IN THIS ISSUE:

• Evans Study Confirms NCGA River Fears
• Corn Growers Stunned by California Governor's Decision to Extend MTBE Phase-Out
• NCGA Honors House Speaker Hastert with President's Award
• NCGA CEO Sees Positive Response From California Agriculture Reps
• NCGA Hits the Road to Fight for Updated River System
• NCGA Biotech Working Group Makes Progress in D.C.
• Ohio Corn Growers Earn Gold Medals During NCGA-Sponsored Recruitment Program
  
  

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Evans Study Confirms NCGA River Fears

A study sponsored by a coalition including the NCGA confirms what the NCGA has been saying for years -- if the lock and dam system on the Upper Mississippi and Illinois Rivers is not updated, the nation's growers are looking at losing hundreds of millions of dollars in the next 20 years. The study's author, Mike Evans, is professor of Economics, Department of Managerial Economics and Decision Sciences, Kellogg Graduate School of Management, Northwestern University. Other sponsors of the study include the Mississippi Area River Coalition (MARC) 2000, the Illinois Corn Growers Association and the American Soybean Association.

According to the study, released on Thursday at the National Press Club in Washington, D.C., the cost of transporting corn on the Mississippi River would increase an average of 17 cents per bushel. Since approximately 80 percent of corn is now exported through Gulf Coast Ports, the average increase in shipping costs for corn exports would rise 13.6 cents per bushel.

Because of that price increase corn exports would drop by 68 million bushels per year, or 1.75 percent of the estimated exports of the year 2020. In addition, the combination of lower real income, higher prices, and higher interest costs would reduce the Federal budget surplus by $1.5 billion per year in 2020.

Evans' study was commissioned to calculate the economic impact of increased congestion on the Upper Mississippi River - Illinois River waterway. A model of world corn imports, exports, and production constructed for this study was used to calculate the increase in the export price of corn at Gulf ports, the reduction in corn prices received by farmers, and the decline in U.S. corn exports and production for a given increase in Mississippi River barge freight rates for agricultural commodities.

Lower commodity prices aren't the only issue looked at in the study. "The increase in food prices caused by the higher transportation costs would reduce disposable income and employment in non-farm states by an additional 5,625 jobs," Niemeyer said. "So the total decline in employment would exceed 20,000 without even taking into account any negative impact of a reduced federal budget surplus or increased deficit."

The study goes on to say if the combination of higher consumer prices, higher interest rates, and a smaller budget surplus reduced real GDP by the same proportion as has occurred historically, employment would decline by an additional 9,375, causing a total reduction of almost 30,000 jobs.

DID YOU KNOW??

The Leader Resource Center, located at www.insidencga.com provides the latest information and calendars for NCGA members on the topics affecting them daily.

Corn Growers Stunned by California Governor's Decision to Extend MTBE Phase-Out

The NCGA, long a proponent of ethanol as a replacement for MTBE, this week expressed its extreme disappointment in a decision by California Gov. Gray Davis reversing his decision taken three years ago to eliminate MTBE from California gasoline by Jan.1, 2003.

In a statement released Friday, March 15, Davis extended the time refiners have to remove MTBE from gasoline sold in California by up to one year. An angry NCGA President Tim Hume said Davis has made it clear that he would rather rely on foreign sources of MTBE than U.S. farmers.

"The governor's decision is based on unwarranted fear that banning MTBE and switching to ethanol will cause gasoline prices to reach $3 per gallon," said Hume, a corn grower from Walsh, Colo. "This view illustrates the complete lack of knowledge of the ethanol market and the U.S. transportation system in California government."

Hume noted that many cities, including Chicago, Milwaukee, St. Louis, Minneapolis, Cleveland and Denver use ethanol and maintain gas prices at or below the national average.

"There is no economic rationale that supports Gov. Davis' assertion that using ethanol will increase gasoline prices in California," Hume continued. "The supply is there and there is adequate transportation to deliver ethanol to the California market."

Farmers throughout the Midwest and in other areas of the United States have been engaged in meeting the additional demand for ethanol that was expected when Gov. Davis made his original decision, explained Hume noting that in the past three years, nearly 1 billion gallons of additional ethanol capacity have come on line.

"Much of that additional capacity is farmer-owned cooperatives that took the challenge set forth by Gov. Davis on March 25, 1999 and built the ethanol production capacity to serve the California market," said Hume. While Gov. Davis and members of his Cabinet have questioned the ability of the ethanol industry to produce enough ethanol to meet the market demand in California they have also questioned the ability of the California refining and distribution industries to be ready to use ethanol by Jan. 1, 2003, stated Hume. However, California refiners and distributors, in filings made under the California Environmental Quality Act (CEQA) have demonstrated their readiness to use ethanol in California gasoline now.

The NCGA president concluded: "While the governor shows a disregard for the decisions by thousands of individuals and businesses and the clear and compelling facts about the continued danger of using MTBE in California gasoline, it is not too late for California refiners and gasoline
distributors to do the right thing and begin using ethanol now."

NCGA Honors House Speaker Hastert with President's Award

The NCGA, recognizing the importance of support from legislators on key issues that advance corn grower issues, has honored the U.S. Speaker of the House Dennis Hastert (R-IL) with the NCGA President's Award. Every year, the NCGA honors an individual or organization with the President's Award for work and efforts to support corn growers' causes during the previous year.

"Speaker Hastert has worked tirelessly in the areas of ethanol, river transportation, trade and the 2002 farm Bill," said NCGA President Tim Hume in presenting the award. "It's this kind of support that helps the NCGA truly represent the interests of its 32,000 members and more than 300,000 corn growers nationwide."

Hume noted that:
Hastert's unwavering commitment to expanding export market opportunities for corn growers has resulted in the timely passage of Trade Promotion Authority in the House of Representatives;
Under Hastert's watch, the House defied the odds and expedited the passage of a new farm bill with broad bipartisan support under some very difficult circumstances; and
Hastert has been steadfast in his support for improving the nation's transportation infrastructure, especially the Mississippi River's lock and
dam system.

He concluded: "The National Corn Growers Association has long relied on your rock solid support of ethanol through some very challenging times." Hastert accepted the award Tuesday afternoon during the meeting of the Corn Board, NCGA's governing body.

NCGA CEO Sees Positive Response From California Agriculture Reps

NCGA CEO Rick Tolman gave a presentation to representatives of the California Agriculture Leadership Program Thursday in St. Louis. Tolman was invited by the group to speak to them concerning NCGA's policies on ethanol. Tolman said while most of the questions were cordial, there were a few sharp ones aimed at NCGA's backing of the MTBE ban and the promotion of ethanol in the Golden State. "A couple people questioned why we're 'forcing' ethanol on California," he said. "I explained to them we were not so much interested in California using ethanol but in an overall renewables program across the U.S., whether it's corn or other products, they really warmed up to that."

Tolman said even though NCGA is disappointed with Gov. Gray Davis' recent announcement to extend the MTBE ban deadline by a year, the 32,000-member corn grower association is pleased to do business with the California growers.

"We're looking at going to California in April to help them develop an ethanol industry," he said, "sharing with them what we've learned, the
mistakes we've made, the things we've been able to put together...they were quite excited by that."

California has also expressed interest in recent months about forming their own state corn growers association, a prospect Tolman welcomes. "The group I met with had heard great things about NCGA," he said, "and they have a lot of interest in what we're doing. Our vision of U.S. agriculture includes California and their vision isn't much different than ours."

DID YOU KNOW??

http://www.ncga.com offers up-to-date Ag News, Weather and Market information. Customize weather information to your local area. Check it out!

NCGA Hits the Road to Fight for Updated River System

In the 1950s, Jack Kerouac wrote a book called "On the Road," an autobiographical depiction of a cross-country road trip he took in his
youth. The National Corn Growers Association (NCGA) has its own Kerouac in Production and Marketing Director Paul Bertels, who has been traveling the Midwest, attending a series of public meetings hosted by the Army Corps of Engineers to get feedback on their Upper Mississippi River Navigation Study. Bertels attended the third of five meetings Wednesday night in Bloomington, Minn., along with approximately 90 concerned citizens who all have a stake in the river.

A few of the individuals, who have no backgrounds in agriculture, spoke to the deficiencies of the Corps scenario process, and misstated the National Academy of Science findings. They also took veiled shots at biotech, trade, and production agriculture.

They did speak in favor of the RFS, although they followed it up by saying farmers should grow more regional crops and switch grass.

Bertels noted, however, NCGA was not without friends in the audience. " I have to give a big thanks to people like Reed Jensen, a farmer from
southeast South Dakota," he said. "Reed explained his operation, and how the river impacted a landlocked state like South Dakota. This is exactly the audience and the Corps need to hear: Real people telling what this means to them, their livelihood, and rural communities."

Near the end of the meeting, Bertels spoke to the attendees. "I went on to clarify some of the misconceptions espoused by the earlier speakers," he said. "Exports do help farmers; reducing inefficiencies on the river would trickle back to farmers in the form of higher prices. I clarified that most of the value-added grain crops are exported by barge through New Orleans, not put into containers and shipped to the coast."

NCGA Biotech Working Group Makes Progress in D.C.

The members of the NCGA Biotech Working Group (BWG) met last week with top biotechnology representatives in Washington, D.C., to discuss topics relating to the advancement of biotech use by the nation's corn growers. The BWG met with many different groups who have a stake in biotech. They had a meeting with EPA reps who are very happy to see NCGA's involvement in Insect Resistance Management (IRM). The EPA encouraged NCGA to keep up its efforts with the 'Know Before You Grow' program and continue to educate growers on how to use biotech responsibly.

The BWG also met with groups such as the Food and Drug Administration (FDA) and the Animal and Plant Health Inspection Service (APHIS) during their trip. APHIS representative John Payne encouraged corn growers to, "continue to work on programs enabling producers and U.S. industry to capitalize on their ability to produce products for specialty needs."

BWG members conferred with USDA Special Council for Ag Secretary Ann Veneman, David Hagwood, who had just returned from a trip to the EU. "David was there promoting the same message NCGA carries," said NCGA Director of Development Tom Slunecka. "He also tested the idea of non-GMO labeling, or labeling only when there is no trace of biotech instead of labeling when there is.

"What this does," Slunecka continued, "is allow consumers a choice without adding extra burden or cost to the commodity system or the vast majority of cosumers."

Ohio Corn Growers Earn Gold Medals During NCGA-Sponsored Recruitment Program

The Winter Olympics may be over but the Ohio Corn Growers Association continues to earn gold medals in membership.

As part of the Affiliated Membership Recruitment Program sponsored by NCGA, Syngenta Seeds and Syngenta Crop Protection, Ohio had the highest total members and highest percentage of members for the first quarter of the 2001 - 2002 NCGA fiscal year (October - December).

Thanks to their highly successful call-a-thon, Ohio added 210 members in the first quarter, a 10-percent increase.

As winners of the highest total number of members and highest percentage of members for the first quarter, the Ohio Corn Growers Association office will receive a prize for the staff.

For more information about the Affiliated Association Recruitment Program, contact Byron Keelin at keelin@ncga.com or
636-733-9004, ext. 105.

NCGA THIS WEEK

• March 27-28 NCGA Vice President of Marketing Brian Stockman will be in Indianapolis, Ind., to attend the Indiana Corn Board Meeting
• March 27-28 NCGA Director of Business Development Rene Shunk will be in Washington, D.C., attending the Biobased Products Workshop Planning Meeting
  

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WASHINGTON D.C. OFFICE