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Articles from 2004 In October


Corn+Soybean Digest

November 1, 2004

USDA Announces 2nd Round of Animal ID Funds

Several states were left out of the first round of announcements allocating money for states to begin implementing a national animal identification system (NAIS). However, on Friday another $1.5 million was doled out to states to implement premise identifications.

States that applied for funding in July and were not selected at that time are now eligible for a portion of the $1.5 million if certain requirements are met.

Earlier this year, the Animal and Plant Health Inspection Service (APHIS) received a transfer of $18.8 million from USDA's Commodity Credit Corporation (CCC) to begin implementing the NAIS. Of this amount, APHIS originally set aside $11.64 million for cooperative agreements with state and tribal governments. USDA has now set aside $1.5 million more to fund additional cooperative agreements. The remainder of the funds is being used in support of other aspects of the national system, including building database architecture and carrying out outreach activities.

In August, APHIS selected 29 projects from more than 40 applications for cooperative agreement funding. The focus of these cooperative agreements is chiefly on premises identification and registration. Some states and tribes will be evaluating animal identification technologies to determine how the collection of records can be automated.

Each of the states that had applied this past summer but were not selected have been notified that they are now eligible for a minimum of $100,000 to carry out premises registration activities. Depending on the number of livestock operations in the state, that amount could be increased by up to $30,000. The revised applications are due by Dec. 1 and must address any feedback received during the evaluation of their first-round application.

State

Amount Available

Alabama Department of Agriculture

$115,000

Arkansas Livestock and Poultry Commission

$115,000

Delaware and Maryland Departments of Agriculture

$105,000

Georgia Department of Agriculture

$120,000

Iowa Department of Agriculture

$130,000

Michigan Department of Agriculture

$120,000

Nevada State Department of Agriculture

$100,000

North Carolina Department of Agriculture and Consumer Services

$120,000

New York Animal Premises and Animal Identification Project

$115,000

Tennessee Department of Agriculture

$130,000

Virginia Department of Agriculture and Consumer Services

$115,000

Wisconsin Department of Agriculture Trade and Commission Protection

$100,000

Washington State Department of Agriculture

$115,000

GRAND TOTAL

$1,500,000

 

 

Web site gives cattle producers more marketing exposure

Alabama beef cattle producers now have a new venue to help market their livestock — the Internet. A Web site, recently launched by the Alabama Feeder Cattle Council in cooperation with the Alabama Farmers Federation, gives producers throughout the state more visibility in advertising high-quality feeder cattle and commercial replacement heifers.

Perry Mobley, director of the Alabama Farmers Federation Beef Division and administrator of the Web site, says it's about time producers reap the benefits of Internet advertising.

"The Internet has the farthest-reaching advertising capability of any one vehicle to date," Mobley says. "With more and more people using it, it is simply the perfect way for producers to reach potential buyers."

Through the site, cattle owners can post any information they want advertised about the livestock they are selling, including breeder contact details, weight, sale date and vaccination history. Advertisers must pay a $25 one-year membership fee and 50 cents per animal posted and meet specific requirements listed on the site.

One big advantage of the site is it gives smaller producers wider exposure to national cattle markets and cattle buyers, says Rickey Hudson, regional Extension agent for the Wiregrass region.

"Smaller operators who may not be able to attend the national meetings and trips to recruit buyers in the Midwest are given a less expensive way to advertise and offer their product — feeder calves."

Another beneficial feature of the site is the free e-mail alert system. "Anyone can sign up for it, and every time new cattle are posted, an e-mail with a link to the new cattle is sent to the recipient," Mobley says.

Though the site is strictly used for advertising, buyers viewing the cattle have contacted breeders and made bids and purchases, he adds.

One producer who has experienced the advantages of the site firsthand is Joe Williams of Dothan.

"I was one of the first ones on the site when it was just getting off the ground, and I've received two or three telephone calls I know I wouldn't have gotten if it weren't for the site. It's a great asset for us in the future because the more we advertise, the more interested people will be in our cattle."

Progressive producers like Williams, who market the best feeder cattle each year, are the primary advertisers on the site, according to Mobley.

Those same forward-thinking cattle producers also are using the site to promote their value-added programs. One such group is the Southeast Alabama Feeder Cattle Marketing Association (SAFE), known for selling calves with strong health programs behind them. "This past August, several SAFE members received bids because they used the Web site to promote their programs and sale," Hudson says.

Even though the site has advertised more than 3,000 calves since it was first implemented in early July, Mobley says its success is difficult to measure overall in light of the strong cattle market.

"It's hard to say if the site had any effect on the price of cattle with the market being so strong this year. Still, several buyers and feedlots reported that they like the convenience of being able to view cattle from their own desk."

With few cattle on the site so far, Mobley says promotion of the site has been limited to feedyards and order buyers in the Midwest and High Plains. "They're our target audience, but if we could advertise the site better in-state, I think we'd be more successful."

In the long run, Hudson believes all Southeastern producers will benefit from the site because it will help overcome the stigma of inferiority for which Southeast cattle have a reputation.

"Over the years, order buyers and feedlot operators have discounted Southeastern cattle as being inferior. Through board sales and this Web site, we hope to conquer this by promoting superior genetics, performance and health."

As long as cattle owners are ambitious enough to try a non-traditional marketing tool like the Web site, both producers and consumers will continue to benefit from progressive thinking, Hudson says.

"It's a great way to promote Southeast cattle and give order buyers and the public the opportunity to experience some of the highest quality cattle in the United States."

For more information, check out the Web site at www.alfeedercattle.org.

Jeanne landed final blow to Georgia's vegetable crops

After repeated hits by tropical storms this fall, Hurricane Jeanne hit Georgia on Sept. 27 and gave what amounted to a final blow to the state's vegetable crop, says a University of Georgia expert.

“Jeanne caught us while we were already down and kind of topped it all off,” says Terry Kelley, a horticulturist with the UGA Extension Service.

The pepper, tomato, squash and cucumber crops were the hardest hit, he says. Along with eggplant, sweet corn and snap beans, Georgia farmers have about 45,000 acres of vegetables planted in fields now.

It's hard to pin down exactly, but Georgia farmers probably lost $145 million in vegetables due to tropical storms and poor fall weather, says Greg Fonsah, a vegetable economist with the UGA Extension Service.

About one-third of the pepper, tomato, squash and cucumber crops were harvested before Jeanne arrived, Kelley says.

But after Jeanne blew through, 75 percent to 90 percent of the remaining pepper and tomato crops were lost in the fields, he says. About half of the remaining squash and cucumber crops were lost.

Most of the damage came from strong winds that knocked plants and fruits to the ground, Kelley says. Wet weather between the storm systems, too, prevented many farmers from applying much- needed pesticides and fungicides to protect their crops from insects and diseases.

Because of Georgia's mild climate, farmers here can plant two vegetable crops a year.

This fall's tropical punches would have hurt less had Georgia farmers harvested successful spring crops to cushion the blows. But they didn't. The crops were good. But prices were bad, he says.

In the Southeastern United States, vegetable harvest usually starts in south Florida around February or March. As the weather warms and crops mature, the harvest moves north through Florida into Georgia and then the Carolinas.

But a mix of cool, dry and then wet spring weather caused vegetables across the Southeast to be harvested near the same time. This flooded markets and dropped prices.

“The vegetable market depends on many factors. You hope at least one of the two seasons treats you decent,” Kelley says. “It's rare for both to be so bad.”

Georgia's average first day of frost is rapidly approaching. It's too late to start any new vegetable crops, he says. But farmers can try to get what's left in the fields to markets. Prices are good now, because supplies are low across the Southeast.

Conservative tillage conference Jan. 13-14

Producers wanting to learn more about increased production at less cost will want to plan on attending the nation’s leading conservation tillage production conference Jan. 13-14.

“This is our eighth annual conference,” says John LaRose, publisher of MidAmerica Farm Publications, which sponsors the National Conservation Tillage Cotton and Rice Conference. “As farmers look for more ways to hone their production methods to trim inputs while boosting yields, this conference has become a must-attend event for growers in the southern U.S.”

The 2005 conference will be at the Park Plaza Reliant Center in Houston. Cotton Incorporated and the US Rice Producers Association are partners in production of the conference.

“The main emphasis of the programs is on reducing production costs and increasing yields in cotton, rice, corn, and soybeans,” LaRose says.

“There will be 12 conference rooms for breakout sessions. All sessions are producer-friendly, with presentations in panel format. Presentations are given twice or three times during the conference to insure that producers can have access to all the topics.”

In addition to researchers who will discuss large-scale trials that address a variety of conservation tillage practices and problems, producers will also share their “how to make it work” experiences.

In addition to the latest information on the major crops of the southern states, there will also be sessions on precision agriculture.

“There is no better meeting for producers to learn about new techniques and systems for reducing tillage, fertility, pesticide, herbicide, and planting costs,” LaRose says.

“While the term ‘conservation tillage’ was originally applied to techniques for conserving soil by reducing the potential for wind and water erosion, farmers quickly found these practices could also cut their fuel, labor, and other input costs.

“More recently, farmers and landlords have learned that a great many other resources can be conserved through a properly designed conservation tillage program. The importance of conserving soil moisture and reducing fuel, labor, and input costs has been a key to economic survival for many farmers.”

Conference attendees from Mississippi, Texas, Alabama, Louisiana, and Tennessee can receive state pesticide recertification credits, and certified crop consultants can earn continuing education credits.

To register for the conference or to obtain further information, contact Robin Moll at 573-547-7212.

e-mail: hbrandon@primediabusiness.com

2004-05 wheat outlook a very mixed bag

It’s a long time from now until winter wheat harvest next May and June. And wheat farmers may need every one of those eight months to find an opportunity to market their crop at better prices.

Although growers planted fewer acres of wheat in 2004-05 – normally a positive sign for prices – the market is sending out contradictory signals because of production increases outside the United States, says Kurt M. Guidry, an agricultural economist with the LSU AgCenter.

Plantings of all classes of wheat fell by 2 million acres in 2004 to 59.7 million, the lowest level in the United States over the past 20 years, he said. Along with fewer acres, slightly lower yields are expected to decrease total production by 214 million bushels to 2.123 billion.

“While production has not been an overwhelmingly negative factor in this market, continued struggles on the demand side of the equation have limited price potential,” says Guidry, a speaker at the 2004 Southern Region Agricultural Outlook Conference in Atlanta.

The real culprit on the demand side, says Guidry, has been export sales. “Despite seeing improved export sales during the 2003-04 marketing year, larger world stocks and increased competition are expected to place wheat exports below the 1-billion-bushel level for only the third time in the past 15 years.

“U.S. exports are expected to fall by 209 million bushels from the previous year to 950 million bushels. While domestic demand is expected to improve moderately, the pessimistic outlook for exports is a real concern for this market.”

While U.S. production has declined, the world wheat crop is expected to reach a record 610 million metric tons for 2004-05. Increased yield prospects in the Ukraine, Romania and several member countries of the European Union will mean more competition for U.S. wheat exports.

And while growing world consumption could help offset much of that increased production, world ending stocks are forecast to be up by more than 7 percent from the previous year.

“While increasing stocks is never a positive for a market, world stocks are still relatively tight,” says Guidry. “During the 2003-04 year, world wheat stocks fell to the lowest level since the 1982-83 marketing year. That tight stock situation has helped provide support to prices over the past year. “While stocks are expected to increase, the 142-million-metric-ton level is still the second lowest in the past 20 years.”

The wheat market has gained some support from delays in harvesting the spring wheat crop. Farmers in the upper Midwest and Northwest had gathered 81 percent of the crop as of Sept. 20 compared to 100 percent of it at the same time last year and an average of 94 percent over the last five years.

Minnesota and North Dakota, two of the major spring wheat producing states, were only 70 percent through or nearly three weeks behind their normal pace. “The delay in harvest has brought questions about spring wheat quality and quantity,” says Guidry.

Guidry says wheat prices have also been drawing support from the surprising performance of export sales through the first four months of the marketing year (May-April). Sales have actually been matching the pace set last year.

The start of winter wheat plantings, meanwhile, will likely start pressuring wheat prices. This year’s unusually dry September weather allowed farmers to get a jump-start on the 2004-05 winter wheat crop.

“The quick start to planting, along with generally favorable moisture levels in major wheat producing areas, has left little concern regarding winter wheat production to the point, Guidry notes. “A continuation of favorable planting and growing conditions would likely start to add pressure to prices.”

The potential for good crops in other parts of the world and the potential for lower export demand longer term could put a damper on prices into next spring, he says. “With new crop futures currently trading in the $3.40 per bushel range, it is highly unlikely that winter wheat acres in 2005 will decline sufficiently enough to bring concerns about production shortfalls,” he notes.

Long-term trends are not favorable either. In looking at price fluctuations over the past five years, the new crop July wheat futures contract has fallen by an average of 46 cents per bushel from the first week in October to the last week in June.

“With the pressures of record world production, reduced export demand and the progression of the winter wheat crop, it is highly unlikely that this market will see appreciable price improvement by the time the winter wheat crop reaches the market next summer,” Guidry says. “For prices to improve substantially, production shortfalls would likely be needed. With world stocks still relatively tight, the potential for price strengthening on any such production shortfalls would be magnified.”

e-mail: flaws@primediabusiness.com

Rice, wheat and coarse grain update

Global rice, wheat and coarse grains stocks as a percent of consumption have fallen to dangerously low levels that have not been experienced in several decades, with the global marketplace seemly paying little attention.

Rice - For the fourth consecutive marketing period global rice consumption is projected to exceeded production. Global rice stocks, which were a record high during the 2000/01 marketing year of 38.2 percent, continue to decline, 2001/02 stocks as a percent of consumption was 34 percent, 2002/03 was 26.9 percent, 20.3 percent in 2003/04 and 2004/05 is not estimated at 16.5 percent.

Coarse Grains - 2004/05 coarse grains 14.8 percent stocks as percent of consumption is slightly above the previous marketing year’s figure of 13.7 percent but significantly below the USDA’s data set going back to 1976/77.

Wheat – 2004/05 wheat mimics coarse grains stocks as a percent of consumption. It is slightly above the 2003/04 marketing period at 23.4 percent and is significantly below USDA’s data set that goes back to 1976/77.

Why the price weakness? Trauma: With no major economic, war, or weather trauma on the horizon, supply is believed to be adequate to meet immediate needs.

Food Security: Despite all of the lip service that is given to the merits of trade, most countries are very food security conscious and where possible produce for their population. Developed countries fear giving up the security of basic food production, while transitioning and developing countries are motivated at becoming self-sufficient and even exporters.

Global Trade: Trade is small relative to production. World rice trade is about 6 percent of production; world wheat trade is about 13 percent of production and world coarse grain production is around 10 percent of production.

Global Competition: The movement toward increasingly open markets and free trade is encouraging a level of global competition that has never before been experienced in the production of basic food commodities. Competition tends to be deflationary.

Global Economic Activity: One has to marvel at today’s current level of global economic activity. With that said, global economic activity is less than uniform because countries around the world are spending a disproportioned share of their currency on certain commodities like energy and steel. This implies slower global growth and simply leaves fewer dollars to purchase other products, goods or services.

Agribusiness: Intelligin offers sale option for ginners

Uster Technologies, Inc., is offering a version of its Uster Intelligin gin process control system for sale, in addition to the lease options the company has offered since the system’s introduction.

According to Uster Technologies, the decision to offer the system for sale was based on the diverse technical needs of the ginning industry.

“There can be advantages to both the lease and the buy option,” said Alvin Ellison of Uster Technologies. “But the ultimate advantage is giving more gins the ability to use this powerful technology.”

Ellison said the lease option version of Intelligin provides ginners with total automatic process control. In this configuration, the system measures the cotton quality and automatically controls temperatures and cleaning.

The purchase version of Intelligin offers the same process monitoring functions and allows the ginner to manually control temperatures and cleaning. Ginners can also select from other options to tailor the Intelligin system to their specific needs.

“This provides ginners with a lot of flexibility, and gives them the ability to maximize profit potential from using Intelligin in the way that works best for their situations,” Ellison said.

“Either system provides the ginner with higher turnout, less waste, better fiber quality, and lower operating costs,” Ellison said. “We can have a system installed and running in as little as two days. With Intelligin, there is the opportunity for immediate improvement.”

This optimum processing results in more bales per module and less damage to the fiber, benefiting the grower, ginner and spinner, according to Uster. The company says that AFIS and HVI data show that short fiber content and neps are reduced significantly, while fiber uniformity is increased. Data has also shown optimization of staple length and leaf grade.<

Corn+Soybean Digest

Brock Online Notes

Soy Demand Said Slowing

China’s purchases of U.S. soybeans have been very strong early in the 2004-2005 marketing year, but reports indicate Chinese import demand has slowed due to tumbling domestic soymeal and soyoil prices.

Chinese traders told Reuters News Service on Monday that crude soyoil prices had lost 200-300 yuan ($24-$36) per metric ton as there had been no difficulties in discharging soyoil cargoes so far, despite new quality standards that took effect Oct. 1.

Soyoil imports surged in September as buyers tried to stock up amid worries over possible trade disruptions due to the rules. The traders said enquiries had dried up for Argentine soyoil, seen at $540-$545 a metric ton on cost and freight basis. Chinese buyers waited for domestic prices to stabilize.

Traders told Reuters that soybean buying had also slowed. With more than 4 million tons of U.S. beans reportedly booked so far, some traders even worried that China might find itself overbought again in two to three weeks. "The soymeal market is a concern," said another trader in southern China. "I think we are headed to a point where maybe we are a little bit overbought."

Traders interviewed by Reuters said domestic soymeal prices were down to around 2,600 yuan ($314) per ton, compared with about 3,000 yuan $362) in the south before the one-week holiday at the start of October.

Some traders quoted U.S. soybeans for November shipment at around $260 a ton cost and freight basis, while others said they had not checked the prices in the absence of enquiries. "We haven't had quotes for quite some time ... There are no serious enquiries," said one trader in Shanghai. "Crushing margins are decreasing."

According to the USDA, through Oct. 7 Chinese commitments to purchase U.S. soybeans totaled 3.745 million metric tons (127.7 million bushels), an increase of 35.9% over the year-earlier commitments of 2.756 million tons (101.3 million bushels), according to the USDA.

USDA reported another 2.393 million tons (87.9 million bushels) in sales to unknown destinations, many of which may be headed to China. But sales to unknown destinations are down 24.5% from a year earlier. Combined U.S. sales to China and unknown destinations as of Oct. 7 totaled 6.138 million tons (225.5 million bushels), 3.6% above a year earlier.

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.