Washington Report for 3-24-14

By Steve Kopperud

RFS wars continue; ethanol posts 2^nd highest profits

The continuing war over whether the U.S. Environmental Protection Agency should reduce, increase or leave unchanged the amount of biofuels mandated for gasoline blending under the Renewable Fuel Standard continues to rage, with aggressive lobbying planned as well as a national one-day TV advertising campaign by those who want to see a higher RFS.

In a related development, a study by Dr. Scott Irwin, University of Illinois, shows the average ethanol plant enjoyed a profit of $23 million last year, the second most profitable year in the industry’s history, behind the $25-million-per-plant reported in 2007. The university reported lower corn prices helped boost third and fourth quarter returns. The study based “profitability” on three components: Ethanol prices, dried distillers grains (DDGs) prices and corn prices.

A group called Americans United for Change planned to pay “high six figures” for an advertising campaign Sunday on the morning news talk shows, aimed at making its case for increasing the RFS. AUC refers to its “Bottom Line” ad campaign as “anti-Big Oil/pro-homegrown jobs.” The Sunday morning news talk shows were chosen because they appeal to “opinion elites and ultimate decision-makers” on the EPA’s proposal to reduce or hold unchanged the RFS.

Switching gears, the American Petroleum Institute said it’s confident it can garner a majority of House members to vote for legislation repealing the RFS. The group said it’s counted 205 members – it takes 218 to pass a bill – who have either signed a letter or cosponsored legislation aimed at least at reducing the RFS and changing the formula by which the law mandates EPA computes RFS levels. API wants a full repeal of the RFS and is concerned EPA’s move to reduce the RFS may distract from its ultimate goal.

Meanwhile, the National Corn Growers Association took a shot at the livestock industry last week for its opposition to the RFS. “It is one thing to complain about the price of corn when it is $8 a bushel,” NCGA President Martin Barbre wrote in a NCGA newsletter, citing the drought reduced 2012 crop. “Now, with corn nearly half that price, livestock and poultry producers are still complaining and singling out ethanol. The fact is there are a lot of people who want the corn price around its historic, if unsustainable, two bucks a bushel.”

Eyes turn to ag in battle for immigration reform

While the likelihood the House will cobble together comprehensive federal immigration reform legislation, conference it with the Senate-passed bill and get it to the president by October is exceedingly slim, the push continues with increased attention focused on the need for ag labor.

The United States today imports more fruits and vegetable because there isn’t enough labor to allow domestic producers to expand production, said two groups, the Agriculture Coalition for Immigration Reform and the Partnership for a New Economy. They recently released a joint report detailing the needs of agriculture broadly and the produce industry specifically when it comes to labor. Individual dairy, fruit, vegetable and livestock producers presented the report and answered questions about their reliance on imported labor – legal and illegal – to keep their operations running.

Fruit and vegetable imports are 79 percent higher than 14 years ago, the groups said, citing U.S. Department of Agriculture and federal data. Much of that production could have been domestic. The loss to domestic producers in 2012 is estimated at $4.8 billion, the report said.

The American Farm Bureau Federation, one of the more than 300 state, regional and national ag groups who are members of ACIR, said the report “proves what we’ve been saying since this debate began: Either we import labor to help America’s farmers tend their crops or we import food.” The group said the United States has the technology and food safety protocols to ensure domestic consumer demand is met.

Industry confident water bill conference deal coming

A compromise between House and Senate bills to reauthorize the Waterway Resources Development Act could be finalized by conferees as early as April. The push to complete the conference negotiations is so the Army Corps of Engineers can finalize its reviews and recommendations on which lock, dam and dredging projects will get federal funding, Congressional Quarterly reported.

House Transportation & Infrastructure Committee Chair Bill Shuster (R-Pa.) said the Senate has agreed to accept the House system for project funding selection, which basically inserts Congress into the project review/approval process. The House bill lists several specific projects for funding but also requires the Corps to annual make recommendations to Congress every two years on projects it deems need federal money.

The Senate modified the House language to allow “conditional” authorization for about 15 more specific projects pending but for which Corps reviews and reports are not in hand. The last of those reports is expected at the end of April, Shuster said.

EPA publishes ag pesticide worker protection proposed rule

The U.S. Environmental Protection Agency has published its proposed rule and is seeking public comment on measures it wants to take to protect ag employees and workers from pesticide exposure. The proposed rule seeks to improve training, increase information access, modernize safety precautions and update compliance requirements. The agency said it logs 1,200-1,400 accidental pesticide poisoning reports each year. Comments are due by June 17, and the full proposal can be found at www.epa.gov/.

FDA denies extension of FSMA feed rule comments; updates other rules

The American Feed Industry Association, the National Grain & Feed Association, the National Renderers Association and the Pet Food Institute said the U.S. Food and Drug Administration has denied their request to extend the comment period on the 405-page Food Safety Modernization Act performance standard proposed rule for animals foods.

Comments are due March 31, and all three groups said they’ll meet that deadline, but comments would have been more detailed, including cost impacts, had they been given an extra 60 days. The human food version of the rule was given 11 months to comment; the feed industry was given just five months.

FDA muddled the future of the FSMA rulemaking by saying last week: “Because the proposed rule on current good manufacturing practice and preventative controls for animals is a companion rule to the proposed rule on human food, FDA is announcing that it will publish revised language for this proposed rule as well. For that reason, the comment period for the proposed rule on animal foods…is not being extended.”

On the other hand, FDA announced it was granting an additional 90 days for comments on both the proposed rule on intentional adulteration of food – which exempts animal foods – and the proposed rule on qualitative risk assessments. It is also granting an extra 45 days for comments on the designation of high-risk foods for traceback.

FDA announces livestock feed problem reporting portal

The U.S. Food and Drug Administration has opened a new portal on its food safety website that allows people to voluntarily report problems with “livestock” feed. FDA defines “livestock” as “including but not limited to, horses, cattle, swine, poultry and fish.” The portal can be found at www.safetyreporting.hhs.gov/

The new online portal also allows “an additional means for consumers to register complaints,” the agency said. The new portal is an expansion of the existing “Safety Reporting Portal” for general product safety complaints to the agency. Insiders say the addition of the livestock portal was to make general phone calls and emails registering complaints to FDA easier to handle.

Vilsack: ‘Actively engaged’ definition proposal not until end of year

When 2014 Farm Bill conferees set new payment limitations on how much federal program aid farmers could collect, they couldn’t agree on how to more tightly define which farmers qualify to get the federal checks, so they ordered the U.S. Department of Agriculture to write a new definition. Secretary of Agriculture Tom Vilsack said that by the end of the year he will release a proposed rule defining what it means to be an “actively engaged” farmer or rancher.

He said particular attention will be paid to investors who qualified for federal support under the old system, but who have no day-to-day involvement in the management of the farm. Appearing at a hearing before the House Appropriations Committee subcommittee on agriculture and the U.S. Food and Drug Administration, Vilsack pledged to take in account when crafting the qualifying definition the long menu of activities that are part of operating a farm or ranch.

Gillibrand wants FSA offices kept open

Sen. Kirsten Gillibrand (D-N.Y.) is the latest political voice to wade into the ongoing debate over the U.S. Department of Agriculture's plan to close or reduce manpower in 250 Farm Service Agency county offices as a cost-saving move. She has 10 FSA offices in her state and is asking Secretary of Agriculture Tom Vilsack to keep all 250 offices open.

Gillibrand said farmers and ranchers rely on FSA help to “navigate” program sign-ups, assistance programs, etc., and this is especially important given all the changes in the crop and dairy programs authorized in the 2014 Farm Bill. It’s not right that farmers have to drive four hours to their local USDA office, she said.

Peterson running for reelection; McAllister joins ag committee

Ending weeks of speculation on his future plans, House Agriculture Committee ranking member Rep. Collin Peterson (D-Minn.) confirmed he will seek reelection this year. In a related development, Rep. Vance McAllister (R-La.) was installed as the newest member of the House ag panel.

Peterson told a North Dakota radio station he decided to run for reelection because “there is a lot of work to do,” including farm bill implementation, flood control, highway construction and ongoing strife between producers and the U.S. Environmental Protection Agency, particularly on the Renewable Fuel Standard, which he strongly supports. Some speculated Peterson’s frustration over enactment of the 2014 Farm Bill might cause him to retire. Peterson’s opponent is expected to be Minnesota state Sen. Torrey Westrom.

McAllister, a small businessman who will sit on three ag panel subcommittees – general farm commodities, conservation/energy and department operations/oversight – immediately upon being sworn in introduced the Commodity Delivery Relief Act. His bill is aimed at the Commodity Futures Trading Commission's proposed rule on swaps and would treat futures contracts resulting in the physical delivery of a commodity, such as natural gas, as a swap.

Bill Gates meets with senators to talk research funding

Only billionaire Bill Gates can get three senior U.S. senators behind closed doors to talk about the value of agricultural research and how Congress needs to spend more money. Microsoft founder Gates, now head of the Bill & Melinda Gates Foundation, met with Sen. Thad Cochran (R-Miss.), ranking member of the Senate Agriculture Committee and a member of the Senate Appropriations Committee; Sen. Roy Blunt (R-Mo.), minority whip of the Senate and an appropriations committee member, and Sen. Mark Pryor (D-Ark.), chair of the appropriations subcommittee on agriculture and U.S. Food and Drug Administration.

Gates wouldn’t discuss what he and the senators discussed but told reporters “investments in agriculture research show a great way to reduce poverty.” He went on to say part of his foundation’s work is to enable small, independent producers around the world to become profitable and escape poverty and improve children’s diets, adding, “Until the children get proper nutrition, you’re not going to end poverty.”