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Conveyor Currents                            December 6, 2013
Upcoming Dates

2014

January 15-16, 2014   Grain & Feed Industry Conference, Embassy Suites, Monterey, CA

April 23-26, 2014  CGFA Annual Convention ~ The Sheraton Resort, Maui, HI 
*** Information Click Here ***

May 14-15, 2014 California Animal Nutrition Conference,  Radisson Hotel in Fresno, CA

 
2015
 
April 22-25, 2015   CGFA Annual Convention - The Monterey Plaza Hotel on Cannery Row.

Annual Convention - Room Reservation Link to Sheraton

This is the link for the on-line reservations for the CGFA Annual Convention - April 23-26, 2014.  

 

 

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California
 Grain & Feed Assn.
      www.cgfa.org
 
California Dept. of Food & Ag 
   www.cdfa.ca.gov
 
U.S. Dept. of Food & Ag
    www.usda.gov
   

 
In This Issue
State Policy Leaders Begin Preparations for Impact of Freeze
Net Farm Income Up Again
Industry Pushes for FSMA Feed Rule Hill Attention
Special Elections Return Democrat Supermajority in Assembly
End-of-Year Time Crunch Likely Pushing Farm Bill Final Action into January
Farm Bill Deal Close as Leaders Express "Optimism"
RFS Sides Continue to Hurl Allegations
Researchers:...Don't Repeal RFS, Change only Slightly
Boehner, Target of Reform Protests
USDA, EPA Announce Expanded Water Quality Trading Partnership Effort
High Court to Hear EPA Case Next Week
Food Safety, Enviromental Issues Focus of White House Regulatory Calendar
DOL Wants Public Input on Chemical Safety Standards
2014 Grain & Feed Industry Conference
State Policy Leaders Begin Preparations for Impact of Freeze

As growers across California try to protect the state's prized $2 billion a year citrus industry and other key crops like lettuce and avocados from the cold snap that engulfed the state this week, policy leaders have begun to discuss what policies may need to be reviewed.  Citrus is not the only  crop endangered, dropping temperatures can damage fruit and delay the harvest of greens.

 

CDFA, the Governor's office and the state legislative leaders are all watching to see what damage may occur and what policies may need to be revised to address any potential damage to crops and livestock.  Our lobbyist and association managers will engage in these discussions if the freeze continues.    

 
Net Farm Income Up Again; USDA Increases Ag Export Forecast

Net farm income in 2013 will hit $131 billion, the highest since 1973 and 15.1% higher than 2012, USDA reported last week, and a share of the credit for that goes to ag exports, now projected by the department to hit $137 billion in fiscal 2014.  The export figure is up $2 billion from August, but lags a year ago by $3.9 billion, USDA said. Livestock, dairy and poultry exports are set at $31.8 billion, $700 million higher than projected in the August report.

 

Net cash income is forecast at $129.7 billion, down over 3% from 2012.  Ag imports are projected to hit a record $109.5 billion, $5.7 billion more than in 2012. 

 

Industry Pushes for FSMA Feed Rule Hill Attention; AFIA, NGFA to Hold Free Webinar

AFIA met this week with key members of the Senate Committee on Health, Education, Labor & Pensions (HELP) and the House Energy & Commerce Committee - both with FDA oversight - to explain the 400-plus page proposed Food Safety Modernization Act (FSMA) rule on current good manufacturing practice, hazard analysis critical control and risk-based preventative controls for food for animals - the "feed rule" - needs a lot more time to be reviewed, analyzed and comments developed. The current mid-January, 2014, deadline is unrealistic, AFIA told the lawmakers.

 

In a related development, and to ensure all feed, grain, ingredient and pet food companies are up to speed on what the feed rule is and what it is not, AFIA, the National Grain & Feed Assn. (NGFA) and Feedstuffs magazine are hosting a free webinar on Wednesday, December 11, beginning at 2 p.m. ET, 11 a.m. PT.   The webinar will focus on what managers should know about the feed rulepublished in the Federal Register on Oct. 29. The webinar will focus on compliance and quality directors, mill managers and legal departments. To register, click here or go to:

 

http://event.on24.com/r.htm?e=723518&s=1&k=EF5462593ED801D794453BEECC51E4F0&partnerref=afia  

 

In its Hill meetings this week, AFIA told lawmakers it also wants to see the feed rule, and proposed FSMA rules on foreign supplier verification and third party accreditation coordinated so their implementation takes place at the same time.  It's expected Sen. Lamar Alexander (R, TN), ranking HELP member, will request an extension of the feed rule comment period as part of a broader request he's developing. 

 
Special Elections Return Democrat Supermajority in Assembly

It was a foregone conclusion that a special election for an open 54th Assembly district seat would fortify the Democratic majority in the Assembly. The only question was which candidate would emerge from an all-Democratic field.  Voters answered that question decisively on Tuesday, electing Sebastian Ridley-Thomas by a wide enough margin to avoid a runoff. Ridley-Thomas secured 60 percent of the vote.

 

After Ridley-Thomas is sworn in, the Legislature will be one seat short of full capacity after months of special elections, just in time for the 2014 legislative session to begin.  Democrats have cemented two-thirds majorities in both houses, allowing them to conduct business without any Republican votes.  Ridley-Thomas was strongly supported by the ag associations and is expected to be open to agriculture and manufacturing issues. 

 

In a much closer election, Matt Dababneh was elected in a special election in the 45th AD.  Democrat Matt Dababneh beat Republican Susan Shelley  by 329 votes out of 29,639 cast, according to the statement of vote.

 

Dababneh was the top vote-getter in 72 Los Angeles precincts while Shelley carried 65. In precincts where turnout was greater than 10 percent, Shelley received almost 51 percent of vote, the results show.  In precincts where turnout was less than 10 percent, Dababneh received about 55 percent of the vote.  Shelley is demanding a recount. 

 

End-of-Year Time Crunch Likely Pushing Farm Bill Final Action into January


After three days of face-to-face meetings this week and multiple conference calls over the Thanksgiving break among the four principal House and Senate Farm Bill conferees, all reports indicate major conference progress, but out-of-sync House and Senate work schedules will likely turn the 2013 Farm Bill into the 2014 Farm Bill.

 

House leadership vows the House will recess for Christmas on December 13; Senate Majority Leader Harry Reid (D, NV) says the Senate is set to be in session until December 20, but could go home earlier.  This week the House met, while the Senate continued its Thanksgiving recess.  This means there's only one week - December 7-13 - during which a conference agreement can be signed, approved and delivered to the President's desk.

 

This narrow window led House Agriculture Committee Chair Frank Lucas (R, OK) to tell an Oklahoma radio station this week that while it continues to be possible for the conferees to reach an agreement before the end of the year, the logistics of getting the bill ready for House and Senate floor action are considerable.  He said the task of getting a final agreement by December 13 is "Herculean," but insists it's possible.

 

If it doesn't happen in the next week however committee staffs and the Congressional Budget Office (CBO) will have more time to finalize and estimate costs of the conference report so it's ready for final congressional action the first week of January. The risk, however, is the time gap allows for heavy lobbying of members home for the holidays, making the outcome less assured than getting a bill done before they leave for Christmas.

 

Late this week, House Majority Leader Eric Cantor (R, VA) said the House could take up the Farm Bill conference report as early as next week, but hinted that floor action may actually focus on an extension since the 2014 scenario means Congress will have to pass a short-term extension of current law before they head home for the holidays.  An extension is necessary because several long-time USDA programs will simply disappear when current authority expires on December 31.  However, Lucas thinks USDA can hold off on implementing any changes if a bill is moving.  The marquee impact of reversion to so-called "permanent law" is that milk price supports would revert to a 1949 formula setting them at more than $35 per hundredweight, translating to $7-8 per gallon at the grocery store.  So far, House Speaker John Boehner (R, OH) has acknowledged a one-month extension of 2008 program authority is doable; Reid has quietly told Senate ag leaders he can live with a one-month extension if a hard deal is in hand.

 

Whether the Farm Bill will move to the House and Senate floors on its own, as part of another bill or will carry other unrelated, but "must-pass" legislation has not been determined.  

 
Farm Bill Deal Close as Leaders Express "Optimism" 

 

House Agriculture Committee Chair Frank Lucas (R, OK) and Senate Agriculture Committee Chair Debbie Stabenow (D, MI) said this week talks between the two chambers - including ag panel ranking members Sen. Thad Cochran (R, MS) and Rep. Collin Peterson (D, MN) - are back on track after faltering just before Thanksgiving when a grand deal was widely reported.  Both the commodity title and cuts to federal food stamps are coming closer to compromises, and the dairy title, which has proved surprisingly controversial recently, may have to be hashed out in open conference committee action, they said.  All four ag leaders were silent about the details of agreements reached so far.

 

USDA reports it has its Farm Bill transition team in place ready to take on changes in authority and program operation if a deal is reached. The implementation of Farm Bill changes to USDA authority will be headed by Deputy Secretary Krysta Hardin.    

 

On cuts to the Supplemental Nutrition Assistance Program (SNAP), it's reported the House has backed away from demanding the full $40 billion in cuts over 10 years included in its bill, and the Senate position has also softened, signaling it may accept cuts above the $4 billion included in its bill.  Insiders say the recent expiration of the 2009 temporary economic stimulus program expansion of SNAP brings $11 billion in savings to the table, allowing the conferees to focus on new overall cuts in the $10 billion area, though that figure could be lower.  House conferee Rep. Marcia Fudge (D, OH), chair of the Congressional Black Caucus (CBC), told a reporter this week the last hurdle to clear is the commodity title, not the nutrition title.  Most of the savings in food stamp spending would be achieved through changing outdated eligibility rules and modifying a state program that permits automatic food stamp enrollment when an individual qualifies for federal heating oil assistance.

 

Based on actions in the last two weeks, it's clear the deep division among national commodity groups has dramatically slowed progress on farm income support rewrites, so much so it inspired the American Farm Bureau Federation (AFBF) this week to call on all "special interests" to leave the conferees alone to finish their work.  

 

The National Corn Growers Assn. (NCGA) and the American Soybean Assn. (ASA) were the latest to throw a wrench into the Farm Bill conference machinery.  NCGA and ASA disagree with other commodity groups and oppose basing the formula for calculating crop payments on actual planted acres.  

 

In mid-November, the two groups recommended that in both the House and Senate approaches to reworking direct payments, the formula should be based on a "rolling average of recent-year plantings to determine base acres."  On November 26, the two groups reiterated their call for a base-acres approach, but said "if agreement cannot be reached on this or some other approach that avoids tying payments to current-year planted acres, we would reluctantly oppose a new farm bill and support an extension of the 2008 Farm Bill."  That extension request would likely be for two years, they said.  The groups said to use actual planted acres is "recoupling" payments to planted acres under a price-based program. The U.S. Canola Assn. joined NCGA and ASA on the letter.

 

A somewhat contentious issue still being hashed out addresses production controls on milk production. The House bill carries a new dairy support program predicated on a margin protection insurance product.  However, that program - championed by Peterson - included a mandatory production controls program tied to the margin insurance, prompting Boehner to describe the program as "soviet-style."  Those production limits were removed on the House floor.  The Senate bill contains the margin insurance/production limit language.  Peterson said late this week the issue has been resolved, though industry - producers and processors - said they had not been informed of the outcome.

 

Also likely to be decided in an open session of all House and Senate conferees is highly controversial House language, added by Rep. Steve King (R, IA), that would preempt a state's ability to set agricultural production practices and then restrict the sale of food from plants and animals from other states not raised in the same manner. The language is aimed at a California law that says if egg laying hens aren't raised and housed as its state law dictates, eggs from other states can't be sold in California. Critics, including the Humane Society of the U.S. (HSUS), contend the language is so broadly written it would overturn 176 state environmental and animal welfare laws.  This week, a letter from 35 California state assembly members opposing the King language was sent to conferees. It was immediately followed by a letter from Iowa agriculture and political leaders - including Gov. Terry Branstad - to Sen. Tom Harkin (D, IA), a member of the conference and former chair of the Senate ag panel, urging him to join King in defending the language. 

 

RFS Sides Continue to Hurl Allegations; EPA Holds Public Hearing on 2014 Blend Mandate

 

With formal publication November 29 of EPA's proposed rule to lower the overall 2014 Renewable Fuel Standard (RFS) on gasoline blend rates for all biofuels, the clock began ticking on a 60-day comment period on the wisdom of the rule.  Both supporters and critics of the EPA proposal immediately cranked up press machines and get-out-the-comments efforts as the agency also set its first public hearing on the proposal for Washington, DC, December 4.

 

The EPA proposal would set the 2014 overall blend rate at 15.21 billion gallons, far less than the mandated 18.15 billion gallons required by the 2007 law that authorized the RFS.  Corn ethanol's RFS would drop from 14.4 billion gallons to just over 13 billion, less than the 13.8 billion called for in 2013.  

 

The public hearing was tough for EPA, with more than 140 witnesses seeking to be heard. Both sides of the RFS issue complained loudly about the agency proposal. Opponents of the RFS, including petroleum companies, livestock and poultry producers, food companies and engine manufacturers gave faint praise to the EPA action, but said it should have happened a long time ago and didn't go far enough.  Supporters of the RFS, including ethanol, biodiesel and other biofuel makers, said the agency proposal is short-sighted, will cost jobs and could kill the nascent biofuels industry.

 

The petroleum industry contends it's forced to blend an arbitrary amount of biofuel no matter the consumer demand for gasoline, leading to an inevitable "blend wall," the point at which the percentage blend of biofuel to gasoline must exceed the legal 10% for gasoline makers to meet their RFS obligation.  Food industry witnesses contend the RFS creates an arbitrary market for corn ethanol, and the competition for corn drives up feed prices and contributes to higher food costs.  The National Chicken Council (NCC) says the RFS is responsible for an $8.8 billion increase in feed costs for poultry producers since 2007.

 

The biofuels industry contends the EPA action "chills" investment and will cost jobs. The American Farm Bureau Federation (ABF) said it was very disappointed in the EPA proposed reduction.  In its statement at the agency hearing, the American Soybean Assn. (ASA), whose members make biodiesel from soybean oil, said the EPA proposal on the biodiesel RFS was disappointing because the level - 1.28 billion gallons for 2014 and 2015 - is significantly less than what the industry is producing and well below the 1.7 billion gallons the industry requested. This position is shared by the National Biodiesel Board (NBB).  The Global Renewable Fuels Alliance (GRFA), Toronto, Canada, said the EPA proposal was the first time the agency had "bowed to petroleum industry pressure."  

 

On December 3, both sides of the issue held telephone press conferences and luncheons.

The Renewable Fuels Assn. (RFA) held a telephone news event that afternoon, which featured individual ethanol and biodiesel producers, as well as the heads of major ethanol and biodiesel trade groups.The telephone press event by those opposed was headlined by the American Petroleum Institute (API), and included the heads of the NCC, the National Turkey Federation (NTF), the Environmental Working Group (EWG), and the Outdoor Power Equipment Institute (OPEI).That event was followed by a press lunch featuring the same cast of presenters.

 
Researchers:  Don't Repeal RFS, Change only Slightly

The Energy Biosciences Institute, a public-private research partnership, released this week a report by two University of Illinois researchers that says Congress should not even consider repealing the RFS, and if changes are necessary, they should be minor.  

 

The institute is a cooperative effort of Illinois, the University of California-Berkeley and the Energy Department's Lawrence Berkeley National Laboratory. The effort is funded by a 10-year, $500-million endowment from British Petroleum (BP).  The paper is set to be published in the New York University Environmental Law Journal.

 

The two researchers said the RFS is "the only federal policy that directly mandates the use of renewable energy" to replace fossil fuels.  They further recommended changes to the RFS to "make it operate as efficiently as possible," including adjusting the mandates to reflect more accurately real-world biofuel production realities.

 
Boehner, Target of Reform Protests, Says House Immigration Reform is Alive, Well

House Speaker John Boehner (R, OH), after immigration reform protestors swarmed through his personal office last week, this week tried to convince those who care that House action on federal immigration reform is not dead, despite saying yet again he'll not negotiate with the Senate over its comprehensive immigration reform bill.  He said "there are a lot of conversations" among the committees of jurisdiction in the House on how "do we best move on a common-sense, step-by-step basis to address this very important issue."  

 

Refusing to take on immigration reform as a single, comprehensive package of reforms, Boehner has instructed his committee chairs to work through several individual bills addressing areas in need of reform.  He said this week he was gratified that the President has not rejected this approach.  Ag interests said the Obama acceptance of the House strategy is a sign of progress.

 

Boehner has been dogged by immigration reform supporters throughout the week, first at his favorite breakfast spot, and again at dawn at his home earlier last week.  The protestors showed up at his office to deliver a turkey and bottle of wine, symbols they say of how immigrant workers harvest the food we eat.

 
USDA, EPA Announce Expanded Water Quality Trading Partnership Effort

USDA and EPA this week announced they've expanded their partnership to support what is known as "water quality trading" and "other market-based approaches" to improving water quality.  

 

Both USDA and the agency said this partnership demonstrates "a better bottom line for farmers and ranchers." Further, the policy is designed to support states, interstate agencies and tribes as they develop and implement their water quality trading programs for nutrients, sediments and other pollutants.

 

"Water quality trading" is a market-based system for helping companies, towns and others comply with Clean Water Act (CWA) requirements, including effluent limits in NPDES permitting.  Trading allows regulated entities to purchase and use pollutant reduction credits generated by other regulated entities in an identified watershed based on cost-savings and "other economic incentives." 

 
High Court to Hear EPA Case Next Week

 

An EPA action to require "upwind" states to limit toxic air emissions that could blow across state lines has been in the federal courts for a while, with a federal appeals court most recently killing the agency action.  Now, the U.S. Supreme Court will hear an EPA appeal of the lower court ruling.  The high court's ultimate action on the case will impact the agency's current efforts to limit emissions of greenhouse gases from utilities under what is deemed "cooperative federalism," that section of the law which guides EPA in cooperating with the states on environmental regulation.

 

At issue is whether the federal appeals court even had the jurisdiction to hear the state and industry cases challenging the EPA action, and whether the court misinterpreted EPA's authority under the Clean Air Act (CAA).  The specific authority is dubbed the "good neighbor" provision of the CAA which requires a state to cut polluting emissions if they cause a reduction in air quality in a neighboring state.

 
Food Safety, Enviromental Issues Focus of White House Regulatory Calendar

 

The White House released November 26 its fall 2013 "Current Regulatory Plan & Unified Agenda of Regulatory and Deregulatory Actions" - the "Unified Agenda" - and it includes several food/feed safety-related items, as well as a listing of familiar environmental issues.  

 

A major part of the agenda is the FDA rules related to the Food Safety Modernization Act (FSMA), including produce safety; human food preventative controls; foreign supplier verification; third party accreditation; current good manufacturing practice, hazard analysis critical and risk-based preventative controls for food for animals; intentional adulteration, and transportation sanitation requirements. June, 2014 is the target date for a proposal on pet food labeling of nutritional and ingredient information, as well as changes in formatting and style.  

 

An April, 2014 proposal from FDA is supposed to codify requirements that drug company sponsors of antibiotics submit to the agency an annual report on the amount of the active antimicrobial ingredient in the drug that's sold or distributed for farm animals.  The proposal could include a requirement that drug distribution data reporting be enhanced.

 

On the environmental side of the unified agenda are plans to review 2003 confined animal feeding operation (CAFO) rules in preparation for updating them based on an "extensive comment period."  Other priorities include an effort to clearly define "waters of the U.S." under EPA's Clean Water Act (CWA) authority; continuing to work on greenhouse gas emission standards for utilities; revise rules on ag worker protections against pesticides; update its National Pollution Discharge Elimination System (NPDES) permitting system; finalize source performance standards for grain elevators, and finalize its underground storage tank rules.

 

DOL Wants Public Input on Chemical Safety Standards

 

Public comment on potential revisions to its Process Safety Management (PSM) standard designed to prevent major chemical "incidents" is requested by the Department of Labor.  The request for information comes on the heels of President Obama's Executive Order 13650 issued after the West, Texas, chemical plant explosion that killed 15, with ammonium nitrate identified as the cause.

In addition to comments on the PSM standard, OSHA wants "input on potential updates" to its explosives and blasting agents, flammable liquids and spray finishing standards.  The agency is also seeking information on specific rulemaking and policy options and the workplace hazards they address.  The request for information can be read at www.osha.gov/chemicalexecutiveorder/OSHA_PSM_RFI.pdf.

 
2014 Grain & Feed Industry Conference - Monterey, CA

The CGFA staff and the GFIC committee have finalized plans for the 2014 Grain & Feed Industry Conference.  As you know, the Grain & Feed Industry Conference is an annual two-day educational event that is planned and coordinated by the California Grain & Feed Association.  The basic purpose of the conference is to provide mill managers and key employees of grain handling and feed manufacturing operations an educational program consisting of both managerial and technical information specific to the industry.

The GFIC committee believes the program topics are very timely and encompass subjects which address the concerns of many of our customers.    The 2014 GFIC will be held January 15-16 at the Embassy Suites Hotel on Monterey Bay.   We are very fortunate to have secured some top notch speakers for our event.  

The success of the Grain & Feed Industry Conference is a direct result of  feed industry management, equipment, ingredient and all associated suppliers once again teaming up to make the conference valuable.  We are confident the 2014 GFIC will once again be beneficial to all attendees.

Registration materials will be mailed out next week along with additional information detailing the program.  Please call the Embassy Suites Hotel by December 31, 2013  to reserve your room.  Identify yourself as part of the California Grain & Feed Association and receive our discounted group rate of $139.00.  The Embassy Suites Hotel phone number  is (831) 393-1115 or go on-line for a hotel reservation form www.cgfa.org/events.

 

  • Hotel Reservations (831) -393-1115  - Group Rate of $139.00 reserve now.
  • 1-800-Embassy: Be Sure  to the say  "2014 Grain Feed Conference" or by referencing the group code "CGF".