6 years, 6 months ago AFBF
GAO Climate Change Report Estimates Lost Crop Revenues
A report by the Government Accountability Office predicts climate change will cost U.S. agriculture up to $9.2 billion between 2020 and 2039 in lost crop yields. The report also details how extreme weather events, including wildfires, has cost the government $350 billion over the last decade, when including crop and flood insurance costs. In the long term, for 2080 through 2099, the annual sector-specific economic effects varied from a range of $12 billion in benefits to $53 billion in costs for the agriculture sector. The report was made available this week by the GAO. The report anticipates various regions of the U.S. will experience crop yield losses, increased road damage and changes in water supply and demand. The GOA says the report recommends the White House uses the information to help identify significant climate risks facing the federal government and craft appropriate federal responses.
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Midwest Senators Introduce Farm Safety Net Fix
A bipartisan bill introduced this week seeks to strengthen and improve the Agriculture Risk Coverage-County Level program, which helps farmers when commodity prices fall to damaging levels. Introduced by North Dakota Democrat Heidi Heitkamp and Iowa Republican Joni Ernst, the bill aims to strengthen the safety net program in the next farm bill to “better support farmers” and make sure farmers “get the accurate payments they deserve.” The ARC county program provides revenue loss coverage at the county level when the actual county crop revenue of a covered commodity is less than the ARC guarantee. Senator Ernst of Iowa noted that some farmers have experienced payment discrepancies due to the program’s reliance on administrative county lines, rather than a farm’s actual physical location. The bill, the Senators say, would Improve data used to make the payments and calculate safety net payments, so they reflect what's owed to producers in the physical counties where their farms are located.
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Farm Bankruptcy Relief Bill Sent to Trump
Legislation that would make it easier for family farmers to reorganize debts when facing bankruptcy received final approval this week, sending the measure to the president’s desk for signature. The bill was included as part of the supplemental appropriations package approved Tuesday in the Senate by a vote of 82-17. The measure would rectify a 2012 Supreme Court ruling on a previous bankruptcy reform law that ignored Congress’ goal of helping family farmers, according to sponsors of the legislation. The Family Farmer Bankruptcy Clarification Act of 2017 is sponsored by Senate Republican Chuck Grassley of Iowa and Democrat Al Franken of Minnesota. Franken said the bill is a “commonsense fix to ensure that the law functions as intended,” and that the bill would protect family farmers across the nation.
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Agriculture Leading Commodity Trade Job Changes
Job changes in the commodities markets are led this year by agriculture, which makes up 43 percent of all job changes in the industry. Bloomberg reports that shrinking profits stemming from years of bumper harvest levels is reducing volatility and trading opportunities for major trade clearinghouses, forcing them to tighten their belts. At least 40 senior managers and executives in agriculture left their positions at clearinghouses such as Archer-Daniels-Midland and Louis Dreyfus this year, based on a count collected by Bloomberg. While in many cases the positions have been refilled, it represents an unprecedented changing of the guard. Specific reasons vary for the changes, but the moves come against a backdrop of tougher trading conditions. Bloomberg says the industry, which for a century has been dominated by ADM, Bunge, Cargill and Louis Dreyfus, has been forced to make wide-ranging changes. Firms have turned to asset sales, trading in niche markets or even processing meat to generate more cash. And, executives are putting more pressure on traders to deliver profits, and trade experts say that’s becoming harder to do.
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Pennsylvania Governor Requesting RFS Waiver
Pennsylvania Governor Tom Wolf has sent a letter to President Donald Trump seeking a waiver for his state from the Renewable Fuel Standard. The Democrat sent Trump the letter last Friday, just as the administration was announcing it would direct the Environmental Protection Agency to abandon proposals that Midwest Senators said would weaken the RFS. DTN reports that Wolf wrote to Trump, saying: “The merchant refiners of the Northeast are not able to acquire enough RIN credits to meet their RFS obligations because they have limited blending capacity. Because of that, Wolf said the refiners must purchase RINs on the secondary market, where prices have increased significantly. If those refiners close, Wolf alleges that the refiners in the U.S. golf would have to increase capacity, and the move would lead to price spikes. However, Renewable Fuels Association President and CEO Bob Dinneen said that studies have shown merchant refiners recover the costs of RINs at the wholesale level. Also, he says there has been little evidence that RIN credit prices affect prices at the pump.
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Egypt Issuing Wheat Import Guidelines to Tackle Trade Problems
Egypt plans to issue a streamlined guide on wheat import regulations for global traders. The guidelines will detail all specifications, procedures and regulations for traders selling to the world’s largest buyer, Egypt. The guidelines will be issued within the next two weeks. Reuters says Egypt is looking to calm nervous suppliers who have been adding high-risk premiums because of what they say are inconsistent import rules and erratic inspection procedures. Two wheat shipments were halted in recent months for containing poppy seeds, and dozens have been delayed for costly additional procedures. That followed a handful of stopped shipments of wheat last year due to a small amount of fungus found in testing by Egypt, amounts lower than the global standard threshold. Suppliers have said the high risks associated with selling to Egypt has led to premiums of up to $500,000 per shipment. With Egypt's state grain buyer expecting to import around seven million metric tons of wheat in the fiscal year that began in July, the premiums could add millions of dollars to the government’s food subsidy bill.
