Friday, July 31, 2015

Thursday July 30 Ag News

Ricketts Announces Trade Mission to Japan
Nebraska’s relationship with Japan is key to growing exports, overseas investment

Today, Governor Pete Ricketts announced that he and Lt. Governor Mike Foley will lead trade delegations to Japan in September in a continuing effort to grow Nebraska’s economy through foreign trade and investment.

Gov. Ricketts will lead a delegation of Nebraska business leaders to the 47th Annual Midwest U.S.-Japan Association Conference (MWJA), in Tokyo, September 12th-16th.

Lt. Gov. Foley will arrive in Japan the week prior, September 9th-11th, with a separate delegation that will focus on promoting Nebraska beef and pork to its largest export partner. Gov. Ricketts will address the conference on September 14th.

“Because Japan continues to be one of Nebraska’s top export customers and business investors, this is the perfect opportunity to continue building on our current relationships and reaffirm our commitment as a key player in Japan and the world marketplace,” said Gov. Ricketts.

Company officials will have the opportunity to meet with approximately 300 top industry and government officials and listen to internationally-known speakers from the U.S. and Japan. Top level executives from leading firms across Japan, such as Ajinomoto Co. Inc., Itochu Corp., Mitsubishi Corp., Sony, Sumitomo Chemical, Toshiba Corp., and Toyota participate in the conference each year.

Brenda Hicks-Sorensen, CEcD, director of the Nebraska Department of Economic Development (DED), will join the Governor’s delegation of Nebraska business representatives and government officials at the conference. In addition to organizing the September 12th-16th portion of the trade mission, DED will work with its Nebraska delegation members to identify appropriate companies for them to meet, and make introductions on their behalf thereby providing networking opportunities throughout the conference.

“This annual conference provides an excellent framework for the Governor and our delegates to meet with key corporate global company leaders, continue to sell the benefits of doing business with Nebraska, and further sustain and forge a traditions-rich relationship,” said Hicks-Sorensen. “We are looking forward to many exciting opportunities that exist for expanding and growing our global business reach.”

The Nebraska Department of Agriculture is organizing the September 9th-11th portion of the trade mission. Nebraska Agriculture Director Greg Ibach, along with representatives of several commodity groups and farm organizations, will join Lt. Gov. Foley for the agricultural trade team activities. The group will be participating in several U.S. Meat Export Federation (USMEF) promotional functions, and the delegation will visit Tokyo to meet with retailers, distributors, importers, and restauranteurs.

“Lt. Gov. Foley and the agriculture delegation will promote Nebraska as a primary source of high-quality, world-class beef and pork to the Japanese marketplace,” Gov. Ricketts said. “They also will meet with food bloggers and media members to tell the Nebraska story. These folks are highly influential in consumer purchasing decisions in Japan, so it is important to have a direct dialogue.”

Over 20 percent of Nebraska’s beef exports and over 50 percent of the state’s pork exports are destined for Japan. In 2014, Nebraska’s beef exports to Japan reached $276 million and pork exports were $235 million. Japan is Nebraska’s largest foreign direct investor, having invested more than $4.4 billion into the state since 2010. Japan is the state's third largest export market, as Nebraska posted merchandise exports of more than $735 million to Japan in 2014, representing 9.3 percent of the state’s total merchandise exports.

“We don’t want to take this market for granted,” Director Ibach said. “There is room to grow our market share, but we must keep in mind that our competitors are trying to do the same thing. These promotional activities keep Nebraska top-of-mind for existing customers and open doors with new ones.”

This is the second overseas trade mission of the Governor’s administration. Governor Ricketts has said that trade missions are an important part of his strategy to Grow Nebraska, and has said he hopes to conduct two trade missions a year.

Three USGC Delegates Honored for A Decade of Service

Three U.S. Grains Council’s (USGC’s) delegates – Randy Ives of Gavilon; Ray Defenbaugh of Big River Resources; and Stan Garbacz from the Nebraska Department of Agriculture – were honored for 10 years of service to the organization at its 55th Annual Board of Delegates Meeting this week in Montreal, Canada.

Asked about their experiences with the Council, the three told different stories but were unanimous in recognizing its value.

The highlight for Ives has been seeing the ethanol industry come together to meet challenges from antidumping cases to biotechnology acceptance.

“The Council has played a very, very exceptional role as we’ve taken distiller’s dried grains with solubles (DDGS) exports from a million short tons to four million and now to nearly 10 million tons,” Ives said.

“A great accomplishment in the last four to five years was educating consumers, end-users and U.S. marketers so we maintained our customer base as DDGS have changed.”

Garbacz said he sees the Council’s work in China as a major achievement.

“China was actually a major corn exporting country when the Council began programs in the country,” Garbacz said. “The Council not only found demand in China for U.S. corn but it also hired people to show the Chinese how to use corn in livestock feed. That brought China to the point where it was importing U.S. corn.”

Working with the Council in China also helped Nebraska promote exports of swine genetics, according to Garbacz.

That produced a double benefit.

“If you’re producing more swine, you need more genetics and with more livestock, you need more livestock feed such as corn,” he explained.

For Defenbaugh, whose company was the first ethanol plant to join the Council, ethanol promotion is a big Council story.

“I encourage anyone in the ethanol industry to have a Council membership,” he said. “Look at how the Council promotes DDGS overseas and how that market has changed with their help. And now they’re promoting ethanol.”

The Council, he concluded, “is an excellent organization for promoting rural America through the enhancement of exports. That is good if you live in rural America and are involved in agriculture.”

Garbacz emphasized the need to continue the Council’s work: “You’ve got to stay on top of markets, especially with the volatility in some countries. The Council has people in every region of the world providing us information that we can analyze so we know what we need to do to compete.”

CNH Industrial Celebrates 50 Years of Operations in Nebraska

CNH Industrial N.V. celebrated an important milestone in Nebraska this past week, marking 50 years of operations at its Grand Island plant. Local dignitaries, including Sen. Curt Friesen of Henderson, Grand Island City Council Leader Linna Dee Donaldson, Grand Island Chamber President Cindy Johnson, and Grand Island Area Economic Development President Dave Taylor, joined hundreds of current and former employees and their families at the plant to honor the legacy of the capital goods manufacturer's premier agricultural equipment manufacturing facilities.

Built to produce combines for the North American market, the first unit came off the production line at the Grand Island plant on Monday, Nov. 22, 1965, a mere five months after the groundbreaking. Customer demands quickly required the operations to expand beyond combines to include haytool equipment. Since opening, the facility has tripled in size from 324,000 sq. ft. to 980,000 sq. ft. today.

"Fifty years is quite an achievement and our success is a direct result of our employees' commitment and the community's support," said Bill Baasch, CNH Industrial vice president of manufacturing for North America. "Today, we honor our history, celebrate our past and present employees, and continue to take pride in our continued contribution to producing world-class agricultural equipment in Nebraska for farmers around the world."

The Grand Island facility operates as one of CNH Industrial's state-of-the-art Centers of Excellence, hosting current product design, manufacturing, and testing all in one location. The plant manufactures combines and hay tools, such as self-propelled and pull type windrowers, and bale wagons, for CNH Industrial's Case IH and New Holland Agriculture brands. Several business units make up the manufacturing area of the Grand Island plant, including fabrication, welding, paint and assembly. Each area uses modern technology to aid in their process, including an automotive grade e-coat paint system, laser cells, robotic welders and wireless testing systems.

The plant manufactures three distinct combine harvester model families at the site: the Case IH 140 series, Case IH 240 Series, and the New Holland Agriculture CR Twin Rotor series. Approximately 35% of its production is exported to 40 countries around the world.

The Grand Island plant is one of 12 manufacturing plants in CNH Industrial's North American footprint, which includes 13 research and development centers and a workforce of 11,000. CNH Industrial designs, produces, and sells 'machines for work' and is present in all major markets worldwide, giving it a unique competitive position.

Senator Presses DOJ to Scrutinize Proposed JBS-Cargill Merger

Sen. Chuck Grassley of Iowa sent a letter to the Department of Justice pressing the Antitrust Division to review JBS USA's proposed acquisition of Cargill Inc.'s pork unit. Grassley expressed concern that the merger will increase concentration and decrease competition in the U.S. pork industry.

"If the JBS-Cargill deal is finalized, the four largest pork processors will control roughly 71 percent of the processing capacity in the country. Continued mergers and acquisitions in an already consolidated pork industry could reduce competition. And, reduced marketing opportunities for farmers and independent producers, and the subsequent impact it could have on pork prices for consumers is of great concern," said Grassley.

JBS USA and Cargill Inc. are currently the third and fourth largest U.S. pork processors respectively. If the transaction is finalized, JBS USA will become the second largest pork processor with a daily slaughter capacity of around 83,000 head. This equates to nearly 20 percent of U.S. daily pork processing capacity.

Grassley has long worked to ensure such mergers are carefully reviewed by the Justice Department to ensure a competitive market. This transaction, reportedly valued at $1.45 billion, comes almost one year after Tyson Foods purchased Hillshire Farms.

JBS USA has a plant located in Marshalltown, Iowa, and Cargill Inc. has a plant located in Ottumwa, Iowa.

ICGA Stands Up for Ethanol; Comment Period Closes

The period to submit comments to the Environmental Protection Agency's (EPA) proposed rule closed. The Iowa Corn Growers Association (ICGA) worked diligently on your behalf to make sure that your voices were heard to oppose the proposed rule and stick to the statute passed by Congress for the Renewable Fuels Standard.

ICGA farmer members and leaders collectively joined voices in opposition and attended public hearings and rallies, spoke with officials on Capitol Hill, and submitted comments. ICGA also sent a letter opposing the ruling to EPA Administrator Gina McCarthy to ensure that our message was made clear. The Association also worked hard to engage Iowans around the state to submit comments by running radio ads targeting farmers and online advertisements that worked to reach consumers and farmers alike, collecting comment cards at events around the state and encouraging race fans at the Iowa Corn 300 to stand up for the ethanol industry.

"This proposed rule by the EPA is going to have a very real impact on farmers, ethanol producers, rural communities, and consumers. It will result in a depressed farm economy which we have already seen from the effects of the 2014 proposed rule, which will in turn hurt agricultural businesses and lenders, as well as our main streets in rural America," ICGA stated in final comments submitted.

In closing in his letter to EPA Administrator McCarthy, ICGA President Jerry Mohr wrote, "On behalf of Iowa's corn farmers, we collectively join our voices in opposition to the proposed rule to lower the RVO for ethanol and we encourage the EPA to rethink the proposal and implement the statutory levels for corn based ethanol. Iowa's hard working farm families need nothing less."

Correcetion: Ames workshop will examine stewardship of antimicrobial drug use in livestock

Stewardship of medically-important antimicrobial drugs in food animals is the subject of workshop targeted to livestock producers, their feed suppliers and veterinarians in seven Midwestern states. The workshop will be Sept. 16, 2015 at the Gateway Hotel, 2100 Green Hills Drive, Ames, IA.

This free workshop is an opportunity for participants to gain a comprehensive understanding of two Guidance for Industry (GFIs) issued by the U.S. Food and Drug Administration (FDA) regarding the use of medically-important antimicrobial drugs in food-producing animals, as well as FDA's revised Veterinary Feed Directive (VFD). The workshop is also an opportunity for other stakeholders, such as state and federal agencies, colleges of veterinary medicine and university extension personnel, to gain insights into the changes needed to meet the requirements.

Led by Farm Foundation, NFP, this workshop is targeted to pork, cattle, poultry and sheep producers, veterinarians and feed suppliers in Iowa, Eastern Nebraska, Minnesota, Wisconsin, Western Illinois, Northern Kansas and Northern Missouri. Advance registration is requested and can be completed online. This is one of 12 regional workshops Farm Foundation will host across the nation in the next three months. A complete list of workshop locations is available on the Farm Foundation website.

The Sept. 16 workshop will include presentations by producer leaders, the local veterinary community, and representatives from the regional feed industry. Officials from FDA and USDA's Animal and Plant Health Inspection Service (APHIS) will also participate. A major part of the agenda is designated for producers, veterinarians and feed suppliers to identify and discuss the management challenges ahead.

To gauge awareness of the changes being put in place by FDA on the use of medically-important antimicrobial drugs in food animals, Farm Foundation, NFP is asking stakeholders to complete a brief survey. The survey is also intended to learn more about the potential implications of these changes. The survey is open to all livestock producers, feed suppliers and veterinarians, whether or not you attend a workshop. CLICK HERE to complete the survey. Survey results will only be gathered and reported in the aggregate. Survey results will be shared with workshop participants.

Comments gathered at the 12 workshops will be compiled in a report assessing the economic and physical challenges facing producers as they implement the new provisions in the GFIs and revised VFD. Informational and educational needs will also be evaluated, as well as the role of veterinarians in monitoring and managing antimicrobial drug use.

Farm Foundation will convene a national summit in late fall 2015 for farmers, ranchers, feed suppliers, veterinarians, academics and government agency staff to address the issues identified in the regional workshops. This will also be an opportunity to advance the conversation on the industry's adaptation to the changing landscape of antimicrobial drug use.

Many producers and businesses across the entire food and agricultural value chain have already taken action to reduce the use of medically-important antimicrobial drugs in food animal production. FDA's GFI 209 and GFI 213 call on animal drug sponsors of approved medically-important antimicrobials administered through medicated feed or water to remove production uses (i.e., to promote growth or improve feed efficiency) from their product labels, and bring the remaining therapeutic uses of these products--to treat, control, or prevent disease--under the oversight of a veterinarian by the end of December 2016. Manufacturers of products containing these medically-important antimicrobial drugs have voluntarily agreed to submit changes to their product labels to comply with the GFIs. FDA also revised the Veterinary Feed Directive (VFD) to facilitate the increased veterinary oversight of medicated feeds called for by GFI 209 and 213. By the end of 2016, administration of these products to food-producing animals will be restricted to use by or on the order of a licensed veterinarian.

Successful adaptation to the policy changes is critical to public and animal health, ensuring consumer confidence in food safety and the future viability of animal agriculture in the United States. "The success of achieving this goal--for both public health and the economic health of animal agriculture--hinges on producers having access to the information they need to adjust production practices, and the capacity of veterinarians to provide the additional oversight needed," says Farm Foundation President Neil Conklin. "As an organization respected for its objectivity, Farm Foundation is well positioned to quickly respond to this informational need and draw relevant and diverse stakeholder groups to the table for constructive discussions on this important topic."

In addition to Farm Foundation's leadership, individual producers and many companies are providing financial support for this educational effort. These include JBS United, Hormel Foods Corporation, Jennie-O Turkey Store, Rose Acre Farms, Elanco Animal Health, J.R. Simplot Company and North American Meat Institute. The staff of Adayana Agribusiness Group will facilitate the workshops.

NCGA to Congress: Farmers Need Safe, Reliable Roads & Bridges

The National Corn Growers Association today expressed disappointment that Congress failed to pass a long-term highway funding bill before its August recess. Congress voted to extend the United States Highway Trust Fund’s authorization through Oct. 29, the second such short-term extension this year.

“Once again, Congress kicked the can down the road – and that road is in bad shape,” said NCGA President Chip Bowling, a farmer from Newburg, Maryland. “Farmers rely on our nation’s infrastructure system every day. We need safe, reliable roads and bridges to get our products to market quickly, safely and efficiently. Instead, our roads and bridges are at best, in disrepair, and at worst, unsafe or unusable – and that hurts every farmer in America.”

Eighty percent of the domestic corn crop is trucked to market, according to USDA’s Agricultural Marketing Service. By one estimate, America’s transportation deficiencies will cost U.S. agriculture $1.3 billion in exports by 2020. Approximately 73% of America’s bridges are located in rural areas, which disproportionately rely on federal funding for repairs and maintenance.

“It’s time to get serious about passing a long-term highway funding bill. Every year we don’t act, the cost of repairs increase, and the burden on our economy grows. Senators and Representatives are returning to their home states for August recess. We’re asking them to take notice of their roads and bridges, to listen to their constituents, and to come back to Washington with solutions for our nation’s infrastructure problem.”

Access to China Key Factor in Maintaining Meat Export Growth

Philip Seng, president and CEO, U.S. Meat Export Federation

The U.S. red meat industry has achieved outstanding export growth in recent years, enhancing profitability for all members of the supply chain. In 2014, both beef exports ($7.13 billion) and pork exports ($6.67 billion) shattered previous records for export value. Beef exports have steadily increased in value in each of the 11 years since global markets began to reopen after the first U.S. case of BSE. For pork, export value has increased in 15 of the past 20 years.

In 2015, several headwinds have made it difficult for the U.S. industry to maintain this positive trajectory. Severe congestion in the West Coast ports – the result of a prolonged labor impasse – impacted our first-quarter results. Unusually large supplies of European pork and Australian beef have poured into key Asian markets, buoyed by favorable exchange rates that make them very attractive to price-sensitive buyers. Key competitors have also achieved gains due to free trade agreements that reduced import duties on their beef and pork products.

These are all important factors affecting U.S. exports, but they are issues over which we have little or no control. The same cannot be said about one of the biggest obstacles U.S. exports currently face – lack of access to China.

China is one of only a handful of international markets that never reopened to U.S. beef following the 2003 BSE case. At that time, and for several years thereafter, China was not a large importer of beef. But that changed dramatically in 2012, when beef import demand in China surged due to strong economic growth and a sharp decline in domestic production. China now imports more beef every month than it did in an entire calendar year in 2011. In the first half of this year, imports totaled nearly $910 million – up 28 percent from a year ago.

While the U.S. industry remains on the sidelines, Australia, Uruguay, New Zealand, Argentina and Canada are all gaining a strong foothold in China. Being shut out of the Chinese market also affects the prices U.S. beef cuts command in other Asian destinations, as China has begun to exert significant influence on global beef trade. For the U.S. beef industry, the lost opportunity due to our lack of access to China is currently estimated at more than $100 per head.

But is there a scientific basis behind China’s demands?

Considering that we export to about 100 countries, all of which have determined that U.S. beef is safe, it would be easy to view China’s import conditions as overly strict. But a growing number of major beef producing and exporting countries are meeting China’s requirements, aware of the market’s potential global impact on beef demand. In mid-2014, for example, China began testing beef imports from Australia for hormone residues, citing a hormone ban that had been in place for more than a decade, but had only been sporadically enforced. Australia responded quickly, implementing a certification program to meet China’s requirements. In the short term, Australia’s exports to China dipped by nearly 50 percent. But that decline was temporary, as Australian producers adjusted and exports to China quickly rebounded.

When Canada confirmed its most recent BSE case in February, the Canadian Food Inspection Agency voluntarily suspended export certificates to China and began consultations with its counterpart agencies in China to restore access. Trade resumed in early April. A similar situation just occurred in Argentina, where trade was suspended due to a finding of vesicular stomatitis (VS) in dairy cattle. Argentine government and industry representatives immediately traveled to China to meet with regulatory officials and reached an agreement to resume trade.

As these examples illustrate, our competitors have learned that the best way to do business with China, as with any customer, is to meet its expectations.

Limited pork access also costly

With regard to U.S. pork, the Chinese market is not entirely closed. The U.S. technically has access for a full range of pork and pork variety meat products (with the exception of processed products), and recently gained access for pork fat. But a significant percentage of U.S. pork production is ineligible to ship to China due to ractopamine use and other factors that conflict with China’s import requirements. This has made it very difficult to capitalize on significant growth opportunities in China that have emerged this year due to high domestic prices, and which are presently being captured by European suppliers.

China produces and consumes about half the world’s pork. And while it is largely self-sufficient in production, even a small fluctuation in China’s need for imported pork can shake up the global market. The U.S. industry has benefitted from these fluctuations in the past – especially in 2011 and 2012, when exports to China were very strong. But with the enforcement of its import requirements and only a small number of U.S. plants being eligible to serve China, we saw a major slowdown in the second half of last year. So far in 2015, exports are down nearly 50 percent from a year ago. In the meantime, EU export volume to China is more than one-third higher year-over-year.

Our lost opportunities in China span a wide range of product categories. China has been an excellent destination for large volumes of ears, feet, stomachs, snouts and other pork offal items, but we are also missing a chance to market pork muscle cuts to China’s rapidly growing processing, foodservice and retail sectors.

Similar to the beef complex, China has no lack of suitors who want a piece of its imported pork market. In addition to the EU, Canada and Chile compete aggressively in China and Mexican pork is a recent entrant into the market. Ractopamine is not an issue for suppliers from the EU and Chile (where it is not approved for use), but other competitors are also undeterred by China’s demands. Canada, in fact, has created a ractopamine-free verification program that even includes segregation at the cold storage facility level. This is another instance in which exceptional opportunities for export growth carried the day.

Our limited access to China has very negative consequences for U.S. pork producers. When the flow of U.S. pork to China slowed severely late last year, industry analysts estimated that the lost value in pork offal alone was more than $7 per head – and it is now estimated to be more than $9 per head. Combine this with lost opportunities for muscle cuts, especially as China’s hog prices reach multi-year highs, as well as the impact on the price U.S. pork can command in other markets, and China’s influence on producer profitability is substantial.

The case for exports is often made by stating that 95 percent of the world’s population lives outside the United States. But this argument is much less compelling when the market that contains nearly 20 percent of the world’s population has little or no access to our red meat products, which I believe are the finest and safest in the world. Yes, China’s import conditions are stringent, but China is not lacking for suppliers willing to meet its demands. This means the U.S. industry faces some difficult decisions as we look for ways to expand access for U.S. meat in this critically important market.

June Farm Prices Received Index Decreased 1.9 percent

The June Prices Received Index (Agricultural Production), at 105, decreased 1.9 percent from May. At 88, the Crop Production Index decreased 2.2 percent. The Livestock Production Index, at 121, decreased 0.8 percent. Producers received lower prices for cattle, broilers, and hay but higher prices for eggs, onions, and lettuce. In addition to prices, the indexes are impacted by the five-year average monthly mix of commodities producers market. Increased monthly movement of wheat, hay, grapes, and peaches offset the decreased marketing of cattle, strawberries, milk, and oranges.

The Prices Received Index is down 7.1 percent from the previous year. The Food Commodities Index, at 113, decreased 1.7 percent from the previous month and is down 7.4 percent from June 2014.

Crop Production:

The June index, at 88, decreased 2.2 percent from May and is 11 percent below June 2014. Marketing of vegetables & melons and fruit & tree nuts decreased during June.

Feed grain: The June index, at 60, is down 1.6 percent from last month and 20 percent below a year ago. The corn price, at $3.58 per bushel, is down 4 cents from last month and 92 cents from June 2014. At $7.63 per cwt, sorghum grain is 6 cents above May and 10 cents higher than June a year earlier.

Food grain: At 75, the index for June is 5.1 percent lower than the previous month and 17 percent below a year earlier. The June price for all wheat, at $5.43 per bushel, is up 10 cents from May but is down $1.06 from June 2014.

Oilseed: At 77, the index for June is unchanged from May but is 31 percent lower than June 2014. The soybean price, at $9.58 per bushel, decreased 2 cents from May and is $4.72 below June a year earlier.

Other crop: The June index, at 91, is unchanged from the previous month but is 15 percent below June 2014. The all hay price, at $162 per ton, is down $13.00 from May and $35.00 lower than June 2014. The price for upland cotton, at 65.1 cents per pound, is up 1.0 cent from May but is down 18.8 cents from June 2014.

Livestock Production:

The index for June, at 121, is 0.8 percent below the previous month and down 5.5 percent from June a year earlier. Compared with a year ago, prices are lower for milk, hogs, and broilers. Prices for market eggs, cattle, calves, and turkeys are up from a year earlier.

Meat animal: At 127, the June index is down 2.3 percent from the previous month and 1.6 percent lower than a year earlier. At $59.90 per cwt, the June hog price is up $1.00 from May but is $24.90 lower than a year ago. The June beef cattle price of $155 per cwt is down $5.00 from the previous month but is $8.00 higher than June 2014.

Dairy: The index for June, at 84, is up 1.2 percent from the previous month but is 27 percent lower than June a year earlier. The June all milk price of $16.90 per cwt is up 20 cents from May but is down $6.30 from June 2014.

June Prices Paid Index Unchanged

The June Index of Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW), at 109, is unchanged from May but is down 3.5 percent from June 2014. Lower prices during June for feeder pigs, hay & forages, complete feeds, and LP gas offset higher prices for feeder cattle, other services, supplements, and gasoline.

IGC Trims 2015-16 World Wheat Forecast

The London-based International Grains Council on Thursday lowered its forecast for global wheat production by 1 million metric tons for 2015-2016, to 710 million tons.

In its monthly report, the IGC raised its forecast for total grains production this year to 1,970 million tons, a 4 million ton boost from the previous month's forecast of 1,966 million tons, largely due to an increase in the estimate for corn production. The harvest is forecast to be 43 million tons below the 2014-2015 record season, but will still be the third-largest crop on record, the council said.

"Unfavorable weather has reduced crop prospects in some regions, especially in the EU and Canada," the council said. However, the drop was outweighed by output gains in corn in China and sorghum in the U.S., it added.

The IGC said poor weather had fuelled a rally in wheat prices early in the month, but worries about supply were outweighed by lower demand and ample wheat stocks. However, consumption is still predicted to outweigh supply by 2 million tons for the season.

The council's forecast for North American wheat saw the most significant drop, falling to 90.3 million tons for the season, from last month's prediction of 92 million tons. The EU also saw a drop from 152.7 million tons, from June's forecast of 153 million tons, while the Black Sea region was revised down only slightly.

Meanwhile, higher forecasts for South America and Asian wheat harvests offset some of the expected losses. The council raised expectations for each region's crops by half a million tons from June's prediction.

The IGC predicted 2,013 million tons of grains were produced worldwide in the 2014-2015 season, a 2 million ton increase from June's forecast.

Potash Corp. Earnings Fall

Potash Corp. of Saskatchewan Inc. posted a 12% drop in its second-quarter profit on Thursday and scaled back the top end of earnings guidance for the year as weaker nitrogen prices impacted results.

The Saskatoon, Saskatchewan, company said increased global supply weighed on nitrogen prices in the quarter, though pricing for potash and phosphate -- its two other key fertilizer nutrients -- improved from a year earlier.

Potash Corp. said quarterly potash sales volumes of 2.5 million metric tons were in line with year-earlier levels, while its average realized price improved to $273 a ton from $263. Potash gross margin was $417 million, up from $395 million a year earlier.

It said sales volumes for nitrogen were also similar to year-earlier levels, at 1.6 million tons, while average nitrogen prices fell 15%. Phosphate sales volumes fell 20%, it said, though prices rose almost 9%.

Potash Corp. earned $417 million, or 50 cents a share, in the latest period, the midpoint of the company's guidance range. Analysts were expecting 51 cents a share.

Revenue fell 8.5% to $1.73 billion, just ahead of the $1.71 billion analysts expected.

Targeted increase of a naturally occurring sugar improves the yield of drought affected corn

A collaborative project between Syngenta and Rothamsted Research has shown that genetically altering the amounts of a naturally occurring sugar can substantially improve the yield of drought affected corn. The research is published in the journal of Nature Biotechnology.

Drought significantly impacts crops worldwide, hitting poorest farmers most dramatically; in the U.S. and even in the UK predictions are that water will become increasingly limiting for crops. The world’s major crops (corn, rice and wheat) are particularly affected by drought during the flowering period.

Syngenta scientists introduced a single transgene to alter the amounts of a naturally occurring sugar, called trehalose 6-phosphate or T6P, in a highly tissue-specific manner. The plants were evaluated over several years in extensive maize field trials in North and South America.

In doing so, corn under no or mild drought, increased in yield between 9% and 49%, and corn under severe drought, increased in yield between 31% and 123%.

The research includes support by a team of scientists at Rothamsted Research, led by Professor Matthew Paul, to understand the regulation of plant and crop processes by T6P. This biological knowledge will help Syngenta develop crop traits for the world’s farmers.

T6P drives the allocation of the plant’s main sugar, called sucrose, to different parts of the plant during growth and development. By altering the amounts of T6P in key cells that deliver sucrose to developing seeds in the cobs, more sucrose is transported into the corn kernels. This increases seed numbers per cob and the overall harvest index and yield.

Professor Matthew Paul said: “The work shows that T6P exerts significant control of yield in corn. This is one of few reports where genetic modification of an intrinsic plant process for yield works in the field.

We think that this can be explained because there is a tension between the need to produce enough seed to survive against the need to adjust seed number to ensure viability.

It is possible that natural selection has placed greater emphasis on survival of a few viable seed rather than on maximizing seed numbers and productivity per se, as required in an agricultural system and there is still room to select for this.”

Dr. Michael Nuccio, Principle Research Scientist at Syngenta and the study leader said: “Our collaboration with Rothamsted Research has given us significant new insights into how our corn trait functions to improve response to drought in the field. This knowledge will be important for designing the next generation of crop varieties able to remain productive under water-limiting conditions.”

The scientists consider the corn yield increases could be the tip of the iceberg. Professor Matthew Paul concluded: “Corn is the world’s highest yielding crop. This technology has the potential to greatly improve maize productivity.

Imagine what could be achieved for global food security if this trait were targeted in other crops too. Not only does it increase maximum yield output but it also prevents catastrophic yield loss in dry years.”

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