Corn & Soybean Digest Farm Industry News
A PRIMEDIA Property November 2, 2005 | 051102   
 >> Logan Hawkes

 >> Corn storage issues

 >> ASA savors victory: Continuation of rust management

 >> Ag lenders warn of 'erosion of equity'

 >> News from the Top of the Hill

 >> Johanns says safety net more than subsidies

 >> The Road Warrior of Agriculture

 >> Lower fuel prices in near term doubtful

 >> Brazil sets pace on alternate fuels

 >> Farm groups demand increased market access overseas

 >> Scientists reflect on influential field trial

 >> New CCR system could mean more money

 >> Tour Brazil with Corn & Soybean Digest Magazine


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Logan Hawkes
11/02/05    Crop News Weekly
Welcome to the eleventh month of the year. Is it just me, or has time accelerated? It's funny, but I am getting to sound more like my father every year. It seems like just yesterday the headlines were full of tropical weather and hurricane news. Oh - that was just yesterday. Perhaps it is not time itself that is going by faster, but us.

It's tough to start this newsletter with a depressing issue, but storm clouds have been gathering on the Hill and recent word from Washington shadows our coverage today. News that the House Agriculture Committee on Friday passed a spending plan that would cut the overall USDA budget by $3.7 billion and lower crop subsidies by about $1 billion is a hard pill to swallow. You can follow the development in Richard Brock's column in the Corn & Soybean Digest this week. In other news and issues, Kent Thiesse talks about corn storage, the American Soybean Association savors a victory over soybean rust management financing, USDA gets another earful of agriculture woe, Brazil steps to the plate on alternative fuel issues, and lower fuel prices for the foreseeable future are apparently something that's not going to happen.

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

Corn storage issues
The biggest challenge with the 2005 corn harvest has been finding adequate storage space for all the harvested corn. The combination of a large amount of carry-over 2004 corn in many areas, along with greater than expected 2005 corn yields, and combined with reduced grain exports through the Gulf after the September hurricanes, has filled both on-farm and grain elevator storage to capacity. We are already seeing large amounts of corn piled on the ground in many communities, and are likely to see much more before the 2005 corn harvest is completed. Many grain elevators have closed their market to taking in and storing corn, other than from producers that are selling the corn on a cash sale to the elevator. - Kent Thiesse, The Corn & Soybean Digest


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ASA savors victory: Continuation of rust management
The American Soybean Association (ASA) and its 25,000 members are celebrating the announcement that the U.S. Department of Agriculture will again fund projects to provide for the early detection, diagnosis, and tracking of the spread of Asian soybean rust in the 2006 growing season. This nationally coordinated network also will help producers in making crop management decisions that reduce pesticide input costs, reduce environmental exposure to pesticides and increase the efficiency and efficacy of pesticide applications. - Farm Press Daily

Ag lenders warn of 'erosion of equity'
While others are concerned about the next farm bill, Arkansas bankers are worried about something more immediate. This month, both USDA officials and state politicians heard that loud and clear at the USDA's "farm bill listening tour" stop in Little Rock. Continuing a chorus that began earlier this summer, the bankers and lenders predicted an unhappy reality will soon hit agriculture. When it does, the USDA can't claim it wasn't warned..."never have so many spent so much to produce abundance and realized so little..." - David Bennett, Farm Press Editorial Staff


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News from the Top of the Hill
COOL Delayed Two Years - The House-Senate agriculture appropriations conference committee voted to delay mandatory country-of-origin labeling (COOL) for meat, fruits and vegetables until Sept. 30, 2008. Under the 2002 farm bill, mandatory COOL was to be implemented in 2006. Opponents of mandatory COOL have argued that the current law is unworkable and the costs for producers and industry would out-weigh the benefits. We can expect this issue to be revisited during consideration of the farm bill in 2007.

Agriculture Appropriations Conference Committee - The House-Senate agriculture appropriations committee completed action on the $100.2 billion fiscal year 2006 agriculture appropriations bill. Key provisions of the bill include:

  • Food Safety and Inspection Service - $838 million, which is an increase of $20 million;
  • Animal Plant and Health Inspection Service - $820.457 million;
  • National Animal Identification System activities - $33.34 million;
  • Animal surveillance and bovine spongiform encephalopathy (BSE) activities - $17.184 million;
  • Agricultural Marketing Service - $75.376 million;
  • Grain Inspection, Packers and Stockyards Administration - $38.443 million;
  • Food Stamp Program - $40.7 billion;
  • Food and Drug Administration - $1.5 billion, which is a $40-million increase;
  • Country-of-Origin Labeling (COOL) - delayed until 2008;
  • Rejected downer animal legislation that would have prohibited downer animals, including swine, from entering the food chain. USDA's policy prohibits this for beef; and
  • Rejected administration's proposal for user fees for meat and poultry inspection.

    The conference report will now be considered by the House of Representatives and the Senate, and then sent to the President for approval.

    2005 Crop Year Counter-Cyclical Payments - USDA announced first partial 2005 crop year counter-cyclical payments. The 2002 farm bill requires these payments to be made in October when possible. The partial payment rates equal to 35% of the projected total rate. Announced partial payments rates are: corn - 14 cents/bu.; sorghum - 9.45 cents/bu.; barley - 5.25 cents/bu.; upland cotton - 4.81 cents/lb.; rice - 19.25 cents/cwt.; and, peanuts - $36.40/short ton.

    Japan Sanctions - Senators Pat Roberts (R-KS), Kent Conrad (D-ND) and 19 other Senators introduced legislation that would impose economic sanctions on Japan if it does not reopen its market for U.S. beef by Dec. 15. The legislation would require the U.S. Treasury to impose additional tariffs on selected items grown, produced or manufactured in Japan in an amount equal to $2.7 billion by Dec. 31, 2005. The tariffs will continue until the administration can certify to Congress that Japan has reopened its market to U.S. beef. In introducing the legislation, Senator Roberts said, "Japan has chosen to ignore internationally recognized science and has instead based their food safety on emotional, politically-driven arguments. This comes at a high price for the American beef industry." Congressman John Salazar (D-CO) plans to introduce similar legislation in the House.

    Japan Reacts to Sanctions Legislation - The Japanese Ambassador to the United States reacted quickly after the sanctions legislation was introduced in the Senate. In a statement the Ambassador said, "We are disappointed to learn that a group of Senators proposed a legislation that would oblige the United States Government to impose arbitrary tariffs on selected Japanese products to the United States if Japan fails to reopen its market to U.S. beef by the end of this year. The domestic procedures in Japan necessary to reopen its market to U.S. beef are in the last stage, and tangible progress was made on Oct. 4. A threat of retaliation is not helpful in solving the problem based on science." The Japanese Prion Committee is expected to meet next week to make its final recommendation to the Food Safety Commission.

    Long-Distance Animal Trucking Petition - The animal rights groups, the Humane Society of the United States, Farm Sanctuary, Compassion Over Killing, and Animals' Angels have filed a petition with USDA to limit truck transport of animals to no more than 28 hours, as required currently for animals hauled by train. The petition would require that for every 28-hour period of confinement in interstate transport, animals would need to be off-loaded for five hours and watered and fed.

    House Passes Cheeseburger Bill - The House of Representatives has passed legislation to protect restaurants, supermarkets, and grocery manufacturers from obesity lawsuits. The "Personal Responsibility in Food Consumption Act" or the so-called "Cheeseburger Bill" prohibits lawsuits by customers who blame fast-food companies and restaurants for their obesity or weight gain. - Scott Shearer, National Hog Farmer

  • Johanns says safety net more than subsidies
    Agriculture Secretary Mike Johanns says that a true safety net for farmers must reach beyond subsidies and bring growers "real and substantial market access" if they are to continue to lead the nation and the world in agriculture. As he has at USDA Farm Bill Forums around the country, Johanns again claimed the current farm bill is contributing to agriculture's problems because farm payments are being capitalized into increased land values and benefits are not being distributed equitably. Those were some of the secretary's comments as he spoke to farm organization representatives at a Commodity Club luncheon in Washington Oct. 6. The speech was billed as a progress report on what Johanns has learned during the 17 farm bill listening sessions he has hosted since July. - Forrest Laws, Farm Press Editorial Staff


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    The Road Warrior of Agriculture
    Dave Kohl writes: "Recently, my business associate, Alicia Morris, and I completed two three-day courses in cash flow, ratio analysis and loan structuring with Dean Duelke, of Deannco Financial Enterprises, Irvine, CA. The courses were very intense and were led by an outstanding instructor who has had numerous years of experience as a banker and consultant." - The Corn & Soybean Digest

    Lower fuel prices in near term doubtful
    A "long, mild fall" could help ease oil prices back from current post-Katrina/Rita levels. But odds are that little can be done to return U.S. gasoline, diesel and natural gas prices to the ranges farmers and consumers were paying a year ago. Energy analysts estimate that Hurricane Katrina disabled 7 percent of U.S. oil refining capacity when it struck the Gulf Coast on Aug. 29. On the Friday before Hurricane Rita hit the Louisiana-Texas coast on Sept. 24, 35 percent of U.S. refining capacity was shut down. But, with all the attention those events have brought to the energy markets, they are the effects, not the causes of tighter energy supplies, according to Matt Roberts, an energy economist with the Ohio State University Extension Service. - Forrest Laws, Farm Press Editorial Staff

    Brazil sets pace on alternate fuels
    More than 30 years after the Arab oil embargo struck fear through much of the industrialized world and U.S. leaders vowed never again, things have changed - at least in Brazil. The largest country in South America,Brazil has almost unshackled itself from foreign oil. It once imported 80 percent of its crude oil; now, it expects to be self-sufficient in a few years. Today, 40 percent of all the fuel Brazilians pump into their vehicles is ethanol, derived primarily from sugarcane bagasse. The government requires that all fuel sold within the country contain at least 25 percent ethanol. - Hembree Brandon, Farm Press Editorial Staff

    Farm groups demand increased market access overseas
    U.S. Trade Representative Rob Portman's proposal to eliminate U.S. agricultural export subsidies and cut farm price supports by more than half by 2010 is generally winning praise from farm organizations and Congress. But some of those groups and the chairman of the Senate Agriculture Committee are demanding that any reductions in U.S. subsidies for a new WTO agreement must be matched by increased access to other countries' markets. Portman's plan, outlined in an article in the Financial Times before it was tabled at a meeting of Doha Round negotiators in Zurich, Switzerland, Oct. 10, also called for tariff reductions of 55 to 90 percent by other WTO members and restrictions on WTO litigation activities. - Forrest Laws, Farm Press Editorial Staff

    Scientists reflect on influential field trial
    When Ernie Jaworski became the leader of Monsanto's first biotechnology team in 1979, he had no idea that 25 years later farmers would be planting 200 million acres of genetically engineered crops. For all Jaworski knew, he and his team were embarking on a search that could have led them to a dead-end that would jeopardize their scientific careers and waste millions of dollars of Monsanto's money. "Could you put corn DNA in a plant and keep it stable? Could a trait that you put in a plant be inherited? All of those were unknowns at the time," he said. "It took several years of hard work to find out whether we could solve the scientific issues that made all this possible." - Farm Press Editorial Staff

    New CCR system could mean more money
    Producers placing their cotton in the CCC loan this fall may notice a new line on the Cotton A-5 Statement of Eligibility and Information Worksheet that you sign at your county Farm Service Agency office. Line 21, which says, "Do you agree that any agent you authorize to redeem this loan may use the automated EAD redemption process?" looks fairly innocuous, but it could mean more money in growers' pockets, according to those familiar with USDA's new electronic loan redemption service. - Forrest Laws, Farm Press Editorial Staff

    Tour Brazil with Corn & Soybean Digest Magazine
    You have just over a week remaining to register! 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:, 952-851-4667 or Renata Stephens, Capital Travel Solutions,, 651/287-4900 or 800/635-5488. A complete itinerary can be viewed on the CTS website:


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