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A PRIMEDIA Property October 26, 2005 | 051026   
TABLE OF CONTENTS
 >> Logan Hawkes

 >> Larger U.S. bean, corn, and cotton crops

 >> Thiesse's Thoughts: LDP VS. CCC Loan

 >> Lenders warn of cash flow/carryover troubles

 >> High fuel fallout

 >> USDA issues final 2004-crop corn and sorghum CCPs

 >> Aphid-resistant soybeans

 >> News from the Top of the Hill

 >> Congress begins to see new disaster relief bills

 >> Two issues may shape 2007 farm law

 >> EPA, IRS agree to extend diesel fuel waivers

 >> Variable crop costs jump

 >> America is running out of time, conventional fuel

 >> Policy premise correct three times a century

 >> Tour Brazil with Corn & Soybean Digest Magazine



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  EDITOR'S NOTE
Logan Hawkes
10/26/05    Crop News Weekly
Just as harvest is slowly winding down and jack-o-lanterns are being carved by little ones, word comes from the USDA October crop production report that harvest is online to produce the second largest corn, soybean and cotton crop ever. Elton Robinson will fill you in on the reasons why in our lead story today.

Around the world of news this week, Kent Thiesse offers up his analysis of loan deficiency payments on corn versus CCC loans from local FSA offices after harvest. Meanwhile, news is not so good for Arkansas growers. While near-record crops are being realized in the Midwest, storm losses in Arkansas top the $900 million mark this year. Meanwhile, members of Congress have introduced new disaster assistance legislation aimed at helping farmers who suffered losses from Hurricane Katrina. Elsewhere in the news, hold on to your hats. You just think fuel prices for the tractor and combine are ridiculously high. Midwest producers will get a real eye opener soon when they discover natural gas prices could go up as much as 71% in the weeks ahead. Also this week, a preview in what may affect the 2007 farm bill. Daryll E. Ray has the full story.

You'll find these stories and more in this issue of Crop News Weekly. Happy reading.



  FROM OUR MAGAZINES
Larger U.S. bean, corn, and cotton crops
10/25/05   
The U.S. cotton, corn and soybean crops are getting bigger each month, a testament to good growers and good genetics. If production forecasts are realized, each crop is on course to be the second largest crop on record. According to USDA's October crop production report, cotton production is forecast at 22.7 million bales, up 2 percent from the September forecast but 2 percent below last year's record high production. Yield is expected to average 797 pounds per acre, up 15 pounds from last month but down 58 pounds from 2004. - Elton Robinson, Farm Press Editorial Staff

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Labeled on more than 200 crops in 72 countries, Quadris has more than proven its worth to thousands of American growers. Over the past four seasons, Quadris has been increasing soybean yields on commercial fields an average of 6 bu/A and helping produce better quality beans. For more information on Quadris fungicide, please visit http://www.quadris-fungicide.com
Thiesse's Thoughts: LDP VS. CCC Loan
10/25/05   
In the past month there have been some very favorable opportunities to request a loan deficiency payment (LDP) on corn produced in 2005. The LDP on corn in Minnesota has been over 40¢/bu. in the past few weeks. One question many growers have contemplated on un-priced 2005 corn is whether they should take the LDP at harvest time and price the grain later, or utilize the CCC loan program at county Farm Service Agency (FSA) offices after harvest. - Kent Thiesse, Farm Press Editorial Staff

Lenders warn of cash flow/carryover troubles
10/24/05   
If bankers' concerns are any indication, Arkansas farmers will be in for a rough off-season. Storm clouds are gathering and the signs are ominous. After months of drought, skyrocketing input costs, low commodity prices and hurricane-spawned storms during harvest, few farmers were expected to escape the growing season unscathed. But the seriousness of many farmers' financial plights is sobering. The Arkansas Extension Service has estimated $900 million-plus losses from hurricane damage alone. - David Bennett, Farm Press Editorial Staff

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"I started selling Lexar based on customer demand. My customers wanted more pre-emergent control and they finally found that with Lexar. Waterhemp is a big problem in our area and Lexar controlled it better than any other product we've used. It did the job even in the dry season we experienced this year. Lexar also provided better crop safety than its competitors. Next season the use of Lexar will increase in my area due to the success it had this year. Previous customers plan to use it again and other customers who learned of the control it offered will switch to it."
Ron Hamson
Hamson Ag., INC.
Dahlgren, IL

High fuel fallout
10/22/05   
Growers finishing up harvest know the immediate ramification of high fuel prices. But high fuel prices will reach much further this year than just the cost of filling a combine or tractor tank. Several companies have announced price increases, and economists estimate deeper cost troubles. Natural gas prices are expected to spike this winter with the Midwest taking a big hit. The U.S. Department of Energy reports that natural gas prices may be 71% higher than they were last year, according to Wally Tyner, Purdue University ag economist. The big share of the price increase is due to overall higher prices, and a small portion is due to the expectation that this winter will be colder than last year's. The only good news, Tyner says, is that gas supplies are adequate and there will be no shortage. - Farm Industry News

USDA issues final 2004-crop corn and sorghum CCPs
10/24/05   
USDA announced that corn farmers will receive a final 2004-crop counter-cyclical payment of 29 cents per bushel and grain sorghum producers a CCP payment of 27 cents per bushel on 85 percent of their acreage base. The Agriculture Department also said it has begun sign-up for the 2006 direct and counter-cyclical payments for all program crops. Farmers have until June 1 to complete sign-up for the payments authorized by the 2002 farm bill without having to pay an additional fee. - Forrest Laws, Farm Press Editorial Staff

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"We're concerned about glyphosate resistance developing. We've had a hard time controlling giant ragweed in soybeans, and waterhemp is tough to control, too. If the weeds get through this year, they will be worse next year. Then it's much harder to get ahead of them, and it starts costing big bucks."
Les Schliep, Pine Island, Minn.

Aphid-resistant soybeans
10/21/05   
Pioneer Hi-Bred International is analyzing its soybean varieties for resistance to soybean aphid. The company has screened numerous soybean lines with the help of a technology it developed with Kansas State University. John Reese, KSU professor of entomology, is the lead university researcher on the project. According to Pioneer, researchers used specific protocols for antibiosis and nonpreference to analyze the varieties. Antibiosis is the plant's natural ability to discourage pests by killing the insect or slowing its reproduction. Nonpreference is the plant's ability to deflect pests to more preferable varieties. - Farm Industry News

News from the Top of the Hill
10/21/05   
Senate Agriculture Committee Cuts $3 Billion - The Senate Agriculture Committee voted to cut $3 billion from agriculture programs over the next five years to meet the requirements of budget reconciliation. The cuts came from farm programs and conservation. Key provisions include:

  • Reduce by 2.5% all payments that producers receive for the 2006 through 2010 crops years for wheat, corn, grain sorghum, barley, cotton, rice, soybeans, peanuts, and honey.

  • Eliminate the Step 2 cotton program as of Aug. 1, 2006. This program was found in violation of World Trade Organization (WTO) earlier this year.

  • Advance direct payments will be reduced from a maximum of 50% to 40% for the 2006 crop year and to 29% for 2007 through 2011 crop years.

  • The Conservation Reserve Program (CRP) acreage cap will be reduced from 39.2 million acres to 36.4 million acres.

  • The Conservation Security Program (CSP) will be limited to $1.654 billion.

  • Funding for the Environmental Quality Incentive Program (EQIP) will be limited to $1.185 billion for fiscal year 2006 and $1.270 billion for fiscal years 2007 through 2010. In 2004, there were four applicants for every dollar of EQIP funding.

  • The Milk Income Loss Contract (MILC) program will be extended through Sept. 30, 2007. The payment factor will be reduced from 45% to 34%. This program was to expire Sept. 30, 2005. Some Democratic Senators argued that these cuts in farm programs were caused by the administration's desire for more tax cuts. The House Agriculture Committee is to make its proposed budget cuts next week.

    Expiration of Price Reporting Law Could Cost States - The producer coalition that supports renewal of mandatory livestock price reporting has indicated that Congress' failure to reauthorize the law could potentially impose new costs on at least one state. Nebraska may have to establish its own price reporting system to meet requirements of Nebraska law. The coalition includes the American Farm Bureau Federation, American Sheep Industry Association, National Cattlemen's Beef Association and the National Pork Producers Council.

    Australia Pork Producers Appeal to High Court - Australian Pork Limited (APL) has filed a request with the Australian High Court seeking a hearing to reverse an earlier court ruling that allowed the importation of processed pork from the United States and other countries. APL is challenging the new quarantine protocols for pig meat. The appeal to the Australian High Court is a two-step process. First, an application for Special Leave must be made. If the application is accepted, then the issue is heard by the High Court.

    Ninth Circuit Denies Canadian Rehearing - The U.S. Court of Appeals for the Ninth Circuit denied R-CALF's request for a rehearing of its earlier decision to allow for the importation of Canadian cattle under 30 months of age. R-CALF President Leo McDonnell in a statement said, "We remain confident that USDA's Final Rule is premature. We will now ask the District Court to schedule a hearing in our case, at which time the court will have a full opportunity to consider all of the facts that demonstrate why USDA's actions concerning Canadian imports are ill-conceived."

    USDA Drops Plans to Close FSA Offices - USDA announced this week that it would not proceed with plans to consolidate Farm Service Agency (FSA) county offices. The "FSA Tomorrow" plan would have closed 713 of the 2,351 county FSA offices. There has been strong Congressional opposition to USDA's proposal. Senators Jim Talent (R-MO) and Mark Pryor (D-AR) amended USDA fiscal year 2006 appropriations bill that would require a cost-benefit analysis of the proposal. The Senate Agriculture Committee's hearing on this issue has been cancelled do to USDA's announcement.

    Link Named GIPSA Administrator - James Link has been named administrator of USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA). Prior to his appointment, Link worked for Texas Christian University as director of the ranch management program.

    Lasseter Named FSA Administrator - Teresa Coarsey Lasseter has been named the new administrator of USDA's Farm Service Agency (FSA). Lasseter has served as Georgia FSA state director and most recently FSA associate administrator for farm programs in Washington, DC. - Scott Shearer, National Hog Farmer

  • Congress begins to see new disaster relief bills
    10/24/05   
    Members of Congress have introduced new disaster assistance legislation aimed at helping farmers who suffered losses from Hurricane Katrina and from the intense drought and other weather problems that occurred in the Midwest this summer. Some disaster bill provisions would also try to help offset the impact of sharply higher fuel prices, extend the Livestock Assistance Program and provide an additional $100 million in Emergency Conservation Program funds. - Forrest Laws, Farm Press Editorial Staff

    Two issues may shape 2007 farm law
    10/20/05   
    As I look at the issues that cannot be avoided as we prepare to lay the groundwork for a discussion of the shape of the 2007 Farm Bill, several things come to mind. The first is the federal deficit and the second is the pressure that is being put on WTO negotiators to eliminate agricultural subsidies. These two factors have the potential to significantly affect the nature of the 2007 Farm Bill discussion. While these two issues may seem to be unrelated, one domestic and the other international, they in fact stem from a common cause. If crop prices in the 1997-2004 period were at the same level that they were in early 1996, we wouldn't be talking about either one. - Daryll E. Ray, Farm Press Editorial Staff

    EPA, IRS agree to extend diesel fuel waivers
    10/20/05   
    EPA has extended the highway diesel sulfur waiver through Oct. 25. The initial waiver was announced in late August after Hurricane Katrina caused severe disruptions in the supply of diesel fuel after it struck the Louisiana and Mississippi Gulf Coasts. Refiners can distribute high sulfur diesel fuel for highway use until that date in the following states: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, South Carolina, Tennessee, Texas and Virginia. Vehicles that have been fueled with waved fuel may be operated in any state. High sulfur fuel still in the system past Oct. 25 can still be sold. Retailers must make the transition by December. - Farm Press Daily

    Variable crop costs jump
    10/21/05   
    Higher energy prices hit growers in the variable cost line on their financial statements. Variable costs are expected to be 33% higher in 2006 than 2002, according to a study by Gary Schnitkey and Dale Lattz, University of Illinois economists. The variable costs of corn production are projected to be $55/acre higher next year than in 2002. About half of the increase is due to fertilizer costs, projected to be $28 higher next year than in 2002. Pesticides and seeds are $17 higher and machinery-related items like fuel are $7/acre higher. Variable costs for soybean production are projected to be up $20/acre in 2006 compared to 2002. - Farm Industry News

    America is running out of time, conventional fuel
    10/21/05   
    If we failed to learn anything else from the recent ravages of Katrina and Rita, we should at least have figured out two things. One is that this country desperately needs a viable and affordable mass transit system linking major cities. The second is that this country must invest and commit to using alternative, renewable fuel sources. Anyone who watched televised depictions of evacuees stranded in New Orleans, unable to leave because of poor health, lack of transportation and too little money to afford to go anywhere, should appreciate the need for systems to move a lot of people from one place to another quickly. - Ron Smith, Farm Press Editorial Staff

    Policy premise correct three times a century
    10/19/05   
    As we review some of the current agricultural policy discussion, we are reminded of the old riddle we first heard as a grade schooler. The question goes like this. "Would you rather have a clock that tells the right time twice a day or one that tells the right time once every four years?" As a child the obvious answer was the clock that told the right time most often, the one that was right twice a day. Then the riddler announces that the clock that is correct twice a day is one that does not run at all while a clock that loses a minute a day is correct once every four years. - Daryll E. Ray, Farm Press Editorial Staff

    Tour Brazil with Corn & Soybean Digest Magazine
    10/26/05   
    You don't have a lot of time left. Get registered! The Corn & Soybean Digest's fourth annual trip to Brazil is set for Jan.12-25, 2006, and you're encouraged to sign up before deadline. Greg Lamp, Editor of The Corn & Soybean Digest, and Clint Peck, Senior Editor of BEEF, will lead the tour exploring Brazil's tropical ag system and assess its strengths and weaknesses as a major competitor for international markets. Highlights include tours of large and small soybean farms, a beef packing plant, an ag research center and a major international export facility. For more information or to register: glamp@primediabusiness.com, 952-851-4667 or Renata Stephens, Capital Travel Solutions, renatas@ctsinc.com, 651/287-4900 or 800/635-5488. A complete itinerary can be viewed on the CTS website: http://www.ctsinc.com/Brazil2006.pdf.



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