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Conveyor Currents
                     February 12, 2016
      


In This Issue
FSMA Informational Seminar
CGFA District Meeting & Golf Tournament
CDFA Announces Vacancies on the Feed Inspection Advisory Board
California Legislative Report
CDFA Drought Update
White House Sends Final Obama Budget to Congress; GOP Declares it "DOA"
House Ag Hears McCarthy Explain EPA Actions
WOTUS Judge Says Ag, Environmental Interests Cannot Play
Corn, Wheat, Soybean Ending Stocks Rising Mostly on Poor Export Demand
Supreme Court Stays Obama Clean Power Plan
University Economist Blast Farm Payments as "Money Transfers"
USDA Sees "Strong Demand" for CRP; Most Competitive Enrollment Bids in History
U.S. Cuba Office Vilsack's Top Priority
CGFA Annual Convention
Upcoming Dates
 
2016
Feb. 29, 2016:
Ridge Creek Dinuba Golf Club
Dinuba, CA



March 10, 2016:
FSMA Seminar
DoubleTree Hotel
Modesto, CA


April 27-30, 2016:
CGFA Annual Convention The Manchester Grand Hyatt San Diego 


May 4-5, 2016:
 California Animal Nutrition Conference at the DoubleTree by Hilton Fresno Convention Center      
Fresno, CA 


March 8-10, 2016:
2016 Golden State Dairy Management Conference
Seaside, CA
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FSMA Informational Seminar

        
Assisting Firms with Implementation Strategies
March 10th: 9:00 am - 4:00 pm
DoubleTree Hotel in Modesto
 
Sponsored by:
CDFA Safe Program
California Grain & Feed Association
National Grain & Feed Association
 


CGFA District Meeting & Golf Tournament
District Chair Nicole Dominguez of ADM invites all CGFA members to the upcoming district meeting on Monday, February 29, 2016 at the Ridge Creek Golf Course in Dinuba.
 
This is a perfect opportunity to get in a round before the annual convention AND a perfect excuse to spend your "extra" Leap Day golfing! 
 
Join us for the Northern/Southern San Joaquin Valley/Sacramento Valley/South Bay District Meeting and Pre-Convention Golf Tournament! Registration includes a taco bar buffet lunch in the Clubhouse, tournament, range balls and cart followed by a dinner and prize ceremony. Please register by February 19th.
 
  
CDFA Announces Vacancies on the Feed Inspection Advisory Board

The California Department of Food and Agriculture (CDFA) is announcing three vacancies on the Feed Inspection Advisory Board (FIAB). The board makes regulatory and enforcement recommendations to the department to help ensure that commercial feed inspections contribute to a clean and wholesome supply of milk, meat, and eggs.


The FIAB vacancies are for commercial feed industry representatives, and applicants must hold a current California Commercial Feed License. The term of office is three years. Members receive no compensation, but are entitled to payment of necessary traveling expenses in accordance with the rules of the California Department of Personnel Administration.


Individuals interested in serving on the Feed Inspection Advisory Board must submit a short resume along with a completed Prospective Member Appointment Questionnaire, available on the CDFA website by February 20, 2016.


Send the resume and questionnaire via email to [email protected] or by mail to:


California Department of Food and Agriculture 
Feed and Livestock Drugs Inspection Program 
Attention: Maria Tenorio 
1220 N Street 
Sacramento, California 95814-5607


For further information on the Feed Inspection Advisory Board and vacancies, you may contact Maria Tenorio at (916) 900-5022 or [email protected].

California Legislative Report
by: Dennis Albiani, Legislative Advocate


Legislation Impaction Organics Certification and Inputs Introduced


Two bills have been introduced that would impact the organic certification process and organic inputs have been introduced. 


AB 1826 (Stone) the organization of California Certified Organic Farmers is sponsoring legislation to make structural reforms to the State Organic Program.  At first, the organization circulated proposed language that would have eliminated the program at CDFA, however, they introduced a spot bill in order to initiate discussions with the department.  We have requested to be invited to the stakeholder discussion in order to ensure balance in whatever reforms are suggested. 


AB 1811 (Dodd) This bill would include biochar as a product intended to be used for influencing soils, plant growth, or crop or plant quality for the purposes of the definition of auxiliary soil and plant substances. The bill would remove soil amendments as a substance excluded from the definition of auxiliary soil and plant substances.  In discussion with the sponsors and author, this legislation may be expanded to regulate soil input claims beyond current fertilizer programs which focus only on N-P-K. 


Seed Library Legislation Introduced


Assembly member Levine has introduced legislation, AB 1810 (Levine), that would modify the California Seed Act to exclude from the labeling requirements seed distributed through noncommercial seed sharing activities "seed libraries" and would also exclude seed sold by a seed microenterprise that grows and sells up to $5,000 annually of agricultural, flower, or vegetable seed. The bill would also define the term "sell" for purposes of the seed law, and would state that the Legislature declares that the seed law is not intended to regulate seed microenterprises or noncommercial seed sharing.  The California Seed Association has met with the author and discussed the purpose of the program to ensure that seed meets specific standards for germination, free from weeds and diseases.  The association is also coordinating with the Seed Program at CDFA to address all the concerns with this legislation and impacts on the program and industry. 


Water Board to Consider Two Resolutions that Could have Lasting Negative Impact on Water


The State Water Resources Control Board will consider adopting two resolutions at their February 16th meeting. One resolution directs staff to develop beneficial uses pertaining to tribal tradition and cultural subsistence fishing. The other resolution would establish the human right to water as a core value and top board priority and provide guidance to staff and the Regional Water Quality Control Boards concerning its implementation.  What these issues mean for the long term activities of the water board have not been well studied but could give these uses priority over other beneficial uses. 






Aliso Canyon Legislation Begins Leg Process


Legislation that would place a moratorium on natural gas storage at Aliso Canyon in Southern California is getting its first hearing on February 22.  SB 380 Pavley will be heard in Assembly Utilities and Communications. The bill is already in the second house policy committee because it was a gut and amend.


For entities that use natural gas located in southern California, the Aliso Canyon gas leak may have ongoing significance.  According to the Energy Commission, gas storage for this summer is likely adequate, however, if Aliso Canyon is not allowed to be used in the future, it could cause shortages during high peak demands such as the summer when natural gas fired power plants are running to meet peak energy production.  This may impact natural gas users with boilers and other equipment in certain regional areas served by Southern California Gas.  We are watching these bills closely and will periodically report on the progress.  


Governor Appoints Head of ORA at the PUC


Elizabeth Echols, 55, of Berkeley, has been appointed director of the California Public Utilities Commission Division of Ratepayer Advocates. Echols was administrator of the U.S. Small Business Administration Pacific Region from 2010 to 2013 and director of the Northern California Chapter of the U.S. Green Building Council from 2009 to 2010. She was a member of the Obama-Biden Transition Team from 2008 to 2009, director of policy at Google Inc. from 2004 to 2008 and chief executive officer at OpNet Community Ventures from 2001 to 2004. Echols was executive director of the E-Commerce Working Group at the White House from 1999 to 2001, senior advisor on telecommunications and Internet policy at the U.S. Department of Commerce from 1994 to 1999 and an associate at Steptoe and Johnson LLP from 1990 to 1994. She earned a Juris Doctor degree from Stanford Law School. This position requires Senate confirmation and the compensation is $137,952. Echols is a Democrat.
CDFA Drought Update
Please find attached the Drought Update document from the Drought Task Force as well as the following updates related to the California drought:
 
State Water Board Adopts Extended Emergency Water Conservation Regulation:
With California still experiencing severe drought despite recent rains, the State Water Resources Control Board (State Water Board) this week adopted an extended and revised emergency regulationto ensure that urban water conservation continues in 2016. The regulation extends restrictions on urban water use through October 2016 while providing urban water suppliers more flexibility in meeting their conservation requirements. It also directs staff to report back on additional flexibility once more complete water supply information is known in April. The action follows Governor Edmund G. Brown Jr.'s Nov. 13, 2015, Executive Order directing the State Water Board to extend the emergency water conservation regulation should drought conditions persist through January 2016. Press Release
 
California Snowpack Holds More Water Than Last Year, But Drought Conditions Continue and So Should Conservation:
Results of the winter's second media-oriented manual snow survey by the Department of Water Resources (DWR) confirmed what Californians have been saying for weeks: It's raining and snowing much more this winter than last. Rainfall and the Sierra Nevada snowpack's water content are both markedly improved this water year, and storage in the state's major reservoirs also has increased significantly since January 1. Rainfall in the three regions tracked continuously by DWR was 123 percent of the historical average between October 1 and January 31. Press Release
 
2016 Drought Contingency Plan: 
The plan was released on January 15, and outlines potential actions that may be needed to modify D-1641 or adjustments to Biological Opinions for Central Valley Project and State Water Project operations from February through November.  The Department of Water Resources and Bureau of Reclamation have prepared the plan in close coordination with the National Marine Fisheries Service, United States Fish and Wildlife Service, California Department of Fish and Wildlife, and State Water Board staff.  The partner agencies recognize the need for continued dialogue and assessment as future hydrology unfolds.  The modeled forecast of reservoir storages, flows, and exports are based on the January 1 hydrology and will obviously change due to the continued rainfall that has occurred to date. Plan
 
Bureau of Reclamation Outlines Water Year 2016 Central Valley Project Water Supply Conditions: 
The CVP's reservoir carryover storage from WY 2015 into WY 2016 (October 1, 2015) was 2.9 million acre-feet, which was 24 percent of capacity and 47 percent of the 15-year average for that date in six key CVP reservoirs (Shasta, New Melones, Trinity, Folsom, Millerton, and the federal portion of San Luis). As of January 19, 2016, storage in major CVP reservoirs was .963 million acre-feet lower than a year ago.  "On December 30, the California Department of Water Resources (DWR) held their first manual snow survey of the year and found the water content to be 16.3 inches, or 136 percent of the January 1 average. With this promising news and El Ni�o storms beginning to materialize, we are feeling encouraged," said Mid-Pacific Regional Director David Murillo. "However, storage in our reservoirs remains low, and we must be prudent as we develop initial operation plans and allocations for CVP water contractors." More Information
 
California Water Commission Begins Formal Rulemaking Process for Water Storage Investment Program Regulations:
The California Water Commission began the formal rulemaking process with the Office of Administrative Law for the first draft regulations for the Water Storage Investment Program. It also began a 45- day comment period on the draft regulations, with written public comments accepted through March 14, 2016.  More Information
 
California Water Commission Accepting Concept Papers:
The California Water Commission is calling upon potential project proponents to submit Concept Papers that summarize potential water storage projects and their benefits. This is an effort by the Commission to gather information regarding projects that may qualify and apply for Water Storage Investment Program public benefit funding.  More Information
 
The Department of Water Resources Has Announced the Release of the Draft Funding Recommendations for the Counties with Stressed Basins Grant Solicitation:
DWR has announced the release of the Draft Funding Recommendations to award 21 proposals, totaling approximately $6.7 million, for the 2015 Counties with Stressed Basins Grant Solicitation under Proposition 1 Sustainable Groundwater Planning Grant Program. On December 8, 2015, DWR received 23 grant applications requesting a total of approximately $7 million, with total project costs of $12.7 million  This release of the Draft Recommendations opens the public comment period. The public comment period will close on February 8, 2016 at 5:00 PM.  More Information
 
State Agencies Held Informational Meeting for Creekside Landowners in Russian River Watershed: 
The State Water Resources Control Board (SWRCB) and the California Department of Fish and Wildlife (CDFW) jointly hosted a public meeting for landowners in the Russian River Watershed on Tuesday, Jan. 26. Staff from the two departments provided information about residents' water rights, the reliability of their water supply and actions they can take to reduce impacts on salmon and steelhead fisheries.  More Information
 
White House Sends Final Obama Budget to Congress; GOP Declares it "DOA"

The FY2017 White House budget proposal, the last to be sent to Capitol Hill by President Obama, didn't hold many surprises this week, reprising mostly spending priorities from previous budget requests.  The GOP-led Congress didn't surprise anyone with its reaction to the administration budget plan when leadership of both House and Senate budget committees declared they wouldn't invite Obama's budget director to appear before their panels, prompting several GOP lawmakers to declare the White House proposal "dead on arrival."


When the budget committees released a joint statement last Thursday that they didn't see much point in inviting Shaun Donovan, head of the Office of Management & Budget (OMB), to participate in budget hearings, White House press secretary Josh Earnest said the committee's decision was akin to GOP presidential hopeful Donald Trump refusing to participate in the last GOP debate because he didn't like one of the moderators.  "They're just not going to show up," Earnest said, calling the move a "Donald Trump approach" to debate of spending priorities, though he acknowledged the proposal is less a discussion document than it is a declaration of administration priorities not funded by Congress.


House Agriculture Committee Chair Mike Conaway (R, TX) dismissed the Obama budget proposal.  "In addition to sentencing future generations of Americans to higher taxes and mounting debt, the...budget threatens to undermine the already weak U.S. economy by dealing a severe blow to America's farmers and ranchers who already suffered a 56% drop in net farm income over the past two years," he said.  Conaway said the president's budget would be more responsible if it moved to "stop high and rising foreign subsidies, tariffs and non-tariff trade barriers...and to stop layering new and costly regulations, like EPA's 'waters of the U.S.' (WOTUS) on our nation's farm and ranch families."


USDA would take a 7% cut in FY2017, the fourth largest cut of any agency/department in the White House proposal. The cut is reflected primarily in a $16-billion reduction in federal crop insurance over 10 years, a move drawing near-universal rejection from bipartisan ag leadership on policy and spending on the Hill, as well as from within the ag community broadly.  For FDA, the administration proposes a total budget of $5.1 billion, a 7.5% increase over FY2016's request, a move heavily reliant on industry user fees.


However, returning in this budget proposal are a number of White House favorites - all of which have failed to materialize in the past.  There is heavy reliance on industry user fees to fund FDA's food safety responsibilities, even though even Hill Democrats oppose the notion; a separate $25-million proposal to help FDA implement the Food Safety Modernization Act (FSMA); a doubling of Commodity Futures Trading Commission (CFTC) and Securities & Exchange Commission (SEC) spending, a concept rejected by both appropriations committees for the last several years; a call for consolidating federal food safety functions into a single new agency at the Department of Health & Human Services (HHS); a $10/barrel tax on oil to fund "clean transportation initiatives," which was described Rep. Fred Upton (R, MI), chair of the Energy & Commerce Committee, as an idea "ripped from the pages of The Onion," a satire magazine, and $1 billion across several federal agencies, including USDA and FDA, to fight rising rates of antibiotic resistance, including money to find out which antibiotics are used by producers on which species of animal for what purpose.
House Ag Hears McCarthy Explain EPA Actions
The exchanges during this week's hearing in the House Agriculture Committee when EPA Administrator Gina McCarthy testified as to her agency's impact on rural economies were predictable, with committee Chair Mike Conaway (R, TX) taking the regulator to task for "overly burdensome" rules and "overreaching" and McCarthy towing the administration line.


"Many members of this committee believe that over the years, EPA has pursued an agenda seemingly absent any recognition of the consequences for rural America and production agriculture," Conaway said in his opening statement.  "EPA is creating regulations and policies that are burdensome, overreaching and that negatively affect jobs and rural America."  He called the controversial "waters of the U.S. (WOTUS) rulemaking "perhaps the most poignant example" of EPA misbehavior. 


Conaway continued, "Instead of simply administering the law, EPA challenges Congress to pass legislation that gives the agency more authority, and if Congress doesn't act, EPA will legislate via regulation, directive, memorandum, or in some cases, intimidation."


McCarthy talked of EPA accomplishments and "common goals" in her testimony.  On WOTUS - EPA refers to it as the Clean Water Rule - she said, "As members of this committee know, recent Supreme Court rulings created uncertainty regarding the application of the Clean Water Act (CWA) to streams and wetlands," adding the rulemaking is designed to "define the scope" of EPA and U.S. Army Corps of Engineers authority under the CWA. 


"This is not about clean water," Conaway said, "This is not about safe drinking water in Flint, Michigan, which some have purposely confused with the WOTUS overreach...the rule is simply the result of EPA ignoring stakeholders, including states and other federal agencies, and the American people, in order to egregiously and vastly expand its jurisdiction." 


Conaway also castigated EPA for ignoring USDA's advice when the agency moves to regulate pesticides, again overburdening farmers. "Federal laws dictate USDA to serve as an important advisor to EPA in the regulation of pesticides.  Historically, USDA's expertise and advice has been evident in the actions EPA has taken to evaluate pesticides and their uses...(but) it concerns me to hear the farm community express increasingly urgent concerns about the lack of seriousness with which EPA takes and incorporates USDA expertise, advice and opinions, especially during formal interagency review."


McCarthy defended EPA's ongoing working relationship with USDA, particularly the expertise the department brings on the science side of agriculture. 
WOTUS Judge Says Ag, Environmental Interests Cannot Play
A federal lawsuit brought against EPA over its "waters of the U.S. (WOTUS)" rulemaking has enough participants representing both sides of the legal battle, said a federal judge in Ohio this week as he disallowed participation by the Michigan Farm Bureau, the Natural Resources Defense Council (NRDC) and the National Wildlife Federation as intervenors in the suit. The judge said the groups' interests are "clearly represented," and added the parties were free to file amicus briefs.


The Farm Bureau argued it should be allowed to join the list of plaintiffs because none of the states involved were concerned expressly about the impact of WOTUS on agriculture.  The environmental groups argued they should be allowed to intervene because their interests were not necessarily identical to those of the federal government and they may not agree with any settlement of the suit that may occur.
  
The suit is a separate action brought by the states of Ohio, Michigan and Tennessee against EPA to stop the WOTUS rule.  The states are also party to other actions brought by 17 states against the agency. 
Corn, Wheat, Soybean Ending Stocks Rising Mostly on Poor Export Demand
Stocks of corn and wheat are expected to increase because of falling export demand, USDA said this week in its February 9 World Agricultural Supply & Demand Estimates.  Slower crushing rates are cited for an increase in soybean stocks as well.


Corn ending stocks have been increased by 35 million bushels, with coarse grain ending stocks overall seen higher this month based on lower corn exports, while corn imports increased.  Imports are estimated to be 10 million bushels higher, with most of that going into southeastern U.S. feed markets. Corn exports were projected to be 50 million bushels lower, with higher than expected demand for corn for ethanol partially offsetting the lost exports.  The projected range for season average farm price is down five cents to $3.35-3.85 a bushel.


Soybean ending stocks are projected to be 450 million bushels, up 10 million from last month due to a lower crush than anticipated, blamed on lower soybean meal export demand.  Overall production, use and exports remained unchanged.  The season-average soybean price range projection is unchanged at $8.05-9.55 a bushel, with meal price projections unchanged at $270-310 a short ton.


Wheat ending stocks are increased 25 million bushels to the highest level since 2009-2010.  Wheat exports were projected to be down 25 million bushels to around 775 million, the lowest since 1971-72, due to increased international competition, particularly from Canada.
Supreme Court Stays Obama Clean Power Plan
In a massive legal blow to President Obama's Clean Power Plan, a major part of his administration's environmental "legacy," the U.S. Supreme Court this week blocked temporarily EPA's rulemakings on carbon/C02 recapture from new and existing power plants. 


The high court's action puts the EPA rulemaking in abeyance until the court decides if it will hear the case or reject it.  EPA can't enforce the September 6 deadline for states to file emission reduction plans or file for extensions until the legal mess is cleaned up. 


The action, industry said, is necessary until a federal appeals court can rule on legal actions brought by 26 states, as well as companies and associations, to "confirm that the legal justification for the Clean Power Plan should be examined by the courts before scarce state and private resources are used to develop state plans."   Arguments in the appeals court action are set for June 2, and if the lower court acts expeditiously, the Supreme Court will decide whether it will hear the case in its next term beginning in October. 


The White House publicly disagreed with the ruling and said it will prevail over time. "The Clean Power Plan is based on a strong legal and technical foundation," the administration said.


Rep. Fred Upton (R, MI), chair of the House Energy & Commerce Committee, and subcommittee on energy power chair Ed Whitfield (R, KY), said in a joint statement: "This decision is huge as the court essentially hit the brakes on the EPA's version of Obamacare.  The court's stay reaffirms the committee's work to protect ratepayers everywhere from the administration's unprecedented regulatory attack on affordable and reliable electricity.  Our oversight shined a bright light on the serious legal questions and the rule's shaky ground and we are pleased the Supreme Court agreed." 
University Economist Blast Farm Payments as "Money Transfers"

A trio of university ag economists took dead aim this week at farm program payments during a meeting at the American Enterprise Institute (AEI), with one prominent Iowa State economist saying current programs "are less about helping farmers manage risk than letting farmers maximize payments."


Dr. Bruce Babcock, an Iowa State economics professor and the Cargill Endowed Chair of Energy Economics, is quoted in several news stories blasting the programs.  "Congress designed the programs to allow farmers to maximize the payments they would get," said Babcock, who has authored several publications critical of the federal crop insurance program.  "It's not risk management; it's really Congress looking for ways to spend money."


Dr. Barry Goodwin, a professor at North Carolina State, told Agri-Pulse:  Changing policy is very difficult.  It doesn't seem to me that there are real changes that take place...the beneficiaries are food aid recipients, landowners who may be distant from production agriculture, and politically powerful ag state representatives."


Babcock said 2014 Farm Bill programs - Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) - were designed to provide producers with the highest returns and farmers have chosen participation accordingly.  However, the Congressional Budget Office (CBO) put a price tag on ARC and PLC of about $3.2 billion over four years, and as of today, that cost has nearly doubled to $6 billion, with some arguing U.S. outlays to support farm income could trigger a new wave of World Trade Organization (WTO) challenges when farm program outlays are added to federal crop insurance payments.  
USDA Sees "Strong Demand" for CRP; Most Competitive Enrollment Bids in History 
USDA is reminding farmers that the competitive sign-up deadline to apply for participation in the Conservation Reserve Program (CRP) is February 26, and that this year's general enrollment perios is one of the most competitive in history due to the statutory limit on acres that can be enrolled thanks to the 2014 Farm Bill. 


The department said the most competitive bids will be those which combine "multiple conservation benefits," including water quality and wildlife habitat.


As of January 16, 23.6 million acres were enrolled in CRP, and contracts for over 1.6 million acres will expire this fall.  The statutory cap set by the Farm Bill is 24 million acres.  Details of the signup can be found here
U.S. Cuba Office Vilsack's Top Priority
USDA needs congressional authority to establish a department office in Cuba to assist with U.S. exports, said Agriculture Secretary Tom Vilsack this week during an appearance before the House Appropriations Committee subcommittee on agriculture and FDA.  He told the spending lawmakers that establishing an office where Cuban questions about agriculture and U.S. good can be answered is his top priority.


Vilsack told the subcommittee he hopes they take his request seriously, explaining Cuba is a market where the U.S. should be the prime player and to date, it is not. However, he added later in his testimony, "One thing I have learned is that my opening statement has little impact on the budget."


USDA can't divert funds from other accounts to fund the office, Vilsack said, and he's looking for congressional approval on the upcoming FY2017 spending bill. 


The Hagstrom Report this week said Vilsack told an industry audience of groups favoring lifting the U.S. embargo on Cuba that he's examining whether checkoff dollars can be used in the Cuba office effort, and an interim move that could include "industry finance dollars" as well.  
CGFA Annual Convention 



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