Tuesday May 29 Ag News

Smith Demands Answers From EPA Over Aerial Surveillance Of Nebraska Livestock Operations

Congressman Adrian Smith (R-NE) today joined Reps. Jeff Fortenberry (R-NE), Lee Terry (R-NE) and Sens. Ben Nelson (D-NE) and Mike Johanns (R-NE) in sending a letter to Environmental Protection Agency (EPA) Administrator Lisa Jackson inquiring about the EPA’s use of aerial surveillance of livestock operations in Nebraska.

“Farmers and ranchers in Nebraska pride themselves in the stewardship of our state’s natural resources,” wrote the Nebraska lawmakers.  “As you might imagine, this practice has resulted in privacy concerns among our constituents and raises several questions.”

Congressman Smith also added, “These operations are in many cases near homes, and landowners deserve legitimate justification given the sensitivity of the information gathered by the flyovers. Nebraskans are rightfully skeptical of an agency which continues to unilaterally insert itself into the affairs of Rural America.”

The letter, which can be viewed here, gives the EPA until June 10, 2012 to respond. Smith serves as co-chairman of both the Modern Agriculture Caucus and the Congressional Rural Caucus.



Industry Leaders Gather for USMEF Meeting in New Orleans

Several hundred leaders of the U.S. red meat industry, ranging from producers, processors, exporters and traders – joined by a hundred meat buyers from around the world – gathered in New Orleans last week for the U.S. Meat Export Federation’s (USMEF) Product Showcase and Board of Directors Meeting.

Representatives for Nebraska were Ed Lammers, a soybean producer from Hartington, Neb., and a farmer-leader for the Nebraska Soybean Board (NSB) and Chairman of the Nebraska USMEF committee, Duane Lee, a soybean producer from Albion, Neb., and Victor Bohuslavsky, a soybean producer from Brainard, Neb., and Executive Director of the Nebraska Soybean Board.

The three-day conference featured market updates from USMEF directors, which represented many of the organization’s 18 international offices. The conference also included status reports from the individual markets as well as meetings of the individual industry segments to discuss specific issues of importance to their members.

The international buyers, representing retail, food service and processors from destinations including Japan, South Korea, Russia, Central and South America and Hong Kong, received hands-on training in advanced meat-cutting techniques as well as information on new and alternative cuts of U.S. beef, pork and lamb to fit in a wide variety of cuisines and menu price points.

“The meeting enabled producers, exporters and other meat industry leaders to hear from USMEF’s international directors about market conditions and challenges in key destinations for U.S. beef, pork and lamb,” said Philip Seng, USMEF president and CEO, prior to the meeting’s start. “At the same time, the Product Showcase opened a real-time window for our exporter members to introduce their products and brands to more than 100 meat buyers from around the world.”

“USMEF has such a diverse membership representing the U.S. red meat industry from the feed-grain farmer to the exporter on the ground in the international marketplace,” said Lammers.  “This meeting gave the producers, processors and other industry stakeholders in the U.S. a close-up view of the issues and challenges we face in export markets as well as how USMEF is using our beef, pork, corn and soybean checkoff dollars to promote our red meat products.”



Drive Under Way to Raise Matching Funds for New Veterinary Diagnostic Center

Fundraising is under way to come up with the University of Nebraska-Lincoln's $5 million share of the cost of building a new Veterinary Diagnostic Center.

After serious and lengthy debate, the Nebraska Legislature this last session approved, and Gov. Dave Heineman signed, legislation to build a new center, with a total project cost of $55 million, of which $5 million is to come from private or other funds. The $50 million will be appropriated over 10 years in financial bonds.

The state funding will be allocated only if the university successfully raises its $5 million share.

The need for a new center is acute, said Ronnie Green, Harlan vice chancellor of UNL's Institute of Agriculture and Natural Resources and NU vice president. The current center, also on UNL's East Campus, was built in 1975 and is insufficient to meet modern needs, to say nothing of future needs. The center's shortcomings include space limitations, poor ventilation and building design that carries increased risk for cross-contamination of contagious pathogens and pathogen exposure of the lab's workforce.

The center provides accurate and timely diagnosis of livestock diseases, including many that can be transmitted to humans. Diseases diagnosed at the center include anthrax, tularemia, avian influenza, West Nile virus and H1N1 flu.

The center improves animal and public health through disease surveillance, develops new testing methods, supports food safety and biomedical research and plays an important role in educating future veterinarians and scientists.

To make a gift to the Nebraska Veterinary Diagnostic Center Fund or for more information, contact Ann Bruntz, University of Nebraska Foundation director of development for IANR, at 402-458-1176 or 800-432-3216. Or go to http://nufoundation.org/veterinary and click on Veterinary Diagnostic Center Building Fund.



Nebraska Cattlemen Midyear Meeting Early Registration Deadline Extended

The Nebraska Cattlemen Midyear Meeting in Atkinson/Stuart is fast approaching with a great line up of speakers and activities planned for the event on June 7th and 8th.  If you have not already registered you need to do so this week as early registration has been extended to Friday June 1.

“I am very excited to have cattlemen from across the state coming to my hometown to grow and share their knowledge to help further define the policies of Nebraska Cattlemen,” said Jim Ramm, NE Cattlemen President. “We will have the opportunity to honor our young people for their academic accomplishments and use this meeting as a teaching opportunity to keep our youth engaged in the beef industry.”

June 7th will begin with Board of Director meetings then leads into an afternoon of golf and area tours. In the evening there will be a welcome reception at the Stuart Auditorium. Friday, June 8th will begin with registration at 7:00 a.m. followed by three sets of committee meetings and the Nebraska Cattlemen Foundation luncheon.

As in years past the six policy committees will be meeting to discuss issues and policy relative to their respective areas. The Nebraska Cattlemen Foundation will hold their annual luncheon to announce the Retail Value Steer Challenge results as well as recognize the recipients of this year’s youth scholarships.

The general session will be a great opportunity to listen to the U.S. Olympic bobsled gold medal winner, Curt Tomasevicz and the 2010 National Cattlemen’s Beef Association President Steve Foglesong. The BQA Trainer of the Year will also be announced at the general session. The general session will conclude the Midyear Meeting.

You can register online at www.nebraskacattlemen.org or call the Nebraska Cattlemen office at 402.475.2333.



New interns broaden scope of Nebraska Corn Board programs

The Nebraska Corn Board is supporting five internships starting this summer. Three of these interns are part of a new program in partnership with cooperators of the Nebraska Corn Board (NCB).

The new interns will be hosted by national cooperators of NCB: National Corn Growers Association (NCGA) in St. Louis, MO, the U.S. Grains Council (USGC) in Washington, D.C. and the U.S. Meat Export Federation (USMEF) in Denver, CO. The internship program in the NCB office in Lincoln and the National Corn Growers Association intern in Washington, D.C. are programs that have been in place for several years.

“Nebraska has been a leader in providing quality interns for the NCGA Washington, D.C. internship, so it was no surprise that our other cooperators took advantage of the opportunity to receive interns from Nebraska,” said Don Hutchens, executive director for the Nebraska Corn Board. “Our board has witnessed the educational and career advantage that internships provide and regard the sponsorship of internships as an investment into Nebraska’s agricultural future. Plus, it is just good work experience for these Nebraska students.”

The NCB office in Lincoln welcomed Melisa Konecky of Wahoo, Neb. for a year-long internship. Melisa will be a senior in animal science and agriculture leadership at the University of Nebraska – Lincoln. As part of her internship, she will oversee crop progress report placement, contribute to communication and market development programs and help with education and promotion activities.

The National Corn Growers Association office in Washington, D.C. will host David Bresel of Lincoln, Neb., as their summer intern supported by a partnership between NCB and NCGA. David is a student in at the University of Nebraska College of Law. He will be involved with a variety of issues related to environmental regulations, transportation, free trade agreements, biotechnology, ethanol and energy.

The National Corn Growers Association headquarters office in St. Louis, Mo., will host Sandra Kavan of Wahoo, Neb., as their first summer intern supported by a partnership between NCB and NCGA. Sandra will be a senior in agribusiness at the University of Nebraska – Lincoln. She will be assisting with membership and communication programs, as well as participating in committee meetings.

The U.S. Grains Council will host James Keating of Ogallala, Neb., as their first summer intern supported by a partnership between NCB and USGC. David is a senior in political science at the University of Nebraska – Kearney. He will be working with policy, assisting with international trade teams and helping to develop promotions and international relations.

The U.S. Meat Export Federation will host Jessica Clowser of Seward, Neb., as their first summer intern supported by a partnership between NCB and USMEF.  Jessica recently returned from a semester internship with Nebraska Senator Mike Johanns in Washington, D.C. and will be attending graduate school next year. In Denver, Jessica will be assisting with promotions and international relationship opportunities.



Seedling Diseases Developing in Corn
Tamra Jackson-Ziems, UNL Extension Plant Pathologist

Early planting and intermittent rains are contributing to the development of seedling diseases in corn this spring. The most common seedling diseases identified in samples submitted to the UNL Plant and Pest Diagnostic Clinic are those caused by Pythium and Fusarium species.

Seedling diseases can be caused by any of several common soilborne organisms, such as Pythium, Fusarium, Rhizoctonia or plant parasitic nematodes. Seedling diseases are often difficult to differentiate and diagnose because their symptoms are very similar. Sometimes, diagnosis may be of limited value because management is the same for several seedling diseases. Microscopic examination and other laboratory analyses of the diseased seedlings often can identify the cause(s) of the problem. Seedling diseases can be confused with insect injury, herbicide damage, planting problems, or environmental stresses that have similar symptoms. Possible symptoms of seedling diseases are:
-    Rotted seed prior to germination
-    Rotted or discolored seedlings after germination, but prior to emergence
-    Post-emergence seedling damping off
-    Root decay

At least 14 species of Pythium can cause seedling blight and root rot. These pathogens require excessive moisture because they produce motile swimming zoospores that infect plant roots. The pathogen overwinters in soil and infected plant debris by producing thick-walled oospores that can survive for several years in the absence of a suitable host or favorable weather conditions.

Although uncommon, Pythium also may cause stalk rot disease in corn during extended wet periods in the middle and later portions of the growing season. Symptoms of Pythium stalk rot can cause collapse of the lower stalks at or near the soil surface. Stalks may appear collapsed, twisted, and water-soaked and could be confused with bacterial stalk rot, except they lack the characteristic foul odor.

There are more than six Fusarium species that can cause seedling diseases and root rots, several of which are common in Nebraska fields. Plants stressed from weather extremes (temperature and moisture), herbicide damage, and physical injury are more prone to infection and disease caused by Fusarium species.

Management
Unfortunately, resistance is not available for diseases caused by Pythium and Fusarium. Although improved field drainage can help reduce seedling disease severity, the most common method for disease management is seed treatment fungicides. Crop rotation can provide some reduction in disease.

Almost all seed corn is treated with more than one seed treatment fungicide, often an insecticide, and sometimes a nematicide. These products protect against some of the pathogens that cause seedling diseases, but, in spite of their activity, diseases may still develop, such as during extended periods of inclement weather or under severe pathogen pressure. Seed treatments will only provide protection during the first few weeks immediately after planting. You can minimize the likelihood of developing seedling diseases by planting high quality seed at appropriate planting depths and soil conditions to support rapid plant growth and emergence.



Millipedes Feeding in Soybeans
Bob Wright, UNL Extension Entomologist

We have received several reports of millipedes damaging soybeans in southeastern and south central Nebraska. A sample submitted to the UNL Plant Pest Diagnostic Clinic was identified by Jim Kalisch as a garden millipede, Oxidus gracilis.

Millipedes have been reported damaging cotyledons and stems prior to emergence of the seedling, and in some cases killing the seedling. In many cases these fields were planted into corn residue from last year. Some of the damaged fields had a neonicotinoid seed treatment which apparently did not provide high levels of control of millipedes. This is not surprising as millipedes are not listed as a pest controlled by neonicotinoid seed treatments (e.g. Cruiser, Poncho, Gaucho).

Millipedes are encouraged by high levels of organic matter on the soil surface. It is possible the mild winter has also led to higher than usual numbers. Their usual feeding habits are on decaying organic matter.

There is little information on chemical control efficacy against millipedes in crops. In at least one case, multiple applications of a pyrethroid insecticide had little apparent effect. Usually millipedes move deeper in the soil as soil surface temperatures increase and soil surface moisture decreases.

At this time probably the main decision to make is whether there is enough damage to warrant replanting.



Mid-America Pipeline Company, Enterprise Products Operating to Pay $1M for Spills in Iowa, Kan., Neb.

Mid-America Pipeline Company, LLC (MAPCO), and Enterprise Products Operating LLC (Enterprise), of Houston, Texas, have agreed to pay a civil penalty of more than $1 million to the United States to settle violations of the federal Clean Water Act related to three natural gasoline pipeline spills in Iowa, Kansas and Nebraska.

As part of a consent decree lodged today in U.S. District Court in Omaha, Neb., and in addition to paying the $1,042,000 civil penalty, the companies have agreed to undertake various measures aimed at reducing external threats to their pipeline, enhance their reporting of spills, and spend at least $200,000 to identify and prevent external threats to the pipeline involved in the spills.

MAPCO owns and Enterprise operates the 2,769-mile West Red Pipeline, which transports mixed natural gasoline products between Conway, Kan., and Pine Bend, Minn. The settlement resolves Clean Water Act violations related to three spills that occurred along the pipeline:
-    A March 29, 2007, rupture near Yutan, Neb., which caused the discharge of approximately 1,669 barrels of natural gasoline directly into an unnamed ditch and Otoe Creek.
-   An April 23, 2010 rupture near Niles, Kan., which caused the discharge of approximately 1,760 barrels of natural gasoline directly into an unnamed ditch, Cole Creek, Buckeye Creek and the Solomon River.
-    An August 13, 2011, rupture near Onawa, Iowa, which caused the discharge of approximately 818 barrels of natural gasoline directly into the Missouri River.

“More than 20,000 miles of pipeline, carrying oil and petroleum products, cross the states of Iowa, Kansas, Missouri and Nebraska in EPA’s Region 7,” EPA Regional Administrator Karl Brooks said. “A frequent cause of pipeline breaks is the action of third parties during farming and excavation. This settlement requires the defendants to honor a schedule of pipeline inspections on the ground and from the air, and reach out to local agencies, contractors and excavators to make sure they are more fully aware of pipeline locations and depths.”

“This settlement requires proactive vigilance to ensure that our soil and waterways are protected from contaminants,” said Deborah R. Gilg, U.S. Attorney for the District of Nebraska. “The agreement will result in safer pipeline operations and that will be good for Nebraska’s environment.”

In addition to the proactive inspections and outreach efforts, the settlement also requires MAPCO and Enterprise to spend $200,000 to relocate, cover, lower or replace pipeline segments; install new remote shutoff valves; install new physical protections such as fences or concrete barriers; and install other new equipment, structures or systems to prevent spills from reaching navigable waters.

The consent decree is subject to a 30-day public comment period and court approval.



Workshop Offers Estate Plan Options for IA Farm Families

Talking about estate planning is difficult and implementing an estate plan can be even harder. And farmers are unique when it comes to retirement and retirement planning. Iowa State University Extension and Outreach understands their situation and is offering Evaluating Your Estate Plan workshops at seven locations during June to discuss estate planning for farm families.

"For farmers, there isn't a distinct moment where they just walk out the door to retirement as someone in a regular wage earning job might do," said Kelvin Leibold, farm management specialist with ISU Extension and Outreach. "Rather, farm families often need to think about how to transition the farm business to the next generation during lifetime, as well as having an estate plan in place."

There are options they can consider such as phasing out or transitioning to another generation. The Evaluating Your Estate Plan program can help in the planning process.

The Evaluating Your Estate Plan workshop answers estate planning questions and helps prepare for future farm transitions and estate planning. Questions often include: Who needs to be involved? What information do I need to gather? When is it the right time to start? Where do I start? How do I decide what to do?

Presenters for the workshop are Leibold and Melissa O'Rourke, ISU Extension and Outreach farm and business management specialist. Leibold joined ISU Extension in 1987 and has vast experience in working with agricultural clients in farm and business planning. O'Rourke is an attorney experienced in agricultural law and estate planning.

The one-day workshop will cover the language of estate planning, gift, estate and inheritance taxes, calculating retirement costs, and many other areas vital to creating a good estate plan. The workshops help anyone who is confused about building a plan for transferring farm assets or unsure what options are best for their farm operation and family.

Registrations for the workshops can be made by calling the county extension office listed with the workshop location. Advance registration is required as space is limited. Workshop sign in starts at 9 a.m. at each site; workshops will adjourn at 4 p.m. The Evaluating Your Estate Plan workshop costs $50 per person and includes workshop materials and lunch.

June 19 -- Sheldon, Northwest Iowa Community College. To register, call 712-737-4230.
June 20 -- Greenfield, Adair County Extension Office. To register, call 641-743-8412.
June 21 -- Oskaloosa, Mahaska County Extension Office. To register, call 641-673-5841.
June 22 -- Marion, Linn County Extension Office. To register, call 319-377-9839.
June 25 -- Dubuque, Dyersville. To register, call 563-583-6496.
June 26 -- Fayette, Upper Iowa University, Student Center Ballroom. To register, call 563-425-3331.
June 27 -- Iowa Falls, Agriculture and Renewable Energy Center, Ellsworth Community College. To register, call 641-648-4850.

For more information, visit the Ag Decision Maker website, www.extension.iastate.edu/agdm/info/meetings.html.



EPA Releases April Biodiesel Volume

The EPA said Thursday that 94.5 million gallons of biodiesel were produced in April, reporting year-to-date production of 331 million gallons through the end of April.

Biodiesel production is reported under the EPA's Biomass-based Diesel category in the Renewable Fuel Standard (RFS). To view the figures, visit the EPA's website here. The EPA numbers show a total of 98 million gallons of Biomass-based Diesel, but that figure also includes renewable diesel.

Last year, the biodiesel industry set a new production record of nearly 1.1 billion gallons, supporting more than 39,000 jobs across the country. Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil and animal fats, biodiesel is the first and only EPA-designated Advanced Biofuel that's produced on a commercial scale across the U.S. It is produced in nearly every state in the country and is used in existing diesel engines without modification.



SURE Disaster Program Deadline Approaches for 2010 Crops

The U.S. Department of Agriculture's Farm Service Agency (FSA) Administrator Bruce Nelson reminded producers today that they have until Friday, June 1, to apply for assistance for 2010 crop losses under the Supplemental Revenue Assistance Payments (SURE) Program. FSA will not act on applications submitted after the deadline. The program provides crop disaster assistance payments to eligible producers on farms that have incurred crop production or quality losses.

Sign-up for the SURE program for 2011 crops will be announced at a later date.

For more information about USDA Farm Service Agency disaster assistance programs, visit a local FSA county office or http://disaster.fsa.usda.gov/. 



USDA Proceeds With Office Consolidation Plan

The U.S. Department of Agriculture (USDA) announced today its decision on Farm Service Agency (FSA) county office consolidations proposed in January as part of USDA’s Blueprint for Stronger Service. In total, FSA will consolidate 125 of the 131 offices originally proposed for consolidation with other USDA service centers, consistent with provisions of the 2008 Farm Bill. Under the Blueprint for Stronger Service, USDA is modernizing and accelerating service delivery while improving the customer experience through use of innovative technologies and business solutions. The Blueprint included USDA’s plan to close or consolidate 259 domestic offices including the FSA offices, additional facilities and labs, and seven foreign offices.

USDA followed statutory requirements provided by Congress in the 2008 Farm Bill for FSA office consolidations. Two sets of criteria were used to identify FSA offices for consolidation. First, USDA identified FSA offices located less than 20 miles from another FSA office that had two or fewer permanent, full-time employees. Additionally, the proposal included all FSA offices with zero permanent employees regardless of location.

Public meetings were held within 30 days of the original announcement in every county affected by the proposal. Comments gathered during this period were reviewed by the department prior to formally notifying Congress of the proposal on Feb. 27, 2012. During the following 90-day Congressional notification period, the department reviewed data used to create the proposal and public comments received during this period. During this review, USDA determined that 6 of the original 131 proposed offices did not meet the 2008 Farm Bill criteria for consolidation. As a result, they are not included in the final plan announced today.

FSA will provide farmers and ranchers affected by consolidations an opportunity to choose the most convenient neighboring county office to conduct their future business. In addition, all employees in a closing office will be provided an opportunity to continue their work with FSA.

FSA is striving to balance budget reductions, staff reductions, and increasing workloads while focusing the efforts of agency staff on continuing to provide high quality service from the remaining 2,119 office locations. The agency’s goal is to strengthen service, notwithstanding reduced budgets and fewer workers.

Since 2011, FSA has seen 1,230 permanent employees leave the agency through voluntary early separation and normal retirement that were needed due to budget reductions made by Congress. FSA has also reduced discretionary administrative expenses by more than 30 percent in the last fiscal year alone.

The six proposed county offices that will continue operating are: Lafayette County, Ark.; Boulder County, Colo.; St. Mary Parish, La.; Pamlico County, N.C.; Mayes County, Okla.; and York County, S.C. For a complete list of FSA county offices affected by this decision, visit http://www.fsa.usda.gov/officeconsolidations.



IGC Cuts Estimates of S. American, Global Soybean Output

The International Grains Council has cut its estimate of South American soybean production this year for the seventh time since September, bringing the projected on-year drop to 16%.  Based on the revised estimate, South America will produce 114.4 million metric tons of soybeans in the 2011-12 marketing year, which is based on aggregate crop and marketing years in producing countries.  The downward revision--by 23 million tons since its initial estimate in September and 1.5 million tons lower than its estimate last month--is due to severe drought and disease, the IGC said in a recent report.

Argentina is estimated to have produced 41 million tons in 2011-12, 1.9 million tons lower than previously estimated, down 16% from 2010-11.  The IGC left its estimate for Brazil's soybean crop unchanged at 65.6 million tons, which would be a decline of 13% from a record 75.3 million tons in 2010-11.

Brazil's soybean exports of the previous crop have surged even as drought has afflicted its current crop. The IGC estimated that the South American' nation's exports in the marketing year ending Sept. 30, 2012, will total 35.7 million tons, up 19% on year.  Argentina's exports for the year are forecast at 8.2 million tons, down from 9.2 million tons in 2010-11.

The IGC is projecting that global soybean output will fall by 30 million tons in 2011-12, while the global trade will fall by 2.3 million tons, indicating a significant depletion of inventories.  Despite a fall in global supply, total soybean shipments to China, the world's top importer, will rise 6% to a record 55.5 million tons because of higher demand for animal feed and vegetable oils, according to the IGC.  Soymeal trade will rise by 500,000 tons to 57.4 million tons, the IGC said, without providing soybean/soymeal inventory levels.

The European Union's soybean imports are expected to fall 11% to a multiyear low of 11 million tons, while its soymeal imports will be unchanged at 22.4 million tons, it said.  The EU's soymeal imports are still relatively high, in line with the five-year average, as lower soybean imports and tight supply of alternative oilseeds has underpinned demand, the IGC said.



Ukraine Winter Grains Condition Improves

By May 24 crops have sprouted on 91.2% of the 8.4 million hectares planted with winter grains in Ukraine for the 2012 harvest, the agriculture ministry reported Monday.

The ministry said May 24 crops were in good and satisfactory condition on 5.17 million hectares or 67.7% of the total area where the crops sprouted to date. Crops in weak condition were reported on 1.66 million hectares or 21.7% of the total area where the crops sprouted to date.

Winter wheat on the date was in good and satisfactory condition on 4.36 million hectares or 71.5% of the total area where winter wheat spouted. Winter barley was in good and satisfactory condition on 520,000 hectares or 43% of the total area where winter barley sprouted. Winter rye was in good and satisfactory condition on 278,000 hectares or 90.3% of the total area where winter rye sprouted.

Ukraine's Prime Minister Mykola Azarov said Feb. 10 Ukraine would have to replant 3.5 million hectares, where winter grains had been damaged by frosts and did not sprout at all or were in weak condition, with spring grains. However, the ministry said Monday the crops condition had improved and damaged winter grains would now have to be replanted with spring grains only on 1.57 million hectares.



CHS expands Brazilian investment to include grain export terminal

CHS Inc., the nation's leading farmer-owned cooperative, announced today it has purchased 25 percent ownership of TCN, a recently-formed Brazilian logistics company founded by NovaAgri, Sao Paulo, Brazil.  NovaAgri will own 75 percent of TCN shares.  In addition to the ownership investment, CHS also signed a long-term agreement with TCN, securing export terminal access at the Port of Itaqui, Sao Luis, Brazil.

"This major and strategic investment gives CHS competitive access to the fastest growing region of Brazil and further strengthens our ability to supply soybeans and corn to global customers," says Stefano Rettore, senior vice president, CHS South America, Sao Paulo, Brazil.  "We believe demographics and income growth, especially in developing economies, means the world demand for soybeans and corn will increase.  This partnership fits into CHS aspirations to expand our global commodities footprint to meet growing demand, and to continue to add value to our member-owners' investment."

Infrastructure development at the Port of Itaqui is expected to greatly improve market access for Brazilian growers by reducing significant logistical bottlenecks and, Rettore says, increased exports will also improve Brazil's trade balance.

In October 2011, TCN was awarded the right to construct one of four export terminals in the Port of Itaqui, in the northeastern Brazilian state of Maranhao on the Atlantic Ocean.  Construction will begin in August 2012, with completion expected during the second half of 2013.  



Marubeni to Buy Gavilon for $3.6 Bln

Marubeni Corp. said Tuesday it will buy Gavilon Group LLC, the U.S.'s third-biggest grain handler, for $3.6 billion excluding debt in a deal that will make it one of the world's largest grain traders.

The acquisition, Marubeni's most expensive purchase to be carried out on its own, will put its grain trading business in a league with global heavyweights such as Cargill Inc. Tokyo-based Marubeni will aim to trade 25 million metric tons of grain in the fiscal year ending March 2013. Marubeni said Omaha, Neb.-based Gavilon's 30 million tons could take global grain handling volume to over 55 million tons.

The deal represents the biggest cross-border acquisition by a Japanese company so far this year and the most expensive purchase solely carried out by Japan's fifth-largest trading house by revenue, according to data provider Dealogic. The U.S. grain trader also carries about $2 billion in debt. Marubeni said on Tuesday that the acquisition will be partly financed by bank borrowing and that it expects the deal will add $100 million to its bottom line next fiscal year.

The move accelerates the Tokyo-based company's efforts to position itself as a regional powerhouse to feed the growing and hungry Asian market, namely China, by boosting its access to actual grain supplies. Marubeni's grain-handling volumes would still rank behind Cargill and Archer Daniels Midland Co. (ADM), but would be among the top five or six globally.

Marubeni's purchase is the latest move in a wave of consolidation across the grain industry. In March, Switzerland's Glencore International PLC (GLEN.LN) announced it was buying Canadian grain handler Viterra Inc. for $6.2 billion.

The consolidation is being driven by increased worries about food security as global grain supplies tighten, said Dave Nelson, a Chicago-based global strategist for Rabobank. The deal places increased competition pressure on Archer Daniels Midland, Bunge Ltd., Cargill and Louis Dreyfus Group--companies that long have dominated the commodities trade and are known throughout the industry as the "ABCD" companies.

Recent deals, along with the rise of growing Asian commodity traders such as Olam, Noble Ltd. and Wilmar International, are changing that landscape, Nelson said. "You don't have the big three or four anymore, you have a big nine."

Marubeni officials said the deal will help both it and Gavilon shore up weaknesses.

"What Marubeni lacked was producing capabilities and what Gavilon lacks was business overseas. In this way, we were a good match," said Daisuke Okada, an adviser on food products to Marubeni President Teruo Asada, at a news conference Tuesday. Okada said the U.S. grain company will be positioned to supply China's demands as it faces shortages in the future.

In recent years, U.S. competitors such as Bunge, Cargill and CHS Inc. have either built new port facilities in the Pacific Northwest or formed partnerships to be better positioned to take advantage of growing exports to China. Marubeni already has a terminal in Portland, Ore.

Closely held Gavilon was formed when the trading arm of ConAgra Foods Inc. was sold for $2.8 billion in 2008 to an investor group led by Ospraie Special Opportunities Fund, General Atlantic LLC, and a fund managed by Soros Fund Management LLC. The company, which buys, stores and ships grain throughout the U.S., also includes a fertilizer distribution network. Gavilon had group revenue totaling $17.85 billion last year.

"As part of a larger trading organization, Gavilon will be well-positioned to more efficiently connect supply with growing global demand," Gavilon Chief Executive Greg Heckman said in a statement. Marubeni said the transaction is expected to be completed by September. Morgan Stanley advised Gavilon and Nomura advised Marubeni on the deal.

Japanese trading houses have been aggressively buying assets overseas as they seek to secure natural resources and commodities. Marubeni alone has spent around $11 billion in overseas acquisitions since the beginning of last year. Marubeni has said it will seek to balance out its portfolio and focus on driving more revenue from its non-energy businesses. About 7.5% of its profit in the last fiscal year came from its food-related businesses and the company previously said it aims to lift that to over 10%.

While Japan is the world's largest corn importer and one of the biggest wheat importers, analysts said the deal was driven more by opportunities to sell grain throughout Asia.

Marubeni historically has been a major trader in the Chinese market, said Philippe de Laperouse, St. Louis-based director of global food and agribusiness for HighQuest Partners, a management consulting firm. But as Chinese demand for soybeans, corn and other products has increased, grain suppliers are looking farther afield for opportunities to secure grain in the U.S. and South America, which they can then export to China.