Evening Report (VIP) -- June 18, 2013

June 18, 2013 09:36 AM
 

DEMOCRATIC FLOOR STRATEGY FOR HOUSE FARM BILL TARGETS "FARM" SPENDING TO REDUCE SNAP CUTS... Washington Consultant Jim Wiesemeyer has obtained a document detailing House Democratic leaders' floor strategy that tells its members what to support and not to support in the House farm bill debate, with the goal being to "provide leverage for Democrats in conference negotiations to protect SNAP and other Democratic priorities without killing the farm bill on the House floor and permitting Republicans to blame Democrats for its demise." The strategy notes that "every amendment that eliminates or reduces payments to farmers helps Democrats preserve and protect SNAP, conservation and other progressive priorities in conference negotiations."

According to the document, House Democratic leadership is telling its members to support the corn, soybean lobbyist-pushed amendment by Reps. Bob Gibbs (R-Ohio) and Ron Kind (D-Wis.) to slash target prices contained in the underlying House farm bill. The strategy also encourages Democratic members to support all reforms or payment limit amendments," including (in order of importance):

  1. Actively engaged reforms that close the loophole that allows wealthy non-farmers to collect farm payments.
  2. Limit the amount of payments an individual farmer can receive to $50,000 or less (current limits are $125,000 per farmer).
  3. Eliminates the separate payment limit for peanuts.
  4. Lower the adjusted gross income requirements for a farmer to be eligible for subsidy payments to $750,000 or lower (currently at $950,000).

The Democratic farm bill strategy also tells its members to support linking conservation compliance requirements to crop insurance premium assistance eligibility. Democratic leadership also told its members to "support any amendment that changes or eliminates the special cotton crop insurance program (called STAX); cotton farmers can still get the same crop insurance policies as all other farmers." Read the Democratic floor strategy.

 

 

CONSULTANT 'UNCOMFORTABLE' WITH SOYBEAN ACREAGE ESTIMATE... Crop consultant Dr. Michael Cordonnier says he is "uncomfortable" with his soybean planted acreage estimate of 77.87 million acres, which is 750,000 more than USDA's March intentions projection. "The longer it stays wet, the greater the possibility that not all the intended soybean acres get planted and there may also be less switching from corn to soybeans," he says.

Dr. Cordonnier says he wouldn't be surprised if planted soybean acreage came in equal or slightly lower than USDA's March planting intentions figure. "It's all going to depend on how wet it stays for the next two weeks," he says. "Outside of the traditional double-crop soybean areas, I don't expect to see many soybeans planted past the early part of July."

For corn, Dr. Cordonnier is sticking with his planted acreage projection of 94.3 million acres, which is 3 million below USDA's March intentions.

For now, Dr. Cordonnier is leaving his corn and soybean crop estimates unchanged at 13.26 billion bu. and 3.26 billion bu., respectively. But he has a neutral to lower bias for both.

 

 

CONSULTANT SAYS 45% OF CORN ACRES, 23% OF SOYBEAN ACRES AT RISK OF BELOW-TREND YIELD... Each year, Dr. Cordonnier ranks corn and soybean yield potential as "below trendline," "at trendline" or "above trendline" in the top 18 states that represent 90% of total corn production and 94.2% of total soybean production.

Currently, Dr. Cordonnier says 45.2% of corn acres are at risk of below-trendline yields, which includes Iowa (14.5%), Illinois (12.5%), Minnesota (9.2%), Wisconsin (4.4%), Missouri (3.4%) and Colorado (1.2%). He says 28% of acres are showing the potential for trendline yields, which includes Nebraska (10.1%), South Dakota (6%), Kansas (4.7%), North Dakota (4.2%), Texas (2.1%) and North Carolina (0.9%). He says just 16.8% of corn acres show the potential for above-trendline yields, which includes Indiana (6.2%), Ohio (4%), Michigan (2.6%), Kentucky (1.6%), Pennsylvania (1.5%) and Tennessee (0.9%). He adds that North Dakota is at risk of moving out of the trendline category next week.

Dr. Cordonnier says 23.1% of soybean acres are at risk of below-trendline yields, which includes Iowa (12.1%), Minnesota (8.8%) and Wisconsin (2.2%). He says 44.8% of acres show the potential for trendline yields, which includes Illinois (12.1%), Missouri (6.8%), North Dakota (6.3%), South Dakota (5.9%), Kansas (5%), Arkansas (4.2%), Mississippi (2.5%) and North Carolina (2%). He says 26.3% of acres have the potential for above-trendline yields, which includes Indiana (6.6%), Nebraska (6%), Ohio (6%), Michigan (2.7%), Kentucky (1.9%), Tennessee (1.7%) and Louisiana (1.4%).

The rankings are based on a variety of factors including crop condition, soil moisture, stage of development, visual observations and current weather. Dr. Cordonnier says his rankings are purely subjective, but provide a guide to the overall state of the corn and soybean crops and yield potential. He says to use the comparisons cautiously, as states can move change categories easily, especially this early in the growing season. Click here to view the Pro Farmer weighted Crop Condition Index for corn and soybeans.

 

 

GREENNESS INDEX REFLECTS ROUGH START TO GROWING SEASON... The Kansas Applied Remote Sensing (KARS) GreenReport maps reflect decreased greenness compared to last year across the central Corn Belt, reflective of the lagging crop development and stress. Click here to view the maps.

 

 

AUSTRALIAN WEATHER BUREAU: CAN'T RULE OUT LA NINA... The Australian Bureau of Meteorology says while ENSO indicators remain neutral (neither El Nino or La Nina), the development of La Nina in 2013 can't be ruled out. "Most international models surveyed... suggest that neutral ENSO conditions are likely to continue, however the Bureau of Meteorology's model suggests there is an increased chance of weak La Nina conditions forming during the (Southern Hemisphere) winter months," it states.

 

 

2012 CROP INSURANCE INDEMNITIES INCH HIGHER... Crop insurance indemnities for 2012 crops have reached $17.362 billion and continue to slightly expand the record level of payouts for the crop insurance program, according to Risk Management Agency (RMA) data. As is typical for this time of year, payouts under the program are rising very slowly as most of the 2012 losses have been processed. If the same level of increase for 2011 indemnities is seen for 2012 indemnities, it would suggest total payouts reaching around $17.45 billion. (That level of indemnities is not the level of total government costs for the program but rather the total payouts.)

For 2013, pasture and rangeland forage coverage has already been put in place on more net acres than in 2012 -- 48.846 million net acres insured versus 48.149 million. Already, $27.7 million in indemnities have been made on 2013 pasture and rangeland forage.

Also, wheat indemnities have reached $399.5 million for 2013 crops, nearly 53% of the level of payouts for 2012 crops with the loss ratio already at 0.28 for 2013 wheat. For all crops, 2013-crop payouts are at $486 million with a 0.19 loss ratio.

 

 

CORN, SOYBEAN LOBBY OPENS THE DOOR FOR MORE FARM SUBSIDY SCRUTINY... Corn and soybean grower lobbyists have been out in force in the days leading up to House floor debate this week. Those two groups released a letter recently focusing on target price levels contained in the House farm bill, but their specific focus behind the scenes has been on higher target price levels for rice and peanuts. The groups' lobbyists have worked with strange bedfellows who usually are their antagonists -- the Environmental Working Group (EWG), a very vocal opponent of crop insurance subsidies.

But the corn and soybean lobbyists have chosen to look the other way at this time in their effort to slash target price levels in the House farm bill -- a movement that has led some observers to bring up other, significant acreage and demand incentives that corn and soybean growers get outside farm bill taxpayer subsides. These include a significant mandate for corn-based ethanol via the Renewable Fuel Standard (RFS), a mandate that has clearly increased corn acreage -- some from acres previously grown to other crops. Ditto for the biodiesel mandate's impact on soybeans and plantings.

The lobby effort comes at a time when the RFS, and in particular the corn ethanol mandate, is under focus in Congress. Some congressional sources signal that if the festering farm bill issues continue, this could help RFS opponents pick up 60 votes in the Senate via lawmakers upset over corn and soybean politics on the farm bill.

Some sources speculate the corn and soybean lobbyist effort is likely tied to getting leverage for a forthcoming farm bill conference, perhaps fearing that revenue assurance program funding (ARC/shallow loss payments) may have to be shaved to accommodate more funding cuts relative to the Senate-passed farm bill.

The debate over what part of the RFS corn-ethanol and biodiesel mandates should count toward farmer support is just getting started. Washington Consultant Jim Wiesemeyer notes, "Corn and soybean lobbyists have opened up a topic they should have avoided -- a topic fueled by taking potshots at a regional program designed to serve as a more effective safety net for some southern-based crops... Some very important policies for corn and soybean growers may come under the microscope ahead -- not just this bill but in years and other legislative initiatives to come. Count on it." Lean more.

 

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close