New energy bill rivals unfinished farm bill in importance

Brownfield
January 7, 2008
By Peter Shinn

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Acting U.S. Ag Secretary Chuck Conner appeared to have a more optimistic tone on prospects for the pending farm bill. But President Bush may have already signed a piece of legislation into law with more significant implications for U.S. agriculture.

Conner keynoted the South Dakota Corn Growers Association (SDCGA) annual banquet in Sioux Falls, South Dakota, Saturday night. During a press conference before his speech, Conner repeated the Bush administration's opposition to the House and Senate versions of the farm bill, arguing the measures are both funded by tax increases and "budget gimmicks" and don’t do enough to tighten farm program payment limits. But Conner also expressed confidence Congress will produce a farm bill President Bush won’t veto.

"We can resolve these differences and have a good bill that the President will enthusiastically sign," predicted Conner.

South Dakota Congresswoman Stephanie Herseth-Sandlin is a Democratic member of the House Agriculture Committee who was on hand for Conner’s remarks. She noted afterward that President Bush hadn't been crazy about the 2002 farm bill but had signed it anyway.

"In my opinion, the President un-enthusiastically signed the 2002 farm bill," Herseth-Sandlin said.

But Conner also looked beyond the farm bill during his press conference. He suggested U.S. agriculture will quickly have to focus its efforts on fulfilling the commitments created by the energy bill President Bush signed into law last month.

"There's challenges in that bill for U.S. agriculture - 15 billion gallons in fairly short order - 36 billion gallons in the not too distant future, either, in terms of not only grain-based ethanol but cellulosic as well," said Conner. "So that's going to be our challenge, to meet those energy demands," he added. "I think we're up for the challenge, but it's going to require a lot of careful attention."

Indeed, Herseth-Sandlin says the new energy bill is already a cornerstone of U.S. ag policy on par with the farm bill. But she told Brownfield she didn't see the energy bill as preeminent.

"I don't think it's more important," Herseth-Sandlin explained. "I think it's just as important and the two really have a lot of synergies that together will lead to stable and successful, profitable markets."

And SDCGA President Reid Jensen went even further. He told Brownfield the new energy bill is even more important than the still unfinished farm legislation, at least at this point.

"I think it is to the farmer right now," Jensen said. "It's supporting prices, creating demand."

But Conner pointed out U.S. corn farmers must literally step up to the pump and produce enough to satisfy the needs of the fuel, livestock and export markets. And he encouraged them to do so.

"Hopefully they're going to plant a big crop," Conner implored, "because we need it for 2008."

But with soybean futures well above $12 dollars and wheat futures over $9 dollars, there’s more competition for acres this year than ever, even with corn futures well over $4.50 a bushel. In fact, retiring USDA chief economist Keith Collins last week predicted corn plantings would fall by five to six million acres this year. But Jensen doesn’t buy that. And even if corn acres do fall in 2008, he said increased productivity will make up for it.

"I think the American farmer, like he always has, will respond and the acres will be planted," Reid asserted. "And with the yields we have now, we have the capability of producing larger yields on less acres."

National Corn Growers Association (NCGA) immediate past President Ken McCauley, who attended Saturday night’s banquet, said he agreed with Reid's assessment. And McCauley told Brownfield U.S. corn producers can take much of the credit for the high prices of all crops.

"You know, making the market react like we have with ethanol is still the most important thing and the farmers getting money out of the market through higher grain prices - and not just corn," McCauley noted. "We have really made things happen and I'm really proud of it."

Those higher prices have made for good times for many. And that appeared to be reflected in Saturday night’s attendance at the SDCGA annual banquet, which Jensen estimated at over a thousand people.

NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving this information for research and educational purposes.

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