NCGA's Mission: To Create and Increase Opportunities for Corn Growers

This is Corn Commentary, the weekly newsletter for state and national grower leaders of the National Corn Growers Association (NCGA).  For complete stories and updated NCGA information, visit www.ncga.com or the NCGA Leader Resource Center, www.insidencga.com.

IN THIS ISSUE:

• Senate Passes Energy Bill
• NCGA Letter Read on Senate Floor
• WTO Talks Collapse
• WRDA – Behind the Scenes
• Informa Increases Corn Acreage Forecast
• Farm Bill Update
• Litterer Visits with Congressmen, USDA Staff

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HoSenate Passes Energy Bill

The Senate early Friday morning passed the Renewable Fuels, Consumer Protection and Energy Efficiency Act of 2007, comprehensive energy legislation that increases the 7.5 billion gallon renewable fuels standard to 36 billion gallons by 2022. Fifteen billion gallons will come from corn-based ethanol.

Additionally, the bill calls for:

• Studies on the feasibility of ethanol pipelines, higher blend levels and the optimization of flex fuel vehicles;
• A 20 percent greenhouse gas (GHG) reduction standard for conventional biofuels that allows existing plants to be grandfathered in to the law;
• Establishment of a 50 percent GHG reduction standard for advanced biofuels;
• Corporate Average Fuel Economy (CAFE) standards for automobiles to increase to 35 miles per gallon by 2020;
• Establishes a goal of increasing the nation’s flexible fuel vehicle fleet to 50 percent; and
• Studies relating to the impacts of expansion of biofuels production on various industrial sectors, as well as an environmental impact study.

With the Senate passage, the legislation will now head to the House of Representatives. If the bill passes the House, both chambers will hold a conference committee to iron out any differences. The House has not indicated when it will take up the bill.

NCGA Letter Read on Senate Floor

During the energy bill debate, Sens. James Inhofe (R-Okla.), Elizabeth Dole (R-N.C.) and Richard Burr (R-N.C.) offered an amendment that would set a stocks-to-use ratio regarding renewable fuels. If corn stocks fell to 10 percent or below, the RFS could be decreased by 15 percent every year until stocks returned to above 10 percent. NCGA and commodity and ethanol groups sent a letter to the Senate indicating their opposition to the amendment. Sens. Jeff Bingaman (D-N.M.) and Dick Durbin (D-Ill.) quoted the letter during debate and urged colleagues to defeat the amendment, which they did, 63-31. The letter stated, “An arbitrary stocks-to-use ratio trigger that restricts corn use for ethanol would likely diminish overall demand and put downward pressure on the price for corn. This would serve as a disincentive to farmers and discourage them from planting more corn at a time when more corn is what the feed and fuel industries need.”

WTO Talks Collapse

The World Trade Organization Doha Round talks fell apart on Thursday, as members of the United States, European Union, Brazil and India (known as the G4) walked away from discussions in Potsdam, Germany. The United States said the meeting was dissolved over manufactured goods; India said it was over agricultural tariffs. The matter now goes back to the entire WTO membership. Though not officially dead, the Doha Round is in trouble. Reports suggest India Trade Minister Kamal Nath called off the talks without consultation. President George W. Bush’s trade promotion authority expires at the end of June. In a Reuters report, USTR Susan Schwab said, “By walking away from what was ... by any measure a bad deal, we are showing the Congress that we are to be trusted.”

Informa Increases Corn Acreage Forecast

Informa Economics predicts planted corn acreage will hit 90.724 million acres, 270,000 more than USDA forecast March 30. Soybeans acreage is projected at 68.77 million acres, up 2.4 percent from 67.14 million forecast by the USDA in March and the lowest since 1996, Informa said. Farmers seeded 75.522 million acres of soybeans a year ago. Spring wheat will be sown on 13.958 million acres, or 150,000 more than the 13.808 million that the USDA projected in March. Last year, 14.9 million wheat acres were planted.

Farm Bill Update

The debate and development of a new farm bill will be much lengthier than anticipated. This week a House Agriculture subcommittee passed an amendment to extend the 2002 farm bill. Any changes to the Commodity Title must come from the full House Agriculture Committee. A floor fight in the House may be inevitable if members continue to look at the status quo and not a reform of farm programs. NCGA has made it clear that it opposes an extension and is continuing to meet with staff and members in the House and Senate on the importance advancing reform and ensuring the 2007 farm bill addresses the future of agriculture and not the past.

House Agriculture Committee Chairman Collin Peterson (D-Minn.) has delayed the full markup of the farm bill until after the July 4 recess. The farm bill will likely see floor time closer to the end of July. Senate Agriculture Chairman Tom Harkin (D-Iowa) said in an interview that he may be embracing the idea of a revenue-based approach in a Commodity Title, saying that a better countercyclical program is needed. Also this week Harkin detailed some of his priorities for the Rural Development Title of the 2007 farm bill in his weekly press call. He expects his markup to come after the July 4 recess.

Some of his priorities include:

• Ramping up production of biofuels and other alternative energy sources
• Continue the value-added product development grants
• Encourage a strong venture capital program to jump-start investment in new, job-creating enterprises in rural communities
• Provide $500 million for a new Rural Collaborative Investment Program, which will support clusters of communities that come together to plan and implement regional economic development strategies
• Expand broadband access to the countryside
• Provide rural America better access to other amenities and necessities that people in cities take for granted, such as improving infrastructure for electricity, clean drinking water and wastewater treatment
• Provide enough funding in the farm bill to cut the number of unfunded applications in half.

Litterer Visits with Congressmen, USDA Staff

NCGA First Vice President Ron Litterer met with Rep. Bruce Braley (D-Iowa) to discuss ethanol issues and his legislation that would offer grants to train a workforce for the growing biofuels industry. Litterer also met with Rep. Leonard Boswell (D-Iowa), a member of the House Agriculture Committee, to discuss NCGA’s revenue safety net proposal. Litterer also met with key staff in the Senate, including Iowa Sens. Tom Harkin (D) and Charles Grassley (R), to discuss farm bill issues. Litterer also met with staff of Secretary of Agriculture Mike Johanns to discuss the farm bill and the recent news on negotiations at the World Trade Organization.

Quotables:

“This bill starts America on a path toward reducing our reliance on oil by increasing the nation’s use of renewable fuels.”

Sen. Harry Reid (D-Nev.), referring to the Senate energy bill passed on Friday.

“I must say we've made very significant progress in the senior officials' meetings, in agriculture in particular. We're not there yet, but we had the sense that if everyone came to the table in Potsdam ready for serious negotiations, ready for the kind of give and take that characterizes the close of a negotiation, we think that we could have succeeded. And we would have had good news to bring to Geneva. As it is, it was less of a negotiation and unfortunately more of an auction with the auctioneer saying, Put more on the table, Put more on the table, Put more on the table! And that's unfortunate . . . For now, I think we go away disappointed but not prepared to give up.”

USTR Susan Schwab on the breakdown of the WTO Doha Round talks in Potsdam, Germany.

"I take committee members at their word regarding their interest in incorporating the ideas offered by the administration to strengthen the current bill. I look forward to working with them to do what I firmly believe is right for American agriculture."

Secretary of Agriculture Mike Johanns on the House Ag subcommittee’s decision to extend the farm bill.