News from the Minnesota Association of Wheat
Growers for Monday, January 24, 2000

RUSSIA 10 MIL. TONS SHORT OF FEED GRAIN?
The Russian news agency Itar-Tass is citing Vice-Premier Vladimir Shcherbak as saying today that a shortage of "fodder grain," the Russian term for corn, barley and other feed grains, may reduce meat production in Russia this calendar year.

Shcherbak said Russia harvested 54.7 million metric tons of grain in 1999. But with a rise in industrial production of almost 9% -- one of the strongest gains in years -- demand for food and fiber is rising.

Meanwhile, USDA General Sales Manager Dick Fritz will be in Russia Jan. 24-26 to sign the agreement providing 500,000 MT of U.S. ag commodity donations to Russia. He'll also be checking on the ongoing food-aid shipments from the first installment of food aid and on the economic recovery in Russia. The latter has some thinking the country will have enough cash to meet import needs, a situation which could indicate that the 500,000 MT donation package may it for a little while in terms of food aid.

SOY PROTEIN SEEN HELPING PREVENT BREAST CANCER
Reuters
WASHINGTON - U.S. researchers said on Jan. 20 that tests on rats had shown that soy protein can help prevent breast cancer.

Scientists at the Arkansas Children's Nutrition Center said they had found evidence that a diet containing whey and soy protein can reduce levels of the female hormone estrogen, which is linked to breast cancer -- the second leading cancer killer in women.

The research, funded by the U.S. Department of Agriculture, found that about 50 percent fewer rats in a test sample had mammary tumors when fed a soy protein diet as compared to a standard diet.

Soy is rich in isoflavones which sometimes act to stimulate estrogen and sometimes interfere with its effects, which is how the popular breast cancer drug tamoxifen works.

Tamoxifen blocks estrogen's bad effects on the breast, while stimulating its good side-effects such as protecting bone density. ``This significant new research, although preliminary, suggests that adding whey or soy protein to the diet may help protect women and children from developing breast cancer,'' said Agriculture Secretary Dan Glickman. ``These findings underscore the importance of research as the critical link between nutrition and health.''

A number of independent studies on small groups of women have shown that women who drank soy milk had lower levels of estrogen in their blood.

LONG-LASTING CLIMATE CHANGES AHEAD?
According to Agdayta (www.agdayta.com )unusually warm waters in the western Pacific and colder than normal waters in the eastern Pacific could be part of wider, long-lasting climate changes that could alter weather patterns around the world ,Reuters reports from scientists on Thursday.

Abnormally warm ocean temperatures may be part of a climate pattern that could last for a decade -- compared to the El Nino and La Nina patterns which generally last for a year or so, an oceanographer at NASA's Jet Propulsion Laboratory said. Scientists say they have detected a decade-long pattern they are now calling the "Pacific Decadal Oscillation." The latest thinking is that current weather patterns may have more to do with this oscillation than with the much-publicized La Nina.

The scientists at NASA's Jet Propulsion Laboratory in Pasadena said new satellite pictures showed a giant horseshoe pattern of higher than normal sea-surface levels developing over the last year was beginning to dominate the entire western Pacific ocean.

At the same time, a wedge of cold water in the eastern Pacific has lowered the sea surface, producing La Nina conditions -- bringing dryer weather than normal to North America while rainfall increased in South America. High sea surface levels are caused by warm water beneath the surface while lower levels are a result of cold water.

The latest photographs, taken by the French TOPEX/Poseidon satellite from Dec. 30 through Jan. 8, show the change could have significant implications for weather in North America, the oceanographer said.

PROJECTED COSTS, PRICES SIGNAL ANOTHER TOUGH YEAR FOR ND CROP PRODUCTION
After declining for two years, costs of crop production in North
Dakota will increase slightly for 2000, according to crop budgets for eight regions of the state published by the North Dakota
State University Extension Service. That increase, coupled with
low commodity prices, will make profits hard to achieve.

The cost of fuel is the key component driving up input costs for
2000. But Swenson is also projecting that interest rates and
machinery costs will be higher, compared to 1999.
Read more at http://www.ext.nodak.edu/extnews/.

TOP 10 CROP INSURANCE CHANGES IN 2000
1) Durum CRC program downsized—This year, only 15 counties in northern ND will be eligible for durum CRC coverage in 2000, with bordering counties eligible for durum CRC coverage through a written agreement. Producers outside of these areas, including Minnesota, will still be able to take CRC for durum, but the crop will be considered as spring wheat. The base price for calculating the minimum guarantee for durum CRC this year will be lower than in 1999.

The 2000 multi-peril durum price is the same as the spring wheat price of $3.15. The CRC durum and spring wheat prices will not be announced until March 10 because they are calculated based on the average of Minneapolis futures in February. However, September durum futures closed at $4.00 on January 13 while spring wheat September futures closed at $3.49.  That indicates a slightly higher guarantee for durum CRC may be expected over spring wheat CRC.

2) Are fall-seeded spring crops insurable?
Unusually warm, dry weather allowed some farmers to plant spring crops last fall. So the question has arisen: Are these crops insurable? In our consultation with crop insurance officials, they say fall-seeded canola will be treated similarly to rules for winter wheat. The farmer must request coverage for this practice in writing from their insurance provider no later than the sales closing date of March 15. If the insurance company agrees to provide coverage, and an inspection proves there is an adequate stand, the crop will be deemed insurable. However, if fall-seeded canola fails, it will have to replanted without reimbursement to be insurable.  RMA officials are in the process of researching the rules for other spring crops, such as spring wheat or sugarbeets, that were fall-seeded, and a decision will be made prior to the March 15 sales closing date.

3) Premium discount of 25% applies in 2000
A premium discount for crop insurance will apply again, but will be about 25% in 2000, depending on participation.  The discount was close to 30% in 1999, but the program went over budget, resulting in the lesser discount this year. The RMA says that most producers took advantage of last year's discount by generally increasing their coverage by 5%.  For example, those with catastrophic coverage bought up to 65%, and those with 65% multi-peril coverage jumped to 70%.

4) Minor premium rate adjustments
Minnesota producers can expect minor premium rate adjustments this year, up and down, county by county, depending on experience.

5) Coverage expansion for some crops
Canola coverage was expanded in Minnesota this year into Clay, Traverse and Wilkin Counties. Potatoes were expanded into Cass, Koochiching and Roseau Counties. Sugarbeets expanded into Pope and Stearns counties. Forage seeding was  expanded in some southern and central Minnesota counties, including Grant, Stevens, Traverse, and Wilkin.  Coverage for dry peas is now available in Kittson County and by written agreement elsewhere.

6) Written agreements provide "tailor-made coverage"
If coverage for a certain crop is not available in your county, you can always apply for a written agreement, RMA officials point out. A written agreement essentially provides "tailor-made" coverage for a particular crop when no other plan is available, with terms and eligibility handled on a case-by-case basis.

7) Quality adjustment changes
There are slight changes to quality provisions this year for corn, soybeans, grain sorghum, wheat, barley, oats, canola, and sunflower.  The change affects only the poorest quality and grades of grain, where the quality adjustment formula has been modified to more accurately reflect actual marketplace discounts.

8) Azure dropped, Foster added
The old malting barley variety Azure has been dropped from qualifying for malting barley price and quality endorsement, while the variety Foster has been added.

9) Higher buy-ups for corn, beans and beets
Higher 80% and 85% buy-up coverage levels are available this year for sugarbeets in Minnesota, and for corn and soybeans in some counties, at an additional premium.

10)  Better regional information and outreach
The MAWG has been urging the Risk Management Agency the last few years to improve the outreach efforts it has with producers in western Minnesota and with groups such as the MAWG.   That is now happening.  The RMA's Regional Service Office in St. Paul has a new administrator, Craig Rice, in place for almost a year now.  The St. Paul office is now doing a better job on its outreach efforts and in communicating with the MAWG and others.  In fact, the Minnesota Wheat web site has a link to fact sheets compiled by the RMA on various crops, including a list of important dates and an outline of basic provisions.  Go to factsheets to read more.

See your crop insurance agent for more specific details on adjustments to final planting dates, production practices, expanded coverage for various crops in different counties, and other facets of crop insurance.

TOP FIVE ISSUES THE MAWG WILL BE TRACKING IN 2000
1) Crop insurance reform
Some sort of crop insurance reform is likely in 2000, and it could very well be a hybrid of three bills (one in the house, two in the Senate) being considered by federal lawmakers.

The U.S. House already passed a bill, HR 2559, last October. It is known as the Combest Bill, after House Ag Committee Chair Larry Combest of Texas.  Among its features, the bill would offer improved coverage at better rates, offer risk management tools to livestock producers, and limit reductions in insurable yields due to crop losses from a natural disaster. Under this bill, 60% of the county's average yield would be the lowest yield assigned to a farmer for a crop year when actual production history is calculated to arrive at insurable yields.

The bill now awaits conference with a plan in the Senate, where there are two leading proposals, a plan sponsored by Senators Pat Roberts of Kansas and Bob Kerrey of Nebraska, and a bill sponsored by Senate Ag Committee Chair Richard Lugar of Indiana.

The Roberts/Kerrey bill is similar to Combest's House bill, but would include more administrative changes to the federal crop insurance system itself, as well as more pilot programs to test new ideas, such as coverage for livestock, specialty crop, and low-risk producers. The Lugar plan would offer producers direct payments in exchange for implementing certain risk management practices.

 The MAWG and the National Association of Wheat Growers supports the Roberts/Kerrey plan, as it offers the best coverage to wheat growers nationwide.  We expect federal crop insurance legislation to be taken up in earnest late spring or early summer.  A melding of the similar Combest and Roberts/Kerrey plans would move faster in Congress than a marriage of the Combest and Lugar plans.  One possibility in the Senate is that Lugar's plan could be included in the Roberts/Kerry bill as a pilot program.  Any legislation would likely begin in the 2001 crop year.  Along with keeping crop insurance reform efforts moving along, another key objective of is to keep the budget resolution that earmarks $6 billion to reform intact.

2) Federal farm bill changes/Market loss assistance
Some ag leaders in Congress will be holding hearings across the country late this winter early spring on recommendations to fix the current farm bill. The NAWG has already constructed a counter-cyclical proposal that will be finalized at the NAWG's national conference next month.  Under the NAWG's proposal, the payment would be triggered whenever the national average price received by producers falls below a "trigger price". The "trigger price" would be established by subtracting the current year's production flexibility payment rate from a base price, say $4.00, since this was the "target price" of the old farm bill, and a price standard that would be acceptable to policy makers. The payment rate would be equal to the difference between the trigger price and the higher of the loan rate or the average price received.  Current law would not be altered by this proposal except for the additional triggered payment. In essence what this would do is guarantee producers no less than $4.00 per bushel on their contract bushels.  It would not be tied to production—only price. 

How a counter cyclical payment might work:
                  $4.00 trigger price
                   -  .60  (about the avg wheat payment under F2F)
                  $3.40
                 - 2.75 (may be loan rate or national avg price)
              =      .65 cent payment on same contract bushels of F2F
Current farm bill not altered, with exception of additional triggered payment based on FSA program yields. System of marketing loans and loan deficiency payments remain in place.

The fact that it is an election year will both hurt and help efforts to reform the farm bill. On one hand, lawmakers will be more likely to listen and to act.  Control of both the Senate and the House is up for grabs, and the rural vote still matters much to both Republicans and Democrats.  On the other hand, legislative work will be cut short by campaigning.  What might happen is that federal lawmakers might propose a tune-up to the farm bill to take effect in 2001, and simply pass another market loss assistance package this year.

3) Budget surplus makes MN farm assistance promising
With Minnesota enjoying a budget surplus projected at well over $1 billion, another state farm assistance measure from the 2000 state legislature is promising, according to Bruce Kleven, the MAWG's state lobbyist in St. Paul.  Kleven says several ideas for assistance may be discussed, including another property tax rebate, targeted relief, or even a short-term state CRP program.  The session begins at noon on Feb. 1, and Kleven expects lawmakers to recess sometime in April, then reconvene and adjourn after reviewing Ventura's actions on bills that reach his desk.

4)  WTO Negotiations
The negotiations are expected to resume in Geneva this year, although some analysts predict serious negotiating won't heat up until after the U.S. elections.  At any rate, what happens really is important to our competitiveness in global grain markets, so we will continue to follow and shape what's happening.  WTO positions on five trade issues important to U.S. wheat—economic barriers, export subsidies, state trading export monopolies, unilateral sanctions, and biotechnology—are explained on the website for U.S. Wheat Associates at: http://www.uswheat.org. 

5) Membership
The benefits of MAWG membership can be placed in four distinct categories:  1) To have a legislative voice in our state and national capitols.  2) Educational and informational benefits, including meetings like this and information such as www.smallgrains.org , the MAWG's Small Grains Update newsletter, and Prairie Grains magazine. 3) Tangible benefits, including a chance at winning Puma Herbicide from AgrEvo, a Polaris ATV from Novartis, even the use of an R72 Gleaner combine from AGCO. With a qualifying purchase of Achieve from Zeneca, you can even get your membership free.  There's also discounts on the educational seminars and conferences that our association provides. 4) Social and fellowship aspects.  You are able to meet other people, build friendships and enjoy activities will fellow wheat producers.

CROP DISASTER PROGRAM SIGNUP ENDS FEB 25
Crop Disaster Program assistance is for farmers who suffered losses to 1999 crops due to natural disasters. Farmers are eligible for compensation for 1999 crop losses directly attributed to adverse weather and related conditions. Many farmers in MN suffered from weather problems at planting and at harvest, and are encouraged to look into the program.

The CDP covers insured crops at 65% of crop insurance market price elections, uninsured crops at 60% of crop insurance price elections, and noninsurable crops at 65% of the 5-year average National Agricultural Statistics Service (NASS) price. Advance payments at 35% of the total projected CDP payment will be issued when a complete application is approved. CDP benefits are limited to $80,000 per person.

Further information is available at local Farm Service Agency offices.

CROP DISASTER PROGRAM QUESTIONS AND ANSWERS COMPILED BY THE ND FSA OFFICE
The Crop Disaster Program began December 13 and is expected to end February 25, 2000.  The following are questions and answers for the program:

           1. What are the eligible disaster conditions?
               Crop losses must be directly attributed to adverse  weather and related conditions.

            2. When and where will applications be taken from producers?
                Applications will be accepted at local Farm Service Agency offices beginning December 13, 1999.  The sign-up period is expected to end February 25, 2000.

             3. When will payments be issued?
                 An advance payment of 35% will be issued after the application is approved.  Final payments will be issued in April.

             4. What rates will be used to calculate payments?            
                 The 1999 Crop Disaster Program payment rates are:
            a.   65 percent of the maximum established by Risk Management price for insured crops

             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?
                 If the value of all eligible applications exceeds the available money, the payments will be factored.               

            6. Which crops are eligible for assistance under the 1999 single-year provisions?
                All crops for which Federal Crop Insurance is available, regardless of whether insurance was purchased and all crops eligible for NAP.

            7. Will pasture losses qualify for assistance?
                 Pasture losses may be made under the Livestock Assistance Program and NAP, if eligibility requirements are met.   Therefore, pasture losses will not be covered under the 1999 Crop Disaster Program.

            8.  Will assistance be available for prevented planting?
                 Prevented planting will be covered under the 1999 Crop Disaster Program.  Payment will be calculated separately from planted acreage.

            9.  Is there any loss threshold?
                To qualify for the 1999 Crop Disaster Program, losses must exceed 35 percent of normal production.  Producers will only be compensated for losses greater than the threshold.

            10. Under the 1999 Crop Disaster Program, will FSA use an "historic" yield for determining the 1999 production loss?
                   Yes, historic production will be the higher of a producer's actual production history or the NASS 5-year county average.   If NASS data is unavailable for non-insured crops, State  Committees (STC) will establish yields using the best data available including county expected yields previously established for NAP.

            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?
                    FSA will not calculate any approved yields for disaster purposes only.  Therefore, producers that do not have an Actual Production History/approved yield must accept the county average yield.

            12. Are quality losses covered under this program?
                  Yes, but quality adjustments can not be applied on crops that the Risk Management Agency has already adjusted due to quality.          

             13.  Will eligibility be calculated on a farm or unit basis?
                    Units will be used.  If units have not been established for a producer, they will be established using basic units according to NAP and crop insurance rules.

            14.  For the 1999 Crop Disaster Program, will harvested and unharvested payment factors apply?
                   Yes.  There will be prevented planting and unharvested payment factors established for insured, uninsured, and non-insurable crops.

            15.  Are conservation compliance provisions applicable?
                   Yes.  Conservation compliance provisions apply to all producers.

            16.  Is there a payment limitation?
                   An $80,000 per person payment limitation will apply.  Any applicable payment limit will be  applied before the determination of any National payment factor.

            17. How do signed crop insurance waivers affect eligibility?
                   The signing of a crop insurance waiver will not prevent producers from receiving a disaster program payment, if they are otherwise eligible.

            18.  Will producers be required to  purchase crop insurance in future years?
                    Legislation requires producers who did not purchase crop insurance for 1999 to purchase crop insurance for 2000 and 2001 crop years on crops that receive a Crop Disaster Program  payment.

            19.   Are producers eligible for this program if they are also receiving benefits under different programs for the same disaster?
                     Yes. A producer will be eligible to receive benefits under this program and NAP, Multiple Peril Crop Insurance, and FSA Emergency Loans.

            20.  What year's gross income will be used to determine if the $2.5 million annual gross income limitation is exceeded?
                   The producer's income from the 1998 tax return will be used.

            21.  If no appraisal was performed for a crop, what will be required of an applicant to verify acreage not harvested?
                   The producer will be required to certify to disposition of the crop and whether or not any secondary use or salvage value was obtained.  If salvage or secondary use value was received, the producer shall furnish available records, that is, weight tickets, sales receipts, for County Committee use in determining secondary or salvage value obtained.  If no records of any kind are available, the Committee may require the producer to provide input cost, that is, seed receipts, fertilizer bills, etc., to verify a crop was planted.

            22. What kind of production evidence is required? 
                   Production records must be acceptable to the County Committee and must be verifiable.  Producers must provide records of production from any source.  If no records are available, a producer must provide a certification as to disposition of the crop and the amount of production.   The County Committee shall establish and the State Committee shall approve a maximum loss level for the crop based on other  county losses.  Producers without evidence will receive the higher of their certified production or the State Committee-approved maximum loss level for the crop.

            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?
                  Those producers no longer farming or having an interest in an insurable crop in 2000 and 2001 will be eligible for 1999 Crop Disaster Program payments.

            24.  If a producer had insurance in 1999, is the producer exempt from taking insurance in 2000 and 2001?
                   If the producer had insurance on all insurable crops in 1999, legislation does not require that producer to obtain insurance in 2000 or 2001.  Premium reductions will apply for 2000 to encourage producers to continue to purchase insurance.

            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?
                   Applications will be taken separately for each producer.

             26.  Prevented planting (corn) is followed by planting a second different crop (canola) that fails.  Is the payment earned on both crops?
                    If a subsequent crop is planted on a prevented planted acreage, the prevented planted crop is not eligible unless the second crop is a cover crop.

             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?
                    The County Committee may require producers to provide records from other units to use in determining acceptable production or to assign production.