First the good news: a farm bill passed the House of Representatives on Thursday, suggesting that -- two years after the last farm bill expired -- a replacement may be nigh. On the bright side, the House's bill could circumvent silly food crises like last year's milk scare. On the dark side, it would also pull the legs out from millions of Americans, leaving them without sufficient funds to feed themselves.
This isn't to say that the Farm Bill, which passed the house by a vote of 216 to 208, isn't generous: it's packed with about $195 billion in price supports, crop insurance, and subsidies that will largely benefit huge agribusinesses. So, in other words, the farm bill, which has been delayed for two years, is showing up late, and is packed with -- no pun intended -- a whole lot of pork.
But for poor people, the bill is a lot less generous. It doesn't contain any money for food stamps. At all.
In 2012, 46.6 million Americans took part in the food stamp program -- AKA the Supplemental Nutritional Assistance Program, or SNAP -- receiving an average of $133.14 per month. As The Atlantic's Derek Thompson reported, that's about 73 percent of the monthly food cost for the average man -- assuming that he's shopping on the USDA's "thrifty" plan.
Doesn't "thrifty" sound better than "hungry"?
This move doesn't just affect the families that rely on food stamps. After all, as the numbers above would suggest, families on food stamps aren't squirreling away their benefits. The $74.3 billion that the government currently distributes in food stamps goes back into the economy almost immediately, creating jobs in supermarkets, discount stores, fast food establishments, farms, and nearly every other industry of the country that deals with food. (This, incidentally, helps explain why a nutritional program is part of a farm bill.) In other words, by cutting $74.3 billion out of the budget, Congress is also cutting $74.3 billion out of the economy, a move that will likely have major ripples.
It isn't hard to see why many Republicans want to rein in food stamps. Between 2007 and 2011, the number of people enrolled in the program increased by 70 percent, and federal expenditures on food stamps are now the highest that they've ever been. Then again, during the same period, the unemployment rate increased by 97 percent. And, while unemployment has dropped in the last two years, the majority of the jobs that have been created have been low-wage and low-benefit -- in short, the kinds of jobs that can leave hardworking Americans struggling to put food on the table for their families.
Republican lawmakers in the House claim that they will pass a separate bill specifically allocating money for food stamps. However, given that farm bills tend to be a compromise between the farm subsidies that Republicans prefer and the nutrition benefits that Democrats champion, it's hard to imagine that Republicans will be inclined toward generosity when they get around to allocating money to SNAP.
The House's farm bill probably won't ever become law. To begin with, it's doubtful it could be reconciled with the Senate's farm bill, which guarantees food stamp funding. For that matter, President Obama has promised to veto any bill that doesn't address food aid -- and with the bill having passed by a squeaky 8-vote margin with 11 House members not voting at all, the bill's supporters have no chance of being able to find the two-thirds majority necessary to override a veto. Still, as a glimpse into the worldview -- and priorities -- of congressional Republicans, the farm bill gives a lot of food for thought.
House GOP's Attempt to Gut Food Stamps Would Gut Economy, Too
The Big 3 carmakers get plenty of press, but what about the carmaker makers? Enter Johnson Controls, a deceptively under-recognized name for its contribution to one of the most consumer-focused industries.
Johnson Controls(JCI) makes much of that cushy seat-foam that lets you ride in cars in comfort. The company is the world's largest supplier of "seating solutions," a segment that pulled in $15.5 billion in sales for the company in 2012. Johnson Controls also makes products tagged to the construction industry such as heating, air-conditioning, ventilating and security systems.
The company has broadened its reach well beyond its roots. In 1885, Warren Johnson, developer of the first electric room thermostat, founded Johnson Controls to sell his invention. Johnson Controls was also first to market with lithium ion batteries for hybrid cars, and is currently the biggest supplier for battery technology for vehicles. It also makes driver information display panels, floor consoles and those garage-door clickers that are integrated to the interior of the car.
You can't tell by the company's name what it does, exactly. CHS Inc., however, has its hands in a wide range of lucrative industries: petroleum products, chemicals, food and financial services. The company is owned by United States agricultural cooperatives and has been ever since it was founded in 1929 as the North Pacific Grain Growers. In 2003, it changed its name from Cenex Harvest States Cooperatives to CHS Inc., keeping Cenex as the name for its energy business, and offering preferred stock and non-voting ownership to investors.
Today, the company is not necessarily the No. 1 player in any of the categories it's involved in, but sweeps in at second or third place in a variety of categories. CHS is the nation's third largest U.S. grain exporter, and the third largest U.S. propane retailer. It has a joint venture with Ventura foods, a major manufacturer of bulk margarine. And while it is by no means up there with the Exxons of the world, CHS sells more than 3 billion gallons of refined fuels such as gasoline and diesel.
(Pictured is CHS's propane innovation from weed control to irrigation.)
It's got a pretty hands-off name, but United Technologies(UTX) is a manufacturer with many arms, and it oversees some of the U.S.'s most prominent brands. Sure, Boeing(BA) and Airbus make the news when they win or lose bids, but United Technologies owns Pratt & Whitney, the company that powers many of the planes those companies produce. And, of course, we all know Otis, the iconic elevator brand, which is a United Technologies company too. Manufacturer Sikorsky is another part of United Technologies' profile. And while Sikorsky may not ring a bell, it made the famous Black Hawk helicopters for the U.S. military.
Even less sexy but more pervasive, perhaps, is United Technologies bread and butter -- its climate, controls and security unit. The division made up the largest portion of the company's net sales in 2012 -- $17.1 billion out of $57.7 billion total.
Behind the drugs you buy is an entire industry built on supplying, pricing, and subsidizing those meds, which is where AmerisourceBergen (ABC) lives. The megapharma company was formed in 2001, when Amerisource Health Corporation merged with Bergen Brunswig Corporation. Today, the resulting hybrid handles 20% of all of the pharmaceuticals sold and distributed throughout the United States, and employs 13,400 people full-time.
The pharma industry has undergone consolidation, with companies forming even larger units to prepare for health care reform, when the government will become an even more powerful drug-purchasing competitor. So AmerisourceBergen signed a three-year contract with Express Scripts, which had just bought Medco Health. Both Express Scripts and Medco are pharma suppliers and consultants. In 2013, AmeriSourceBergen penned a deal with Walgreen(WAG) and Alliance Boots. The deal could give the triad the purchasing power to buy more generics than any other purchaser in the industry.
Archer Daniels Midland Company has been around since the turn of the century, when George Archer and John Daniels went in together on a business based on crushing linseeds. ADM(ADM) has flown under the radar aside from a press spike when it got caught up in a price-fixing scandal during the 1990s, which was featured in the 2009 movie "The Informant."
By that time, the company had somewhat righted its reputation -- it was ranked the Most Admired company in the food Industry on Fortune's 2009, 2010, and 2011 lists.
ADM is known primarily for its involvement in the corn industry, but its reach extends far beyond that. ADM still crushes linseeds and other oilseeds, for example. In fact, strong global demand for those products protected the company this past year from drought problems in the U.S. that hurt harvests and lowered levels on the Mississippi River, a major ADM shipping channel.
ADM is also one of the largest milling companies anywhere, processing 20 acres of wheat per-minute, all over the world. If you've got a sweet tooth, ADM is one of the largest cocoa product producers and owns roughly 16% of the ground cocoa market. If you raise pig, horse, fish or any of several other animals, ADM cranks out the corn- and soy-based products to feed them.
McKesson was around during the old days of the American medical industry. In 1833, John McKesson and Charles Olcott formed the company in New York, starting out stocking medical ships coming to port with chests full of herbs, roots and spices from Pennsylvania Shaker communities.
Medical services, of course, have come a long way, and so has the company, which is now the largest pharmaceutical distributor on the continent. McKesson(MCK) peddles more than 150,000 medical-surgical products, including bandages and exam tables, and, it claims, offers healthcare solutions that touch "more than 160 million covered lives."
No more a conduit for Shaker spices, the industry today involves selling a much murkier product called "health solutions," which guides clients through the coverage levels they should offer, among other things, and "provider technologies," which aim to help clients deal with the digitization of medical records. Over half of all "health systems" in the United States use McKesson's technologies in this category. It's lucrative -- McKesson nets more than $123 billion in annual revenue.
Also, McKesson is building a medical robot army. Every year, according to the company, "More than 300 Robot-Rx pharmacy robots deployed in North America dispense 350 million medication doses error-free." The future of medicine, ladies and gentlemen.
Lurking behind the health care debate are, of course, the companies that provide health care. Though it sounds like some kind of futuristic supercontinent, Humana(HUM) is actually the fourth largest provider of health care in the United States, with nearly 30 million policyholders.
The company, with its headquarters in Louisville, Ky., is poised to thrive as health care reform shapes the industry. Humana brought on 2,900 new care management professionals in 2012. Though costly, the price of that and other operational solutions should be offset by other areas in which the company made a profit. For example, the flu, though bad for your respiratory system, was good for Humana's bottom line. Incremental costs from increased hospital admissions, thanks to the flu, should earn Humana $75 million for 2012 and 2013.