Perspectives in Ag: Vilsack says new report shows critical benefits of farm bill conservation
December 27, 2013
Tom Vilsack: A New Report Shows the Critical Benefits of Farm Bill Conservation
America's farmers, ranchers and landowners have led the way in recent years to conserve and protect our soil, water and wildlife habitat.
With the help of farm bill programs, the U.S. Department of Agriculture has worked with a record number of producers since 2009 — more than 500,000 of them — to get this important work done.
Ever since the Dust Bowl, we've known that investments in conservation on working lands and other wild areas is important. And this week, a new report amplified our understanding for the critical importance of the farm bill in protecting natural resources in the Chesapeake Bay Watershed.
The report showed that over the past seven years, conservation efforts have reduced the amount of nitrogen leaving fields by 48.6 million pounds each year — about 26 percent — and reducing phosphorus by 7.1 million pounds, or 46 percent.
These conservation practices are also preventing soil erosion, helping to ensure that our farm fields across the Chesapeake Bay Watershed remain vibrant and productive in the years to come. Conservation practices have lowered the estimated amount of eroded soil by about 15.1 million tons every year, or 60 percent.
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Put another way, that's enough soil to fill about 150,000 railcars.
In addition to ensuring healthy cropland and clean water, these programs strengthen wildlife habitat that boosts outdoor recreation. From hunting and fishing, to camping and hiking, outdoor recreation adds more than $640 billion in benefits to our economy each year.
The Chesapeake Bay watershed initiative is just one of many landscape-scale initiatives undertaken by USDA in recent years. From the Mississippi River Basin to the Ogallala Aquifer, USDA has worked with producers to enroll millions of acres in targeted landscape initiatives — and today's report once again highlights the positive impact this work can have across the nation.
A new farm bill would continue targeted conservation efforts on working lands that ensure soil quality, water quality, erosion control, forest restoration, and wildlife habitat. It would continue major working land programs such as the Environmental Quality Incentives Program and Conservation Stewardship Program, through which USDA has provided more than 190,000 landowner contracts since 2009, as well as the Conservation Reserve Program under which we have held a signup each year during this Administration.
A new farm bill would also ensure that tens of millions of acres remain in conservation practices by linking crop insurance compliance to conservation program participation.
Across the nation, our farmers, ranchers and landowners are stepping up to protect our natural resources. They deserve our support – and the most important thing that can happen today is for Congress to achieve passage of a new food, farm and jobs bill that stands by producers and continues our long legacy of conservation.
Brokers: A New Year, New Markets
As we prepare to switch the calendar, many futures market participants are already looking ahead, trying to predict the values of commodities for the upcoming year.
As farmers plan out the crops they'll plant and the size of livestock herds they'll keep, they frequently use the futures markets to help them lock in prices for grain and animals to help ensure profits. Likewise, mining companies and energy producers use forward projections to help make decisions on new projects. Meanwhile, end users of commodities are hoping to lock in prices for the goods they buy so that they can profitably convert commodities like soybeans, lumber, natural gas, and copper into the finished goods they sell to the public.
In coming months, there are a few general themes that may guide the futures markets.
Shortages to Surplus
Over the last year, various commodities markets have seen an increase in production and falling demand, which has resulted in rising inventories and falling prices. The best example of this phenomenon is corn; after a record crop this year, corn prices collapsed from $7.46 last January to only $4.26 on Friday.
Other markets like copper, gold, wheat, and coffee are experiencing similar price pressures due to high levels of production and tepid demand.
Fed Pulling Back
For months, traders have been anticipating that the government's stimulus program would be reduced, which led to rising interest rates and falling prices for gold, partially unwinding the impact of stimulus. Earlier this month, the Federal Reserve announced it was reducing its bond and mortgage buying program by $10 billion per month, which confirmed the market's expectations. In the coming months, economists expect that the economy will be further weaned off of stimulus, but the pace of the changes is still unknown.
Changing Geopolitical Landscape
As 2013 comes to a close, a series of global political concerns remain on the radar. The ongoing civil war in Syria, a nuclear standoff with Iran, North Korean threats, and rising tension between China and Japan over maritime territory all threaten to disrupt global commerce.
Meanwhile, the European Union's economy is stabilizing, and there is increasing talk of a Trans-Pacific free trade agreement that could sharply increase trade between the US and other nations. We may not resolve any of these questions during 2014, but any of them could create major moves in the commodities markets and warrant a watchful eye.
Walt and Alex Breitinger are commodity futures brokers with Paragon Investments in Silver Lake, Kan. They can be reached at (800) 411-3888 or http://www.indianafutures.com.