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Big in Ag 2013: Farm policy
As 2013 draws to a close, there are a couple of major farm policy stories unfolding, both of which with the potential to have major impacts to corn and soybean farmers. Follow along to see how these big-time stories have unfolded in the last year.
Most recently, an EPA hearing sought opinions from industry stakeholders on what paring back the RFS would mean to all sides of the business. "The last thing we want to do is again trigger this nation going into another farm crisis," said Iowa Governor Terry Branstad during the hearing. See what else went down at the hearing.
While the talk is heavy in Washington, industry experts have been drilling into the RFS, the ethanol business and what it means to the ag sector and rural America. While natural gas drilling has more potential for immediate rural prosperity, ethanol's longer-term effects are more substantial, a federal report showed recently.
Though it's not yet foregone that the RFS will be cut as much as EPA's proposing, there are fairly distinct implications for the grain markets if it's pared back. But, what if it isn't cut as much? How much could it be cut and still maintain enough biofuel demand to avoid a dump in corn and soybean prices? One economist took that on recently.
When EPA's plans to cut the RFS were announced earlier this fall, it was greeted with immediate opposition from the farm sector, one of which grain produced for fuel is a critical part of the supply/demand equation. "This would take 500 million bushels of demand away from America's farmers," said Bob Dinneen, president of the Renwable Fuels Association, last month.
Prior to EPA's announcement, there was already talk about what the federal government might do to shake up the fuel sector in a time when gasoline demand is on the decline. "We believe this will effectively kill any additional investment in advanced biofuels," one ethanol industry leader said in early November.
The other big farm policy story -- the next farm bill -- is just as up-in-the-air as the RFS. Congress faces a hard deadline soon for passage of a final package, but with the sluggish pace of progress through the year, no one involved sees an easy path to that resolution.
In late November, executive-branch officials brought forth a report that showed what exactly the farm bill's passage would mean to the many sectors of the economy it will touch, an effort lawmakers hope will speed along the process.
Lawmakers had actually set a deadline of Thanksgiving to get the farm bill moved toward a vote, but that effort fell short, much to the disappointment of the ag sector. "We feel like there's still kind of an impasse on whether to adopt either the House or Senate version of Title I," American Soybean Association president Danny Murphy told Agriculture.com in November.
A part of the ongoing farm bill negotiations -- one that's been a common refrain through the last few years' farm policy talks -- is payment limits, the effort toward which that's been led by Iowa Senator Charles Grassley. The Iowa republican said last month the lingering negotiations last month were endangering any possible progress on the payment limits front.
Those payment limits, though part of the farm bill negotiations the last few cycles of the policy, could be a stumbling block in talks this go-round, Grassley said in early November. The Iowa Republican on the Senate Agriculture Committee who has championed tighter limits for years, told reporters that if the final bill doesn't have payment limits, "I probably will vote against it."
Farm bill negotiations restarted in earnest in early November, though ag committee members in both chambers agreed there were "big issues still to be decided yet. Right now, they're doing what, as a former chairman, I always called clearing the underbrush," said Iowa Senator Tom Harkin.
Not everything's a stalemate, though. In late October, the House passed the Water Resources Reform and Development Act of 2013. The legislation will go a long way to expediting the maintenance of critical river transportation infrastructure on which a lot of ag commodities travel.
A continued stalemate on the farm bill and the future of the Renewable Fuel Standard have dominated the farm policy scene in 2013.