Washington Insider-- Friday

Bipartisan Conservation Legislation Passes

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

USDA Issues Report On Cattle Market, But Signals Investigation Continues

USDA issued its report on the cattle and beef market fluctuations in the wake of the fire at the cattle processing plant in Holcomb, Kansas, in August 2019 and the disruptions from the COVID-19 situation.

The report lays out what contributed to the record spread between boxed beef and cash cattle prices, but stated the recap “does not examine potential violations of the Packers and Stockyards Act. The investigation into potential violations is ongoing, and therefore, AMS has limited ability to publicly report the full scope and status of the investigation.”

The report also stated the exam does “not preclude the possibility that individual entities or groups of entities violated the Packers and Stockyards Act during the aftermath of the Tyson Holcomb fire and the COVID-19 pandemic.” There is also the mention in the report that USDA has “engaged in discussions with the Department of Justice (DOJ) regarding allegations of anticompetitive practices in the meat packing industry. The investigation into potential violations under the Packers and Stockyards Act is continuing.”

The report does list several options USDA believes would help the price discovery process in the cattle market, including reducing the level of non-reporting under Livestock Mandatory Reporting, better access to risk management training/education for small and medium-sized cattle producers, and changes to the Packers and Stockyards Act.

But USDA did not explicitly back any specific efforts. It is clear that this report will not be the final word relative to the cattle market disruptions that have emerged.

China's Buys Of US Ag Products Continue To Stack Up

For the week ended July 16, USDA's Weekly Export Sales reported more sales of US ag commodities to China. They included for 2019/20, net sales of 7,079 metric tons of corn, 78,645 metric tons of sorghum, 209,872 metric tons of soybeans, but net reductions of 4,401 running bales of upland cotton.

For 2020, net sales of 479 metric tons of pork and 7,159 metric tons of beef were reported.

For 2020/21, net sales of 127,090 metric tons of wheat, 1.960 million metric tons of corn (mostly known via daily sales announcements last week), 175,000 mt of sorghum, 1.486 mmt of soybeans, and 2,640 running bales of upland cotton.

Much of the corn and soybean business for China for the 2020/21 marketing year were known after USDA made daily sales announcements for China last week, including the largest daily sale of corn to China which was the fourth largest daily sale ever made to any destination.


Washington Insider: Bipartisan Conservation Legislation Passes

Amid tough legislative struggles over virus relief, trade and numerous other issues, the House on Wednesday overwhelmingly passed bipartisan conservation legislation, Bloomberg is reporting this week. The report says that many in Congress and the administration hope the new programs will boost the ailing economy through several shovel-ready outdoor and infrastructure projects.

The Great American Outdoors Act would provide full, mandatory funding at $900 million a year for the Land and Water Conservation Fund (LWCF) — making that program “no longer subject to the annual appropriations process.”

LWCF pays for federal land acquisition as well as parks, wildlife refuges, ball fields and other projects in local communities across the country. In addition, it would create a new five-year trust fund of up to $9.5 billion from unallocated onshore and offshore energy revenues to address a $20 billion deferred maintenance backlog in America's national parks and public lands.

The “deferred maintenance backlog” portion would be split among five land agencies with 70% going to the National Park Service, Bloomberg said.

“Combined, these two major programs amount to one of the biggest wins in conservation in decades,” House Natural Resources Committee Chairman Raul Grijalva, D-Ariz., said.

President Donald Trump said he will sign the bill, which the Senate passed in June.

Previous Trump administration budget proposals recommended gutting LWCF, but two of the program's Republican advocates in the Senate — Cory Gardner of Colorado, and Steve Daines of Montana, face tough re-election campaigns this year, Bloomberg noted,

The fund was permanently reauthorized in 2019, but only has received full funding twice since it was created in 1965.

Democratic and Republican lawmakers value the program because it supports projects in every congressional district and public lands and outdoor recreation have grown in popularity during the coronavirus pandemic. Many outside groups, from sportsmen to small businesses to environmental organizations, strongly support the bill.

Reps. Joe Cunningham, D-S.C., and Mike Simpson, R-Idaho, the lead sponsors of the House bill, said that the legislation would create approximately 100,000 jobs at a time when the country desperately needs them.

The bill “takes the next step in our pro-conservation agenda,” said House Speaker Nancy Pelosi, D-Calif., who singled out Cunningham, a freshman and former ocean engineer, for praise. Cunningham also faces a tough re-election campaign.

Rep. Nanette Barragan, D-Calif., noted that LWCF is critical to providing access to green spaces and nature in urban areas traditionally cut off from the benefits of outdoor recreation—a point that League of Conservation Voters President Gene Karpinski reiterated.

“This victory is a testament to the power of grassroots activists and the enduring popularity of conservation,” Karpinski said in a statement. “But as a recent report from the Center for American Progress and Hispanic Access Foundation shows, there is more work to be done to ensure every community — especially low income and communities of color — has access to public lands, local parks and other outdoor opportunities.”

In addition, Rep. Rob Bishop, R-Utah, objected to making LWCF funding mandatory, especially at a time when oil and gas revenues are falling sharply because of the pandemic, according to the Congressional Research Service.

LWCF relies on offshore energy revenue. That revenue also funds the Gulf of Mexico Energy Security Act, including the revenue-sharing arrangement between the federal government and the Gulf Coast states that produce most of that energy.

After dwindling offshore revenues are divvied up among programs that are mandatory, which would include LWCF under the legislation, there's not likely to be much if any left over for deferred maintenance, Bishop said.

Bishop, the top Republican on Natural Resources, is the lead sponsor of the “Restore Our Parks and Public Lands Act,” the deferred maintenance backlog bill in the House that was combined with the LWCF funding measure. While he opposes mandatory funding for LWCF, he supported the permanent authorization of the program that Congress approved in the 2019 public lands package.

Not all outside groups were happy with the legislation, Bloomberg emphasizes. “Our national parks are indeed a treasure, but they shouldn't be used as trade bait by Democrats and Republicans who seek to take even more land out of private ownership,” Tom Pyle, president of the American Energy Alliance, said.

The federal government manages about 640 million acres of land, most of it in Western states.

“As this bipartisan legislation moves forward, it's important for lawmakers on both sides of the aisle to remember that, even during these challenging times, our nation's conservation efforts are made possible by American oil and natural gas,” said Lem Smith, vice president of upstream policy at the American Petroleum Institute.

Members from Gulf Coast states like Louisiana—which produces the lion's share of offshore energy revenues — also criticized the legislation's mandatory funding component. They argued that it will siphon away funds that their states receive, which they use for coastal restoration.

So, we will see. The new bill appears strongly supported and likely to be signed into law — an unusual bipartisan effort that indicates that the possibility of greater cooperation still exists, at least in a few areas, Washington Insider believes.

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