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News from the Minnesota Association of Wheat |
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U.S. WHEAT ASSOCIATES WHEAT LETTER NO WORD ON 10% OF U.S. WHEAT EXPORTS USW, waiting to hear if this year's program for up to 3 million metric tons (MMT) of U.S. wheat is
approved by OMB, is beginning to get seriously nervous about the lack of action. Three million tons equates to 10% of total U.S. wheat exports. In fiscal year 1999, the USDA bought about 5 MMT for donations under the
416(b) program, or about 17% of exports. "We don't know why the OMB is taking so long on this," said Nelson Denlinger, USW vice president for government affairs. "The U.S. government is U.S.
wheat's biggest single export customer, and a rollback of the program would have a significant impact." Commodity organizations, including USW, have been told that OMB is reviewing FY 2000 budgets to ensure that
budget ceilings are kept intact. That process does not usually extend 3 and a half months into the start of the fiscal year.
IMPORTERS TO TESTIFY ON GRAIN CLEANING INITIATIVE "Millers throughout South America
have been very vocal in their complaints of higher dockage in U.S. wheat in comparison to Canadian shipments," explained Alvaro de la Fuente, USW regional vice president in Chile. "Dockage is an important
disadvantage for the U.S." De la Fuente's observations are backed up by written comments submitted to FAS by the largest wheat miller in Brazil. In a letter from Santista Alimentos S.A., Jose Kfuri explained that
"the biggest barrier for us to import further volumes of US origin wheat is obviously our government imposed import tariffs. The second major barrier is the impurity and amount of dust that we receive in our mills
[from U.S. wheat] originating in the Gulf." Mr. Kfuri went on to support the initiative "for economical and environmental reasons." He also points out that reducing dockage will "give the US
government more ammunition in further discussions regarding trade restrictions in importing US origin wheat to Latin American countries, notably Brazil." Felipe Laserna, a buyer from Colombia who purchases wheat
on behalf of a group of 22 millers representing close to 30% of the market share, plans to fly to the U.S. to testify personally. "We are very concerned about the impurities present on the grain," Mr.
Laserna states. "Comparing quality and cleanliness, we are forced in many cases to buy from alternative origins because it is very difficult to handle dirty wheat in a mill regardless of any discount in price."
"On behalf of the Colombian milling industry, we have requested on many occasions the need of having cleaning equipment at the loading ports, especially from the US Gulf that has been historically our natural
supplier of wheat," Mr. Laserna stressed. It is important to the entire U.S. wheat industry that U.S. export facilities have the capability "to deliver dockage content at whatever level each customer is
willing to specify and pay for," USW president Alan Tracy said. "The U.S. supplies a complete line of varieties and qualities -- with the notable exception of dockage content. The fact that wheat buyers from
South America and Africa are flying to the U.S. specifically to explain that importance highlights the urgency of this initiative."
QUOTE OF THE WEEK
USDA REPORTS ON WINTER WHEAT Also on Wednesday, the USDA issued their revised 1999-00 supply/demand estimates for wheat, with few changes in the world wheat numbers. USDA pegged 1999-00 world wheat production up slightly at
584.45 MMT, compared to last month's estimate of 584.16 MMT. World wheat imports were increased 780 TMT to 124.86 MMT. Similarly, the 1999-00 U.S. wheat situation was left basically unchanged, except that 1999-00
U.S. feed usage did increase by 1.37 MMT to 8.17 MMT, and the U.S. ending wheat stocks figure decreased by 1.49 MMT to 26.46 MMT.
TOP TEN CUSTOMERS GENERALLY TRACKING FOR 99/00
CROP DISASTER PROGRAM QUESTIONS AND ANSWERS COMPILED BY THE ND FSA OFFICE
1. What are the eligible disaster conditions? 2. When and where will applications be taken from producers? 3. When will payments be issued?
4. What rates will be used to calculate payments? b. 65 percent of the NASS 5-year average
for non-insurable crops c.. 60 percent of the maximum established Risk Management price for uninsured crops.
Note: Crop Revenue Coverage prices cannot be used. 5.
Will payments be factored? 6. Which crops are eligible for
assistance under the 1999 single-year provisions? 7. Will pasture losses qualify for assistance? 8.
Will assistance be available for prevented planting? 9. Is there any loss threshold? 10. Under the 1999 Crop Disaster Program, will FSA use an "historic" yield for
determining the 1999 production loss? 11. Under the 1999 Crop Disaster Program, must a producer provide actual yield history
or can the producer simply accept the NASS 5-year average yield or the STC-established yield for the crop? 12. Are quality losses covered under this program? 13.
Will eligibility be calculated on a farm or unit basis? 14. For the 1999
Crop Disaster Program, will harvested and unharvested payment factors apply? 15.
Are conservation compliance provisions applicable? 16. Is there a payment limitation? 17. How do signed crop insurance waivers affect eligibility? 18. Will producers be required to purchase crop insurance in future years? 19. Are producers eligible for this program
if they are also receiving benefits under different programs for the same disaster? 20. What
year's gross income will be used to determine if the $2.5 million annual gross income limitation is exceeded?
21. If no appraisal was performed for a crop, what will be required of an applicant to verify acreage not harvested?
22. What kind of production evidence is required? 23. Some producer are going out of business because 1999 was such a disastrous
year. If they apply for their 1999 losses but will not be continuing their insurance coverage because they are no longer in business, can they qualify? 24. If a producer had insurance in 1999, is the producer exempt from taking insurance in 2000 and 2001?
25. Will applications be processed for each shareholder on a unit or will the application include all names of all producers in the crop(s) on
the unit?
26. Prevented planting (corn) is followed by planting a second different crop (canola) that fails. Is the payment earned on both
crops? 27. If a producer requests payment on a crop on only one unit, does
production from all units the producer has an interest in have to be reviewed?
USDA WORLD AGRICULTURAL OUTLOOK BOARD Course Grains: Oilseeds: Soybean ending stock are lowered 30 million bushels this month, to 365 million bushels.The U.S.
soybean producer price range is projected at $4.50 to $5.00 per bushel, up 5cents per bushel from last month, mainly due to reduced U.S. oilseed supplies. The U.S.soybean oil price is reduced 0.25 cent to 15.00 to
17.00 cents per pound. The soybean meal price range is unchanged at $140 to $165 per short ton.Global oilseed production is projected at a record 295.6 million metric tons, down 1.3 million tons from last month,
but up 2.9 million tons from last year. Almost all of this month's change is due to reduced U.S.oilseed production. Foreign production, at a record 213.5 million tons, is down slightly from last month,
but up 5.2 million tons from last year. Increased soybean production in Argentina and slightly higher sunflower seed production in the former Soviet Union are ffset by reductions in China's cotton seed output and
India's rapeseed crop. Argentina's soybean crop is raised 0.5 million tons to 19.0 million tons, based on record harvested area. Recent beneficial rains in Argentina have helped stabilize yield prospects and
have enabled growers to meet planting intentions. Brazil's soybean crop forecast is unchanged this month at 31.0 million tons as larger area offsets reduced yield. Other significant changes this month include
a 0.2-million-ton increase in Malaysian palm oil crop to 10.4 million tons and an increase in global palm oil inventories.
REVENUE INSURANCE EXPANDED FOR 2000 CROP YEAR For the 2000 crop year, revenue assurance is expanded for corn and soybeans in Indiana; for spring wheat in Idaho, Minnesota and South Dakota; for feed barley and canola/rapeseed in
Idaho and North Dakota, and for sunflowers in North Dakota. The maximum coverage level for enterprise and whole-farm units is increased to 85%. Last year, revenue assurance for corn and soybeans was expanded into
Illinois, North and South Dakota and Minnesota and spring wheat was approved as a new crop for North Dakota. Producers would select a coverage level up to 80% for whole-farm units and a fall harvest price option that
used the greater of the projected harvest price or the fall harvest prices in determining the revenue guarantee. The program was changed to use the Chicago board of Trade futures for crop prices rather than using the
county crop prices. The CBOT futures and the actual production history were the basis for determining the revenue guarantee and revenue assurance premium rates.
USDA published the action in the Jan. 11 Federal Register.
CONSUMER AND FARM STUDY REVEALS
GAPS ON KEY AG, FOOD PRODUCTION ISSUES
The study, conducted by Roper Starch Worldwide in July and August 1999, is one of the most comprehensive farmer - consumer studies ever undertaken. Specifically, the research asked 1,002 consumers to share their views
of modern farming practices and to assess the job farmers are doing in meeting the food demands of the public. The survey also asked 704 of the nation's farmers and ranchers to assess their own performances - as well as
assess consumers' perspectives about agricultural practices. "While no one should be too surprised to learn that most consumers don't understand what farmers do to produce their food and clothing, this research
shows that many of us in agriculture have miscalculated where consumers' most pronounced concerns exist," says Jay Poole, Vice President of Agricultural Relations for the Philip Morris family of companies, one of
the nation's largest purchasers of agricultural products. Selected Survey Results
1) Consumer preferences for the food they eat 2) Consumer satisfaction with various food characteristics 3) Farmers' views of consumer preferences and satisfaction with the food supply 4) Farmers' and consumers'
attitudes toward modern food production practices and the impacts of those practices on the environment 5) Farmers' and Consumers' views about the healthfulness and safety of the food supply, as well as farm and food
policy. Here are the topline survey results: Consumers open-minded about biotechnology
The survey indicates that both consumers and farmers are open to biotechnology, particularly when they see its direct benefits. While 37 percent of consumers say they've heard more about the benefits than drawbacks of biotechnology, their support for biotechnology increases to:
57 percent if biotechnology improves the taste of foods 65 percent if biotechnology improves the nutritional value of food 69 percent if biotechnology increases food production
73 percent if biotechnology reduces pesticide use "These results are not unusual," observes Bob Pares, Vice President of Roper Starch Worldwide. "Consumers are willing to use whatever means are
available to achieve desired outcomes. It's the same trend we're seeing with alternative medicine." Farmers overestimate negative perceptions, while consumers remain uncertain
The research shows that farmers overestimate the level to which consumers have heard drawbacks about several key agricultural production practices, including biotechnology, the use of hormones in milk production, irradiation, and antibiotics used to treat animal diseases.
The survey also indicates, consumers haven't heard or don't know much about many farming practices. For example, the biggest group of consumers say they haven't heard enough about either the benefits or drawbacks of
the following farming or food production practices to have formed an opinion: 41 percent on biotechnology 41 percent on irradiation 31 percent on the use of antibiotics to treat animal diseases
28 percent on using hormones to increase milk production in dairy cows, or organic production methods "Influential Americans"™ - those who are more active in community affairs or politics -
have heard more than other consumers about both the benefits and drawbacks of most agricultural practices. Despite the controversies surrounding several of these practices, the better-informed "influential"
consumers generally are more accepting of some technologies, including biotechnology. "One of the consumer trends we've been watching over the last decade is this need to be informed," notes Pares.
"Consumers want to make informed choices, and if the agriculture industry is not putting out the information, someone else will, and the information they share may not always be accurate or in the best interest of
agriculture." Other key findings
While consumers appear open-minded on many farming practices, they are not comfortable with the use of pesticides in food production and will accept higher prices (57 percent), a smaller food selection (68 percent), seasonal availability (72 percent), and biotechnology (73 percent) as trade-offs for not using chemicals in food production.
"Some of these results really surprised us," notes American Farm Bureau Federation President, Dean Kleckner. "It's clear that the agricultural industry has not done a good job educating consumers about
the benefits of pesticide use. It's important that we don't make the same mistake with biotechnology and other new farming practices." One thing farmers (71 percent) and consumers (67 percent) agree upon is that
the agricultural industry is doing only a "fair" or "poor" job of explaining the benefits and drawbacks of farming techniques to the public. This study is part of the Philip Morris Shared
Solutions™ Agricultural Initiative, a project for their family of companies to work together with the nation's farmers and ranchers to address important issues confronting the farm-to-consumer production chain.
"One of the things the agricultural industry can do is inform and educate consumers about modern agricultural production practices," notes Poole. "Consumers have a huge influence on agricultural policies.
We must address the gaps identified in this study if we want to establish sound farm policies." The Philip Morris family of companies is an agriculture-based consumer products company with 152,000 employees
worldwide. It markets brands found in nine out of 10 consumer homes, including Kraft, Oscar Mayer, Post and Miller. The American Farm Bureau Federation is the nation's largest general farm organization with affiliated
organizations in the 50 states and Puerto Rico. To receive a summary of the Gap Research, write to Steve Bennett, Morgan & Myers, 606 East Wisconsin Ave., Milwaukee, WI 53202.
Shared Solutions is a service mark of Philip Morris Companies, Inc.
AGRICULTURE'S FUTURE OUTLINED
NATIONAL ASSOCIATION OF WHEAT GROWERS REPORT FROM WASHINGTON NAWG ON THE GO NAWG TO COSPONSOR RAIL FORUM This year's forum will focus on
Congressional perspectives on railroading and the competition debate, the successes and failures of the 1980 Staggers Act, impacts and results of the rail industry's mergers, the similar debate in Canada and more.
Please contact the NAWG office by February 24, if you would like to attend. CONFERENCE CORNER ATTEND THE WHEAT CONFERENCE AND HAVE THE OPPORTUNITY TO WIN USE OF A NEW HOLLAND 8970 210hp GENESIS TRACTOR!
For those who have yet to register - please call NAWG at 202-547-7800 and ask to speak to Annie Leftwood for details on how to register. You can also
visit our web site at: www.wheatworld.org
to find a schedule of events and a registration form that can be printed out and faxed to NAWG at: 202-546-2638. Conference participants should make reservations at the Tropicana Hotel: 800-634-4000. Space is Limited
so CALL NOW!
Wheat Industry Conference & ExpositionTropicana Hotel - Las Vegas, Nevada
THIS WEEK ON CAPITOL HILL DASCHLE TO LEAD SENATE DEMOCRATS TO REWRITE FEDERAL FARM POLICY
A press release from Senator Daschle's office stated that "Daschle said the DPC hearing are necessary because the
Senate Agriculture Committee has refused repeated requests to take up the issue despite the fact that House Agriculture Chairman Larry Combest (R-Texas) plans to hold hearing this year in his committee. The current lack
of an adequate safety net is at the root of the continuing farm crisis, which has growing implication not only for rural America, but for people across the country, Daschle said. The hearing will include a diverse
group of economist, social experts and producers.
USDA/EPA/USTR COMMENT PERIOD EXTENDED FOR GRAIN CLEANING NAWG has already submitted its comments on behalf of wheat growers. If you have not submitted any comments, please do so at this time.
FAS TO HOLD PUBLIC HEARING ON CLEAN WHEAT INITIATIVE
FARMERS BRING SUIT AGAINST MONSANTO Farmers allege that the grains were
not adequately tested for health and environmental risks, and have subsequently been unsaleable on the world market.
The suit was brought in U.S.
District Court for the District of Columbia,and is being led by the firm of Cohen, Milstein and Hausfeld. Plaintiffs are receiving additional assistance from anti-biotechnology activist Jeremy Rifkin. Since the
suit alleges that Monsanto acted in conspiracy with other companies to fix prices and to monopolize the genetically modified corn and soybean markets, Plaintiffs are asking for treble damages, which allows for three
times the final damage calculation. Part of this conspiracy is attempted international control of water rights, to control the entire food chain, from growth, to production, to harvesting. The suit alleges severe
economic damage to farmers, because consumers, particularly in Europe have rejected genetically engineered crops. Farmers allege in the suit that they are less able to get products into market and sell them worldwide.
Monsanto has responded by stating the suit is without merit. Genetically engineered crops have been subject to intense scrutiny by USDA, EPA and FDA using internationally recognized standards. Monsanto also states
that the result of genetic engineering has been more high quality seed, which has been better resistant to environmental impacts and able to grow faster, which was the impetus for genetically engineered crop development
in 1996. Monsanto has now begun selling the seed to third world countries, perhaps an indication that the grains have met international standards.
Congressman Dennis Kucinich (D-Ohio) has suggested that he will introduce legislation to prevent farmers against such anti-competitive practices as Monsanto is being accused of. He sees biotech seed company
consolidation as detrimental to the average farmer, as such companies are able to control prices, markets and large-scale production, hurting the ability of small family farmers from getting products into the market.
Such consolidation is what has made genetic engineering possible, and Kucinich said consumer awareness of the effects of genetically engineered foods is also needed. Such legislation may include ability to purchase
non-engineered seed, banning of the "terminator" seed that renders offspring seed sterile and granting farmers the right to save seed for future planting. Kucinich has long been a supporter of farmers and an
opponent of genetically engineered crops. In November, he introduced legislation, which would require labeling of all genetically engineered crops, poultry and livestock. While the lawsuit specifically alleges
actions with regard to corn and soybean, wheat growers should pay attention to the development of the lawsuit and Representative Kucinich's legislation. If severe penalties are levied against Monsanto, or if the
legislation passes, we could see new limits placed on genetic engineering of crops, and large agricultural concerns retreating from their support of genetically engineered products.
NATIONAL DROUGHT POLICY COMMISSION ANNOUNCES HEARING The Commission was established to coordinate and
provide recommendations for the development of a Federal drought emergency policy. It also makes recommendations to the President and Congress on how to better integrate Federal drought laws and programs with states
local and tribal programs without infringing upon state control of water resources.
FSA WAIVES BENEFICIAL INTEREST REQUIREMENT This waiver will allow farmers to receive a loan deficiency payment (LDP) or marketing loan gain even though they have already marketed or "lost beneficial interest" for an amount of otherwise eligible
1999 crop. The beneficial-interest rule only applies to the 1999 crop year. The LDP rate will be the rate that was in effect on the date the producer marketed the commodity and in the county where the commodity was
delivered. FSA defines the date the commodity was sold as the date beneficial interest was lost. FSA county offices are requiring that for quantities sold, producers must obtain production evidence (this may include
self-certification by the producer). For those producers that fed the production to livestock or planted it as seed, the payment rate will then be the rate in effect on the date the commodity was fed or seeded. As for
marketing loan gains, the payment rate will be the rate in effect on the date that the farmer redeemed the loan. Restrictions included in the waiver are as follows: producer may not have already received an LDP or
marketing loan gain for the same commodity, must have been the actual producer of the commodity, and lastly the producer must have had beneficial interest in the commodity either at the time it was marketed or at the
time the loan was redeemed. GORE PROPOSES MORE FUNDING TO FARMERS FOR CONSERVATION PLANS The bulk of the plan, $600 million will provide additional income to those farmers who
voluntarily initiate conservation programs such as protecting water supplies and curbing erosion. Another $125 million will go towards USDA's Conservation Reserve Program (CRP) for farmers to establish more buffer
strips. Gore's proposal also asks to expand CRP by an additional 4 million. Additionally, $550 million will go to USDA conservation programs to assist farmers. According to Vice President Gore, "Farmers are among
the most important stewards of our land and water. Despite the accomplishments made in stopping soil erosion and protecting water quality, agriculture's environmental challenges are multiplying. The initiatives that I
am announcing today will provide needed financial support to our family farmers as well as tremendous environmental benefits for the American people." Vice President Gore conservation plan is part of a larger
Administration safety net for farmers.
GLICKMAN ANNOUNCES CRP SIGN UP USDA will continue to rank and evaluate prospective CRP offers using the Enviornmental Benefits Index (EBI). EBI is based on the potential
environmental benefits gained from enrolling the land in the CRP. EBI cutoff used in previous sign-ups may not be used for this one and for those who may have met previous EBI sign-up thresholds are also not
guaranteed a contract. Secretary Glickman stated, "CRP is a highly successful and competitive program. I encourage all landowners to find out about the EBI before the February 11, 2000, deadline, and to consult
with local USDA experts on steps they can take to maximize EBI points and increase the likelihood that their bid will be accepted."
TRADE NEWS FROM WETEC ADMINISTRATION URGES FOR PASSAGE OF PNTR The President reiterated that this
agreement is good for America, its farmers, manufacturers and investors. The market access achieved through the agreement will be an asset to all sectors of U.S. industry, while China will have no additional access to
the U.S. market. He also praised the additional safeguards placed in the deal that would protect against import surges and product dumping. Clinton stated, "This deal will not change China, or our relationship
with China overnight, but it is clearly a step in the right direction, and it is clearly in the short and long term best economic interest of the American working people." He highlighted the importance of having
China agree to abide by the same international trade rules the U.S. and 135 other countries conform to and described China's accession into the WTO as a win-win situation. In response to a question about the chances
of PNTR passage the President was optimistic, but added that it "should be scheduled for a vote at the earliest possible time." China is scheduled to meet with EU trade officials later this month as the only
outstanding bilateral negotiation that must take place before the accession process within the WTO may begin. The tone of these meetings will likely signal the potential timing for a vote in Congress. It remains unclear
if the EU will quickly bring a China deal together or if the process may yet drag on longer giving PNTR opponents more time to gird up for a difficult congressional battle late in the summer. However, smooth EU-China
negotiations could clear the path for a late May or early June vote. The U.S. wheat industry continues to place PNTR for China as a high legislative priority for the coming session and will make a vigorous push for
its passage. USDA - FAS COMMODITY DONATIONS FUTURE CALENDAR OF EVENTS NAWG |
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