Tag Archives: kansas
Senate Passes Half-Trillion Dollar Farm Bill; Ball’s In House’s Court
Posted: Tuesday, June 11, 2013 12:00 am | Updated: 9:24 am, Tue Jun 11, 2013. 0 comments WASHINGTON (AP) – The last time Congress passed a farm bill, Democrats had control of the House and the food stamp program was about half the size it is today. That was five years ago. Conservatives calling for an overhaul of the domestic food aid program will try to trim the nation’s nearly $80 billion grocery bill when the House weighs in on farm legislation in a few weeks. The Senate overwhelmingly voted Monday to expand farm subsidies and make small cuts to food stamps in a five-year, half-trillion dollar measure. But passage in the House isn’t expected to be so easy – or so bipartisan. House Speaker John Boehner, R-Ohio, said Monday that his chamber will take up its version of the farm bill later this month. He made clear his own dislike for generous farm subsidies included in the bill, saying his “concerns about our country’s farm programs are well-known.” But Boehner acknowledged that the rest of the chamber might not agree with him. “If you have ideas on how to make the bill better, bring them forward,” Boehner said in a statement directed to his colleagues. “Let’s have the debate, and let’s vote on them.” House consideration will come after more than a year’s delay. The Senate passed a similar version of its farmbill last year, but the House declined to take it up during an election year amid conflict over the amount to cut from food stamps, now known as the Supplemental Nutrition Assistance Program, or SNAP. One in seven Americans now use the program. The Senate bill would cut the food stamp program, now known as the Supplemental Nutrition Assistance Program, or SNAP, by about $400 million a year, or half a percent, and Senate Democrats have been reluctant to cut more. The farm bill approved by the House Agriculture Committee last month would cut the program by $2 billion a year, or a little more than 3 percent, and make it more difficult for some people to qualify. In his statement Monday, Boehner signaled support for the House bill’s level of food stamp cuts, saying they are changes that “both parties know are necessary.” Other Republicans are expected to offer amendments to expand the cuts, setting up a potentially even more difficult resolution with the Senate version. At the same time, Democrats are expected to try and eliminate the cuts. Food stamps were added to the farm bill decades ago to gain urban votes for the rural measure, which sets policy for farm subsidies, programs to protect environmentally sensitive land and other rural development projects. But with the program’s exponential growth during the recent economic downturn, food stamps are now making passage harder. “I expect it to come from all directions,” House Agriculture Committee Chairman Frank Lucas, R-Okla., said last month, acknowledging the complications of moving the bill through his chamber. On the Senate floor, senators rejected amendments on food stamp cuts, preserving the $400 million annual decrease. The bill’s farm-state supporters also fended off efforts to cut sugar, tobacco and other farmsupports. Senators looking to pare back subsidies did win one victory in the Senate, an amendment to reduce the government’s share of crop insurance premiums for farmers with adjusted gross incomes of more than $750,000. Sens. Dick Durbin, D-Ill., and Tom Coburn, R-Okla., said their amendment would affect about 20,000 farmers. Currently the government pays for an average 62 percent of crop insurance premiums and also subsidizes the companies that sell the insurance. The overall bill expands crop insurance for many crops and also creates a program to compensate farmers for smaller, or “shallow,” revenue losses before the paid insurance kicks in. The crop insurance expansion is likely to benefit Midwestern corn and soybean farmers, who use crop insurance more than other farmers. The bill would also boost subsidies for Southern rice and peanut farmers, lowering the threshold for those farms to receive government help. The help for rice and peanuts was not in last year’s bill but was added this year after the agriculture panel gained a new top Republican, Mississippi Sen. Thad Cochran. Critics, including the former top Republican on the committee, Kansas Sen. Pat Roberts, said the new policy could guarantee that the rice and peanut farmers’ profits are average or above average. The House has similar provisions expanding crop insurance and rice and peanut subsidies. Dairy programs could also be contentious on the House floor. Both the Senate and House bills would overhaul dairy policy by creating a new insurance program for dairy producers, eliminating other dairy subsidies and price supports. The new policy includes a market stabilization program that could dictate production cuts when oversupply drives down prices. The program faced little opposition in the Senate but a similar overhaul in the House bill is expected to face resistance in that chamber, where Boehner last year called the new stabilization program “Soviet-style.” Boehner reiterated those concerns in his statement Monday, saying he will support an amendment on the floor to challenge the proposed policy. The Senate bill also would: Overhaul dairy policy by creating a new insurance program for dairy producers, eliminating other dairy subsidies and price supports. The new policy includes a market stabilization program that could dictate production cuts when oversupply drives down prices. The program faced little opposition in the Senate but a similar overhaul in the House bill is expected to face resistance in that chamber, where Boehner last year called the new stabilization program “Soviet-style.” He reiterated those concerns in his statement Monday, saying he will support an amendment on the floor to challenge the proposed policy. Make modest changes to the way international food aid is delivered, a much scaled-back version of an overhaul proposed by President Barack Obama earlier this year. Senators adopted an amendment that would slightly boost dollars to buy locally-grown food close to needy areas abroad. Currently, most food aid is grown in the United States and shipped to developing countries, an approach the Obama administration says is inefficient but that has support among farm-state members in Congress. Consolidate programs to protect environmentally-sensitive land and reduce spending on those programs. Expand Agriculture Department efforts to prevent illegal trafficking of food stamp benefits. Continue reading
Farm Belt’s Boom Shows Signs of Slowing
The Wall Street Journal Menu By Mark Peters The rise in prices for agricultural land slowed somewhat to start the year in parts of the U.S. Farm Belt, new reports showed, signaling a boom in land values might be moderating as commodity prices cool and incomes for farmers are expected to weaken. The Kansas City Federal Reserve Bank said in a report Wednesday that prices for nonirrigated farmland in its region rose 3.4% in the first quarter from the fourth quarter of 2012. That was much slower than the 7.7% quarter-to-quarter increase recorded for the same region a year earlier. A separate report from the St. Louis Federal Reserve Bank also released Wednesday showed that land values in parts of the Midwest and Southeast regions fell by an average of 2.3% in the first quarter compared with the previous quarter. Analysts cautioned against making too much of a single quarter. And even with those slower rates, values for nonirrigated farmland in the Kansas City district, which stretches from western Missouri to Wyoming, have soared a total of 19.3% over the past year to record levels, the bank said. More information will come on Thursday in a report expected from the Federal Reserve Bank of Chicago, whose region includes several of the biggest corn-growing states in the upper Midwest. Economists have been watching farmland values closely, with some voicing concern about a possible bubble, as farmers have plowed the money from a record run-up in commodity prices back into the land. A low interest-rate environment has exacerbated the situation, making the rising farmland more attractive for farmers seeking better returns on their money. But signs of a slowdown are emerging. The benchmark corn contract has fallen more than 20% from records set last summer as federal forecasters predict a record corn crop this autumn. Farmers’ costs also are increasing, especially for key goods such as seed and fertilizer, the Kansas City Fed said. On Wednesday, tractor maker Deere & Co. forecast net cash income for U.S. farmers will fall 9.5% to $122.7 billion in 2013. But executives added that farmers should be able to withstand lower incomes because debt levels aren’t rising, even after big investments in land and equipment in recent years. “You see in the U.S. very strong farmer balance sheets, despite what’s been happening with land prices,” said Deputy Financial Officer Marie Ziegler. Nathan Kauffman, an economist with Kansas City Fed, said it will take a few quarters to determine whether the first quarter’s “modest” slowdown marks a fundamental shift in the farmland market or a short-term ebb. Bill Davis, chief credit officer at Farm Credit Services of America, said the agricultural lender saw a flurry of sales at the end of 2012 as farmers sold land ahead of tax increases that took effect this year. And while sales continue in farm states such as Iowa and Nebraska, the surge in prices hasn’t. “We have seen things level off in the first quarter,” he said. Bankers surveyed by for the Kansas City Fed’s latest report said debt levels for farmers generally remain manageable. But they noted that young farmers and those who are expanding operations face rising debt levels. The Fed bank has warned that farmers historically have increasingly turned to debt to continue capital investments even as incomes decline, which can magnify problems in a downturn. –Bob Tita contributed to this article. Continue reading
Prices for Farmland Show Moderation
By MARK PETERS The rise in prices for agricultural land slowed somewhat to start the year in parts of the U.S. Farm Belt, new reports showed, signaling a boom in land values might be moderating as commodity prices cool and incomes for farmers are expected to weaken. The Kansas City Federal Reserve Bank said in a report Wednesday that prices for nonirrigated farmland in its region rose 3.4% in the first quarter from the fourth quarter of 2012. That was much slower than the 7.7% quarter-to-quarter increase recorded for the same region a year earlier. A separate report from the St. Louis Federal Reserve Bank also released Wednesday showed that land values in parts of the Midwest and Southeast regions fell by an average of 2.3% in the first quarter compared with the previous quarter. Analysts cautioned against making too much of a single quarter. And even with those slower rates, values for nonirrigated farmland in the Kansas City district, which stretches from western Missouri to Wyoming, have soared a total of 19.3% over the past year to record levels, the bank said. More information will come on Thursday in a report expected from the Federal Reserve Bank of Chicago, whose region includes several of the biggest corn-growing states in the upper Midwest. Economists have been watching farmland values closely, with some voicing concern about a possible bubble, as farmers have plowed the money from a record run-up in commodity prices back into the land. A low interest-rate environment has exacerbated the situation, making the rising farmland more attractive for farmers seeking better returns on their money. But signs of a slowdown are emerging. The benchmark corn contract has fallen more than 20% from records set last summer as federal forecasters predict a record corn crop this autumn. Farmers’ costs also are increasing, especially for key goods such as seed and fertilizer, the Kansas City Fed said. On Wednesday, tractor maker Deere DE -4.40% & Co. forecast net cash income for U.S. farmers will fall 9.5% to $122.7 billion in 2013. But executives added that farmers should be able to withstand lower incomes because debt levels aren’t rising, even after big investments in land and equipment in recent years. “You see in the U.S. very strong farmer balance sheets, despite what’s been happening with land prices,” said Deputy Financial Officer Marie Ziegler. Nathan Kauffman, an economist with Kansas City Fed, said it will take a few quarters to determine whether the first quarter’s “modest” slowdown marks a fundamental shift in the farmland market or a short-term ebb. Bill Davis, chief credit officer at Farm Credit Services of America, said the agricultural lender saw a flurry of sales at the end of 2012 as farmers sold land ahead of tax increases that took effect this year. And while sales continue in farm states such as Iowa and Nebraska, the surge in prices hasn’t. “We have seen things level off in the first quarter,” he said. Bankers surveyed by for the Kansas City Fed’s latest report said debt levels for farmers generally remain manageable. But they noted that young farmers and those who are expanding operations face rising debt levels. The Fed bank has warned that farmers historically have increasingly turned to debt to continue capital investments even as incomes decline, which can magnify problems in a downturn. —Bob Tita contributed to this article. Write to Mark Peters at mark.peters@dowjones.com A version of this article appeared May 15, 2013, on page A2 in the U.S. edition of The Wall Street Journal, with the headline: Prices for Farmland Show Moderation. Continue reading
