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Farm Bill Follies- A Possible Path to an August Conference- It Boils Down to Trust  

Based on conversations we have had and on news reports coming out of our nation's capitol, there could be an interesting "country road" approach to doing a new five year farm bill, starting with floor time next week being granted by GOP Majority Leader Eric Cantor.  

Several reports are now indicating that House Majority Leader Eric Cantor will schedule time for a disaster relief package on the floor next week before Congress goes home for their August recess.  Cantor has made no such announcement publicly- but did indicate that was a possibility in floor comments yesterday afternoon.  

"I do believe the House will address the livestock disaster program that unfortunately in the last farm bill was only authorized for four years," said Speaker John Boehner, the top House official. He said Republican leaders were working with Chairman Frank Lucas of Oklahoma and the Agriculture Committee "on an appropriate path forward."

Here's how things could go down- and where the "trust factor" comes into play.

1. Cantor schedules floor time next week for livestock disaster aid wrapped up in a one year extension of the current farm law- with money to pay for the Disaster Help coming from probably the Commodity Title of the one year extension.  

2. Collin Peterson, top Democrat, agrees to support the extension- TRUSTING John Boehner in Point 5 below.

3. House Passes the Disaster and Extension Package and Leaves Town.

4. Senate Leadership Asks for a Conference- using their Five year Farm Bill already passed as the basis for that request.

5. Speaker John Boehner AGREES and appoints Conferees.

6. Conference occurs during August recess or in early September- the Senate negotiating from their recently passed Farm Bill and the House substituting in the House Ag Committee package for the extension as their starting point.

7. Lucas and Senate Ag Committee Chair Debbie Stabenow and parties come up with the "Ultimate Farm Bill"(the name that Chairman Lucas has used with us more than once for a final farm bill proposal) This is NOT a slam dunk- serious differences have to be dealt with in the level of nutrition program savings and makeup of the farm safety net in the Commodity Title. 

8. Conference Report Comes Back in September to both bodies for a straight up or down vote.

Ranking Member Collin Peterson has to support the Disaster and Extension proposal- otherwise few if any Democrats come along and the bill fails- and to support it- he has to believe that it will lead to a Conference of the full fledged five year farm bill deal.  He told Politico that otherwise it is a GOP plan to kill the farm bill that came out of Committee. Peterson has to TRUST Speaker Boehner to appoint the Conferees- and Boehner has offered no assurances out loud, at least to this point.  Reports indicate that Senate Ag Chairlady Debbie Stabenow is urging Peterson to support this plan to move the process forward.  

One other factor- if lawmakers who want major change in the House Ag Committee Farm Bill believe that the train may be leaving the station next week when it comes to getting a shot at being a change agent- will they quickly step up and offer their amendments to the disaster package and one year extension?  Will the Rules Committee allow those amendments?     

Click here for the Politico.Com report that focuses on the decision that Peterson is pondering.  Chuck Abbott with Reuters also  offers an update on these possibilities- click here for that story.  

NCBA President J.D. Alexander Says Drought, Industry Trends, and Politics Top Concerns for Cattle Producers 

It's no secret the cattle industry is currently getting hammered from multiple directions. From the drought which is affecting the heart of cattle country, to regulatory nightmares, to stalled farm legislation, the cattle industry is having to do what it has always done: adjust.

As a cattle producer and feedlot owner himself, J.D. Alexander, the current president of the National Cattlemen's Beef Association, is weathering the storms right along with his organization's membership. He spoke with us as part of our coverage of the Summer Cattle Conference in Denver, Colorado.

Alexander says he's seen a lot of things in his many decades in the cattle business, but this year's serious drought across much of the Midwest and throughout Nebraska, where his feedlot is located, is a first.

"It's something I've never seen in my lifetime. We've seen tremendous crops and conditions in the past several years and, lo and behold, this year it is totally turned upside down. We've got silage that is being cut a month early. The crop is just not performing very well at all."

J.D. had a lot to say and you can read more or listen to our full conversation by clicking here.

Exceptional Drought Returns- The Latest Pictures- AND- Rain Arrives for a Fortunate Few 

Driven by intense heat, wind and one of the driest May-July periods on record, the flash drought and its impacts continued to accelerate in Oklahoma. The U.S. Drought Monitor map released this morning now portrays 91% of the state in at least severe drought (D2-D4), the most since Nov. 8, 2011. Exceptional (D4) drought also makes an unwelcome return to Oklahoma in Ellis and Roger Mills counties, its most significant presence since early March 2012 when drought was seemingly on the way towards extinction. A scant three months ago, only 15% of the state was even considered in any type of drought, at least according to the Drought Monitor.

More than 50% of the state is now portrayed in extreme-exceptional drought, the most since Nov. 15, 2011. At this time last year, more than 50% of the state was covered in exceptional drought, with 70% in the extreme-exceptional categories.

The severity of the drought on a national scale also increased accordingly. More than 38% of the country is now considered to be in severe-exceptional drought, the most since the Drought Monitor effort began in 2000 (last week's extent and also the Sept. 10, 2002, amounts rank #2 and #3).  

We have the latest drought pictures and maps on our website.  Click here to check them out.  

As of early this Friday morning- we have rain in far east central and southeastern Oklahoma from yesterday- and some in northwestern Oklahoma from the night before.  Click here for the real time Mesonet map from the last few days showing the rainfall totals statewide- a lot of folks that were wishing and hoping for moisture got nothing.   

AFR President Urges Coburn to Compromise on MAP Program

American Farmers and Ranchers President Terry Detrick has written a letter to Senator Tom Coburn urging him to rethink his position on the Market Access Program.

Coburn recently came out against continued funding for the program.

Detrick reminded Coburn that "the first dollars come from private sector producers to promote and market their products. Through a series of matching funds, these dollars are multiplied. Because of those investments, markets are opened, both domestic and export sales increase, and many dollars find their way back to communities across America creating jobs and increasing economic activity."

The letter goes on to acknowledge that compromise may be necessary, but asks Coburn to consider preserving as much of the MAP program as possible.

Click here for a link to view the complete AFR letter to Senator Coburn.

Anderson Says Recent Grain Market Volatility Driven by Better Grasp on World Supplies

A 60-cent drop early in the week on grain markets after weeks of increases gave some traders a little bit of heartburn. Oklahoma State University Grain Marketing Specialist Kim Anderson says the market simply woke up and took stock of the actual supply picture.

"We were expecting prices to back off at some point in time. We had a $2.95 price rally. You go back in time to June 15th, Kansas City Board of Trade September contract, $6.46. On July 20th, the Friday before the Monday on the drop, it was $9.41. It declined 27 cents on Monday, 33 cents on Tuesday, back up on Wednesday, back down on Thursday. You look at cash, it went from $6.07 to $9.03 and back to $8.43."

He said some of the market's fears about the amount of grain for export were allayed by reports out of various producing countries last week.

"If you look at the Black Sea area, they're expected to export 33 percent. Australia was dry, their production is down. Argentina planted less acres. Corn and the drought. Corn production going from about 14.4 billion down to, maybe, less than 12 billion bushels. All of that got us the rally.

"But if you look at what came out this week, it was announced that India is exporting wheat and is tendering wheat for export. Australia got some rain. Their wheat may not be as low as they'd expected. Seedborough is importing corn from Brazil. And the market woke up and says, 'Hey! We are in a world market.' So I think we had some negative factors came in and the market woke up that we may have driven it too far."

You can hear more of Kim Anderson's analysis in our preview of this week's SUNUP program by clicking here. You'll also find the complete lineup for this Saturday's show.

Proposed APHIS Rule Could Impact Farmers

The USDA has proposed a revision of regulations implementing the Animal Welfare Act (AWA) to redefine "retail pet store." The proposed rule would expand the number and type of animal breeding and husbandry facilities subject to licensure, inspection, and recordkeeping under AWA.

The rule has been brought to the Alliance's attention by members who believe it is poorly written and needs to be clarified or thrown out.

While the rule appears to be focused on pet breeders, farmers and ranchers could also be impacted. As it is written, if a farmers or breeder sells even one animal as a "pet" in a situation where the buyer does not come to their home, farm or place of business, they must become USDA licensed. A farmer selling an animal for purposes such as 4-H projects could potentially come under the impact of the rule.

To read more about how the APHIS rule could impact farmers, please click here.

Report Finds Land Values Increased More Strongly than Expected

Farmland values that increased by as much as 20 to 30 percent, and the factors that may eventually slow those growing ag land values, headline an updated land values analysis issued by the Rabobank Food & Agribusiness Research and Advisory (FAR) group.

"The six year surge in U.S. agricultural land values continues to be top-of-mind for many in agriculture," notes report author Sterling Liddell, Vice President, Food and Agribusiness Research & Advisory. "We expected land values to grow significantly in late 2011 and early 2012 and the growth was even stronger than we predicted; in excess of 30 percent in some cases."

In the report, "U.S. Farm Land Continues to Dazzle," Liddell draws a strong correlation between the rate of growth and higher corn, soybean and wheat prices, which resulted from persistently tight global grain stocks and low interest rates. 

Click here to read more of the Rabobank analysis.