Friday April 27 Ag News

USDA Grant to Fund New Agricultural Policy Research at UNL

All consumers are not the same. Neither are all agricultural producers. Yet ag policy analysis typically has assumed they are, which can result in ineffective or inefficient policies. The University of Nebraska-Lincoln is leading a new research effort to change that approach.

UNL received a two-year $766,166 grant from the U.S. Department of Agriculture to establish a new policy research group within its Center for Agricultural and Food Industrial Organization.

Traditionally, policy studies have imagined a "representative consumer" or "representative producer" in analyzing agricultural policy, said Konstantinos Giannakas, UNL agricultural economics professor who will lead this research.

However, there's really no such thing. Consumers respond to food policies in very different ways, driven by preferences, income and other factors. Producers' responses to ag policies vary, too, depending on factors including education, experience, location, management skills and available technology.

"We're not all the same. We make different decisions based on where we're coming from," said Peter Calow, research professor with UNL's Office of Research and Economic Development and part of the research team. "It's hard to take these differences into account. It's much easier to make the presumption that everybody is the same."

Calow said policy-makers long have understood that those differences exist, "but they presumed the variability wouldn't make a lot of difference in the end" in making policies about consumers' and producers' decisions.

USDA and others now believe those distinctions potentially make a huge difference, and UNL's research is aimed at developing a new policy-analysis framework that will take them into account.

Many market studies already account for these differences, Giannakas said, but policy studies are lagging.

As an example, Giannakas pointed out, one can look at consumers' reaction to initial introductions of genetically modified foods. European consumers were up in arms initially, while most American consumers were not.

"We'll be trying to get a handle on these variabilities through observing what people say and do in experimental situations, which is an area called behavioral economics. This is really cutting edge stuff," Calow said.

Giannakas agreed. "This is novel. This has not been done in ag policy analysis."

"Economics is about behavior and incentives. Policy is about the kind of incentives you're creating for people," Giannakas said. "The so-what question – why USDA is excited about this, why policy makers are excited about this – is this will enable us to take any policy and see how it will affect different consumer groups and different producer groups."

The research will build on work Giannakas and colleagues have been doing for a decade, which has focused on the market for organic products; the economics of innovation and intellectual property rights; the economic effects of the introduction of genetically modified products under different regulatory and labeling regimes; the role of cooperatives in the agri-food system; conservation compliance on highly erodible lands; the market and welfare impacts of country-of-origin-labeling; and consumer demand for quality-differentiated products.

Once developed, this new framework will be used to analyze important policy issues such as the market potential and best regulatory response to food nanotechnology; producer behavior and design of policies related to downstream water pollution issues; least-cost policies to facilitate commercialization of biomass crops for energy; the impact of agricultural policies on entrepreneurship and the economic development of rural communities; and producer response to various risk management policies.

Policy analysis will be able to determine the effects of different policies on different groups of producers and consumers – for example, comparing consumers of nanofoods vs. consumers of conventional, genetically modified or organic products; low income vs. high income producers; more efficient producers vs. less efficient producers.

"We believe this will lead to improved policy design, enhanced efficiency, increased effectiveness and fewer policy failures," Giannakas said.

The research, which also will use behavioral and experimental economic methods in policy analysis and design, will involve about 11 faculty as well as graduate and post-doctoral students.

The grant is from USDA's National Institute of Food and Agriculture.

The Center for Agricultural and Food Industrial Organization is part of UNL's Department of Agricultural Economics within the university's Institute of Agriculture and Natural Resources.




Smith Presses USTR Kirk, USDA Secretary Vilsack to Stand Up for Pork Producers

Congressman Adrian Smith (R-NE) today sent a letter to U.S. Trade Representative Ron Kirk and U.S. Secretary of Agriculture Tom Vilsack asking they work with the Colombian government to remove its unjustified sanitary and phytosanitary (SPS) requirements on certain pork imports. This unscientific trade barrier would cause U.S. pork producers not to realize the full economic benefits possible under the recently-passed Colombia Free Trade Agreement.

“All too often, foreign governments unfairly have blocked U.S products based on arbitrary guidelines,” said Smith.  “The recently passed agreement with Colombia presents a huge opportunity for U.S. pork producers, but the country’s continuation of unscientific requirements on certain pork imports could cost tens of millions of dollars and nearly 1,000 direct jobs. It is vital science determines the import standards for all of our producers and I will continue to work with the Administration to reverse this harmful and baseless policy.”

Colombia requires all chilled pork imports to be tested for trichinae, even though it does not test its own domestically produced pork. According to the International Commission on Trichinellosis, there is a 1 in 300 million chance of finding trichinae in the U.S. commercial food supply. These tests place an unnecessary and burdensome cost on U.S. pork producers when the risk for exposure is negligible.

Smith was a key supporter of the recently passed trade agreement with Colombia. Smith is working with both governments to ensure the removal of the testing requirement before the implementation of the agreement on May 15th.  Smith serves on the Ways and Means Committee which has jurisdiction over trade policy in the U.S. House of Representatives.





House Bill Introduced to Stop EPA Manipulation of Clean Water Act

U.S. Congressmen John Mica (R-Fla.), Nick Rahall (D-W.V.), Frank Lucas (R-Okla.), Collin Peterson (D-Minn.) and Bob Gibbs (R-Ohio) today, April 27, 2012, introduced legislation (H.R. 4965), which is strongly supported by the National Cattlemen’s Beef Association (NCBA) and the Public Lands Council (PLC). The bill would prevent the Environmental Protection Agency (EPA) and the Army Corps of Engineers (Corps) from using their clean water guidance to expand the regulatory regime under the Clean Water Act (CWA). NCBA President J.D. Alexander said the legislation would stop EPA’s intentional avoidance of the rulemaking process and Congress.

“The problem with EPA is accountability. This administration has made clear its preference to use guidance documents as opposed to going through the rulemaking process. This allows the activists turned government officials to avoid public scrutiny and bypass the consideration of legal, economic and unintended consequences,” said Alexander, who is also a Nebraska cattleman. “This is a clear violation of the Administrative Procedures Act.”

The document that triggered this bipartisan legislation was the CWA jurisdictional guidance. The draft, which was proposed by EPA and the Corps April 26, 2011, is expected to be finalized soon. The guidance essentially attempts to give EPA and the Corps jurisdiction over all types of waters and many features not waters at all. The guidance claims to provide clarity and certainty to landowners. According to PLC President John Falen, if the guidance is finalized, the only thing livestock producers can be clear and certain about is more federal regulation and costly permits.

“This is a direct hit on the private property rights of farmers and ranchers across this country,” said Falen, who is a Nevada rancher. “We will fight hard against this administration’s ongoing efforts to curtail the private property rights of farmers and ranchers by regulating them to the brink of bankruptcy. We commend the representatives for standing up for private property rights and the preservation of American agriculture.”

Alexander said despite three Supreme Court rulings and a letter from 170 members of Congress opposing the guidance, EPA and the Corps have “crowned themselves kings” of every drop of water in the country. He said this bill is the best path forward in preventing the guidance from becoming reality. This legislation is subsequent to the Preserve the Waters of the United States Act, which is almost identical to H.R. 4965, introduced by U.S. Senators John Barrasso (R-Wyo.), Dean Heller (R-Nev.) Jim Inhofe (R-Okla.) and Jeff Sessions (R-Ala.) March 28, 2012. 




Iowa Corn Checkoff Announces July Elections For Six Crop Reporting Districts

Corn growers in Crop Reporting Districts 1, 2, 4, 5, 7, and 8 will vote July 10 at their county extension offices for representatives to serve on the Iowa Corn Promotion Board (ICPB).    Each winner will serve a three-year term representing corn growers from their respective crop reporting districts.

Anyone who has produced and marketed 250 bushels of corn or more in Iowa in the previous year is eligible to vote in the election.  Producers unable to visit an extension office on July 10 may vote by absentee ballot.  Absentee ballots will be available from May 24 to June 27 by contacting the ICPB office at 515-225-9242.  All absentee ballots must be postmarked by July 10.

Current candidates are as follows:

Crop District #1 - Buena Vista, Cherokee, Clay, Dickinson, Emmet, Lyon, O’Brien, Osceola, Palo Alto, Plymouth, Pocahontas and Sioux
·         Kurt Harms from George in Lyon County
·         Gary Small from Rembrandt in Buena Vista County

Crop District #2 - Butler, Cerro Gordo, Floyd, Franklin, Hancock, Humboldt, Kossuth, Mitchell, Winnebago, Worth and Wright
·         Deb Keller from Clarion in Wright County
·         Chris Weydert from Algona in Kossuth County

Crop District #4 – Audubon, Calhoun, Carroll, Crawford, Greene, Guthrie, Harrison, Ida, Monona, Sac, Shelby and Woodbury
·         Larry Klever from Audubon in Audubon County
·         David Leiting from Carroll in Carroll County

Crop District #5 – Boone, Dallas, Grundy, Hamilton, Hardin, Jasper, Marshall, Polk, Poweshiek, Story, Tama and Webster
·         John Brockman from Melbourne in Marshall County
·         Kevin Rempp from Montezuma in Poweshiek County

Crop District #7 – Adair, Adams, Cass, Fremont, Mills, Montgomery, Page, Pottawattamie and Taylor
·    Doug Holliday from Greenfield in Adair County
·    Trevor Whipple from Northboro in Fremont County

Crop District #8 - Appanoose, Clarke, Decatur, Lucas, Madison, Marion, Monroe, Ringgold, Union, Warren and Wayne
·    Ray Cook from Seymour in Wayne County
·    Don Hunerdosse from Milo in Warren County

Other corn producers interested in running for the Board can get on the ballot by filing a nomination petition with the ICPB no later than 4:30 p.m. on May 14.  Completed petitions must be signed by 25 corn producers from the prospective candidate’s district and notarized.

Iowa growers elect 17 of their peers to serve on the Iowa Corn Promotion Board to oversee the investment of funds generated by the Iowa corn checkoff.  The Board’s primary activities include domestic and foreign market development, research into new and value-added corn uses, and education about the corn industry.  A portion of the seats on the board are up for election each year.

For more information on the ICPB or director elections, please contact the ICPB office at (515) 225-9242 or by mail at 5505 NW 88th Street #100, Johnston, IA 50131.




Update for Veterinarians Program May 30

Veterinarians who work with cattle are invited to sharpen their skills and learn the latest information on a variety of topics at a May 30 workshop in southern Iowa. The 19th annual "Update for Veterinarians" will focus on topics of specific interest to beef practitioners, according to Iowa State University (ISU) Extension and Outreach beef program specialist Joe Sellers who is organizing the event at the ISU McNay Research Farm near Chariton.

"All of our speakers are from Iowa State this year," Sellers said. "We created the program based on discussions with local practitioners about issues facing their clients."

Terry Engelken will present information on identifying fescue foot and other toxicity symptoms, and results of an Iowa-based cow internal parasite survey. Other speakers and topics are Mary Drewnoski with fescue management, Steve Ensley with updated impacts of pyrethroid application on bull fertility, Dan Loy with review of improving digestibility of low quality forages, Stephanie Hansen with results of a forage/mineral study, Grant Dewell with an update from ISU's Veterinary Diagnostic and Production Animal Medicine department, and Sellers with heifer development strategies and using the Iowa Beef Center's estrus synchronization planner.

"The Iowa Beef Center at Iowa State and ISU Extension and Outreach have put together a great program of current topics and presenters, and we've applied for six hours of continuing education credits," Sellers said.

Registration begins at 8:45 a.m. with the first of four morning speakers starting at 9:15 a.m. Four more speakers will follow lunch. Those who preregister by May 28 will pay $50 per person which includes the noon meal. Those who preregister after May 28 and those who register onsite will pay $70.

The brochure with registration form is available. For more information, contact Sellers by phone at 641-203-1270 or by email at sellers@iastate.edu.




IGC: China Corn Imports Forecast Higher

China's corn imports may rise 50% to around 6 million metric tons in the next IGC marketing year that begins July 1, the International Grains Council said Friday.

The IGC kept China's corn import forecast unchanged for 2011-12 at 4.0 million tons.

The country's corn imports are forecast to rise for a fourth consecutive year due to strong domestic demand, high local prices and high transportation costs from northern growing areas to the south, making imports from the U.S. or Argentina cost effective, it said.

With local prices close to record highs and U.S. export prices lower, there is speculation that China may have already bought as much as 2.0 million tons of new crop U.S. corn that will be harvested from August, the IGC said.

Private importers in China may also have recently bought up to 700,000 tons of corn for near-term delivery, it said.

Earlier this month, old crop domestic corn was quoted around $385/ton in Dalian, and values further south in Guangzhou were around $406/ton, the IGC added.

U.S. corn for June shipment is currently being offered around $326-$330/ton, cost-and-freight, which is economically viable even after factoring in the 14% taxes, traders said.

The IGC also revised up its forecast for China's wheat imports in 2011-12 by 5% to 2.1 million tons, more than double the 1 million tons of actual imports in the previous year.

Rains across most of the North China Plain and northeast were beneficial for winter wheat in the reproduction stage and for the germination of spring wheat, but some areas, notably Sichuan province, remained too dry, the IGC said.

Based on average yields, the total wheat acreage is projected to be similar to last year at 24.3 million hectares, while production is forecast at 116 million tons in 2012-13, down from 117.9 million tons in the previous year.




IGC: S. American Bean Output Down

The International Grains Council Friday cut its estimate of South American soybean output for the sixth time since September, bringing the projected on-year drop to 15%, a decline that is expected to severely deplete global inventories.

South America is now expected to produce 115.9 million metric tons of soybeans in the 2011-12 marketing year due to severe drought and disease, the IGC said.

The figure is more than 20 million tons lower than the IGC's estimate in September and 3.6 million tons lower than its last estimate earlier this month.

The IGC cut its estimate for Brazil's soybean crop by 1.4 million tons to 65.6 million tons, which would be a decline of 13% from a record 75.3 million tons in 2010-11. Drought throughout the growing season has badly hurt the soybean crops in Brazil's Parana, Rio Grande do Sul and Matto Grosso do Sul regions, while a fungal disease in Matto Grosso also hit yields, the IGC said.

Argentina is now expected to produce 42.9 million tons in 2011-12, 2.1 million tons lower than previously estimated and a decline of 12% from the previous year.

Brazil's soybean exports of the previous crop have surged even as drought has afflicted its current crop. The IGC estimated that its exports in the marketing year ending Sept. 30, 2012, will total 35.7 million tons, an increase of 19%.

Argentina's exports for the year are forecast at 8.3 million tons, down from 9.2 million tons in 2010-11.

The IGC said U.S. soybean plantings may be higher than the government's preliminary projection of 29.9 million hectares due to the recent rise in soybean prices relative to corn prices. A tight supply of nitrogenous fertilizer, a crucial input in corn production, may also encourage farmers to switch to soybeans, it said.





Changes to the U.S. Grain Standards Proposed
(from US Wheat Assoc. newsletter)

USDA’s Federal Grain Inspection Service (FGIS) proposed changes to the U.S. Grain Standards, specifically to the definitions of “Contrasting Classes” and “Shrunken and Broken Kernels in a Federal Register announcement April 11, 2012. USW and other industry stakeholders submitted comments on the standards during FGIS’s periodic review beginning in November 2009.

Growers and country elevator operators likely will welcome the proposed definition for contrasting classes in hard white (HW) wheat. For grading HW, the current system considers all red wheat as contrasting classes. The revision would instead treat hard red spring (HRS) and hard red winter (HRW) wheat as “Wheat of Other Classes.” By changing the definition, the proposed standard would allow U.S. No. 1 HW to contain up to 3 percent HRS or HRW and U.S. No. 2 HW up to 5 percent. This would be considerably less stringent the than the current standard, in which U.S. No. 1 and U.S. No. 2 HW may contain no more than 1 percent and 2 percent, respectively, of red wheat. Because HRW and HRS are similar to HW in milling and end-use properties, small admixtures of these classes do not affect HW functionality. 

Many country elevators have been reluctant to handle HW because of the risk that red wheat admixtures, which are very difficult to avoid entirely when handling both red and white wheat classes, would downgrade HW. Many HW varieties also produce a small percentage of red kernels due to backcrossing with red parents to improve disease and sprout resistance. 

These concerns likely restricted HW production because many growers did not want to risk downgrading of their crop and had difficulty finding elevators willing to handle HW. The proposed standards should help expand HW by reducing the grade risks for both growers and handlers. Growers could then better respond to domestic and international market demand for high quality, whole-grain products made from HW wheat.

FGIS is also proposing that the shrunken and broken kernel limits for U.S. No. 1 and U.S. No. 2 grades be revised to reduce the current limits of 3 percent and 5 percent to 2 and 4 percent, respectively. USW suggested this revision in response to customer concerns that some U.S. cargoes had higher shrunken and broken kernel levels compared to Australian and Canadian cargoes.

Shrunken and broken kernels, defined as any wheat kernel or part of a kernel that passes through a 1.626 mm by 9.545 mm oblong hole sieve, negatively influence flour yield in the milling process. For several years, domestic millers and overseas buyers have recommended limiting amounts for the top two grades. FGIS reviewed shrunken and broken kernel levels in more than 100,000 samples of export cargoes from 2005 to 2009 to evaluate the potential impact of tighter standards. The review showed that under the proposed standard only 5 percent of the samples grading U.S. No. 1 would have been assigned a lower grade and there would be no impact on samples grading U.S. No. 2. Thus FGIS concluded that the revision would have limited impact on the grades wheat growers would receive (although the effect may be greater for individual crop years or growing areas). 

Under federal law, FGIS must solicit final public comment on the proposed changes. Read more at http://1.usa.gov/Jq5IDw. Comments may be submitted on or before June 11, 2012.

USW thanks FGIS for their thoughtful consideration of the proposals submitted for revision of the U.S. Grain Standards.




USDA Dairy Products 2011 Summary

Total cheese production, excluding cottage cheeses, was 10.6 billion pounds, 1.5 percent above 2010 production. Wisconsin was the leading State with 24.9 percent of the production.

Italian varieties, with 4.56 billion pounds were 3.3 percent above 2010 production and accounted for 43.0 percent of total cheese in 2011. Mozzarella accounted for 78.1 percent of the Italian production followed by Provolone with 7.7 percent and Parmesan with 6.1 percent. California was the leading State in Italian cheese production with 31.0 percent of the production.

American type cheese production was 4.27 billion pounds, 0.5 percent below 2010 and accounted for 40.3 percent of total cheese in 2011. Wisconsin was the leading State in American type cheese production with 18.6 percent of the production.

Butter production in the United States during 2011 totaled 1.81 billion pounds, 15.7 percent above 2010. California accounted for 34.4 percent of the production.

Dry milk powders (2011 United States production, comparisons with 2010)
Nonfat dry milk, human - 1.51 billion pounds, down 3.1 percent.
Skim milk powders - 446 million pounds, up 75.7 percent.

Whey products (2011 United States production, comparisons with 2010)
Dry whey, total - 1.01 billion pounds, down slightly.
Lactose, human and animal - 1.00 billion pounds, up 10.1 percent.
Whey protein concentrate, total - 431 million pounds, up 0.7 percent.

Frozen products (2011 United States production, comparisons with 2010)
Ice cream, Regular (total) - 900 million gallons, down 3.1 percent.
Ice cream, Lowfat (total) - 440 million gallons, up 5.8 percent.
Sherbet (total) - 45.0 million gallons, down 8.7 percent.
Frozen Yogurt (total) - 60.7 million gallons, up 21.2 percent.