Washington Report for 10-12-12

By Steve Kopperud

USDA Again Lowers Corn Crop Estimate, U.S., World Stocks Decline

The 2012 U.S. corn crop continues to decline and is now estimated at 10.7 billion bushels, down slightly from last month’s estimate and 13 percent lower than 2011, the U.S. Department of Agriculture announced this week in its October 11 Crop Production Report. In its World Agricultural Supply & Demand Estimate, which was also released October 11, the department says U.S. feed grain supplies are projected to continue their decline based on less carrying and production since September. The 2011-2012 corn supplies are seen decreasing 214 million bushels and 2012-2013 beginning corn stocks were lowered 193 million bushels. Corn use was estimated to decline about 100 million bushels based on declining exports, and ending stocks for 2012-2013 were pegged at 691 million bushels. World corn stocks are estimated to drop 5.4 percent, to 117.27 million metric tons or about a 50-day supply, the tightest global stocks in 39 years. The department estimates average U.S. 2012 per-acre yield at 122 bushels, down nearly a bushel from the September forecast, 25.2 bushels below last year and the lowest average per-acre yield since 1995. Harvested acres ticked up just under 1 percent to 87.7 million acres.

Letters Fly, Dueling Studies Mount as EPA RFS Waiver Comments Filed

Untold trees died for the paper, and Internet electrons flew, as thousands of public comments – and the inevitable press releases – on the need for the Environmental Protection Agency to waive the ethanol Renewable Fuel Standard in the wake of the worst U.S. drought in nearly 75 years, dwindling corn supplies and spiking prices were filed this week. The filing deadline was October 11, extended at the request of the National Corn Growers Association. The National Chicken Council and the National Turkey Federation, two of the most active among the 20 national agricultural organizations, including the American Feed Industry Association, calling for a temporary waiver of the ethanol RFS and the groups likely to lead the charge to repeal the authorizing law in the next Congress, said in press statements that between the two associations and their members, more than 12,000 comments calling for the RFS waiver were hand-delivered this week to EPA. The Renewable Fuel Association – dedicated to convincing EPA no waiver is needed – sent a letter signed by 22 presidents and CEOs of various ethanol and renewable fuel companies to EPA this week supporting the RFS and thanking EPA Administrator Lisa Jackson “for your commitment to the RFS … we applaud your continued efforts to reject calls to waive or alter the RFS.” The letter said, “The U.S. ethanol industry spent nearly $40 billion on raw materials, other inputs and goods and services to produce 13.9 billion gallons of ethanol during 2011.” RFA also “reminded” stakeholders in an October 11 email written by the governors of Iowa, Illinois, Minnesota, South Dakota and Oregon to EPA supporting the RFS with no waiver. Those calling for the RFS waiver include the governors of Arkansas, North Carolina, Delaware, Maryland, Virginia, Texas, New Mexico and Georgia. The EPA call for public comment was based upon the formal petitions filed by Arkansas and North Carolina, along with nearly 200 bipartisan members of Congress, environmental, consumer and hunger groups and the United Nations’ Food & Agriculture Organization. EPA’s deadline for a decision on the waiver is mid-November.

Romney Iowa Speech Yields Farm Bill, Rural Challenge; Obama Shoots Back

Keenly aware that House and Senate GOP candidates are taking campaign heat for the lack of new 2012 Farm Bill, Republican presidential candidate Gov. Mitt Romney this week took his message to Van Meter, Iowa, using the rural setting and his audience of about 1,200 to blame President Obama for his administration’s failure to “lead Congress” on passage of a five-year 2012 Farm Bill. In addition, the Romney campaign released a 16-page white paper that keyed on reducing taxes on farmers and ranchers, expanding access to trade, regulatory reform and North American energy independence by 2020. “The big difference between the president and me, he has no plan for rural America, no plan for agriculture, no plan for getting America back to work,” Romney said. The Obama campaign criticized Romney for telling farmers “a series of falsehoods,” failing to mention the House Farm Bill hasn’t been acted upon because House GOP leaders have refused to give the bill floor time, and slamming his white paper for its lack of details. Several Democrat House members, including agriculture committee ranking member Rep. Collin Peterson (D-MN) – who called Romney’s remarks “unfair and it shows a complete lack of understanding of what’s going on” – acted as surrogates for the president in rebutting Romney, and National Farmers Union President Roger Johnson slammed the GOP-controlled House for failing to act on the ag committee-approved Farm Bill, and promoting a bill more in line “with the draconian principles outlined in GOP Vice Presidential nominee Rep. Paul Ryan’s budget.” The Romney white paper can be found at http://www.mittromney.com/blog/agricultural-prosperity-mitt-romneys-vision-vibrant-rural-america.

USDA Holds First Drought Workshop, More to Follow

The U.S. Department of Agriculture held its first drought workshop this week in Omaha, Nebraska, and has scheduled three more. “The purposes of these workshops will be for us to listen to producers and communities regarding the intermediate and long-term challenges created by the current drought,” said Secretary of Agriculture Tom Vilsack, saying the USDA needs a “partnership” with local communities, states, tribes and federal government. At the Omaha meeting, USDA, along with the federal Small Business Administration and the National Credit Union Administration, outlined individual agency and department efforts to provide drought relief, as well as interagency efforts. The remaining workshops will be held in Pueblo, Colorado; Pine Bluff, Arkansas; and Archbold, Ohio. 

Senate “Gang of Eight” in Quiet, Intense Meetings to Avoid Fiscal Cliff

What used to be the Gang of Six is now the Gang of Eight bipartisan Senators who have been meeting quietly on a weekly basis in hopes of finding a legislative solution to expiring tax cuts and mandatory federal budget reductions, collectively known as the “fiscal cliff” looming January 1, 2013. At issue during three days of meetings this week are about $4 trillion over the next 10 years in expiring personal and corporate tax rate reductions – the “Bush tax cuts” – and sequestration, a mandatory across-the-board 3-percent cut in federal spending mandated in last year’s debt ceiling/deficit reduction agreement. The eight Senators plan to have what’s being referred to as a “grand bargain” framework to offer colleagues when they return for the November lame duck session, but no announcement is expected before the election because control of the House and Senate will have obvious impact on what’s included in any deal. The eight are focusing on a plan worked out by the Commission on Fiscal Responsibility & Reform, headed by former Sen. Alan Simpson (R-WY) and former Clinton chief of staff Erskine Bowles, a proposal that pushes a combination of tax cuts, federal revenue increases and entitlement program rewrites as the only logical way an effective deficit reduction plan can work. Over the next couple of weeks, the eight Senators are expected to begin expanding their work group, as well as including key House members in the discussion. The eight Senators are Sen. Mark Warner (D-VA), Sen. Richard Durbin (D-IL), Sen. Tom Coburn (R-OK), Sen. Saxby Chambliss (R-GA), Sen. Mike Crapo (R-ID), Sen. Kent Conrad (D-ND), Sen. Mike Bennet (D-CO) and Sen. Mike Johanns (R-NE).

CFTC Rulemakings Come in for GOP Attack

Commodity Futures Trading Commission action to finalize its major rules required by the Dodd-Frank law on financial reregulation has come in for heavy criticism from House Republicans. Treasury Secretary Tim Geithner received a letter this week from GOP members, including House Agriculture Committee Chairman Frank Lucas (R-OK), urging him to delay several pending CFTC rulemakings, including regulations on non-banks being defined as “swap dealers,” derivates trade by the foreign subsidiaries of U.S. companies. At the same time, a group of GOP House members said CFTC action to set speculation position limits is ideologically and politically motivated. The Geithner letter said the CFTC’s actions are creating uncertainty and “widespread confusion” among market players, and said the commission is promulgating rules and has no plan on how to enforce them. The Republican members said the Financial Stability Oversight Council, which Geithner chairs, could vote to defer the rules “based on market stability and regulatory harmony.” On the speculative position limits criticism, CFTC Chairman Gary Gensler was the target of a letter that demanded the commission detail the labor costs connected to the position limits rule, and reminded Gensler a U.S. District Court judge struck down the rulemaking on September 28 saying the CFTC didn’t show proper justification for the rulemaking.

EPA Sets October 22 Rural, Ag Committee Teleconference

The Environmental Protection Agency’s Farm, Ranch & Rural Community Committee – an advisory panel designed to ensure EPA understands the impact of its rulemakings on rural America and food producers – will hold a teleconference on October 22 from noon to 2 p.m. EDT. The agency said the teleconference is needed “to discuss specific topics of relevance for consideration by the committee in order to provide advice and insights to the agency on environmental policies and programs that affect and engage rural communities.” The Agricultural Retailers Association said listening in on the committee’s meeting will allow comments to be brought forward on a variety of issues, including NPDES/Clean Water Act permitting; Army Corps of Engineers/EPA Clean Water Act authority expansion; greenhouse gas regulations; Florida nutrient criteria and drift reduction issues. For more information on how to participate, contact Alicia Kaiser at kaiser.alicia@epa.gov.