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Kicking the Can Down the Road Jim Wiesemeyer
Senior VP, Farm & Trade Policy Informa Economics
European crisis: Greece – Spain – Others
China and India: Slower growth
U.S.: Fed weighing action
U.S. debt/ceiling: Tomorrow is another day
Ag economy has been doing very well/okay
Rest of economy struggling
Federal budget situation not sustainable
75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11
0
20
40
60
80
100
120
Billion dollars
Net Farm Cash Income
Direct government payments*
* emergency payments are striped area of government payments)
Net cash income in agriculture reached nearly $110 billion in 2011. However a more normal harvest and weak global
economy signal declines in 2012. Are we transitioning back to a new plateau?
Farm Income: Agriculture Continues Strong Performance
Crop Prices Easing as Prices Paid by Farmers Reach Record Levels
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
2010
2011
2012 75
100
125
150
175
200
225
Index (1990-92=100)
Prices received: crops
Prices paid*
*Prices paid commodities & services, interest, taxes and wage rates
Prices received: livestock
Senate begins: Big week ahead…
House Ag: Watching Senate; ready to go
Conference: Lame-duck? Lucas to lead
Focus: ARC, crop insurance, food stamps
Conflict: Push for target/reference prices
Key: Move from base to planted acres
Estimated total spending: $965 billion over 10 years
CBO scores ‘savings’ at $23.6 bil., but…
Whoops: No cotton safety net for 2013 crop
Pay cap changes won by Sen. Grassley
Amendments: Number and scope
Germane Issues: Food stamps | Crop insurance | Pay caps | MAP | Checkoffs
Non-germane issues: Regulations, N. Korea, Sequestration report
Different approach than Senate
Farmer choice: ARC – Price protection
Food stamps: More cuts than Senate
FY 2013 spending
Highway bill | Farm bill?
Debt ceiling hike?
Alternative to sequestration/ATB cuts
Tax extenders 2001 and 2003 tax cuts
Payroll tax holiday
Estate tax
AMT fix
Doc fix
U.S. and Russia’s WTO accession
TPP
New farm bill WTO challenges?
New USDA Undersecretary for trade?
COOL changes?
New USDA GIPSA administrator
LFTB
Renewable energy…
Source: National Journal Member Research, 2012.
Elections:
The Factors That Matter Most Watch with a Critical Eye – Not Every Campaign
Twist and Turn Is Important
Which Is It?:
• Retrospective
referendum?
(or)
• Prospective choice?
Campaign Story
Swing-State Analysis:
• Swing-state economic
fortunes
• Swing-state demographics
Swing States
Economic Trajectory:
• Historical growth rate
• Future economic
expectations
Economic Outlook
I II III
Key states… Obama immigration change key Nevada (Hispanics 17% of voters)
Iowa
Ohio
Virginia
Colorado (Hispanics 13% of voters)
New Hampshire
North Carolina
Pennsylvania
Florida (Hispanics 19% of voters)
Biggest of battleground states Fla. | Ohio | Va. | N.H. | Iowa | Colo.
Romney must win Fla. | Ohio | Va.
Obama can win with victory in one of those states and one of the other three
Caveat: Major economic or other surprise
Bottom Line: Who Will Win?
Predictions
President Obama Wins
Re-Election
Republicans Retain Control
of the House
Republicans Win Control
of the Senate
55% 75% 50%