2014 Outlook

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Those with decades of Washington D.C. experience struggle to predict the political scene there nowadays.

But certain issues are on the front burner. How and when they will be resolved is harder to say.  Congress' inability to agree on much, the president's waning popularity and trust and his gearing up to take executive action on issues Congress hasn't addressed provide clues.  Congress is going to have to settle for smaller, less ambitious legislation, rather than the comprehensive two-thousand page monsters. Agriculture can expect the White House and federal agencies like EPA to push even farther beyond statutory authority. This from an administration already bolder and more arrogant than FDR's.

Additionally, Majority Leader Harry Reid jamming through the end of the 60-vote majority for federal appointments has enabled the Democrats to pack the D.C. Circuit with more left-leaning judges. That means when industry associations, nonprofit groups or companies challenge in court what they regard as federal agency overreach, they have a much higher chance of drawing judges with little empathy for business.

While the overwhelming majority of the Farm Bill budget has nothing to do directly with animal agriculture, there are key components that it, although much less than dairy, rice, cotton and sugar, where it is pivotal.

It's no secret by now that mCOOL has been colossally expensive, has failed to ignite with consumers and has drastically hammered Canadian feeders at a time when U.S. packers need all the volume they can get. The WTO has shown absolutely no sympathy for either version of USDA's mCOOL rules. This year another WTO decision will come down and the U.S. will be eying billions of dollars in trade penalties, probably beginning in 2015. Also, the lawsuit from the industry is awaiting a ruling on an injunction within weeks.

The passage of the Farm Bill without addressing mCOOL – and the negotiations around that failure – were quite revealing. Free market livestock and meat industry trade groups felt betrayed, misled and certainly, snubbed. That outcome added to Senate Majority Leader Harry Reid's very public opposition to the Trade Promotion Authority (TPA) or "fast track" bill, made it obvious that the free trade issue for now is dominated by politicians hewing to the anti-trade labor union and environmental policy lines.

This administration has shown little interest in expanding trade until now, regardless of any economic boost. Fast track Trade Promotion Authority (TPA) expired back in 2007. Democrats opposed renewing it when George W. Bush was president, as they knew he would not negotiate trade treaties that protected their only real trade interests: expanding their environmental and global warming philosophies worldwide and protecting not American citizen/consumers' pocketbooks but labor unions fearing competition.

A good TPA is absolutely critical, given that major trade deals are being negotiated: the TPP – Transpacific Trade Partnership and the TTIP – the Transatlantic Trade and Investment Partnership. The U.S. cannot afford to give away such enormous potential.

There is another complication. Japan, whose entry in to the TPP was considered a major coup just months ago, now is threatening to throw a monkey wrench into things by insisting on major protections for its domestic agriculture. Is this a negotiating bluff or a political sop? Sources indicate this problem can be overcome with some time. 

While the Trans-Pacific Partnership negotiations have been slower than hoped, it may be just as well for now, as we may not get TPA unless we get a Republican Senate. That puts more importance on 2014's election.

The legislation authorizing trade promotion assistance to all our red meat exports through the USMEF did make it into the Farm Bill. With beef exports, for example, adding in the neighborhood of $250 value to fed animals, exports have been a key factor in the beef industry's survival during this recession.

Immigration is a real wild card. Several smaller bills dealing with parts of the immigration issue cleared House committees last fall. House Speaker Boehner has shown an inclination to a piece-by-piece approach. The problem is the leftover comprehensive Senate bill. Virtually no Republicans – and probably some Democrats – want to end up on a Conference Committee being forced to accept parts of that bill.

To complicate matters, Speaker Boehner has said he doesn't want to move immigration bills until after the April primary filing deadline. He wants to keep moderate Republicans from facing any more primary challenges from Tea Party conservatives over immigration.

Washington's biggest guessing game now revolves around Obamacare and immigration. Will the Republicans stand pat and allow Obamacare to take down the Democrats' hope of holding the Senate? Or will the Republicans tackle immigration, the only issue potentially big enough to distract the electorate from Obamacare to gain minority votes and donor dollars?

Tax reform is unlikely in an election year and given Sen. Max Baucus, a major reform proponent, likely going off to China to serve as the next U.S. Ambassador to China.

This should be an interesting year.


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