Dan Huseman, Week 2 — January 19, 2017

Because of the Martin Luther King holiday and a statewide ice storm, the second week of the session was a little shorter than usual. Committee work has begun, but no bills have been sent to the floor for debate.

The Majority Party in the House continues to work on legislation which will ultimately result in a de-appropriation of $117 million for the current budget year. This reduction is due to the fact that revenues have slowed, and there is not as much money available to spend We have been working on this since December, and it is time to get it finished so we can move on to next year’s budget. The goal of our bill is to hold Medicaid and K-12 education harmless, affect as few jobs as possible, and maintain adequate service levels for all agencies. These are difficult choices, but they must be made in order to balance the budget.

Since it was a slower week than normal with no bills to debate, I thought you might find the following article interesting.

NORTHEY REVIEWS KEY ISSUES FACING IOWA AGRICULTURE IN 2016

On Thursday, December, 22, 2016, the Iowa Department of Agriculture and Land Stewardship (IDALS) issued a press release in which Iowa Secretary of Agriculture Bill Northey highlighted some of the top ag issues in Iowa in 2016.

Record Production, Economic Challenges

Much of Iowa had a nearly ideal growing season that saw Iowa farmers produce record corn and soybean crops again this year. Iowa corn production is forecast at 2.69 billion bushels according to the latest USDA, National Agricultural Statistics Service Crop Production report. This surpasses last year’s (2015 crop year) record of 2.51 billion bushels. The statewide average yield is expected to be a record setting 199.0 bushels per acre, 7.0 bushels per acre higher than the previous record that was set last year. Soybean production is forecast at 561 million bushels for Iowa. If this forecast is sustained, this will be the largest crop on record, 6.80 million bushels above 2015’s record high. The statewide yield forecast is 59.0 bushels per acre, 2.5 bushels more than the previous record set last year.

However, the significant drop in crop prices over the past few years has made it a very challenging time on the farm economically as in many cases current prices are below the cost of production for farmers.   Average statewide corn prices fell from $3.37 to $3.008 from November 2015 to Nov. 2016. Statewide average soybean prices have recovered somewhat from $8.14 to $9.25 from Nov. 2015 to Nov. 2016, but in many cases are still below the cost of production.

It has also been a challenging year economically for Iowa livestock farmers.   Cattle prices have continued to fall and were at $101 per hundred weight in October, down from $128 per hundred weight last year and $161 two years ago.   Hog prices are also down from $55.50 in Oct. 2015 to $41.70 in Oct. 2016. Iowa egg production has recovered from the devastating highly pathogenic avian influenza outbreak that resulted in the depopulation of more than 30 million Iowa laying hens last year. Iowa egg production in October 2016 was 1.30 billion eggs, up 3 percent from last month, and up 71 percent from last year, according to the latest Chickens and Eggs report from the USDA’s National Agricultural Statistics Service. The average number of all layers on hand during October 2016 was 53.7 million, up 1 percent from last month, and up 55 percent from last year.   However, egg prices have fallen dramatically, from $1.26 per dozen in October of 2015 to just $.21 per dozen in October of this year.

The tighter margins seen on the farm are starting to ripple through the economy. Land prices are down 5.9 percent over the past year. There have been several announcements of layoffs and mergers by manufactures, machinery providers, seed companies, and other business that serve the agriculture industry. Despite the challenges, opportunities remain. In general, exports remain strong. Agricultural exports account for 10% of the U.S. exports; and support nearly one million jobs across the country. To help continue to grow exports, Secretary Northey participated in trade missions with the Iowa Economic Development Authority and USDA to the Dominican Republic, Costa Rica, Ukraine and Romania.

Iowa Water Quality Initiative

The Iowa Department of Agriculture and Land Stewardship is continuing to expand efforts to work with all Iowans to make water quality improvements. Earlier this year Secretary Northey announced that 1,900 farmers committed $3.8 million in cost share funds to install nutrient reduction practices in 97 counties in Iowa. Eligible practices include cover crops, no-till or strip till, or using a nitrification inhibitor when applying fall fertilizer. Participants include 900 first-time participants and more than 1,000 past users that are trying cover crops again and receive a reduced cost share rate. There are also currently 45 existing demonstration projects located across the state to help implement and demonstrate water quality practices through the initiative. This includes 16 targeted watershed projects, 7 projects focused on expanding the use and innovative delivery of water quality practices and 22 urban water quality demonstration projects. More than 100 organizations are participating in these projects. These partners will provide $19.31 million dollars to go with over $12 million in state funding going to these projects.

Nearly $350 million in state and federal funds have been directed to programs with water quality benefits in Iowa last year. This total does not include the cost share amount that farmers pay to match state and federal programs and funds spent to build practices built without government assistance. More information about the initiative can be found at www.CleanWaterIowa.org.

In a related matter, IDALS issued a press release on Tuesday, January 10, 2017, in response to the Governor’s budget recommendation outlined in his annual Condition -of-the-State address.   Secretary Northey commented—“Governor Branstad has been a leader in identifying and providing an ongoing and growing revenue source to support the Iowa Water Quality Initiative. His proposal to provide $17.6 million in fiscal year 2018 and $25.1 million in fiscal year 2019 without raising taxes would allow us to continue to scale up our water quality efforts both efficiently and effectively. This proposal again shows that water quality is truly a top priority and Iowa remains committed to taking on the challenge of improving water quality.”

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