Food and Policy Center, the Food and Agricultural Policy Research Institute, USDA, and even The Wall Street Journal agree on.”

Echoing the sentiments of Conaway – a CPA from Midland, TX – were witnesses Dr. Robert Johansson (Chief Economist-USDA), Dr. Nathan Kauffman (Asst. VP and Omaha Branch Executive for Kansas City Fed), Dr. Joe Outlaw (Co-Director of the Agriculture and Food Policy Center at Texas A&M), Dr. Pat Westhoff (Director for the Food and Agricultural Research Institute at the University of Missouri) and Dr. Scott Brown (Economist at University of Missouri).

The Chairman announced that Rep. Frank Lucas (OK-R) would kick off a series of subcommittee hearings on February 28 at a time when “1 in 10 farms are now highly or extremely leveraged. Nominal debt levels are at all-time highs and real debt levels are approaching where they were prior to the 1980s farm financial crisis”. He added that “Chairman Lucas’ strong admonition during the last Farm Bill debate that a safety net is supposed to be there to help farmers in bad times—not in good times—is one that Congress might better take to heart this go around. Every hole in the current safety net that now requires mending is the result of our not fully heeding that wisdom. Had we followed his counsel more closely, I doubt that there would be anywhere near the current urgency in writing a new Farm Bill.  That wisdom isn’t just from a guy who’s been around the block a few times in writing Farm Bills – it’s from a guy who actually farms and ranches.”

House Passes Bill Ending Red River Land Dispute

The National Cattlemen’s Beef Association and the Public Lands Council applaud the House passage of H.R. 428 the Red River Gradient Boundary Survey Act. The bill, introduced by Mac Thornberry (TX-R) would seek to settle all federal ownership claims by providing legal certainty to landowners along the Red River.

“Private landowners have owned and successfully managed lands along the Red River for quite some time, some for over 100 years,” said Joe Guild, NCBA policy division chairman. “These landowners hold deeds to the land and have regularly paid property taxes. We remain opposed to the taking of private property through federal usurpation and applaud the House for taking affirmative action to fix this problem.”

In 1923, the U.S. Supreme Court determined that the gradient line of the south bank of the Red River was the boundary between Texas and Oklahoma (Oklahoma v. Texas). Recognizing that the Red River is a unique situation, the State of Texas and the State of Oklahoma agreed to an interstate boundary compact known as the Red River Boundary Compact, essentially resolving the dispute over the definition of the border between the two states. The 106th Congress enacted legislation ratifying the compact, establishing the new Texas-Oklahoma boundary on August 31, 2000.

In 2013, the Bureau of Land Management (BLM) stated that there is an estimated 90,000 acres of land along the 116 mile stretch of the Red River that may be considered public domain.

Congressman Thornberry’s bill, and the Senate companion S. 90 introduced by John Cornyn (TX-R), would settle the dispute by requiring a survey of the majority of the 116 mile stretch of the contested area using the gradient boundary survey method developed and backed by the Supreme Court to find the proper ownership boundary between the public and private land. This survey is to be completed within two years and is to be performed by qualified surveyors chosen by the states of Texas and Oklahoma.

Two-Thirds of Panama Canal Shipments Tied to U.S.

With sixty-nine percent of all cargo traveling through the Panama Canal originating from or destined for the United States, including roughly one-third of total U.S. grain exports, the new set of locks will open opportunities for larger and more efficient shipments of all products.

More than 350 attendees had a firsthand look at the new Panama Canal expansion on Monday to kick off events at the U.S. Grains Council (USGC) 14th International Marketing Conference & 57th Annual Membership Meeting in Panama City, Panama. The tour of the Agua Clara locks in Colon, Panama, was a unique opportunity to see trade in action, and an important reminder of the dynamic global trade environment for those who last visited the Canal shortly after construction on the new locks began.

“When USGC last met in Panama, the canal expansion was only a construction site,” said Chip Councell, USGC chairman and a grain farmer in Maryland. “Visiting the new locks reflects the long-term commitment of the Council and its members to enabling more and expanded trade opportunities for American agriculture.” Attendees witnessed Councell and Manuel Benitez, Panama Canal deputy administrator, signing a formal memorandum of understanding between the two organizations on the importance of the Panama Canal to U.S. grain trade.

Wheat Growers Developing Farm Bill Priorities

NAWG’s Domestic and Trade Policy Committee met recently at the annual Wheat Industry Winter Conference in Washington, DC and discussed a number of topics in preparation for development of the next Farm Bill.  The Committee discussed the economic conditions in wheat country, including the impact of non-convergence between the local cash price and the Hard Red Winter wheat futures market.  Producers have been experiencing a particularly wide basis (over $1.50 per bushel in some areas), which has implications for crop insurance and farm programs, as the price that a farmer is actually receiving for their wheat is lower than what’s factored into those programs.

The Committee also delved into the impact of quality issues resulting from low Falling Numbers in the Pacific Northwest as well as other quality issues like vomitoxin.  Some states have had interest in working to identify whether adjustments can be made to quality adjustment discount factors or whether there are other policy changes that could be made to help farmers when they are affected by conditions outside of their control.

And finally the Committee continued its internal discussions to develop priorities for the next Farm Bill.  In the lead up to the organization’s next board meeting at Commodity Classic in early March, NAWG urges its state association members to have discussions at their local levels and to come to Commodity Classic prepared to debate and settle on priorities.