Friday 27th January 2012

USDA sees corn area up 5%, wheat up 8%, soybeans down 1%

USDA’s 2011 prospective plantings report shows expected year to year increases for corn, wheat and cotton against a slight decrease for soybeans.

Corn is pegged at 92.178 million acres, up 5% from 2010′s 88.192 million and above the average pre-report estimate of 91.662 million acres. If realized, this would be the second largest since 1944, trailing the 93.5 million planted in 2007. Iowa, Nebraska, Ohio and South Dakota are all expected to see increases of a quarter million or more.

Soybeans are seen at 76.609 million acres, down 1% from 2010′s 77.404 million acres and slightly under the average guess of 76.969 million acres. USDA sees decreases of over 100,000 acres in Iowa, Nebraska and Ohio. Still, if producers follow through, this would be the third largest on record including new all time highs for New York and North Dakota.

The total U.S. wheat area is projected at 58.021 million acres, an increase of 8% from last year’s 53.603 million acres and larger than analysts were expecting. By class, winter wheat is pegged at 41.229 million acres, up 10% from a year ago, spring wheat is seen at 14.427 million acres, 5% above last year, and durum is placed at 2.365 million acres, down 8% from 2010.

U.S. cotton acreage is estimated at 12.566 million acres, a jump of 15% from 2010.

SELECTED CROPS BY STATE:
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Bill introduced to repeal U.S. sugar program

Since first going to Washington, Indiana Senator Richard Lugar has been an outspoken critic of the U.S. sugar program, and on Wednesday, March 30, the Senior Senator introduced legislation that is being described as a bold step towards repealing the sugar program.

“The New Deal-era sugar program has been big government at its worst for decades,” Lugar explained. “It picks the pocket of every American with a hidden tax, drives jobs overseas, and enriches a handful of powerful sugar producers in the United States. It is one of the worst forms of government interventionism in America.”

In introducing his bill, the most senior Republican on the Senate Agriculture Committee, says with more Members of Congress willing to take on reform, it is, “time to finish the job.”

Parham named APHIS administrator

U.S. Ag Secretary Tom Vilsack has appointed Dr. Gregory Parham as administrator of the Animal and Plant Health Inspection Service (APHIS), taking over from Cindy Smith who has held the position since 2007.

National Pork Producer Council President Doug Wolfe of Wisconsin said NPPC is looking forward to work with the new administrator.

“With his extensive background in USDA programs, including food safety and animal health, Dr. Parham is well suited to meet the growing challenges faced by animal agriculture domestically and globally,” said Wolfe.

Is LED lighting right for your farm?

The newest technology in lighting for the farm is LED…but is it the right choice for your farm? Maurice Nankivill is an electronics engineer with CMB Electronic Lighting, he says while LEDs are the most efficient form of lighting available today, there are a couple of factors to consider before converting. First, how many hours per day will the lights be on? Second, will your installation allow for heat dissipation?

AUDIO: Nankivill talks about LED lighting 3:00 mp3

Organic group files preemptive suit vs Monsanto

A group of organic farmers, organizations and organic seed companies have filed suit challenging Monsanto’s patents on genetically modified seed. Calling it a preemptive strike, the group says there is a chance organic crops could become “contaminated by transgenic pollen” and if that happens Monsanto could possibly sue them for patent infringement. The suit asks that if a farmer’s organic crops are contaminated by a Monsanto genetically modified seed, they be immune from patent infringement.

In a statement, Monsanto says they have “not ever sued and has publically committed to not sue farmers over the inadvertent presence of biotechnology traits in their fields.” The company calls the plaintiffs’ approach “a publicity stunt designed to confuse the facts about American agriculture.”

Read the PUBPAT suit here:

Monsanto’s statement follows:

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March a profitable month for dairy producers

The dairy profitability ratio improved in March, USDA Ag Prices report has corn at $5.46 per bushel, down 18 cents from February. Soybeans in March averaged $12.10, down 60 cents and alfalfa hay increased $9 to $136 per ton putting the cost of feed to produce a hundred pounds of milk at $9.36. With the all-milk price for March at $20.40 the income over feed cost comes in at $11.04 per hundredweight, the highest profit since January of 2008.

The preliminary price for March milk ranges from $18.40 in California to $24.00 in Florida. Those prices are going to be short-lived though, the March Class III contract is at $19.44 while the April, May and June contracts range from $16.63 to $16.70.

The average price for dairy cows in the United States in January was $1,300, unchanged from last October and $40 less than January of last year. Michigan had the highest price in January, $1,450 with Wisconsin right behind at $1,430. California, Idaho, Kansas and Texas shared the lowest average price $1,200.

Obama lays down energy goals

President Obama Wednesday morning outlined his administration’s domestic energy goals. U.S. Agriculture Secretary Tom Vilsack told Radio Iowa that the president is pushing for increased production and use of plant-based biofuels so the U.S. can be more “self-reliant.”

“To do that, you’ve got to build an infrastructure, you’ve got to obviously look for more opportunities for oil and gas here in the United States, you have to look at alternative energy sources; renewable energy, wind, solar, hydro, and yes, nuclear if it’s safe,” Vilsack said, during an interview with Radio Iowa. “At the same time you need to create new opportunities for a biofuel industry that really does help provide us less reliance on imported oil.”

President Obama says the country has to find “better and smarter” ways to produce energy and says within the next two years he’d like to see construction begin on four new advanced biofuel plants in the U.S. that would use wood chips, switch grass or plant waste rather than corn to make ethanol. Vilsack says those plants would “no doubt” be located in other parts of the country.

“In order for Iowa to continue to have a thriving ethanol industry, there has to be national support for that industry, and in order for there to be national support, we have to make sure that there are opportunities in other parts of the country to be able to produce ethanol and see the benefits of ethanol,” says Vilsack.

Cellulosic ethanol plants that use corn stalks, switch grass or other plant material can’t match the volume of ethanol that corn-based plants are able to produce, partly because of the vast amount of plant waste that must be used to make a gallon of ethanol, according to Secretary Vilsack. Increasing plant-based ethanol production is not only about reducing dependence on foreign oil, says Vilsack, it’s about creating jobs in rural America.

“The nature of these biorefineries is different from oil refineries where you can have one large structure that basically services several states and only one state gets the benefit,” says the Agriculture Secretary. “Because of the bulk associated with feed stock, biorefineries are smaller in size, but they have to dot the landscape every 150-200 miles, so this is a real opportunity for us, I think, to have a real revitalization and resurgence in rural economies across the country.”

According to a White House fact sheet, President Obama will look for ways to reform biofuels incentives to meet today’s challenges and save taxpayers money.

That, however, does not mean an immediate end to tax breaks for ethanol and biodiesel, according to Vilsack.

“We saw what happens when you abruptly end incentives and support for a fledgling industry with the biodiesel tax credit that was not allowed to continue for a period of time last year and the result was that industry lost half of its production and 12,000 jobs,” said Vilsack. “So I think the president understands and appreciates that instead of a cliff in terms of these incentives, we need to develop a glide path.”

Vilsack says that means phasing-out tax breaks for ethanol and soybean-based biodiesel “over time” and making more federal investments in biofuels infrastructure, like pipelines and blender pumps.

Radio Iowa contributed to this article.

Herseth Sandlin on 25X25 Committee

Former Representative Stephanie Herseth Sandlin has accepted a seat on the 25x’25 National Steering Committee.

Herseth Sandlin, now a principal at Olsson, Frank and Weeda Law, in Washington, D.C., served as South Dakota’s at-large House Member from 2004-2011. Her three committee assignments included the House Ag Committee, where she helped write the 2008 Farm Bill and also worked to enact two Renewable Fuels Standards important to the biofuels industry.

Herseth Sandlin grew up on her family’s farm near Houghton, in northeastern South Dakota.

Broin testifies ethanol answer to high gas prices

POET CEO Jeff Broin is testifying before the Senate Ag Committee and urging members to support ethanol production through consistent policy as a way to reduce high gas prices.

Broin says the solution to keeping gas prices lower is for American drivers to have an alternative to gasoline.

“A recent summary of several study concluded that ethanol keeps U.S. retail gasoline prices about $.17-cents per gallon lower. That translates into an annual savings of $100 per driver or $24-Billion for all U.S. drivers.”

Broin says the path to breaking through the blend wall has begun with EPA allowing E15 in 2001 and newer vehicles – and Broin urged Senators to block any attempts to “deprive consumers” that choice.

He also advocated Growth Energy’s Fueling Freedom plan that would scale back the ethanol tax credit in favor of funding ethanol infrastructure. And, he urged senators to keep funding in place for USDA’s biomass crop assistance program for farmers in the production of cellulosic ethanol. In addition,

“Today it is impossible to get financing for a cellulosic ethanol plant without a federal loan guarantee. I urge the Senate to continue funding for the DOE’s (Department of Energy’s) renewable energy loan guarantee programs.”

Broin said technology for POET’s Project LIBERTY cellulosic ethanol plant in Emmetsburg, Iowa, has been reviewed by the Department of Energy, and the company is awaiting a loan guarantee to begin construction.

“Our first commercial [cellulosic ethanol] project, which is scheduled to start up late next year, will create about 300 jobs and launch an industry that will create almost 90,000 direct jobs just by meeting minimum targets in the RFS.”

With stable policy and support, Broin said, the “oil industry would no longer enjoy exclusive access to 90-percent of the fuel supply” and allow ethanol to compete in the marketplace.

Soybeans up, corn and wheat down ahead of USDA numbers

Soybeans were higher on technical and speculative buying, along with position squaring ahead of Thursday’s USDA numbers and the unwinding of spreads with corn. Traders expect a slight decrease in U.S. acreage and a slight increase in quarterly stocks. The reports are out at 7:30 AM Central. In any event, beans are also watching continued harvest delays in Brazil. Soybean meal was mostly firm and bean oil was up ahead of the USDA numbers. USDA’s weekly export sales report is out Thursday at 7:30 AM Central. Soybeans are pegged at 300,000 to 600,000 tons, meal is seen at 100,000 to 175,000 and oil is placed at 5,000 to 15,000 tons.

Corn was lower on profit taking ahead of the USDA numbers, in addition to that spread trade with beans. The trade sees a year to year jump in acreage and a big quarter to quarter cut in the U.S. supply. That said – after these numbers are out, traders will start really paying attention to fieldwork and planting delays with USDA’s weekly crop progress updates starting in April. Ethanol futures were lower. Taiwan’s Maize Industry Procurement Association bought 43,300 tons of No. 2 U.S. corn. Out of the total, 43,000 tons were at a $1.85 premium to the CBOT July and the remaining 300 tons was picked up at $340.55 per ton. Weekly U.S. corn sales are estimated at 600,000 to 1.6 million tons.

The wheat complex was lower ahead of the USDA numbers. Traders expect USDA to show a year to year rise in wheat acreage, with most of that in winter wheat, along with a slightly tighter supply. Still, the overall fundamental picture remains bearish, especially on the demand side. European wheat was lower ahead of the USDA reports. According to Dow Jones Newswires, Ukraine has extended its grain export ban from the end of March until July 1. USDA’s Moscow attaché raised its grain production outlook to 84 million tons with exports seen at 5.5 million and planting about double this time last year; wheat’s expected to total 52.5 million tons. Unknown destinations bought 150,000 tons of 2011/12 U.S. hard red winter. Weekly U.S. wheat sales are projected at 400,000 to 600,000 tons.