Budget accord reaches without cotton and dairy farm bill language
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Lawmakers reached a budget agreement for the remaining months of Fiscal Year 2017, which ends September 30. Cotton and dairy farm program language did not make it in the final budget package.
Instead, included in a list of congressional directives accompanying the spending deal is a request that the USDA Secretary within 60 days issue a report on administrative options for providing financial relief to cotton growers, and also offer immediate assistance to dairy producers.
Reason for the cotton and dairy language omission, sources say, is a disagreement with dairy-state lawmakers Sen. Patrick Leahy (D-Vt.) and Sen. Debbie Stabenow (D-Mich.) with other lawmakers. Rep. Collin Peterson (D-Minn.) had worked out a dairy plan with House Ag Chairman Mike Conaway (R-Texas), which was paid for, but Leahy did not go along. Peterson supported the cotton program changes pushed by Conaway and others. Sources say this does not bode well for the new farm bill debate ahead.
A Capitol Hill contact told us the reason for the lack of cotton and dairy provisions: “Sens. Stabenow and Leahy insisted on over $800 million for dairy. It was not offset. It was not vetted. And dairy industry hadn’t all agreed. Peterson offered a budget neutral proposal but they refused. When they didn’t get their way, they objected to cotton. Result: dairy and cotton farmers got left in the lurch. The senators should have found a budget neutral plan, vetted it thoroughly, and had buy in from all of dairy. Because they did not, their farmers will go without help longer.”
The budget deal delivers new defense spending, provides another $1.5 billion for border security, extends expiring health insurance benefits for coal miners and includes $2 billion in new spending for the National Institutes of Health. It does not allocate any money to a southern border wall with Mexico.
Summary of agriculture-related spending: Congress allocated $153.4 billion in mandatory and discretionary spending for programs at USDA and FDA, which is $12.8 billion above Fiscal 2016 levels — a net increase the Appropriations Committee said is related to mandatory spending outside of its jurisdiction. Discretionary spending is $20.88 billion, or $623 million below levels enacted last year. Link to a summary of agency-specific funding.
Another rider that appears to be missing is one that would block USDA from enforcing rules under its Grain Inspection, Packers and Stockyards Administration, which are designed to protect chicken growers in their contracts with processors. The department has already has put off enforcing an interim final rule until October while it takes more comments, while two other regulations are in the initial stages of rulemaking.
Some riders that were included:
- USDA cannot procure poultry products from China and include them in child nutrition programs.
- States can apply for a waiver to opt out of whole grain requirements if they demonstrate financial hardship and also be granted exemptions to serve flavored, low-fat flavored milk in school meal programs.
- USDA is directed to launch a pilot program on collecting farmers’ yield data in order to address discrepancies in commodity subsidy payments from county to county.
Omnibus Summaries – For detailed summaries of the 11 Appropriations bills within the Omnibus, including funding levels and policy items, check the following links:
Labor/Health and Human Services/Education
Transportation/Housing and Urban Development
Link for the full text of the bill and accompanying reports.
USDA Secretary Sonny Perdue will announce an interim final rule that will provide “flexibility” in the nutrition standards that the Obama administration implemented under the Healthy, Hunger-Free Kids Act. Senate Agriculture Chairman Pat Roberts (R-Kan.) will join Perdue for the announcement at a school in Leesburg, Virginia. The former Obama administration’s rules — which require strict calorie limits; the near-elimination of salt; multiple servings of raw vegetables, fruits, and whole grains; tight restrictions on meat and fat, and bans on everything from vending-machine sweets to bake sales — were meant to combat childhood obesity when they were imposed in 2012. In March, the School Nutrition Association lobbying group asked the Trump administration to allow more “practical flexibility” for school districts, including looser salt restrictions and cutting the whole-grain requirement in half. Many districts reported high costs, increased food waste, and lower student participation in school lunch programs as a result of the program’s draconian requirements.
The House will take up a North Korea sanctions bill during the week.
Several hearings are on tap, with attention on the House side on the Financial CHOICE Act, pipeline and hydro infrastructure modernization, oil and gas technology innovation, maritime transportation issues and small business innovation.
On the Senate side, the nomination hearing for Iowa Governor Terry Branstad to be the US Ambassador to China will take place, with other sessions on broadband infrastructure, the economy and private-sector growth and flood insurance. The Senate will also consider the nomination of President Trump’s pick for the Securities & Exchange (SEC) chairman.
On Saturday, May 6, the Senate Agriculture Committee heads to Michigan for a farm bill hearing on Saturday.
At the White House, President Trump meets with Palestinian Authority President Mahmoud Abbas on Wednesday and Australian Prime Minister Malcolm Turnbull on Thursday.
We arrive in May which means the key jobs report is on tap. But ahead of that, there will be plenty of other important updates coming. Monday opens with the key Personal Income & Outlays report, followed by PMI Manufacturing, ISM Manufacturing and Construction Spending. Wednesday’s updates include ADP Employment, PMI Services and the ISM Non-Manufacturing Index followed by releases Thursday that include International Trade, Weekly Jobless Claims, Productivity & Costs and Factory Orders. Friday’s big release will be the April Employment report in the morning followed by Consumer Credit in the afternoon. After the disappointing showing in the US economy to start 2017, traders will be assessing the data releases to see if they suggest that could be revised up or not at the end of May. The week will also open with several countries around the world closed for May Day or Labor Day, with Japanese markets on an extended break in the week ahead. US markets, however, will be open for business all week.
The next Federal Open Market Committee (FOMC) meeting is on tap May 2-3. No change in interest rate policy is expected at the meeting – the CME FedWatch Tool signals a near-95-percent chance for no shift in policy. That will keep attention on the Fed’s $4.5 trillion balance sheet which Fed officials mostly agreed in March would be appropriate to address by the end of this year. The attention will be on the post-meeting statement to see if that mentions anything on the timing of any balance-sheet efforts with the initial expectation that the Fed will stop reinvesting the results. Even though the FOMC meeting is not one with a post-meeting press conference, markets will not have to wait long for comments from Fed officials. Friday has a barrage of Fed speakers who will be able to comment on Fed policy by that point. Those on the schedule including Vice Chair Fischer adn San Francisco’s Williams (2018 voter) are the first up, with the trio of St Louis Fed’s Bullard (2019 voter), Chicago Fed’s Evans (2017 voter) and Boston Fed’s Rosengren (2019 voter) on a panel at Hoover’s Monetary Policy Conference held in Stanford, California, where they will take questions from the audience. Fed Chairwoman Janet Yellen will appear before markets close on Friday, speaking about “125 Years of Women’s Participation in the Economy” at the 125 Years of Women at Brown Conference held at Brown University in Providence, Rhode Island. And over the weekend San Francisco’s Williams is on tap once again. That should provide markets with some additional flavor from the FOMC session beyond the post-meeting policy statement.
Weather will stay a focus for agriculture markets – whether Corn Belt conditions are still forecast to allow corn planting to resume after a wet weekend will be the initial focus and whether that could mean potential for more soybean plantings. Plus wheat traders will be monitoring the HRW wheat tour as it rolls across Kansas and parts of Oklahoma, Colorado and Nebraska. The attention there will be on disease issues and whether the recent freezing temps had any impact on the crop that is more advanced in maturity compared to year-ago. On the data side, Monday will bring the monthly industrial reports from USDA on cotton, fats & oils, grain crushings and flour. Also on Monday will be the Crop Progress update with the focus on corn, soybean and spring wheat planting along with winter wheat condition ratings, with Grain Inspections data providing an indication on foreign demand for corn, soybeans and wheat. Thursday will bring the release of Weekly Export Sales figures along with the Agriculture Trade Data update. The week closes out with livestock trade data on Friday.
NOTE: This column is copyrighted material; therefore reproduction or retransmission is prohibited under U.S. copyright laws. |
