Six members of the House from both sides of the aisle obtained over 65 colleagues' signatures on a letter sent this week to House GOP and Democrat leaders urging the party leaders to allow federal ethanol tax credits and the ethanol import tariff to expire December 31, and to resist trying to repackage federal ethanol supports. At the same time, 16 national and regional ag groups called on the Senate Environment & Public Works Committee to hold a hearing on the federal Renewable Fuel Standard (RFS) impact on the national economy. However, adding fuel to the ethanol tax fires, was Rep. Charles Rangel (D, NY) who introduced this week a bill to renew the ethanol import tariff through 2014, a move his office said is to force foreign and U.S. ethanol producers to use nine processing plants located in El Salvador, Costa Rica, Jamaica, Trinidad and Tobago and the U.S. Virgin Islands.  

Rangel and his cosponsors are all tightly aligned with Caribbean nation economic development and see the ethanol import tariff as leverage to force use of the facilities, many of which are either underproducing or idle. The action enraged the Brazilian ethanol industry, and the Brazilian association of sugar cane and ethanol producers said the Rangel bill is "a blatant move...that risks a trade war between the U.S. and its trade partners, including friendly nation's like Brazil," according to reports. Brazil has suspended but not repealed its own tariff on imported ethanol, and U.S. ethanol producers are currently exporting about 900 million gallons a year, with about 450 million gallons going to Brazil.

The 5th Gordon Currie "Salty" Crab Feed / North Bay District Meeting has been scheduled for Tuesday, January 17, 2012.  The event begins at 6:00 pm at Mister McGoos Restaurant located at 1375 Petaluma Boulevard North, Petaluma, CA.  The cost is $45.00 per person and reservations are due by January 9th in care of Darrel Freitas.  Click here for flyer   

House Agriculture Committee Chair Frank Lucas (R, OK) allowed in a radio interview this week his panel may be forced to consider a one-year extension of the current omnibus farm law because of the political and financial uncertainties next year. Lucas referred to the Herculean effort of trying to move a multi-billion-dollar rewrite of federal farm policy during a presidential election year and in an atmosphere dedicated to slashing federal spending. Lucas said he doesn't "know what the economic lay of the land is going to be" in the spring, and "what forces who don't necessarily understand or really appreciate rural America/production agriculture are going to insist from us.

"Lucas' prediction of a 2012 Farm Bill becoming a 2013 Farm Bill was echoed by Rep. Mike Conaway (R, TX), who chairs the House ag panel's subcommittee charged with rewriting farm payment programs. He said the 2012 elections - during which 17 Senators are up for reelection - means the desire to vote on controversial spending packages will contribute to a desire to punt the Farm Bill into 2013. He said the omnibus package will likely pass the full ag committee, but the education process with the full House and cited heated House floor exchanges over farm programs during debate on the FY2012 ag appropriations bill. Meanwhile, Senate Agriculture Committee Chair Debbie Stabenow (D, MI) is sticking to her plan to hold hearings beginning in late January/early February both in Washington, DC and throughout the country, but her staff is talking as though the rewrite of payment programs cobbled together for the now defunct Joint Special Committee on Deficit Reduction will be the foundation for her panel's product. Conaway, referring to the estimated $23 billion the super committee draft bill would save, said that total savings "will be the ceiling in the Senate and the floor in the House."

As members of Congress eye the calendar and yearn to get out of Washington, DC for the holidays, weeks of bitter infighting over a package of FY2012 spending bills ended with a deal struck late December 15 to avoid a government shutdown at midnight, Friday, December 16. Both the House and Senate are expected to vote on the $1-trillion spending package - which funds nine individual spending bills - on Friday. Overall, the bill meets the August discretionary spending ceiling, meaning the package reduces the federal budget. The spending bill moved forward once negotiators agreed to separate it from an on-going battle over how to pay for an extension of the Social Security payroll tax cut. The House is also expected to vote Friday on a $8.6-billion emergency disaster bill, along with a bill to impose a 1.8% across-the-board federal spending cut to pay for for emergency disaster aid.  

While House approval is almost assured, the Senate will not take up the measure, as it continues to push for a bill that does not need offsets. While leaders on both sides of Capitol Hill agree the federal payroll tax cut must be extended for at least a year, the battle is how to pay for it and whether to tack on to the bill an unemployment benefits extension and a host of federal tax breaks set to expire at the end of the year, including a number of bioenergy tax incentives that benefit wind, solar, biodiesel - both soy and animal-based fuels - along with research/development credits and related items. The House passed its version of the payroll tax cut extension this week - including unemployment benefits and a "doc fix" - language preventing a reduction in physician Medicare reimbursement - as a means to put pressure on negotiators, but Senate Majority Leader Harry Reid (D, NV) wants the pure compromise package, so it's expected this weekend - if a deal is done - the Senate will vote first to disapprove the House bill and then vote in favor of the compromise package. Sticking points included a House GOP push for approval of the controversial Keystone XL pipeline project through the Midwest, a project opposed by the Democrats and the White House. The Democrats want the pipeline proposal off the table, and had insisted on a surtax on households earning $1 million or more; however, late December 15, Sen. Max Baucus (D, MT), chair of the tax-writing Senate Finance Committee, said the compromise package on which he's been working does not carry the millionaire surtax.

A dramatically rewritten USDA rule on how livestock and poultry processors contract with growers went final this week in the Federal Register, and while it doesn't remove all sections to which the industry objected, it goes a long way. The new rules are effective Feb. 7, 2012. USDA published four separate rulemakings as part of its 2008 Farm Bill requirement to take action under Grain Inspection Packers & Stockyards Administration (GIPSA) antitrust authority to ensure livestock and poultry contractors are fairly treated. USDA dropped out or watered down most of the objectionable requirements first proposed in June, 2010, but retained requirements on suspension of delivery of birds; criteria for additional capital investments; the period of time permitted for a grower to remedy a breach of contract, and arbitration. Most national producer groups greeted the new USDAS rulemaking with relief. In November, the agriculture/FDA FY2012 appropriations bill signed by President Obama carried language stopping USDA from going forward with its earlier rulemaking. These same groups had objected to the 2010 USDA rulemaking as going beyond the congressional mandate of the 2008 Farm Bill, imposing stringent and unrealistic requirements on growers and processors alike. The National Chicken Council (NCC), while praising Congress for reining in USDA and pledging to work with its members on compliance with the final rule, said it was "disappointed the final rule still includes provisions estimated to cost the chicken industry as much as $55.5 million annually."

Senate Agriculture Committee Chair Debbie Stabenow (D, MI) invited four victims of the October 31 MF Global (MFG) bankruptcy, showcasing, a grain elevator operator, the president of a trading company, a farmer, and a cooperative executive from across the Midwest. Testifying at the December 14 hearing were Roger Hupfer, Freeland Bean & Grain, Inc., an elevator operator from Freeland, Michigan; Jeffrey Hainline, president of Advanced Trading, Inc., Bloomington, Illinois; Dean Tofteland, a Luverne, Minnesota farmer, and C.J. Blew, a farmer/rancher from Hutchison, Kansas, who is also chairman of the board of the Mid Kansas Cooperative Association and a member of the board of CHS, Inc. Blew, who told the committee "we must assure the sanctity of segregated accounts," said his co-op is still missing 64% of the association's margin funds and excess cash, while Tofteland said he's lost more than $100,000 since MFG filed for bankruptcy protection. Hupfer said he's also dealing with a loss of customer confidence. "They expect us to provide and maintain competitive, perpetual marketing programs to assist them with their risk management," he said. "How will we be able to effectively manage the increased volatility and price risk, and place our hedges with confidence if the very integrity of exchange-based futures trading is in jeopardy." Hainline said this loss of confidence translates to lower prices for farmers and higher prices to consumers.