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Jan. 3, 2012 Red River Farm Network reports: Debt Crisis Tops RRFN Year-end List - Each year, the Red River Farm Network puts together its listing of the top ten agriculture stories of the past 12 months. For 2011, the ongoing debt crisis tops the list. The outside markets kept the agricultural trade on its toes throughout the year. The Euro-zone was often at the heart of this anxiety, with Greece, Italy and Spain all taking their turns with financial turmoil. The problems weren't any easier at home with Congress failing to take action, forcing $1.2 trillion in automatic budget cuts in 2013. Congress fought over the possibility of raising the debt ceiling, eventually agreeing to raise the debt limit while cutting $900 billion. Congress also agreed to $1.2 trillion in automatic cuts if the deficit reduction super committee failed to come to terms on more cuts. Standard and Poor's lowered the US bond rating. #2-Ag Committee Leadership Drafts Farm Bill Plan - Senate Agriculture Committee Chair Debbie Stabenow, Ranking Member Pat Roberts, House Agriculture Committee Chair Frank Lucas and Ranking Member Collin Peterson worked behind the scenes to craft a farm bill draft. While the super committee attempted to find places to cut the budget, the ag committee leadership put together a plan to make $23 billion in cuts to farm spending. As a caveat, Stabenow, Roberts, Lucas and Peterson wanted the ag committee to have control over those cuts by drafting an early version of the 2012 Farm Bill. The super committee process imploded, shutting down the draft proposal--for now. When the Farm Bill process is written under regular orders this year, the draft proposal put together by committee leadership will likely serve as the starting point in the discussions. #3--Good and Bad, Weather Impacts Farm Country - The Missouri, Red, Souris Rivers and Devils Lake flooding put thousands of acres of farmland underwater this past spring. A record 6 million acres of prevented plant ground was seen in North Dakota, with a total of 10 million PP acres nationwide. The North Dakota State Fair was one casualty of Minot's record flooding. In the Southern Plains, drought took its toll on crops, livestock and farmers. The 2011 crop year ended with an unusually dry and open harvest season. #4--A Year of Record Net Income - All-time record corn and feeder cattle prices were seen in 2011. Corn topped at $7.99 3/4. The annual average price for 400-500 pound steer calves was just shy of $150 per hundredweight, more than $25 higher than last year and $15 more than the previous record in 2005. Most commodity markets experienced very strong markets, including soybeans over $14 and Chicago wheat approaching $9. Record exports helped generate historic highs in net farm income. #5--Regulatory Overreach - The Obama Administration was criticized for perceived regulatory overreach. Throughout 2011, agriculture groups voiced concern over fugitive farm dust rules, proposed child labor standards, pesticide permitting regs and more. The Obama Administration, including Agriculture Secretary Tom Vilsack, downplayed that criticism. RRFN asked Vilsack why that message has not been heard. "I don't think people want it to get through; let's be honest, the House of Representatives spent time passing a bill saying that EPA could not regulate farm dust when EPA had no intentions ever to regulate farm dust, so it was politics." South Dakota Representative Kristi Noem sponsored the dust bill, saying "it is something that producers across this country want; they need the certainty this bill provides." #6--MF Global Collapse Shakes Confidence in the Futures Trade - As MF Global declared bankruptcy, an estimated $1.2 billion went missing from customer accounts. It appears money was transfered from segregated customer accounts within MF Global's final hours. MF Global is the eighth largest bankruptcy in US history, but the biggest story may be the potential loss of confidence in the futures market. Segregated customer accounts have always been sacrosanct, but this situation changed that mindset. In an attempt to find answers, numerous congressional hearings have been held. Former MF Global executives and government regulators took a verbal lashing, but few answers were found. #7--FTA's Finally Pass and Are Signed into Law - Free Trade Agreements, which were first proposed in the Bush Administration, received congressional approval and the President's signature. These trade deals with South Korea, Panama and Colombia offer significant trade opportunities for agriculture. Implementation of the complex trade rules will continue into the year ahead. #8--Land Values Explode - Reports of a $20,000-per-acre land sale in Iowa kept the coffee shops buzzing nationwide. While this sale is the extreme, land values skyrocketed throughout farm country in 2011. In the Northern Plains and Upper Midwest, it is estimated farmland values rose by 20 to 25 percent in a single year. The South Dakota Farm Bureau reports farmland values tripling in value over the past ten years. #9--Ethanol Industry Faces Policy Challenges, but Enjoys Positive Economics - As 2011 came to a close, the ethanol blenders' credit and the import tariffs were allowed to expire. The Environmental Protection Agency approved E15, but the anti-ethanol sentiment seems to grow in the consumer media and on Capitol Hill. Despite that, US ethanol hits a production record in December. #10--Canadian Government Delivers a Blow to CWB - In the elections this past spring, the Conservatives promised to end the Canadian Wheat Board's single desk marketing monopoly.That fateful day came December 16th with the Canadian government ending the 70-year monolopy in the domestic wheat trade. Legal challenges are continuing. Tweet |
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