Jim Wiesemeyer, Informa Economics, 2012 Pork Management Conference, June 19-22 in Savannah, Ga.

1. Kicking the Can Down the Road
Jim Wiesemeyer
Senior VP, Farm & Trade Policy
Informa Economics

2.  European crisis: Greece – Spain – Others
 China and India: Slower growth
 U.S.: Fed weighing action
 U.S. debt/ceiling: Tomorrow is another day

3.  Ag economy has been doing very well/okay
 Rest of economy struggling
 Federal budget situation not sustainable

4. 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

5. Crop Prices Easing as Prices Paid
by Farmers Reach Record Levels1992
1993
1994
1995
1996
1997
1998
1999
2000
20012002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
75
100
125
150
175
200
225
Ind ex (1990-92= 100)
Prices received: crops
Prices paid*
*Prices paid commodities & services, interest, taxes and wage rates
Prices received: livestock

6.  Senate begins: Big week ahead…
 House Ag: Watching Senate; ready to go
 Conference: Lame-duck? Lucas to lead

7.  Focus: ARC, crop insurance, food stamps
 Conflict: Push for target/reference prices
 Key: Move from base to planted acres

8. Estimated total spending: $965 billion over 10 years

9.  CBO scores ‘savings’ at $23.6 bil., but…
 Whoops: No cotton safety net for 2013 crop
 Pay cap changes won by Sen. Grassley

10.  Amendments: Number and scope
 Germane Issues: Food stamps | Crop
insurance | Pay caps | MAP | Checkoffs
 Non-germane issues: Regulations, N. Korea,
Sequestration report

11.  Different approach than Senate
 Farmer choice: ARC – Price protection
 Food stamps: More cuts than Senate

13.  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

14.  U.S. and Russia’s WTO accession
 TPP
 New farm bill
 WTO challenges?
 New USDA Undersecretary for trade?
 COOL changes?

15.  New USDA GIPSA administrator
 LFTB
 Renewable energy…

19. Source: National Journal Member Research, 2012.
Elections:
The Factors That Matter Most
Watch with a Critical Eye – Not Every Campaign
Twist andTurn Is Important
Which Is It?:
• Retrospective
referendum?
(or)
• Prospective choice?
Campaign
Story
Swing-State Analysis:
• Swing-state economic
fortunes
• Swing-state demographics
Swing
States
EconomicTrajectory:
• Historical growth rate
• Future economic
expectations
Economic
Outlook
I II III

20.  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)

21.  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

22. Bottom Line: Who Will Win?
Predictions
President ObamaWins
Re-Election
Republicans Retain Control
of the House
RepublicansWin Control
of the Senate
55% 75% 50%