Tuesday May 21st, 2013 • 9:59:12am
WASHINGTON (AP) The organic food industry is gaining influence on Capitol Hill, prompted by its entry into traditional farm states and by increasing consumer demand.
That's not going over well with everyone in Congress.
Tensions between conventional and organic agriculture boiled over this week during a late-night House Agriculture Committee debate on farm legislation that for decades has propped up traditional crops and largely ignored organics.
When Rep. Kurt Schrader, D-Ore., a former organic farmer, offered an amendment to make it easier for organic companies to organize industry-wide promotional campaigns, there was swift backlash from some farm-state Republicans. One lawmaker said he didn't want to see the industry get a free ride and a second complained about organics' "continued assault on agriculture."
"That's one of the things that has caught me and raises my concerns, is that industry's lack of respect for traditional agriculture," said Rep. Austin Scott, R-Ga. He was referring to some organic companies' efforts to reduce the number of genetically modified crops in the marketplace.
At the same time, Scott acknowledged that he and his wife buy organic foods.
Growing consumer interest in organics has proved tough for some Republicans on the committee to ignore. Eight Republicans, most of them newer members of the committee, joined with all of the committee's Democrats in supporting the amendment, which was adopted 29-17.
Rep. Vicky Hartzler, a Missouri Republican who owns a farm equipment business and a corn and soybean farm, said she supported the amendment not only because helping organics is good for agriculture but because many of her constituents eat organic foods.
"Organics are a niche market in agriculture with a growing market share, so it makes sense for me to allow farmers to invest some of their own funds to promote their products," she said.
The amendment would allow the organic industry to organize and pay for a unified industry promotional campaign called a "check-off" that is facilitated by the Agriculture Department but is no cost to the government. These promotional programs have traditionally been limited to individual commodities or crops, producing familiar campaigns like "Got Milk?" and "Beef: It's What's for Dinner."
NEW YORK (AP) Encouraging news about the U.S. economy extended the stock market's rally Friday.
A gauge of future economic activity rose more than analysts had expected, as did a measure of consumer confidence, adding to evidence that the economy is steadily recovering.
Stocks closed higher for a fourth straight week. Indexes are at record levels after surging this year on optimism about the economy and record corporate earnings. The market is also being supported by ongoing stimulus from the Federal Reserve, which is keeping long-term borrowing costs at historically low levels.
"This slow but relatively steady growth, that keeps inflation in check and keeps interest rates low, is actually a pretty healthy environment for the stock market," said Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. "Right now we are very optimistic."
General Motors rose $1.03, or 3.2 percent, to $33.42. The automaker's stock is trading above the $33 price of its November, 2010 initial public offering for the first time in two years.
Northrop Grumman gained $3.17, or 3.2 percent, to $82.19 after the defense contractor said its board approved the repurchase of another $4 billion in stock, and that it plans to buy back a quarter of its outstanding shares by the end of 2015.
The Dow Jones industrial average rose 121.18 points, or 0.8 percent, to 15,354.40. The index gained 1.6 percent for the week and is up 17.2 percent for the year.
The index started higher, then drifted through the rest of the morning. The index added to its gains in the afternoon, climbing about 70 points in the last two hours of the day.
The Standard & Poor' 500 index climbed 15.65 points, or 1 percent, to 1,666.12. The gauge is up 2 percent this week and has gained 16.8 percent this year.
After some lackluster reports on the economy Thursday, including slowing manufacturing and an increase in applications for unemployment benefits, Friday's reports were a tonic for investors.
The Conference Board said its index of leading economic indicators rose 0.6 percent last month after a revised decline of 0.2 percent in March. The index is intended to predict how the economy will be doing in three to six months.
NEW YORK (AP) The price of oil rose to $96 a barrel on Friday on hopes that a steady recovery in the U.S. economy could boost fuel use.
Benchmark oil for June delivery rose 86 cents to close at $96.02 a barrel on the New York Mercantile Exchange. But even with three straight days of gains, oil finished the week down 2 cents.
A gauge of future economic activity in the U.S. rose more than analysts expected, as did a measure of consumer confidence, adding to evidence that the economy is steadily recovering. Traders hope that's a sign of increased demand for fuels like gasoline.
At the pump, gas prices rose 2 cents to an average of $3.62 a gallon. But that average is skewed by ballooning gas prices in the Midwest. Refinery outages in the region have created fuel shortages. The average price in Minnesota and North Dakota jumped 15 cents overnight.
WASHINGTON (AP) The House and Senate Agriculture Committees laid the groundwork this week for reducing the size of the federal food stamp program, approving farm bills that would shrink food aid and alter the way people qualify for it.
The two chambers are far apart on how much the $80 billion-a-year program should be cut, however, reflecting a deep ideological and at times emotional divide on the role of government in helping the poor.
Resolving those differences will be key to passage of the massive five-year farm bill that lawmakers are attempting to push through for the third year in a row. The far-reaching bill costs almost $100 billion annually over five years and would set policy for farm subsidies, rural programs and food aid.
Legislation approved by the House Agriculture Committee late Wednesday would cut about $2.5 billion a year, or a little more than 3 percent, from the food stamp program, which is used by 1 in 7 Americans. A Senate Agriculture Committee bill approved a day earlier would cut less than a fifth of that amount.
At both committee meetings, debate over the food stamp cuts was heated, with defenders of the program saying the bills would take food out of the mouths of children and the elderly. In the House, the discussion turned to the Bible.
Rep. Juan Vargas, D-Calif., quoted the Gospel of Matthew in opposing the cuts: "When I was hungry, you gave me food. When I was thirsty, you gave me drink."
In response, several Republicans talked about their Christianity and said the Bible encourages people to help each other but doesn't dictate what the federal government should do. "We should be doing this as individuals, helping the poor," said Rep. Doug LaMalfa, R-Calif.
Rep. Jim McGovern, D-Mass., offered an amendment to do away with the cuts that was rejected by the panel. "Christians, Jews, Muslims, whatever we're failing our brothers and sisters here," McGovern said.
In the Senate committee meeting, Sen. Kristen Gillibrand, D-N.Y., called votes for the program a moral statement.
FORT WORTH, Texas (AP) In a quest to speed up the boarding process, American Airlines is letting passengers board sooner if they travel lightly.
The airline said Thursday that people carrying just a personal item that fits under the seat no rolling suitcases will be allowed to board before most other passengers.
American said that the change will allow flights to take off sooner, helping the airline improve its on-time performance.
Airline officials say boarding times have increased in the last few years. The airlines have created this problem by cutting back flights, which makes planes more crowded, and also charging fees for checking baggage, which encourages passengers to haul their luggage on board.
The result can be sharp-elbowed competition for scarce bin space that leads to short tempers among passengers and flight attendants.
American tested the new boarding procedure at seven airports earlier this year and began applying it to all flights Thursday. Passengers carrying just a personal item such as a purse, backpack or computer bag that fits under the seat will board right after Group 1 premium passengers and before groups 2, 3 and 4.
The airline said that it will let passengers check a carry-on bag at the gate at no charge. That means savvy travelers will be able to move up in the boarding order and avoid checked-bag fees $25 for the first bag, $35 for a second on flights within the U.S. although they'll have to retrieve their bag at baggage claim after they land.
If it works as designed, light travelers will be seated quickly. Fewer people will be stuck behind the inevitable guy who takes too long to hoist his rolling bag into an overhead bin and position it to his liking.
NEW YORK (AP) Investors nudged the stock market to all-time highs Wednesday despite a handful of disappointing economic reports.
Google's stock topped $900 for the first time after the company announced new versions of its prodcuts, and Macy's rose after beating Wall Street's profit estimates.
The market headed lower at the start of trading, following news that U.S. manufacturing slowed last month and France entered a recession. It turned higher before noon, and was back to breakeven by 3 p.m. A late surge left indexes at record levels.
Even signs of a slowdown haven't stopped the stock market's run this year. Bad news can still shake investors' nerves. But many of them believe reports of sluggish economic growth mean the Federal Reserve will keep pumping money into financial markets.
Expect choppy growth
Terry Sandven, chief equity strategist at U.S. Bank's wealth management group, said most investors have come to expect choppy economic growth, so they take mildly disappointing reports in stride. With companies reporting rising earnings and few appealing alternatives, he sees no reason to sell stocks.
"It's a good backdrop for the market to trend higher," Sandven said.
The Dow Jones industrial average rose 60.44 points to close at 15,275.69, an increase of 0.4 percent. It had been down as much as 40 points in early trading.
The Standard & Poor's 500 index gained 8.44 points to 1,658.78, up 0.4 percent. Both closed at all-time highs.
"Yes, we're at all-time highs, but valuations are still attractive," Sandven said. The S&P 500 is trading at 15 times earnings for 2013, in line with the historical average of the closely watched price-to-earnings ratio.
Tepid economic growth also keeps interest rates low, which encourages investors to buy dividend-paying stocks instead. More than four out of every 10 companies in the S&P 500 pay a higher yield in dividends than U.S. government bonds pay in interest, according to Sandven.
ENID (AP) Kansas-based Koch Industries has announced plans to build a new fertilizer plant at its Koch Nitrogen facility in Enid.
Koch said in a news release Wednesday that it will invest $1 billion and increase fertilizer production at the facility by more than 1 million tons per year. The company says construction is expected to begin during the fourth quarter of 2014 and the plant is to be operational in 2016.
WASHINGTON (AP) The Transportation Department says fewer flights arrived on time and more were canceled in March than a year ago.
On the other hand, fewer passengers are lodging formal complaints against the airlines.
The government said Wednesday that 79.8 percent of flights arrived within 14 minutes of schedule in March. That's down from 82.2 percent in March 2012.
Hawaiian Airlines and Virgin America had the best on-time ratings, while regional carrier ExpressJet and JetBlue Airways had the worst.
WASHINGTON (AP) The Senate Agriculture Committee on Tuesday approved a massive five-year farm bill that would cut spending while also creating new subsidies for farmers.
The legislation approved 15-5 includes concessions to Southern rice and peanut farmers, thanks to a new top Republican on the committee, Mississippi Sen. Thad Cochran. The bill eliminates $5 billion in annual subsidies, called direct payments, that are important to those Southern farmers but makes it easier for them to receive alternate subsidies if prices dip.
The Senate bill calls for a total of roughly $2.4 billion a year in cuts, while a House version to be considered Wednesday would save $4 billion out of almost $100 billion annually. Those cuts include more than $600 million in yearly savings from across-the-board cuts that took effect earlier this year.
Much of the savings in the House and Senate bills comes from eliminating the direct payments, which are frequently criticized because they aren't tied to production or crop prices. Part of that savings would go toward deficit reduction, but the rest of the money would create new programs and raise subsidies for some crops while business is booming in the agricultural sector.
Republican Sen. Pat Roberts of Kansas, the top Republican on the committee in the last session of Congress, criticized the higher subsidies for Southern farmers, which are essentially a lower threshold for rice and peanut subsidies to kick in. Roberts said the new policy could guarantee that those farmers profits are average or above average.
"I simply don't know how to justify a program that pays producers more than the cost of production and essentially becomes nothing more than another income transfer program, not a risk management tool," Roberts said.
Under the House bill, authored by Rep. Frank Lucas, R-Okla., those subsidies for rice and peanut farmers could kick in even sooner. These "target price" programs allow farmers to receive subsidies if prices fall below a certain threshold. It hasn't been used much in recent years because of record crop prices, but is intended to be a safety net if prices collapse.
OKLAHOMA CITY (AP) The Oklahoma Senate gave final legislative approval on Tuesday to a $7.1 billion general appropriations bill to fund state government for the upcoming fiscal year, overcoming the objections of Democrats and some Republicans who say the plan's priorities are misguided.
The Senate voted 28-20 for the bill, which reflects an agreement between the governor and Republican legislative leaders. Eight Republicans joined the Senate's 12 Democrats in opposing the bill, which required 25 votes for passage. It now heads to the Gov. Mary Fallin, who is expected to sign it.
The bill increases spending by nearly $270 million over the current year's budget, with funding growth focused mostly on education, health care and human services.
"This is a responsible and fiscally conservative budget, with increases targeted to core government services education, infrastructure and human services," Senate President Pro Tem Brian Bingman said in a statement.
Much of the opposition in the Senate centered on a $30 million appropriation to a fund designed to pay for improvements to state-owned buildings that was a priority of House Speaker T.W. Shannon, R-Lawton. The money will be overseen by a commission that will develop a prioritized list of state properties in need of repair and state assets that could be liquidated to help pay for projects.
"We, as a body, can't say how we're going to spend $30 million," said Senate Democratic Leader Sen. Sean Burrage, D-Claremore. "I think this budget demonstrates bad business and misguided priorities."
Several Republican members voiced concern that the money could be used to help finish construction of the American Indian Cultural Center and Museum in Oklahoma City. The total costs of the museum, located along the Oklahoma River at the intersection of interstates 35 and 40, already have been estimated at $171 million.
Senate Appropriations Committee Chairman Sen. Clark Jolley, who answered questions about the bill on the floor, acknowledged that some of the $30 million could be used on the project because it was a state-owned entity. But he described that possibility as a "phantom menace" because of legislative opposition to spending additional money on the project.
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