News from the Minnesota Association of Wheat
Growers for Monday, March 13,  2000

CLINTON SENDS CHINA LEGISLATION TO THE HILL. On Wednesday, President Clinton sent legislative language to the Congress that would give him the authority to terminate the "application of Title IV of the Trade Act of 1974 to the Peoples Republic of China." This action would grant China permanent normal trade relations status upon their accession to the World Trade Organization (WTO).

In a release from the White House Press Secretary the President touted the advantages of the agreement signed with China last November. The release states, "The agreement will dramatically cut import barriers currently imposed on American products and services. It is enforceable and will lock in and expand access to virtually all sectors of China's economy." The President goes on to say, " We give up nothing with this agreement."

The agreement is enforceable and the U.S. will not have to amend any trade laws. The release states that "our protections against unfair trade practices and potential import surges are stronger with the Agreement than without it." The White House release also emphasizes the importance the Administration will place on ensuring China's compliance.

China has had the advantage of one-way trade into the United States, this agreement allows the trade to flow both ways as U.S. farmers, workers and companies will now have unfettered access to the Chinese market. Failure to approve permanent normal trade relations would only serve to give farmers in Canada, Europe, Australia and Latin America greater access while U.S. farmers are again forced to sit on the sidelines and watch a lucrative market be usurped by our competitors. As in the case of formally sanctioned markets such as Iran, Libya and Sudan or currently sanctioned ones like Cuba the U.S. would be unilaterally sanctioning their own farmers.

In a speech before sending the legislation to the Hill the President concluded by stating, "If you believe in greater openness and freedom for the people of China, you ought to be for this agreement. If you believe in a future of greater prosperity for the American people, you certainly should be for this agreement. If you believe in the future of peace and security in Asia and the world, you should be for this agreement. This is the right thing to do. It's an historic opportunity and a profound American responsibility."

IRANIAN REFORMS MAY LEAD TO GREATER TRADE RELATIONSHIP.
The L.A. Times reported Tuesday that the United States may be close to ending sanctions on caviar, carpets and pistachios from Iran. The paper cited an unnamed U.S. official who said the Administration is considering goodwill gestures towards Iran in response to the recently held elections.

During the parliamentary elections a coalition rode a pro-reform message to a significant majority. The coalition supports reform minded Iranian President, Mohammad Khatami. This event could lead to greater communication between the two governments and increase the role trade plays in this relationship.

Last spring the Administration lifted unilateral sanctions on Iran, Libya and Sudan, for food and medicine supplies. While success has been achieved in the Libyan market this action has yet to bear fruit for wheat producers in the Iranian market. A major obstacle has been the insistence of Iranian officials that trade be able to flow less impeded in both directions. The U.S. currently does not allow the importation of caviar, rugs and pistachios from Iran making them less agreeable to major purchases of U.S. commodities.

Reacting to the story, an Iranian official said that if the sanctions on Iranian goods were eased they would "buy wheat and other products like medicine."

CHECK TEMPERATURE, CONDITION OF STORED GRAIN AS WEATHER WARMS
The warm weather  of late winter has caused concern among some crop producers who have dry grain stored on their farm. There are two main steps for maintaining stored grain quality, according to Bill Wilcke, engineer with the University of Minnesota Extension Service.

"First, measure the temperature at several points in the grain bin or pile," says Wilcke. "Second, check the condition of the stored crop, looking for mold, insects, and bad odors."

Whether to run aeration fans is often a concern. Wilcke says if the grain temperature is between 30 and 50 degrees F and no quality problems are evident, no aeration is necessary. "Just keep checking the grain every week or two, and only run the fans if you detect problems later on," he advises.

If the grain is warmer than 50 degrees, watch for weather in the 30 to 50-degree range and operate fans to cool the grain, says Wilcke. If the grain temperature is much less than 30 degrees, watch for weather in the 30 to 50-degree range and operate fans to warm the grain.

"Managers who decide to warm grain need to be aware that some condensation occurs during the grain warming process," says Wilcke. "Once they start the fans, they need to keep them running until the warming front has moved all the way through the bin."

Wilcke says one of the two basic reasons for aerating dry stored grain is to keep the grain cool enough so that molds and insects are not active. This means keeping the temperature of stored grain less than 60 degrees F at all times. It also means it's generally best to avoid running fans when the outdoor temperature is above 60, whether the fan controls are manual or automatic.

"Molds and insects are less active at lower temperatures, so it's better to keep stored grain well under 60 degrees," says Wilcke. "In fact, in the upper Midwest, we suggest winter storage temperatures of 20 to 30 degrees, and summer storage temperatures of no more than about 50."

The other basic reason for aeration is to keep the grain temperature close enough to the average outdoor temperature so that there are no problems with moisture migration and condensation. If stored grain is too much warmer than outdoor temperatures during winter, moisture will tend to move from the warm areas of the grain pile to the cold areas. Moisture will condense on the cold grain. Over time, the re-wet grain will develop mold and insect problems and start to heat and form a crust.

Again, Wilcke recommends winter stored grain temperatures of 20 to 30 degrees F  in the upper Midwest. "That's close enough to average outdoor temperatures to avoid moisture migration in most cases," he says.

In summer, if the grain temperature is too much colder than the outdoor air, any warm, humid air that comes into contact with the cold grain will cause moisture to condense on the grain. "Holding grain at 30 to 50 degrees during summer in the upper Midwest is usually close enough to the average outdoor temperatures that we can avoid major condensation problems," Wilcke concludes.

TRANSFERRING YOUR FARM OR RANCH TO THE NEXT GENERATION
Is it the right time to transfer?

By Marsha A. Goetting, CFP, CFCS, MSU Extension Family Economics Specialist

Even though transferring the farm/ranch usually takes several years, here are several factors to help you decide when is the right time to begin a transfer.

Your financial security in retirement
Do a forward projection of retirement income and expenses. Will you and your spouse have sufficient annual income to get you through the retirement years? Have you made provision for higher than normal medical expenses or nursing home expenses?

The financial position of the entering rancher
Give serious thought and planning to the financial position of the younger generation. Do they have some equity to put into the farm/ranch? Can they afford the payments to you? Will they have a business of sufficient size and efficiency to generate an adequate living for themselves? If the answer to these questions is "no," perhaps you had better delay transferring until they are in a better position, or plan to make major concessions to assist them.

Your social security position
If you have contributed at a high level during your lifetime to the Social Security system, your best option may be to retire at age 62. Retiring at 62 may generate $6,000 to $12,000 more in annual Social Security checks for you and your spouse depending on the amount you paid in. In addition, you will no longer have to make payments into the system.

If you have been a high income person and contributed for 35 years, it is unlikely that additional contributions will significantly raise your benefits.

If you have contributed to Social Security on a low level of earnings during your lifetime, it may pay you to delay retiring until age 65. You can build your benefit package if you are able to make larger contributions to Social Security during these last few years. High earning and high contributions could have a significantly positive effect on your Social

Security benefits.
Every individual is different regarding Social Security contributions. Contact your local social security office about your contributions and benefits before making any decisions about when to retire.

Your emotional readiness and willingness to let go

Transferring assets and management to someone else means you no longer will be in control of the farm/ranch. If you can not let go, or if you can not stand to see someone else in the power role, do not retire until you can accept a reduced role.

If the farm/ranch is your whole life, if you have spent nearly every waking moment building and working on this farm/ranch, and if you have little else in your life-expect some problems. Leaving the farm/ranch should be planned for well in advance.

Your health
Transferring your farm/ranch to someone else can afford you time to do the things you have always wanted to do. Retiring early while your health is good may give you more time to travel or do those things.

Successful retirees are usually committed to good physical and mental health. They eat right, exercise regularly, and keep mentally fit by reading, thinking, and conversing. Are you ready to do the same?

Adapted with permission from Erlin J. Weness, Area Extension Educator, Farm Management, Minnesota Extension Service, University of Minnesota.

For more information...
The MSU Extension publication "Transferring Your Farm or Ranch to the Next Generation" (EB 149) includes a set of worksheets-one for the older generation and one for the younger. ) The book is available for $2 from MSU Extension Publications, PO Box 172040, MSU, Bozeman, 59717. "Talking toAging Parents About Finances" (MT 9324 HR) is free on the Web at www.montana.edu/wwwpb/pubs/estate.html or for $1 shipping from MSUExtension Publications.

ANOTHER COMPANY TO CUT SOYBEAN CRUSH Cargill plans to close an Alabama soybean crush plant, making it the latest in a string of international grain companies to announce such plans.

Despite the recent announcements from other grain company giants, USDA's monthly supply/demand data issued earlier today showed no change in its estimate for soybean crush during the current marketing year. 0 0

Crush margins, or the cost of soybeans subtracted from the combined price of the resulting soymeal and soyoil, hovered in the mid-20-cents-a- bushel range for most of this year, and rose to the low 30-cent level after ADM's announcement.

The industry's largest processor, Archer Daniels Midland Co., announced March 1 it will close indefinitely its Helena, Arkansas; Fredonia, Kansas; and Taylorville, Illinois, crushing facilities beginning March 13. On Feb. 10, Bunge Corp. said it will close its Vicksburg, Mississippi, soybean crushing plant indefinitely until margins improved.

Cargill Inc. plans to close its Guntersville, Alabama, soybean crushing plant indefinitely in mid-April because of large oversupply of soybean products and stagnant world demand, Reuters news service reports. "The poor business environment, though global in nature, has impacted the U.S. crush industry the most negatively," Cargill states. "Cargill has been curtailing operations at all of its U.S. plants for the past 18- 24 months."

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