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Conveyor Currents                              October 25, 2013
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January 15-16, 2014   Grain & Feed Industry Conference, Embassy Suites, Monterey, CA

April 23-26, 2014  CGFA Annual Convention ~ The Sheraton Resort, Maui, HI 
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April 22-25, 2015   CGFA Annual Convention - The Monterey Plaza Hotel on Cannery Row.

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In This Issue
Farm Bill Conference Begins October 30
AFIA and NGFA Release Statement on FDA FSMA Feed Rule
Houses Passes Waterways Bill 417-13
CDFA Denies Price Increase for 4b Milk
RFS Discussions Continue; EPA May Release 2014 Numbers Next Week
Immigration Reform Battles in House Expanding
Animal Ag Hits Back at Pew Commission Report
CFTC to Hold Public Meetings on Position Limits
President Nominates Jeh Johnson as DHS Secretary
Farm Bill Conference Begins October 30; Tea Partiers Take Aim

The 2013 Farm Bill conference committee will formally commence on October 30, the first -- and perhaps the last time -- all 41 members from the House and Senate will be in the same room at the same time.  This first meeting, to be chaired by House Agriculture Committee Chair Frank Lucas (R, OK) -- the Senate chaired the conference in 2008 -- will essentially be the forum in which the format of the conference will be laid out and members will be allowed to make opening statements. 


However, in a front page story in the October 24 edition of USA Today, members of various Tea Party groups around the country, as well as the fiscally conservative Heritage Action for America, the lobbying arm of the Heritage Foundation, said neither House nor Senate Farm Bill cuts enough spending going forward, and called for an extension of 2008 farm program authority.  They want to see the conferees kill off federal crop insurance subsidies along with direct payments. 

Both Lucas and Sen. Debbie Stabenow (D, MI) this week said all the right things about bipartisanship, a need to create a viable income safety net, the importance of crop insurance, etc., with Stabenow reminding her colleague that during these days of budget battles  a reconciled Farm Bill represents federal budget savings in excess of $25 billion over 10 years. Both she and Lucas want to get the Farm Bill to the finish line, and with the their ranking committee members -- Rep. Collin Peterson (D, MN) and Sen. Thad Cochran (R, MS) -- have been meeting privately to get a game plan down and move the conference most efficiently.


The biggest policy hurdles for the conferees to get over remain cuts in federal food stamp payments, reconciliation of House and Senate approaches to shifting direct payments, international food aid -- 55 Senators sent conferees a letter supporting current food aid programs -- and crop insurance issues.



AFIA and NGFA Release Statement on FDA FSMA Feed Rule

Arlington, Va. and Washington, DC, Oct. 25, 2013

The U.S. Food and Drug Administration (FDA) issued the proposed rule on Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Food for Animals. The release marks the latest set of proposed rules issued by the agency to implement the Food Safety Modernization Act (FSMA).  In response, the American Feed Industry Association (AFIA) and National Grain and Feed Association (NGFA) issued the following joint statements:


"We are pleased to see these rules are now available for public comment," said Richard Sellers, AFIA vice president of feed regulation and nutrition. "These rules will have a major impact on our members. We will begin implementing our plan to analyze the preventive control rules jointly with the Foreign Supplier Verification and the Accreditation of Third Party Auditors rules already released. We have asked the agency to extend the deadline for comments to match the preventive control rules deadline."

"Publishing the proposed preventive control rule for animal feed and pet food is another important step in FDA's ongoing implementation of FSMA," said David Fairfield, NGFA vice president of feed services. "We intend to work closely with AFIA, Pet Food Institute and other industry partners in developing comments on the proposed provisions to help ensure the requirements are achievable and facilitate the continued manufacture and distribution of safe animal feed and pet food."


AFIA and NGFA said they both will submit extensive public comments on the proposed rule. "AFIA has been very active for five years in FSMA legislation," said AFIA President and CEO Joel G. Newman. "FSMA represents the most significant reform to feed regulation in several decades. It will help ensure the continuation of the highest standards of safety throughout the entire food system. AFIA will be working with FDA, feed industry partners and our members over the coming months and years to guarantee a smooth implementation of FSMA."


NGFA also was active in working with Congress in drafting the FSMA law, noted NGFA President Randy Gordon, and has formed several industry working groups to develop comments on the preventive control proposed rules for human food and animal feed.  


"The industry has developed effective product safety programs that are tailored to the operations of individual facilities," Gordon said.  "It will be vitally important that FDA's regulations provide the flexibility necessary for companies to continue to effectively address feed safety, as well as provide the necessary education and training of its inspectors and the regulated industry.  All indications are that the agency shares those views, and we'll be eager to work with FDA in implementing this truly fundamental change in its approach to food and feed safety."    


FDA has posted a link to the proposed rules here. The rules will be published in the Federal Register on Oct. 29. Comments will be due 120 days after the official publication in the Federal Register.


Houses Passes Waterways Bill 417-13; Conference Expected Quickly

As expected this week, the full House approved its version of a reauthorized federal waterways program on a 417-13 vote despite threats from House fiscal conservatives to bring the bill down. 

House Transportation & Infrastructure Chair Bill Shuster (R, PA) called the bill "one of the most policy and reform focused measures" passed by the House.


The bill is the first reauthorization of federal waterways authority in several years, and will pay for future projects undertaken by the U.S. Army Corps of Engineers related to locks and dams, harbor maintenance, dredging of waterways and environmental protection.  The bill seeks to speed up regulatory and environmental project reviews, kill project earmarks and will use a new funding formula.


The spending conservatives' arguments did not get much attention within the full House as the bill from the time of introduction was touted by Shuster -- and handled by his committee -- in a bipartisan way. 


Shuster is confident House Speaker John Boehner (R, OH) will name conferees quickly.  And while much of the House bill is similar if not identical to the Senate bill approved last summer, the manner in which projects are selected for funding will be the major debate topic.


In previous iterations of the law, the respective transportation committees would pass their bills with specific projects and specific funding listed in the law.  However, given restrictions on earmarks, that won't happen in the future.  The Senate bill sets project criteria the Corps must use for project selection and funding, and authorizes $5.7 billion over five years for those projects.  The House bill specifies 23 projects on which $3.1 billion can be spent in the next five years, but requires the Corps to submit to Congress for approval its recommendations on project funding -- including state and local recommendations -- and requires the President to recommend projects as part of his annual budget request to Congress.


Another conference hurdle will be a request from barge operators and shippers to allow them to pay 6-9 cents per gallon more in diesel surcharge to help fund the inland waterways projects.  Neither bill contains that language as congressional tax writing committees have to first give the green light for the increase in the current 20-cent-per-gallon diesel tax.  The Administration prefers a new per vessel fee formula it says will raise $1.1 billion.  

CDFA Denies Price Increase for 4b Milk


California Department of Food and Agriculture has denied milk producers' proposal to temporarily increase the price of 4b milk going into cheese vats and to permanently increase the cap on whey value sliding scale in the state's 4b pricing formula. Producers were hoping a negotiated deal between producers and processors this summer would have resulted in the increases.

The California Department of Food and Agriculture dashed milk producer's hopes Tuesday when Secretary Karen Ross denied an increase to the milk price for Class 4b milk, used for manufacturing cheese.In a long battle to reconnect the value of whey in the 4b pricing formula to the marketplace, producer groups petitioned Ross to increase the 4b price by 35 cents per hundredweight of milk for one year and to permanently increase the cap on the whey value sliding scale from 75 cents to $1 per hundredweight.Ross denied that proposal and instead extended temporary increases she put in place this summer on all classes of milk - including an increase of 15 cents for 4b milk - through June 2014.

Those increases combined will raise the blend price for all milk by 12.5 cents per hundredweight, as opposed to producers' proposal that would have increased the blend price by 46 cents per hundredweight.Producers went into the Sept. 12 hearing on their petition with cautious optimism, banking on an agreement containing the petitioned increases between producers and processors, negotiated by Assemblyman Richard Pan and supported by several legislators.California's milk producers were optimistic. But fixing the state's pricing system is like trying to move a boulder up a mountain, said Michael Marsh, CEO of Western United Dairymen. He said the rub came during the hearing when processors, represented by Dairy Institute of California, refused to honor the deal they had negotiated.

The Dairy Institute contend producers walked away from the agreement when they had language linking an increase to economic conditions stripped from the bill.Marsh said producer groups and Western United's lobbyist are unaware of any such conversation of stripping the language from the bill having ever taken place.Producers are disappointed, especially by what they view as processors backing out of a deal they put in writing, said Rob Vandenheuvel, manager of Milk Producers Council."When you find out folks who are supposed to be partners in the industry go back on their word, it's very disappointing," he said. "The bottom line is a deal is not a deal," he said.CDFA was not part of any negotiations, and there was no piece of legislation reflective of an agreement, Ross said.Processors were not petitioners, Ross said, and when questioned in the hearing, processors responded that there was no agreement.

The hearing was granted due to uncertainty in dairy markets and the then-unknown outcome of the corn crop. While market places are clearly recovering and feed prices are going down, that recovery is slow. Ross said an extension of modest additional income for dairy producers was prudent to insure the stability of the dairy sector and allow time to get a better a sense of what's happening in markets.Ross said she understands there will be disappointment with her decision, but testimony did not provide justification for the proposed increases.

She also realizes that California's pricing system is outdated and broken and she is committed to working on a long-term fix, she said.That's little consolation for the state's milk producers, Lynn McBride, executive director of California Dairy Campaign, said."We were disappointed once again. We think the decision demonstrates the state's milk-pricing system just isn't fair to milk producers in our state," she said.

RFS Discussions Continue; EPA May Release 2014 Numbers Next Week


Renewable fuels groups met this week with the EPA to discuss their recommendations on 2014 Renewable Fuels  Standard (RFS) mandated blending levels, and unverified biofuels industry reports indicate the EPA may announce as early as next week its RFS mandates for the coming year.


Rumors abound as to what EPA will do based on agency statements made several weeks ago when it released its 2013 numbers that it was aware of concerns by the petroleum industry over the RFS mandates and the possibility of forcing the gasoline refining industry to hit the blend wall.  The blend wall is the point where there is insufficient gasoline being refined to accommodate the amount of biofuels EPA mandated without increasing the percentage blend. 


Talk this week focused on the possibility the agency could hold the RFS mandate levels of biofuels at 2013 levels. Several media outlets reported last week the agency was looking to decrease by almost half the amount of biofuels currently mandated for blending with gasoline.  This set off a flurry of denials by EPA officials who said any agency thinking at this point is in the draft stage.

Immigration Reform Battles in House Expanding; Issa Has "Legal Status" Bill

Rep. Steve Stockman (R, TX) this week sent a letter to his House colleagues urging them to "block Sen. Reid's strategy to pass amnesty," and asking them to sign on to a letter to House Speaker John Boehner (R, OH) to block any conference action on immigration reform with the Senate before the House has passed its full slate of immigration bills.


Meanwhile, Rep. Darrell Issa (R, CA) said he will unveil his own immigration reform bill next week that would provide a special visa to all undocumented immigrants in the U.S., granting them legal status for six years.  He called the bill a "come-from-the-shadows" effort while the legislative battles over broader immigration reform play out.  Also, House Minority Leader Nancy Pelosi (D, CA) has said she may introduce an immigration reform bill to jump start the House effort.


Stockman's letter was about a procedural move reportedly contemplated by Senate Majority Leader Harry Reid (D, NV) to take whichever House-approved immigration bill first comes over to the Senate and use it to try for a conference committee with the Senate's approved omnibus immigration reform package.


Boehner and House Judiciary Committee Chair Bob Goodlatte (R, VA) are publicly dedicated to a piece-meal House immigration reform strategy.  Various House committees -- mainly the judiciary panel -- have approved or will soon approve nearly a dozen bills, each specific to an immigration reform component.  Both Boehner and Goodlatte say they are "hopeful" these bills will begin moving to the floor this fall.


However, several House members, including Republicans who support immigration reform, are pushing Boehner to allow a straight up or down vote on the Senate's omnibus reform package, similar to the vote Boehner allowed on the debt ceiling/continuing resolution plan negotiated in the Senate.


Last week, over 200 immigration reform support groups sent a letter to Goodlatte opposing his "anti-immigrant, anti-worker" approach to reform in the Judiciary Committee-approved Agricultural Guestworker Act.  The groups called the bill unworkable because while the Senate bill's ag worker section -- negotiated between grower groups and the United Farm Workers -- puts undocumented workers on a 10-year road to eventual citizenship, Goodlatte's bill grants the same workers "legal status" in the U.S.  The opposing groups called this "permanent second class status." 

Animal Ag Hits Back at Pew Commission Report

The nation's livestock and poultry industries this week refuted an update of a controversial report by the Pew Commission on Industrial Farm Production.  The report, entitled "Advances in Animal Agriculture: What the Center for a Livable Future, Pew Commission and Others Aren't Telling You About Food Production," was coordinated by the Animal Agriculture Alliance (AAA), Arlington, Virginia.


The Pew Commission report, updating similar work done in 2008, was released by the Center for a Livable Future, an anti-animal ag group funded through a grant from the GRACE Foundation and housed at the Johns Hopkins University Bloomberg School of Public Health.  The Center is also responsible for the "Meatless Monday" campaign to reduce meat consumption.


Each producer group who participated in the AAA effort was asked to provide accomplishments in animal care, responsible antibiotic use, food safety, environmental sustainability and industry research initiatives.  The report highlights the continuing improvements in these areas, including the adoption of new technology to improve animal welfare and food safety.  The producer groups participating were U.S. Poultry & Egg Assn., National Chicken Council, National Turkey Federation, United Egg Producers, National Cattlemen's Beef Assn., National Pork Board, National Pork Producers Council and the National Milk Producers Federation.


Further, the AAA report was released during a teleconference October 22 that featured Dr. Richard Raymond, former USDA undersecretary for food safety under President George W. Bush; Dr. Scott Hurd, Iowa State University and former acting deputy undersecretary for food safety at USDA; Dr. Janeen Salak-Johnson, University of Illinois; Dr. John Glisson, University of Georgia, Dr. Frank Mitloehner, University of California-Davis, and Dr. Guy Loneragan, Texas Tech University.

CFTC to Hold Public Meetings on Position Limits


The Commodity Futures Trading Commission (CFTC) announced this week it will hold a public meeting November 5 at 9:30 a.m. to take comment on issues related to position limits on derivatives and aggregation of accounts.  The meeting will be accessible by computer or through toll-free call-in by going to

President Nominates Jeh Johnson as DHS Secretary


Former Pentagon general counsel Jeh Johnson is President Obama's pick to replace Janet Napolitano as secretary of the Department of Homeland Security (DHS).  Obama said, "from the moment I took office, Jeh was an absolutely critical member of my national security team...Jeh has a deep understanding of the threats and challenges facing the United States."


The road to confirmation for Johnson won't be an easy one.  The President had no more than announced his choice, when critics emerged.  Sen. John Cornyn (R, TX) said he has "grave concerns" about a nominee without strong law enforcement credentials, an obvious reference to Cornyn's priority on Mexican border security.  Sen. Jeff Sessions (R, AL) made similar remarks.


But Johnson has his fans as well.  Sen. Tom Carper (D, DE), chair of the Homeland Security & Government Affairs Committee, praised Johnson's Department of Defense experience.  However, Carper is also concerned about the high number of unfilled senior appointments at DHS.  Sen. Patrick Leahy (D, VT), chair of the Senate Judiciary Committee, shares Carpers' concern and called the vacancy rate at DHS "a disservice to the American people."