Agribusiness
the RFS, ethanol and corn PDF Print E-mail
News Releases - Agribusiness
Written by Grassley Press   
Wednesday, 01 August 2012 13:56

Floor Statement of U.S. Senator Chuck Grassley

The Renewable Fuels Standard, Ethanol, and the U.S. Corn Crop

Wednesday, August 1, 2012

 

Mr. President,

The President and CEO of Smithfield Foods, Larry Pope, took to the opinion pages of the Wall Street Journal again to blame all that ails him on the Renewable Fuels Standard.

Some may recall that he did the same thing back in April of 2010 when commodity prices were rising.  At that time, he perpetuated a smear campaign and blamed ethanol in an attempt to deflect blame for rising food prices while boosting Smithfield’s profits.  And now he’s at it again.

I may start referring to Mr. Pope as Henny Penny from the children’s folk tale Chicken Little.  Every time Smithfield has to pay a little more to America’s corn farmers to feed his hogs, Mr. Pope starts up with the same argument that the sky is falling and it’s all ethanol’s fault.

Mr. Pope’s opinion piece in the Wall Street Journal might lead some to believe that he’s very knowledgeable about the ethanol industry.  But there are many areas where he’s not.  He continues to perpetuate the myth that ethanol production consumes 40 percent of the U.S. corn crop.  Mr. Pope states, “ethanol now consumes more corn than animal agriculture does.”

Everyone with a basic understanding of a livestock farm, a corn kernel or an ethanol plant knows that’s not true.  According to USDA, 37 percent of the corn supply is used in producing ethanol. But the value of the corn does not simply vanish when ethanol is produced.  One-third of the corn re-enters the market as a high value animal feed called dried distillers grains.

I would imagine that millions of hogs raised by Smithfield every year are fed a diet containing this ethanol co-product.  Mr. Pope appears unaware of its existence.  When the distillers’ grains are factored in, 43 percent of the corn supply is available for animal feed.  Only 28 percent is used for ethanol.

This is the inconvenient truth for ethanol detractors.  They prefer to live in a bubble where they believe that ethanol is diverting corn from livestock use.  That’s just not the case.

Mr. Pope also proclaims, “Ironically, if the ethanol mandate did not exist, even this year’s drought-depleted corn crop would have been more than enough to meet the requirements for livestock feed and food production at decent prices.”

I’d like to ask Mr. Pope, why do you think that is?  Why did farmers plant 96 million acres of corn this year?  Why have seed producers spent millions to develop better yielding and drought resistant traits?  The answer is simple:  Ethanol.

If not for ethanol, farmers wouldn’t have planted 96 million acres of corn this year.  Without ethanol, I doubt we’d have seen investment in higher yielding and more drought tolerant corn plants.

I’m sure Mr. Pope is an intelligent man.  But he’s woefully uninformed on the issue of what the ethanol industry and the demand for corn has done for the size and genetic improvement of the corn crop.

It’s easy to understand Smithfield’s motive.  They benefit from an abundant supply of corn, just not the competing demand for it.  What is Smithfield’s primary problem?  Again, the answer is simple:  cost and profit.  They still want to pay $2 for a bushel of corn.

This is an important point that I hope people understand.  For nearly 30 years, until about 2005, companies like Smithfield had the luxury of buying corn below the cost of production.  Corn prices remained at about $1.50 to $3.00 a bushel for nearly 30 years.  Farmers routinely lost money.

The federal government then provided economic support for the farmers.  Producers like Smithfield had the best of both worlds.  They were able to buy corn below the cost of production, and let the federal government subsidize their business by guaranteeing a cheap supply of corn.

In the view corporate livestock producers, subsidies are just fine if they allow them to buy corn below the cost of production.  Anybody could look like a genius with that business model.

Mr. Pope also continues to overstate the impact of corn prices on the consumer.  Agriculture Secretary Vilsack recently stated that farmers receive about 14 cents of every dollar spent on food at the grocery store.  Of that, about three cents is the value of the corn costs.

A research economist at the USDA recently stated that a 50-percent increase in the price of corn will raise the total grocery shopping bill by about one percent.  To put it in perspective, the value of corn in a four-dollar box of corn flakes is about ten cents.

Mr. Pope also exaggerated the impact of ethanol on food prices in 2010, and he’s doing it again today.  He’s using the devastating drought to once again undermine our nation’s food, feed and fuel producers.  And he’s doing it to make more money.

Repealing the Renewable Fuels standard won’t bolster Smithfield’s profits.  Because of the flexibility built into the renewable fuels mandate, a waiver won’t significantly reduce corn prices.

A recent study by Professor Bruce Babcock at Iowa State University found that a complete waiver of the Renewable Fuels Standard might reduce corn prices by only 4.6 percent.  The report states, “The desire by livestock groups to see additional flexibility in ethanol mandates may not result in as large a drop in feed costs as hoped.”  And, “…the flexibility built into the Renewable Fuels Standard allowing obligated parties to carry over blending credits from previous years significantly lowers the economic impacts of a short crop, because it introduces flexibility into the mandate.”

The drought is enormous in both scale and severity.  But we won’t know the true impact until September, when the harvest begins.  The latest estimates from USDA indicate an average yield of 146 bushels per acre.  That would result in a harvest of 13 billion bushels.  This would still be one of the largest corn harvests.

I would suggest that those claiming the sky is falling withhold their call for waiving or repealing the Renewable Fuels Standard.  It’s a premature action that will not produce the desired result.  And it would increase our dependence on foreign oil and drive up prices at the pump for consumers.

 
U.S. Soybean Farmers Celebrate Partnership with China PDF Print E-mail
News Releases - Agribusiness
Written by United Soybean Board   
Tuesday, 31 July 2012 12:26
Checkoff helps mark 30th anniversary of growing trade with biggest export partner

ST. LOUIS (July 31, 2012) – China imported 895 million bushels of whole U.S. soybeans last year –more than half of all U.S. soybeans exported. In honor of this important relationship, a delegation of U.S. soybean farmers representing the United Soybean Board (USB), the American Soybean Association (ASA) and the U.S. Soybean Export Council (USSEC) plan to recognize the past 30 years of developing this partnership.

“U.S. soybean farmers go beyond providing our Chinese customers with a reliable supply of high-quality soybeans,” says Vanessa Kummer, USB chair and a soybean farmer from Colfax, N.D. “We have a partnership devoted to helping China reach its food-security and -safety goals in the 21st century. The soy checkoff, and my fellow soybean farmers representing ASA and USSEC, honor the anniversary of this valued and important partnership.”

U.S. soybean farmers started laying the foundation for today’s strong trade relations with China in 1982. Ever since, the United States has been a committed partner with China in meeting its long-term goal of sustainable food security.

“The creation of the partnership mutually benefits both Chinese soy customers and U.S. soybean farmers,” says ASA President Steve Wellman, a soybean farmer from Syracuse, Neb. “Since ASA opened its Beijing international marketing development office in 1982, China has quickly risen to become the largest customer of U.S. soy – importing more than $11 billion today. We look forward to continuing our partnership.”

U.S. soybean farmers’ activities to help expand Chinese agriculture and agribusiness have played a part in China’s increasing production of meat, poultry and fish products. The effort to modernize and develop China’s animal-agriculture industry contributes to its food security and supports the animal-production goals outlined in China’s 12th Five-Year Plan.

“As we celebrate this important milestone, we look forward to further growth of this partnership and providing China with an exceptional product,” says Roy Bardole, USSEC chairman and soybean farmer from Rippey, Iowa. “We remain committed to providing China, and our other customers around the world, the highest-quality soybeans.”

A Chinese delegation highlighted the promising future for this relationship earlier this year by committing to purchase more than $6 billion worth of U.S. soybeans during signing ceremonies in Des Moines, Iowa, and Los Angeles. Altogether, these commitments total more than 13.4 million metric tons, or 492.3 million bushels of U.S. soy, and set a new record for U.S. soybean purchase commitments made in one signing trip.

In conjunction with the formal recognition of the 30-year partnership between the U.S. soybean sector and China, the U.S. group plans to tour a soy crushing plant in northern China, visit Jianguo Poultry Company and participate in a round-table discussion with Chinese soy leaders.

The 69 farmer-directors of USB oversee the investments of the soy checkoff to maximize profit opportunities for all U.S. soybean farmers. These volunteers invest and leverage checkoff funds to increase the value of U.S. soy meal and oil, to ensure U.S. soybean farmers and their customers have the freedom and infrastructure to operate, and to meet the needs of U.S. soy’s customers. As stipulated in the federal Soybean Promotion, Research and Consumer Information Act, the USDA Agricultural Marketing Service has oversight responsibilities for USB and the soy checkoff.

For more information on the United Soybean Board, visit www.unitedsoybean.org
Visit us on Facebook: www.facebook.com/UnitedSoybeanBoard
Follow us on Twitter: www.twitter.com/unitedsoy
View our YouTube channel: www.youtube.com/user/UnitedSoybeanBoard

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Braley Pressures House Agriculture Chairman to Release Farm Bill and Allow a Floor Vote PDF Print E-mail
News Releases - Agribusiness
Written by Jeff Giertz   
Tuesday, 31 July 2012 12:08

Braley sends letter to Ag Committee Chairman Lucas urging him to report Farm Bill

Washington, D.C. – Rep. Bruce Braley (IA-01) today requested that House Agriculture Committee Chairman Frank Lucas push harder to get a multi-year Farm Bill to the House floor for an up-or-down vote.

In a letter sent to Lucas, Braley requested that he immediately “report” the Federal Agriculture Reform and Risk Management (FARRM) Act from the Agriculture Committee.  The Committee passed this version of the Farm Bill on July 11th.  However, Chairman Lucas has refused to “report” the bill, a crucial procedural step that is necessary before the House can begin consideration of the bill on the floor.

“Iowa farmers need the certainty of a multi-year Farm Bill, especially given the worsening drought,” Braley said.  “The longer the House waits to vote on a new Farm Bill, the more farmers risk losing the farm safety net when the current Farm Bill expires on September 30th.  I urge House leaders to act immediately to allow a vote on the Farm Bill.”

House Leadership has refused to take up the FARRM Act, meaning Congress likely will not consider a multi-year Farm Bill before a month-long August recess.  Continued delays could allow the Farm Bill to expire on September 30th, meaning the Farm Bill would revert to the outdated 1949 version of the law.

Braley has led the charge to pressure House leadership to allow a vote on the Farm Bill as soon as possible by taking steps to launch a ‘discharge petition.’ If 218 members sign the petition, House Leadership would be forced to hold a vote on the Farm Bill.

Braley’s letter to Chairman Lucas can be downloaded at the following link: http://go.usa.gov/Ga1

Below is the text of Braley’s letter to Chairman Lucas:

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July 30, 2012

 

The Honorable Frank Lucas

Chairman

House Committee on Agriculture

1301 Longworth House Office Building

Washington, DC  20515

 

Dear Chairman Lucas:

As you know, House Leadership has recently announced they will be bringing up a one-year extension of the Farm Bill this week. While a short-term extension is preferable to no action at all, I have heard serious concerns from many agricultural groups in my state about taking this approach. We need to continue to push for consideration of a multi-year Farm Bill on the House floor.

I was pleased when on July 11th of this year your Committee approved the Federal Agriculture Reform and Risk Management (FARRM) Act by a vote of 35-11 with bipartisan support. Although I don’t agree with all of the provisions in this bill, I was encouraged that there was progress on moving this. I was looking forward to having an open debate on the House Floor on this bill and then having this go to conference to come up with the best language possible.

What concerns me is that although your Committee ordered this bill to be reported almost three weeks ago, the Committee report has yet to be completed. House Rule XIII, clause 2(b), makes it “the duty of the chair of each committee to report or cause to be reported promptly to the House a measure or matter approved by the committee and to take or cause to be taken steps necessary to bring the measure or matter to a vote.”

In your July 11th press release on the approval of the FARRM Act, you were quoted as saying, “Today marked an important step forward in the development of the next Farm Bill.” I would appreciate an explanation as to why after the passing of almost three weeks, you have yet to fulfill your duty to report this for Floor consideration. While I understand you can’t control what Leadership decides to bring up on the House calendar, you can show your commitment to our nation’s farmers and ranchers, who need the certainty of a five-year Farm Bill.

 

The need to extend assistance for farmers gets more urgent every day, given the worsening drought that is blanketing more than half the country. Just like millions of small businesses across the country, farmers need certainty and confidence in the federal programs that affect their lives. In the United States some sixteen million jobs depend on the success of American agriculture, and the Farm Bill has a huge impact in my home state of Iowa. Agriculture and related industries account for one in six jobs there and contribute $72 billion into the state’s annual economy. Failure to pass a long-term Farm Bill will have a devastating impact on the agriculture industry.

As the agriculture industry across the country faces the worst drought in decades, I’m particularly concerned that failure to act on a five-year Farm Bill could only exacerbate the current challenges faced by thousands of farmers. Farmers feed our nation, and we need to make sure to provide them the tools they need so that they can continue to deliver safe, affordable food to the table. Every American has a stake in this bill.

Please respond to my office promptly on when the FARRM Act committee report will be released. I stand prepared to work with you in a bipartisan manner to pass a bill that provides long-term certainty.

Sincerely,

Bruce Braley

Member of Congress

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Agriculture Secretary Vilsack Announces New Obama Administration Efforts to Assist Farmers and Ranchers Impacted by Drought PDF Print E-mail
News Releases - Agribusiness
Written by USDA Communications   
Tuesday, 31 July 2012 10:52

WASHINGTON, July 23, 2012 - Agriculture Secretary Tom Vilsack today announced new flexibility and assistance in the U.S. Department of Agriculture's major conservation programs to get much-needed help to livestock producers as the most wide-spread drought in seven decades intensifies in the United States. Vilsack also announced plans to encourage crop insurance companies to provide a short grace period for farmers on unpaid insurance premiums, as some farming families can be expected to struggle to make ends meet at the close of the crop year.

"President Obama and I are committed to getting help to producers as soon as possible and sustaining the success of America's rural communities through these difficult times," said Vilsack. "Beginning today, USDA will open opportunities for haying and grazing on lands enrolled in conservation programs while providing additional financial and technical assistance to help landowners through this drought. And we will deliver greater peace of mind to farmers dealing with this worsening drought by encouraging crop insurance companies to work with farmers through this challenging period. As severe weather and natural disasters continue to threaten the livelihoods of thousands of our farming families, we want you and your communities to know that USDA stands with you."

The assistance announced uses the Secretary of Agriculture's existing authority to help create and encourage flexibility within four USDA programs: the Conservation Reserve Program (CRP), the Environmental Quality Incentives Program (EQIP), the Wetlands Reserve Program (WRP), and the Federal Crop Insurance Program.

Conservation Reserve Program (CRP)

To assist farmers and ranchers affected by drought, Vilsack is using his discretionary authority to allow additional acres under CRP to be used for haying or grazing under emergency conditions. CRP is a voluntary program that provides producers annual rental payments on their land in exchange for planting resource conserving crops on cropland to help prevent erosion, provide wildlife habitat and improve the environment. CRP acres can already be used for emergency haying and grazing during natural disasters to provide much needed feed to livestock. Given the widespread nature of this drought, forage for livestock is already substantially reduced. The action today will allow lands that are not yet classified as "under severe drought" but that are "abnormally dry" to be used for haying and grazing. This will increase available forage for livestock. Haying and grazing will only be allowed following the local primary nesting season, which has already passed in most areas. Especially sensitive lands such as wetlands, stream buffers and rare habitats will not be eligible.

Environmental Quality Incentives Program (EQIP)

To assist farmers and ranchers affected by drought, Vilsack is using his discretionary authority to provide assistance to farmers and ranchers by allowing them to modify current EQIP contracts to allow for prescribed grazing, livestock watering facilities, water conservation and other conservation activities to address drought conditions. EQIP is a voluntary program that provides financial and technical assistance to agricultural producers on their land to address natural resource concerns on agricultural and forest land. The USDA Natural Resources Conservation Service (NRCS) will work closely with producers to modify existing EQIP contracts to ensure successful implementation of planned conservation practices. Where conservation activities have failed because of drought, NRCS will look for opportunities to work with farmers and ranchers to re-apply those activities. In the short term, funding will be targeted towards hardest hit drought areas.

Wetlands Reserve Program (WRP)

To assist farmers and ranchers affected by drought, Vilsack is using his discretionary authority to authorize haying and grazing of WRP easement areas in drought-affected areas where such haying and grazing is consistent with conservation of wildlife habitat and wetlands. WRP is a voluntary conservation easement program that provides technical and financial assistance to agricultural producers to restore and protect valuable wetland resources on their property. For producers with land currently enrolled in WRP, NRCS has expedited its Compatible Use Authorization (CUA) process to allow for haying and grazing. The compatible use authorization process offers NRCS and affected producers with the management flexibility to address short-term resource conditions in a manner that promotes both the health of the land and the viability of the overall farming operation.

Federal Crop Insurance Program

To help producers who may have cash flow problems due to natural disasters, USDA will encourage crop insurance companies to voluntarily forego charging interest on unpaid crop insurance premiums for an extra 30 days, to November 1, 2012, for spring crops. Policy holders who are unable to pay their premiums in a timely manner accrue an interest penalty of 1.25 percent per month until payment is made. In an attempt to help producers through this difficult time, Vilsack sent a letter to crop insurance companies asking them to voluntarily defer the accrual of any interest on unpaid spring crop premiums by producers until November. In turn, to assist the crop insurance companies, USDA will not require crop insurance companies to pay uncollected producer premiums until one month later.

Thus far in 2012, USDA has designated 1,297 counties across 29 states as disaster areas, making all qualified farm operators in the areas eligible for low-interest emergency loans. Increasingly hot and dry conditions from California to Delaware have damaged or slowed the maturation of crops such as corn and soybeans, as well as pasture- and range-land. Vilsack has instructed USDA subcabinet leaders to travel to affected areas to augment ongoing assistance from state-level USDA staff and provide guidance on the department's existing disaster resources. To deliver assistance to those who need it most, the Secretary recently reduced the interest rate for emergency loans from 3.75 percent to 2.25 percent, while lowering the reduction in the annual rental payment to producers on CRP acres used for emergency haying or grazing from 25 percent to 10 percent. Vilsack has also simplified the Secretarial disaster designation process and reduced the time it takes to designate counties affected by disasters by 40 percent.

USDA agencies have been working for weeks with state and local officials, as well as individuals, businesses, farmers and ranchers, as they begin the process of helping to get people back on their feet. USDA offers a variety of resources for states and individuals affected by the recent disasters. For additional information and updates about USDA's efforts, please visit www.usda.gov/drought.

The Obama Administration, with Agriculture Secretary Vilsack's leadership, has worked tirelessly to strengthen rural America, maintain a strong farm safety net, and create opportunities for America's farmers and ranchers. U.S. agriculture is currently experiencing one of its most productive periods in American history thanks to the productivity, resiliency, and resourcefulness of our producers. A strong farm safety net is important to sustain the success of American agriculture. USDA's crop insurance program currently insures 264 million acres, 1.14 million policies, and $110 billion worth of liability on about 500,000 farms. In response to tighter financial markets, USDA has expanded the availability of farm credit, helping struggling farmers refinance loans. In the past 3 years, USDA provided 103,000 loans to family farmers totaling $14.6 billion. Over 50 percent of the loans went to beginning and socially disadvantaged farmers and ranchers.

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USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write to USDA, Assistant Secretary for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-relay).

 
Loebsack Announces Over $1 Million in Funding for Advanced Biofuels Producers PDF Print E-mail
News Releases - Agribusiness
Written by Joe Hand   
Tuesday, 31 July 2012 10:37


Washington, D.C. – Congressman Dave Loebsack today announced a total of $1,073,514 for advanced biofuel producers in Iowa.  The funding is being provided through the United States Department of Agriculture (USDA) Bioenergy Program for Advanced Biofuels.

“Investments in alternative energy sources, such as biofuels, help create jobs here in Iowa and pave the way to America’s energy independence by reducing our dependence on foreign oil,” said Loebsack.  “I am pleased this funding will go to producers that are on the cutting edge of these groundbreaking technologies.”

Under the USDA Bioenergy Program for Advanced Biofuels payments are made to eligible producers based on the amount of biofuels a recipient produces from renewable biomass, other than corn kernel starch.  Examples of eligible materials include but are not limited to: crop residue; animal, food and yard waste material; vegetable oil; and animal fat.  The program supports the research, investment and infrastructure necessary to build a biofuels industry that creates jobs and broadens the range of materials used to produce renewable fuel.

Details of the funding are below.

·         Clinton County Bio Energy, LLC: $64,382 for biofuel from waste products

·         Iowa Renewable Energy, LLC in Washington: $135,510 for biofuel from waste products

·         Renewable Energy Group, Inc. based in Ames, and with facilities in Newton and Danville among others: $873,622 for biodiesel transesterification

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