Count on farm bill debate, rice growers are told

By MONETTE TAYLOR | South Central Texas Edition

Jim Wiesemeyer of Informa Economics was one of several speakers at the recent USA Rice Outlook Conference in Austin. � Staff photo by Taylor

Jan. 12, 2006 - If there is one thing ag producers can count on this year, it will be debate of the 2007 Farm Bill, according to Jim Wiesemeyer of Informa Economics.

Wiesemeyer, vice president of Informa Economics’ Washington bureau, was one of several speakers at the recent USA Rice Outlook Conference in Austin. He noted political power plays on the federal, and even state, levels will certainly have a hand in shaping the bill that’s so important to those who make their living from agriculture.

In developing the 2007 Farm Bill, the U.S. Department of Agriculture was charged with collecting public comment and several hearings were held across the nation. The comment period is now closed, and USDA officials are analyzing the 4,348 comments received, according to the agency’s website.

While public comment will be utilized by officials, Wiesemeyer mentioned key players will naturally be President Bush, U.S. Ag Secretary Mike Johanns, and USDA’s Deputy of Agriculture Chuck Conner, who will possibly be replacing Bill Hawks as USDA’s Under Secretary of Marketing and Regulatory Programs. 

There will be “lots of change in future trade agreements,” commented Wiesemeyer.

With the House majority leader, Tom DeLay, along with Senate majority leader, Bill Frist, each in trouble with ethics, and along with all undercurrents that have surfaced in the past week or so, the Republican leadership may be in trouble.

Elections in 2006 will have 18 Democrats and 15 Republicans vying for offices, and in 2008, there will be 12 Democrats and 21 Republicans seeking seats in Congress.

�In the Senate, it doesn�t take as much (numbers for passage),� explained Wiesemeyer.

Recent governor races across the country are “signaling potential problems for Republicans,” said Wiesemeyer. He believes signs are pointed more to Hillary Clinton to lead the Democratic Party. Currently, Chambliss (R-Ga.) and Goodlatte (R-Va.) represent the House and Senate Ag Committees, but it could end up being Harkin (D-Iowa) and/or Peterson (D-Minn).

�The rural vote is very important in tight election years,� noted Wiesemeyer.

Besides going to the polls in 2006, producers will be making decisions for their operations for dealing with rising fuel prices, taxes, and commodity prices – all in the shadow of Farm Bill changes.

Wiesemeyer believes the price of corn and soybeans will go the way of cotton in marketing programs in developing countries. Wiesemeyer cited that by 2020, 80 percent of the population will be in undeveloped countries and they will buy two-thirds of the world’s meat and poultry.

Expectations for 2006 include larger U.S. meat and milk supplies, he said, yet the continued large supplies signal transition over the next years. Wiesemeyer quoted commodities/prices expected for 2005-2006: wheat/$3-3.50 per bushel; corn/$1.70-2 per bushel; soybeans/$5-6 per bushel; soybean meal/$160-180 per ton, and cotton/$.45-.50 per lb. These levels are about the same as in previous years.

Meat producers are looking at lower prices for 2006: Cattle/$75-80 per cwt; hogs/$43-46 per cwt; broilers/$.70-.75 per lb; turkeys/$.67-73 per lb; and milk/$13-14 per cwt.

Statistics show that between 1999 and 2004, U.S. farm income was up 48 percent, and acreage value was up 33 percent. Over the next five years, the House wants $49.9 billion cut from agriculture, and the Senate is calling for a $35 billion cut, Wiesemeyer said.

Current tax breaks need to be extended in order to take care of budget deficits, Wiesemeyer added, because of mandatory programs called for in the new legislation. Some wonder if the “safety net” for producers is worth giving up competing with other countries.

Johanns wants the new Farm Bill by early 2007, but the Democrats want to extend the current 2002 Farm Bill, according to Wiesemeyer.

Ag cuts are coming and benefits will decline, said Wiesemeyer, but the safety net will remain.

In conclusion, he noted “you have to be competitive … Farm Bills are evolutionary, not revolutionary.”