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How Policy Developments are Affecting Livestock Programs


As the 2018 Farm Bill programs and policies begin to be implemented, there tends to be a great deal of attention given to the commodity programs for crop producers.

But there are important parts of the farm bill for livestock producers as well, and not just dairy. As livestock producers consider new farm bill details, it also will be important to keep an eye on other major policy developments.

Commodity programs
Of course, the largest component of farm bill legislation affecting livestock is the long-standing dairy program. Following up on calls to reform the Margin Protection Program for dairy that have come since it was created in the 2014 Farm Bill, Congress first amended the MPP program in the 2018 appropriations process.

It then substantially changed the program and renamed it the Dairy Margin Coverage program in the 2018 Farm Bill. The new program maintains the protection for the margin between milk prices and feed costs but offers higher coverage levels for smaller operations (the first 5 million pounds of milk annually) and generally lowers the premium cost for the lowest coverage levels.

The dairy provisions also allow producers to use both the DMC program and the Livestock Gross Margin insurance product, expanding price risk management alternatives for dairy producers.

Livestock producers tend not to directly engage in discussions or developments with the crop support programs, except to the extent that livestock producers also are crop producers. But even for primary livestock producers, the new decision between Agriculture Risk Coverage and Price Loss Coverage for crop producers sets the stage for substantial program supports that will in turn support feed production and indirectly help livestock producers.

Conservation programs
Livestock producers also are primary stakeholders in conservation policy and traditionally have participated in and benefited from the working lands programs and the easement programs for grassland. The Environmental Quality Incentives Program and the Conservation Stewardship Program both were renewed in the farm bill, but opportunities may become more limited or competitive.

Total funding authority was cut relative to baseline budget increases built off the prior farm bill, and total spending is projected to top out in 2020 before decreasing for the first time since the working lands programs were established in the 1990s and early 2000s.

The cuts to working lands programs helped restore disappearing baseline funding for both the Agricultural Conservation Easement Program and the Regional Conservation Partnership Program, which both provide some opportunities for livestock producers.

The Conservation Reserve Program also will grow toward an increased enrollment cap of 27 million acres from the current 24 million. There could be competition for some additional grazing acres, but they would be at a reduced rental rate equal to no more than 85% to 90% of the county rental rate instead of 100%. And, increased opportunities to manage haying and grazing on CRP have reduced the lost forage potential of those acres for livestock.

Trade programs
Beyond the daily news attention to ongoing trade conflicts and progress or lack of progress on trade agreements, the programs in the trade title of the farm bill help leverage federal dollars with commodity group and organizational dollars to promote U.S. agricultural exports and develop new and expanded markets.

The farm bill reauthorized existing food-aid programs and consolidated the authority for export promotion programs, elevating them to a level that would be protected in future farm bill baseline budgets.

The $235 million in new trade promotion funding in the farm bill, coupled with the $200 million of trade promotion funding in the ad hoc trade assistance package announced last fall, should help drive ag trade promotion and development.

Livestock health
The biggest headline in the 2018 Farm Bill for livestock producers, other than dairy, is the commitment of $300 million over 10 years for animal disease prevention and management.

Building on the existing network of animal health laboratories, the legislation calls for the establishment of a national animal disease preparedness and response program, as well as a national animal vaccine and veterinary countermeasures bank.

The effort is to gear up against multiple animal and zoonotic disease outbreaks, including food-and-mouth disease.

Other programs and policies
There are many other farm bill provisions that will touch livestock producers, from ag credit to research to value-added grant programs and more. One of the final sections of the farm bill also calls for a USDA study on the feasibility of establishing a Livestock Dealer Statutory Trust and the role it could play in protecting producers, auction markets and other parties in cases of livestock dealer insolvency.

Of course, there are many issues beyond the farm bill that will affect livestock producers. Trade uncertainty continues with numerous existing conflicts, but also opportunities in new agreements, negotiations or market development.

Environmental regulations are significant, as well, particularly the work on a new Waters of the United States rule. Immigration policy and agriculture are deeply intertwined with the issues of security, supply of agricultural workers and the role of immigrant labor in the livestock production and processing sectors.

Food policy will become increasingly critical as alternative proteins and lab-cultured meat products make their way toward the consumer market under a yet-to-be-developed USDA and FDA regulatory framework.

Nutrition policy also is worthy of attention, as the newly named members of the federal Dietary Guidelines Advisory Committee work toward new 2020-25 dietary guidelines that affect everything from recommendations for healthy eating to federal food program requirements.

The previous panel on 2015-20 guidelines generated political turmoil over the inclusion of environmental and sustainability language in draft nutrition guidelines before they were eventually excluded from the final version.

Whether it becomes part of the nutrition debate again, the issue of climate, sustainability and the role of food animal production already has reappeared in the policy arena and could be on the congressional agenda this year, as well as the presidential campaign trail leading up to 2020.

Livestock producers and organizations need to keep alert to policy issues and developments, whether they are provisions of the new farm bill or separate policy issues playing out in various arenas.

Even if livestock producers are sometimes stereotypically described as independent folks who are disengaged from the policy process and who like animals more than they like people, they will need to keep engaged given the breadth and significance of the issues in front of them.

Source: Bradley D. Lubben, UNL

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