Friday July 27 Ag News

Drought Map Shows Intensification in Nebraska, Central U.S.

It's official: Part of central Nebraska now is experiencing the state's first exceptional drought -- the most intense level -- in eight years, according to the National Drought Mitigation Center.

The center, headquartered at the University of Nebraska-Lincoln, reported findings in this week's U.S. Drought Monitor, its weekly report on drought conditions, which was released Thursday (July 26).

"The extreme drought in the central part of the state last week was intensified to exceptional on this map, and there was a broad intensification from severe to extreme drought in the state," said Brian Fuchs, a climatologist and U.S. Drought Monitor author.

Fuchs said the intense drought has come on fairly quickly. "In eight weeks, we went from being in fairly good condition to having the whole state in severe drought or worse."

Nebraska is not alone. This week's Drought Monitor set a record for the fourth straight week for the area in moderate drought or worse in the 12-year history of the map and showed widespread intensification of drought.

This week's map shows 53.44 percent of the United States and Puerto Rico in moderate drought or worse, up from 53.17 percent the week before; 38.11 percent in severe drought or worse, compared with 35.32 a week earlier; 17.2 percent in extreme drought or worse, compared with 11.32 percent; and 1.99 percent in exceptional drought, up from .83 percent.

"We've seen tremendous intensification of drought through Illinois, Iowa, Missouri, Indiana, Arkansas, Kansas and Nebraska, and into part of Wyoming and South Dakota in the last week," Fuchs said. "The amount of D3 (extreme drought) developing in the country has increased quite a bit for each of the last several weeks."

Fuchs also noted that as of this week, every state in the country had at least a small area shown as abnormally dry or worse. "It's such a broad footprint," he said.

"This drought is two-pronged," Fuchs said. "Not only the dryness but the heat is playing a big and important role. Even areas that have picked up rain are still suffering because of the heat."

The forecast for most of the drought-affected area is for drought to continue to develop and intensify. "Conditions are likely to persist," Fuchs said. "We'll see further development and intensification into the fall." Fuchs based his assessment on the Seasonal Drought Outlook released July 19.

Although the Drought Monitor has only a 12-year history, experts can put the 2012 drought into historical context by using the older Palmer Drought Severity Index, which has data back to 1895. By that measure, only droughts in 1934, 1939 and 1954 covered a larger area in the U.S.

The U.S. Department of Agriculture's Economic Research Service this week reported that almost 40 percent of the country's agricultural land is in severe or worse drought. It is affecting 62 percent of farms, and about 88 percent of the corn crop and 73 percent of cattle areas.

The U.S. Drought Monitor map is jointly produced by the National Drought Mitigation Center at UNL, the National Oceanic and Atmospheric Administration, the U.S. Department of Agriculture, and about 350 drought observers across the country. It is released each Thursday based on data through the previous Tuesday.

Drought Monitor authors synthesize many drought indicators into a single map that identifies areas of the country that are abnormally dry (D0), in moderate drought (D1), in severe drought (D2), extreme drought (D3) and exceptional drought (D4).

Statistics for the percentage area in each category of drought are automatically added to the U.S. Drought Monitor website each week for the entire country and Puerto Rico, for the 48 contiguous states, for each climate region, and for individual states. The National Climatic Data Center maintains drought data based on the Palmer Drought Severity Index, calculated to the beginning of the historic record. More links: U.S. Drought Monitor: http://droughtmonitor.unl.edu and Seasonal Drought Outlook: www.cpc.ncep.noaa.gov/



Trade Mission to China
Nebraska Governor Dave Heineman

International business is increasingly important and beneficial to Nebraska’s economic strength. Global trade and investment generates in excess of 56,000 jobs and more than $9 billion in new money here each year.

During the last four years, Nebraska recorded 29 international investments from 12 countries. These investments totaled more than $4.17 billion and created more than 1,400 jobs in the state. Exports from Nebraska also have increased rapidly. In 2011, we exported $7.5 billion, a 30% increase from 2010.

To help expand Nebraska’s trade efforts, I will be leading an upcoming trade mission to China. Joining me will be 35 business and industry leaders, including Catherine Lang, Director of the Nebraska Department of Economic Development, economic development professionals and representatives from the University of Nebraska.

China is a logical choice for this next mission. China has been the second most active foreign investor during the past three years with six new investments in Nebraska. In addition, China is Nebraska’s fourth largest trading partner and one of the state’s fastest growing markets, having more than doubled during the past five years with a 36% increase in 2011.  Combined exports totaled more than $380 million last year, up from nearly $279 million in 2010.

Export product areas are diverse and include: automotive machinery manufacture, medical equipment and supplies, educational materials, processed foods, water purification systems, lawn maintenance equipment, sporting goods, electronic equipment, transportation equipment, and grain handling and storage equipment.　

The trade mission will include stops in Beijing, Xi’an and Shanghai, China. This will mark the 11th trade mission undertaken by my administration.

We plan to meet with many company officials who have attended our previous two Reverse Trade Missions. In 2008, I hosted Nebraska’s first ever Reverse Trade Mission, where we had 140 international attendees, with approximately 60 from China. This last September, I hosted the state’s second Reverse Trade Mission, which had 115 attendees, with approximately 50 from China.

Our goal is to generate new markets for many Nebraska products and our hope is to attract Chinese companies that want to expand into the American market, especially those interested in doing business in Nebraska.

This trade mission represents an important opportunity to explore business development efforts that will benefit communities here at home for years to come. We want to make this trip a success for all those involved, and I look forward to leading a delegation that includes a wide variety of interests here in Nebraska.



Johanns Commends Steps to Reopen Taiwan Markets to U.S. Beef

U.S. Sen. Mike Johanns (R-Neb.) today issued the following statement after speaking with Taiwanese Ambassador Yuan about his country's actions to open their markets to American beef:

"Nebraska's cattle industry produces some of the highest quality beef in the world," Johanns said. "Taiwan's legislature should be commended for taking a first step to reopening their markets to U.S. beef. I encourage them to keep this process moving without any unnecessary delays.

"I look forward to seeing the first shipment of Nebraska beef arriving on their shores very soon and hope this science-based approach will continue to be the norm."
In 2010, the U.S. exported nearly 39,000 metric tons of beef and beef variety meats to Taiwan valued at $216.3 million.  Taiwan effectively closed their market to U.S. beef in January 2011 after implementing a zero-tolerance policy for ractopamine, a feed additive commonly used to increase the efficiency of livestock production.

Johanns met with the Taiwanese ambassador regarding this issue in March 2011 and wrote to express concern in April 2011. On Wednesday, the Taiwanese legislature amended their food  sanitation law to authorize the executive branch to bring minimum standards for ractopamine in line with those of more than two dozen nations, including the U.S.

Johanns hopes this policy will be applied to all imported meats, not just beef imports.



Informa Cuts 2012 Grain Estimates

Private analytical firm Informa Economics on Friday became the latest crop forecaster to cut its outlook for the 2012 U.S. corn and soybean harvests due to poor weather, according to traders.

Informa's downward adjustment in corn and soybean production levels is based on the assumption that August will continue the stressful weather experienced thus far in the 2012 growing season.

The data were released as a special update on U.S. corn and soybeans assuming unfavorable August weather. Informa will release its normal August production report based on surveys on Aug. 3.

Informa lowered its estimate for the U.S. corn harvest to 11.475 billion bushels from its early-July estimate of 12.49 billion bushels, traders said. The firm cut its yield estimate for the crop to 134 bushels an acre from its previous estimate of 142.5 bushels an acre, they said.

"The stressful weather pattern the U.S. is experiencing has been reducing crop prospects on a daily basis," Informa said in the report.

Grain users are uncertain about the size of the upcoming autumn harvests after intense heat stressed the crops. Farmers need to harvest a big corn crop to replenish low inventories.

Informa lowered its estimate for the soybean harvest to 2.890 billion bushels from 3.012 billion bushels, traders said. It pegged the average yield at 38.5 bushels an acre, compared to its early-July estimate of 40 bushels per acre.

By contrast, the U.S. Department of Agriculture in July estimated the U.S. corn crop at 12.970 billion bushels, using a 146 bushel-an-acre yield, and soybean output at 3.050 billion, using a 40.5 bushel-an-acre yield. The USDA is scheduled to release updated figures Aug. 10.



IGC Cuts US 2012-13 Soybean Output
International Grains Council has slashed its U.S. soybeans output forecast for 2012-13 by 9.5% to a five-year low of 79 million tons as a severe drought is wilting the crops in the Midwest.  Production was estimated at 83.2 million tons in 2011-12 and is projected to fall for the third successive year.

IGC also cautioned that there is potential for further reduction if the weather conditions don't improve soon.  With crops now entering their crucial pod-filling stage, persistent hot and dry weather across much of the Midwest has significantly impacted yield potential, IGC said in its monthly report.  Less than a third of the U.S. soybean crop is in good condition, IGC said citing official government reports.

IGC also lowered U.S. soybean exports forecast for 2012-13 by 12% to 35.5 million tons. Brazil is likely to be world's top soybean exporter, pushing U.S. to the second place.  Brazil may get the top position this year itself as shipments are already up 40% on year during the October-June period.

IGC slashed U.S. soymeal export forecast by 8% to 7 million tons.  Due to lesser U.S. output, IGC also slashed global output forecast for 2012-13 by 3% to 259 million tons. However, at these levels, global soybeans production will still be 9% higher on year, if weather turns favorable in South America after the recent drought.  Output is lower in the U.S. at a time when demand is increasing and global trade is forecast to rise 4% to a record 94.7 million tons.

China with more than 60% share in global trade is driving up demand and imports are likely to rise 4% to a record 59 million tons.  Relatively strong economic growth, and an associated change in dietary patterns towards greater protein content, is giving a push to Chinese demand for animal feed and vegetable oils, IGC said.  Demand from countries such as China amid tight supply is pushing up prices. Near-month soybeans for August delivery on the Chicago Board of Trade hit a record high of $17.7775 a bushel on July 20.

On the positive side, the surge in global prices will likely spur larger plantings in South America and coupled with a return to at least average yields, production in the region is expected to rebound, by at least one-fifth, to around 140 million tons in 2012-13, IGC said.

Global soymeal trade is likely to be little changed on year around 57.5 million tons. Imports by the European Union, world's top importer are forecast unchanged at 22.7 million tons but much lower than 2007-08 record of 25.4 million tons.

IGC Cuts Russian 2012-13 Wheat Output
The International Grains Council Friday lowered Russia's wheat output forecast for the 2012-13 aggregate marketing year by 8.2% to 45 million metric tons.  Production is now expected to fall 20% but will still be higher than 41.5 million tons in 2010-11, when a fierce drought prompted a ban on exports, IGC said.

IGC also slashed Russia's wheat export forecast to 9 million tons. This figure is 59% lower than the 2011-12 actual exports of 22 million tons.  Traders are worried that Russia may impose restrictions on exports again or ban them altogether. There aren't any firm price offers for September shipment due to policy uncertainties, a trader in Lausanne said.

The Russian government plans to review the situation Aug. 8.



Vilsack Announces Support for Producers to Grow Renewable Feedstocks for Advanced Biofuels

Agriculture Secretary Tom Vilsack today announced payments for 125 advanced Biofuel producers across the country to support the production and expansion of advanced biofuels from a wide variety of non-food sources, including waste products.

"Advanced biofuels are a key component of President Obama's 'all-of-the-above' energy strategy to reduce the Nation's reliance on foreign oil and take control of America's energy future," said Vilsack. "These payments represent help spur an alternative fuels industry using renewable feedstocks grown in America, broadening the range of feedstock options available to biofuels producers, helping to create an economy built to last."

The funding is being provided through USDA's Bioenergy Program for Advanced Biofuels, which was established in the 2008 Farm Bill. Under this program, payments are made to eligible producers based on the amount of biofuels a recipient produces from renewable biomass, other than corn kernel starch. Examples of eligible feedstocks include but are not limited to: crop residue; animal, food and yard waste material; vegetable oil; and animal fat. Through this and other programs, USDA is working to support the research, investment and infrastructure necessary to build a biofuels industry that creates jobs and broadens the range of feedstocks used to produce renewable fuel.

For example, in Somerset, Ky., Somerset Hardwood Flooring will receive a $7,040 payment for producing wood pellets from residual sawdust from its hardwood flooring manufacturing process. The company produces about 40 tons of wood pellets annually. FPE Renewables, LLC, based in Lyden, Wash., generates nearly two million kilowatt hours of electricity annually. The firm will receive a payment of $9,612 for producing biogas primarily from dairy waste, which is converted to electricity. In West Point, Va., Virginia Biodiesel Refinery, LLC, will receive a payment of $7,900 for making biodiesel from recycled cooking oil and soybean oil.

Increased biofuel production plays a relatively minor role in retail food price changes because the growing diversity of feedstock used to produce biodiesel allows for flexibility and helps relieve market pressures. Biodiesel is made from an increasingly diverse mix of non-food feedstocks, including recycled cooking oil, agricultural oils and animal fats, allowing most biodiesel producers to select from a choice of feedstocks if prices rise or supplies are limited. Therefore, the industry's impact in commodity markets is significantly reduced. As the market expands for home-grown renewable energy, American farmers and producers will create even more good-paying jobs that can't be exported. The biofuels industry in the U.S. currently employs about 400,000 people and is expected to employ around a million people in the U.S. by 2022.

USDA today is announcing $19.4 million in payments to 125 local producers and business-owners. Below is a complete list of the 111 producers (by state) receiving payments of more than $500 for production of advanced biofuels. (Producers receiving payments in the amount of $500 or less are not included in the list.)

Iowa
-    Clinton County Bio Energy, LLC: $64,382 for biofuel from waste products
-    Iowa Renewable Energy, LLC: $135,510 for biofuel from waste products
-    Renewable Energy Group, Inc.: $873,622 for biodiesel transesterification
-    Western Dubuque Biodiesel, LLC: $287,034 for biodiesel transesterification
-    Western Iowa Energy: $250,277 for biofuel from waste products

Nebraska
-    Ag Processing, Inc.: $313,119 for biodiesel transesterification



Farm Service Agency Announces Continuous Sign-up for CRP Highly Erodible Land Initiative

Continuous sign-up for the Highly Erodible Land (HEL) Initiative under the Conservation Reserve Program (CRP) started on July 23, 2012.  Nebraska received a total allocation of 42,300 acres to enroll in the HEL CRP program.  Offers will be accepted until either the state acreage allocation limit is reached or September 30, 2012 (whichever occurs first).

“CRP is a voluntary program that has protected environmentally sensitive land for more than 25 years,” said Josie Waterbury, Executive Director for the Thurston County Farm Service Agency.  “This initiative will accept offers with an erosion rate of at least 20 tons per acre per year for new cropland or CRP acres that expire on September 30, 2012; however, existing grass stands that are not considered expiring CRP will not be considered eligible," she said.

Producers can stop by their local FSA Office to determine if their land qualifies for the Highly Erodible Land Initiative and to receive additional location-specific details.

Landowners enrolled in CRP receive annual rental payments and cost-share assistance to establish long-term, resource conserving covers on eligible farmland.  Incentive payments are not authorized under this initiative.

New land contracts approved during this continuous sign-up initiative will become effective the first day of the month following the month of approval and are valid for 10 years.

CRP contracts set to expire on September 30, 2012, may be offered for consideration and approved contracts will become effective October 1, 2012, and are also valid for 10 years.



Branstad Issues Disaster Emergency to Assist Producers

Thursday, Iowa Gov. Branstad issued a disaster emergency proclamation that will provide relief to Iowa farmers hit hard by the drought being experienced in the state.

This proclamation takes affect at noon today for the next 60 days. The assistance comes in the form of a suspension of state laws and regulations affecting the transport of hay, straw and stover. The drought has destroyed or depleted sources of these products that are necessary for livestock production and feed.

Specifically, this proclamation allows for:
-- Overweight loads: Hay, straw and stover may be transported in loads weighing up to 90,000 pounds gross weight without obtaining an overweight permit normally required by the Iowa Department of Transportation. Overweight loads cannot travel on the interstate without a permit. This proclamation applies to noninterstate roadways. Specific axle weight limits do apply. Visit the Iowa DOT's website www.iowa.dot.gov to see the maximum gross weight table and determine the legal limits for your vehicle/trailer combination. A vehicle that is overweight, but not overwidth, can travel at all hours.

-- Overwidth loads: A vehicle transporting these goods can be overwidth, without an Iowa DOT permit, if they do not exceed 12 feet 5 inches wide. An overwidth load can travel on any road, including the interstate, as long as its gross weight does not exceed 80,000 pounds. Movement must occur between the hours of 30 minutes before sunrise and 30 minutes after sunset. All flags, signs and lights normally required are still needed.

-- Overweight and overwidth loads: A vehicle transporting these goods can be both overwidth, up to 12 feet 5 inches, and overweight, up to 90,000 pounds. However, these vehicles cannot travel on the interstate.

-- Driver hours of service: The driver hours-of-service regulations pertaining to persons transporting these specific agricultural goods are suspended. Certain rest periods must be provided to drivers to prevent fatigued or ill drivers from operating on the roadways.

For additional details, call 1-800-925-6469 or visit the Iowa DOT's website at www.iowadot.gov where a question and answer sheet can be found.



Despite Extreme Weather, Soy Demand Expected to Remain Strong

The 2012 growing season got off to a fast start for many U.S. soybean farmers due to warm, dry weather conditions – conditions that continue throughout many critical growing areas of the United States.

Northwest Iowa farmer Jim Stillman, who serves as vice chair of the United Soybean Board (USB), hopes, along with other soy checkoff farmer-directors, that conditions improve so they have a big harvest that can help meet strong global demand for U.S. soy.

"We started out dry, had a little rainy period, which delayed us a little bit, but right now, many of us need rain," Stillman says.

National Weather Service data shows parts of the two biggest U.S. soybean-producing states, including Stillman’s home state and neighboring Illinois, have experienced less than half of the precipitation they normally receive by this time of the year.

"Demand for soybeans right now is great," says Stillman. "China and other countries want to buy, and our biggest customers here in the United States continue to feed a lot of poultry and hogs."

At USB’s meeting in late February, the organization’s secretary, Jim Call, a soybean farmer from southwest Minnesota, asked each farmer-director to indicate "wet, dry or normal," when he conducted roll call. At that time, only about five out of the 69 farmers who voluntarily serve on USB indicated "normal," with the remaining half either indicating conditions on their farms at that time were "wet" or "dry."

At its most recent July meeting, USB farmer directors were asked to anticipate how much their soybean production will be reduced due to the drought. More than 60 percent responded that their crop would be reduced by between 10 percent and 50 percent. An additional 21 percent anticipated more than a 50 percent reduction.



Drought Drives Cattle Inventory Down, Consumer Demand Remains High

In recent history, drought has been isolated to various regions of the country, rather than a widespread drought threatening most of the country. Last year, for example, drought was centered primarily in the Southern Plains. According to Kevin Good, senior market analyst for CattleFax, 70 percent of the U.S. cattle inventory is located in regions of drought.

“The widespread drought has ultimately led to the worst pasture conditions in the past 15 years,” said Good. “The U.S. calf crop is down 800,000 head. The bottom-line, when all is said and done, the cattle herd will decrease by about 500,000 head. This is compared to a 900,000 decrease a year ago, so we are seeing a liquidation but at a slower pace than last year.”

Despite the obvious challenges facing America’s cattlemen and women, Good offered reason for optimism. Consumer demand remains strong with solid retail and foodservice sales. As consumers continue to demand nutritious beef, cattlemen are given reason to remain in the cattle business and avoid liquidation. National Cattlemen’s Beef Association (NCBA) CEO Forrest Roberts said the challenges cattlemen are facing are serious, but we are encouraging them to trust the market signals and maintain cowherds if possible.

“The thing we have to remember is that consumers continue to prefer beef on the dinner table. Consumers are sending very clear signs to cattlemen to hang tough and continue producing the protein they prefer most,” said Roberts. “There is no doubt this will be tough. But cattlemen are tough people and I am confident we will weather this storm and rebuild the U.S. cowherd once weather conditions improve.”

More than 700 cattlemen from across the country attended the summer conference in Denver. The event concludes tomorrow, July 28.



House Tackles Death Tax, Senate Strays

National Cattlemen’s Beef Association (NCBA) Associate Director of Legislative Affairs Kent Bacus offered attendees of the 2012 Cattle Industry Summer Conference an update on recent movements in Washington, D.C., regarding the estate tax. This issue, according to Bacus, is the number one priority for NCBA, which is the oldest and largest national organization representing cattlemen and women. The issue rises to the top policy issue for family-owned small businesses, such as farms and ranches, because of the burden it places on families hoping to pass their business on to the next generation.

“The estate tax is a prime example of bad tax policy and Congress should repeal. Unfortunately, we hear from some elected leaders who claim to be defenders of the little guy. Meanwhile, they avoid opportunities to kill the death tax,” said Bacus. “In order to sustain these family businesses, the future must contain a level of certainty. The next generation cannot possible afford to take over the family business if they are taxed to death.”

Bacus gave some good news to cattlemen seeking permanent relief from the estate tax. Bacus reported that Congressman Kevin Brady (R-Texas) has 218 cosponsors on his Death Tax Repeal Permanency Act. This legislation would essentially provide full and permanent relief from the tax. Senator John Thune of South Dakota also introduced a companion bill - the Death Tax Repeal Permanency Act of 2012 - in his chamber and that bill has 37 co-sponsors. They also released an updated study proving how harmful and ineffective the death tax is from the Joint Economic Committee. Bacus said the study’s key points are the estate tax continues to hurt the economy, fails as a revenue generator, creates a barrier to economic equality and could increase revenue if it were abolished.

The bad news conveyed at the conference was the recent action taken by the Senate. The Senate voted on two tax packages this week that will be used for messaging purposes this election season. Senate Majority Leader Harry Reid (D-Nev.) led efforts to secure passage of a tax package that extends tax rates for family income up to $250,000 for a year, raises the top rate on capital gains and dividends, as well as continue several targeted tax provisions. The Reid package, according to Bacus, does not address the estate tax and would leave small business owners and ranchers vulnerable to a reversion of the pre-2001 levels of a 55 percent tax on estates worth $1 million or more. Bacus said this is unacceptable.

“Most farmers and ranchers would trip the $1 million threshold on land values alone. Land values are through the roof and all of the assets it takes to operate a farm or ranch, including livestock, farm machinery and more, would hit the majority of farm and ranch families throughout the country,” said Bacus. “This is not a tax on the wealthy. We must find permanent relief or risk taking land out of production agriculture, threatening our ability to provide food for U.S. consumers and abroad.”

Bacus said NCBA supports Rep. Brady and Sen. Thune in their quest to abolish the tax. Given the current political environment, however; NCBA would also support making the current tax levels of 35 percent on farms and ranchers valued at $10 million per couple. Bacus said this tax level, which is set to expire on Dec. 31, 2012, misses the majority of farmers and ranchers.



Action Team Focuses on Membership, Leadership, Communications

At a meeting last week in Washington, the National Corn Growers Association's Grower Services Action Team reviewed new membership benefits, NCGA communications efforts and the Leadership At Its Best program. They also enjoyed a special presentation on social media by a communications official from the U.S. Department of Agriculture.

"Our team has a great portfolio of responsibilities, and we're very happy to see record membership and record investment in our programs by the state checkoff organizations," said Brandon Hunnicutt, a Nebraska grower who chairs the Grower Services Action Team. "From member benefits to leadership development to our award-winning communications programs, NCGA and its state associations have helped create a grassroots association that is effective and respected nationwide."

At its July 16-17 meeting, the team reviewed strategic plans for membership and communications for 2013. With more than 37,000 members and growing, NCGA is well on its way to meeting the goal of 40,000 members by 2020, as expressed in the NCGA Strategic Plan, Hunnicutt noted.

The team also reviewed NCGA's involvement in four key image programs: The Corn Farmers Coalition, CommonGround, American Ethanol Racing and the U.S. Farmers and Ranchers Alliance.



NCGA: American Agriculture Needs a New Farm Bill

National Corn Growers Association President Garry Niemeyer released the following statement in response to a decision by the House of Representatives to take up a one-year extension of the farm bill:

“America’s farmers need a new farm bill that will allow them the ability to make sound business decisions for the next five years.  An extension of current law fails to provide the needed level of certainty.  The National Corn Growers Association has strongly advocated programs, such as direct payments, be reformed into more efficient farm policy that will be responsive to taxpayers. 

“It is important to get to conference and pass a bill before the current law expires September 30.  Continuing outdated farm policies will negatively impact agriculture, the federal budget, consumers and the economy.”



ASA: Ask Representative to Vote Yes on H.R. 6156, Grant PNTR with Russia

The American Soybean Association is asking you to contact your representative and tell them to vote YES on H.R. 6156, the Russia and Moldova Jackson-Vanik Repeal Act of 2012. The House leadership intends to bring this legislation for a floor vote early next week if we can demonstrate sufficient support for H.R. 6156. Passage of this legislation will graduate Russia from the Jackson-Vanik amendment and authorize the U.S. to establish permanent normal trade relations (PNTR) with the world’s sixth largest economy.

On Aug. 22 – less than 30 days – Russia will become a member of the World Trade Organization (WTO). In order for U.S. soybean farmers to take advantage of the many market opening commitments that form Russia’s accession package to the WTO, Congress must pass legislation to graduate Russia from the Jackson-Vanik amendment.

There are only FOUR legislative days remaining to pass this legislation – it is critical that Congress enact it before the August recess.

Facts about the Russian Market
-    Russia is the world’s sixth largest economy with more than 140 million consumers, and is an important market for the U.S. soy industry as it imported more than $770 million in meat, poultry, egg and dairy products in 2011.
-    The pork and poultry industries, which use soybean meal in animal feed, are poised to see great success in Russia as income levels rise and the demand for meat increases.
-    If Congress fails to approve PNTR with Russia, U.S. farmers will not be able to take advantage of the benefits of those market-opening reforms, letting more than 150 other countries seize the benefits of Russia’s open market.
-    Establishment of PNTR with Russia will not require the U.S. to provide any market access benefits, lower any U.S. tariffs, or make other changes to our trade laws.



One-Year Farm Bill Extension Possible on House Floor
(from NAWG)

As the agronomic and political impacts of the nation’s growing drought came into clearer focus this week, House Republican leaders shifted course toward possible consideration of a one-year extension of current farm programs.

At a House Agriculture Committee Members meeting Wednesday, Committee Chairman Frank Lucas (R-Okla.) pitched the idea, which would also include an extension of disaster relief programs, especially vital for livestock producers who cannot buy crop insurance and do not participate in Title I.

By Thursday, Republican leaders were whipping votes and planning for floor consideration next week, the last week before the month-long August recess.

Lucas, who has the unenviable job of convincing his leadership to bring any farm legislation to the floor, told members of the press at mid-week that an extension was possible and even logical with drought effects worsening by the day.

His Democratic counterpart, Ranking Member Collin Peterson, and Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.), first voiced opposition to an extension. However, if Stabenow seeks to move a bill to conference committee following a successful House vote, the way could be paved for Congress to pass a full farm bill before current law expires on Sept. 30.

Questions about the potential plan abound. It’s not yet clear how direct payments, which were eliminated in both House Committee- and Senate-passed versions of the bill, will be treated under a possible extension.

The effect of an extension on the law’s baseline – which has already been reduced dramatically in recent years and could take another hit with coming sequestration cuts in 2013 – is unknown.

Another concern is how Members in both chambers will react to a hopeful but unconventional path toward farm bill passage.

National Association of Wheat Grower’s priority continues to be achievement of a new, five-year farm bill before current law expires this fall. A short-term extension doesn’t give farmers the certainty that they need and would likely not incorporate reforms that have been essential to gaining support for new farm and food policy in both chambers.

SPCC Clarity Bill Approved By House Transportation Committee
The House Transportation and Infrastructure Committee approved a bill Thursday to clarify requirements facing farmers under the Spill Prevention Control and Countermeasure, or SPCC, rule.

The bill, the Farmers Undertake Environmental Land Stewardship (FUELS) Act or H.R. 3158, was introduced last fall by Rep. Rick Crawford (R-Ark.) and co-sponsored by 38 other Members.

It would ease some of the restrictions imposed by the current SPCC rule, which is administered by the Environmental Protection Agency (EPA).

The SPCC rule is applicable to any facility, including farms, with an aggregate above-ground oil storage capacity of 1,320 gallons in tanks of 55 gallons or greater. In order to fully comply with SPCC rules, a facility must have, among other things, identified contractors who can help operators clean up an oil spill; provided overfill prevention devices such as a high-level alarm; and provided effective secondary containment measures such as a dike or double-walled tanks.

Farms in operation before Aug. 16, 2002, need SPCC plans in place now, while those started after Aug. 16, 2002, have until May 10, 2013, to develop and implement their plans.

The bill passed this week would create three classes of farms for SPCC purposes:
1) Farms with individual tanks with storage capacity greater than 10,000 gallons, aggregate storage capacity of at least 42,000 gallons or spill histories would need professional engineers to certify their SPCC plans.
2) Farms with aggregate storage capacity greater than 10,000 gallons but less than 42,000 gallons and no history of spills could be self-certified by the farms’ owners or operators.
3) Farms with aggregate storage capacity less than 10,000 gallons and no history of spills would be exempt from requirements.

The bill would also exclude all containers on separate parcels that have a capacity less than 1,320 gallons from the aggregate storage capacity of a farm.

NAWG and a dozen other organizations wrote leaders of the Committee on Wednesday to express strong support for the bill, saying it would “bring some much needed clarity to agriculture on the confusing requirements of the EPA’s [SPCC] rule.”

The agriculture community has repeatedly expressed concerns that the existing threshold for SPCC plan requirements, 1,320 gallons, has no scientific or industry basis; that establishing two separate rule deadlines for long-existing and newer farms has caused intense confusion; and that requiring professional engineers to sign off on SPCC plans adds significant logistical hurdles and cost to compliance with the rule.

Groups representing farmers have been further frustrated by EPA’s response to questions about compliance assistance and challenges getting EPA officials to farms to talk with agricultural producers about the issue.



RFA thanks Obama Administration for responsible defense of the RFS

Obama Administration statements rebuffing “alarmist calls” for the need to waive the Renewable Fuel Standard (RFS) are absolutely correct, wrote Renewable Fuels Association (RFA) President and CEO Bob Dinneen in a letter to Agriculture Secretary Tom Vilsack and EPA Administrator Lisa Jackson.

“Both of your agencies have responsibly answered the panicked appeals to modify or dismantle the RFS, stating plainly that consideration of waiving the program is simply not warranted. Your comments have provided the kind of certainty and security that is necessary to ensure the renewable fuels industry continues to evolve. Further, your agencies’ recent remarks regarding the RFS serve as important signals to the investment community that the nation’s commitment to diversifying our fuel supply and creating a future market for new advanced biofuel technologies remains intact,” Dinneen wrote.

Specifically, Dinneen addressed concerns caused by the hot and dry weather by underscoring how the “tremendous flexibility built into the RFS program” was designed to accommodate marketplace anomalies like this summer’s drought.

“The ability of obligated parties under the RFS to “bank” excess Renewable Identification Number (RIN) credits and use them for compliance in the following year provides a significant measure of flexibility that takes pressure off of the corn market in the event of a short crop,” wrote Dinneen.

Dinneen pointed to the estimated 2.4-2.6 billion RINs available and recent analysis by Professor Bruce Babcock at Iowa State University that found a waiver might result in only a 4.6% reduction in corn prices.

Professor Babcock concluded that, “The desire by livestock groups to see additional flexibility in ethanol mandates may not result in as large a drop in feed costs as hoped.” He further found,  “…the flexibility built into the Renewable Fuels Standard allowing obligated parties to carry over blending credits (RINs) from previous years significantly lowers the economic impacts of a short crop, because it introduces flexibility into the mandate.”

Dinneen also confronted erroneous contentions that ethanol demand for corn was inelastic as a result of the RFS requirements.  Dinneen noted that, “Since the first week of June, which is when corn prices began to surge in response to worsening drought conditions, ethanol consumption of corn has fallen nearly 14 percent and is at a two-year low. In this same period, corn export inspections actually increased 15 percent.”

“When all the facts are on the table, it becomes abundantly clear that waiving or altering the RFS in any way at this time would not be prudent, nor would it have any meaningful impact on corn prices or availability for feed use. Clearly, market signals and the flexibility of the RFS are already working to ration demand in anticipation of a shorter-than-expected grain crop. Still, even if ethanol production is significantly reduced as a result of tighter supplies of corn in 2012/13, obligated parties should have very little difficulty in meeting their obligations under the RFS for 2012 and 2013.,” Dinneen concluded.



USGC North China Crop Tour Shows Good Corn but Poor Wheat Crop

Corn production in North China is projected to be about 3.5 million metric tons (138 million bushels) greater than last year provided weather conditions remain favorable, according to conclusions reached following industry crop tours coordinated by the U.S. Grains Council's office in Beijing.

The anticipated increase in North China, along with a 2-4 million ton (79-157 million bushel) increase in Northeast China and a 1-2 million ton (39-79 million bushel) increase in other growing regions, adds up to an anticipated 6-10 million ton (236-394 million bushel) increase overall in China this year compared to last, said Bryan Lohmar, USGC director in China.

"While China's corn crop looks good, there may be greater demand for corn since the country's winter wheat crop was adveresly affected by disease and poor weather" Lohmar said. "This may result in less wheat being used in place of corn in animal feed, which may create additional demand for corn."

The crop tours were conducted July 9-13 and visited Henan, Shandong and Hebei provinces, where roughly 30 percent of China's corn is produced.



Kenny Chesney Joins Lineup for Farm Aid Concert

Kenny Chesney will join Farm Aid at its annual benefit concert at Hersheypark Stadium on Sept. 22, the organization announced Thursday.

"Growing up in a small town outside Knoxville, family farmers were a big part of our community," said Chesney, who is from Luttrell, Tenn. "I am proud to play on the Farm Aid stage again, especially in Central Pennsylvania, where agriculture is at the heart of the community."

Chesney is a four-time Academy of Country Music and Country Music Association Entertainer of the Year. He joins the star-studded Farm Aid 2012 lineup, which features Farm Aid board members Willie Nelson, Neil Young, John Mellencamp and Dave Matthews, performing with Tim Reynolds, as well as Jack Johnson, ALO, Pegi Young & The Survivors, and Lukas Nelson & Promise of the Real.

"Kenny Chesney is a true friend to America's family farmers and we are proud to have him back on the Farm Aid stage this year," said Carolyn Mugar, executive director of Farm Aid. "The Farm Aid concert is possible thanks to the generosity of the artists, who donate their time and their performances to raise awareness about the family farmers who grow good food for all of us."

Tickets for Farm Aid 2012 are available at www.livenation.com , www.ticketmaster.com , Ticketmaster outlets, GIANT Center Box Office, or by phone at 800-745-3000. Ticket prices range from $35.75 to $99.75. For venue information, visit www.hersheyparkstadium.com .

Farm Aid's mission is to build a vibrant, family farm-centered system of agriculture in America. Farm Aid artists and board members Willie Nelson, Neil Young, John Mellencamp and Dave Matthews host an annual concert to raise funds to support Farm Aid's work with family farmers and to inspire people to choose family farm food. Since 1985, Farm Aid, with the support of the artists who contribute their performances each year, has raised more than $40 million to support programs that help farmers thrive, expand the reach of the Good Food Movement, take action to change the dominant system of industrial agriculture and promote food from family farms.