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Corn+Soybean Digest

Planting Tips To Improve Stand Establishment

One of the simplest ways to improve a crop's yield performance is to be meticulous with all aspects of planting. Poor stand establishment can result in poor plant development, which can be a leading cause of yield loss. Traditionally, much attention is given to the process of fine-tuning a planter to achieve good seed-to-soil contact and uniform seed placement. However, one of the best time investments that a grower may make all year is ensuring that the planter is placing the seed at the proper depth, says Stephen Smith, agronomy services manager at Mycogen Seeds.

"Planting conditions change with every field a grower plants. Factors such as crop rotation, previous tillage operations, residue amounts, moisture conditions, soil types, soil structure, field uniformity and compaction are just a few of the variables that will change from field to field. Because of these variable conditions, seed planting depth can vary greatly, even within the same field," he explains.

According to Smith, the proper corn seed planting depth is between 1.5 and 2 in. "Seed planted less than 1-in. deep may have root establishment problems which can lead to increased herbicide injury, lack of root mass and increased root lodging. Seed planted more than 2.5-in. deep will potentially take longer to emerge and will be placed in a more hostile growing environment," he explains.

"The only way to properly monitor seed placement is to frequently stop and check the location of the seed. The more you check, the better your results will be," he says.

When planting into a new field, planting depth should be checked frequently because it may vary an inch or more by location within the field, says Smith. "Check planting depth in an area that is representative of the field. Field margins that are exposed to heavy traffic from previous years and areas where soil has been recently disturbed are not good areas to check. If residue conditions change greatly across the field or tillage practices are not uniform, then seed depth should be rechecked in areas where field conditions change," he recommends.

"At the very least, be alert to changing planting conditions, and take a moment to review activity behind the planter. A few well-spent minutes can result in a better, healthier stand and may prevent a disaster resulting from improper seed depth," he explains.

"All of a grower's careful planning may make no difference if proper seed placement is not obtained," he shares.

For further information, please contact Stephen Smith, Agronomy Services Manager with Mycogen Seeds, at 317-337-4662 or by e-mail at sesmith@dow.com.

Corn+Soybean Digest

Ethanol Tax & Budget

The administration’s budget for fiscal year 2005 extends the income tax credit and an excise tax exemption for ethanol producers until Dec. 31, 2010. The current tax provisions are to expire in 2007. The income tax credit for ethanol producers is 52 cents/gal. Those who produce less than 30 million gallons/year receive a credit of 62 cents/gal.

Corn+Soybean Digest

A Good Farm Wife – Part 3

The Questions You Should Ask

Last week I was in Columbia, SC, teaching at the Agribusiness Leadership Institute sponsored by AgSouth Farm Credit, a newly-merged Farm Credit association. I sparked much interest in the spouses when I mentioned the farm wife series of articles I’ve been writing. Let’s continue our dialogue.

Last time we focused on investing outside the farm or ranch business. Now, examination of business documents must be discussed.

Do the in-laws and business partners have the proper business transfer paperwork in place? These documents might include buy-sell agreements, a will and written estate plans. Some family members may say it is none of your business; however, it should be your concern if your immediate family has a business interest. Don’t let a grunt, groan or scowl deter you from seeking the detail that is necessary in today’s world to operate a professional business.

Do your brother-in-law, mother and father-in-law have prenuptials or buy-sell agreements that are documented? A stepfather-in-law or brother-in-law can be either your best friend or your worst nightmare.

Has the business arrangement been updated in the past five years? A business is a work in progress that requires periodic monitoring given changing business and family conditions.

By following the advice I’ve given in these past three columns, hopefully you’ll be well on your way to becoming a good farm wife who is involved in ensuring the success of the family farm business in the future.

Hopefully this has given you something to think about on these cold winter days.

My e-mail address is:sullylab@vt.edu

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

Survey Shows Precision Ag Tools Worth Investment

The benefits of adopting precision agriculture technologies far exceed the costs required to use such systems, according to a 2003 survey of Ohio farmers.

The survey, which analyzed the adoption and use of 18 precision farming components, found that more than half the respondents believed their overall precision farming system was useful enough to justify the costs. Respondents also commented that precision farming components, such as variable rate application of lime, phosphorus and potassium, geo-referenced soil sampling and satellite field photography, were beneficial to their farming operations.

Marvin Batte, an Ohio State University professor and agricultural economist who led the study, said that such results might aid in the decisions of those farmers looking to adopt such technologies.

"The survey shows how others who adopted this technology are evaluating it and what individual components they are finding most useful," Batte said. "It also helps growers make careful decisions on what technology to adopt, so that it fits their operational needs. Not every precision agriculture component is for every farmer."

Batte will be on hand at the Conservation Tillage and Technology Conference in Ada, OH, Feb. 27 to discuss the results of the survey.

About 2,500 farmers were contacted for the study, with half responding. Similar to a study conducted in 1999, the survey analyzed the adoption and use of a variety of precision agriculture components such as yield monitors, guidance systems, boundary mapping and a host of GPS-related techniques. Characteristics such as a farmer's age and educational background, as well as farm size, also were analyzed to determine their impact on precision agriculture use.

"Overall, precision farming adoption has increased," Batte said. "About 30 percent of farmers surveyed had adopted at least one precision farming component, about eight percentage points higher than in 1999. And the average adopter uses about four precision farming components."

The most widely adopted precision agriculture components were geo-referenced grid soil sampling, variable rate application of lime, phosphorus and potassium, and the use of a yield monitor, all of which increased in use by an average of 7-12% from four years earlier.

One interesting result was the adoption of precision guidance systems, such as light bars or auto-steer technologies. More than 5% of respondents have adopted some form of guidance system. In 1999 such technology was virtually unheard of and unattainable.

"You can say that such technology is being adopted rather briskly," Batte said.

The survey also revealed that the rate of adoption and use of precision agriculture technologies is dependent upon a variety of characteristics, such as the size of the farm, age of the farmer and his or her employment status.

"Larger farms lead the way in use and adoption of precision agriculture," Batte said. "For variable rate application of P, K and lime, which usually is priced on a per-acre basis, adoption rates are just over twice as large for the largest farms relative to the smallest sales group. For technologies such as yield monitor, GPS receiver and precision guidance where a fixed investment is required, adoption is 10-15 times greater for the largest than for the smallest farms."

Fifty-eight percent of those surveyed who have adopted one or more precision agriculture components have gross farm sales of more than $500,000 a year.

Farmers age 35 or younger tend to adopt such technologies much quicker than those in older age groups. Nearly 50% of young farmers have adopted precision agriculture technologies, compared to 31% of those aged 50-65. And farmers who work full-time on their farm are more likely to adopt precision agriculture technologies than those farmers who work part time on the farm or work full time at another job.

Some technologies that farmers have not embraced include variable rate seeding, variable rate application of pesticides and GPS or sensor-directed spot spraying of pesticides and herbicides.

Batte believes the rate of adoption of such components is slow because not enough information is available to make recommendations or accurately apply applications for maximum benefit.

The Conservation Tillage and Technology Conference takes place Feb. 26-27. The event brings together nearly 70 speakers from land-grant universities, the farming sector and agricultural industries and organizations. Sessions cover a wide range of topics, including precision agriculture, soil fertility, water quality, insect and disease management, strip-till research, valued-added farming and crop management.

Registration is $35 a day or $50 for both days. For a conference agenda, registration information, or directions to Ohio Northern University, visit the event Web site at http://hancock.osu.edu/ag/ctc/ctc.htm or contact the Hancock County Ohio State Extension office at (419) 422-3851 or the Allen County Soil and Water Conservation District at (419) 223-0040.

Conference sponsors include Ohio State University Extension, Northwest Ohio Soil and Water Conservation Districts, U.S. Department of Agriculture, Natural Resources Conservation Service, USDA Farm Service Agency and the Ohio No-Till Council.

Another record corn crop, prices edge up

ARLINGTON – Corn yields in the United States this year are expected to hit another record on top of the one set in 2003, say USDA analysts, who are forecasting 10,410 million bushels of production from 73.2 million acres, with a national average yield of 142.2 bushels per acre.

And corn used for ethanol production is expected to increase by 13 percent.

The projected farm price of $2.60 per bushel is 15 cents higher than the midpoint of the 2003/04 range.

USDA’s Interagency Commodity Estimates Committees announced the predictions at the annual Agricultural Outlook Forum at Arlington, Va.

The forecast yield is up almost 300 million bushels over 2003.

However, says commodity analyst William Tierney, reduced carry-in stocks will be partially offsetting, and total supplies are projected at 11,321 million bushels, up just 110 million over 2003/04.

Tierney, who is with the World Agricultural Outlook Board, Office of the Chief Economist, USDA, says an expanding ethanol market will push use of corn by another 1.3 billion bushels in 2004/05.

“Ethanol production has expanded rapidly, and as of January, 2004, is approximately 3.1 billion gallons per year, with additional capacity planned or in the process of being built.”

Ethanol producers have made a commitment to those states that have banned MTBE in gasoline fuels that they will have sufficient supplies of ethanol to replace the MTBE.

Feed and residual use of corn is expected to decline from 2003/;04 levels because other feed grains are expected to provide additional feed, and beef production is expected to decline.

“With normal weather, grain sorghum production will increase from the drought-reduced levels of prior years,” Tierney says. “With larger supplies, feed and residual use of sorghum is expected to increase. Total beef production is projected to decline as more heifers are held back to rebuild the cow herd. In addition, byproducts from ethanol production will displace feed grains in some rations.”

Other corn food, seed, and industrial uses are now “mature markets,” he says, and while they are continuing to grow, that growth will depend on an increasing population and expanding economic growth. Corn used to make high fructose corn syrup is expected to grow 1 percent. The syrup is used mostly in soft d rinks, a market that is being hit by weight-reduction campaigns. Corn used to make starch is expected to increase as the economy grows and consumes more paper and building materials. Corn cereals and other corn products are growing along with population growth.

U.S. corn exports are projected at 2,100 million bushels, Tierney says, an increase of 100 million from the 2003/04 forecast.

“The global setting for U.S. feed grain trade is more favorable than for wheat, and corn exports will face less competition from China and South Africa. But normal growing conditions for Argentina in 2004/05 should lead to an increase of exports from that country. Feed-quality wheat exportable supplies should return to a more normal level, displacing some corn feed use. The European Union, Russia, and Ukraine will all return as major feed-quality wheat exporters.”

With more feed-quality wheat available on the world market, corn imports will decline in some countries, such as South Korea, the European Union, the Philippines, and Israel. Eastern Europe will have more normal feed crops and higher feed exports. With the accession of 10 Eastern European countries to the European Union, much of Eastern Europe’s grain exports will go to the rest of the European Union, reducing the external import needs of corn and freeing up more feed-quality wheat for export from the EU.

China’s corn imports “will have a major impact on the U.S.’ share of the world feed grain trade,” Tierney says. “Although Chinese domestic corn prices rose sharply in the fall and winter of 2003/04, and the government announced a number of measures to increase crop plantings, China’s farmers are expected to continue to switch crop land to soybeans, cotton, and other high value crops. In addition to competition from more profitable crops, corn and wheat plantings are imperiled by the conversion of arable land to non-agriculture uses and by the reduced availability of water for irrigation.”

But, he says, the volume of China’s corn exports will continue to depend largely on the level of its corn stocks and by government export incentives.

U.S. corn exports in 2004/04 could also be affected by the avian influenza outbreaks in the poultry flocks of at least 10 Asian countries. “Most analysts agree that the greatest impact of the disease is the reduction in production due to the loss of export markets, and the decline in consumption as consumers react to stories about the disease being transmitted to humans,” Tierney says. “But from a global perspective, the increase in poultry production in countries unaffected by the disease, or an increase in pork production, may act to absorb some of the feed ingredients that are no longer consumed by the Asian poultry industry.”

Ending corn stocks are projected at 821 million bushels, a drop of 80 million from the forecast for 2003/04.

e-mail: hbrandon@primediabusiness.com

Water scarcity may impact China

China is the world’s largest wheat-producing country and a decrease in production could have a significant impact on international markets.

“Cropping patterns in China will likely change as farmers address water conservation issues,” says the Interagency Agricultural Projections Committee, which outlined its projections for the period to 2013. “Effective conservation policies will induce farmers to use water in ways that are more in accordance with its economic value in production.”

Water uses that bring a low return, such as wheat irrigation, are likely to be replaced by uses that provide higher returns, such as cotton, with lower irrigation needs. The introduction of Bt cotton in the North China Plain region has also made cotton much more profitable in that area.

“Because of the profitability of Bt cotton, and low wheat prices, increasing numbers of farmers are forgoing winter wheat and planting full-season, spring-sown cotton instead, which they irrigate one to three times before the rainy season begins. In addition, cotton tends to be more salt-tolerant than wheat, and much of the North China Plain’s shallow water table has salinity problems.”

Additionally, the analysts say, some irrigated wheat land could be switched to vegetable production, using modern water-saving practices. “A shift to vegetables would also be in accordance with China’s underlying resource endowment, which is labor-abundant and land-scarce. If China further opens its agricultural markets, this, too, will hasten the shift into more labor-intensive crops that could bring higher returns from the country’s limited water resources.”

Rapidly increasing industrial and domestic water consumption and expanding irrigation over the past 40 years have drawn down ground water tables and disrupted surface water deliveries, a problem that is most severe in the North China Plain area of north central China.

Over 50 percent of China’s wheat and nearly 40 percent of its cotton have been produced in three provinces – Hebei, Shandong, and Henan – and both crops rely heavily on irrigation.

“Wheat is the most likely crop to experience production declines due to irrigation water shortages,” the analysts say.

Most of the wheat in the areas affected by irrigation water shortages is winter wheat, harvested in June, and followed by corn or, increasingly, cotton. Over 70 percent of the annual rainfall on the North China Plain falls July-September, so the second crop does not rely on supplemental irrigation as much as winter wheat.

Wheat is also threatened by reduced water availability because irrigated wheat brings a low return in proportion to water costs and is less suited than horticultural crops to water-saving irrigation technologies such as drip irrigation, plastic mulching, etc.

China continues to draw down water resources, analysts say, and many observers anticipate the situation worsening unless effective conservation policies can rapidly be put into place. A variety of policies have been established to encourage more effective water conservation in both agricultural and non-agricultural uses.

“The success of these policies,” the analysts say, “will depend on several factors. Policy reforms will depend critically on the enforcement of withdrawal limits, both from surface water systems and from ground water. Also important is the extent to which policies and local management practices provide water users and water managers an incentive to conserve water resources.”

e-mail: hbrandon@primediabusiness.com

Competition keeps lid on food prices

ARLINGTON, Va. – Fears that increased consolidation among food retailers would result in reduced competition, less pressure on retailers to develop and improve the quality of their goods and services, and higher consumer food prices have proven unfounded, says USDA Economist Ephraim Leibtag.

“The opposite trend has taken hold,” he said at the annual USDA Agricultural Outlook Forum at Arlington.

“Conventional food retailers now vie with discount supercenters, club warehouse stores, dollar stores, convenience stores, and drug stores that are increasingly offering a larger array of food products to their price-sensitive and time-pressed customers.”

In fact, he says, the share of at-home food sales for warehouse clubs and discount supercenters rose dramatically from 1991, with only 1.8 percent, to 2003, with 11.1 percent.

“Conventional food retailers also face greater competition from restaurants and other food away-from-home market options for consumer food dollars.”

Leibtag, with USDA’s Economic Research Service, says conventional supermarkets have been forced to compete with these alternative food outlets by reducing prices and by finding ways to differentiate their product from those available at their competitors.

“The expanding services offered by retailers may increase their operating costs, but the competitive pressure from warehouse clubs, supercenters, dollar stores, and restaurants continue to keep prices for standard food items at relatively low inflation levels.

The all-food Consumer Price Index rose just 2.2 percent in 2003. It is expected to rise from 2.2 percent to 3.2 percent in 2004, as current trends in retail food markets are partially offset by the overall improving economy, pushing food price inflation slightly above 2003 levels, “but still fairly steady over the next year.”

Looking ahead, Leibtag says the first decade of the 21st century will likely see a continuation of the historical decline in average annual food price inflation.

“The 1970s, a relatively high inflation decade, had average annual food price inflation of 8.4 percent, while the 1980s saw increases of 4.6 percent, on average, per year. The current trend in food prices began in the 1990s, which had average annual inflation of 2.6 percent. Current USDA baseline projects predict average annual food price inflation of just 2.2 percent for the current decade.”

e-mail: hbrandon@primediabusiness.com

Wheat prices to remain unchanged

Prices received by producers are projected to be $3.35 per bushel, unchanged from the midpoint range for 2003/04, due primarily to lower exports.

Dry conditions in parts of the Plains, along with cold weather and soggy soils in the Corn Belt, are cited as question marks about the crop to be harvested this spring, according to a report from USDA’s Interagency Commodity Estimates Committees presented at the annual Agricultural Outlook Forum at Arlington.

“The ratio of harvested-to-planted acres in 2004 is expected to be 84 percent, slightly less than the 10-year national average ratio,” says William Tierney, commodity analyst for the World Agricultural Outlook Board, Office of the Chief Economist, USDA, who presented the report. “The assumed yield for 2004 results in a projected production of 2,120 million bushels, down over 215 million from 2003. Smaller production, though partially offset by larger carryin stocks, will leave 2004/05 supplies down 174 million bushels from a year earlier.”

Food use is expected to decline slightly, he says, as a result of reductions in per-capita wheat food consumption due to changes in diets and baking technology, and this will more than offset the effect of population growth.

Feed and residual use, at 250 million bushels, will be up “modestly” from the 225 million bushels in 2003/04.

“Lower wheat prices during harvest will promote its use for feeding,” Tierney says. “Hog and poultry producers in the Southeast and Atlantic Coast areas, and cattle and hog feeders in the Plains likely will see relatively high prices for corn during the early summer. In the Plains, which saw poor corn and sorghum crops in 2003, livestock operations will have to obtain corn for feeding from greater distances than usual.”

Although world wheat trade is expected to increase in 2004/05, he says U.S. exports are forecast to fall 200 million bushels below the 1.05 billion forecast for 2003/04 – the highest level of exports since 1995/96.

“Because drought and winter kill sharply reduced production in the European Union, Central Europe, and the Former Soviet Union, U.S. wheat exports and world export market share increased in 2003/04,” Tierney notes. “But in 2004/05, a Foreign Agriculture Service evaluation of the prospects for the region’s winter wheat crop suggests that a substantial recovery is expected in crops in Europe and the Former Soviet Union. As a result, many importers are expected to obtain more of their purchases from lower-priced wheat from Russia, Ukraine, and other minor exporters. Also, net wheat exports by the European Union are expected to rise.”

As usual, Tierney says, “Imports by China are a source of great uncertainty.” A February estimate indicated its 2003 crop would be reduced to 86 million metric tons, a drop of 5 percent from last year. “Recently, one government think tank in China pegged the 2004 crop at 83.4 million metric tons, which would be the smallest since 1983.”

As of Feb.5, export commitments of old crop U.S. wheat to China were 40 million bushels, the largest since 1997. “Even more unusual,” Tierney says, “was the 33 million bushels of wheat sales that had already been booked for new crop 2004/05.”

Total U.S. wheat disappearance in 2004/05 is expected to decline around 8 percent, but supplies are down slightly less, about 6 percent; thus, ending stocks, at 541 million bushels, will be slightly higher than a year earlier. The ending stocks-to-use ratio, 24.7 percent, is slightly larger than the 22.5 percent forecast for 2003/04, but below most levels since 1996.97.

e-mail: hbrandon@primediabusiness.com

Shadow of 'mad cow" depressing outlook

ARLINGTON, Va. – In 2003, things were shaping up to be the best of times for U.S. livestock producers, and then everything was turned topsy-turvy with the May 20 announcement of a single confirmed case of “mad cow” disease in Canada.

“The meat sector was turned on its head,” says Joel L. Greene, livestock analyst for USDA’s World Agricultural Outlook Board. Then, with the Dec. 23 announcement that a BSE-positive dairy cow had been found in Washington state, "international meat markets were thrown into turmoil," as bans were put into place on imports of beef from the U.S., the world's leading supplier of high quality grain-fed beef.

More than 2 billion pounds of beef normally exported over the course of a year, was “left in limbo," Greene said at USDA’s annual Agricultural Outlook Forum at Arlington.

“U.S. markets are highly uncertain, and are constantly adjusting to market closings in response to BSE. The U.S. cattle industry is faced with several challenges, including reopening of export markets as soon as possible.”

But, Greene says, the BSE finding “has brought to the forefront the need for an animal identification system with traceability that will enable the U.S. to rapidly respond to animal disease and food safety issues.”

The implementation of such a system will likely prove crucial to assuring foreign customers that U.S. beef is safe and help encourage the reopening of foreign markets, he says.

As if things weren’t bad enough with the BSE findings in Canada and Washington state, the spread of avian influenza in Asia “created more upheaval in meat markets,” Greene says. “Even as the Asian outbreak presented opportunities for increased U.S. exports of broilers, an outbreak of a less virulent strain of the disease in Delaware, New Jersey, and Pennsylvania just as quickly clouded the prospects for broiler exports in the short term.”

In addition to the consequences of disease outbreaks, Greene says, the U.S. livestock and poultry sectors are confronted with higher feed costs in 2004, with corn and soybean meal prices move significantly higher than last year.

A growing U.S. economy is expected to continue to support meat demand, however, he says, and in the international arena, the weakened U.S. dollar “will be supportive for meat exports.”

There were hints early last year that the liquidation phase of the current cattle cycle might be winding down, Greene notes, “but any ideas of herd expansion evaporated during the year as dry forage conditions and very strong prices resulted in more cattle being placed into feedlots.”

At 37.9 million head, the calf crop in 2003 was nearly 1 percent lower than the previous year, and was the smallest since 1951.

“Conditions for retaining heifers in 2004 may not be very favorable,” Greene says, “and cattle liquidation could well continue for a ninth year.”

Forage conditions will be crucial, he says, “and even with normal weather patterns, many pasture areas are severely stressed and water reserves will need to be built up to support an increased number of cattle."

Although the number of cattle on feed Jan. 1 in all feedlots was 4 percent higher, cattle supplies are tightening, Greene says. Feeder cattle outside feedlots are down an estimated 4 percent, and a decline in placements is expected during the year.

Commercial beef production in 2004 is forecast to decline about 3 percent to nearly 25.4 billion pounds. Six percent fewer cattle are expected to be slaughtered this year, but a recovery in average carcass weights will result in a smaller decline in beef production.

“Declines in cattle slaughter in 2003 were magnified by sharp drops in carcass weights in response to poor feeding conditions, strong beef demand, and the ban on Canadian imports from late May into August. Feedlots marketed cattle as quickly as possible, and during the last half of 2003 carcass weights averaged 25 pounds lighter than a year earlier.

In 2004, cattle weights are expected to resume a more normal growth pattern, Greene says. Average carcass weights are forecast to be about 14 pounds higher than in 2003 and cow slaughter is expected to be about 15 percent lower than 2003 – which had the highest slaughter level since 1997.

After averaging $84.69 per cwt in 2003, fed cattle prices in 2004 are forecast to be in the mid-$70 range. “The price outlook was significantly lowered following the BSE discovery in December,” he says, and “there will be a greater supply of beef looking for a home in the domestic market.”

Feeder price prospects are also reduced, projected to be in the low to mid-$80 range per cwt. Retail beef prices are also expected to be lower, after reaching a record $4.17 per pound in the fourth quarter of 2003. “The wholesale-to-retail spread approached $1.90 in December,” Greene says, “but with lower cattle prices now in the system, the spread is likely to narrow and retail prices move lower.”

The U.S. exports 90 percent of its beef to four markets: Japan, South Korea, Mexico, and Canada. After the BSE discovery, most markets were shut to U.S. beef and beef products.

“Because of the uncertainty about the length of the bans imposed on beef imported from the U.S., our export forecasts have assumed that the bans currently in place will remain until countries announce their removal,” Greene says.

Thus, beef exports are forecast at 220 million pounds, compared to a record 2.5 billion pounds in 2003.

“Beef exports this year are going to be determined by how quickly major U.S. beef markets will be opened again,” he says.

Imports of beef into the U.S. are forecast at 3.3 billion pounds for 2004, up 11 percent from last year, but only 3 percent above 2002.

e-mail: hbrandon@primediabusiness.com

Outlook participants receive new slant

That was the case this year when Leslie Meyer presented USDA’s cotton forecast. Meyer said USDA believes China will import 7 million bales of cotton this year. Moments later, Gary Taylor, president and CEO of Cargill Cotton, said Cargill was predicting Chinese imports of 9 million to 10 million bales.

Sometimes, the administration tries to spin the numbers. This year, Keith Collins, USDA’s chief economist, gave an optimistic U.S. economic outlook that might not be shared by all of his peers. But there was little dissent with Collins’ forecast that U.S. agriculture has a better outlook than it had at last year’s Forum.

Speaking last week, Collins predicted U.S. farm exports could reach $59 billion and might have exceeded the 1996 record of $60 billion if not for the discovery of the first case of mad cow disease in the United States.

Most Outlook Forums provide a new take on some aspect of agricultural trade. This year’s magic moment may have been Collins’ observation about the increasingly competitive nature of global commodity markets.

He noted that if you take the 2002 soybean exports of Brazil and Argentina, the coarse grain exports of China and the Former Soviet countries and the wheat exports of India and the Former Soviet countries you have a total of 85 million metric tons of grain. Those countries exported less than 10 million tons in 1994.

A close second might have been his comments on China. In 1997 or 1998, the Forum was rife with predictions of how much grain China would have to import to feed its population. Instead, China embarked on a program of self-sufficiency that made it a grain exporter.

Now China may be coming full circle, buying large quantities of U.S. soybeans and cotton. “The question, Collins said, is: “are we at the long-awaited turning point where China focuses resources on more labor-intensive crops and becomes a more sustained importer of bulk crops?”

Then, there’s Brazil. “Most people know Brazil has increased its soybean planted area by 25 million acres since the mid-1990s,” he said. “But Brazil is not just soybeans. They have increased production of cotton, soybeans, broilers, pork, corn and beef by 25 to 75 percent since the late 1990s.

“While I am portraying a positive economic picture for U.S. production agriculture in 2004,” he said, “that optimism should be tempered by potential consequences of the continued production growth of Brazil and other emerging competitors.”

Cargill’s Taylor, who gave a cotton merchant’s perspective on China, also offered this take-home nugget: “It doesn’t matter what the United States does to reduce textile imports from China – they (Chinese manufacturers) will just move to Indonesia (or some other low-cost labor country.)”

e-mail: flaws@primediabusiness.com