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Friday, February 7, 2014

A new farm bill back in action

by WLJ

This past week, a revised farm bill was put back into place as the House and Senate reached a temporary agreement. The 959-page bill, which included $956 billion in spending, was finally released as the current farm bill had expired last fall. For the next half-decade, we will be tied into this agreement, right or wrong.

Accounting for only 2 percent of the national budget, this bill seems to garner as much conversation as any agreement passed through Congress from a year-to-year basis. The proposed spending limit is down from the previous spending level by $16.5 billion, but still, the farm bill has been the talk on most major networks for the smaller pieces of the pie.

To clarify, the farm bill contains all nutritional programs for the general public, farmer and rancher subsidy programs, insurance programs and conservation programs. The new farm bill displays cuts in all of those areas except for insurance, which was increased by $6 billion.

During negotiation, the area that gained the most debate between the two branches included the Supplemental Nutrition Assistance Program (SNAP), i.e. food stamps. House Republicans took the stance to drastically cut this spending by $40 billion and make it more difficult to attain stamps from the federal government while the Senate Democrats wanted to follow the Oval Office and merely tweak the regulations and cut by a mere $4 billion in spending. As the new farm bill was released, the Senate was the victor on this subject, as the new bill cut $8 billion from this category, which ultimately means this will affect few people who are currently receiving benefits. In the meantime, it has seemed to me that commodity programs and crop insurance has gained more national media attention even though nutritional programs accounts for 80 percent of the entire bill! These two areas were cut far more than that of nutritional programs at $21 billion over the next 10 years.

At this point in time, with the national deficit continuing the increase, I am personally in favor of true across-the-board spending cuts. However, the cumulative effect of allowing consumers to live off government assistance programs only teaches the same to a younger generation and the problem is compounded. Where I see the failing in the current farm bill is the lack of program restructuring for citizens who are actually unable to provide for themselves and those who are truly able. The past farm bill created many loopholes, and it seems the new farm bill did little to cover those up.

On the positive note, after several months with an expired farm bill, we now have legislation in place and can adjust to what programs and funds are available within our industry and can adjust to the new rules and regulations. It is a continuing challenge to provide for a growing population on decreasing farmable acreage, and some of these programs directed under the farm bill do help a percentage of farmers and ranchers in their year-to-year businesses.

In an economic situation with inflating inputs prices, the lack in supply of beef is the major factor more than anything. The combination of drought through various regions of the country and a cow herd inventory reaching a 61-year low, companies are consolidating to maintain viability, such as the upcoming closure of National Beef’s Brawley, CA, facility and Cargill’s Plainview, TX, plant shutting down last year. The tight beef supply is continuing to drive prices slightly higher on a national scale even though those regional areas are being affected with slightly suppressed prices.

My worry is that with the little spending cuts to nutritional programs, and beef shelf prices on the rise, the 47 million people receiving government assistance—nearly one-sixth of the nation’s population—are not encouraged to purchase beef. It seems to me that a stronger emphasis on economic growth would be more beneficial for our industry rather than continuing to help those who might not actually need the help, but under the current administration, beef is not considered to be high-priority food in a balanced diet.

Since unemployment rates have been at all-time highs over the last several years, the SNAP program has doubled in spending since 2008 from $38 to $78 billion in 2013. Food stamps were created to help those truly in need during the Great Depression, but the program has evolved under several administrations to the point we are in today when so many people are enabled to live off government programs.

I’m not saying the government shouldn’t help those who really do need help. The recent years with the economic recession and painfully slow “recovery” has affected countless Americans, and I am not downplaying that by any means. But I am saying the government is making it easier not to help yourself when able, and this easy access is taking away from the people who truly need assistance. Either way, in need or not, I worry that these two groups of people—with the trends that we are seeing in our markets—are parts of our population who will not be able to be beef consumers. — LOGAN IPSEN

 
 


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