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National News |
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Updated Friday, June 27th
Accurate Reports For 2008 Damage to Crops
USDA's National Agricultural Statistics Service is taking several steps to assess the impact of the 2008 crop acreage, according to a release issued late Thursday. The agency wants to report the impact on the crop of the extraordinary flooding in the Midwest. NASS will release the 2008 Acreage report as scheduled on Monday, June 30. However, NASS collected most of that acreage data during the first two weeks of June, before most of the flooding occurred. In the report, the agency will use standard procedures to estimate the planted area, but in an effort to more accurately determine how much of the planted area will actually be harvested for grain, NASS will re-interview producers during the week of June 23 in flood affected areas. This will provide more information about producers' harvesting intentions for corn, soybeans and sorghum. This information along with data normally collected from across the country during this time will be reflected in the August 12 production report. For more information about USDA's response and efforts in the Midwest, visit www.usda.gov/safety.
Cattle on Feed Report
The USDA’s NASS agency released the Cattle on Feed report Friday. And according to that report, cattle and calves on feed for slaughter market in the United States totaled 10.8 million head on June 1, 2008. The inventory was 4 percent below June 1, 2007 and 3 percent below June 1, 2006. Placements in feedlots during May totaled 1.90 million, 12 percent below 2007 and slightly below 2006.
AFBF Opposes Texas Request For Exemption to Renewable Fuels Standard
A request by the state of Texas for exemption from the Renewable Fuels Standard (RFS) should be denied, the American Farm Bureau Federation told the Environmental Protection Agency last week. Ethanol benefits the economies of both the United States and Texas. Additionally, Texas doesn't meet standards that have been established for granting a wavier, AFBF wrote in a letter to Stephen Johnson, EPA administrator. In addition, AFBF said that Texas doesn't meet established standards for a waiver, which require proving severe harm to the economy of a state, region or the nation. According to the organization, the Texas request doesn't take into consideration the substantial economic benefits of ethanol, including lower retail gasoline prices and increased opportunities for Texas agriculture producers. AFBF also noted in its letter to EPA that although Texas officials assert the state's livestock sector is experiencing severe harm due to increased corn prices caused by the RFS, no data linking the two is provided. Increased corn prices are caused by numerous factors, AFBF wrote. These include record export demand fueled by a weak dollar, record domestic feed use, a flood of speculative money into the commodities markets, and dramatic price increases for crude oil and energy. Coalition Pushes For Examination Into Food Prices A coalition of farm and commodity organizations, including the American Farm Bureau Federation, on Monday, urged congressional leaders to promptly initiate comprehensive hearings to examine all the reasons for increased retail food prices. The coalition urged the hearings to focus on the underlying causes of the rise in food prices, which sectors of the economy are responsible for those rise in prices, and weather any of them have benefited unduly from such price increases. Iowa Farm Bureau Says Damage in Iowa Should Not Affect Most Food Costs Flood waters in Iowa have damaged nearly 1.3 Million corn acres and up to 2 Million acres of soybeans. Although corn has increased by $1.50 per bushel, most foods at the grocery store level won’t be impacted, according to an Iowa Farm Bureau press release this week. This is because global wheat production is up and wheat has a larger impact on breads and cereal than corn. Additionally, $.81 of every food dollar spent go to fuel and marketing costs not directly related to the price of the crop. Monsanto Company Announces Contribution to The American Red Cross Monsanto Company announced June 17 that it is donating a total of $1.5 million to the American Red Cross to assist in flood relief efforts in Iowa and other Midwest states. Monsanto’s support of the Red Cross comes at a time the agency is facing what has been called “a rolling disaster.” It is estimated that recent floods have already affected tens of thousands of people and flooded three million acres in Iowa alone. In addition to its $1 million donation for Iowa, the company announced that it has also designated $500,000 for flood-relief efforts in other Midwest states. Company officials say the donation is to be used by the Red Cross as it deems necessary to support the thousands of people affected by this natural disaster. As of June 15, the Red Cross had opened 74 shelters for flood victims, providing housing for more than 7,500 people. More than 270,000 meals and snacks have been served. For more information, visit the Red Cross web site at www.redcrosschat.org.
U.S. And South Korea Come to Agreement In Beef Trade
The Financial Times reported Monday that a deal has been reached in the South Korea beef import debate. While that deal could face political opposition in Washington, the report says U.S. beef imports could resume to that market as quickly as this week. Dealmakers agreed to voluntarily restrict beef shipments to Korea to meat from cows less than 30 months of age. Under the agreement, according to the report, regulators will label all products with an age-verification stamp. Whether lawmakers like the change in the beef rules, or not, could be significant as the overall trade agreement moves forward. Potential Problems Substituting Wheat For Corn In Feed USDA and others are counting on wheat substitution for corn feed to help offset some of the corn lost to flooding. But livestock producers argue that using wheat has problems. National Cattlemens’ Greg Doud argues it’s not that simple to substitute wheat for corn. Aside from availability, there is the issue of diet.“We do have the ability to feed some wheat to cattle, I believe you can only use about 10 percent in a ration, and if you start a cattle out on wheat, you have to maintain wheat in that ration all the way through.” Hogs can consume an all-wheat diet, but Dallas Hockman, with the National Pork Producers Council, says the economics of wheat versus corn still isn’t settled. “If you look at some of the numbers projected by Dr. Bob Wizner out of Iowa State, it does point to having some very low ending stocks coming in. We have a planters report coming out at the end of this week, so we’ll know, but even in that case it hasn’t taken into consideration the impact of the most recent floods.” Before the floods, wheat was significantly more expensive than corn. Now National Cattlemen’s’ Doud argues, both are expensive. “Let’s say for example you take 2 Million acres of U.S. corn production out, at 150 bushels an acre, that’s 300 Million bushels of corn out of the equation which tightens that corn balance sheet well below any sort of normal level, which means we are probably going to have to start rationing corn in the coming year.” And Doud says other Countries like China and Argentina have slowed or stopped their corn exports, boosting competition for available wheat for feed. NPPC, meantime, has just asked the EPA to halve the renewable fuels requirement says Hockman. Hockman endorses former USDA Chief Economist Keith Collins findings in a new report that as much as half of the run-up in corn prices is due to ethanol demand. Results to be Released of the U.S. Swine Inventory
On June 27 USDA will release the results of their latest survey of the U.S. swine inventory. The University of Missouri calculates the breeding herd is 2.0 percent smaller than a year ago, but pegs the market hog inventory up 6.2 percent. That puts the total herd about 5.4 percent bigger than on June 1, 2007. Estimates of hogs in the 60 to179 pound weight groups implies that third quarter hog slaughter will be 7 percent or so above year-ago levels. Fourth quarter 2008 hog slaughter is estimated to be nearly 3 percent larger than the number slaughtered in October through December 2007. If so, look for fourth quarter 2008 hog prices to average close to $46/cwt on a live basis.
Agriculture Can Be a Dangerous Business
Agriculture is consistently among the most hazardous occupations in the U.S., according to Dennis Murphy, Penn State professor of agricultural safety and health, and founding board member of the new Ag Safety Council. In an average year, 516 workers die while doing farm work, and each day about 243 agricultural workers suffer lost-time injuries. Murphy said, "The council's mission is to proactively address ongoing and emerging occupational safety and health issues affecting agriculture in the U.S." The new council, driven by farmer/rancher and agribusiness leaders, is the first of its kind in the country to pursue a national strategy to reduce disease, injuries and fatalities in American agriculture. The group will attempt to influence research priorities to rapidly identify best-management practices for worker safety and health that maximize cost efficiency and sustainability. A variety of membership packages are available for individuals and organizations. For more information, visit www.ashca.org
Devastation In The Midwest– The Long Road to Recovery Farmers and landowners in the northern portion of Iowa are beginning to see the end of the June floods. At least some land is drying and planting and replanting is resuming. But downstream problems along the Mississippi River remain with the latest levy to be breached in St. Charles County at St. Louis. According to Keppy, FSA also approved the use of conservation reserve program land in Iowa to spread manure as part of the recovery effort.
Accurate Acreage Report Will Include Surveys of Flooded Areas The National Agricultural Statistics Service is conducting surveys in flood affected areas this week to get updated information for next Monday's acreage report. The original surveys were conducted before the severe flooding of the past week. Carol House with NASS says the information will still be somewhat spotty as many farmers aren't sure what they will be able to do. House says, "Making sure we understand what is going on in terms of any replanting that might have been done and then what the acreage is that is standing for harvest." That information along with surveys of farmers nationally will be put together for a first look at U.S. crop production based on actual surveys that will be released on August 12.
U.S. Agreement With Philippine Markets
Agriculture Secretary Ed Schafer has signed a memorandum of agreement with Philippine Agriculture Secretary Arthur Yap. The Philippines is a key market in Southeast Asia for U.S. agricultural exports, with sales reaching over $950 million in fiscal year 2007, the highest level ever. The United States remains the top food and beverage supplier to the Philippines. At the same time, the United States is the number one market for Filipino agricultural products, with sales for more than $621 million in fiscal year 2007, including coconut oil, tropical fruits and vegetables and sugar.
More Time Needed To Discover the Truth Behind Oil Prices
The House Agriculture Committee chose not to vote on H.R. 6334, the Increasing Transparency and Accountability in Oil Prices Act of 2008 on Tuesday. Committee Chairman Collin Peterson announced that more time for hearings in July was needed to fully delve into the possibility of speculation in energy markets impacting prices. The bill would give additional power to the Commodity Futures Trading Commission. However; CFTC Acting Chairman Walter Lukken testified that supply and demand is the cause behind spiraling costs of crude oil, saying "We have no evidence that excessive speculation is taking place."
Kroger Co. RECALLS GROUND BEEF PRODUCTS—may be contaminated with E. Coli
The Kroger Co. is recalling an undetermined amount of ground beef products that may be contaminated with E. coli the U.S. Department of Agriculture’s Food Safety and Inspection Service announced Wednesday. The products subject to recall include all varieties and weights of ground beef products bearing a Kroger label sold between May 21 and June 8 at Michigan and Columbus and Toledo, Ohio Kroger retail establishments. These ground beef products also include a sell-by date between 05/21/08 and 06/08/08. These products were distributed to Kroger stores in Michigan and Columbus and Toledo, Ohio. FSIS has confirmed that none of the affected products remain available for purchase at stores; however consumers are urged to check their refrigerators and freezers and discard or return the ground beef products for a refund.
AFBF Reports Damage Estimates So Far in 2008
American Farm Bureau Federation’s June Market Update reports that more than eight billion dollars in estimated weather–related damage has occurred thus far in 2008. Iowa accounts for approximately half the damage. The publication notes there are problems in at least a dozen other states ranging from the excessive wetness and flooding in Illinois to drought in California. Other states taking a hit from excessive wetness and flooding are: Illinois, 1.3 billion; Missouri, 900 million; Indiana, 500 million; Nebraska 500 million; and an additional 1 billion in the remaining wet states. As for drought, California suffered 500 million dollars in estimated damage. This equals the estimated drought-related damage in all other states combined.
DCP Sign Up
Agriculture Secretary Ed Schafer has announced that signup has begun for USDA’s 2008 Direct and Counter-cyclical Payment Program. Contracts are available at USDA Service Centers and signup will continue until September 30, 2008. USDA's DCP readiness follows the June 12 availability of marketing assistance loan and loan deficiency payment provisions. Producers can fill out their 2008 DCP contract at any USDA Service Center. Producers can also sign-up online. Payments will be made as soon as practical after enrollment. Final direct payments will be issued after October 1, 2008. Counter-cyclical payments vary depending on market prices, and are issued only when the effective price for a commodity is below its target price.
Great Lakes Compact
The Great Lakes Compact and ensuing water withdrawal legislation are officially out of the hands of the Legislature as the House wrapped up its work on the legislation Thursday. That follows work completed by the Senate the day prior on the legislative package. The House also approved bills 5746 and 1380. The legislation designates six of the current energy renaissance zones for cellulosic ethanol firms and allows the state to allocate $18.7 million from the 21st Century Jobs Fund to create centers for energy excellence in Michigan.
Research Needed to Examine Decline in Bee Populations
The House Agriculture Subcommittee on Horticulture and Organic Agriculture held a hearing Thursday to review the status of pollinator health including colony collapse disorder. Research was a topic of discussion. University research funding was expected at 2.5 million dollars this year. And more help is on the way through the farm bill. Still President Bush wants 780,000 more in fiscal ’09. But that may not be enough to find out if a virus, pest, pesticide or diet is killing the bees that pollinate over 15 billion dollars worth of fruits, vegetables, seeds and nuts each year. Some growers told the ag panel they have either had to cut back planted acres or rent fewer hives as rates increase. Beekeepers say they have lost millions of dollars.
U.S. Beef To Go On Sale Next Month in South Korea
Thursday, the government of South Korea was expected to begin the importation of U.S. beef. The Yonhap News Agency reports U.S. meat products already in Korean freezers will be inspected then go on sale beginning early next month. Korean Prime Minister Seung-Soo Han told ruling party legislators and cabinet ministers that, the utmost effort will be made in conducting inspections. Critics call the latest deal insufficient. They say it does not legally bind U.S. exporters to export restrictions in the agreement. Still, some U.S. processors say they are willing to certify their beef meets the standards and label them as such.
Iowa Senator Defends Biofuels Against the GMA
Iowa Senator Chuck Grassley went to the floor of the Senate yesterday in another effort to set the record straight about ethanol and the Grocery Manufacturers Association. The Senator said, biofuels are being made the scapegoat for rising wheat prices, even though the 2007 crop was the largest planted in four years. He said, biofuels are being blamed for the increased price of things such as rice and bananas, which have no correlation to corn production or our biofuels polices. Senator Grassley said, the Grocery Manufacturers have focused all their efforts on ethanol. But it’s important to note that biofuels are actually working to lower the price of gasoline at the pump. The Senator added, those who are determined to pull the rug out from under today’s biofuels should know that the next generation won’t exist if the current generation is undermined.
AFBF Chief Economist Says Corn-Based Ethanol is Driving Down Price of Gasoline
The chief economist at the American Farm Bureau Federation says he doesn’t need to read an economic study to know that corn-based ethanol is driving down the pump price of gasoline. The higher price of diesel is all the proof Bob Young needs. “Historically, the difference between diesel prices and gasoline prices has only run about a nickel a gallon, and it’s been the other way. The gasoline was more expensive than diesel by about a nickel a gallon. I think if we look at the difference today, it’s actually even probably a little bit bigger than this, but we’ve clearly got a widening gap a very definite gap between diesel prices and gasoline prices. We’re not using any ethanol in diesel production.” Young says about two-thirds of the nation’s gasoline supply has some ethanol mixed into it. Young said he tells livestock producers the days of $2.50 to $3.00 corn are gone forever, and sky-high production costs are the reason why. Young said he didn’t know when corn prices would correct, but noted that several forecasters are talking about 2009-crop corn trading below $5.00.
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