Lawmakers Face Limited Options to Attack Obama Regulations

Jan. 11, 2017 Volume 13, Number 2

Lawmakers face limited options to attack Obama regulations

President-elect Donald Trump has made clear he plans to make good on his campaign promises to undo major parts of President Obama’s regulatory agenda. But that could be heavy lifting for the executive branch, requiring a time-consuming notice-and-comment process that could take many months or years to complete.

So, many in the agriculture and energy sectors are looking to Congress to take steps that could block enforcement of several rules, or even kill them. The surest, and quickest, way to repeal a rule is through the use of the Congressional Review Act, a 21- year-old law that gives Congress a defined time period to vote down new regulations.

The CRA has been used successfully just once, in 2000, to kill OSHA ergonomics standards imposed by the Clinton administration. President Obama has vetoed five CRA resolutions, including measures aimed at killing the “waters of the United States” (WOTUS) rule and the EPA’s greenhouse gas limits on electric utilities. This year, there will be a GOP president in the White House who would sign a CRA resolution. Rep. Kevin McCarthy, R-Calif.

But major hurdles remain. A rule isn’t eligible for CRA review unless it was issued in the final 60 legislative days of the last Congress, which means any regulations finalized before the middle of last June won’t be affected. And while the CRA resolutions can’t be filibustered in the Senate – they only require a majority vote to be approved – getting a majority of the Senate to kill a regulation that is, say, seen as important to public health won’t be easy either.

House Majority Leader Kevin McCarthy, R-Calif., said on the House floor Jan. 4 that while leadership has not “determined what needs to be repealed first,” he expected that the initial targets would be the Office of Surface Mining Reclamation and Enforcement’s stream-protection rule, which is intended to prevent water pollution from surface coal mines, and the Bureau of Land Management’s rule to prevent methane venting, flaring and leaking from oil and gas operations.

McCarthy’s assertion that both rules “are limits to our energy production” was disputed by Rep. Raul Grijalva of Arizona, the top Democrat on the House Natural Resources Committee, who urged his colleagues in a Jan. 9 letter to oppose repeal efforts.

www.Agri-Pulse.com 1 Other rules that are eligible for CRA include Farmer Fair Practices and SNAP retailer rules that USDA issued in December. FDA’s new Nutrition Facts Panel rule, which requires listing of added sugars, won’t be eligible for CRA action: FDA notified Congress of the rule a few days before the 60-day cutoff, June 13.

Also ineligible for CRA action: USDA’s catfish inspection program. It, too, was issued before the 60-day period. The Senate approved a CRA resolution killing the rule, but House GOP leaders refused to bring it to a vote because of opposition from Southern lawmakers.

Here’s a look at prospects for some Obama-era rules that could be targeted by Congress:

Farmer Fair Practices rule. It sets standards for proof of harm to producers by processors’ contracting practices. USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) issued the rule in “interim” form, meaning that the agency is still considering public comment. But interim rules are still eligible for CRA actions in Congress. The National Pork Producers Council is organizing online letters urging Congress to repeal the rule. But the big question is whether there are enough votes to approve a disapproval resolution.

The rule has an important supporter in Senate Judiciary Chairman Chuck Grassley, an Iowa Republican who has long tangled with meatpackers over their market power, and other GOP senators could side with him.

Ferd Hoefner of the National Sustainable Agriculture Coalition doesn’t think the political will exists in Congress to kill the rule, despite strong opposition to it from the major livestock industry groups. “They would lose several GOP votes, and it is not clear how many (Democratic) votes they could sway to make up the difference – quite possibly none,” said Hoefner. “In the big scheme of CRA floor time (and nominations and all the rest), it would be a very NSAC's Ferd Hoefner unlikely candidate.”

USDA defends the rule by saying the previous interpretation of the Packers and Stockyards Act required a producer to prove that a company’s contracting practice caused harm across “the entire market.” Now, the rule is clarified to tell courts that a practice can be in violation of the PSA without the producer proving harm to industry-wide competition.

SNAP retailer rule. This rule, also finalized in December, increases the number of healthful products that convenience stores must offer if they participate in the Supplemental Nutrition Assistance Program. As first proposed, the rule came under heavy fire on Capitol Hill, but USDA scaled back the requirements, earning a positive response from House Agriculture Chairman Mike Conaway, R-Texas.

Previously, stores were required to have 12 qualifying items on shelves to be considered a SNAP retailer. USDA had proposed to bump that number to 168, but finalized a requirement of 84. Will lawmakers now want to kill a rule seen as helping to combat obesity among low-income people?

“USDA did a good job listening to and addressing concerns about the SNAP retailer rule,” said Margo Wootan, director of nutrition policy at The Center for Science in the Public Interest, a consumer advocacy group. “It is reasonable and shouldn’t be weakened further, but it could be,” she said.

www.Agri-Pulse.com 2 Child nutrition. Many GOP conservatives would dearly love to undo the nutrition standards imposed on schools under the since-expired Healthy, Hunger-Free Kids Act (HHFKA). The Heritage Foundation has called for rolling back the standards, and the House Freedom Caucus includes them on its list of top priorities.

The last Congress was unable to pass a reauthorization bill that could have weakened the rules, and Senate Democrats can be expected to block any such legislation again this year. Moreover, USDA may have taken some of the political pressure off the standards Jan. 6 by announcing that a further reduction in sodium limits would be delayed until the 2018-2019 school year.

The chairman of the House Agriculture Appropriations Subcommittee, Robert Aderholt, R-Ala., posted a series of statements on his Twitter feed Jan. 6 that seemed to signal that he’s going to make a run at using USDA’s budget to at least delay the sodium reductions even further. “Congress made it clear in law that USDA cannot move forward with tighter sodium standards without the science to back up the changes,” Aderholt tweeted. He went on, “Let’s work with local schools to Make School Meals Great Again.”

But Aderholt acknowledged in an interview that USDA may have taken some of the political heat off the issue by delaying the sodium reduction. He said he would leave the door open to addressing the issue through an appropriations rider.

CSPI’s Wootan is concerned that Republicans could use the CRA process to kill the standards for snacks that are sold on school grounds, since a Smart Snacks rule was finalized last July, well within the timeframe for CRA eligibility. Heritage’s Daren Bakst, a specialist on food and agriculture policy, wants Congress to try to repeal the snack rule. “Congress needs to be aggressive in using the CRA, including when it comes to the federal overreach connected with the HHFKA,” he said.

But the top Democrat on the Senate Agriculture Committee, Debbie Stabenow of Michigan, told Agri-Pulse she doubts Republicans could pass a CRA resolution in the Senate. “I highly question it,” she said.

The School Nutrition Association, which represents school nutrition directors, says the rule “has forced schools to take many healthy school meal options off a la carte menus, unnecessarily limiting student choices and reducing revenue for school meal programs.”

Stream protection rule. This rule, which is due to become effective Jan. 19, the day before Trump takes office, is a prime candidate for repeal under the CRA. Under development for many years, the rule is designed to “prevent or minimize impacts to surface water and groundwater from coal mining,” according to the Office of Surface Mining Reclamation and Enforcement.

Coal-state lawmakers, however, have targeted the rule for CRA review. Republican senator Shelley Moore Capito of West Virginia, for example, said, “I am confident that we will be able to use the Congressional Review Act to stop this rule from taking effect.”

Capito and other legislators say the rule would harm both surface and underground coal mines and cause job losses in the already embattled coal industry. Rep. Morgan Griffith, R-Va., echoed Capito, saying the rule “is so unpopular that there will probably be many in Congress” who will support a CRA resolution to repeal the rule. (Grijalva is not one of them. In his letter to fellow Democrats, the Arizona congressman said the rule establishes “new protections and standards based on the latest science.”) www.Agri-Pulse.com 3 Chances are good they will at least get to vote on a CRA resolution, given statements from the leaders of the House and Senate. On Jan. 5, House Speaker Paul Ryan, R-Wis., said, “Without any real input from the states, the administration recently handed down regulations that could wipe out literally thousands upon thousands of jobs in coal country. We plan to put a resolution of disapproval on the new president’s desk to stop this rule.”

And Senate Majority Leader Mitch McConnell, R-Ky., also vowed to introduce a CRA resolution “to overturn this egregious regulation.”

Trump has said re-energizing the coal industry is one of his priorities.

BLM Planning 2.0. This rule, which overhauls the Bureau of Land Management’s planning process, also was released in December, and livestock groups and some Western states would like to get rid of it. Senate Energy and Natural Resources Chairwoman Lisa Murkowski, R- Alaska, told Agri-Pulse Tuesday that the rule is a good candidate for a CRA resolution.

The House Natural Resources Committee held two hearings on the proposed rule at which Republican members called on BLM “to go back to the drawing board” after hearing from stakeholders such as cattlemen and local governments.

They say the new process shifts too much authority to the federal government for developing resource management plans on BLM land, “ignoring the expertise at the ground level and the diversity of the government’s vast land portfolio across the U.S,” according to a committee spokesperson.

But BLM says it is “increasing public access at earlier stages in the process, including public input on the scope of the resource management plan,” according to the rule. Absent CRA review, a new regime at the Interior Department could propose to suspend implementation of the rule, accept public comment, and then propose a new rule.

Clean Power Plan. As with WOTUS, Congress approved a resolution to kill the CPP but Obama vetoed the measure. Both rules are now ineligible for further CRA action. The CPP could be upheld by the D.C. Circuit Court of Appeals, where judges may be trying to get a decision out before the Trump administration takes office and tries to change the government position – which is now to defend the rule.

That could be problematic, however: Career attorneys in the Justice Department and Environmental Protection Agency put forth staunch arguments in September in favor of the regulation, which is designed to reduce carbon emissions from power plants. And proponents, such as outgoing EPA Administrator Gina McCarthy, are fond of pointing out that states have already made significant progress implementing the CPP.

So, the clock is ticking, and players on both sides of the issue – including the electric utility industry, coal companies, environmental groups and the affected states – will be watching to see what the appeals court does.

No matter how the court rules – and the chances appear to be good that it will uphold the CPP – a petition to the Supreme Court appears likely. In the meantime, an EPA led by Scott Pruitt, Oklahoma’s attorney general and a big supporter of the petroleum industry, could begin the process of administratively rolling back the plan, but not without significant opposition from environmental groups. www.Agri-Pulse.com 4 Waters of the U.S. This is another case where an appeals court – in this case, the 6th Circuit Court of Appeals in Cincinnati – is at the center of the debate. But again, a new administration could decide that it wants to put a hold on the litigation and reconsider the matter.

That might be easier to do than with the CPP, since no argument has been held in the WOTUS case. Unlike the CPP, which was set up by EPA in cooperation with affected states and includes a totally new set of pollution reduction goals to combat climate change, the WOTUS rule is a joint EPA-Army Corps of Engineers effort (despite the Corps’ last-minute objections to the final rule) to interpret a long-debated definition in the Clean Water Act – what exactly is a “water” of the United States?

No matter what the administration decides, it will still have to decide where “waters” exist, on a case-by-case basis. Whether it is able to use the rule that is now in litigation, or agency guidance that the rule replaced, is the question. That means that controversy over the interpretation of the Clean Water Act will continue to bedevil farmers, ranchers, developers and other landowners who want to use property that might have a connection to waters of the U.S.

AFBF makes regulatory reform a top priority The American Farm Bureau Federation (AFBF) wants the Trump administration and the 115th Congress to make reform of the federal rulemaking process a top priority, according to the 351 voting delegates attending the organization’s 98th annual meeting in Phoenix this week. Among other things, they’d like the process to adhere to the use of sound science, allow more transparency by agencies and departments and prohibit agency misuse of social media to lobby the public in support of agency proposals, according to a resolution advanced by Missouri Farm Bureau President Blake Hurst.

That last item was aimed at the EPA and its 2014 outreach campaign in support of the Waters of the U.S. (WOTUS) rule. Farm Bureau’s grass roots campaign in opposition to the WOTUS rule was “Ditch the Rule” and in 2014, EPA responded with a campaign called “Ditch the Myth.”

The voting body, representing over 5 million farmers and rancher members, covered a lot of territory during their approximately six-hour policy-making session, including transportation, conservation, immigration, nutrition and farm policy. The most contentious debate came after North Dakota Farm Bureau President Daryl Lies successfully amended current AFBF policy to oppose requiring growers to meet conservation compliance rules as a requirement for AFBF President Zippy Duvall crop insurance premium subsidies. “When you dance with the devil, the devil always leads,” emphasized Lies, who argued that working with environmental interests would lead to even more requirements in the future.

But later in the day, delegates voted 255 to 85 to remove that change and return to their previous policy. Minnesota President Kevin Paap said the linkage between crop insurance premium subsidies and conservation compliance is a realistic expectation in exchange for public support of agriculture.

“We have to talk in agriculture about continual improvement. We have to talk about what we can do better. Conservation is certainly one of those,” he said. www.Agri-Pulse.com 5

AFBF President Zippy Duvall said he was pleased with the end result. “I think there was some confusion about the original amendment,” he explained. ‘But we wanted to keep our partnership” with the conservation community. In other delegate actions:

Beyond fresh: In response to complaints about the high cost of some fresh fruits and vegetables, California Farm Bureau President Paul Wenger led an effort to incorporate all types and forms of domestically grown fruits and vegetables in the Fresh Fruit and Vegetable Program, giving priority to fresh and locally grown when available.

Right to repair: Delegates voted to amend the Digital Millennium Copyright Act to require ag equipment manufacturers to allow equipment owners and independent repair facilities to have access to the same ag equipment diagnostic repair information made available to the manufacturer’s dealers and authorized repair facilities.

Pruitt endorsement: Calling Trump’s nominee for EPA, Oklahoma Attorney General Scott Pruitt a “breath of fresh air,” Oklahoma delegates urged and won the body’s support for his nomination. “As state AG, he successfully challenged regulatory overreach such as the waters of the U.S. and other climate-related issues,” their resolution noted. A reference to EPA as a “rogue federal agency” was deleted from the resolution before final passage.

Farm bill: While AFBF has taken a very early lead on developing farm bill background materials, the farm policy subcommittee asked for more in-depth analysis on four issues before they make policy recommendations. These include: Generic acres, Conservation Reserve Program, Agricultural Risk Coverage (county) and dairy.

The ‘golden age’ is over: Economists offer grim farm income outlook

A handful of ag economists all offered similarly gloomy pictures of the farm economy this week at the American Farm Bureau Federation’s 98th Annual Convention in Phoenix. John Newton, Farm Bureau’s director of market intelligence, said recognition of changes in the economic conditions should lead to a different way of thinking among U.S. farmers and ranchers.

“The golden age of ag income is over,” Newton said, “so we need to think about marketing decisions, finding those new customers, and recognize that price is very sensitive to supply shocks.”

Some of Newton’s colleagues expanded on some of the potential “side hustles” (with “hustle” being used to mean a side business) that producers could consider to bolster their traditional revenue streams. Maybe forming a community-supported agriculture (CSA) service or starting an agri-tourism enterprise would add a little to the bottom line, but the traditional forms of agricultural income don’t appear headed for record highs in 2017.

Pat Westhoff, director of University of Missouri’s Food and Agricultural Policy Research Institute, gave Farm Bureau members a crop sector outlook that pointed toward solid production and disappointing prices.

“We’ve got low prices across the board,” Westhoff said. “If there were a crop that had really good returns, people would be growing it, right? Things tend to move together, and that’s what we’re seeing right now, unfortunately.”

www.Agri-Pulse.com 6 Westhoff offered projections of more than 90 million acres of corn yielding just under 14 billion bushels of production. If realized, that production would be under projections for the 2016 crop, which have been topping 15 billion bushels. Westhoff also expects a soybean harvest of about 3.9 billion bushels, a drop from the estimated 4.3 billion in 2016. He said that drop in production – spurred by a decline in yield projections – could lead to some price recovery.

More figures on 2016 production are expected from the Jan. 12 World Agricultural Supply and Demand Estimates report, the first of 2017.

Expansion is likely to continue in the protein sector, said JBS agriculture economist Karl Skold. His early-morning address at the convention jolted some attendees awake as he explained that expected expansion of the size of the nation’s cattle and hog herds wouldn’t do much to dispel price concerns in the industries.

Skold said specifically that in pork, production should be up about 3 percent, partially on the heels of increased slaughter capacity. However, he pointed out that Americans have held steady with per capita consumption of about 50 pounds of pork annually, so trade will have to absorb the extra product.

Beef will also be in a precarious place when it comes to trade in 2017 as the biggest buyer of U.S. product – Japan – trends toward taking in less of the meat. Some will point to a cushier trade relationship between Japan and Australia as a driving factor in that shift, but no matter the cause, the U.S. will have to find a new home for some of its exported beef. Skold said South Korea is showing promise as a growing market, but a collection of nations he deemed “all other” is also showing signs of growth.

The beef industry is being challenged to open new markets, and to “get people to eat one pound more, a half-pound more every year,” Skold said. Part of the challenge, he said, is to get these “other” countries, countries “that you may have never even heard of,” to start eating beef, as the big markets that the industry has been dependent upon are not expanding and their populations aren’t growing very fast.

House rules change could ease federal land transfers

A change in House budgetary rules could make it easier for states or local governments to gain control of federal lands. The new rule, pushed by Natural Resources Chairman Rob Bishop, would mean that transfers of federal lands to local and state governments would no longer require a spending or revenue offset to account for the value of the acreage.

The rule change has come under sharp criticism from conservation groups who want to keep public lands in federal hands. But the rule doesn’t apply to Senate procedures, and any House-passed transfer bills would still have to pass the Senate, where Republicans hold a narrow 52-48 majority. Rob Bishop, R-Utah “Why are we binding ourselves on a simple accounting technique? It’s stupid,” Bishop, R- Utah, said of the old rule that required budget offsets. “Take the accounting techniques out of the evaluation. Let Congress make the policy based on what is the good policy, without being held up by some ineffective and arcane accounting technique.” www.Agri-Pulse.com 7

Another concern of conservationists is that financially strapped state or local governments would sell off the land once it’s in their hands. Bishop say that’s easy to prevent by writing restrictions into the transfer legislation.

A wild card is Trump’s nominee for Interior, Rep. Ryan Zinke. The Montana Republican has opposed federal land transfers but voted for the rules package last week. President-elect Donald Trump also has made differing statements on the issue.

Still, Bishop thinks the House rules change is a significant step Rep. Ryan Zinke, R-Mont. forward. “We’ll make policy decisions based on policy objectives, not necessarily trying to find the offset that we have to do this to satisfy an unfair rule.” Could a land transfer get enacted? “Yeah. Will it definitely? Not necessarily,” he said. “It’s still got to go to Congress. Congress has to decide they have to do those kinds of exchanges.”

Another rule change approved by the House could allow lawmakers to force votes to cut specific agencies or even specific government employees. It reinstates for one year what is known as the Holman rule. House Majority Leader Kevin McCarthy calls the rule change a “pilot program,” since it’s scheduled to expire in one year. House Agriculture Chairman Mike Conaway, R-Texas, says he isn’t convinced that the rule is needed but says it will be allowed to expire if it’s abused.

Low interest rates, soft commodity markets spell cash rent relief

In the U.S. farmland cash rent arena, landlords may see further erosion on their returns while tenants should expect mostly stable to moderately falling rates, according to leading economists and farm managers.

Farmers/operators renting land are, of course, painfully aware of the swift run-up in cropland rents. On average, 2016 cash rents were up 70 percent since 2006 nationally. Across the Corn Belt, the average rose similarly and peaked in 2014 at $212 per acre. The spike in Northern Plains rents was even sharper: up 113 percent, to $114, from 2006 to 2015.

Yet, when looking at the economic drivers and long-term trends, farmland rents are actually at historically soft levels, and experts advise they aren’t likely to stiffen soon. That’s a big deal in the farm economy: With about 40 percent of farmland in the lower 48 states rented, and about 70 percent of those acres leased at fixed-dollar rates, cash rents are a big slice in crop production budgets.

Fortunately for tenants, the rates on both cropland and pastureland have finally receded in the past year or two in most regions after a steep, steady climb for about a decade.

www.Agri-Pulse.com 8 USDA’s national estimate of net cash rent, which reflects both reduced rates and fewer acres rented, peaked in 2014 and has fallen 13 percent since.

“What is driving cash rental rates is the return that farms can generate – the budgeted figures given the costs and the yields and the market prices currently out there,” says Gary Schnitkey, agricultural economics professor at the University of Illinois. But farm income has fallen significantly since its robust levels of 2012 and 2013, squeezing the amounts available for rent in the crop budgets. “That is what’s bringing the cash rents down,” he says.

That squeeze on crop budgets has reined in the usual relationship between the rental rates and farmland prices. The owners of about 80 percent of rented farmland are absentee landlords, not farm operators, and most of them expect an annual financial return on their land in addition to whatever appreciation may accrue in the land’s value. The return, measured by dividing the rental rate by the land’s value, has eroded over recent decades: from more than 5 percent, on average, for U.S. cropland two decades ago to 3.3 percent in 2016, according to USDA surveys. For the Corn Belt, that percentage slipped from 3.7 percent in 2010 to 3.0 percent in 2016 because increases in rental rates were slower than the steep climb in average cropland values, which doubled in seven years to $7,000 per acre in 2014.

Cash rents would have fallen faster, except for “what we call the lag effect with cash rents,” says Michael Downey, accredited farm manager with Hertz Farm Management Inc. in Mount Vernon, Iowa. “That is the challenge we find with cash rents: They tend to lag behind (changes in) commodity prices and farm incomes,” he says.

Downey notes that annual cash rents are typically set several months before the start of a new crop season, and he believes “cash rent definitely had a target on its back a year ago.” So, he says, “Cash rents need to start coming down to adjust for lower commodity prices and farm income.” USDA surveys show that 2015 cropland rents in Iowa were down 4 percent, and down 6 percent for 2016. Last year, for the farm accounts he manages, he says, “generally, I lowered rents 5 to 10 percent, and I’m doing that again for 2017.”

Downey and another professional farm manager, Dennis Reyman, with Michael Downey, Stalcup Ag Service in Storm Lake, Iowa, report that most farms under Hertz Farm Management their watch earned profits for 2016, despite dismal market prices for most of the year.

“The last two years have had great yields. The income (for soybeans) was at least $100 more per acre than we planned on a year ago. Corn was $50 better than expected,” Reyman said. Nonetheless, like Downey, Reyman cut rental rates as much as 10 percent on most accounts for 2016 crops, and “for 2017, perhaps 5 percent to 10 percent is typical.” Now, he says, “I think we are pretty close to stabilization” of cash rental rates, considering that 2016 produced better-than-expected results.

Cortney Cowley, economist at the Omaha branch of the Federal Reserve Bank of Kansas City, says bankers in the seven states of the Plains and West served by her bank also typically expect further cash rent erosion. “On the average, going into 2017, we still see rents going down anywhere between 5 and 10 percent,” she says, although “we still see a lot of variability in both farmland values and cash rental rates.” She notes that landlords hit with property tax hikes more often resist rent reductions. www.Agri-Pulse.com 9 Another major factor restraining farmland cash rent increases is prevailing interest rates on long- term financial investments. That happens because the financial market rates compete for investors against the 3 to 4 percent return on farmland rent. Low interest rates in the financial market reduce the capital cost of buying farmland (low land mortgage rates), thus increasing the value of land and profitability of owning it.

But the reduced interest costs in buying farmland also benefit the tenants because less money is needed from the tenant to pay off interest on the mortgage. As a result, although falling interest rates drive up land prices, cash rents don’t go up as fast as the land prices. Thus, low interest rates are generally associated with soft cash rental rates. Cortney Crowley, Kansas City Fed

Schnitkey illustrated that relationship by comparing the interest rate paid on a 10-year U.S. Treasury note with the ratio of Illinois cropland rental rates to Illinois cropland prices. Both were at around 6 percent 20 years ago, and the Treasury note has since declined to about 2 percent while the land rent/value ratio has fallen to 3 percent. He points out that the Treasury note’s yield has fallen more than the land rent/value ratio, and he thinks that leaves room for further erosion of farmland cash rents. At least, he says, interest rates are not going to encourage higher cash rents unless interest rates jump a lot.

Patrick agrees: “I think there will be some minor interest rate increases over the next year or two. But interest rates are so low . . . that I just don’t think a small change in interest rates is going to affect cash rents.”

Senate vets nominees, while ag waits for USDA pick

President-elect Donald Trump’s search for an agriculture secretary drags on. His inauguration is just nine days away and there has been mostly silence from the Trump transition on the search process over the past week. Speculation abounded last week that former Georgia Gov. Sonny Perdue had a lock on the job but that may longer be the case.

Sources have said that there are regional tensions over who gets the job. Sen. Chuck Grassley, R-Iowa, tweeted Monday that he hoped Trump picked a secretary from “above the Mason-Dixon Line where the states of IA, Mich, Wisc, Ohio, Penn lie.” But a House member of Trump’s agricultural advisory team, Robert Aderholt, R-Ala., tells Agri-Pulse that there is still pressure to select a Hispanic for the job.

He and other lawmakers profess to be in the dark about Trump’s potential selection, including the man who will be responsible for getting Trump’s pick confirmed. “I want to ask you guys: ‘What are you hearing?” Senate Agriculture Chairman Pat Roberts, R-Kan., quipped to reporters when they asked Tuesday about prospects for a nominee.

In the meantime, the Senate postponed a hearing on the nomination of Trump’s choice for Commerce, billionaire Wilbur Ross, pushing it from Thursday to Wednesday, Jan. 18, before the Senate Commerce, Science and Transportation Committee. The hearing could provide some fresh clues on Trump’s approach to dealing with China and Mexico on trade issues.

Trump spokesman Sean Spicer reiterated Tuesday that Ross “will be the administration’s policy leader when it comes to negotiating and renegotiating trade deals. www.Agri-Pulse.com 10

The Senate Environment and Public Works Committee is expected to hold its confirmation hearing for Scott Pruitt, Trump’s nominee to run the EPA, next week. The Senate Energy and Natural Resources Committee scheduled its hearing on Rep. Ryan Zinke, R-Mont., for Interior on Jan. 17. Other nominees awaiting hearings are Andrew Puzder for Labor, and Robert Lighthizer to become U.S. Trade Representative.

Puzder’s nomination was welcomed by farm groups who have clashed with the department over its regulations or administration of the H-2A visa program. But he is coming under fire from Democrats who accuse his fast-food restaurants of underpaying workers and managers in various ways. On Tuesday, Sen. Elizabeth Warren, D-Mass., led a mock hearing with some of the workers. Puzder became CEO of CKE Restaurants, which operates the Hardee’s and Carl’s Jr. burger chains, in 2000.

The ranking Democrat on the Senate Agriculture Committee, Debbie Stabenow, D-Mich., said that given the allegations it was “outrageous” that Puzder was named to run the Labor Department.

Pruitt, meanwhile, has gone a long way toward alleviating concerns among biofuel producers and some farm groups about his position on the Renewable Fuel Standard. During a meeting with nine Midwest senators on Jan. 5, Pruitt committed to follow the “rule of law” in administering the RFS, said Grassley, who hosted the meeting.

Drought persists despite heavy rains in Golden State

Heavy rains and snowfall in the West hold out the prospect for a bountiful 2017 for California agriculture, but farm groups and meteorologists are still hesitant to declare victory over the drought that has gripped the state for five years.

Storms dropped massive amounts of precipitation over northern California this past weekend, flooding rivers and increasing the already substantial snowpack in the Sierra Nevada mountains.

Still, even more is needed to bring normalcy back to the Golden State’s farming sector, said Daniel Sumner, a professor at the University of California.

“Rain this time of year falling on the fields has some relevance, but the most important thing is the snowpack,” Sumner told Agri-Pulse. “There’s lots of moisture coming over the next week or so, and we may be getting to normal, but we’re certainly not there yet. Things could be relatively normal now and still we could have a disastrous year … if more rain and snow doesn’t come through January and February.”

California farmers generally don’t depend on steady rain to sustain their fields and orchards, but instead rely heavily on the snowpack that builds up in the Sierra Nevada in December, January and February and then melts into the rivers and reservoirs through the spring and summer.

Currently, the snowpack is above average, according to the California Department of Water Resources (DWR). Data show that current snow levels are 171 percent of normal in the Southern Sierra region, 130 percent in the Central Sierras and 111 percent in the Northern Sierras.

www.Agri-Pulse.com 11 Massive amounts of snow were dumped on the mountains this past weekend, but it was a storm on Jan. 4 and 5 that first pushed the snowpack up to historical averages, said Brad Rippey, a USDA meteorologist.

Up until then, Rippey said, California had been getting more than its normal share of rain – from 30 percent to 70 percent above average, depending on location – but the snowpack was only about 70 percent of what it should have been for the first three months of the state’s water year, which begins Oct. 1.

There is still no guarantee that California will finish the water year above average, Sumner said. Even after the recent storms, the snowpack is only averaging about 58 percent of the total needed through the end of March to ensure there will enough water for the rest of the year, according to an analysis of government data.

“I certainly think it’s premature to say the drought is over,” said Alyssa Houtby, public affairs director for California Citrus Mutual. “Of course, we’re welcoming the rain … but certainly California isn’t out of the woods yet in terms of the drought.”

Maps from the National Drought Mitigation Center show improving conditions in the state, which is the nation’s biggest agricultural producer. However, they still show large swaths of parched land in regions where most of the country’s vegetables, fruit and tree nuts come from. As of last week, 18 percent of the state was still experiencing “exceptional” drought conditions, according to the Drought Center’s latest report. That compares to 45 percent at the same time a year ago, but it’s still troubling to the state’s farmers.

On the bright side, though, most of California’s reservoirs that farmers depend on for irrigated crops are now near or above average levels, according to DWR data. For example, the San Luis reservoir, located in the western San Joaquin Valley where farmers produce hundreds of millions of dollars’ worth of almonds, grapes, cherries, tomatoes, hay, milk and livestock, is 66 percent full and at 93 percent of its historical average.

“There are a few reservoirs in the southern area that are low,” Rippey said, “but for the most part, the reservoirs that are filled by the Sierras are vastly improved.”

But just because the reservoirs have plenty of water now and there’s a healthy snowpack, that doesn’t guarantee supplies over the summer, said DWR’s David Parker. “The optimal situation is to have the snow levels peak at the beginning of April,” he said. “Then it can melt gradually during the summer.”

And for California to truly recover from the past five years of drought and be prepared for future dry weather, the state needs to recharge its massive groundwater reserves that farmers tap into with expensive wells in times of dryness, said Sumner. www.Agri-Pulse.com 12 New president seeks to raise visibility for National Grange

National Grange Master Betsy Huber, just completing her first year as president of the oldest U.S. general farm organization, aims to increase its stature as it celebrates its 150th anniversary in 2017. The Grange plans to put its emphasis on crop insurance and health care legislation and rural telecommunications policy next year, she told a recent luncheon of USDA retirees.

The top issue for the Grange this year is expanding broadband communications. “Too many rural areas are without adequate service,” she said, adding that 53 percent of rural America lacks high-speed internet access. Huber is particularly concerned about continued availability of subsidized “lifeline” communications in rural areas, outlining the Grange views in an article on Agri-Pulse earlier this year.

“We also plan to be very active on the farm bill,” she said, emphasizing food security and safety. “We believe that SNAP (Supplemental Nutrition Assistance Program) should be in the farm bill. We don’t want to take food away from the hungry, but there needs to be oversight to eliminate abuses,” she added. “We also want to work on better food handling by the consumer,” she said, emphasizing educational programs to teach people the proper way to take care of food after it leaves the grocery store.

The Grange also “strongly supports the continuation of the Betsy Huber multi-peril federal crop insurance program,” according to policy adopted at its November 2016 annual meeting, urging that it cover “all program, non-program and specialty crops on a nationwide basis.”

One of its more extensive policy resolutions calls for significant changes in the dairy program, including a milk supply management program, a raise in the milk support price, legislation geared toward controlling volatility of month-to-month milk prices, and “major improvements to the dairy producer income insurance program.”

Grange policy appears favorable to some initiatives expected under the incoming Trump Administration but at odds on others. Saying that doctors are becoming scarce in some rural areas, she would amend “some parts of the Affordable Care Act” that could hinder the availability of medical care for patients in rural America. Like most national farm and commodity groups, the Grange opposes the Waters of the United States (WOTUS) rule proposed by the Environmental Protection Agency and Army Corps of Engineers.

However, it could be on opposite sides on trade. “Our policy resolution supports the TPP (Trans- Pacific Partnership),” she said. “We have had a big debate on NAFTA (North American Free Trade Agreement), but our policy remains in favor of free and fair trade.”

The Grange is “very supportive of biotechnology,” Huber said, noting that biotech food ingredients have been proven safe. “We have a number of members growing organic or local food that oppose it, but the majority continues to support biotechnology.” Its policy opposes legislation that requires the labeling of products of milk from cows treated with recombinant bovine somatotropin (rBST), one of the first commercial uses of biotechnology.

www.Agri-Pulse.com 13 Huber, who was born and raised on a dairy farm in Chester County, Pennsylvania, is the first woman elected as “master” – the formal title of the president of the organization formally known as the National Grange of the Patrons of Husbandry. She says the national group now consists of about 2,000 local granges in 37 states with some 160,000 members. They are most active in the Northeast and Pennsylvania and the Northwest states and California.

She also is the steward of a significant history of legislative accomplishment. The Grange is credited with enactment of the first legislation to regulate railroads, of enactment of rural free delivery for the Post Office and with its early support for a Cabinet-level USDA. The first secretary of agriculture, Norman Jay Coleman, was a Grange member, she noted.

Huber’s office gives her the responsibility for one of the most coveted office buildings in Washington. On H Street overlooking Lafayette Square, the landmark 11-story building was dedicated by the late President Dwight D. Eisenhower in 1960, and is the only private edifice in a federal block across from the White House. Although rumors have surfaced in the past that one or more government agencies would like to buy it to consolidate the federal enclave, Huber said that, although they may want it, “there has been no pressure lately. We don’t intend to sell.”

News Briefs…

Bumble bee gets endangered designation. The Fish and Wildlife Service is listing the rusty patched bumble bee as endangered, citing the use of pesticides, and neonicotinoids in particular, as a primary factor in the decline of the pollinator – along with habitat loss, pathogens and other factors. “Although the overall toxicity of pesticides to rusty patched or other bumble bees is unknown, pesticides have been documented to have both lethal and sublethal effects,” FWS said in a final rule, being published today. FWS said most studies it examined “did not address the risk posed from the additive and synergistic effects of multiple exposures to multiple pesticides.” Responding to comments critical of the proposed rule by Bayer CropScience and CropLife America, FWS said that while it is “difficult to pinpoint exactly when the species’ decline began,” data show that the bee’s “precipitous declines” became apparent around 1995 and continued into the early 2000s, a period that “coincides with increased neonicotinoid use.” Bayer and CropLife asserted that the decline began before neonics began to be widely used and that bees are, in fact, able to coexist with corn and soybeans. Bayer, for example, said that FWS did not consider field studies that “have found no adverse effects when bees are placed near treated crops and allowed to forage naturally.” FWS acknowledged “that there are studies that did not find adverse effects, but that “the totality of data … suggests some insecticides kill bumble bees and others cause sublethal effects.” Before the mid- to late-1990s, the bee was found in 31 states and Canadian provinces throughout the Northeast, Southeast and Midwest, FWS said. The bee’s range has now shrunk to 14 states/provinces, the service said.

Pork trademark lawsuit should be dismissed, USDA says. USDA has asked a federal judge to put an end to a long-running lawsuit over the sale of “The Other White Meat” (TOWM) trademark. In 2012, the Humane Society of the U.S. and an Iowa hog farmer challenged the 2006 purchase of TOWM by the National Pork Board from the National Pork Producers Council. HSUS claims the board overpaid for TOWM as part of a “sweetheart” deal to prop up the NPPC, which at the time was in need of money. But USDA, in a brief filed last week, said the trademark is well worth the $35 million purchase, which at 5.75 percent annual interest works out to $3 million per year for 20 years. The department also disagreed with HSUS that TOWM was replaced in 2011 by the new “Pork: Be Inspired” trademark. (HSUS said in its November 11 brief that “NPPC continues to receive multimillion dollar payments each year, while individual www.Agri-Pulse.com 14 producers are being deprived of millions in promotional activities in exchange for a trademark collecting heritage dust.”). Instead, USDA said TOWM was incorporated into the “Be Inspired” campaign. USDA also argued that HSUS’s lawsuit challenging the 2006 purchase is barred by the statute of limitations and also is moot, having been “superseded” by USDA’s 2016 review of the purchase, which found it to be lawful.

Farm Hands on the Potomac…

Former US Agency for International Development chief Rajiv Shah has been selected to lead the Rockefeller Foundation, one of the country’s largest and most influential philanthropies. In recent years, the foundation has focused much of its effort on improving health and well-being in Africa, aiding economic development in impoverished areas and developing strategies to combat climate change. OFW Law’s Marshall Matz says Shah’s appointment will be “very important to taking the Green Revolution to Africa.” Shah ran USAID from 2010 to 2015. Before that he served briefly as an under secretary at USDA and as the department’s chief scientist.

Jess McCarron, who until last month was deputy press secretary at USDA, is now press secretary for the Democrats on the Senate Agriculture Committee. Michigan Sen. Debbie Stabenow, the panel’s ranking member, recently announced several other additions to the panel’s Democratic staff. Mary Beth Schultz will be chief counsel. She had been minority chief counsel on the Senate Homeland Security Committee. Mike Schmidt was hired as senior professional staff. Schmidt most recently severed as associate administrator for policy and programs for the USDA’s Farm Service Agency. Rosalyn Brummette was also hired as a staff assistant after holding various communications at the nonprofit Enroll America.

Sen. Patrick Leahy of Vermont has named two key aides as he assumes the post of Democratic leader on the Senate Appropriations Committee. Charles Kieffer is the committee’s minority staff director, and Chanda Betourney is the panel’s minority chief counsel and deputy staff director. Kieffer has almost four decades of prior experience in the appropriations process, including long stints with the Senate Appropriations Committee, the Office of Management and Budget, and the Department of Health and Human Services. Betourney is a native Vermonter and longtime member of Leahy’s staff.

The National Association of Wheat Growers has promoted Joshua Tonsager to vice president of policy and communications. His previous post was senior legislative director. Tonsager joined NAWG in March 2015 after working for former senator Tim Johnson for five and half years as a research assistant and legislative assistant handling agriculture and trade issues.

Todd Batta was named deputy director for congressional affairs for the Farm Credit Administration. Prior to joining FCA, Batta was assistant secretary for congressional relations at USDA. For two years ending in June 2014 Batta was a senior adviser to Agriculture Secretary Tom Vilsack.

Liz Hermsen has left the office of Sen. Bob Casey, D-Pa., for USDA where she’ll join the Food and Nutrition Service to work on child nutrition policy. Hermsen had spent 15 years on Capitol Hill, the last seven on Casey’s staff, most recently as a senior policy adviser. Hermsen says questions about food, the environment or energy should now be directed to Claire Borzner.

Montana Gov. Steve Bullock named Ben Thomas as the director of the state Department of Agriculture. Thomas has held several positions with USDA, most recently as deputy under

www.Agri-Pulse.com 15 secretary, marketing and regulatory programs. He also served as legislative aide and counsel for then-senator Max Baucus, D-Mont. Bullock picked another USDA official, Patrick Holmes, as his natural resources policy adviser. Holmes was chief of staff to the under secretary for Natural Resources and Environment.

The American Farm Bureau Federation presented its highest honor, the Distinguished Service Award, to Bob Stallman, who stepped down as AFBF president last year after holding the post for 16 years. As the Farm Bureau’s chief spokesman in Washington, the Texan “led the charge in standing up to government overreach and helped secure major gains for farmers and ranchers,” AFBF said. Delegates also elected Don Tuller, president of the Connecticut Farm Bureau, to represent the Northeast Region on the AFBF Board. Kalena Bruce of Missouri is the new chair of AFBF’s Young Farmers and Ranchers Committee.

The National Potato Council’s delegates elected Dwayne Weyers of Aspen Produce in Center, Colorado, as NPC president for 2017. Daniel Chin of Klamath Falls, Oregon, is the new vice president of the Grower and Public Relations Committee and Cully Easterday of Pasco, Washington, is first vice president and will run the Trade Affairs Committee.

Nancy DeLong has left her post as interim director of the Conservation Technology Information Center for the Sand County Foundation where she’ll be senior director of conservation programs. DeLong spent more than 25 years with DuPont Pioneer, where she implemented the company’s first sustainable agriculture strategy.

The Farm Credit Council has a new communications team in D.C. John Pulley is vice president of strategic communications, Mark Hayes, formerly with NRECA, is director of media relations, and China Riddle is digital communications manager.

The American Frozen Food Institute has hired Chelsee Woodey as its vice president of government affairs. Woodey, a former legislative aide for then-senator Jim Bunning, R-Ky., most recently served as director of legislative affairs with the International Dairy Foods Association…Devin Helfrich is moving to the U.S. Fish and Wildlife Service after spending four years on the staff of Rep. Alan Lowenthal, D-Calif., most recently as legislative director. At USFWS, the MIT grad will be working in the Congressional Affairs Office. Lowenthal’s new legislative director is Rachel Gentile.

Best Regards,

Sara Wyant.

Editor

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