Does not matter: Infrastructure bill passed: What's next for ag

Nov 08, 2021

Presented by The American Forest Foundation

With help from Meredith Lee and John Hendel

Quick Fix

— Democrats succeeded in sending the bipartisan infrastructure bill to President Joe Biden's desk. Next up, they want to pass the trillion-dollar-plus social spending package before Thanksgiving.

— While the cost of food is rising, average milk prices have basically stayed the same for U.S. consumers this year, following years of oversupply that have strained small dairy farmers.

— The Agriculture Department is wading into the net neutrality crossfire with its ReConnect broadband program, and Republican lawmakers are warning USDA to back off.

HAPPY MONDAY, NOV. 8! Welcome to Morning Ag, where your host finds Doug the Potato to be quite endearing! Send story tips to xbustillo@politico.com and @ximena_bustillo, and follow us @Morning_Ag.

A message from the American Forest Foundation:

Across the U.S. 1 in 4 rural Americans owns forestland. An often-overlooked demographic, family forest owners, like farmers and ranchers, provide a significant opportunity to help address our climate challenges. In fact, with the right actions, forests can double the amount of carbon they sequester and store. Reaching this potential will take more than one solution. Learn more about family forest owners and the tools that can empower them to support America's climate efforts.

Driving the Day

AG GETS BILLIONS FROM BIF PASSAGE: House Democrats rallied to pass the bipartisan infrastructure package late Friday night that will provide billions of dollars for broadband access, forest management and conservation programs after Biden signs the measure into law, your host and Meredith Lee report.

How we got here: Only 13 House Republicans voted for the bill, alongside all but six Democrats. The vote followed intense maneuvering from Democratic leaders to push past progressive members who insisted on pairing the infrastructure measure with a separate, more broader social spending bill, reports POLITICO's Nicholas Wu.

What they're saying: A wide range of agricultural groups praised the passage of the long-awaited bill, including the Michigan Agri-Business Association, Farm Credit Council, National Cattlemen's Beef Association, National Association of Wheat Growers, National Association of State Departments of Agriculture, National Corn Growers Association and more.

Agriculture Secretary Tom Vilsack highlighted the broadband funding in a statement, saying it will give farmers "access to real-time information and new technologies needed to maintain their competitive edge" and help rural communities "become better connected to jobs, telemedicine, and distance learning."

Groups largely applauded the investment in expanding rural broadband: The bill includes $40 billion for states to build out broadband infrastructure and $14 billion to help consumers afford their internet bills, along with money for traditional infrastructure projects like roads and bridges.

What's next: The bill now heads to Biden's desk to be signed into law, while the House turns its attention to passing Democrats' $1.75 trillion climate and social spending package , which includes nearly $90 billion in agriculture-related spending. House Democrats are aiming to pass the bill before the Thanksgiving recess, even though it's fate in the Senate remains uncertain.

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NO, RETAIL MILK PRICES AREN'T SKYROCKETING: While food prices are rising, average milk prices have basically stayed the same for U.S. consumers since January, our Meredith Lee reports.

Despite a CNN report that triggered alarm last week, the retail price of whole milk in the U.S. since the start of the year has increased just 3 cents, to $3.69 a gallon. That means milk prices are up less than 1 percent, in contrast to around a 5 percent increase in the benchmark consumer price index over the same period.

Certainly, some cities have experienced isolated price swings in milk prices — though not as large as one family on CNN reported (up 80 cents in just a few weeks).

That's because the U.S. in general has an oversupply of milk, and it's gotten worse over the past few decades as smaller farms have shuttered and larger farms have bought up their livestock and increasingly dominated the industry.

It's a problem that policymakers have been struggling to confront for years. And while the Biden administration has pledged to address antitrust issues in industries ranging from technology to meatpacking, the dairy sector hasn't been a focus so far, in part because consumers aren't seeing significantly higher prices as a result of consolidation.

"Milk isn't the issue," a senior White House official said. "You haven't seen a huge spike in prices, but for some meat prices it's gone up substantially. That's because it's more vulnerable to these kinds of spikes."

For now, the White House is more intensely focused on the steep jump in the price of meat and poultry, which has left Democrats vulnerable to Republicans' political attacks over inflation.

A message from the American Forest Foundation:

Fresh from USDA

KEEPING TABS ON THE CLIMATE SUMMIT: Vilsack and Senate Agriculture Chair Debbie Stabenow (D-Mich.) participated in a fireside chat on Saturday at the 26th U.N. Climate Change Conference in Glasgow, Scotland, to discuss the need for innovation to increase productivity and build up resilience in the food and ag system.

Focus on local: Stabenow touted funds from the latest Covid-19 relief package for USDA find ways to bolster the food supply chain against disruptions. "We need more than four meatprocessing operations in the United States. We need local, we need regional," she said. "What do we do to build in redundancy and resiliency in our systems and be able to address things more from a local standpoint?"

A shout-out to biofuels: "I get the electric car thing, but I am not quite as sold on electric planes yet," the secretary quipped, adding that the need for fuels for aviation and other transports opens up the door for more biofuel investment. "That's the intersection of transportation and agriculture."

AIM for Climate: Vilsack also promoted the new Agriculture Innovation Mission for Climate, a recent partnership between the U.S. and United Arab Emirates to raise investments in climate-friendly food and ag innovations. According to Vilsack, the effort has already reached its target of $4 billion in commitments; the new goal is to reach $8 billion by the next U.N. climate gathering.

CLIMATE PROJECTS COMING IN 2022: USDA is currently reviewing nearly 400 comments on how climate pilot programs should work, with the goal of announcing more details sometime between the end of this year and early 2022, reports our Helena Bottemiller Evich.

"We listened to farmers," Vilsack said in an interview last week. "Farmers basically said: Demonstration projects. Let's figure out what works and what doesn't."

More timeline talk: Vilsack added that after applications are received, the goal would be to make decisions by "late spring" about how the resources will be allocated. He also said it was possible that the "rubber could meet the road" a bit sooner — maybe in the first quarter of the year — but "certainly" applications would be open by then.

DEMOCRATS' NET NEUTRALITY OPENING SALVO COMES AT USDA: The department is wading into the net neutrality crossfire with its ReConnect broadband program, which is making available more than $1 billion in connectivity loans and grants for internet service providers. But applicants committing to net neutrality will get a leg up, per USDA's new evaluation criteria, our Pro Tech friends tell MA.

Here's the rub: ISPs currently aren't legally required to abide by anything of the sort. Democrats including Biden, however, have widely called for a return to net neutrality regulations ever since the Trump-era FCC rolled back these rules in 2017. Although Democrats had said they feared ISPs would block and throttle consumers' internet traffic in the absence of regulation, ISPs have generally followed these principles voluntarily.

USDA's move is a small way to try to make sure ISPs keep up this behavior as left-leaning advocates await a Democratic majority at the FCC, which might try to revive such safeguards in 2022.

But USDA is making waves: 13 Senate Republicans just asked Vilsack to back off, calling the provision "dangerous." USDA officials didn't say whether they coordinated with the FCC on the language, simply telling our Pro Tech colleagues that the department is working to "respond as promptly as possible."

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Row Crops

— Anne DeCesaro is now policy director for the House Select Committee on Economic Disparity and Fairness in Growth. She most recently was director of policy and regulatory coordination for food, nutrition and consumer services at USDA.

— The latest monthly employment report shows that the U.S. added 531,000 jobs in October, including 119,000 in food services and drinking places. Read the report here.

— Adrienne Wojciechowski was confirmed by the Senate on Friday to be assistant secretary of congressional relations at USDA. More details here.

— A Louisiana Federal Court blocked Biden's Covid-19 vaccine mandate for private employers with more than 100 workers, reports POLITICO's Rebecca Rainey.

— Poultry processing line speeds have been tied to health risks for plant workers, but regulating line speeds is complicated. Vox has more.

— The average size of a chicken has increased over the last century due to breeding techniques, but some growers are now reverting back to breeding smaller birds. Bloomberg has the story.

A message from the American Forest Foundation:

The opportunity across rural America to address our climate challenges is significant. And no more so than in partnership with family and private forest owners. Family forest owners, with properties ranging from 20 to 2,000 acres, collectively own the largest portion of forests in the U.S. Yet most struggle with the high cost of management that comes with keeping a forest healthy and productive. If policymakers want to scale up climate action, while also bringing economic opportunities to rural communities, they need to jumpstart carbon markets for these small forest owners. Carbon markets appeal to landowners because they offer a voluntary option for action. They also complement other government tools and leverage private-side investment, getting to scale without a large government price tag. Learn more about family forest owners and how Congress can catalyze forest carbon markets for small forest holders today.

THAT'S ALL FOR MA! Drop us a line: xbustillo@politico.com; hbottemiller@politico.com; meredithlee@politico.com; gmott@politico.com and pjoshi@politico.com .