IN THIS ISSUE:

• NCGA Views EU Wheat Shipment as Move to Replace Domestic Corn
• NCGA Goes to Capitol Hill, Presses for Crop Disaster Assistance Reform
• NCGA Making Allies at World Corn Congress
• NCGA Member Speaks in Favor of Death Tax Repeal on Capitol Hill
• EU, Mexico Becoming Large Markets for DDGS
• NCGA-Sponsored Ethanol Pump Tour Hits Illinois Saturday
• NCGA, Grains Council See Similarities Between U.S., Chinese Farmers
• NCGA's Tolman: Great, Exciting Things Happening in South Dakota
• Diamond Rio to Entertain at 2003 Commodity Classic in Charlotte, NC

NCGA Views EU Wheat Shipment as Move to Replace Domestic Corn
NCGA was disappointed to learn three cargos (25,000 metric tons each) of feed wheat from the European Union (EU) are en route to North Carolina. NCGA and state corn grower organizations believe the feed wheat is intended to be a direct replacement for U.S. corn.

CEO Rick Tolman said this could be set up as a structural trend that could continue off and on for a long time, saying rumors are also circulating other importers are watching this issue closely with an eye to Black Sea feed wheat. "While Canada, the United States, and Australia have had short wheat crops this year," he said, "the rest of the world is awash in low-quality wheat. The Ukraine, Russia, Bulgaria, and India are among those who will be exporting feed-quality wheat. This will be in direct competition with U.S. corn on the world market. We are likely to see a major impact on U.S. corn exports to South Korea and Southeast Asia.

The exporter, the United Kingdom's Grainfarmers PLC, argue that the feed wheat is cheaper than U.S. corn and producers a leaner less fatty loin. Reports indicate if satisfied, the importer, Wilmington Bulk of Wilmington, N.C., a consortium of hog producers, could handle 50,000-75,000 metric tons of feed wheat per month for an annualized total of 600,000-900,000 metric tons.

Tolman said NCGA is watching the situation very closely and will be exploring appropriate options for a response to the North Carolina imports. "We believe in and support fair trade," he said, "and if indeed this is simply the result of higher U.S. corn prices allowing this product to compete with us, then we need to accept that. However, if it is as a result of domestic or export subsidies in the EU or distortions from U.S. transportation policies, then we have an obligation address those issues and defend U.S. corn producers.

"The U.S. has set very low barriers to product entry into our domestic market. In contrast, the EU has high tariffs, high subsidies and restrictive phytosanitary requirements that preclude U.S. corn exports to that market. That is not our definition of 'fair trade.' "This is a complex issue with long-term implications," Tolman concluded. "We need to be careful to come at it with a well thought out strategy that considers all of the variables."

NCGA Goes to Capitol Hill, Presses for Crop Disaster Assistance Reform
Representatives of the NCGA delivered to senior staff members of the House and Senate Agriculture committees Tuesday a draft proposal that would reform the current crop disaster program. The Companion Disaster Assistance Program seeks to ensure purchasers of crop insurance are treated more equitably than in past disaster assistance programs. NCGA's Disaster Task Force developed the companion program to address critical concerns NCGA has about equality of delivery and compliance requirements. NCGA is urging Congress to adopt disaster assistance legislation that will meet the following guidelines:

1. Ensure adequate and more timely aid to those who have suffered losses;

2. Recognize individual producers' investments in crop insurance policies; and

3. Avoid duplication of federal benefits.

"There is a hole that exists in the safety net," said NCGA Disaster Task Force Chair Ron Litterer. "The reform is designed to treat participants in the crop insurance program more equitably in delivery of disaster assistance payments and to address some of the gaps in today's crop insurance program."

Plagued with severe drought and floods that are choking much of the nation's farmlands in disaster conditions unmatched since the 1950s, many farmers and ranchers are facing economic impacts of disproportionate size. Yet, continually barraged with negative media attention, farmers have found themselves defending their need for disaster assistance to the press, public and Congress.

In response to the harsh conditions, the Senate recently passed a $6 billion amendment for emergency disaster relief. Yet, the legislation follows a similar design as the previous ad hoc disaster programs that were provided to growers. Past disaster programs targeted payments to growers with large yield losses, but growers could still lose up to 35% of their expected crop and sustain substantial financial loss. For example, a grower with an average yield of 133 bushels could produce 87 bushels, representing a 35% yield loss. Under the current crop disaster program, the grower would not receive disaster aid for this significant loss. The net insurance payment for most growers is relatively small, leaving a hole in the safety net that is not covered by crop insurance or disaster aid. Given the importance of crop insurance to U.S. production agriculture, NCGA is also urging changes that allow for a more common sense approach to a replant policy and the compliance requirements for irrigated acreage in order to prevent unnecessary use of limited water resources.

"The reform will be designed to treat participants in the crop insurance program more equitably in delivery of disaster assistance payments," said Litterer. "It will also address some of the gaps in today's crop insurance program. "We have dramatically improved the crop insurance program for our producers. Now is the time to offer a better way to deliver assistance to producers hit hard by natural disasters."

NCGA Making Allies at World Corn Congress
NCGA and the U.S. Grains Council (USGC) represented American agriculture and making international friends during the World Corn Congress under way in Pau, France. The conference drew representatives from agricultural organizations from around the world and NCGA Director of Development Tom Slunecka said the relationship between NCGA and the French corn growers association (AGPM) is encouraging. "Everything here is going very well," he said earlier in the week. "NCGA's message is being received well and we've seen amazing relationships emerge between us and the French corn growers. Just in the last few months, the friendship has grown and is evident from the treatment we've received here." NCGA President Tim Hume and President-Elect Fred Yoder attended a roundtable discussion group Tuesday, where Yoder addressed the leadership of the French corn growers. During that discussion, issues concerning U.S. farm policy and biotechnology were addressed.

Yoder and Hume are expected to talk to more than 1,000 members of the French Corn Growers Association and an additional 3,500 French farmers on Wednesday. Slunecka went on to say plans are in the works to partner with the French corn growers in the future. "Both NCGA and the Grains Council are looking at some issues down the road where we could partner with our French counterparts," he said. "Both Ken Hobbie (USGC CEO) and I feel there is value to our membership to continue to build this relationship."

NCGA Member Speaks in Favor of Death Tax Repeal on Capitol Hill
Maryland grower and NCGA member Jamie Jamison spoke yesterday about permanently repealing the estate tax (a.k.a. death tax) at a Capitol Hill press conference given by House Majority Leader Dick Armey. One of only two non-congressional members invited to participate in the event, Jamison discussed the devastating impact the estate tax has on farmers and small business owners. Representatives Jennifer Dunn (R-WA) Jim Nussle (R-IA) Tom Latham (R-IA) and a Virginia farmer also spoke at the event. The press conference was held to publicize H. R. 524, a House resolution that passed yesterday 242-158. The legislation, introduced Sept. 17 by Rep. Nussle, encourages the Senate to complete action on the Permanent Death Tax Repeal Act of 2002. NCGA policy, too, supports repealing the federal estate tax. "The death tax not only affects farmlands, but small businesses," said Jamison. "For most farmers, their children are expected to work. They get little or no pay with the idea being the children will inherit the family farming business for all of their sacrifice and hard work." According to Majority Leader Army, the federal estate tax constitutes less than 2 percent of the federal budget. Of every tax dollar received from estate taxes, 65 cents is spent on litigation surrounding the tax. "My father died seven years ago," said Jamison. "We now find ourselves burdened with costly insurance premiums for my elderly mother and tax attorney fees starting at $300 per hour. "Try paying for that with $2 per bushel of corn."

EU, Mexico Becoming Large Markets for DDGS
The European Union (EU) is a major market for distillers dried grains with solubles (DDGS) from the United States, and NCGA and Grains Council members were there this week assessing the outlook for future U.S. exports. Participants in the mission to Brussels, Rotterdam, Hamburg, Copenhagen and Dublin include: Rest-of-World Advisory Team member Gayle Bergstrom of the Minnesota Corn Research and Promotion Council; Trade Policy Committee Chairman Tim Burrack of Iowa Corn Promotion Board; Value-Added Advisory Team member Theresa Schmalshof of Illinois Corn Marketing Board; and Harold Tilstra of Agri-Energy, LLC. Also accompanying the team is Manager of International Operations Diane Henry.
"As U.S. ethanol production increases, the Council is placing an increased priority on building export markets for co-products of ethanol production such as DDGS," said John Schnittker, Council manager of market analysis and team escort. "During this mission to Europe, Council leaders are investigating the trade implications that additional reforms in EU agricultural policies could have on U.S. corn co-product exports to the area."

Worldwide, U.S. exports of DDGS grew 16 percent for the January-July 2002 period compared to the same period last year. Mexico's livestock sector is also increasingly interested in using DDGS as a feed component, according to Mexico Director Ricardo Celma. Celma and a team of consultants traveled to Guadalajara, Michoacán, Querétaro and Tehuacán last month to explore the market potential for DDGS in the swine and poultry production areas.
"Adverse weather conditions have driven down domestic grain production and driven up prices, forcing many grain consumers, mainly from the livestock sector, to look for better options for feed rations to reduce feed costs without sacrificing efficiency," Celma explained.

"DDGS represent the best option in swine production due to the high energy content, which is associated with a high protein level. Adding this to the ration allows efficiency in production costs and in production management as well." --Submitted by U.S. Grains Council

NCGA-Sponsored Ethanol Pump Tour Hits Illinois Saturday
Ethanol continues to be attacked in the media and the national energy bill with a renewable fuels standard (RFS) is in serious danger. In an effort to promote the benefits of ethanol and passage of the RFS, AgriTalk radio has teamed up with NCGA to promote the "AgriTalk Ethanol Pump Tour 2002." After stops in Iowa and South Dakota, the next town to become Ethanol City, USA, is Taylorville, located in central Illinois. AgriTalk host Mike Adams, along with Illinois Corn Growers Association members Leon Corzine and Garry Niemeyer, will broadcast and pump gas from the FS Fuel 24 station in Taylorville located on North Cheney Street from 10 a.m. to 1 p.m. The theme for the event is "AgriTalk on your radio - Ethanol in my tank!" AgriTalk also will be handing out T-shirts and caps with the AgriTalk and NCGA logos on them. Illinois Corn Growers Association Communications Director Mark Lambert said the event is taking place at an opportune time for the Illinois corn growers. "It's great timing because it coincides with our launching our 'Excellence in Ethanol' marketing award," he said, "and the first award goes to the Christian County FS for the great work they've done in promoting ethanol and ethanol use." Lambert said they would be presenting five or six of the awards per year for those who go above and beyond in their efforts to promote the benefits of ethanol production and use. "It's nice to have a community event at Christian County FS so they can be publicly recognized for the work they've done," he said. "It never hurts to tell people thanks and to give them exposure." AgriTalk and representatives of the host state corn grower associations will distribute literature and other materials promoting the benefits of ethanol while pumping gas (gas with ethanol added, of course) for customers in Midwest states in coming months. Growers are encouraged to attend the event or listen to it live on their AgriTalk affiliate. Farmers are also encouraged to contact their elected official and tell them of the importance of passing a comprehensive energy bill containing the RFS by visiting the NCGA web site at www.ncga.com and using the Legislative Action Center.

NCGA, Grains Council See Similarities Between U.S., Chinese Farmers
U.S. and Chinese farmers face many of the same challenges despite drastically different production systems, according to Asia Advisory Team members participating in the Council's 2002 China Corn Tour. Bob Dickey of the Nebraska Corn Board and Jim Berg of the Ohio Corn Marketing Program were in China's key corn-producing provinces this week, taking a first-hand look at crop conditions and meeting with local farmers, traders, end-users and government officials.
"As a farmer from the United States, I see many of the challenges here that we have in the United States," Dickey said, citing weeds, stalk rot and rootworm.

"In the States we like to rotate corn, soybeans, etc. Over here, they have a lot of corn-on-corn, year after year, so personally I've seen a lot more insect damage than I've seen for quite some time in the United States."
Berg was struck by the size of Chinese farm operations. "It's hard to believe you see vast areas of corn, similar to Iowa, Illinois, Nebraska, and yet these large fields are made of up individual farmers' plots of one acre or less." --Submitted by U.S. Grains Council

NCGA's Tolman: Great, Exciting Things Happening in South Dakota
NCGA President-Elect Fred Yoder and CEO Rick Tolman visited Huron, S.D., recently to attend a joint meeting of the South Dakota Corn Council and the South Dakota Corn Growers Board. Tolman said the visit was a productive one, where he and Yoder discussed NCGA and NCGA programs.

"Great and exciting things are going on in South Dakota," he said. "The South Dakota growers are very aggressive in ethanol plant promotion efforts. There are some very impressive numbers concerning the amount of corn now being used for ethanol production in South Dakota, with several new large plants are under construction or on the drawing board. They have developed a good distillers grain market both in and out of the state and are shipping DDGS as far as California and Texas." Tolman and Yoder also participated in a Livestock Development Roundtable sponsored by the two South Dakota corn organizations. "Guests from industries such as banking, livestock, rural development, state government and other associations were invited to the meeting to discuss the synergies in tying the ethanol industry and DDGS production to state livestock development. It was an excellent meeting and we were able to participate in some great discussion." South Dakota will continue to play a large part in NCGA as they have a strong slate of candidates applying for NCGA action teams and committees for fiscal year 2003. "It's always encouraging to see growers taking an interest in being active at the national level," said Tolman. "All the successes NCGA has seen over the years are due solely to the strengths and talents of our states and their growers."

Diamond Rio to Entertain at 2003 Commodity Classic in Charlotte, N.C.
You've heard them with their American Country Music (ACM) Award-nominated "One More Day," and now you're hearing their current hit "Beautiful Mess." At the 2003 Commodity Classic Feb. 27-March 1 in Charlotte, N.C., you'll be able to hear these and other hits performed live by award-winning Diamond Rio.

Organizers of Commodity Classic, the annual combined convention and trade show of the American Soybean Association (ASA) and NCGA, have announced Diamond Rio will be the featured entertainment on Saturday, March 1. "We are pleased that a group of such high caliber as Diamond Rio will be wrapping up the premier agricultural event of the year," said ASA's Bob Rikli of Murdock, Neb., co-chair of the Commodity Classic Grower Committee. As four-time CMA "Vocal Group of the Year," Diamond Rio has received more Country Music Association awards and nominations through the 1990s than any other group. With over 7 million albums sold, all Gold-certified and three Platinum, Diamond Rio has had 20 Top 10 singles, 15 Top 5 singles and seven Number One singles. Band members lead vocalist Marty Roe, Gene Johnson, Jimmy Olander, Brian Prout, Dan Truman and Dana Williams recently introduced their eighth album, "Completely" which includes the current hit "Beautiful Mess." "Completely" is the follow-up to "One More Day," which marked Diamond Rio's resurgence in 2000-01. In the wake of the attacks of Sept. 11, the "One More Day" single was revived as one of America's "healing" songs, and it has remained so to this day. "Diamond Rio will provide Commodity Classic with the quality of entertainment that attendees have grown to expect," said NCGA's Greg Guenther of Belleville, Ill., co-chair of the Commodity Classic Grower Committee. "Commodity Classic has earned the reputation of a first-class event, and this talented musical group will help us ensure that in Charlotte." For more information about Commodity Classic, visit www.commodityclassic.com.

NCGA THIS WEEK

• Sept. 23 NCGA Director of Business Development Rene Shunk and Research and Development Manager Nathan Danielson will meet with representatives of Argonne National Laboratories and Vertec Bio Solvents in Chicago.
• Sept. 24-26 NCGA President-Elect Fred Yoder, CEO Rick Tolman, Director of Communications Mimi Ricketts and Strategic Marketing Communications Marketing Manager Gary Bradley will attend the annual Farm Progress Show in Alleman, Iowa.
• Sept. 26 Shunk and Danielson will visit with representatives of Michigan State University to discuss the polyols project in Lansing, Mich.
• Sept. 26 NCGA Livestock Programs and Information Manager Tracy Snider will meet with representatives of Archer Daniels Midland to discuss DDGS in Decatur, Ill.

© 2002 National Corn Growers Association

ST. LOUIS OFFICE

WASHINGTON D.C. OFFICE