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Friday, April 10,2009

Vilsack hears concerns of young producers

by Chris Clayton - DTN
Craig Evans and Chris Hiley flanked Secretary of Agriculture Tom Vilsack at Evans farm last Tuesday as the two farmers explained their worries about the costs of being young farmers and ranchers.

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Friday, February 6,2009

JBS still committed to completing National Beef deal

by Chris Clayton - DTN
JBS Swift is continuing talks with the U.S. Department of Justice (DOJ) on potentially divesting assets to complete its purchase of National Beef Co., and talks remain stuck on some of the major points laid out by DOJ in its anti-trust case, JBS executives said late last month.

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Monday, November 19,2007

Livestock groups eye Senate farm bill

by Chris Clayton - DTN
Commodity farmers get the lion’s share of focus in the farm bill, but there are several provisions in the Senate farm bill that could affect the way livestock producers do business. Senate debate is stalled over how to accept amendments, but several senators are expected to offer proposals on the Senate floor as early as next week to tighten buyer-seller arrangements in the complex livestock industry. The Senate farm bill includes a ban on packer ownership of livestock longer than 14 days before slaughter. But the Senate bill also has a provision that would allow private companies to forward contract with dairy producers. There also is a provision to create an office of special counsel on competition issues at USDA. Arbitration in livestock and poultry contracts would also be voluntary and could not be a required provision in such contracts. Livestock producers and groups generally come down on different sides of these issues depending on whether they back open cash sales or argue that a producer and packer should be able to do business with limited government involvement. Allan Sents, a Kansas feedlot manager and board member for the U.S. Cattlemen’s Association (USCA), said some key amendments are needed to clean up and clarify language in the 1921 Packers and Stockyards Act that courts have repeatedly interpreted broadly to justify packer business practices. “To me, the clarification on the Packers and Stockyards Act is more import than the ban on packer ownership,” Sents said. Senate Agriculture Committee Chairman Tom Harkin, D-IA, plans to offer one such amendment to clarify a “competitive injury.” It would redefine the legal requirements for a producer to show in court that they have been injured by the way packers are buying cattle. Now, a producer must show that he and several others were affected by a packer’s actions, instead of just his own operation. “It’s just an untenable burden to be placed on a producer,” said Bill Bullard, R-CALF United Stockgrowers’s Association CEO. R-CALF backs the Senate provisions on country-of-origin labeling, the packer ban, interstate shipment of state-inspected meat, and the establishment of an office of special counsel for livestock at USDA. Further working on language in the packer laws, Sen. Charles Grassley, R-IA, and Sen. Jon Tester, D-MT, will offer a provision stemming from the Pickett versus Tyson court case. In that case, Tyson argued that acts violating the Packers and Stockyards Act were a justifiable business practice. The Grassley-Tester Amendment would state that claims of business justification would not be a legitimate defense for an unlawful practice. Other senators keep offering a litany of amendments, but National Farmers Union President Tom Buis said it’s likely a lot of those amendments are just political posturing and will be eventually pulled. Buis said his group likes much of what is in the Senate livestock provisions, with the exception of the provisions allowing forward contracting in the dairy industry. “We think it certainly could lead to further consolidation of the dairy industry,” Buis said. One proposal creating a lot of debate is a proposed amendment by Sen. Mike Enzi, R-WY, that is meant at getting to the issue of captive supply of livestock. The amendment would restrict confidential one-on-one business deals with prospective buyers. Under the proposal, forward contracts would be prohibited for more than 40 head of cattle. “The Enzi amendment is probably the most problematic provision out there,” said Colin Woodall, executive director of legislative affairs for the National Cattlemen’s Beef Association (NCBA). “The way it looks, it will probably be in the final Senate version.” Packers have sent out letters saying the Enzi provisions would take away premiums and niche-marketing contracts, but producer groups such as R-CALF and USCA have denounced those letters as fear mongering. Sents said he would like to hear the debate and merits of the Enzi amendment. Right now, Sents said cattle feeders often have to wait until sometime on Friday afternoon before the week’s cash trade really begins. Captive supplies by packers have created smaller trading windows and fewer cattle sold in negotiated markets, he said. “I certainly favor the concept of the Enzi amendment,” Sents said. Others argue that this focus on livestock is a holdover from price collapses nearly a decade ago and isn’t a reflection of the more recent strong markets in cattle and hogs. “Why is it so wrong to have contracts now that we’re making money?” said Joy Philippi, a Nebraska pork producer and past president of the National Pork Producers Council. The ban on packer ownership too may have a bigger ripple effect on pork than cattle, given the vertical integration in the pork industry. Philippi said contract-feeding hogs for packers is the way a growing number of younger producers are getting established in agriculture. “What happens to the people who have good feeding contracts with packers?” Philippi said. Restrictions on contracts and supply could generate a great deal of debate on the Senate floor. For instance, Harkin said he supports forward contracts as long as there are producer protections. Contracts should have provisions for resolving disputes between a buyer and seller, and there should be no mandatory arbitration clause in the contracts. Contracts must be transparent, and Harkin said there should be a window of time, 24 or 48 hours, to get out of the contract. “If you have all of those in there, it would be fine,” he said. The Senate bill has a provision for a new special counsel, but some senators want to broaden the authority in the language. Twenty industry groups ranging from NCBA and National Grain and Feed Association to the Grocery Manufacturers Association, the Pet Food Institute, Biotechnology Industry Association, and the U.S. Chamber of Commerce co-authored a letter earlier this week to express concern about an amendment by Grassley and Sen. John Thune, R- SD, on the special-counsel provisions. Senators are trying to address the perceived ineptness of the USDA’s Grain Inspection Packers and Stockyards Administration. The agency, known as GIPSA, has received a great deal of criticism from Congress over the past two years after a USDA Office of Inspector General report in early 2006 found GIPSA had done very few actual livestock investigations over the previous six years yet had artificially inflated the numbers. Some members of Congress sought to even separate GIPSA’s Packers & Stockyards oversight from USDA. Still, NCBA resists the argument that a special counsel is needed. “It’s just redundancy,” Woodall said. “It’s adding another layer of bureaucracy that we don’t think is going to do anything but slow things down ... It’s like having Kenneth Star on staff 24 hours a day and the sole purpose is to prosecute people.” Starr was the special prosecutor who investigated the Clinton presidency, leading to President Clinton’s impeachment trial by Congress.

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Monday, November 12,2007

Farm Bill expands help for beginning farmers and ranchers

by Chris Clayton - DTN
Beginning and young farmers and ranchers are going to have better options for tapping into USDA programs stemming from the 2007 Farm Bill. The House and Senate farm bills reflect that Congress is working to help younger producers get better access to capital and land. It’s a contrast to the past when lawmakers would talk about the needs, but never follow through with better benefits for younger, beginning producers. “Both bills represent the most attention beginning farmers have gotten in the farm bill,” said Ferd Hoefner, policy director for the Sustainable Agriculture Coalition. “As far as the farm bill, this is definitely a high-water point and if we can get some of the funding worked out, it could be a big breakthrough.” There are provisions in the commodity, conservation and credit programs that provide extra incentives for producers through tweaks such as lower loan rates or higher cost-share percentages, for example. Most of the beginning farmer provisions in the Senate and House are similar and in some cases, the language in the two bills is identical. Others, however, look comparable, but one chamber may have funding for a program while the other does not. The House passed its full farm bill in July. The Senate takes up the farm bill in a floor debate next week. The differences in the final Senate version and the House bill would also have to be hashed out before a final vote. Both bills right now increase loan limits for the Farm Service Agency on direct farm ownership and operating loans from $200,000 to $300,000. But the Senate also increased the funding authorization by a similar percentage to potentially allow for more loans at larger amounts. The House bill does not make that adjustment, which is a “fairly glaring oversight,” Hoefner said. “It sounds like a small point, but it could be a really big point down the road,” he said. There is comparable language in the two bills for the Beginning Farmer and Rancher Down Payment Loan Program, though there are differences in the allowable loan rate that would have to be adjusted. Both bills lower the down payment required to 5 percent and increase the allowable sale price to $500,000. Loan terms are also extended to up to 20 years. The Beginning Farm and Rancher Development Program was created in the 2002 Farm Bill, but never received any funding. The program is expected to create competitive grants of up to $250,000 for university extension offices or private non-profits to provide training, outreach and technical assistance for beginning farmers and ranchers. The House funds it with $15 million mandatory spending each year while the Senate has no mandatory money authorized. Then there is the individual accounts pilot program for beginning farmers and ranchers that would create matching savings accounts. The money could be used on capital expenses for a farm or ranch, including buying land. While authorized in both versions, neither the House nor Senate has actual money set aside. “But we’re not giving up that it may incorporated into a floor amendment,” Hoefner said. The Farm and Ranchland Protection Program, which funds conservation easements to protect agricultural property from being sold for development, also has $398 million in increased spending in the House bill while no new money in the Senate. The program has made it easier for older farmers to avoid selling out to developers and instead protect land for their children or other, younger farmers. Both bills offer beginning and socially disadvantaged farmers up to 90 percent cost-share for the Environmental Quality Incentives Program, or EQIP. That’s 15 percent better than the prevailing rates for other farmers. At least 5 percent of total EQIP funds in the House bill would go for beginning or disadvantaged farmers, while that is as high as 10 percent in the Senate bill. Each bill also has a provision offering incentives for landowners in Conservation Reserve Program (CRP) contracts to modify their contract if land is being sold to a beginning or socially disadvantaged farmer or rancher. This would allow the new buyer to return some of the land to production before the CRP contract expires while still paying the retiring landowner on the CRP contract. “This is sort of to level the playing field so the landowner might be more willing to sell to the beginning farmer rather than highest bidder, which is most normally the case,” Hoefner said. There’s another provision that also allows the young or beginning farmer to begin the transition to organic production though there may be a year left on a CRP contract. The bill also includes up to $20,000 per-year payments over three years for farmers attempting to shift traditional farmland into organic acres. The Senate treats this as part of the EQIP program.

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