Administration Backs Corn Gluten Industry, Drops Quotas for Wheat Gluten Imports

More than 5 million tons of U.S. corn gluten should soon be free of EU-imposed duties, thanks to the Bush Administration decision this week to decline to extend quotas on wheat gluten imports. The decision was hailed by NCGA and allied groups such as the Corn Refiners Association (CRA), which have opposed the extension of U.S. wheat gluten quotas. The current quotas - set to expire June 1 - have been in effect for the past three years. Last January, a WTO panel ruled that the U.S. quotas failed to comply with WTO safeguards law, and the EU retaliated with a 5 euro per ton duty on imported U.S. corn gluten feed. The U.S. wheat gluten industry sought a two-year extension of the current quotas, and was supported by the U.S. International Trade Commission. NCGA and the CRA adamantly opposed this extension, citing the EU's promise to continue its retaliatory duties against U.S. corn gluten. Under the Administration's action, the wheat industry will receive compensation from USDA for the EU's unfair practices, while the corn industry will be free of the retaliatory actions. "This is a win-win for both corn and wheat farmers," said Brent Porteus, PPAT action team chairman.

Grower President Explains Biotech Issues in Thailand

NCGA Lee Klein returned to the United States Saturday after a recent trip to Thailand, where he explained the views of the nation's corn growers on biotech to Thai farmers and government officials. For more information on this story, please go to here.

National Corn Growers Welcomes Indiana Corn Checkoff

NCGA welcomes the Indiana Corn Growers Association's recent milestone. Indiana became the 20th state with a corn checkoff when Gov. Frank O'Bannon approved a measure establishing a 1/2-cent per bushel checkoff that begins Sept. 1. For more information on this story, please go to here.

NCGA Seeks Speedy Solution to StarLink Food Tolerance

In a letter to EPA Administrator Christine Whitman, NCGA President Lee Klein urged the agency to conduct a timely review of potential Cry9C allergenicity as it relates to human food use. Asserting NCGA's belief that EPA has the necessary data to determine the allowable presence of StarLink corn that can be allowed in food products, Klein noted that continued uncertainty on this issue harms U.S. corn exports. The establishment of a tolerance standard also would provide guidance for trading partners interested in setting such standards, particularly within the EU. "We ask that EPA devote the necessary resources to analyze the available information and make a final determination on the allowable presence of StarLink corn in food as quickly as possible," Klein wrote. He added that EPA should determine if approved testing methods on all lots of raw corn delivered to dry mills and corn destined for food starch production in wet mills will provide adequate assurance that consumers would not be exposed to more than "extremely" low levels of Cry9C. Any concentrations of Cry9C exceeding 20 parts per billion (ppb) would then be diverted to feed or industrial uses. "If the current situation is allowed to persist, the United States will lose valuable export customers and the longer these issues are not resolved the more market share U.S. corn farmers will lose. . . EPA must make this a priority and reach a decision as soon as possible," Klein concluded.

NCGA's Continues Work on New Farm Bill

Continuing its efforts on the new Farm Bill, NCGA was busy this week both internally and with congressional colleagues. The Public Policy Action Team met via conference call on Thursday to discuss the status of the proposal and to devise NCGA's plan of work on the issue for the next two months. On Friday, June 1, NCGA convened a conference call with state executives for a similar update and strategy session. In the last few weeks NCGA has been busy visiting with interested congressional offices on the proposal. NCGA has had numerous follow-up meetings following the April 25 testimony before the House Agriculture Committee and Senate offices interested in learning more about the concept. NCGA continues its working relationship with AgriLogic, Inc., for economic analysis on the counter-cyclical income support proposal. At press time, AgriLogic is awaiting data from NCGA members for model-farm analysis. Now that many NCGA members are nearing the end of their planting season, we hope the remainder of the data will be submitted so that final analysis can be completed.

Government Will Sell 100,000 Tons of Sugar, USDA Announces

In a move designed to help the sugar industry, USDA announced yesterday that it will sell up to 100,000 tons of refined sugar for conversion into ethanol. NCGA immediately sought government assurances that this decision will be managed in a manner that will not cut into corn grind, and will be used to enhance the corn-to-ethanol conversion process. USDA noted that it will impose a 10,000-ton-per-purchaser limit to ethanol producers, which the agency said could produce up to 15 million gallons of additional fuel. In a released statement, it said, "Ethanol producers can absorb this sugar without negative impacts on the domestic corn market." Ethanol producers have stated that managed correctly, small amounts of refined sugar can be added to the corn stream in a dry-mill ethanol plant without reducing corn use. If that's the case, this development can be beneficial for both corn and sugar because it can reduce excess sugar stocks while not reducing corn grind. And a reduction of sugar stocks can diminish the negative impact sugar stocks have had on fructose prices and trading relationships with Mexico.

NCGA Talks Biotech Regulations with Industry, Government

The NCGA Biotech Working Group (BWG) has been busy recently carrying out directives issued by the Corn Congress at this year's annual meeting in San Antonio. For more information on this story, please go to .

Distillers Grains Technology Council

Tracy Snider, NCGA's manager, livestock information and programs, has been working diligently on distillers grains and other co-product information as well as staying up to date with new and revisited ideas by attending the 5th Annual Distillers Grains Technology Council Symposium in Louisville, Ky., May 23-25. The conference was focused on energy and transportation costs specifically related to drying of distillers' grains and the marketing opportunities for wet distillers grains. This was a well-attended conference with representation from both the fuel and beverage alcohol industries all with vested interest in the quality, consistency and sale ability of spent grains to the livestock industry. Snider is highly interested in cooperative marketing techniques for distillers' grains as well as product differentiation in the highly competitive feed ingredient market. A PowerPoint presentation regarding DDGS and utilization in the dairy industry is available on the intranet for your information and use, as well as a trip report and summary of the conference. For more information, contact Tracy via email snider@ncga.com.

Congress Passes $1.35 Trillion Tax Cut Package; Awaits President's Signature

Congress last weekend passed the President's $1.35 trillion tax package. The White House had not yet received the bill and did not indicate when President Bush would sign it. The cuts go into effect July 1. The tax package will:

• Provide immediate relief for taxpayers this year, by refunding a maximum of $300 to singles, $500 to single parents and $600 for married couples. The Treasury Department expects to start mailing about 90 - 95 million refund checks by the beginning of August.
  
  
• Lower over time the top tax rate, paid by people with incomes higher than $300,000 from 39.6 percent to 35 percent. By 2006 the bill will lower the 36 percent rate to 33 percent, the 31 percent rate to 28 percent and the 28 percent rate to 25 percent. The 15 percent rate will not change, and there is a new 10 percent rate.
  
  
• Double the $500 per-child tax credit and make it available to many low-income families.
  
  
• Eliminate the phase-out of itemized deductions and personal exemptions.
  
  
• Ease the penalty paid by half of married couples when they file joint tax returns, such as widening the 15 percent bracket so that more of their earnings are taxed at a lower rate, though marriage penalty provisions would not take effect until 2005.
  
  
• Reduce-gradually-the estate tax over the next decade before repealing it in 2010. Before repeal, the exemption from the estate tax, now set at $675,000, would eventually rise to $3.5 million. At the same time, the rate at which estates are taxed would decline in steps, from 55 percent currently to 45 percent in 2007.
  
  
• Raise contribution limits for 401(K) plans from $10,500 to $15,000 in 2006. For IRA contributions, the annual contribution limits will jump from the current $2,000 to $5,000 by 2008. It is important to note, however, that all tax cuts will cease in 2010, unless they are reinstated by another President or Congress at the end of the decade. President Bush is expected to sign the bill next week.

NCGA This Week

• NCGA President Lee Klein will travel with other NCGA grower leaders and staff and U.S. Grains Council staff to meet with the European Union (EU) officials during the week of June 10 to discuss current trade, consumption, demand and policy with government agriculture officials, importers and the dairy feed industry. Scheduled stops will include Brussels, Belgium; Geneva, Switzerland; and Paris, France. Other NCGA participants are Leon Corzine, Assumption, Ill., Production & Stewardship Action Team vice chairman; Fred Yoder, Plain City, Ohio, Corn Board member and chairman of the Biotech Working Group; Rick Tolman, NCGA CEO and two staff members from U.S. Grains Council.
  
  
• Representatives from the Korean Feed Association will be visting the St. Louis offices of the National Corn Growers Association Monday, June 4.
  
  
• NCGA director of business development Bob Sedlacek will be attended a two-day fiber utilization conference June 5 and 6 in Decatur, Ill.

ST. LOUIS OFFICE

WASHINGTON D.C. OFFICE