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Articles from 2003 In April


CRP sign-up scheduled to begin May 5

Veneman made the announcement during an Earth Day celebration in Maryland. She also announced that USDA is releasing $1.8 billion in funding for other conservation programs including the Environmental Quality Incentives Program (EQIP), and the Wetlands Reserve Program (WRP).

According to a state-by-state breakdown provided by USDA, individual states will each receive between $733,000 and $69 million in financial and technical assistance from the funding. Among the Sun Belt states, Texas and California top the list of Natural Resource Conservation Service conservation funding recipients receiving $130.9 million and $98.2 million, respectively.

Missouri leads the list of Mid-South states with $61.4 million, followed by Mississippi with $59.4 million, Arkansas with $52.5 million, Louisiana with $52.2 million, and Tennessee with $28.6 million in NRCS funding.

In the Southeast, Florida tops the list with $53.3 million, followed by Georgia with $41.9 million, Alabama with $29 million, North Carolina with $38 million, South Carolina with $28.1 million, and Virginia with $25.5 million.

The Southwest and Far West states of Oklahoma and Arizona are slated to receive $50.1 million and $25.1 million in NRCS funding.

‘Great strides’

"America’s farmers and ranchers have made great strides to improve the environment, and this administration is committed to assisting their ongoing stewardship efforts to enhance soil, water and air," Veneman said.

"These announcements highlight the importance that President Bush places on a strong environmental policy that is compatible with a growing, healthy economy. His 2004 budget includes a record $3.9 billion for conservation on our nation’s farmlands, which is more than double the funding level from when he came into office."

The general sign-up for CRP, which is in addition to CRP’s ongoing continuous sign-up program, will be held May 5 through May 30. Current program participants with contracts expiring this fall can make new contract offers during the sign-up period.

According to Veneman, only one other general sign-up for CRP will be offered before the current farm program expires in 2007.

The Conservation Reserve Program pays landowners annual rental payments and up to 50 percent of the cost of establishing conservation practices in exchange for enrolling environmentally sensitive land into the program and out of agricultural production. Acreage enrolled in the program is then planted to resource-conserving vegetative covers, making the program a major contributor to increases in wildlife populations, Veneman says.

Acreage reserve

The 2002 farm bill authorized USDA to maintain CRP enrollment up to 39.2 million acres, with USDA reserving 2 million acres of that total for the most environmentally desirable and sensitive land targeted with the continuous sign-up program. All new CRP contracts will become effective either Oct. 1, 2003, or Oct. 1, 2004, whichever the producer chooses.

USDA’s Farm Service Agency will again evaluate and rank eligible CRP offers using the Environmental Benefits Index (EBI) for environmental benefits to be gained from enrolling the land in CRP. Decisions on the EBI cutoff will be made after the sign-up period ends, and after analyzing the EBI numbers of all the offers. Those who would have met the previous sign-up EBI thresholds are not guaranteed a contract under this sign-up, according to USDA officials.

e-mail: dmuzzi@primediabusiness.com

Marketing savy could help new partners

“Ever since I could walk and follow my dad and grandfather around, that’s what I’ve wanted to do,” says the 24-year old Hunt County, Texas, grain farmer. He and his father Kenneth are tending 4,800 acres of wheat and milo this year, the first crop they’ll make since they officially created a partnership and merged separate operations into one.

The timing could be better, Kenneth says. High production costs and poor commodity prices make farming in northeast Texas and elsewhere a tough business. But they hope to parlay some newly learned marketing skills, sound risk management decisions and a custom application business into a formula for success.

Kenneth says he’s proud to have his son join him, but he also expresses concern about what the future holds for Kendal and other young farmers.

“I didn’t exactly discourage him,” he says, “but I got him to visit Texas A&M University at Commerce and talk to some of the folks there before he made up his mind. But he’s always wanted to farm and that’s what he’s doing.”

“I may still go to college,” Kendal says. “That’s always a possibility.”

He’s taking advantages of other educational opportunities in the meantime. He and Kenneth participated in a Master Marketer program, sponsored by Texas A&M, several years ago, and both agree it’s one of the best things they’ve ever done for the farm.

“I’ve always understood the fundamentals of marketing,” Kenneth says, “but I didn’t understand the technical side. Master Marketers helped me understand how the process works.”

“Marketing is where the money is,” Kendal says. “We’ve cut production costs as much as we know how, and we can’t really see where we can cut any more and increase profit. The money is in marketing what we grow.”

He says the Master Market curriculum was intense. “We went every other weekend, eight hours a day for two straight days for a total of six weeks. They pack a lot of information into a weekend. We had speakers from the Kansas Board of trade as well as university specialists.”

Kendal says many good crop producers do a poor job of marketing what they grow. “Too many just cross the scales and take what’s offered,” he says. “It’s in our best interest to develop a marketing plan.”

Kenneth says a thorough marketing program demands someone watch for opportunities “eight hours a day. We don’t have time to do that, so we still use a marketing consultant.”

Chad Hobbs, with the F.C. Stone Company, helps a lot,” Kendal says. “We’re still not doing a lot of hedging. I just can’t get used to margin calls, but we pay attention to marketing opportunities.”

“We use DTN and keep up with market movements,” Kenneth says, “but we still like having someone watching out for us.”

Hobbs, a former Texas A&M risk management specialist, “got us interested in the Master Market program,” Kendal says.

Risk management plays an important role in operation decisions. A sound marketing strategy reduces some risk, but crop selection and their custom application business also help.

“I enjoy planting corn,” Kenneth says, “but we planted none this year. We can make more money with corn than we can with milo, but we take a lot more risks. I can’t ever remember losing a milo crop.”

The transition into a partnership and jumping from 2,300 acres to 4,800 puts a strain on finances, Kenneth says. “Once we pay the equipment down a bit, we may go back to corn. But this year, we’re looking at crops that will cash flow, and wheat and milo fit the bill. We’ll play as safe as possible for now.”

Their custom application business also helps with cash flow. “We use our sprayer to bring in extra income,” Kenneth says. “It’s especially important this year because we have a lot of crop inputs on the front end. We’ll do as much custom work as possible.”

Kendal says custom application allows them to upgrade equipment for their own farm by spreading costs over their operation and the custom business.

Kendal started the custom application operation while he was still in high school. “We bought a sprayer and I started doing custom work,” he says. “I still do most of the custom spraying and dad fills in.”

Most of their customers are repeats. “A lot of our business comes from people we know and people we’ve worked for before,” Kenneth says. “Some of the local companies we do business with also provide referrals. And then we try to drum up some business on our own.”

“We usually stay busy with custom work,” Kendal says. “In 1998, we had a drought all season and the sprayer sat for about six months.”

Kenneth says much of what he and his son have accomplished the last few years would have been impossible “without an understanding banker. Craig Overstreet, our loan officer and president of the First Bank of Farmersville, has stood behind us. It’s an independent, locally owned bank, and we’ve done business there for 34 years. That makes a difference.”

Kendal says nothing he’s encountered so far has soured him on farming as a career, but he does worry a bit about the future. “Two things bother me: losing farm land to development and low prices.”

He says maintaining a sound marketing strategy will help with prices. “But staying in business may mean finding a way to keep leasing land. We lease all but 84 acres and urbanization is taking a lot out of production. But a lot of farmers in the area are reaching retirement age and I think as they quit farming I’ll be able to rent land.”

Kenneth says he’d like for the long-term outlook to be a bit more promising for Kendal. “We’re looking at soybeans, mostly to clean up new land. I’d like to find a way to make them profitable. Also, we’d like to find a hard wheat adaptable to this area.”

Hard wheat brings about 60 cents per bushel more than soft.

Even with the challenges, Kendal says he’s happy to be where he is. “I like working with my dad,” he says.

Both admit to having occasional differences of opinion about how to run things. “But we usually talk it out and come to a mutual understanding,” Kendal says.

Both say they have “some interesting conversations.”

e-mail: rsmith@primediabusiness.com

Cotton gin waste tested in "hydromulch"

Typically, hydromulches contain paper, wood or straw in a slurry mixture with water and grass seed. The slurry, usually dyed green, helps the seeds stick and stay in place and provides a moist and nutritious mulch for germination.

The test hydromulches will have ryegrass seed in them and will be dyed red, green or brown to distinguish between those made with wastes from different cotton gin processes and regions. Agricultural engineers Greg Holt and Mike Buser, with the ARS Cotton Production and Processing Research Unit in Lubbock, Texas, and agricultural engineer Daren Harmel and soil scientist Ken Potter, with the ARS Grassland Soil and Water Research Laboratory in Temple, Texas, will do the testing. Summit Seed will provide equipment and supplies.

The researchers will compare the test hydromulches to three conventional ones, looking at factors such as seed germination, costs and erosion control.

The waste is held together by a low-cost process — COBY, for Cotton Byproducts — invented by the Lubbock scientists. It uses a hot, gelatinized starch solution that acts as a glue and as a lubricant to smooth the mixture's flow through extrusion equipment.

The scientists see this as another way to use waste material that cotton gins would otherwise have to pay to have removed. These costs are estimated at $4 million to $6 million annually.

The cotton-waste mixture has also been made into pellets and tested in pellet-burning stoves and as fertilizer and cattle feed. In a test with 162 heifers, cattle gained more weight on less feed. And Summit Seed is testing a dry mixture as a bedding mulch for landscaping use.

ARS is the U.S. Department of Agriculture's chief scientific research agency.

Missouri farmers settle with USDA

Plaintiffs alleged that they and other farmers in Dunklin County received substantially less in loan deficiency payments than they were entitled to receive because they were instructed by Farm Services Agency officials to sign the wrong form. The action asserted 12 counts for relief, including constitutional violations and challenges to the validity of USDA regulations and policies denying equitable relief contrary to statutory authority.

“This had to do with beneficial interest in cotton,” says attorney Gretchen Garrison, of Stinson Morrison Hecker LLP. “Producers are supposed to apply for LDP’s while they still have beneficial interest in a cotton crop. ‘Beneficial interest’ has its own set of criteria but the form the class members signed locked in LDP rates at the time of ginning.”

Garrison says that would be appropriate only for people who lose beneficial interest at that time. For others – like those who sell their cotton and lose title after ginning – there’s another form that allows you to “float” until ginning is completed and the cotton is sold. Nothing is locked in until the point of sale.

“Well, in this particular year, from the date of ginning to the date of sale, the LDP rate rose. Because these farmers were told – and did – sign a particular FSA form, they weren’t allowed the higher LDP rate,” says Garrison.

“I wouldn’t use the word ‘fault’ when describing the FSA office’s advice,” says Garrison. “They just made a mistake. The LDP hadn’t been available for a while and people weren’t familiar with the procedures.”

In relevant statutes, there is a procedure for requesting relief and appealing if relief is denied. Every producer who signed the wrong forms requested relief and was denied.

“Everyone was told in their notices of denial that the finding was not open to appeal. Some of the producers went ahead and tried anyway. Some producers in Dunklin County actually took their appeals all the way through the National Appeals Division. They won at the hearing level but when they went to the director, their requests were denied.”

Garrison, working with lead attorney Don Downing, was successful in opposing the government’s attempts to close discovery.

“We submitted lots of document requests, interrogatories and depositions and the government opposed all of that. That isn’t an uncommon thing. The court denied their attempts to foreclose and said we could proceed. It was at that time that we entered into discussions for settlement.”

Garrison said more than 500 farm numbers were represented in the lawsuit.

Downing, in a press release, says the $2.25 million settlement represents approximately 75 percent of the maximum theoretical damages.

“Many farmers received more than 75 percent of their actual losses,” he said. “The adequacy of the settlement from the farmers' perspective is reflected by the fact that not a single farmer in the county objected to or opted out of the settlement…the case presented complex issues of administrative law and review of agency actions. We believe that ultimately, justice prevailed in a manner intended by Congress when it created a statutory exception to the general rule against stopping the government as to farmers who rely in good faith on what they are told by agency representatives.”

e-mail: dbennett@primediabusiness.com

LibertyLink paired with Herculex I hybrids

“Bayer CropScience has granted a trademark license to Dow AgroSciences and Triton Genetics for the use of the LibertyLink trademark,” says Eric McEwen, Brand Manager for Liberty.

The Herculex I trait protects corn plants season long against first- and second-generation European corn borer plus southwestern corn borer, black cutworm and fall armyworm, according to Dow AgroSciences. Herculex I is the only in-plant product that protects against black cutworm. These hybrids are also tolerant to over-the-top applications of Liberty herbicide.

Liberty quickly controls more than 120 grasses and broadleaf weeds in corn including some of the toughest such as smartweed, morningglory, ragweed, woolly cupgrass, waterhemp and velvetleaf.

“Liberty delivers consistent, convenient weed control for about $16 per acre,” says McEwen. “Combining Liberty with elite hybrids containing the Herculex I and LibertyLink traits can help growers attain top yields.”

"Herculex I Insect Protection is part of the broad number of traits offered by Pioneer that expand choices for growers," says Marty McDermott, Pioneer Product General Manager - Corn. "The tolerance to Liberty herbicide also enhances choices within growers' weed control programs."

Soon, corn growers will have even greater options, representatives of the companies said.

“We’re committed to making this leading-edge technology available throughout the seed industry,” explains David Borgmeier, Traits Licensing marketing specialist with Dow AgroSciences. “More than 75 seed companies have expressed interest in hybrids containing Herculex I and LibertyLink traits.“

For more information on Liberty herbicide or the LibertyLink seed system, visit http://www.cornexperts.com.

e-mail: flaws@primediabusiness.com

AgCenter names 2 new professorships

Sanders was named the Floyd S. Edmiston Sr. Professor in Agriculture and Natural Resource Management, and Burts was named the Grace Drews Lehmann Professor in Human Ecology.

Both professorships were endowed by contributions from Evelyn Edmiston Howell of Houston, Texas, with matching funds from the Louisiana Board of Regents' Support Fund.

Howell designated Sanders' professorship in memory of her father, Floyd S. Edmiston Sr., a long-time county agent for the LSU AgCenter's Extension Service.

Sanders, who served a number of years as Extension weed scientist on the Baton Rouge campus, currently is resident coordinator of the LSU AgCenter's Idlewild Research Station in Clinton, La. His work involves non-crop and aquatic weed control, invasive plant surveys and control, and forage and forestry weed control.

Howell gave Burts' professorship in memory of Grace Drews Lehmann, who was Howell's classmate in home economics at LSU. Lehmann earned her LSU degree while confined to an iron lung and was an inspiration to Howell and her husband.

Burts is professor and division head of Family, Child and Consumer Sciences in the LSU AgCenter's School of Human Ecology. She and her colleagues have produced the largest body of research in the area of developmentally appropriate practice – one of the major issues in the field of early childhood education.

Howell's husband, Paul N. Howell, acquired a small oil refinery in San Antonio, Texas, in 1955. This formed the basis of what became Howell Corp., a New York Stock Exchange company with headquarters in Houston.

Paul Howell died in August 2001 in Houston after a lengthy illness. And the company was sold to the Anadarko Petroleum Corp. in 2002.

A native of Baton Rouge, Evelyn Howell once lived at the gates of LSU on State Street, and as a young girl, attended 4-H camp at the LSU AgCenter's Grant Walker Educational Center in Pollock. She graduated from the LSU Lab School in 1943 and enrolled in LSU, where she graduated with a degree in home economics in 1947.

Howell worked as an Extension intern in DeSoto Parish, where her father was posted, and taught one year at the LSU Lab School.

Rick Bogren is a writer for the LSU AgCenter. e-mail: rbogren@agcenter.lsu.edu

Corn fed domestically, shipped internationally

Recently, we have been grappling with how to account for corn and soybean meal that is exported via exports of meat and poultry. It is not all that easy because the USDA does not routinely estimate feed demand by livestock category. So we can't look up somewhere how much corn is demanded by broilers and divvy-up the total based on levels of domestic and export consumption of broiler meat.

Assumptions have to be made about feed conversion rates and other factors to estimate how much corn is fed to broilers in total and then to estimate how much corn is shipped overseas via poultry exports. Yes, the corn is fed domestically, but we can't count the same corn both as domestic demand and export demand. So for every bushel of corn that reaches another country embedded in meat or poultry, and is added to corn export demand, a bushel of corn must be deducted from domestic demand.

After accounting for corn exported via meat and poultry, are we finished? Well, it would seem so, because we now have a better picture of the totality of grain that finds its way directly or indirectly to export customers. But trade is not a one-way street. In fact, we tend to import more beef than we export. To the extent that livestock and poultry farmers in other countries have fed corn/grain to produce the meat, we also import grain via meat. Since imported beef, for example, tends be from cattle that are more grass-fed than is typically the case in the U.S., not as much corn is implicitly imported per pound of beef as would be the case in beef exported from the U.S.

One way to deal with this import issue is to net out the estimated grain fed to meat/poultry that is imported into the U.S. from the estimated grain exported from the U.S. via meat and poultry. We showed a graph of domestic and export demand that resulted from using this "net export" approach in a recent column.

Another, and perhaps more conceptually correct approach, would be to make two separate calculations: one being the estimated quantity of corn exported by way U.S. exports of meat and poultry and the other being the quantity of corn imported via U.S. imports of meat and poultry. But rather than subtracting corn imported from corn exported as is done in the net export approach, treat the implied corn exports as described earlier. That is, add it to the usual/published corn export number and subtract it from the published level of domestic corn demand. But then do an additional step. Add the corn embedded in U.S. imported meat to the U.S. domestic demand for corn. That is, if we count corn used to produce exported meat and poultry as corn exports, logically we also should count meat/poultry-based corn imports as domestic utilization of corn.

It is easy to make the argument that published corn export numbers underestimate "total" corn exports because they leave out corn fed to livestock and poultry that are exported as meat. But if one argues for representing total corn export demand in that way, then a corresponding representation of grain imported via imported meat seems to be required.

Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of the UT's Agricultural Policy Analysis Center. For more information, go to http://www.agpolicy.org.

e-mail: dray@utk.edu

U.S., Vietnam sign quota agreement

The agreement, which came after three weeks of difficult negotiations, is supposed to cap Vietnamese textile and apparel exports to the United States at $1.65 billion to $1.7 billion a year. But the American Textile Manufacturers Institute says the deal gives Vietnam the “most generous access” to the U.S. textile market ever granted.

“This unfortunate agreement is coming at a very difficult time for the American textile industry,” said Willis C. Moore III, ATMI chairman. “We are deeply dismayed that the U.S. government appears to have abandoned its commitments to the textile industry.

“By granting Vietnam the largest quotas in history for the most sensitive products made by this industry, the U.S. negotiators have ensured that more textile plants will close in the United States and more textile jobs will be lost in this deeply distressed industry.”

Officials with the U.S. Trade Representative’s office said that without the quota agreement, Vietnam’s textile exports to the United States, which grew from $49 million in 2001 to $952 million in 2002, would have exceeded the new quota levels by the end of 2003.

Several large U.S. manufacturers and retailers, including Nike, Gap and K-Mart, sent letters to U.S. Trade Representative Robert Zoellick urging him not to impose quotas on Vietnamese exports.

But ATMI’s Moore said the quotas for a wide range of textile and apparel products far exceed any reasonable level for a single country.

“This agreement trades away good paying American jobs to a communist country so that importing interests can save pennies per garment,” he said. “Make no mistake, these quotas are enormous – just one of them sets the knit shirt category at 164 million shirts, or one for every adult person in the United States.”

Moore said the new quota agreement provides Vietnam with import quotas amounting to more than 600 million square meters, an increase of 625 percent from the 83 million square meters of textile and apparel products Vietnam was shipping when the U.S. government announced it wanted to negotiate quotas last September.

“In their efforts to get Vietnam to sign an agreement, our negotiators literally doubled and tripled the quota offers they had made just two months ago,” said Moore. “This was after they acknowledged that Vietnam’s government-owned and subsidized textile sector posed a potent threat to our workers.”

The agreement came only a few days after the U.S. government reported that the textile industry had lost another 2,900 jobs in February following a sharp drop in industry sales. Over the last two years, the industry has closed more than 150 textile mills and lost more than 90,000 jobs.

ATMI officials seemed especially bitter over what they called a betrayal of promises made by senior administration officials to work with them to prevent the demise of the U.S. textile industry.

“It is increasingly hard for this industry to reconcile the government’s action with the words of Commerce Secretary Don Evans 14 months ago when he stood before us and said, ‘We know what you’re going through. Know that the textile industry now has a friend in Washington,’” said Moore.

Moore also expressed disappointment that the Office of the U.S. Trade Representative had allowed Vietnam to delay the completion of the negotiations while it built up higher levels of textile shipments.

“This agreement breaks with a 40-year plus history of the U.S. textile program by awarding Vietnam quotas based on current trade rather than on base levels set during the initial negotiation,” he noted.

“Despite repeated assurances by U.S. negotiators that Vietnam’s tactic of delaying negotiations in order to build ever higher quota levels would not succeed, the new agreement includes all of the trade that Vietnam built up through negotiating delays and even includes hefty increases, ranging from 10 percent to, in one case, 60 percent.”

That resulted in the U.S. providing quotas for woven trousers and knit shirts, the U.S. textile industry’s most sensitive products, for the equivalent of $1.1 billion or more than half of what ATMI amounts to $2 billion in access to the U.S. market.

“At 164 million shirts, the Vietnamese quota for cotton knit shirts is larger than those of China, Thailand, Bangladesh, Cambodia and the Philippines combined,” said Moore. “The quota is nearly three times the U.S. offer made just two months ago.

“The quota for cotton woven trousers is 84 million trousers, or one pair of trousers for every adult male in the United States. It is bigger than the combined quotas for China, India, Thailand and Pakistan and more than twice the size of the U.S. offer made just two months ago.”

The agreement is scheduled to run through December 2004 but could be extended annually while Vietnam seeks admission to the World Trade Organization, a move it expects in 2005.

It calls for the Hanoi government to permit inspection of Vietnamese factories to confirm production claims in the wake of evidence that China has been transshipping textile and apparel products through Vietnam to the United States. Vietnam has also committed to abide by international rules regulating the use of child labor.

e-mail: flaws@primediabusiness

Growers to receive second progress payment of season

A progress payment based on standard grades of two cents per pound on Seasonal Pool San Joaquin Valley Acala varieties and one cent on California Upland and California/Arizona styles was approved at Calcot's April executive committee meeting.

The committee also approved a one-cent per pound payment on Pima cotton in the seasonal and call pool.

Calcot's board of directors at its March meeting authorized the executive committee to approve a payment up to $7 million based on achieving a healthy March month finanical end. Such action was necessary to make the payment in a timely manner, since the full board of directors will not meet again until May 15.

Payment will be in the mail to Calcot's California and Arizona members by April 30.

After the payment, base grade SJV Acala will stand at 65.20 cents per pound for grade 31-3-36 in gin UD free terms. C/A cottons will stand at 60.30 for 31-3-35, and California Upland cotton (SJV non-Acala) will be 61.90 cents per pound, gin UD free.

San Joaquin Valley Pima will be advanced at 83.85 cents per pound following the one-cent progress payment. Desert Pima varieties will be at 82.25 cents per pound.

Only Pima cotton in Calcot's Call Pool was eligible for a progress payment at this time, and will be paid one cent per pound, bringing the advance level to 200 points off the fixation.

The payment is the second progress payment of the season, following the initial advance paid during the cotton harvest in the fall of 2002, and a progress payment made in January.

Calcot will typically make from two to four progress payments per season, with a final settlement made in late September following the end of the marketing year, which runs from Aug. 1 to July 31.