Farm Bill Extended Through April 18

Farm Bill Extended Through April 18; Food Costs; Biofuels
Congressional Quarterly reported yesterday that, “The Senate on Wednesday passed a 30-day extension of the nation’s farm law to give bicameral negotiators more time to hammer out a deal on a long-term agriculture policy overhaul.

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Farm Bill: Extending the Extension; WASDE Report Congressional Quarterly writer Catharine Richert reported yesterday that, “Both parties in the House have agreed to move a 30-day extension of the farm policy law this week as negotiations continue on a five-year rewrite.

“‘We are not going to let the farm bill die,’ said House Minority Leader John A. Boehner, R-Ohio.”

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Biofuels: Oil & Corn Prices, Environmental Concerns
Brian Baskin, writing in today’s Wall Street Journal, reported that, “Light, sweet crude for April delivery rose $2.75, or 2.6%, to $107.90 a barrel on the New York Mercantile Exchange, a settlement record. The front-month contract hit an intraday high of $108.21, marking the ninth out of the last 10 sessions in which a record was set.

“Futures have risen $20 in less than two months, largely on the weakness in the dollar, which makes commodities priced in the U.S. currency relatively cheap for buyers in other currencies.”

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As Farm Bill Stalls, Focus on Commodity Supply and Demand
David Streitfeld reported in yesterday’s New York Times that, “Everywhere, the cost of food is rising sharply. Whether the world is in for a long period of continued increases has become one of the most urgent issues in economics.

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Corn Yields and Farm Policy: An Important Link- Part II
Recall that last Sunday FarmPolicy.com pointed out that supply and demand factors have recently coalesced in a way that has caused the market price of several key program crops to increase substantially.

These higher market prices have turned attention to a wide range of important issues including energy policy and biofuels, food inflation, and conservation program management.

Some might argue that corn is one of the more important variables in the current high price environment. Corn is a versatile crop that is used for a variety of purposes, and acreage decisions regarding corn have ripple impacts on the supply and price of other commodities.

As a result, corn yields and more specifically, estimates regarding the projected growth rate in corn yields, have taken on an important role in the farm policy debate.

Last week’s update noted that the more important policy issue in the current environment is the rate of growth in corn yields: Are corn yields increasing at a faster rate?

Agricultural economists at the University of Illinois have looked at this issue in greater detail and have summarized their results in a short, easy to read paper entitled, “Are Corn Trend Yields Increasing at a Faster Rate?” (To listen to an audio recap on this issue, just click here (MP3- about 8 and half minutes).

On Tuesday, March 4, WILL AM 580 Radio (Champaign, IL) and University of Illinois Extension held an outlook meeting at which Dan Basse of Ag Resource delivered a keynote address that covered a wide range of current agricultural issues.

As part of his broad outline of issues, Mr. Basse also addressed the important issue of corn yields and policy.

Mr. Basse referred to this slide in his presentation, and noted that, “[USDA Under Secretary for Rural Development] Tom Dorr stated at the USDA meeting just a few weeks ago- said that if we are to maintain, we need corn yields at 300 bushels per acre sometime within the next two decades. I would agree with that, if we can get there, everything will be fine. If we can’t get there people in Washington will very quickly start wondering about their biofuel policies and why we are using food for the production of fuel.”

To listen to more extended comments on this issue from Dan Basse, and some of his observations and perspectives on the corn yield impact on U.S. farm and energy policy, just click here (MP3- six minutes).

The audio recap also includes a brief audio excerpt from some comments regarding corn yields made recently by Jon Doggett of the National Corn Growers Association at a Farm Foundation policy forum in Washington, D.C.

Keith Good