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BASF ends year on positive note

RESEARCH TRIANGLE PARK, N.C. – A combination of several winning product launches, a focus on meeting customers’ needs and successful efforts to manage costs resulted in a positive year for the BASF Agricultural Products business in North America in 2003, the company announced.

“We are pleased that the business strategy we instituted in late 2002 worked successfully in 2003,” said Bill Wisdom, vice president of Agricultural Products, North America, for BASF. “Overall, a number of factors, including a focus on profitability, a business model designed to meet the needs of our customers, new product launches, and cost management efforts, combined to produce a very positive year for our business in North America.”

Among specific accomplishments in 2003 for North America, Wisdom cited:

-- The introduction of new products include Headline and Cabrio EG fungicides for the citrus, peanut, potato, cereals, fruit and vegetable markets; Pentia plant regular for cotton; and the Clearfield Production System for wheat and sunflower, including Beyond herbicide, Insignia fungicide for the golf course market, Pendulum Aqua Cap herbicide for the professional turf market, and Overdrive herbicide for the non-crop pasture, hay and rangeland markets.

-- BASF successfully completed the purchase of the active ingredient fipronil, incorporating Regent insecticide into its growing portfolio of products for the nation’s corn growers. This acquisition also strengthened the U.S. Specialty Products business by adding Termidor, the leading termiticide/insecticide, to the BASF professional pest control portfolio.

-- BASF proactively streamlined its business in an effort to compete long-term in an ever-changing market and refocused on the business needs of its customers.

-- The company continued to identify and incorporate ways to strengthen its relationship with key customers in 2003.

“Like our distributor and retailer partners, we are striving to focus on core competencies; deliver a differentiating offer; set reasonable business expectations; and responsibly manage costs,” Wisdom said. “We saw that strategy work in 2003, and we intend to stay on that same course in 2004 and beyond.”

Looking to 2004, the company is launching at least four new products to the marketplace, including Pristine and Endura fungicides for the fruit, vegetable, peanut and tree nut markets; and Prowl H2O herbicide for the corn and soybean market, and Habitat herbicide for the aquatic weed control market in North America.

“These launches are not only indicative of our strong product-development pipeline, but reflect our ability and commitment to meet the needs of our business customers and ultimately their customers as well.” Wisdom said.

“We take nothing for granted, but we are optimistic heading into 2004 and beyond,” Wisdom said. “Working closely with our trade partners we are on track to meet the challenges of today’s changing markets and confident we will meet the expectations of our customers.”

For more information about BASF products, see your local retailer or visit the BASF Web site at www.agproducts.basf.com.

With sales of €3 billion in 2002, BASF’s Agricultural Products division is a leading supplier and marketer of fungicides, insecticides and herbicides. Based on its broad experience in R&D, manufacturing, marketing and sales, the vision of BASF’s Agricultural Products division is to be the world’s leading innovator, optimizing agricultural production, improving nutrition, and thus enhancing the quality of life for a growing world population. Further information on BASF Agricultural Products can be found on the web at www.basf.de/en/produkte/gesundheit/pflanzen.

e-mail: flaws@primediabusiness.com

Award goes to Ironstone's new Leaping Horse label

Recognition for their fast-selling "Leaping Horse" wines aimed at entry-level consumers is only the latest in a series of milestones for Lodi, Calif., grower-vintner John H. Kautz and his family.

In January at the Unified Wine and Grape Symposium in Sacramento Kautz received the "Rising Star Award" for the new line of Cabernet Sauvignon, Merlot, Chardonnay, White Zinfandel, and Shiraz retailing at $5 to $6 per 750 ml bottle.

The new selections, which join Kautz’ Ironstone Vineyard’s existing core ($8 to $12) and reserve ($15 to $25) brands of leading popular varietals, were launched in January and February of 2003 and earned an 87 percent sales growth during that year.

Kautz, who has accumulated 5,000 acres of vineyards around Lodi since he started growing wine grapes in 1968, was a founding member of the California Winegrape Growers Association. He was president of the California State Board of Food and Agriculture from 1990 to 2001.

"We were hoping to sell 50,000 cases of Leaping Horse, but sales went to nearly 350,000," said Kautz. The majority was sold in the eastern U.S., and, surprisingly, only a small portion was sold in California. "Now we have to go to work on studying the demographics to find out who’s buying it."

The triangular-shaped label, featuring a stylized horse and rider poised in midair, is also color-coded by variety. "The label itself is appealing enough," Kautz said, "for consumers to pick it up. Then once they’ve tried the wine, they are back buying it again."

Success factor

Leaping Horse, he said, owes some of its acceptance to the phenomenal success of JFJ Bronco Winery’s Charles Shaw label, also known as "Two-buck Chuck," priced at $1.99 per bottle at Trader Joe stores. Those sales absorbed much of the California glut of bulk wine.

"Consumers have found they can buy some excellent quality wine at very low prices. That has in turn encouraged them to experiment with other wines, and it possibly has had some effect on people trying and buying our wines again, even at double or triple the price of Two-buck Chuck."

A native of Lodi, Kautz has been in farming all his life and started on his own farming tomatoes in 1948. Always mindful of the Lodi district’s warm days and cool nighttime breeze ideal for grape growing, he later developed his vineyards and in 1971 planted the first heat-treated Cabernet Sauvignon in the district.

Over the years, he was also an early proponent of Merlot and chose varietals such as Cabernet Franc, Petite Syrah, and Syrah for their utility either as stand-alone wines or for use in blending.

Now each season the Kautz family crushes 30,000 tons at their Bear Creek Winery at Lodi and 3,500 tons at their Ironstone Vineyards winery at Murphys. The combined output yields more than 700,000 cases per year, making theirs the 18th largest winery operation in the U.S.

Family involvement

John and his wife Gail are chairman and vice chairman, respectively, of the family corporation, and their four children have principal responsibilities.

Stephen manages the Ironstone Vineyards operation, Kurt handles the farming and Bear Creek Winery, Jack oversees property development and sales, and Joan is in charge of exporting to 44 countries.

John said the Ironstone venture came from much planning and selection of a site for both farming and tourism. Their property at Murphys was originally selected for apple and grape growing because of its climate: "above the fog and below the snowline."

The Ironstone name comes from the very hard bedrock formation blasted away to form caverns for cooperage.

They broke ground for the winery at Murphys in the fall of 1989 and made their first crush in 1991. Modeled after a Gold Rush-era stamp mill, it opened to the public in 1994. The structures and grounds -- including award-winning gardens -- host weddings, conferences, and cultural events. At times, weekend visitors number 2,000 to 3,000.

The plan was to build a winery and enhance their label at the same time. A label can be built in either of two ways, Kautz said. One is to spend millions on advertising and promotion. The other is to spend the same amount on a beautiful facility that will generate credible coverage in newspapers and magazines to attract visitors.

"When people see a facility like this they remember forever. When they see an advertisement they remember for only a very short time."

Industry changes

Consumers, now oriented toward higher quality at lower price, are changing the way the wine grape industry does business. Many industry leaders, including Kautz, believe the change is structural and not another of the periodic boom-and-bust cycles of the past.

"It’s going to have a long-term effect on a lot of growers in the coastal areas. They will have to compete, given the prices wineries will be willing to pay, during the next few years, and I don’t know if they can do it.

"I also think it’s going to be a while before growers see much over $500 a ton for any variety. And at four tons to the acre as an average over the years on the coast, $2,000 an acre doesn’t even cover direct costs."

Anyone who plans to survive in grape growing, he added, will have "to produce quality grapes, with a balanced sugar-acid ratio, at pretty low prices."

He added that the wine grape dilemma is not confined to California. "Argentina, Chile, Australia, New Zealand, South Africa, the south of France, and even Eastern Bloc counties, are expanding their capacity and want the U.S. market."

Watch weather for nitrogen timing

Growers are always asking us when is the best time to top dress winter wheat in this region. We have been working with timing studies since the mid 1980s, and we reviewed our research trials to try to make some sense out of the numbers.

We found data on 14 studies from 1987 to 2003. Over that period, we have compared an early application (early February) to a late application (early March) to measure the optimum timing for grain yield. After summarizing the data, we found in some years, timing did not make very much difference – the early February applications made almost as much as the early March applications. Other years, the late application made 8 or 9 bushels more than the early ones.

We assembled rainfall data over the same period (courtesy of Maynard Cheek), and found a common denominator. Years with very wet springtime conditions in March and April favored the March applications. Later applications during those years produced 8 or 9 bushels more than the early February applications. On the other hand, in years where March and April rainfall was less than normal, there was very little difference in grain yield between the early and late applications.

We believe this can be explained by nitrogen loss through denitrification and surface runoff. Denitrification is simply the loss of nitrogen in a gaseous form to the atmosphere. It is the most common form of loss in heavy soils with a low water infiltration rate. Most of our Blackland and transitional Blackland soils have water infiltration rates of less than 0.2 inch per hour. The top few inches of soil quickly become saturated during a heavy rain.

Warm, saturated soils create ideal conditions for a number of facultative anaerobes, bacteria that operate in the absence of oxygen, which can use the oxygen off the nitrate ion and release the nitrogen back into the atmosphere. This is called “denitrification,” and can at times reach 10 pounds of nitrogen per acre per day. Heavy water runoff during this time can carry soluble nitrogen away from fields and into waterways. We do not see these types of nitrogen losses in drier years, which likely explains why there is little difference between the early and late nitrogen applications.

How should a producer use this information to maximize profits? None of us have the benefit of a crystal ball so we cannot determine the wet years ahead of time. Over the past 20 years, we have been well served by targeting mid February to begin topdressing our wheat and hope to be finished by the first week in March. In research plots, we have produced as much wheat by topdressing in mid March (often past jointing) as we have in early March.

James Swart is an Extension IPM specialist, and Don Reid, professor and agronomist, at Texas A&M-Commerce.

e-mail: rsmith@primediabusiness.com

'Price new crop on 69-cent-plus rallies'

LUBBOCK, Texas – As cotton farmers prepare to plant their 2004 crop they might better keep one eye on the weather and the other on the futures market.

“If December 2004 futures rise to the 69 cents level before June, be ready to price some, maybe most, of your cotton,” advises Texas Extension cotton marketing specialist Carl Anderson.

Anderson offered a marketing outlook at the annual Southwest Crops Production Conference and Expo in Lubbock and said increases in U.S. and world cotton acreage likely will cause price reductions.

“A 10-percent increase in U.S. acreage this year may produce an 18-million-to-20-million-bale crop,” he said. Coupled with anticipated increases across the cotton-producing countries, carryover stocks could increase “sharply to around 6 million to 7 million bales, similar to 2001/2002. The price would be less than loan rate.

“The extreme market uncertainty along with a restructured market environment is a strong signal for growers to develop marketing and pricing strategies early to reduce exposure to sudden adverse price moves,” he said. “The farm program provides a reasonable safety net.”

He said growers could do better than loan rate, however, if they work the market. “When growers intend to plant around 10 percent more cotton worldwide, chances are good for a season with more cotton and at least a 10 cents to15 cents drop in December futures.”

That drop would bring cotton from the mid-60-cent level in mid-winter to the low 50-cent range and near the 52-cent loan rate by October or November.

A 10-percent acreage increase would push world production from 92.65 million bales from the 2003 crop to 99.5 million bales in 2004. Added to a 32.36-million-bale beginning stocks, total supply would be more than 131 million bales. Anderson said the “A” index price would fall to around 59 cents a pound, a steep decline from the near 71-cent index on the 2003 crop.

He said world production in 2003 was up by 4.4 million bales compared to 2002. Consumption dropped by just less than 1 million bales, but ending stocks also declined by 4.3 million bales. The “A” index rose 15 cents per pound.

Anderson said farmers find an “export-driven market hard to predict. We could see a $100 per bale price swing between contract high and lows. Expect roller coaster dips and rallies, as the market will tend to move too high or too low.”

Anderson said producing high quality would take some of the uncertainty out of the market.

“Look for better varieties that produce better quality cotton and higher yields,” he said. “Look for something that consistently brings at least 4 cents per pound over the 52-cent loan value.”

He said the market wants 35 staple and higher, 28 to 32 grams /Tex. “At 25 grams/Tex expect a big discount. Micronaire should be around 4.3.”

Anderson said China remains the market catalyst. “Chinese cotton warehouses must be empty before mills get licenses to import. A spurt of buying should be a trigger if the United States has cotton to sell.”

He said a 70-cent- per-pound range “is as high as I can see it going. We’ll export 11 million bales from the 2003/2004 crop. We’ll use 6 million and we can make 19 million bales. A 2-million-bale carryover will push prices down.”

Anderson said mill buyers could look to build stocks while markets “are on a slide. That could mean a rally of 5 cents on the old crop, maybe 4 cents on the new.”

He said bad weather could result in a stable crop for 2004. “Falling stocks would result from a disaster and that’s unlikely. The possibility is strong that stocks will increase and prices will drop.”

Anderson said options trading offers growers an opportunity to reduce price risks. “Just after harvest, farmers should think about the year ahead. If they work smarter and not necessarily harder, they can make money in the cotton market.”

He said buying a December 2004 put at 62 cents a pound would cost about 2 cents a pound. If the price drops to 50 cents, the option value increases from a 2-cent cost to a 12-cent advantage. The gain for the farmer would be 10 cents per pound. If the price drops to 55 cents, the gain would be 5 cents.

“In an uncertain export-driven market, cotton options are likely to be used more to insure price,” he said.

Anderson offered three rules for cotton marketing:

  • “Markets are not going to give you anything.

  • “You have to take pricing opportunities from the market.

  • “Develop year-round plans to price commodities favorably.”

Anderson said from Jan. 6 through Feb. 10 of this year “cotton prices dropped 1 cent per day. The market can flip at any time, so farmers have to be quick.”

e-mail: rsmith@primediabusiness.com

World wants quality cotton

Perhaps the stars and the planets are finally aligned in the proper positions to allow Southwest cotton farmers to pick up a premium for high quality.

“The world is not accustomed to the current demand for high quality cotton,” says Ed Jernigan, chairman and CEO of Globecot, a cotton marketing service, based in Nashville, Tenn.

Jernigan outlined the current cotton market situation and also took a look ahead and offered a historical perspective on cotton quality demand during a crop consultant seminar, sponsored recently by Bayer CropScience at South Padre, Island, Texas.

Jernigan said South Texas farmers “have done the best job of anyone in the United States to change to what the cotton market wants.”

He said for years the industry looked for ways to keep Texas cotton off contract. “Today, Texas growers have changed to what the market demands.”

Jernigan said the current emphasis on high quality resulted from a combination of factors in China’s textile industry.

“China is the world’s largest consumer of cotton and the largest U.S. cotton customer. But historically, China imported lower grade cotton and relied on domestic production for the high quality cotton they needed.”

He said the Chinese textile manufacturing sector has undergone changes similar to those in other countries. High speed spinning demands stronger and longer staple cotton to run efficiently. In 2003, much of China’s crop was destroyed by heavy rain and flooding. “They did not produce enough high grades and had to come to the marketplace for high quality cotton and the United Sates had it. They bought a lot of South Texas cotton.”

Jernigan said China has exhausted its cotton stocks. “Those reserves no longer play a role in the market. Their domestic crop produced only 22.4 million bales instead of the anticipated 29 million. By Feb. 1, 2004, China had bought 5 million bales of cotton. I think they will buy 10 million bales.”

He said China will likely be in the market for some time, “but will not import shorter staple. They don’t want one and one-sixteenth-inch cotton, although there are no absolutes with Chinese marketing. Most likely, they’ll want one and-one eighth inch or better.”

Jernigan said textile demand in China grew by more than 10 percent in 2003.That demand is likely to increase, a result of the Cultural Revolution and increased consumer demand.

China likely will increase cotton acreage. On-farm price for cotton is just slightly less than 80 cents a pound, so it’s a promising option. “China increased acreage by 15 percent or 16 percent last year,” Jernigan said. “But China also has a program to stimulate grain production and that may cut into cotton acreage expansion.”

He said cotton production for 2004 could range from 27 million bales to 32 million bales, if conditions are perfect. “I don’t use that 32 million bale figure in estimates but it remains a possibility. A 27 million to 28 million bale crop seems more realistic and at that level, China still needs to import cotton.”

Jernigan said Bangladesh, India, Indonesia, Pakistan and Turkey also will come into the cotton market. Turkey most likely will look for lower grades, but the others need higher quality cotton. Jernigan said Bangladesh could import about 1.7 million bales; India could buy 1 million, Indonesia looks for as many as 2.2 million bales for import; Pakistan takes about 1.75 million and Turkey imports 1.8 million.

With that much demand for higher grades, “we’re seeing a shrinking supply of high quality cotton,” Jernigan said. “And futures prices for Strict Low Middling, one and one-sixteenth cotton do not always reflect what’s going on in the market.”

He said South Texas growers’ decision to add FiberMax varieties into planting schemes several years ago may now pay dividends. He said the top tier of the world’s best quality cotton includes West Africa and Central Asia, which is considered high quality but with contamination problems; San Joaquin Valley Cotton, which has a good reputation; Australian cotton that mills want; California/ Arizona and Zimbabwe cottons, also with good reputations for high quality; and now U.S. FiberMax, with a good name for quality cotton.

“For the 2004/2005 marketing year, the quality of U.S. cotton plays a crucial role in export viability,” he said. “Demand for quality will be high.”

He said a mid-60-cent futures price in mid-February seems a good floor. “I don’t see much downside risk and we could see rallies above 70 cents, contingent on world acreage. A 100-million bale to 102-million bale production projection would set a record.”

A price rally back in October may have spurred interest in expanding cotton acreage, Jernigan said. “Recent dips could limit increases. And any hiccups in production, monsoons, droughts and so forth, could stimulate price rallies.”

Jernigan said competition from synthetic fibers continues to hurt cotton. China also tops the list as the world’s largest manmade fiber consumer. “Before cotton prices jumped last fall, cotton claimed 51 percent of the fabric share in China. After the jump, the share dropped to a bit more than 49 percent, so the price differential meant only about a 1.5 percent blip.”

Jernigan said a quality and price relationship shows up in cotton marketing as far back as 1825, when Sea Island cotton in South Carolina brought $1.10 per pound. Regular upland cotton sold for about 9 cents a pound at the time. Sea Island cotton featured long staple. Growers also maintained a strict quality control on seed. And the cotton was bagged instead of baled.

Jernigan compared cotton grade charts from 1946 and recent production for Arkansas, Mississippi and Texas. In a 1946 classing guide, Mississippi averaged 34.2, Arkansas 32.2 and Texas 30.5.

Recent guides show a little change in Arkansas, at 34.8 and Mississippi at 34.5, but Texas has improved to 34.3.

He also says the U.S. base quality for cotton, SLM one and one-sixteenth, is too low, but was put in place with the 1977 Food and Agriculture Act.

Finally, Jernigan said the change in the domestic cotton industry would mean a strong reliance on exports. In 1977, U.S. production hit 14.4 million bales; domestic use was 6.4 million bales and exports were 5.4.

“In 2003/2004, the United States cotton industry exports more than doubled domestic use.”

And as the export market becomes the most important sales outlet, farmers must adjust production to what that market demands, Jernigan said.

e-mail: rsmith@primediabusiness.com

'What were we thinking?'

Those of you considering shucking your current career or crop enterprise mix and venturing into the domesticated goat cheese business, as we all do from time to time, might want to read a book on the topic before making much of an investment.

The Perils and Pleasures of Domesticating Goat Cheese, by Miles Cahn, should shed a bit of light on what awaits an unsuspecting novice in the goat-raising and cheese-making industry.

Cahn often resorts to the phrase “What were we thinking?” as he recalls the process of restoring a run-down, 300-acre upstate New York farm into an agricultural enterprise that would “pay for itself.”

Mr. Cahn’s adventures probably ring true with a number of former city dwellers who decided that a small farm would provide a nice getaway from the traffic, congestion and stress of city life. His experience with ramshackle buildings, poor soils and an inadequate water supply also might invoke a wry smile from kindred spirits who longed for a simpler life.

It started out simply enough. Cahn and his wife, founders of the Coach Handbag Co. in New York City, succumbed to a Green Acres urge and bought a small farm as a weekend getaway.

“Picturing ourselves going up to this beautiful farm every weekend to unwind, we could not imagine there would soon come a time when we would actually be living and working up there, trying desperately to get away from the farm and go down to the city for a little peace and quiet,” Cahn writes.

They decided to turn the farm into a milk goat dairy and cheese factory, hoping to make enough cheese to provide a consistent supply to stores and restaurants in New York City. Apparently, they ignored rule number one of running a dairy. Don’t plan to leave the farm. Ever.

The snowball began to roll. They built milking parlors, drilled wells, improved pastures, hired a herdsman and farm manager, bought purebred goats and constructed a cheese facility, all with no identified market for their end product.

“We were so taken by the sheer elegance of this concept that we completely overlooked the fact that at the time there was scarcely a restaurant in the whole city (New York) serving goat cheese.”

They overlooked a few other facts as well and as renovations progressed, they found the getaway as much work as they left the city to avoid. Finally the weekend escape turned into a never-ending operation, so the Cahns had to decide which full-time career to keep, the successful handbag business or goat cheese.

They chose cheese. What were they thinking?

Apparently, it’s worked out. The operation, dubbed Coach Farm, now boasts 1,000 head of milk goats, all of whom have names. I can’t contemplate having to remember the names of 1,000 goats. I have four siblings and I can barely remember what to call them.

I’ve never owned a goat. Never wanted one. But the Cahns seem to have found another successful niche. They learned how to raise goats, how to make cheese and how and where to sell it. But from Mr. Cahn’s descriptions of the renovation process, the project required significant outlays of cash and profitability came slowly.

Turning a run-down farm into a modern goat dairy is for neither the weak of heart nor the short of cash. One wonders how far the enterprise would have gone had the family not had either great credit or significant financial resources.

The book itself (Catskill Press) is little more than a personal essay on perseverance. The text takes only about 20 pages, some of which tends to tediousness in detailing the cheese-making process. Parts, however, are amusing descriptions of the frustrations and pitfalls awaiting anyone taking on new challenges. The largest part of the book consists of nicely done photography by Cahn’s daughter, Julie.

The Perils and Pleasures of Domesticating Goat Cheese might make a good resource to keep handy for folks coming to the Southwest countryside “to get away from it all.”

It might also do as a handy guide when farmers contemplate taking on a new enterprise to bolster profits. Regardless of how good a scheme sounds, there’s always a goat in there somewhere to provide a touch of reality.

e-mail: rsmith@primediabusiness.com

Georgia oilseed co-op pushing for shareholders

It's put-up-or-shut-up time for Southern farmers who may resent or envy the share the "middle man" gets of their crops.

"Farmers always say the guy they sell their crops to is the one who makes the most money," says Robert Carlson, chief executive officer of Farmers Oilseed Cooperative of Claxton, Ga. "Now they have a chance to be that guy."

The FOC began offering stock in the "new-generation cooperative" last December. Carlson and others are crisscrossing the state, meeting with potential investors. The co-op plans to build a $66 million processing facility near Claxton, Ga.

The plant would crush 900 tons (30,000 bushels) of soybeans or 700 tons of canola or peanuts per day. It would supply a refinery that would produce 300 tons of edible oil per day, focusing on high-value retail and food service products.

So far, farmers haven't been beating down doors to get in on the deal. The co-op must sell at least 8 million shares and aims for 11 million. But in late January, sales had reached only 280,000 shares.

To invest, a farmer must buy a $500 share of common stock and put down a 10-percent deposit on at least 2,500 shares of class A stock at $2.45 per share. The latter are tied to the right and the obligation to sell oilseed crops to the co-op. A 10-percent discount is available until March 15.

"I don't think the money is that big an issue," says George Shumaker, an oilseeds economist with the University of Georgia College of Agricultural and Environmental Sciences.

Three things, he said, are holding back farmer investors.

One, "trying to grow a new crop for a market that doesn't yet exist is hard to visualize," Shumaker says. Part of the uncertainty is that Georgia farmers aren't familiar with the new co-ops. Successful examples, though, are plentiful in the Midwest.

In the co-ops they've known, someone starts a business and invites others to buy into it. New-generation co-ops start with a group of farmers who obligate themselves to making the venture work.

A second restraint, Shumaker says, is that for most Georgia farmers, oilseeds aren't their biggest concern. Cotton and peanuts are their big crops. Canola, in particular, is a crop few Georgia farmers have grown. But Shumaker says it has the sweetest potential in the new co-op.

A few farmers here have successfully grown the winter crop but couldn't make it work with the nearest market in Canada. The co-op would provide a local buyer, and Shumaker pegs the income for co-op members at $2.50 per bushel above the market price.

A third hold-up, he says, is the discouragement farmers are hearing from buyers, grain elevator operators and others who would be competitors. These are people they've had long-term relationships with," he says. "These are people they trust."

Both Shumaker and Carlson, a 30-year veteran of the oilseed industry, say they're confident the venture will succeed if the needed farmer investments materialize.

"I don't think there's any doubt they will be successful if they get the funds," Shumaker says. "Their business plan is sound. You can see in the Midwest how competitive these co-ops can be in a market that seems to be driven by large corporations."

If the co-op does succeed, he predicts it will lead to similar co-ops for other Georgia crops. The one abiding question, though, is whether enough farmers will invest to get it started.

Carlson says farmers must appreciate its value-added nature. "And they have to be willing to think long-term," he says. "It will be late 2007 before they get the first nickel back."

Will farmers come up with the money? Carlson isn't making bets. "I'm much more confident in the plant succeeding than I am in getting the investment funds," he says.

Boll Weevil Program vote scheduled

This spring, Regions 1, 2 and 3 of west Tennessee will decide whether to approve a new referendum which would restructure and extend boll weevil eradication efforts. Ballots will be mailed to eligible voters in early March and are scheduled to be counted on March 25. The ten-year program would cost growers an annual maximum of $12.25 per acre of cotton. It is anticipated that assessments would drop to $5 per acre or less after the proposed, 10-year program expires. This prediction is based on costs in areas that have already completed eradication, such as middle Tennessee. If the proposed referendum passes, it will replace the current referendum, and growers will not pay the previously approved assessments for 2004 and beyond.

The current program includes a maximum annual assessment of $20 to 32.25 per acre, depending upon which region a farm is located. To date, grower costs have been reduced by about 20 percent because of state funding contributions. State support is expected to continue for 2004 and beyond, although how much is uncertain. Any state funding would offset some of the proposed $12.25 per acre fee.

The Region 1 program is scheduled to expire following the 2004 growing season. Three years of full assessments remain for growers in Regions 2 and 3 under the current referendum. If the proposed referendum is not approved, the eradication program will continue in 2004 based on the currently approved referendum. However, Region 1 producers in the southern counties of west Tennessee must pass a new referendum before the growing season of 2005 if eradication efforts are to continue.

Following “active” eradication programs, a maintenance program is necessary to prevent boll weevils from re-establishing within eradicated areas (and promptly dealing with any re-infestations). This is accomplished by maintaining a trapping and equipment infrastructure. In the long run, this job gets easier and cheaper as boll weevil eradication progresses across the Cotton Belt. However, calling the pending referendum a maintenance program is a misnomer because west Tennessee has not completed the active stages of boll weevil eradication.

The proposed referendum will cover operating expenses necessary to finish eradicating the boll weevil in west Tennessee. It will also refinance existing debt and include maintenance program costs over the next ten years.

Cost overruns have accumulated since the program began in west Tennessee during 1998. In particular, migrating weevil populations along the Mississippi River have elevated program costs during the last two years. Eradication efforts are behind schedule in southwest Tennessee, but the program has made great strides. Boll weevil populations have been reduced by over 92 percent across the state, and we expect rapid progress now that our leaky borders have been repaired with the inclusion of adjacent areas of Arkansas into an eradication program.

Before Tennessee cotton farmers vote, they should seriously consider the benefits of boll weevil eradication and the likely impacts of not approving a new referendum. Unfortunately, it is easier to quantify how much boll weevil eradication costs than how much it saves. However, average yields during the last three years are the highest ever in Tennessee, with no yield losses attributed to the boll weevil during this same time.

Contrast that with estimates of yield losses during the previous eight years, ranging from 2 percent to 18 percent and averaging about 5.5 percent. These losses occurred despite routinely making two to five insecticide applications for this pest each season. If these numbers are in the ballpark, economic losses related to the boll weevil have cost the average grower as much as the assessments dedicated to eradicate this pest.

Without doubt, some of the recent yield increases can be attributed to good weather, varieties with high yield potential, and the use of Bt cotton. But conservatively, the average Tennessee producer has increased yields by 50 pounds of lint per acre as a result of boll weevil eradication efforts. In a year of late cotton, such as 2003, many producers feel they made an additional 100 to 250 pounds of lint that would have otherwise been sacrificed to boll weevils.

What if west Tennessee never passes a new referendum? Expect boll weevil populations to return to pre-eradication levels in two to four years. Today’s cotton is a friendlier place for the boll weevil because of Bt cotton, restrictions on the use of traditional, broad-spectrum insecticides, and pyrethroid resistance in tobacco budworm populations (forcing the use of newer, selective insecticides in non-Bt cotton). It is impossible to calculate how much the adoption of Bt cotton, and the associated reduction in applications of broad-spectrum insecticides, has hindered weevil eradication efforts. But it is almost certain that spraying for boll weevils will increase if they are allowed to repopulate Tennessee.

Are there tools available to control boll weevils if they re-infest Tennessee? The answer is yes and no. Methyl parathion has all but disappeared from the market place. There are significant restrictions on the use of other traditional boll weevil products, and who knows how future regulations may impact the availability of other products. Newer products like Trimax and Centric will lose much of their utility because they lack activity on boll weevil. There is also the potential threat and costs of quarantines on equipment and cotton itself.

These realities are not intended as scare tactics, but rather, emphasize the importance of continuing boll weevil eradication efforts in Tennessee. The progress toward boll weevil eradication represents a significant investment and accomplishment of Tennessee cotton producers, but the greatest potential benefits of this investment lie ahead.

Scott D. Stewart is cotton IPM specialist and Chism Craig is cotton specialist with the University of Tennessee Extension Service.

e-mail: erobinson@primediabusiness.com

Researchers see promise in Valor

ORLANDO, Fla. – When Valent’s new Valor herbicide receives an in-season label for cotton, which Valent expects in time for the 2004 use season, it will provide growers with another option in their weed control arsenal.

At a recent Valor product launch event in Orlando, weed scientists from three land-grant universities gave their take on how to best use this new herbicide alone and in combination with other herbicides.

Ed Murdock, a retired weed scientist with Clemson University, says the biggest benefit he sees with Valor is the residual activity it provides for pigweed control, even several weeks after treatment. He hasn’t seen the same residual activity on pitted morningglories, coffeebean or nutsedge.

Even so, Murdock says, the residual pigweed control Valor provides is a “major plus” for those producers battling the hard-to-control weed. “Our number one problem is pigweed, everything else is secondary,” Murdock says. “Growers must-control weeds prior to, or at planting, are pigweed, Carolina geranium, horseweed, chickweed and henbit.”

In his studies of burndown herbicides, a stand-alone treatment of glyphosate controlled 50 percent of the pigweed population. Adding Valor to the mix increased pigweed control to 100 percent.

Murdock recommends adding 2 ounces of Valor with a glyphosate burndown treatment for the control of Palmer Amaranth, commonly known as pigweed.

“If you go into reduced tillage, you’ve got to be a good manager because you are 100 percent dependent on your herbicide program working,” Murdock says.

However, Murdock sees little residual benefit with Valor if Palmer Amaranth is not a problem. The new herbicide does provide residual activity on prickly sida and common lambsquarters at the 2-ounce application rate. “You can pick up more weeds including morninglory and coffee senna if you up the Valor rate to 3 ounces per acre.”

A preplant burndown tank mix with Valor is probably not needed, he cautions, if 2,4-D is applied early in the season.

Alan York, a weed scientist at North Carolina State University, says, “Traditionally, burndown tankmixes of 2,4-D plus glyphosate have been extremely efficient in controlling cutleaf evening primrose. But, a lot of growers don’t want to use it because of worries about washing it out of their tanks.

Up until now, York says, there haven’t been many alternatives available to cotton growers. “Clarity provides adequate control, but isn’t a player because of the product’s cost. Resistant horseweed populations may change our minds about the economic benefits of that product, however.”

York does not recommend Valor applied as a stand-alone product. While he has seen mixed results, he says Valor alone “just didn’t do it,” on many problem weeds.

“A tank mix of glyphosate and Valor looks extremely good early on, or at about 18 days after treatment. Stretching out farther into the season, we do see some weed re-growth, but my gut feeling is that the weed control provided is probably good enough,” he says. “Adding 2,4-D to that tank mix provides extremely good control and eliminates re-growth.”

In addition, York says he hasn’t seen any antagonism on the weed species controlled with Valor. “You can help on some species without tanking away control of other species,” he says.

A late April application, following a mid-December application of glyphosate plus Valor, picks up some residual control of several weed species, he says. “Having this residual control provides the growers with insurance against early season weed competition in cotton.”

York does caution growers on potential “splash up” injury when using Valor herbicide. If Valor is applied to bare ground and little to no rainfall occurs after treatment, then the potential is there for an irrigation treatment at the time the cotton plants are emerging to cause the previously applied product to “splash up” onto the cotton plant causing plant injury, he says.

To avoid splash-up injury, York recommends carefully following the labeled application specifications for Valor.

Stanley Culpepper, a weed scientist with the University of Georgia in Tifton, has undertaken comparison studies of post-directed layby weed control treatments following good early-season weed control.

Culpepper compared the “standard treatment” of glyphosate as a stand-alone product versus a tank mix of glyphosate and Valor at the 1 ounce rate, and a treatment of 2 ounces of Valor plus MSMA.

Adding Valor to the glyphosate provided acceptable control to both entireleaf and pitted morningglories, as well as yellow nutsedge and palmer amaranth. “Ask yourself when the Palmer Amaranth is coming up, before or after layby, before spending the money on Valor,” he says. “Some other weeds, like annual grasses, aren’t helped with the addition of Valor, and are often best controlled by a stand-alone treatment of glyphosate.”

Deciding which Valor rate to use, Culpepper says, is based on the amount of residual weed control desired.

Because the tank mix of Valor and MSMA performed similarly to the Valor-glyphosate mix in his tests, Culpepper suggests using whichever tank mix best fits your production system.

Culpepper says he is concerned about potential herbicide injury caused by applying Valor to young, small green cotton. “It’s also very important to remember to use a nonionic surfactant, and not a crop oil concentrate. Crop oil concentrates will certainly heat up the Valor, and can cause crop injury,” he says.

“Cotton growers are going to have to make a precise application no matter how you apply a Valor tank mix. You’ll know quickly if you mistakenly apply the tank mix 5 or 6 inches up the plant, because your cotton leaves will be down on the ground.”

e-mail: dmuzzi@primediabusiness.com

Governor's visit huge hit at Tulare Farm Show

What a difference a gubernatorial recall makes.

California Gov. Arnold Schwarzenegger drew thousands in his visit to the World Ag Expo this year.

The "Governator" was the second governor to visit the Tulare, Calif., farm equipment show in three years. The man Californians kicked out of the governor’s mansion, Gray Davis, was heralded as the first governor in 20 years to visit the show when he flew into Tulare three years ago. The last before Davis was his former boss, Jerry Brown.

Davis drew a polite, but meager crowd compared to Schwarzenegger. The news media almost outnumbered the crowd for Davis.

It was a sharp contrast to the hundreds who wedged into the wide walkways around the CASE IH exhibit area to hear Schwarzenegger.

"It was amazing to see the people packed in so tight to see the governor," said Earl Williams, president of the California Cotton Ginners and Growers Associations. "There were so many people the governor’s car could hardly get through the crowd. He told his aides he was really surprised and impressed by the size of the crowd."

Schwarzenegger flew to Central Valley to stump for his two budget initiatives designed to bail California out of its financial morass. He also came to tell farmers he knows they are overregulated and overburdened with unnecessary costs.

Workers compensation costs are driving businesses out of California, but Schwarzenegger recognized that farmers cannot walk away from their farms to escape those unreasonable costs.

"If you break you arm on the job it costs five times more than it would if you broke your arm at home," said the most popular governor in California since Ronald Reagan.

"That is wrong," he proclaimed, drawing one of many rousing applauses.

Schwarzenegger joked with the crowd, but was deadly serious when he told them he has given the state legislature until this spring to pass meaningful workers compensation reform or he was going to put the issue on the November ballot for voters to make the decisions.

Surrounded by a rainbow of tractor colors and the agricultural bounty of the central valley, Schwarzenegger’s visit on one of nicest days ever for the Tulare event was the biggest thing to happen at World Ag Expo in decades.

e-mail:hcline@primediabusiness.com