reference prices

The Republican-controlled House has not advanced a new farm bill because "they just don't have the votes" to pass a bill that is $33 billion over budget, said Agriculture Secretary Tom Vilsack over the weekend. Senate Agriculture chairwoman Debbie Stabenow was more "practical," he said, by proposing a smaller increase in so-called reference prices and finding the money to pay for it.

The salient question in farm bill negotiations is how large an increase to allow for so-called reference prices that trigger crop subsidy payments, said Agriculture Secretary Tom Vilsack on Thursday. When that issue is resolved, it would be “relatively simple” to wrap up work on the legislation this year after months of deadlock, he said.

With Congress resuming work after its summer recess, Senate Agriculture chairmwoman Debbie Stabenow said she would do "everything in my power to pass a farm bill" this year. Farm-state lawmakers have been deadlocked for weeks over SNAP funding, higher crop subsidy spending, and climate mitigation.

Except for the “lame duck long shot” of a post-election compromise, the slim chances that Congress will pass a new farm bill this year “have become nonexistent,” said farm policy expert Jonathan Coppess on Thursday. The primary reason is the “long-unspecified demand” by Republicans for higher crop subsidy spending without providing details, wrote Coppess, a USDA official during the Obama era, at the farmdoc daily blog.

Crop supports would be set so high in the farm bill written by House Republicans that cotton, peanut, and rice growers, and probably wheat and sorghum farmers too, "would receive a payment every year," said an environmental group on Tuesday. Farm groups called for Agriculture Committee passage of the bill later this week despite questions about the financial underpinnings of the five-year legislation.

The farm bill drafted by House Agriculture Committee chair Glenn Thompson could boost crop subsidy spending by $23 billion — 56 percent — above current levels and favor growers in the South over farmers in the North, according to analysts at two Midwestern universities. To offset the cost, they said, reductions may be needed in conservation, crop insurance, or nutrition programs.

With the new farm bill months overdue, Senate Agriculture Committee chair Debbie Stabenow proposed a farm bill on Wednesday that would boost so-called reference prices — a roadblock issue — while rejecting the $28 billion cut in SNAP sought by conservative Republicans. “That is a hard red line for me,” Stabenow told reporters.

Right-wing extremists among House Republicans are seeking a one-sided farm bill when it is time for serious negotiations and compromise, said Democrats on the House Agriculture Committee on Tuesday. "Our bipartisanship is in need of a big lift," said Georgia Rep. David Scott, the senior Democrat on the committee.

Congress is not so much stalled over writing the new farm bill as unable to get started on it, considering the ongoing mystery of reference prices, said farm policy expert Jonathan Coppess. Higher reference prices, a key factor in boosting crop subsidies, are a priority of farm groups and their allies in Congress but no proposal has been made public in the past year to increase them. (No paywall)

Half a dozen House Republicans pushed back on Wednesday against a drive by farm groups for higher reference prices in the new farm bill, while analysts said that an expansion of federally subsidized crop insurance could cost nearly $600 million a year. Farm groups say that despite high farm income, a stronger safety net is needed because of increased production costs.

Agricultural leaders in the House and Senate are negotiating quietly over elements for the new farm bill, already four months overdue, said the president of the largest U.S. farm group on Tuesday. "We feel they are putting pen to paper now," said Zippy Duvall of the American Farm Bureau Federation, although the legislation must wait for a congressional resolution of the prolonged struggle over funding the government.

In a bid to break the farm bill deadlock, Senate Agriculture Committee chair Debbie Stabenow said that she was “open to proposals” to increase so-called effective reference prices for all crops in the U.S. farm program but would not accept cuts in SNAP or climate funding. “If we’re going to get a farm bill done this spring to keep farmers farming, it’s time to get serious,” she said in a letter to all senators.

Commodity prices are forecast to fall in 2024 but so will crop production expenses, said agricultural economist Michael Langemeier of Purdue University. "Moderation in input prices, particularly fertilizer prices, is likely to result in lower breakeven prices in 2024."

Agriculture Secretary Tom Vilsack said he’s certain Congress will meet the Dec. 31 deadline to pass the farm bill or temporarily revive its predecessor, but it will require a dose of creativity to do it. Lawmakers have been deadlocked for weeks over farm group demands for a larger safety net when there are few ways to pay for it.

Almost every farm in the country will benefit from a more generous trigger for crop subsidy payments in the years ahead if Congress does nothing more than extend the current farm law, said associate professor Jonathan Coppess of the University of Illinois on Thursday.

Congress could be even later than expected in completing the new farm bill, said two farm policy experts during a webinar on Tuesday, four days before the current law expires. House and Senate Agriculture Committee leaders are now aiming for passage of the 2023 farm bill by the end of December, but closed-door negotiations have moved slowly.

U.S. farm groups are giving priority to winning higher reference prices, a key factor in calculating crop subsidies, in the farm bill due this year in Congress. But the benefits would flow to a relative handful of large cotton, rice, and peanut growers, said an environmental group on Tuesday.