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Regulations, deficit, trade among issues affecting Texas agriculture

A panel of agricultural commodity association representatives waded into some deep issues, including cap and trade legislation, water use restrictions, crop insurance, trade restrictions and biofuels during the Texas Alliance for Water Conservation conference in Muncy, Texas.

David Gibson, executive director, Texas Corn Producers Board, said commodity associations are already looking toward the next farm bill. “We’re talking about 2012,” he said. “It takes time for the process.”

He also criticized President Obama’s budget, especially proposed cuts in commodity programs. “But members of Congress are still in charge of the budget. Unfortunately, we have fewer representatives from rural areas.”

Josh Winegarner, Texas Cattle Feeders Association, agreed that the cuts would hurt agriculture if they are enacted but said it would have little effect on Congress. “The president’s budget got a lot of attention early on, but it gets put on a shelf and is not looked at again. It’s just a request.”

Gibson said proposed cap and trade legislation also poses problems for farmers and ranchers. “We were against it when it came out. A Texas A&M study showed the dangers of increased input costs for agriculture. Other states were not as opposed at first. But they have seen how it would be destructive and have come out in opposition.”

He’s also concerned that the federal government will exert more influence on the state’s water resources. “We want to keep control of water in the state.”

Severe water restrictions would have significant effects on agriculture. “The Conservation Reserve Program took land out of production,” he said, resulting in economic declines in some rural areas. “Water restrictions would do similar things. At what point does it affect farm income?”

Some areas of the Texas High Plains are already under district imposed water use restrictions and have found that metering has helped increase water use efficiency.

Gibson said corn growers are looking to research, especially in breeding, to develop more drought tolerant hybrids. “Some are available now and will revolutionize corn production.”

Shawn Wade, Plains Cotton Growers, Inc., said PCG spends a lot of effort with “legislative battles. The Environmental Protection Agency is ready to regulate carbon whether Congress does or not."

He said farmers and ranchers should work closely with commodity associations and organizations such as the Southwest Council of Agriculture, a rural Texas advocacy group. “We need to be proactive on water issues. We need to set the agenda instead of letting it be set for us. Start metering water now, for example.”

Ag associations also are looking at ways to improve crop insurance and are concerned about proposed budget cuts. “In the proposed budget for USDA, we don’t see less spending, but funds would come out of crop insurance (among other titles).”

He said a pilot program for cottonseed insurance, planned for 2011, would give cotton farmers an opportunity to protect what has become a more valuable commodity. He said cottonseed is more than a by-product of cotton production and a valuable product in its own right.

“Cottonseed prices have gone up in the last few years. At prices ranging from $125 to $150 a ton, it’s worth protecting.”

Trade assistance and market development will be a key for cotton farmers. Cotton prices decline during a recession, he said.

“So does beef,” stated Winegarner. “We’re seeing an increase in ground beef, but that’s less money than ranchers get from steak.”

He agreed with Wade that livestock producers should become involved in commodity associations, but also expand involvement outside their own organizations. “Be involved locally and at the state level, too."

He said associations must do a better job of public relations. “We’ve done a poor job of telling our story. We let our detractors tell our story and they don’t know our story. We have to tell it ourselves and inform American consumers about what we do. We have to reclaim the message.”

Winegarner said the industry “is getting hit with issues we shouldn’t get hit with.” He believes the Clean Water Restoration Act could cause serious problems for agriculture. “They have eliminated the word ‘navigable’ from the regulation. Now, (regulated) water could include playa lakes and bar ditches.”

Regulating animal antibiotic use also concerns livestock producers. “The Food and Drug Administration is trying to usurp USDA authority. We need to stay with USDA.”

Winegarner also discussed problems with market access, especially with Japan and Russia.

Wane Cleveland, Texas Grain Sorghum Producers, said sorghum remains an unsung hero in commodity production. “Nothing exciting has happened in the sorghum industry since the 1960s,” he said. That’s when hybrids came out.

“But grain sorghum is the reason cattle feeders came to the High Plains. Now it’s the commodity of last resort, it’s what to use when everything else is too high.”

Ethanol production has helped elevate sorghum status, however. Cleveland said some 30 percent of sorghum production now goes into ethanol production. “But we have to continue to develop into our own commodity, not just what’s planted when cotton gets hailed out.”

He said a recovering economy in 2010 should spur ethanol as gasoline prices rise. Also, California is increasing ethanol ratio to 10 percent in gasoline instead of 5 percent. “EPA is considering a 15 percent ethanol blend and that will put ethanol plants back on line.”

He said ethanol currently enjoys a positive economic outlook as grain prices have come down. Grain-based ethanol will remain the standard for the near future. “I think cellulosic ethanol is still a long way off. It’s a more difficult process than the current system.”

He said the industry is pleased that grain sorghum is now rated at 98 percent the value of corn. “Last year it was at 88 percent.”

Cleveland said the state check-off also will help improve sorghum’s status. Currently, check-off coffers hold $7 million. “That’s’ somewhere between strawberries and mushrooms." But research will help sorghum become more competitive. “We’re looking for over-the-top herbicide resistance, both GMO and non-GMO."

Tom Sell, Combest, Sell and Associates, LLC, a firm that represents agricultural interests, moderated the panel and commented on the partisan atmosphere that pervades Washington, D.C.

“It has gotten to the point of one party saying ‘If you lose I win,’” he said. He also commented on the federal deficit, which has doubled in the last 10 years.

“That deficit will affect farmers."


TAGS: Management
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