A Primedia Property
March 2, 2005 050302

Table of Contents
Logan Hawkes
Record supplies will depress U.S. exports over 2004
Zero ag trade balance could be in offing for 2005
Lower production, lower prices in USDA's forecast
Australia finds own problems with herbicide resistance
Chinese corn exports picking up
News from the Top of the Hill
Johanns 'optimistic' Congress will pass budget
Thiesse's Thoughts: Federal budget cuts
USDA forecasts record high net cash farm income
Who says casinos can't be educational?
NEW? NEXT? NOW?
ASA voting delegates set policy direction
Corn growers enjoy Johanns visit, record trade show


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Letter from the Editor
Logan Hawkes
03/02/05    Crop News Weekly
March has arrived and with it the hope of a warmer growing season just around the corner. Best of luck to all in the critical weeks and months ahead.

Speaking of critical - reader email coming in after last week's edition indicates not everyone in the ag business thinks that the possibility of reduced ag funding by the feds is a completely bad idea. One reader writes that all of us should be prepared for less support and more fortitude for the coming years - an idea that in principle has great merit. Better risk management, they say, may be the key to living under future payment limitations and a tighter U.S. budget. Yet another reader writes that we made a couple of mistakes in last week's edition. First off, Sen. Ken Crawford of North Dakota is actually Sen. Kent Crawford. We were just testing you on this one. The big mistake was that the good senator is a democrat and not a republican as reported - sorry for the confusion.

The guilty electronic editors and spellcheckers have been completely tested, punished and retuned to prevent such simple mishaps - like general gramar and speling mistaks.

As far as calling a dem a rep, we think it is part of a larger political conspiracy - or a mistake. Again, thanks for bringing this to our attention. Happy reading!


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For more information about how to protect your fields from the threat of soybean rust, please visit www.soybeanrust.com


From our Magazines
Record supplies will depress U.S. exports over 2004
Hembree Brandon
02/28/05    Western Farm Press
U.S. agricultural exports are forecast to hit $59 billion in fiscal 2005, down from the $62.3 billion level of 2004, but up $3 billion from USDA's Nov. 2004 projection. The decline from 2004 is due to record global grain, soybean, and cotton supplies, according to Nora Brooks and Carol Whitton, Economic Research Service coordinators, and Ernest Carter, Food and Agriculture Service coordinator. Their projections were presented at USDA's Agricultural Outlook Forum 2005 here.


Zero ag trade balance could be in offing for 2005
Hembree Brandon
02/28/05    Western Farm Press
An expected decline in the value of U.S. agricultural exports in fiscal 2005, along with an increase in agricultural imports, is projected to result in a U.S. agricultural trade balance of zero. If that scenario is realized, it would be the first year without a surplus in nearly half a century, according to the February 2005 USDA Agricultural Baseline Projections to 2014 report by the Interagency Agricultural Projections Committee. The last year with a zero balance was 1959.


Lower production, lower prices in USDA's forecast
Hembree Brandon
02/25/05    Western Farm Press
South America is poised to capture most of the increase in global demand for oilseeds in the coming years, says USDA Chief Economist Keith Collins, and "will remain our most formidable competitor in the world market." Global soybean carryover as a percent of total use for 2004-05 is expected to be up "quite sharply -- very high by historical standards," he said at Agricultural Outlook Forum 2005 at Arlington, Va. But lower prices for soybeans, the weakness of the U.S. dollar against the Brazilian real, and the Asian soybean rust problem "could stall soybean expansion in Brazil."


Australia finds own problems with herbicide resistance
Ron Smith
02/25/05    Southwest Farm Press
Steve Powles, a plant biologist and director of the Western Australia Pesticide Resistance Initiative, is in the United States doing missionary work of a sort, but instead of trying to save souls, he's trying to save glyphosate. January is peak summer in the land down under and that's when Powles, like most of his countrymen, likes to take vacation. But this year he traded warm summer Australian sun and sand for the cold rain and ice of an American winter.


Chinese corn exports picking up
Richard Brock
02/23/05    The Corn & Soybean Digest
Chinese corn exports are picking up as lower prices and higher freight rates restore a competitive edge in the Asian market against its rivals from Argentina and the United States, according to Reuters News Service. Traders on Friday told Reuters China might be able to ship 300,000-400,000 metric tons of corn each month for total exports of about two million tons in the first half of 2005, up from just 2.32 million tons in the whole of 2004. Most of the exports are expected to go to South Korea.


News from the Top of the Hill
Scott Shearer
02/25/05    National Hog Farmer
Deadline to Signup for Air Emissions Agreement Nears - The Environmental Protection Agency (EPA) published the Animal Feeding Operations Consent Agreement and Final Order in the Federal Register on Jan. 31, 2005. EPA has given producers 90 days from the date of publication in the Federal Register to sign up to participate in the agreement. Therefore, pork producers have approximately two months remaining to sign up and obtain the protections offered by EPA for past violations of air emissions. The National Pork Producers Council (NPPC) is urging all pork producers to participate in this critical agreement. More information on the air emissions consent agreement can be obtained on NPPC's website at: http://www.nppc.org/hot_topics/airemissions.html

Agriculture Sales to Cuba Tightened - The Department of the Treasury's Office of Foreign Assets Control (OFAC) has now determined that the payment for agriculture shipments to Cuba has to be received "prior to shipment of goods." The policy for the past three years has been that the payment must be received before the goods are released to the Cuban government. The agriculture community is very concerned that this will limit sales to Cuba, which has been a growing market for U.S. agriculture, and that this is another step by the administration to limit those sales. The White House has consistently opposed any changes regarding the United States' sanctions policy towards Cuba. Since 2001, when Congress passed legislation allowing for the sale of agricultural products to Cuba, the U.S. has exported approximately $800 million in agricultural products. The American Farm Bureau Federation stated, these "regulations are unwarranted and will have the basic effect of disrupting the shipment of U.S. farm products, and, initially, it will likely cut off all purchases of U.S. farm products to Cuba." Senator Larry Craig (R-ID) said "OFAC's ruling is a slap in the face to American farmers, shippers, ports and the legislative branch working to open markets for our producers. With our farmers and processors facing difficult times, and some shippers and ports relying heavily on Cuban trade, it is perplexing that bureaucrats, still stuck in a Cold War mentality, continue to try and curb one-way export markets."

Cuba Trade Legislation - Senators Larry Craig (R-ID), Max Baucus (D-MT), and Pat Roberts (R-KS) have introduced S. 328, the "Agricultural Export Facilitation Act of 2005," which clarifies that payments by Cuba for agricultural sales do not have to be made before the shipment of the goods. This would overrule the Office of Foreign Assets Control's recent decision (see previous story). The legislation would also allow payments to be made directly to U.S. banks and make it easier for U.S. citizens to travel to Cuba to market agricultural products.

State Attorneys General Support R-CALF Suite - The attorneys general from Montana, North Dakota, Connecticut, Nevada, New Mexico, South Dakota, and West Virginia filed a "friend-of-the-court" brief with the U.S. District Court in Billings, MT, asking for a temporary court order to prevent USDA's rule to allow Canadian live cattle under 30 months of age to enter the U.S. R-CALF has asked the court to impose an injunction until the court has heard its case against the rule. The court is scheduled to hear arguments regarding R-CALF's request next week.

Payment Limitations - Senators Chuck Grassley (R-IA), Chuck Hagel (R-NE), and Byron Dorgan (D-ND) have introduced S. 385, which would lower payment limitations to $250,000. Currently, a producer may receive $360,000 in commodity payments per year. The legislation also limits the use of generic certificates and tightens the limits for producers under the three entity rule. Senator Hagel said, "This bill would bring sensible reform to our farm policy. Because of the loopholes in the Farm Bill, about 60% of farm payments go to 10% of producers - allowing the largest farm operations to grow with tax-payer dollars, while family farms get squeezed out. This step to level the playing field for small family farmers is long overdue." This will be a major fight in Congress, especially in the Senate, with most of the support for lowering payment limitations coming from the Midwest and Great Plaines states and strongly opposed by cotton and rice states.

Johanns 'optimistic' Congress will pass budget
Forrest Laws
02/25/05    Western Farm Press
Agriculture Secretary Mike Johanns says he is "optimistic" Congress will pass most of the spending cuts for agriculture that President Bush proposed in his fiscal year 2006 budget. Speaking at USDA's annual Outlook Forum in Arlington, Johanns said he wasn't surprised that the president's proposals, which include reduced payment limits and a cap on CCC loan eligibility, are drawing intense opposition from farm groups.


Thiesse's Thoughts: Federal budget cuts
Kent Thiesse
02/23/05    The Corn & Soybean Digest
President Bush has released some proposed cuts in the level of spending on farm program commodity payments in 2006 and 2007. The expected expenditures on these commodity payments in 2005 are estimated at approximately $24.1 billion, which is up significantly from the $14.5 billion estimated payments in 2004 and $15.9 billion in 2003. Actually, the 2003 and 2004 spending levels were $7 billion and $8 billion under the USDA budgeted amount, due to higher grain prices, which resulted in lower than anticipated levels of counter-cyclical payments and loan deficiency payments (LDPs).


USDA forecasts record high net cash farm income
Hembree Brandon
02/25/05    Western Farm Press
Despite projections for a $13 billion drop in the value of U.S. agricultural marketings for 2005, USDA's chief economist says record government payments will help push net cash farm income to a record high $78.1 billion, slightly ahead of 2004. And Keith Collins said at Agricultural Outlook Forum 2005 at Arlington, Va., "Farm household income should remain close to last year's level, and still will be well above the average for U.S. households."


Who says casinos can't be educational?
Dave Kohl
02/23/05    The Corn & Soybean Digest
Agriculture Road Warrior Dave Kohl Writes:A trip to Treasure Island Casino to speak to an agricultural group of farm managers and rural appraisers was very educational. First, one only has to go through the casino, get a whiff of the smoke and see all the senior citizens at the gambling stations to realize that Medicare and Medicaid are having deep problems. Yes, many are there to socialize but this whole place looked like a pre-cancer ward!


NEW? NEXT? NOW?
Wayne Wenzel
Farm Industry News
One year ago we reviewed some of the top technology trends transforming agriculture. We also scanned the horizon for clues about the opportunities for and obstacles in the path of these new advances. Now it's 2005, and some of the technologies we described have been adopted so rapidly they hardly seem new anymore. Meanwhile, others that grabbed our attention have lagged a bit but are still developing over the horizon. What next?



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From the News Wire
ASA voting delegates set policy direction
02/28/05    American Soybean Association
Soybean producers gathered in Austin, Texas, last week to review and revise the policy direction of the American Soybean Association (ASA). Soybean producers from production areas across the United States participated in this annual process that guides the ASA as it pursues future initiatives to improve U.S. soybean farmer profitability. The voting delegates session was held in conjunction with the tenth annual Commodity Classic Convention and Trade Show.


Corn growers enjoy Johanns visit, record trade show
02/28/05    NCGA News
A visit from Secretary of Agriculture Mike Johanns and a record number of trade show exhibits highlighted the 2005 Commodity Classic last week in Austin, Texas, according to the National Corn Growers Association (NCGA). Overall attendance at the event was 3,323 people, including nearly 1,100 growers. The best-ever trade show featured 186 exhibitors in 708 booths. The event also attracted 85 members of the media. "This was without a doubt one of the best Commodity Classic events we've ever had," NCGA President Leon Corzine said.



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Q: How many acres could potentially be infected with soybean rust?

A: Soybean rust is very aggressive, but making predictions is difficult as more information is being developed on U.S. varieties in U.S. conditions. The severity will depend on the timing of infection, the amount of inoculum and most importantly, the environment.

For more soybean rust Q&A, please visit www.soybeanrust.com


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