Monday March 4 Ag News

Agricultural Groups Welcome U.S.-EU Trade Talks

A coalition of U.S. food and agricultural organizations led by the National Pork Producers Council today praised the Obama administration for launching negotiations with the European Union (EU) on a transatlantic free trade agreement (FTA) and for its insistence that the agreement be comprehensive and ambitious.

In a letter signed by 64 organizations sent today to the Office of the U.S. Trade Representative, the coalition said any FTA with the EU “must fit the excellent model established with the Trans-Pacific Partnership (TPP) … This means no less than a negotiation that covers all significant barriers in a single comprehensive agreement.”

The coalition expressed concern, however, with a trade working group report that suggested an initial U.S.-EU FTA be designed to “evolve over time,” eliminating most barriers to trade and investment but setting up a mechanism to address other barriers.

Recent statements from EU officials, for example, have raised doubts about the EU’s commitment to dealing with sanitary and phytosanitary (SPS) issues as part of the negotiations.

SPS issues must be addressed as part of the negotiations, the coalition wrote, not simply left to some future consultative mechanism, and SPS provisions must be enforceable.

The coalition pointed out that a comprehensive and ambitious U.S.-EU FTA will generate economic growth, reduce market volatility and create thousands of new jobs on both sides of the Atlantic.

“But such a momentous free trade agreement must be built on the foundation established by the United States in the TPP and other U.S. free trade agreements, which build … ‘the best trade policy for the future,’” wrote the coalition.



Iowa Weather Summary for February 2013

February  brought  temperatures  varying  from  below  zero  to  near  60.  Precipitation during the month arrived as both rain and snow.  Although most  farmers  welcomed  any  precipitation—whether  rain  or  snow—concerns remained about  the  level of moisture  that will be available as the growing season begins.

As February  came  to  a  close,  topsoil moisture  levels  rated 45 percent very short, 41 percent short, 13 percent adequate, and 1 percent surplus.  North Central  Iowa  is  the driest  area of  the state with 66 percent very short.  Over half the land is reported to be very short of moisture in 3 of the  9  districts  in  the State.   North  central, west  central  and  southwest Iowa all report 57 percent or more of the land is very short of moisture.

Grain  movement  rated  47  percent  none,  38  percent  light,  13  percent moderate and 2 percent heavy.   February had a few snowstorms which caused interruptions to grain transportation in some areas.

Availablity  of  hay  and  roughage  supplies  fell  to  50  percent  short, 49 percent  adequate  and  1  percent  surplus  with  31  percent  of  the remaining  supply  in  good  condition.   Livestock  conditions  have  been reported  as  normal.   Hog  and  pig  losses  in February were  20  percent light,  79  percent  average  and  1 percent  heavy.   Cattle  and  calf  losses were  23  percent  light,  75  percent  average  and  2  percent  heavy.    For most of the winter farmers have been able to graze cattle on corn stalks which  has  helped  stretch  hay  supplies.    Calving  has  begun  on  some farms.  



IOWA PRELIMINARY WEATHER SUMMARY
Provided by Harry Hillaker, State Climatologist, Iowa Department of Agriculture & Land Stewardship
FEBRUARY 2013

General  Summary.     
Iowa  temperatures  averaged  23.6 degrees or 0.4 degrees  below  normal  while  precipitation  totaled  1.31 inches  or 0.26 inches  above  normal.      This  ranks  as  the  66th warmest  and  40th wettest February among 141 years of records.

Temperatures.  
The month’s coldest weather came on the first day with actual  temperatures falling  to -14 degrees at Elkader and Indianola and wind chills down to -31 degrees at Mason City.   However, the cold did not last  long as above normal  temperatures prevailed for 11 of  the first 14 days of  the month.     Daytime  temperatures  frequently reached  into the  low  fifties  in  southwestern  and  southern  Iowa  from  the  3rd  to  the 13th.     Keokuk recorded  the month’s highest  temperature at 59 degrees on the 10th.   The second one-half of the month was mostly on the cold side with below normal  temperatures prevailing on all but  three of  the last 14 days of  the month.     The colder  late month weather was mostly the result of lower daytime temperatures owing to persistent cloudiness with only a few dates with subzero overnight lows.

Heating Degree Day Totals.  
Home heating requirements, as estimated by  heating  degree  day  totals,  averaged  10  percent  greater  than  last February but the same as normal.   Degree day totals for the season-to-date (since July 1, 2012) are running 8 percent greater than  last season but 5% less than normal.

Precipitation.    
The  statewide average precipitation was  slightly above normal  for  the  third  consecutive  month  thanks  to  four  widespread precipitation events.   Light to moderate rain fell over the southeast one-half  of  Iowa  on  the  6th-7th  and  statewide  on  the  9th-11th.      Greatest precipitation totals fell across northern Iowa with the second storm with rain  changing  to  light  snow  late  in  the  event.      The  largest  of  the month’s  storm  systems  came  on  the  21st-22nd  with  snow  falling statewide.     Greatest  snow  amounts of  seven  to  ten inches  fell mostly across northern and western Iowa while extreme eastern areas saw only two  to  four inches  of  accumulation.      Finally,  snow  fell  across  the southeast  two-thirds of  the state on  the 26th-27th with widespread eight to twelve inch amounts across central Iowa from Winterset to Waterloo.   Traer  in  Tama County  reported  the most  snow  during  this  last  event with 16 inches.     Monthly precipitation  totals were well above normal over  parts  of  eastern  Iowa  and  below  normal  over much  of  the west central and southwest.   Preliminary totals varied from only 0.27 inches at  Hastings  in  Mills  County  to  3.49 inches  at  Burlington.      The statewide average snowfall was 10.5 inches or 3.7 inches above normal to rank as the 23rd snowiest February among 126 years of records.

Winter Summary.  
The three mid-winter months averaged 24.3 degrees or 2.2 degrees  above normal while precipitation  totaled 3.84 inches or 0.50 inches  above  normal.      This  ranks  as  the  41st warmest  and  42nd wettest  winter  among  140  years  of  records.      This  was  the  seventh consecutive wetter than normal winter for the state.



Russia/China Actions Renew Debate on Science-based Trade

The big news in the meat industry in recent weeks has involved two of our leading export markets, Russia and China. Neither country allows the production, sale or use of the two beta agonists that are registered for use in the United States, and in the past few months both have taken steps to enforce their bans on beta agonist residues in imported pork and beef.

The first to move was Russia, which notified the United States and other countries in December that they were required to certify that their pork and beef exports were free of ractopamine residues. When the U.S. government did not implement a program for certifying exports, Russia closed its market to imports of beef and pork from the United States. In the past week China also has notified USDA of its intention to implement new enforcement measures for its zero tolerance policy for ractopamine residues in pork imported from the United States.

Since beta agonists are widely used by U.S. producers, the only practical way to meet Russia’s or China’s zero tolerance requirement would be to segregate meat from animals that have been fed beta agonists from those that have not. This kind of product segregation program would add costs to the packer in addition to those incurred by producers who forego the use of these compounds. Nonetheless, before the Russian market closed, several large pork packing companies were giving serious consideration to implementing ractopamine-free programs and dedicating some part of their production to a product that is free of ractopamine residues.

This raises several important questions which have implications for the U.S. meat industry’s participation in the global marketplace and which, therefore, deserve the careful consideration of every member of this industry.

To understand why these packers are interested in meeting Russia’s zero-residue standard requires a closer look at the economics of the meat export business. Although Russia only accounts for roughly 7 percent of U.S. beef exports and 4 percent of pork exports, this understates its importance to the U.S. red meat industry that in 2012 found willing buyers for American pork in 116 different countries and beef in 132.

Last year Russia imported $566 million of U.S. beef and pork, but most of this trade was in only a few items (inside and gooseneck rounds, beef livers and hams). Because Russian buyers pay a premium for these items over customers in other foreign markets or here at home, where excess supplies of round and ham cuts as well as livers often put downward pressure on prices, the closure of the Russian market will have a larger negative impact on live hog and cattle prices here in the U.S. than the value of the lost trade alone. This is because these items will be sold at lower prices and the added supply will depress prices on the U.S. market. When you take into consideration the lower prices that will be paid for these items, the impact of losing the Russian market is closer to $800 million for the U.S. industry as a whole. This converts to roughly $15 per head for cattle and $4 per head for hogs.

China adds another dimension to the discussion. Although it remains closed to U.S. beef, China in 2012 purchased nearly 16 percent of all U.S. pork exports by volume, accounting for more than $704 million of U.S. product. That translates to about $4.75 per head for variety meat alone and closer to $7 per head when muscle cuts are included. Like Russia, China pays a premium for items that are undervalued by other markets. From feet to snouts to stomachs, the offal items purchased by China have a minimal alternative value, and up to 50 percent of the entire U.S. production of certain offals and byproducts is exported to China. While these are attention-getting numbers for an industry that operates with very low margins, Russia’s decision to enforce its ban on beta agonist residues and the recent action by China are not isolated events. Taiwan and the EU also have ractopamine-related import restrictions in place, and there are other markets where the lack of domestic regulations regarding beta agonist usage and residues make the trade environment uncertain. Over the past few months, as packers have contemplated how they would respond to Russia’s enforcement of its ban on beta agonist residues, they have also had in mind opportunities for supplying customers in these other markets.

The U.S. red meat industry has accomplished remarkable increases in efficiency and productivity by adopting new production technologies as they have been approved and brought to market. The use of those technologies has been a significant factor in the U.S. industries’ efficiency, with beta agonists alone adding up to $5 per head to producer profitability. Because our industry is so technology-driven and exports account for a growing share of our production, we have become strong advocates of the need for countries to base their health standards on the best available science. At the same time, one of the keys to the success the U.S. red meat industry has enjoyed in export markets has been our dedication and commitment to meeting customers’ expectations.

Russia’s ban on residues of beta agonists in imported meat brings into clear focus the dilemma that arises when our support for science-based trade and meeting the demands of our customers collide with a foreign country’s non-science-based import requirements. In the days and weeks leading up to the Russian market closure, the industry worked closely with the U.S. government to find a way to preserve access to the market. The industry has encouraged our government to press Russia to adopt a science-based standard for beta agonists. At the same time, we also asked USDA to develop a program for certifying residue-free exports. This two-track approach reflected the industry’s continued commitment to safe, effective production technologies and global trading rules that set science as the foundation for health standards. But it also reflected the industry’s commitment to supplying markets with the products they demand.

We remain hopeful that a way can be found to resume beef and pork exports to Russia but, for the foreseeable future, this is likely to be possible only if the U.S. and Russian governments can agree on a program under which USDA will certify beta agonist residue-free exports. Many in the industry are concerned that agreeing to such a program for Russia sets a precedent that could be followed by other countries. This is why it is so important for the U.S. government to continue to defend the principle of science-based trade and to press other governments to respect international scientific opinion on the safety and low risk of these compounds when properly utilized.

As we think about the implications of decisions that the industry and the U.S. government make in response to Russia’s decision to close its market to our exports, it is important to keep in mind that beta agonists are not approved for use in the EU, which is the principal pork exporter to Russia (and China). In addition, other pork exporting countries where beta agonists are approved for use, notably Canada and Brazil, are working with the Russian government to secure continued access to the Russian market.

Russia’s move to enforce its beta agonist policy is a clear reminder that if we are going to succeed in a very competitive global market, we are likely to be faced with some difficult decisions. Some of these decisions could require compromises that none of us like, but increasingly we are learning that this is an inevitable consequence of participating in a growing, lucrative and complicated global market.



Obama Nominates 3 to Cabinet Posts

(AP) -- President Barack Obama filled in more pieces of his second term leadership team Monday, nominating a trio of new advisers to lead the Energy Department, Environmental Protection Agency and budget office.

The nominations signal the White House's desire to get back to normal business after the president and Congress failed to avert the $85 billion in automatic spending cuts that started taking effect Friday. While the president has warned of dire consequences for the economy as a result of the cuts, the White House does not want the standoff with Congress to keep Obama from focusing on other second term priorities, including making nominations for top jobs and pursuing stricter gun laws and an overhaul of the nation's immigration system.

Two of Obama's new nominees will also focus on another second term priority — tackling the threat of climate change. To head that effort, Obama promoted current EPA official Gina McCarthy to lead the agency and MIT scientist Ernest Moniz to run the Energy Department.

"They're going to be making sure we're investing in American energy, that we're doing everything we can to combat the threat of climate change, that we're going to be creating jobs and economic opportunity," Obama said of McCarthy and Moniz. "They are going to be a great team."

The president also tapped Wal-Mart's Sylvia Mathews Burwell as his next budget chief, thrusting her into the center of Washington's heated partisan fiscal fights.

Speaking at a White House ceremony, Obama said Burwell not only knows how "to make the numbers add up" but to ignite middle class economic growth. He said Burwell and her team would face particular challenges as the so-called sequester cuts take hold, but said he was confident they would "do everything in their power to blunt the impact of these cuts on businesses and middle class families."

Burwell is Washington veteran, having served in several posts during the Clinton administration, including deputy OMB director. She currently heads the Wal-Mart Foundation, the philanthropic arm of the retail giant, and previously served as president of the Gates Foundation's Global Development Program.

Moniz, 68, oversees MIT's Energy Initiative, a research group that focuses on innovative ways to produce power while curbing greenhouse gas emissions. But unlike outgoing Energy Secretary Steven Chu, he is also well-versed in the ways of Washington, having served as the Energy Department's undersecretary in the Clinton administration.

Moniz has also advised Obama on central components of the administration's energy plan, including a retooling of the country's stalled nuclear waste program, energy research and development, and unconventional gas.

In a 2009 alumni interview published on Boston College's website, Moniz noted that he learned to balance both political and scientific demands while working in the Clinton administration. "Physics sometimes looked easy compared to doing the people's business," he said.

In nominating McCarthy to be the nation's top environmental steward, Obama is promoting a climate change champion and a 25-year veteran of environmental policy and politics. McCarthy has served under both Republicans and Democrats, and is known for a matter-of-fact approach appreciated by both businesses and environmental advocacy groups.

Among her past bosses: former Massachusetts governor and Obama's Republican presidential opponent Mitt Romney, for whom she was a special adviser on climate and environmental issues.

Since coming to Washington in 2009, McCarthy has been the most prominent defender of EPA policies. As the head of the air pollution division, she has been behind many of the agency's most controversial new rules — from placing the first limits on greenhouse gases on newly built power plants to the first-ever standard for toxic mercury pollution from burning coal for electricity.

All three nominees announced Monday must be confirmed by the Senate.



RFA Welcomes McCarthy and Moniz Appointments to EPA and Department of Energy

Bob Dinneen, President and CEO of the Renewable Fuels Association, today welcomed President Obama’s nominations of Gina McCarthy as Administrator of the Environmental Protection Agency (EPA) and Ernest Moniz as the next Secretary of Energy (DoE).

“Gina McCarthy is a very solid choice for EPA. She is knowledgeable, willing to listen, and straight-forward. She knows the EPA inside and out and has typically approached challenges with a common-sense determination to resolve them in a timely manner. As a Bostonian, I have to say I like her accent too.

“RFA and the ethanol producers we represent look forward to meeting with Secretary-designee Moniz to update him on the state of the U.S. ethanol industry, our track record of success in fostering greater energy independence, and the exciting results of ongoing investment in next generation biofuels.”



ACE statement on the nomination of Gina McCarthy to head up the EPA

The Executive Vice President for the American Coalition for Ethanol, Brian Jennings today released the following statement on Gina McCarthy’s nomination to replace Lisa Jackson as Administrator for the U.S. Environmental Protection Agency (EPA).

“We appreciate President Obama nominating Gina McCarthy as Administrator of EPA, a step which shows the President’s continued commitment to ethanol and other renewable fuels. Gina McCarthy understands the Renewable Fuel Standard to be the linchpin to our continued success reducing petroleum use and greenhouse gas emissions. She’s also familiar with how E15 passed the tests EPA administered before approving it as a safe option for 2001 and later model year passenger vehicles. Upon



AEC Applauds McCarthy Appointment as Administrator to EPA

Brooke Coleman, Executive Director of the Advanced Ethanol Council (AEC), applauded President Obama’s nomination of Gina McCarthy as Administrator of the Environmental Protection Agency (EPA).

“Gina McCarthy is the perfect choice. Her reputation as a doer with a deep understanding of the mechanics of critical air and energy regulations is well-earned. She has been very engaged on the development of the cellulosic biofuels industry and the administration of the Renewable Fuel Standard (RFS). She clearly knows how to get things done inside and outside of the agency, and the advanced ethanol industry looks forward to working with Gina McCarthy and her team.”



NCGA Praises Choice for EPA Administrator

National Corn Growers Association President Pam Johnson today congratulated Gina McCarthy on her nomination as administrator of the  U.S. Environmental Protection Agency, as announced today by President Obama.

"We appreciated working with Assistant Administrator McCarthy over the past few years in her role as head of the EPA's Office of Air and Radiation, which was responsible for the approval of the E15 ethanol blend fuel option in 2012.  We look forward to working closely with her and her team on ethanol and other issues that come before the agency."



Ethanol, Farm Bill Front-and-Center for Corn Farmers

Delegates to the National Corn Growers Association's Corn Congress policy meeting and corn growers elsewhere during the 2013 Commodity Classic last week talked up the importance of defending the Renewable Fuel Standard and getting a smart and strong five-year farm bill passed this year after  the numerous delays of 2012.

At a time when corn yields are still rising strong, the importance of protecting a growing market like ethanol is paramount to corn farmers. Despite the drought last year, for example, more corn growers than ever before had yields of 300 or higher on the National Corn Yield Contest, demonstrating that all markets - livestock feed, exports, and others as well as ethanol - will be important to the organization.

"The Renewable Fuel Standard is important because it provides a level of stability to the marketplace and ensure that there is a good supply of domestic, renewable biofuel available," NCGA President Pam Johnson said. "It helps create jobs and save struggling rural communities."

Johnson also noted that corn growers believe it is time to make fundamental changes to long established farm programs, and growers support reforms that include programs that will provide assistance to growers only when it is most needed.

"An effective, affordable federal crop insurance program remains our No. 1 farm policy priority," Johnson said. "And we have long supported programs that complement growers' crop insurance protection in those years where prices or yields are significantly reduced.  For growers, especially young farmers, managing the potential loss of revenue is critically important.''



Vilsack to Appoint Voting Members to FSA County Committees to Ensure Fair Representation

Agriculture Secretary Tom Vilsack announced today that he will appoint voting members from socially disadvantaged (SDA) communities to serve on county committees in county jurisdictions that lack fair SDA representation under the authority granted in the Farm Security and Rural Investment Act of 2002 (2002 Farm Bill). Appointments will be made beginning next week. The final rule that will be published in the March 4, 2013, Federal Register affirms the interim rule from June 4, 2012.

“For decades, county committees have played a critical role in delivering important federal farm programs to citizens of rural communities across our nation,” said Vilsack. “By strengthening county committees so that they fully represent the ethnic, racial and gender segments within the counties they serve, we are helping to ensure that these governing bodies play a vital and relevant role well into the future.”

Secretary Vilsack will use the authority granted in the 2002 Farm Bill to appoint SDA committee members with voting privileges. The appointed SDA committee members do not replace voting members who were elected but will supplement the existing election process. Currently there are 7,700 elected county committee members representing 2,244 county jurisdictions. Individuals who serve as non-voting minority advisors were encouraged to submit a nomination form indicating their willingness to serve. Nomination forms also have been accepted from community-based organizations representing SDA producers. The Secretary will appoint SDA voting members from the nominations received.

FSA will continue outreach efforts to increase SDA voter participation and SDA representation on county committees through the regular election process. Additionally, each year, USDA will conduct a fresh statistical analysis, and appointments with voting authority will continue to occur in areas identified as under-representing the diversity of area producers.

County committees were formed in the 1930s to oversee federal farm programs, a tool for grassroots engagement whereby locally elected committees give farmers effective self-government authority. That authority continues today, making farmers primary stewards of farm programs passed by Congress, including administration and outreach to all farmers and ranchers in their area.



USDA Dairy Products January 2013 Production Highlights

Total cheese output (excluding cottage cheese) was 933 million pounds, 2.4 percent above January 2012 but 2.0 percent below December 2012.  Italian type cheese production totaled 400 million pounds, 0.2 percent below January 2012 and 2.3 percent below December 2012.  American type cheese production totaled 375 million pounds, 2.4 percent above January 2012 but 2.4 percent below December 2012.  Butter production was 185 million pounds, 2.6 percent above January 2012 and 7 percent above December 2012.

Dry milk powders (comparisons with January 2012)
Nonfat dry milk, human - 143 million pounds, down 6.9 percent.
Skim milk powders - 48.0 million pounds, up 20.8 percent.

Whey products (comparisons with January 2012)
Dry whey, total - 87.2 million pounds, down 9.3 percent.
Lactose, human and animal - 88.1 million pounds, up 1.6 percent.
Whey protein concentrate, total - 38.8 million pounds, up 0.8 percent.

Frozen products (comparisons with January 2012)
Ice cream, regular (hard) - 58.4 million gallons, up 5.9 percent.
Ice cream, lowfat (total) - 27.4 million gallons, down 3.9 percent.
Sherbet (hard) - 2.94 million gallons, down 3.9 percent.
Frozen yogurt (total) - 3.60 million gallons, up 3.4 percent.



National Dairy Producers Conference to Focus on Farm Bill, Immigration Reform Challenges

The outlook for a new farm bill, and a better safety net for dairy farmers, will be one of the key sessions at the upcoming National Dairy Producers Conference (NDPC) April 7 – 9 in Indianapolis, Indiana.

The conference, open to dairy farmers from across the country, will provide an in-depth discussion of the issues facing the dairy industry, with educational discussions on topics ranging from farm policy to immigration reform to agricultural finance. The meeting is organized by the National Milk Producers Federation (NMPF).

On Monday, April 8th, a two-hour session will address the prospects in 2013 for the NMPF-backed dairy reforms contained in the 2012 Farm Bill. That session will feature presentations from congressional staff, NMPF leadership, and agricultural economists – all discussing the outlook for getting the Dairy Security Act (DSA) passed this year, and how that measure would benefit farmers. Although the DSA came close to passage at the end of 2012, the agriculture committees in the House and Senate will have to restart the farm bill process this spring. The NDPC panel will review how that process will unfold, and will examine why a dairy margin insurance program with market stabilization will provide better financial protection for farmers compared to current programs.

"The National Dairy Producers Conference is the only forum where dairy farmers from across America can meet together and have in-depth discussions about the policy issues affecting them," said Jerry Kozak, President and CEO of NMPF. "There’s no shortage of major challenges right now in our business. The focus of this conference is on addressing solutions for the future."

In addition to reviewing the farm bill, the conference will include another session about the prospect for immigration reform legislation on Capitol Hill, with presentations from individuals representing dairy farmers, the White House and Congress. The National Dairy Producers Conference will also examine the state of the agricultural banking sector as it relates to dairy farming. A trade policy panel will address how the U.S. can both protect and promote its dairy products in world markets, while a panel on dairy cow marketing will focus on the marketing of cull dairy cows.

Guest speakers at the NDPC include Purdue agricultural economist Christopher Hurt, who will review the outlook for feed prices this year, and Bill Weldon of Elanco, who will discuss new ideas under development for products to enhance a dairy cow’s productivity.

The NDPC sessions will be preceded by an optional farm tour that will take place on Sunday, April 7th. Participants will be able to get an insider tour of Fair Oaks Farms, one of the largest dairies in the country, with a consumer education facility.

Although the conference is geared primarily toward dairy producers, anyone with a stake in the dairy industry is invited to attend. This may include dairy cooperative executives and directors, dairy processors, suppliers and consultants to the dairy industry, state and federal regulators, promotion organization executives, and academics.

The hotel registration deadline is March 14th. More information on the NDPC is available at www.nmpf.org/NDPC.



The Andersons Announces Second Quarter Cash Dividend

The Andersons, Inc. announced a second quarter 2013 cash dividend of 16 cents ($0.16) per share payable April 22, 2013, to shareholders of record on April 1, 2013.  This is The Andersons' 66th consecutive quarterly cash dividend since its listing on the Nasdaq on February 20, 1996. There are approximately 18.7 million common shares outstanding.