NFU NEWS CLIPS, MAY 18
In this edition:
U.S. Farmers Union Demands 30-Day Review of CME Trading Plan
May 18, 2012
The U.S. National Farmers Union asked the Commodity Futures Trading Commission to start a 30-day review period of extended trading hours by CME Group Inc. and Intercontinental Exchange Inc.
The moves to extend trading hours “have alarmed many of NFU’s members, many of whom are involved in the cash grains market,” NFU President Roger Johnson said in a statement on the group’s website. “Concerns regarding the volatile price swings that occur when U.S. Department of Agriculture reports are released have been voiced.”
Chicago-based CME, the world’s largest futures exchange, delayed plans to expand grain trading hours for the second time this month on May 16. Traders led by R.J. O’Brien & Associates and the two largest U.S. grain-handling organizations objected to CME’s changes because markets would be open during the release of USDA reports, increasing volatility and reducing their ability to make informed decisions.
Corn prices on the exchange have dropped 3.4 percent this year and soybeans are up 18 percent.
ICE, as the Intercontinental Exchange energy and agriculture marketplace is known, targeted CME by offering grain contracts for the first time on May 14 that trade 22 hours a day. Yesterday, CME said its Chicago Board of Trade will be open for trading from 5 p.m. to 2 p.m. Chicago time Sunday through Friday, or 21 hours a day after withdrawing an earlier plan for 22 hours. The CBOT currently allows trading 17 hours a day.
The USDA monthly crop reports are released at 7:30 a.m. Chicago time when grain trading has traditionally been halted. No date was set for the transition.
The Washington-based National Farmers Union represents about 200,000 farmers, ranchers and fishermen, according to its website.
The National Grain & Feed Association and the North American Export Grain Association, the two largest U.S. grain- handling organizations, also objected to CME’s shift to a 22- hour trading day.
More groups back commodity program choices
May 17, 2012
Members of several farm groups told a House Agriculture subcommittee Thursday that they support giving producers choices of commodity programs in the next farm bill, instead of the approach taken by the Senate Agriculture Committee to rely mainly on a shallow loss revenue programs.
Eric Younggren, a Hallock, Minnesota farmer who is president of the National Association of Wheat Growers told the committee that his group supports a revenue program modeled after the 2008 Farm Bill’s ACRE and SURE progams. But when asked by Agriculture Chairman Frank Lucas (R-OK) if his group supports other options, Younggren said the Wheat Growers recognized that other parts of the country have different needs.
American Soybean Association president Steve Wellman of Syracuse, Nebraska, said that after two years of developing policy with soybean farmers across the country, his group decided to back a revenue program in the 2012 farm bill. The group supports the Senate committee’s new Agriculture Risk Coverage program. But he, too, told the committee that his group does not oppose other programs as long as they don’t distort farmers’ planting decisions.
Armond Morris, an Irwinville, Georgia farmer who chairs the Southern Peanut Farmers Federation told the committee that the Senate bill’s ARC program would not protect peanut growers, according to University of Georgia analysis.
His group favors giving peanut farmers a choice between the revenue program and a countercyclical program with a target price of $534 a ton (about half of estimates of current production costs). The Senate bill ends the countercyclical program.
Roger Johnson, president of National Farmers Union, said his group would favor either a countercyclical program or its own proposal for a voluntary farmer-owned reserve that would not be tied to base acres. The cost of the NFU program, which it calls a Market-Driven Inventory System, would be less than a countercyclical program, he said, because the federal government would pay less for storage payments under the MDIS system. MIDIS would raise market prices.
Johnson said that his group, like all of the others, is a strong supporter of the crop insurance program, but that alone does not protect farmers from an economic crisis.
“Crop insurance alone cannot protect against multiyear price collapse,” he said.
The submitted testimony those appearing before the Subcommittee on General Farm Commodities and Risk Management can be found here.
Healthy Food Is a Better Deal Than Junk, USDA Says
May 16, 2012
Wall Street Journal
Healthy food isn’t necessarily more expensive than junk food, according to a new government report.
The finding contradicts long-held conventional wisdom that it’s cheaper to snack on potato chips than carrots, and bolsters the Obama administration’s fight against rising obesity levels in the U.S.
“The United States is facing an obesity epidemic and the crisis of poor diets threatens the future of our children — and our nation,” says Secretary of Agriculture Tom Vilsack.
Food economists traditionally measure the amount of calories you get for your money. By that measure, you still get more when you buy pizza, French fries or other foods high in sodium, salt and saturated fat.
But the USDA study looked at a food’s worth from new perspective and concluded there’s better value in fruits, vegetables, lean meat and low-fat milk. You may get fewer calories per dollar, researchers say, but you get more food when you’re measuring based on price per weight, or price per portion.
And often less-healthy food options are made up of empty calories, prompting people to eat even more, notes Andrea Carlson, lead researcher of the report.
“Take a chocolate glazed doughnut, which is 240 calories,” she says. “You can easily eat one, if not two or three without any trouble at all. However, a banana, which has a lot of nutrients in it and will make you feel quite full, has only 105 calories. You will fill fuller if you eat the banana versus the doughnut.”
By the food-portion metric, romaine lettuce is much cheaper than ice cream sandwiches and 1% milk is cheaper than soda.
About 17% of the 12.5 million children between the ages 2 and 19 are obese, according to the Centers for Disease Control and Prevention. The Department of Agriculture recently revamped nutrition rules for school cafeterias to get kids to eat more fruit, vegetables and whole grains while cutting out fatty foods.
To view this story at its original source, follow this link: http://blogs.wsj.com/health/2012/05/16/healthy-food-is-a-better-deal-than-junk-usda-says/?KEYWORDS=agriculture
Firms to Invest in Food Production for World’s Poor
May 17, 2012
New York Times
The Obama administration has drafted some of the world’s largest food and finance companies to invest more than $3 billion in projects aimed at helping the world’s poorest farmers grow enough food to not only feed themselves and their families but to earn a livelihood as well.
New Alliance for Food Security and Nutrition seeks provide aid to farmers like these in Ethiopia.
President Obama and the leaders of four African countries will introduce the group of 45 companies, the New Alliance for Food Security and Nutrition, on Friday at a symposium on food security and agriculture that will begin the summit meeting of the Group of 8 industrialized nations this weekend at Camp David in Maryland.
“We are never going to end hunger in Africa without private investment,” said Rajiv Shah, the administrator of the United States Agency for International Development. “There are things that only companies can do, like building silos for storage and developing seeds and fertilizers.”
The alliance includes well-known multinational giants like Monsanto, Diageo and Swiss Re as well as little-known businesses like Mullege, an Ethiopian coffee exporter.
The introduction of the group will coincide with the administration’s report on the progress of what is known as the L’Aquila Food Security Initiative, the largest international effort in decades to combat hunger by investing in the fundamentals of agriculture, including seeds, fertilizer, grain storage, roads and infrastructure.
The initiative, first agreed upon by the Group of 8 leaders at their meeting in L’Aquila, Italy, in 2009, was a pledge to put $22 billion into food and agriculture projects. Although much of the money had previously been earmarked for agriculture projects, about $6 billion was new.
Almost all of the $22 billion has now been “budgeted and appropriated,” and 58 percent of it has been disbursed, Mr. Shah said. “I am confident that continuing into this year and the next, the U.S. and other countries will absolutely meet their commitments,” he said.
He conceded, however, that not all of the money is being spent as promised, which has drawn complaints from many nongovernmental organizations and African countries.
“The grand promise of L’Aquila was, if you build a plan for agriculture, the donors will help them find the resources for it,” said Gregory Adams, director of aid effectiveness at Oxfam America, an international relief and development organization.
“Now there are 30 plans of varying degrees of quality with shovel-ready projects donors could invest in today, but instead donors have put their money in other things.”
Some donor countries have insisted that their money be spent on traditional food handouts rather than the building blocks of an agricultural development program, Mr. Adams said.
Several companies that were contacted said the administration had asked them not to speak about their commitments until Friday.
Mr. Shah, however, offered a few examples. Tanseed, a Tanzanian seed company, will commit to spend $11 million over time to buy certified seed and sell it in little packets to meet the needs of small farmers.
Derek Yach, senior vice president for global health and agriculture policy at PepsiCo, a member of the alliance, said it grew from work the World Economic Forum had been doing on food security with the African Union.
“What’s exciting about it is that the companies participating really extend across the value chain,” Mr. Yach said, including seeds, plants, processing and financing.
Mr. Shah said that the administration does not plan for the private sector to take over.
“The president will commit to encouraging ourselves and our G-8 partners to seek to maintain the high level of commitment to agriculture and food security even as we go forward beyond the formal L’Aquila period” of three years, he said.
Crop insurance payout nears $11 billion
May 16, 2012
A few months ago, questions circled closer to the $9 billion mark.
But now, some are speculating the crop indemnity payments for the last crop year could soar beyond the $11 billion mark, according to a crop insurance industry group.
A report released Wednesday by National Crop Insurance Services (NCIS) shows the number of payments going out to insurance-covered farmers from weather-related crop losses is sitting around $10.7 billion right now, and that number's not topped out yet, an NCIS report shows. Even though it's still climbing, that number's already 25% higher than the previous record of $8.76 billion set in the flood year of 2008.
"Spurred on by one of the worst weather years in history, farmers and ranchers faced unparalleled challenges in 2011 and crop insurance reached record amounts. The numbers paint a picture of Mother Nature’s devastation that befell farmers from coast to coast," according to NCIS.
Corn, cotton, wheat, soybeans and grain sorghum took the biggest financial hits, in that order, in 2011. Indemnities paid in some major production areas have been higher, but the overall amount paid is still less than the price farmers paid for their coverage.
"While the average loss ratio across the country is at .90 -- which means that for every dollar purchased in coverage, 90 cents was paid out in indemnities -- those numbers are much higher in some key states," according to NCIS.
The growing crop insurance bill has some industry leaders shows the need for more structured federal support for disaster protection on the farm, says NCIS president Tom Zacharias.
"With damages from last year approaching the $11 billion mark, the fact that there has not been a single call from farmers and ranchers for a federal disaster bill is testimony to the efficacy of crop insurance and proof that farmers and rancher consider it indispensable," he says.