Judge Limits CRP Grazing

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A federal judge ordered the U.S. Dept. of Agriculture and the National Wildlife Federation to work out a compromise to allow limited haying and grazing while still protecting conservation. The decision may also have a significant impact on whether or not USDA will decide to allow for penalty-free early outs for current Conservation Reserve Program (CRP) contract holders.

United States District Court Judge John Coughenour ruled to allow livestock producers to utilize at least 2.5 million acres of non-critical CRP land for haying and grazing, rejecting the calls for a ban of USDA's Critical Feed Use (CFU) initiative. 

July 17 the U.S. District Court for the Western District of Washington held a hearing on a temporary restraining order on the use of CRP acres for Critical Feed Use.

Previously on July 8, the judge had ordered a 10-day restraining order that halted all critical feed use activity underway. Farm Service Agency officials indicated at the time of the injunction, contracts approved for the program represented a total of 2.1 million acres, with approximately 1.7 million planned for haying and grazing use. A total of 24 million acres was initially eligible for the program.

The judge gave both sides until Tuesday, July 22, to work out elements of the compromise. He promised to issue a modified preliminary injunction on the same day implementing an adapted version of the critical feed use program. Until his final ruling is released, the Temporary Restraining Order remains in place and all current haying and grazing practices must cease.

The plaintiffs have demonstrated a "strong likelihood that they will succeed on their claim that the FSA violated the National Environmental Policy Act (NEPA), in that it acted arbitrarily and capriciously and not in accordance with law," the judge said.

In declining to extend the injunction, Coughenour stated, "There are substantial competing hardships, whose impact could be devastating to citizens who trusted that their government was acting legally in implementing the Critical Feed Use initiative, as well as to the nation and the world economy at large, if the Court issues the injunction that Plaintiffs urge.•bCrLf 

Instead, he ordered the NWF and USDA to come up with a compromise plan designed to mitigate the hardships of livestock producers, suggesting that at least 2.5 million acres of CRP land be released for haying and grazing which is the acreage the judge said FSA Deputy Administrator John Johnson predicts will be the total number of acres actually affected by this initiative.

The judge criticized the government's environmental impact analysis and part of the compromise may include a provision that would forbid the Secretary from reviving this program without first conducting an Environmental Impact Statement (EIS) or a Programmatic EIS. Another potential compromise provision may forbid participation by land that has been hayed or grazed within a certain number of years.

Cattle producers have already invested over $800,000 in equipment, water, leases and fencing according to the submitted declarations to the National Cattlemen's Beef Assoc. used in filing a friend of the court brief supporting USDA's actions. The American Farm Bureau Federation added that more than 4,000 livestock producers relied on USDA's announcement about the new program.

The National Pork Producers Council also signed onto the friend of the court brief. NPPC board member Doug Wolf, who raises both hogs and cattle on his 1,300 acre farm in Lancaster, Wis., said, "This is a significant victory for pork producers who face not only losses as a result of volatility on grain markets, but tremendous uncertainty over securing adequate supplies of feed. The court's decision to allow this land to be hayed and grazed could free up an estimated 105 million bushels of corn, or a ten to fifteen percent increase in carry over stocks of grain, providing the certainty producers need to continue operating.•bCrLf

CRP early outs

The ruling may hinder USDA's decision to allow for penalty-free early out from CRP contracts. For weeks U.S. Secretary of Agriculture Ed Schafer and other USDA officials have indicated a decision on the release is "imminent."

Jonah Ford, grain analyst at Greenrush Capital Management, explained the latest judicial battle with the Critical Feed Use Program is a negative precursor in future USDA actions regarding CRP. "From a legislative point of view it would be easier to get rid of the ethanol mandate than change the CRP program," he said. He added in the near-term a change isn't going to relieve pressure on crop prices.

Johnson said the latest CRP litigation will be part of the consideration Schafer will use in his CRP decision and Johnson stated Schafer "hopes to make a decision in the near future."

A warning sound was blasted by 15 environmental groups in a letter to Schafer stating allowing the nearly three fourths of the land enrolled in the program back into production would result in a "loss of billions of dollars of taxpayer investment in conservation on these lands." The groups wrote that because the lands are marginal for crop production, "the impact on aggregate commodity supplies and prices would be modest."

Others, such as the governor of South Dakota, urged for specifications that would limit the impact of a decision. Gov. Michael Rounds asked Schafer to limit early out terminations only on those contracts set to expire in 2009.

The latest crop production estimates from USDA confirmed continued tight stocks ahead and the need for additional acres in 2009.

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