Questions Asked, And Comments Given

February 28, 2012 04:14 AM

via a special arrangement with Informa Economics, Inc.

TOPICS: Estate taxes | Farm bill timing | Presidential contest | GOP convention | Sen. Lugar | Farmers and USDA reports | Oilseed crush

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

My frequent speeches throughout the country always bring some questions that I comment on (and hopefully answer in most cases). Here are a few of the most topics addressed during my recent speeches – see you at the Commodity Classic as I will give several speeches related to that event, sponsored by Pioneer.

What will happen to estate tax provisions after 2012? Current language expires at the end of this year, and if not changed, the estate tax exemption goes from the current $5.1 million mark to $1 million – equivalent to around 150 acres of Iowa farmland! Congress will likely extend the current language via a lame-duck session of Congress after the Nov. 6 elections. That is when lawmakers must deal with the expiring 2001 and 2003 tax cuts. The unknown is how many years the estate tax language will be extended – it will not likely be permanent – some Democratic lawmakers want to lower the exemption to around $3.5 million.

Do you still believe the new farm bill will be completed yet this year? Yes, even though I am in the minority on this one. Frankly, I never like to bet that Congress, especially this one, will get anything done on time (in fact with this Congress, that anything will get done!). The biggest hurdle is for the so-called leaders in Congress – both Democrats and Republicans – to give floor time in order for a farm bill to be debated. There will be some controversial issues/votes in that debate. Some lawmakers, especially Senate Majority Leader Harry Reid (D-Nev.), do not want to consider any measure that election-year lawmakers will have to vote on. That is not the definition of leadership. So, I still believe that the Senate and House Ag panels will report out a farm bill from their respective committees. Again, will there be floor time allocated to vote on the omnibus farm bill? Ask Reid and House Speaker John Boehner (R-Ohio). If the Ag panels do not report out a marked-up farm bill, then they are to blame.

Who will win the presidential contest this year? It's still too early for a definitive response on that. Heck, the GOP still doesn't have their official candidate, and may not for more than a few months. During my speeches I say my hunch now is that President Obama gets reelected. But it mostly depends on (1) the economic situation ahead of the election and (2) the impact of the Hispanic voter – this group could well decide not only the presidential election, but a few key Senate races. The Republicans have gone out of their way to upset this growing group of voters. That is why I say the only way the Republicans have a chance of defeating Obama is if they have an Hispanic on the vice presidential ticket, namely Sen. Marco Rubio (R-Fla.). And frankly, the GOP would have higher odds of winning the presidency if they could put on the ballot, "Candidate to be determined after the elections!" The GOP presidential primary has been more like a reality show that you can't turn off.

Will there be a brokered/contested GOP convention? The odds of a contested GOP convention are quite low. But the so-called "smart" people monitoring the GOP presidential primary to date have been so wrong, so often that they could qualify for being in this Congress! So, not impossible, but not probable. If Mitt Romney loses today's Michigan primary, the odds of a brokered/contested convention at least increase.

You just visited Indiana recently, will Sen. Lugar win the GOP primary? Yes. But I will tell you this – he has spirited opposition and has had to confront his moderate positions. His opponents are attacking him for not having an official home in Indiana. He certainly has enough money now to afford a home in that great state. Any little bit helps in this housing depression – so Sen. Lugar, be an example: buy a house in Indiana! I will also predict that the majority of Indiana voters will not vote to reelect President Obama – they voted for him in the 2008 election.

Are farmers losing faith in USDA reports? It depends on the state you visit. But USDA sources tell me that the rate of response to some USDA surveys has been decreasing. (I also learned that farmers in some states consistently underreport their production – one such state I am told is North Dakota...hmmm. That probably comes back as a negative when they have a legitimate crop disaster.) Farmers especially are critical of USDA Grain Stocks reports being so volatile. And they do not accept the usual USDA/NASS explanations for that volatility. Many in the private U.S. grain trade believe there should be a peer review of USDA's Grain Stocks methodology. Some NASS sources say that is already happening, but I'm awaiting official word from NASS/Washington on that one.

Authority key issue relative to USDA picking up discontinued fats & oilseed crush from Census Bureau. The termination of the Current Industrial Reports fats and oilseeds crush report by the Census Bureau has left USDA and other data users without an official set of data on the oilseed crushing industry. While many in USDA would like the agency to pick up the report to continue it, that has not happened. Officials tell me that the key reason is that it would take legislative authority for USDA to take over the data collection and publishing of the information. Should USDA be given the authority to take over the report, contacts advise they would likely "tweak" it to make it more tailored to the needs of agriculture data users.



NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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