Drought Impact

Floor Speech

Mr. CARDIN. Mr. President, I rise today to speak about the devastating impact the drought gripping nearly 80 percent of the country is having on food producers.

Fewer natural occurrences are more devastating to agricultural production than extreme drought. The drought conditions the United States is facing today are considered the worst the country has seen in more than 50 years.

Data computed in the Palmer Drought Severity Index indicate that the severity of the current drought is on par with the Dust Bowl of the 1930s.

USDA has determined that more than 1,000 counties in 26 States, encompassing more than two thirds of the lower 48, are experiencing drought conditions. Drought conditions stretch from coast to coast and encompass nearly every State south of 42nd parallel west of the Mississippi River while also including nearly all of Florida, Alabama, Georgia and South Carolina. It is also worth noting that farmers on Delmarva peninsula are coping with a drought of their own as well as record high temperatures.

While these conditions undoubtedly present challenges for commodity growers, agricultural science, modern farming techniques and a series of financial support programs help commodity growers cope with increasingly difficult growing conditions.

These advances in farming, combined with robust grower supports like commodity direct payments and federally subsidized crop insurance premiums, along with a high market price for corn, driven by increased demand for corn from a variety of sectors, including ethanol producers who must meet government mandates to produce 15.2 billion gallons of ethanol this year, all help U.S. grain growers survive this difficult growing season.

Our national farm support programs are centered on assuring the financial security of commodity growers. However, there is little to no assurances on the availability and affordability of corn feed for livestock and poultry and for food production broadly.

This issue hits very close to home for me as Maryland's poultry industry continues to struggle tremendously during this drought because there is so little corn feed available. What feed is available is extremely expensive.

Feed accounts for more than 75 percent of the cost of raising poultry. Corn futures project the price of corn hitting $9 dollars a bushel by the end of the summer. As the price of feed continues to rise, feed costs will make up an even greater percentage of the cost to grow birds to market weight.

And unlike raising hogs and cattle, which ruminant species that can eat other types of feed like soybeans or hay, chickens can only eat grains--in other words corn.

To understand how important the availability of affordable corn is let's take a look at chicken by the numbers:

As of today, the price per bushel of corn is $8.20.

One bushel of corn equals 56 pounds of shelled corn.

On average, it takes 7 weeks and 13 1/2 pounds of corn to raise a single chicken to market weight.

Market weight for a single chicken is approximately six pounds, although the weight of the bird that is actually meat is probably somewhere closer to three or four pounds.

Approximately four birds can be raised, from egg to slaughter, on a bushel of shelled corn--or, a little more than $2 worth of corn.

The retail price for a whole three pound chicken at a popular Maryland supermarket chain is $6 (at $2 per lb).

That means that the retail price of a pound of chicken is equal to the price of corn feed. And corn is just one input cost to raising poultry.

Clearly market conditions like this are not sustainable for maintaining a viable domestic poultry industry.

Domestic poultry, beef, and pork producers operate without the safety nets commodity growers have. Those domestic producers that are still owned by U.S.-based companies are at an even greater disadvantage, because many of the foreign owned meat and poultry companies in the U.S. can afford to operate at a loss for extended periods of time because they have financial backing from state-run banks overseas.

Our meat and poultry producers are in dire need of relief if they are going to survive into the future. One way to provide some relief for poultry and livestock growers would be to modify the Renewable Fuel Standard's ethanol production mandate for corn ethanol so as to provide our farmers better access to the corn stocks they need.

Food producers--including livestock and poultry producers, who use tremendous amounts of corn to raise their livestock and produce food--do not have the luxury of a mandated market for their products.

I understand the important role domestic ethanol production will play in helping our Nation achieve greater energy security. However, the nurturing and growth of our domestic biofuels industry must not come at the expense of our domestic food supply. In other words, we cannot sacrifice U.S. food security for energy security. That is why I do not support the use of food based feedstocks like sugar and corn to be commercially produced into ethanol.

Domestic food production is reaching a state of crisis driven by the increasing cost of inputs, like corn, that the food producers have to unfairly compete with industries that are operating with under government production mandates.

That is why Senators Boozman, Mikulski and I introduced legislation making a simple change to the Renewable Fuel Standard to help provide domestic food producers access to corn.

This legislation will link the amount of corn ethanol required for the RFS to the amount of U.S. corn supplies. This legislation sets up a process so that when the USDA reports on U.S. corn supplies towards the end of each year, based upon the ratio of corn stocks to expected use, there could be a reduction made to the RFS mandate for corn ethanol. This is a commonsense solution to make sure that we have enough corn supplies to meet all of our corn demands.

Once a year, the administrator of the Environmental Protection Agency will review the current corn crop year's ratio of U.S. corn stocks-to-use ratio in making a determination of the RFS.

Another way to deliver some of this needed relief would be for the House to immediately pass the Senate Farm Bill that passed with bipartisan support in the Senate in June.

The livestock disaster provisions originally enacted in the 2008 Farm bill expired in 2011, leaving producers without disaster assistance for the current crop year. The Senate bill strengthens these programs and makes them retroactive to address the current drought of 2012.

As of July 17, approximately 73 percent of cattle producing areas were affected by moderate or more intense drought.

As I mentioned earlier, the Delmarva peninsula, where a fair amount of the corn is raised for feed for Delmarva poultry, is in a state of drought, as are the regions of the country where the rest of the corn Delmarva poultry uses is shipped in from.

Livestock disaster programs are critical as farmers and ranchers experience losses in livestock and grazing land due to extreme heat, drought, and fire. The 2012 Farm Bill provides permanent funding and authority for the Livestock Disaster Programs.

Beyond helping livestock and poultry growers, the 2012 Farm Bill also provides much needed assistance to fruit and vegetable growers, too, by expanding crop insurance coverage to these farmers. The bill also allows the Risk Management Agency to conduct research and development on new crop insurance products to expand access to index-based weather insurance products for fruit and vegetable growers.

The House appears poised to just kick the can for a year. The House is likely to consider a measure to merely extend the 2008 Farm Bill for a year, while also offering some drought assistance--paid for from cuts to conservation programs.

This is a plan that the American Farm Bureau opposes, and demonstrates both the dysfunction of the House--in that they won't simply do what's easiest and best for farmers by taking up and passing the Senate bill--while also ignoring how vital farm conservation is to preventing agricultural disasters.

The Senate Farm Bill preserves USDA conservation programs. The Natural Resource Conservation Service, formerly known as the Soil Conservation Service, was born out of the tragedy of the Dust Bowl.

The disastrous droughts of the 1930s taught us the lesson that we need to do more to protect water and soil resources so that we do not repeat the mistakes of the past.

The 2012 Senate Farm bill conservation programs are critical for keeping America's farmers and ranchers doing what they do best--growing and producing a safe and stable food supply. Crops need healthy soil and plentiful water to grow, and natural disasters like drought have a long-term impact on soil and water quality.

The Farm bill's conservation title provides farmers and ranchers access to the tools they need to conserve and keep our Nation's natural resources as resilient as possible, even in the face of drought and other natural disasters.

For the good of American agriculture and the American consumer, I urge the House leadership to take advantage of this last opportunity before the August recess to do what is right and pass the Senate Farm bill. My hope is that House leadership will realize that it behooves us, when we go home to our districts during the summer recess and attend State and county fairs, to be able to tell our farming communities that we sent a Farm bill to the President with meaningful reforms and essential disaster relief to help them through these difficult times.

Personally, I want to be able to tell my poultry growers that Washington hears their plight. That is why, in addition to urging House passage of the Senate Farm bill, I would also like to see further relief for poultry growers in the form of improved access to corn feed.

For decades, America's corn growers were outproducing demand for corn from food producers. While consumers may have benefitted from relatively low corn prices, American corn and grain growers were hurting badly.

Since 2007, the tides have been turning significantly. National demand for corn is at an all-time high and corn is likely to reach $9 a bushel in the near future. A growing and hungry Nation, combined with new demands for corn that are the result of technological innovations, have created new uses for corn in the form of ethanol as both a motor fuel additive and in plastics. These new uses, combined with expanded traditional uses, have fueled the upward spike in corn prices.

The effects of the 2012 drought are obviously a catastrophe that we cannot legislate away. However, there are actions that the USDA and EPA could take to help improve market access to the corn stocks food producers need to keep feeding America.

Senators Hagan, Chambliss, Pryor, Boozman, and I have authored a letter to the EPA administrator calling for the waiver of the Renewable Fuel Standard's conventional ethanol production mandate for this year. Doing so would allow food producers to compete fairly with ethanol producers for corn.

While ethanol production is down, due to high corn prices ethanol producers are sitting on roughly 2.5 billion production credits, known as RINs (Renewable Identification Numbers), that they could cash in and further reduce the perceived demand for corn and increase the supply available to food producers.

I understand the important role domestic ethanol production will play in helping our Nation achieve greater energy security. However, the growth of our domestic biofuels industry must not come at the expense of our domestic food supply. We cannot sacrifice U.S. food security for energy security. That is why I do not support the use of food based feedstocks like sugar and corn to be commercially produced into ethanol.

I believe the future of biofuels must be in the development and production of cellulosic and advanced biofuels that are not derived from feedstocks that are part of essential food sources.

Because of corn's many uses, it has become a commodity that is in high demand. Assuring our domestic food producers' access to this valuable and increasingly scarce crop is so important to controlling the cost of food in America and maintaining the economic viability of our U.S. food companies.

I urge my colleagues to join Senators Hagan, Boozman, Pryor, Chambliss and I in calling on EPA to waive the RFS corn ethanol production mandate and call on the House to pass the Senate's Farm bill.

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