A number of agricultural and producer organizations have written the congressional leadership urging Congress to move forward on the pending free trade agreements (FTA) with Korea, Colombia, and Panama. The group indicated that the U.S.-Korea FTA would expand exports for U.S. commodities and result in $1.8 billion in additional sales – a 46% increase. Congress was also reminded that competitors of U.S. goods are actively pursuing these markets. Canada completed its FTA with Columbia last month which, consequently, could mean the U.S. share of the Colombian wheat import market could fall from around 70% down to as low as 30%. The U.S. market share for feedgrains has dropped sharply from 96% in 2007 to 38% in 2009. The American Meat Institute estimates that the U.S. meat industry will lose $127 million in exports as a result of the Canadian FTA with Colombia. Organizations signing the letter included the American Farm Bureau Federation, American Meat Institute, American Soybean Association, National Association of Wheat Growers, National Cattlemen’s Beef Association, National Corn Growers Association, National Council of Farmer Cooperatives, National Grange, National Milk Producers Federation, National Turkey Federation and the Pet Food Institute.

Biofuels Incentives Update— At the request of Senator Jeff Bingaman, chairman of the Senate Energy and Natural Resources Committee, the Congressional Budget Office (CBO) has assessed the cost of various biofuels tax credits against their energy security and environmental benefits. CBO estimated the blender’s tax credit for ethanol will cost $7.6 billion this year. The report also concluded that, “After adjustments for the different energy contents of the various biofuels and the petroleum fuel used to produce them, producers of ethanol made from corn receive 73 cents to provide an amount of biofuels with the energy equivalent to that in one gallon gasoline.” Senator Bingaman noted, “Corn-based ethanol plays an important role in our nation’s transportation fuel mix. Thanks in part to corn-based ethanol, U.S. oil import dependence peaked in 2007, and is expected to decline further until 2035. But corn-based ethanol is now a mature technology whose market share is protected by an aggressive Renewable Fuel Standard. And ethanol prices are currently well below gasoline prices, making it even harder to justify the existing subsidy.” The ethanol blender’s tax credit expires Dec. 31, 2010.

Promote Domestic Energy Production — Senators Amy Klobuchar (D-MN) and Tim Johnson (D-SD) have introduced legislation to establish strong renewable energy and energy efficiency standards, incentives for developing biofuels and biofuels infrastructure, and targets for the availability of advanced vehicle technologies. The legislation, Securing America’s Future with Energy and Sustainable Technologies Act (SAFEST), would establish:

• A strong, renewable electricity standard of 25% renewable energy by 2025;

• A strong energy efficiency resource standard (1% per year);

• A long-term extension of tax credits for ethanol and biodiesel;

• New incentives for biofuels infrastructure and deployment; and

• Targets for the availability of advanced vehicle technologies. <.ul>

The legislation is supported by Growth Energy, American Wind Energy Association, Renewable Fuels Association, National Farmers Union and National Corn Growers Association.

Livestock Hearing — The House Agriculture subcommittee on Livestock will hold a hearing on July 20 to review livestock and related programs at USDA in advance of the 2012 Farm Bill. Issues expected to be raised with administration officials include the proposed livestock and poultry rule on competition, mandatory price reporting, National Animal Identification System and country-of-origin labeling.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.