In the State of the Union address last week, President Obama stressed the need to develop every available source of American energy.

Ethanol was not mentioned in the speech, but the president stated that his administration would work to open federal lands for clean-energy production and more natural gas development.

The president said that the U.S. supply of natural gas can last nearly 100 years and should be developed to support more than 600,000 jobs over the next decade. In the only direct reference to agriculture, Obama spoke about the EPA decision to not classify spilled milk as a hazardous material.

The proposal was fought by ag groups, but the president emphasized why regulatory powers are needed. Obama said, "I'm confident a farmer can contain a milk spill without a federal agency looking over his shoulder, but I will not back down from making sure an oil company can contain the kind of oil spill we saw in the Gulf two years ago.”

The Senate Committee on Agriculture, Nutrition and Forestry may get involved in helping determine which Farm Service Agencies close. Senator Grassley raised concern about the budget cutting plans to close 131 FSA offices and more than 250 USDA offices, facilities and laboratories. Grassley is working to make sure the closures are fair and that farmers are adequately served. The planned closures are a result of a cut in USDA’s discretionary budget by nearly $3 billion over the next 10 years.

Biodiesel supporters have been lobbying Congress to extend the federal tax credit for the U.S. biodiesel industry. However, there is not currently much consideration. A bill introduced in the Senate in November extended many tax cuts, but not for the ethanol and biodiesel tax credit that expired at the end of 2011.

The likelihood that the ethanol tax credit will be revived is very small. There is a proposed House bill that would increase the cage sizes for laying hens.

The legislation comes from an agreement with the Humane Society of the United States and the U.S. egg industry in which the HSUS said it will stop trying to pass state ballot initiatives that would dictate egg production practices if egg producers agree to nearly double cage sizes for laying hens. The National Pork Producers Council says that the bill would set a dangerous precedent for allowing the federal government to regulate on-farm production practices. Government inspections of U.S. chicken and turkey plants could get an overhaul under a proposal by USDA unveiled late last week.

A greater focus would be put on food safety to reduce by a small amount the number of food-borne illnesses. The proposal calls for inspectors to focus on areas with the greatest risk of contamination, although to reduce spending the work would be done with 500-800 fewer inspectors. The plan would devote more of inspectors time to pathogen sampling and verifying that sanitation and meat safety codes are being followed.

Traditional slaughter-line inspections would continue as well. USDA estimates the government would save $90 million over three years and meat production costs would drop by $257 million per year. This would be the first major overhaul of poultry inspections in 50 years. USDA expects the new system would reduce illness due to salmonella and campylobacter bacteria by 1.5 percent. Chicken and turkey account for nearly half of U.S. meat consumptions.

A $25 million loan has been given conditional approval to build a biorefinery plant in Blairstown, Iowa. The funding will come from USDA’s Biorefinery Assistance Program to produce cellulosic ethanol. The 55,000 square foot facility would produce cellulosic ethanol by converting municipal solid waste and other industrial pulps into advanced biofuels as well as using seed corn waste. The facility is expected to produce about 3.6 million gallons of cellulosic ethanol per year.