Friday's Ag Headlines

“President Releases Budget”

Calling it - A New Era of Responsibility, President Obama as unveiled a 3.55 trillion dollar budget for fiscal year 2010. In the President’s message Mr. Obama pledged – we will make the investments in the next three years to double our Nation’s renewable energy capacity. In the process, he added, - we will put Americans to work in new jobs that pay well – jobs installing solar panels and wind turbines and develop the new energy technologies that will lead to even more jobs and more savings, putting us on the path toward energy independence.

The bill: provides over 20-billion dollars in loans and grants to support and expand rural development activities. Supports the implementation of a 250-thousand dollar commodity program payment limit. Reduces direct payments to the largest farmers. Reduces crop insurance subsidies and eliminates cotton storage credits. The budget also Improves enforcement of the Packers and Stockyards Act and supports nutrition programs.

The President said – those of us who manage the public’s dollars will be held to account – to spend wisely, reform bad habits, and do our business in the light of day – because only then can we restore the vital trust between a people and their government.
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“Harkin Comments Favorably on Budget Proposal”

Iowa Senator Tom Harkin, Chairman of the Senate Ag Committee, says - there will be no quick fixes to the economic situation facing our country. That’s why the blueprint sent to Congress by President Obama provides honesty in budgeting; making tough choices, but wise investments that will restore our fiscal health and cut the deficit in half over the first five years.

Harkin said, - we need every federal dollar to go where it can do the most good. In scrubbing the budget, the President has focused on reforming large commodity program payments and the direct Freedom to Farm payments.

The Iowa Senator said - the proposal for increased nutrition funding is a critically needed and justified investment in better diets and nutrition for America’s children, which can lead to lifelong better health and wellness. This investment goes hand-in-hand with and is integral to the president’s call for health care reform because it is a key prevention strategy.
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“Chambliss Concerned with Safety Net”

Senator Saxby Chambliss says he is - greatly concerned - with several proposals outlined in the President’s budget. The Ranking Member of the Senate Ag Committee says - efforts to cut direct payments and make other sweeping changes to current farm policy will only inject additional uncertainty into the farm economy. Chambliss said the bill - will be met with my strong opposition.

Chambliss said – I believe it is unwise to completely alter the makeup of the farm safety net before we have the opportunity to assess the effects of the reforms included in the 2008 farm bill. The Georgia Senator emphasized our focus should be - the certainty they expect - and work with the agriculture community at the appropriate time to make any changes in the current farm safety net.
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“More Reaction”

House Ranking Member Frank Lucas opposes President Obama's budget proposal that calls for eliminating direct payments to farmers with more than 500-thousand dollars in annual sales. Lucas says - this proposal attacks family-run farms all across rural America. The people who provide us with the safest, most abundant food supply in the world are being asked to shoulder the burden of our economic crisis.

Lucas said - this proposal is ill-timed, ill-conceived, and completely out of touch with the realities of production agriculture. He added - we made a commitment to our producers when we passed the 2008 farm bill. Now, during an economic crisis, now when our producers are trying to make planning decisions, now when they're trying to address higher input costs, we're going to renege on our promise to them.
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“Organizations Note Weaknesses in Budget Bill”

The President’s budget calls for direct farm program payments to farms with sales over a half-million dollars to be phased out over three years. Earlier, Secretary of Agriculture Tom Vilsack told members of the National Association of Wheat Growers – the future of direct payments is not going to be an easy future. He predicted they have a – limited future.

The National Cotton Council said the proposed program changes fail to recognize the work recently completed by Congress on the farm bill. The NCC emphasized that after a lengthy and arduous debate, the current farm law, which is still being implemented, introduced significant commodity program changes while maintaining an important safety net for production agriculture, and enhanced conservation and nutrition programs.

The Act includes a new provision directing the Secretary of Agriculture to cover a portion of upland cotton Commodity Credit Corporation loan storage costs during periods of low prices. NCC says - the new provision simply legislates at a reduced rate an administrative practice that USDA has undertaken for several years. The cost of the new provision was fully offset by modifications to the upland cotton counter-cyclical target price.
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“Proposal Will Impact WTO Talks.

What impact will the President’s proposal have on WTO talks? An economist at Truth about Trade and Technology says anything that would reduce payments to farmers in the United States would be looked on favorably by the rest of the world. Ross Korves says - it's what happens next when times get tough - that would spell out the longer-term impact of U.S. domestic farm policy on WTO talks.

U.S. spending on farmers has been one of many points of contention in World Trade Organization talks and trading partners want to see more concessions. Total U.S. crop and dairy subsidies are estimated to total about 7.5-billion dollars this year due to relatively strong crop prices. In 2005, when prices were lower, subsidies were more than 16.4- billion.
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“Cap on Greenhouse Gas Emissions Difficult Sell”

A mandatory cap on the nation’s greenhouse gas emissions, a key part of President Obama’s domestic agenda, may be hard to sell on Capitol Hill. The cap would be designed to generate revenue for the Federal Government – and at the same time address the world's most pressing environmental issue. But key Senators already disagree on how to design a system that limits emissions, puts a price on carbon and allows industries to trade pollution allowances.

The developing battle is pitting one region against another. Lawmakers from coastal states understand a carbon cap is a critical goal. But many feel its long-term economic benefits would outweigh its costs. But others from the middle U.S. fear it could hurt their states' economies. Many of these states depend on fossil fuels and manufacturing.

A federal cap-and-trade program would create a new commodity - allowances that would permit industries to discharge specified amounts of carbon dioxide into the atmosphere -- and a market for that commodity that would be worth tens or perhaps hundreds of billions of dollars, along with a complex new regulatory system.
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“Farm Bureau Encourages Rural Development”

American Farm Bureau Federation President Bob Stallman told attendees at USDA’s annual Outlook Forum that the relationship between farmers and rural communities is still a two-way street. The Farm Bureau leader said it is clear that today’s farm families need employment opportunities in their hometowns in addition to their farm income. And, he said, they need vibrant local businesses that provide goods and services to their farms.

Stallman said - the need to emphasize rural development issues such as high-speed Internet access, improved healthcare services, enhanced education and improved infrastructure is growing in importance to America’s farm and ranch families. Stallman said, in order to improve the quality of life in rural America, Farm Bureau will be a public policy advocate and serve as a ready resource on rural development issues for states and counties.
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“Canadian Cattlemen: Time to Move Against COOL”

The Canadian Cattlemen’s Association says it has seen enough. It’s time for its government to take its trade challenge against the United States’ Country-of-Origin Labeling legislation to the World Trade Organization. The Canadians had earlier opted to wait and see if the new administration would make changes to the COOL rule. But, U.S. Ag Secretary Tom Vilsack has communicated to the U.S. industry that he expects adoption of his suggested voluntary guidelines. And that prompted the desire by the Canadians to move against the U.S.

Before the final rule was announced, a number of U.S. meat packers and processors curtailed their imports of Canadian livestock and meat, citing the expense of dedicating separate production lines to handle imported animals or products.

COOL requires labeling at U.S. retail for muscle cuts, ground beef, veal, pork, lamb, goat and chicken; wild and farm-raised fish and shellfish; fresh and frozen fruits and vegetables; peanuts, pecans, macadamia nuts, and ginseng sold by designated retailers.
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“U.S. Sorghum Going to Canada”

The U.S. Grains Council has organized the sale of four railcars of South Dakota sorghum to Canada. The sale of approximately 360 metric tons was finalized this week. Dan Keefe, USGC manager of international operations for DDGS, said this sale was not about quantity but more so about opportunity. Keefe said, - this is the initial step in getting greater quantities of U.S. grain sorghum to our northern neighbors.

Keefe said U.S. sorghum has strong potential for growth in the Canada’s marketplace due to its competitive price to local wheat and barley. Exporting sorghum, according to Keefe, is profitable for U.S. farmers; in the case of this transaction, the sorghum was priced higher than it was in South Dakota.
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“Senators Want Delay in Chinese Cotton Registry”

A handful of key U.S. Senators want China to delay implementation of its new registration system exclusively for imported cotton. The program is set to begin March 15th. The Senators argue the new system, launched as part of China’s General Administration of Quality Supervision Inspection and Quarantine, lacks transparency and is in clear violation of China’s World Trade Organization accession agreement.

In a letter to Ag Secretary Tom Vilsack, U.S. Trade Representative Peter Allgeier and Chinese Ambassador Zhou Wenzhong, - Senators Saxby Chambliss, Tom Harkin, Blanche Lincoln, Thad Cochran, and Pat Roberts specifically outline their requests to encourage appropriate U.S. officials to continue to engage appropriate Chinese authorities to gain the delay.

Additionally, they ask them to schedule technical consultations if the delay is accepted and request this matter be included on the agenda for next month’s regular meeting in the WTO on technical barriers to trade.
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“Producers Favor Biotech Traits in Wheat”

Anecdotal evidence has long suggested many wheat producers would like biotech traits in their arsenal, and national wheat organizations support biotech commercialization. But what do local growers really want? More than three-quarters of wheat growers responding to a recent National Association of Wheat Growers survey approved a petition supporting the commercialization of biotechnology in wheat.

This large number of approvals may be just what private technology providers need to be assured of ground-level support for their efforts before undertaking the decade-long, multimillion-dollar path toward commercialization of a trait.

To date, the survey has enjoyed a 32 percent response rate, with approval rates similar across states and farm sizes.
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“Report: Rural Employment Down”

The Daily Yonder/Center for Rural Strategies reports that 297-thousand jobs have been lost in Rural America – and all but 15-thousand were shed in December of 2008. Rural counties lost 282-thousand jobs in December, raising the rural unemployment rate to 7.6 percent, up from 6.8 percent in November. The national unemployment rate was 7.1 percent in December.

The Center says every state except Texas lost employment in rural areas in December. The highest rates of unemployment increase for rural counties occurred in the Northern Great Plains. The worst percentage increase occurred in Shelby County, Missouri, where the unemployment rate rose 86 percent.
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“Lamb-Mutton Exports Strong”

The export of U.S. lamb and mutton muscle cuts set a new single-year record in 2008. The U.S. Meat Export Federation reports that, after a decline in 2007, volume increased 28 percent during 2008 - exceeding five-thousand metric tons. But the strongest growth was in value, which nearly doubled over 2007 by reaching 21.5 million dollars – an all-time record for a single year. When lamb variety meats are included, total exports increased by 44 percent in worldwide value to more than 25.3 million – the second-highest total on record.

The USMEF reports that lamb exports to the Caribbean were the largest factor, increasing 121 percent in volume and 240 percent in value over 2007. Bermuda alone accounted for about half the value of global U.S. lamb exports, totaling 10.65 million dollars for the year. Other significant Caribbean destinations for U.S. lamb include the Bahamas, Jamaica, the Cayman Islands and the Dominican Republic.

Elizabeth Wunderlich, U.S. Meat Export Federation representative in the Caribbean, says - exporters are becoming more aggressive when it comes to the export market for lamb, and the Caribbean has certainly been one of the shining stars. She points out - you have a native population there that really enjoys cooking and eating lamb, as well as a hotel and restaurant industry that loves to feature high-quality cuts of U.S. lamb.
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