Reports indicate House Republican leaders will schedule consideration of disaster assistance legislation the week of July 30. As press reports about the drought’s devastating impact covering much of the United States intensify, House leaders, who have been reluctant to schedule consideration of the comprehensive farm legislation approved by the Agriculture Committee on a strong bipartisan vote, also are increasingly reluctant to send members home for the August recess without addressing growing losses.
Republican leaders are considering legislation that would reauthorize several livestock assistance programs that expired in ’11 and may include a one-year extension of current farm law.
Initially, House Democrats expressed strong opposition to the plan to include an extension arguing the Committee bill was ready and provides the long-term, predictable policy that farmers and ranchers require. Rep. Peterson (D-MN), ranking member of the House Agriculture Committee said, “Whenever you get leadership involved, you get a big mess. Both sides.”
However, there seems to be a reconsideration of the opposition if the one-year extension provides a way to get the House and Senate to a conference committee leading to final agreement on a five-year bill that could be considered by the House and Senate this fall. The procedures and strategy are being discussed and legislation likely is to be considered by mid-week. If Democrats decide to oppose the extension, it is questionable whether Republicans can muster 218 votes to extend current law given conservatives opposition to direct payments and nutrition programs in current law. This contrasts with the provisions in the Committee-approved bill which terminate direct payments, reform nutrition programs and reduce future spending on agriculture programs by almost $36 billion.
House Agriculture Committee Chairman Lucas (R-OK) has said he would vote for the extension but views it as an intermediate step towards completing work on comprehensive legislation. Senate Agriculture, Nutrition & Forestry Chairwoman Stabenow (D-MI) initially opposed the extension but recently has said that if the House sends the Senate a one-year extension, she will use a procedure to move to conference.
One outstanding question is how the House will pay for the livestock disaster programs’ renewal, estimated to cost between $300 and $500 million. Another question is how an extension might affect the budget baseline and development of future policy.
The NCC continues to work with Committee leaders and the agriculture community to urge adoption of comprehensive, balanced, long-term farm policy.
House Approves Red Tape Reduction Measure
The House passed (245-172) The Red Tape Reduction and Small Business Job Creation Act, which would block all pending federal rules that impose annual economic costs of $50 million or more. The Act is a combination of seven bills, all of which fit the goal of reducing what Republicans say are hurdles to economic growth imposed by excessive federal regulations.
The Act would end “major” federal regulations until the unemployment rate reaches 6% or below. The US unemployment rate currently is at 8.2% and has not been below 6% since July ’08, according to the Bureau of Labor Statistics.
The Congressional Budget Office projected earlier this year that the unemployment rate probably would remain above 6% until late ’16. That would delay implementation of the ’10 health-care overhaul and the Dodd-Frank Wall Street regulatory law because implementation of those laws depends on regulations that, for the most part, have not been promulgated or finalized.
The legislation incorporates a regulatory freeze bill (H.R. 4078) and other proposals that would bar President Obama and future presidents from issuing regulations in the final months of their presidencies. The package also targets “sue and settle” practices employed by environmental groups to strengthen environmental rules through court settlements. These groups use lawsuits to force the EPA and other federal agencies to expedite rules or make existing ones more stringent. EPA has been accused of actually encouraging such suits to achieve desired actions while avoiding political hurdles.
The White House has threatened a veto but the bill probably will never be considered by the Senate.
During the floor debate, the House rejected numerous amendments proposed by Democratic members designed to exempt public health and environmental rules. The House approved a number of amendments proposed by Republicans, including an amendment by Rep. McKinley (R-WV) to modify the threshold for determining whether a rule is significant enough to be stopped. As originally drafted, the legislation would halt any rules that impose annual economic costs of $100 million or more. Rep. McKinley’s amendment lowers the threshold to $50 million.
The Administration estimates the regulatory moratorium would affect about 140 rules in agencies, including the EPA, Occupational Safety and Health Administration, and Securities and Exchange Commission. The measure also would apply to any regulation determined by the Office of Management and Budget to have a “materially negative effect on jobs, public health and safety, local and state governments, or the environment.” The only areas of government exempted are the Board of Governors of the Federal Reserve System, the Federal Open Market Committee and the US Postal Service.
The House Transportation and Infrastructure Committee, by voice vote, approved H.R. 3158 -- the Farmers Undertake Environmental Land Stewardship (FUELS) Act. The legislation directs the EPA administrator to raise exemption levels for a single fuel container at any farm from 1,320 gallons to 10,000 gallons and allow for self-certification with storage capacity levels of greater than 10,000 gallons but less than 42,000 gallons, providing the facility has experienced no spills. A professional engineer (PE) only would be required to write a SPCC Plan if a single container capacity exceeded 10,000 gallons or total storage capacity exceeded 42,000 gallons or if the farm or facility has experienced a spill.
Prior to committee markup of H.R. 3158, the NCC joined 12 other organizations on a letter to Reps. Mica (R-FL), chairman, and Rahall (D-WV), ranking member, of the House Committee on Transportation and Infrastructure, expressing support for this legislation. The letter is on the NCC’s website at www.cotton.org/issues/2012/upload/fuelslet.pdf.
Current regulations require that farms in operation on or before Aug. 16, '02, must maintain their existing plans and amend those plans if needed by May 10, '13. Farms in operation after Aug. 16, '02, but before May 10, '13, must prepare and implement a plan on or before May 10, '13. Farms that begin operations after May 10, '13, will be required to have a plan in place before they begin operations.
The SPCC rule applies to farmers and ranchers with above-ground oil storage facilities with a capacity of at least 1,320 gallons in containers holding more than 55 gallons and can reasonably be expected to discharge oil into navigable water. The regulation requires farmers to make structural improvements to prevent spills by constructing a containment facility, like a dike or a basin, which must retain 110% of the fuel in the container.
Such infrastructure improvements would cost farmers tens of thousands of dollars and would cost even more to procure the services of a PE. Many producers have reported that they are unable to find PEs willing to work on farms. Some states do not have a single qualified PE registered to provide SPCC consultation.
Agriculture Secretary Vilsack announced that USDA will begin sign-up for the Highly Erodible Land Initiative under the Conservation Reserve Program (CRP) on July 23, ’12. The initiative’s purpose is to protect up to 750,000 acres of the nation’s most highly erodible croplands. Producers may enroll at their local Farm Service Agency (FSA) county office. Enrollment will continue until the 750,000 acre limit has been met.
Producers are encouraged to contact their local FSA office or visit FSA’s website at www.fsa.usda.gov/crp for additional information regarding CRP.
FSA County Committee Nomination Deadline Near
Farm Service Agency (FSA) Administrator Juan M. Garcia reminds farmers and ranchers that they have until Aug. 1, ’12, to nominate eligible candidates to serve on local FSA county committees. The committees help local farmers through their decisions on commodity price support loans, conservation programs and disaster programs, and by working closely with county executive directors.
To be eligible to hold office as a county committee member, individuals must participate or cooperate in a program administered by FSA, be eligible to vote in a county committee election, and live in the local administrative area where they are running. A complete list of eligibility requirements, nomination forms and additional information are available at www.fsa.usda.gov/elections.
All nominees must sign the nomination form FSA-669A. All nomination forms for the ’12 election must be postmarked or received in the local USDA Service Center by close of business on Aug. 1, ’12. Ballots will be mailed to eligible voters by Nov. 5 and are due back to the local USDA Service Centers on Dec. 3. The newly elected county committee members will take office on Jan. 1, ’13.
Wear American Act Introduced
The National Council of Textile Organizations (NCTO) declared its support for the “Wear American Act of 2012” -- legislation introduced by Sen. Brown (D-OH) that would require all government agencies to source 100% Made in the USA when procuring textiles, textile components and apparel items.
The Act would increase the content requirements under the Buy American Act for textiles, textile components, and apparel only and still would be subject to Buy American Act exceptions in the case of domestic non-availability of an item.
NCTO President Cass Johnson said, “On behalf of the U.S. textile industry, I applaud Senator Brown’s (D-OH) leadership in recognizing the value that domestically procured textile and apparel items bring to our government and to our national economy. Whether on the playing field or as part of the federal government, using the Made in the USA brand should be an integral part of how the United States represents itself to our citizens and the rest of the world. Our country should stand proud of our products made in this country, proud of our manufacturing base and proud of the workers who produced those goods. Increased U.S. government procurement of U.S. made textile and apparel products also helps our economy grow. Instead of outsourcing these products, let’s help bring more manufacturing back to the United States. Every textile job created in this country supports three other U.S. jobs, so the payoff to the overall economy is significant.”
Johnson said the Wear American Act is being introduced at a time when the textile industry in the last three years has invested more than $3 billion, including building new plants in the United States that produce some of the most innovative yarns and fabrics found anywhere in the world. He noted that the US textile industry has added more than 2,000 new jobs during a time when the US economy is struggling and shipped $53 billion worth of textile products last year, and therefore could easily supply the federal government with its entire textile and apparel procurement needs.
NCTO noted that major studies from Boston Consulting Group and others have urged importers to reconsider sourcing product in the United States. These studies point out that increasing labor and higher transportation costs in China coupled with better productivity in US plants have sharply narrowed the “China Advantage” in many manufactured product areas.
Southwest Producers to See Mid-South Operations
Eleven cotton producers from Texas, Oklahoma and Kansas will see cotton operations in Tennessee, Missouri, Arkansas and Mississippi on July 30-Aug. 2 as part of the NCC's '12 Producer Information Exchange (P.I.E.) program.
Sponsored by Bayer CropScience through a grant to The Cotton Foundation, the P.I.E. program is in its 24th year of helping its U.S. producer participants improve yields and fiber quality.
The group will begin their activities on July 30 in W. Tennessee with a visit to the Stoneville Breeding Facility at Agricenter International in Memphis before touring the U. of Tennessee AgResearch & Education Center in Milan and Hargett Farms in Bells. The next day they will travel to Missouri to see irrigation on Parker and Jones Farms in Senath and tour Farmer's Union Gin in Holcomb before visiting Bayer CropScience's Test Facility in Clarkedale, AR, for updates on weed resistance and new varieties.
On Aug. 1, the group will return to W. Tennessee for individual farm tours in Fayette County. The next day will be spent in Mississippi where they will get a briefing on the Delta and that area's cotton production from the Delta Council and a market outlook for cotton from Staplcotn Cooperative before participating on individual farm tours with producers in the Clarksdale area.
The Southwest participants include: Texas – Zak Adams, Agua Dulce; Bryan Baker and Kris Humphreys, both from Sudan; Dee Dusek, Eola; Roger Gist, IV, Hereford; Allen Jansa, Garden City; John McDowell, Jr., Shamrock; and Joe Posey, Roby; Oklahoma – Adam Bohl, Chattanooga; and Derrick Burnam, Mangum; and Kansas – Kal White, Oxford.
Southeastern producers toured California's San Joaquin Valley in mid-July in this season's first PIE tour. The two remaining tours will have Far West producers visiting North Carolina on Aug. 5-10, and Mid-South producers touring Texas on Aug. 19-24.
Sales Weak, Shipments Steady
Net export sales for the week ending July 19 were 9,200 bales (480-lb). This brings total '11-12 sales to approximately 13.0 million bales. Total sales at the same point in the '10-11 marketing year were approximately 15.1 million bales. Total new crop ('12-13) sales are 2.8 million bales.
Shipments for the week were 160,800 bales, bringing total exports to date to 11.3 million bales, compared with the 14.1 million bales at the comparable point in the '10-11 marketing year. With slightly more than one week remaining in the marketing year, weekly shipments must average roughly 296,000 bales to reach the USDA projection of 11.6 million bales.
Effective July 27-Aug. 2, ’12
Adjusted World Price, SLM 11/16
63.02 cents
*
Fine Count Adjustment ('11 Crop)
0.45 cents
Fine Count Adjustment ('12 Crop)
0.65 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
13
Special Import Quota (480-lb bales)
851,117
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
83.02 cents
Forward 5 Lowest 3135 CFR Far East
81.55 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
86.45 cents
Forward US CFR Far East
81.70 cents
'11-12 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-May)
90.61 cents
**
**Aug.-July average price used in determination of counter-cyclical payment
