NFU News Clips June 12, 2012

PLEASE NOTE - Contents in the NFU News Clips are presented from their original sources. National Farmers Union does not have editorial control over the content. NFU does not endorse the views and issues contained in these articles and they do not necessarily represent NFU's official policy and positions. The News Clips are intended to provide news stories as they are presented by the media.

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In this edition:

·         D.C. Watch: Senate farm bill deliberations continue

·         Farm groups to watch grain trade as USDA goes 'live'

·         WASDE: Corn Exports Lowered 50 Million Bushels

·         Russia to allow GMOs in order to enter WTO

·         Dry period stresses corn, erodes bumper-crop predictions

D.C. Watch: Senate farm bill deliberations continue

June 11, 2012

Drovers

Rich Pottorff

The Senate began debating the farm bill last week, but the bill is not expected to be finalized for three weeks or more. According to official estimates by the Congressional Budget Office (CBO), the bill as currently constructed would save $8.5 billion over five years by ending direct payments and other commodity support programs and implementing the “shallow loss” Agriculture Risk Coverage program.

About $1.8 billion would be saved as a result of changes in conservation programs and another $1.7 billion is saved by changes to the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. Changes to the Senate bill are possible since a lot of amendments will be offered. Senate Agriculture Committee leaders hope to have the bill passed by the end of this month.

The House Agriculture Committee is expected to begin working on their version of the farm bill around the middle of the month. Based on recent public statements, the House version will retain target prices and counter-cyclical payments as an option for farmers and will make significantly larger funding cuts to the SNAP.

House ag leaders hope to get their bill through the House during July, setting up a conference committee with the Senate to work out the differences in the two bills. There is more talk about getting the farm bill done before the end of the year and less talk about extending the current bill than there was a month ago.

A federal judge has ordered FDA to reconsider denials of two recent petitions to restrict the use of certain antibiotics in livestock production.

Farm animals consumed 29.1 million pounds of antibiotics in 2010 and some groups fear that widespread use of low doses of antibiotics in animal feed lead to bacteria that are resistant to the drugs. But this is the second time in the last few months that the Food and Drug Administration has lost court battles concerning its refusal to ban the use of some drugs for livestock.

The Court ruled last week that FDA “must evaluate the safety risks of the petitioned drugs and either make a finding that the drugs are not shown to be safe or provide a reasoned explanation as to why the Agency is refusing to make such a finding”.

The House Agriculture Appropriations Subcommittee has started drafting the bill that will provide funding for the Agriculture Department for fiscal 2013. The appropriations bill is expected to put overall discretionary spending at $19.4 billion, down $500 million from the level approved for fiscal 2012. The Senate’s Agriculture Appropriations bill calls for $20.8 billion in discretionary spending. The House bill is also expected to provide less money for nutrition programs than was the case in the Senate.

The House of Representatives refused to include an amendment to the House Energy and Water Appropriations Bill that would have allowed the Army Corps of Engineers to expand the Clean Water Act enforcement onto private lands not connected to “navigable” waters. The Obama Administration has been trying to expand the definition of the Clean Water Act to include all waters, but the vote in the House blocks that effort.

A survey conducted by the Princeton Survey Research Associates found that 76 percent of those responding want federal spending for farm subsidies to either stay the same or be increased when the next farm bill is approved.

Fewer than 20 percent want farm subsidies cut. Only 20 percent of respondents believed spending on the SNAP program (food stamps) should be increased. The study was conducted for the National Journal and United Technologies. The survey results are at odds with the push in Congress to cut funding for farm programs by $23 billion or more over the next decade.

To view this story at its original source, follow this link:  http://www.cattlenetwork.com/cattle-news/latest/DC-Watch-Senate-farm-bill-deliberations-continue--158424945.html

Farm groups to watch grain trade as USDA goes 'live'

June 12, 2012

Reuters
Tom Polansek

If grain markets go "haywire" following the government's latest crop report on Tuesday, some agricultural industry heavyweights might call Congress before they call their brokers.

Major farm groups will scrutinize every tic of corn, wheat and soybean prices after the Department of Agriculture's all-important monthly report comes out at 7:30 Central time (0830 EST) -- the first time ever it is released during active Chicago futures trading hours.

The trading activity, whether it is volatile or placid, will help determine what recommendations the country's biggest agricultural lobby groups submit to the USDA regarding the timing of future reports.

"If the markets go haywire and volatility is off the charts," the American Farm Bureau Federation will consider asking members of Congress to get involved in determining when USDA should issue its reports, said Kelli Ludlum, director of Congressional relations for the Farm Bureau.

"I think there are going to be at least some hiccups," she said. "The question is how severe will they be. Hopefully it's not a train wreck.

The dawn of nearly round-the-clock trading has pulled the world's preeminent grains contracts into the modern era and shaken the culture of traditional pit trading at the Chicago Board of Trade and its counterparts in Kansas City and Minneapolis.

The USDA is collecting feedback on when to release crop reports because last month, the CME Group's Chicago Board of Trade, which dominates agricultural markets, and rival IntercontinentalExchange expanded the trading day.

The Farm Bureau, National Farmers Union, and National Grain and Feed Association said they will consider Tuesday's trading when formulating their responses.

MAN VS MACHINE

Anxiety over changing dynamics around the global grain market's most important set of official data is fueled by fears that farmers and traders may be caught in a maelstrom of high-frequency trading in the milliseconds following the reports, as high-tech traders and big hedge funds crunch thousands of data points far faster than any human can.

Previously, traders had two hours to digest the reports.

Ludlum said that if volatility does not increase significantly, the Farm Bureau prefers to figure out report times with the exchanges and USDA, not with lawmakers.

Even a muted market reaction to Tuesday's data would not allay concerns at the Farmers Union, said President Roger Johnson, a third-generation family farmer from Turtle Lake, N.D.

This month's report may be bad indicator of future activity, with few traders expecting significant adjustments in the USDA's estimates for U.S. ending stocks for corn, soybeans and wheat or for winter wheat production in the United States this year.

"It may be a fairly benign report that's entirely within trade expectations and the next one may be way outside of the bounds of trade expectations," Johnson said.

The National Grain and Feed Association and others have pushed the exchanges to halt trading for USDA reports.

Yet, it "is clear the markets are going to open" when the reports are released, the USDA's chief economist said last week. He said the reports will likely be issued later in the day, when higher volume can help minimize the impact of new data on the markets.

 To view this story at its original source, follow this link:  http://www.reuters.com/article/2012/06/12/us-farm-groups-markets-idUSBRE85B05V20120612

WASDE: Corn Exports Lowered 50 Million Bushels

June 12, 2012

Ag Web

U.S. feed grain supplies for 2012/13 are virtually unchanged as adjustments to 2011/12 balance sheets are largely offsetting and projected 2012/13 production and use are unchanged on the month. Projected 2012/13 season average price ranges for corn, sorghum, barley, and oats are all unchanged.

Adjustments to corn usage for 2011/12 reflect the latest ethanol production and trade data. Corn used to produce ethanol in 2011/12 is projected 50 million bushels higher. Weekly ethanol production has increased since mid-April after gradually declining from the record levels of late December. The higher corn use projection assumes slightly lower ethanol production during the June-August quarter as compared with the same period last year. 

Corn exports are projected 50 million bushels lower as shipments and sales continue to fall off of the pace needed to reach last month’s projection. Tight domestic supplies and increased competition, especially from Brazil, are also expected to reduce U.S. export prospects during the summer months.   Projected corn ending stocks for 2011/12 are unchanged, as is the 2011/12 season average farm price which remains at $5.95 to $6.25 per bushel.

Changes to the 2011/12 balance sheets for sorghum, barley, and oats are driven by the latest trade data and also mostly offsetting. Sorghum exports for 2011/12 are projected 10 million bushels lower, but offset by a 10-million-bushel increase in expected feed and residual use. Projected barley imports are raised 4 million bushels and exports are lowered 3 million bushels boosting ending stocks 7 million bushels. Oats ending stocks are projected 10 million bushels lower with projected imports lowered 15 million bushels and feed and residual use reduced 5 million bushels. Projected 2011/12 farm prices for all three feed grains are unchanged. 

Global coarse grain supplies for 2012/13 are projected 4.8 million tons higher with increases in corn beginning stocks and production. Global corn beginning stocks are increased 1.6 million tons mostly reflecting higher 2011/12 production for Brazil and China. Brazil corn production is raised 2 million bushels for 2011/12. Despite lower reported area for the main season crop, the rapid expansion in area and nearly ideal weather for the second season (safrinha) crop is boosting Brazil’s corn production prospects to a record 69 million tons. 

Much of the expansion in safrinha corn has been in the Central West region, where corn is planted in January and a pronounced dry season typically begins by early May. This year’s rainy season extended through early June providing an additional 4 to 6 inches of beneficial rainfall for filling corn. China’s 2011/12 corn production is raised 1.0 million tons in line with recent revisions to official government estimates.

World corn production for 2012/13 is increased 4.2 million tons this month with increases in China, EU-27, and FSU-12. China production for 2012/13 is raised 2.0 million tons based on higher reported corn area as land planted to soybeans declines. EU-27 corn production is increased 1.1 million tons mostly on higher area and yields for Hungary. 

Production is up 0.8 million tons for Russia and 0.3 million tons for Belarus both on higher reported area. World barley production is lowered, however, with a 0.5-million-ton reduction for Turkey and 0.2-million-ton reduction for Syria.

Global 2012/13 coarse grain trade is projected higher this month on increased imports and exports of corn. Corn imports are raised for EU-27 and Indonesia. Corn exports are increased for Russia and Belarus, both reflecting higher expected production and supplies. Higher imports and production support increased corn feeding in EU-27. 

Higher beginning stocks and production in China boost prospects for feeding, but a partly offsetting reduction in industrial use limits the increase in corn consumption. Russia corn feeding is lowered 0.3 million tons reflecting slower expected year-to-year growth in feed grain consumption with rising feeding efficiencies in pork and poultry production. Global corn consumption is increased 2.4 million tons. Global corn ending stocks are projected 3.4 million tons higher. Of the increase, 2.0 million tons are for China and 1.0 million tons are for Brazil.

To view this story at its original source, follow this link:  http://www.agweb.com/article/wasde_corn_exports_lowered_50_million_bushels/

Russia to allow GMOs in order to enter

WTO

June 12, 2012

Ag Professional
Colleen Scherer

As Russia aims to join the World Trade Organization (WTO), it is sweetening the deal by offering to drop its restrictions on genetically modified crops for food and feed.

In the coming weeks, Congress will be presented with a choice of whether it should stand up against human-rights abuses in Russia, or support greater access for U.S. companies to Russia's more than 142 million consumers. Russia's legislative body, the Duma, will take up the ratification of its WTO accession July 4.

Cultivation of transgenic crops has been prohibited in Russia and products containing 0.9 percent of GMO ingredients must be specially marked.

The Russian Federal Service on Surveillance for Consumer rights protection and human well-being (Rospotrebnadzor) have proposed to completely lift restrictions on the use of genetic modification technologies in the cultivation of agricultural crops in Russia.

 “In order to ensure protection of public health, food and environmental safety, Russian scientists should create GMO lines adapted to grow in Russia, and to introduce it into agricultural sector," the service said in a statement.

The Federal Service has been looking to models used by the United States, Brazil and Argentina, where GM crops have been permitted.

To view this story at its original source, follow this link:  http://www.agprofessional.com/news/Russia-to-allow-GMOs-in-order-to-enter-WTO-158474965.html

Dry period stresses corn, erodes bumper-crop predictions

June 12, 2012
Des Moines Register
Dan Piller

About two-thirds of Iowa’s farm soil is rated short of moisture by the U.S. Department of Agriculture, and some farmers reported stressed crops Monday.

Dry conditions are eroding predictions of a bumper crop this year, which was expected to replenish tight supplies of corn and lead to lower prices.

The rain that fell late Sunday and early Monday is likely to do little good without more soon. With the exception of northwest Iowa, the recent rain is the last Iowa will see for at least a week, the National Weather Service said Monday.

“The short-term forecast doesn’t provide much hope,” state climatologist Harry Hillaker said.

Precipitation is more than 1 inch behind normal for the first 11 days of June, he said.

Farmers say it’s early, that the crop can recover, but rainfall is vital before the crucial pollination period that usually happens in the first two weeks of July.

“We can get by all right now, but we’ll need more rain soon,” said Jim Stillman, who farms near Emmetsburg.

Chuck Walters, who farms in Hardin County, said he had begun to notice signs of stress — mostly rolled-up leaves — in his corn last weekend.

“We got three-quarters of an inch last night, so we’re pretty fortunate,” Walters said Monday. “But we’ll need more soon.”

The U.S. Department of Agriculture’s weekly crop condition report shows a jump in the percentage of topsoil and subsoil rated dry to 66 percent this week from 46 percent a week ago.

The condition of Iowa’s corn crop dipped from 67 percent good to excellent, from 75 percent last week and 81 percent two weeks ago.

The report Monday was further confirmation of the driest conditions in Iowa since at least 2006.

“My ground is about as dry as I can ever remember it,” said Gary Edwards, who farms near Anamosa. He has noticed “rootless corn” that happens in too-dry soils.

Last week the U.S. Drought Monitor map showed 88 of Iowa’s 99 counties as “abnormally dry.” A band of counties from Fort Dodge to Mason City was listed as “moderate drought.”

Corn prices, which had risen 44 cents per bushel last week on fears of dry conditions, pulled back Monday on the Chicago Board of Trade before the monthly U.S. Department of Agriculture crop forecast to be issued this morning.

July corn was down 6 cents per bushel to $5.92, and December new crop corn dropped 10 cents to $5.30. July soybeans fell 2 cents per bushel to $14.24, and the November new crop was down 1 cent per bushel to $13.31.

The U.S. Department of Agriculture in April forecast a record corn crop of more than 14.25 billion bushels, or about 166 bushels per acre. That yield, if achieved, would push corn surpluses back up to the 1.8 billion to 2 billion bushel level that was common before 2010 and would likely drop corn prices below $5 per bushel for the first time since late 2010.

In the last two years, domestic and world corn shortages have pushed up prices above $7 per bushel, giving farmers record incomes, setting record high farmland prices and enabling Iowa to enjoy an unemployment level well below national averages.

A wet April prompted expectations of a big harvest. But in May, Iowa received only half of its normal 3.45 inches of rainfall.

Hillaker said Monday’s rain put Iowa at .78 inches of rain for June so far, below the 1.84 inches normal for the first 11 days of the month.

Hillaker said that when conditions are warm and dry, moisture normally evaporates at the rate of .20 per inch per day.

“So for most of the state, the rainfall we had last night will be gone in a couple of days,” Hillaker said.

To view this story at its original source, follow this link:  http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=2012306120052&nclick_check=1