NCGA Pushes for Optional Revenue Based Farm Bill Program
In a letter to Senate and House Agriculture Committee leadership, NCGA President Ron Litterer urged support of a viable, optional revenue countercyclical program in the new farm bill. Litterer stressed the importance of an alternative risk management program that better protects producers against changing market conditions and shortfalls in production.
“NCGA recognizes the importance that a revenue-based safety net option does no harm to current farm support programs, but we must oppose changes that will, in effect, result in a meaningless option,” Litterer wrote.
Litterer said that a viable revenue counter cyclical program option is imperative given the new market realities and challenges farmers face – such as low yields from drought, floods and other adverse weather conditions. He indicated that escalating fertilizer, seed, chemicals, and land costs have significantly increased risks for farmers.
Litterer added, “We are deeply concerned, though, that savings reported to be generated by the Average Crop Revenue Election (ACRE) program may be maximized to offset increases for funding existing price based programs.”
“Since the 2002 Farm Bill’s enactment, our current policy of fixed price supports has functioned well as a risk management tool in times of chronic low prices due to continuing surpluses,” Litterer continued. “Because marketing loan payments are based on actual production, low yields lead to low support even though revenue is low. Federal crop insurance can trigger both indemnities and price support as a result of significant crop losses or a decline in prices, but examination of participation data in crop insurance reveals that most producers purchase policies with deductible losses from 25 to 35 percent.”
On Wednesday, House Speaker Nancy Pelosi appointed conferees to participate in the farm bill negotiations with the Senate conferees. The House-Senate conference met for the first time Thursday to discuss the House’s latest farm bill proposal.
The current farm bill is set to expire April 18.
Click here to read the NCGA letter to Congress.
NCGA Comments on House Action Denying the Colombia Free Trade Agreement Vote
The NCGA said it is disappointed with Thursday’s 224-195 House vote lifting the requirement that the Colombia free trade agreement be considered within a 90-day window. The House action decreases the likelihood that the trade agreement with Colombia will be considered later this year.
“While we are disappointed in today’s decision, we strongly hope that Congress will be willing to consider and weigh the real benefits of the Colombia free trade agreement to U.S. agriculture and corn growers nationwide,” said NCGA Joint Trade A-Team Chairman Bill Hoffman. “We urge Congress to vote on the trade agreement this year.”
The Colombia TPA would provide immediate access to Colombia’s market for 2.1 million metric tons of corn at zero duty. The U.S. feed grain industry will benefit from immediate duty free access to the Colombian market for distillers dried grains and corn gluten feed/meal. NCGA estimates that U.S. corn dried distillers grains production will reach more than 31 million tons by 2010/2011.
NCGA Sees More Reason for Optimism on Corn Acres
A rise in the projected use of corn for export and as livestock feed provides increased room for optimism about corn acreage, the NCGA said Wednesday.
“Many analysts expect growers to increase the number of acres planted to corn, beyond the 86 million estimated last month by the USDA,” said NCGA Chairman Ken McCauley. “We’re already looking at the second-highest acreage in over 50 years and market fundamentals are strongly signaling for growers to consider planting more corn to meet increasing demand.”
McCauley, a grower from White Cloud, Kan., said he also took another look at his planting intentions and budgets following recent comments by Darrell Good, a University of Illinois agricultural economics professor. “The pendulum has swung decidedly in favor of corn at this point,” Good said in an Associated Press story on April 7. For a lot of the central and northern Illinois farms, he added, “corn pencils out easily” to be more profitable than soybeans.
In its monthly World Agricultural Supply and Demand Estimates (WASDE), released today, USDA projects increases in corn exports and use of the grain for livestock feed while projecting a decrease in the use of corn for ethanol. The report provides the following updated figures for corn consumption:
Feed and Residual: 6,150 million bushels (up 200 million from March WASDE report)
Ethanol: 3,100 million bushels (down 100 million from March)
Other Food, Seed and Industrial: 1,360 million bushels (up 5 million from March)
Total Domestic Use: 10,610 million bushels
Exports: 2,500 million bushels (up 50 million from March; a record high)
Total Use: 13,110 million bushels
Ending Stocks: 1,283 million (down 155 million from March)
The USDA also upgraded the season average price for corn to a midpoint of $4.30 per bushel. McCauley notes while this is an increase from the previous projection, many farmers will receive far less than the prices of $6 or more currently quoted in the main stream media from the Chicago Board of Trade.
Click here to read the entire USDA WASDE Report
Click here for the Associated Press story on corn acreage
Now Hear This: A Better Way to Get Top NCGA News
The NCGA, which has been making audio files of its top news stories available for some time, is now providing another convenient way for listeners to get them – through podcast subscription.
“We’re always on the lookout for ways to improve service and make it more convenient for our key audiences to get our information,” said Fred Stemme, NCGA vice president of marketing. “More and more, people prefer to listen to the news while they are doing something else – rather than having to sit down and read it – and podcasting is a good tool for getting the word out about what we do.”
A podcast is a short, recorded radio program in the form of a digital audio file, usually in the popular MP3 format. This audio file is included in a feed (called RSS) that a computer or web service can subscribe to and automatically download for you to listen to either directly on your computer or on a portable audio player, such as an iPod. Many free subscription services are available.
Click here for more information.
NCGA Supports U.S. Colombia Free Trade Agreement
Fast track process for the U.S.-Colombia free trade agreement (FTA) got under way today, notes the NCGA.
“The Colombia free trade agreement will open up new opportunities for corn growers,” said NCGA President Ron Litterer. “Under the agreement, the United States will have immediate access to Colombia’s market for 2.1 million metric tons of corn at zero duty.”
According to the Office of the United States Trade Representative (USTR), 92 percent of U.S. imports from Colombia face absolutely no duty as a result of unilateral U.S. preference programs. Similarly, Colombia’s tariffs on most imports from the United States range from 5 to 15 percent with some as high as 35 percent.
“The U.S. feed grain industry will benefit from immediate duty free access to the Colombian market for distillers dried grains and corn gluten feed/meal,” said NCGA Joint Trade A-Team Committee Chairman Bill Hoffman.
NCGA estimates that U.S. corn dried distillers grains production will reach more than 31 million tons by 2010/2011.
“Enhanced market access for distillers dried grains products is becoming increasingly important as expansion of the U.S. ethanol industry continues to boost production of these feed products,” Litterer added.
Congress will vote on the matter within 90 days.
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