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News from the Minnesota Association of Wheat |
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GLICKMAN COMMENTS ON CLINTON'S AG PROPOSAL Moreover, it was suggested that Glickman also emphasized the importance of the
Congress' approval of normal trade relations with China. According to news wire sources, Glickman feels the situation could become "catastrophic" for agriculture if Congress could not provide a permanent
normal trade relationship arrangement with China for their entry into the WTO. He further noted that China conceded a great deal in the areas of US citrus, wheat and livestock imports. Some USDA officials
have indicated the increased trade with China could be worth as much as $7 billion back to US farmers.
LUGAR SUGGESTS QUID PRO QUO ON TRADE PACT Senate Agriculture Committee Chairman Richard Lugar (R-IN) says that if the European Union continues to be the major thorn in the flesh of international trade negotiators,
it may be time to remind the EU that the region's security is not divorced from its commerce. "Our strategic relationship is NATO," says Lugar, yet "bit by bit we're being blockaded by unreasonable
European import policies." "We're going to have to talk with the Europeans about our strategic relationship, and that is NATO," Lugar said Monday at a news conference. "We protect Europe and have
been doing that for a long time. It's very important that in this relationship we have that security and commerce are not divorced. It's a comprehensive relationship." It's "vital" that a new round of
World Trade Organization talks get underway, he said. "There's no way for price to move dramatically unless we move goods. With Europe stopping us cold, we've got to talk about that. If we can't do it in the WTO,
we'd better get busy on bilateral (agreements)." Lugar said his committee may hold hearings on the issue of labeling biotech crops, as required by an agreement reached last weekend among 130 nations. The
agreement, sponsored by the United Nations, does not apply to processed foods. "I'm concerned about this whole business"of biotech labeling, Lugar said. The EU is putting "a damper on trade" with its
position against accepting any imports of crops that have been genetically engineered. "And it's under the guise of protecting the environment, not consumer safety." The chairman also said the Clinton
Administration's expected proposal for a supplemental income program for farmers again brings up the question of whether farmers are entitled to financial relief year after year. "So far, the answer is yes,"
he said. Beyond that, the crucial question is whether Congress should go back to supply controls or stay with a market economy for agriculture. President Clinton and Agriculture Secretary Dan Glickman have said they
don't want a return to supply controls, Lugar noted, but "if we're talking about raising price, it means lower supply."
TUESDAY MARKET COMMENTS
Commissioner's Column During the last few months, as we moved out of the 20th century and into the 21st, I have heard many people ask what the future holds for Minnesota
agriculture. In agricultural meetings I have attended across the state this winter, that question is usually on the program in one form or another. Of course I don't have all the answers. No one
does. However, by looking at trends, we can often anticipate the most appropriate responses. That also holds true when it comes to how government should respond to the changes taking place in agriculture.
One key change in the production sector that needs to be recognized is the shift from independence to interdependence. As harsh as it may sound, I believe that in order to survive in the new agricultural
environment, producers will need to stop thinking of themselves as "independent family farmers" and start thinking of themselves as "interdependent farm families." Despite what some politicians might say, that
doesn't mean that producers will need to give up their freedom and become mere employees of the demonized "corporate farms." Rather, it means that farmers who want to support a family will need to look for
opportunities to work cooperatively with other farmers and for ways to meet the needs of customers through direct marketing or niche marketing. Throughout the history of American agriculture, farmers have
prided themselves on their independence. My fear is that too many farmers might decide that this tradition of independence rules out new forms of marketing and value-added activity. By clinging stubbornly to
the word "independent" and waiting for government to solve the industry's problems, we may risk accelerating the demise of the family farm. I strongly believe interdependence will be a key word for the 21st
century. We also need to realize that the days are gone for producing what we want to produce when we want to produce it. Just as many other industries have adopted "just in time" supply practices, in
the 21st
century producers must get to know their customers and learn the farm products they want. Producers should ask themselves when they last took time to determine who their customer is and what they want. Too often, we grow what we want without determining if a suitable market exists for it.
When I visited Denmark several years ago, I learned that people in that country are required to be licensed in order to farm. That type of regulation may strike us as odd, but there are some things we can learn
from how the Danes farm. For example, as part of the licensing process, aspiring livestock producers spend a few days living as a guest in the home of a customer. Traveling to Japan, for instance, the Danish
students learn a wonderful first-hand lesson about the cultural tastes of their future customers. If more American farmers had this opportunity, I guarantee they would have a better perspective on what their end
users want. We've heard the message over and over about how U.S. agriculture must become more market-oriented. As a farmer myself, I sometimes joke that driving a tractor is more fun than researching markets or
crunching numbers. But thinking strategically about our marketing is a habit I think we ought to develop. Despite the current downturn in the agricultural economy, there are indeed opportunities out there.
I'm absolutely convinced that the ability to provide a specific product, in a specific time, to a specific market at a pre-arranged price will give Minnesota producers an edge. There is a new program called
FarmConnect that may prove to be a very useful tool for farmers interested in doing this. The Minnesota Department of Agriculture is joining with farm groups around the state to organize FarmConnect this winter.
Essentially, FarmConnect will be a cooperative that connects producer-members with specific market opportunities. It will help farmers by simplifying the process of uncovering market opportunities, while at the
same time, making it easier for customers to identify farmers who can supply them with the products they need. As I mentioned earlier, our production sector needs to develop closer ties to the end user. The
FarmConnect concept promises to do that. One advantage FarmConnect offers to end users is that through this effort, they will be connected to a significant number of producers capable of supplying the quantity and
quality of products desired. At the same time, this will benefit producers by helping them line up new and more lucrative direct marketing opportunities. Meetings about FarmConnect will be held across Minnesota
in February and March. I encourage all producers and those with an interest in the future of agriculture to attend a meeting and learn more about this concept. More information and the meeting schedule may
be found on the web site,
UPCOMING SPRING WHEAT BAKERS MEETINGS—FOR SHAREHOLDERS ONLY Spring Wheat Bakers has put together a variety specific wheat origination program where they may be purchasing wheat from their members in your area.
Wednesday, February 2: Thursday, February 3: If you are within 50 miles of the following towns, we would strongly urge you to attend one of
these meetings and become involved in the process. We need our members participation to make this successful. All of these locations
are potential collection sites for us and we offer them as points of reference only. To assure adequate seating at the meetings we would ask that you
contact Jennifer or Linda, at the office, to RSVP. The number is 1-800-963-9256.
MARKETING VIDEOS AVAILABLE THROUGH NDGGA
Contacts: (Bismarck, ND) – The North Dakota Grain Growers have five sets of marketing videos that are available to
marketing clubs throughout North Dakota and Minnesota. The videos, purchased by the NDGGA with assistance from an education grant from the U.S. Department of Agriculture's Risk Management Agency, cover five topic
areas: "Using Futures Markets," "A Marketing Strategy For Grain," "Speculation," "Using Agricultural Options," and "Understanding Basis." The tapes will be loaned by the NDGGA free of charge to marketing
clubs. The tapes supplement printed material supplied by North Dakota State University to many marketing group facilitators in North Dakota this winter. The videos cover all aspects of using futures and
options to increase your net price received for the crops grown on individual farms. "These tapes will be an excellent aid to help farmers better understand the whole marketing process," says Allan Skogen, NDGGA
president, and a Valley City producer. "The Grain Growers recognize the need for marketing education is growing each year. Providing these resources to producers is just a beginning of the education and
marketing services we will be providing this year." Skogen says the NDGGA also sought additional funds to supplement a web site and some written material to help producers get a better handle on marketing
strategies. "You are seeing the Grain Growers take steps to help our members try and take more control of their own destiny. Improving marketing skills is the first step in improving producers bottom line,"
he says. Marketing Clubs interested in using the videos should contact the NDGGA at 701-222-2216, by e-mail at agdakota@btigate.com, or through written correspondence to: North Dakota
Grain Growers Association, 4023 State Street, Bismarck, ND 58501
FARM RESUME CAN HELP PRODUCERS COMMUNICATE WITH
LANDLORDS, LENDERS Just as job applicants need to sell themselves to a prospective employer, crop producers sometimes need to sell
themselves to a potential landlord or lender. And a farm resume can be a valuable tool to help accomplish this, says Dave Resch, Scott County educator with the University of Minnesota Extension Service. "Like a
job resume, a farm resume highlights the qualifications of the producer and the producer's present farm business," says Resch. "Along with helping to communicate with a landlord or banker, a resume may also
help to sell services or products." Resch cites a list of items to include in a good farm resume. The list was developed by Joe Parcell, University of Missouri Extension economist. --Biographical background.
Include how and when your farm business became established. Also list your participation in community activities, and other members of the family and their skills and contributions to the farm business. --Management
objectives for the future. A brief statement of your ideas for the future may separate you from the competition. --Experience. List how long you have farmed and how many acres. Also include special training and
skills, along with specific licenses. These could include the Private Pesticide Training Certificate and others that are applicable. --Equipment. List major equipment available for your use. Be sure to note
equipment that will improve efficiency and that will help environmentally, such as by reducing erosion or compaction. --Environmental statement. Provide a statement supporting your position on soil management,
precision agriculture, and use of biotechnology. --Risk management strategies. Share your knowledge about risk management tools such as crop insurance, forward pricing, and futures markets. Be sure to include
strategies regarding production and environmental risks. --Insurance information. Provide types of insurance and their coverage and limits. --References. Just as in a personal resume, include names of people
and businesses that will provide information about you and your farm business. Be sure to include your bank. Always get permission from all references. --Other information. A photo of the present farm and yourself can
be helpful. This will provide a glimpse of how you handle and care for your present business. "Your resume should be consistent with your management philosophies and your operation's capabilities," says
Resch. "Along with the resume, you may want to design a bimonthly or quarterly newsletter for people and businesses you deal with. This can inform them about how the business is going during the year."
Web,V2MN,V4MN,A4 Resc0127 Source: Dave Resch, (612) 492-5410
THE MARKET ADVISOR: MARKETING OPPORTUNITIES IN THE MAKING Weather and the USDA's January Supply and Demand Report have been the driving forces behind the price rally that began in December. I would use
this rally to make additional sales of inventory and to begin sales of anticipated production. An oversold condition may have started the rally in December. The USDA report on Jan. 12 helped the rally, especially for
corn. Corn stocks were reduced by 280 million bushels, due primarily to increased feed use and exports. Dry conditions in South America and concerns about potential drought in the United States have added fuel to the
rally. Keep in mind that trend yields in 2000 could return prices close to the lows of 1999. Preliminary projections in November for the 2000 crop year by the Food and Agricultural Policy Research Institute (FAPRI)
indicate only modest improvements in wheat and corn seasonal average prices and new lows for soybeans. Exports-to-date (Jan. 13) are not that great for most crops. Soybeans, durum and soft red winter wheat are doing
the best. As a percentage of projected, export commitments (actual exports plus unshipped sales) are behind last year and the five-year average for all wheat, slightly greater than last year but behind the five-year
average for corn, and greater than last year and about equal to the five-year average for soybeans. Relative to last year, export commitments are up for durum and soft red winter wheat but seriously lagging for hard red
spring. These are reasons for bringing old crop sales up to 90 percent for wheat and corn and 65 percent for soybeans. Use further modest price increases to make additional sales. For new crop, I would focus on
$3.70 to $3.90 in the Minneapolis September spring wheat futures contract for making sales using elevator contracts and put options. Realistic price objectives are $2.50 to $2.70 in the December futures for corn and
$5.60 to $5.95 in the November futures for soybeans. Scale up sales to be 65 percent sold at the high end of the ranges. The low end of the price ranges for corn and soybeans assures farm prices at least equal to loan.
NEW PRODUCER CO-OP AIMS TO CONNECT FARMERS WITH MARKETPLACE These ag leaders will develop FarmConnect as an accelerated effort to connect producers with market opportunities.
"As producers, we realize that we need to break out of the rut of producing undifferentiated commodities and being price takers," says Art Brandli, Warroad, MN farmer and chairman of FarmConnect. "FarmConnect is
designed to build a system that will simplify the process of locating market opportunities for farmers, while at the same time, simplify the food industry's need to identify farmers who can supply them with the products
they need." "What we ultimately want to see is a win-win situation for both producers, and end-users," says Brent Sorenson, FarmConnect CEO. "FarmConnect is a producer-owned, market-driven organization that will
work with buyers to find out exactly what they need, and will work with producers to provide information on crop or livestock production to meet those needs." Sorenson says FarmConnect benefits end users by
connecting them to significant numbers of producers capable of supplying the quantity and quality of products desired, and benefits producers by identifying market niches and opportunities to add value to their
production. Brandli says the strength of FarmConnect will be in its ability to bring together active, innovative producers of a diverse number of crops and livestock. "The cost to join FarmConnect, at $500 per
member, was purposely set at a very low level to encourage the widest possible participation of producers," says Brandli. Minnesota farmers can learn more about FarmConnect at a series of meetings being held across
the state beginning in mid-February, or by calling FarmConnect at 218-281-8449. To find out where meetings are being held in your area, visit the FarmConnect website at CONTACT: Art Brandli, Chairman –
218-386-2083 or Brent Sorenson – 218-281-8449 |
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