Does not matter: Lawmakers struggle to address food inflation

Jun 13, 2022

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QUICK FIX

— A bill to battle rising food prices could see a vote in the House this week, as Democrats continue to grapple with addressing record-setting food inflation before the midterms. Top Republicans are pushing back, though, arguing the legislation doesn't do enough.

— A pair of top House Democrats is pressing the Federal Trade Commission to do more to crack down on infant formula price-gouging in online marketplaces amid ongoing shortages.

— Agriculture economists are warning that a drop in net cash farm income is imminent unless lawmakers and USDA facilitate an infusion of ad-hoc assistance.

HAPPY MONDAY, JUNE 13. Welcome to Morning Ag. I'm your new host, Garrett Downs. Thank you to my wonderful colleagues Meredith Lee, Hannah Farrow and Valerie Yurk for keeping MA a must-read in the past few weeks. Tips? Send them along to gdowns@politico.com, meredithlee@politico.com and ecadei@politico.com, and follow us @MorningAg.

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Driving the Day

AG INFLATION BILL ADVANCES: The House Rules Committee on Monday will consider a bill to battle food and fuel inflation and meat industry consolidation, signaling the full chamber could vote on it as early as this week.

What's in it? The omnibus appropriations bill known as the Lower Food and Fuel Costs Act would create a meat and poultry special investigator within the USDA, create a food supply chain task force, authorize year-round sale of E15 grade ethanol fuel, provide subsidies to small meat producers and adjust conservation programs to include precision agriculture.

The package is a smorgasbord of ag legislation before Congress, put together by House Democrats in an attempt to act on record-setting inflation roiling consumers and crack down on meat industry consolidation.

The outlook: Many of the included bills passed out of the House Ag Committee in a bipartisan fashion, largely by voice vote or unanimous consent.

A major outlier, however, is the Meat and Poultry Special Investigator Act, which cleared the panel on a mostly party-line 27-21 vote.

Introduced by Rep. Abigail Spanberger (D-Va.), the bill would create a new office within USDA to investigate complaints of anticompetitive behavior under the Packers and Stockyards Act — a 1921 law to regulate the meat and livestock industry. A bipartisan companion measure has been introduced in the Senate by Sens. Jon Tester (D-Mont.), Chuck Grassley (R-Iowa) and Mike Rounds (R-S.D.).

Republican and industry blowback: The inclusion of the investigator bill could make passage of the omnibus a partisan battle, despite many of the included bills having wide bipartisan support on their own.

Ag Committee Ranking Member G.T. Thompson (R-Pa.) last week called the bill a "charade" in a statement.

The National Cattlemen's Beef Association and the North American Meat Institute, two powerful lobbies on behalf of the meat industry, also oppose the investigator bill.

Not a Republican monolith: Some Republicans have become increasingly supportive of additional oversight in the meat sector.

Rep. Dusty Johnson (R-S.D.), whose Butcher Block Act is included in the omnibus package, voted to advance the special investigator bill from committee in May, and the Senate companion measure has six Republican cosponsors.

Also on the Hill this week: The House Ag Committee on Tuesday will hold a farm bill hearing on non-SNAP nutrition programs and will dig into the role of climate research in supporting agriculture resiliency on Wednesday.

Meanwhile, Senate Ag on Friday will hold its second field hearing for the 2023 farm bill at Arkansas State University in Jonesboro, Arkansas, the home state of Ranking Member John Boozman (R-Ark.).

A message from The Interrupt:

"Just eat less." "Just take the stairs." "Just stop being lazy."

More than 108 million American adults suffer from obesity. But the conversation about obesity is overly simplistic — it can be hurtful and misleading. Healthy diet and exercise are important, but for many people they aren't enough. Obesity is a complex disease and there's no one-size-fits-all solution.

Let's interrupt the conversation and treat obesity like the disease it is. Learn more.

ONLINE BABY FORMULA SCAMS: A pair of top House Democrats is pressing the Federal Trade Commission to do more to crack down on online scams and price-gouging for infant formula.

Details: Desperate parents and caregivers are still struggling to find formula on shelves in many states. In some cases, people are paying hundreds of dollars for a single can of formula on secondary online markets like Amazon, eBay and Facebook. The market is currently rife with scams and deceptive marketing. Sometimes, parents are paying for formula but not ultimately receiving anything.

On the Hill: Democratic Reps. Bobby Scott (Va.), who chairs the Education and Labor Committee, and Frank Pallone (N.J.), who chairs the Energy and Commerce Committee, are pressing FTC in a new letter today to expand its current efforts around infant formula price manipulation to online marketplaces. The FTC in May announced a probe into baby formula scams and consolidation in the market. ICYMI: Meredith has this behind-the-scenes look at the White House's early missteps that helped fuel the crisis that boiled over in May.

What we're hearing: House Ag members Kim Schrier (D-Wash.) and Dusty Johnson (R-S.D.) are expected to introduce a bill to bolster early warning systems in the infant formula market in the coming days.

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FARM INCOME WARNINGS: Despite high commodity prices, farmers are under immense strain from sky-high input prices, including fertilizer, seed and fuel.

Inflation bites: Joe Outlaw, the co-director of the Agriculture Food Policy Center at Texas A&M, recently told House Ag lawmakers that those high costs and inflation increase risk while cutting into profits.

Critical inputs like fertilizer were already reaching unprecedented costs before Russia invaded Ukraine in March. After the invasion, fertilizer costs soared even higher as Russia and its close ally Belarus are top producers of nitrogen and potash fertilizers.

Adjustments for 2023: Outlaw suggested changes be made to two USDA safety nets: the Price Loss Coverage and Agriculture Risk Incentive programs. Both programs, he said, need to have reference prices ratcheted up to adjust for inflation.

Rice, not nice: Outlaw noted concerns about rice producers, saying two-thirds of rice farms are poised to sustain losses in 2022.

Differing opinions: Joseph Janzen, an assistant professor at the University of Illinois, told lawmakers that corn, soybean and wheat farmers can expect higher profitability in 2022 relative to 2021.

Those commodities, he said, will fetch record prices for the remainder of 2022 and still elevated prices into 2023.

Inflation buoy: Inflation has not been all bad for farmers. Commodities have also reached record highs, allowing farmers to offset higher input costs.

Thompson, the top Republican on the House Ag Committee, expressed concern the equation may soon turn against farmers when commodity prices drop if inputs stay high.

Janzen said a resolution to the war in Ukraine could lead to lower prices on both sides, but said there is a "concern for U.S. agriculture" that additional compounding factors on the input side could persist beyond the war and create an imbalance.

A message from The Interrupt:

Row Crops

— USDA says it will spend $65 million to create a pilot program that aims to support ag employers who implement health and safety standards for workers from the U.S. and northern Central American countries via the seasonal H-2A visa program.

— We're watching the Supreme Court and whether it decides to hear Bayer's bid to dismiss claims that its Roundup weedkiller causes cancer. The court could announce a decision as early as today. It comes amid a larger debate over warning labels on pesticides that the Biden administration is involved with as well.

— Sen. Jon Ossoff (D-Ga.) raised the issue of India's high pecan tariffs during a recent meeting with India's Ambassador to the United States, Taranjit Singh Sandhu. Ossoff said those tariffs are hurting Georgia farmers who export pecans to international markets.

A message from The Interrupt:

Obesity is not a "willpower thing." Obesity is not your fault. Obesity is a disease.

Americans lose $1.7 trillion fighting it annually. And it kills 2.8 million people around the world every year.

We have to stop blaming people with obesity and start exploring a spectrum of solutions that actually work. It's time to work across sectors and industries to meet this challenge.

It's time to focus on what individuals need to secure better health. It's time to interrupt the conversation and confront obesity together. Learn more.