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A Prism Business Media Publication May 17, 2006 | 060517   
TABLE OF CONTENTS
 >> Logan Hawkes

 >> Farmers having their say, but is anybody listening?

 >> Costs of alternative tillage systems

 >> USDA forecast smaller U.S. crops in 2006-07

 >> Tax cuts and deficit spending

 >> News from the Top of the Hill

 >> The monster under the bed

 >> Brazilians seeking closer relations with China

 >> ASA announces biodiesel priorities for next energy bill

 >> Curing ills of trade policy a balancing act for agriculture

 >> Proper soil fumigant application critical for producer

 >> Thiesse's Thoughts: The Politics Of Ethanol

 >> Road Warrior: Global Perspectives

 >> Farm programs should include range of producers

 >> Hurricane assistance sign-up to begin May 17

 >> Producers urge Committee to 'stay course' on farm bill

 >> What is it that distorts markets?

 >> Weather brings mix of concerns for soybean farmers

 >> Good marketing could easily offset rising costs

 >> Sign Up for MarketMaxx

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  EDITOR'S NOTE
Logan Hawkes
05/17/06    Crop News Weekly
There's so much attention being focused on immigration reform and U.S. policy abroad, it's easy to miss out on the news that impacts life on the farm. For example, Brazil is positioning their soybean export trade to target the growing Chinese market, a move that is good for Brazil, perhaps not so good for future U.S. soybean exports. And there's competition issues at the domestic level. While everyone seems to agree that ethanol production is a good thing for our nation, some argue corn is the best farm product to get the job done. The ASA says soybeans are a better ethanol crop while others support development of sugar-rich alternative crops, like sugarcane, to meet the need.

Elsewhere in the news this week, U.S. farmers find themselves in an anxious position these days, with their own government appearing to be hell-bent on placing agriculture on the scrap-heap. Can politicians ever keep their promises? Also this week, Strip-till and no-till tillage systems have lower fuel use and lower costs than typical-till and heavy-till systems. Get the details inside this issue. And - hold on to your hats - USDA's first crop assessment of 2006-07 is for smaller output in all major U.S. crops. However, planting is still under way in many parts of the United States, making the May 12 estimates for the 2006-07 season highly tentative.

There's far more ag news to cover this week than usual, so dig in and enjoy. Happy reading!



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  FROM OUR MAGAZINES
Farmers having their say, but is anybody listening?
05/15/06   
U.S. farmers find themselves in an anxious position these days, with their own government appearing to be hell-bent on placing agriculture on the scrap-heap along with textiles and other industries that have practically become non-existent in this country. To their credit, the commodity groups and organizations that lobby for farmers have worked with the current Administration and Congress to insure a "fair shake" for farmers in the upcoming farm bill. But it hasn't done much good. It has resulted in broken promises -- promises that were made when the current farm bill was passed and signed into law. - Paul Hollis, Farm Press Editorial Staff

Costs of alternative tillage systems
05/16/06   
Strip-till and no-till tillage systems have lower fuel use and lower costs than typical-till and heavy-till systems, according to a University of Illinois (U of I) Extension report. "Tillage adds about $9.50 in costs per acre and between one and two gallons of fuel use," says Gary Schnitkey, a U of I Extension farm financial management specialist, who co-authored the report with colleague Dale Lattz. "The economic advisability of adopting these reduced tillage systems depends on whether yield losses occur or pesticide costs are increased with their adoption." Schnitkey says the report, "Costs and Fuel Use for Alternative Tillage Systems," was prompted by recent increases in fuel and new equipment prices. - The Corn & Soybean Digest

USDA forecast smaller U.S. crops in 2006-07
05/15/06   
USDA's first crop assessment of 2006-07 is for smaller output in all major U.S. crops. However, planting is still under way in many parts of the United States, making the May 12 estimates for the 2006-07 season highly tentative. U.S. cotton production for 2006-07 is forecast at 20.7 million bales, 13 percent below 2005-06, based on a projected yield of 770 pounds per acre. - Elton Robinson, Farm Press Editorial Staff

Tax cuts and deficit spending
05/16/06   
If you have an income of $1 million (hey, the public thinks everyone in farming is a millionaire from Uncle Sam's crop program payments), your friends in Washington want to give you a tax cut of $42,000. Won't exactly buy a big Mercedes, but maybe a lesser model for tooling around the farm and running to the parts store. If your income is a paltry $50,000 (we're speaking hypothetically, of course, since everyone in farming is a millionaire, and $50k is chump change), those selfsame D.C. buddies want to slash your taxes by -- are you ready for this? -- $46. Which might buy a tank of gas for your pickup. - Hembree Brandon, Farm Press Editorial Staff

News from the Top of the Hill
05/12/06    National Hog Farmer
Agriculture Appropriations -- This week, the House Appropriations Committee approved the fiscal year 2007 agriculture appropriations bill. The bill provides $18.4 billion in discretionary funding which is $96 million below last year's appropriations bill. The committee extended the peanut storage and the Milk Income Loss Contract (MILC) programs for one month, which allows them to expire at the end of the 2002 farm bill. The committee rejected an amendment by Congressman Todd Tiahrt (R-KS) that would have allowed individual companies to test for bovine spongiform encephalopathy (BSE). Highlights of the bill include:

  • Avian Flu/Pandemic countermeasures and monitoring are funded at $80 million -- a new budget allocation. In addition, funds from the December 2005 supplemental, totaling $111 million are available through fiscal year 2007.

  • Food Safety and Inspection Service is funded at $853 million, $24 million above last year and $96 million above the President's request. The bill does not include $105 million in new user fees for meat and poultry inspection as proposed by the Administration.

  • Animal and Plant Health Inspection Service activities are funded at $904 million, $92 million above last year. The bill does not include $8 million in new user fees proposed by the Administration.

  • Bovine Spongiform Encephalopathy (BSE) detection and prevention activities are funded at about $90 million, the same as last year.

  • Commodity Supplemental Food Program is funded at $118.3 million, $11 million above last year.

  • Child Nutrition Programs (Mandatory) are funded at $13.3 billion, $685 million above last year.

  • Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is funded at $5.244 billion, $40 million above last year.

  • Food Stamp Program (Mandatory) is funded at $37.9 billion. In fiscal year 2007, participation is estimated to decrease by about 1.1 million participants according to the most recent estimates by the Administration.

  • Food for Peace Program (PL 480) Title II is funded at a program level of $1.2 billion, an increase of $85 million above last.

  • Agricultural Research Service is funded at $1.2 billion, $49 million below last year's level.

  • Conservation Operations activities are funded at $791 million, $40 million below last year.

  • The Foreign Market Development (FMD) program is fully funded at $34.5 million and the Market Access Program (MAP) is fully funded at $200 million.

    The House of Representatives may consider the bill as early as next week.

    Ethanol Import Tax -- Senators Dianne Feinstein (D-CA), John Kyle (R-AZ), and John Sununu (R-NH) have introduced legislation to lift the 54-cent/gal. tax on imported ethanol. President Bush has indicated the import tariff should be temporarily lifted to assist coastal states secure adequate supplies of gasoline. Senators Tom Harkin (D-IA), Byron Dorgan (D-ND), Dick Durbin (D-IL), Tim Johnson (D-SD), and Barack Obama (D-IL) sent a letter to President Bush objecting to the lifting of the ethanol import tax. The Senators said this "would be a serious mistake that would undermine a carefully-targeted U.S. tax incentive promoting the growth and development of our domestic renewable fuels industry." Senators Charles Grassley (R-IA) and John Thune (R-SD) in a letter opposing the proposal said, "lifting the tariff would be a victory for the oil companies, a kick in the face to rural America where the ethanol comes from, and leave consumers with the same high gas prices we have today."

    Agricultural Groups Oppose Lifting Ethanol Import Tax -- In a letter to the House and Senate leadership, the American Farm Bureau Federation, National Corn Growers Association, and the Renewable Fuels Association stated their strong opposition to the legislation introduced to lift the tax on imported ethanol. The letter stated, "Such a policy is short-sighted and detrimental to America's long-range energy needs and we strongly urge all Senators and Representatives to oppose this legislation. While demand for ethanol has grown over the past several months due to decisions by the petroleum industry to remove methyl tertiary butyl ether (MTBE) from gasoline, that change has not caused the large spikes in retail gasoline prices." The organizations also reminded the leadership that Brazil's ethanol industry is highly subsidized. "Most importantly, removing the secondary ethanol tariff would be asking American taxpayers to subsidize already heavily subsidized ethanol and sugarcane production in countries like Brazil," the letter stated.

    Rural Working Group -- Energizing America -- The House Democratic Rural Working Group, co-chaired by Congressmen Bobby Etheridge (D-NC) and Stephanie Herseth (D-SD), unveiled the House Democratic Caucus' energy proposal, "Energizing America: Farmers Fueling Our Energy Independence." It includes:

  • Doubles the percentage of renewable fuels sold in America in six years;

  • Extends tax credit for ethanol and biodiesel through 2015 and increases tax, benefits to small ethanol producers;

  • Increases the percentage of flex-fuel vehicles that run on ethanol, or gasoline;

  • 75% of all cars made in the United States would be flex-fuel cars within seven years,

  • Increase the number of gas stations offering ethanol (E-85) and biodiesel through new incentives and requirements; and

  • Invests in research to make biofuel production more efficient and environmentally sound.

    New Farm Bill Policy -- American Farmland Trust (AFT) released its framework and vision for a new farm policy entitled, "Agenda 2007: A New Framework and Direction for U.S. Farm Policy." AFT's proposal would shift current direct farm program payments to new "green payments" to create greater incentives for farmers to deliver environmental benefits. The proposal would also provide for revenue-based risk management programs to replace counter-cyclical programs; provide a $1 billion grants program to foster innovative enterprises, markets and regional food systems; and a new cooperative conservation program to encourage further stewardship. Former U.S. Secretaries of Agriculture Clayton Yeutter and Dan Glickman endorsed this new approach to farm policy. Yeutter said, "The clock is ticking for U.S. agriculture. Our farmers and ranchers can and should control their own destiny by taking the lead on farm policy reform. The alternative is to risk World Trade Organization challenges that may impose reforms on us that we would prefer to avoid."

    USDA Risk Assessment Farm Bill Paper -- Secretary of Agriculture Mike Johanns released a risk management analysis paper, the first in a series of USDA's farm bill theme papers. Johanns' said, "Our purpose with these analysis papers is not to suggest policy but to inform and educate the public." The paper provides data and analysis of current risk management programs offered by USDA. The paper is available at: http://www.usda.gov/. - Scott Shearer

  • The monster under the bed
    05/12/06   
    It's worthy of an early-day Mack Sennett film, the farce going on in Washington these days, as everyone from the president on down tries to see who can put on the biggest show of concern and/or outrage about high gasoline prices. It's as if they all had a simultaneous Road to Damascus experience and realized the petroleum sky was falling. Democrats are blaming Republicans, Republicans are blaming Democrats, and everyone's blaming Big Oil, which in the past quarter set another record for profits -- some $16 billion collectively. - Hembree Brandon, Farm Press Editorial Staff

    Brazilians seeking closer relations with China
    05/12/06   
    The United States isn't the only country looking to take advantage of China's demand for agricultural products. A commission from the Brazilian Agriculture Ministry went to China at the beginning of March to settle sanitary and phytosanitary matters for a possible increase in commerce between the two nations. The main objective was to obtain a definitive certification of Brazilian transgenic soybeans for export to that country and to sign a protocol with the Chinese Quarantine Ministry. This is another step Brazil is taking to broaden its agricultural export markets. Agreements in commerce could yield not only exceptionally rewarding contracts in the gigantic Chinese market, but also work as a kind of international truce between the two countries when it comes to fighting over new opportunities. - Jose Sergio Osse

    ASA announces biodiesel priorities for next energy bill
    05/11/06   
    The American Soybean Association (ASA) has long advocated that soybean farmers can help the United States meet its energy needs through the production of soy biodiesel. During a recent national media teleconference, ASA outlined its biodiesel legislative priorities for Congress to consider as it develops another energy bill. "Biodiesel is environmentally sound alternative to petroleum diesel that is made here in the United States using soybeans grown on American soil," said ASA President Bob Metz, a soybean producer from West Browns Valley, S.D. "Biodiesel is a top-notch product that lessens our dependence on foreign oil, improves the quality of the air we breathe and stimulates rural economies where it's produced." - American Soybean Association

    Curing ills of trade policy a balancing act for agriculture
    05/11/06   
    "You can make a fortune in the import business," promised the ads in the pulp magazines of my teen years. While most of the fortunes were made by those selling their "blueprints for financial success," there was a fascination and mysteriousness about goods from other parts of the world -- and their low cost and potential for profit only added to the allure. Made in Japan, a label that was sneered at post-World War II as representing shoddy workmanship, soon grew to represent high quality in automobiles, electronics, cameras, and a flood of other goods craved by an America in the throes of economic prosperity in the '70s and '80s. - Hembree Brandon, Farm Press Editorial Staff

    Proper soil fumigant application critical for producer
    05/11/06   
    Though soil fumigants have been around for many years, some growers may need to use these gas pesticides for the first time in 2006, and may not be familiar with the dangers of these soil-applied products. Growers producing high dollar per acre crops, most prominently vegetable crops, have been the traditional users of Telone and other popular fumigants. With the decrease in tobacco acreage in the upper Southeast, many growers have turned to niche crops, including vegetables, which often require soil fumigants for controlling weeds, disease and nematodes. - Roy Roberson, Farm Press Editorial Staff

    Thiesse's Thoughts: The Politics Of Ethanol
    05/09/06   
    For the past decade or so, as the ethanol industry has grown in Minnesota, Iowa and other Midwestern states, it has garnered very little attention from big oil companies, the national media or from the politicians in Washington, D.C. Now, all of a sudden, ethanol is a major news story every day, is being discussed by President Bush and congressional leaders, and is being blamed by some as a major cause of our high retail gas prices. So what has changed in the past year? First of all, the dramatic rise in crude oil prices to over $70/barrel, and the resulting retail gas price at the pump of nearly $3/gal. Also in August of 2005, Congress finally passed a comprehensive Energy Bill, after nearly two years of debate, which emphasizes domestic development of renewable energy.

    Road Warrior: Global Perspectives
    05/09/06   
    Dave Kohl writes: "Let's take a ride in the fast lane and gain some global insight concerning issues and trends that may influence your bottom line. These are based upon my travels and attendance at the International Home Delivery Conference in Orlando and several bankers' conferences." - The Corn & Soybean Digest

    Farm programs should include range of producers
    05/10/06   
    U.S. farm programs should be broadened to provide benefits to greater numbers of producers, but not in a way that makes "wealthy farms" even larger, Agriculture Secretary Mike Johanns says. The secretary also says any changes in U.S. farm programs should make them less vulnerable to challenges in the WTO where dispute panels have ruled against provisions of the U.S. cotton program and may consider a challenge to the rice program. - Forrest Laws, Farm Press Editorial Staff<.i>

    Hurricane assistance sign-up to begin May 17
    05/10/06   
    Agriculture Secretary Mike Johanns announced farmers may begin sign-up May 17 for four crop and livestock assistance programs designed to help producers unfortunate enough to be in the paths of the 2005 hurricanes. Johanns authorized the programs, which will distribute $250 million in Section 32 funds, last October. He offered no explanation of why it took more than six months to begin the sign-up for the programs. - Forrest Laws, Farm press Editorial Staff

    Producers urge Committee to 'stay course' on farm bill
    05/10/06   
    The message could not have been clearer: Farmers like the current farm program and urge the U.S. Congress to either extend it or use it as the base for a new one. Twelve members of the House of Representatives Agriculture Committee seemed to get that message following a recent field hearing in San Angelo, Texas. "I think the 2002 law works well," said Rep. Colin Peterson, Minnesota, ranking minority member of the committee. "The testimony I've heard in Texas shows a lot of commonality with what I hear in Minnesota." - Ron Smith, Farm Press Editorial Staff

    What is it that distorts markets?
    05/10/06   
    We were interested in reading this year's Economic Report of the President, http://www.gpoaccess.gov/eop/, which contains a chapter on agriculture. One of the main themes of the report is that "support to agriculture can be provided in many forms that are potentially less market-distorting than existing commodity subsidies." In this column we look at the ways the chapter proposes that this less distorting support can be delivered.?After looking at a selected history of the evolution of agricultural programs and who currently receives the benefits, the report asserts that today's farmers "have many options for managing the risks they face" that were not available at the time commodity support programs were put in place in the 1930s. - Daryll E. Ray

    Weather brings mix of concerns for soybean farmers
    05/10/06   
    Mississippi's soybean planting through mid-April was well ahead of our five-year average. Even though the season is off to a good start, it has not been without some concerns. Many farmers started planting earlier than ever before. Although many had some concerns, the yields that early planting has afforded us in recent years made many push the envelope on planting. Some acreage in the Delta was planted as early as late February. - Alan Blaine

    Good marketing could easily offset rising costs
    05/11/06   
    What you don't know could cost you $30,000 at the end of this cotton growing season. If you're counting, that's enough to purchase around 6,500 gallons of diesel fuel and enough to fertilize 200 acres of cotton at today's prices. Looked at another way, it's enough to offset the increase in both fertilizer and fuel costs over last year on 788 acres of cotton. According to a survey, $30,000 is a rough average of the additional profits growers achieve annually after graduating from the Texas A&M Master Marketer program, so it's not out of the realm of possibility. - Elton Robinson, Farm Press Editorial Staff

    Sign Up for MarketMaxx
    05/17/06   
    Sign up and play The Corn And Soybean Digest's fantasy grain game called MarketMaxx. It's easy, fun and hopefully you'll learn a little more about how to market the corn and beans your raise. It's easy to sign-up. Just log on to http://www.marketmaxx.net and register at the top left and begin trading your fictitious 100,000 bu. of corn and 50,000 bu. of soybeans. If you're a winner at the end of the game on October 31 you could take home the grand prize of a year's use of a Massey Ferguson tractor or combine. Or, win additional prizes such as a computer system from Syngenta Crop Protection, customized rugged mobile computers from Grayhill Custom Mobile Solutions or a high-speed satellite Internet service from Agristar Global Networks. - The Corn & Soybean Digest



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