News Room

Farm Bill: Sec. Schafer Elaborates on Possible Extension

By Keith Good,

FarmPolicy.com, Inc.

Reuters writer Charles Abbott reported yesterday that, "If Congress is close to wrapping up work on the new U.S. farm law, the Bush administration may allow some leeway on an April 18 deadline for the new law, Agriculture Secretary Ed Schafer said on Monday.

"Disagreement between House and Senate tax committee leaders on how to pay for a $10 billion spending increase has slowed action on the farm bill, the five-year policy blueprint.

"Congressional farm committee leaders also disagree on issues such as an agriculture disaster fund."

Mr. Abbott indicated that, "A one-month extension of some agricultural programs expires on April 18, creating an informal deadline for the new law, now six months overdue. President George W. Bush says if there is no agreement by April 18, Congress should extend the 2002 farm law for at least one year.

"Asked if April 18 was a firm deadline, Schafer said 'we can look at another short-term extension' if Congress is in the final stages of enacting a bill after agreeing on a spending level, a framework of key points and how to pay for it."

To listen to a brief audio clip from Sec. Schafer on this issue, just click here (MP3-1:00- Rod Bain, USDA Radio).

Yesterday's Reuters article also stated that Sec. Schafer commented on the Conservation Reserve Program: "Large-scale release of land from the long-term Conservation Reserve would have little impact on food prices. '(It) doesn't solve the problem.' The Conservation Reserve pays landowners an annual rent to retire environmentally fragile land."

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, "Agriculture Secretary Ed Schafer said Monday the Bush administration does not consider April 18 a drop-dead date and would consider another short-term extension of the farm bill if Congress and the administration have agreed on a basic framework by the date the current extension of the 2002 farm bill expires.

"When President Bush agreed to that extension, he said that if Congress could not write a new farm bill by April 18, Congress should send him an extension for a year or longer because farmers should not have to deal with the continued uncertainty of whether a new bill will be passed. After a speech to the North American Agricultural Journalists on Monday, Schafer said, 'If we have the framework agreement done, [including] reforms and overall spending and are working out the mechanics ... we could look at another short-term extension.'

"But Schafer added that if there is no progress by Congress before April 18, he would not recommend another short-term extension and would prefer a longer extension of the current law."

Yesterday's DTN article also indicated that, "Schafer said the administration is willing to consider a permanent disaster program as part of 'a total safety net package,' but is concerned that the current proposal would put the disaster payments in the World Trade Organization's amber box of trade-distorting subsidies;" and pointed out that, "The long-term solution for high commodity prices is to get the research done for cellulosic biofuels, Schafer said. He predicted that higher commodity prices could be an issue for 10 years until cellulosic biofuels are in production. He also said USDA officials are keeping a close eye on the livestock industry for potential trouble due to high feed prices in attempt to 'avert' a crisis in that industry or to manage one if necessary."

To listen to Sec. Schafer's comments on disaster aid and trade concerns, click here (MP3- 1:00- Rod Bain, USDA Radio).

U.S. Crop Progress

The USDA's National Agricultural Statistics Service (NASS) released their weekly Crop Progress report yesterday, highlights of which were reported yesterday by DTN's Anthony Greder.

Mr. Greder noted that, "Winter wheat [graphic] is beginning the 2008 growing season with lower condition ratings than it did in spring of 2007, according to the first USDA weekly crop progress report. Winter wheat is rated 21 percent poor to very poor for the week ended April 6. Only 10 percent of the crop was rated poor to very poor in the comparable week of 2007. Of course, that first week of crop ratings in 2007 fell before the notorious Easter freeze that devastated wheat fields.

"Overall, winter wheat was rated 8 percent excellent, 37 percent good, 34 percent fair, 14 percent poor and 7 percent very poor. That compares to 19, 45, 26, 7 and 3 percent respectively last year."

"Spring wheat [graphic] is 5 percent planted, compared to 4 percent at this time last year and a 6 percent average."

The DTN article pointed out that, "'Planting progress figures for spring wheat, barley, oats, cotton, and rice are also somewhat bullish to the grains futures markets because they are slower across the board than their five-year averages,' [DTN Analyst Elaine Kub] said. 'This forebodes potentially yield-reducing delays for all crops, including corn.'

"'USDA is often able to include a corn-planting progress figure in its first April Crop Progress report,' she added, 'but nationwide, planting is currently too minimal to be reported.'"

With respect to future's prices, the Associated Press reported yesterday that, "Wheat for May delivery fell 53 cents to $9.2125 a bushel; May corn dropped 8 cents to $5.90 a bushel;; May soybeans declined 22 cents to $12.55 a bushel."

And Hyun Young Lee reported in today's Wall Street Journal that, "Crude-oil futures rose nearly 3%, as the market braced for further gains on emerging supply concerns.

"April Drought Conditions in U.S."

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Keith Good
President
FarmPolicy.com, Inc.

Journalism Fellow
German Marshall Fund
of the United States

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