In the top of the news this week, and speaking of reminders, Agriculture Secretary Mike Johanns reminds us we have until the end of the week to wait before sign-up begins for the 2006 Conservation Security Program. In a related story, a few farmers are going to be disappointed because the initial selection of the 110 watersheds eligible for funding as announced by USDA last summer was based on President Bush's fiscal 2006 budget request. Congress provided funding for only 60 watersheds. Also this week, drip irrigation can save you money and water, but without proper system care the opposite can happen. We'll tell you all about it this week. Elsewhere in the news, anyone who keeps up with the federal deficit knows that the farm sector is likely to face a vastly different budget outlook when Congress begins writing a new farm bill than when it wrote the 2002 legislation. We'll try to help you understand the changes that are coming. Finally this week, ag biotech is a growing concern, but mostly outside U.S. borders. Iran and China are becoming the most advanced countries in the commercialization of biotech rice, the world's most important food crop.

State of the Union & Ethanol - President Bush in his State of the Union address set a national goal of replacing more than 75 percent of the United States' oil imports from the Middle East by 2025. Bush said it was time for the U.S. to break its "addiction" to foreign oil through new technology. The National Corn Growers Association in a statement said, "Corn growers witnessed firsthand the president's firm commitment to our business. By highlighting corn ethanol, President Bush showed his confidence that America can count on corn growers and the ethanol industry." According to the White House, the President's proposed budget for fiscal year 2007 will include $150 million to help develop bio-based transportation fuels from agricultural waste products, such as wood chips, stalks, or switch grass. This is a $59 million increase over fiscal year 2006. Research scientists estimate that "accelerating research into cellulosic ethanol can make it cost-competitive by 2012." The potential would displace up to 30 percent of the U.S.'s current fuel use.

Mexico Re-opens to U.S. Bone-In Beef - Mexico has resumed trade in U.S. bone-in beef from animals under 30 months of age. Secretary of Agriculture Johanns said, "Mexico's decision to further open its market to U.S. beef is a testament to the safety of U.S. beef and a clear expression of confidence in the U.S. safeguards to prevent BSE." In 2003, the U.S. sold $40 million of bone-in beef products to Mexico.

Canadian Border - Montana Litigation - Five meat organizations filed a friend of the court brief in support of USDA's rule allowing cattle and beef imports from Canada. The brief urges the continuation of cattle and beef trade with Canada. The brief is in response to R-CALF's request for a hearing in U.S. District Court in Montana regarding its litigation against USDA's final rule allowing for the importation of cattle and beef products from Canada. The friend of the court brief stated the rule opening the Canadian border is "working well," and that the arguments that reopening the Canadian border for beef would "undercut consumer confidence in U.S. beef and that the influx of Canadian cattle would adversely affect domestic cattle prices are not borne out by USDA economic date." Those filing the brief were the American Meat Institute, National Meat Association, North American Meat Processors, Southwest Meat Association and the Eastern Meat Packers Association.

Agricultural Contracts Increasing - In a recent study entitled "Agricultural Contracting Update: Contracts in 2003," USDA's Economic Research Service (ERS) found that contracts in 2003 covered 39 percent of the value of U.S. agricultural production. This is up from 36 percent in 2001. The study shows a growing trend as contracting covered only 11 percent of the value of production in 1969 and 28 percent in 1991. The recent increases in contracting are concentrated in hog, tobacco, cotton, and rice production. The study also found that contracting is closely tied to farm size. "Contracts covered just one-fifth of production among farms with less than $250,000 in sales, and over half (53 percent) of production on the largest farms, those with over $1 million in sales." The study found that from 2001 and 2003, contracting increased among the largest farms, but held steady or declined among smaller farms.

Farm Numbers Decline in 2005 - USDA this week reported that the number of farms in the U.S. in 2005 was estimated at 2.1 million. This is a decrease of 0.6 percent compared to 2004. The number of acres in farms was 933.4 million acres which is a decrease of 2.9 million acres from 2004. USDA estimated the number hog operations at 167,330 which is a decline of 3 percent from 2004 and 9 percent from 2003. Operations with 2,000 head or more accounted for 79 percent of the inventory. Operations with cattle totaled 982,510 which is 1 percent below 2004 and 3 percent below 2003.

CRP Re-enrollments and Extensions - USDA announced that it will begin notifying agricultural producers with Conservation Reserve Program (CRP) contracts expiring in 2007 that they may extend or re-enroll their contracts. The CRP contracts expiring in 2007 cover nearly 16 million acres. USDA also announced that a general CRP sign-up will be held from March 27 through April 14. Producers will be able to make offers for CRP's competitive general sign-up. The offers will be evaluated based on cost and five environmental factors: wildlife, water, soil, air and enduring benefits.

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