FCSAmerica Growing On 2013 Meetings Underway
Presented by Farm Credit Services of America, GrowingOn 2013 is an educational meeting being held in 31 locations in Iowa, Nebraska and South Dakota designed to help producers plan and reduce risk. Steven D. Johnson, Ph.D., Farm & Ag Business Management Specialist, Iowa State University Extension, will present Beyond Outlook: Managing Crop Price Risks. Learn how outside markets, investors and the U.S. and global economies will impact you in 2013 and what the prospects for the Farm Program are. Also, find out how the online program Manage Profits can help you plan grain sales while managing your risk through the use of a case study. Manage Profits lets you use your crop insurance data and your production history to create a marketing plan. Also, hear from Farm Credit Services of America crop insurance specialists. The 2012 growing season strongly confirmed for many producers why they invest in crop insurance. It also emphasized the need for selecting the correct crop insurance mix for their operation and working with an expert agent. Learn what they recommend you should revisit for 2013. Seating is limited. Reserve your seat today. Go to www.cropinsurancespecialists.com.
Nebraska
December 10, 2012
Embassy Suites
1040 P St
Lincoln, NE
877-244-1284 (Beatrice) or 888-396-3276 (Lincoln)
Registration: 11:30 AM CST
Meal: 12:00 PM CST
Program: 1:00 PM CST
December 11, 2012
New World Inn
265 33rd Ave
Columbus, NE
800-807-3276
Registration: 9:30 AM CST
Program: 10:00 AM CST
Meal: 12:00 PM CST
December 11, 2012
Divots Conference Center
4200 W Norfolk Ave
Norfolk, NE
800-777-1853 (Norfolk) or 888-293-9008 (O'Neill)
Registration: 5:30 PM CST
Meal: 6:00 PM CST
Program: 6:45 PM CST
December 12, 2012
Riverside Golf Club
2820 Riverside Drive
Grand Island, NE
800-503-3276
Registration: 9:30 AM CST
Program: 10:00 AM CST
Meal: 12:30 PM CST
January 15, 2013
Marina Inn
4th & B St.
South Sioux City, NE
800-383-0630
Registration: 9:00 AM CST
Program: 10:00 AM CST
Meal: 12:00 PM CST
Iowa
January 17, 2013
Carrollton Inn
1730 Hwy. 71 N
Carroll, IA
800-383-0698
Registration: 6:00 PM CST
Meal: 6:00 PM CST
Program: 7:00 PM CST
PwC Study: Renewable Fuel Standard Is Estimated to Cost Chain Restaurants Billions
The National Council of Chain Restaurants today released a new, comprehensive report on the impact of federal ethanol policies, specifically the U.S. Environmental Protection Agency’s Renewable Fuel Standard, on the chain restaurant industry, commodity prices and the food supply chain. The 32-page report, which can be read in its entirety at www.NCCR.net, was released during a Capitol Hill press conference.
“The use of corn-based ethanol required by the federal Renewable Fuel Standard mandate has dramatically distorted the market and increased costs throughout the food supply chain,” said NCCR Executive Director Rob Green. “The RFS has had an adverse effect on the chain restaurant industry, which has witnessed marked increases in commodity prices and associated costs to the tune of billions of dollars a year.”
To study the impact of federal ethanol policies on the chain restaurant industry, NCCR commissioned PwC US to research, analyze and estimate the potential cost and economic impact of the federal RFS mandate. PwC reviewed numerous public and private reports and combined these findings with chain restaurant survey data to calculate the overall cost of the RFS mandate to chain restaurants.
“Policies encouraging the use of ethanol not only impact the corn market, but have unintended consequences for other parts of the economy,” the PwC report said. “Corn is an input into the production of a wide variety of food products, from baked goods to meat production.”
PwC estimated the impact under several scenarios and concluded that the RFS mandate could cost chain restaurants up to $3.2 billion annually, with quick-service restaurants witnessing cost increases upward of $2.5 billion, and full-service restaurants seeing increases upward of $691 million.
“The RFS mandate artificially inflates the price of corn, which increases costs throughout the system, from cattlemen and poultry and pork producers to dairy farmers and restaurant operators,” Green said. “The RFS mandate forces small business owners, franchisees and their suppliers to spend higher and higher sums on commodities, which ultimately drives up prices on the end-user, the consumer.”
“Chain restaurants aren’t all mega-corporations,” said Ed Anderson, owner of a four unit Wendy’s franchise in Virginia and Chairman of Wendy’s Quality Supply Chain Cooperative. “Many are systems of small business franchises like the one my family owns.”
“The government picked winners and losers when they passed the RFS mandate,” Anderson said. “This mandate is costing me $20,000 to $30,000 per restaurant. It is blatantly unfair and we urge Congress to repeal it.”
The production of ethanol and its byproducts represent the largest use of U.S. corn production with roughly 45 percent of all U.S. corn dedicated solely to ethanol production. Reflecting that use, the price of corn has nearly quadrupled since the RFS mandate was established in 2005. Higher corn prices have translated into higher commodity prices, grain prices, feed prices and consumer prices.
“The federal RFS mandate is essentially an ethanol tax on consumers and should be repealed,” Green said.
Chain Restaurants Serve Up Scare Tactics on RFS
The fast food industry is playing fast and loose with the facts when it comes to the impact of the Renewable Fuel Standard (RFS) on food prices. Today, the National Council of Chain Restaurants (NCCR) is rolling out a campaign of scare tactics and half-truths. In both a study released this morning and a Wall Street Journal guest opinion piece, NCCR managed to avoid any discussion of what really drives food prices—energy costs.
“Clearly, Big Food and Big Oil are on the defensive. They lost in their bid for a waiver of the RFS, so now they are resorting to super-sized myths about the impact of the RFS on food prices. Every reasonable analysis of the factors influencing food prices has concluded that the cost of diesel fuel, gasoline, and other energy inputs is the major driver. This study conveniently avoids that issue,” said Bob Dinneen, President of the Renewable Fuels Association. “The bottom line is the RFS is working. Renewable fuels have already displaced 10% of annual gasoline demand and dramatically lowered fuel costs for all Americans.”
Dinneen also pointed out that, contrary to NCCR’s scare tactics, food prices are not advancing abnormally. According to USDA and the Department of Labor, annual food inflation in 2012 and 2013 will be right in line with the 20-year average. In fact, food inflation rates since the RFS was adopted in 2005 have, on average, been lower than they were throughout the 1980s and early 1990s.The analysis released by NCCR today relied in part on a study by Farm Econ that is now more than four years old and has been thoroughly debunked. When considering more recent studies, the NCCR analysis found the RFS would increase corn prices by no more than four percent in 2015. When that marginal increase in corn prices is worked through to the wholesale and retail levels, the impact on consumer food prices is almost indiscernible.
“It is important to mention that Price Waterhouse Cooper did no original analysis. They simply reviewed select studies – in one case, a four year old discredited analysis – while ignoring more recent peer-reviewed work that did not support the funder’s political position,” said Dinneen.
Curiously, the NCCR study chose not to include the findings of a recent analysis commissioned by the International Centre on Trade and Sustainable Development. That study found that corn prices wouldn’t have been any different at all in 2009/10 (the last year examined) with or without the RFS in place. That study also found prices for beef, broiler meat, pork, and eggs would have been no different from 2005-2010 with or without the RFS.
Also contrary to the NCCR study’s claims about the effect of the RFS on prices for other crops, the ICTSD study showed 2009/10 prices for wheat and rice were higher by less than 1% because of the RFS, while soybean prices were 1.7% higher. Clearly the RFS is not affecting the prices for these crops in a noticeable way.
Facts worth noting:
• Ethanol is not produced from the sweet corn that humans consume. It is made from field corn, which is used for livestock feed and industrial purposes.
• One-third of every bushel of grain used in the ethanol process is returned to the market as nutrient-dense livestock and poultry feed.
• Less than 3% of the global grain supply will be used by the U.S. ethanol industry in 2012.
• 39 million metric tons of animal feed were produced by ethanol plants in 2011. That’s 6,000 pounds of feed per beef cow at feedlots across the United States.
• 7 hamburgers per person worldwide could have been produced from the ethanol industry’s 2011 animal feed output. That is 50 billion hamburgers.
• Only 14 cents of every dollar spent on food is related to agricultural ingredients. The remaining 86 cents goes to energy, packaging, food processing and other costs.
• There is a near perfect correlation between U.N. food price index & World Crude Oil prices, highlighting the fact that energy costs drive food prices.
Specifics on recent food prices:
• Big Food complains that “food prices have spiked nearly 18% since 2005,” the year the first RFS was passed by Congress. That’s an average of just 2.57% per year, which is right in line with the 20-year average for annual food inflation, and far below food inflation rates from the 1970s and 1980s. Further, food prices since 2005 have advanced at a slower rate than general inflation. That’s hardly a “spike” in our book.
• Additionally, 2010 saw the lowest year-over-year food inflation in nearly 50 years. Meanwhile, the ethanol industry produced a record amount of fuel that year. In fact, the ethanol industry used more corn in 2010 than it will use in 2012.
• The food groups decry the 18% “spike” in food prices since 2005, but fail to mention the 55% increase in retail gasoline prices, the 60% increase in diesel prices, and the 68% increase in crude oil prices since 2005. If there was any truth to the myth that retail food prices have increased abnormally since 2005, it would be mostly because of surging energy prices. Every step in the food supply chain is affected by energy prices.
NCGA: Chain Restaurants’ Ethanol Report Full of Empty Calories
The following is a statement from National Corn Growers Association President Pam Johnson on a report released today by the National Council of Chain Restaurants attacking the Renewable Fuel Standard:
“A half-baked report from the lobbyists for chain restaurants does not serve up an accurate picture of ethanol’s impact when it comes to boosting jobs in rural America, lowering fuel prices or helping increase energy independence by expanding domestic, renewable fuel use in the United States. These are all points that make the Renewable Fuel Standard an important policy we need to protect and defend.
“The fact is, the NCCR study by PricewaterhouseCoopers was limited to only two possible scenarios. When the U.S. Environmental Protection Agency released its look at the RFS earlier this month, its researchers looked at 500 scenarios and made the right decision to reject an unnecessary waiver request. Eighty-nine percent of these 500 scenarios, according to the EPA, showed ‘no impacts from the RFS program at all’ when it comes to corn, food and fuel prices.
“Further, the study falsely states that more corn goes into ethanol than other uses. Its reliance on the general USDA categories without diving deeper ignored the fact that nearly twice as much corn is used for livestock feed than for ethanol. On such a complicated issue, it’s important to take a more comprehensive approach.”
ACE says Chain Restaurants are ‘out to lunch’ on the Renewable Fuel Standard
The American Coalition for Ethanol (ACE) responded strongly today to a study funded and released by the National Council of Chain Restaurants on the Renewable Fuel Standard (RFS).
ACE Executive Vice President Brian Jennings says the council of chain restaurants is ‘out to lunch’ on the RFS.
“It appears the National Council of Chain Restaurants invested in a report that would give them an excuse to raise food prices. Contrary to their claims, a recent fact-based analysis by the U.S. Department of Agriculture and EPA showed that the Renewable Fuel Standard (RFS) has virtually no impact on food prices, so we encourage the media to take this fast-food study with as much salt as you’d find in one of their meals,” said Jennings.
In denying recent requests to waive the RFS on November 16, EPA said it analyzed 500 different market scenarios and found that in 89 percent, “we see no impacts from the RFS program at all” on corn, food and fuel prices. In the 11 percent where there was an impact, EPA said the RFS on average increased the price of corn by just 7 cents a bushel. In consultation with the USDA, EPA also estimated how these projected changes in corn prices would influence U.S. food prices. They found that a $0.07/bushel decrease in corn prices would result in a 0.04% decrease in the food consumer price index (CPI). Furthermore, a $0.07/bushel decrease in corn prices would result in a reduction of U.S. household expenditures on food equal to $2.59 in 2012/2013.
Jennings also noted there are consequences for the huge amount of ‘food away from home’ eaten by Americans at chain restaurants.
“Americans notoriously pay much more for eating out, not because of ethanol or even the food served at chain restaurants, but because of marketing, transportation, labor, and other expenses driven by the price of oil,” said Jennings. “We refuse to take criticism from an industry that charges consumers four times what fast-food companies pay for food, and then literally throws millions of dollars’ worth of food in the trash every year. Our industry manufactures more than 33 million metric tons of distillers grain every year, which is enough cattle feed to provide every person in the U.S. with 4 quarter-pound hamburgers every week for a year.”
Weekly Ethanol Production for 11/23/2012
According to EIA data, ethanol production averaged 803,000 barrels per day (b/d) – or 33.73 million gallons daily. That is down 8,000 b/d from the week before. The 4-week average for ethanol production stood at 816,000 b/d for an annualized rate of 12.51 billion gallons.
Stocks of ethanol stood at 18.3 million barrels. That is a 3.2% decrease from last week.
Imports of ethanol showed 27,000 b/d, up from last week.
Gasoline demand for the week averaged 353.9 million gallons daily, down significantly from the previous two weeks.
Expressed as a percentage of daily gasoline demand, daily ethanol production was 9.53%.
On the co-products side, ethanol producers were using 12.175 million bushels of corn to produce ethanol and 89,617 metric tons of livestock feed, 79,894 metric tons of which were distillers grains. The rest is comprised of corn gluten feed and corn gluten meal. Additionally, ethanol producers were providing 4.18 million pounds of corn oil daily.
USDA is Counting End-of-Year Row Crop and Hog Inventories
USDA’s National Agricultural Statistics Service (NASS) is asking approximately 85,000 producers across the country to respond to important surveys involving corn, soybeans, sorghum, rice, cotton, and hogs. From November 29 to December 17, NASS will be gathering final information about the 2012 U.S. row crops focusing on harvested acreage, as well as crops produced and stored. There will also be a hog survey that will capture current inventory figures.
“It is important to note that responses to these surveys will be included in the County Agricultural Production Survey data and used in calculating county yields,” said Bob Bass, director of NASS’s data collection and processing center. “Producers should not underestimate the importance of their participation in these surveys because USDA uses county yields to evaluate and administer vital farm disaster and insurance programs.”
In addition to row crops, NASS is asking hog producers about their fall pig crop, farrowing intentions for the next six months and current inventory for the quarterly Hogs and Pigs report.
Many respondents have already received their surveys for both row crops and hog information in the mail. Respondents can either fill out the questionnaire using NASS’s easy and secure online system or mail it back. NASS representatives will also contact producers who do not respond to the survey in order to help them complete the questionnaire over the telephone.
"After another growing season with unprecedented weather-related challenges in many parts of the country, farm and ranch operators can help ensure that the farm and insurance programs USDA administers appropriately meet producer needs by providing the Department with complete and accurate data,” said Bass. “We can’t underscore enough the value of their participation in these surveys. The information collected can considerably help rural businesses, communities and industries, and so we urge producers to take the time to respond to these important surveys.
As with all NASS surveys, the information collected in the December surveys is kept strictly confidential, as required by federal law. NASS will not publish any individual’s information. By law, individual information is not subject to the Freedom of Information Act and is not shared with anyone, including other government agencies. Survey results are available in aggregate form only and are equally available to all parties. For more information about these surveys, visit www.nass.usda.gov/Surveys.
Feed, Lean Hog Prices Lessen Drought's Blow to Producers
An increase in lean hog prices and a decrease in feed costs have combined to reduce the drought's effect on the pork industry, a Purdue Extension agricultural economist says.
During the height of the drought, when December corn futures reached $8.49 per bushel and December soybean meal futures reached $540 per ton, markets anticipated heavy liquidation of sows. That feared liquidation dropped December lean hog futures to $70, and producers anticipated per-head losses of $50-$60, Chris Hurt said.
"A panic response might have been to cover substantial amounts of feed needs at record high prices, to forward-price lean hog futures before the outlook worsened or to just sell out altogether," he said. "Now that the damage from the 2012 drought is better known, those who did not panic are facing much smaller losses than what were feared at the height of the crisis."
In drought years, feed prices often peak at or just after the height of the drought, then decrease. That trend has continued in 2012, with December corn futures now near $7.40 per bushel and December soybean meal futures closer to $425 per ton.
According to Hurt, a $1-per-bushel reduction in corn prices and a $100-per-ton reduction in soybean meal prices lower hog production costs by about $12 per head.
"Lower feed prices are important to the reduction in anticipated losses, but improved lean hog prices have been even more significant," he said. "December lean hog futures are currently above $80, which represents at least a $10 increase over drought-induced liquidation fears in early September. A $10 increase in lean hog prices means more than a $20 reduction in anticipated losses."
The increased lean hog prices combined with lower feed costs have translated into reduced losses of about $30 per head - about 40 percent coming from the lower feed prices and 60 percent from higher lean hog futures, Hurt said.
That's not to say that sow liquidation didn't occur. Producers increased sow slaughter in early July and continued that trend through mid-October.
"During this 14-week period, sow slaughter averaged 4 percent higher than for the same weeks of 2011 and likely resulted in a national breeding herd reduction of about 2 percent," Hurt said. "In the weeks since mid-October, sow slaughter has dropped below previous-year levels as optimism for a much-improved outlook in 2013 was unfolding."
That optimism might be warranted. Hurt said a return to profitability could come as early as spring. While he estimates losses of about $15 per head will continue through the first quarter of 2013, live-hog prices are expected to reach the break-even point by early May. The second and third quarters of 2013 could bring a return to profitability of about $10 per head.
Lower feed prices could keep the pork industry profitable into fall 2013 and winter 2014, Hurt said.
But even with a projected return to profitability, he warned producers not to be hasty with thoughts of expansion.
"Some producers might want to jump the gun and get expansion started in the spring of 2013. But one glance at the current Drought Monitor tells us that normal crop yields in the U.S. for 2013 are far from assured," Hurt said. "The uncertainty should keep most producers from expansion fever until the crops are more nearly assured in late-July and August."
USDA Scientists and Cooperators Sequence the Wheat Genome in Breakthrough for Global Food Security
U.S. Department of Agriculture (USDA) scientists working as part of an international team have completed a shotgun sequencing of the wheat genome, a paper published in the journal Nature reported today. The achievement is expected to increase wheat yields, help feed the world and speed up development of wheat varieties with enhanced nutritional value.
"By unlocking the genetic secrets of wheat, this study and others like it give us the molecular tools necessary to improve wheat traits and allow our farmers to produce yields sufficient to feed growing populations in the United States and overseas," said Catherine Woteki, USDA's Chief Scientist and Under Secretary for Research, Education and Economics. "Genetics provides us with important methods that not only increase yields, but also address the ever-changing threats agriculture faces from natural pests, crop diseases and changing climates."
Olin Anderson and Yong Gu, scientists with USDA's Agricultural Research Service (ARS) based at the agency's Western Regional Research Center in Albany, Calif., played instrumental roles in the sequencing effort, along with Naxin Huo, a post-doctoral researcher working in Gu's laboratory. All three are co-authors of the Nature paper.
ARS is USDA's principal intramural scientific research agency, and the work supports the USDA goal of ensuring global food security.
As the world's largest agricultural research institute, USDA is focused on reducing global hunger by increasing global cooperation and collaboration on research strategies and their implementation. For example, through the U.S. government's Feed the Future initiative, USDA and the U.S. Agency for International Development (USAID) are coordinating their research portfolio with ongoing work of other donors, multilateral institutions, and government and non-government entities at the country level to effectively improve agricultural productivity, reduce food insecurity and generate economic opportunity.
Grown on more land area than any other commercial crop, wheat is the world's most important staple food, and its improvement has vast implications for global food security. The work to complete the shotgun sequencing of the wheat genome will help to improve programs on breeding and adaptation in Asia and Sub-Saharan Africa for wheat crops that could be drought tolerant and resistant to weeds, pests and diseases.
ARS is one of nine institutions with researchers who contributed to the study. The lead authors are based in the United Kingdom and were funded by the British-based Biotechnology and Biological Sciences Research Council. Funding also was provided by USDA's National Institute of Food and Agriculture, or NIFA. NIFA focuses on investing in research, education and extension programs to help solve critical issues impacting people's daily lives.
The study represents the most detailed examination to date of the DNA that makes up the wheat genome, a crop domesticated thousands of years ago. The wheat genome is five times the size of the human genome, giving it a complexity that makes it difficult to study. The researchers used the whole genome shotgun sequencing approach, which essentially breaks up the genome into smaller, more workable segments for analysis and then pieces them together.
Another international team of scientists is working on a long-term project expected to result in more detailed sequencing results of the wheat genome in the years ahead. But the results published today shed light on wheat's DNA in a way that will help breeders develop hardier varieties by linking genes to key traits, such as disease resistance and drought tolerance.
Wheat evolved from three ancient grasses, and the ARS team, working closely with partners at University of California, Davis, sequenced the genome of one of those three parents, Aegilops tauschii. That sequencing, funded in part by the National Science Foundation, was instrumental in the study. It allowed researchers to identify the origins of many of the genes found in modern-day wheat, a key step in linking genes to traits and developing markers for use in breeding new varieties.
Wheat growers face numerous challenges each year. Acidity in the soil can make wheat difficult to grow in some areas. Stem rust, a fungal disease, can wipe out entire crops, and a particularly aggressive form of stem rust has developed the ability to knock out genetic resistance in many popular wheat varieties and is causing major losses overseas.
USDA scientists have conducted similar genomic studies that have helped to increase the productivity of dairy operations, enhance cattle breeding and improve on varieties of a number of other crops, including tomatoes, corn and soybean. In 2010, another ARS team published a paper in Nature detailing the sequencing of Brachypodium distachyon, a model plant used to study wheat, barley and biofuel crops.
Recent international research collaborations have been critical to meet challenges such as combating wheat rust and increasing wheat productivity, fighting aflatoxin contamination in food, and sequencing genomes of important crops.
Sioux Falls Biodiesel Blending Facility Opening Today
A grand-opening event was held today at the Harms Oil Biodiesel Blending facility in Sioux Falls to celebrate the availability of biodiesel year-round in southeast South Dakota, southwestern Minnesota and northwest Iowa. The biodiesel blending facility at Harms Oil incorporates a heated tank to allow for year-round blending of the renewable fuel.
The event will include representatives from the South Dakota Soybean Research & Promotion Council, Minnesota Soybean Research & Promotion Council, the National Biodiesel Foundation and Harms Oil.
Harms Oil has installed two 20,000 gallon underground tanks. One tank is heated and will hold biodiesel in the winter, while the second tank will also hold biodiesel during warmer months.
Trailers coming through the facility will already have diesel on board and will be bottom loaded with biodiesel to achieve the desired blend level.
Jill Long Thompson Named Chair and CEO of Farm Credit Administration
President Barack Obama has designated Jill Long Thompson Chair and CEO of the Farm Credit Administration (FCA) effective Nov. 27, 2012. She succeeds Leland A. Strom, who served as Chairman and CEO since May 2008.
Dr. Long Thompson has served as a member of the FCA Board since her appointment by President Obama in March 2010.
As Chair of FCA, Long Thompson will be responsible for policymaking, adopting regulations, and overseeing the examination and regulation of the institutions that compose the Farm Credit System (System), including the Federal Agricultural Mortgage Corporation (Farmer Mac). The System has $239.7 billion in assets. As of September 2011, it held approximately 43 percent of the nation’s farm business debt.
Strom will remain a member of the Board pending future action by the President and the U.S. Senate. Kenneth A. Spearman, who was appointed to the Board by President Obama in 2009, serves as the third member. He also serves as Chairman of the Farm Credit System Insurance Corporation.
Long Thompson has many years of leadership experience. From 1989 to 1995, she represented northeast Indiana as a Member of the U.S. House of Representatives, serving on the Agriculture Committee and the Committee on Veterans’ Affairs. As a congresswoman, she introduced one of the nation’s first pieces of legislation banning members of Congress from accepting gifts; this legislation also expanded disclosure requirements for lobbying activities.
From 1995 to 2001, she served as Under Secretary for Rural Development in the U.S. Department of Agriculture where she oversaw an annual budget of $10 billion and a staff of 7,000 employees. In this position, she managed programs that provide services to the underserved areas of rural America.
The first and only woman to be nominated by a major party to run for Governor of Indiana, Long Thompson is also the first and only Hoosier woman to be nominated by a major party to run for the U.S. Senate.
Prior to her government service, Long Thompson taught at Indiana University, Valparaiso University and Manchester College for many years. She is also a former fellow at the Institute of Politics at Harvard University’s John F. Kennedy School of Government. She holds an M.B.A and Ph.D. in Business from the Kelley School of Business at Indiana University and a B.S. in Business Administration from Valparaiso University.
Long Thompson grew up on a family farm outside of Larwill, Ind. Today, she and her husband, Don Thompson, reside on a farm near Argos, Ind.
FCA is a bipartisan, independent regulatory agency. Initially created by Executive order of the President in 1933, the agency now derives its powers and authorities from the Farm Credit Act of 1971, as amended.
BASF completes acquisition of Becker Underwood
BASF has completed the acquisition of Becker Underwood from Norwest Equity Partners, a U.S.-based private equity investment company, for a purchase price of US$1.02 billion (€785 million). With the acquisition, BASF is now a leading global provider of technologies for biological seed treatment as well as seed treatment colorants and polymers. BASF has also expanded its product portfolio in the areas of biological crop protection, turf and horticulture, animal nutrition and landscape colorants and coatings.
“The acquisition fits very well with our long-term growth strategy. It will provide our customers with an even broader range of innovative solutions for agriculture. And it also provides our new colleagues with access to BASF’s global R&D platform as well as new markets and customers,” said Dr. Andreas Kreimeyer, member of BASF’s Board of Executive Directors responsible for the Agricultural Solutions segment and Research Executive Director.
In the coming months, a detailed integration plan will be developed by a joint team of BASF and Becker Underwood employees. Most businesses of Becker Underwood will join the newly established global business unit Functional Crop Care as part of BASF’s Crop Protection division. Within this new unit, BASF will merge its existing research, development and marketing activities in the areas of seed treatment, biological crop protection, plant health, as well as water and resource management with those of Becker Underwood. Becker Underwood’s animal nutrition business will be integrated into BASF’s Nutrition & Health division.
The newly formed global Functional Crop Care unit will become effective January 1, 2013. It will be headed by Dr. Juergen Huff, Senior Vice President.
Dr. Peter Innes, currently CEO of Becker Underwood, has accepted the position of Global Senior Advisor to the Crop Protection division. He will support the integration of Becker Underwood into BASF and the implementation of the Functional Crop Care unit.
“Now we are focused on an integration which is as seamless as possible for our customers and our employees,” said Markus Heldt, President of BASF’s Crop Protection division. “Becker Underwood will be a cornerstone of our Functional Crop Care unit and we are looking forward to further developing our business together with our new colleagues.”
In 2011, BASF’s Crop Protection division reported sales of around €4.2 billion and is expecting another record year in 2012. With its products and services, BASF helps growers to improve their yields and the quality of their products.
EU: No Need to Re-Evaluate GE Corn
The European Food Safety Authority, or EFSA, said Wednesday there is no need to re-evaluate the safety of genetically engineered corn made by Monsanto Co. because a study linking the crop to cancer in rats published in September had serious defects in its design and methodology.
The EU's decision comes after the French government said last month it would no longer pursue an immediate ban on EU imports of the corn made by the St. Louis-based chemicals giant, known as NK603, after its food-safety regulator, ANSES, also concluded the study was flawed.
ANSES said the number of rats included in the study was too small to make any finding statistically significant.
The University of Caen study, led by Gilles-Eric Seralini, concluded that rats fed for two years on NK603 corn, or exposed to the company's Roundup brand of glyphosate weed killer designed to be used with the corn, developed more tumors and other severe diseases than a control group fed regular corn. The study also found that rats exposed to Roundup exhibited more disease symptoms than the test group.
Monsanto officials responded to the study by saying they didn't believe it presented any information that justified a change on the approval of NK603 imports or broader views on the safety of the genetically modified products.
"Conclusions cannot be regarded as scientifically sound because of inadequacies in the design, reporting and analysis of the study as outlined in the paper," the EFSA said in a statement. "Consequently, it is not possible to draw valid conclusions about the occurrence of tumours in the rats tested, based on the information published by Seralini et al."
The EFSA made similar criticisms of the paper last month but also requested additional information from the study's authors related to experimental design, reporting and analysis of findings to help inform its final assessment. "No such material had reached the Authority before publication of this statement," it said.
Before reaching its conclusions, the EFSA said it considered independent assessments of the Seralini study by organizations in the EU member states of Belgium, Denmark, France, Germany, Italy and the Netherlands.
Potash Ridge Raises Less Money Than Expected From Initial Public Offering
Potash Ridge Corp., which is developing a potash mine in Utah, raised $20 million dollars from its initial public offering, about half of the amount originally targeted, according to people familiar with the offering.
The smaller-than-expected issue again highlights the fragility of the Canadian IPO market amid continued global economic uncertainty and equity volatility, and investors' particular concerns over slow demand for commodities.
Last month, Potash Corp. of Saskatchewan (POT), the world's leading potash producer, reported a 22% drop in third-quarter earnings, citing declining sales to China and India. Further, Potash Ridge's IPO comes at a time when some analysts are predicting development of a spot market for potash, which could drive potash prices lower and create more price volatility.
Potash Ridge, which is expected to list its shares on the Toronto Stock Exchange, had originally aimed to raise $40 million, pricing the offering between $1 and $1.25 a share. However, the company had to cut the offering's size to $20 million and price the issue at $1 a share to generate sufficient demand.
Potash Ridge plans to use the IPO proceeds to explore and develop its Blawn Mountain project in Utah.
Welcome to the KTIC Agriculture Information blog!!! Check back here for the latest in ag news and information, from local events to international happenings and government reports that affect your operation. Please email with suggestions! -Chad Moyer, Farm Director, KTIC Radio
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