Farm Bill, Immigration Measure, and RFS Key Items on Policy Agenda

Posted on 06/24/2018 5:05 PM

USDA Acreage and Grain, Rice Stocks reports released Thursday


The Senate this week will debate and vote on its version of a new farm bill, with the key unknown being the topics of amendments and their fate.
     The House may vote on a Republican compromise immigration bill after it was delayed late last week amid internal GOP differences.
     Another attempt may be made to announce RFS/RVOs this week for 2019 corn-based ethanol and 2020 biodiesel, but as usual, industry discord surfaced on the widely leaked provisions and an announcement set for last Friday was canceled.

 

One of three key policy items is certain this week: a Senate vote on its version of a new farm bill. The other two are in the iffy category (1) a House vote on a hard-to-get immigration reform measure and (2) an EPA announcement of renewable volume obligations (RVOs) relative to the Renewable Fuel Standard (RFS), an announcement that was initially expected last Friday but apparently pulled back due to oil industry rancor.

Republicans are again hopeful they can hold a vote on GOP compromise immigration legislation, HR 6136, which lawmakers scrapped Thursday, House Majority Leader Kevin McCarthy (R-Calif.) said in his end-of-week leadership colloquy.

Talks late last week focused on the E-verify program and agricultural workers.

President Trump on Friday urged Republican lawmakers to "stop wasting their time on immigration" until after November's midterm elections, which he predicted will bring enough GOP members to Washington in a "Red Wave" to allow the party to pass legislation on its own. Some lawmakers have said Trump is jeopardizing efforts to pass legislation. House Majority Whip Steve Scalise (R-La.) said, "Unfortunately, I think what the president was expressing is the frustration that Democrats have refused to engage in solving the problem."

McCarthy said he expects a bipartisan Committee on Foreign Investment in the United States (CFIUS) measure (HR 5841), offered by Rep. Robert Pittenger (R-N.C.), will be on the House agenda on Tuesday, June 26.

The House will also take floor time on the 2019 Defense spending bill.

The Senate late Monday will vote on a three-bill spending package, HR 5895, known as a "minibus," that includes Energy and Water Development, Legislative Branch and MilCon-VA appropriations.

A vote to start debate on the Senate's new farm bill will take place late Monday, following its successful trip through the Senate Ag panel on a 20-1 vote, with Sen. Chuck Grassley (R-Iowa) the only naysayer. Around two days could be needed for the complete debate and vote on amendments.

The farm bill coming out of the Senate Ag Committee (S 3042) was not really the status quo measure most thought, as Ranking Member Debbie Stabenow (D-Mich.) was successful in getting a lot of funding and a new budget baseline for organic agriculture while a big spending cut was made for rural electric co-ops. Unlike the House bill, the Senate version doesn’t include major changes to the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps.

How many and the substance of amendments debated and voted on will be the only real suspense regarding the farm bill. Topics of amendments will likely include crop insurance, the sugar program (expected by Sen. Pat Toomey (R-Pa.) and who should be eligible for farm program payments and the cap for such payouts — Sen. Grassley said he expects to get his amendment considered to tighten commodity program eligibility rules. “I’ve been promised that I can offer it on the floor,” Grassley said. Sens. John Thune (R-S.D.) and Sherrod Brown (D-Ohio) will try to get language approved that would make changes and most funding for the Ag Risk Coverage Program (ARC) at the expense of a program favored by southern producers and lawmakers, the Price Loss Coverage (PLC) program. Senate Ag Chairman Pat Roberts (R-Kan.) was successful in avoiding this topic during the Ag panel markup session, saying he did not want regional divides from getting in the way of a bipartisan farm bill, the buzz word for this farm bill this go around. Thune has also been pushing a higher maximum number of acres for the Conservation Reserve Program (CRP) than the one million acre boost in the underlying Senate bill.

Some senators are may seek to hitch a ride on the farm bill for livestock hauling exemptions. Haulers of livestock or bees would benefit from greater flexibility from hours of service and electronic logging device rules Sens. John Hoeven (R-N.D.) and Michael Bennet (D-Colo.) can get their bill, the Modernizing Agricultural Transportation Act, S 3051), attached with the farm bill. The measure addresses concerns of drivers who say moving animals that need to stop and be fed need flexibility from the current limits on driving hours.

Regarding tax policy, the Trump administration is expected to unveil a new 1040 tax form this week and it will be in the form of a "postcard as promised," Treasury Sec. Steven Mnuchin has said. That should prove interesting.

An RFS announcement that was supposed to be unveiled Friday was yanked back, due to oil industry opposition. RFS watchers, however, note that whatever is announced on the Renewable Fuel Standard (RFS) never totally pleases either biofuel proponents or its opponents, mainly in the oil industry. Thus, many were surprised when the announcement was delayed as it was supposed to be detailed at a farm outside Kansas City with two Trump administration officials attending — EPA Administrator Scott Pruitt and USDA Secretary Sonny Perdue. That the “news” was going to be issued at a farm location more than suggests it was going to be farmer friendly, with sources signaling especially for the biodiesel industry supporters.

At issue was what EPA was going to say regarding how it was going to propose and/or implement the reallocation of biofuels (ethanol/biodiesel) that have successful received an increasing number of waivers from the renewable volume obligations (RVOs). The EPA is now reportedly going to issue the biofuel RVOs without the contentious proposal, but that could have been accomplished last Friday, others note.

Regarding international-related events, South Korean industry minister Paik Un-gyu is expected to visit Washington to discuss car tariffs with U.S. lawmakers, according to a Yonhap News report.

President Trump at the White House on Monday will host Jordan’s King Abdullah II and Queen Rania. On Wednesday, President Trump and Portuguese President Marcelo Rebelo de Sousato will have a private conversation at the White House, followed by a bilateral meeting.

The key economic report comes Thursday with the update on GDP. This week's daily calendar — the focus on all these updates continues to be how it plays into the Fed which now expects four rate increases in total for 2018 instead of the three it previously expected to make.

Monday: Chicago Fed National Activity Index | New Home Sales | Dallas Fed Mfg. SurveyTuesday: S&P Corelogic Case-Shiller HPI | Consumer Confidence | Richmond Fed Manufacturing Index
Wednesday: MBA Mortgage Applications | Durable Goods Orders | International Trade in Goods | Retail Inventories [Advance] | Wholesale Inventories [Advance] | Pending Home Sales Index
Thursday: GDP | Jobless Claims | Corporate Profits | Kansas City Fed Manufacturing Index
Friday: Personal Income and Outlays | Chicago PMI | Consumer Sentiment

Several Fed speakers are on tap this week, with the interest-rate discussions remaining on how many rate hikes are still ahead this year, and any remarks on inflation and the budding trade war. The list of Fed appearances:

Tuesday: Atlanta Federal Reserve Bank President Raphael Bostic (current voter) participates in an armchair chat at the Birmingham Civil Rights Institute in Birmingham, Alabama. Dallas Federal Reserve Bank President Robert Kaplan (2020 voter) participates in a moderated Q&A session at the "Greater Houston Partnership State of Talent" in Houston, Texas.
Wednesday: Boston Federal Reserve Bank President Eric Rosengren (2019 voter) gives the 2018 Annual O. John Olcay Lecture on Ethics and Economics at the Peterson Institute for International Economics in Boston.
Thursday: St. Louis Federal Reserve Bank President James Bullard (2019 voter) participates in a moderated conversation on the U.S. Economy and Monetary Policy at the Ascension Health Management Annual Conference in St. Louis.

Key USDA reports come Thursday with Acreage and Grain Stocks. Other U.S. and international agriculture and energy-related reports and events on tap this week:

Monday, June 25

Ag reports and events:

  • Export Inspections
  • Crop Progress
  • Food Price Outlook
  • Poultry Slaughter
  • 2018 World Food Prize Laureate announcement ceremony, USDA.
  • Andre Pessoa, head of Agroconsult, speaks at a press event on Brazil’s 2017-18 corn crop and results of crop tour

Tuesday, June 26

Ag reports and events:

  • Livestock & Meat Domestic Data
  • Noncitrus Fruits and Nuts, Annual
  • OECD-CEPS publishes annual report on policy developments and related support to agriculture in 51 countries.

Energy reports and events:

  • API weekly U.S. oil inventory report
  • World Gas Conference, Washington, through Friday. Speakers include U.S. Energy Secretary Rick Perry and the chief executive officers of Exxon Mobil Corp. and Chevron Corp.

Wednesday, June 27

Ag reports and events:

  • Broiler Hatchery

Energy reports and events:

  • U.S. weekly ethanol inventories
  • Energy Information Administration weekly oil inventory report

Thursday, June 28

Ag reports and events:

  • Weekly Export Sales
  • Agricultural Prices
  • Egg Products
  • Hogs and Pigs
  • Peanut Stocks and Processing
  • Texas regulators to decide whether to approve AEP’s massive Wind Catcher farm, what would be the largest wind farm in America. Still needs other state approvals.
  • EU weekly grain, oilseed import and export data
  • Buenos Aires Grain Exchange weekly crop report

Energy reports and events:

  • EIA natural gas storage change

Friday, June 29

Ag reports and events:

  • CFTC weekly commitments of traders report on various U.S. futures and options contracts.
  • Acreage
  • Grain Stocks
  • Rice Stocks
  • International Food Security Assessment
  • Peanut Prices
  • Statistics Canada June seeded area for wheat, soy, barley, canola, durum

Energy reports and events:

  • Baker Hughes weekly U.S. oil/gas rig counts
  • EIA’ s Monthly Crude Oil and Natural Gas Production

Other reports and events this week include:

Monday, June 25

  • President Trump, First Lady Melania Trump to host Jordan’s King Abdullah II and Queen Rania at the White House; leaders expected to talk terrorism, Iran, Syria, Palestine, and Israel, according to White House.
  • National Security Adviser John Bolton to meet with U.S. allies in London and Rome to discuss national security issues, and travel to Moscow to discuss a potential meeting between Presidents Trump and Putin, an aide said. Trip is slated Monday-Wednesday.
  • Final opinions for the Supreme Court term are expected, with a ruling on the travel ban.

Tuesday, June 26

  • Primaries/Elections. Congressional primaries in Colo., Md., N.Y., Okla., and Utah, with runoff elections in Miss. and S.C.
  • FY 2019 appropriations: Labor, Health & Human Services. House Appropriations holds markup session.
  • FY 2019 appropriations: Pentagon. Senate Appropriations' defense panel to consider Pentagon spending bill for FY 2019.
  • FY 2019 appropriations: Labor, Health & Human Services. Senate Appropriations panel.
  • Nominations. Senate Energy and Natural Resources Committee meeting to consider Energy Department nominees.
  • Forest Service. House Oversight and Government Reform subcommittee hearing on the effects of Forest Service road closures.

Wednesday, June 27

  • President Trump and Portuguese President Marcelo Rebelo de Sousato have private conversation at White House, followed by a bilateral meeting.
  • Broadband. Senate Commerce Committee weighs legislation requiring the commerce secretary to assess effects of broadband deployment on the U.S. economy.
  • White House government reorganization proposal. House Oversight and Government Reform Committee hearing on the White House government reorganization plan.
  • Bills, nominations. Senate Commerce, Science and Transportation Committee meeting to consider various bills and nominations, including the Interstate Transport Act and the nomination of Geoffrey Starks to be a member of the Federal Communications Commission.

Thursday, June 28

  • Nomination: IRS. Senate Finance Committee confirmation nomination hearing for Charles Rettig to lead the IRS.
  • Bank stress tests. Federal Reserve to release part two results of Wall Street’s annual bank stress tests.
  • European leaders meet in Brussels for a two-day European Union summit that will tackle a joint policy on immigration.

Friday, June 29

  • Investment restrictions. Treasury to release investment restrictions report.
     

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