Wednesday, April 02, 2008

Slip-slidin' away...

I noted Rep. Charles Rangel is back from a spell of ill health and in good form, I would say. The powerful Ways and Means Chairman wants more farm bill reform before he signs off on the $$.
Lawmakers need to put more reforms into the new U.S. farm law, the chairman of the House tax committee said on Tuesday, suggesting more money for federal anti-hunger programs.

"Our farm bill is not the most popular legislation," chairman Charles Rangell of the House Ways and Means Committee said after meeting his Senate counterpart to discuss ways to pay for a $10 billion spending increase for the new law.

Congress faces an informal deadline of April 18 to agree on the new law, now six months overdue. Farm bills are omnibus legislation that cover public nutrition, land stewardship, biofuel, crop subsidy and many other programs. Two-thirds of the money in the new law would go to nutrition.

While walking through the Capitol, Rangell told reporters that improvements were needed In the farm bill. He declined to suggest them but noted during a time of "soaring food prices," it would not be difficult to deduce what they are. [More]

In fact, as corn, soy, etc. prices soar, and food inflation grinds on consumers, the ag PR machine will battle a flood of negative press to rein in payments to guys like me. The farm press is even struggling to report the numbers themselves.
An 8% increase in retail food prices was found in American Farm Bureau’s informal Marketbasket Survey for the first quarter of this year. Of 16 basic grocery store food items, prices increased on 11, decreased on four and one stayed the same compared with the fourth quarter of 2007.

The largest increases were on a 5-pound bag of flour, followed by cheddar cheese, corn oil and a dozen large eggs. Prices dropped on whole milk, pork chops, oat cereal and sirloin strip roast.

The overall cost for the 16 items was $45.03 in the first quarter of ’08, up $3.42 cents from the previous quarter.

Farm Bureau attributes the higher prices to continued strength in the wheat and cheese markets, and, higher costs for processing, packaging and transportation, noting “runaway energy prices.” [More]
Ahem - that's 8% IN ONE QUARTER, folks! I don't think the media or the public are buying these non-explanations any more. If retail dollar share is ag's excuse during rising prices, it is meaningless during low inflation as well. And AFBF very carefully does not report food expenditure per person, just percent of disposable income.

With stagnant wages and rising food prices, that classic number of misdirection could go the wrong way pretty soon.

All this added to the inability of Congress to craft anything like a consensus farm bill, and now factoring in a more combative president means I think the odds for a new farm bill are dropping hourly.

Now think what this discussion will be like a year later, when grain farmers have made even more money, food inflation is relentless, and houses still haven't sold.

1 comment:

Anonymous said...

Now think what this discussion will be like a year later, when grain farmers have made even more money, AND WHEN JOHN MCCAIN IS PRESIDENT!

Even if they do get a Farm Bill done by April 18, (and I agree with you, prospects are 50/50 at best) the next big order of business for the new President and thenext Congress may be the arcane process of Budget Reconcilation. This process could essentially re-write the Farm Bill and other entitlements.