Commodity Prices- Food Prices
Neil Irwin reported in today’s Washington Post that, “Financial markets are frazzled, and the jobs situation is getting worse. But there is a surprising bit of good news for the economy in the months ahead.
“Prices for global commodities — oil, of course, but also a variety of metals, agricultural products and other raw materials — have been falling steadily since mid-July, after reaching record highs. Prices are still elevated, pinching consumers and businesses alike. But these modest declines should offer some relief to stretched American pocketbooks in the months ahead and help reverse some of the steep rise in inflation that occurred in the spring and early summer.”
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Farm Bill: 10-Acre Issues
Brian Gadd reported yesterday at the Zanesville Times Recorder Online (Ohio) that, “U.S. Rep. Zack Space (Ohio) kept up a busy ‘recess’ schedule Tuesday, by hosting the first of three town hall meetings throughout the 18th Congressional District.
“Space brought along Rep. Collin Peterson, chairman of the House Committee on Agriculture, to give an update on the latest legislative information on agriculture and the Farm Bill at the Ohio University Zanesville/Zane State College Campus Center.”
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Senate Ag Committee Field Hearing
The Senate Ag Committee held a field hearing yesterday in Omaha, Nebraska entitled, “Food, Feed and Fuel Production: Today and Tomorrow.”
DTN writer Chris Clayton provided an overview of the hearing in an article from yesterday (link requires subscription) and noted in part that, “Despite various legislative proposals in Congress to change ethanol policies, Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, said Monday he doesn’t see any plan getting approved this fall that would jeopardize the domestic ethanol industry.
“Lawmakers looking to lower prices of corn or gasoline have tossed out proposals to reduce the renewable fuels standard or lower the 54-cent tariff on imported ethanol. But Harkin pointed out that Congress has to deal with appropriations legislation and likely has barely a month to complete its work before breaking again for elections.
“‘With the abatement of high corn prices that have come down now, oil prices are down, things have eased a little bit so I don’t think you will see much debate this fall,’ Harkin, D-Iowa, said following a committee field hearing on food and fuel in Omaha.”
The DTN article indicated that, “Still, Harkin said the first major issues the next president will tackle will be winding down the war in Iraq, health-care policy and energy policy. Fights over ethanol and renewable energy will continue.
“‘It will be in full force next year,’ Harkin said.”
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Focus on Trade
Louis Uchitelle reported in today’s New York Times that, “Exports are the bright spot this year in an otherwise bleak economy. But the world is not suddenly snapping up made-in-America goods like aircraft, machinery and staplers. The great attraction is decidedly low-luster commodities like corn, wheat, ore and scrap metal.”
The Times article explained that, “Commodity sales have been helped greatly this year by rising prices, particularly for grains, and also by the decline in the value of the dollar, which reduces the cost of American exports in other currencies. Both trends, however, have recently reversed, suggesting that the rise in commodity sales will not be sustained, and that exports might shrink, weakening the economy another notch.”
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Farm Bill
DTN writer Chris Clayton reported yesterday (link requires subscription) that, “Agriculture Secretary Ed Schafer is butting heads with members of Congress over actual language in the 2008 farm bill and what Congress argues is the intent or way some provisions on farm programs should be interpreted.
“Schafer told DTN on Thursday USDA is ‘getting a lot of heat’ from Congress because of efforts to cut off the smallest farmers from receiving direct payments or counter-cyclical payments. Though spelled out in the farm bill passed earlier this summer, Congress wants USDA to be more flexible in shutting off people from commodity programs due to the provision eliminating farmers who own 10 acres or fewer.
“In a similar vein affecting commercial-sized farmers, USDA is having an ongoing tug-of-war over how to interpret the Average Crop Revenue Election program, set to begin by the 2009 planting season. Schafer argues Congress budgeted ACRE one way, but that it wants USDA to implement the program another way.”
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Posted by Keith Good • August, 21, 2008 • 5:09 am 