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Corn+Soybean Digest

On The Docket For 2008: A Farm Bill?

New Farm Bill Stalls in Senate
The U.S. Senate went on a two-week Thanksgiving recess on Nov. 16, without passing a new farm bill. Congress will reconvene on Monday, Dec. 3. The Senate version of the new bill that was approved by the Senate Agriculture Committee was introduced to the full Senate for approval during the week of Nov. 5-9. As many as 260 different amendments to the legislation passed by the Senate Ag Committee have been introduced by the 100 U.S. Senators. A cloture proposal to limit the amendments and discussion on the new bill before a vote is taken failed in the Senate on Nov. 16, with only 55 yes votes. A cloture vote sets a timeline for voting on a Bill in Congress, usually speeds up passage of legislation and requires 60 yes votes to pass.

The current farm bill expired on September 30, 2007, so there currently is no bill in place for the 2008 growing season. Interestingly, if no new farm bill is passed, farm programs would go back to the base ag program policies that were established by Congress in the Agricultural Act of 1949, which is not likely to happen. One likely possibility is that Congress could ask USDA to begin the 2008 farm program sign-up based on 2007 farm program provisions, and then adjust the program payments, etc. after a new farm bill becomes law. This is what occurred for the 2002 crop year after the last farm bill expired following the 2001 crop year, when the U.S. Senate had not finalized a bill by the end of December 2001. The U.S. Senate finally reached agreement on the 2002 Farm Bill in February 2002, and the 2002 farm programs were implemented by USDA retroactively for the 2002 crop year, beginning in April 2002.

Some members of Congress have called for an extension of the 2002 Farm Bill for one or two more years to work out some of the differences. At this time, there does not appear to be enough support in Congress to extend the current farm bill and farm programs; however, that could change after Jan. 1, 2008, if Congress can not reach agreement on a new farm bill, or if President Bush vetoes the bill that is passed by Congress. Most leaders in Congress do not want to extend the current bill because of concerns with the current legislation, increasing Federal budget issues and making the new farm bill an issue in the 2008 elections.

Crop Planning for 2008
The lack of a new farm bill and not knowing farm program provisions for 2008 is not likely to have a major impact on 2008 planting decisions for most Midwest farm operators. Currently, the only guaranteed portion of farm program payments are the direct payments, which are determined by pre-set crop base acres, payment rates and payment formulas – regardless of actual planted acres. None of the current proposals for the new farm bill would drastically change the direct payment provisions for the 2008 crop year. All other commodity program payments for corn, soybeans, wheat and other major farm crops, such as counter-cyclical payments (CCPs) and loan deficiency payments (LDPs), are safety-net type payments that only occur when average crop prices drop below certain levels. Current grain prices for corn, soybeans and wheat are all well above the threshold level where any potential CCPs or LDPs would occur for the 2008 crop year, so changes in CCPs or LDPs are not likely to have much impact on 2008 crop planning decisions. The biggest change being proposed in a new farm bill would be to switch from the current CCPs and LDPs to an average crop revenue (ACR) farm program, where payments are based on both average prices and statewide average yields. However, if the ACR program becomes available, it will likely be optional and will not occur until the 2009 or 2010 growing season. Most 2008 crop planting decisions will be based on economics, including crop rotation advantage, input expenses, land costs and projected market prices.

Rural Legislative Forum on Dec. 7
“Celebrating Minnesota’s 150th Birthday … What Will Minnesota Look Like A Generation From Now?” is the theme of the 25th annual Rural Legislative Forum on Friday, Dec. 7 from 9:00 a.m. to 3:00 p.m. at the South Central College Conference Center, 1920 Lee Blvd., North Mankato. Tom Gillaspy, Minnesota state demographer, will be the keynote speaker at the Forum. The response panel will feature four Minnesota state commissioners, a deputy commissioner, and two statewide educational leaders. The afternoon session will include several state legislators from south-central Minnesota. Forum sponsors include: Minnesota Agri-Women, Minnesota Farm Bureau, South Central Technical College’s Agri-Business Department and Farm Business Management Program, Region Nine Development Commission and the University of Minnesota Extension Service.

Registration cost for the forum is $10/person in advance, and pre-registration is requested by Friday, Nov. 30. Cost is $15 at the event, without pre-registration. The registration fee includes the noon lunch and all printed materials. To register or for more information about the forum contact the Blue Earth County Extension Office by phone at (507) 304-4325 or by e-mail at: [email protected].

Happy Thanksgiving
Many of us have a lot to be thankful for in 2007, whether it is business, income, family, friends or community. As we reflect on our successes and happiness, let’s not forget to remember those in need during this holiday season, not just in other parts of the U.S. or the world, but in our own local communities! There are many local charitable and civic organizations that do special projects during the holidays. Be sure to support those efforts in your local community.

Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at [email protected].

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