Evening Report (VIP) -- December 6, 2012

December 6, 2012 09:09 AM

CPC: EL NINO UNLIKELY TO DEVELOP OVER NEXT SEVERAL MONTHS... The National Weather Service's Climate Prediction Center (CPC) says during November, the Pacific Ocean reflected ENSO-neutral conditions, which they expect to continue into spring 2013. It says while the tropical atmosphere suggested borderline ENSO-neutral to weak El Nino conditions at times from July to September, these signs have largely dissipated. Therefore, it says El Nino is unlikely to develop over the next several months. Click here for more.


THREE-QUARTERS OF CONTIGUOUS U.S. COVERED BY DROUGHT... According to the National Drought Monitor, 76.16% of the contiguous U.S. is covered by some form of drought, which compares to 75.97% last week. Drought conditions especially worsened in the South, where 84.02% is covered by drought, up from 79.04% last week.

"From southeastern Texas through central Louisiana, moderate drought and severe drought expanded to cover areas where precipitation deficits for the last 90 days ranged from 8 to 14 inches. In the Panhandles region, exceptional drought coverage increased as dryland wheat conditions deteriorated. Dalhart, Texas, received 6.04 inches of rain in 2011 and 6.35 inches to date in 2012. Both of these totals are more than 2 inches below the driest year on record for the previous 62 years (1949-2010; record low for this period was 8.37 inches in 1955)," states the monitor. Click here for more.


CPC: DROUGHT TO PERSIST ACROSS PLAINS AND WESTERN CORNBELT... The updated Seasonal Drought Outlook from CPC through February calls for drought to persist across the Plains and much of the western Corn Belt. But some drought improvement is expected in eastern Iowa into the eastern Corn Belt.

"For the December-February 2012-13 seasonal drought outlook, some improvement in drought conditions is expected over California, and portions of Montana and Wyoming. Drought persistence is favored across the rest of the West and most of the Great Plains region, as well as over interior portions of the east Gulf Coast region, and drought development is possible over the eastern panhandle of Florida and adjacent portions of southeastern Georgia," it states. "Remaining areas of drought east of the Mississippi River are expected to see at least some improvement in conditions due to the occasional passage of storm systems." Click here for a related map.


LUCAS: I’D RATHER HAVE NOTHING THAN A FARM BILL WITHOUT PRICE LOSS COVERAGE… House Ag Chairman Frank Lucas (R-Okla.), speaking at the Farm Journal Forum today, pointed out that when the "powers that be," namely President Obama and House Speaker John Boehner (R-Ohio), determine the farm bill must get done, it will get done. But, consistent with recent talk, Lucas did indicate that budget reconciliation will likely take the form of a mechanism similar to that of the failed Super Committee process of 2011, where all standing committees will be assigned specific dates by which they must take definitive action to deliver definitive cuts.

He emphasized that roughly three weeks before year-end does not allow enough time to address the major budget issues and that reforms are needed. He expressed confidence the ag committees would be able to step up and offer mandated savings, but again said a transition period will likely be needed considering the "magnitude of the changes we're talking about."

Lucas expressed optimism that ag leaders had made great progress in recent days regarding the commodity title. But speaking to the differences between the Senate-passed farm bill and the House Ag Committee-passed bill, Lucas was adamant the farm bill must offer producers choices. He said he recognizes the importance of revenue programs to certain areas of the country and noted that is why we have the safety net choices included in the House ag panel version. Notably, he says he would rather have no farm bill than one without a price loss coverage program. Click here for more.


STABENOW OPTIMISTIC ABOUT FARM BILL COMPROMISE… Like House Ag Committee Chairman Frank Lucas' (R-Okla.) remarks earlier today at the Farm Journal Forum, Senate Ag Committee Chairwoman Debbie Stabenow (D-Mich.) said the end zone for a new farm bill can take several paths, but she spent the most time discussing how a farm bill could be part of an end-of-year deficit reduction plan. She said she was "very encouraged" by recent ag committee talks regarding farm bill differences and stressed that she would not support an extension of the current farm bill, as an extension would be like "negotiating a farm bill." She did, however, signal she may be open to a transition program, depending upon what form it would take. She also said an area of agreement is opposition to direct payments.

Asked whether or not there would be a producer choice in the new farm bill relative to either revenue assurance or target prices, Stabenow said there is a "difference in philosophy on how some view what is best" regarding farm policy. However, she said, "both sides must have to come to the middle" and give a little.

Regarding the future of estate taxes, Stabenow said, "We have to act and we will" because there is "no way" the estate tax exemption per individual should go down to only $1 million, which it would be in 2013 if there is no fiscal cliff agreement. She said, "We're either going to keep the current $5.1 million exemption, or go back to what was in place in 2009, with a $3.5 million exemption per person." For more details, click here.


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