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Articles from 2003 In December

Georgia schedules corn short course Jan. 20

The 2004 Georgia Corn Short Course and annual meeting of the Georgia Corn Growers Association is set for Tuesday, Jan. 20, at the Rural Development Center in Tifton.

Registration for the short course is 8:00-8:30 a.m. The morning session is as follows: Increasing the Value of Georgia's Corn — Impact of Value-Added Research and Business to Georgia Growers — National Corn Growers Association; Value-Added Opportunities for Corn and Policies Affecting Corn Growers in Georgia — Randy Hudson, University of Georgia; Clean Cities Program and Alternative Fuel Deployment — David Dunagan, U.S. Department of Energy Clean Cities Program; and Marketing Corn in Georgia: The Cost of Ownership and Using Marketing Strategies to Secure a Profitable Price — Georgia Shumaker, University of Georgia.

Following a sponsored lunch and the business meeting of the Georgia Corn Growers Association, the afternoon session is as follows: Tillage and Row-Spacing Trial Results and Double-Cropping Corn/Results of Three Studies — Dewey Lee, University of Georgia; Irrigation Sheduling and Sensor Technology, Including a Report on Irrigation Monitoring — Jim Hook, University of Georgia; Seed Treatment Field Studies — David Buntin, University of Georgia; Post-Harvest Maize Weevil Control — Steve Brown, University of Georgia; Impact of Fungicides on Diseases in Corn — Bob Kemerait, University of Georgia; and Research Efforts in Reducing Aflatoxin: A Biological Approach in Georgia — Dewey Lee, University of Georgia.


USDA issues new 'downer' rules

At a Dec. 30 press conference, Agriculture Secretary Ann M. Veneman said her agency will institute a national animal identification program, and will ban meat from cows that can’t walk to stand on their own.

“For more than a decade, the United States has had in place an aggressive surveillance, detection and response program for BSE,” says Veneman. “While we are confident that the United States has safeguards and firewalls needed to protect public health, these additional actions will further strengthen our protection systems.”

USDA reported Dec. 23, 2003 that a cow in Washington State had tested positive for Bovine Spongiform Encephalopathy, also known as BSE or mad cow disease. However, it is now believed that animal originated from Canada.

The new safeguards designed to bolster the U.S. protection systems against BSE, have been under consideration for many months, Veneman says. “The policies will further strengthen protections against BSE by removing certain animals and specified risk material and tissues from the human food chain,” she says.

While many cattle in the United States can be identified through a variety of systems, the Secretary also announced that USDA will begin immediate implementation of a verifiable system of national animal identification. The development of such a system has been underway for more than a year and a half to achieve uniformity, consistency and efficiency across this national system.

Additionally, USDA will now be more specific as to what can be labeled as meat when advanced meat recovery technology is used to remove muscle tissue from the bone of beef carcasses under high pressure. A hold will be put on all meat from cattle that have been tested for BSE until the test has confirmed negative, and USDA is will now prohibit the air-injection stunning of cattle to insure that portions of the brain do not end up in meat intended for human consumption.

USDA has also declared that risk materials including skull, brain, eyes, and the spinal cord of cattle over 30 months of age and the small intestine of cattle of all ages, will no longer be allowed in the U.S. food supply.

“These are initial steps that USDA will take to enhance our protection system,” Veneman says. “I am appointing an international panel of scientific experts to provide an objective review of our response actions and identify areas for potential additional enhancements.”

For more than a decade, Veneman says, the United States has had in place an aggressive surveillance, detection and response program for BSE.

According to USDA, The United States has tested over 20,000 head of cattle for BSE in each of the past two years, 47 times the recommended international standard. Since 1989, USDA has banned imports of live ruminants and most ruminant products from the United Kingdom and other countries having BSE. And beginning in 1997, the FDA prohibited the use of most mammalian protein in the manufacture of animal feed intended for cattle and other ruminants.

An independent analysis by Harvard in 2001 and again in 2003 shows that the risk of BSE spreading in the United States is low and any possible spread would have been reversed by the controls we have already put in place, Veneman says.


Outlook bullish for 2004 alfalfa hay prices

This represents a precipitous drop of almost 100,000 acres from a record high of 1,140,000 acres in 2002.

However, there are 300,000 more milk cows in California today than there were five years ago. That is one reason Seth Hoyt, senior agricultural economist with the California Agricultural Statistics Service is bullish on the 2004 alfalfa hay market.

Hoyt and Jim Tillison, executive vice president of the Alliance of Western Milk Producers, told the recent 33rd annual California Alfalfa and Forage Symposium in Monterey, Calif., that the 15-month slide in milk prices bottomed out last fall and a recovery, albeit a slow one, is at hand. That means hay prices should rebound in 2004. If they take another dip like they did last year, alfalfa fields would come out quicker than farmers could hook up disks.

Alfalfa producers statewide took serious economic hits on hay prices last year, especially in California’s Imperial Valley where the spread between 2002 and 2003 supreme quality hay prices was a gulf at $23 per ton. The price drops were less in the Tulare-Hanford-Visalia area ($20) and in the Tracy-Patterson-Stockton ($5).

Last season’s poor returns has growers looking to replace alfalfa with other crops this season.

According to Hoyt, there are some attractive alternatives, specifically cotton in the central San Joaquin Valley and processing tomatoes statewide.

Fourth more cotton

Cotton acreage could increase 20 to 30 percent in the San Joaquin Valley this season, said Hoyt, bolstered by strong prices fueled by rumored high import demands from China.

Cotton futures jumped 20 cents a pound on China buying a million bales of U.S. cotton a month or so ago, but plummeted when the U.S. challenged China’s exports into the U.S.

Hoyt said exporters are telling him the tariff dispute is a "temporary bump in the road" and "we are going to plant a lot more cotton in 2004" to meet demands of China and other importers.

California cotton is concentrated in six southern San Joaquin Valley counties and if acreage went up 25 percent, that could take 40,000 acres of alfalfa out of the market — "significant for one area of the state." The Southern San Joaquin Valley accounts for roughly half the state’s alfalfa acreage.

California cotton acreage totaled 700,000 acres last season, including 550,000 acres of Upland/Acala and 150,000 acres of Pima. Experts say Pima acreage will increase on the back of strong prices. There is little doubt it will reach 200,000 if spring planting weather is good. It could go higher.

However, it remains to be seen if the Acala/Upland acreage will increase. Some are predicting it would not, others are saying it could increase 10 to 20 percent.

Hoyt’s prediction of more processing tomato acreage is fueled by a California crop production decline of 16.4 percent last season compared to 2002. Reports are circulating that there is a world shortage of paste. Prices for paste in bins and drums jumped 10 percent in November.

To Sudangrass

Imperial Valley producers are expected to shift significant alfalfa acreage to Sudangrass for the export market.

The only caveat Hoyt attached to his bullish 2004 alfalfa hay market prediction is the uncertainty about how much milk cow hay dairies still have on hand. One of the sharpest declines in milk prices ever last year forced dairymen to cheapen their rations, lowering concentrate rations and stretching utilization of milk cow hay longer.

Typically, dairymen try to increase production to offset lower prices. "Dairymen were more concerned about survival than increasing production," Hoyt said.

A market turnaround in the dry cow hay market will depend on how quickly carryover supplies are reduced.

Dairymen may continue to cheapen up feed rations. Chicago Board of Trade futures prices are running $11.40 to $11.75. Those prices are a big improvement over rock-bottom prices of $9.50. However, Hoyt said it may take longer for the industry to "heal" at $11.50 prices.

"If milk cow hay at dairies is less that what we saw last year, I think it will tend to bring hay buyers into the market earlier in 2004," said Hoyt.

The other factor in the hay price equation is corn silage. When hay prices reached record levels in 2001, there was a 75,000-acre increase in corn silage acreage in the state. Something like that could happen again in 2004 if hay prices got too high.

Dairy outlook

The California dairy industry began extricating itself from a 15-month price malaise this fall thanks to a successful $54 million industry-funded program to reduce the number of herds in the nation; reduce milk production and promote exports.

The economic situation became so critical dairymen "actually quite buying cows," joked Tillison.

Dairymen accounting for 70 percent of the nation’s milk production kicked in a nickel per hundredweight of production to a fund for paying dairymen to reduce production.

The Cooperatives Working Together (CWT) program received 2,000 bids and accepted 376 to remove approximately 1.2 billion pounds of milk supplies from the domestic marketplace through 2004.

Almost 33,000 cows were slaughtered in the herd retirement program. Seventeen herds representing 10,000 cows were retired in California.

As a result of CWT, milk prices increased last fall. They have since fallen a bit, but should increase again when the CWT export assistance program kicks in.

California, the nation’s No. 1 milk producing state, was a strong participant in the herd retirement program. "When you retire a herd in California, it is a significant impact, much more so that in the Midwest where the impact of the herd retirement was not as significant," said Tillison.

More than 600 million pounds were taken out of the milk supply by herd retirement and another 88 million pounds were removed by dairymen agreeing to reduce production. Dairymen received about $4 per hundredweight for participating in both programs.

Tillison said the third phase of the CWT program will kick in shortly, a $20 million export assistant program to export about 30 million pounds of cheese during the next six months and about 10 million pounds of butter. These volumes represent about 500 million pounds of milk equivalent.

Will be compensated

CWT participant producers will be compensated for selling cheese and butter to exporters.

There are 1.7 million dairy cows in California and they are the driving economic force for the alfalfa hay market.

California became the No. 1 dairy state in the nation in 1993. It currently ranks No. 2 in cheese production, headed for No. 1 within three years, said Tillison. When that happens, Tillison expects Wisconsin to go "absolutely berserk."

That is the only No. 1 ranking left for California to capture. It already is No. 1 ice cream, butter and non-fat dry milk production.

Grant to protect California tree seedlings

"This $150,000 grant will fund the maintenance of more than two million tree seedlings in Magalia, Calif., and 36,000 pounds of seeds in Davis, Calif., for another year," said Veneman. "We look forward to working with California Governor Schwarzenegger on this and future projects that will benefit the residents of the state."

"I am very pleased that we have the opportunity to make this grant, as we improve California's environment while strengthening our relationship with the state," said Pacific Southwest Regional Forester Jack Blackwell. "This grant will help protect this important resource."

The native pine, fir and oak seedlings in Magalia would have been lost due to funding shortfalls, and the future of a seed bank representing California's conifer diversity was also in question before today's USDA announcement. The seedlings and seeds, which are matched to specific areas and elevations of the state, are the only realistic option for quickly replanting large areas devastated by fires, insect infestations and mudslides.

Mad cow case from north of border?

While he cautions that it’s still preliminary information, USDA’s chief veterinary officer Dr. Ron DeHaven says his department’s primary line of inquiry leads back to Canada.

“We are working to verify that information. Officials on both sides of the border are seeking only one thing, and that is the truth. We want to know exactly where this animal came from and, whether that turns out to be U.S. origin or Canadian origin, we'll let the chips fall where they may and call them as they are,” DeHaven said at a Dec. 28 technical briefing on the subject.

According to DeHaven, USDA is continuing to work with Canadian officials to verify the trace back including DNA testing, and a continued search of all records related to the cow in question. USDA’s is also tracing the other 73 head of cattle that came into the United States or appear to have come into the United States with the indexed or positive cow. In addition, two cattle facilities in the state of Washington have also been quarantined to stop movement of animals on and off the premise to expedite and prevent complications of USDA’s investigation.

“The purpose of that quarantine or hold order is not to stop the spread of the disease. It's important to realize that BSE is not a contagious disease. It's not spread by contact, direct contact, animal to animal. Rather, it's a disease with the primary means of transmission of consumption of affected proteins or proteins from an infected animal,” DeHaven says.

According to Dr. Ken Petersen with USDA’s Food Safety and Inspection Service, the beef products related to the Dec. 23 BSE-related recall did not contain those tissues known to contain the BSE agent, including the brains, spinal cord and distal ileum.

“The recalled beef represents an essentially zero risk to consumers,” Petersen says. “The eight-state recall was initiated out of an abundance of caution following the report of one cow testing presumptive positive for BSE. Even though we remain confident in the safety of these beef products we are and we will continue to verify distribution and control of all products related to the recall.

“The risk related to consumption of the recalled muscle meat is virtually zero,” he notes. “And that's because of the cautions that were put in place revolving around the extent of this particular recall. So the meat per se, because it did not contain any spinal cord-related material, we think is a very, very low risk to consumers.”

Adds Dehaven: “There is in fact a large body of scientific evidence to suggest that meat from cattle is not a tissue at risk as it relates specifically to BSE. The Organization of International Epizootics, recognized by the World Trade Organization as the animal health International standard-setting body, acknowledges that countries can safely import meat products from countries that are affected by BSE even from countries that have a moderate to high risk of having BSE.”

Dr. Stephen Sundlof with the U.S. Food and Drug Administration says the Canadian government has implemented restrictions similar to those in the United States to prevent the spread of mad cow disease. It’s also important for consumers to understand, he says, that cattle are very, very much more susceptible to this disease than humans.

Since 1989, the USDA has banned the importation of live ruminant animals and products from ruminant animals from the United Kingdom, and any other country where BSE had been diagnosed. In 1997, USDA prohibited the importation of live ruminants and products from live ruminants from all of Europe primarily due to the trading practices between member states of the European Union.

In fact, he says, both the United States and Canada have had a ban in place since 1997 that prohibits the feeding of ruminant protein to ruminants, such as cattle, knowing that that is the primary if not only mechanism for spreading the disease from one animal to another.

With the recent finding of a BSE positive cow in the United States, DeHaven says USDA is looking at any and all appropriate changes that could be made to the country’s BSE-related regulations.

More specifically, USDA is considering any changes that could be made in partnership with the industry, such as increased testing, or changes to the feed ban. At the point, DeHaven says, the changes are likely to include “all of the above.”

“There have been many comparisons made between our situation in North America and the situation in Europe as it relates to BSE. Even though we are very early in this investigation there is no indication that we have anywhere near the magnitude of the problem that Europe has experienced over the past years,” he says. “Indeed, we have reason to be confident that our preventive measures have afforded us a high level of protection. Some of those measures would include the surveillance program that we've had in place for over 10 years now, targeting that high-risk population; the fact that we've had a feed ban in place to prevent animal-to-animal transmission – and that's been in place since August of 1997; and that we stopped the importation of animals from the European Union in 1989, again which is the most likely source of any infection that we would have in North America.”

Those aren’t the only changes being considered.

A proposed rule published in November would again allow some “minimal risk” Canadian cattle products be imported into the United States, including live cattle under 30 months of age.

However, DeHaven says, “Clearly we will have to take into account this new situation, the findings of our investigation relative to this new situation as we review those comments, and consider whether or not to publish a final rule.”

The BSE incident is also likely to affect beef exports to Japan, which quickly closed its doors to American beef products at the news.

That’s unfortunate, according to Dehaven. “We feel very strongly in the United States that international trade and any trade restrictions should be well founded in the science,” he says. “Unfortunately with this situation what we've seen internationally is, again, an over-reaction, trade restrictions imposed more out of public perception than based on the science that we know about this particular disease. We think that the restrictions that are being imposed should be lifted.”

The United States, he says, has a “very good” program in place to prevent BSE in this country, and any trade restrictions being imposed are “not well-founded in science.”


Virginia/North Carolina risk seminar planned Jan. 12

A risk management seminar is planned for Jan. 12 at the Paul D. Camp Community College Regional Work Force Conference Center in Franklin, Va.

The seminar is designed to provide timely risk management information to agricultural business and policy decision makers. It begins with registration at 9:30 a.m.

Experts will present information on grain contracts and market outlook, peanut market structure, peanut contracts, cooperative marketing possibilities and peanut market prices.

Jonah Bowles of the Virginia Farm Bureau will discuss grain contracts and give a market outlook. Dallas Barnes of Severn Peanut Co. will talk about the peanut market structure. Billy Barrow of Golden Peanut Co., Fred Garner of Birdsong Peanut Co. and a representative of Severn Peanut Co. will discuss types of peanut contracts. Dell Cotton of the Peanut Growers Cooperative Marketing Association will discuss cooperative marketing possibilities. Gary Bullen of North Carolina State University Extension and Jim Pease of Virginia Tech will discuss peanut market prices.

In the afternoon, Mike Roberts, with the Virginia Tech Extension Service, will present peanut, soybean and corn budgets looking at cost per acre, cost per unit and potential income from a program acre.

A bank representative is scheduled to discuss evaluation of a loan application. Wayne Purcell, Virginia Tech professor emeritus, will discuss the Capital Access program.

A representative of the USDA Risk Management Agency will also discuss crop insurance, including the policy potential for cost of production coverage and contract income coverage.

To register, call the City of Suffolk Extension office at 757-923-2050 or 757-923-2051.


With BSE, Industry Must Pull Together

On Tuesday evening, I was driving across Eastern South Dakota on my way home for the holidays when the 6 p.m. radio news led off with a report by USDA Secretary Ann Veneman. Bovine Spongiform Encephalopathy (BSE) had been discovered in a Washington state Holstein cow.

That newscast was followed by a syndicated talk show, in which the host criticized Veneman for assuring Americans that the case was not terrorist related. It was obvious that the commentator wasn't familiar with the dynamics of the disease. He all but called Veneman a liar for issuing such an assurance so closely on the heels of the discovery announcement.

Within 15 minutes or so of this host's (Chicken Little) rant, a couple of cattle producers, one from South Dakota and the other from Nebraska, called in to point out that Veneman's statements were justified. The callers said that, given what was known about BSE and its etiology, it was a highly unlikely root for a bioterriosm attack. The two callers assured the radio audience that Americans have little to worry about regarding BSE from either a food safety or bioterrorism standpoint.

A confirmation of BSE in the Washington animal won't be known for a few days, but the U.S. beef industry learned what's in store. Within hours of the announcement, Japan implemented a temporary ban on U.S. beef imports into the country. By Wednesday morning, South Korea, Mexico, Hong Kong, Malaysia, Singapore, Australia and Taiwan followed with temporary bans as well. That same morning, publicly traded beef-related stocks were losing ground across the board.

The two well-informed producers who called into the talk show likely won't have any effect on the world trade aspects of this BSE case. But they played a valuable role in helping to salve the anxieties of fellow listeners. And they illustrated the role that good, accurate information, credibly delivered, will play in the coming days and weeks.

On the national level, the National Cattlemen's Beef Association (NCBA) was front and center in providing information and spokespeople to the networks. And, early network coverage had been fairly balanced and reassuring to consumers, on the whole.

It is in crisis times such as these that the work of such multi-issue member organizations such as NCBA is most visible. But rest assured that NCBA and others like it have been on the job all along.

It was NCBA's leadership and cooperation with USDA and other groups and government agencies that helped diffuse U.S. consumer reaction to Canada's BSE announcement in May 2003. In fact, surveys at the time showed confidence among U.S. beef consumers actually grew.

The yet-unconfirmed case of BSE in the U.S. also points out the wisdom of NCBA's push for a science-based response to BSE outbreaks in foreign countries. While some quarters were calling for the continued closure of U.S. borders to Canadian beef and cattle imports -- ostensibly as a way to boost US domestic markets -- NCBA's membership called for a reasoned response based on science.

The road ahead for the industry is unclear and much remains to be sorted out. To the benefit of the U.S., much has been learned about BSE since it originally broke in the United Kingdom in 1986. Now is the time for the industry to pull together and face this challenge with a unified front. Everyone involved in this industry owes it to the business to educate themselves on the disease and the industry's response -- and help deliver the correct information when and where they can.

For more information on BSE, please visit

Corn+Soybean Digest

Year in Review

Year in Review

The following summarizes a few thoughts for 2003. To say the least, it was a year of extremes inside and outside of agriculture, which has implications on management.

  • Dry in the west and wet in the east, both hindered quality and quantity of crops.

  • High prices for beef and low painful conditions for the dairy industry.

  • Land prices continue to be strong because of urban pressures, government supports, low interest rates and the desire to own a piece of America.

  • My Canadian friends survived despite four major hits: SARS, the blackout, the Mad Cow breakout and forest fires in the West.

  • Top five concerns of producers going into the next year:

  1. Weather and water

  2. Healthcare costs

  3. Balancing time and family

  4. Consolidation of the food sector

  5. Global markets

The stock market and economy are making a fragile but nice recovery, but not for the workers.

Thoughts on managing in this environment:

  • Prices are established globally, and costs, locally. Low overhead cost per unit will be a critical element to examine in your business structure.

  • Analyze trends, not specific points in time. Is it a good year and good trend or bad year and bad trend?

  • Cash and financial liquidity is still king, allowing you to get through the valleys of low earnings and cash flow and capitalize quickly on opportunities.

  • What’s your people strategy? Whether it is suppliers, employees or acquaintances, getting the right people on your business bus in the right seats works well in any environment, whether it is farming, small business or coaching.

  • Balance, in a multi-tasking world with cell phones, e-mail, and a 24-7 environment, is a key word in everyone’s playbook. Occasionally sit down by the log cabin and old mill and watch the river flow.

We wish you a happy holiday season!

See you next year!

My e-mail address

Editors' note: Dave Kohl, The Corn and Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He recently completed a sabbatical working with the Royal Bank of Canada. He is now back at Virginia Tech with his academic appointment, which is teaching, extension, and applied research.

To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.

This online exclusive is brought to you by The Corn and Soybean Digest

Corn+Soybean Digest

Scientist Says Aphid Invaders Pose Specter Of 'Clone Warfare'

The Chinese soybean aphid is no bigger than 1/16-in. long fully grown, but what it lacks in size it more than makes up for in numbers, warned a speaker at the University of Missouri (MU) Crop Management Conference in Columbia.

"This thing is built as a reproductive machine in that it reproduces asexually," says Ken Ostlie, University of Minnesota entomologist. "They're all basically females, and the mother essentially clones herself. What we face is the challenge of clone warfare."

Minnesota has the worst problems with the soybean aphid, a native Asian pest that appears on soybean leaves by the thousands, seemingly almost overnight, Ostlie says. The current economic threshold is set at 250 aphids per plant. "They can go from 250 to more than 800 in less than a week."

That state's soybean farmers have seen not only significant yield losses, he says. "We've seen changes in soybean quality as well in the form of less oil and smaller beans."

The pest has been moving steadily south, said Tom Clark, MU entomologist. "We first detected it here in 2000, in northeast Missouri," he says. "Last year, we saw a pretty wide expansion. It's probably safe to assume that it's now everywhere in the state where soybeans are grown."

High-pressure weather systems bring northeasterly winds that carry millions of the tiny pests, Clark said. "A lot of them drop out over parts of Missouri."

The soybean aphid "doesn't take long to colonize an entire state," Ostlie says. "These things move pretty quickly." One reason it has thrived in Minnesota is because "the cooler it is, the longer they survive," he says. "Anything 95 degrees Fahrenheit or above is basically a lethal temperature. In Missouri, you're going to have a better chance of having those high temperatures that will hold them back."

Unfortunately, the soybean aphid could be highly adaptable. Its range in Asia stretches from southern Siberia to the tropical climes of Indonesia, Ostlie says. "You'd expect over time to see an adaptation taking place."

Clark agrees. "We have high summer temperatures, and that slows down their reproductive cycle. But who's to say there couldn't be a mutation, so that the species would do better in higher average temperatures?"

Research in Minnesota and Missouri has shown seed treatments and repeated insecticide spraying afford some degree of control. But seed treatments are effective only in the early part of the season, Ostlie says, and soybean aphids "can sense when the residual effect of the pesticides wear off and the plant is safe for re-colonization."

Pesticides also endanger other beneficial insect species that feed on the soybean aphid, Clark says. Many of those insects - damsel bugs, minute pirate bugs, lacewings and parasitic wasps, to name a few - "are already in place in Missouri." The soybean aphid is also known to overwinter here, he adds.

The pest often overwinters on buckthorn, says Wayne Bailey, MU extension state entomologist. "We have at least seven species in the state, and we know that three species serve as overwintering hosts of the soybean aphid."

Despite the influx of soybean aphids into Missouri last year, Clark says, very few fields experienced the economic threshold of 250 bugs per plant, at least partly because of the fierce summer heat and the pest's natural predators.

Nevertheless, Ostlie says, "we just don't know what we're going to see in the long run. There are so many factors. "This is one insect I respect."