Remarks made last week by the chairman of Nestle about the use of corn for biofuels production were not only wrong but dangerous, the president of the National Corn Growers Association said.
“It is scandalous, ludicrous and highly irresponsible for the chairman of a global conglomerate that tripled its profits last year to talk about higher corn prices forcing millions into starvation,” said NCGA President Bart Schott. “Perhaps if Nestle is so concerned about food prices, its board will consider putting more of their $35.7 billion in 2010 profits back into poor communities. Just their profits alone represent more than half the entire farm value of the 2010 U.S. corn crop.”
Schott was reacting to comments by Nestle Chairman Peter Brabeck-Letmathe at a meeting last Tuesday of the Council on Foreign Relations. Schott also challenged Brabeck-Letmathe to take the time to study facts and figures before making ridiculous comments about an industry that he clearly knows little about, nor bothered to study up on.
The U.S. Grains Council received initial reports that Friday’s earthquake and the subsequent tsunami may have caused significant damage to many of Japan’s agricultural facilities and production areas. While the extent of the damage is not yet known, it will likely impact grain trade.
“Some ports in northern Japan, Kushiro, Hachinohe, Ishinomaki and Kashima, were hit by the tsunami. We’ve heard some feed mills and livestock operations have also been damaged by the tsunami. Those facilities were not severely damaged by the earthquake itself but were affected by the tsunami,” said Tommy Hamamoto, USGC director in Japan. “It is too early to tell what effect this will have on Japan’s agricultural sector, but it could be of significance.”
American Farm Bureau Federation President Bob Stallman wrote to members of the House today urging them to support passage of H.R. 872, the Reducing Regulatory Burdens Act of 2011, and sign on as co-sponsors.
“In addition to agricultural producers, a significant number of stakeholders will be impacted by a new federal requirement under which the Environmental Protection Agency and delegated states must issue Clean Water Act National Pollutant Discharge Elimination System general permits for certain pesticide applications,” Stallman told lawmakers in his letter. “This unprecedented action is the result of a 2009 decision of the 6th Circuit U.S. Court of Appeals.”
Stallman called on Congress to take action before the permit requirement becomes final.
“We are concerned that due to unrealistic deadlines for state-delegated implementation and compliance many states will not meet the court ordered deadline of April 9, 2011,” Stallman wrote. “Adding to the uncertainty, EPA has yet to release a final permit. This leaves pesticide users without time to fully understand or come into compliance with the permit and further increases their potential liability.”
The overall mix of crop production across the country this year is likely to be the same as last year, according to the Wall Street Journal. Prices of all commodities are soaring, and there shouldn’t be a big shift from one crop to another.
Analysts expect next month’s planting intentions report by the Agriculture Department will show only minor changes, which could help the price rally for farm commodities.
It will also prove difficult to put more cropland into production. Gerald Bange, chairman of USDA’s World Agricultural Outlook Board, signaled at AFBF’s annual meeting in Atlanta in January that 10.7 million acres could move into production this year, but some analysts believe this land won’t move into use because it is often less productive.
The Agriculture Department’s dramatic 9 percent cut in the estimate of corn stocks puts the stocks-to-use ratio at the lowest level since the Great Depression, but Agriculture Secretary Tom Vilsack said he believes there will be enough corn for food, feed, fuel and exports.
Joe Glauber, USDA’s chief economist, said corn stocks will remain tight until 2012 and it will take time to rebuild. The stocks-to-use ratio for the 2010-2011 marketing year, which runs through Aug. 31, is estimated at 5 percent, the lowest since 1995-1996. In 1936-1937, during the Great Depression, the stocks-to-use ratio was the lowest ever at 4.5 percent. The average ratio is 13 percent.
Lower supplies and higher demand continue to play a major role in price increases for wheat and corn in the Agriculture Department’s February crop report released today. USDA made no changes in the wheat, soybeans and cotton stocks estimates, but corn stocks were reduced to 675 million bushels from 745 million bushels in the January estimate.
This puts corn stocks at a very tight level of 5 percent, the same as the record level of 5 percent that occurred in the 1995-96 marketing year. Tight supplies are driving up corn prices, with USDA projecting the 2010-11 marketing-year average farm price to be $5.05 per bushel to $5.75 per bushel, up from $4.90 to $5.70 in the January report.
The Agriculture Department’s Animal and Plant Health Inspection Service on Thursday announced its decision to grant non-regulated status for alfalfa that has been genetically engineered to be resistant to the herbicide commercially known as Roundup.
“After conducting a thorough and transparent examination of alfalfa through a multi-alternative environmental impact statement and several public comment opportunities, APHIS has determined that Roundup Ready alfalfa is as safe as traditionally bred alfalfa,” Agriculture Secretary Tom Vilsack said. “All of the alfalfa production stakeholders involved in this issue have stressed their willingness to work together to find solutions. We greatly appreciate and value the work they’ve done so far and will continue to provide support to the wide variety of sectors that make American agriculture successful.”
After releasing a final environmental impact statement in December 2010, USDA took another step to ensure that this issue received the broadest examination before making its final decision. USDA brought together a diverse group of stakeholders to discuss feasible strategies for coexistence between genetically engineered, organic and other stakeholders. The stakeholders helped to identify areas of consensus; issues where the group disagreed and opportunities for further dialogue; and areas where USDA could—or should—play an important and helpful role.
Farm Bureau is pleased with the announcement, as it clears up uncertainty for producers and allows them to move forward with planting decisions.
Ag blogger Emily Zweber explains in this post, what the deregulation means for her family farm.
The Problem with Roundup Ready Alfalfa
By Rob Jones
Round-Up Ready alfalfa? When I first heard about this I was puzzled why a company would risk so much investment in a crop that is characterized by taking care of itself when it comes to weeds. Sure it takes a while to get it established, but cover-cropping, extra care weeding before planting, planting into stubble, nurse cropping, can all help minimize weed pressure while getting started.
As for prolonging alfalfa stands, I think there is a misconception that weeds kill out alfalfa. If an alfalfa stand begins to thin, it’s because of soil imbalances, not weeds, otherwise weeds would take over immediately.
Honestly, contamination is a serious issue. So what is the answer to the dilemma?
In the state of Queensland, Australia, floods spread across an area the size of France and Germany combined.
Wheat rose to the highest in almost five months as floods may hamper grain shipments in Australia and cold temperatures threatened U.S. crops. Scorching heat in South America is cutting harvest forecasts in one of the world’s key farm belts according to the Wall Street Journal.
Despite a previous committment to full deregulation of biotech alfalfa, Sec. Tom Vilsack (right) is now entertaining the idea of releasing the crop with various restrictions.
Despite the USDA’s own proposal from last year, Sec. Vilsack’s department is now reversing course on deregulating Roundup Ready Alfalfa. According to the Department’s environmental review, the alfalfa was judged substantially equivalent to other varieties without red flags for regulators. But instead of taking the news as a green light to let the alfalfa on the market, as they have with other biotech plants like corn, USDA is waffling.
Now, the deregulation of Roundup Ready alfalfa could be accompanied by restrictions on seed production and, in some cases, cultivation of the hay itself, should USDA decide on implementing one of two preferred alternatives presented in a court-ordered environmental review of the crop.
The Wall Street Journal has strong words about the decision to “invite representatives from the biotech and organic industries to USDA in the coming days to discuss how the two farming methods may coexist.”
By suggesting that industry and activist groups negotiate compromises in advance of the final ruling on whether to deregulate, Mr. Vilsack is using the Department’s regulatory authority as leverage against businesses whose products are overwhelmingly regulated by USDA.
It gets worse. Mr. Vilsack’s authority in the regulatory decision-making process is based on the assumption of sound scientific data. But according to people who attended the meeting last Monday, the USDA Secretary told the assembled groups that science itself is subjective, and that he could have three different groups bring him three different supposedly scientific opinions.
The Agriculture Department’s December crop report released Friday shows continued tight supplies of corn, cotton and soybeans that will help drive planting decisions next year, according to the American Farm Bureau Federation.
“Grain stocks weren’t reduced as much as we had expected, with USDA only making minor adjustments to the corn, wheat and soybean balance sheets,” said John Anderson, AFBF economist. “USDA did, however, lower its cotton stocks forecast to 1.9 million bales, compared to 2.2 million bales in last month’s report. That’s a drop of 300,000 bales in ending stocks, which is a significant drop given how low stocks already were.”
The USDA report indicates supplies of the three crops will be tight going into the new year. That points to strong demand, higher prices and an increase in corn, cotton and soybean plantings in 2011, according to Anderson.
Higher corn prices haven’t put a dent in profits for ethanol plants thanks to strong demand for the biofuel and higher prices for dried distillers grain.
Ethanol plants in Iowa are earning a profit of about 27 cents for every gallon produced, compared to a loss of 6 cents per gallon as recently as July, according to Ag Trader Talk, an online grains-information service in Clive, Iowa.
“If you’re not making money in ethanol right now, you have a problem with your production process,” said Jason Ward, an analyst at Northstar Commodity Investments LLC in Minneapolis. “They’ve got three of the four main components working in their favor.”
Colorado’s corn harvest is well under way with farmers reporting excellent yields across much of the state.
USDA reports 1.21 million acres of corn production in Colorado, an increase of 220,000 acres over 2009, according to the Colorado Corn Growers Association.
“Yield estimates are generally very good from farmers that finished harvesting or are in progress. I think we’ll have statewide yield averages that surpass the USDA estimate,” said Mark Sponsler, executive director for CCGA.
“U.S. corn farmers will be able to meet all demands for food, feed, fuel and exports,” the National Corn Growers Association said in response to the U.S. Department of Agriculture’s reduced projection for 2010 corn production. “The harvest of 12.7 billion bushels, the third-largest crop in history, will still provide a surplus, or ending stocks, of nearly 1 billion bushels.”
Following the EPA's decision, filling stations will now be able to sell gasoline blended with up to 15% ethanol.
The Environmental Protection Agency’s approval of E15 (gasoline blended with up to 15 percent ethanol) for model year 2007 and newer cars and light-duty trucks is a step toward strengthening America’s commitment to home-grown energy, according to the American Farm Bureau Federation.
“Ethanol is a clean-burning, home-grown renewable fuel. Increasing the percentage of ethanol in the domestic gasoline supply moves our nation one step closer to greater energy independence,” said AFBF President Bob Stallman. “It also promotes job creation in rural America.”
The decision announced by EPA Wednesday applies to 43 million vehicles or about 20 percent of the current U.S. duty fleet. A second decision by EPA on the use of E15 (for model year 2001 to 2006 cars and light-duty trucks) will be made after additional Department of Energy testing is completed toward the end of the year. A total of 86 million cars/light-duty trucks or about 54 percent of all vehicles on the road today are model year 2001 to 2006.
Record U.S. agricultural exports are providing an unexpected boost to President Barack Obama’s goal of doubling U.S. exports by 2015. Farm exports from the U.S., the world’s largest grain shipper, may top the 2008 record of $115.3 billion in 2011, according to Joe Glauber, the Agriculture Department’s chief economist.
The boom is expected to continue through 2011, with wheat prices predicted to average $7.28 per bushel and corn prices forecast to be $5.83 per bushel, according to a Bloomberg News survey.
“It’s going to be the best year American farmers have had in two and a half decades,” said Dennis Gartman, an economist and editor of the Gartman Letter in Suffolk, Va. The next big winners are obviously the fertilizer companies and farm-equipment manufacturers. The winner no one seems to be talking about is small banks in the Midwest.”
The EPA yesterday approved a request by Growth Energy, and ethanol industry trade group, to increase the amount of ethanol blended into regular unleaded gasoline from 10 to a maximum of 15%. The approval of the ‘green jobs waiver’ will allow companies to blend up to 15% ethanol into motor vehicle fuel creating a blend known as E-15.
The new standard applies only to 2007 and newer model cars and trucks. EPA is expected to decide whether to approve E15 for vehicles 2001 to 2006 in November.
According to Growth Energy, the group that proposed the new standard, the decision is the first move to help eliminate the ‘blend wall’ or the point at which no more ethanol can be used by the U.S. fleet due to the arbitrary 10% blend limit.
From the USDA Agriculture Research Service: A group of agricultural scientists reported in today’s issue of the journal Science that corn that has been genetically engineered to produce insect-killing proteins isolated from the soil bacterium Bacillus thuringiensis (Bt) provides significant economic benefits even to neighboring farmers who grow non-transgenic varieties of corn.
“Modern agricultural science is playing a critical role in addressing many of the toughest issues facing American agriculture today, including pest management and productivity,” said Agriculture Secretary Tom Vilsack. “This study provides important information about the benefits of biotechnology by directly examining how area-wide suppression of corn borers using Bt corn can improve yield and grain quality even of non-Bt varieties.”
The uncertainty continues over the planting of Roundup Ready sugar beets in 2011.
A federal judge in California has ruled that USDA has once again violated a federal environmental law by allowing companies to plant Roundup Ready sugar beet seedlings.
In August, Judge Jeffrey White ruled that USDA was wrong in deregulating Round Ready sugar beets without completing a proper environmental impact statement. USDA agreed to do the study, saying it would take at least two years to complete. Meanwhile, in September USDA said that it would allow the industry to begin planting Roundup Ready seedlings, called “stecklings”. Environmental groups filed a complaint against USDA, seeking an injunction to stop the agency from allowing the stecklings to be planted and the judge has agreed.
Secretary of Agriculture Tom Vilsack expressed frustration over the latest ruling. Vilsack says the uncertainty over whether farmers will be allowed to plant Roundup Ready beets is stressing farm families who grow the crop. He suggests that environmental groups and those who favor biotechnology are going to have to figure out a way to co-exist, as opposed to the current climate, which is—as Vilsack puts it—“winner-take-all”.
No country has disrupted grain markets over the years more dramatically than Russia — perpetrator of the infamous “great grain robbery,” when the Soviet Union secretly bought up a quarter of U.S. wheat stocks after a poor harvest in 1971.
Even with the embargo, USDA estimates food prices will rise 15 percent in Russia over the next year. Clayton Yeutter, who served as secretary of agriculture in the first Bush administration, calls the embargo “singularly unhelpful” in a period of economic uncertainty.
Even as prices rise, China and India are sitting on very large wheat stocks — a reflection of policies heavily tilted toward protecting domestic consumers. India’s surplus stocks are twice the government’s desired level and China’s amount to 43 percent of its total yearly grain production, according to USDA estimates. China has discouraged exports since 2008 and imported some wheat this year. Indian exports are negligible because the government has been supporting the price of wheat paid to farmers at above the world price.
Corn Prices hit a two year high at the close of markets on Friday. Estimates of the size of this year’s crop are being cut an pushing prices up even higher according to MeatingPlace.com. Prices closed in Fridays market at $5.12 to $5.32 a bushel according to data collected by the Chicago Mercantile Exchange.
The rising corn prices pushed protein stock prices down. As much as a 2.73% decrease in protein stocks has been seen with the increase in corn prices.
In an effort to help clarify the labeling of food products for consumers, the Corn Refiners Association Tuesday petitioned the Food and Drug Administration (FDA) to allow manufacturers the option of using “corn sugar” as an alternative name for high fructose corn syrup.
“Consumers need to know what is in their foods and where their foods come from and we want to be clear with them,” said Audrae Erickson, CRA president. “The term ‘corn sugar’ succinctly and accurately describes what this natural ingredient is and where it comes from—corn.”
According to CRA high fructose corn syrup is not high in fructose when compared with other commonly used nutritive sweeteners, including table sugar, honey and fruit juice concentrates, according to CRA.
According to Chris Clayton of DTN,
U.S. Sen. Dick Lugar, R-Ind., issued a news release Wednesday stating he welcomed the decision by the Iowa Farm Bureau calling for an end of direct subsidy payments to farmers and basing farm programs on revenue-based insurance.
“I am encouraged by Iowa Farm Bureau endorsing farm program reforms. All farmers face risks, not just those covered by our current programs. The next farm bill debate in 2012 will require us to respond to our runaway deficit and cut costs. Revenue insurance is the best way to do that while enhancing trade opportunities and not distorting market prices,” Lugar said.
In the 2002 and 2007 federal farm bill debates, Lugar proposed scrapping antiquated programs and replacing them with crop specific revenue-based and whole farm revenue-based insurance. His 2007 Farm, Ranch, Equity, Stewardship and Health (FRESH) Act (http://lugar.senate.gov/…) would have phased out current farm programs that benefit roughly half of U.S. farmers and instead offered all U.S. farmers options that protected against severe losses of revenue on an annual basis. The changes would save billions of taxpayer dollars.
Lugar’s amendment did not pass, but was supported by nearly four-fifths of the Senate, an increase from three-fifths in 2002.
In a world where the importance of a high-protein diet is widely recognized, consumers value the meat they eat and recognize the role it plays in keeping them healthy and strong, according to Darrin Ihnen, president of the National Corn Growers Association, who said many people don’t understand the role of grain in livestock production.
“At National Corn Growers Association, many of our grower-leaders, myself included, have livestock feeding operations,” said Ihnen. “I see the value every say of using corn as a natural, healthy and nutritious feed for our animals. Likewise, as someone involved in the industry, I see a lot of the myths that are out there about grain feed.”
The Hudson Institute’s Center for Global Food Issues issued a study in 2007 that found that beef produced with grains produces 40 percent fewer greenhouse gas emissions and saves two-thirds more land for nature compared to organic grass-fed beef. When people are concerned about acreage and land use, that’s a good thing.
Texas AgriLife Research scientists have discovered a resistance gene to one of the most plaguing wheat viruses today. Studying a Colorado wheat variety, scientists identified the gene providing resistance to wheat streak mosaic virus.
The virus is one of the most common wheat viruses found in the 75 million acres of wheat in the US. Wheat curl mite is the vector of this plaguing virus; no chemicals are labeled to control the mite, making gene resistance to the virus a significant discovery.
The research included study of Kansas wheat variety RonL, Nebraska variety Mace as well as TAM 11 and TAM 112. Dr. Jackie Rudd, wheat breeder of the AgriLife Research team, said wheat has 21 pairs of chromosomes and one of those has potential resistant to wheat streak mosaic virus. The Wsm2 gene as it will now be called, offers scientists the potential to develop resistant wheat varieties much quicker through accelerated breeding and increased resistance levels.
Federal District Court Judge Jeffrey White revoked the Agriculture Department’s approval of Roundup Ready sugar beets Friday because the department had not adequately assessed the environmental consequences before approving them for commercial cultivation.
The decision appears to effectively ban the planting of biotech sugar beets, which make up 95 percent of the crop, until USDA prepares an environmental impact statement and approves the crop again, a process that could take two years. The decision bans planting of biotech sugar beets next spring, but does not impact this year’s crop, which is planted and set for harvest this fall.
Today’s Wall Street Journal reports that the decision won’t disrupt sugar supplies this year, but could cause headaches for food companies after that. Food companies are uncertain where they will source their sugar beets after next year.
The USDA Farm Service Agency (FSA) reminds producers that the deadline to enroll in the Conservation Reserve Program (CRP) general sign-up is quickly approaching. Farmers and ranchers have until close of business on Friday, Aug. 27, 2010, to offer eligible land for CRP’s competitive general sign-up. Applications can be completed by land owners at the FSA county office where their farm records are maintained. The 2008 Farm Bill authorized USDA to maintain CRP enrollment up to 32 million acres.
In addition to producers signing up for the first time, CRP participants with existing contracts that are scheduled to expire on Sept. 30, 2010, may elect to re-enroll under a new 10-15 year contract. Cropland that is highly erodible, or within a national or state Conservation Priority Area, or is covered under an expiring CRP contract is generally eligible to be enrolled into CRP, provided all other eligibility requirements are met.
USDA announced today that Colorado winter wheat production broke a record in 2010, with an average yield of 45 bushels per acre. This is the highest ever yield per acre for Colorado and raises the total production in 2010 to 103.5 million bushels. The 10-year average for winter wheat production is 63.3 million bushels, or 30 bushels per acre.
This is the largest winter wheat crop harvested in Colorado since 1985, when 134.5 million bushels were harvested. The following year, a large percentage of land was taken out of production and put into the Conservation Reserve Program (CRP). In 1985, there were 3.7 million acres planted and 3.45 million acres harvested. This year, 2.45 million acres were planted and 2.3 million acres were harvested.
The United States stands to gain a good share of the wheat export market that Russia is forfeiting due to the Russian government’s decision to halt grain exports until the end of the year, according to John Anderson, an economist with the American Farm Bureau Federation.
The Agriculture Department today released its August World Agricultural Supply and Demand estimates or WASDE report. In the report, USDA projected a huge drop in Russian wheat exports for the 2010-2011 marketing year: 3 million metric tons, compared to 18.5 million metric tons, in the 2009-2010 marketing year. Russia decided to exit the grain export market this year because of a serious drought that is reducing crop prospects.
“This is a jaw dropping reduction in exports for Russia,” Anderson said. “And because the United States is expecting a good wheat crop with good stock levels, our farmers stand to take up a big share of wheat exports that would have gone to Russia.”
Even though Russia has decided to temporarily ban grain exports due to a severe drought, AFBF Economist John Anderson doesn’t expect a repeat performance of 2007-2008 when grain prices shot sky high due to global shortages.
Last week, Russian Prime Minister Vladimir Putin announced a ban on grain exports from Russia to begin Aug. 15 and end Dec. 31. The temporary ban covers exports of wheat, rye, corn, wheat flour and wheat and rye flour. The announcement cites concerns about potential domestic shortages and domestic price increases as reasons for the export ban.
“Will we see the kind of thing we saw a couple of years ago with record high wheat prices? At this point I think probably not, because the supply situation is a lot different now, but the market is still maybe a little bit touchy to that kind of thing and I think that how this plays out over the next six months is the critical period,” Anderson said.